This Cutting-Edge Drug Has Endocyte (Nasdaq: ECYT) Stock Soaring

Endocyte Inc. (Nasdaq: ECYT) stock skyrocketed over 130% today (Friday) after the Indiana-based biopharma won market approval for its first drug, a cancer therapeutic called "vintafolide." The drug was developed in collaboration with Merck & Co. (NYSE: MRK).

Today, Merck announced the European Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion of vintafolide, along with its companion imaging agent, etarfolatide. The drugs were part of a group CHMP voted to approve during a March 17-20 meeting.

Now that the CHMP has green-lighted vintafolide, the European Commission (EC) will issue a legally binding decision within about three months. If the EC approves, vintafolide will be granted a centralized marketing authorization that's valid in the 28 members of the EU.

What's more, today Endocyte announced study results from its phase 2b target trial, which showed that risk of disease worsening or death was reduced by 25% for lung cancer patients treated with a combination of vintafolide and the chemotherapy drug docetaxel.

Here's why vintafolide is going to be a huge win for ECYT and its investors.

Endocyte's (Nasdaq: ECYT) Drug Is a Big Win

Vintafolide treats various cancers by targeting the folate receptor – a protein that is commonly expressed on the surface of many human cancers, like ovarian cancer.

Folate is a B vitamin essential to cell growth and division, and characteristically rapidly dividing cancer cells often express highly elevated levels of folate receptors so they can capture enough folate to support their rapid growth.

Vintafolide acts by binding a small molecule to the folate receptor – it "tricks" the receptor into thinking it's the folate (or folic acid derivatives) it seeks to bind with to support cell growth and division.

But when vintafolide is accepted by the folate receptor, it releases a potent chemotherapy drug called vinblastine, which instead kills the cell.

Using a small molecule that's linked to a potent drug creates a "small-molecule drug conjugate," and, with vintafolide, Endocyte succeeded in innovating the first-ever technology platform for creating them.

Meanwhile, the companion imaging agent etarfolide is able to identify patients who are positive for the folate receptor and are therefore more likely to respond to treatment with vintafolide.

"This is our second randomized study in a very challenging indication, where vintafolide has met the primary endpoint when used in patients selected with the companion imaging agent etarfolatide," Endocyte vice president of medical affairs Binh Nguyen, MD, PhD, said today regarding the positive phase 2b study results. "These results provide further validation of our targeted approach to treatment using companion imaging and our SMDC technology."

The trial tested the vintafolide/docetaxel combination across 199 patients who had experienced treatment failure with one prior chemotherapy regimen.

ECYT said there were no drug-related deaths in the group of patients taking a combination of the drug. The combination produced a 25% reduction in the disease worsening or causing death, compared with patients who only took the approved, available treatment.

Endocyte has been working with Merck to bring vintafolide to the market. Here's how the two companies have collaborated – a $1 billion deal in the making…