Endocyte shares plunge 30% on news of a "strategic restructuring"

Endocyte Inc. (NASDAQ:ECYT) saw its shares plunge in pre-market trading after the biotech firm announced plans for a “strategic restructuring” that includes an about 40% reduction in its workforce and clinical trial changes.

The Nasdaq-listed company, which plans to lay-off 47 employees, largely in the third quarter, said it expects to book total restructuring costs of about US$2.4mln, including severance, clinical trial termination charges and other costs.

It added: “The company is continuing to review the potential impact of the restructuring, and is unable to estimate any additional restructuring costs or charges at this time.”

Endocyte said it is stopping enrollment for its EC1456 drug trial, though it will continue to enroll a small number of patients in the compound’s ovarian cancer surgical study. T

The firm said it will also pare down the number of patients in an early-stage trial for its EC1169 compound for taxane-exposed metastatic castration-resistant prostate cancer, excluding patients who are new to treatment.

Endocyte added that it will continue developing its chimeric antigen receptor T-cell (CAR T-cell) SMDC adaptor platform and its dual-targeted DNA crosslinker drug EC2629.

With 15 minutes to go until the New York open, Endocyte were down 30% in pre-market trading at US$2.73.

Story by ProactiveInvestors