Part I — Financial Information Unaudited Financial Statements Presents Celldex Therapeutics' unaudited condensed consolidated financial statements for the period ending September 30, 2019, detailing financial position and performance Condensed Consolidated Balance Sheets | Financial Metric | Sep 30, 2019 (in thousands) | Dec 31, 2018 (in thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $16,586 | $24,310 | | Marketable Securities | $56,332 | $69,712 | | Total Current Assets | $75,103 | $99,079 | | Total Assets | $131,841 | $155,809 | | Total Current Liabilities | $11,888 | $12,602 | | Total Liabilities | $30,461 | $31,749 | | Total Stockholders' Equity | $101,380 | $124,060 | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (in thousands, except per share) | Three Months Ended Sep 30, 2019 | Three Months Ended Sep 30, 2018 | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $546 | $941 | $2,686 | $7,774 | | Research and Development | $11,101 | $11,918 | $32,333 | $55,242 | | General and Administrative | $3,403 | $3,722 | $12,207 | $14,936 | | Goodwill Impairment | $0 | $0 | $0 | $90,976 | | Operating Loss | $(11,844) | $(7,764) | $(42,042) | $(144,313) | | Net Loss | $(11,413) | $(7,243) | $(40,431) | $(141,781) | | Basic and Diluted Net Loss Per Share | $(0.75) | $(0.66) | $(2.92) | $(14.12) | Condensed Consolidated Statements of Cash Flow | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(35,415) | $(59,805) | | Net Cash Provided by Investing Activities | $13,856 | $26,468 | | Net Cash Provided by Financing Activities | $13,835 | $25,872 | | Net Decrease in Cash and Cash Equivalents | $(7,724) | $(7,465) | | Cash and Cash Equivalents at End of Period | $16,586 | $32,823 | Notes to Unaudited Condensed Consolidated Financial Statements - The company believes its cash, cash equivalents, and marketable securities of $72.9 million as of September 30, 2019, will be sufficient to fund planned operations for at least the next twelve months14 - A one-for-fifteen reverse stock split of the company's common stock was effected on February 8, 2019, with all share and per-share amounts retroactively adjusted in the financial statements15 - During the nine months ended September 30, 2019, the company issued 3.9 million shares of common stock under its controlled equity offering sales agreement with Cantor, resulting in net proceeds of $13.8 million43 - In the first quarter of 2019, the company recorded a non-cash impairment charge of $1.8 million related to an investment in a private company due to the deterioration of its financial condition41 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, and strategic focus on key drug candidates and clinical development programs Overview - Celldex is a biopharmaceutical company focused on developing and commercializing immunotherapies and other targeted biologics for cancer and other diseases with unmet needs67 - The company is concentrating its resources on the research and development of three primary drug candidates: CDX-1140 (CD40 agonist), CDX-3379 (ErbB3 inhibitor), and CDX-0159 (KIT inhibitor)68 - All development programs are currently fully owned by Celldex, aligning with its strategy to maximize value by either retaining full economic rights or entering into favorable commercial partnerships70 Clinical Development Programs - CDX-1140: The Phase 1 monotherapy dose escalation is complete, with a recommended Phase 2 dose of 1.5 mg/kg, and a combination cohort with KEYTRUDA® is planned to open in Q1 20208592 - CDX-3379: A Phase 2 study in HNSCC showed a durable complete response, and the study has been expanded to evaluate biomarkers (FAT1/NOTCH mutations) that may be associated with antitumor activity98100102 - CDX-0159: A Phase 1a study in healthy subjects is planned to start by year-end 2019, with subsequent plans to study its efficacy in Chronic Idiopathic Urticaria (CIU)104 - Varlilumab: Future development is focused on creating a bispecific antibody that combines PD-1 blockade with a CD27 agonist, leveraging extensive experience from previous studies108 Results of Operations - For Q3 2019, net loss increased to $11.4 million from $7.2 million in Q3 2018, mainly due to a smaller gain on the fair value remeasurement of contingent consideration114115 - For the nine months ended Sep 30, 2019, net loss decreased to $40.4 million from $141.8 million in the prior-year period, primarily due to the absence of large non-cash goodwill ($91.0 million) and intangible asset ($18.7 million) impairment charges recorded in 2018125126 | R&D Expense Change (Nine Months Ended Sep 30, 2019 vs 2018) | Change (in thousands) | Percentage Change | | :--- | :--- | :--- | | Personnel | $(5,931) | (26)% | | Product Development | $(12,588) | (75)% | | Total R&D Expense | $(22,909) | (41)% | Liquidity and Capital Resources - As of September 30, 2019, the company had $72.9 million in cash, cash equivalents, and marketable securities138 - Management believes its current cash position is sufficient to fund planned operations through 2020138 - The company plans to raise additional capital through licensing, business combinations, or equity/debt offerings to meet future liquidity needs beyond 2020139 - Net cash used in operating activities for the first nine months of 2019 was $35.4 million, a decrease from $59.8 million in the same period of 2018, primarily due to lower R&D and G&A expenses140 Quantitative and Qualitative Disclosures About Market Risk The company's financial instruments, primarily cash and marketable securities, are exposed to market risk, though management deems interest rate risk immaterial due to short-term investments - The company's investment portfolio is used to preserve capital for funding operations and consists of cash, money market funds, and short-term, high-grade securities148 - Due to the short-term nature of its investments, the company does not believe it has material exposure to market risk from interest rate changes148 - The company does not utilize derivative financial instruments149 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of September 30, 2019, the company's disclosure controls and procedures were effective at a reasonable assurance level151 - No material changes were made to the internal control over financial reporting during the quarter ended September 30, 2019152 Part II — Other Information Risk Factors Refers investors to previously disclosed risk factors in the 2018 Form 10-K, noting no material changes during the period - The company states there were no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K filed on March 7, 2019156 - Investors are directed to the risk factors section in the 2018 Form 10-K for a comprehensive understanding of potential risks affecting the business, financial condition, or future results155 Exhibits This section lists the exhibits filed as part of the Form 10-Q report, including CEO and CFO certifications and XBRL data files, which are incorporated by reference - The report lists exhibits filed with the Form 10-Q, including CEO/CFO certifications (Exhibits 31.1, 31.2), Section 1350 certifications (Exhibit 32.1), and XBRL data files (Exhibit 101)154157
Celldex Therapeutics(CLDX) - 2019 Q3 - Quarterly Report