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Endocyte (ECYT) Up 14.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Endocyte (ECYT - Free Report) . Shares have added about 14.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Endocyte due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Endocyte Posts Narrower-Than-Expected Loss in Q2

Endocyte incurred a loss of 17 cents per share in the second quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The figure was narrower than the year-ago loss of 28 cents.

The company earned collaboration revenues of $0.013 million in the reported quarter, up 7.1% year over year..

Quarterly Details

Research and development (R&D) expenses decreased 11.9% year over year to $7.6 million, courtesy of the workforce reduction as part of the company’s restructuring plan, and the discontinuation of certain research and development activities.

General and administrative expenses increased 28.6% year over year to $4.6 million due to an increase of $0.5 million in compensation expense.

Pipeline Update

The company’s key pipeline candidate is 177Lu-PSMA-617, a first-in-class radioligand and therapeutic (RLT) that targets prostate-specific membrane antigen. The company acquired exclusive worldwide rights to develop and commercialize 177Lu-PSMA-617 from ABX GmbH in October 2017. The candidate holds more than $1 billion market opportunity and its development is now a priority for the company.

The company initiated the phase III VISION study of 177Lu-PSMA-617 during the second quarter.

Endocyte expects to file an investigational new drug application (IND) for phase I study of EC17/CAR T-cell therapy in patients with osteosarcoma in the fourth quarter of 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 6.25% due to these changes.

VGM Scores

At this time, Endocyte has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our style scores.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Endocyte has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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