Might as well handle all tweets at once on this name in a blog. Here is my theory on CLDX:
First disclosure: I own 22.5k at 4.60. Not recommending to buy or sell the stock. What you do is up to you. Just like with every single biotech I follow, major risk in the name. I personally like the company and I have liked it at higher levels before without success. In the future, I will only be updating my thoughts on CLDX on material events or news items, it’s too hard to track everyday for every penny tick. Not interested in that.
Risk position/size: Risking around 20% 2009 profits if went to zero. I don’t mind a spanking as long as it don’t hurt too bad.
Timeframe: Will hold up into 2010 ASCO conference if I need too. No stops. Will only update on material news events.
Onto CLDX. Since twitter is a usefull tool, might as well get down and dirty and crunch some numbers in a real trade while it’s down. Here is my theory and numbers on CLDX in no particular order:
On January 14th CLDX changed it’s CDX-110 study to be listed as a collaborator:
http://clinicaltrials.gov/ct2/show/NCT00458601?term=cdx110&rank=1
I find this interesting. Why do I find this interesting? Because on January 13th, CLDX just increased the amount of shares available for STOCK OPTIONS from 1.5M to 3.9M. This week they started to grant those options. That’s my buy signal.
You don’t put your name on a study unless you want to be seen from my experience. Let’s get to the meat:
Last year BMY made a big purchase of MEDX. Why does this matter for CLDX? Because MEDX was one of it’s biggest shareholders! So, once BMY took over MEDX, they started to dump the stock in mass:
http://sec.gov/Archives/edgar/data/14272/000119312509259343/dsc13da.htm
BMY is now under 5%, but we will never know if they are done selling, because they are not required to file. So, second week of January I started a starter position of 10k shares around 4.65-4.70 range. From the price action that I have seen, it looks like, to me, BMY is liquidating it’s entire position, almost every day. At the going rate, BMY would be completely out this week, with Feb being a true month without this seller. So why would BMY sell?
In my opinion, BMY sold because CLDX already has a parter for the 110 brain cancer VACCINE (Yep, it’s a VACCINE boys & girls, know anyone else who just had a breakthrough with a VACCINE?) with PFE, a competitor. This partnership is worth up to 390 million in milestones plus royalties, if approved. I can’t tell the real reasons why BMY is selling, so I look at the numbers:
CLDX has about $95 million cash (Keep in mind burns cash every QTR). They have no drugs in phase 3, but they have a very interesting pipeline (Posted at the very end), with BMY selling directly into the 011 breast cancer news release:
http://finance.yahoo.com/news/Celldex-Therapeutics-Presents-bw-1615220111.html?x=0&.v=1
So, you are telling me, that backing out the ‘Net Cash’ of around 90 million, that CLDX pipeline is ONLY WORTH $40 million bucks with a signed partnership worth up to $390 million PLUS it’s pipeline? I don’t buy it!
My theory is very simple. CLDX management looks like complete morons. Hell, that CRGN deal they did last year for the cash, probably thinking that the capital markets would not open up make them looks like total idiots, but that does not matter. Even if I dont’ believe in the numbers, I know enough history that when CLDX management gets options they usually get them near bottom and are very good at selling them. lol So at the very least I will follow them.
Obviously, my entire theory blows up if Phase 2 110 results due sometime around March blows up. I don’t see myself based on the last dataset I saw from last ASCO conference, where they were one of the stars. Regardless, at this price it looks like to me future success of this drug is not in the stock.
I don’t call bottoms in biotech. That would be stupid. I call out PIGS & I try and call out value. I see value here myself why others see confusion. Maybe I get the hammer here, would not be the first time I got hammered on a biotech. Remember from the webinar, could not be more right on VNDA pharma and I absolutely got plastered on the name. I don’t mind get plastered as long as I do the homework MYSELF, not rely on others. Do your own homework. Shoot holes in my theory. What am I missing?
Anyway, Here is the rest of the pipeline, which when I invest or swing trade like in CLDX here, I need to see to sleep better at night:
CDX-1307 Colorectal, bladder, Phase 1
pancreas, ovarian and
breast tumors -
CDX-1401 Multiple solid tumors - Phase 1/2
CDX-1127 Immuno-modulation, - Preclinical
multiple tumors
CR011* Metastatic melanoma and - Phase 1/2
breast cancer
CR014* Renal and ovarian cancer - Preclinical
INFLAMMATORY CDX-1135 Transplantation - Phase 1/2
DISEASE (formerly TP10) Renal disease - Preclinical
CDX-1189 Renal disease - Preclinical
INFECTIOUS CholeraGarde� Cholera infection Vaccine Phase 2b
Technologies
DISEASE ETEC Enterotoxigenic E coli Vaccine Phase 1
infection Technologies
Ty800 Typhoid fever infection - Phase 2
CDX-2401 HIV infection Rockefeller Preclinical
University
Welsh
