Please ensure Javascript is enabled for purposes of website accessibility

Down 14.8%: Is Celldex Therapeutics Stock an Incredible Bargain?

By George Budwell - Jul 14, 2017 at 7:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Celldex's clinical updates at ASCO failed to impress investors.

What happened

Despite a widespread rally across the biotech landscape last month, the struggling clinical-stage cancer company Celldex Therapeutics (CLDX -6.89%) still managed to shed 14.8% of its value in June, according to S&P Global Market Intelligence. The primary culprits behind this sizable move lower appear to be the company's two clinical updates at the American Society of Clinical Oncology meeting early in the month. 

A man slumped over a desk in front of a chart with a falling stock price.

Image source: Getty Images.

So what

Long story short, investors were apparently hoping for an overwhelmingly positive update for either Celldex's antibody-drug conjugate glembatumumab vedotin, or glemba, in advanced melanoma, or for the company's T-cell booster, varlilumab as part of a combo therapy with Bristol-Myers Squibb's (BMY -0.55%) Opdivo for advanced-stage colorectal and ovarian cancer.

Unfortunately, varlilumab's results were wholly unimpressive, casting serious doubt on the future of this potential combo moving forward. And while glemba's early-stage results in advanced melanoma were more upbeat with 16% of patients exhibiting reductions in the size of their tumors, this encouraging result may not be enough to break into a drug market that's arguably near its saturation point at this stage.  

Now what

Celldex is roughly seven months away from unveiling glemba's potentially pivotal-stage data in triple negative breast cancer (TNBC). And with varlilumab failing to shine so far when used in conjunction with Opdivo, the company sorely needs glemba's TNBC to be a hit.

The market, unfortunately, doesn't seem to be all that optimistic about this possibility, based on how Celldex's shares have been trading so far this year. In fact, the biotech's stock is currently near its 52-week lows -- even though most biotechs have been surging higher over the past few weeks.  

This trend raises the question: Is Celldex a contrarian buy? Although anything is possible with glemba's forthcoming data readout, the history of this particular class of anti-cancer therapies doesn't exactly inspire confidence, and TNBC has proven to be an extremely tough nut to crack from a pharmaceutical standpoint. In other words, Celldex appears to be fairly valued in light of its sky-high risk profile. 

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Celldex Therapeutics, Inc. Stock Quote
Celldex Therapeutics, Inc.
$34.20 (-6.89%) $-2.53
Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
$74.15 (-0.55%) $0.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.