Chimerix Inc (CMRX) 2014 Q1 法說會逐字稿

Good morning , and welcome to the Chimerix first quarter 2014 financial results conference call. All lines have been placed on mute. (Operator Instructions). At this time, I would like to turn the conference over to your Company's Executive Director of Investor Relations and Corporate Communications, Mr. Joe Schepers, please go ahead.

Thank you, and welcome to Chimerix's first quarter financial results conference call. On the call today are Michelle Berrey, President, CEO and CMO, Tim Trost, CFO, as well as 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 of our programs, including our Phase III SUPPRESS trial, and future clinical trials of brincidofovir, also knows as CMX-001 and related matters. These statements involve risks and uncertainties that may cause actual results to differ materially from those projected in 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 quarterly report on Form 10-Q, its most recently filed reports on Form 8-K, and other documents subsequently filed 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 substantial results or circumstances. I also want to point out that the Company issued a press release this morning containing financial results for the first quarter results of 2014. The press release is available on the Company's websiteat www.Chimerix.com.

At this time, I would like to turn the call over to Michelle Berrey.

Thank you Joe. Thank you all for joining us this morning. This is our first quarterly financial results conference call since I was appointed President and CEO on April 9th, in addition to my position as Chief Medical Officer. It is truly an honor to serve the Company in this role, and I appreciate the support from my colleagues and our Board of Directors, as we move Chimerix forward towards the completion of the Phase III SUPPRESS study, and the first regulatory submission for Brincidofovir. I'm grateful to have the opportunity to work with so many talented and dedicated colleagues who are committed to making a difference in the lives of people facing life threatening viral infections.

Today I will provide a brief overview of some of the key events during the first quarter of 2014. After my remarks, Tim Trost will discuss our first quarter financial results, and we will take questions. As Joe mentioned, Mike Rogers and Linda Richardson are also on the call this morning, and are also available to answer your questions. I will begin our overview with the Phase III SUPPRESS trial in CMV prevention. Our clinical team remains focused on completing enrollment of SUPPRESS around the end of 2014, which would provide data in mid-2015. Brincidofovir, if approved would be the first and only product for the prevention of cytomegalovirus or CMV and hematopoietic cell transplant recipients.

To underscore the importance of Brincidofovir's potential to address this high, unmet medical need, Brincidofovir has received Fast Track designation by the FDA for CMV, in addition to adenovirus and smallpox. Since early March, we have been in active discussions with the FDA to design a pivotal trial that would inform use of Brincidofovir to treat life threatening adenovirus infections. We are currently enrolling patients into the pilot portions of this trial. Data from the pilot portions will be submitted to the FDA along with our final study design of the Phase III trial in the second half of this year. The pilot portion of the trial will remain open until the final study design is decided.

At this point, we have general agreement with the FDA on a pivotal study that would compare two durations of Brincidofovir treatment. Additional historic data will also be gathered on transplant recipients over the two years prior to the initiation of the Brincidofovir trial, in order to verify the high mortality rate for untreated adenovirus infections. These data will be gathered at the same centers participating in the Phase III trial. Positive efficacy and safety data from this trial will potentially inform the first indication for Brincidofovir for the treatment of adenovirus infection. Both the pilot portion and the final pivotal study include pediatric and adult patients.

As we discussed on our fourth quarter financial results conference call in March, we continue in active discussions with the US and European regulators regarding a CMV prevention trial in solid organ transplant recipients with a focus on renal transplants. We expect to have a final study design by the end of 2014. While there have been dramatic improvements in recent years, less than half of the transplanted kidneys are still functioning ten years after transplant. Reducing injury to the kidney from viral infections, and the drugs use to treat them could make a huge difference in one of our most scarce resources.

A trial in prevention of CMV in renal transplant recipients may provide the correlation of CMV viremia with CMV disease, which could be one of several mechanisms for obtaining traditional approval for CMV prevention for Brincidofovir. At the Blood and Marrow Transplant Tandem Meetings in February, we presented the safety profile of Brincidofovir in over 100 pediatric patients treated to date, including children less than 2 years of age. We also presented data on adenovirus infections, and the potential for Brincidofovir in these patients. These oral presentations suggested that Brincidofovir is well-tolerated in highly immuno-compromised pediatric patients, and showed rapid antiviral activity against adenovirus, a DNA virus with a high mortality rate with no available therapy.

In April, at the European Society for BMT, the Company presented a summary of Brincidofovir safety data from two placebo controlled studies, and an expanded access trial of Brincidofovir. Brincidofovir therapy showed no evidence of negative effects on white blood cell production, an important indication of a successful new hematopoietic cell transplant. The lack of negative impact on the white cells has allowed Brincidofovir to begin dosing very soon after the transplant in the Phase III SUPPRESS trial. Although we demonstrated a clinically and statistically significant impact on the rate of CMV reactivation in Phase II, the mean first day of dosing at day 24, following the transplant meant that Brincidofovir was not dosed early enough to avoid reactivation of CMV, and other viruses that began to cause infections in the early days following HCT. We believe that this early dosing in the SUPPRESS trial further improves our probability of success for the primary end point.

During 2014, we plan to continue to present and publish data on Brincidofovir's favorable safety and tolerability profile, and broad spectrum of antiviral activity, as well as Brincidofovir's potential use in multiple patient populations. Several abstracts have been accepted for upcoming scientific meetings. Lastly, in April, we were pleased to announce that Lisa Ricciardi was appointed to our Board of Directors. She has an outstanding global record of achievements in the healthcare industry, and we look forward to her contributions to the Company.

I will now turn the call over to our CFO, Tim Trost, for a review of the financial results for the first quarter 2014.

Thanks, Michelle. As As Joe mentioned in our introductory remarks, earlier today we issued a press release containing our financial results for first quarter 2014. Starting first with our balance sheet, Chimerix had $99.9 million in cash and cash equivalents, $8.5 million in debt, and approximately 26.9 million outstanding shares of common stock at March 31st, 2014.

Turning to our statement of operations, Chimerix reported a net loss of $10.4 million, or $0.39 per basic and diluted share for the first quarter of 2014. During the same period in 2013, the Company recorded net loss of $9.1 million, or $22.58 per basic and diluted share. Revenues for the first quarter of 2014 decreased to $780,000, compared to $1.8 million for the same period in 2013, due to a decrease in the first quarter of 2014, and reimbursable expenses associated with the Company's ongoing contract with the Biomedical Advanced Research & Development Authority, or BARDA.

Research & Development expenses increased to $8.3 million for the first quarter of 2014, compared to $6.8 million for the same period in 2013, this increase is primarily due to the effective increased costs related to the Phase III SUPPRESS trial, and growth of the Company's clinical regulatory and development groups. We have consistently stated on our previously quarterly conference calls that we expect R&D expenses to increase as we continue to increase activities associated with SUPPRESS, and we have now begun to experience this. We expect a significant increase in R&D expenses for the full year 2014, compared to full year 2013. Due not only to the ongoing enrollment of the SUPPRESS trial, but also expenses related to the recently announced adenovirus trial. R&D expenses may be uneven from quarter to quarter.

General & Administrative expenses increased to $2.7million for the first quarter of 2014, compared to $1.5 million for the same period in 2013. The increase relates to costs associated with growth of the administrative group, including the starting up of a commercial team under Linda Richardson, as well as continued increased costs of operating as a publicly traded company. For full year 2014, we expect an increase in G&A expenses compared to the full year 2013. Again, this increase is due to growth of our organization, and costs of operating as a publicly traded company, as well as critical prelaunch activities necessary for the successful commercial launch of Brincidofovir.

Loss from operations was $10.2 million for the first quarter of 2014, compared to a loss from operations of $6.5 million for the same period in 2013. The variance is due primarily to the decrease in revenue from the BARDA contract, along with the increased Research & Development and General & Administrative expenses, all as previously discussed. Interest expense was $196,000 in the first quarter of 2014, compared to $356,000 in the same period in 2013. The decrease is based upon a decline in our average outstanding loan payable principal balance, as we continue to pay down the debt.

For first quarter of 2014, there were no fair value or warrant charges as all of the outstanding preferred warrants converted to common stock warrants upon the completion of our IPO in April of 2013. For the first quarter of 2013, we recorded $2.2 million of expense, due to the change in our Company valuation at that time. As a reminder, the first quarter 2014 financial results as well as this morning's announcement are available on the Investors section of our website.

I will now turn the call over to the operator for questions.

Thank you. (Operator instructions). Our first question comes from the line of Katherine Xu of William Blair. Your line is now open.

Hi, good morning. I'm just wondering for the adenovirus pilot study, how many patients do you have right now? What is the goal of this pilot study? Does that influence the protocol that you are designing for Phase III, and why there are two treatment durations?

Good morning, Katherine. So the adenovirus trial pilot portion was initiated for the main part to provide access, while we were finalizing the study designed for the pivotal trial. So that pilot portion does not have to have a certain number of patients. It's really to provide access while the study discussions are ongoing. Having said that, we will provide the data that are available on those patients to the FDA at the time that we are submitting the final protocol, however many patients are there. We had initially discussed around 20 patients in the pilot portion. We are leaving that number open. Again, there's not a certain number of patients that need to be enrolled in order for us to finalize the study design.

The majority of the data that are informing the final study design are coming from the 350 and EIND data that were presented at the European BMT Meeting in 2013, which showed the dramatic antiviral declines and the improved mortality rates short term compared with historic data. So those historic data are key, and are an integral part of the design of our pivotal study which we now have general agreement about, because those data have not been as well publicized across adenovirus as for other viral infections. We do want to have a confirmatory set of data that shows the high mortality rate at the same centers where we are conducting Phase III. So because it's not appropriate to have a placebo control for this high mortality infection, because there are no other therapies available for treating adenovirus infections, it was a proposal to the FDA to compare two different durations, and there are some precedents for a statistical comparison of two durations as a scientifically valid means of evaluating a compound in a Phase III setting.

I think your other question was about the number of patients in the pilot portion, and we're not giving guidance on that at this time. Again, it is not something that's critical path for initiation of the adenovirus pivotal trial.

Alright. So it's definitely a treatment study and not a prevention study?

That's correct. That's correct. It's intended to be a treatment study for patients with disseminated adenovirus infection. And that is the main group of patients for the statistical comparison, and the main source of data for what we consider to be that primary indication for treatment of adenovirus. Having said that, we will also be enrolling patients who have earlier adenovirus infection, meaning they have asymptomatic adenovirus viremia, or have localized adenovirus infections, although those are not the main population for comparison of the two durations of therapy, we may have additional data sufficient in those populations to expand that indication.

Thank you. And one other question. Do you plan to hire a Chief Medical Officer at some point?

That's a good question. At this point, we are not opening a search for a Chief Medical Officer. We are planning to shore up our resources in the clinical group, but we are comfortable with the leadership that we have in place at the moment with Herve Mommeja-Marin, and we are happy with the progress of our clinical trials and the development programs to date.

Thank you.

Thank you.

Thank you. Our next question comes from the line of Ritu Baral of Canaccord.

Hi guys. Thank you for taking the questions. I just have a follow-up to Katherine's and your explanation. It sounds like you are saying that mortality will either be a primary end point, or a very, very important end point in the adenovirus part two of the Phase III, and also when you look at the two durations, is that where viral load may come in, a comparison of the two durations?

Good morning, Ritu. That's a great question, and yes, mortality, whether that is all caused mortality, non-relapse mortality, or progression-free, meaning adenovirus progression-free mortality, are still in discussion as the primary end point, but all of those are obviously clinical end points. Because we don't have an adenovirus assay, we don't have as much data on adenovirus viremia, and that's really not an appropriate surrogate, even for a primary end point. We are trying to standardize the adenovirus assessments across all of the sites, and that's one of the keys for our historic data is to be able to go back to centers that have serum banks, where we can have a consistent assay to look at adenovirus.

But, yes, in the instance that we had similar effectiveness demonstrated by both durations of therapy, it is important to have those secondary end points that look at viral load, and again that could be adenovirus burden in the blood, or in the respiratory or GI tract, because we aren't clear at this point what clearance of adenovirus would require, in a patient who remains immuno-suppressed still have shedding, and no longer need interventional therapy. So those are important questions that we will be answering within the Phase III trial, and really the reason we wanted to stick with that mortality end point where we have demonstrated improved mortality in the 350 and EIND data, compared with the historic data.

Got it. And will you be taking samples from the GI, from lung as well as plasma for sure in these trials?

Yes. Yes, we are.

Got it. And how has, I guess, standard of care changed over the years? Obviously that will impact your comparison of historical control to the data that you generate going forward.

Yes, and the main reason that we wanted to include those historic data at the same centers so that we could control for some of those factors. So with an increased use, especially at some centers of T-cell depletion, for example, we are seeing increasing rates of adenovirus infection, with the increasing use of unrelated source for the transplant itself. We see an increased use of immunosuppressants because of GvHD, so with all of those increasing effects on the immune system, we are seeing continued increased reporting of adenovirus, and more severe outcomes. So that the current standard of care for disseminated adenovirus infection at this point is mainly supportive, with a decrease in immunosuppressants and with IVIg at some centers and really, there is no other alternative, save IV Cidofovir off label. And we are all aware of the significant side effects of IV Cidofovir, but I think that really speaks to the gravity of disseminated adeno infection. That compound is considered as a compound of last resort, but it is still used. It was not considered an appropriate control, however, because of that significant toxicity.

Got it. So you feel comfortable that at least within centers, standard of care has not changed that much in the time frame that you are going back to the historical data?

We'll probably limit that historical data to the two years prior to availability of the pilot portion of this adenovirus trial, and then we will try to do some, as well as group means on sets of data on mortality and risk factors that influence that mortality, but also do as much as we can to match comparisons with similar groups, or even similar individuals.

Got it. Thanks for taking the questions.

Thank you.

Thank you. Our next question comes from the line of Brian Klein of Stifel. Your line is now open.

Hi, thank you for taking my questions. Good morning. I wanted to get your plans for the solid organ renal transplant trial, now that you are pursuing a Phase III in adenovirus?

Yes, good morning, Brian. So the solid organ transplant study was our number two trial we were trying to get up and running in the first half of 2014. Obviously with the focus on adenovirus and the opportunity that we had to initiate that trial and open that dialogue again with the Agency, pursuing adenovirus really moved to the forefront, however, we are continuing with that dialogue with the FDA and the European health authorities, and our intention is to have a final study design available in the second half of 2014, although initiation of that trial is very likely to be out into 2015. We are initiating our medical advisory group for a solid organ transplant study, and have several opportunities to meet with that group over the summer to help lead us to what we hope would be a successful study design that would be clinically relevant and informative for that study. It is something that has continued to be an area for us, not just because of the large population and the unmet medical need in CMV, but also because of the opportunity with the renal transplant patients to demonstrate Brincidofovir's impact on BK virus infection.

Great. Thank you. And then --

Thanks, Brian.

And one last question. In terms of some of the preclinical work that you have done, have you ever looked at co-infections of adenovirus and CMV and the Brincidofovir, can it suppress both of them if they are present at the same time?

Yes. No, that's a great question. And it's actually one of the main advantages for Brincidofovir, is that broad spectrum of activity, in the patient population that we are focusing for, even in SUPPRESS, those highest risk allogeneic transplant patients we saw in our Phase II study, that many of the patients were infected with multiple double stranded DNA viral infections, and across our 350E, EIND data set, particularly in the pediatric patients, we had more than half of the patients infected with two or more double stranded DNA viral infections. We did have patients who came into the 202 study, our preemptive therapy study in adenovirus, who were actively infected with CMV, and currently taking ganciclovir, but continued to have high levels of active CMV replications. With their randomization to Brincidofovir, especially on that twice-weekly dose, we saw rapid declines of their CMV and with the combination. So they stayed on ganciclovir but with the addition of Brincidofovir had rapid declines in their CMV levels. So we do have evidence that the drug is not specifically acting on just one viral infection. In addition, we believe that it can prevent reactivation, or prevent primary infections in these patients who we know are susceptible to multiple infections simultaneously.

Great. Thank you.

It's a great question. Thank you.

Thank you. (Operator instructions.) Our next question comes from the line of Phil Nadeau of Cowen and Company. Your line is now open.

Good morning. Thanks for taking my questions. First just a follow-up to the last question. Michelle, what end points are you considering in the kidney transplant study? Would it be something like graft survival, or are there other end points that you can examine?

It's a very good question, and some of that depends on whether we continue to require that study for a second confirmatory study for traditional approval, and that's without the need to have that as a full approval, pivotal study, it does give us much more flexibility in end points and design. Again, that's still something that we are in active discussions about. If we have a control arm of the current standard of care, then we would likely have a very different end point for the study, than we would if we are comparing it with the preemptive therapy which would look a lot more like the SUPPRESS design.

So those end points would certainly include prevention of CMV infection, but also BK, graft survival, and overall patient survival. We have seen it with the solid organ transplant data, where you can compare preemptive therapy with prevention of CMV that just by preventing CMV, you can improve had the GFR of individual patients, and we believe that's because of the indirect effects of CMV, the cytokines, really, the inflammation, et cetera, as well as the need with many of these viral infections to decrease the immuno-suppressants. So it is multi factorial but we believe that there are many opportunities to show both the efficacy against CMV and other viruses like BK, as well as improved safety over the currently available antivirals.

Okay. Great. My second question is on Letermovir. We saw the publication yesterday. I'm just curious whether you had a chance to review it and whether you have learned anything new from the publication that you didn't know before?

No, I think it was similar data to what we saw them publish at the completion of their Phase II program now a couple of years ago. So no, there's not really significant new data. I would point out that it's a different patient population, although we were both studying and we continue to study the high risk allogeneic HCT recipients who are CMV seropositive. We are studying the highest risk patients, so the patients with the higher morbidity, the unrelated transplant cord blood, et cetera, and I think that is where the greatest unmet medical need is, in those patients who are at the highest risk. So although I think the data are very promising, and again, publication of a Phase II study in the New England Journal is a great indication of that unmet medical need, I think we are very comfortable with our safety profile, profile, the review of the FDA by our safety profile, which provided us with the opportunity to begin dosing in those first days after transplant, and the additional opportunities that we have in the broad spectrum activity, against the other double stranded DNA viruses.

Okay. Great. And then the last question is just on SUPPRESS. Can you remind us whether you are seeing blinded data from SUPPRESS, and if you are, whether you would be willing to discuss how you think the diarrhea prophylaxis is working, whether it is controlling the rates of diarrhea as you had hoped in a blinded manner?

We are, of course, seeing the blinded SAEs from this patient population, and we have a DSMB is that meeting regularly, with a focus on looking at the potential for the toxicity, and of course, the GI profile. The DSMB, as we have discussed is only looking at safety. They are not looking at efficacy, because we didn't want them to stop the study short if we did hit that primary end point early. So in their review of the safety data to date, and of course, they would be unblinded data, they have not felt there was a need to have any changes in our current protocol, or the SMMP.

Great. Thanks for taking my questions.

Thanks, Phil.

Thank you. I'm showing to further questions at this time, I would like to hand the call over to Michelle Berrey for any closing remarks.

So thank you very much for the attention this morning, and for all of the great questions. It's a great opportunity for us to share with you what has been a pretty busy quarter and beginning for 2014. We are very excited about the ongoing activity with SUPPRESS, with our adenovirus pivotal trial, and the opportunity for us to work closely with the FDA to really get this program moving forward very aggressively, and again, with the solid organ transplant in the months to come. So again, thank you, and have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may now disconnect. Thank you. Have a great day.