Please ensure Javascript is enabled for purposes of website accessibility

Why Celldex Therapeutics, Inc. Popped Today

By Brian Orelli, PhD - May 9, 2016 at 3:21PM

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

It's a biotech thing.

Image source: Celldex Therapeutics.

What: Celldex Therapeutics (CLDX 12.28%) jumped 12% today on no apparent news other than it's a biotech. The sector had a good day, with the SPDR S&P Biotech ETF (XBI 1.09%) ending the day up 3.8%.

So what: Since Rintega failed its phase 3 trial in March, Celldex's share price movement has generally been in sync with the index but more extreme in both directions. That's pretty typical for many biotechs; the further out the next binary event is, the more likely a company's short-term movements will be based on sentiment rather than fundamentals.

CLDX Chart

CLDX data by YCharts.

Now what: Investors will have to wait for data from ongoing phase 2 trials to see a value inflection. Celldex recently completed enrolment in a phase 2 trial testing glembatumumab vedotin in metastatic melanoma and is still enrolling a phase 2b trial in patients with metastatic triple-negative breast cancers. It also recently started a phase 2 trial combining another cancer drug, varlilumab, with Bristol-Myers Squibb's (NYSE: BMY) Opdivo.

Celldex ended the first quarter with $254 million in the bank, which management thinks should be enough to complete the current trials and begin new ones. If the current trials are successful, the valuation will hopefully be higher, resulting in less dilution from a secondary offering, or a better partnership deal if the company ends up licensing one or both of the drugs to a larger drug company.

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
$29.35 (12.28%) $3.21
SPDR Series Trust - SPDR S&P Biotech ETF Stock Quote
SPDR Series Trust - SPDR S&P Biotech ETF
XBI
$77.06 (1.09%) $0.83

*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
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

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.