Celldex Therapeutics, Inc.
) shares shot up 26.9% on news regarding an agreement with
Bristol-Myers Squibb Company
) for the development of Celldex's varlilumab and Bristol-Myers'
nivolumab in a phase I/II study.
The study will evaluate the safety, tolerability and preliminary
efficacy of nivolumab (a programmed death receptor-1 (PD-1) immune
checkpoint inhibitor) and varlilumab (a monoclonal investigational
antibody targeting CD27) for various types of cancer, including
non-small cell lung cancer, metastatic melanoma, ovarian,
colorectal and squamous cell head and neck cancers. The study is
slated to begin in the fourth quarter of 2014.
Terms of the Deal
Celldex will receive a one-time payment of $5 million from
Bristol-Myers. The cost of development for this study, which will
be conducted by Celldex, will be shared by both companies.
Bristol-Myers has a time-limited right of first negotiation in the
event of wanting to out-license varlilumab.
Additionally, an existing deal between Celldex and Medarex (a
wholly owned subsidiary of Bristol-Myers) related to Celldex's CD27
program has been re-structured. As a result, certain future
milestone payments, due from Celldex to Medarex, have been waived
and future royalty rates have been reduced.
We are positive on Celldex's agreement with Bristol-Myers - the
agreement should be beneficial for Celldex which is gaining a
strong partner in the form of Bristol-Myers, a company with
expertise in the field of immuno-oncology. The deal terms look
favorable - sharing of development costs and more importantly, the
restructuring of the Medarex agreement. Moreover, Celldex has the
freedom to explore varlilumab with other important mechanisms
outside this collaboration.
Of late, immuno-oncology has attracted the interest of several
) signed a deal with Incyte Corporation (INCY) for the development
of its investigational immunotherapy, MEDI4736, in combination with
Incyte's INCB24360 for the treatment of cancer.
Celldex currently carries a Zacks Rank #3 (Hold). A better-ranked
stock in the biotech sector is
Gilead Sciences Inc.
), carrying a Zacks Rank #1 (Strong Buy).
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