Celldex Who? 2 Not-as-Risky Stocks That Shot Up in the Past Year

October 4, 2016
By Alex Keown, BioSpace.com Breaking News Staff

NEW YORK – Celldex Therapeutics was once counted as a hot stock by analysts at the Motley Fool. Although it suffered a fall following the failure of its cancer vaccine Rintega, some analysts pegged the company’s triple negative breast cancer candidate, glembatumumab vedotin as a turnaround drug.

Now though, Fool analyst George Budwell suggests that investors turn their attention from Celldex and focus on two other cancer drugmakers—Ariad Pharmaceuticals and Exelixis .

Ariad Pharmaceuticals

Cambridge, Mass.-based Ariad struggled earlier this year, slashing 25 percent of employees as part of an effort to invest in the growth of its drug products. In the spring that seemed to be paying off, as the streamlined company moved into a Phase III trial for its lung cancer drug brigatinib, an investigational anaplastic lymphoma kinase (ALK) inhibitor. The company could be looking at filing for approval sometime next year. Budwell said the company has also “shored up its balance sheet” through a European licensing deal with Incyte Corp. for its blood cancer drug, Iclusig. In 2014 Ariad inked a $77.5 million deal with Japanese firm Otsuka Pharmaceutical, giving Otsuka the rights in 10 Asian countries to Iclusig.

All of those things add up to make Ariad appear to be ripe for acquisition by a larger company, Budwell said. If brigatinib is approved by the U.S. Food and Drug Administration, Budwell said Ariad will become even more attractive for M&A prospects.

Shares of Ariad are down this morning, trading at $13.38.

Exelixis Inc.

Cancer treatment company Exelixis is expecting data from its Phase III live cancer drug, cabozantinib, later this year. Cabozantinib, a kinase inhibitor, is designed for a late-line of therapy, but if approved, could prove to be a strong revenue generator. In September, the company touted interim data from its Phase III trial that showed the drug was on course to meet its efficacy goals. A secondary interim analysis is anticipated at a later date. Later this month, Budwell said investors will get the chance to see “a more detailed look at cabozantinib's mid-stage trial dubbed CABOSUN for the treatment of front-line treatment for kidney cancer via an upcoming presentation at the European Society for Medical Oncology meeting on Oct. 10.”

While the trial data is exciting news for Bay Area-based Exelixis, Budwell said the company’s top line is forecasted to grow by more than 400 percent through the end of 2017.

Shares of Exelixis are currently trading at $12.66.

In the meantime, shares of Celldex are up more than 9 percent this morning, trading at $4.38 per share. The company has a market cap of about $382 million, Budwell said.