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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-15006

CELLDEX THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware

    

No. 13-3191702

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

Perryville III Building, 53 Frontage Road, Suite 220, Hampton, New Jersey 08827

(Address of principal executive offices) (Zip Code)

(908) 200-7500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $.001

CLDX

Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer 

    

Accelerated filer 

Non-accelerated filer 

Smaller reporting company

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 

As of July 31, 2021, 46,481,843 shares of common stock, $.001 par value per share, were outstanding.

Table of Contents

CELLDEX THERAPEUTICS, INC.

FORM 10-Q

For the Quarterly Period Ended June 30, 2021

Table of Contents

 

    

Page

Part I — Financial Information

Item 1. Unaudited Financial Statements

3

Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020

3

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020

4

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3. Quantitative and Qualitative Disclosures About Market Risk

28

Item 4. Controls and Procedures

29

Part II — Other Information

Item 1. Legal Proceedings

30

Item 1A. Risk Factors

30

Item 6. Exhibits

31

Exhibit Index

31

Signatures

33

2

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

June 30, 

December 31, 

    

2021

    

2020

Assets

Current assets:

Cash and cash equivalents

$

43,446

$

43,836

Marketable securities

 

120,591

 

150,586

Accounts and other receivables

 

496

 

1,802

Prepaid and other current assets

 

3,073

 

1,619

Total current assets

 

167,606

 

197,843

Property and equipment, net

 

3,496

 

3,815

Operating lease right-of-use assets, net

2,718

3,449

Intangible assets, net

 

30,690

 

30,690

Other assets

 

41

 

41

Total assets

$

204,551

$

235,838

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

685

$

1,048

Accrued expenses

 

7,851

 

8,459

Current portion of operating lease liabilities

1,331

1,327

Current portion of other long-term liabilities

 

4,621

 

3,372

Total current liabilities

 

14,488

 

14,206

Long-term portion of operating lease liabilities

1,446

2,154

Other long-term liabilities

 

6,335

 

10,121

Total liabilities

 

22,269

 

26,481

Commitments and contingent liabilities

Stockholders’ equity:

Convertible preferred stock, $.01 par value; 3,000,000 shares authorized; no shares issued and outstanding at June 30, 2021 and December 31, 2020

 

 

Common stock, $.001 par value; 297,000,000 shares authorized; 39,616,696 and 39,603,771 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

 

40

 

40

Additional paid-in capital

 

1,282,657

 

1,279,824

Accumulated other comprehensive income

 

2,592

 

2,589

Accumulated deficit

 

(1,103,007)

 

(1,073,096)

Total stockholders’ equity

 

182,282

 

209,357

Total liabilities and stockholders’ equity

$

204,551

$

235,838

See accompanying notes to unaudited condensed consolidated financial statements

3

Table of Contents

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share amounts)

Three Months
Ended

Three Months
Ended

Six Months
Ended

Six Months
Ended

    

June 30, 2021

    

June 30, 2020

    

June 30, 2021

    

June 30, 2020

Revenues:

Product development and licensing agreements

$

26

$

$

29

$

2,285

Contracts and grants

 

3,454

 

236

 

4,136

 

680

Total revenues

 

3,480

 

236

 

4,165

 

2,965

Operating expenses:

Research and development

 

12,356

 

9,705

 

25,076

 

21,400

General and administrative

 

4,306

 

3,528

 

8,426

 

7,194

Intangible asset impairment

3,500

3,500

Loss (gain) on fair value remeasurement of contingent consideration

258

(5,132)

741

(4,898)

Total operating expenses

 

16,920

 

11,601

 

34,243

 

27,196

Operating loss

 

(13,440)

 

(11,365)

 

(30,078)

 

(24,231)

Investment and other income, net

 

67

 

106

 

167

 

347

Net loss before income tax benefit

(13,373)

(11,259)

(29,911)

(23,884)

Income tax benefit

228

228

Net loss

$

(13,373)

$

(11,031)

$

(29,911)

$

(23,656)

Basic and diluted net loss per common share

$

(0.34)

$

(0.50)

$

(0.76)

$

(1.20)

Shares used in calculating basic and diluted net loss per share

 

39,616

 

22,082

 

39,615

 

19,744

Comprehensive loss:

Net loss

$

(13,373)

$

(11,031)

$

(29,911)

$

(23,656)

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities

 

5

 

(3)

 

3

 

(25)

Comprehensive loss

$

(13,368)

$

(11,034)

$

(29,908)

$

(23,681)

See accompanying notes to unaudited condensed consolidated financial statements

4

Table of Contents

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(In thousands)

Six Months
Ended

Six Months
Ended

    

June 30, 2021

    

June 30, 2020

Cash flows from operating activities:

Net loss

$

(29,911)

$

(23,656)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

 

1,539

 

2,313

Amortization and premium of marketable securities, net

 

(173)

 

(335)

Gain on sale or disposal of assets

(24)

(20)

Intangible Asset Impairment

3,500

Loss (gain) on fair value remeasurement of contingent consideration

741

(4,898)

Non-Cash Income Tax Benefit

(228)

Stock-based compensation expense

 

2,784

 

1,408

Changes in operating assets and liabilities:

Accounts and other receivables

 

1,306

 

686

Prepaid and other current assets

 

(1,544)

 

(436)

Accounts payable and accrued expenses

 

(750)

 

(254)

Other liabilities

 

(3,982)

 

(1,412)

Net cash used in operating activities

 

(30,014)

 

(23,332)

Cash flows from investing activities:

Sales and maturities of marketable securities

 

116,000

 

47,000

Purchases of marketable securities

 

(85,739)

 

(132,439)

Acquisition of property and equipment

(710)

(1,145)

Proceeds from sale or disposal of assets

24

20

Net cash provided by (used in) investing activities

 

29,575

 

(86,564)

Cash flows from financing activities:

Net proceeds from stock issuances

 

 

166,667

Proceeds from issuance of stock from employee benefit plans

 

49

 

24

Issuance of Term Loan

2,962

Payment of Term Loan

(2,962)

Net cash provided by financing activities

 

49

 

166,691

Net (decrease) increase in cash and cash equivalents

 

(390)

 

56,795

Cash and cash equivalents at beginning of period

 

43,836

 

11,232

Cash and cash equivalents at end of period

$

43,446

$

68,027

Non-cash investing activities

Accrued construction in progress

$

$

22

See accompanying notes to unaudited condensed consolidated financial statements

5

Table of Contents

CELLDEX THERAPEUTICS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2021

(1)  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Celldex Therapeutics, Inc. (the “Company” or “Celldex”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the operations of the Company and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

These interim financial statements do not include all the information and footnotes required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited financial statements for the year ended December 31, 2020, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2021. In the opinion of management, the interim financial statements reflect all normal recurring adjustments necessary to fairly state the Company’s financial position and results of operations for the interim periods presented. The year-end condensed balance sheet data presented for comparative purposes was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future interim period or the fiscal year ending December 31, 2021.

At June 30, 2021, the Company had cash, cash equivalents and marketable securities of $164.0 million. The Company has had recurring losses and incurred a loss of $29.9 million for the six months ended June 30, 2021. Net cash used in operations for the six months ended June 30, 2021 was $30.0 million. The Company believes that the cash, cash equivalents and marketable securities at the filing date of this Form 10-Q will be sufficient to meet estimated working capital requirements and fund planned operations for at least the next twelve months from the date of issuance of these financial statements.

During the next twelve months and beyond, the Company may take further steps to raise additional capital to meet its long-term liquidity needs including, but not limited to, one or more of the following: the licensing of drug candidates with existing or new collaborative partners, possible business combinations, issuance of debt, or the issuance of common stock or other securities via private placements or public offerings. Although the Company has been successful in raising capital in the past, there can be no assurance that additional financing will be available on acceptable terms, if at all, and the Company’s negotiating position in capital-raising efforts may worsen as existing resources are used. There is also no assurance that the Company will be able to enter into further collaborative relationships. Additional equity financings may be dilutive to the Company’s stockholders; debt financing, if available, may involve significant cash payment obligations and covenants that restrict the Company’s ability to operate as a business; and licensing or strategic collaborations may result in royalties or other terms which reduce the Company’s economic potential from products under development. The Company’s ability to continue funding its planned operations beyond twelve months from the issuance date is also dependent on the timing and manner of payment of contingent milestones from the acquisition of Kolltan Pharmaceuticals, Inc. (“Kolltan”), in the event that the Company achieves the drug candidate milestones related to those payments. The Company, at its option, may decide to pay those milestone payments in cash, shares of its common stock or a combination thereof. If the Company is unable to raise the funds necessary to meet its long-term liquidity needs, it may have to delay or discontinue the development of one or more programs, discontinue or delay ongoing or anticipated clinical trials, license out programs earlier than expected, raise funds at a significant discount or on other unfavorable terms, if at all, or sell all or a part of the Company.

6

Table of Contents

In December 2019, a novel strain of coronavirus, now referred to as COVID-19, surfaced in Wuhan, China. The virus continues to spread globally, has been declared a pandemic by the World Health Organization and has spread to hundreds of countries, including the United States. The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global economy, as well as businesses and capital markets around the world. In an effort to halt the outbreak of COVID-19, various states, including New Jersey, Massachusetts and Connecticut, where the Company has office, research and manufacturing facilities, have placed significant restrictions on travel and many businesses have announced extended closures which could adversely impact our operations. To date, the Company has not experienced significant delays or disruptions in planned and ongoing preclinical and clinical trials, manufacturing or shipping. Potential impacts to our business include delays in planned and ongoing preclinical and clinical trials including enrollment of patients, disruptions in time and resources provided by independent clinical investigators, contract research organizations, and other third-party service providers, temporary closures of our facilities, disruptions or restrictions on our employees’ ability to travel, and delays in manufacturing and/or shipments to and from third party suppliers and contract manufacturers for APIs and drug product. Any prolonged negative impacts to our business could materially impact our operating results and could lead to impairments of our Intangible in-process research and development (“IPR&D”) assets with a carrying value of $30.7 million at June 30, 2021.

(2)  Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements on Form 10-Q for the three and six months ended June 30, 2021 are consistent with those discussed in Note 2 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

In June 2016, the FASB issued guidance on the Measurement of Credit Losses on Financial Instruments. The guidance requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard will be effective for the Company on January 1, 2023. We are currently evaluating the potential impact that this standard may have on the Company’s consolidated financial statements and related disclosures.

7

Table of Contents

(3)  Fair Value Measurements

The following tables set forth the Company’s financial assets and liabilities subject to fair value measurements:

As of

    

June 30, 2021

    

Level 1

    

Level 2

    

Level 3

(In thousands)

Assets:

Money market funds and cash equivalents

$

40,174

$

40,174

Marketable securities

120,591

120,591

$

160,765

$

160,765

Liabilities:

Kolltan acquisition contingent consideration

$

9,008

$

9,008

$

9,008

$

9,008

As of

    

December 31, 2020

    

Level 1

    

Level 2

    

Level 3

(In thousands)

Assets:

Money market funds and cash equivalents

$

35,066

$

35,066

Marketable securities

150,586

150,586

$

185,652

$

185,652

Liabilities:

Kolltan acquisition contingent consideration

$

8,267

$

8,267

$

8,267

$

8,267

The Company’s financial assets consist mainly of money market funds, cash equivalents and marketable securities and are classified as Level 2 within the valuation hierarchy. The Company values its marketable securities utilizing independent pricing services which normally derive security prices from recently reported trades for identical or similar securities, making adjustments based on significant observable transactions. At each balance sheet date, observable market inputs may include trade information, broker or dealer quotes, bids, offers or a combination of these data sources.

The following table reflects the activity for the Company’s contingent consideration liabilities measured at fair value using Level 3 inputs for the six months ended June 30, 2021 (in thousands):

Other Liabilities:

Contingent

    

 Consideration

Balance at December 31, 2020

$

8,267

Fair value adjustments included in operating expenses

 

741

Balance at June 30, 2021

$

9,008

The valuation technique used to measure fair value of the Company’s Level 3 liabilities, which consist of contingent consideration related to the acquisition of Kolltan in 2016, was primarily an income approach. The significant unobservable inputs used in the fair value measurement of the contingent consideration are estimates including probability of success, discount rates and amount of time until the conditions of the milestone payments are met. As of June 30, 2021, the weighted average discount rate used in calculating the fair value of contingent consideration was 6.3% (with a range of 5.9% to 7.4%) and the weighted average amount of time until the conditions of the milestone payments are met was 3 years.

During the three and six months ended June 30, 2021, the Company recorded a $0.3 million and $0.7 million loss on fair value remeasurement of contingent consideration, respectively, primarily due to changes in discount rates and the passage of time. During the three and six months ended June 30, 2020, the Company recorded a $5.1 million and $4.9 million gain on fair value remeasurement of contingent consideration, respectively, primarily due to updated assumptions for CDX-3379 related milestones due to the discontinuation of the CDX-3379 program and the passage of time. The assumptions related to determining the fair value of contingent consideration include a significant amount of judgment, and any changes in the underlying estimates could have a material impact on the amount of contingent consideration adjustment recorded in any given period.

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The Company did not have any transfers in or out of Level 3 assets or liabilities during the six months ended June 30, 2021.

(4)  Marketable Securities

The following is a summary of marketable debt securities, classified as available-for-sale:

Gross Unrealized

Amortized

Fair

    

Cost

    

Gains

    

Losses

    

Value

(In thousands)

June 30, 2021

Marketable securities

U.S. government and municipal obligations

Maturing in one year or less

$

16,168

$

3

$

$

16,171

Maturing after one year through three years

8,181

2

8,183

Total U.S. government and municipal obligations

$

24,349

$

5

$

$

24,354

Corporate debt securities

Maturing in one year or less

$

96,246

$

$

(9)

$

96,237

Maturing after one year through three years

Total corporate debt securities

$

96,246

$

$

(9)

$

96,237

Total marketable securities

$

120,595

$

5

$

(9)

$

120,591

Gross Unrealized

Amortized

Fair

Cost

    

Gains

    

Losses

    

Value

(In thousands)

December 31, 2020

Marketable securities

U.S. government and municipal obligations

Maturing in one year or less

$

40,328

$

3

$

(2)

$

40,329

Maturing after one year through three years

Total U.S. government and municipal obligations

$

40,328

$

3

$

(2)

$

40,329

Corporate debt securities

Maturing in one year or less

$

110,265

$

2

$

(10)

$

110,257

Maturing after one year through three years

Total corporate debt securities

$

110,265

$

2

$

(10)

$

110,257

Total marketable securities

$

150,593

$

5

$

(12)

$

150,586

The Company holds investment-grade marketable securities, and none were in a continuous unrealized loss position for more than twelve months as of June 30, 2021 and December 31, 2020. The unrealized losses are attributable to changes in interest rates and the Company does not believe any unrealized losses represent other-than-temporary impairments. Marketable securities include $0.3 million and $0.2 million in accrued interest at June 30, 2021 and December 31, 2020, respectively.

(5)  Intangible Assets

At June 30, 2021 and December 31, 2020, the carrying value of the Company’s indefinite-lived intangible assets was $30.7 million. Indefinite-lived intangible assets consist of acquired IPR&D related to the development of the anti-KIT program (including CDX-0159) and the TAM program, a broad antibody discovery effort to generate antibodies that modulate the TAM family of RTKs, comprised of Tyro3, AXL and MerTK. CDX-0159 is in Phase 1 development and the TAM program is in preclinical development. As of June 30, 2021, none of the Company’s IPR&D assets had reached technological feasibility nor did any have alternative future uses.

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The Company performs an impairment test on IPR&D assets at least annually, or more frequently if events or changes in circumstances indicate that IPR&D assets may be impaired. As a result of the discontinuation of the CDX-3379 program in the second quarter of 2020, the Company concluded that the CDX-3379 IPR&D asset was fully impaired and a non-cash impairment charge of $3.5 million was recorded in the second quarter of 2020. As a result of a change in the projected development and regulatory timeline related to the TAM program in the fourth quarter of 2020, the Company concluded that the TAM IPR&D asset was partially impaired and a non-cash impairment charge of $14.5 million was recorded in the fourth quarter of 2020. Due to the nature of IPR&D projects, the Company may experience future delays or failures to obtain regulatory approvals to conduct clinical trials, failures of such clinical trials or other failures to achieve a commercially viable product, and as a result, may recognize further impairment losses in the future.

(6) Other Long-Term Liabilities

Other long-term liabilities include the following:

    

June 30, 

    

December 31, 

2021

2020

(In thousands)

Net deferred tax liabilities related to IPR&D (Note 11)

$

1,840

$

1,840

Contingent milestones (Note 3)

9,008

8,267

Deferred revenue (Note 10)

 

108

 

3,386

Total

 

10,956

 

13,493

Less current portion

 

(4,621)

 

(3,372)

Long-term portion

$

6,335

$

10,121

(7) Stockholders’ Equity

In May 2016, the Company entered into a controlled equity offering sales agreement with Cantor Fitzgerald & Co. (“Cantor”) to allow the Company to issue and sell shares of its common stock from time to time through Cantor, acting as agent. At June 30, 2021, the Company had $50.0 million remaining in aggregate gross offering price available under the Company’s November 2020 prospectus.

In July 2021, the Company issued 6,845,238 shares of its common stock in an underwritten public offering resulting in net proceeds to the Company of approximately $270.0 million, after deducting underwriting fees and offering expenses.

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The changes in Stockholders’ Equity during the three and six months ended June 30, 2021 and 2020 are summarized below:

    

    

    

    

Accumulated

    

    

Common

Common

Additional

Other

Total

Stock

Stock Par

Paid-In

Comprehensive

Accumulated

Stockholders’

Shares

Value

Capital

 Income

Deficit

 Equity

(In thousands, except share amounts)

Consolidated balance at December 31, 2020

 

39,603,771

 

$

40

 

$

1,279,824

 

$

2,589

 

$

(1,073,096)

 

$

209,357

Shares issued under stock option and employee stock purchase plans

 

10,867

 

 

 

 

74

 

 

 

 

 

 

74

Stock-based compensation

 

 

 

 

 

1,275

 

 

 

 

 

 

1,275

Unrealized loss on marketable securities

 

 

 

 

 

 

 

(2)

 

 

 

 

(2)

Net loss

 

 

 

 

 

 

 

 

 

(16,538)

 

 

(16,538)

Consolidated balance at March 31, 2021

 

39,614,638

 

$

40

 

$

1,281,173

 

$

2,587

 

$

(1,089,634)

 

$

194,166

Shares issued under stock option and employee stock purchase plans

 

2,058

 

 

 

 

(25)

 

 

 

 

 

 

(25)

Stock-based compensation

 

 

 

 

 

1,509

 

 

 

 

 

 

1,509

Unrealized gain on marketable securities

 

 

 

 

 

 

 

5

 

 

 

 

5

Net loss

 

 

 

 

 

 

 

 

 

(13,373)

 

(13,373)

Consolidated balance at June 30, 2021

 

39,616,696

 

40

 

1,282,657

 

2,592

 

(1,103,007)

 

182,282

    

    

    

    

Accumulated

    

    

Common

Common

Additional

 Other

Total

 Stock

 Stock Par

 Paid-In

 Comprehensive

Accumulated 

Stockholders’

 Shares

 Value

 Capital

 Income

Deficit

 Equity

(In thousands, except share amounts)

Consolidated balance at December 31, 2019

 

16,972,077

$

17

$

1,104,706

$

2,619

$

(1,013,316)

$

94,026

Shares issued under stock option and employee stock purchase plans

 

12,573

 

 

24

 

 

 

24

Shares issued in connection with at the market agreement

 

746,152

 

1

 

1,613

 

 

 

1,614

Stock-based compensation

 

 

 

686

 

 

 

686

Unrealized loss on marketable securities

 

 

 

 

(22)

 

 

(22)

Net loss

 

 

 

 

 

(12,625)

 

(12,625)

Consolidated balance at March 31, 2020

 

17,730,802

$

18

$

1,107,029

$

2,597

$

(1,025,941)

$

83,703

Shares issued in connection with at the market agreement

 

5,978,452

 

6

 

23,686

 

 

 

23,692

Shares issued in underwritten offering

 

15,384,614

 

15

 

141,346

 

 

 

141,361

Stock-based compensation

 

 

 

722

 

 

 

722

Unrealized loss on marketable securities

 

 

 

 

(3)

 

 

(3)

Net loss

 

 

 

 

 

(11,031)

 

(11,031)

Consolidated balance at June 30, 2020

 

39,093,868

 

39

 

1,272,783

 

2,594

 

(1,036,972)

 

238,444

(8)  Stock-Based Compensation

A summary of stock option activity for the six months ended June 30, 2021 is as follows:

Weighted

Weighted

Average

Average

Exercise

Remaining

Price

Contractual

    

Shares

    

Per Share

    

Term (In Years)

Options outstanding at December 31, 2020

 

3,042,229

$

28.93

8.2

Granted

 

1,340,010

$

27.97

Exercised

 

(2,058)

$

4.74

Canceled

 

(35,559)

$

9.78

Options outstanding at June 30, 2021

 

4,344,622

$

28.80

8.4

Options vested and expected to vest at June 30, 2021

 

4,174,361

$

29.17

8.4

Options exercisable at June 30, 2021

 

1,445,834

$

51.46

6.7

Shares available for grant under the 2021 Plan

 

3,294,526

The weighted average grant-date fair value of stock options granted during the three and six months ended June 30, 2021 was $21.73 and $21.71, respectively.

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The aggregate intrinsic value of stock options vested and expected to vest at June 30, 2021 was $69.9 million. The aggregate intrinsic value of stock options exercisable at June 30, 2021 was $26.0 million. As of June 30, 2021, total compensation cost related to non-vested employee and non-employee director stock options not yet recognized was approximately $36.0 million, net of estimated forfeitures, which is expected to be recognized as expense over a weighted average period of 3.1 years.

Stock-based compensation expense for the three and six months ended June 30, 2021 and 2020 was recorded as follows:

Three months ended June 30, 

Six months ended June 30, 

    

2021

    

2020

    

2021

    

2020

(In thousands)

(In thousands)

Research and development

$

762

$

342

$

1,423

$

652

General and administrative

 

747

 

380

 

1,361

 

756

Total stock-based compensation expense

$

1,509

$

722

$

2,784

$

1,408

The fair values of employee and director stock options granted during the three and six months ended June 30, 2021 and 2020 were valued using the Black-Scholes option pricing model with the following assumptions:

Three months ended June 30, 

Six months ended June 30, 

    

    

2021

2020

    

2021

    

2020

Expected stock price volatility

 

9798%

97%

9798%

9197%

Expected option term

 

6.0 Years

6.0 Years

6.0 Years

6.0 Years

Risk-free interest rate

 

1.21.3%

0.5%

0.81.3%

0.50.6%

Expected dividend yield

 

None

None

None

None

(9)  Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income, which is reported as a component of stockholders’ equity, for the six months ended June 30, 2021 are summarized below:

Unrealized

Loss on

Marketable

Foreign

    

Securities

    

Currency Items

    

Total

(In thousands)

Balance at December 31, 2020

$

(7)

$

2,596

$

2,589

Other comprehensive gain

 

3

 

 

3

Balance at June 30, 2021

$

(4)

$

2,596

$

2,592

No amounts were reclassified out of accumulated other comprehensive income during the six months ended June 30, 2021.

(10)  Revenue

Product Development and Licensing Revenue

The Company’s agreement with Rockefeller University, as amended, (the “Rockefeller Agreement”) provides for the Company to perform manufacturing and development services for Rockefeller University for their portfolio of antibodies against HIV. This portfolio was licensed to Gilead Sciences in January 2020 from Rockefeller University (“Rockefeller Transaction”). Pursuant to the Rockefeller Agreement, the Company received an upfront payment of $1.8 million as a result of the Rockefeller Transaction which was recorded to revenue during the first quarter of 2020. The Company is eligible to receive additional payments from Rockefeller University if this portfolio progresses through clinical and commercial development.

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Contract and Grants Revenue

The Company has entered into the Rockefeller Agreement and an agreement with Gilead Sciences pursuant to which the Company performs manufacturing and research and development services on a time-and-materials basis or at a negotiated fixed-price. The Company recognized $3.2 million and $3.8 million in revenue under these agreements during the three and six months ended June 30, 2021, respectively, and $0.2 million and $0.6 million during the three and six months ended June 30, 2020, respectively.

During the third quarter of 2020, the Company was awarded a Small Business Innovation Research (“SBIR”) grant from the National Institutes of Health (NIH) to support the Company’s CDX-1140 and CDX-301 programs. The Company recognized $0.2 million and $0.3 million in grant revenue under the award during the three and six months ended June 30, 2021.

Contract Assets and Liabilities

At June 30, 2021 and December 31, 2020, the Company’s right to consideration under all contracts was considered unconditional, and as such, there were no recorded contract assets. At June 30, 2021, the Company had $0.1 million in contract liabilities recorded, which is expected to be recognized during the next 12 months as manufacturing and research and development services are performed. At December 31, 2020, the Company had $3.4 million in contract liabilities recorded. Revenue recognized from contract liabilities as of December 31, 2020 during the three and six months ended June 30, 2021 was $3.0 million and $3.4 million, respectively.

(11)  Income Taxes

The Company has evaluated the positive and negative evidence bearing upon the realizability of its net deferred tax assets and considered its history of losses, ultimately concluding that it is “more likely than not” that the Company will not recognize the benefits of federal, state and foreign deferred tax assets and, as such, has maintained a full valuation allowance on its deferred tax assets as of June 30, 2021 and December 31, 2020.

The net deferred tax liability of $1.8 million at June 30, 2021 and December 31, 2020 relates to the temporary differences associated with the IPR&D intangible assets acquired in previous business combinations and is not deductible for tax purposes. A $0.2 million non-cash income tax benefit was recorded during the second quarter of 2020 related to the impairment of the CDX-3379 IPR&D asset and a $0.9 million non-cash income tax benefit was recorded during the fourth quarter of 2020 related to the partial impairment of the TAM program IPR&D asset.

Massachusetts, New Jersey, New York and Connecticut are the jurisdictions in which the Company primarily operates or has operated and has income tax nexus. The Company is not currently under examination by these or any other jurisdictions for any tax year.

(12)  Net Loss Per Share

Basic net loss per common share is based upon the weighted-average number of common shares outstanding during the period, excluding restricted stock that has been issued but is not yet vested. Diluted net loss per common share is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average potentially dilutive common shares outstanding during the period when the effect is dilutive. In periods in which the Company reports a net loss, there is no difference between basic and diluted net loss per share because dilutive shares of common stock are not assumed to have been issued as their effect is anti-dilutive. The potentially dilutive common shares that have not been included in the net loss per common share calculations because the effect would have been anti-dilutive are as follows:

Six Months Ended June 30, 

    

2021

    

2020

Stock Options

 

4,344,622

 

3,085,287

Restricted Stock

 

 

 

4,344,622

 

3,085,287

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(13)  Kolltan Acquisition

On November 29, 2016, the Company acquired all of the share and debt interests of Kolltan, a clinical-stage biopharmaceutical company, in exchange for 1,217,200 shares of the Company’s common stock plus contingent consideration in the form of development, regulatory approval and sales-based milestones (“Kolltan Milestones”) of up to $172.5 million. The Kolltan Milestone payments, if any, may be made, at Celldex’s sole election, in cash, in shares of Celldex’s common stock or a combination of both, subject to provisions of the Merger Agreement. Certain Kolltan Milestones related to the METRIC clinical study, TAM partnership closing within two years of the acquisition, CDX-3379 and CDX-0158 have been abandoned and, because of this, as of June 30, 2021, the Company believes that the adjusted amount we may be required to pay for future consideration is up to $107.5 million contingent upon the achievement of the Kolltan Milestones.

In October 2019, the Company received a letter from Shareholder Representative Services LLC (“SRS”), the hired representative of the former stockholders of Kolltan, notifying the Company that it objected to the Company’s characterization of the development, regulatory approval and sales-based Kolltan Milestones relating to CDX-0158 as having been abandoned and contending instead that the related milestone payments are due from Celldex to the Kolltan stockholder. The Company disagrees with their objection and believes their objection to be without merit.

On August 18, 2020, Celldex filed a Verified Complaint in the Court of Chancery of the State of Delaware against SRS (acting in its capacity as the representative of the former stockholders of Kolltan pursuant to the Merger Agreement) seeking declaratory relief with respect to the rights and obligations of the parties relating to certain contingent milestone payments under the Merger Agreement relating to the discontinued CDX-0158 program. Specifically, Celldex sought the entry of an order declaring that:

(i)

Celldex’s determination to discontinue the development of CDX-0158 (formerly known as KTN0158) was proper and valid under the Merger Agreement;

(ii)

the Milestone Abandonment Notice dated December 5, 2018 from Celldex was valid and effective under the Merger Agreement and that the “Successful Completion of Phase I Clinical Trial for KTN0158” Milestone has not been achieved and has properly been abandoned; and

(iii)

under the Merger Agreement, the CDX-0159 program is not a program that results in milestone payments under the Merger Agreement.

In SRS’ responsive Answer and Verified Counterclaim, SRS made claims of breach of contract with respect to the Merger Agreement, breach of implied covenant of good faith and fair dealing, declaratory relief, and unjust enrichment regarding abandonment of the CDX-0158 milestones, based in part on SRS’ assertion that the CDX-0159 program is in essence an extension of the CDX-0158 (formerly KTN0158) program. The parties entered into non-binding mediation in May 2021 following SRS’s approach to Celldex about its interest in settlement or mediation discussions, but those discussions did not result in a resolution of the dispute. The case remains ongoing and we are currently unable to predict or estimate the outcome of this matter. The case is currently scheduled for trial in June 2022.

Following the Company’s discontinuation of the CDX-3379 program, the Company sent a milestone abandonment notice to SRS with respect to Kolltan Milestones related to the CDX-3379 program. In October 2020, the Company received notice that SRS has objected to that notice, seeking further information from the Company, which was provided pursuant to the terms of the Merger Agreement.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future.

There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:

our dependence on product candidates, which are still in an early development stage;
our ability to successfully complete research and further development, including preclinical and clinical studies, and, if we obtain regulatory approval, commercialization of our drug candidates and the growth of the markets for those drug candidates;
our anticipated timing for preclinical development, regulatory submissions, commencement and completion of clinical trials and product approvals;
the impact of the COVID-19 pandemic on our business or on the economy generally;
whether the COVID-19 pandemic will affect the timing of the completion of our planned and/or currently ongoing preclinical/clinical trials;
our ability to negotiate strategic partnerships, where appropriate, for our drug candidates;
our ability to manage multiple clinical trials for a variety of drug candidates at different stages of development;
the cost, timing, scope and results of ongoing preclinical and clinical testing;
our expectations of the attributes of our product and development candidates, including pharmaceutical properties, efficacy, safety and dosing regimens;
the cost, timing and uncertainty of obtaining regulatory approvals for our drug candidates;
the availability, cost, delivery and quality of clinical management services provided by our clinical research organization partners;
the availability, cost, delivery and quality of clinical and commercial-grade materials produced by our own manufacturing facility or supplied by contract manufacturers, suppliers and partners;
our ability to develop and commercialize products before competitors that are superior to the alternatives developed by such competitors;

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our ability to develop technological capabilities, including identification of novel and clinically important targets, exploiting our existing technology platforms to develop new drug candidates and expand our focus to broader markets for our existing targeted therapeutics;
the cost of paying development, regulatory approval and sales-based milestones under the merger agreement by which we acquired Kolltan, and the cost, timing, and outcome of our declaratory judgment action against the Kolltan stockholder representative with respect to certain of those milestones;
our ability to realize the anticipated benefits from the acquisition of Kolltan;
our ability to raise sufficient capital to fund our preclinical and clinical studies and to meet our long-term liquidity needs, on terms acceptable to us, or at all. If we are unable to raise the funds necessary to meet our long-term liquidity needs, we may have to delay or discontinue the development of one or more programs, discontinue or delay ongoing or anticipated clinical trials, license out programs earlier than expected, raise funds at significant discount or on other unfavorable terms, if at all, or sell all or part of our business;
our ability to protect our intellectual property rights and our ability to avoid intellectual property litigation, which can be costly and divert management time and attention;
our ability to develop and commercialize products without infringing the intellectual property rights of third parties; and
the risk factors set forth elsewhere in this quarterly report on Form 10-Q and the factors listed under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual report on Form 10-K for the year ended December 31, 2020 and other reports that we file with the Securities and Exchange Commission.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith, and we believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.

OVERVIEW

We are a biopharmaceutical company dedicated to developing therapeutic monoclonal and bispecific antibodies that address diseases for which available treatments are inadequate. Our drug candidates include antibody-based therapeutics which have the ability to engage the human immune system and/or directly affect critical pathways to improve the lives of patients with inflammatory diseases and many forms of cancer.

We are focusing our efforts and resources on the continued research and development of:

CDX-0159, a monoclonal antibody that specifically binds the KIT receptor and potently inhibits its activity, currently being studied in two Phase 1b studies. We are studying CDX-0159 in mast cell driven diseases, including, initially, in urticarias and plan to initiate a study in prurigo nodularis in the fourth quarter of 2021. In October and December 2020 respectively, we announced that enrollment had opened and the first patients had been dosed in Phase 1b studies in chronic spontaneous urticaria (CSU) and chronic inducible urticaria (CIndU). Positive interim data from the Phase 1b study in CIndU were reported in July 2021 in patients with cold urticaria and symptomatic dermographism. The study has also been expanded to include patients with cholinergic urticaria.

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CDX-1140, an agonist monoclonal antibody targeted to CD40, a key activator of immune response, currently being studied in a Phase1 study. Dose escalation was completed in solid tumors and lymphoma and the recommended dose for further study was determined to be 1.5 mg/kg for both CDX-1140 monotherapy and in combination with CDX-301, our dendritic cell growth factor. We have initiated multiple expansion cohorts within the study, including a combination cohort with KEYTRUDA® (pembrolizumab) in patients refractory to PD1/PDL1 treatment and a combination cohort with standard of care chemotherapy in patients with untreated metastatic pancreatic cancer. We are exploring additional combination cohorts with mechanisms that we believe could be complementary or synergistic with CDX-1140; and
CDX-527, a bispecific antibody that uses our proprietary highly active anti-PD-L1 and CD27 human antibodies to couple CD27 co-stimulation with blockade of the PD-L1/PD-1 pathway, for which we initiated a Phase 1 study in advanced solid tumors in August 2020.

We routinely work with external parties to collaboratively advance our drug candidates. In addition to Celldex-led studies, we also have an Investigator Initiated Research (IIR) program with multiple studies ongoing with our drug candidates.

Our goal is to build a fully integrated, commercial-stage biopharmaceutical company that develops important therapies for patients with unmet medical needs. We believe our program assets provide us with the strategic options to either retain full economic rights to our innovative therapies or seek favorable economic terms through advantageous commercial partnerships. This approach allows us to maximize the overall value of our technology and product portfolio while best ensuring the expeditious development of each individual product. Currently, all programs are fully owned by Celldex.

The expenditures that will be necessary to execute our business plan are subject to numerous uncertainties. Completion of clinical trials may take several years or more, and the length of time generally varies substantially according to the type, complexity, novelty and intended use of a drug candidate. It is not unusual for the clinical development of these types of drug candidates to each take five years or more, and for total development costs to exceed $100 million for each drug candidate. We estimate that clinical trials of the type we generally conduct are typically completed over the following timelines:

    

Estimated

 

Completion

Clinical Phase

 

Period

Phase 1

 

1 - 2 Years

Phase 2

 

1 - 5 Years

Phase 3

 

1 - 5 Years

The duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during the clinical trial protocol, including, among others, the following:

the number of patients that ultimately participate in the trial;
the duration of patient follow-up that seems appropriate in view of results;
the number of clinical sites included in the trials;
the length of time required to enroll suitable patient subjects; and
the efficacy and safety profile of the drug candidate.

We test potential drug candidates in numerous preclinical studies for safety, toxicology and immunogenicity. We may then conduct multiple clinical trials for each drug candidate. As we obtain results from trials, we may elect to discontinue or delay clinical trials for certain drug candidates in order to focus our resources on more promising drug candidates.

An element of our business strategy is to pursue the discovery, research and development of a broad portfolio of drug candidates. This is intended to allow us to diversify the risks associated with our research and development expenditures. To the extent we are unable to maintain a broad range of drug candidates, our dependence on the success of one or a few drug candidates increases.

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Regulatory approval is required before we can market our drug candidates as therapeutic products. In order to proceed to subsequent clinical trial stages and to ultimately achieve regulatory approval, the regulatory agency must conclude that our clinical data demonstrate that our product candidates are safe and effective. Historically, the results from preclinical testing and early clinical trials (through Phase 2) have often not been predictive of results obtained in later clinical trials. A number of new drugs and biologics have shown promising results in early clinical trials but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals.

Furthermore, our business strategy includes the option of entering into collaborative arrangements with third parties to complete the development and commercialization of our drug candidates. In the event that third parties take over the clinical trial process for one of our drug candidates, the estimated completion date would largely be under control of that third party rather than us. We cannot forecast with any degree of certainty which proprietary products, if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our development plan or capital requirements. Our programs may also benefit from subsidies, grants, contracts or government or agency-sponsored studies that could reduce our development costs.

As a result of the uncertainties discussed above, among others, it is difficult to accurately estimate the duration and completion costs of our research and development projects or when, if ever, and to what extent we will receive cash inflows from the commercialization and sale of a product. Our inability to complete our research and development projects in a timely manner or our failure to enter into collaborative agreements, when appropriate, could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to seek additional, external sources of financing from time to time in order to continue with our business strategy. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business.

During the past five years through December 31, 2020, we incurred an aggregate of $350.6 million in research and development expenses. The following table indicates the amount incurred for each of our significant research programs and for other identified research and development activities during the six months ended June 30, 2021 and 2020. The amounts disclosed in the following table reflect direct research and development costs, license fees associated with the underlying technology and an allocation of indirect research and development costs to each program.

    

Six Months 

    

Six Months 

Ended

Ended

June 30, 2021

June 30, 2020

 

(In thousands)

CDX‑0159/Anti-KIT Program

$

10,973

$

2,896

CDX‑1140 and CDX-301

 

2,845

 

5,586

CDX‑527

 

2,328

 

5,891

Other Programs

 

8,930

 

7,027

Total R&D Expense

$

25,076

$

21,400

Clinical Development Programs

While our clinical development programs have not been significantly, negatively impacted by COVID-19 to date, we continue to carefully monitor the evolving situation closely across all our development programs and work to minimize potential impact/disruptions.

CDX-0159

CDX-0159 is a humanized monoclonal antibody that specifically binds the receptor tyrosine kinase KIT and potently inhibits its activity. KIT is expressed in a variety of cells, including mast cells, and its activation by its ligand SCF regulates mast cell growth, differentiation, survival, chemotaxis and degranulation. In certain inflammatory diseases, such as chronic spontaneous urticaria (CSU), also known as chronic idiopathic urticaria (CIU) and chronic inducible urticaria (CIndU), mast cell degranulation plays a central role in the onset and progression of the disease.

CDX-0159 is designed to block KIT activation by disrupting both SCF binding and KIT dimerization. Celldex believes that by targeting KIT, CDX-0159 may be able to inhibit mast cell activity and decrease mast cell numbers to provide potential clinical benefit in mast cell related diseases.

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In June 2020, we completed a randomized, double-blind, placebo-controlled, single ascending dose escalation Phase 1a study of CDX-0159 in healthy subjects (n=32; 8 subjects per cohort, 6 CDX-0159; 2 placebo). Subjects received a single intravenous infusion of CDX-0159 at 0.3, 1.0, 3.0, or 9.0 mg/kg or placebo. The objectives of the study included safety and tolerability, pharmacokinetics (PK) and pharmacodynamics (tryptase and stem cell factor) and immunogenicity. Tryptase is an enzyme synthesized and secreted almost exclusively by mast cells and decreases in plasma tryptase levels are believed to reflect a systemic reduction in mast cell burden in both healthy volunteers and in disease. Data from the study were featured in a late breaking presentation at the European Academy of Allergy and Clinical Immunology (EAACI) Annual Congress 2020 in June. CDX-0159 demonstrated a favorable safety profile as well as profound and durable reductions of plasma tryptase, consistent with systemic mast cell suppression.

These data supported expansion of the CDX-0159 program into mast cell driven diseases, including initially in chronic spontaneous urticaria (CSU) and chronic inducible urticaria (CIndU), diseases where mast cell degranulation plays a central role in the onset and progression of the disease. The prevalence of CSU and CIndU is approximately 0.5-1% of the total population or up to 1 to 3 million patients in the United States alone (Weller et al. 2010. Hautarzt. 61(8), Bartlett et al. 2018. DermNet. Org). CSU presents as itchy hives, angioedema or both for at least six weeks without a specific trigger; multiple episodes can play out over years or even decades. About 50% of patients with CSU achieve symptomatic control with antihistamines or leukotriene receptor antagonists. Omalizumab, an IgE inhibitor, provides relief for roughly half of the remaining antihistamine/leukotriene refractory patients. Consequently, there is a need for additional therapies. CIndUs are forms of urticaria that have an attributable cause or trigger associated with them, typically resulting in hives or wheals. Celldex is exploring cold-induced, dermographism (scratch-induced) and cholinergic (exercise-induced) urticarias.

In October 2020, we announced that enrollment had opened and the first patient had been dosed in a Phase 1b multi-center study of CDX-0159 in CSU. This study is a randomized, double-blind, placebo-controlled clinical trial designed to assess the safety of multiple ascending doses of CDX-0159 in up to 40 patients with CSU who remain symptomatic despite treatment with antihistamines. Secondary and exploratory objectives include pharmacokinetic and pharmacodynamic assessments, including measurement of tryptase and stem cell factor levels and clinical activity outcomes (impact on urticaria symptoms, disease control, clinical response) as well as quality of life assessments. CDX-0159 is administered intravenously (0.5, 1.5, 3 and 4.5 mg/kg at varying dosing schedules) as add on treatment to H1-antihistamines, either alone or in combination with H2-antihistamines and/or leukotriene receptor agonists.

In December 2020, we announced that enrollment had opened and the first patient had been dosed in a second Phase 1b study in CIndU being conducted in Germany in patients who are refractory to antihistamines. This study is an open label clinical trial designed to evaluate the safety of a single dose of CDX-0159 in patients with cold urticaria (n=10) or symptomatic dermographism (n=10). In March of 2021, we added a third cohort in patients with cholinergic urticaria (n=10). Patient’s symptoms are induced via provocation testing that resembles real life triggering situations. Secondary and exploratory objectives include pharmacokinetic and pharmacodynamic assessments, including changes from baseline provocation thresholds, measurement of tryptase and stem cell factor levels, clinical activity outcomes (impact on urticaria symptoms, disease control, clinical response), quality of life assessments and measurement of tissue mast cells through skin biopsies. CDX-0159 is administered intravenously (3.0 mg/kg) on Day 1 as add on treatment to H1-antihistamines.

In July of 2021, we reported positive interim data from the cold urticaria and symptomatic dermographism cohorts. As of the data cut-off on June 11, 2021, 20 patients had received a single intravenous infusion of CDX-0159 at 3 mg/kg, including 11 patients with cold urticaria and 9 patients with symptomatic dermographism. Patients had high disease activity as assessed by provocation threshold testing. In patients with cold urticaria and symptomatic dermographism baseline critical temperature thresholds were 18.9°C/66°F (range: 5-27°C/41-80.6°F) and FricTest® thresholds were 3.8 (range: 3-4) of 4. Safety results were reported for all 20 patients; activity results were reported for the 19 patients who received a full dose of CDX-0159. 14 of 19 patients completed the 12-week study observation period and five were ongoing (range of 2-8 weeks) as of June 11, 2021.

All 19/19 (100%) patients experienced a clinical response as assessed by provocation threshold testing; 18/19 (95%) experienced a complete response and 1/19 (5%) experienced a partial response.10/10 (100%) patients with cold urticaria experienced a complete response. 8/9 (89%) patients with symptomatic dermographism experienced a complete response and 1/9 (11%) experienced a partial response. Compete responses were observed in all 3 patients (1 cold urticaria; 2 symptomatic dermographism) with prior Xolair® (omalizumab) experience, including two who were Xolair refractory.

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Rapid onset of responses after dosing and sustained durability were observed. Most patients with cold urticaria and symptomatic dermographism experienced a complete response by week 1 and by week 4, respectively. The median duration of response for patients was 77+ days for cold urticaria and 57+ days for symptomatic