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Celldex (CLDX) Q4 Loss Narrower than Expected, Sales Beat

Zacks Equity Research

Celldex Therapeutics, Inc. CLDX incurred adjusted loss of 95 cents per share in fourth-quarter 2018, narrower than the Zacks Consensus Estimate of a loss of $1.20 and the year-ago loss of $2.55. The loss has been adjusted for a gain of $1.65 million on fair value re-measurement of contingent consideration. However, including the fair value re-measurement item, the reported loss was 81 cents compared with a loss of 42 cents in the year-ago quarter.

Total revenues in the quarter declined 49% year over year to $1.8 million. It also surpassed the Zacks Consensus Estimate of $1 million. The year-over-year decline was due to decrease in contract revenues from the International AIDS Vaccine Initiative and Frontier Biotechnologies.

However, the stock’s performance has been disappointing in the past year. It has slumped 88.8% compared with the industry’s 18.9% decline.


Quarterly Details

Research and development expenses were down 109.4% year over year to $11.2 million during the quarter, mainly owing to lower personnel costs, and decline in clinical study and contract manufacturing related expenses. General and administrative expenses were $4.3 million, down 26.5% year over year, mainly attributable to lower personnel and commercial planningexpenses.

As of Dec 31, 2018, Celldex had cash, cash equivalents and marketable securities of $94 million compared with $139.4 million as of Dec 31, 2017. The biotech company’s cash position was weakened by higher operating expenses, including costs related to discontinuation of glembatumumab vedotin development, partially offset by net proceeds from the sale of its common stock under a contract with Cantor.

Celldex believes that its cash position, as of December 2018-end, plus anticipated proceeds from the future sale of its common stock under the agreement with Cantor will be enough to meet working capital requirements and fund planned operations through 2020.

2018 Results

The company reported adjusted loss of $6.81 per share in 2018, wider than the Zacks Consensus Estimate of $5.85 and the year ago loss of $9.4.

Revenues were $9.5 million, down 25.2% year over year. However, the figure beat the Zacks Consensus Estimate of $9.2 million.

 Pipeline Focus

Following the discontinuation of the development of its earlier lead candidate glembatumumab vedotin in April 2018, Celldex is focused on the development of CDX-1140 and CDX-3379. Although the candidates are in early to mid-stage studies, the company is progressing well with these.

In the earnings release, the company announced that currently enrollment is on track in a phase I study evaluating CDX-1140 in solid tumors. Interim data from CDX-1140 study, which showed desired safety profile, was presented in April 2019.

Moreover, in August, two separate cohorts were initiated in the study to evaluate CDX-1140 monotherapy with a dose of 0.36 mg/kg, and a combination of CDX-1140 and CDX-301.

Enrollment is complete in the first stage of the 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. Celldex plans to present updated data from the study in a future medical meeting in 2019.

Other pipeline candidates like varlilumab and CDX-301 are being evaluated externally through investigator-sponsored studies and internally in combination studies. There are also several pre-clinical candidates in the company’s pipeline, including CDX-0159.

The company is evaluating varlilumab in a phase I/II study in combination with Bristol-Myers’ BMY Opdivo in five indications, namely colorectal cancer, ovarian cancer, head and neck squamous cell carcinoma, renal cell carcinoma and glioblastoma.

Celldex completed a one for fifteen reverse stock split, effective Feb 8, 2019. On Feb 11, 2019, Celldex common stock began trading on a split-adjusted basis on the NASDAQ Capital Market.

Celldex Therapeutics, Inc. Price, Consensus and EPS Surprise

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


Zacks Rank and Stock to Consider

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

A better-ranked stock is Celgene Corporation CELG, carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Celgene’s earnings per share estimates have increased from $9.29 to $10.01 for 2019 and from $11.58 to $12.12 for 2020 in the past 60 days.

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