Endocyte, Inc. (ECYT) shares fell 4.8% following the announcement of its intention to issue shares and the pricing of the underwritten public offering of its common stock. The company is looking to issue 4.5 million shares at $21 per share. Endocyte expects gross proceeds of $94.5 million through this offering. The offering will lead to dilution of the shareholder base.
The underwriters have been granted an option to purchase up to 675,000 shares with a 30-day window to do so.
Endocyte intends to utilize the funds raised from the issuance of shares for working capital, capital expenditure, research and development expenses, clinical trial costs and general and administrative expenses. Cash, cash equivalents and investments at the end of Dec 31, 2013 were roughly $148.9 million.
We note that Endocyteshares surged 92.4% last week with the phase IIb TARGET study evaluating Vynfinit (vintafolide) in non-small cell lung cancer (NSCLC) patients met its primary endpoint of improved progression free survival. So, the current fall may also include market adjustments.
Endocyte is focused on developing its pipeline. Endocyte expects mature overall survival data from the TARGET study by the end of 2014. Endocyte and partner Merck & Co. Inc. (MRK) gained a positive opinion in the EU from the Committee for Medicinal Products for Human Use (CHMP) for Vynfinit and companion imaging components (Folcepri and Neocepri) for the treatment of adult patients with FR-positive, platinum-resistant, ovarian cancer, in combination with pegylated liposomal doxorubicin (PLD). Conditional approval should be granted within two or three months, which will trigger a milestone payment of $12.5 million to Endocyte.
Endocyte and Merck will initiate a phase II randomized trial on Vynfinit in FR-positive triple negative breast cancer in April or early summer this year.
Endocyte carries a Zacks Rank #3 (Hold). Investors looking for a better stock may consider companies like Alkermes (ALKS) and Shire (SHPG), both of which carry a Zacks Rank #1 (Strong Buy).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment