Image Source: Celldex Therapeutics

The later the stage, the harder they fall.

Celldex Therapeutics (CLDX -3.12%) learned that lesson the hard way. The biotech announced on March 7 that the phase 3 clinical trial of Rintega in treating newly diagnosed EGFRvIII-positive glioblastoma would be discontinued. Celldex lost over half of its market cap overnight. What does Rintega's clinical trial flop mean for the company's future? 

Harsh reality for Rintega
It's fair to say that Celldex executives were absolutely stunned by the outcome of the ACT IV phase 3 study of Rintega. Previous phase 2 clinical results were encouraging. However, an interim analysis from the ACT IV study showed no statistical difference in overall survival between results from patients using Rintega and control arm patients using placebo. Based on this disappointing news, the independent data safety and monitoring board recommended that Celldex discontinue the trial.

Any thought that the phase 2 ReACT clinical trial for Rintega might provide another shot for the cancer vaccine were quickly dashed. Celldex stated in a conference call on March 7 that this study would not move forward.

The only hope for Rintega at this point appears to be discovery of something in the ACT IV data that provides a reason to pursue further study. One possibility is that anomalies are found with the control group. Unfortunately for Celldex, any such hope can best be described as a long shot.

Backup plans
Unlike many development-stage biotechs, Celldex does have other candidates in the pipeline. Glembatumumab vedotin (often referred to as glemba) is an experimental antibody-drug conjugate in two phase 2 clinical trials -- one targeting breast cancer and the other targeting melanoma.

Celldex also has great expectations for varlilumab (also known as varli), a monoclonal antibody currently in five early stage studies. Two of those studies involve larger drugmakers. Roche partnered with Celldex in 2015 to study a combination of varli with its own cancer immunotherapy atezolizumab in treating kidney cancer. Bristol-Myers Squibb is also working with Celldex on a study of varli in combination with Bristol's nivolumab in treating multiple solid tumors.

There's good news and bad news with these varli studies. The bad news is that there's a lot of time remaining -- both clinical trials wrap up in late 2017. The good news is that Bristol is helping fund the varli/nivolumab study, which will help Celldex stretch out its cash. Also, multiple data readouts are expected from some of these varli studies this year. 

Looking ahead
Not long ago, Celldex was looking at the prospect of potentially seeing revenue from Rintega as early as 2017. Now, the biotech is several years away from any product on the market. That's a drastic change in outlook.

Still, though, glemba could ultimately prove to be a blockbuster -- assuming all goes well with clinical trials. It remains to be seen what sales potential varli might have. Celldex has $289 million in cash and cash equivalents, which should be sufficient to take the company through at least 2017.

After the horrible Rintega news, Celldex now stands bruised and battered. But it still stands. The future isn't nearly as bright as it once was for the biotech, but there is a future nonetheless.