Chimerix - Q2 2022

Transcript

Speaker 0

Good afternoon, ladies and gentlemen, and welcome to the Chimerix Second Quarter 2022 Earnings Conference Call. I would now like to introduce you to your host for today's call, Michelle Les Belluto, Vice President of Strategic Planning and Investor Relations at Chimerix.

Speaker 1

Please proceed. Thank you, and good afternoon, everyone. This afternoon, we issued a press release on our Q2 operating update. You can access this press release in our Investors section of our website. With me on today's call are President and Chief Executive Officer, Mike Sherman Chief Medical Officer, Ellen Melamed Chief Financial and Business Officer, Mike Andriole Chief Science Officer, Randall Lanier and our Chief Technology Officer of Omnipronone's Josh Allen.

Before we begin, I'd like to remind you that the statements made on today's call include forward looking statements 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. Mike Sherman.

Speaker 2

Good afternoon, everyone. Thanks for joining us today. We've been busy the past the 2 months, so let me get right to the details of the progress we've made, and I'll start with TEMBEXA. In July, we marked a significant milestone recording our first TYMEXA product revenue covered by 2 international agreements of $35,000,000 in aggregate. This was only possible because we made the decision a couple of years ago to manufacture over 300,000 treatment courses of TEMBEXA at our own risk without a contract, somewhat atypical in the biodefense space.

Because of that decision, we were able to take advantage execution as it relates to creating and delivering on contracts. These are great examples. The same decision to manufacture product at risk will also position us to respond immediately to place TINVEXA into the U. S. Stockpile once the BARDA agreement is in place.

We mentioned previously that the monkeypox outbreak introduced some new considerations for both BARDA and Chimerix. So we our and have been thoughtful to address those urgently. In the meantime, the international sales we've recorded have satisfied our near term capital needs. You may be aware that while TEMBEXA was approved for smallpox, preclinical data does support the activity of Temexa against multiple orthopoxviruses including monkeypox. The FDA commented on that potential in their post approval manuscript.

The fact of the matter is no randomized control studies have been performed in humans with monkeypox with either of the FDA approved antivirals for smallpox and There are still a lot of unknowns as the virus spreads and mutates into potentially more resistant strains. We're working with leading infectious disease physicians on potential options to generate additional data. Let me now turn to ONC-two zero one. Pleased to announce today the the design details of our Phase 3 action study of ONT-two zero one. This is the most advanced study in this H3K27M population patients.

I'll let Alan go into the design details, but let me make a few points upfront. We've worked with KOLs across disciplines Angiographies to design a trial with a probability of success that's high and multiple ways to achieve this efficiently. The action studies highly differentiated from the other Phase 3 studies that have been performed in the broader glioblastoma stoma space. It really comes down to the Phase 2 data we have in hand and the circumstance in which it was generated compared to other drugs that really differentiate this drug's likelihood of success. I should first note that about a third of the studies in this space advance to Phase 3 without Phase 2 data.

For those that did advance based on Phase 2 data, it was rare that the patient population was associated with a targeted genetically specified mutation like H3K27M. With that target, we can focus on the same homogeneous population of patients in Phase 3 that were the source of the data In Phase 2, we can also identify those patients with the same tools used in Phase 2, which are reliable diagnostic methods already nearly the universally used. The isolation of single agent activity is also critical. Many previous Phase 2 studies have been conducted with drug combinations Or have failed to have adequate washout periods to distinguish drug effects. They then relied on time point endpoints like PFS compared to historical benchmarks.

And in contrast, we've carefully isolated the single agent activity of ONT-two zero one in our Phase 2 data. Importantly, we've measured tumor response using RANO criteria, the most rigorous standard. This method was developed to address some of the the company shortcomings of prior response rate measures such as the Levin and McDonnell criteria. Our overall response rate of 20% to 30% in the relapse setting using renal, complemented by the durability of those responses evaluated by blinded independent central review also increase our confidence relative to prior studies done using less stringent criteria. It's also critically important that our efficacy data was generated in the absence of anti angiogenic drugs like Avastin, which can confound imaging and yield false response and progression assessments, which have historically failed to translate to Phase 3 success for other drugs.

Finally, the consistency across multiple clinically meaningful endpoints is particularly convincing. The ON-two zero one data demonstrates a clear association between response and a reduction in steroid use and an improvement in performance status. There's also an association with survival as all responders were alive at 2 years or were alive at the data lock if that was earlier than 2 years. For patients who did not achieve a response, none were alive 2 years. The internal consistency of this data is striking.

We previously noted the ongoing work related to compiling safety data to the patient efficacy cohort. I'm now happy to say we've completed a more robust assessment of over 200 patients And the results reveal a very attractive safety profile as expected. I'll turn the call over to Alan to share more about the details of the Phase 3 action study as well as hit on those findings in the latest safety assessment. Alan?

Speaker 3

Thank you, Mike. I'm excited to briefly go over the details of our Action Phase 3 study. We expect to activate select U. S. Cycle later this year and continue into international sites throughout the first half of next year.

ACTION is a randomized, double blind, placebo controlled and multicenter the study in newly diagnosed diffuse glioma patients whose tumors are hard with H3KKX7M mutation. Treatment with ONTO-one will occur following completion of radiation therapy. The study will enroll approximately 4 50 patients who we randomized received 6.5 milligrams of OTO-one at 1 of 2 dosing frequencies, once or twice weekly or placebo. The primary endpoint of the study is overall survival. The study will also guide with progression free survival with an alpha control for both OS and PFS.

OS will be assessed for efficacy at 3 alpha controlled time points, 2 interim analysis the independent data monitoring committee followed by a final assessment. The final PFS analysis will be formed using renal htg by blinded independent Tetra Review. Participants in this study must have a Karnovsky or a landscape performance status, which is a measure of patients' ability to perform ordinary tasks of greater than or equal to 70 at the time of randomization. Key exclusion criteria are the presence of a primary spinal tumor, diffuse intrinsic pontine glioma, evidence of left and right of disease or cerebrospinal fluid dissemination. The study will take place at up to 120 sites in North America, Europe and Asia Pacific.

The first interim analysis anticipated in early 2025 with final data in 2026. The study has greater than 80% power with an assumed hazard ratio of 0.65 for orphan survival 0.60 for progression free survival. Independent comparison will perform for each ONTAR-one study group versus control at each time point. The study design builds on findings from the Phase 2 data that should increase the likelihood that patients will respond to increasing the time for patients being on ONTO-one as well as limiting the study to patients with a KPS of greater than or equal to 70. All of these factors were associated with better response in the Phase 2 data set.

In addition, the study design has a number of elements, which the Q4 of 2019, which should support RAP enrollment. This includes a wider time window to identify patients as there is a natural 6 week gap between initial diagnosis the completion of radiation therapy. The presence of an HJK27M mutation will be identified as part of the standard of care at the time of initial diagnosis with widely available tests. In addition, patients are twice as likely to receive LOCK2 1 of a placebo. Randomized clinical trials and registration, FDA has pushed further evaluation on multiple dosing and target indications, which has included discussions with Chimerix.

Noting that ONC21's efficacy was mainly based on the single dose and schedule, we incorporated an additional dose in the Phase 2 study the upside of increasing study enthusiasm and probability of a successful study. This additional schedule has been well tolerated in previous ONP-twenty one trials. In the meantime, we've been updating our Occhio-one safety data analysis that includes a robust safety analysis performed at 211 patients. With this new stated data added to the rest of the data we've already reported, we now have a better characterization of this risk benefit of this drug. In this analysis, treatment emergent adverse events that were drug related were generally Grade 1 and 2.

The most common events were headache, fatigue, nausea and vomiting. The only related adverse event of Grade 3 or higher that occurred in more than 2% of patients with fatigue reported at 2.8%. CAVIVUS events reported in the pediatric population were generally similar tadaliraportin adults. Only 5 patients, 2.4% experienced a treatment related adverse event leading to study drug discontinuation, reduction or interruption. These events were neutropenia in 3 patients, hypersensitivity in 1 patient, neutrophilcalt disc decreased in 1 patient and a pulmonary embolism in 1 patient.

With the Phase 3 trial soon underway and this data in hand, we plan to revisit the question of accelerated approval based on the Phase 2 data with FDA in the Q4 of this year. With that, I'll turn it over to Mike Angiolo to speak to our financial results.

Speaker 4

Thanks, Alan, and good afternoon, everyone. With Alan's overview of the action study and rationale for why we're optimistic about its outcome, I wanted to just make a few comments on the potential commercial market for ONC201. As most of you are aware diffuse gliomas are a particularly lethal form of brain cancer and H3K27M mutants are among the worst of what is already a the unmet need for new therapies in glioma broadly and H3K27M mutants in particular is among the highest unmet needs in all of oncology. As it relates to ON-two zero one, our market research indicates that the unaided awareness of this agent for 3K27 ms mutants is already high and following the participation in the action study of up to 120 sites across the major markets, We expect the association of this agent to H3K27M mutations will be nearly ubiquitous among top prescribing neuro oncologists. If the action study is successful, we expect this awareness will translate to rapid adoption of the therapy in major markets.

This likely adoption should be aided by a competitive landscape that is quite attractive. Specifically, we're not aware of any other Phase 2 or Phase 3 programs the industry targeting this mutation. These dynamics likely make ONT-two zero one unique in a market where there have been several examples of underperforming commercial launches in Kology in recent years. Consequently, we view the commercial risk here as relatively low and continue to view this as a worldwide annual revenue opportunity that should comfortably exceed $500,000,000 As Mike mentioned earlier, this past July, we announced 2 international PEMEXA procurement contracts totaling nearly $35,000,000 We've delivered nearly all of that product recently and will realize at least $32,000,000 in revenue in the 3rd quarter. On a pro form a basis, cash at the end of June would have been approximately $70,000,000 when including this additional revenue.

As it relates to the pending transaction for the sale of Temvexis to Emergent in late July, the HSR waiting period expired. That satisfied one of the key closing conditions. The other two remaining key closing conditions are execution of the procurement contract with BARDA Anbarka's approval of a preinnovation agreement between Chimerix and Emergent. I know that investors are eager to have a BARDA contract executed as are we. Certainly, the recent declaration of the monkeypox outbreak as a public health emergency by both the WHO and HHS has influenced how both parties are approaching the final details of this agreement.

To that end, we'll work expeditiously with our counterparts at BARDA to finalize the contract as soon as reasonably possible. In the interim, we continue to operate the business in the ordinary course and we'll provide another update to the market on finalization of the Bard agreement when we can. With our current cash position, in addition to the expected cash generated from the sale of TEMEXA, Chimerix expects to be well positioned to advance the action study and other pipeline programs without concern of a near term dilutive financing. Now moving to our statement of operations. The company reported a net loss of $23,500,000 or $0.27 per basic and diluted the Q2 of 2022 compared with a net loss of $17,800,000 or $0.21 per basic and diluted share in the Q2 of 2021.

Research and development expenses increased to $18,000,000 for the Q2 of 2022 compared to $13,800,000 for the same period in 2021. The main driver of this increase is the ongoing development related to ONC201. General and administrative expenses increased the $5,800,000 for the Q2 of 2022 compared to $4,400,000 for the same period in 2021. And with that overview, I'll now turn the call back to Mike Sherman for closing remarks. Mike?

Speaker 2

Thanks, Mike. Before I open it up for questions, I'd like to take a minute to welcome Christopher Jordan to the team as our Vice the regulatory affairs. Christopher comes to us with over 30 years of pharma experience across all stages of product development. Some of our management team. I've had the pleasure of working with Christopher at Endocyte and Novartis where he recently led the regulatory strategy and the FDA approval and EMA submission of PSMA-seventeen or Pluvicto as it's now known.

His knowledge in the oncology field and track record of navigating complicated regulatory processes will be a great addition to the team as we continued development of our oncology pipeline. With that, Brianna, I'll turn it over to you to open the call for questions.

Speaker 0

Your first question will come from Maury Raycroft with Jefferies. Your line is now open.

Speaker 5

Hi, thanks

Speaker 6

the data monitoring committee at 164 events and then 246 events and then the final at 327 events. If successful, could either of the initial interim assessments at 164 or 246 be enough to file for approval?

Speaker 2

Yes, those are designed such that with statistical significance at those endpoints, Pretty significant advantages, we would expect those to be the basis of the regulatory submission and approval.

Speaker 6

Got it. And then also can you talk more about the twice a week dosing and what you've seen in prior clinical data that supports the rationale for moving the twice per week dosing into the Phase 3.

Speaker 2

And I just turn that directly over to Alan and Josh to share both the rationale for including it as well as some of the experience we've had with it in prior trials.

Speaker 3

Yes, this is Alan. I'll start. We have evaluated twice weekly dosing and have been shown that this has been in effect a safe regimen in several studies. One of the reasons we want to move this forward is we wanted to have the opportunity even a more intense dose. We know that we want to try to maximize the effect we've seen and we really haven't seen any challenge so far with safety from the current dosing regimen.

This also is addressed In part what you've seen from the FDA regarding optimization of dose and we think that this helped Also address the situation where you do have 2 shots on goal and essentially you have 2 places for a patient to get on study with OPT201. And I'll pass on to Josh for any additional comments.

Speaker 7

Sure. This is just speaking to the rationale really comes from preclinical in vitro findings showing that the efficacy of BOT-two zero one can be increased With prolonged exposure to the same concentration, a little bit of a sweet spot towards 48 hours of an incubation time really leading to that maximal effect. So the thinking is that we're getting into these brain tumors with the current dose, achieving therapeutic concentrations. And if we can just prolong that duration for an extra day by giving a second dose on a consecutive day here that might be the key to unlocking an increase in efficacy based on those models. So That in combination with the safety experience in the clinic that Alex spoke to is what leads us to incorporate that.

Speaker 6

Got

Speaker 2

it. I'll add one other thing, Maury. The notion that to COURAGE enrollment in this trial. You would need to go to a 2:one randomization anyway if it were a single schedule. And so you kind of get that 2 to 1 benefit here with just a little bit higher and in aggregate.

So I think a good use of the statistical power in order to get another shot on goal for success And still encourage patients to enroll.

Speaker 6

Got it. Yes, it's all helpful. And maybe last question for me, just Wondering if in communications with FDA, if they communicated on whether an accelerated approval path based on the Phase 2 data and additional supporting data, if that's still on the table.

Speaker 2

Yes, we as we discussed, at our last call, We essentially delayed that conversation after their feedback earlier this spring with a focus on getting moving with the Phase 3 trial and knowing that without this additional safety data in hand, We were a little bit limited in our ability to make a strong case for the risk benefit assessment. So now that we have this additional safety data set, which really plays out exactly as we expected. We'll be able to go back to them. So in the meantime, we really haven't Push that conversation beyond the Phase 3 trial. We'll revisit that here later this year.

Speaker 6

Got it. Okay. Thanks for taking my questions.

Speaker 2

Thanks, Marty.

Speaker 0

Your next question comes from Joseph Thome with Cowen. Your line is now open.

Speaker 8

Ben. Hi, there. Good afternoon and thank you for taking our questions. Maybe the first one, just on OX201, with the Phase 3 you're administrating shortly after completion the question of radiation. Is there a timeframe that's mandated in the study?

And maybe can you compare this to the timeframe post radiation that patients saw

Speaker 3

So there's a couple of ways you're looking at this. One of the reasons we've done this way, we're allowing patients to Start the screening process when they are initially diagnosed and then starting the radiation therapy, so you have plenty of time you can actually grab the patient. There's a specific time frame which you should be randomized, which I believe and I'll let Josh correct this. I think it's 6 to 8 weeks post radiation. I'm sorry, not post patient, post initial diagnosis.

But I want Josh to clarify the exact timing. I don't really have that in front of me.

Speaker 7

Yes, sure. We'll enroll in the range of 2 to 6 weeks post radiation for this study, and that contrast to the prior efficacy analysis in the relapse setting was more than 3 months that washout period there. So this study is substantially moving patients up closer to radiotherapy, which we think will give them a better shot at having prolonged duration of therapy and perhaps better response response.

Speaker 8

Okay, perfect. Thank you. And then maybe jumping over to Timbexa, is there a time limit associated with the EBS deal closing on when the BARDA contract needs to be finalized, like does that have to be a 2022 event? And then second part of that, should we anticipate any substantial additional ex U. S.

Revenues going forward or have you kind of hit the key markets? Thank you very much.

Speaker 2

I'll let Mike hit those two questions.

Speaker 4

Yes. There's an outside date in that agreement that's available there for both parties, Joe, September 30 in that agreement. And then as it relates to the international opportunity, we continue to have discussions with parties internationally. I think the declaration of the public health emergency certainly by the WHO is continues to sort of activate interest in those conversations. So the contracts that we entered into at the end of June were certainly ones that we were able to turn around very quickly.

We'll continue to have those conversations No, in the weeks ahead.

Speaker 8

Perfect. Thank you very much.

Speaker 0

Your next question comes from Ed White with H. C. Wainwright. Your line is now open.

Speaker 9

Good evening. Thanks for taking my questions. Just circling back to the potential for accelerated approval, Have you set a meeting date with the FDA yet regarding accelerated approval? Ann, does using the 2 different dosing schedules in the Phase 3 study somewhat Pamper the expectations for accelerated approval.

Speaker 2

Yes. I'll let others add to this. We're preparing the materials that would be the basis for that meeting now as the safety data set It's just has just been completed. I would suggest that having that study in place and up and running and really well advanced at the time an action from the regulators would be taken on an accelerated approval is a big part what the FDA wants and needs to see in considering an accelerated approval. So I think that would actually provide some comfort.

If we were exploring lower doses, We're actually exploring the potential of a more efficacious higher dose that obviously if it's not more effective or it's insufficient safety than that would not impact an accelerated approval relative the lower dose. It actually also simplifies some potential commercial issues that might arise if you are lowering your dose from an accelerated approval Regimen. So I don't think it impacts in a negative way their consideration. In fact, I think having a robust design with certainty around having overall survival to confirm a full approval really was going to be required anyway. And this just gets them a much more robust assessment of that and frankly consistent with their guidance as it relates to for dose optimization that I think would be supportive of that conversation.

Speaker 3

Hey, Mike, can I add here? This is Alan. I think part of this comes back to the fee that we received and actually OncoSutis received From FDA years back. So dose optimization really wasn't in the situation back then. Things have evolved in FDA.

So Again, if you go according to what they've said, sales optimization is often more focused on the Phase 3 aspect of that. So I do think agree with Mike that we have still the reasons to discuss it. This is also very high

Speaker 9

Okay, thanks. And then just on Cambrexa, regarding monkeypox, have you been approached by any governments outside the U. S. Regarding potential purchases due to monkeypox? And perhaps if you could just review in a little bit more detail the preclinical data for monkeypox Ann, your thoughts on either you or Emergent pursuing studies in monkeypox.

Speaker 2

Maybe, I think, Ed, as it relates to the conversations with parties outside the U. S, Those were likely accelerated as a result of monkeypox, although maybe never directly referenced in that context given the approval in smallpox. As Mike said, those conversations are ongoing. Maybe I'll turn it over to Randall just to make a couple of comments, knowing that there are a lot of unknowns in terms of the treatments for monkeypox. There is some pretty compelling basis you to believe that TEMBEXA be an active and safe agent for use in this population.

Speaker 10

Sure, Mike. So I'll start, I guess, with in vitro and just say that monkeypox is the 2nd most sensitive orthopoxvirus we've ever tested. It's about twice as sensitive to 10BEXA as Variola, about 4 times more sensitive than the mousepox virus that we use for approval And about 14 times more sensitive than the rabbitpox virus that we use for approval. So from an in vitro standpoint, There's every reason to believe that monkeypox would be highly responsive to TYMEXA. We also have 2 animal models, one of them in mice, which showed 100% protection from monkeypox virus infection with TYMEXA And then one in Prairie Dogs, where it was sort of intermediate protection, but it turned out that Prairie Dogs Like monkeys actually, analyze Tembecza much faster.

So the exposure within prairie dogs of Tembec is about 15% that of human. And that's the reason that we saw kind of intermediate sponsors there. With respect to humans, obviously, there's the published cases of 3 monkeypox virus cases in the U. K, where all three patients responded very well to, Tembexa and the paper was actually fairly negative on the drug for reasons that we don't fully understand, but the patients receiving, timbrexant did all fully recover. There was clear virologic effects.

They did have transient ALT elevations that were That caused to be discontinued, but the patients all responded fully. And I should just That with regard to the ALT elevation, the manuscript ignored

Speaker 7

all of

Speaker 10

the FDA data, Which was instead of 3 patients was 392 timbrexant recipients versus 208 placebo recipients where the ALT elevations were 7% in the Tempex arm and 5% in the placebo arm. So, all of the data suggests that this drug should work quite well for monkeypox.

Speaker 9

Okay, great. Thanks for taking my questions.

Speaker 8

That's it.

Speaker 0

Your next question comes from Sumit Roy with Jones Research. Your line is now open.

Speaker 5

Hi, everyone, and congratulations on all the progress. A quick question on the ACTION trial. Positively, Alan, if you can remind us from the relapsedrefractory glioma Phase 2, what were the immediate prior treatment regimen for those patients. Was it mostly radiation and also the temozolomide chemo. And the second is on action, would it have been better to have a physicians' choice of the control arm rather than a placebo, just any thoughts?

Speaker 3

Yes. So under the Q1, the choice of the control arm. And I think it's important to note in the control and the Phase 3 trial, post radiation therapy. There really is no standard of care. Patients typically receive the radiation therapy and then they wait until progressive disease.

So this is an ideal time to study this. It also builds on some of the factors we saw in the Phase II trial that we think will actually increase the probability of the success. Typically in this study you're going to have little smaller disease, you're going to be on therapy longer and we're going to include the lower KPS core and include in the 60s. So we do think these factors increase our probability of technical success in this population. I'm going to ask Josh to kind of go through what he found in the prior since he was the one who was initially doing these trials from the Phase 2 studies.

Josh.

Speaker 7

Hi, there. Yes, with regards to the prior therapies and that recurrent experience, obviously, all of these patients have radiation recurred and Waited more than 90 days as I noted on earlier comments in terms of additional therapies these patients saw prior to getting OXO-one tended particularly in the adult population to include chemozolomide, even though that chemotherapy is known to not have benefit within the subset of H3227 and we still saw exposure to that just given the possibility of other agents. Other therapies included bevacizumab for somatic relief of edema in addition to nitrofluorrhoea and cycloneusty. So really just a mixture of chemotherapy And we're hopeful that moving earlier as we've noted a couple of times here, moving earlier in line with therapy prior to exposure to those chemotherapies will increased the likelihood of our patients benefit of T201.

Speaker 5

Got it. Thank you for that. And one last question on ONK-two zero six. Just curious on the timeline what are you thinking of to bring this drug pre IND or in the clinic?

Speaker 2

Yes. As Wood mentioned, that drug is being evaluated in 2 studies, 1 pediatric Anne and another, an adult. The adult study is being sponsored by the NIH. And to be fair, our focus has really been on accelerating ON-two zero one. And so we are escalating that dose through that program.

I would expect to But we'll report separately as we get closer to what we expect to be a data readout on that and a selection for an indication Well, that we would pursue that. One of the things we've talked about in the past is that even though there's the targets for ONK-two zero six are the same as ONK-two zero one that That drug opens up different opportunities in terms of development within oncology and so we would expect to pursue certain non overlapping indications initially with ONP-two zero one.

Speaker 5

Got it. Thank you so much for taking the questions.

Speaker 8

Thank you.

Speaker 0

There are no further questions at this time. I will now turn the call back over to Mike Sherman.

Speaker 2

Thanks, Rhiannon. Thanks again everyone for joining the call. We look forward to the next updates particularly on the progress of the BARDA contract. Thank you. Have a good evening.