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Celldex Therapeutics, Inc (NASDAQ:CLDX)

2012 Lazard Capital Markets Healthcare Conference

November 11, 2012 9:30 AM ET

Executives

Anthony Marucci - President & CEO

Analysts

Ryan Martins – Biotech Analyst, Lazard Capital Markets

Moderator

I’m Ryan Martins, Biotech Analyst here at Lazard. We are pleased to have our next presenting company, Celldex Therapeutics. To give us an update on the company we have with us here the CEO, Anthony Marucci.

Anthony Marucci

Thank, you Ryan. Good morning everyone and thank you for joining us this morning. As always I’m pleased to have this opportunity to discuss Celldex and our story, our pipeline and how certainly we’re positioning ourselves as a leading biopharmaceutical company going forward. Before I begin this morning I just want to let you know that I will be making some statements that are forward looking in nature. So I would like to refer everybody to our SEC filings where we discussed these risks and uncertainties in more detail.

As I have said in previous presentations, Celldex is pioneering the development and application of novel recombinant therapeutic proteins in a variety of unmet needs. Our platform technology has improved several important product candidates which we are now moving into late stage clinical development.

The combination therapy approach that we have developed at Celldex allows us to selectively and optimally combine proprietary antigens, human therapeutic antibodies, drug conjugates and immunomodulators, so highly differentiated and effective targeted therapies for patient populations that will certainly benefit the most.

We have a great deal of expertise in the company from an area of development of these therapeutic proteins. We also have the infrastructure in house to develop the antibodies and the modulators ourselves. And as we discuss our pipeline today I’d like to remind everyone that we are well positioned from a cash perspective to strongly and effectively move forward this pipeline as we ended the quarter with more than $77 million in cash and certainly allows us to get well into 2014.

As you can see from the pipeline, it is very well staged, a variety of clinical development programs. For today’s presentation I’d like to focus in on four of the programs. Rindo obviously in GBM both in frontline and recurrent, discussion of CDX-011 which is our antibody drug conjugate, just finished up a study in metastatic breast, 1127, which is a proprietary human antibody that targets CD-27 and then briefly I’ll touch on CDX-1135 which is an ultra orphan indication and dense deposit disease using our viable complement inhibitor targeting C-3 and C5.

So let’s get started by talking about why Rindo is important to us and why the target EGFRvIII is important as well. As I’ve said in previous discussion, vIII is highly tumor specific. It’s only expressed in tumors and not in normal tissues. The target has been validated now and several clinical trials that we have conducted and also is gaining greater importance as a tumor marker by outside researchers.

Historically, these vIII patients have not done very well at all. The median survival has been in the area 13 to 15 months, with very few surviving beyond 3 years. With our validated assay which we are currently developing with LabCorp for the Phase III study, we’re comfortable with saying that 31% of patients do express vIII and you can see the incidents rates in the US and in the EU bring it to approximately 13,000 new incidences every year.

We are the only drug that are developing this specifically for vIII that’s targeting this disease. We have a strong proprietary IP position for the target as well as combination therapies and mechanisms of actions. We have fast track status in the US as well as often drug status in both the EU and the US.

These are data here that we first presented in 2010 and then obviously updated data last year and again this year we will update this data at the Society of Neuro-Oncology meeting, which will be held in Washington DC later on this week.

As you can see from this chart, all three studies from Rindo, Act III, Act II and Activate have shown very consistent survival data and very consistent survival data at two years as opposed to where you can see this historically matched control where the survival was approximately 15 months and the two year survival was 6%.

What we plan on presenting this year as Celldex to give heads ups to everyone is more long term survival. So these two years, three years and potentially even longer will be updated. We will also have data presented from outside consortiums that have run studies that include vIII patients and you’ll see some data from those studies as well. So this historically matched control group will certainly be updated with a much larger data set population.

I go to the Capital Meyer curves, again this important from our perspective that these curves will also be updated. So what we’re looking to see is how our data match out long term. I think these tails that had been formed from the Activate study in green, the Act II data from the blue curves and now the ACT III study in the red curve. We want to see how those match out and we’re comfortable that this drug is really having an impact on patients’ longer term and you can see much large, longer than the historical match control groups.

Interestingly here as well is the three things we’re always looking for with our drug. Do we a separation early on so we can get our PFS advantage? Are we seeing continued separation through the median for survival and you’re seeing here that as well. And then obviously from our perspective, are we having any real impact for the patient long term and again, once again you can see here that these curves continue to separate and the patients continue to do well.

So, these next two slides we asked a question; what impact are we really having on the disease? Are we having good immune responses? At the biological level, is the drug doing anything to the disease? So these two next slides will certainly address that.

As you can see on this slide here, fully 85% of these patients developed a fourfold increase in their VIII antibodies titers and a majority of the patients fully two thirds saw titers greater than one to 12000 which is extraordinarily high when you consider therapeutic vaccines. You can see from the graph that the titers continue to get better and the response continues to get better.

So we know that from the vaccine perspective, we’re getting the immune responses we’re looking at, but what’s it doing biologically? And that’s where this slide becomes important, and as you can see here, of the 32 patients from prior studies that have gone, progressed and have gone on to get a second surgery, fully 81% of those patients had completely lost their vIII expression and additional three others had a marked reduction of less than 10%. And why is that important? Because in order to get off to the study, your cells have to express at least 10% of vIII.

So these patients wouldn’t have even been eligible for entry. So fully 29 out of 32, we’ve either eliminated the cells completely from the tumor or we’ve knocked it down significantly. As important, researchers outside of Celldex have also looked at recurrent tissues from patients who have been either on Temozolomide alone or Irinotecan or Avast and as you can see here, 15 out of the 15 patients that were tested there, all of these patients still had their vIII in the cell surf separate recurrent. So again, from a biological point of view the vaccine is doing what it’s supposed to do and that’s wiping out the cells from the tumor.

So with this data, we initiated the Act IV study last year and this is a randomized placebo controlled international study that is double blind. We initiated the study last December, and at this point in time we are perfectly happy with the way the study is accruing, the way we’ve set up the sites. We’re very much on path to complete this, the accrual of the study by the end of next year.

The study is going on in 19 countries around the world and between 150 and 180 centers around the world as well. So we’re quite happy with the way things are going today. The Phase II trial that we have ongoing is in recurrent GBM and I think this trial’s important for several reasons. One, once a patient progresses with their disease, there’s really not much help left. So presently Avaxim [ph] is the approved drug in a recurrent setting and how we’ve structured this study is pretty unique.

There are two groups. The first group being patients who have not seen neither Avaxim nor Rindopepimut. So this will be a randomized portion of the study where they’ll either get Rindo plus a vaccine or a vaccine alone and that’s in 31 to 1 setting. The group two are those patients that have progressed from Avaxim and these certainly are patients that become very refractory. And so group two is going to be a smaller data set. It will be a single on study in combination with Avaxim.

We’re targeting to complete group two of this study, the accrual by the end of this year and we would be presenting data on both of these groups either in June of next year or certainly by the second half of next year.

Our second program is called CDX011. It’s an antibody drug conjugate that focuses on a proprietary antibody, which again is fully human in combination with a valid toxin and linker from Seattle Genetics which is the same one used from Adcetris. This program has been in both Melanoma and in metastatic breasts. We ran Phase I, II studies in both Melanoma and breast and then we just moved forward in the metastatic setting last September.

So the study in the metastatic setting in September of 2010 that we initiated was that they all had to be GPN and B Positive. There was 120 patients randomized 2 to 1 of single agent CDX-011 versus physician’s choice. We targeted 30 centers in the US. We also targeted 18 months to complete the study and the response that we got from investigators on the study was that we completed it four months ahead of schedule and we needed ten fewer sites in order to complete the study. So the enthusiasm that we saw from the physicians and obviously the data that we got from the study is certainly made us very happy. And these were the data that we presented in May of this year. It’s broken down in four areas, one is the overall patient population of the 120 patients, and then obviously being a targeted therapy we broke it down between different expression levels and as you can see it came down to two groups, one the Triple Negative Breast Cancer patients which doesn’t have much in the way of treatment for patients and then we broke it down further into expression rates and you could see here that cells that express are equal to or greater than 25% of GPNMB, we took the cut there.

So you can see by these data, it’s been pretty impressive. Overall, we had a 19% response rate which was higher than in the phase I, II study. We also saw that the Investigator’s Choice group did fairly well overall, but then as we started getting into the more targeting aspects of the drug, in particular the last two columns here for the high GPNMB express as we saw a response rate of 32% and CDX-011 where we didn’t see anything for the investigator’s Choice. And then in the high GPNMB Triple Negative group again of 36% response rate with a zero response rate for the Investigator’s Choice.

We also saw that the disease control rate overall was much better than the control group. We did see shrinkage in many of the patients overall but our response rate in these highly refracted patients is pretty remarkable. I will tell you that in the Investigator’s Choice, the median number of therapies for these metastatic patients was five, and in the ‘011 group, the median number of prior therapies was six. So you have some really advanced patients that receive this kind of response rate is very gratifying.

These next two slides will just show the point of response rate to the level of expression and you can see on the left below the low GPNMB expression with ‘011 had about a 14%, 13% response rate but as you went further up on the number of cells that had GPNMB it goes to the aspect of hardening. So you can see here that overall the response rate was well above 30%. When you look at the Investigator’s choice on the right hand side, you can see what low expression. It had a fairly good response rate but as it went further and further it got certainly lower.

The next slide is even more dramatic because it shows the Triple Negative patients. And as again you can see on the left hand side, low expression GPNMB was less than 10% even for the CDX-011, but as you got further and further of higher expression rates for these Triple Negative patients certainly well above 30%, so we are very happy. Looking at the right side, there’s absolutely nothing. Whether it’s low expression or higher expression, the Investigator’s Choice drugs simply did not have any effort on this very terrible disease.

So what will we do? San Antonio we are going to be presenting more data from the study. We are looking at some more information. So I think at San Antonio we will present the more mature datasets as well as more data as what we can find from the study. We will also then talk about your plans for going forward with this program, and in addition besides metastatic growth we also believe that there is activity in melanoma as we saw in the phase I, II study. We saw a 15% response rate there. Now that Yervoy and Roche’s drug have gone through the melanoma pipeline, we see a space for ‘11 perhaps in third line of melanoma. We also see opportunities in lymphoma, Osteosarcoma in small cell lung as GPNMB expression in those three indications seems appropriate.

So with that the third program called 1127 targets CD27. So you can get where we come up with our names. Not very easy to recognize. Why this drug is – why we are enthusiastic about this drug is again, it builds on our experience developing Yervoy and PD-1 during our days in Medarex and certainly CD27 is really unique in that it has a dual mechanism in action in lymphoma. Not only does it activate the CD27 pathway in these lymphoma indications but CD27 express pretty in some B cells lymphoma. So you get this dual mechanism of activating these T cells and also getting direct killing. So you can look at this and see Yervoy activating the pathway and anaerotoxin going after the direct killing methodology.

Certainly in solid tumors we do also see an opportunity. So with that we began a phase I study in November of this year – of 2011 I am sorry and in both in solid tumors and lymphomas. This study – the solid tumor arm will be complete accrual by the end of this year. The lymphoma arm we hope to complete accrual by the end of the first quarter with data coming out later on in next year and planning forward. So it is two arms, five cohorts. We started at 1mg per kg in each cohort and we worked our way up to 10mg per kg. Solid tumors include melanoma, not small cell, prostate, ovarian and then lymphoma is the third B-cell lymphomas. So next year we’ll have data and then we’ll move forward with our future studies for this program.

The last product that I’d talk with you briefly today is 1135. This is our sireable complement inhibitor. As we know complimenting addition in rare diseases has been a successful business model as Alexian has certainly done with Solaris. 1135 has been in the clinic, as has Solaris in cardiac ischemia years ago, and we certainly have seen pre-clinically that CDX-1135 has had a very big impact on dense deposit disease. It’s a rare, ultra-rare indication afflicting a lot of young children and so what we are doing here is we are going to be starting a pilot study and in next month or so to see if the effects of ‘35 can really have an impact on this disease as well as helping these children get off dialysis. So this study will be starting up in the next month or so. We are hoping to have data from these patients by the second half of next year and certainly if the data works out well, we’ll move it forward and move it forward very quickly.

So with that as we can tell we had a lot of activity this year. There is still more presentations to make. As I said later on this week we will be at the Society of Neuro-Oncology meeting updating data from the window studies as well as data done by outside parties for patients with B3. So we will be presenting those data at San Antonio for CDX-011. We will be presenting updated data there as well. We also plan on having an end of phase 2 meeting with the FDA towards the end of the year to outline the plans for developing of this drug going forward. For CDX-1127 they said we will look forward to completing that study and then making plans both for the solid tumor arms as well as the lymphoma going forward which we think will be very exciting.

301, which a dendritic growth factor has just completed phase 1 studies. There will be data presented I believe the first quarter of next year. Again I think this is an important molecule for 30 days and we want to start developing accommodation therapies for that. 1401 again is using vaccines to target the immune system and that program is now really to go into combination studies that we are working with the NCI to do the proper combinations for this program. As I said 1135 we’ll initiate a pilot study a little bit later on this year.

On the operational front we plan to continue to leverage this energy and the expertise of our platform and our management of these risks and maintain our policy of fiscally being discipline going forward. As I said we are pleased to have more than $77 million in cash. It’s more than enough to get us well into 2014 and will provide us the opportunity to further get the value creation from our programs. So obviously we believe we are a highly differentiated company, we have a number of programs that have had outstanding data today and we are looking forward to getting more data in these later stage studies. So we are addressing substantial markets with none of these programs, the May 2 programs are always going after the un-met need in patients and certainly so far so good.

So I thank you for the opportunity to present to you this morning. I look forward to taking any questions if there are some.

Question-and-Answer Session

Moderator

I think we may have time for a couple of questions. Maybe start out with a bit with 1135, dense deposit disease. Five patients did I hear you correctly, would take about a year to get that data?

Anthony Marucci

Yeah, we’ll it’s an ultra-rare indication. So it’s about 300 to 500 patients in the U.S. The top person we believe in this area, in dense deposit disease Richard Smith is going to be running the study. So we believe that it won’t take that long, it’s going to be a six month regimen. So by the time we get the data it will be about a year.

Moderator

And – there’s a question out there.

Harry

What’s your stand on clarifying the manufacturing status of CDX-011?

Anthony Marucci

Yeah. Sure Harry. So there was a issue with the company called Former Tech that was – that did the manufacturing of the program while we were still encouraging hands. We have gone through the process of reprocessing the drug or refilling it. We think that we’ll be done with that by the end of the year and we’ll present it to the FDA to go forward. It didn’t have any impact on the phase 2b study. So didn’t impact our treating our patients but this is for next study to make sure that we don’t have to go -- manufacturing.

Moderator

Will there be any addition manufacturing runs to be done?

Anthony Marucci

For ‘11?

Moderator

Yeah

Anthony Marucci

Yeah. As you get into late phase development. Certainly you’d have to do additional studies, additional manufacturing. You need to do that plus consistency as you are going to go towards the commercial realm which we are. So just as a normal course you have to do consistency runs anyway. But this is enough to get us well started and start because the other program studies with this drug.

Moderator

Thanks.

Anthony Marucci

Okay. Thank you.

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