UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-15006

CELLDEX THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware		No. 13-3191702
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Perryville III Building, 53 Frontage Road, Suite 220, Hampton, New Jersey 08827

(Address of principal executive offices) (Zip Code)

(908) 200-7500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.001		CLDX		Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 28, 2023, 47,252,469 shares of common stock, $.001 par value per share, were outstanding.

Table of Contents

CELLDEX THERAPEUTICS, INC.

FORM 10-Q

For the Quarterly Period Ended March 31, 2023

Table of Contents

		Page
Part I — Financial Information
Item 1. Unaudited Financial Statements		3
Condensed Consolidated Balance Sheets at March 31, 2023 and December 31, 2022		3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022		4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022		5
Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		27
Part II — Other Information
Item 1A. Risk Factors		28
Item 6. Exhibits		29
Exhibit Index		29
Signatures		30

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PART I — FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)


	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	54,123	$	29,429
Marketable securities		224,264		275,523
Accounts and other receivables		1,314		347
Prepaid and other current assets		9,896		12,394
Total current assets		289,597		317,693
Property and equipment, net		3,995		3,747
Operating lease right-of-use assets, net		3,633		4,001
Intangible assets		27,190		27,190
Other assets		104		104
Total assets	$	324,519	$	352,735
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,374	$	3,340
Accrued expenses		9,374		12,835
Current portion of operating lease liabilities		1,493		1,445
Current portion of other long-term liabilities		978		990
Total current liabilities		15,219		18,610
Long-term portion of operating lease liabilities		2,157		2,588
Other long-term liabilities		4,403		5,333
Total liabilities		21,779		26,531
Commitments and contingent liabilities
Stockholders’ equity:
Convertible preferred stock, $.01 par value; 3,000,000 shares authorized; no shares issued and outstanding at March 31, 2023 and December 31, 2022		—		—
Common stock, $.001 par value; 297,000,000 shares authorized; 47,244,681 and 47,200,695 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		47		47
Additional paid-in capital		1,585,863		1,580,829
Accumulated other comprehensive income		2,123		1,260
Accumulated deficit		(1,285,293)		(1,255,932)
Total stockholders’ equity		302,740		326,204
Total liabilities and stockholders’ equity	$	324,519	$	352,735

See accompanying notes to unaudited condensed consolidated financial statements

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CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended		Three Months Ended
	March 31, 2023		March 31, 2022
Revenues:
Product development and licensing agreements	$	—	$	30
Contracts and grants		967		144
Total revenues		967		174

Operating expenses:
Research and development		26,798		17,056
General and administrative		6,640		6,911
Gain on fair value remeasurement of contingent consideration		—		(536)
Total operating expenses		33,438		23,431

Operating loss		(32,471)		(23,257)
Investment and other income, net		3,110		207
Net loss	$	(29,361)	$	(23,050)

Basic and diluted net loss per common share	$	(0.62)	$	(0.49)

Shares used in calculating basic and diluted net loss per share		47,214		46,739

Comprehensive loss:
Net loss	$	(29,361)	$	(23,050)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities		863		(1,782)
Comprehensive loss	$	(28,498)	$	(24,832)

See accompanying notes to unaudited condensed consolidated financial statements

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CELLDEX THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(In thousands)


	Three Months Ended		Three Months Ended
	March 31, 2023		March 31, 2022
Cash flows from operating activities:
Net loss	$	(29,361)	$	(23,050)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		726		811
Amortization and premium of marketable securities, net		(1,256)		772
Gain on fair value remeasurement of contingent consideration		—		(536)
Stock-based compensation expense		4,340		3,153
Changes in operating assets and liabilities:
Accounts and other receivables		(967)		(71)
Prepaid and other current assets		2,722		(7,148)
Accounts payable and accrued expenses		(3,448)		(2,738)
Other liabilities		(1,325)		4,273
Net cash used in operating activities		(28,569)		(24,534)
Cash flows from investing activities:
Sales and maturities of marketable securities		127,000		27,845
Purchases of marketable securities		(73,846)		(16,890)
Acquisition of property and equipment		(585)		(575)
Net cash provided by investing activities		52,569		10,380
Cash flows from financing activities:
Proceeds from issuance of stock from employee benefit plans		694		304
Net cash provided by financing activities		694		304

Net increase (decrease) in cash and cash equivalents		24,694		(13,850)
Cash and cash equivalents at beginning of period		29,429		39,143
Cash and cash equivalents at end of period	$	54,123	$	25,293

Non-cash investing activities
Accrued construction in progress	$	134	$	53

See accompanying notes to unaudited condensed consolidated financial statements

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CELLDEX THERAPEUTICS, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2023

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared by Celldex Therapeutics, Inc. (the “Company” or “Celldex”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the operations of the Company and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

These interim financial statements do not include all the information and footnotes required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited financial statements for the year ended December 31, 2022, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023. In the opinion of management, the interim financial statements reflect all normal recurring adjustments necessary to fairly state the Company’s financial position and results of operations for the interim periods presented. The year-end condensed balance sheet data presented for comparative purposes was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.

The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future interim period or the fiscal year ending December 31, 2023.

At March 31, 2023, the Company had cash, cash equivalents and marketable securities of $278.4 million. The Company has had recurring losses and incurred a loss of $29.4 million for the three months ended March 31, 2023. Net cash used in operations for the three months ended March 31, 2023 was $28.6 million. The Company believes that the cash, cash equivalents and marketable securities at the filing date of this Quarterly Report on Form 10-Q will be sufficient to meet estimated working capital requirements and fund planned operations for at least the next twelve months from the date of issuance of these financial statements.

During the next twelve months and beyond, the Company may take further steps to raise additional capital to meet its long-term liquidity needs including, but not limited to, one or more of the following: the licensing of drug candidates with existing or new collaborative partners, possible business combinations, issuance of debt, or the issuance of common stock or other securities via private placements or public offerings. Although the Company has been successful in raising capital in the past, there can be no assurance that additional financing will be available on acceptable terms, if at all, and the Company’s negotiating position in capital-raising efforts may worsen as existing resources are used. There is also no assurance that the Company will be able to enter into further collaborative relationships. Additional equity financings may be dilutive to the Company’s stockholders; debt financing, if available, may involve significant cash payment obligations and covenants that restrict the Company’s ability to operate as a business; and licensing or strategic collaborations may result in royalties or other terms which reduce the Company’s economic potential from products under development. The Company’s ability to continue funding its planned operations beyond twelve months from the issuance date is also dependent on the timing and manner of payment of amounts due under the Settlement Agreement with Shareholder Representative Services LLC (“SRS”) (refer to Note 13), in the event that the Company achieves the milestones related to those payments. The Company, at its option, may decide to pay those milestone payments in cash, shares of its common stock or a combination thereof. If the Company is unable to raise the funds necessary to meet its long-term liquidity needs, it may have to delay or discontinue the development of one or more programs, discontinue or delay ongoing or anticipated clinical trials, license out programs earlier than expected, raise funds at a significant discount or on other unfavorable terms, if at all, or sell all or a part of the Company.

(2) Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements on this Quarterly Report on Form 10-Q for the three months ended March 31, 2023 are consistent with those discussed in Note 2 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022, except as it relates to the adoption of new accounting standards during the first three months of 2023 as discussed below.

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Newly Adopted Accounting Pronouncements

On January 1, 2023, the Company adopted ASU 2016-13: Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance requires that credit losses be reported using an expected losses model rather than the incurred losses model and establishes additional disclosure requirements related to credit risks. For available-for-sale debt securities with unrealized losses, the standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company has reviewed recently issued accounting pronouncements and concluded they are either not applicable to the business or not expected to have a material impact on the Company’s consolidated financial statements as a result of future adoption.

(3) Fair Value Measurements

The following tables set forth the Company’s financial assets and liabilities subject to fair value measurements:


	As of
	March 31, 2023		Level 1		Level 2		Level 3

	(In thousands)
Assets:
Money market funds and cash equivalents	$	54,089		—	$	54,089		—
Marketable securities		224,264		—		224,264		—
	$	278,353		—	$	278,353		—


	As of
	December 31, 2022		Level 1		Level 2		Level 3

	(In thousands)
Assets:
Money market funds and cash equivalents	$	16,813		—	$	16,813		—
Marketable securities		275,523		—		275,523		—
	$	292,336		—	$	292,336		—

The Company’s financial assets consist mainly of money market funds, cash equivalents and marketable securities and are classified as Level 2 within the valuation hierarchy. The Company values its marketable securities utilizing independent pricing services which normally derive security prices from recently reported trades for identical or similar securities, making adjustments based on significant observable transactions. At each balance sheet date, observable market inputs may include trade information, broker or dealer quotes, bids, offers or a combination of these data sources.

Contingent consideration liabilities measured at fair value using Level 3 inputs were $0.0 million as of March 31, 2023 and December 31, 2022. The valuation technique used to measure fair value of the Company’s Level 3 liabilities, which consist of contingent consideration related to the acquisition of Kolltan Pharmaceuticals, Inc. (“Kolltan”) in 2016, is primarily an income approach. The significant unobservable inputs used in the fair value measurement of the contingent consideration are estimates including probability of success, discount rates and amount of time until the conditions of the milestone payments are met.

During the three months ended March 31, 2023, there was no gain or loss on fair value remeasurement of contingent consideration. During the three months ended March 31, 2022, the Company recorded a $0.5 million gain on fair value remeasurement of contingent consideration primarily due to changes in discount rates. The assumptions related to determining the fair value of contingent consideration include a significant amount of judgment, and any changes in the underlying estimates could have a material impact on the amount of contingent consideration adjustment recorded in any given period.

The Company did not have any transfers in or out of Level 3 assets or liabilities during the three months ended March 31, 2023.

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(4) Marketable Securities

The following is a summary of marketable debt securities, classified as available-for-sale:


	Gross Unrealized
	Amortized						Fair
	Cost		Gains		Losses		Value

	(In thousands)
March 31, 2023
Marketable securities
U.S. government and municipal obligations
Maturing in one year or less	$	81,514	$	47	$	(51)	$	81,510
Maturing after one year through three years		15,064		12		—		15,076
Total U.S. government and municipal obligations	$	96,578	$	59	$	(51)	$	96,586
Corporate debt securities
Maturing in one year or less	$	128,159	$	—	$	(481)	$	127,678
Maturing after one year through three years		—		—		—		—
Total corporate debt securities	$	128,159	$	—	$	(481)	$	127,678
Total marketable securities	$	224,737	$	59	$	(532)	$	224,264


	Gross Unrealized
	Amortized						Fair
	Cost		Gains		Losses		Value

	(In thousands)
December 31, 2022

SEC Form 10-Q filed by Celldex Therapeutics Inc.