This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Biotech Stock Mailbag: Celldex, Exelixis, Geron, NPS Pharma

I asked the manager of a large health care fund why he owns Celldex. He can't be quoted by name, but his top reason for owning Celldex is CDX-1127, the company's cancer immunotherapy candidate.

"It's all about CDX-1127. Celldex is really the only small-cap immuno-oncology play," he told me. The rest of Celldex's assets, collectively, were attractive, he added, but his focus was CDX-1127, despite the fact that we still haven't seen human clinical data yet.

[It should be noted that this manager runs a large fund so Celldex is a very small portion of his overall portfolio. He can afford to take a risk on an early-stage drug. Main Street investors don't have that luxury.]

There are compelling reasons to own Celldex but the valuation is getting ahead of itself. That's the way I see the stock today. Now take note: Valuation shorts are dangerous, never more so in an environment where investors want to own biotech and drug stocks and are happy to take on greater risk to do so. Biotech and drug stocks only sell off today for two reasons: 1) a clinical trial blows up, or 2) the FDA rejects a drug or an advisory panel hands down a negative vote. Celldex is not in danger of either of these two things happening in the near future.

A related email from "HeyMikey99":

Would like to hear your thoughts on Celldex and their phase III drug rindopepimut, especially considering your recent article on Agenus.

"Rindo" is the most advanced cancer therapy in Celldex's pipeline but it's also the product most likely to fail, according to sentiment checks I made this week with buyside investors.

Cancer vaccines don't work. Dendreon's (DNDN) Provenge is the lone exception, and it has been a commercial failure, in part because many oncologists are skeptical of the data upon which Provenge was approved. Rindo is a cancer vaccine that targets a mutated protein, EGFRv3, present in about one-third to one-half of brain cancers. Rindo is designed to train a patient's immune system to recognize and attack cancer cells containing EGFRv3.

Celldex is one of three companies developing cancer vaccines against brain cancer and the only one with data showing promise. Agenus (AGEN) and Northwest Biotherapeutics (NWBO) are a lot less impressive and seem more interested in promoting their stocks than developing drugs.

You can take a look at the rindo data presented to date on Celldex's Web site. All the phase III studies are single arm and match rindo against historical controls. The absence of controlled data is a risk. What's most interesting is the consistency in the rindo results across three different studies. Remember, Pfizer (PFE) once licensed rindo but gave the drug back to Celldex in 2010, after much of the phase II data were known.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NPSP $45.97 0.02%
CLDX $7.26 0.00%
EXEL $4.54 0.00%
GERN $2.86 0.00%
AAPL $94.02 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs