What: Celldex Therapeutics (CLDX 8.11%), a clinical-stage oncology company, fell by more than 10% Monday on heavy volume. This double-digit drop in Celldex's share price appears to be related to the broad sell-off that's taking place across nearly all of biotech today, and that's hitting developmental-stage companies particularly hard.
So what: Biotech investors are apparently bracing themselves for the conservative guidance that's almost certainly coming down the pike from top dogs in the industry like Gilead Sciences (GILD 0.82%). After all, Gilead and many other leading names in the industry are providing corporate and scientific updates at the annual J.P. Morgan Healthcare Conference in San Francisco this week.
In years past, some of the most closely watched names in biotech have used this conference to unleash relatively weak annual outlooks, perhaps to temper expectations for the year. On the bright side, Gilead and its biotech brethren have generally clobbered their initial guidance, although it has tended to cause a temporary pullback in their respective share prices in the interim.
With this big picture in mind, seasoned biotech investors may want to consider taking advantage of this dip in Celldex's share price today. After all, it wasn't long ago that Celldex announced that its experimental brain cancer vaccine, Rintega, improved the overall survival of patients with EGFRvIII-positive recurrent glioblastoma, a particularly encouraging result in light of the aggressive nature of this disease.
And in the next month or so, the company is expected to update investors on a second interim analysis for Rintega's late-stage study as a treatment for newly diagnosed EGFRvIII-positive glioblastoma, giving the stock a major near-term catalyst.
Now what: While nothing is certain in the risky world of clinical-stage biopharma, I'm cautiously optimistic that Celldex has a winner on its hands with Rintega based on the vaccine's performance in the clinic to date. That's why I may add this stock to my personal portfolio once this biotech-specific volatility subsides.