BOSTON (TheStreet) -- This is the "I took a vacation and stuff happened" Biotech Stock Mailbag.

Manish R. emails, "You've been quite bullish on Celldex Therapeutics (CLDX - Get Report) in the past so I was surprised when you didn't comment at all on the company's recent setback as it relates to Rintega and the lack of an [FDA] accelerated approval application. What are your current thoughts on the stock?"

I was on vacation last week when Celldex gave the regulatory update for its cancer immunotherapy Rintega. Based on cautious FDA guidance, Celldex will not file Rintega for accelerated approval of recurrent brain tumors. It's fair to call the news a setback for Celldex, although the company was careful previously not to promise an early FDA filing.

Still, I certainly thought FDA would be more amenable to reviewing Rintega early based on the positive clinical data from the ReACT study presented in the spring. The slide in Celldex's stock price following the Rintega regulatory update shows I wasn't the only person more bullish than I should have been.

I spoke with Celldex CEO Anthony Marucci and Chief Medical Officer Tom Davis on Thursday about Rintega. The FDA has not told the company definitively that the Rintega data from the ReACT study are not worthy of review under accelerated approval. FDA did express concerns, however, about making an accelerated approval decision based on the exploratory design of the ReACT study.

The study, which enrolled 72 patients with recurrent brain tumors, was not designed from the outset to support an approval filing. Celldex has been clear on this point from the beginning. As previously presented, Rintega plus Roche's  (RHHBY) Avastin significantly delayed brain tumor re-growth and prolonged overall survival compared to Avastin plus placebo.

In meetings with FDA, Celldex argued the Rintega benefit to recurrent brain tumor patients plus the agency's prior decision to award the drug with a Breakthrough Therapy Designation warranted an accelerated approval filing. FDA was resistant, mainly because the relatively small number of patients enrolled in the study raised the risk that the observed Rintega benefit was a product of chance.

Essentially, FDA wants more evidence of Rintega's efficacy than Celldex is able to produce at this time, hence no accelerated approval filing. It's worth noting Celldex is under the purview of the biologics, or CBER, division of the FDA because Rintega is classified as a vaccine. CBER tends to be take a more conservative regulatory stance than the drug, or CDER, side of the FDA.

Fortunately, the wait for more Rintega clinical data isn't too long. The second interim analysis from the ongoing "ACT IV" phase III study of Rintenga in newly diagnosed brain tumor patients will read out in December or early 2016. Positive results from the ACT IV study will enable Celldex to seek FDA approval of Rintega. If the study fails, Celldex will be forced to rethink Rintega's development or conduct another study.

The selloff in Celldex isn't fun but I still believe in Rintega and hope (expect) the next look at the ACT IV study to more fully demonstrate its benefit for brain tumor patients.

@adamfeuerstein Adam, what's your opinion on $blue insider selling? TY

— SwoleStreet (@yoldash718) August 19, 2015

When an insider sells a large block of company stock, an outside investor worries there's something materially negative going on at the company. This bad news, not yet disclosed publicly, might have compelled the insider to sell. Insiders might also sell their own stock because they believe it's fairly valued (or over-valued.) Or, an insider sale might have no deeper or sinister meaning at all. It was just time for the executive to get paid.

On Aug. 7, Bluebird Bio (BLUE - Get Report) CEO Nick Leschly exercised company options and sold stock worth approximately $17 million, according to Four other Bluebird directors and executives also sold smaller amounts of company stock.

The size of Leschly's Bluebird stock sale is certainly noteworthy but I don't attach any significant, negative meaning to the timing of the transaction. All the Bluebird insider sales were conducted under 10b5-1 "pre-planned" trading arrangements. I'm the first guy to say 10b5-1 trading plans can be changed and/or manipulated to help insiders profit, but I don't believe Leschly or any of his co-workers are taking advantage of outside investors in any way.

"Sometimes, a 10b5-1 sale is just a 10b5-1 sale," says Bluebird Senior Director of Investor Relations Manisha Pai, in response to my questions about Leschly's stock sale. "This is part of Nick's compensation. There is no significance beyond that and is not related to Global Blood Therapeutics (GBT) or a lack of confidence with Bluebird."

Global Blood Therapeutics is developing a drug to treat sickle cell disease, so it's a potential Bluebird competitor. [They might also be synergistic.] Global Blood went public on Aug. 12, right after Leschly's stock sales, which is why some investors linked the two events.

If Leschly's insider sales are no big deal, why is Bluebird's stock so weak? Since hitting an all-time high of $194 at the end of May, shares are down more than 30%. Bluebird's sell off has been particularly steep in August. [Bluebird shares are still 40% higher for the year.]

I don't believe a singular reason exists to explain the slide in Bluebird's stock price. Leschly's insider sale and the potential for competition from Global Blood are probably playing a role, but so is the normal summer slowdown in the markets, particularly in August when a lot of investors take time off.

Investors can also be fickle with biotech valuations. Bluebird is developing one-time gene therapies with the potential to cure (not just treat) some very serious blood diseases. These products, if successful, will be blockbusters, but Bluebird's market value exceeds $4.5 billion, even with the recent sell off. I'm not saying Bluebird is overvalued or undervalued, just that valuation sentiment can shift fairly quickly.

From a fundamental perspective, the next big event for Bluebird will be the presentation of updated beta-thalassemia and sickle cell data at the American Society of Hematology (ASH) annual meeting, Dec. 5-8. Research abstracts previewing these important data presentations should be publicly available on Nov. 5. Historically, the biggest moves higher in Bluebird's stock price have come following the presentation of new clinical data, so the upcoming ASH meeting is definitely something to note on your calendar.

@adamfeuerstein what's your take on the whole $kite fiasco?

— shmittahcapital (@ymscapital) August 20, 2015

I mostly agree with Forbes' Matt Herper. Kite Pharma  (KITE) CEO Arie Belldegrun should have shut his mouth. Herper believes Belldegrun's decision to hold a conference call to explain the death of a very sick cancer patient in a study was justified. But Herper also said Belldegrun was reckless for disclosing too much additional (and positive) information about the study, which is still ongoing.

I take a harder line. Belldegrun should not have said anything publicly about the patient death because the study was not stopped or affected in any way. Cancer patients in clinical trials die. It's a sad reality, but it's not a material, disclosable event for investors unless the death (or any adverse safety finding) causes a study to be stopped prematurely or changed significantly.

The study involving Kite's cell therapy was not stopped or altered due to the patient death, so it was unnecessary for Belldegrun to say anything. Kite's stock price took a big hit on unchecked speculation about the patient death, but that is still not justification enough for Belldegrun's public comments. To me, Belldegrun running his mouth made him look more concerned about Kite's stock price than the well being of a cancer patient.

Belldegrun is not stupid. He knows bubbly biotech investors have bid up the valuations of Kite and his main rival Juno Therapeutics (JUNO) well beyond what's justified fundamentally based on the relatively small amount of clinical data presented to date. There's legitimate excitement about the CAR-T technology to dramatically improve outcomes for cancer patients, but there are also a lot of challenges, risk and unknowns overlooked in our current biotech bull market.

It's in Belldegrun's best interest to keep investors focused on the CAR-T dream and not the reality, which is why he's compelled to be more promotional than he should be.

Darien W. writes, "Isn't it time for you to stop bashing Inovio Pharmaceuticals (INO - Get Report)? Once again, the company shows you to be a fool for not believing in their ground-breaking technology. Fortunately, I stopped listening to you a long time ago and so did AstraZeneca (AZN - Get Report)."

While I was gone, Inovio announced a cancer collaboration with the Medimmune unit of AstraZeneca. As part of the collaboration, Inovio's immunotherapy INO-3112 will be combined with undisclosed pipeline drugs in AstraZeneca's pipeline in studies of patients with cancers caused by the human papillomavirus (HPV.) AstraZeneca paid $27.5 million upfront to license INO-3112 from Inovio. The company is also eligible for another $700 million in milestone payments and royalties on sales from AstraZeneca if INO-3112 is developed successfully and approved.

Big if.

Inovio is good at starting drug development projects and getting Big Pharma to sign partnership agreements. Unfortunately, Inovio's is lousy at seeing any of these projects or partnerships through to a successful outcome. You should be skeptical the latest hook-up with AstraZeneca ends any better.

Let's remember the partnership between Inovio and Roche signed in 2014 has already been cut in half. Joint development plans for a prostate cancer therapy were shelved, leaving only an early-stage project in hepatitis B. Similarly, Inovio partnerships with Wyeth (now part of Pfizer (PFE - Get Report)) and Merck (MRK - Get Report) have also been terminated.

Inovio's track record developing drugs on its own is just as bad. The cancer chemotherapy bleomycin delivered via electroporation failed. The HIV drug pictovir shut down. ChronVac-C, an experimental hepatitis C drug, failed. Have you heard Inovio mention the flu vaccines VGX-3400 and VGX-3500 lately? I haven't. Likewise, VG-1027 for rheumatoid arthritis and diabetes seems to have disappeared.

VGX-3100 is Inovio's most advanced pipeline product for cervical dysplasia, but whether or not it ever moves into a pivotal phase III study, as promised, is anyone's guess. The VGX-3100 phase II study was completed in 2014, yielding mediocre results compared to existing, more effective treatments.

Darien is right, I'm not an Inovio believer.


Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.