Endocyte, Inc. (NASDAQ: ECYT) is a current company I have been long since early May and decided to share my basic thoughts and general thesis on the company, split into posts regarding its basic business model, valuation, general risks, catalysts needed for the investment to work, and concluding thoughts. $ECYT, Endocyte, Inc. / 1440 Endocyte is an Indiana-based biotechnology company that specializes in therapy development for the treatment of cancer and inflammatory diseases. The company creates small molecular drug conjugates (SMDCs) and companion imaging diagnostics to better personalize drug therapy. The SMDCs actively target receptors that are over-expressed on diseased cells relative to healthy cells. ECYT formerly had two wholly-owned subsidiaries, which were formed for commercialization duties and pre-launch activities in Europe, but were dissolved in late-2015 and early-2016. The basic story on this company is that they currently generate no revenue due to the current lack of a drug product. They have two products in the pipeline (Phase I), known as EC1456 and EC1169, both geared toward cancer treatment. The company has a very simple, straightforward balance sheet -- it has zero debt and 97% of its assets are comprised of cash, cash equivalents, and short-term investments. The attraction for value/deep value investors resides in the fact that the company is currently trading around liquidation value. It's "net-net working capital" (current assets minus total liabilities) comes in at $160.5 million as of March 31, 2016. With practically all of ECYT's current assets coming in the form of cash and cash-like equivalents, its basic liquidation value comes in at $3.79 per share. The company currently trades around $4 per share. The downside on the company is essentially floored by its immediate liquidation value (pending any unexpected one-time expenses, such as litigation). By the end of the FY2016, management expects the company's cash balance to be in the $125 million to $130 million range. This would bring today's share price to 33%-34% above 2016 year-end liquidation value. The company might conservatively project to be able to fund its operations for an additional 4.5 years off its cash balance even without any revenue uptake. The company, too, is keeping open the possibility of corporate partnerships. But these would likely only offer value once the company has enough insight into the potential of these drugs after the full accumulation of initial human data. The value of ECYT in the near-term stems exclusively from the news flow on its data regarding EC1456 and EC1169. The most recent data came out at the American Society of Clinical Oncology (ASCO) conference that ran from June 3-7, 2016. EC1456 is currently in Phase I dose escalation in solid tumors, while EC1169 is in Phase I dose escalation phase as well but only with respect to a form of resistant prostate cancer. Both appear well-tolerated by patients and demonstrate anti-tumor behavior. Valuation Catalysts General Risks Conclusion