What happened

Shares of Celldex Therapeutics, Inc. (NASDAQ:CLDX), a clinical-stage biotech, rose 16.3% in September, according to data from S&P Global Market Intelligence. It looks like investors anticipating news from the company's ongoing pivotal trial lifted the stock ahead of an investment bank presentation.

So what 

This August, Celldex enrolled the last of 327 women with triple-negative breast cancer and tumors that overexpress gpNMB, a cell surface protein the company's lead candidate targets. Glembatumumab vedotin, or glemba, shakes hands with gpNMB on its way into tumor cells where it delivers a lethal dose of chemo.

Hand drawing an upward line graph.

Image source: Getty Images.

Glemba's approach appears to work as well as it sounds, at least for a limited population of advanced-stage breast cancer patients with tumors that overexpress gpNMB, but lack three common targets existing treatments aim for. In an earlier study, progression-free survival among a small subset of patients who fit this description was 3.5 months versus just 1.5 months for those receiving standard chemo.

Now what

The ongoing pivotal study pits glemba against standard chemo, with progression-free survival as the primary endpoint. Repeating, or even approaching the results seen in the early study would almost certainly lead to an approval. The triple-negative population is small but lacks effective treatment options.

If approved, glemba could generate around $400 million per year in sales for Celldex at its peak. At recent prices, Celldex sports a market cap of just $404 million. Biotech stocks generally trade at mid-single-digit multiples of their total sales, making this a top healthcare stock to buy right now.

Investigators will unblind the data after 203 progression events, which Celldex expects to occur in the second quarter of 2018. If the study is successful, the company could have a submission ready for the FDA six to eight months later.

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