Celldex third quarter net loss increases to $11.8 million

Celldex Therapeutics, Inc.Nov 2 2011

Celldex Therapeutics, Inc. (NASDAQ: CLDX) today reported financial results for the third quarter and nine months ended September 30, 2011. Celldex reported a net loss of $11.8 million, or $0.27 per share, for the third quarter of 2011 compared to a net loss of $9.1 million, or $0.28 per share, for the third quarter of 2010. For the nine months ended September 30, 2011, Celldex reported a net loss of $32.1 million, or $0.85 per share, compared to a net loss of $25.2 million, or $0.79 per share, for the nine months ended September 30, 2010.

“After discussions with FDA and EMA, we are on track to initiate our Phase 3 study of rindopepimut in EGFRvIII-expressing glioblastoma in December”

"After discussions with FDA and EMA, we are on track to initiate our Phase 3 study of rindopepimut in EGFRvIII-expressing glioblastoma in December," said Anthony S. Marucci, President and Chief Executive Officer of Celldex. "The initiation of the pivotal rindopepimut program will be a major accomplishment for Celldex and our shareholders, while most importantly moving this promising candidate one step closer towards potential registration for the patients who suffer from this fatal disease. We will also initiate an additional Phase 2 clinical study of rindopepimut in combination with Avastin^® by year end."

"Further, we will set the stage for a series of additional significant events in other programs. First, we will complete enrollment in our Phase 2b study of CDX-011 in breast cancer by the end of this year, which should drive data availability in this important indication in mid-2012. We will also begin a Phase 1 study of CDX-1127 in patients with solid tumors and hematological cancers and a Phase 1 study of CDX-301, an immune and stem cell growth factor, in healthy subjects," concluded Marucci.

Recent Highlights and Upcoming Milestone Events:

• Concluded study design discussions with FDA and EMA and finalized the clinical protocol for the ACT IV Phase 3 randomized, KLH-controlled, double-blind study of rindopepimut.
• Continued brisk enrollment of the 120 patient, randomized Phase 2b study of CDX-011 in patients with glycoprotein NMB (GPNMB)-expressing advanced, refractory breast cancer, including triple negative disease. This study is on track to fully accrue by year-end 2011.
• Announced orphan drug designation in the European Union for rindopepimut which provides 10 years of market exclusivity from product launch in the EU, fee reductions, as well as access to the central authorization procedure. The EMA's Orphan Medicinal Product Designation is designed to promote the development of drugs that may provide significant benefit to patients suffering from rare, life-threatening diseases. The Company previously was awarded orphan drug status in the U.S. which provides 7 years of market exclusivity from product launch in the U.S. as well as Fast Track designation.
• The Company expects to present final median overall survival data from the rindopepimut Phase 2 multi-center ACT III study at the Annual Meeting of the Society for Neuro-Oncology to be held November 17-20, 2011 in Orange County, CA.
• Celldex expects to initiate four new clinical trials by year-end 2011:
  • Phase 3 randomized, KLH-controlled, double-blind study of rindopepimut in patients with newly-diagnosed, gross total resected glioblastoma (GB) that express EGFRvIII. The primary endpoint of the study will be overall survival. The ACT IV study is expected to enroll up to 374 patients at over 150 clinical sites internationally.
  • Phase 2 randomized study of rindopepimut in combination with Avastin in recurrent or refractory glioblastoma patients (the ReACT study). The ReACT study is expected to enroll up to 95 patients in the U.S. and will evaluate objective response rates (ORR), progression free survival (PFS) and overall survival (OS) endpoints in this patient population.
  • Phase 1 study of CDX-1127, Celldex's first therapeutic antibody program, in patients with solid tumors or hematologic cancers. CDX-1127 is a fully human monoclonal antibody targeting CD27.
  • Phase 1 trial of CDX-301, an immune and stem cell growth factor, in healthy subjects in collaboration with Rockefeller University. Celldex's first priority is to develop this molecule for hematopoietic stem cell transplant, where it has demonstrated improvement of immune cell reconstitution in preclinical in vivo models.

Third Quarter and Year-to-Date Financial Highlights:

Revenues for the third quarter of 2011 were relatively consistent with revenues for the third quarter of 2010 as increased product royalty revenue related to Rotarix® in 2011 was offset by $1.3 million in Pfizer non-cash deferred revenue related to rindopepimut recognized in 2010. Revenues for the first nine months of 2011 decreased by $2.2 million when compared to the first nine months of 2010 due primarily to $3.9 million in Pfizer non-cash deferred revenue related to rindopepimut recognized in 2010, offset in part by increased product royalty revenue of $2.0 million recorded in 2011. Celldex's retained interests in Rotarix^® net royalties, which were not sold to Paul Royalty Fund, are recorded as product royalty revenue and a corresponding amount that is payable to Cincinnati Children's Hospital (CCH) is recorded as royalty expense.

Total operating expenses for the third quarter were $13.8 million compared to $11.3 million for the third quarter of 2010. For the first nine months of 2011, total operating expenses were $37.8 million compared to $36.6 million in the first nine months of 2010. The increases in total operating expenses between periods were primarily driven by increased clinical trials costs for rindopepimut and CDX-011 studies, including preparations for the initiation of the ACT IV study. The increase was also due to higher costs related to R&D personnel, primarily in clinical operations, higher preclinical costs associated with CDX-1127 and CDX-301, as well as increased expenses resulting from higher license/milestone payments to licensors and an increase of $2.0 million in Rotarix^®-related royalty fees payable to Cincinnati Children's Hospital (CCH) in 2011. These increases were partly offset by decreases in G&A expenses and for the nine-month periods, a decrease in amortization expenses for acquired intangible assets in 2011 compared to 2010. As a result of renovations in our Fall River facility completed in late 2010, we have increased our capacity to produce cGMP grade antibody products for our clinical programs.

The $3.4 million decrease in investment, other income and interest expense, net in 2011 is primarily due to other income of $3.0 million recorded for the TopoTarget sublicense income payment received in 2010.

At September 30, 2011, Celldex reported cash, cash equivalents and marketable securities of $62.8 million, a decrease of $8.4 million from June 30, 2011. The decrease was due primarily to operational expenses during the third quarter. Celldex believes that current cash, cash equivalents and marketable securities as of September 30, 2011 and interest income on invested funds are sufficient to meet estimated working capital requirements and fund planned operations into 2013. As of September 30, 2011, Celldex had approximately 44.1 million shares outstanding.