Celldex Therapeutics, Inc. CLDX is expected to report third-quarter 2015 results on Nov 3. Celldex has a pretty good track record with the company beating estimates in three of the last four quarters with an average positive earnings surprise of 3.62%.
In the last reported quarter, Celldex had posted a positive earnings surprise of 2.94%. Let’s see how things are shaping up for the third quarter of 2015.
Rintega in Focus in Q3
Celldex, a development-stage biopharmaceutical company, is focused on the development and commercialization of immunotherapies targeting cancer and other difficult-to-treat diseases.
Rintega (also known as rindopepimut and CDX-110) is the most advanced candidate in the company’s pipeline. The candidate is currently in a pivotal phase III study (ACT IV) for the treatment of front-line EGFRvIII positive glioblastoma multiforme (GBM) and a phase II study (ReACT) for the treatment of recurrent GBM.
While the second interim analysis of the ACT IV study is expected in late 2015/early 2016, the final analysis should be out by 2016 end in newly diagnosed GBM patients. Positive data from the ACT IV study would allow the company to file for approval both in the U.S. and EU for the front-line as well as recurrent setting. Meanwhile, the company intends to present matured overall and long-term survival data from the ReACT study by year end.
Apart from Rintega, Celldex has several early- and mid-stage candidates in its pipeline including glembatumumab vedotin (phase II studies for triple negative breast cancer and metastatic melanoma) and varlilumab (phase I/II, several combination studies across multiple types of cancer) among others. Varlilumab is being evaluated in combination with Bristol-Myers Squibb Company’s BMY Yervoy as well as Opdivo and in several phase I/II combination studies across multiple types of cancer.
With no approved product in its portfolio at the moment and Rintega being the company’s lead pipeline candidate, investor focus will remain on its progress and other pipeline related updates.
With no approved products in its portfolio, Celldex depends entirely on product development and licensing agreements, contracts and grants for revenues. Celldex has partnership agreements with quite a few companies for varlilumab including Bristol-Myers. We believe Celldex will record collaboration revenues in the third quarter of 2015 as well.
Although there may be fluctuations on a quarterly basis, research & development expenses are expected to remain consistent while general & administrative expenses are projected to increase on Celldex’s commercialization plans for the launch of Rintega and glembatumumab vedotin, upon approval.
Earnings Whispers?
Our proven model does not conclusively show that Celldex is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat earnings. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00% since the Most Accurate estimate is in line with the Zacks Consensus Estimate of a loss of 35 cents per share.
Zacks Rank: Celldex carries a Zacks Rank #3. Celldex’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for Sarepta Therapeutics, Inc. SRPT is +10.08% and it carries a Zacks Rank #3. The company is scheduled to release third-quarter 2015 results on Nov 5.
Merrimack Pharmaceuticals, Inc. MACK has an Earnings ESP of +2.44% and carries a Zacks Rank #3. The company is scheduled to report third-quarter 2015 results on Nov 9.
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