Celldex (CLDX) Q3 Earnings Beat Estimates, Revenues Miss

Celldex Therapeutics, Inc. (NASDAQ:CLDX) incurred adjusted third-quarter 2018 loss (excluding gain on fair value re-measurement of contingent consideration) of 8 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents and the year-ago loss of 14 cents. However, including the fair value re-measurement item, the reported loss was 4 cents.

Total revenues in the quarter declined 76.9% year over year to $0.9 million. It also missed the Zacks Consensus Estimate of $2 million. The year-over-year decline was due to decrease in contract revenues from the International AIDS Vaccine Initiative.

Shares of the company rallied 12.8% on Nov 8, presumably on promising pipeline progress. However, the stock’s performance has been disappointing so far this year. It has declined 86.6% compared with the industry’s 14% decrease.

Quarterly Details

Research and development expenses were down 45.7% year over year to $11.9 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 $3.7 million, down 30.2% year over year mainly attributable to lower personnel and marketing expense.

As of Sep 30, 2018, Celldex had cash, cash equivalents and marketable securities of $105.6 million compared with $114 million as of Jun 30, 2018. The biotech company’s weakened cash position was due to higher operating expense including costs related to discontinuation of glembatumumab vedotin development, partially offset by net proceeds raised from sales of its common stock under a contract with Cantor.

2018 Outlook

Celldex expects that its cash position as of the end of September 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

Following the discontinuation of development of its earlier lead candidate glembatumumab vedotin in April, 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 currently enrollment remains on track in a phase I study evaluating CDX-1140 in solid tumors and a phase II study evaluating CDX-3379 in combination with Eli Lilly’s (NYSE:LLY) Erbitux for the treatment of advanced head and neck squamous cell cancer. Interim data from CDX-1140 study, which showed desired safety profile, has been accepted for presentation at the Society for Immunotherapy of Cancer Annual Meeting later this month.

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

Other pipeline candidate like varlilumab and CDX-301 will be evaluated externally through investigator-sponsored studies and internally in combination studies. There are also several preclinical candidates in its pipeline, including CDX-0159.

The company is evaluating varlilumab in a phase I/II study in combination with Bristol-Myers’ (NYSE:BMY) Opdivo in five indications namely colorectal cancer, ovarian cancer, head and neck squamous cell carcinoma, renal cell carcinoma and glioblastoma. Data from the glioblastoma arm has been accepted for presentation this month at the Society for Neuro-oncology Annual Meeting.

The acceptance of data for presentation at the scientific body suggests encouraging study activity and has raised investors’ enthusiasm about the progress of the company’s pipeline.

Zacks Rank & Stock to Consider

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

Vertex Pharmaceuticals (NASDAQ: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 $3.75 to $3.83 for 2018 in the past 30 days. The company delivered a positive surprise in all the trailing four quarters with the average beat being 18.94%. Share price of the company has increased 20.3% in a year’s time.

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