Biotech drugmaker Endocyte said Tuesday it has regained rights to an experimental cancer drug from Merck & Co., after the treatment failed in a key study last month.

The company said Merck has decided to discontinue development of vintafolide.

Merck and Endocyte announced in early May that they were halting a clinical trial of the drug in ovarian cancer because patients were not benefiting from a combination of vintafolide and chemotherapy. Endocyte shares plunged more than 60 percent on the news.

In March, European regulators had granted the drug conditional approval for ovarian cancer based on an earlier study.

West Lafayette, Indiana-based Endocyte said it will evaluate the drug's use for lung cancer treatment, pending final results from a mid-stage study in patients with non-small cell lung cancer. The company said in a statement it expects to present detailed data from that trial at a scientific meeting later this year.

Vintafolide is an injectable drug designed to target a receptor that appears on cancer cells but doesn't exist on most other cells.

In early April, Endocyte raised $101.8 million from a stock offering. Stock offerings often reduce a company's share price because they put more shares on the market.

Shares of Endocyte Inc. fell $1.52, or 19.7 percent, to $6.20 in afterhours trading. Earlier in the day shares rose 71 cents, or 10 percent, to $7.72 in regular trading.