Celldex Therapeutics, Inc. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. Celldex is a clinical-stage biopharmaceutical company developing antibody therapeutics; it reported no product-sales revenue and has no approved commercial products. The filing was signed February 28, 2022.
Financial performance and position
| Metric | 2021 | 2020 |
|---|---|---|
| Total revenue | $4.7 million | $7.4 million |
| Research and development expense | $53.3 million | $42.5 million |
| General and administrative expense | $20.5 million | $14.5 million |
| Operating loss | $71.2 million | $63.4 million |
| Net loss | $70.5 million | $59.8 million |
| Net loss per share, diluted | $1.64 | $2.02 |
| Net cash used in operating activities | $60.9 million | $40.4 million |
Revenue fell 37%, principally because 2020 included a $1.8 million payment tied to the Rockefeller/Gilead transaction and higher contract-service revenue. Revenue was mainly contract manufacturing, research and development services, and grants—not product sales. Gross margin is not presented as a meaningful standalone measure in the filing.
At year-end, cash and cash equivalents were $39.1 million and marketable securities were $369.1 million, totaling $408.3 million. Total current assets were $410.8 million; current liabilities were $16.5 million; total liabilities were $25.2 million. No term-loan balance was outstanding; the 2020 term loan was repaid in 2020. Lease obligations and contingent consideration remain. Management said available cash, equivalents and securities were expected to fund planned operations through 2025, subject to assumptions and potential cash milestone payments.
Cash from financing was $272.4 million, including $269.9 million net proceeds from a July 2021 underwritten stock offering. Outstanding shares rose from 39.6 million at year-end 2020 to 46.7 million at year-end 2021. Investment and other income declined to $0.5 million from $2.4 million. Celldex recorded a $3.5 million non-cash impairment charge in 2021, versus $18.0 million in 2020, and a $1.4 million gain from remeasuring contingent consideration in 2021.
Material changes and business developments
- CDX-0159 became the largest identified R&D program expense: $24.4 million in 2021 versus $8.4 million in 2020. Positive interim Phase 1b results in cold urticaria and symptomatic dermographism included responses in all 19 fully dosed patients; the small, early-stage study does not establish efficacy in larger trials.
- CDX-0159 development expanded to prurigo nodularis, with the first patient dosed in a Phase 1b study in December 2021. Subcutaneous formulation and additional indications were discussed as plans or developments reported after year-end.
- CDX-1140 continued in Phase 1 expansion cohorts. The company reported preliminary activity with pembrolizumab, alongside more frequent arthralgia, myalgia and fatigue; a chemotherapy combination in pancreatic cancer may not be optimal, and alternatives are being explored.
- CDX-527 completed dose escalation and began an ovarian-cancer expansion cohort. Early data from 11 patients showed no dose-limiting toxicities or treatment-related serious adverse events; this remains preliminary Phase 1 evidence.
- The TAM program IPR&D asset was fully impaired in 2021 after limited third-party licensing interest. Celldex also recorded a full impairment of CDX-3379 in 2020 after discontinuing the program.
Outlook, risks and contingencies
- Management expects operating losses and higher cash use to continue as R&D advances, particularly for CDX-0159; it expects revenue to decrease over the next 12 months and R&D and G&A costs to increase.
- All leading programs remain investigational. Clinical results may not predict later-stage outcomes, and trials face safety, enrollment, regulatory, manufacturing and funding risks. COVID-19 and supply-chain disruptions could cause delays, although the company reported no significant impact to date.
- Celldex may need additional capital for long-term liquidity. Equity financing could dilute shareholders; debt or partnerships may constrain or reduce the company’s economics.
- Kolltan acquisition milestones were originally up to $172.5 million; after certain milestones were abandoned, Celldex estimated up to $107.5 million could remain payable if milestones are achieved. Payment may be in cash, shares or both. Litigation with the former Kolltan stockholder representative challenges the abandonment of certain milestones, including disputes related to CDX-0158/CDX-0159. The company could not estimate the outcome; trial was scheduled for June 2022.
- Other key risks include dependence on contract manufacturers and collaborators, competitive therapies, intellectual-property disputes, uncertain reimbursement and regulatory approval, and potential future impairment of the $27.2 million remaining IPR&D asset.
- PwC issued unqualified opinions on the financial statements and internal control over financial reporting; management and the auditor reported internal controls effective as of year-end.
Most important facts for investors to verify
- Progress, trial design, safety and durability of CDX-0159 results in larger and later-stage studies, including planned dosing and the subcutaneous formulation.
- Whether early CDX-1140 and CDX-527 signals translate into clinically meaningful results, and the safety and strategic direction of combination studies.
- Actual operating cash burn versus the stated funding runway through 2025, and the timing or need for additional financing.
- Outcome of the Kolltan milestone litigation and any milestone-related cash obligations or share dilution.
- Execution of manufacturing scale-up and CDX-0159 process transfer, and the status of remaining IPR&D and associated impairment assumptions.