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What's in the Cards for Celldex (CLDX) this Earnings Season?

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Celldex Therapeutics, Inc. (CLDX - Free Report) is scheduled to report second-quarter 2017 results on Aug 8 after market close. Celldex’s performance has been encouraging as it delivered positive surprise in three of the trailing four quarters and met estimates in one, delivering an average positive surprise of 6.04%.

In the last reported quarter, the company’s earnings came in line with expectations.

Celldex Therapeutics’ shares are down 30.5% so far this year against a 9% increase registered by the industry during this period.

Let’s see how things are shaping up for this announcement.

Factors at Play

Celldex, earns revenues entirely from product development and licensing agreements, and contracts and grants. The company recognizes revenues under its clinical trial collaboration with Bristol-Myers Squibb Company (BMY - Free Report) for varlilumab. We believe the company will continue to record revenues from these sources in the second quarter of 2017.

With no approved product in its portfolio, investor focus will remain on pipeline development.

Celldex’s efforts to build its immuno-oncology pipeline are impressive. Its lead pipeline candidate, glembatumumab vedotin is currently being evaluated for the treatment of triple negative breast cancer (phase IIb - METRIC study) and metastatic melanoma (phase II). It is also being evaluated for the treatment of other cancers (squamous cell lung cancer, uveal melanoma and pediatric osteosarcoma) in which glycoprotein NMB is expressed.

The company announced in Jun 2017 that glembatumumab vedotin demonstrated a median overall survival of nine months for all patients and 15.8 months in patients with stage III/IV checkpoint-refractory metastatic melanoma, improving on its previous results. Moreover, the phase I portion of a phase 1/2 dose escalation and cohort expansion studyshowed that varlilumab in combination with Bristol-Myers Opdivo in advanced cancer patients was well toleratedat all tested dose levels.

Apart from glembatumumab vedotin, Celldex has several promising candidates in its pipeline, including CDX-1401/CDX-301 (phase II—multiple solid tumors; in collaboration with CITN) and CDX-014 (phase I—advanced renal cell carcinoma) among others.

Operating expenses vary on a quarterly basis.

Earnings Whispers

Our proven model does not conclusively show that Celldexis likely to beat on earnings this quarterThis is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 26 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Celldex has a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Arena Pharmaceuticals, Inc. is scheduled to release results on Aug 7 after the closing bell. The company has an Earnings ESP of +5.88% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Puma Biotechnology Inc. (PBYI - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3. The company is expected to release results on Aug 8.

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