Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Celldex Therapeutics (CLDX 1.73%), a clinical-stage biopharmaceutical company focused on developing novel immunotherapeutic solutions to fight cancer, rocketed higher by as much as 28% today following the announcement of a clinical trial collaboration with Bristol-Myers Squibb (BMY 3.86%).
So what: According to Celldex's early morning press release, the two companies will combine Bristol-Myers' investigational anti-PD-1 inhibitor nivolumab and Celldex's investigational compound varlilumab, a CD-27-targeting antibody, in a phase 1/2 study that could include multiple solid tumor types, including non-small cell lung cancer, metastatic melanoma, and ovarian, colorectal, and squamous cell head and neck cancers. The belief based on preclinical studies is that the combination of immunotherapies could enhance the body's immune system to recognize and fight back against these cancer types. Under the terms of the agreement, Bristol-Myers will make a one-time up-front payment of $5 million to Celldex. with the two companies sharing development costs. The phase 1/2 study is expected to begin by the fourth quarter.
Now what: This is great news if you're a shareholder in Celldex because it means the company has potentially landed a brand-name marketing partner in Bristol-Myers Squibb (if the combo proves successful). In addition, it gets to combine one of its most promising compounds with arguably one of the most prominent immuno-oncology clinical options available. I will be very eager to see the early results from the combination of these two therapies.
However, I would also suggest that investors not let this news go to their heads. Celldex is already valued at a whopping $1.4 billion and is entirely a clinical-stage company. While there's plenty of promise here with rindopepimut as a front-line glioblastoma multiforme therapy, the most aggressive form of brain cancer, I would caution that all of that optimism and then some has likely been baked into its shares already.
