Celldex reports net loss of $6.6 million for first-quarter 2010

Celldex Therapeutics, Inc. (NASDAQ: CLDX) today reported financial results for the first quarter ended March 31, 2010. Celldex reported a net loss of $6.6 million, or $0.21 per share, for the first quarter of 2010 compared to a net loss of $7.7 million, or $0.49 per share, for the first quarter of 2009. At March 31, 2010, Celldex reported cash, cash equivalents and marketable securities of $75.4 million, which the Company believes will be sufficient to meet estimated working capital requirements and fund operations into 2012.

“We entered 2010 with several programs poised to move into randomized late-stage studies”

"We entered 2010 with several programs poised to move into randomized late-stage studies," said Anthony S. Marucci, Celldex's President and Chief Executive Officer. "Beginning at ASCO next month, these programs will result in a number of value-driving events over the course of the year. Celldex has made consistent progress through the first quarter of 2010 and we are in a strong position to continue taking significant strides through the rest of the year. We look forward to updating shareholders on our progress as clinical results from these programs become ready to announce."

First quarter and recent highlights:

• Presented important preclinical data for CDX-1127, a therapeutic antibody candidate for oncology indications, at the 2010 American Association for Cancer Research (AACR) 101st Annual Meeting in April. Studies demonstrated that targeting CD27 receptors with Celldex's human anti-CD27 antibodies can increase the numbers of responding T cells and directly impact tumor cells expressing CD27. These results support the ongoing development of CDX-1127, which is a candidate from Celldex's Precision Targeted Immunotherapy Platform.
• Received a $3 million sublicense payment from TopoTarget A/S as a result of its co-development and commercialization agreement with Spectrum Pharmaceuticals, Inc. for Belinostat, a novel histone deacetylase (HDAC) inhibitor for the treatment of cancer.

Upcoming highlights

• The Company and its collaborators will be making four (4) presentations at the annual meeting of the American Society of Clinical Oncology (ASCO) to be held June 4-8^th in Chicago, Illinois. Anticipated presentations include:
  • Interim data from the ACT III study, a trial testing CDX-110 (PF-04948568) in newly diagnosed Glioblastoma Multiforme (GBM). CDX-110 is partnered with Pfizer.
  • Final safety and immune activity data for CDX-011, an antibody-drug conjugate product, in patients with advanced melanoma.
  • Data on the correlation of GPNMB expression with outcomes in breast cancer patients treated with CDX-011.
  • The clinical design for a randomized Phase 2b study in muscle-invasive bladder cancer for CDX-1307, the Company's first antibody-based dendritic cell targeted vaccine, in combination with multiple immune modulators.

Further Financial Highlights

The net loss of $6.6 million for the first quarter of 2010 represents an improvement of $1.1 million when compared to the net loss for the same period in 2009, primarily due to the receipt of a sublicense income payment of $3 million from TopoTarget A/S, partially offset by higher operating expenses in the first quarter of 2010.

Revenues for the first quarters of 2010 and 2009 were approximately the same at $3.7 million. Product development and licensing revenues in both 2010 and 2009 primarily reflect recognition of $1.3 million in Pfizer deferred revenue related to CDX-110 in the three-month periods. The increase in contracts and grants revenue in 2010 compared to 2009 primarily reflects revenues for work performed for Rockefeller University. In 2010, Celldex also recognized $2.1 million in product royalty revenue related to offsetting royalty expense payable to Cincinnati Children's Hospital (CCH) compared to product royalty revenue of $2.0 million payable to CCH in 2009.

In late March 2010, the FDA decided to temporarily suspend the use of Rotarix^® in the United States as a precautionary measure following the discovery of PCV-1 DNA material in the vaccine. Because of our agreement with Paul Royalty Fund (PRF), we will not be negatively impacted by the FDA's decision to suspend use of Rotarix^® in future quarters. If our royalty revenue from Rotarix^® is negatively impacted by the FDA's decision, our royalty expense for Rotarix^® would be similarly impacted and therefore our net loss or cash position will not be impacted as a result of the FDA's decision.

Research and development (R&D) expense in the first quarter of 2010 and 2009 were approximately $6.4 million and $6.5 million, respectively. Changes in R&D expenses between 2010 and 2009 primarily reflect lower clinical trial costs in 2010 as management of the CDX-110 program was transitioned to Pfizer in mid-2009 and lower contracted research expenses and license fees in 2010, offset by higher facility-related expenses and higher personnel-related expenses in 2010.

Royalty expense includes product royalty and sublicense royalty fees on our out-licensed programs. The $0.1 million increase in royalty expenses in 2010 was due to an increase in Rotarix^® related royalty fees. Our retained interests in Rotarix^® net royalties which were not sold to PRF are recorded as product royalty revenue and a corresponding amount that is payable to CCH is recorded as royalty expense..

General and administrative (G&A) expense decreased by $0.5 million to $2.8 million in 2010 as compared to G&A expense of $3.3 million in the first quarter of 2009 was primarily due to $0.7 million in severance expense, including related non-cash stock-based compensation expense, incurred during the three months ended March 31, 2009 related to the departure of our former SVP, Business Development. The effect of these decreases was partially offset by $0.2 million in higher personnel expense during the three months ended March 31, 2010, primarily related to higher headcount.

The $1.4 million increase in amortization expenses for the quarter ended March 31, 2010 was primarily due to the amortization of intangible assets acquired in connection with the CuraGen Acquisition.

The $3.0 million increase in investment and other income, net in 2010 is primarily due to other income of $3.0 million recorded for the TopoTarget sublicense income payment. The $0.3 million increase in interest expense was primarily due to interest recorded in 2010 on the CuraGen convertible debt which we assumed in connection with the CuraGen Acquisition.

During the quarter ended March 31, 2010, cash, cash equivalents and marketable securities decreased by approximately $7.1 million from December 31, 2009, primarily due to operating expenses incurred during the quarter, payment of 2009 bonus amounts, CuraGen-related severance payments and prepayments of clinical trial and contracted research costs, offset partially by the payment received from TopoTarget.

As of March 31, 2010, Celldex had approximately 31.8 million shares outstanding.

SOURCE Celldex Therapeutics, Inc.