Celldex Therapeutics (CLDX) Surges on an Upgrade

Shares of Celldex Therapeutics (CLDX) rallied sharply last week, after the company announced that it had dosed its first patient in a CDX-1135 pilot study of dense deposit disease. Celldex, which has a diversified drug pipeline of cancer, infectious disease and inflammatory disease treatments, spiked 14% on July 5 after the announcement, which complemented a "buy" rating from analysts at Guggenheim, who gave the stock a price target of $24.

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Celldex is up more than 200% over the past year. Investors are focusing on two major drugs, which have the potential to substantially increase its revenue. Celldex's first product is a vaccine candidate for front line Glioblastoma, which has reached Phase III trials. Glioblastoma is an often fatal brain tumor that affects 20,000 people annually. The estimated market for the drug, which has already obtained orphan drug status in the U.S. and the European Union, is approximately $1 billion - which could be a massive boost for a company that only has a market cap of $1.72 billion. A second product, CDX-011, is an antibody drug conjugate (ADC) used to treat GPNMB metastatic breast cancer. ADCs are commonly known as "armed antibodies," since they inject individual antibodies with chemotherapy toxin, which are subsequently trained to only deploy the toxin when they come in contact with a targeted cancer cell. This has become an attractive alternative to traditional chemotherapy, which targets all cells which divide rapidly, including hair follicles, gastrointestinal cells and bone marrow - which results in hair loss, digestive problems, and a compromised immune system. Several other major companies, such as ImmunoGen (IMGN), Immunomedics (IMMU) and Seattle Genetics (SGEN) are all developing ADCs as well. Although Celldex's CDX-011 ADC has completed Phase II trials with extremely favorable results (32% overall response rate vs 13% placebo response rate), it was actually produced from ADC technology licensed from Seattle Genetics. What's odd about this licensing agreement is that Seattle Genetics is also developing a breast cancer ADC, which hasn't started Phase I trials yet. However, Seattle Genetics is more focused on marketing its FDA-approved treatment for Hodgkin's Lymphoma and Large Cell Lymphoma, known as Adcetris. Another major competitor is Ariad Pharmaceuticals ARIA, which has a strong pipeline of cancer drugs which are most in Phase II trials. It also owns a single FDA approved drug, Iclusig, which can be used to treat two kinds of leukemia. Inclusig is also undergoing tests to treat leukemia, lung cancer and gastrointestinal tumors, which means that revenue from the product, which generated $6.4 million in revenue during its launch quarter, could spike if it is approved for other treatments. Celldex is a small but growing company in the exciting world of cancer treatments. Investors should keep a close eye on its Glibolastoma and ADC treatments, which could both become blockbuster drugs. Other News About CLDX Celldex On The Rise Why did Celldex surge last week? Sell Cy to Kinetics, But Buy Celldex, Costco, and This Stock Instead Jim Cramer is bullish on Celldex. Other Stocks in the News Netflix Reaches Expanded Licensing Deal with PBS Netflix gets more shows, but will it be enough to keep the revenue flowing? IconicBrandsThatJustVanished Did you notice that these brands disappeared? Copyright 2013 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.

Published on Jul 11, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

Copyrighted 2020. Content published with author's permission.

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