Chimerix, Inc. (NASDAQ:CMRX) Q3 2023 Earnings Call Transcript

Chimerix, Inc. (NASDAQ:CMRX) Q3 2023 Earnings Call Transcript November 2, 2023

Chimerix, Inc. misses on earnings expectations. Reported EPS is $-0.27 EPS, expectations were $-0.22.

Operator: Good morning, ladies and gentlemen, and welcome to the Chimerix Third Quarter 2023 Earnings Conference Call. I would now like to introduce you to your host for today’s call, Michelle Laspaluto, Vice President of Strategic Planning and Investor Relations at Chimerix. Please proceed.

Michelle Laspaluto: Thank you, John. Good morning, everyone, and welcome to the Chimerix third quarter 2023 financial and operating results conference call. This morning, we issued a press release related to our third quarter update. You can access the press release in our Investors section of the website. With me on today’s call are President and Chief Executive Officer, Mike Andriole; Chief Medical Officer, Allen Melemed; and Chief Technology Officer, Josh Allen. Before we begin, I’d like to remind you that the statements made on today’s call include forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties and other factors. These risks and uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements.

A biotechnologist wearing lab coat, creating a unique formulation for a therapy.

Please refer to our filings with the SEC for a more complete disclosure of these risks and uncertainties. At this time, I would now like to turn the call over to our President and Chief Executive Officer, Mike Andriole.

Mike Andriole: Thank you, Michelle, and good morning, everyone. The third quarter was marked by continued execution across our pipeline including continued enrollment in our global Phase 3 ACTION study of ONC201 and Phase 1 dose escalation studies for our second-generation compound, ONC206. I’ll start with ONC201 in the ACTION study. We now have 113 sites open across 12 countries and tracking ahead of our prior guidance of activating 100 sites by September 30. Enrollment is progressing with site activation, and we continue to expect first and second interim overall survival data as well as PFS data in 2025. Geographically, we now have about an equal number of sites activated in Europe as the US. This past September, we participated in the European Association for Neuro-Oncology Conference, also known as EANO in the Netherlands.

And at that conference, we hosted a symposium on the current diagnosis, treatment strategies and clinical trials for H3 K27M mutant glioma and engaged with the neuro-oncology community broadly to drive ongoing awareness and interest in the ACTION study. I was very pleased with the level of enthusiasm across the European community for this program and the degree of support from so many investigators who recognize the very high unmet need in this patient population. I was also reminded of the value to our industry of being back in person at medical conferences following the pandemic as attendance at EANO was at a new record high, and we have seen a nice increase in site activity across Europe in the week since that conference ended. That increase is in addition to already strong engagement prior to EANO.

Turning to North America. The annual meeting for the Society for Neuro-Oncology, also known as SNO, will occur in Vancouver, Canada in just a couple of weeks where we are also planning a large presence. I’ll let Josh comment on our plans around this conference, but we’re looking forward to seeing many of our investigators in the ACTION study as well as other program collaborators later this month. Our efforts in enrolling the ACTION study are also underpinned by a robust publication strategy that includes a recently published manuscript in cancer discovery this quarter, which focused on frontline ONC201 survival data and further explained its mechanism of action. The data from this peer review publication further strengthens our confidence in the ACTION trial and also further supports its enrollment.

I’ll let Josh speak more to the details included in this recent manuscript. As we continue to enroll the ACTION study, we’re also simultaneously preparing the company and the market for ONC201’s potential commercialization. To that end, we’re in the process of finalizing recruitment of a Chief Commercial Officer, and I’m excited that, that process is nearing completion. In fact, I expect to announce the hiring of that individual before the end of the year. Turning briefly to ONC206. The protocol amendments for each of our dose escalation studies have been approved as expected during the third quarter. These amendments allow for a more intense dosing schedule that includes twice a day dosing up to three consecutive days weekly in order to increase the duration of therapeutic exposure.

We expect the continual 72-hour exposure of ONC206 to potentially generate additional monotherapy activity both in CNS tumors and potentially tumors outside of the CNS based on emergent in vivo data. The PNOC and NIH studies are enrolling at the more frequent dose levels. And we expect those to be complete in the first half of 2024. As you may recall, we previously reported a GBM response on the once-a-week schedule starting at dose level two, and that patient’s response remains ongoing as the patient’s dose level has increased. Since these studies began enrolling again, I’m also happy to report we have observed no Dose-Limiting Toxicities thus far. Before I turn the call over to Josh, I’d like to reiterate our deliberate and disciplined approach to capital allocation.

We ended the quarter with $217 million in cash and equivalents, which is on plan to meet our previous guidance of approximately $200 million in cash at the end of the year. We continue to expect our cash balance to be sufficient to support operations into the end of 2026 and through each of the expected action clinical endpoints. For more details on our third quarter balance sheet and income statement, please refer to the press release, which we released earlier today. With that, I’ll turn the call over to Josh, to provide additional colour, on our recent publication in Cancer Discovery and our recent engagements with The Neuro-Oncology Community. Josh?

Josh Allen: Thank you, Mike. So we continue to see benefit from our connections to The Global Neuro-Oncology Community. As Mike mentioned, over the last quarter, we held the symposium at the European Association for Neuro-Oncology Conference in the Netherlands. There, we met with leading neuro-oncologist in active clinical trial investigators in addition to holding a symposium for presentations by thought leaders related to H3-K27M-mutant Glioma, including the ACTION study. Later this month, we will be similarly present at the Annual Society for Neuro-Oncology meeting in Vancouver, where we are planning a large presence, including the symposium on future directions and the diagnosis of treatment of H3-K27M-mutant Glioma as well as supporting our collaborators who will be making a series of oral presentations on preclinical and clinical studies of ONC201 in different treatment settings.

We’re looking forward to seeing many of our investigators and collaborators in person, as we drive continued engagement in the ACTION study and keep a close eye on emerging treatment strategies in molecularly defined chemo. In addition to these larger Neuro-Oncology conferences, we also remain actively engaged on the scientific front, including presentation of non-clinical data that reflect our deepening understanding of the novel mechanism of action of the [Indiscernible] at the AACR Special Conference in Cancer Research for brain cancer held in Minneapolis just a few weeks ago. As Mike mentioned, a research manuscript co-authored by numerous academic investigators and chimeric recently published in the journal Cancer Discovery that reflects several years of clinical, translational and mechanistic investigations of ONC201 as a first-in-class therapy for H3-K27M-mutant Glioma.

The manuscript describes data that support a range of important conclusions for ONC201 in H3-K27M-mutant Glioma, that span its mechanism of action, its biological activity within patient tumours and its clinical activity that extends beyond the prior efficacy analyses in the recurrent setting. Starting with the mechanistic-finding, the data provide a step-by-step understanding of why ONC201 is uniquely poised to address this disease that starts with the engagement of its ClpP key binding target in the mitochondria and ends with reversal of the H3K27 trimethyl loss event in the nucleus. Reversal of this epigenetic hallmark is remarkable as it is the direct consequence of the H3 K27M mutation and is thought to be the pathophysiological driver of the disease.

These findings were consistent across disease models and importantly reversal of H3K27 trimethyl loss was robustly evident across all tumor biopsies obtained from ONC201 treated patients. Turning to clinical outcomes. The survival of H3 K27-mutant glioma patients who received ONC201 in the frontline setting following radiotherapy, which I’ll notice the same setting of the ACTION trial was reported as 21.7 months from diagnosis in contrast to 12 months for patients who did not receive ONC201. Favorable survival outcomes among ONC201 treated patients were consistently observed across a variety of sensitivity and subgroup analyses. It is worth noting that while the previously disclosed results for ONC201 in the recurrent setting were skewed towards adult patients and thalamic primary tumor locations, this frontline dataset described in the manuscript were skewed towards pediatric patients and brain stem tumor locations.

Aggregately, these findings demonstrate that ONC201 is a first-in-class therapy for H3 K27M-mutant glioma that consistently reverses the major driver of the disease pathology and appears to be associated with compelling outcomes in uncontrolled trials across multiple clinical settings. These filings boost our confidence in the prospect of randomized controlled evaluation of ONC201 and the ongoing ACTION study, which is further strengthened by inclusion of dose intensification to twice weekly dosing. With that, I’ll turn the call back over to Mike for closing remarks.

Mike Andriole: Thanks, Josh. During the third quarter, we’ve continued to execute our plan with a focus on bringing ONC201 to patients as soon as possible. We’re beginning to prepare our organization to potentially launch ONC201 and are excited about the promise to further broaden our pipeline in the future by advancing ONC201 and/or through business development. With that, operator, we’ll open the call up to questions.

See also Billionaire Marc Lasry’s Top 10 Stock Picks and 12 Most Important Holidays in the US.

Q&A Session

Operator: Thank you. [Operator Instructions] Your first question comes from the line of Maury Raycroft from Jefferies. Please go ahead.

Unidentified Analyst: Hi. This is James [ph] on for Maury. Congrats on the progress and thanks for taking our question. Can you talk more about the progress on site initiation enrollment feedback from investigators specifically in Western Europe and also Canada? And can you book and time frames for when you could reach full enrollment of the 450 patients needed for the study?

Mike Andriole: Sure. And thanks for the question, James. Engagement in Western Europe actually across all of Europe has been strong, I think, is evidenced by the speed of site activations to date in that part of the world, I’d say Canada has been a little bit slower. But from a regulatory perspective, that’s not entirely unusual. But engagement at sites with investigators has been quite strong in both geographies. In terms of when we would expect full enrollment in the study. We haven’t given that guidance but continue to reinforce our guidance to have first interim efficacy overall survival data in the first half of 2025. So you might expect it would be a similar time frame if you just look at the number of events required to hit that in time lines.

Unidentified Analyst: Got it. Thanks. And where are you in enrollment for the consecutive dosing phase cohorts with ONC206, do you anticipate that you would press release that data in an earnings call, have a separate event of that? Or would you present that data at an upcoming medical conference.

Mike Andriole: Yes. Good question. We’ve got two separate arms. Pediatric and or recurrent and front line in the pediatric PNOC study and then a separate obviously, study with the NIH. So there are three different in a way, arms ongoing with that Phase I studies, James. And so we’re not going to give a play-by-play on where we are with each one. But all three are enrolling, and we continue to expect that we’ll have enrollment completed in the first half of 2024. I think that we’ll likely top line the safety data to the extent that there’s efficacy insights that we can gather from that we’ll do that at that time. But I want to probably set expectations that if you look at, at least the parent compound on 201 in the recurrent setting, there was an 8.3-month time to onset of response.

And so there’s a natural lag between the maturity of those patients into a response and when we might have safety data. So there’s probably a two-step process in terms of identifying safety data and additional insights from an efficacy responder perspective. The other insight I’ll make is some of those patients who will qualify for those studies may have seen ONC201 previously. And so it could have resistance mechanisms built in that would make assessing response more difficult. We also have some patients in the PNOC study that are in the frontline setting and therefore, confounding a response assessment really making the money valuable for response. And so we’re really focused on the recurrent setting in patients who are naive to the Imipridone class and assessing response.

So we’ll look at the totality of the data at the time, but I think it’s likely to be top line safety data first that we would press release and then followed perhaps by maturing efficacy data.

Unidentified Analyst: Great. Thank you for taking our questions. I’ll hop back in the queue.

Mike Andriole: Sure.

Operator: Your next question comes from the line of Naureen Quibria with Capital One. Please go ahead.

Naureen Quibria: Hi. Good morning. Thanks for taking my question. I guess, I’ll start first with ONC206, the patient response, the GBM patient responder — the patient is still on study. How long has the patient been on therapy? And can you comment on what dose — how many doses they’ve received — the different levels.

Mike Andriole: The patients – yes Naureen, the patients — well, first, thanks for the question, Naureen. That patient has been on study for about 1.5 years at this point. So it’s been quite some time, a very durable response they have continued to dose escalate. Last I heard, I’ll ask Allen or Josh to weigh in on this, but my understanding is they graduated to dose level 4. That was the last piece of information I had on that patient. I don’t know, Josh, you have other insight

Josh Allen: Not much to add. I know that, that patient has dose escalated at least twice since the initial dose level at 100 milligrams. I know the investigators reported a deepening of the response, as that dose escalation has occurred in that patient, which is very encouraging. But overall, I think the macro message is we’re compelled by this idea that ONC206 continues at the preclinical level to show signs of efficacy outside of H3 K27M-mutant glioma. Clearly, that was a strong indication that, that can translate at least in that patient. And as Mike has pointed to, we look forward to continuing execution at this intensified dose schedule and taking a careful look within the response valuable population in the study to see what the path forward looks like outside of H3 K27M. So great news for that one patient and look forward to seeing more of that

Naureen Quibria: Great. Thanks, Josh. And maybe this one for you or Allen. Do you — can you comment on what type of data on this patient and any of the preclinical type of data that we presented at the upcoming SNO conference.

Mike Andriole: Yes. The — go ahead, Josh. I think you’re closest to that.

Josh Allen: Go ahead. I’ll start with SNO, and just mentioned that we expect at least three oral presentations to occur at SNO on ONC201. Two of them are related to positioning ONC201 as a combinatorial backbone in DMG, right, given the signal as a monotherapy that this drug has produced its safety profile, its oral administration, et cetera, really physicians that an ideal backbone therapy. So some of the mechanistic data, pre-clinical rationale and then available emerging clinical safety and outcomes associated with ONC201, as the backbone therapy will be presented in SNO, I think that’s going to be the subject of a couple of those studies. So you’ll expect to see more of that at SNO.

Naureen Quibria: Terrific. Okay. And just one more. Can you just remind me with the ONC206 trials that are ongoing the dose escalation. Is it just post-radiation or do they receive a little bit of temozolomide as well?

Mike Andriole: There are arms that have — that are in the frontline setting post-radiation and also arms that are at recurrence. I believe temozolomide is allowed prior to initiation of 206.

Allen Melemed: Mike, this is Allen, I can answer is a Phase I study. It’s a little more open on the conclusion for criteria as we are trying to get safety for this patient population. I think the moment is as if we could see some signs of activity, [indiscernible] where we’re seeing this activity and that will help us decide where to go in for future.

Naureen Quibria: Okay. Thanks so much

Operator: Your next question comes from the line of Soumit Troy with Jones Research. Please go ahead.

Soumit Troy: Good morning, everyone and congratulations on all the progress. On ONC206, could you remind us the dose escalation is going to be with 100-milligram dose level twice weekly. And how much dose exposure increase do you expect from the prior schema?

Mike Andriole: Yeah, excuse me, I’ll have Josh perhaps contribute to this too, but we have a slide in our deck that essentially lays out the dose frequency and schedule. So the next two dose levels following reactivation of this new protocol are evaluating similar, essentially similar exposures and dose levels that were given once a week, but doing it fractionated over three days and then escalating up from there. A big picture, we’ll end up at about four times the dose on a weekly basis if we make it all the way to dose level 11. Josh, anything to add?

Josh Allen: No, I think you covered it.

Soumit Troy: Okay. So — and with the time to respond being about eight months or so, and I’m expecting these patients just got to the dose escalation part just got initiated. So the data is most likely, we are thinking end of 2024. Is that a correct assumption, the efficacy data?

Mike Andriole: I think to the extent that we have valuable efficacy data, it will come in likely after completion of the safety analysis, right, Schumit? And so we’d expect that, as we said, in the first half or middle part of next year. And we’ll share what efficacy insights, response insights we have at that time. And we’ll update that during the course of the years those patients continue to be followed.

Soumit Troy: Got it. And one last question. In terms of the location of the tumor itself, we should expect a broad range, right, between anything between the POM, GIPG, STEM?

Mike Andriole: Yeah. This is looking at primary CNS tumors, so it’s going be a fairly heterogeneous patient population.

Soumit Troy: Got it. Got it.

Allen Melemed: The only exception is, this is Allen. The only exception is we are excluding patients that you typically see with the H3 K27. So look outside of that. But otherwise, it’s broader for CNS disease.

Soumit Troy: Great. I understand. Thank you so much and congrats again on the progress.

Mike Andriole: Thanks, Soumit.

Operator: Your next question comes from the line of Joel Beatty from Baird. Please go ahead.

Unidentified Analyst: Good morning. Hi. This is Ben on for Joel. Thanks for taking our questions. First question is, what expense trajectory to expect over the next few quarters?

Mike Andriole: Hi, Ben. Was – I’m sorry to clarify, Was that expense trajectory, you asked?

Unidentified Analyst: Yes, sir.

Mike Andriole: Yeah. It’ll be similar, I would expect. If you look at our first half run rate in terms of cash burn in 2023 and this latest quarter, we’re averaging, you know, 15 million, 16 million, 17 million a quarter. I would expect that to continue over the next couple quarters. John, it does help.

Unidentified Analyst: Thank you so much.

Mike Andriole: Yeah. I was just going to add, as we begin to prepare for commercialization, you might see an uptick in expense, but I would say in the grand scheme of things, it would be just at the margin.

Unidentified Analyst: Great. That’s super helpful. And then I guess on the identification of biomarkers for ONC206 for future efficacy studies, would you expect the biomarkers to be similar to the biomarkers you showed for 201 in the Cancer Discovery publication or something different?

Mike Andriole: Yes, a really good question. Then I’ll let Josh weigh in on that. Josh?

Josh Allen: Yes, Ben. Great question. And as you would expect from — we’ve been working on ONC201 at this platform for a number of years now, and we’re expecting to leverage all of that molecular information we’ve gathered from those efforts and pour it into the ONC206 program. So what I’ll say is we’re really excited about what we’re seeing with ONC206. We’ve been working hard in the lab ourselves and with collaborators and have generated a growing body of compelling in vitro and in vivo efficacy that we’re excited about. As we’ve mentioned, the potency increase and the alternative engagement of additional target engagement interactions that we’ve seen with ONC206 relative to ONC201 while that may not be a meaningful opportunity for H3 K27-muglioma, given that ONC201 is have on-target saturation there.

We think there’s a lot of other opportunities outside of H3 K27 both within the CNS and outside of the CNS, that can be addressed by ONC206. So we’re seeing signs of that in preclinical studies. Clearly, we’ve reported on this one responder early in dose escalation in the Phase 1 ONC206 that endorses that hypothesis. And what we’re looking to do now is take some of these molecular biomarkers, some of which you’re pointing to, but good ideas can come from anywhere. So we’re trying to take all of those ideas we have for specific molecular driver alterations in cancer that could be associated with ONC206 heightened activity and test some of those hypotheses against the compelling preclinical activity we’re seeing so that we can run towards actionable alterations in follow-on trials, if that’s appropriate.

So — good question, good thinking, and we’re hard at work testing a lot of these theories that include what we’ve learned from ONC201 in ONC206 over the years.

Unidentified Analyst: Great. Thanks for the insights.

Operator: Your final question comes from the line of Troy Langford from TD Cowen. Please go ahead.

Troy Langford: Hi. Good to know on the progress this quarter, and thanks for taking our questions. First one is just ONC206. So with respect to the based on just the escalation work, do you currently expect the Phase 1 work for both the NIH-sponsored study and the PNOC sponsored study to complete around the same time? And if not, would you need to wait for both of those definite before you move forward with the program?

Mike Andriole: Yeah. Good question, Tory. We do expect them based on what we know right now to complete around the same time, I don’t think we have any insight that they would be materially different, of course, as we get closer to the final dose levels, assuming that we don’t have a safety event that would stop us earlier at a particular dose level. We right now are planning for them to complete around the same time, if that should change, then, of course, we’ll update you accordingly. And an additional thoughts on that? I was going to ask Allen any did.

Allen Melemed : No. The only thing I would add is the demand for the one is high. So it’s really how quick we can fill the cohort, close the cohorts and then open a new cohort. So there’s high demand here.

Troy Langford: Okay. Great. And then just one other ONC206. So with respect to some of the expansion opportunities for that compound, can you just provide any color around how you think about balancing investment into some of these other areas with the need to preserve the cash runway for the ACTION study?

Mike Andriole : Yes. Great question. And so as we — if you think about capital allocation, we have earmarked some capital on balance sheet for Phase 2 studies that could be ONC206, it could be another compound, maybe that could be in-licensed. As we’ve said in prior quarters, Troy, the bar for business development continues to be high, because we continue to see early preclinical and clinical data with 206 that continues to raise the bar for anything else we would pull in and allocate capital to. Clearly, if we — the more substantial of a Phase 2 study we might run with ONC206 would shorten the runway, and we’ll evaluate that when we make that decision. To what extent would we shorten the runway, what are our access to other dilutive or non-dilutive capital.

And in particular, any additional insight we might have on milestone payments that might be forthcoming from Emergent BioSolutions with respect to the TEMBEXA divestiture we made last year, all factor into that calculus. But it starts with how much conviction do we have in the data to date ONC206 both pre-clinically and clinically and sharing that data with the market, making sure that second diction is shared externally as well.

Troy Langford: Great. Thanks for all the extra color. That’s all for me.

Mike Andriole : Sure.

Operator: I will now turn the call back over to Mike Andriole for closing remarks.

Mike Andriole : Thanks, John. Thank you, everyone, for your time this morning. For those of you attending the Snow Conference this month, please stop by our booth. Otherwise, we look forward to updating you again in the coming months.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.