Continue Reading Below
Shares of the struggling small-cap biotech Celldex Therapeutics (NASDAQ: CLDX) finally showed some signs of life in November. Specifically, the biotech's stock rose by a healthy 27.6% last month, according to data from S&P Global Market Intelligence. Even so, the drugmaker's shares are still down by 14.4% year to date.
Celldex's stock got a boost last month from its third-quarter earnings release, where the company announced the initiation of two new clinical trials to assess CDX-3379 in recurrent head and neck squamous cell cancer and CDX-1140 in solid tumors. The company also restated that its lead clinical candidate glembatumumab vedotin -- or glemba for short -- remains on track to produce top-line data for its ongoing mid-stage study in triple negative breast cancer (TNBC) sometime in the second-quarter of 2018.
Celldex's decision to advance these early- and mid-stage clinical candidates is a major development for one key reason: It lowers the risk of its share price absolutely cratering in the event that glemba misses the mark in TNBC altogether or the data simply won't warrant an accelerated regulatory filing.
Continue Reading Below
Celldex's decision to aggressively develop its broader clinical pipeline, however, does have a serious downside. Namely, new clinical trials will almost certainly ramp up the company's cash burn rate by a substantial margin moving forward. That's especially unwelcome news at this stage, given that Celldex is already losing around $26 million per quarter, and the company exited the third quarter with only $140.5 million in cash, cash equivalents, and marketable securities. In other words, Celldex is probably going to be forced to raise a large sum of capital next year -- that is, if it wants to remain an independent entity following glemba's top-line readout.
10 stocks we like better than Celldex Therapeutics
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Celldex Therapeutics wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017