Please ensure Javascript is enabled for purposes of website accessibility

Why Celldex Therapeutics Inc. Shares Jumped on Wednesday

By Keith Speights - Aug 23, 2018 at 3:03PM

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

A big gain on no news for this clinical-stage biotech.

What happened

Shares of Celldex Therapeutics Inc. (CLDX -7.48%) closed 13.6% higher on Wednesday. There wasn't any obvious news related to the biotech that served as a catalyst for the stock. Why did Celldex enjoy such a nice bump? Volatility -- both positive and negative -- is commonplace for clinical-stage biotech stocks. A swing of just a few cents makes a big percentage difference for micro-cap stocks like Celldex. 

So what

It's tempting to begin speculating on why investor interest in Celldex spiked on Wednesday. Did positive news leak out about progress on a clinical trial? Is a big company interesting in partnering with Celldex? There are all kinds of potential explanations we could make up about the biotech stock's big move. But the key thing is that we would have to make them up. 

Man with outstretched arms in front of giant stock data screen

Image source: Getty Images.

The only hard news available about Celldex is what the company itself reported earlier this month in its second-quarter update. Enrollment continues for the phase 2 clinical study evaluating CDX-3379 in combination with Erbitux in treating advanced head and neck squamous-cell carcinoma. Celldex is also enrolling patients for a phase 1 study of CDX-1140 in treating multiple types of solid tumors. 

Beyond those announcements, the main story for Celldex is that the company's cost-cutting is helping preserve cash. The biotech slashed its staff and restructured after reporting disappointing results in April for glembatumumab vedotin (glemba) in a pivotal study targeting the treatment of triple-negative breast cancer.

Now what

There are two things that investors should do going forward. First, wait for Celldex to provide more clinical updates. The company should make progress in enrolling for its clinical studies. Celldex also plans to present data from the glioblastoma cohort of the phase 1/2 clinical study of varlilumab and Opdivo at a medical meeting later in 2018. 

Second, investors should monitor Celldex's cash position. The company had cash, cash equivalents, and marketable securities totaling $114 million at the end of June. That's probably enough to fund operations through the rest of 2018 and 2019. Celldex thinks this amount plus proceeds from future stock offerings through its existing agreement with Cantor Fitzgerald should carry it through 2020.

Celldex stock is likely to remain highly volatile. Unless there are clear reasons behind big up-and-down swings in the biotech's share price, the best thing to do is to simply ignore the noise.  

Keith Speights has no position in any of the 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.
CLDX
$34.53 (-7.48%) $-2.79

*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
390%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

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.