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Celldex (CLDX) Q1 Loss Wider Than Expected, Shares Down


Celldex Therapeutics, Inc. CLDX incurred first-quarter 2018 loss (excluding goodwill impairment charges) of 19 cents per share, wider than the Zacks Consensus Estimate of a loss of 17 cents but narrower than the year-ago loss of 28 cents. Lower costs and higher revenues led to the year-over-year improvement.

Total revenues in the quarter soared 165% year over year to $4.1 million, beating the Zacks Consensus Estimate of $2.03 million. The manufacturing service agreement with the International AIDS Vaccine Initiative and Frontier Biotechnologies drove the top line.

Shares of the company fell 6.5% on May 10 on the wider-than-expected loss and discontinuation of development of three candidates including earlier announced glembatumumab vedotin.

However, the stock has not done too well so far this year. It has declined 74.6% compared with the industry’s 11.3% decrease.

Quarterly Details

Research and development expenses were down 15.1% year over year to $21.9 million during the quarter. General and administrative expenses were $5.6 million, down 22.2% year over year.

As of Mar 31, 2017, Celldex had cash, cash equivalents and marketable securities of $123.2 million compared with $139.4 million as of Mar 31, 2018. The biotech company’s weakened cash position was due to higher operating expense, partially offset by net proceeds raised from sales of its common stock this month under a contract with Cantor.

2018 Outlook

Celldex expects that its cash position as of the end of December plus $6.1 million in net proceeds generated from the sale of its common stock in the last two months and the anticipated proceeds from any future sales of common stock under the agreement with Cantor will be adequate to fund the working capital requirements as well as planned operations through 2020.

Discontinued Clinical Studies

In April 2018, the company announced the failure of its antibody drug conjugate (“ADC”) candidate, glembatumumab vedotin in phase IIb METRIC study, evaluating it in breast cancer. Following the failure, the company has decided to discontinue the development of the candidate across all indications, including metastatic melanoma.

Apart from glembatumumab vedotin, Celldex announced in its earnings release the discontinuation of development of early phase ADC candidate, CDX-014 and antibody fusion protein candidate, CDX-1401. The company has taken this decision for better allocation of its resources.

Pipeline Focus

Celldex is now focusing on development of CDX-1140 and CDX-3379. Varlilumab and CDX-301 will be evaluated externally through investigator-sponsored studies. However, the company will evaluate varlilumab and CDX-301 internally in combination studies. There are several preclinical candidates in its pipeline, including CDX-0159.

In January 2018, the company closed enrollment for phase II trial, evaluating varlilumab with Bristol-Myers’ BMY Opdivo including cohorts in five indications namely colorectal cancer, ovarian cancer, head and neck squamous cell carcinoma, renal cell carcinoma and glioblastoma.

A phase II study is currently evaluating CDX-3379, a human monoclonal antibody, in combination with Eli Lilly’s LLY Erbitux for the treatment of advanced head and neck squamous cell cancer.

A phase I study is evaluating CDX-1140 in several solid tumors and Celldex is planning to add cohorts to evaluate CDX-1140 in combination with CDX-301 or varlilumab. An investigator-initiated study is evaluating CDX-301 in advanced non-small cell lung cancer.

Celldex Therapeutics, Inc. Price, Consensus and EPS Surprise

Celldex Therapeutics, Inc. Price, Consensus and EPS Surprise | Celldex Therapeutics, Inc. Quote

Zacks Rank & Stock to Consider

Celldex currently carries a Zacks Rank #3 (Hold). Enanta Pharmaceuticals, Inc. ENTA is a better-ranked stock in the drugs sector, carrying a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enanta’s earnings per share estimates significantly increased from 86 cents to $2.48 for 2018 over the last 30 days. The company came up with an average beat of 372%. The stock has surged 68.9% so far this year.

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