sanjeri
Celldex Therapeutics, Inc. (NASDAQ:CLDX) is a great long-term biotech play to look into. The reason why I state this is because it has been able to advance a drug by the name of Barzolvolimab (CDX-0159) for the treatment of patients with chronic urticaria (CU). It has been able to achieve proof of concept in phase 1b studies in patients with chronic inducible urticaria (CIU) and chronic spontaneous urticaria (CSU) using this drug. Plus, it has the ability to go after other urticaria indications like cold urticaria and cholinergic urticaria. With proof of concept being established, it has already initiated dosing in one phase 2 study using Barzolvolimab treating patients with CSU. The first patient to be dosed in the second phase 2 study using this drug to treat patients with CIU is expected in the coming months. Even then, it has the potential to expand to other disorders such as Prurigo Nodularis (PN) and Eosinophilic esophagitis (EOE).
With one drug just about establishing a pipeline, plus with several proof of concept studies already established for chronic urticaria (both inducible and spontaneous), these are the reasons why I believe Celldex is a great long-term biotech to look into. In addition, there is potential to develop bi-specific antibody drugs for oncology as well. Such a drug is CDX-527, which uses CD27 and PD-L1 to treat patients with ovarian cancer. In addition, it has another drug known as CDX-1140, which uses CD40 signaling. CD40 signaling plays a huge role in activating the immune system. It is expressed on macrophages, dendritic cells, and various tumor cells types. Not only has it established proof of concept for Barzolvolimab, but it has potential to expand its pipeline with other well-known cancer targets.
Barzolvolimab For The Treatment Of Patients With Chronic Urticaria
The first program to go over involves the use Barzolvolimab for the treatment of patients with chronic urticaria. As I noted above, Celldex was able to establish proof of concept in using its monoclonal antibody Barzolvolimab in both Chronic spontaneous urticaria (CSU) and Chronic Inducible Urticaria (CIU). Chronic Spontaneous Urticaria occurs when a patient has hives that are on the skin of at least or greater than 6 weeks. Not only that, but it is present on the skin for most days of the week. It can be caused by an allergic reaction to food or a drug, but the issue is that the reaction doesn’t go away. These patients experience a host of symptoms such as:
- Red or swollen hives on skin that last for 6 weeks
- Itching of the skin
- Swelling of lips or throat.
For Celldex this presents as a good opportunity. CSU is just one portion of the hives population that it is targeting. I will go into more detail below, but there is another type known as chronic inducible urticaria (CIU). Going back to CSU, though, there are roughly 3.2 million people in the United States who are suffering from it. If left untreated these patients have to go through years with it.
The allergy treatment market is a huge market and as such Celldex has huge potential. It is expected that the allergy treatment market could reach $40.36 billion by 2026. But how can a drug like CDX-0159 help patients with CSU? The problem is that CSU occurs because mast cell activation in the body causes the release of histamines, leukotrienes and chemokines. The problem with that in turn is that it causes itching for the patient or hives. Well, the goal of CDX-0159 is to reduce mast cell activation, which theoretically in turn should reduce or eliminate the formation of histamines, leukotrienes and chemokines.
That’s good, but aren’t there already a host of antihistamines that are used to treat patients with hives? There are, and there even is an FDA approved biologic that helps patients with CSU. However, believe it or not, but only about 50% of patients that take antihistamines or leukotriene receptor antagonists achieve relief for symptomatic control. Chronic Inducible Urticaria is somewhat similar to CSU above, but with CIU there is an attributable cause or trigger that causes hives (wheals). In other words, something in particular causes the hives that can be explained.
In the case of Celldex it is going after the two most common forms of CIU. These forms are:
- Cold induced CIU
- Dermographism CIU
The cold-induced CIU happens as the name suggests exposure to cold. This means that the hive happens because of cold air, ice and cold water just to name a few things. On the other hand, dermographism CIU occurs because of scratching. This means the person scratching an area causing hives or tight clothing that rubs hard against the skin. Between this indication CIU, CSU and other types they are determined by Doctors using an algorithm type of a chart. They look at history and what triggers may have caused the urticaria. As for possible market opportunity, CIU is another good one. It is said that it affects 0.5% of the entire global population. Another way to put it is that 15% to 20% of those with urticaria have CIU.
Celldex has already dosed the first patient in the first phase 2 study using Barzolvolimab for the treatment of patients with CSU. These are patients who remain symptomatic despite having received prior antihistamine therapy. A total of 168 patients will be randomized 1:1:1:1 to receive subcutaneous injections of the following:
- 75 mg of Barzolvolimab once every 4 weeks
- 150 mg of Barzolvolimab once every 4 weeks
- 300 mg of Barzolvolimab once every 8 weeks
- Placebo during a 16-week placebo controlled period
The primary endpoint of this study is going to be the mean change in baseline to week 12 in UAS7. What does the value of UAS7 mean? It measures disease activity and whether or not a person has severe disease. The range of values of weekly UAS7 are as follows:
- Score of 28-42 = severe activity
- Score of 16-27 = moderate activity
- Score of 7-15 = mild activity
- Score of 1-6 = well controlled
- Score of 0 = urticaria-free
This phase 2 study which was initiated and then the one to follow soon is mainly because of positive results that were achieved in prior phase 1b studies. For instance, when it came to CIU patients who only received one dose of Barzolvolimab, it was shown that 100% (19 out of 19 patients) achieved a clinical response. More notably, 95% (18 out of 19 patients) achieved a complete response, which is quite astonishing after only one dose of this monoclonal antibody drug.
Additional positive proof of concept data was achieved when looking at the CSU population. When CSU patients were given this very same drug, it was noted that 57.1% achieved a complete response ((UAS7=0)) at week 12 when given the 1.5 mg/kg dose. The UAS7=0 complete response at 8 weeks using 3 mg/kg of the drug was 44.4%. This is pretty good, especially when you consider that these patients were given prior omalizumab treatment.
Financials
According to the 10-Q SEC Filing, Celldex Therapeutics had cash, cash equivalents and marketable securities of $380.5 million as of March 31, 2022. A big reason for the cash on hand is because it completed an underwritten public offering back in July of 2021. That is when it sold a total of 6,845,238 shares of its common stock at a price of $42 per share. The underwriters also took the option of purchasing an additional 892,857 shares of common stock at the very same price. In total, it raised approximately $287.5 million before deducting underwriting discounts and commissions and offering expenses. It states that it believes it has enough cash to fund operations through 2025.
The only way this estimate could change or be impacted is if Celldex pays Koltan contingent milestones in cash. If such an event happens, then it may need to raise cash earlier than expected. Still, I don’t see the need for it to raise cash this year if at all. The Koltan milestones are based on Celldex acquiring Koltan Pharmaceuticals back in 2016. With such an acquisition it obtained several antibody-based drugs targeting receptor tyrosine kinases ((RTKs)).
Risks To Business
There are several risks that investors should be aware before investing in this biotech. The first risk relates to the lead drug in the pipeline which is Barzolvolimab. One phase 2 study using this drug treating patients with CSU has been initiated. The second phase 2 study treating patients with CIU will soon be initiated in the 2nd half of 2022.
Even though prior phase 1b studies showed the drug to work well for both of these patient populations, there is no guarantee that either of the phase 2 studies will be successful. One reason why I state this is because the sample size of patients was small. Roughly 8 or 9 patients were established with each cohort. It will be important to see if the percentages of responders remain the same when the sample size increases.
The second risk relates to possible expansion of this drug towards other indications. As I noted above, the goal is to expand the use of this drug towards treating patients with Prurigo Nodularis (PN) and Eosinophilic esophagitis (EOE). While Barzolvolimab has worked well so far in CSU and CIU, there is no guarantee that it will also work for these other inflammatory indications.
The third risk relates to both the CDX-1140 and CDX-527 oncology drugs. These programs completed phase 1 dose escalation studies to test for safety thus far. The next goal is to see if they work in treating specific types of cancer patients.
Conclusion
Celldex Therapeutics is a great long-term biotech play to look into. That’s because it has done well to establish proof of concept in using Barzolvolimab to treat patients with chronic inducible urticaria (CIU) and chronic spontaneous urticaria (CSU). There is potential to possibly expand this drug to other inflammatory conditions like Prurigo Nodularis (PN) and Eosinophilic esophagitis (EOE).
I believe that the Barzolvolimab drug will do well in the follow up studies. The good thing is that if it doesn’t ultimately succeed in late-stage studies, then it has other drugs in the pipeline which may yield some value as well. The CDX-1140 drug targeting CD40 co-stimulation is one intriguing drug to track in the coming years, but I have higher hopes for the bispecific antibody program. I mentioned the drug CDX-527 which uses both CD27 co-stimulation and the nature of PD-L1. CD27 is important for activating the immune system, however, PD-L1 allows cancer cells to avoid detection of the immune system. By establishing bi-specific antibodies, two independent pathways can be targeted at the very same time. This could ultimately lead to improvements in response rates, overall survival, progression-free survival (PFS) and other measures. Even better, the bi-specific pipeline being developed can be used for both oncology and inflammatory disorders as well.
Lastly, two bi-specific preclinical drugs in the pipeline are being advanced. One is PD-1 and ILT4 for the targeting of solid tumors and then SCF/KIT for the targeting of inflammatory/autoimmune disorders. With proof of concept established for Barzolvolimab in CSU and CIU, plus the ability to expand the pipeline in targeting both oncology and inflammatory disorders, these are the reasons why I believe that Celldex Therapeutics is a great long-term biotech play to look into.
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