Replies to post #140285 on Biotech Values

[jq1234]

(I don't think jq1234 or anyone here has talked much about the value of the diagnostic test, but management seems to think that it's a big deal.)

They can't partner EC20 with MRK because they only partner EC145 with MRK. The rest of their folate receptor pipeline will also depend on this test.

[GrthzGd]

ECYT management made a really huge deal out of the fact that they had retained all rights to EC20, the diagnostic test they have for the folate marker. They must have mentioned this about ten times.

I don't know what a folate receptor is, but Endocyte's Pipeline page indicates that their next four drugs also target solid tumors involving those. Therefore, I would think that their EC20 test would also be used in conjunction with them, which should add to their value in shrinking certain kinds of tumors in certain kinds of patients, as it appears to have done, from Merck's perspective, in the case of EC145.

[mcbio]

No SPA with the FDA for the Phase III here in U.S. CEO reminded the questioner that the FDA will not grant an SPA in ovarian where OS is not the primary endpoint. This confirms, a bit obliquely, that the Phase III in the U.S. will have PFS as the primary endpoint, which is what my sources had told me.

Thanks for the notes blade. I'm sure they will need very robust PFS results for approval in absence of OS benefit so risk of course is it may be a real high hurdle that may be tough for them to meet.

ECYT management made a really huge deal out of the fact that they had retained all rights to EC20, the diagnostic test they have for the folate marker. They must have mentioned this about ten times. No kidding. (I don't think jq1234 or anyone here has talked much about the value of the diagnostic test, but management seems to think that it's a big deal.) There will be a joint committee between MRK and ECYT to work out the details of how the test will be used in the new trials and in the other cancer indications that MRK wants to test EC145 in.

I assume this is a big deal as it presumably means ECYT will retain all revenue from the EC20 tests. I have no idea what the potential numbers could look like here in terms of revenues for them on sales of the diagnostic.

ECYT's next three new drugs in development will target inflammatory diseases and one will be a ADC for prostate cancer.

Thanks again for the info.

And a special thanks to McBio for reinforcing my early thoughts about the company after the alleged "failed" Phase II. I actually did double down and sorry to hear that you didn't, but glad you made out great with what you had. And thanks to jq1234 for his always insightful comments. Like McBio, I'm not selling anything yet.

Props in particular go to turtle for causing me to do a 180 on ECYT after a little more digging based on his comments (#msg-70627973 ).

[DewDiligence]

…ECYT CC, which I actually thought was rather lame. None of the really interesting questions around milestones, royalties or standstill agreements (I'm not exactly sure what they are.) got answered.

Standstill agreements typically specify the conditions under which the larger company (MRK in this instance) can increase its equity stake in the smaller company or can offer to acquire the whole company; they may also have ancillary terms regarding such matters as BoD representation. Standstill agreements have a specified expiration date; they typically run for about 3-5 years.