Celldex Therapeutics, Inc. CLDX is scheduled to report second-quarter 2015 results on Aug 10 after the market closes. Celldex has a decent track record with the company beating estimates in two of the last four quarters with an average positive earnings surprise of 2.08%.
In the last reported quarter, Celldex posted a positive earnings surprise of 8.33%. Let’s see how things are shaping up for the second quarter of 2015.
Rintega in Focus
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.
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. Varilumab 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.
During the quarter, Celldex reported encouraging data from the phase II ReACT study on Rintega, which showed that Rintega plus Roche’s RHHBY Avastin prolonged life in patients with GBM significantly over patients who were just on Avastin (11.6 vs. 9.3 months). Meanwhile, a phase III study (ACT IV) on Rintega in patients with newly diagnosed glioblastoma, which is currently underway, was recommended to continue following the first pre-specified review by an independent Data Safety and Monitoring Board. The second interim analysis is expected in late 2015/early 2016.
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.
Being a development-stage company, Celldex does not generate product revenues yet. Instead Celldex has to depend entirely on product development and licensing agreements, contracts and grants for revenues. Celldex has partnership agreements with quite a few companies for varilumab including Bristol-Myers among others. We believe Celldex will generate collaboration revenues in the second quarter of 2015 as well.
While research & development expenses are expected to remain consistent over the next 12 months, general & administrative expenses are projected to increase on Celldex’s commercialization plans for the launch of Rintega in the U.S. and EU, 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 34 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.
Stock to Consider
Here is a health care stock that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter.
The Earnings ESP for Aegerion Pharmaceuticals, Inc. AEGR is +85.19% and it carries a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 5.
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