Celldex Therapeutics: Can an Orphan Program Create Larger Gains?

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Celldex Therapeutics (NASDAQ:CLDX) has been one of the best performing biotechnology stocks of the last two years. Since January 2012, gains have reached 700 percent as Celldex has established itself as a clinical leader in the development of cancer therapeutics. However, what’s really exciting is that Celldex might be preparing to make a move in treating orphan disease and, if successful, this could catapult Celldex to a whole new level.

24 Months to Remember

If we reflect on the last two years and the cause for Celldex’s 700 percent gain, it has been developments surrounding the company’s brain cancer drug — Rindopepimut — and its breast cancer drug — CDX-011 — that has led to such large returns. Rindopepimut is in Phase 3 testing to treat glioblastoma multiforme, which is a very aggressive form of brain cancer where the life expectancy is about one year post-diagnosis. Last August, Celldex increased the size of its Phase 3 trial from 95 to 170 total patients due to early signs of anti-tumor activity. Then, in November the company presented an interim look at its trial, showing a 4.1 month improvement in overall survival compared to the control group.

Still, much data is needed to label Rindopepimut a guaranteed clinical success; but because of data with CDX-011, investors have given Celldex the benefit of the doubt. CDX-011 was tested on patients exhibiting a protein called GPNMB, those who were no longer responding to other treatments (at least three failed). In this very difficult patient population, CDX-011 produced a 33 percent response rate compared to 0 percent in the control group. Moreover, overall survival increased by seven months, essentially solidifying its place as an effective drug.

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