Clinical-stage biotech Celldex Therapeutics (NASDAQ:CLDX) is down about 70% year to date, after its first candidate to reach late-stage development failed in March. However, the company's pipeline is robust, and it just became a bit larger.
Tibor Keler, the company's co-founder and chief scientific officer, presented the latest pipeline info at a recent healthcare investor conference. Despite being a relatively young biotech that just lost its lead candidate, its pipeline is bustling with activity. Here's what management wants you to know.
1. Celldex has a deep bench
Since its inception just over 10 years ago, Celldex has amassed an impressive array of targeted oncology candidates. Rather than put all its eggs in one basket, it has new drug candidates in early- and late-stage clinical studies that Keler describes as the following:
[D]ifferentiated by including antibody-drug conjugate approaches, as well as pure immunotherapy molecules and immune-modulating molecules.
Its first drug to enter phase 3, Rintega, was a cancer vaccine that targeted brain cancer cells with a specific mutation associated with tumor spreading. Adding it to a standard of care with Avastin from Roche produced significantly improved outcomes in a small phase 2 trial. When Celldex announced its failure in phase 3 -- as Rintega performed consistently, but patients receiving a standard chemotherapy, temozolomide, performed unusually well -- the stock took a beating under the assumption the rest of its candidates were useless.
When Rintega failed, Celldex already had an entirely different candidate, Glemba, in a phase 2b trial designed to support an application.
Looking further ahead, Celldex is taking multiple shots on goal with immune-modulating candidate varlilumab in combination with the incredibly successful Opdivo from Bristol-Myers Squibb and recently approved Tecentriq from Roche.
Even further out are CDX-1401, CDX-301, and CDX-014, which are all aimed at their own specific targets, with the intention of destroying cancer cells in different ways. All of Celldex's candidates may be targeted cancer therapies, but aiming them at different targets makes "differentiated" seem like an understatement.
2. Celldex has plenty of cash
Drug development isn't cheap, and far too many clinical-stage biotech investors see their slice of potential profits dwindle as companies sell more of their own shares to fund development of their pipeline. This isn't an immediate issue for Celldex, as Keler went on to describe the company as the following:
[V]ery well positioned financially to develop this pipeline ourselves.
While the company is in a relatively solid position financially, this might be a bit of a stretch. Celldex exited March debt-free with about $254 million in cash and marketable securities. During the first quarter, $27.5 million spent on R&D pushed total losses to $34.7 million for the three-month period.
Glemba's registrational phase 2b trial was still taking on patients when the company last reported, and previous expectations to complete enrollment by the end of the year have been pushed back. Once all patients are enrolled, we can reasonably expect primary goal results within less than a year, but for the moment it's hard to put a timeline on Glemba data.
At the rate Celldex has been burning through cash, it probably has enough to keep the lights on until we know if Glemba's a winner. If it succeeds, and the stock soars, selling a few shares to keep operations rolling wouldn't lead to heavy dilutions. Conversely, if Glemba fails, Celldex stock would probably receive another beating and require heavy share dilution, or debt, to fund development of all the candidates in its growing pipeline.
3. Glemba looks like a positive for triple-negative
Unlike Rintega, Glemba is a double-sided drug with a protein that recognizes a cancer target, gpNMB, on one side, connected to a lethal chemo-bomb that it releases after binding to its target and entering the cell. This is what Keler was referring to when he mentioned "antibody-drug conjugates" as an example of the biotech's varied approach.
In the underserved population of breast cancer patients with tumors that don't express three common targets that existing therapies aim for, Glemba could become an important option. Referring to a small group of these "triple-negative" breast cancer patients within a larger trial, Keler said:
In patients with high gpNMB expression we see a significant increase in the median PFS.
What he's referring to is a previous study with 124 heavily pre-treated, advanced breast cancer patients. There were 16 patients in the trial with triple negative tumors that overexpress gpNMB. Among this group, patients receiving Glemba survived without disease progression for 3.5 months, as opposed to just 1.5 months for those receiving an investigator's choice of existing therapies.
There are an estimated 170,000 breast cancer patients with triple negative tumors, but the number that also express gpNMB at high levels is unclear. Glemba's pivotal trial is measuring progression free survival against a single chemo drug, Roche's Xeloda, in these patients. If it performs as well in the 300-patient trial as it did among the 16 patient subgroup, I would expect Celldex stock to soar.
4. Varlilumab works safely with others
Further out than Glemba is a protein that targets CD27, commonly found on the surface of tumor cells. It's supposed to promote an immune response when it binds its target, but with drugs like these, concern for overstimulation of the immune system are well justified. This doesn't seem to be an issue with varlilumab. Referring to phase 1 trial results, Keler said:
[I]t has an excellent safety profile with minimal toxicities, and no really immune-related toxicities.
While varlilumab accelerates an immune response on its own, that phase 1 trial paved the way for testing varlilumab in combination with several drugs that take the brakes off the immune system. Most notable is an ongoing trial with Bristol's Opdivo, a drug on pace to pass $3 billion in sales in its second full-year post approval.
It's under study in combination with Opdivo in several tumor types. Which indication might move forward, if any, is unclear at this point. The good news is that in combination with Opdivo, its safety profile held up. This paves the way for further studies in combination with Opdivo and others in this incredibly important class of cancer therapies. Look for more data from varlilumab next year.
5. More combination approaches to come
In addition to Glemba, Celldex recently began a phase 1 trial with a similar drug aimed at a different target often expressed on kidney cancer cells. Called CDX-014, the protein side seeks TIM-1, and once inside releases a chemo-bomb. These double-sided drugs are called antibody drug conjugates (ADCs), and according to Keler:
I think combination therapy for ADCs is certainly something that you'll be seeing from us.
While chemotherapy drugs have long been associated with immune-system suppression, ADCs such as Glemba and CDX-014 may actually complement other immune system modulating therapies. It's early still, but some evidence suggests ADCs actually stimulate an immune response.
There are several ways Celldex could act on this. It might initiate studies with its own ADCs, in combination with drugs such as Opdivo. Perhaps it will employ a commercial-stage ADC, such as Adcetris from Seattle Genetics in combination with its immunotherapies.
Just what form future combination studies might take is unclear, but we can certainly expect more data for Celldex candidates in the quarters ahead.