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Why Is Celldex (CLDX) Down 29% Since Last Earnings Report?

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It has been about a month since the last earnings report for Celldex Therapeutics (CLDX - Free Report) . Shares have lost about 29% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Celldex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Celldex Q3 Earnings Beat Estimates, Revenues Miss

Celldex  incurred adjusted third-quarter 2018 loss (excluding gain on fair value re-measurement of contingent consideration) of 8 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents and the year-ago loss of 14 cents. However, including the fair value re-measurement item, the reported loss was 4 cents.

Total revenues in the quarter declined 76.9% year over year to $0.9 million. It also missed the Zacks Consensus Estimate of $2 million. The year-over-year decline was due to decrease in contract revenues from the International AIDS Vaccine Initiative.

Quarterly Details

Research and development expenses were down 45.7% year over year to $11.9 million during the quarter mainly due to lower personnel costs and decline in clinical study and contract manufacturing related expenses. General and administrative expenses were $3.7 million, down 30.2% year over year mainly attributable to lower personnel and marketing expense.

As of Sep 30, 2018, Celldex had cash, cash equivalents and marketable securities of $105.6 million compared with $114 million as of Jun 30, 2018. The biotech company’s weakened cash position was due to higher operating expense including costs related to discontinuation of glembatumumab vedotin development, partially offset by net proceeds raised from sales of its common stock under a contract with Cantor.

2018 Outlook

Celldex expects that its cash position as of the end of September plus anticipated net proceeds from future sales of its common stock under the agreement with Cantor will be adequate to fund working capital requirements as well as planned operations through 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 33.33% due to these changes.

VGM Scores

At this time, Celldex has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Celldex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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