Chimerix Inc (CMRX) 2017 Q1 法說會逐字稿

Good morning. Welcome to the Chimerix conference call discussing the financial results of the first quarter 2017. Please be advised today's call is being recorded at Chimerix' request. I would like to turn the call over to Michelle LaSpaluto from Chimerix.

Thank you, and welcome to the Chimerix First Quarter 2017 Financial Results Conference Call. This morning at 7.30 a.m. Eastern Time, we issued a press release containing the financial results and other updates for the first quarter of 2017. The press release is available on the company's website at www.chimerix.com. You may also access today's call via webcast on the Investors section of the Chimerix website. An archive of the webcast will be available approximately 2 hours after the conclusion of the event.

With me on today's call are Michelle Berrey, President and CEO; Garrett Nichols, Chief Medical Officer; Linda Richardson, Chief Strategy and Commercial Officer; and Tim Trost, Chief Financial Officer.

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, uncertainties and other factors, including the possibility that there may not be a viable continued development path for brincidofovir, that the FDA and other regulatory authorities may not approve brincidofovir or brincidofovir-based regimens, and our marketing approval, if granted, may have significant limitations on their use. As a result, brincidofovir may never be successfully commercialized. In addition, Chimerix may be unable to file for regulatory approval of brincidofovir with other regulatory authorities. These risks, uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements. You are cautioned not to rely on these forward-looking statements. These risks, uncertainties are described in detail in Chimerix' filings with the Securities and Exchange Commission, including a Form 10-K filed earlier today, its most recently filed reports on Form 8-K and other documents subsequently filed with the Securities and Exchange Commission. All forward-looking statements are based on information currently available to Chimerix, and Chimerix assumes no obligation to update any forward-looking statements.

At this time, I'd like to turn the call over to our president and CEO, Michelle Berrey.

Good morning, everyone. Thank you for joining us. We're all here because we believe in the promise of new medicines, and we at Chimerix believe in brinci and the tremendous difference this medicine can make, not just in protecting us all from a smallpox bioweapon attack, but in the lives of transplant recipients and in a growing number of individuals who are relatively immunocompromised: those on biologics and other immune-suppressing medicines. Brinci targets indications that are considered orphan diseases, viral diseases that prevent thousands of patients from surviving the transplant that cures their cancer or frees them from 3-times-a-week dialysis.

In 2018, we plan to have two pivotal trials for brinci, one in short-course oral brinci and one in IV brinci. And in addition, we anticipate our second molecule, CMX521, will enter the clinic later this year and will be in a proof-of-concept study in norovirus prevention in 2018. In late April at our Investor Day in New York, we had the honor of a presentation by one of the leading adenovirus researchers, Professor Thomas Lion, from the children's hospital of Vienna, Austria, who has helped us understand why we see adenovirus reactivation in patients after transplant and how early intervention with brinci can prevent or treat life-threatening adenovirus infections. We also had a presentation from Dr. Joshua Hill from the Fred Hutch in Seattle, who shared his research that shows 90% of stem-cell transplant recipients reactivate at least 1 DNA virus in the first 100 days after transplant and 2/3 of transplant recipients have 2 or more DNA viruses. These viruses have a significant impact on a patient's ability to survive the first year after transplant. A recording of the presented slides featuring doctors Lion and Hill's research can be found at our website. I encourage you to view them if you were not able to join us.

This morning, Garrett will walk you through our latest clinical timelines and the progress we have made in discussions with European regulators for the AdAPT trial, previously known as Study 999, which we believe could lead to the approval of brinci in Europe. Linda will speak to the numbers of patients we believe can benefit from brinci and our plans to implement the land and expand strategy to get brinci on the market as soon as possible. Finally, as Tim will detail later in the call, our strong balance sheet allows us to conduct and deliver the potential catalysts I've mentioned.

I'd now like to turn the call over to Garrett for an update on our clinical programs.

Thank you, Michelle. I'd like to begin with an update from our oral brincidofovir program. Later this year, we plan to initiate our Adenovirus after Allogeneic Pediatric Transplantation, or AdAPT, study, the study that was formerly known as Study 999. We have applied our key learnings from our completed adenovirus studies and from external experts such as Dr. Thomas Lion in order to increase the probability of success for AdAPT.

The first of these learnings is that rapid identification and treatment of adenovirus viremia in our pediatric allotransplant recipients is key. We will conduct the study at centers where screening protocols are in place. Secondly, rapid intervention with oral brinci as quickly as possible after adenovirus viremia is confirmed enables rapid clearance of adenovirus from plasma. In the AdVise study, fully 72% of pediatric patients with adenovirus viral load less than 5 logs -- that is, less than 100,000 c/mL -- cleared the plasma within 4 weeks. And this is critical because we have shown that adenovirus clearance at Week 4 was associated with improved survival in AdVise.

So how does that compare to the comparator arm in AdAPT, which will predominantly be treated with off-label IV cidofovir? Recently, data from the U.K. pediatric transplant consortium, published in Blood, has addressed that question. They compared patients who received standard-of-care IV cidofovir with those who were able to access brincidofovir via the expanded-access program. In that paper, 80% of their pediatric stem-cell transplant recipients cleared adenovirus viremia with brinci at a median of 4 weeks of therapy, with only 35% of patients clearing with IV cidofovir after a median of 9 weeks of therapy. And oral brinci was more likely to clear plasma viremia than IV cidofovir in patients without immune reconstitution. This is why the AdAPT study will enroll T-cell-depleted stem-cell transplant recipients in the first 100 days after transplant. This is a population in whom immune reconstitution is slow. Thus, short-course oral brinci should improve outcomes compared to off-label IV cidofovir, particularly given that brinci has demonstrated hematologic safety in the early post-transplant period and avoids cidofovir-like nephrotoxicity. The U.K. consortium also showed that short-course brinci therapy was reasonably well tolerated. Only 1 of 18 patients had to stop therapy due to gastrointestinal adverse events. By comparison, renal toxicity was observed in 9 of the 23 patients treated with IV cidofovir.

The AdAPT trial thus will enroll pediatric T-cell-depleted allogeneic stem-cell transplant recipients with confirmed adenovirus DNA in the plasma of greater than 1,000 c/mL, and within the first 100 days from their transplant. These patients will be randomized 2:1 to oral brinci or to standard of care. We will employ the new treat-to-clear paradigm, treating patients until adenovirus is cleared from the plasma rather than the fixed 12 weeks of therapy that were recommended in the AdVise trial.

The primary endpoint is the proportion of patients with undetectable plasma adenovirus at Week 4 after randomization, a time point that we believe will clearly differentiate oral brinci from the standard of care. 141 patients will be recruited. With 2:1 randomization, the study has 90% power to demonstrate a minimum of 30% improvement in response; in other words, a 70% response on oral brinci compared with 40% response on standard of care at Week 4. As previously discussed, the demonstration of superiority of oral brinci and the clearance of adenovirus from the plasma could enable conditional or full approval in Europe.

We continue to receive worldwide demand for brinci, supplying this lifesaving drug to 70 patients thus far in the first quarter of 2017, approximately half of which were ex-U. S. Such demand bodes well for our ability to quickly recruit the AdAPT study. We project that data from the study will be available in early 2019, which will facilitate an application and European approval in 2020. Our next steps have been to submit the final protocol and background package to the CHMP to confirm that the study, if successful, would be sufficient for conditional approval in Europe. We anticipate feedback over the summer. The AdAPT protocol will be submitted to the FDA to enable the conduct of the study in the U.S. as well. Following data availability and potentially with a positive opinion from the EMA, we would consider petitioning the FDA for consideration of the data for accelerated approval.

Next, I'll chart the progress that we've made with our IV formulation of brincidofovir. We presented full results from our single ascending-dose study of IV brinci at our Investor Event last month. In this Phase I study, a total of 40 healthy subjects were randomized to receive either a single dose of IV brinci or placebo in 1 of 4 cohorts: 10 mg, 25 mg, 50 mg given over 2 hours, and 50 mg given over 4 hours. IV brinci at the therapeutic doses of 10 and 25 mg demonstrated a favorable tolerability profile with no drug-related adverse events identified. To be clear, there was no nausea or diarrhea or other gastrointestinal side effects. This dose range is likely to be selected for future studies for the treatment of adenovirus and prevention of CMV and other DNA viruses, based on the antiviral activity that has previously been demonstrated with oral brinci at the 100-mg dose.

In Cohorts 3 and 4, IV brinci 50 mg was given over 2 hours or 4 hours respectively. 50 mg is considered a supratherapeutic dose, which was explored to evaluate the potential effects of brinci on the QT interval and other safety parameters. A majority of AEs in these cohorts were mild and self-limited. 4 subjects in Cohort 3 reported drug-related adverse events: 1 drug-related GI AE, 2 subjects with a mild headache and 1 subject reported pain and irritation at the IV infusion site. In Cohort 4, 5 subjects reported 9 drug-related adverse events: 3 subjects with GI AEs, 2 subjects with headache and 1 subject with reversible elevations of liver transaminases reported as an adverse event. Therapeutic doses of IV brinci thus achieved plasma concentrations with IV doses that were 1/10 of those required with oral dosing. The 10- and 25-mg doses were very well tolerated and no new adverse events were identified with the IV formulation of brinci, compared with the large safety database with oral brinci.

Though we are building on a foundation of significant data that were obtained from the oral program, we do have some additional questions to answer before we initiate our pivotal trial with IV brinci. The demonstration of multiple-dose safety and PK in both healthy volunteers and patients is paramount and will be progressed in parallel starting this summer. Assuming positive data from these studies, we intend to initiate a pivotal trial of IV brinci for the prevention of DNA viral infections after stem-cell transplantation that will start next year.

So as we considered the options for such a study, we looked at a number of key questions. First, what would be the primary endpoint for this study? Should we target the prevention of CMV or adenovirus? If CMV were considered, one would have to address the potential need to provide a positive control arm with letermovir. If that were the case, one would need to await the commercial availability of letermovir and then consider the time that would be needed to produce match placebo supplies. This would delay such a trial until 2019. On the other hand, for adenovirus, there is no currently approved therapy and a high unmet medical need exists. Therefore, there is a more direct path from a regulatory perspective.

Second, what would be our population? Would it be adult or pediatric allogeneic stem-cell transplant recipients? We know that pediatric patients more commonly reactivate adenovirus when compared to adults, and they are at risk for multiple DNA viral reactivations as well. We and others have frequently shown that pediatric transplant recipients more commonly have 2 or 3 or more DNA viruses at the same time, which supports a study of pediatric patients for multiviral prevention.

Finally, should our study be a superiority study versus placebo or a noninferiority versus an active control? A noninferiority study versus letermovir for CMV, of course, would be larger than a placebo-controlled study for adenovirus. A placebo control is thus preferred. It results in a smaller study, and as mentioned previously, clinical supplies may be created now.

Given these considerations, we have proposed a placebo-controlled trial of IV brinci in pediatric allogeneic stem-cell transplant recipients in order to demonstrate multiviral prevention. We call this the MVP-Peds study. The primary endpoint of this study will be the prevention of adenovirus disease. Because there is no approved prevention for adenovirus, we can conduct a placebo-controlled study in this setting. And based on the research from Dr. Thomas Lion that he summarized at last month's Investor Day, we will enroll pediatric patients who are particularly high-risk for the development of adenoviral disease. Namely, these would be patients with high levels of adenovirus in the stool after transplant. Secondary endpoints will include CMV and the prevention of other DNA viral infections, along with health outcome measures. With this design, a study of approximately 270 patients, randomized 2:1 to brinci or placebo, would have 85% power to reduce the adenovirus disease by half from 36% to 18%.

In summary, given that there are no approved therapies for adenovirus, a pediatric study that targets prevention of adenovirus disease represents the most efficient regulatory pathway for IV brinci. This population can be enriched by screening for adenovirus in the stool in order to enhance differences between the active and placebo arms. Pediatric patients often reactivate multiple DNA viruses after stem-cell transplantation. The inclusion of secondary endpoints such as CMV reactivation, requiring the use of preemptive therapy or BK-virus-associated hemorrhagic cystitis can help us to build a value story and provide proof of concept for multiviral prevention in other populations that are not a part of this study.

And with that, I'd like to turn the call over to Linda.

Thank you, Garrett. Today I'd like to touch on just a few of the key points I shared in more detail at our recent Investor Day presentation. To start, we believe that there is a significant commercial opportunity for brinci that will build substantially from our initial launch of oral brinci in the EU, projected to be in 2020 based on our current development plan. In 2021, we plan to follow with launches of IV brinci in both the EU and U.S. using data from the MVP-Peds study of brinci and the prevention of adenovirus and other DNA viral infections that Garrett just outlined. This commercial approach, which we're calling land and expand, is based on a get-to-market strategy built upon a regulatory and clinical pathway that we believe will result in the quickest route to commercialization, first by launching in the pediatric allogeneic HCT population at risk for life-threatening ADV infections and then expanding to address other DNA viral infections in additional transplant and immunocompromised patient populations based on a strongly aligned clinical and commercial plan.

Let's take a moment to highlight the adenovirus market potential. Pediatric HCT recipients appear to represent just the tip of the iceberg. Data from the U.S. Healthcare Cost and Utilization Project, or HCUP, shows that in 2014, there were nearly 8,000 projected hospitalizations where patients were discharged with an adeno-related code. Pediatric and adult allogeneic HCT and SOT recipients and immunocompromised patients represented approximately 1/4 of this HCUP assessment. The remaining ADV-related hospital discharges, nearly 6,000, included a significant number of patients with chronic underlying cardiac and respiratory conditions, including COPD and cystic fibrosis. Thus, the largest segment of these adeno-related discharges is not in the transplant or immunocompromised populations at all. We intend to explore the potential opportunity for brinci to provide benefit to these patients as well.

Similarly, we continue to learn more about the market dynamics related to the numbers of transplant patients at risk for multiple concurrent DNA viral infections. During our recent Investor Day event, Dr. Josh Hill presented data demonstrating that it's common for an HCT recipient to be faced with more than 1 active viral infection in the days following transplant. Dr. Zinnia (sic) [Genovefa] Papanicolaou, who participated in our panel discussion, shared that in her institution, Memorial Sloan Kettering, they are seeing similar, if not higher, viral coinfection rates in their HCT recipients, up to 96%. Unfortunately, as the number of DNA viral infections increases, so does the risk of mortality. This presents a clear market opportunity for a new, effective therapy with activity against a broad number of DNA viruses. This could be a potential game-changer for patients and health-care providers.

With that in mind, we are committed to evaluating brinci's ability to deliver differentiating clinical results that would translate into expanded market opportunities in a number of first-to-market antiviral treatment and prevention indications, including and beyond CMV. For additional detail, I would encourage you to reference the commercial presentation from our Investor Event day, found on the Chimerix website.

Now I'll turn it over to Tim.

Thank you, Linda, and good morning, everyone. As Michelle LaSpaluto mentioned in her introductory remarks, earlier today we issued a press release containing our financial results for the first quarter of 2017.

Starting with our balance sheet, at the end of the first quarter 2017, we remain well capitalized, with approximately $265 million in capital to fund operations. We also have approximately 46.7 million outstanding shares of common stock. Turning to our statement of operations. The company reported a net loss of $17.8 million or $0.38 per basic and diluted share for the first quarter of 2017 compared with a net loss of $26.3 million or $0.57 per basic and diluted share in the first quarter of 2016. Contract revenue for the quarter was approximately $1.1 million, as compared with $1.2 million for the same period in 2016 due to a decrease in the first quarter of 2017 in reimbursable expenses associated with the company's ongoing development contract with BARDA. Research and development expenses decreased to $12.7 million for the first quarter of 2017, compared with $20.9 million for the same period in 2016. This decrease was due primarily to completion of the SUPPRESS and AdVise trials, the termination of our 2 solid-organ trials, SUSTAIN and SURPASS, and a decrease in compensation expense, partially offset by an increase in expense related to CMX521 for norovirus. General and administrative expenses decreased to $6.6 million for the first quarter of 2017, compared to $6.9 million for the same period in 2016. The decrease results from a reduction in compensation expense and other G&A expenses, partially offset by an increase in commercial preparation. Loss from operations was $18.3 million for the first quarter of 2017, compared to a loss from operations of $26.6 million for the same period in 2016, due primarily to the decreased research and development expenses, as previously discussed.

As we designed and initiated our current clinical development plans in both oral and IV brinci in 2016, we also significantly reduced costs, including downsizing our organization in order to conserve capital. These actions resulted in a net cash burn decrease during 2016 of 35% and a similar reduction in headcount. We expect to maintain a relatively static organization during 2017, as we believe we are currently well positioned to execute on our near-term objectives. We also intend to maintain our stringent focus on cost control as we move forward with these new plans.

Looking forward to the remainder of 2017, we continue to expect both R&D and G&A expenses for the full year 2017 to trend upward modestly from 2016, although there may be unevenness from quarter-to-quarter. Key drivers of 2017 R&D expense include our AdAPT trial, our IV program leading to the MVP-Peds trial, our CMX521 program for norovirus and our smallpox development program.

I would like to close by again highlighting our strong balance sheet, which, as of the end of first quarter 2017, stood at $265 million, which we believe is sufficient to fund the near-term clinical milestones that Michelle articulated.

With that, I'd now like to turn the call back to Michelle for final remarks.

Thank you, Tim. I hope this morning's call has provided a rationale for our continued belief in brinci's broad-spectrum antiviral activity and its potential to fulfill the promise of both treatment and multiviral prevention through our flexible oral and IV formulations. AdAPT has the potential to demonstrate the benefits of short-course oral brinci in serious adenovirus infections, and if positive, could support the first approval of brinci in Europe in 2020. We are excited to be moving IV brinci forward and beginning the multiple-ascending-dose study and dose-ranging studies in patient populations with CMV and BK infection later this year. We continue to work closely with BARDA to advance brincidofovir as a potential medical countermeasure for smallpox. Following completion of a planned second animal efficacy study, we plan to meet with the FDA to discuss any additional required data for a regulatory decision for brinci in smallpox.

In addition to our current pipeline, our business plan and vision for growth focus on leveraging our proprietary lipid-conjugate technology and developing promising new molecules from our compound library. We have an active discovery program, and as mentioned earlier, plan to have CMX521 for the treatment of norovirus in clinical testing by the end of 2017. We've made considerable headway during the first quarter, highlighted by clinical and operational progress that positions us well to achieve the value-creating milestones we expect for the remainder of 2017. Our key driver remains our belief in brincidofovir as the only antiviral that has demonstrated broad-spectrum in vitro and clinical activity against multiple DNA viruses and our belief in the team that is dedicated to making brinci available for the patients whose lives depend on it.

Operator, we'll now open the line for any questions.

(Operator Instructions). Our first question is from the line of Jessica Fye of JPMorgan.

[Start with a] commercial question as we think about the adeno prevention opportunity for IV brinci. I think you had, in your Analyst Day, a percentage of something like 37% of children have positive stool tests for adeno, and those would be sort of the ones you would enroll in the study. Do you know if that rate is the same in the U.S. and Europe, and then also what that rate might be for adults, as we think about the kind of expand portion of land and expand?

That's a -- so, Jess, this is -- yeah, this is Garrett. I think as far as the U.S. versus Europe, it's presumed that the rate would be similar, as the practices, in terms of immune suppression for children in transplant techniques would be similar. It just depends on the age of the child and the underlying transplant techniques, but certainly if we look at a center like the University of Cincinnati, where a number of our patients in our clinical program have been enrolled, they do see a large number of patients that reactivate adenovirus in the stool prior to developing adenovirus in the blood.

Yeah, and I think if you go, Jess, to the slide where we're projecting the rates, and even Dr. Lion was saying it's probably 4% to 13% in adults for adenovirus in allogeneic stem-cells transplant, and we've seen the huge range in the peds. And we've kind of settled in, if you're screening them proactively, let's take a not-too-crazy rate of about 25% to 30% and move from there, which correlates with what Garrett was saying. So the practice in Europe of screening in the stool is ahead of where we are in the U.S., so that's some building that we would like to do. But as I said in the presentation, adeno is happening in patients far outside of pediatric allogeneic stem cells. That's just the landing spot. When we know that these other infections are getting -- 2/3 of them have other infections, we plan to do something about that as well. So I hope that gives kind of a basis of the numbers in the presentation.

Yes, okay. Got it. And then, as we think about the -- kind of the lead indication for oral brinci in adeno treatment, can you guys talk about just how you're thinking about peak sales for that opportunity? Kind of taking all those numbers you provided and putting them together? Where do you see peak sales ending up?

Well, I think for the oral treatment, that's the land, get on the market with the data we have in a highly -- an unmet-need population. I think there will be some switchover, frankly, some cannibalization, if you look at IV. And in all logic, if you're going to intervene on those patients sooner in these MVP prevention trial, you'll pick up folks that don't get to treatment, right? So I think it's logical to say that peak sales in any one segment are kind of combined, right? Because by the time they start to do that, the IV will have launched a year behind and will be coming in. The reimbursement is the issue in Europe. If we launch with that first, we will have reimbursement already underway as you then go to get reimbursement for the IV. So it's a very strategic move to have something that's reimbursed and out on the market just being the tip of the iceberg. It paves the way for IV.

Thank you. Our next question is from the line of Katherine Xu of William Blair.

So for the AdAPT study, the primary endpoint apparently is the surrogate endpoint, and then the -- can you just remind us what the secondary clinical endpoints are, and how likely you could hit those endpoints, and how likely those would satisfy the FDA requirements, potentially?

Well, so, we're going to be looking at a number of different secondary endpoints. Obviously the time to clear adenovirus is a secondary endpoint. The rates of relapse adenovirus infection after clearance of the adenovirus will be a secondary endpoint. We'll be looking at time to clearance of symptoms of adenovirus in addition to critical outcomes such as adenovirus-related mortality, transplant-related mortality and overall mortality. I think that they clearly -- this has been a study that's been designed in conjunction with the European regulators. We are hoping to conduct a study in the United States as well and we'll submit the study over the summertime in order -- to the FDA in order to hopefully conduct a study in the U.S., and we'll have the conversation with the FDA as to what the -- as to the context of that study. And then, once we have the data, we'll have further discussions with the FDA as to what more might be required, if anything, to bring oral brinci to the market.

Okay. And then another question on the MVP-Peds study. What do you expect the label to read based on MVP-Peds as a pivotal? And your secondary endpoints, looking at CMV, do you think you're powered for that? And if you just see a trend in that, how do you see it impact the commercial uptake? It is -- of course, using adenovirus that you are aiming for in multiviral [patients]?

Sure, sure. So but the primary endpoint of the study would be the prevention of adenovirus disease. So the indication would be that intravenous brinci is indicated for the prevention of adenovirus disease after pediatric allogeneic stem-cell transplant because that's the population of patients that we would be looking at. As far as the secondary endpoints are concerned, I mean, if we are able to demonstrate clinically significant reduction in BK hemorrhagic cystitis, that could be a part of -- that could be part of the clinical results section of the label as well. If we prevent the use of preemptive therapy for cytomegalovirus, that was the endpoint from the SUPPRESS study, that could also be a part of the clinical piece.

Yes, I think having that data, given that there is nothing from any of these conditions, I think having breakouts or activity, even if they didn't reach statistical significance, I'm sure the medical community would be interested in pursuing, maybe, investigator-initiated studies. We could look at what the trend looks like to do -- facilitate our own and move forward from there. So it's really going to be getting the -- getting secure in adeno and moving from there. And when you look at the activity, and you look at the tolerability to date in just of that, evaluating the IV at the doses we think we would have, I mean, we're very optimistic that we could get into the -- kind of the reverse engineering of SUPPRESS, starting with adeno and the high unmet need and knowing that kids develop CMV, etc., after adeno. It may be another way to demonstrate what we hoped to demonstrate originally in SUPPRESS with the oral.

And just remember, too, that although that first indication for IV would be in a pediatric setting, the data from Josh Hill that he reviewed at the Investor Event showed that 90% of the adult stem-cell transplant patients reactivated at least 1 virus, and 2/3 reactivated 2 or more. And those same -- similar proportions were seen at the all-adult Memorial Sloan Kettering in association. So when we look at the most efficient regulatory pathway, the MVP-Peds, that doesn't mean that that's the last indication. We would certainly be conducting in parallel dose-ranging studies in adults and looking at other populations that can get us into that adult prevention setting, as well as treatment of active viral infections. So that indication for prevention of multiviruses in peds wouldn't be the final indication for IV.

Agree.

So would you conduct a Phase III in adults right after the landing studies?

It's something that we're looking at. Right now, we're about speed, and it makes the most sense for us to get to market with the pediatric indication, given, as Garrett walked through, we can do a superiority study with placebo control. So that's the fastest route. How to expand from there may depend on whether we are also moving forward with a Phase III in BK treatment and the kidney transplant recipients. So if you have the dosing information and the breadth to show the prevention of multiple viruses independent of the age of the transplant recipient, may not be necessary to conduct a second MVP adult study.

Yeah, I think there's just 2 portions to the land and expand. Landing in adeno in one patient population and then expending to all these adenovirus cases that can cause morbidity and mortality, significant hospitalization costs, etc. Moving through that expansion, that adeno is in more places than pediatric allogeneic stem-cell patients, moving through that, and demonstrating that, and then moving through into expansion into other indications, other viruses, broad-spectrum protection -- I mean, we do see ourselves as potentially a single antiviral solution to many problems. And that's the end game, the goal.

Our next question is from the line of Yigal Nochomovitz of Citi.

A few on the preparation for MVP-Peds; specifically, the multiple-ascending-dose study that you're planning in virally infected subjects. So can you just go through a few things there? First of all, I assume it's going to be the therapeutic doses, not the supratherapeutic doses, for that study. Secondly, who are you actually enrolling? Are these pediatrics that failed standard of care, and are they going to need to be positive for 1 or 2 or more viruses? And then thirdly, I guess most importantly, what might we learn -- I know it's obviously a PK study, but what might you learn incidentally on efficacy, if anything, that could give us some confidence in a positive outcome for MVP-Peds?

Great questions, Yigal. So there's a couple of different things. We need to look at PK and safety in both the healthy volunteers, which obviously have nil in terms of background rate of gastrointestinal events for the most part, but we also need to look at patient PK just to confirm that the PK in patients is comparable. So what we're looking for is a patient population that does not have a high rate of background GI side effects so that we can substantiate the findings from the therapeutic doses that we had in the single-ascending-dose study in a patient population. So we're looking at, for example, kidney transplant patients with CMV viremia and/or BK virus -- viremia, in order to look at PK and safety, and as you indicate, potentially a little bit of a virologic efficacy as well, although that's not the primary purpose of those studies. So we're going to be launching into those studies later on this year. The healthy-volunteer multiple-ascending-dose study will start this summertime. And this -- so that's the information that we would have in order to look at the MVP-Peds study. Once we have that type of information to hand, we would then be able to move into some PK confirmatory pieces. That's the Phase II part of the MVP-Peds study. And then, once we have confirmed that the PK with IV brinci and the virologic activity of IV brinci in pediatric patients is comparable to what we have seen with the oral adenovirus program, we would then be able to launch the Phase III portion. That's why we envision the MVP-Peds study to be a Phase II-III study, confirmatory PK, followed by the pivotal aspect of that particular study. And that study would start in 2018.

So then -- and then, on the supratherapeutic versus therapeutic? What's the -- how do you address that?

Well, so, we don't believe that we would need to go to higher exposures than 25 mg. Certainly, we have seen with the 10-mg dose that that approximated the PK exposures that we saw with the oral 100-mg dose, and the oral 100-mg dose has shown pretty exquisite efficacy for the treatment of active adenovirus infection in our AdVise study. So we don't believe that we need to go, if anything, any higher than the 10-mg dose, but the 25-mg dose provides us that additional head room.

Okay. And then on -- sorry.

Just to be clear, so we had already done our dedicated QT study with oral brinci and have never seen any liabilities there, but because the PK curves are different for IV -- you get a higher Cmax -- we wanted to make sure that we covered in the single-ascending-dose study so that we didn't have to conduct another dedicated QT study. That's the reason for exploring those supratherapeutic -- that's the terminology that we use to talk about doses and exposures that are higher than our intended doses for Phase III. So it was a way to embed a dedicated QT study in our single-ascending-dose study.

All right, got it. And then, on -- in Europe, for the AdAPT trial, once you start that, are you going to stop the compassionate use, I assume, to just help with enrollment in Europe, or does that continue as well?

That's another great question. I think that we will be encouraging physicians whose patients are eligible to enroll in AdAPT to enroll in that study, that that's the primary mechanism for ensuring patients that need to have broad access to our medicines, is to conduct clinical trial to bring the medicine to the marketplace. So if the patients are eligible for AdAPT, they will be encouraged to enroll in AdAPT.

Okay. I don't know if you can answer this one; it's more of a technical question. But I know, Garrett, you mentioned the deltas for AdAPT, 30% improvement, 70% versus 40%, and for the MVP-Peds, I think you said 36% versus 18%. Have you calculated, or can you -- do you know the minimum threshold for hitting the p-value for those 2 trials?

So the studies are powered based on those assumptions. So is it based on the assumption that we have 70% response in the brinci arm, 40% response on the control arm, and we've got greater than 90% power to demonstrate that type of a delta. I'm not sure what -- how to answer what would be the minimum. It depends on what the comparator rate is.

Yes, if you just look back at the -- so the AdAPT, again, the assumptions of 70 and 40, if you look back to, say, the fourth quartile of enrollment and the lower viral loads, those same kinds of patients that we're aiming for, in the AdAPT trial, we had higher clearance rates, especially for these lower viral loads, that we think we will be recruiting in AdAPT because it's taking place at the institutions where they're doing screenings. And the comparator, we pulled that from the Manchester cohort that Garrett walked through. So those are the best estimates. We were a little conservative in saying that they would do even better in the context of this clinical trial versus the Manchester data of the consortium that was closer to 35%. We bumped that up to 40% to make sure that we were able to achieve our goals for the AdAPT. So we've done everything that we can do in AdAPT to pull together what gave us better probabilities of success, all the way from the 202 trial, the AdVise trial, and these external comparisons, to make sure that this one comparative study achieves all of our goals, with clearance of viremia at 4 weeks and, hopefully, those secondary endpoints as well.

Sorry, Michelle, I guess I wasn't -- yes, no, I'm fine with the assumptions on the control. I was just curious; you're not going to -- if it's 40% for AdAPT on control, you're not going to need 70% to hit the endpoint. You'll be well -- you'll be very, very highly significant. So I'm just wondering if you know what the minimum is. And it might be somewhere between 50% and 60%, perhaps, to actually hit the endpoint? That's all I was asking, is -- if you follow. I mean…

Yes. We'll have to get back to you with that calculation, and I think, again, it depends on the -- some of the feedback that we're getting from the CHMP about your handling of data, your statistical analyses. So we should have that later this summer.

Our next question comes from the line of David Lebowitz of Morgan Stanley.

I had a question on the upcoming adeno trial, and I was curious as to how Europe is looking at prior data versus the U.S., and why you feel comfortable to be able to exceed with more -- to move with a more accelerated process in Europe while taking more of a wait-and-see approach with the U.S. Could you explain to me what you understand of their thinking at this point?

Well, I think that Europe has traditionally been a little bit more accepting of surrogate markers such as what we've proposed in this study, which is the clearance of adenovirus viremia at Week 4. From a regulatory perspective, they have a mechanism -- it's a conditional approval mechanism which has been the route for approval for several products in recent years, oncology products, products such as Sarepta, where products have basically been approved based on data sets and surrogates. So we have had conversations with the European regulators, and certainly as we end up looking at this, a particular patient population, they are cognizant of the tremendous unmet medical need, the fact that there's no approved medications for this indication in Europe, and actually, there is no approved cidofovir available in Europe, full stop. The other piece that we've been doing in the European setting is to substantiate the current practices in Europe with regards to the treatment of adenovirus after stem-cell transplant. That's an ongoing epidemiologic study where we're looking at outcomes over the last three years in European sites. It's called the ADVANCE study, which is posted on clinicaltrials.gov if you want some more detail about that particular study. But that's a very important part of our attempts to show what is currently happening and identifying the tremendous unmet medical need that is adenovirus after stem cell transplant.

Our next question comes from the line of Marc Frahm of Cowen and Company.

It's primarily for Garrett. So, when we think about kind of the expand strategy, one of the bigger keys of it, right, is to see at least a strong signal, if not statistical significance, on some of these secondary endpoints in MVP-Peds for other double-strand DNA viruses. If we look back at SUPPRESS, while you did show a very early separation of the curves on CMV disease, we didn't see that with BK, and more generally, double-strand DNA viruses, in terms of their diseases. So, is the -- when you think about MVP-Peds, I mean, do you think that you're going to be able to show the signal mostly because you're going to have enriched when you look for enroll based on adenovirus, you'll have enriched for these other diseases much more, or is it something about the exposures relative to IC50, so it's really going to change the outcome?

I don't -- we don't anticipate that we're going to be looking at doses or exposures of IV brinci that are significantly in excess of those that we have with SUPPRESS. The duration of therapy, the availability of patients to stay on IV brinci because of its superior tolerability, is one issue that could be different between SUPPRESS. But the other is, obviously, we won't have the graft-versus-host-disease confusion and the excess immunosuppression that really was the undoing of the SUPPRESS study. So I think that those two aspects, the ability to treat throughout the period of highest risk, because of no GI side effects, as we've seen so far with the single-ascending-dose study with IV, and secondly, the lack of excess immunosuppression that we're likely to see in these studies.

But I guess the question I'm kind of getting at is, you were -- those kinds of GI tolerability and excess of use -- essentially excessive use of corticosteroids really drove kind of the late return of the curves, right? Bring them back together in SUPPRESS for CMV, whereas for the BK, we didn't really see the separation up front, right?

Well I think the -- but the steroids are basically being applied very much up front in these patients, so if you're using prophylactic brinci as we did in the SUPPRESS study, the big problem was that we initiated it early and at the time of the emergence of the diarrheal side effects overlapped with the graft-versus-host-disease incidents. And that's at about the time that you also start seeing disease with BK, for example. So they're getting whacked with steroids at the same time that they're -- that BK is basically coming up. So it's a difficult question to answer. We need to do the studies, but we have -- what we did see as we discussed at the -- shortly after the initial Tandem BMT conference was a trend toward the decrease in the rate of BK viremia in patients that were treated with brinci versus those that were treated with placebo in the SUPPRESS study, which gives us a reason to believe that it's going to be different as we end up moving forward.

Yes, when you think about the timing of CMV versus BK, BK reactivates much earlier, and unfortunately, in the SUPPRESS study, they were also starting on steroids a lot earlier. So where you did see that separation of the curve with CMV through Week 14, we saw that separation early in BK through the first 8 weeks or so, but by then, we had twice the rate of GVHD diagnosis, unfortunately, on the brinci arm, and all of those patients were the ones who were getting much, much higher exposure to steroids and immunosuppression, so that it was a very similar separation early, and then later, the curves coming back together. Just those time frames are a little different when you think about BK versus CMV. But again, we have clinical data on use of brinci in treatment scenarios that have shown activity against all of these viruses, again, when you are not faced with trying to overcome the immunosuppression with steroids and other agents. So again, starting earlier and maintaining a level exposure with the IV, not having to have dose interruptions, for example, should be able to maintain that study exposure and prevent all of these viruses from reactivating.

And if you look, Marc, on the website, during Josh Hill's presentation, there was a slide building when these viruses activate. So you started -- his data started with looking at CMV, but then BK right away, you see the build when HHV-6 comes in, cumulative incidents of CMV at 64% in the first 100 days, and it's 54% for BK, and then 47% for HHV-6. And this is all -- you see the patterns early on. And BK tends to come and persist. So I think that gives us a feel, as we see more and more data coming in from different types of transplant populations, Memorial Sloan Kettering being different than that at the Hutch, and you see people seeing the same things, this does give us some confidence that without steroids kind of mucking it up, and not having that GVHD confusion and having the IV onboard, that we should be able to demonstrate what we had aspired to with SUPPRESS.

All right. That's helpful. And then, just a quick one again on the smallpox procurement contract. Can you give an update on kind of where that stands and maybe if there's an appetite for -- on BARDA's part to execute something based on leftover funds before the fiscal year closes?

Yes, so with BARDA, we have been in a little bit of a wait-and-see approach because of the lack of a fiscal year '17 budget. So -- and CR. They're not really anxious to get into bigger contracts that commit them for multi-year payouts. Where, I think, with fiscal year '18, we're already seeing movement on the hill to get a fiscal year '18 budget, and we believe that this administration has shown their support for BARDA, and in particular, the medical countermeasures, as part of their military approach. And so, that -- we do believe that that will be at least stable, if not increased, funding for fiscal year '18. The timing of that works well with our plans to finalize the pivotal study with the (inaudible) model and get that conducted later this year. When those data are available, of course, we'll go back to the FDA and make sure there's no further information that would be needed. But I do think that there is -- we're hopeful for a fiscal year '18 opportunity for procurement contract. Stay tuned, and I think when we see the fiscal year '18 budget we'll have a little better feel for that.

Our next question is from the line of Ed White of FBR and Company.

So my BARDA question was just asked, so I'm going to move on to the norovirus. If you could just give us a little bit more on the 521 study. So I see the challenge study is on schedule to start in 2018, and it looks from the presentation that you gave at your Analyst Day, your timelines from 2018 to 2020. Maybe you can just tell us a little bit about what that study will look like, the number of patients, and are you going after prevention and treatment at the same time, or are these going to be different studies, which one will you look at first? Just any detail you can give us on that front. Thanks.

Sure. So there's a couple of different populations that we've looked at as far as the norovirus opportunity based on the unmet medical need. One of the studies would be in our transplant population of patients where chronic norovirus is experienced by up to 30% of solid-organ or stem-cell transplant patients in the first year after transplantation. Terrible, terrible problem for those individuals because they shed norovirus for long periods of time. Thus, they are in a -- at potential for transmitting it to others, but the patients themselves suffer from chronic diarrhea. So in those individuals, a placebo-controlled trial could be envisaged in order to decrease the duration of shedding and clinical symptoms. So that's one population that we would potentially be looking at as a Phase II or III population for therapy. But the other, larger opportunity is an opportunity to prevent transmission of the virus in outbreak-type settings. There's a number of different potential applications of that type of an application. One thinks about hospital wards, one thinks about inpatient nursing units, nursing home units, one thinks about military installations. These are settings in which norovirus can spread very quickly. And the great thing about the norovirus development program is that we have the ability to do healthy-volunteer challenge studies. And when you do those types of challenge studies, you can vary the time at which they receive the drug and the time which they are challenged with norovirus, so that we can figure out what is the time period between receipt of the drug and challenge, where the efficacy of the drug can be demonstrated. So in essence, you're doing a replication of a field study by basically giving healthy volunteers the drug for, say, 2 or 3 days, and then challenging them with the drug, or challenging them after receipt of drugs for only 1 day, for example. So we would be able to move from our first-time-in-humans study, which is planned for starting before the end of this year, into a healthy-volunteer challenge study in early 2018, so that we would then be able to show not just proof of concept, but really kind of the proof of principal that can then be rapidly transitioned into a field study, for example, in a nursing home or a military barracks, that type of a setting.

Our next question is from the line of Stephen Willey of Stifel.

This is Philomena Kamya, in for Stephen Willey. Just given the majority of the compassionate use requests for ex-U. S., is it safe for us to assume that the European sites alone will be sufficient to meet the enrollment target of 140 patients, sort of in time for a preliminary data release by 2019?

Yes, we've conservatively assumed a period of a year to enroll that study based on just ex-U. S. sites. Clearly, if we bring the U.S. on board, which is what we hope to do, the time for enrollment of that study could be significantly shorter.

And how many U.S. sites do you envision sort of onboarding? Is there a number, or?

So we're doing feasibility right now in order to determine what would be the footprint of sites ex-U. S., and then, as far as U.S. sites, we would go with our largest pediatric stem-cell transplant centers, those centers that are doing monitoring for adenovirus at present, and those that have the most significant history with regards to using brincidofovir in this setting.

But in combination, the U.S. -- if the U.S. and European sites were basically brought on board, again, we projected -- or we provided brinci via our expanded-access program to 70 patients in the first quarter alone. That's U.S. and ex-U. S. sites. And that's with the more restrictive population of cidofovir failures rather than looking at patients who may have asymptomatic adenovirus viremia, which is the enrollment criteria for the study. So potentially even a broader population of patients would be eligible for the study. So that kind of gives you an idea. If 70 could be enrolled in a quarter, then 140 would be pretty quick.

Thanks for the question. All right, well, thank you very much for your time and attention this morning, and we look forward to providing more updates soon. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect.