This Day On The Street
Continue to site
ADVERTISEMENT
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

Good Luck Chasing Celldex

NEW YORK ( TheStreet) -- Ask any seasoned investor about her or his definition of "regret" and you'll likely get a mixed bag of responses. Whether it's buying too high or selling too low -- lament, or what is coldly known in the market as "crying over spilled milk," goes with the territory.

Nevertheless, as closely as I follow the biotech sector, I'm having a hard time coming to terms with not having pulled the trigger on Celldex Therapeutics (CLDX - Get Report) earlier this year. This is despite my having proclaimed about how cheap I thought it. Since then, not only have shares of Celldex soared 235% year-to-date, but since January 2012 the biotech company has rewarded shareholders with gains of more than 700%.

Although it's certainly possible that new developments regarding the company's brain cancer treatment Rindopepimut and its orphan product CDX-1135, which is use to treat dense deposit disease can propel the shares higher, I believe this is one of those situations where those who are on the sidelines have to raise the white flag and/or say goodbye. This ship has sailed -- at least for now.

But understand, this has nothing to do with my lack of confidence in Celldex's management to continue steering this ship in the right direction. As an investor with a strong bias towards value and a low-risk threshold, Celldex's stock price just never seemed right to me -- at least not relative to Roche (RHHBY) and Bristol-Myers Squibb (BMY). Not to mention, Celldex has had a very unattractive cash-burn rate, which led to almost $70 million in negative cash flow over the past year.

Now, this is not unusual for a young biotech company, especially one that is managing various drug trials that are in all three study phases. Nor am I bringing up its cash situation to justify my lack of conviction for not having pulled the trigger on this trade. But I do have to question the Street's overzealousness towards Rindopepimut.

It's true the recent efficacy data have been encouraging, yes. I will also grant Rindopepimut does produce impressive patient results when compared to, say, Avastin, which is the Roche alternative. But Rindopepimut, while advancing well in clinical developments, has yet to be granted approval. I believe it's premature -- as evident by the stock price -- to assume that it will be.

1 of 2

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CLDX $28.86 -0.59%
AAPL $130.60 -0.90%
FB $79.20 -1.20%
GOOG $532.48 -1.40%
TSLA $250.75 -0.28%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs