Endocyte, Inc. ECYT reported second-quarter 2015 loss of 25 cents per share, narrower than the Zacks Consensus Estimate of a loss of 30 cents. The company generated earnings of 52 cents and the year-ago period.
The company earned collaboration revenues of $13,000 in the reported period compared to $49.2 million in the year-ago period. This decline was due to the recognition of deferred revenue related to Endocyte’s former collaboration with Merck MRK.
The Quarter in Detail
Research and development (R&D) expenses stood at $6.7 million, down 64.6% year over year. The decrease reflects lower expenses related to the TARGET trial (which is now complete) and termination of the PROCEED study in May 2014. Additionally, decrease in manufacturing expenditure for Vynfinit and etarfolatide pulled down the R&D spend.
General and administrative expenses were down 48.9% to $4.1 million. This was primarily due to the discontinuation of commercial activities following the withdrawal of marketing applications in Europe during the second quarter of 2014 and a reduction in headcount.
Pipeline Update
Endocyte stated on its second-quarter call that the phase I studies on EC1456 (advanced solid tumors) and EC1169 (recurrent prostate cancer) are on track. The company will present the final overall survival analysis from the TARGET study on Vynfinit for non-small cell lung cancer (NSCLC) at the World Conference on Lung Cancer in Sep 2015.
2015 Outlook
Endocyte continues to expect its 2015-end cash balance to exceed $155 million. The company anticipates higher expenditure from current levels due to further expansion of the studies on EC1456 and EC1169 once the maximum-tolerated doses are determined.
Our Take
We are pleased with Endocyte’s second-quarter 2015 results. The company’s progress on the development of Vynfinit for NSCLC is encouraging.
Endocyte carries a Zack Rank #3 (Hold). Some better-ranked stocks in the health care sector are Valeant Pharmaceuticals International, Inc. VRX and Anacor Pharmaceuticals, Inc. ANAC. While Valeant carries a Zacks Rank #1 (Strong Buy), Anacor holds a Zack Rank #2 (Buy).
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