It has been a quiet but volatile year for Celldex Therapeutics, Inc. (CLDX), with the stock up 8% over the last 12 months.
However, the past five sessions have brought a 20.6% move upward for CLDX stock, including a 13% hike today, and that’s because things are about to get very interesting for a company that has otherwise been short on recent catalysts.
What’s Going On?
Back in July, CLDX stock was trading north of $25, then collapsed to a low of nearly $10 just two months later. This reaction followed a third-quarter report where investors were basically told to be patient.
Celldex is right in the middle of a 745-patient Phase 3 trial for Rintega called ACT IV. Rintega treats a very aggressive form of brain cancer called glioblastoma multiforme, and was already proved to be successful in a Phase 2 study called reACT for treating recurrent forms of glioblastoma multiforme in combination with the drug Avastin.
This study, along with other trials for Rintega, is why the FDA gave the drug a Breakthrough Therapy Designation; Rintega has already proven itself to extend life and shrink tumors for patients with this horrible disease.
Celldex could seek FDA approval for Rintega in treating that recurrent patient population with Avastin, but that’s a small percentage of patients.
Instead, CLDX is waiting on data from ACT IV, which will determine if Rintega can be used as a standalone drug for newly diagnosed patients, a much larger population. CLDX unveiled this plan in its Q3 report, and also told investors that data from ACT IV won’t be presented until late 2015 or early 2016.
Investors had expected ACT IV data in mid-2015. So this, coupled with Celldex’s decision to wait for data before filing its New Drug Application, has crippled its stock.
With that said, it’s now November and CLDX is set to reach the number of required events for interim analysis before year’s end. This means that data is near, and if positive, as most suspect it will be, then Celldex could stop the trial early and submit Rintega for FDA approval in the treatment of recurrent and newly diagnosed GBM patients.
Time to Buy CLDX Stock?
In today’s biotechnology market, it is rare to find a company that’s near FDA approval with a Breakthrough drug that has a market capitalization below $1.5 billion. Fact is that CLDX has been overlooked as anti-PD1s and CAR-T technology dominate the headlines in oncology. However, Rintega is a best-in-class drug in treating GBM, thereby making CLDX stock a rare opportunity, with the majority of its big stock gains still to come.
In anticipation of this data, don’t be shocked if CLDX stock heads back to $25-plus, where it was back when shareholders first expected ACT IV data.
Beyond that, CLDX is also much closer to data from CDX-011 and Varlilumab than it was back in July.
CDX-011 is in a Phase 3 trial where it treats patients with an advanced stage of breast cancer that no longer respond to other treatments. In a Phase 2 trial, CDX-011 extended life and reduced the size of tumors by a statistically significant measure, which contributed to much of CLDX’s stock gains back in 2013.
Meanwhile, Varlilumab is still in the early stages of development, but is being tested in a Phase 1/2 study with blockbusters Yervoy and Opdivo.
Looking ahead, investors expect interim analysis from both studies, and when combined with the near-term catalyst of Rintega data and an FDA approval, there’s a good chance that the next year will be very good for CLDX stock owners.
As of this writing, Brian Nichols owned shares of CLDX.