Don't think I've seen this article posted here yet so appreciate...

Don't think I've seen this article posted here yet so appreciate people's take on it. Part of the report may be missing as it seems strange the way prima and cvac are introduced.

The guy who wrote it seems to think that the market that Prima can capture is less than its current market cap. Surely this is nuts!

http://www.smallcapnetwork.com/Before-You-Plow-Into-Endocyte-Inc-NASDAQ-ECYT/s/via/1789/article/view/p/mid/3/id/105/

[Do NOT buy or sell ECYT until you have read everything.

Before You Plow Into Endocyte, Inc. (NASDAQ:ECYT)....

By Bryan Murphy Published: March 14, 2012 9:40:28 AM PDT

ECYT $5.89 +$2.17 +58.33%

What makes a stock jump 44% in a day? It doesn't take earnings growth - that's for sure. Endocyte, Inc. (NASDAQ:ECYT) posted an even bigger loss than the year ago quarter when it posted Q3 results last night, incurring a $10.8 million dip into the red ink following only a $3.4 million loss for the same quarter a year earlier. Rather, what can prod your stock higher by leaps and bounds is announcing that you plan to file a couple of new drug requests in Europe. And to be clear, ECYT didn't win approval for the new drugs in Europe.... it just announced it would be making the request.

And that gets you a 44% gain these days? Yep.

To be fair, both of the drugs have the so-called 'orphan drug' status, and both are in Phase III trials. The former just means that the European Commission that oversees drugs (and approvals) is looking for a reason - any reason - to approve the Endocyte therapies. The latter is a great sign that the ECYT drugs would win approval in the U.S. and European markets anyway, as most drugs that make it to Phase III are ultimately approved; the preclinical and Phase I studies are the most common stumbling block.

The red-hot need perceived by EU health authorities is a treatment for platinum-resistance ovarian cancer. Options are out there.... just not many good ones. Both drugs that are going to be filed for approval sometime in Q3 of this year are aimed at ovarian cancer.

While the news is good, traders may be bidding up Endocyte shares without quite enough perspective. Specifically, what's the actually market opportunity in Europe for an effective ovarian cancer treatment? The answer isn't clear.

The total global market for ovarian cancer is $3.6 billion annually. A total of 318,000 have it, with 73,000 new diagnosed cases of it occurring every year. Only 10% of its victims survive beyond five years, underscoring the reason it's been given an orphan drug designation by the EU. But still, what about Europe? What kind of fiscal opportunity is ECYT really facing there?

According to data provided by IMS compiled by Strides Arcolab when it unveiled its generic Carboplatin for the treatment of ovarian cancer in Europe, the market is only worth $138 million per year. In a recent presentation from Nomura about Prima Biomed Ltd., highlighting its ovarian caner drug C-Vac, it estimated the total global market opportunity to be $2 billion, and estimated that 20% new cases of ovarian cancer (out of its global estimate of only 240,000 total ovarian cancer patients) occur in Europe. That's roughly 13,000 new cases of ovarian cancer per year in the EU. Assuming that 20% of those ovarian cancer sufferers spent 20% of the dollars allocated on treatment of it, that means ovarian cancer in Europe is a $400 million market.

Either way, we can reasonably assume the EY ovarian cancer market is something in the $200 to $300 million range. That's a lot of money, and part of the reason Endocyte, Inc. is up today. Just for the record though, the company's not going to automatically capture all of that market. A 50% market share is a stretch, which would represent only (ballpark) $125 million in European sales, and it's going to be going up against Roche's Avastin (bevacizumab), which is now licensed for use in ovarian cancer in Europe. And remember, the ECYT drugs are aimed at an even smaller sliver of ovarian cancer victims - platinum-resistance ovarian cancer.

Point being, the medical advance is well received, but investors may be getting ahead of themselves. This is a $189 million company that's merely got a chance to capture a piece of pie that's smaller than its entire market cap.

It's certainly a fun hype-driven ride in the meantime though.