What happened

Shares of Celldex Therapeutics, Inc. (NASDAQ:CLDX), a clinical-stage biotech developing targeted cancer therapies, took a few steps back last month. Although the company's first-quarter earnings report was fairly benign, the stock dipped 13.7% in May, according to data from S&P Global Market Intelligence.

So what 

When Celldex Therapeutics reported first-quarter results last month, the company noted continued progress enrolling advanced breast cancer patients into a pivotal trial with its lead candidate, glembatumumab vedotin (glemba). Management didn't push back the expected enrollment completion timeline last month, but it's easy to understand why the market appears impatient: The company initiated the study more than three years ago.

Cut out paper arranged in the shape of a downward sloping stock chart.

Image source: Getty Images.

Now what

It turns out that finding 300 advanced breast cancer patients with tumors that lack three common therapy targets and overexpress glemba's target is even harder than it sounds. As announced much earlier, Celldex still expects to complete enrollment by this September. The trial will measure progression-free survival for patients treated with glemba versus standard chemotherapy.  

During the midstage study that informed the ongoing pivotal trial, the majority of patients treated with glemba survived more than twice as long as those treated with standard chemo. Repeating the results would make the candidate's subsequent New Drug Application a slam dunk. If Celldex can keep its enrollment timeline, we'll probably know if it truly has a winner on its hands less than one year from now.

If approved for the highly specific breast cancer indication, glemba could go on to generate about $400 million per year at its peak. That's well above the company's recent enterprise value of just $187 million, so further hints of success could send the stock soaring.

Glemba is also in a handful of other studies as a solo therapy and in combination with some of the industry's most successful new cancer drugs. Beyond glemba, Celldex is sponsoring clinical trials for four more cancer therapy candidates. Despite the flurry of activity, the company ended the first quarter with about $167 million in cash, which should see it through 2018.

Cory Renauer has no position in any stocks mentioned. The Motley Fool recommends Celldex Therapeutics. The Motley Fool has a disclosure policy.