Celldex Therapeutics, Inc. (NASDAQ:CLDX): Forget ASCO, Here's What's Important

ASCO is always a big event on the biotechnology calendar and – as expected – we've seen a number of companies run and fall on the back of presentations associated with various bits of development asset data. One of the companies that took the stage over the weekend was junior oncology company Celldex Therapeutics, Inc. (NASDAQ:CLDX), with management choosing to present data from a phase I study investigating the efficacy of a drug called Varlilumab in patients with advanced cancer, when it's combined with Bristol-Myers Squibb Co (NYSE:BMY)'s Opdivo.The data was OK, nothing spectacular, and markets have sold off on the company on the back of the report. Basically, out of 21 patients suffering from either late stage colorectal or advanced ovarian cancer, 3 demonstrated some degree of tumor shrinkage. It's a safety and tolerability study, so that there's not a dramatic degree of difference between the two arms of the study in terms of clinical benefit isn’t going to stop the drug advancing into mid-stage trials, but as we know all too well, biotechnology investors love to see clinical benefit in these studies, even if it's set up as a secondary endpoint. It's also got to be taken into account that these are advanced patients with essentially no options left but palliative care. Against this framework, a partial response in even just a small percentage can be enough to warrant registration submission. Not necessarily approval, but submission.Anyway, that's not the focus of this discussion.What is the focus, is a drug that – as illustrated by the sell off response to the latest data release – markets seem t be overlooking: a drug called Glembatumumab vedotin.This is the company's lead development asset and Celldex is currently investigating it in two primary oncology indications – breast cancer and late stage melanoma. The former is the lead indication of the two, but the latter isn’t too far behind.In the breast cancer indication, the company is currently enrolling as part of a phase IIb study that – if successful – will serve to underpin a New Drug Application (NDA) with the FDA; there's no need for a phase III, in other words. The data that set up this study was incredible, showing a close to 100% overall survival rate increase between active and control (chemo) arms of the study, weighted towards the former, in a large portion of the patients under investigation.If the company can repeat this feat in the ongoing phase IIb, the drug is a shoo-in for approval when it goes in front of the agency.There's a setback, however, and this is also weighing on sentiment a little. The company is struggling to enroll its target of 300 patients (remember, this are late-stage patients with a very specific type of breast cancer) and this difficulty has led to a couple of enrollment target misses so far this year. With that said, management still expects to complete the enrollment by September this year. If it achieves this goal, it sets the trial up for a first half 2018 topline readout and – with any luck – an early 2019 FDA approval.The company also presented data from the second Glembatumumab target, the melanoma indication, at ASCO, and showed a 16% response rate out of more than 60 patients. Considering these patients have (again) failed almost all available therapy options previously, that's not a bad number. For us, it reinforces the potential of the drug in the breast cancer indication.So the takeaway here is that investors should, at least for now, forget what just happened at ASCO. It was neither good nor bad (regardless of what the market's response might suggest) but it's just not that important at the moment. The real value in Celldex lies in its breast cancer target and the completion of enrollment this September. If it hits this milestone, ASCO will be very much forgotten.We will be updating our subscribers as soon as we know more. For the latest updates on CLDX, sign up below!Disclosure: We have no position in CLDX and have not been compensated for this article.