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The 5 Dumbest Things on Wall Street This Week: Sept. 27

3. Celldex Shenanigans

Remember the good old days when sell-side analysts would push profitless stocks to drum up investment banking business? You know, those wild and crazy times during the Internet bubble when Wall Street giants like Jack Grubman and Henry Blodget lined their own pockets by setting astronomical price targets on crappy or supremely speculative stocks?

Well, if you are too young to recollect the quid-pro-quo research of the go-go 1990's, or have shuttered those memories forever, have no fear. A classic case was on display in the biotech sector this week and boy did it strike our nostalgia bone.

On Monday, Leerink Swann analyst Howard Liang raised his price target on Celldex Therapeutics (CLDX - Get Report) from $29 to $45 per share, which implies the company's market value will ultimately be $3.6 billion if it hits Liang's target. Shares of the cancer drug company popped 10% Monday on Liang's cheerleading to $33, giving it an impressive market-cap of $2.7 billion.

Seriously, that's quite a feat for a company with essentially no sales and that Wall Street expects to lose 97 cents a share this year and $1.02 cents in 2014.

So why does Liang believe Celldex is worth $1 billion more today than it was last Friday?

It's because of CDX-1127, an experimental cancer immunotherapy which hasn't yet reported any clinical data in patients. The first human data from a phase I study are expected in early November, but as TheStreet's biotech ax Adam Feuerstein points out, Liang is setting the bar very low for Celldex to clear.

"As a combination partner for immune checkpoint inhibitors such as anti-PD-1 agents, we believe the efficacy bar [for CDX-1127] is not high based on our analysis of early clinical data on other IO agents, and we believe any demonstration of single-agent activity coupled with a clean safety profile could position CDX-1127 as one of the leading candidates for PD-1 combination," wrote Liang.

The eagle-eyed Feuerstein also highlights the fact that Celldex raised $90 million this past February in an offering co-managed by Liang's employer Leerink. And one can only imagine that Leerink will be right there should Celldex need to raise additional funds again.

And Liang too, of course, with a pom pom in each hand.
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