The minimum bar for novel oncology agents today is the ability to beat chemotherapy. As Celldex learned today, failure to do that will be punished by investors.
The New Jersey-based company’s valuation fell below cash levels on news that its antibody-drug conjugate glembatumumab vedotin was no more effective than Xeloda in the difficult triple-negative breast cancer setting, prompting discontinuation of research in all indications. While sellside analysts have put some hope in Celldex’s second asset, varlilumab, investors are for the moment disregarding any of the company’s pipeline projects (see table below).
Celldex executives said glemba had an effect on its target, glycoprotein NMB (gpNMB), but it failed to show the necessary durability to move the needle on the primary endpoint, progression-free survival. Patients taking the antibody-drug conjugate had a median PFS of 2.9 months versus 2.8 months in the Xeloda arm, and the hazard ratio of 0.95 missed statistical significance at a p value of 0.76.
The failure was perhaps presaged by a harsh review at last year’s Asco meeting, where in melanoma at least glemba was criticised for failing to show complete responses and having a high level of off-target toxicities, even though the rationale behind the use of antibody-drug conjugates is to deliver chemotherapy agents directly to tumour tissue. A share fall of 25% was recorded during the active Asco trading period (Asco event analyser – Puma investors’ Aphinity for Roche data, June 8, 2017).
Today, shares fell 59% to 88 cents in mid-morning trading, valuing Celldex at $124m, below its cash balance of $139m at the end of 2017. Chief executive Anthony Marucci said the company would now review its pipeline and look to cut costs to extend the cash runway past 2019, although the discontinuation of commercial and manufacturing activities around glemba will help.
|What's left for Celldex?|
|Project||Mechanism of action||Status|
|Phase II||Varlilumab||TNF receptor superfamily member 7 antibody||Combination studies with Opdivo in colorectal, ovarian, head and neck, kidney and brain cancers|
|CDX-301||FMS-like tyrosine kinase 3 regulator||Investigator-led trial combining with radiotherapy in lung cancer|
|CDX-3379||EGFR ErbB-3 antibody||Combination with Erbitux in head and neck cancer|
|Phase I||CDX-014||T-cell immunoglobulin & mucin domain 1 antibody||Added ovarian cancer to phase I trial focusing on kidney cancer|
EvaluatePharma’s consensus of sellside analysts forecast 2022 sales of $331m for glemba. The attention now obviously turns to varlilumab, which has a more modest 2022 forecast of $48m, but its potential could be coming into greater focus with data from combination studies with Bristol-Myers Squibb’s embattled Opdivo in a number of solid tumour indications.
The fact that Opdivo’s star appears to be on the wane cannot help sentiment here, but Celldex has bigger challenges – including Nasdaq’s minimum $1 share price – than just which anti-PD-1 agent varlilumab is paired with. Celldex has few cards to play, so will need stellar data from the combo studies for investor interest to return.