Celldex Therapeutics (CLDX) recently held its first quarterly call since releasing highly promising Phase I data on CDC-0159 — its novel mast cell blocking antibody, reports John McCamant, biotech sector expert and editor of The Medical Technology Stock Letter.
CDX-0159 is a humanized monoclonal antibody that specifically binds the receptor tyrosine kinase KIT with high specificity and potently inhibits its activity.
KIT is expressed in a variety of cells, including mast cells, which mediate inflammatory responses such as hypersensitivity and allergic reactions. KIT signaling controls the differentiation, tissue recruitment, survival and activity of mast cells.
In certain inflammatory and allergic diseases, such as chronic urticaria, mast cell activation plays a central role in the onset and progression of the disease. KIT inhibition is involved in the potential treatment of various multi-billion acute and chronic conditions.
Clinical trials in chronic urticaria are on schedule to begin this fall. New durability data was released, and blockbuster markets identified. Urticaria (hives) are red, itchy welts that result from a skin reaction.
With a market cap of ~$375 million with ~$200 million in cash, in our view, CLDX is extremely undervalued based on the potential of CDX-0159 alone.
After releasing highly positive initial clinical data resulting in significant mast cell depletion and a clean safety profile, further updates and multiple trial initiations are due this fall.
These clinical trials are relatively quick to perform as trials go and data are released. Lastly, as a wholly owned asset, we believe CLDX has also become an attractive potential takeover candidate.
CDX-0159 remains proprietary to CLDX and to us that makes the stock even more attractive. Major sophisticated investors have taken positions in CLDX since June, and with major catalysts expected over the next 3-9 months, potential acquirers may begin to take notice, too.
