Endocyte Cuts Workforce by 40 Percent After Clinical Trial Falters

Xconomy Indiana — 

Endocyte is halting a clinical trial for one of its cancer drugs and narrowing the focus of another following a review of the two early-stage drug programs, the company announced Friday.

The changes are sparking a corporate restructuring that will shift the West Lafayette, IN-based company’s focus to compounds in its drug pipeline that have yet to enter clinical trials. Endocyte (NASDAQ: ECYT) said in a securities filing that the shakeup will cut 47 jobs companywide, which represents approximately 40 percent of the workforce. The estimated $2.4 million in restructuring costs includes severance and benefits for the workers, as well as expenses to terminate the clinical trial.

Endocyte, which has no FDA-approved therapies, focuses on developing drugs called small molecule drug conjugates (SMDCs). These drugs hitch a drug payload to a targeting ligand, a molecule that binds to receptors on the cell of a particular target, such as cancer. This approach is intended to be more precise than other treatments.

Endocyte had been testing one SMDC, called EC1456, in a Phase 1 clinical trial that aimed to enroll 220 patients with non-small cell lung cancer. On Friday, Endocyte said an assessment across multiple patient groups and multiple doses did not show enough clinical activity to continue this trial.

EC1456 is also being tested in a separate Phase 1 study enrolling ovarian cancer patients. Endocyte said that early data from this study show evidence that the company can identify patients whose disease cells have the receptor that the drug targets. This study will continue, “in order to inform other SMDC programs in development,” Endocyte said.

A second Endocyte drug program, EC1169, will narrow following an interim analysis of a Phase 1 trial that has been enrolling prostate cancer patients. Endocyte said the analysis confirmed clinical activity of the drug in patients that had previously been treated with taxane, a type of chemotherapy. The company added that it believes EC1169 may help those patients because the antigen that the drug targets increases with prior treatments. But the company will stop enrolling patients who have not previously been treated with taxane.

In addition to continuing the clinical development of EC1169, Endocyte said it is working on bringing other potential cancer treatments into clinical trials. The company plans to file an application with the FDA for the go-ahead to begin clinical trials for EC2629, a cell-based therapy that could treat solid tumors. The company has also been researching a type of cancer therapy called a chimeric antigen receptor T-cell (CAR-T) with Seattle Children’s Research Institute. Endocyte has not identified the cancer target for this drug but the company said that it plans to start clinical trials in 2018.

According to the securities filing, Endocyte’s board of directors committed to the corporate reorganization on May 23. Employees were not notified until today. The news comes nearly a year after founding CEO Ron Ellis abruptly resigned from the company. Endocyte said that after completing the restructuring, it expects it will have approximately $105 million in cash at the end of 2017.

Image of slide showing prostate cancer by the National Cancer Institute.