Expert Financial Analysis and Reporting

Investment Significance of Upcoming Conference Call
Celldex (CLDX) has raised expectations for positive results for rindopepimut in recurrent glioblastoma. It will hold a conference call on Monday, November 25 at 8:30 AM to discuss results on the use of rindopepimut in recurrent glioblastoma. The actions of Celldex clearly indicate that the data will be positive. The recently published abstract of the paper on which this presentation partially will be based, indicated that there was an immune response to rindopepimut and that there was one complete response and one objective response out of 25 patients for an overall response rate of 8%.

I find the data interesting from this standpoint. There is widespread skepticism on Wall Street and in the medical community that any cancer vaccine will be effective. There has been one cancer vaccine approved and that was Dendreon’s (DNDN) Provenge. However, there were a long string of failures before the Provenge approval and some after.

Even among people like me who are hopeful that cancer vaccines/ immunotherapy can be the next great breakthrough in oncology, the data causes me to scratch my head. The conventional wisdom is that cancer vaccines/ immunotherapy should be used as close as possible to initial diagnosis and surgery because it takes a long time to take effect. If so, rindopepimut would be expected to have little chance to work in the recurrence of an aggressive cancer like glioblastoma. Also, rindopepimut targets a single antigen, EGFRvIII, and many people believe that a cancer vaccine should target several antigens to be effective. Finally, some have suggested that there is less EGFRvIII expression in recurrent glioblastoma than newly diagnosed glioblastoma than recurrent. If so, rindopepimut would be expected to be more effective in newly diagnosed glioblastoma (for which phase III data is sometime off) than recurrent glioblastoma.

The conference call on Monday should be very interesting and may give us new insights into rindopepimut and perhaps cancer vaccines overall. There should be more data in the oral presentation than in the abstract that has already been published. The data in the abstract is several months old. In recurrent glioblastoma, this is a long time so that the data will be more mature and hopefully more meaningful.

This promises to be an important event for the stock. What is my prediction on the outcome? I think the data will be encouraging. However, this is based almost totally on the emphasis that Celldex has put on the data. Based purely on the science as I understand it, I would have been skeptical. I am extremely interested in seeing the data and hearing Celldex interprets it.

Background for Conference Call on Monday
Celldex announced on August 12, 2013, that it had completed enrollment in an initial cohort of 25 patients who were refractory to Avastin. Based on preliminary evidence of stable disease, tumor shrinkage and investigator-reported response, the company decided to add an expansion cohort of approximately 75 patients to better characterize the potential activity of rindopepimut in this refractory patient population.

The results in the 25 initial patients will be reported at the Society for Neuro-Oncology Annual Meeting of November 21 through 24 in San Francisco. The embargo on the abstract was lifted on Monday, November 11, and available on the SNO website. I have included a copy of the abstract in the appendix of this report. It has been accepted as an oral presentation and is entitled "ReACT: a Phase 2 Study of Rindopepimut Vaccine (CDX-110) Plus Bevacizumab in Relapsed Glioblastoma." The oral presentation will be made in a session lasting from 10:20 AM to 12:00 PM on Sunday, November 24. On Monday, November 25, at 8:30 am EST, management will also hold a conference call to review the data.

The data release relates to 25 patients enrolled in one arm of the Phase II ReACT trial in recurrent GBM. Patients with recurrent GBM have the expectation of six to nine months of median overall survival. They can be treated with Avastin, Gliadel Wafer as an adjunct to surgery (seldom used), surgery or just supportive care. These particular 25 patients were part of an arm of ReACT that enrolled patients who did not respond to Avastin. The August 12th announcement of the trial expansion obviously raised the expectation that rindopepimut had produced a clinically meaningful improvement.

The question is what constitutes a clinically meaningful improvement in recurrent GBM patients who are resistant to Avastin. I note that Avastin was approved in recurrent GBM on the basis that it produced tumor shrinkage in about 28% of patients, increased progression free survival by about 4.2 months but had no effect on median overall survival. Could it be the case that rindopepimut also might be approved on the basis of improvement only in progression free survival without an increase in median survival? Remember that these patients have very short survival expectations and have no viable drug option. Because of these factors, it is possible that this narrow indication could be a quick route to approval for rindopepimut.

Of the 600 recurrent glioblastoma patients, we don't know how many patients would be Avastin resistant. Hence, the addressable patient population is some fraction of 600. While this is a very small patient population, the approval for this narrow indication could be very important commercially. Once approved, it could lead to off-label use in newly diagnosed patients as well. And as previously noted, I am also expecting that rindopepimut could be priced at $100,000 per course of therapy so that 600 patients represents an addressable market of as much as $60 million in the US and $120 million worldwide.

The Abstract
I have included a copy of the abstract that has already been released.

ReACT: a phase II study of rindopepimut vaccine (CDX-110) plus bevacizumab in relapsed glioblastoma

David Reardon 1, Gordon Li2, Lawrence Recht2, Karen Fink3, Louis Nabors4, David Tran5, Annick Desjardins6, Nitin Chandramouli7, J. Paul Duic8, Morris Groves9, Anne Clarke10, Thomas Hawthorne10, Jennifer Green10, Michael Yellin10, John Sampson6
1Dana-Farber Cancer Institute, Boston, MA, USA, 2Stanford University School of Medicine, Stanford, CA, USA, 3Baylor Research Institute, Dallas, TX, USA, 4University of Alabama, Birmingham, AL, USA, 5Washington University, St. Louis, MO, USA, 6Duke University Medical Center, Durham, NC, USA, 7Utah Cancer Specialists, Salt Lake City, UT, USA, 8The Long Island Brain Tumor Center at Neurological Surgery, P.C, Lake Success, NY, USA, 9Texas Oncology, Austin, TX, USA, 10Celldex Therapeutics, Inc., Needham, MA, USA

EGFRvIII is a constitutively active tumorigenic deletion mutation of EGFR, expressed in ~30% of primary glioblastoma (GB) and linked to poor long-term survival. The investigational vaccine rindopepimut consists of the unique EGFRvIII peptide sequence conjugated to keyhole limpet hemocyanin (KLH), delivered intradermally with GM-CSF as an adjuvant. Three phase II studies of rindopepimut in newly diagnosed, resected, EGFRvIII+ GB have supported improvements in progression-free survival (PFS) and overall survival (OS), compared to contemporary cohorts matched for major eligibility criteria. Bevacizumab (BV), which inhibits VEGF and its immunosuppressive properties, may augment EGFRvIII-specific immune response and antitumor activity in patients with advanced GB. ReACT is a Phase II study of rindopepimut plus BV in patients with 1st or 2nd relapse of EGFRvIII+ GB. BV-naïve pts (Group 1; n=70) are randomized 1:1 to BV plus double-blinded injection of either rindopepimut or control (KLH). BV-refractory patients (Group 2, n=25) receive BV plus open-label rindopepimut. To date, 31% of screened patients are EGFRvIII+. 47 patients (Group 1=22, Group 2=25) have been enrolled, and 23 (Group 1=12, Group 2=11) continue treatment. Primary treatment-related toxicity was Grade 1-2 injection site reaction. Rindopepimut-induced anti-EGFRvIII humoral responses are robust (median peak titer [range] = 1:12,800 [1:100-1:3,276,800]), similar or higher to those in rindopepimut studies of newly diagnosed GB, and greatest in BV-refractory patients. Of 17 Group 2 patients evaluable for response (investigator-assessed; RANO criteria), one Complete Response (32+ weeks duration; peak anti-EGFRvIII titer=1:3,276,800) and one Partial Response (at week 8; subsequent confirmation pending) have been observed. 5/17 (29%) had PFS >8 weeks. Preliminary data show that rindopepimut+BV can induce remarkably potent EGFRvIII-specific immune response and objective tumor response in immunosuppressed patients refractory to BV. Full response, PFS and OS data for both groups are expected to further define the potential clinical benefit of the combination in relapsed GB.