PART I Item 1. Business Celldex Therapeutics develops immunotherapies and targeted biologics for cancer, advancing four key drug candidates Overview Celldex Therapeutics develops cancer immunotherapies, focusing on four drug candidates after discontinuing others - Celldex Therapeutics, Inc. is a biopharmaceutical company developing and commercializing immunotherapies and targeted biologics for cancer and other diseases13 - Current pipeline focus includes CDX-1140, CDX-3379, CDX-301, and Varlilumab14 - Discontinued development of glembatumumab vedotin, CDX-014, and CDX-1401 in Q2 2018 following the failure of the Phase 2b METRIC Study of glembatumumab vedotin16 Clinical Development Programs This section details the clinical development status of Celldex's key drug candidates CDX-1140 CDX-1140, a CD40 agonist antibody, is in Phase 1 development, showing dose-dependent immune activation - CDX-1140 is a fully human agonist monoclonal antibody targeting CD40, a key activator of immune response, found on immune cells and many cancer cells19 - A Phase 1 study initiated in November 2017 is enrolling up to 180 patients with solid tumors and B cell lymphomas to determine the maximum tolerated dose (MTD) and evaluate tolerability and biologic effects20 - Interim Phase 1 data (November 2018) showed dose-dependent immune activation, good tolerability, and no MTD reached, with preliminary evidence of enhanced immune activation in combination with CDX-30122 CDX-3379 CDX-3379, an ErbB3 blocking antibody, is in Phase 2 for head and neck cancer after showing responses in earlier studies - CDX-3379 is a human monoclonal antibody designed to block ErbB3 (HER3) activity, a receptor regulating cancer cell growth and resistance to therapies25 - A Phase 1a/1b study showed objective responses in combination with Erbitux (one durable complete response in head and neck cancer) and Zelboraf (two partial responses in lung cancer)26 - An ongoing Phase 2 study combines CDX-3379 with Erbitux in HPV-negative, Erbitux-resistant, advanced head and neck squamous cell carcinoma patients previously treated with anti-PD1 checkpoint inhibitors, with one confirmed complete response documented in the first stage (n=13) enrollment30 Varlilumab Varlilumab, a CD27 agonist antibody, showed an acceptable safety profile and immunologic activity in Phase 1, with Phase 2 data showing promising results in ovarian cancer and GBM - Varlilumab is a fully human agonist monoclonal antibody activating CD27, a co-stimulatory molecule, to stimulate T cells and enhance immune response against cancer31 - A Phase 1 single-agent study in 90 patients with solid or hematologic cancers showed an acceptable safety profile and immunologic activity, with durable multi-year clinical benefit in select patients32 - A Phase 1/2 combination study with Opdivo completed Phase 2 enrollment in January 2018 across various solid tumors, with ovarian cancer cohorts showing a 14% ORR and GBM cohort data (November 2018) showing OS12 of 50% in unmethylated MGMT promoter patients333538 CDX-301 CDX-301, a recombinant Flt3L, expands dendritic and hematopoietic stem cells, used as a priming agent in combination therapies - CDX-301 is a recombinant Flt3L, a hematopoietic cytokine that expands dendritic cells and hematopoietic stem cells, potentially potentiating anti-tumor responses in combination therapies39 - A Phase 1 study demonstrated an acceptable safety profile and mobilization of dendritic and hematopoietic stem cells in healthy volunteers41 - CDX-301 is currently used as a priming agent in the ongoing Phase 1 trial of CDX-1140 to increase cells available for CDX-1140 activation42 Development Strategy Celldex aims to develop effective immunotherapy regimens through combination therapies and seeks alliances for funding and commercialization - Celldex aims to leverage its understanding of the immune system to develop effective immunotherapy regimens through combinations of therapeutic agents43 - The company seeks governmental and corporate alliances for funding and intends to commercialize products through direct selling or corporate partners to maximize portfolio value and expedite development44 Partnerships Celldex may enter co-development and commercialization partnerships, which carry risks including termination or pursuit of competing technologies by partners - Celldex may enter co-development and commercialization partnerships to provide financial and other resources, including research, development, manufacturing, and sales/marketing capabilities45 - Partnership agreements carry risks, including termination if products are not fully developed, failure to meet obligations, or partners pursuing competing technologies, which could delay or prevent commercialization4648 Research Collaboration and License Agreements Celldex holds various license agreements for technology and patents, requiring royalty, maintenance, and milestone payments - Celldex has license agreements for technology, patents, and applications, requiring royalty payments, annual maintenance fees, patent prosecution costs, and potential future milestone payments49 - Key agreements include licenses with Medarex (for varlilumab, low-to-mid single-digit royalties), University of Southampton (for CD27 antibodies, up to $1.0 million milestones, low single-digit royalties), Amgen (for CDX-301 and CD40L, up to $0.9 million milestones, low single-digit royalties), Yale University (for RTK products including CDX-3379, $3.0 million one-time payment, low single-digit royalties), and MedImmune (for CDX-3379, up to $45.0 million regulatory/development milestones, up to $125.0 million sales milestones, tiered high single-digit to low teens royalties)5051525355 Competition The biotechnology and pharmaceutical industry is highly competitive, with Celldex facing rivals possessing greater resources and faster development capabilities - The biotechnology and pharmaceutical industry is highly competitive and subject to rapid technological change56 - Celldex faces competition from large pharmaceutical companies, universities, and research institutions with substantially greater financial, technical, and human resources56 - Competitors may develop products more rapidly, obtain regulatory approvals faster, or acquire/license advantageous technologies, potentially hindering Celldex's market position5758 Manufacturing Celldex relies on Contract Manufacturing Organizations (CMOs) for large-scale production and operates its own facility for early-stage clinical trial drug substance - Celldex has limited commercial manufacturing experience and relies on Contract Manufacturing Organizations (CMOs) for large-scale production of drug candidates for late-stage clinical trials and commercialization61 - The company operates its own cGMP manufacturing facility in Fall River, Massachusetts, for early-stage clinical trial drug substance (CDX-1140, CDX-301, CDX-0159)62 - Reliance on third-party manufacturers limits control and ability to monitor processes, potentially leading to delays and additional costs if manufacturing needs are not met65 Commercial Organization Celldex has limited commercial experience and plans to expand its team or pursue strategic partnerships for product commercialization - Celldex has limited commercial experience in marketing, sales, distribution, and product reimbursement66 - The company may expand its commercial team to retain marketing rights and commercialize products directly or pursue strategic partnerships for development, sales, marketing, and distribution66 Patents, Licenses and Proprietary Rights Celldex protects its intellectual property through patents, licenses, and trade secrets, but faces risks of challenges and enforcement difficulties Patents Celldex's patent strategy involves filing applications and acquiring exclusive rights, but patent enforceability and commercial benefit are not assured - Celldex's intellectual property strategy involves filing patent applications and obtaining patent rights in the U.S. and internationally, as well as acquiring exclusive rights through licenses67 - The company owns or licenses over 200 granted patents and applications, including those for CDX-1140 (expiry 2037), CDX-3379 (expiry 2032), CDX-301 (U.S. patent expiry 2020), and varlilumab (U.S. patent expiry 2034, European patent revoked but under appeal)69[7
Celldex Therapeutics(CLDX) - 2018 Q4 - Annual Report