Analyst Conference Summary

Celldex Therapeutics
CLDX

conference date: March 14, 2017 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2017 (Q4, fourth quarter 2016)


Forward-looking statements

Overview: A clinical stage biotechnology company reports progress on its many pipeline projects.

Basic data (GAAP):

Revenue was $1.9 million, up sequentially from $1.4 million and up from $1.8 million year-earlier. All revenue was from license agreements, contracts or grants.

Net loss was $32.3 million, sequentially from $32.0 million and up from a net loss of $35.2 million year-earlier.

EPS was negative $0.30, up sequentially from negative $0.32, and up from negative $0.33 year-earlier.

Guidance:

none

Conference Highlights:

CEO Anthony Marucci stated "As we look to 2017, we have prioritized completing the glemba studies in breast cancer and checkpoint-refractory metastatic melanoma, the Phase 2 collaborative study of varlilumab with BMS's Opdivo and our Phase 1 studies of both CDX-0158 and CDX-014. Data from a number of these programs are expected to be available over the next 6 to 12 months."

In the quarter Celldex completed the acquisition of Koltan Pharmaceuticals, which specialized in antibodies targeting receptor tyrosine kinases. Also prioritized pipeline.

Celldex is working with Bristol-Myers to do a broad Phase 1/ 2 combination study of varlilumab (CDX-1127) with nivolumab (Opdivo) in collaboration with BMS for a variety of cancers. Phase 1 data should be present mid-year 2017. Phase 2 cohorts should complete enrollment in Q1 2018.

CDZ-1127 is in a combined with Tecentriq or Sutent study is discontinued to focus on the study combined with Opdivo, which includes a renal cell carcinoma cohort. This was mainly a cost-cutting measure.

Glembatumumab vedotin (CDX-011) Phase 2 studies [METRIC] continued to enroll patients for metastatic triple negative breast cancer overexpressing gpNMB, with enrollment completion hoped for in September, 2017.

"Glemba" or CDX-011 for metastatic melanoma (post checkpoint therapy) Phase 2 study added a third arm combined with Opdivo or Keytruda for patients who failed prior checkpoint therapy. The data from the single-agent arm was reported in October and was positive. A third arm combines glemba with Varlilumab, which should generate data in the fall of 2017.

A Phase 1/2 study of CDX-014 (glembatumumab vedotin), an ADC targeting TIM-1, for renal cell carcinoma should complete Phase 1 enrollment by the end of 2017.

CDX-0158 (formerly KTN0158) for KIT positive tumors Phase 1 study continued, with data expected by year-end.

CDX-3379 (formerly KTN3379) is planned to move to a Phase 2 study.

A CDX-011 Phase 1 study in squamous cell lung cancer continued. CDX-011 is also in NCI sponsored studies for uveal melanoma and pediatric osteosarcoma.

CDX-301 is in several early studies, one for HSCT (hematopoeitic stem cell transplantation) and one for B-cell lymphomas.

CDX-014 started a Phase 1 study in renal cell carcinoma should complete enrollment by the end of 2017.

Preclinical focus is on CDX-1140, the TAM (Tyro3, AXL, MerTK targets) program, and bispecific antibodies.

Cash ended at $190 million, down $13 million sequentially from $203 million. $3.3 million was raised from common stock sale under the Cantor agreement. Cash should fund operations through 2018, assuming Koltan milestones are paid in stock.

Operating expenses of $37 million consisted of: $25 million for R&D; $12 million for general and administrative; and $0.2 million amortization. There was $2.5 million other revenue.

To support filings, Celldex will need to both build an approved manufacturing facility and a diagnostic test. May seek a partner for glembatumumab.

The current CFO will depart this summer, to be replaced by a subordinate.

Q&A:

Glemba melanoma data and presence of rashes indicating activity? That does seem to hold up under examination. We are not sure it can be used to concentrate patients.

NFM1 program? We are talking to investigators, but have no plans to proceed until at least 2018.

Milestone payments due to Koltan? Nothing in 2017. Milestone in 2018 would be in $10 million range.

Melanoma study response types? All reported responses were partial, but they had significant volume shrinkages. More data later this year.

Glemba partnering color? Would prefer to do it for all indications, on a geographic basis. We want skin in the game, not just royalties.

How far did you get on the Glemba manufacturing process? We are not holding off, we are just deferring the more expensive parts for a while.

Any response in uveal melanoma would be impressive, because nothing has shown activity so far.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, not financial advice.

Copyright 2017 William P. Meyers