Why Is Celldex (CLDX) Down 2.3% Since Last Earnings Report?

It has been about a month since the last earnings report for Celldex Therapeutics (CLDX). Shares have lost about 2.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Celldex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Celldex Q2 Loss Narrower Than Expected, Revenues Miss

Celldex 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 the 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 and contract agreement with the International AIDS Vaccine Initiative.

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.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 30.58% due to these changes.

VGM Scores

At this time, Celldex has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Celldex has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.