Chimerix - Q3 2023

Transcript

Operator (participant)

Good morning, ladies and gentlemen, and welcome to the Chimerix third quarter 2023 earnings conference call. I would now like to introduce you to your host for today's call, Michelle LaSpaluto, Vice President of Strategic Planning and Investor Relations at Chimerix. Please proceed.

Michelle LaSpaluto (VP of Strategic Planning and Investor Relations)

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

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

Mike Andriole (President and CEO)

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

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

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

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

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

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

Josh Allen (CTO)

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

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

The manuscript describes data that support a range of important conclusions for ONC201 in H3 K27M-mutant glioma, that span its mechanism of action, its biological activity within patients' tumors, and its clinical activity that extends beyond the prior efficacy analyses in the recurrent setting. Starting with the mechanistic finding, the data provide a step-by-step understanding of why ONC201 is uniquely poised to address this disease, that starts with the engagement of its ClpP binding target in the mitochondria and ends with reversal of the H3 K27 trimethyl loss event in the nucleus. Reversal of this epigenetic hallmark is remarkable, as it is the direct consequence of the H3 K27M mutation and is thought to be the pathophysiological driver of the disease.

These findings were consistent across disease models, and importantly, reversal of H3 K27 trimethyl loss was robustly evident across all tumor biopsies obtained from ONC201 treated patients. Turning to clinical outcomes, the survival of H3 K27M mutant glioma patients who received ONC201 in the frontline setting following radiotherapy, which I'll note is the same setting as the ACTION trial, was reported as 21.7 months from diagnosis, in contrast to 12 months for patients who did not receive ONC201. Favorable survival outcomes among ONC201 treated patients were consistently observed across a variety of sensitivity and subgroup analyses.

It is worth noting that while the previously disclosed results for ONC201 in the recurrent setting were skewed towards adult patients and thalamic primary tumor locations, this frontline data set described in the manuscript were skewed towards pediatric patients and brain stem tumor locations. Aggregately, these findings demonstrate that ONC201 is a first-in-class therapy for H3 K27M-mutant glioma that consistently reverses the major driver of the disease pathology and appears to be associated with compelling outcomes in uncontrolled trials across multiple clinical settings. These findings boost our confidence in the prospective randomized controlled evaluation of ONC201 in the ongoing ACTION study, which is further strengthened by inclusion of dose intensification to twice-weekly dosing. With that, I'll turn the call back over to Mike for closing remarks.

Mike Andriole (President and CEO)

Thanks, Josh. During the third quarter, we've continued to execute our plan with a focus on bringing ONC201 to patients as soon as possible. We're beginning to prepare our organization to potentially launch ONC201, and are excited about the promise to further broaden our pipeline in the future by advancing ONC206 and or through business development. With that, operator, we'll open the call up to questions.

Operator (participant)

Thank you. At this time, if you would like to ask a question, please press Star, followed by the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Thank you. Your first question comes from the line of Maury Raycroft from Jefferies. Please go ahead.

James Paul (Investment Banking Analyst)

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

Mike Andriole (President and CEO)

Sure. You know, and thanks for the question, James. Engagement in Western Europe, actually across all of Europe, has been strong, I think is evidenced by the speed of site activations to date in that part of the world. I'd say Canada has been a little bit slower, but from a regulatory perspective, that's not entirely unusual. But engagement at sites with investigators has been quite strong in both geographies. In terms of when we would expect full enrollment in the study, we haven't given that guidance, but continue to reinforce our guidance to have first interim efficacy overall survival data in the first half of 2025.

So, you might expect it would be similar time frame if you just look at the number of events required to hit that in timelines.

James Paul (Investment Banking Analyst)

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

Mike Andriole (President and CEO)

Yeah, good question. You know, we've got two separate arms, pediatric and recurrent and frontline in the pediatric PNOC study, and then a separate obviously study with the NIH. So there are three different, in a way, arms ongoing with that, phase I studies, James. And so, we're not going to give a play-by-play on where we are with each one, but all three are enrolling, and we continue to expect that we'll have enrollment completed in the first half of 2024. I think that we'll likely top-line the safety data, to the extent that there's efficacy insights that we can gather from that. We'll do that at that time.

But I want to probably set expectations that if you look at at least the parent compound, ONC-201, in the recurrent setting, you know, there was an 8.3-month time to onset of response. And so there's a natural lag between the maturity of those patients into a response and when we might have safety data. So there's probably a two step process in terms of identifying safety data and additional insights from an efficacy responder perspective. The other insight I'll make is some of those patients who will qualify for those studies may have seen ONC-201 previously, and so could have resistance mechanisms built in that would make assessing response more difficult.

We also have some patients in the PNOC study that are in the frontline setting and therefore confounding a response assessment, really making them invaluable for a response. And so we're really focused on the recurrent setting in patients who are naive to the imipridone class in assessing response. So we'll look at the totality of the data at the time, but I think it's likely to be top-line safety data first that we would press release and then followed perhaps by maturing efficacy data.

James Paul (Investment Banking Analyst)

Great. Thank you for taking our questions. I'll hop back in the queue.

Mike Andriole (President and CEO)

Sure.

Operator (participant)

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

Naureen Quibria (Director and Senior Research Analyst)

Hi. Good morning. Thanks for taking my question. I guess I'll start first with ONC206, the patient response, the GBM patient responder. So the patient's still on study, you know, how long has the patient been on therapy, and can you comment on what dose, you know, how many doses they've received? The different levels.

Mike Andriole (President and CEO)

Well, first, thanks for the question, Noreen. That patient's been on study for about a year and a half at this point, so it's been quite some time, a very durable response. They have continued to dose escalate. Last I heard, I'll ask Allen or Josh to weigh in on this, but my understanding is they graduated to dose level four. That was the last piece of information I had on that patient. I don't know. Josh, do you have other insight?

Allen Melemed (Chief Medical Officer)

Not much to add. I know that patient has dose escalated at least twice since the initial dose level at 100 milligrams. I know the investigator has reported a deepening of the response as that dose escalation has occurred in that patient, which is very encouraging. But overall, I think the macro message is we're compelled by this idea that ONC206 continues at the preclinical level to show signs of efficacy outside of H3 K27M-mutant glioma. Clearly, that was a strong indication that can translate, at least in that patient.

Josh Allen (CTO)

As Mike has pointed to, we look forward to continuing execution at this intensified dose schedule, and taking a careful look within the response of valuable population in the study, to see what the path forward looks like outside of H3 K27M. Great news for that one patient. We look forward to seeing more of that.

Naureen Quibria (Director and Senior Research Analyst)

Great. Thanks, Josh, and maybe this one's for you or Allen. Do you, can you comment on what type of data on this patient and any of the preclinical type of data, that'll be presented at the upcoming SNO conference?

Mike Andriole (President and CEO)

Yeah, the-

Josh Allen (CTO)

Yeah, I can-

Mike Andriole (President and CEO)

Go ahead, Josh. I think you're closest to that.

Josh Allen (CTO)

Go ahead. I'll start with SNO, Noreen, and just mention that we expect at least three oral presentations to occur at SNO on ONC201. Two of them are related to positioning ONC201 as a combinatorial backbone, right? In DMGs, right? Given the signal as a monotherapy that this drug has produced, its safety profile, its oral administration, et cetera, really positions it as an ideal backbone therapy. So, some of the mechanistic data, preclinical rationale and then available emerging clinical safety and outcomes associated with ONC201 as a backbone therapy will be presented in SNO. I think that's going to be the subject of a couple of those studies. So you'll expect to see more of that at SNO.

Naureen Quibria (Director and Senior Research Analyst)

Terrific. Okay, and just one more. Can you just remind me, with the ONC-206 trials that are ongoing, the dose escalation, is it just post-radiation, or do they receive a little bit of temozolomide as well?

Mike Andriole (President and CEO)

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

Allen Melemed (Chief Medical Officer)

Mike, this is Allen. I can answer. As this is a phase I study, it's a little more open on the inclusion criteria as we are trying to get safety for this patient population. I think the bonus is if we do see some signs of activity, we need to evaluate where we've seen this activity, and that'll help us decide where to go for future.

Naureen Quibria (Director and Senior Research Analyst)

Okay, thanks so much.

Operator (participant)

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

Soumit Roy (Biotech Research Analyst)

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

Mike Andriole (President and CEO)

Yeah, Soumit, I'll have Josh perhaps contribute to this too, but we have a slide in our deck that essentially lays out the dose frequency and schedule. So the next two dose levels following reactivation of this new protocol are evaluating similar, essentially similar, exposures and dose levels that were given once a week, but doing it fractionated over three days and then escalating up from there. Big picture, we'll end up at about 4x the dose on a weekly basis if we make it all the way to dose level 11. Josh, anything to add?

Josh Allen (CTO)

No, I think you covered it.

Soumit Roy (Biotech Research Analyst)

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

Mike Andriole (President and CEO)

I think, yeah, to the extent that we have evaluable efficacy data, it will come in, likely after completion of the safety analysis. Right, Soumit? And so we'd expect that, as we've said, in the first half or middle part of next year. And we'll share what efficacy insights, response insights we have at that time. And we'll update that during the course of the year as those patients continue to be followed.

Soumit Roy (Biotech Research Analyst)

Got it. One last question. In terms of the location of the tumor itself, we should expect a broad range, right, between anything between the pons, DIPG, stem?

Mike Andriole (President and CEO)

Yeah, this is looking at a primary CNS tumor, so it's going to be a fairly heterogeneous patient population.

Soumit Roy (Biotech Research Analyst)

Got it. Got it.

Allen Melemed (Chief Medical Officer)

The only exception is... This is Allen. The only exception is we are excluding patients that you would typically see with H3 K27M and looking outside of that, but otherwise it's broader for a CNS disease.

Mike Andriole (President and CEO)

Yeah.

Soumit Roy (Biotech Research Analyst)

Great. Understandable. Thank you so much, and congrats again on the progress.

Mike Andriole (President and CEO)

Thanks, Soumit.

Operator (participant)

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

Ben Lee (Investment Banking Analyst)

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

Mike Andriole (President and CEO)

Hi, Ben. I'm sorry. To clarify, was that expense trajectory, you asked?

Ben Lee (Investment Banking Analyst)

Yes, sir.

Mike Andriole (President and CEO)

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

Ben Lee (Investment Banking Analyst)

Got it. That's helpful. Thank you so much.

Mike Andriole (President and CEO)

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

Ben Lee (Investment Banking Analyst)

Great. That's, that's super helpful. And then, I guess on the identification of biomarkers for ONC206, for future efficacy, efficacy studies, would you expect the biomarkers to be similar to the biomarkers you showed for ONC201 in the Cancer Discovery publication or something different?

Mike Andriole (President and CEO)

Yeah, really good question, Ben. I'll let Josh weigh in on that. Josh?

Josh Allen (CTO)

Yeah, Ben, great, great question. As you would expect from, you know, we've been working on ONC201 and this platform for a number of years now, and we're expecting to leverage all of that molecular information we've gathered from those efforts, and pour it into the ONC206 program. So what I'll say is we're really excited about what we're seeing with ONC206. We've been working hard in the lab ourselves and with collaborators and have generated, you know, a growing body of compelling in vitro and in vivo data that we're excited about. As we've mentioned, the potency increase and the alternative engagement of additional target engagement interactions that we've seen with ONC206 relative to ONC201.

While that may not be a meaningful opportunity for H3 K27M-mutant glioma, given that ONC201 is having on-target saturation there, we think there's a lot of other opportunities outside of H3 K27M, both within the CNS and outside of the CNS, that can be addressed by ONC206. So we're seeing signs of that in preclinical studies. Clearly, we've reported on this one responder early in dose escalation in the phase I for ONC206 that endorses that hypothesis. And what we're looking to do now is take some of these molecular biomarkers, some of which you're pointing to, but you know, good ideas can come from anywhere.

So we're trying to take for all of those ideas we have for specific molecular driver alterations in cancer, that could be associated with ONC206, heightened activity and test some of those hypotheses against the compelling preclinical activity we're seeing, so that we can run towards, you know, actionable alterations in follow-on trials, if that's appropriate. So, good question, good thinking, and we're hard at work testing a lot of these theories that include what we've learned from ONC201 and ONC206 over the years.

Ben Lee (Investment Banking Analyst)

Great. Thanks for the insights. All set from us.

Operator (participant)

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

Troy Langford (VP of Biotechnology Equity Research)

Hi, congrats on the progress this quarter, and thanks for taking our questions. First one's just on ONC206. So with respect to the phase I dose escalation work, do you currently expect the phase I work for both the NIH-sponsored study and the PNOC-sponsored study to complete around the same time? And if not, would you need to wait for both of those to finish before you move forward with the program?

Mike Andriole (President and CEO)

Yeah, good, good question, Troy. We do expect them, based on what we know right now, to complete around the same time. I don't think we have any insight that they would be materially different. Of course, as we get closer to you know, the final dose levels, assuming that we don't have a safety event that would stop us earlier at a particular dose level, we would. Right now, we are planning for them to complete around the same time. If that should change, then, of course, we'll update you accordingly.

Troy Langford (VP of Biotechnology Equity Research)

Okay, great.

Mike Andriole (President and CEO)

Allen, any additional thoughts on that? Oh, I was just gonna ask Allen, any additional.

Allen Melemed (Chief Medical Officer)

Yeah, no, the only thing I would add is the demand for the ONC206 is high, so it's really how quick we can fill the cohort, close the cohort, and then open a new cohort. So there's high demand here.

Mike Andriole (President and CEO)

Yep.

Troy Langford (VP of Biotechnology Equity Research)

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

Mike Andriole (President and CEO)

Yeah, great. Great question. And so as we think about capital allocation, we have earmarked some capital on balance sheet for phase II studies. That could be ONC206, it could be another compound, maybe, maybe that could be in-licensed. As we've said in prior quarters, Troy, the bar for business development continues to be high because we continue to see early preclinical and clinical data with 206 that continues to raise the bar for anything else we would pull in and allocate capital to. Clearly, if the more substantial of a phase II study we might run with ONC206 would shorten the runway, and we'll evaluate that when we make that decision.

To what extent would we shorten the runway? What are our access to other dilutive or non-dilutive capital? And in particular, any additional insight we might have on milestone payments that might be forthcoming from Emergent BioSolutions with respect to the TEMBEXA divestiture we made last year, all factor into that calculus. But it starts with how much conviction do we have in the data to date on ONC206, both preclinically and clinically, and sharing that data with the market, making sure that that conviction is shared externally as well.

Troy Langford (VP of Biotechnology Equity Research)

Great. Thanks for all the extra color. That's all for me.

Mike Andriole (President and CEO)

Sure.

Operator (participant)

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

Mike Andriole (President and CEO)

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

Operator (participant)

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