Celldex Therapeutics, Inc. (CLDX) Earnings Call Transcript & Summary

Good morning. Sarah Cavanaugh from Celldex will open the meeting. Sarah?

Welcome to the Annual Meeting of Stockholders of Celldex Therapeutics being held this year by remote communication. Please note that any nonhistorical statements the company will make today will constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those statements as a result of a number of risks and uncertainties, including the risks that Celldex has cited in its most recent 10-K and 10-Q filings with the Securities and Exchange Commission and that Celldex typically cites in its press releases. Also, I would like to remind everyone that this meeting is not a public forum for the purposes of the SEC's regulation FD. As a result, while we will provide you with general background information about Celldex, we will not be providing any material nonpublic information at this meeting. I now turn the meeting over to Anthony Marucci, Celldex's Co-Founder, President and Chief Executive Officer and a member of the Board of Directors.

Thank you, Sarah. Good morning. I'd like to take a moment to thank each employee and each director for their continued hard work during this unprecedented and uncertain times. I would also like to thank our shareholders for your continued support and your participation in today's virtual annual meeting. We typically conduct our annual meeting in person. But given the ongoing pandemic, we made the decision to host this year's meeting virtually to protect the health of our employees, Board members and shareholders. While we assume today's virtual meeting will go smoothly, given the new format and the fact that our speakers are not in the same room, we have limited the number of speakers to decrease the potential for technology issues and to ensure a smooth meeting. With that said, it is now 9:02, and this meeting is called to order. I'd like to introduce our Board members in attendance today. I am joined by our Chair, Karen Shoos and fellow Board members, Keith Brownlie, Herbert Conrad, James Marino and Harry Penner. We have also present representatives from our auditor, PricewaterhouseCoopers; Anna Hagberg, who will act as the independent Inspector of Elections; Sarah Cavanaugh, Senior Vice President of Corporate Affairs and Administration; and Sam Martin, our Senior Vice President, Chief Financial Officer and Secretary. The company's bylaws provide that any business brought before an annual meeting by a stockholder, which is not specified in the notice of the meeting must be submitted in writing in advance to the Secretary of the company and that the notice meets certain requirements. The company did not receive any such notice, and as such, voting will be confined to the 4 proposals outlined in the proxy statement. Prior to the meeting, I appointed Sam Martin as acting secretary of the meeting. I ask Sam to include with the minutes of the meeting a copy of the affidavit of distribution, a certified list of stockholders, a notice of meeting and the proxy statement previously mailed to all stockholders, which we refer to as the proxy materials. The notice of meetings and proxy statement were filed with the Securities and Exchange Commission, on May 4, 2020. The proxy statement describes the record date for this meeting and the number of eligible votes of common stock outstanding on that date. Prior to the meeting, I appointed Anna Hagberg as the Inspector of Elections, and she has taken the appropriate oath. At this point, I will call the formal portion of our meeting to order with the Inspector of Elections, please report the existence of a quorum.

The Board of Directors selected April 21, 2020, as the record date for the annual meeting. On the record date, there were 18,082,050 shares of common stock outstanding. A total of 13,180,511 shares of common stock are present in person or by proxy at this meeting, representing at least a majority of the voting power. Accordingly, a quorum is present.

Thank you, Anna. Since a quorum is present, we may now proceed to the business of the meeting. To assure an orderly meeting, I will first entertain motions for the 4 proposals to be presented at today's meetings, and the polls will be open for voting. I will then provide a brief update on the company's recent progress and address questions related to the 4 proposals, our development programs and our overall business to the extent that we -- that they are germane to the meeting and do not require the disclosure of nonmaterial, nonpublic information. Only validated stockholders will be able to speak to ask questions in a designated field on the web portal. Out of the consideration for others, please limit yourself to 2 questions. We will attempt to answer as many questions as the time allows, but as always, we are available to answer your questions after the meeting as well. I will then declare the polls closed and ask the Inspector of Elections to provide a preliminary voting tally. The final votes will be reported by the company in an 8-K. There are 4 proposals to be presented to you today. As indicated in the proxy statement, the Board of Directors has nominated each of myself, Keith Brownlie, Herbert Conrad, James Marino, Harry Penner and Karen Shoos for election as directors.

As a stockholder, I move to elect Anthony Marucci, Keith Brownlie, Herbert Conrad, James Marino, Harry Penner and Karen Shoos as directors for the terms described in the proxy statement.

I second the motion.

The second proposal is to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2020.

As a stockholder, I move to approve the second proposal.

I second the motion.

The third proposal is to approve an amendment to our 2008 stock option plan and incentive plan, including an increase in the number of shares reserved for issuance thereon there from 1,900,000 to 4,133,333 shares.

As a stockholder, I move to approve the third proposal.

I second the motion.

The fourth proposal is an advisory and nonbinding proposal to approve the compensation of the company's named executive officers as disclosed in the proxy statement.

As a stockholder, I move to approve the fourth proposal.

I second the motion.

Each proposal will be approved if it receives an affirmative vote of the holders of the majority of the total votes cast in person or by proxy at this meeting. I assume that everyone present has voted by means a proxy or voted via telephone or on the Internet. If there is anyone present who would like to vote now, either because they have not voted or because they wish to change their vote, please vote now by using the voting buttons on the virtual meeting interface. Stockholders who have sent in proxies or voted via telephone or internet and do not want to change their vote, do not need to take any further actions. All proxies received in the mail have been voted as instructed. If no direction was given, the shares were voted for each of the proposals I just listed. Thank you. I would like to take a few moments to provide a brief company update before we address questions. Celldex has made considerable progress in the first half of 2020. Earlier this month, data from our KIT and mast cell inhibitor, CDX-0159 was discussed at a late-breaking presentation at the European Academy of Allergy and Clinical Immunology Annual Conference by Dr. Marcus Maurer, a leading medical expert in urticaria, whose research focuses on the physiological and pathological functions of mast cells. CDX-0159 demonstrated a favorable safety profile as well as profound and durable reductions of plasma tryptase, consistent with systemic mast cell suppression. A single dose of CDX-0159 induce dose-dependent tryptase reduction below the level of assay detection within days at doses as low as 1 milligram per kilogram and maintain suppression for over 2 months at 3 milligrams per kilogram and above. These results surpassed our expectations and support the rapid advancement of CDX-0159 into clinical studies in our target patient populations. To this end, we look forward to initiating studies in chronic spontaneous urticaria and chronic inducible urticaria, both mast-cell-driven diseases in the fall. Importantly, these indications will provide data readouts along the way with full data expectations and chronic inducible urticaria in the first quarter of 2021 and in chronic spontaneous urticaria in the second half of 2021. We also continue to enroll patients in our own studies of CDX-1140 and CDX-3379 and plans of data updates for those programs later this year. I want to take a moment to focus in on CDX-1140, given this compound's unique profile. We believe 1140 is a best-in-class CD40 agonist, successfully balancing systemic doses for good tissue and tumor penetration with acceptable safety profile has long been a long-standing challenge for the CD40 agonist space. With the maximum tolerated dose and a recommended Phase II dose at 1.5 milligrams per kilogram, CDX-1140 has achieved one of the highest systemic dose levels in the CD40 agonist class. Expansion cohorts are actively recruiting right now in our Phase Ib study, including the combination with Keytruda, and we look forward to providing an update later this year. We also continue to expand our pipeline strategically and are completing preparations to advance CDX-527, the first candidate from our bispecific platform into a Phase I study in refractory advanced cancers. We plan to initiate the study in the second half of 2020. Finally, and importantly, on Monday, we announced a follow-on offering through which we issued -- which we raised, I'm sorry, $130.4 million, which is expected to close today. This raise is supported by a quality list of healthcare-focused investors and will fund the continued advancement of our clinical and preclinical development programs and general corporate purposes. We look forward to providing a more in-depth update on our midyear call in August but appreciate the opportunity to share these highlights with you now. At this time, we will entertain questions that stockholders wish to raise regarding the proposals submitted at this meeting or regarding Celldex, in general, to the extent germane and not otherwise addressed in my remarks. Our chair, Karen Shoos and representatives from our independent registered public accounting firm are also present and available to answer appropriate questions from stockholders.

At this time, there are no questions from stockholders.

At this point, I will add a question-and-answer period. Stockholders should feel free to write to Investor Relations, care of the company, or e-mail us at [email protected], if they have questions or comments that they wish to address to the company or myself. I will be closing the polls in a moment. So please finalize voting if you are now -- voting now. [Voting]

I now declare the polls closed. The Inspector of Elections will now report on the preliminary results of the proposals.

Each of Anthony Marucci, Keith Brownlie, Herbert Conrad, James Marino, Harry Penner and Karen Shoos was elected and received a majority of the votes cast in the election. The proposal to ratify PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for fiscal year 2020 was approved by a majority of the votes cast. The proposal to approve an amendment to the company's 2008 stock option and incentive plan was approved by a majority of the votes cast. The proposal to approve the nonbinding advisory vote on the executive compensation of the company's named executive officers as described in the proxy statement was approved by a majority of the votes cast. The precise number of votes will be set forth in my written report.

At this point, I will entertain a motion to adjourn the meeting.

So moved.

I second the motion.

The meeting is now adjourned. Again, thank you all for attending. We wish you well and hope you enjoy your summer. Operator, at this time, you may close the call.

Thank you. Ladies and gentlemen, today's meeting has adjourned. You may disconnect your lines at this time. And have a wonderful day. Thank you for your participation.