Chimerix, Inc. (NASDAQ:CMRX) Q3 2024 Earnings Call Transcript

Chimerix, Inc. (NASDAQ:CMRX) Q3 2024 Earnings Call Transcript November 7, 2024

Chimerix, Inc. misses on earnings expectations. Reported EPS is $-0.26 EPS, expectations were $-0.24.

Operator: Good morning, ladies and gentlemen and welcome to the Chimerix Third Quarter 2024 Earnings Conference Call. I would now like to introduce you to your host for today’s call, Will O’Connor from Stern Investor Relations. Please proceed.

Will O’Connor: Thank you, operator. Good morning, everyone and welcome to the Chimerix third quarter 2024 financial and operating results conference call. This morning, we issued a press release related to our third quarter operating 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 Scientific Officer, Josh Allen; Chief Financial Officer, Michelle LaSpaluto; Chief Medical Officer, Allen Melemed; and Chief Operating and Commercial Officer, Tom Riga, for questions. 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 the 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. Please refer to our filings with the SEC for a more complete disclosure of these risks and uncertainties. At this time, I’ll now turn the call over to President and Chief Executive Officer, Mike Andriole.

Mike Andriole: Thank you, Will. Good morning, everyone, and thanks for joining us. The third quarter was marked by continued execution across our pipeline, including continued enrollment in our global Phase 3 ACTION study of Dordaviprone, and we are nearing complete enrollment of our Phase 1 dose escalation studies for our second-generation imipridone ONC206. The Phase 3 ACTION study is active in 15 countries worldwide, and our first interim data readout is potentially less than a year away. During this past quarter, we received confirmation from the prespecified interim safety review undertaken by the study’s independent Data Monitoring Committee, which recommended the ACTION study continue as is with no change to study conduct.

This is always welcome news, but even more so in the case of the ACTION study, where we have two treatment arms, one at the Phase 2 625-milligram dose administered once per week and a second treatment arm administering 625 milligrams twice per week on consecutive days or essentially a double dose of the Phase 2 schedule. Passing this IDMC safety review with no change to study conduct to any arm is a meaningful milestone and underscores the well-documented safety profile of Dordaviprone that makes it both a promising profile as a potential monotherapy, but also an ideal candidate as a potential backbone therapy. Last month, we participated in the European Association for Neuro-Oncology Annual Meeting in Glasgow, Scotland. It was evident that the 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 only continues to strengthen with time.

Q&A Session

Turning a little closer to home, the Annual Meeting for the Society for Neuro-Oncology, also known as SNO, will occur in Houston, Texas later this month, where we’re planning a large presence. We view our partnership with the SNO organizers and engagement at this pivotal conference as important to the success of our programs. Not only will we have presentations for Dordaviprone, but we’ll also showcase ONC206. Abstracts for that conference will release next week, so please stay tuned for more details. For those attending, we’re looking forward to seeing many of you and our investigators in person. We continue to make progress with the Therapeutic Goods Administration, or TGA, to file for provisional approval in Australia. While this was not on our radar last year, we were agile when an opportunity arose earlier this year, and we’re now in a position to file an NDA for provisional approval around year-end.

Having the NDA document ready for submission in Australia also aids our capacity and time lines should we have a positive interim overall survival outcome for action next year. To that end, we are judiciously preparing the company and the market for Dordaviprone’s potential commercialization as we may be within a year from the first interim readout. With our Phase 3 ACTION study and our expanded access programs in the U.S. and Europe, we now have a well-laid foundation with hospitals and physicians who have ongoing treatment experience with Dordaviprone. Recall, there are no approved therapies specific to this patient population, and we consequently expect a rapid uptake upon potential commercialization, forecasting a potential global market opportunity over $750 million.

Turning to our second generation imipridone ONC206. Our objective for the year is to gather safety and PK data in an unselected CNS patient population and to evaluate lead indications for the program. I’m happy to report the Phase 1 dose escalation is nearing completion, and the lab has been working diligently on non-clinical studies to inform the next step for the program. We continue to see ONC206 as well tolerated in adult and pediatric patients as we near completion of the dose escalation studies. As we review the incoming clinical and preclinical data, we plan to announce next steps for the program in the coming months. Before I turn the call over to Michelle for a review of the financials, I’d like to take a brief moment to recognize the recent promotion of Josh Allen as our Chief Scientific Officer.

Since joining Chimerix in 2021 with the acquisition of Oncoceutics, Josh has been an integral team leader and a trusted colleague to many across the company and has continually advanced the research and development of the imipridone class of compounds from academic discovery to the lead registration phase program. Please join me in congratulating Josh on this well-deserved promotion. With that, I’ll turn the call over to Michelle for a brief review of our financials.

Michelle LaSpaluto: Thank you, Mike. Earlier today, we issued a press release containing our financial results for the third quarter of 2024. For the third quarter of 2024, we reported a net loss of $22.9 million compared to a net loss of $24 million in the third quarter of 2023. Research and development expenses increased to $19.6 million for the third quarter of 2024 compared to $17.4 million for the same period of 2023. This was primarily driven by increased spending in the ACTION study. General and administrative expenses decreased to $5.2 million for the third quarter of 2024 compared to $9.3 million for the same period in 2023. This decrease is due to a onetime non-cash expense related to historical grants recognized during the same period in 2023.

We ended the third quarter with just over $152 million in cash and cash equivalents. As anticipated, our cash burn rate did experience a modest increase this quarter. As in preparation for the commercialization of Dordaviprone, we are committed to sensible cash management. Currently, we have a cash runway extending into the fourth quarter of 2026. With that, I will turn the call back over to Mike for closing remarks.

Mike Andriole: Thanks, Michelle. We’ve continued to execute our plan as expected in the third quarter with a focus on bringing Dordaviprone to patients as soon as possible. We are beginning to prepare our organization to launch Dordaviprone and are excited about the promise to further broaden our pipeline in the future by advancing ONC206 or through business development initiatives. With that, Leonardo, we will open the call to questions.

Operator: Thank you. [Operator Instructions] Your first questions come from the line of Maury Raycroft. Please go ahead.

Maury Raycroft: Yes. Can you talk about how you’re preparing the submission of the NDA for Australia and the potential launch by the end of ‘25? How are you using these commercialization efforts to potentially scale the organization for a potential U.S. launch too? Do you plan to leverage that NDA submission to dovetail into conversations with other regulatory agencies for accelerated approval paths as well?

Mike Andriole: Yes. No, thanks for the question. So there’s probably two parts to that question. There’s a regulatory component and the commercial component. So I’ll ask Tom Riga to comment on the commercial side. On the regulatory side, having the backbone of the new drug application complete for Australia has great utility in other markets around the world. There’s a lot of overlap between that backbone and what might be needed or expected in other markets around the world. So we see synergy there in having this ready. Of course, the efficacy component for this application will be predicated on the Phase 2 response rate data that we’ve previously announced. In terms of where we might utilize that in other markets around the world, we continue to look at the ACTION study as the first opportunity for registration in other markets around the world, but should that change, we will update the market accordingly. Tom, do you want to comment on commercial?

Tom Riga: Yes. We are enthusiastic to be inside of a year of first potential data from the ACTION study. And I think as we approach the market, our med affairs team is up and running and in full force and the early commercialization efforts are focused around payer engagement, forecast confirmation, some of the commercial build and internal infrastructure. But we’re taking a very gated spend. I think you could see in our SG&A line, we are going to be conservative and gated as we get more data within the program, but we will make sure that we’re ready for the market as we’re enthusiastic about the opportunity.

Maury Raycroft: Great. Thanks for the clarity. And just another quick follow-up, so EBS announced the execution of contract options for $67.4 million to acquire TEMBEXA for national preparedness efforts. And they also announced yesterday that they’ll conduct clinical trials with TEMBEXA for monkeypox in Africa. So how much of that total contract value would Chimerix be eligible to receive? And what will be the timing for receiving that milestone? Do you have any insight into how the monkeypox outbreak has affected the U.S. government’s initiative to stockpile TEMBEXA for smallpox?

Mike Andriole: Thanks for the question. Let me take the monkeypox part of that question, and then I’ll ask Michelle to answer the first part on the partial clin exercise. of $67 million. From a monkeypox perspective, yes, Emergent did announce participation in a randomized monkeypox study at the end of business yesterday. They’re best positioned to answer questions on that. That is an ongoing new study to explore TEMBEXA’s utility in that population. We will see how that unfolds in the coming years. That could lead to potential royalties to Chimerix when and if there could be international sales associated with that indication. But of course, they’re at the very beginning of that process now. Michelle, comments on the milestone?

Michelle LaSpaluto: Yes. BARDA did exercise a partial exercise with Emergent for TEMBEXA, which was just over $67 million. And with that option, we are due approximately $2.7 million related to that exercise. However, due to accounting rules, we have to wait until the cash is received for that to be recorded. So hopefully, next quarter, we’ll have a little bit more information on that.

Mike Andriole: Yes. And that exercise, I think, goes out to 2027, Michelle. So it’s a multiyear exercise of a claim that’s about or an option that’s, I think, just over half of the value of that next option.

Michelle LaSpaluto: That is correct. That’s our understanding.

Maury Raycroft: Great. Thank you so much for taking my questions.

Tom Riga: Welcome.

Operator: [Operator Instructions] Alright. That concludes our question-and-answer session. I will now turn the conference back over to Mike Andriole for closing remarks.

Mike Andriole: Thanks, Leonardo. Thank you, everyone, for your time this morning, and we look forward to updating you in the coming months.

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