Why Endocyte Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Endocyte has received a distressing two-star ranking.

With that in mind, let's take a closer look at Endocyte and see what CAPS investors are saying about the stock right now.

Endocyte facts

Headquarters (founded)

West Lafayette, Ind. (1995)

Market Cap

$590.7 million

Industry

Pharmaceuticals

Trailing-12-Month Revenue

$49.2 million

Management

Co-Founder/CEO Ron Ellis
Co-Founder/Chief Scientific Officer Philip Low

Return on Equity (average, past 3 years)

(35.3%)

Cash/Debt

$134.8 million / $62.1 thousand

Competitors

Sunesis Pharmaceuticals


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 10% of the 20 All-Star members who have rated Endocyte believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, zzlangerhans, touched on the stock's seemingly unsustainable price run:

Kudos to those who saw the opportunity when Endocyte was beaten down, as the share price rebounded once it became clear that the company would submit vintafolide for accelerated European approval regardless of the negative OS data and partnered the drug with Merck globally on very favorable terms. The stock has gapped up at regular intervals and the latest may be occurring as I write. Nevertheless, I think the valuation has become excessive given the possibility that CHMP might not wish to give a favorable opinion with the topline PFS data from the PROCEED phase III trial of vintafolide expected in H1 2014. Even if CHMP issues a favorable opinion, PROCEED will have to yield positive PFS and likely OS data to maintain approval and have a strong commercial impact. I missed the easy money here but those more fortunate would be wise to take at least some of their profits off the table.

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The article Why Endocyte Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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