What's In Store For Celldex (CLDX) This Earnings Season?

Celldex Therapeutics, Inc. (NASDAQ:CLDX) is expected to report first-quarter 2018 results on May 8.

Last quarter, the company delivered a positive earnings surprise of 26.09%. The company has an impressive track record with earnings beating estimates thrice and meeting the same once, delivering an average positive earnings surprise of 18.94%.

However, Celldex Therapeutics’ shares have lost 72.2% so far this year compared with a 10.8% decline for 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 (NYSE:BMY) for varlilumab. The company will continue to record revenues from these sources in the first quarter of 2018.

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

In April 2018, Celldex had a setback when its lead pipeline candidate, glembatumumab vedotin, failed in the phase IIb breast cancer study – METRIC. The candidate was also not able to demonstrate significant advantage over chemotherapy.

In the first quarter, Celldex added a fourth cohort – glembatumumab plus CDX-301 arm – to a phase II study evaluating glembatumumab vedotin in metastatic melanoma.The combination will be evaluated in melanoma patients who have failed prior failed prior checkpoint therapy.

The company has another oncology candidate, varlilumab, in its pipeline. In January 2018, the company closed enrollment for a phase II trial, evaluating varlilumab with Bristol-Myers’ Opdivo in several inidcations.

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

In January, Celldex expanded its phase I study on CDX-014 in advanced renal cell carcinoma to include patients with ovarian clear cell carcinoma.

Though R&D and SG&A costs declined in the last reported quarter, operating expenses may vary on a quarterly basis.

Earnings Whispers

Our proven model does not conclusively show that Celldex is likely to beat estimates this quarter. This 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 17 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Celldex’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

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

Stocks That Warrant a Look

Here are some biotech 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.

Aptevo Therapeutics Inc. (NASDAQ:APVO) has an Earnings ESP of +36.94% and a Zacks Rank #3. The company is expected to release first-quarter results on May 11. You can see the complete list of today’s Zacks #1 Rank stocks here.

Array BioPharma Inc. (NASDAQ:ARRY) has an Earnings ESP of +21.19% and a Zacks Rank #2. The company is scheduled to release first-quarter results on May 9.

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