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Celldex (CLDX) Q2 Loss Narrower Than Expected, Revenues Miss

Zacks Equity Research

Celldex Therapeutics, Inc. CLDX incurred adjusted second-quarter 2019 loss (excluding gain on fair value re-measurement of contingent consideration) of 92 cents per share, narrower than the Zacks Consensus Estimate of a loss of $1.17 and the year-ago loss of $2.43. However, including the fair value re-measurement item, the reported loss was 84 cents narrower than loss of $1.67 in the year-ago period

However, total revenues in the quarter declined 75% year over year to $0.7 million and missed the Zacks Consensus Estimate of $1.26 million. The year-over-year decline was due to decrease in revenues from the collaboration agreement with Bristol-Myers BMY and contract agreement with the International AIDS Vaccine Initiative.

Celldex share price performance has been disappointing so far this year. The stock has declined 27.2% compared with the industry’s 2.9% decrease.

Costs Decline

Research and development expenses were down 52.8% year over year to $10.1 million during the quarter mainly due to lower personnel costs and decline in clinical study and contract manufacturing related expenses. General and administrative expenses were $3.9 million, down 30.4% year over year mainly attributable to lower personnel and marketing expense.

As of Jun 30, 2019, Celldex had cash, cash equivalents and marketable securities of $81.3 million compared with $85.1 million as of Mar 31, 2019. 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 under a contract with Cantor.

2019 Outlook

Celldex believes that its cash position as of the end of June plus anticipated net proceeds from future sales of its common stock under the agreement with Cantor will be adequate to fund working capital requirements as well as planned operations through 2020.

Pipeline Focus

Celldex is focused on development of CDX-1140 and CDX-3379. Although the candidates are in early to mid-stage studies, the company is progressing well with the studies.

In the earnings release, the company announced that it has completed enrollment in the monotherapy arm of the phase I study evaluating CDX-1140 in patients with recurrent, locally advanced or metastatic solid tumors and B cell lymphomas. Meanwhile, enrollment in another arm of the study evaluating a combination of CDX-1140 and CDX-301 is on track. The company has completed dose limiting toxicity for eight monotherapy doses and three combination doses. The fourth combination dose is under review. Detailed data will be presented at a medical meeting by year end. The company may evaluate CDX-1140 in combination with PD-1 or PD-L1 inhibitors, chemotherapy, radiation therapy and Celldex’s monoclonal antibody candidate, varlilumab, going forward. Interim data announced in April showed that CDX-1140 was safe.

Currently, enrollment is underway in a phase II study evaluating CDX-3379 in combination with Eli Lilly’s LLY Erbitux for the treatment of advanced head and neck squamous cell cancer. Interim data announced in June supported further evaluation of CDX-3379. Based on the data, Celldex expanded the patient population to focus on the development of CDX-3379 in biomarker selected patient population.

The company is planning to file an investigational new drug application by the end of the year to initiate a phase Ia study to evaluate pre-clinical monoclonal antibody candidate, CDX-0159, in inflammatory diseases.

Celldex Therapeutics, Inc. Price, Consensus and EPS Surprise


Celldex Therapeutics, Inc. Price, Consensus and EPS Surprise

Celldex Therapeutics, Inc. price-consensus-eps-surprise-chart | Celldex Therapeutics, Inc. Quote

Zacks Rank & Stock to Consider

Celldex currently carries a Zacks Rank #3 (Hold).

Vertex Pharmaceuticals VRTX is a better-ranked stock in the pharma sector, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vertex’s earnings per share estimates have moved up from $4.22 to $4.59 for 2019 and from $5.76 to $6.03 for 2020 over the past 60 days. The company delivered a positive surprise in all the trailing four quarters with the average being 17.87%. Share price of the company has increased 6% in a year’s time.

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