Please ensure Javascript is enabled for purposes of website accessibility

Is Celldex a Bargain After Losing a Third of Its Value Last Month?

By Todd Campbell - Sep 15, 2015 at 8:22AM

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 promising brain cancer drug could make Celldex Therapeutics an intriguing clinical-stage biotech to buy.

Source: Celldex Therapeutics.

What: After reporting in its second-quarter earnings release a timeline for its brain cancer drug Rintega that could be longer than investors were hoping for, shares in Celldex Therapeutics (CLDX 1.32%) lost 37% of their value in August.

The significant slump in the company's shares may be presenting an opportunity for risk-tolerant investors to step in and buy.

So what: Celldex is a clinical stage biotech company that is developing cancer therapies. Because Celldex doesn't have any products on the market (yet), investors have been watching its pipeline closely.

Specifically, investors are tracking progress for Rintega, a drug for the tough-to-treat brain cancer known as glioblastoma. In May, Celldex offered up encouraging Rintega's mid stage phase 2 trial results showing that combining it with Avastin helped delay tumor growth, while also extending survival rates, and that led to optimism that Rintega could qualify for an accelerated timeline for approval.

However, those hopes appear dashed by Celldex's August revelation that discussions with regulators leave it believing that it will need to submit complete results from its phase 3 trial to win a regulatory green light.

Now what: There's a significant unmet need for new brain cancer therapies, but up to 40% of phase 3 trials fail and that could be why the FDA is approaching Rintega cautiously.

Regardless, the next Rintega interim analysis is expected either later this year or early in 2016, depending on the timing of evaluable events. Assuming that analysis results in a continuation of the trial, the phase 3 trial is slated to wrap up in November 2016.

If Rintega's late-stage trial does confirm positive results from earlier trials, then it could become part of a standard of care for the 10,000 to 12,000 new patients diagnosed with this aggressive cancer every year, but Rintega isn't the only cancer therapy that could move the needle for Celldex in the future.

The company is also conducting mid stage trials evaluating glembatumumab vedotin, or glemba, as part of a combination therapy in patients with an amenable genetic make-up and early stage trials of a CD-27 activating drug, varlilumab, that may have promise across a variety of cancers. A phase 2 study of glemba in triple negative breast cancer should complete enrollment next year and another study in metastatic melanoma is also under way. Meanwhile, varlilumab is being studied in phase 1/2 trials as an adjunct treatment for non-small lung cancer, metastatic melanoma, colorectal cancer, and kidney cancer.

Overall, Celldex has a slate of intriguing drugs that could succeed, but there are no guarantees, and that makes it risky. Having said that, Rintega's mid-stage results and the potential for a filing in brain cancer in 2017 suggest that this is a company risk-tolerant investors ought to consider buying in portfolios. 

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.
$26.95 (1.32%) $0.35

*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 service.

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 05/27/2022.

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.