Chimerix CEO Discusses Q4 2013 Results - Earnings Call Transcript

Mar. 7.14 | About: Chimerix Inc (CMRX)

Chimerix Inc (NASDAQ:CMRX)

Q4 2013 Earnings Conference Call

March 7, 2014 08:30 AM ET

Executives

Joseph Schepers - Executive Director of IR

Kenneth Moch - President and CEO

Tim Trost - CFO

Michelle Berrey - CMO

Linda Richardson - CCO

Analysts

Phil Nadeau - Cowen & Company

Ritu Baral - Canaccord Genuity

Katherine Xu - William Blair & Co. LLC

Josh Schimmer - Piper Jaffray

Brienne Kugler - Morgan Stanley

Operator

Good morning and welcome to the Chimerix Fourth Quarter and Full Year 2013 Financial Results Conference Call. Today’s call is being recorded. (Operator Instructions) At this time I would like to turn the conference call over to the company’s Executive Director of Investor Relations and Corporate Communications, Joe Schepers. Please go ahead sir.

Joseph Schepers

Thank you and welcome to Chimerix fourth quarter and full-year 2013 financial results conference call. On the call today are Kenneth Moch, President and CEO; Tim Trost, CFO; Michelle Berrey, Chief Medical Officer; Linda Richardson, Chief Commercial Officer and Mike Rogers, Chief Development Officer. Before we begin, allow me to read Chimerix’s Safe Harbor regarding forward-looking statements.

During the course of this conference call, the company will be making certain forward-looking statements such as statements relating to certain R&D programs, including our Phase 3 SUPPRESS trial or future clinical trials of Brincidofovir also known as CMX001 and related matters. These statements involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements.

These risks and uncertainties are discussed more fully in Chimerix’s filings with the Securities and Exchange Commission, including without limitation its most recent annual report on Form 10-K, its most recently filed reports on Form 8-K and other documents subsequently filed with or furnished to the Securities and Exchange Commission. All forward-looking statements made on this call speak only as of the time they are made and Chimerix undertakes no obligation to update these statements to reflect subsequent events or circumstances.

I also want to point out that company issued a press release this morning containing financial results for the quarter and full year ended December 31, 2013. The press release is available on the company website at www.chimerix.com.

At this time, I would like to turn the call over to Kenneth Moch.

Kenneth Moch

Thanks Joe, and thank you all for joining us today. Given the fact that this call is both a fourth quarter update and year end overview, I will start today’s discussion with a review of our key accomplishments for 2013 and then provide an overview of our key objectives for 2014. As part of this, in just a few moments I will ask Tim Trost to give you a financial update, Michelle Berrey to talk about our clinical development endeavours, and our new Chief Commercial Officer, Linda Richardson to give you her initial thoughts and insights into the launch preparations for Brincidofovir.

Among the highlights which stand out in 2013 are the following. In April we completed our highly successful IPO which resulted in gross proceeds of $117.9 million. In August, we announced positive top line results from or exploratory phase 2 study 202 of Brincidofovir and haematopoietic stem cell recipients with early adenovirus infections. And in September we announced the dosing of the first patient in our SUPPRESS phase 3 trial of Brincidofovir, for the prevention of cytomegalovirus reactivation in haematopoietic cell recipients.

Throughout 2013, we released a spectrum of data regarding Brincidofovir from our placebo-controlled trials as well as from our extensive Compassionate Use Activities. These data supported both our initial focus on the development of Brincidofovir for the prevention of CMV in transplant recipients, and our larger goal of developing Brincidofovir as the first broad-spectrum antiviral against DNA viruses.

In September the phase 2 dose ranging trial of Brincidofovir for CMV prevention was published in the New England Journal of Medicine. Over the past decades only about two dozen phase 1 and phase 2 compounds have had their results published in the New England Journal, which speaks to the unmet need which Brincidofovir is addressing as its first indication.

Finally during 2013 we made several key additions to the board and leadership team. In February, Ernie Mario joined the board as our Chairman, and in August Rod Drake also joined the Board. In March Mike Rogers joined Chimerix as our Chief Development Officer, and in December we announced the appointment of Linda Richardson as our Chief Commercial Officer.

2014 will be an equally, if not more eventful year for Chimerix. The key focus of the Company and our clinical team is to complete enrolment in SUPPRESS. Our goal is to reach this objective by year-end 2014 which would provide data in mid-2015. To reiterate a critical fact, we believe that if the phase 3 data replicate what we have seen in phase 2, the result of the SUPPRESS trial could be sufficient for the accelerated approval of Brincidofovir for the prevention of CMV in HCT recipients.

This timeline is the reason we added Linda Richardson to our leadership team. As I have been with the other members of the Chimerix leadership team, I was and am delighted that Linda has joined us, because of the breadth of her skills and experience in launching important and innovative new medicines. As part of our 2014 budget we have allocated resources to critical path prelaunch activities which are necessary for the commercial launch of Brincidofovir.

Based on the market characteristics and dynamics, we fully anticipate launching Brincidofovir ourselves in the U.S. and Canada and potentially in other territories throughout the world. Looking beyond SUPRESS, 2014 will be a year in which we seek to expand the development of Brincidofovir into a broader range of DNA viruses, new patient populations and additional territories. These will be key additional value creating events for the compound.

First, we are in the planning stages for a second Phase 3 trial of Brincidofovir for the prevention of CMV and solid organ transplant recipients, a trial which could serve as a confirmatory second study to support traditional approval for the prevention of CMV.

Second, during 2014 we will be expanding our activities into Europe. We anticipate adding several sites to the SUPRESS trial. We are also in the process of obtaining scientific advice from the European Medicines Authority on our Brincidofovir development plan.

Third, as SUPRESS is focused on adult stem cell transplant recipients, during 2014, we expect to finalize our paediatric plans with both the FDA and the EMA.

And fourth, we are also focused on identifying other potential indications for Brincidofovir, building on our belief that the compound has the characteristics of a pipeline in a product. As in 2013, we will continue to present and public data on Brincidofovir’s broad spectrum activity and its potential in multiple patient populations.

As I mentioned at the start, in a few moments, Michelle Berrey will discuss in greater detail our clinical activities and Linda Richardson will provide our initial thoughts on the commercial strategy and prospects for Brincidofovir.

But before Linda and Michelle give their presentation, I will turn the call over to our CFO, Tim Trost for a review of the financial results for the fourth quarter of 2013. Tim?

Tim Trost

Thanks Ken. As Joe mentioned in his introductory remarks, earlier today we issued a press release containing our financial results for the fourth quarter and full year 2013. Starting first with our balance sheet; Chimerix set a 110 million in cash and cash equivalents, 9.9 million in debt and approximately 26.7 million outstanding shares of common stock, at December 31, 2013.

Turning to our statement of operations; Chimerix reported the net loss of 8.2 million, or $0.31 per basic and diluted share for the fourth quarter of 2013. During the same period in 2012, the company recorded net loss of 4.3 million, or $3.90 per basic and diluted share. Revenues for the fourth quarter of 2013 decreased to 879,000 compared to 3.6 million for the same period in 2012 due to a decrease in the fourth quarter of 2013 and reimbursable expenses associated with the company’s on-going contract with the Biomedical Advanced Research and Development Authority or BARDA.

Research and development expenses were 6.3 million for the fourth quarter of 2013 compared to 6.3 million for the same period in 2012. These numbers reflect the effect of increased costs related to the SUPRESS trial and growth of the organization, offset by the effect of having completed several Phase 1 and 2 trials in 2012. We expect an increase in research and development expenses in the full year 2014 compared to the full year 2013. R&D expenses may be uneven from quarter-to-quarter.

General and administrative expenses increased to 2.6 million for the fourth quarter of 2013 compared to 1.4 million for the same period in 2012. The increase relates to cost associated with the registration and sale of shares of our common stock by existing shareholders in October 2013 along with an increase in costs attributable to the growth of the business and operating as a publicly traded company. Loss from operations was 8 million for the fourth quarter of 2013 compared to a loss from operations of 4.1 million for the same period in 2012. The variance is due primarily to the decrease in revenue from the BARDA contract along with the increase in general and administrative expenses as we build our corporate infrastructure, both as a public company as well as for the planned regulatory filing and launch of Brincidofovir.

Interest expense was 195,000 in the fourth quarter of 2013 compared to 409,000 in the same period in 2012. The decrease is based upon a decline in our average outstanding loan payable balance in 2013 due to pay downs of the debt, since the drawdown of the $12 million second tranche in the third quarter of 2012.

For the fourth quarter of 2013, there was no fair value of warrant charges as all of the outstanding preferred warrants converted to common stock warrants upon the completion of our IPO in April 2013. For the fourth quarter of 2012 we recorded an add-back of 226,000 due to the change in our company valuation at that time. As a reminder, the fourth quarter 2013 earnings as well as this morning’s announcement are available on the investors section of our website.

We’d now like to turn the call over to our Chief Medical Officer Michelle Berrey.

Michelle Berrey

Thank you, Tim. My remarks this morning will focus on why we believe there is a high probability of success for our SUPRESS trial and demonstrating the safety and efficacy of Brincidofovir for prevention for prevention of CMV reactivation in hematopoietic cell transplant recipients and potentially for clinical events caused by other DNA viruses common in these patients. I will also provide an update on our plans for our trial in solid organ transplant recipients and early data and other DNA viruses and other patient populations.

The primary focus for our clinical team in 2014 is the enrolment of the SUPPRESS Phase 3 trial. We’re enrolling [indiscernible] hematopoietic cell transplant recipients that are considered at high risk for CMV infections based on prior exposure to CMV. Although we know prevention is the most effective means of avoiding CMV disease, antivirals with activity against CMV have not been able to be used for prevention of CMV and HTC recipient, because of the negative effects of available compounds on white blood cells and on the new bone marrow, leaving this patient population with no available prevention for CMV.

SUPPRESS is designed as a superiority trial of Brincidofovir over the current standard of regular monitoring for CMV, an initiation of antiviral pre-emptive therapy and patients with evidence of early CMV infections. 450 patients will be randomized 2:1 to the two cohorts for a total of 300 patients on the active Brincidofovir arm and 150 patients on the placebo or standard of care arm. Patients can be randomized after receiving their stem cell transplant and all enrolled patients will take Brincidofovir or placebo through week 14 or about the first 100 days after the transplant, the period of time when the risk of DNA viral infections is the highest. All trial subjects will be followed for an additional 10 weeks after the last doses study drug for a total of 24 weeks or about six months.

We anticipate fully enrolling SUPPRESS during 2014 and having data from this trial in the middle of next year. The SUPPRESS trial design is based on our dose ranging Phase 2 trial, which demonstrated a dose response relationship and a statistically significant decrease in the rate of detectable CMV at the time subject [throughout] study drug.

The publication of this Phase 2 trial in New England Journal underscores the high unmet medical need for CMV prevention in this population and the potential for Brincidofovir to make a significant difference in current medical practice. The primary end point for SUPPRESS is the percentage of patients in each arm who have CMV reactivation and who require initiation of pre-emptive therapy an end point we believe has a high probability of success based on the similar design and patient population for our Phase 2 trial and the high correlation of successful Phase 2 and Phase 3 studies in anti-infective.

The one significant change between Phase 2 study design and SUPPRESS is the timing of the first dose of Brincidofovir placebo. For our Phase 2 study and for all studies previously conducted in CMV prevention, dosing cannot begin until after evidence of engraftment of the new stem cell transplant, which occurs during the first few weeks, because the risk of negative effects on the new [indiscernible].

Brincidofovir has demonstrated the lack of hematologic toxicity, so dosing can begin as soon as the patient receives their new bone marrow infusion. And our Phase 2 trials, the main first day of dosing was the day 24 with dosing beginning as late as day 35 following transplants. Because of the later initiation of dosing in Phase 2, there were 50 of the 230 patients enrolled in Study 201 who had evidence of reactivated CMV before they were able to start study drugs. With earlier dosing in SUPPRESS, we may be able to prevent CMV reactivation in these 20% of patients further improving our probability of success for the primary end point.

In addition, we’re increasing the likelihood that will be able to detect a difference in the number of clinical events related to other DNA viruses, including BK adenovirus and the other herpes viruses in addition to CMV, that contribute to the morbidity and mortality in the first six months following transplants.

These data supporting the lack of hematologic or bone marrow toxicity are obviously critical to our ability to begin dosing in the early transplant period and one of the key differentiating characteristics of Brincidofovir. A full analysis of the hematologic safety of Brincidofovir will be presented at the upcoming European BMT meeting in Milan in April.

We have implemented a safety monitoring and management plan for SMMP for the SUPPRESS trial to address drug related diarrhoea in our earlier studies of HTC recipient. We found that a temporary dose interruption missing a dose or two of Brincidofovir allows the gut to rest and allows the patient to restart Brincidofovir successfully in most cases.

We implemented this SMMP in our Phase 2 study in patients with adenovirus infections with one permanent discontinuation among patients randomized to either once or twice weekly Brincidofovir. As we mentioned in our last quarterly conference call, in order to achieve traditional approval for CMV prevention, a second confirmatory trial for Brincidofovir should be underway at the time of NDA filing of our data from SUPPRESS. This confirmatory trial should establish the correlation of CMV viremia with CMV disease.

We are in on-going discussions with the FDA on the patient population, control arm and duration for a CMV prevention trial and renal transplant recipient. We have to reach agreement on these fundamental aspects in the first half of 2014 and to have the final study design agreed with the FDA and European regulators during this calendar year.

Renal transplant recipients have a significant rate of CMV infection and disease and represent a growing patient population with approximately 20,000 transplants per year in the U.S. and nearly 100,000 patients on the waiting list. Although graft survival has improved, less than 50% of the transplanted kidneys survive 10 years. Viral infections with CMV and BK virus play a major role in graft loss. A trial in prevention of CMV and renal transplant recipients should provide the correlation of CMV viremia with CMV disease needed to support traditional approval for CMV prevention for Brincidofovir. We are continuing to review data from our large expanded access database from EIND and Study 350 with over 400 patients we've been treated with Brincidofovir for a life threatening infection with the DNA viral infection.

We expect to be presenting and publishing clinical data on Brincidofovir's safety profile and broad spectrum antiviral activity during 2014. We have several abstracts already accepted for presentation at upcoming meetings here in the U.S. and in Europe. At the BMT Tandem Meeting last week in Texas, we reviewed the safety profile of Brincidofovir in over 100 paediatric patients including children less than two years of age we've received the drug today and we have presented data on adenovirus infection and the potential for Brincidofovir in these patients. The slides that were presented at the BMT meetings are posted on our website.

In addition to the bone marrow transplant conferences, we are targeting medical conferences with different physician and prescriber audiences including transplants [arc] and the solid organ and IV physicians. We look forward to keeping the financial community apprised of our publications and presentations at upcoming medical meetings throughout the year.

Thank you for your time this morning, I will now turn the call over to Linda Richardson, our new Chief Commercial Officer. Linda?

Linda Richardson

Thank you very much Michelle and I just want to let everyone know how great it is to be here and be a part of Chimerix. I am very excited about this opportunity and I think there is a real chance to build something special here.

As you have heard from the previous comments, with Brincidofovir, we have a broad spectrum antiviral with significant therapeutic potential. In 2014, as we [glean] greater understanding regarding the clinical effects of the drug through a deep dive analysis of our existing Brincidofovir patient database which as you know is sizable, we will work to priorities our subsequent development activities for Brincidofovir looking beyond the clear potential and CMV.

For me I have just attended my first BMT Tandem Meeting. Hearing the presentations and speaking to physicians who manage patients undergoing bone marrow transplant, it’s apparent that there is considerable interest in Brincidofovir within that transplant community. One of my priorities in 2014 will be to establish a strong commercial platform by engaging with key customers including healthcare professionals, patients and payers to help inform the value proposition of the drug and identify unmet needs that Brincidofovir may be able to fulfil. These insights will help drive the foundation of our commercial platform.

Also at BMT last week, I encountered some information very pertinent to Chimerix. A poster from researchers at NIH looked at the potential benefits of CMV prevention in HCT recipients. In their study of approximately 130 patients, 90 had CMV reactivation and required pre-emptive therapy with current antivirals.

This CMV reactivation was seen as early as day eight and the majority of CMV reactivation occurred in the first six weeks after transplant. As Michelle already articulated, the earlier dosing of Brincidofovir in SUPPRESS should allow for an increased opportunity for prevention of CMV infection.

Also in this NIH analysis, they report that although CMV disease and death were generally avoided by initiating preventive therapy, non-relapse mortality was still three times higher in patients with CMV reactivation than in patients without CMV reactivation, a finding that was statistically significant. Finally, the NIH study also evaluated the much longer hospital stay and medical complications for patients who required pre-emptive therapy for CMV reactivation. They calculated a potential cost savings of $30,000 to $60,000 per patient, if an effective CMV prevention were available.

Now from my perspective this information reinforces the attractiveness of brincidofovir's potential as the first and only antiviral indicated for the prevention of CMV in adults undergoing allogeneic stem cell transplants. The phase III data from SUPPRESS will provide us with a great deal of information regarding important secondary data points related to help outcome, enabling us to better quantify the specific advantages of brincidofovir in the study population.

These are obviously anticipated as; we are picking specific endpoints compared to both arms. And the ultimate goal here being to establish not only the clinical benefits of preventing CMV reactivation with Brincidofovir, but also to help economic advantages that maybe realized from preventing other infections, rehospitalization, improving mortality et cetera.

So in SUPPRESS we can see brincidofovir meeting an unmet need for prevention of CMV reactivation, certainly a benefit for the transplantation but also bringing an economic value to the healthcare system. From a commercial perspective, 2014 will be the start of a highly active period of establishing the Brincidofovir value proposition and understanding how to maximize the brand at launch while also seeing how we prioritize establishing the broad spectrum potential of Brincidofovir in other areas of high value and unmet need.

Appreciate your attention and I look forward to sharing our progress with you on future calls and now I’d like to turn it over to Ken for some closing comments.

Kenneth Moch

Thank you, Linda, Michelle and Kim. As my colleagues and I have mentioned to many of you, we remain committed to maintaining an open end and interactive dialogue with the investment community. We look forward to sharing additional data on the safety and efficacy of Brincidofovir, as well as on the enrollment of SUPPRESS and the design of additional clinical trials throughout 2014. We’ve been truly been gratified in Chimerix as best reflected in the many meetings and insightful discussions which occur when we attend investor conferences. We will continue along this path during 2014, attending a wide range of scientific presentations and investor meetings as well as visiting numerous cities.

And with that I will now turn the call back to the operator for questions.

Question-and-Answer Session

Operator

Thank you, (Operator Instructions) our first question comes from Phil Nadeau with Cowen & Company, your line is open.

Phil Nadeau - Cowen & Company

Good morning, thanks for taking my questions and congratulations on a very productive year. First question, I think at one point you had said you might be able to present some data from Brincidofovir’s [capacity] use programs specifically on solid organ transplantations at the ISHLT meeting in April. Is that presentation still going to happen?

Michelle Berrey

Good morning, Phil, Michelle, we do have a presentation at ISHLT at the end of April in San Diego, it'll be our first presentation reaching out to the audience of solid organ transplant physicians, this particular presentation is regarding the in vitro and clinical resistance profile of Brincidofovir, we have submitted additional abstracts on our data and other organ transplant populations including liver transplant, lung transplant et cetera to various meetings throughout this year, again in our effort to get the data in front of various audiences.

Phil Nadeau - Cowen & Company

Okay, great, that’s very helpful, thanks. And then my second question’s actually on the diarrhea management program, the study’s now been enrolling for a bit of time. I’m wondering if you have any initial blinded on the [indiscernible] discontinuations in SUPPRESS or is it really flat or do you just not expect to get any of that while the studies ongoing.

Michelle Berrey

Those safety data are being reviewed in real time by our DSMV, an independent group of physicians with specific request to monitor both blinded and unblinded data on reach of diarrhea, we’re also looking specifically at hematologic safety because of the earlier dosing and we have a nephrologist as well, just to make sure that we’re adequately reviewing all, any indications of renal safety. So those DSMV meetings will be going on in real time throughout the conducts of the trial, but again we’ll be reviewing safety only, with any findings from that unblinded DSMV review, they could modify any portion of the trial of course with the consent of the sponsors and FDA.

Phil Nadeau - Cowen & Company

So just on that last point, how would it be communicated to you if things are maybe deviating from the original plan, would they come to you with that signal, would they come to you with the recommendation of how the trials should be altered, what would be the…

Michelle Berrey

So we have real time monitoring safety events during the conduct of the trial and then on a regular basis we have summaries of those events as they’re coming in real time priority through our ECRS that are forwarded to the DSMV. So the DSMV serves a role of recommending and reviewing, so any recommendations or any change to the trial would come back to us, the sponsor for discussion with the FDA.

Phil Nadeau - Cowen & Company

Great, thanks and just one last question, I know you said for 2014 one of the goals is to identify new patient populations or diseases to develop Brincidofovir, could you give us any idea of your preliminary thoughts again outside of that HS stem cell transplant and solid organ transplant [indiscernible] indication, if there’s interesting signals that you’re beginning to chase down.

Michelle Berrey

Sure, so we are looking at the 350 and EINB safety database for the activity that we’ve seen with those patients who’ve been treated with Brincidofovir for a life threatening or serious infection, and I will say, across the spectrum of the herpes viruses, adenovirus, polyomavirus, the simplex viruses, we have seen activity at least in an uncontrolled setting across these viruses. The list of potential diseases, probably numbers like couple of dozen, we're excited to have Linda Richardson with us so that we can evaluate what the best opportunities are. Obviously with our limited resources, we don’t want to extend ourselves beyond our focus of enrolling SUPPRESS and getting the solid organ transplant study initiated.

So part of the evaluation would be working in collaboration with a group that could also provide that resource support. There are a couple of interesting potential ideas; one in HPV related recurrent respiratory papillomatosis. We have had a couple of patients through our emergency access trial who have received Brincidofovir, juvenile patients with HPV in their respiratory tract who really don’t have a good therapy at this point.

The activity of Brincidofovir in JC virus has been summarized, we've looked through our database and again its uncontrolled data. But I would say there is something that we are continuing to explore and we're also in early conversations with some groups looking at a recent publication on the use of valganciclovir in patients with glioblastoma, obviously a very serious disease spread, a potential correlation with CMV, and some early data coming out of that, valganciclovir trial that may have demonstrated an early survival benefit. So those are just three of the potential, couple of dozen opportunities that we're exploring to really take advantage of the broad spectrum activity of Brincidofovir. Thanks for the question.

Operator

Our next question comes from Ritu Baral with Canaccord, your line is open

Ritu Baral - Canaccord Genuity

My questions are sort of where your thoughts are on the upcoming solid organ trial; Michelle, what structure is a feasible trial design in your current thinking given that you are doing -- that there are 20,000 renal transplants a year, and why not consider liver transplants as well given the lack of an approved treatment option there?

Michelle Berrey

The main reason for focusing on the renal transplant population is because of the early data we saw in our phase 2 dose ranging trial in stem cell transplant patients where we saw an increase in GFR, improved serum creatinine, and a decrease in blood and the urine in patients who had evidence of BK virus infection. This is the first potential clinical evidence of activity of Brincidofovir against BK virus infection and those related clinical events.

We know in the renal transplant population that BK virus has a significant impact on graft survival, and focusing our first trial in CMV prevention on this patient population gives us a unique opportunity to demonstrate that activity against BK virus infection in those renal transplant patients, and potentially impact graft survival.

Ritu Baral - Canaccord Genuity

And given the 20,000 patients a year, what’s a feasible trial design for something like this, if you do have to show CMV diseases and outcome?

Michelle Berrey

So when solid organ transplant patients develop CMV viraemia, they also develop what’s called CMV syndrome, so they have a fever or fatigue and changes in their clinical labs, which are indicative of early CMV disease. This is considered for regulatory purposes a clinical endpoint rather than having CMV viraemia alone which is considered a surrogate endpoint. So CMV reactivation or early CMV disease in a solid organ transplant patient would be considered a clinical endpoint and would be sufficient for the correlation we would need to achieve traditional approval.

Ritu Baral - Canaccord Genuity

And do you think that the SMMP, the diarrhea management plan would be the same in this trial, as it is for the bone marrow trial?

Linda Richardson

It’s a great question. I think our management plan would be the same however, and at least from our expanded access database it does not appear that the rate of drug-related diarrhea are as high once we're outside the stem cell transplant population. Obviously we’ll be learning a lot more about that during the SUPPRESS trial, but we've not seen as high a rate of the higher grades of diarrhea in a drug -- that were considered drug-related in these solid organ patients. It is something they have different concomitant meds so we will be watching that closely. But yes we do intent to use a very similar if not the same SMMP.

Ritu Baral - Canaccord Genuity

Got it and last question just around back to what you said about BK. Will BGFR, GFR be your main endpoint for tracking effect on BK virus or is BK viremia or viruria for any other measure useful?

Michelle Berrey

So looking specifically at clinical events is really the best way to go for definitive endpoints for BK virus and the blood origin we don’t have an FDA approved validated assay so it’s really in our best interest to demonstrate a beneficial effect on this clinical endpoints. GFR looking at some markers in the urine that have recently been described that may help us differentiate BK virus impact versus drug related toxicities versus rejection. But at the end of the day what would really help to demonstrate is improved renal function and potentially improved graft survival. So it’s really best to focus on those hard clinical endpoint.

Operator

Our next question comes from Katherine Xu with William Blair. Your line is open.

Katherine Xu - William Blair & Co. LLC

Yes hi. Good morning. I’m just curious in SUPRESS so far which day Brincidofovir is started in patients on which day? Do you have a...

Michelle Berrey

Good morning Katherine.

Katherine Xu - William Blair & Co. LLC

Hi.

Michelle Berrey

So I would say probably our first month or two of the data that we saw were not representative because as the trials were initiated at various sites, the transplant physicians wanted to get their patients who were already -- had already received their transplant, they wanted to get them on to the trail. So they may have been in there, their third week. Patients can began study drug up to date 28, however our belief that half of the patients should begin study drug within the first week and the cumulative 90% in the first two weeks, I believe will be supported and looks to be accurate given our enrolment to date.

Katherine Xu - William Blair & Co. LLC

Okay. So with the renal transplant study the graft loss can that be endpoint?

Michelle Berrey

Yes, it certainly will be one of our secondary end point because that trial will be focused in patients who are at increased risk of CMV infection. CMV will be our primary endpoint in order to use that trial for traditional approval for prevention of CMV. But certainly the clinical endpoints graft loss of improved renal function would all serve a significant secondary endpoint.

Katherine Xu - William Blair & Co. LLC

So it’s still not clear where the comparator arm would be?

Michelle Berrey

We are continuing to have those conversations. There is certainly the data are supportive of the pre-emptive approach which is used in many institutions very similar to what is being used in our hematopoietic cell transplant population where we monitor frequently for CMV with a real time sensitive PCR and then initiate pre-emptive therapy. Because of the drawbacks of currently available therapy, there are certainly larger studies that support the use of pre-emption even in the limited indicated populations for available therapies.

Katherine Xu - William Blair & Co. LLC

Okay. And I asked this question before but I just want to listen -- hear the answer again if you don’t mind, Michelle. So for SMMP we have a dose interruption, you don’t expect that dose interruption would affect efficacy?

Michelle Berrey

We’ve not seen any evidence through our trials that have included the SMMP in its current form, either in the prevention setting, so in patients who have dose interrupted in general, we see those patients interrupting after they’ve achieved steady state. So because of the six day intracellular half-life, the drug is remaining at adequate concentrations we believe in the target cells and thus avoiding any virologic breakthrough soon we don’t believe it would affect efficacy as patients are following the current SMMP.

Katherine Xu - William Blair & Co. LLC

Thank you. And last question for Tim. Do you think you need to raise money for the renal study before it starts?

Tim Trost

Well, yes, I mean, I’ll start, Michelle might chime in here. I mean recall that the use of proceeds for our IPO was to get the data from the SUPRESS trial with a moderate cushion. So therefore to the extent we ultimately add additional clinical trials into our business plan that of course implies additional financing needs, we do feel like we have several options available to us, precisely when and how that shapes out timing wise vis-à-vis precisely when and how a start of a trial shapes out is still under evaluation. But we would be very hesitant to get too far down any new clinical trial roads prior to having sufficient capital.

Kenneth Moch

I think the one thing to add is something Michelle -- this is Ken by the way, Michelle stated before which is we’re also talking to groups where there is funding potentially from those groups relating to other clinical trials other than the potential other Phase 3.

Operator

Our next question comes from Josh Schimmer with Piper Jaffray. Your line is open.

Josh Schimmer - Piper Jaffray

Maybe if you can just help us understand how you’re balancing the pursuit of new individual antiviral indications against the pursuit of a label that encompasses use of Brincidofovir in all of them. And when do you think you’ll have additional updates on that kind of balance and decisions and strategy?

Michelle Berrey

I would say that our primary focus is the continued enrolment of SUPPRESS, clearly those trials that are more likely to get us to approvals whether that’s accelerated approval with the SUPPRESS trial or both traditional approval with the solid organ transplant study, are those that are always going to be our highest priority. However we do want to take advantage of some of the early uncontrolled data that we are seeing in our expanded access database and we also recognize the huge unmet medical need for some of the viruses that have been the target of our exploratory study such as with the adenovirus study that we reported out last September.

Some of these viral infections are unprecedented, there are no available therapies and the regulatory pathway towards a true indication is much less clear than it is for CMV. Thus our focus on CMV is a primary endpoint both in HCT recipient and in solid organ transplant recipient with the opportunity to explore the secondary end points for the other DNA viral infections.

Having said that, where we have seen evidence of some potential activity of Brincidofovir and our Study 350 and emergency INDs, we are very interested in continuing to gather more information, potentially to do some dose finding to make sure that we are -- we do have the right dose of Brincidofovir for those patients. And to look at the activity in the areas of -- it’s an understatement, huge unmet medical need where there are not available therapies. So that is certainly something that brings those viral infections to the top of our priority list, once we get beyond the two major studies that will get us to our accelerated and traditional approval.

We’re also looking at what opportunities -- go ahead Josh.

Josh Schimmer - Piper Jaffray

I was just going to say, is there a scenario from the SUPPRESS study in which you see a benefit across multiple double stranded DNA viruses beyond CMV that enables just based on that trial a label that extends the application beyond this transplant setting?

Michelle Berrey

So we are definitely looking for CMV for advanced clinical events associated with CMV and those clinical events that are associated with any of the DNA viral infections that we know occur very commonly in these patients.

One example is we are looking at HHV-6 related encephalitis and mental status changes. There have not been multi-centre large prospective study of many of these viral infections that point estimates are difficult to estimate for the SUPPRESS study and whether or not we would achieve statistical significance on those is a little tough therefore to predict.

However there is an opportunity for us to demonstrate the potential clinical benefit of Brincidofovir and HHV-6 and BK virus infection potentially and adenovirus infection as well. And we do believe that prevention is a superior modality to avoid the morbidity and mortality associated with these viral infections. So it’s really dependent on the incidents that we see for these clinical events in the placebo or standard of care arm whether we would be statistically significant difference for these other viral infections, but certainly it is a strong part of our emphasis in the SUPPRESS trials and something we’re working very closely with our sights on.

Josh Schimmer - Piper Jaffray

And so just to clarify, you did see that signal, is there the potential to now request from the FDA based on that a label and indication that’s not just limited to the transplant setting?

Michelle Berrey

There is certainly a potential for us to request that indication. The strength of the data I think will really tell the likelihood of those data being considered as an indication I think it’s much more likely that even a statistically significant difference is something that would improve the use of Brincidofovir and really expand its utility beyond the highest risk patients who are at high risk for CMV. We know that those patients who are at high risk for CMV reactivation are also at high risk for multiple other double-stranded DNA viruses. Certainly, this data will be reflected in the clinical trial section of the label and would provide us with opportunities for presentation at conferences et cetera.

It is one of the things that particularly are paediatric transplant doctors are interested in, as mentioned before the adenovirus data and for both adenovirus and HHV-6 infection, we believe that prevention of those infections is a much more efficient means of avoiding the high mortality rate than treatment after the disease has already taken the hold.

Operator

(Operator Instructions) Our next question comes from David Friedman with Morgan Stanley. Your line is open.

Brienne Kugler - Morgan Stanley

Just wondering what your current thoughts are on partnering in the EU versus commercializing CMX001 yourself?

Kenneth Moch

I will let Linda answer that in a second but I think just as a framework all of these are economic evaluations of the value to Chimerix and to the Company and our shareholders and also issues of speed and control of the message. So, I think it’s all at this point best to say it’s open for evaluation but that’s part of Linda’s responsibility in terms of the commercial strategy also given her broad global experience launching innovative medicines. Linda, you want to add something?

Linda Richardson

I think it’s important to respect some of the differences in commercialization in the EU particularly what you see now with price points and negotiations and study as you look the GVA and what happens with Germany right now and the trials that are required somewhat arbitrarily by these bodies versus what you do for registration for efficacy and safety trial. So, evaluating who has present footprint there and capacity and versus what it would take us to invest and also the timelines because our first focus needs to be on preparing the market for North America and putting Canada, discussions with trials and development of the program, for registration in Europe I believe are underway and Michelle and her team are having those conversations that you would evaluate from steaming from what they say to you first and what’s your likelihood of approval and what might that look like and then look for either, I think the potential for partnerships for commercialization or what it would take for you to do it yourself.

So at this point a lot of it is in the information gathering stage.

Kenneth Moch

Other questions or else I think we can move on. Anybody asking in the queue, operator?

Operator

I am showing no further questions. I will now turn the call back over to Kenneth Moch for closing remarks.

Kenneth Moch

Well thank you all for your participation today. We look forward to our future conversations with the investment community either at scientific meetings and there were a number of folks at the BMT Tandem Meeting last week in Texas, I am sure there will be others at our upcoming presentations. And we look forward to seeing many of you in-person at investor conferences or in your various cities as we travel around the country. With that thank you all and have a very good day.

Operator

Thank you. Ladies and gentlemen, this concludes today’s presentation. Thank you once again for your participation. You may now disconnect, have a great day.

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Chimerix (CMRX): Q4 EPS of -$0.31 beats by $0.10. Revenue of $0.88M misses by $0.31M.