Chimerix Inc

NASDAQ:CMRX

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good morning, ladies and gentlemen, and welcome to the Chimerix Second Quarter 2024 Earnings Conference Call. I would now like to introduce your host for today's call, Will O'Connor of Stern Investor Relations. Please proceed.

[Will O'Connor]

Thank you, operator. Good morning, everyone, and welcome to the Chimerix Second Quarter 2024 Financial and Operating Results Conference Call. This morning, we issued a press release related to our second quarter operating update. You can access the press release in the Investors section of the Chimerix website.

With me today with me on today's call are President and Chief Executive Officer, Mike Andriole; Chief Financial Officer, Michelle LaSpaluto, and Chief Technology Officer, Josh Allen. We also have Allen Melemed, our Chief Medical Officer; and Tom Riga, our Chief Operating and Commercial Officer for questions.

Before we begin, I'd like to remind you that the statements made on today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties and other factors. These risks and uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements. Please refer to our filings with the SEC for a more complete disclosure of these risks and uncertainties.

At this time, I'll now turn the call over to Chimerix President and Chief Executive Officer, Mike Andriole.

[Michael Andriole, executive]

Thanks, Will. Good morning, everyone, and thank you for joining us. It's been a busy summer at Chimerix, and we continue to make meaningful progress across our clinical programs. Starting with our lead program, dordaviprone, our team continues to be laser focused on the execution and enrollment of the Phase III ACTION study, which is on track for the first interim overall survival readout in the third quarter of next year.

We're executing with urgency as there remains a significant need for patients battling this lethal disease. With no approved treatment options available that have proven clinical benefit beyond radiation therapy, we're keenly aware of the importance of speed in addressing this unmet need. It's because of this need that we continuously evaluate registration pathways globally to accelerate commercial access to dordaviprone where possible. Earlier this year, we initiated the evaluation process for dordaviprone to be considered for provisional registration in Australia.

Provisional registration is a 3-step process that begins with a presubmission meeting to evaluate current data, the status of pivotal studies and other program features. Following a supportive presubmission meeting earlier in the year, our team recently initiated the second step in this process, the filing of a provisional determination application. Should the regulators in Australia approved this application, the final step is to apply for provisional registration. If we proceed to this final step, it's expected that an NDA filing could occur as early as year-end 2024 with possible commercial availability in early 2026.

This morning, we're also excited to provide a safety and PK update from our other clinical program, the second generation imipridone ONC206. We're making great strides advancing this program through Phase I studies, which recently began dosing within an expected therapeutic range, and we are now enrolling the first of 2 remaining dose cohorts. As we escalate and intensify the dose within this range, we're encouraged by ongoing pharmacokinetic data that is in line with modeled expectations for delivering dose proportionate exposures for extended durations.

Importantly, these exposures have not been associated with dose-limiting toxicities thus far. With these data, we have increasing confidence in the safety profile and therapeutic window for ONC206, and we look forward to completing enrollment in our dose escalation trials by the end of the year.

I'll now turn the call over to Josh for a more detailed discussion on the ONC206 data we announced this morning. Josh?

[Joshua Allen, executive]

Thank you, Mike, and good morning, everyone. I'm delighted to provide an update on the program for our next-generation product, ONC206 that is being evaluated in ongoing Phase I clinical trials. I'll start with a reminder that this is a small molecule that shares the novel ClpP and DRD2 binding targets with its parent compound dordaviprone, and exhibits a tenfold increase in potency, while retaining favorable safety and oral administration attributes.

It also maintains the relatively rare ability to penetrate the blood-brain barrier and has shown encouraging activity in nonclinical studies of specific forms of cancer, both within and outside of the central nervous system. In the ongoing Phase I trials for pediatric and adult CNS tumors, we have previously completed dose escalation on a once per week administration schedule at doses reaching up to 350 milligrams. That experience demonstrated the desired peak plasma concentrations and safety in patients that we expected based on our nonclinical models.

In parallel to the clinical evaluation of this dose schedule, nonclinical studies suggested that the anticancer activity of this compound could be enhanced by prolonging the duration of time that tumor cells are exposed to biologically active concentrations. This appeared to potentially be achievable through dosing on a twice per day for 3 consecutive days per week administration schedule based on our modeling, and we have been busy testing this in the clinic this year.

We have now generated human data for safety and pharmacokinetics or PK for short, at doses reaching up to 100 milligrams at this intensified administration schedule. We are happy to report that the tolerability of the compound continues to be favorable as we continue dose intensification with no meaningful changes in the overall adverse event profile as the dosing has either escalated up or become more frequent. The most frequent treatment-related adverse events are fatigue, vomiting and lymphopenia that have occurred in a minority of patients and are largely low grade.

With respect to PK results, our goal was to sustain biologically active concentrations for a prolonged duration of time, and that is indeed what we have accomplished with the intensified dose schedule. At 100 milligrams twice a day for 3 days per week, the human PK results show that biologically active concentrations of ONC206 were sustained for beyond 24 hours in plasma and that peak plasma concentrations are well in excess of the compounds IC50 in vitro as well as exposures associated with in vivo efficacy in oncology models.

Keep in mind that this is all based on plasma concentrations as that many target tissues are expected to have even higher exposure based on prior distribution studies in rodents, for example, brain tissue showed a twofold higher drug concentration relative to plasma, and that's before considering disruptions to vasculature in the tumor microenvironment that are expected to further augment drug delivery.

While that is already promising at the current dose, our modeling suggests that we may be able to push the dose up even a bit further to fully optimize the pharmacologic activity of the compound. We, therefore, have 2 more dose levels to enroll that we expect to top out at 200 milligrams twice a day for 3 consecutive days per week by the end of the year. This enrollment is on top of the more than 75 patients dosed to date that have provided a robust safety in PK data set.

Following this, we will make a determination of how to best advance the compound into efficacy studies in selected populations. Establishing safety and PK are the primary goals of these studies. However, we are all, of course, keen to look for objective responses whenever possible, and we have an eye on this in the current and future cohorts. These are Phase I trials that enroll patients at various doses with many different forms of CNS cancer and at different time points in their disease journey that often involve surgery, radiotherapy and chemotherapy. Therefore, assessment of response needs to be handled very carefully to avoid misinterpretation.

Response assessment may be appropriate in the subset of patients who meet certain criteria, including those who have a CNS tumor that has progressed on prior therapy, received monotherapy ONC206 without concurrence or very recent anticancer interventions, are naive to imipridone treatment have achieved adequate exposure to ONC206 and have disease characteristics that are evaluable by conventional response criteria for CNS tumors such as [indiscernible] (00:12:30).

The ongoing trials have recently begun enrolling patients who meet these specific criteria, and we expect some patients enrolled in the 2 remaining dose cohorts may also meet these criteria for appropriateness to evaluate objective response. This is an exciting opportunity to get an initial glimpse into the potential of ONC206 to treat CNS tumors, and we are carefully monitoring these patients in these higher dosing cohorts in particular, those who are starting to stay on study beyond the typical window of time for DLT assessment when we would otherwise expect further disease progression.

Given the need to confirm responses and the importance of characterizing their durability, initial readout of objective response is expected to occur in the first half of 2025. We are very excited about the current stage of the study where ONC206 is now safely achieving sustained biologically active concentrations in patients, some of which have forms of CNS cancers that are expected to be responsive to ONC206 based on preclinical models and some of which have never been tested before in the clinic with either ONC206 or even ONC201. An example of that is medulloblastoma, where ONC206 has consistently shown compelling in vivo efficacy as a monotherapy in mouse models, and we have just enrolled our first patient with this tumor type. We look forward to updating you more on this program in the future that is evaluating the potential of ONC206 in indications beyond that of dordaviprone.

With that, I will turn the call over to Michelle for an update on financial results.

[Michelle Laspaluto, executive]

Thank you, Josh. We continue a balanced approach of investing in R&D, while keeping a tight control on G&A expenses, which has essentially been flat year-on-year. This discipline has allowed us to maintain an average burn for the past 6 months of about $16 million a quarter. We expect this rate to increase modestly in the quarters to come as we begin to make investments in launch readiness in advance of the interim OS assessment next year. As always, we remain confident in our ability to make smart investment decisions as we approach upcoming catalysts.

Now turning to the financial results for the quarter. Earlier today, we issued a press release containing our financial results for second quarter of 2024. The second quarter of 2024, we reported a net loss of $20.7 million compared to a net loss of $18.6 million in the second quarter of 2023. Research and development expenses increased to $18.4 million for the second quarter of 2024 compared to $16.9 million for the same period in 2023. This was driven primarily by increases in spending in the ACTION study. General and administrative expenses remained essentially flat at $4.5 million for the second quarter of 2024 compared to $4.4 million for the same period in 2023. We ended the second quarter with just over $171 million in cash and cash equivalents. Under our current operational plan, we expect to have cash into 4Q of 2026.

With that, I will now turn the call back over to Mike.

[Michael Andriole, executive]

Thanks, Michelle. Throughout the remainder of 2024, we will continue to focus on the execution and enrollment of the Phase III ACTION study to accelerate this potentially life-altering drug to patients as quickly as possible, and we'll continue to advance our discussions with regulators in Australia and hope to reach agreement on filing for provisional registration before year's end. The safety and PK progress we reported today from the ONC206 program furthers our conviction in the potential for the second generation imipridone, and we look forward to enrolling the remaining 2 dose cohorts yet this year. Lastly, as we move past the midpoint of the year, I'd like to take a brief moment to thank all of my fellow employees at Chimerix, who are working tirelessly to bring this pipeline to fruition. Thank you for your dedication to our mission. It's this shared sense of purpose that drives our continued progress now and into the future.

With that, Dustin, we'll open the call to questions.

[Operator]

[Operator Instructions] Our first question for today comes from the line of Maury Raycroft from Jefferies.

[Maurice Raycroft, analyst]

Congrats on the progress. Maybe I'll start with 206. So for the higher dose cohorts for 206, could you potentially backfill any of those cohorts? And maybe talk more about the first half of 2025 update. Can you talk about number of patients that you could report on the amount of follow-up goals that you have? And just how you plan on doing that disclosure as well?

[Michael Andriole, executive]

Yes. Thanks, Maury, for the question. I'm going to turn that over to Josh to answer both of those. Josh?

[Joshua Allen, executive]

Yes, happy to do that. Maury, good to hear from you. In terms of backfilling cohorts for the remaining couple that we're going through, we'll be looking at treatment-naive patients. I mean there's the opportunity on the pediatric trial for some intrapatient dose escalation after naive patients have completed their DLT window. So by and large, we're looking really to load in patients that are in the treatment-naive setting.

In terms of how many patients and how much follow-up we're looking at. In general, these are -- especially as we get into the final cohorts of the study, tend to follow more of the 3 plus 3 kind of paradigm. And keep in mind, there's 2 different trials, 2 different enrollment settings for pediatrics. So we should have an experience that follow somewhere in that range with about 3 cohorts following roughly a 3 plus 3 design.

In terms of the amount of follow-up, the DLT window, keeping in mind, safety is the primary goal of the study lands at around a month. So that's what you need sort of for safety. Response assessment, like I mentioned in my prepared remarks, it takes a little more time to confirm and characterize durability. So we're looking more at the first half of 2025 when we look at how long we would need to follow some of those patients out in these final cohorts for initial look at response.

[Maurice Raycroft, analyst]

Got it. Okay. And anything more you're seeing about the types of tumors that could be in that update? Any baseline trends that you're seeing that you can comment on?

[Joshua Allen, executive]

Not too much to say other than, I mentioned the medulloblastoma example there. I'll just note that ONC201 within CNS tumors was largely limited in it's exploration to glioblastoma and H3 K27M mutant glioma. Given some of the initial stages of escalation with 206 when it started in its program at a time ACTION wasn't open, there was a variety of tumors that may have came into that initial experience, but we really think there's a lot of other CNS tumors that have never been tested before with either ONC206 or ONC201 that could make sense based on the mechanism of nonclinical data.

So we're really excited in these final cohorts to get into some of these tumor types that we think could make sense, and we've never tested before, medulloblastoma is just one example of that. I mentioned there and look forward to seeing if we get more patients that fit that profile and updating on them in the future.

[Maurice Raycroft, analyst]

Got it. Okay. And maybe I'll ask one question on 201 and hop back in the queue. Just for the new guidance for the interim overall survival data in third quarter of this year -- of 2025, are you seeing event rates stabilize? Or is there anything else on clinical metrics that you can comment on that you're seeing in the study?

[Michael Andriole, executive]

Yes. Thanks, Maury, for the question. Certainly seeing enrollment rates are consistent, stable and predictable at this point. Event rates, blinded event rates are just now beginning to come in. So I'd say still early days on blinded event rates, but stay tuned in the coming quarters for updates there. We have enough confidence to project out about a year when we expect that first interim OS but more to follow on blinded event rates and observed event rates as we get into the next quarter, I think it will be instructive.

[Operator]

Our next question comes from the line of Soumit Roy from Jones Research.

[Soumit Roy, analyst]

Congrats on all the progress. Sorry, I missed the comment on the last question. Could you provide any color on the enrollment status like how far long is it the Phase III ACTION trial is enrolled? And will you be providing any baseline characteristics in a blinded fashion ahead of -- well ahead of the data?

[Michael Andriole, executive]

Soumit, thank you for the question. Yes, enrollment, we continue to be excited about the level of engagement from investigators around the world, not just in the U.S., a really balanced enrollment between the U.S., Europe and Asia and really proportional. So it continues to be very encouraging. We're seeing meaningful contributions geographically around the world. We haven't provided exact guidance on where we are with enrollment, but we're on track to meet that first interim OS assessment in Q3 of next year. With respect to early disclosures of patient characteristics, we're not planning to do that, that will be part of the final data readout.

[Soumit Roy, analyst]

Okay. And one last question. Would you be providing any color on screen failure rate? Is it matching up with your prior experience? Or if anything changed by geographical location or any other metrics?

[Michael Andriole, executive]

Thanks, Soumit. I'll turn that over to Allen for comment. Allen?

[Allen Melemed, executive]

Our screen value rates as we've been expecting to -- now these are hard patients to get as it is a rare patient population, and our enrollment does have specific criteria that is necessary to show activity. But our screen value rate has been consistent throughout the study at this point.

[Michael Andriole, executive]

Yes. And it's pretty much in line with what we expected at the start of the study.

[Allen Melemed, executive]

Correct.

[Operator]

Our next question comes from the line of Ed White from H.C. Wainwright.

[Edward White, analyst]

Just a follow-up on the 206 study, you had mentioned that the response data could be available in the first half of '25. What about the further PK -- final PK and safety data, would that be available before that? And if we would disclose before that or just wait until you get the response rate data?

[Michael Andriole, executive]

Yes. Thanks, Ed, for the question. I'll turn that over to Josh. Josh?

[Joshua Allen, executive]

Thanks for the question. The safety experience really requires about a month DLT window rates. So I mentioned that we plan to round out the rest of the dose escalation cohorts by the end of the year. So I would expect safety data and PK data to follow in the months to come after that.

[Edward White, analyst]

Okay. And just on dordaviprone, if you could just discuss your ex U.S. strategy, in particular, Australia. I think you had mentioned prior that you were looking to get a distribution agreement for Australia? Are you making any progress there or any progress outside of the U.S.?

[Michael Andriole, executive]

Yes. Thanks, Ed. We've been studying that commercial model outside of the U.S. for some time. I'm going to ask Tom Riga to comment on our status there. Tom?

[Thomas Riga, executive]

Yes, we're doing a lot of work on that. I think the first step here is to work through the TGA process and subsequently the HTA process for reimbursement. But we are looking at a lean commercial model that could include distribution partners and other strategies that will minimize the expense here at Chimerix but enable us to provide commercial availability. So more to follow as we progress through the regulatory process, but we are actively engaged in studying that business case.

[Edward White, analyst]

And my last question is just for Michelle. You had mentioned that you are making investments in the launch and expect to see operating expenses increase modestly. What kind of investments have been made towards the launch so far? And are these -- should we be thinking mostly for 2025? Or will some of these expenses impact the back half of this year?

[Michelle Laspaluto, executive]

Yes, thanks. So we have seen -- we've made a little bit of investment in this year, obviously, with Tom coming on board. And I do expect that, as I mentioned to increase a little bit more this year, but obviously, a little bit more as we continue into 2025. So Tom, did you want to maybe elaborate a little bit on some of the early investments?

[Thomas Riga, executive]

Yes. Ed, we're going to -- we're taking a gated approach to our spend on launch that lines up to our development milestones. So in the early days, we're engaging key stakeholders. Obviously, the investigators and the customer base through action as well as patient advocacy and the third stakeholder here is the payer and starting to engage and have early conversations there. So I think what you can expect from a burn standpoint in the back half of this year is modest. That work will involve both sales force size, structure, forecasting work to round out our early efforts in that regard. But it won't involve substantial increase in head count and others. So we're going to take a measured approach here to make sure that we're ready for the first interim here in Q3 of next year.

[Operator]

Our next question comes from the line of Troy Langford from TD Cowen.

[Troy Langford, analyst]

Congrats on the progress at the quarter end. I just have 2 questions, both on dordaviprone. First, can you just remind us how large do you think the commercial opportunity for dordaviprone in Australia could be relative to that of the U.S. and EU? And then related to that, do you think the TGA will want to see that first interim OS data from the ACTION study before they issue an approval?

[Michael Andriole, executive]

Yes. Thanks, Troy. It's Mike. I'll start with that first question, and I'll ask Tom to comment on the size of the commercial opportunity in Australia. But with respect to our interactions with TGA today, it's been focused on the Phase II 50-patient registration cohort that we did the BICR on some time ago and the output of that. So there is certainly within that window, the potential for that interim OS to read out and yet that's not the basis of our discussions with regulators in Australia. It's really on the Phase II response rate data.

Tom, do you want to talk about the commercial opportunity?

[Thomas Riga, executive]

Yes. Commercial opportunity in Australia is small relative to Europe and U.S., obviously, based on population. I think that proof of concept, I think, is important both for gaining first regulatory approval as well as providing commercial access for patients in need. So that could be a business that is interesting if managed in a lean fashion from an overall operating expense, and we are looking forward to that potential opportunity.

[Operator]

Seeing as there are no more questions in the queue, that concludes our question-and-answer session. I will now turn the call back over to Mike Andriole for closing remarks.

[Michael Andriole, executive]

Thanks, Dustin, and thank you, everyone, for your time this morning. We look forward to updating you in the coming months.

[Operator]

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