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Why Is Celldex (CLDX) Down 29.2% 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 29.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Celldex Q1 Earnings and Sales Beat

Celldex incurred adjusted loss of $1.13 per share in first-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of $1.14 and the year-ago loss of $2.85. The loss was adjusted for an impairment charge of $1.8 million and a loss of $1.5 million on fair value re-measurement of contingent consideration. However, including the fair value re-measurement item, the reported loss was $1.40 compared with loss of $12.61 in the year-ago quarter.

Total revenues in the quarter declined 65% year over year to $1.4 million. The year-over-year decline was due to decrease in contract revenues from the International AIDS Vaccine Initiative and Bristol-Myers. Revenues, however, surpassed the Zacks Consensus Estimate of $1 million.

Quarterly Details

Research and development expenses declined 48.9% year over year to $11.2 million during the quarter, mainly owing to lower personnel costs, and decline in clinical study and contract manufacturing related expenses. General and administrative expenses were $4.9 million, down 12.5% year over year, mainly attributable to lower personnel and commercial planning expenses.

As of Mar 31, 2019, Celldex had cash, cash equivalents and marketable securities of $85 million compared with $94 million as of Dec 31, 2018. The biotech company’s cash position was weakened by higher operating expenses, including costs related to discontinuation of glembatumumab vedotin development, partially offset by net proceeds from the sale of its common stock under a contract with Cantor.

2019 Outlook

Celldex believes that its cash position, as of March 2019-end, plus anticipated proceeds from the future sale of its common stock per the agreement with Cantor will be enough to meet working capital requirements and fund planned operations through 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Celldex has a nice Growth Score of B, however its Momentum Score is doing a bit 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Celldex has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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