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Endocyte Falls on Inconclusive Phase IIb, Uncertain Phase III

By Jennifer Boggs

Managing Editor

Shares of Endocyte Inc. plummeted 65.3 percent Tuesday on news that the company's ovarian cancer drug EC145 appeared to be bested in a Phase IIb study and a planned Phase III study could be delayed due to doxorubicin shortages.

Executives of the West Lafayette, Ind.-based firm tried to spin the data as positive, arguing that the study was underpowered and hailing the promising data supporting the use of companion diagnostic EC20 to identify patients whose tumors are positive to the folate receptor (FR). But Wall Street remained unconvinced, as Endocyte shares (NASDAQ:ECYT), trading at 43 times their normal volume, fell $6.72 to close at $3.57, by far the lowest the stock has traded since the firm went public earlier this year.

In fact, Tuesday's news mars one of the most successful initial public offering (IPO) stories of the year. Although the firm took the usual haircut on its IPO price, selling 12.5 million shares at $6 apiece, Endocyte's stock was well received on its debut, jumping 29 percent on the first day of trading and rising as much as 60 percent in the following months. (See BioWorld Today, Feb. 7, 2011.)

Investors had been impressed with early data from Endocyte's EC145, a small-molecule conjugate combining vitamin folate with vinca alkaloid. In April, the firm had reported preliminary results from the PRECEDENT study showing EC145 in combination with pegylated liposomal doxorubicin improved progression-free survival (PFS) from 11.7 weeks to 21.7 weeks, an 85 percent increase over standard therapy. (See BioWorld Today, April 27, 2011.)

But data from supplemental analyses proved far less promising. After comparing investigator-determined PFS to PFS determination by an independent review committee, the data lost statistical significance in the intent-to-treat population. Statistical significance was maintained only in a subset of patients whose lesions all tested positive for FR.

Overall survival (OS) data were even bleaker. EC145 actually failed to extend survival as long as the control arm. In the intent-to-treat group, the EC145 plus doxorubicin group had OS of 14.1 months vs. 16.9 months in the doxorubicin-only group.

Endocyte's execs offered several reasons for those unexpected OS results. First, the study was "significantly underpowered," particularly in the control arm, Ron Ellis, president and CEO, told investors on a conference call. That is likely the reason OS in the control arm was so much higher than historical median survival of 12.7 months with doxorubicin in ovarian cancer.

Survival data also could have been confounded by subsequent therapy, since most patients in the study received post-study chemotherapy. There was also a clear imbalance in the platinum-free interval for patients in the EC145 arm and doxorubicin-only arm, Ellis added.

But the bottom line is that Endocyte "really can't say that [EC145] improves survival," he said. "A larger study is going to be needed to confirm any survival benefit."

And that raises another issue, one that is beyond the company's control.

Endocyte had been moving into a large Phase III trial, designated PROCEED, intended to fulfill requirements for FDA approval. But that study has been on hold due to the shortage of Doxil, Johnson & Johnson's liposomal doxorubicin. The company is in discussions to start a separate Phase III study, replacing doxorubicin with paclitaxel.

The FDA has indicated that full approval could be based on one study clearly showing an OS advantage or two studies showing PFS advantages with the addition of EC145, Ellis said.

"This is a very fluid situation," he added. "We don't know when Doxil is going to come back on board."

The good news is that if the company focuses just on patients whose lesions all test positive for FR using the EC20 diagnostic, Endocyte should be able to afford to run two studies. As of Sept. 30, the firm had about $138.9 million in the bank.

The bad news is that the doxorubicin shortage could end up delaying the company's European plans. Endocyte had anticipated filing for conditional approval of EC145 in platinum-resistant ovarian cancer early next year based on data from the PRECEDENT study and an earlier Phase II trial. But the plan was that the confirmatory Phase III trial would be fully enrolled by the time the European Medicines Agency began its review.

"We're ready to file," Ellis said, noting that the supplemental analyses released Tuesday would be "neutral" to the European data packet. "But the biggest concern with the EMA is the uncertain confirmatory trial [due to] the Doxil shortage."