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Celldex (CLDX): What's Ahead for the Stock in Q1 Earnings?

Celldex Therapeutics, Inc. CLDX is expected to report first-quarter 2016 results on May 4.

In the last reported quarter, Celldex posted a positive earnings surprise of 2.94 %. Let’s see how things are shaping up for this announcement.

Factors at Play

Celldex, a development-stage, biopharmaceutical company, is focused on the development and commercialization of immunotherapies targeting cancer and other difficult-to-treat diseases.

The company earns revenues entirely on product development and licensing agreements, and contracts and grants. It has partnership agreements with quite a few companies for varlilumab including Bristol-Myers Squibb Company BMY. We believe the company will continue to receive revenues from these sources in the first quarter of 2016 as well.

In the to-be-reported quarter, Celldex’s most advanced candidate, Rintega (also known as rindopepimut and CDX-110), suffered a huge setback when an independent Data Safety and Monitoring Board (DSMB) recommended the company to discontinue the evaluation of Rintega in the phase III ACT IV study for the treatment of patients with newly diagnosed EGFRvIII-positive glioblastoma.

Meanwhile, Celldex has several early- and mid-stage candidates in its pipeline. Some promising candidates include glembatumumab vedotin for the treatment of metastatic triple negative breast cancer (phase IIb), metastatic melanoma (phase II) and advanced or metastatic squamous cell carcinoma (phase I/II) of the lung; and varlilumab for the treatment of solid tumors (phase I/II), among others. Varlilumab is being evaluated in combination with Bristol-Myers’ Yervoy as well as Opdivo and in several phase I/II combination studies across multiple types of cancer.

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

Surprise History

Celldex has a pretty good track record with the company beating estimates in all the four trailing quarters, with an average positive earnings surprise of 5.70%.



Earnings Whispers?

Our proven model does not conclusively show that Celldex is likely to beat estimates this quarter. That 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 earnings. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00% since the Most Accurate estimate is in line with the Zacks Consensus Estimate of a loss of 34 cents per share.

Zacks Rank: Celldex’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.

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

Stocks to Consider

Here are a couple of health care 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.

The Earnings ESP for Zoetis Inc. ZTS is +2.44% and it carries a Zacks Rank #3. The company is scheduled to release results on May 4.

The Earnings ESP for Genocea Biosciences, Inc. GNCA is +2.50% and it carries a Zacks Rank #3. The company is scheduled to release results on May 5.

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BRISTOL-MYERS (BMY): Free Stock Analysis Report
 
CELLDEX THERAPT (CLDX): Free Stock Analysis Report
 
GENOCEA BIOSCI (GNCA): Free Stock Analysis Report
 
ZOETIS INC (ZTS): Free Stock Analysis Report
 
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