Chardan Capital Remains Positive on Endocyte (ECYT) into 2014 ESMO Congress

Chardan Capital reaffirms Endocyte (Nasdaq: ECYT) at Buy with a target price of $15 heading into the upcoming 2014 ESMO Congress this weekend.

Analyst Ling Wang noted that Endocyte's presentations will include: the full data from a phase II TARGET trial of vintafolide in the second line NSCLC (an oral presentation during the late breaker session, #LBA40_PR); interim data from a phase I dose-escalation trial of the folic acid-tubulysin small-molecule drug conjugate EC1456 in advanced solid tumors; and subset analysis from the phase II PRECEDENT trial of vintafolide in ovarian cancer.

Wang comments:

* Phase II TARGET trial has met the primary endpoint of PFS – the OS data will be the key focus. Earlier this year, ECYT has reported the topline data from the TARGET trial. The trial met the primary endpoint of PFS (HR 0.75, p-value 0.0696, one-sided test) under the pre-defined threshold of p<0.1 in the combination of vintafolide and docetaxel arm in FR 100% NSCLC patients. We expect the detailed data to be presented at the ESMO conference to include PFS, ORR and more mature OS data (with ~50-60% of the total death events). At the time of the interim analysis, both ORR and OS favor the vintafolide combination arm.

* We expect potential upside at ESMO driven by low investor expectation and potentially impressive OS benefit. Although it is hard to handicap the OS results given the trial was not sufficiently powered for detecting OS signal and various factors that could impact OS even with the PFS benefit, we see an upside potential given the low investor expectation driven by the setback earlier this year (the discontinuation of the phase III PROCEED trial and partner Merck returned vintafolide rights back to ECYT). Additionally, according to our literature search, there seems to be relatively strong correlation between the HR of PFS and the HR of OS in post-frontline NSCLC trials that don’t allow crossover of treatment, Hidekazu S., et al., Asia-Pacific Journal of Clinical Oncology 2014; and Katsuyuki H et al, Lung Cancer 79 (2013) 20–26). Since TARGET trial does not allow crossover post progression, we see a good chance of reporting OS benefit with relative impressive HR and great risk/reward.

For an analyst ratings summary and ratings history on Endocyte click here. For more ratings news on Endocyte click here.

Endocyte closed at $7.07 yesterday.

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