Analyst Conference Summary

conference date: August 8, 2018 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2018 (Q2, first quarter 2018)

Forward-looking statements

Overview: Continuing to advance what is left of the pipeline.

Basic data (GAAP):

Revenue was $2.8 million, down sequentially from $4.1 million and up from $3.8 million year-earlier. All revenue was from license agreements, contracts or grants.

Net income was negative $16.4 million, up sequentially from negative $118.1 million and up from negative $28.6 million year-earlier.

EPS was negative $0.11, up sequentially from negative $0.84, and up from negative $0.23 year-earlier.

Guidance:

none

Conference Highlights:

CEO Anthony Marucci, Celldex Therapeutics CEO, stated: "During the second quarter, we continued to focus on advancing CDX-1140, our promising antibody targeted to CD40, a key activator of immune response, and CDX-3379, which blocks the ErbB3 receptor, an important regulator of cancer cell growth and survival. We have completed the third monotherapy dose level in the ongoing Phase 1 study of CDX-1140 and are encouraged with the tolerability, immune system activation and early signs of biological activity we have seen to date. We will also be exploring the potential of combining CDX-1140 with our dendritic cell mobilizer, CDX-301, and plan to begin enrolling those cohorts in September. In the next few months, we expect to complete enrollment in the first stage of our Phase 2 combination study of CDX-3379 and Erbitux in advanced head and neck squamous cell carcinoma. Additionally, we have IND enabling studies underway with CDX-0159, our anti-KIT antibody, with the aim of adding it as a new clinical program in 2019"

Has sufficient cash to take pipeline to important inflectino points, after restructuring.

Celldex is working with Bristol-Myers to do a broad Phase 1/2 combination study of varlilumab with nivolumab (Opdivo) for a variety of cancers. Phase 2 cohorts is enrolling for 5 types of cancer. Targets CD27. Data presented at ASCO in June showed improved biomarker levels, response rates, and progression free survival in the ovarian cancer cohort. HNSCC (head and neck squamous cell carcinoma) and renal cell carcinoma cohort showed some responses or stable disease. Glioblastoma cohort data will be available in late 2018.

CDX-3379 (formerly KTN3379) continued an open-label Phase 2 study for head and neck squamous cell cancer, in combination with Erbitux. Blocks ErbB3 (HER3). After the first stage of the Phase 2 study completes enrollment, data will be analyzed before proceeding further. Clinical data from phase 1b was presented at AACR in April, showing safety and reduction of ErbB3 levels. Of 12 patients 11 showed stable disease and one showed tumor shrinkage.

CDX-301 is in several early investigator-sponsored studies, one for HSCT (hematopoeitic stem cell transplantation), one for B-cell lymphomas, and NSCLC. May do future studies combining with 1140. Data presented at AACR in April for NSCLC showed progression-free survival at 4 months achieved by 56% (or 5 of 9) of patients. Also 56% achieved PRs (partial responses).

CDX-1140 continued Phase 1 trial enrollment, testing against a variety of CD-40 expressing cancers. The three lowest dose cohorts have completed enrollment. An expansion phase is also planned, and may start combination cohorts later this year. Preclinical data was presented at AACR in April. Role is to activate dendritic cells. Less toxic than other CD40 therapies.

A CDX-301 plus CDX-1140 cohort will begin enrollment next month.

Preclinical drugs are being readied to enter clinical trials.

Cash ended at $114.0 million, down sequentially from $123.2 million.

Operating expenses of $19.6 million consisted of: $21.4 million for R&D; $5.6 million for general and administrative; $0 million goodwill impairment; $0 million intangible asset impairment; and $0 million amortization, plus a gain of $7.4 million on remeasuring a contingent consideration. Operating loss was $16.9 million. There was $0.5 million other revenue. The income tax benefit was $0 million.

Q&A:

1140 details, toxicity? CD40 agonist antibodies have taken various approaches. Our antibody is able to bind and activate the receptor without interacting with other molecules. Our molecule engages with dendritic cells within the tumor environment. We also wanted a less frequent dosing schedule.

Varlilumab measure for going forward? We have seen biologic and clinical effects. We have not set a specific bar to go forward. We don't see a head and neck or renal clear path forward yet, but we have some good data.

Value of the franchise, currently discounted to cash? The whole immuno-oncology space has taken a bit of a hit. We think 1140 is an important asset, differentiated from other CD40 therapies. Our goal is to put the right combination of drugs together so that the immune system can handle the cancer.

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