RBC Capital Markets said FDA could approve Endocyte Inc.'s (NASDAQ: ECYT) EC145 to treat women patients with platinum-resistant ovarian cancer. The brokerage said Endocyte, based on guidance from regulators, will pursue progression-free survival as the primary endpoint for the Phase 3 with overall survival as a secondary endpoint.

It is likely, in our view, that FDA could approve EC145 based on a robust, statistically significant progression-free survival (PFS) advantage, which is later supported by either a strong trend or statistically significant overall survival advantage, said Jason Kantor, an analyst at RBC Capital Markets.

Our meetings with management confirm that Endocyte recently met with both U.S. and European Union regulators and is prepared to commence the Phase 3 trial. Near-term, we expect Endocyte to announce the start of Phase 3 and to provide an update on whether or not it intends to file for EU approval with Phase 2 data (potential upside scenario not in our expectations), said Kantor.

Kantor believes interactions with U.S. and European Union regulatory agencies did not lead to any material changes in the design of the trial, which could begin enrollment shortly.

Kantor said that pending final comments, Endocyte will shortly disclose the outcome of European Union regulatory feedback on whether or not it can file for approval with Phase 2 data. His base case assumes Phase 3 needed for U.S./European Union approvals; European Union go ahead would be upside for the drug.

Kantor believes the planned Phase 3 trial will be required for European Medicines Agency (EMA) approvals. A Committee for Medicinal Products for Human Use (CHMP) go ahead to file with Phase 2 would be upside for three reasons: it potentially moves up commercialization timing; it partly lowers regulatory risk, and it makes a potential partnership more likely and terms more attractive.

Management confirmed that multiple discussions have been ongoing although timing is uncertain. Ideally, we would like to see the company retain a portion of marketing rights and believe it makes sense to sign a regional partner such as one for Europe and/or Asia. Our base case assumes a partnership in 2012; therefore, a partnership in 2011 would be upside to our forecasts, said Kantor.

The company said EC145 targets a chemotherapy drug to folate receptors over-expressed on cancer cells. The chemotherapy drug is a very potent vinca alkaloid. Endocyte has completed two multi-center single arm studies of EC145 in patients with advanced ovarian cancer and advanced non-small cell lung cancer.

Additionally, EC145 is currently being investigated in the PRECEDENT trial, a randomized phase II study comparing EC145+DOXIL to DOXIL alone in platinum-resistant ovarian cancer patients. This study has completed enrollment. Cancerous tumors in about 80 percent to 90 percent of ovarian cancer patients and 70 percent to 80 percent of non-small cell lung cancer patients over-express folate receptors.

Endocyte is a biopharmaceutical company developing targeted therapies for the treatment of cancer and other serious diseases. The company uses its proprietary technology to create novel small molecule drug conjugates (SMDCs) and companion imaging diagnostics.

SMDCs actively target receptors that are over-expressed on diseased cells, relative to healthy cells, which enables the treatment of patients with highly active drugs at greater doses, delivered more frequently, and over longer periods of time than would be possible with the untargeted drug alone.

The combination of an SMDC with its companion imaging diagnostic is designed to personalize the treatment of patients by delivering effective therapy, selectively to diseased cells, in patients most likely to benefit.

The company’s lead SMDC, EC145, targets the folate receptor, which is frequently over-expressed in some of the most prevalent, and difficult to treat solid tumor indications, including ovarian, non-small cell lung, breast, colorectal, kidney, endometrial, and other cancers.

Endocyte stock rose 1.17 percent to $9.41 on the NASDAQ Stock Market at 9:48 am EDT.

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