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Down 11.7%: Is Celldex Therapeutics Now a Buy?

By George Budwell – Updated Nov 29, 2016 at 3:05AM

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Celldex's volatility continues with a double-digit move lower on Monday.

Image Source: Getty Images. 

What happened

Shares of Celldex Therapeutics (CLDX -6.12%) fell by 11.7% yesterday in the absence of any discernible news event. 

So what

Celldex's stock has been extremely volatile this month due to a slew of factors. First off, the biotech's stock got a welcome boost as a result of Hillary Clinton's unexpected loss earlier this month, implying that dramatic changes to U.S. drug pricing schemes are off the table for the time being.

Next up, Celldex announced the acquisition of Kolltan Pharmaceuticals for its pipeline of antibody-based drugs targeting receptor tyrosine kinases, further augmenting the company's portfolio of anti-cancer drug candidates.

And lastly, the company's lead experimental drugs, glembatumumab vedotin and varlilumab, are now primed to produce numerous data readouts over the coming year.

In light of all these moving parts, the market appears to be having some serious difficulties in terms of valuing this clinical-stage biotech. 

Now what

Celldex is a particularly intriguing name in the developmental-stage oncology space because of its diverse clinical pipeline that sports multiple high-value drug candidates and its rock bottom market cap of a mere $395 million.

The antibody-drug conjugate glembatumumab vedotin, for instance, is presently in a pivotal study for triple-negative breast cancer (TNBC) that's on track to produce top line results in late 2018. As TNBC currently lacks any specific forms of therapy, glembatumumab would essentially have this entire market to itself if it proves to be a superior treatment to plain old chemotherapy (capecitabine). 

Stated simply, Celldex's rather meager valuation is arguably justified by just this single indication for glembatumumab, meaning that the market is possibly ignoring the remainder of the biotech's rather diverse oncology pipeline at the moment. 

The bottom line is that market has taken an overtly pessimistic view toward Celldex following the high-profile failure of its experimental brain cancer vaccine, Rintega, earlier this year. But this disappointing clinical miss doesn't mean that the company's other product candidates are doomed to fail as well. 

All in all, Celldex does look like a compelling buy for risk-tolerant investors after yesterday's double-digit move lower based on the simple fact the biotech has multiple shots on goal at producing a novel cancer therapy in the years to come.  

George Budwell has no position in any stocks mentioned. The Motley Fool recommends Celldex Therapeutics. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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