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Edited Transcript of CMRX earnings conference call or presentation 2-Mar-17 1:30pm GMT

Thomson Reuters StreetEvents

Q4 2016 Chimerix Inc Earnings Call

Durham Mar 2, 2017 (Thomson StreetEvents) -- Edited Transcript of Chimerix Inc earnings conference call or presentation Thursday, March 2, 2017 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Michelle LaSpaluto

Chimerix Inc. - Director of Accounting

* Michelle Berrey

Chimerix Inc - President & CEO

* Garrett Nichols

Chimerix Inc - Chief Medical Officer

* Linda Richardson

Chimerix Inc - Chief Commercial Officer

* Timothy Trost

Chimerix Inc. - SVP, CFO & Corporate Secretary

* Tim Trost

Chimerix Inc - CFO

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Conference Call Participants

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* David Lebowitz

Morgan Stanley - Analyst

* Yigal Nochomovitz

Citigroup - Analyst

* Philip Nadeau

Cowen and Company - Analyst

* Katherine Xu

William Blair & Company - Analyst

* Jessica Fye

JPMorgan - Analyst

* Ed White

FBR Capital Markets - Analyst

* Philomena Kamya

Stifel Nicolaus & Company - Analyst

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Presentation

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Operator [1]

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Good morning. Welcome to the Chimerix conference call discussing the financial results of the fourth quarter and the full-year 2016.

(Operator Instructions)

I would now like to turn the conference over to Michelle LaSpaluto from Chimerix.

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Michelle LaSpaluto, Chimerix Inc. - Director of Accounting [2]

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Thank you, and welcome to the Chimerix fourth-quarter call and full-year 2016 financial results conference call. This morning at 7:30 AM Eastern Time, we issued a press release containing financial results and other updates for the fourth quarter and full-year 2016. 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 Investor section of the Chimerix website.

An archive of the webcast will be available approximately two 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 Commercial Officer; and Tim Trost, Chief Financial Officer.

Before we begin, I would like to remind you that some statements made on today's call will 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 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 fulfil 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 and uncertainties are described in detail in Chimerix filings with the Securities Exchange Commission including its Form 10-K filed earlier today, its most recently filed reports on 8-K, and other documents subsequently filed with the Securities Exchange Commission. All forward-looking statements are based on information currently available to Chimerix, and Chimerix assumes no obligation to update any such forward-looking statements. At this time, I'd like to turn the call over to our President and CEO, Michelle Berrey.

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Michelle Berrey, Chimerix Inc - President & CEO [3]

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Good morning, everyone, thank you for joining us. This morning we will be reviewing financials and other updates for 2016, but I would like to set up the call this morning first what we believe our five pillars for value creation at Chimerix. We will share with you how our learnings from 2016 have helped to shape our plans to maximize the potential of brincidofovir's broad-spectrum antiviral activity.

Our ability to now develop brinci with now two distinct formulations, as an oral and IV therapy, has not only given us an opportunity to fulfill the promise of multi-viral prevention, but it's now provided a potential path to explore treatments for viral infections that would not have been previously possible with oral brinci.

The five pillars for value creation at Chimerix include: short course, oral brinci for the treatment of adenovirus; oral brinci as a medical counter measure for the treatment of smallpox; IV brinci for multi-viral prevention in high-risk transplant recipients; IV brinci for the treatment of serious viral infections such as BK and CMV that would not have been possible with oral brinci; and building out our pipeline with new molecules from our discovery group including CMX521 for the prevention and treatment of norovirus infections.

As we look at our clinical plans and pipeline on slide 4, it is worth noting that our most significant accomplishment in 2016 was developing a much more thorough understanding of our lead molecule brincidofovir. As we reviewed the viral logic and clinical outcomes data from our trials in CMV and adenovirus, the antiviral activity of brinci was apparent, but the tolerability and safety of longer duration oral dosing didn't allow us to maximize the potential benefit of this broad-spectrum antiviral.

Oral brinci in patients with severe adenovirus infections provided rapid virologic responses in the first weeks of therapy which we now plan to pursue with the treat-to-clear paradigm in Study 999 that takes advantage of this potent antiviral effect in short course therapy.

Our new IV formulation of brinci progressed from animal studies last summer into the clinic at the end of the year. Today we report promising results from the third cohort of our single ascending dose study. Later in 2017, we look forward to our multiple ascending dose study of IV brinci and initiation of dose ranging studies in patients with BKV and CMV.

We are actively pursuing plans to explore once or twice weekly IV brinci in the much-needed setting of multi-viral prevention in high-risk transplant recipients. Through the recently published research out of the Fred Hutch Cancer Research Center, we now understand that DNA viral infections are occurring very early in adult and pediatric transplant recipients and that each additional virus that reactivates has a significant negative impact on the likelihood of surviving the first year.

The focus on these high-risk patients is no longer only on CMV, but on the cumulative risks of all of the DNA viruses including adenoviruses, EVV and HHV-6, as well as the polyoma viruses BK and JC. We're continuing to build out our pipeline with our proprietary nucleoside CMX521, completing IND enabling studies, and progressing to the clinic later this year as the first potential antiviral for norovirus prevention and treatment.

We have right sized our organization focused our resources on our core priorities. Tim will share with you are substantially reduced burn over the last year which resulted in our ending 2016 with approximately $278 million in capital. We will share with you this morning how we plan to leverage this capital to deliver data supporting short course oral dosing for adenovirus infection in Study 999 as well as our plans to advance a versatile IV formulation for brinci for multi-viral prevention and treatment indications. I would now like to turn the call over to Garrett for details on our clinical programs.

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [4]

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Thank you, Michelle. We kicked off 2017 by applying five key learnings from last year to our program going forward. Number one, gastrointestinal toxicity of oral brincidofovir was related to G.I. over-exposure and the duration of dosing. Number two, high brinci plasma exposures delivered via the intravenous route in animal studies did not result in the gut injury observed with oral brinci dosing.

Number three, IV brinci provides higher drug levels in the plasma in difficult-to-reach compartments in animals which allows potential exploration of treatment indications not possible with oral dosing. Number four, oral brinci was associate with rapid clearance of adenovirus in the advised trial. And finally, number five, rapid clearance of adenovirus was associated with a decrease in overall mortality in adenovirus associated mortality in AdVise.

Let's talk about these in a bit more detail. The first of these learnings is that the big G.I. toxicity we observed with oral brinci is related to brinci over-exposure in the gut and the duration of that exposure. As shown on slide number 6, when brinci is given orally to rats, shown in purple on the graph, significantly higher exposures were observed in the intestine when compared to other organs. This provides a clear explanation for the G.I. toxicity observed with chronic dosing with an oral formulation.

In contrast, IV brinci, shown in green, delivered comparable drug exposure to keep organs in the rat, avoiding over-exposure of the gut with significant improvement in G.I. tolerability. And that improvement in G.I. tolerability should enable longer term dosing with IV brinci for either prophylaxis in stem cell transplant patients or for active viral infections that may require longer treatment such as BK nephropathy after kidney translation.

Our second learning on slide 7 relates to the first. When brinci is given intravenously, we achieved high plasma exposures without causing gastrointestinal toxicity. In our 28-day rat study with IV brinci we were able to achieve drug concentrations that were severalfold higher than we had ever achieved with oral dosing. And despite those high drug concentrations, we had no clinical findings at the highest dose.

No animals had diarrhea and all animals gained weight as we would expect during the course of the study. On final pathology, there were no findings at the mid-range dose, and even at the highest dose, only minimal single cell injury in the gut was observed.

The third learning, on slide 8, with IV brinci gives us dosing flexibility; with a lower risk of gastrointestinal toxicity we have the potential to explore higher exposures and potentially longer durations than were achievable with oral dosing. This may be useful for certain treatment indications such as BK nephropathy or CMV disease. In addition, higher exposures achieved in the central nervous system with IV dosing, as shown in green, could support clinical testing for viral infections in the brain. IV brinci does allow us exploration of treatment indications that might not have been possible with oral brincidofovir, providing the opportunity for success.

On slide number 9, we see how these animal studies have translated to humans today. Last year, we began a single ascending dose study in a total of 40 healthy subjects to investigate the safety, tolerability, and plasma concentrations of IV brinci following single escalating doses in healthy adult subjects. To date, subjects have been randomized to IV brinci or placebo in three cohorts: 10 mg, 25 mg, and 50 mg, all given over a two-hour infusion. As presented at the JPMorgan Conference in January, a 10 mg dose of IV brinci provides similar exposures as 100 mg of oral brinci, the dose that was used in the SUPPRESS and AdVise studies. Brinci drug levels have increased in a linear fashion as the dose was increased.

In the third cohort, IV brinci at a 50 mg dose provided plasma drug exposures that were higher than we have been able to achieve with oral brinci dosing. These higher exposures are at or above the range targeted for treatment of active viral infections with BK virus or CMV. The ability to potentially provide once or twice weekly dosing together with brinci is known high [barrier] to resistance, provides us with much broader opportunities to bringing clinical value to patients.

In this ongoing blinded study, a favorable safety and tolerability profile has been observed in all three cohorts completed to date. Slide 10 shows that safety lab changes were limited to grade one or two on a scale of grade 1 to 5 in some subjects in the first three dosing courts. None of these lab changes were considered clinically significant. Reported adverse events were mild and were limited to the third cohort which received IV brinci 50 mg or placebo.

In cohort three, mild adverse events that were considered possibly related to study drug or placebo included: three subjects with discomfort or bruising at the site of the IV catheter insertion; two subjects with a mild headache that spontaneously resolved; and one subject with loose stools that also spontaneously resolved.

Looking back at our dedicated QT study with oral brinci, single oral doses of 350 mg resulted in about 20% of healthy subjects reporting diarrhea. G.I. possibility of single-dose IV brinci observed through cohort three is improved compared to single-dose oral brincidofovir.

In this study, we are also determining active drug levels in cells. Given the known long intracellular half-life of the active anti-viral [cidophere diphosphate],these data should provide us with the confidence to move forward with once or twice weekly dosing. Further details of the clinical and pharmacokinetic data including data from the fourth and final cohort will be presented in the first half of 2017.

On slide 11, we switch to learnings from oral brinci for serious adenovirus infection. Not shown on this slide, we recently published the final data from the Phase 2 study of brinci in asymptomatic adenovirus infection in stem cell transplant patients. And on February 22, final data from the AdVise trial of brinci for the treatment of adenovirus infection in [aloe] stem cell transplant recipients were presented at the BMT Tandem Meeting.

Recall, the AdVise trial was an open label, multi-tener study designed to evaluate the efficacy, safety, and overall tolerability of oral brinci for the treatment of adenovirus infection. The presentation which was given by Dr. Vinod Prasad from Duke University, focused on the 158 pediatric and adult subjects who had adenovirus infections diagnosed aloe stem cell transplant. All subjects were treated with 12 weeks of oral brinci and were followed for 36 weeks.

The key learning from AdVise was that the rapid antiviral effect with brinci lead to quick clearance of adenovirus in the plasma. This affect was even more pronounced in pediatric patients who started with lower adenoviral loads than adults, in part, due to the regular screening the transplant centers have put in place for pediatric patients.

As shown on slide 11, the earlier treatment that brinci was started, the better the outcomes. For those pediatric patients who started brinci with viral loads of less than 10,000 copies or four logs, shown here on the green, on the curve, it took only a median of eight days for the virus to be cleared from the blood. For those who started with less than five logs, or 100,000 copies in the blood, nearly 3/4 of pediatric patients had cleared adeno from the blood in the first four weeks of treatment. With the majority of patients clearing adeno in the first four weeks, it is now clear that we don't need the 12-week course of brinci that was used in AdVise. Short courses of oral brinci should result in clearance of adenovirus from the plasma in the majority of patients.

On slide 12, as we previously highlighted, responders who cleared adenovirus viremia by week six had nearly doubled the survival rate and a lower adenovirus associated with mortality compared with subjects who did not have an anti-viral response. In the pediatric patients with disseminated disease, virologic responders had a much lower overall mortality of 25% compared with 54% of non responders.

But importantly, both pediatric and adult patients who cleared adeno were much less likely to die from an adeno-attributible cause. Only one of the 38 responders had a fatal adeno-associated outcome at week 36.

As you are aware, most of the experience with brinci has been through our ongoing expanded access program. On slide 13, just this month, the UK pediatric stem cell transplant consortium published data in the Journal Blood, from 41 episodes of adenovirus viremia in pediatric recipients of T-cell depleted aloe stem cell transplants who were treated with either IV brincidofovir or oral brincidofovir.

Rapid virologic response defined as a two log or 99% decrease in adenoviral load in the first two weeks of therapy was observed in 72% of patients who received oral brinci compared to only 9% of patients who were treated with off-label IV brincidofovir. The differences were most notable for infections that occurred within the first 100 days after transplant when immune reconstitution had not yet occurred. With these learnings in hand, we have proposed a trial to demonstrate the virologic and clinical benefits of short course oral brinci.

On slide 14, we show our proposal for a small open-label study in approximately 140 pediatric recipients of T-cell depleted four core blood stem cell transplants. Children who were at highest risk of serious adeno infection. Patients will be randomized 2 to 1, to oral brinci versus the current standard of care which for most patients will include off-label brincidofovir.

We will include pediatric patients with confirmed plasma adenovirus at least 1,000 copies in the first 100 days post transplant. Much like preemptive therapy for CMV, subjects will be treated until adenovirus is cleared from the plasma. Patients will receive a minimum of four weeks and a maximum 12 weeks of oral brinci.

We are proposing a primary endpoint of the proportion of patients who have cleared adenovirus from the blood at week four. This study has 90% power to detect a difference of 30% between the study [arms]. And with positive data, this study could facilitate conditional or full approval in the EU.

In summary, on slide 15, our ability to provide brinci in oral and IV formulation enables development across multiple indications and populations with the potential to address life-threatening viral infections that currently have no approved therapies.

For oral brinci, short course dosing for the treatment of adenovirus and smallpox continue in development. Study 999, a small comparative study in pediatric stem cell transplant recipients at high risk of adenovirus disease is anticipated to begin in the second half of 2017.

For IV brinci, the single ascending dose study in healthy subjects continues with the final cohort nearing completion. A multiple ascending dose study in healthy subjects is planned to begin in mid-2017. Initiation of Phase 2 dose ranging in CMV and BK infections is also anticipated before the end of 2017. With the ability to provide higher drug exposures, we can now explore a broad range of additional indications especially in viral CNS infections. And the ability to dose for longer durations due to lower risk of GI toxicity allows pursuit of multi-viral prevention studies.

How might we quickly get back to our original promise of multi-viral prevention in high risk stem cell transplant recipients? On slide 16, we highlight one proposal we are considering. Because high risk pediatric stem cell transplant recipients often reactivate adenovirus in the very early post transplant period, and because no other therapies exist for adenovirus, a placebo-controlled superiority study for the prevention of adenovirus infection could allow for a small rapidly accruing study.

In addition, such a trial could enable a secondary endpoint of prevention for CMV because in these high-risk pediatric patients, adenovirus tends to reactivate earlier than CMV. With this design, the end goal of multi-viral prevention could be achieved with the conduct of a single placebo-controlled study.

We plan to share more details of this study design at our forthcoming investor event that Michelle will highlight at the end of the call. With that, I will now turn the call over to Linda.

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Linda Richardson, Chimerix Inc - Chief Commercial Officer [5]

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Thank you, Garrett. Good morning, everyone. I would like to highlight a few activities we have initiated regarding market development in education and to comment briefly on the emerging competitive landscape.

As you can see, in slide 17, stem cell transplant recipients are at risk of infection from a multitude of DNA viruses that frequently reactivate in the early days following transplantation. Dr. Josh Hill and colleagues from the Fred Hutch Cancer Research Center have summarized their center's data in February's online publication of the Journal Blood.

In a study of over 400 aloe transplant recipients, Dr. Hill found that among the patients that we activated CMV, 75% had at least one other DNA viral infection detected. Detection of more DNA viruses was correlated with a higher risk of death in this population and led the authors to conclude that better antiviral strategies are needed to improve outcomes. This clearly demonstrates that aloe HCT recipients need more than just prevention of CMV. They need antiviral protection from a range of viral threats.

Last week at the Tandem BMT Meeting in Orlando, two companies presented data from their Phase 2 or 3 trials in CMV. The [letrameter] trial sponsored by Merck met its primary endpoint in preventing CMV reactivation in adult HTC recipients. Shire presented Phase 2 dose ranging data from [rivibivir] in resistant refractory CMV. While it is encouraging to see progress in the fight against CMV infections, it is in increasingly clear that these patients face morbidity and mortality risks beyond CMV that cannot be addressed with the CMV specific antiviral.

This is where the unique broad spectrum antiviral activity of brinci could possibly provide distinct benefits. Our clinical development program remains focused on providing differentiating data that would potentially allow us to become a new solution.

Additionally, as depicted on slide 18, we continue to see strong demand for brinci in 2016, BR351 and named patient programs, and I can share that we already have had 60 physician requests for brinci in just the first two months of 2017. This demonstrates that there remains a significant unmet need.

Slide 19 highlight activities we are undertaking to increase our presence at medical conferences and continue our interaction with key opinion leaders, particularly in the EU where we anticipate our first launch will take place. In advance of the European BMT meeting later this month, we are holding an advisor work with EU experts and during the conference we're sponsoring our first educational presentation. We're pleased to have some of the leading experts on adenovirus speaking on this important topic. The presentation will also include information from Advance which you may recall is a natural history study of the treatment of adeno infections in the EU and an important step towards increasing our understanding of treatment patterns and practices.

Additionally, there will be several oral presentations abstracts highlighting data from European transplant centers summarizing the use of brinci to treat adeno infections in their HTC recipients. We plan to share this information in greater detail with you following the public presentations at EBMT.

While we know there's a need for antiviral therapies beyond CMV, we also believe that ADV infections are a threat to immuno-compromised patients beyond transplant recipients.

We continue our work to characterize these at-risk patients and look forward to presenting these learnings at our upcoming investor event which Michelle discuss in her closing remarks. I'll now turn the call over to Tim to discuss our 2016 financials.

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Timothy Trost, Chimerix Inc. - SVP, CFO & Corporate Secretary [6]

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Thank you, Linda, and good morning. As Michelle LaSpaluto mentioned in her introductory remarks, earlier today, we issued a press release containing our financial results for both the fourth quarter and full-year 2016. Starting with our balance sheet, at the end of 2016, we remain well capitalized with approximately $278 million in capital to fund operations. We also had a proximally $46.5 million outstanding shares of common stock.

Turning to our statement of operations, the Company reported net loss of $15 million or $0.32 per basic and diluted share for the fourth quarter of 2016 compared with a net loss of $37.8 million or $0.82 per basic and diluted share in the fourth quarter of 2015. Contract revenue for the quarter was approximately $2 million as compared with $3.1 million for the same period in 2015 largely due to a decrease in the fourth quarter of 2016 in reimbursable expenses associated with the Company's ongoing development contract with [florida].

Research and development expenses decreased to $11.7 million for the fourth quarter of 2016 compared with $31.8 million for the same period in 2015. This decrease was due primarily to completion of the SUPPRESS and AdVise trials and the termination of our two solid organ trials Sustain and Surpass.

General and administrative expenses decreased to $5.6 million for the fourth quarter of 2016 compared to $9.5 million for the same period of 2015. The decrease results from a $2.4 million decrease in commercial preparation cost and a decrease in overall operational support costs.

Loss from operations was $15.4 million for the fourth quarter of 2016, compared to a loss from operations of $38.2 million for the same period in 2015 due primarily to the decreased research and development expenses as previously discussed.

During 2016, we devised and launched new development plans for both oral and IV formulations of brinci while at the same time focusing on initiatives to reduce our costs and conserve capital. Net cash burn for 2016 reflected a 35% decrease over 2015.

Looking forward, as a result of our advances in our clinical programs, we currently expect both research and development and general and administrative expenses for the full-year 2017 to trend upward modestly from full-year 2016, although there may be unevenness from quarter to quarter.

I would like to close by again highlighting our strong balance sheet which as of year-end 2016, stood at $278 million which we believe is sufficient to fund the near-term clinical milestones that Michelle articulated. With that, I would now like to turn the call back to Michelle for final remarks.

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Michelle Berrey, Chimerix Inc - President & CEO [7]

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Thank you, Tim. Turning to our final slide, 21, outlining the potential catalyst for 2017, we hope we shared with you our continued belief in brinci's broad spectrum antiviral activity and its potential to fulfill the promise of multi-viral prevention and treatment of viral infections through our flexible oral and IV formulations.

Study 999, the Treat to Clear paradigm, has the potential to demonstrate the benefits of short course oral brinci in serious adenovirus infections, and if positive, could support the first potential approval of brinci in Europe.

For smallpox, we continue to work closely with BARDA to finalize study design elements for a second animal efficacy study for the treatment of smallpox. We are excited to be moving IV brinci forward completing the single ascending dose study in the coming weeks and beginning the multiple ascending dose study and dose ranging studies in patient populations with CMV and BK infection later this year.

As Garrett highlighted, we have begun to explore different study designs to demonstrate the multi-viral prevention that we believe only brinci can provide. With the team that has proven dedication to pursuing solutions for immuno-compromised patients and patent protection for brinci through 2034, we now have the opportunity to explore treatment of viral infections like BK and JC viruses; IV brinci broadens our opportunities for success.

We continue to build out our pipeline with our clinical candidate CMX521 for the prevention of norovirus infections and hope to begin Phase 1 studies before year end.

We trust this morning's call has provided an informative update on the progress we made in 2016 and outlined some of the value creating milestones we expect in 2017.

We will be holding our Annual Investor Event on Thursday, April 27 in New York. At that meeting, we expect to share the full data set from our single ascending dose study of IV brinci and plans for our next studies in virally infected patients. We hope to see you there. Operator, we'll now open the line for any questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

David Lebowitz, Morgan Stanley.

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David Lebowitz, Morgan Stanley - Analyst [2]

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Thank you for taking my question. Quick question on the IV [vis-a-vis] multi prevention trial that you were discussing. How far along is the design of this trial? And has the FDA seemed to minimal to looking at the trial to potentially assess not only for adeno at that the primary endpoint but also potentially other CMV on secondary?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [3]

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So we will provide a lot more detail about the science behind this proposal at the investor day that Michelle mentioned at the end of the call. Suffice to say that this is in planning stages at this point, we are in active conversations with the key opinion leaders and investigators who support this type of design to get back to the multi-viral prevention promise for brinci.

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David Lebowitz, Morgan Stanley - Analyst [4]

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Okay. And another question on the 199 study. It seems that study has been designed to obtain central approval in the EU. Can you just also outlined what next steps would be for seeking out that indication in the US?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [5]

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So we hope to conduct the study in the US as well. Europe has mechanisms for conditional approval based on surrogate endpoints and we believe that the premises there for using this study -- this one last small study to support a file in Europe. We will be presenting this study design to the FDA and hope to also conduct this study in the US, the study is primarily designed to fulfill conditional approval mechanisms via Europe.

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David Lebowitz, Morgan Stanley - Analyst [6]

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Thank you for taking my questions.

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Operator [7]

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Yigal Nochomovitz, Citigroup.

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Yigal Nochomovitz, Citigroup - Analyst [8]

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Hi, guys, thanks for taking my questions. (technical difficulties) Maybe you can just offer some general [cost on return] of your full data now that you have seen it. Are there any opportunities in that data set that you believe you can explore after seeing the full data? And then more specifically with regard to the multi-viral prevention trial, assuming that works, you would have success on secondary endpoint for CMV and competing with [Letermovir] which has a primary endpoint for CMV prevention. So I was curious how you position brinci with respect to physicians making decisions between those two drugs?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [9]

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Sure, so I think we have seen from the Letermovir data, we were down in Orlando watching the presentation. Clearly, the primary endpoint of the study with regards to the prevention of clinically significant CMV infection. And you know, that is certainly good news for patients.

This was a study that was in adults may have not done any dose range finding or any dosing in pediatric patients. So we clearly see the pediatric subjects were really at risk for multiple DNA viral infections and we know that adenovirus is at one particular risk for mortality in pediatric patients. This is a study that therefore we think is enriched for multi-viral prevention where we can demonstrate the benefits but include not just adenovirus, not just CMV, but also BK virus which causes hemorrhagic cystitis in this patient population.

So that is our direction and goal, at the moment, once we demonstrate that multi-viral prevention it can get IV to market, then we will obviously also have a platform for adult patients as well. We are planning on conducting as shown in the pipeline slide dose range finding studies for CMV treatment and for BK treatment which again, is a population with unique unmet medical need. We're also planning to develop phase 3 studies once we complete those, the dose range finding studies for BK in particular.

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Linda Richardson, Chimerix Inc - Chief Commercial Officer [10]

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I also think there's an opportunity as we accumulate more data in a variety of patient populations to make a health, economic and cost argument for hospitals and plans. If you have a product that has successfully demonstrated that they could cover -- the product could cover multiple infections I think we would be looking at the health, economic dossier and reimbursement dossier that would reimburse the cost of this which you can do particularly in Europe without having an indication. They look at all the information that would be cost effective so potentially having one agent instead of paying for two new oral or IV antivirals would be something that we would consider pending our data.

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [11]

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And there is value from a patient perspective as well. The patients who take Letermovir because it is CMV only, it doesn't cover herpes virus. It doesn't cover [virasolaster] virus that the patients not only have to take pills once a to prevent CMV they have to take pills twice a day to prevent herpes simplex and virasolaster what we hope will be a single IV infusion once weekly to prevent those viruses and more.

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Yigal Nochomovitz, Citigroup - Analyst [12]

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Okay. Thank you very much.

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Operator [13]

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Philip Nadeau, Cowan and Company.

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Philip Nadeau, Cowen and Company - Analyst [14]

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Good morning. Thanks for taking my questions. First of all, an FDA question. FDA and studied 999, it seems like you are in discussions with update over pivotal trial design and adenovirus treatment for about a year. So I'm sure that you kind of propose something like Study 999 to them in the past. What was there issues with the design? Is it the endpoint? Do they want something more like mortality endpoint rather than adenovirus clearance? Or is or something else that the FDA can't get comfortable with?

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Michelle Berrey, Chimerix Inc - President & CEO [15]

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Yes, I will address the first then hand it off to Garrett. Certainly in our work with antiviral division at the FDA or the number of decades, we have seen their acceptance of surrogate endpoints like viremia. We do have ongoing discussions with the European regulators to accept surrogate endpoint and our hope is that with additional data that, that could be considered by the FDA for approval.

In addition, the ability of IV to provide that longer-term prevention, we think that could be additional set of data to help us get to that primary endpoint and broader use of brinci with this oral and IV formulation. So those will be upcoming discussions with the FDA as we move forward with the program.

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [16]

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Most of our conversations have been around the AdVise trial. And applying those results and potentially treatment of adenovirus disease where the FDA has been focused on overall mortality as an endpoint.

It is a very difficult thing for us to do, particularly with out the ability to do a placebo control and with off label brincidofovir being used in that patient population. So really I think the 999 study is our opportunity to conduct the first comparative study head-to-head against current standard of care to demonstrate both the biologic clinical benefits that brinci can bring.

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Philip Nadeau, Cowen and Company - Analyst [17]

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That's very helpful, thanks. Second, on the study you are doing now, the Single Ascending Dose study, it looks like you have seen good tolerability with a two-hour infusion of IV brinci.

What is the rationale to go up to a four hour infusion at the same dose? What you hope to learn from that next dose cohort?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [18]

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So the four hour infusion as much is anything else is to look at some of the relationships between Pharmacokinetic parameters and our active antiviral. So brinci given over two hours has a higher Cmax versus given over four hours which would have ideally the same AUC. So different Cmax you see relationships.

What we're looking at not just concentration of brinci in the blood in these patients, but also looking at concentrations of our active antiviral which is [cidofovir diphosphate] in cells. So some key data we're getting from the study is going to be cidofovir diphosphate concentrations and peripheral blood mononuclear cells to look at the difference between two-hour for our infusion on that key parameter hopefully can help us understand better -- weekly dosing or twice weekly dosing is going to be needed in treatment indications.

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Philip Nadeau, Cowen and Company - Analyst [19]

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That's very clear. Thank you. And then a question for Tim.

On the smallpox contract with BARDA, is it still your expectation you could see revenue once there is a budget passed or have your expectations changed.

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Tim Trost, Chimerix Inc - CFO [20]

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You are speaking about procurement revenue from our procurement contract?

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Philip Nadeau, Cowen and Company - Analyst [21]

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Yes, that's right.

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Tim Trost, Chimerix Inc - CFO [22]

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Yes, I mean, we have always said that at such point in time we are under contract with them for a procurement. We can get to revenues at the point in time we are actually shipping the drug. We would be in a position to do that would save the first one to two years or thereafter from getting the contract.

The wildcard is of course when are we going to get the contract? And we continue to very actively dialogue with the federal government on that remain hopeful, but you know, predicting the future, especially when it involves our federal government is pretty difficult thing.

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Philip Nadeau, Cowen and Company - Analyst [23]

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Got it. Thanks for taking my questions.

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Michelle Berrey, Chimerix Inc - President & CEO [24]

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Thank you, Phil.

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Operator [25]

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Katherine Xu, William Blair.

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Katherine Xu, William Blair & Company - Analyst [26]

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Hi, good morning.

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Michelle Berrey, Chimerix Inc - President & CEO [27]

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Good morning, Katherine.

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Katherine Xu, William Blair & Company - Analyst [28]

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Good morning, just wondering with regard to the IV brinci, can you just comment on the [practicality] in the prevention study if you administer it for let's say 13 weeks or so. Then patient checks out of the hospital before then, then if it's a weekly the let's say it's four hour infusion? And also, in the pediatric study you are going for the IV for multi-viral provision but also the oral for adenovirus treatment. Is there some redundancy there?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [29]

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With regards to your first question, the stem cell transplant patients are considered to be at risk for complications of their transplant, especially during the first 100 days after transportation. And almost all allogeneic stem cell centers have the patients very close to the center after they are discharged from hospital. So they will stay in a caring house or an apartment close by to the hospital, coming to the stem cell transplant center at least a couple of times a week to be checked on.

In those types of appointments, those hospitals -- or those clinics have infusion bays. They are frequently receiving other IV administer products and so a two to four hour infusion during one of those visits via the Hickman catheter support they have is really actually quite convenient for them when compared to the pill burden that would be associated with other comparable prevention agents.

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Linda Richardson, Chimerix Inc - Chief Commercial Officer [30]

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And in our preliminary [eckon found that out] with some of the primary market research that we did, when we were originally looking at the IV formulation and staying okay, which we have here? Is it practical?

We had some positive feedback on that, and I think as we're learning more about the potential additional benefits of IV as we do our Single Ascending Dose and we get into this, the target product profiles will become even more enhanced. So I think in addition to the practicality of those HTC patients be near the center and what benefits we may bring, it will become less of an issue for sure.

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Michelle Berrey, Chimerix Inc - President & CEO [31]

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Your second question was on the redundancy of oral versus IV. We really see it as increase flexibility. So with oral, we did see a rapid decline in adenovirus viral loads that was associated with an improved overall mortality as well as significant decrease in adeno associated mortality.

So we believe that is important for this one last [treat] to clear study, study 999, to quickly get oral brinci on the market and pull together the data that we now have in almost 1,000 individuals who have been treated with brinci for life-threatening adenovirus infection. Whether an IV that would be coming probably a year behind that would be preferable. Probably in some of the more advanced cases where you have concern about absorption.

We do know from our rat radiolabeled study that IV brinci does provide drugs to the lumen of the gut so we can get drug inside the got even with an IV administration. So certainly, you could treat with either oral or IV for a gut infection. We do think that the IV flexibility, not just for prophylaxis as Garrett outlined in the patients who are either in or near the transplant centers for the first four month that are their highest risk.

But even if we were exploring some of these other treatment indications like BK viremia and kidney transplant recipients, an IV administration once a week when there is no currently available therapy for BK virus and when the patients are faced with potentially losing their kidney transplants with and only alternative of going back on three times a week dialysis certainly once a week IV infusion that can clear BK viremia is a nice alternative there. Again, to summarize, the oral and IV availability we believe give us flexibility in these different indications.

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Katherine Xu, William Blair & Company - Analyst [32]

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Thank you. I have a couple more, if I may.

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Michelle Berrey, Chimerix Inc - President & CEO [33]

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Sure.

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Katherine Xu, William Blair & Company - Analyst [34]

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For the [CMV] patients that you might pursue because of the CMS penetration of IV brinci. What are the most attractive and lower hanging indications that are clinically and regulatory feasible? And also, in terms of a different reaction from pediatric population to drugs of course, there are a lot of various explanations, in particular with diarrhea, it reacts differently to brinci -- oral brinci.

Then we also observed in other studies with different mechanisms of drugs, the equivalent of dosing would cause severe diarrhea in adults and like nothing in pediatric patients. So just curious, you know, any insight the [you have seen] on the mechanisms of potential explanations there?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [35]

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As far as the first question was concerned, so what would be the most attractive CNS infection, certainly there's a lot of interest from investigators to look at herpes simplex encephalitis. That is one proposal that we had for a number of years and is based on some data that was published in the Journal of infectious diseases in a mouse model where brinci was more effective in a mouse model of herpes simplex encephalitis when compared to acyclovir.

Which obviously is the gold standard in that infection. So there's a lot of interest in that area. Other areas that are very interesting our JC Virus.

Obviously, there's nothing to fight JC Virus and it is a particular devastating infection in patients like multiple sclerosis patients who are receiving biologics for a long period of time. So these are some of the populations of patients that could be of interest as we try to take advantage of the higher CNS concentrations that are achieved.

In terms of the mechanism for diarrhea, I think we've learned a lot from the animal studies by doing some of these radiolabeled animal studies with IV and oral therapy. What we do see is obviously that when the drug is given intravenously, there's comparable levels of brinci to get to a variety of tissues including the gut. So more even exposure.

But when oral brinci is given, you see most of the drug staying within the gut. Some of the drug obviously gets into the plasma and we know the amount of drug into the plasma has been effective in reducing adenovirus in these patient populations, we know that that's one of the key learnings from the IV and oral rat radiolabeled studies.

As to why it's different in kids versus adults, this may just be due to differences in biology where kids basically are growing and they have more rapid turnover of their gut mucosa. That is our working hypothesis as far as differences we have observed there.

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Michelle Berrey, Chimerix Inc - President & CEO [36]

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Thank you, Katherine.

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Operator [37]

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Jessica Fye, JPMorgan.

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Jessica Fye, JPMorgan - Analyst [38]

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Hey, guys, thanks for taking my question. With respect to the placebo-controlled adeno prevention study for IV brinci the slide mentions that better tolerability could allow for longer duration of dosing in the high risk period.

Given both starting even earlier, a little bit earlier that you could, and or how long are we talking sort of overall? And should we take it to mean that you can give us more details at the analyst meeting you're talking to regulators about that design in the very near term?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [39]

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I think we will be talking about the science behind the design. We have some strategies for enriching this population of patients for significant adenovirus infections based on some recent publications and work by a number of different investigators in this space. We will be spending some time talking through all of the science behind us and the rationale for the population that we propose to look at.

But the bottom line is that patients -- pediatric patients with adenovirus infection after transplant usually carry the adenovirus infection into the transplant and so what that means is it potentially -- you can identify the patients that are at most risk for adenovirus infection, even pre-transplant. So the therapy with IV brinci could potentially start prior to the transplant and continue throughout the high risk period to prevent other infections including BK, including cytomegalovirus.

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Jessica Fye, JPMorgan - Analyst [40]

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Okay. And forgive me if you mentioned this, but you talked about some grade [1-2] live abnormalities with IV brinci. What were those and the were they dose-dependent? I know you said you saw no liver pre-clinically so curious what this might of been?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [41]

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So it's a number of different changes in laboratory abnormalities. They occurred in -- as is typical in this patient population, includes serum chemistries, include hematology, these are all across the board, but none of these were clinically relevant.

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Michelle Berrey, Chimerix Inc - President & CEO [42]

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We will have more data at the April investor event as Garrett mentioned, where the study is still blinded. So we will have the full data that we can share after unblinding. But to date again, these have just been very transient changes that are pretty typical to see in phase 1 studies. No trends, certainly no [hean]. No kidney toxicity, and again, well-tolerated as Garrett's review. But we will have all of the specifics that we can share at the end of April.

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Jessica Fye, JPMorgan - Analyst [43]

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Got it.

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Operator [44]

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Ed White, FBR and Company.

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Ed White, FBR Capital Markets - Analyst [45]

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Hi, guys, thanks for taking my questions. A lot of them have been answered, but I do have a question on smallpox not regarding BARDA but the FDA. So is there any update you can give us on the second animal model study and any discussions that you've been having with the FDA?

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Michelle Berrey, Chimerix Inc - President & CEO [46]

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Yes, great question, Ed, thanks for that. We have submitted last year our safety summary with three weeks of exposure which is our proposed dosing for smallpox medical countermeasure 200 mg once a week for three doses. So we submitted that last year together with the rabbitpox efficacy study.

Both of those are actually coming out in paired set of manuscripts in the next couple of months. Again, for the safety and efficacy, we are waiting to hear back on a couple key questions on the FDA review of the rabbitpox efficacy model prior to initiating the second animal model. So there are just a couple of outstanding questions on design elements that we want to make sure we have agreement on prior to initiating that.

But in the conduct of those animal models efficacy studies, it doesn't take long time to run the studies so we just one to make sure that we get that nailed down prior to kicking off that study. Again, this should suffice with as a second animal efficacy model.

Once the data are available, our plan is to get in front of the FDA as quickly as possible to make sure there's nothing else that needs to be explored to fulfill a potential NDA which could be our first approval in the US potentially for smallpox. So again, we will keep you guys updated as soon as we hear back on the timing of the conduct of that second efficacy study.

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Ed White, FBR Capital Markets - Analyst [47]

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Okay. Great, thank you. That's all that I had.

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Michelle Berrey, Chimerix Inc - President & CEO [48]

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Thanks, Ed.

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Operator [49]

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Stephen Willey, Stifel.

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Philomena Kamya, Stifel Nicolaus & Company - Analyst [50]

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Hi, this is Philomena Kamya in for Stephen Willey. Thanks for taking my questions.

It appears as though in Study 999, there's an assumption of a standard of care objective response rate of 40%. We were just sort of wondering how you derived at those assumption and what you believe the components of standard of care will be, particularly given that cidofovir is not available in Europe?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [51]

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That's a great question because when one looks at the literature and tries to understand what the response rates would be with the current standard of care, one sees a variety of different approaches that have been taken in a variety of different ways that the data has been presented. For example, the publication that we referenced from the UK Consortium, looked at two log decrease within two weeks. There's others that are basically look at all kinds of other endpoints and starting at different places as well.

The standard of care is really recommended to be decreasing immunosuppression with pre-emptive therapy with IV cidofovir, but a variety of different approaches are basically used by different centers and the gaps in understanding for that are part of the reason that we are conducting the natural history study advance. What we have done is a single center ten year review of pediatric stem cell transplant patients treated with current standard of care in order to inform our estimates. That data is not publicly available, it should be available soon.

We hope that we will see some of that data presented at upcoming scientific conferences. But those are the data we have to base the response rates. And obviously the response rates for the brinci arm are informed by both our Study 202 which was just recently published, in addition to our response rates from Study 304.

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Philomena Kamya, Stifel Nicolaus & Company - Analyst [52]

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Thank you. And just by way of follow-up, if US [sites] are included Study 999, would you then have to adjust those assumptions to accommodate usage? And what are some of the baseline variables that you envision sort of stratifying in the study 999 trial?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [53]

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So some of the key findings that we've talked about before, the speed of [virological appearance] depends on where you start. It is also very important to look at in order to decrease variability, to look at transplants that occurred or infections that occur within the first 100 days after transplant when immune reconstitution has not yet occurred.

So the key stratification variable at the moment that we proposed for this is based on baseline viral load greater than or less than 10,000 copies. These patients are being screened actively.

We hope to catch them very early in their infection when they are in the 1,000 and 10,000 range. But we believe there will be some patients that exceed that level and efficacy stratification factor for us to look at.

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Philomena Kamya, Stifel Nicolaus & Company - Analyst [54]

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And just one more question. The results presented at the BMT meeting demonstrated that a high proportion of pediatric patients were capable of depleting viral loads to undetectable levels.

Of the [nephropathic] patients who attained these decreases in adenovirus viral load, what proportion were adults versus pediatric patients? Given that you are assuming it is reconstitution of the gut compartment that sort of responsible for this? I'm understanding that correctly?

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Garrett Nichols, Chimerix Inc - Chief Medical Officer [55]

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I think the differentiating factor for brinci when compared to IV cidofovir is that brinci is able to achieve rapid decline in viral load independent of immune reconstitution. So that's really the kind of the key learning. I would also direct you to the paper that was just published [in blood] were similar conclusion was made. Again, the lymphocyte count at the time of virologic clearance was much, much lower than the patients treated with brincidofovir versus cidofovir. So cidofovir only could achieve virologic clearance once immune reconstitution had occurred whereas brinci was able to achieve clearance in the absence of immune reconstitution. This is kind of our key advantage and the reason we will be able to deliver positive results in the 999 study.

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Michelle Berrey, Chimerix Inc - President & CEO [56]

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Just one clarification. So in the adults, both in pediatric and adult patients, we saw a strong correlation between clearance of adeno from the blood and a significant decrease in mortality overall and adeno associated mortality. That was consistent in both pediatric and adult patients.

When you look at the screening though that is taking place in the pediatric population, that is what is responsible for us being able to identify pediatric patients earlier. We know that when adults are diagnosed with adenovirus is often as a -- in a cluster of other infections which may include invasive fungal infections and other risks.

We did continue to see the same correlation in peds and adults is just adults had many other competing risk for short-term mortality because we don't screen them. So they do tend to get diagnosed later. But those adventures are consistent across those populations.

Again, in some of the data that Linda has shared earlier last year, was that we see adenovirus infections and hospitalizations in both adult and pediatric patients outside the transplant community as well. So we do believe that the benefits of brinci can bring improved outcome in overall mortality and specifically in adeno associated mortality with improvements that we're seeing in screening and earlier identification of adeno in adults.

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Linda Richardson, Chimerix Inc - Chief Commercial Officer [57]

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It's clearly one of the educational tenants that we will be working to develop that you need to look sooner in adults than later to have better outcomes.

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Philomena Kamya, Stifel Nicolaus & Company - Analyst [58]

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Understood, thank you for taking our questions.

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Michelle Berrey, Chimerix Inc - President & CEO [59]

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Thank you very much. Go ahead.

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Operator [60]

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I'm not showing any further questions on the phone lines.

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Michelle Berrey, Chimerix Inc - President & CEO [61]

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Perfect, thank you very much. Thank you all for joining us this morning. Again, it's an important continued data coming out of the BMT [Tandem] meeting as well as in recent publications showing the increased understanding of the importance of multiple DNA viral infections and the cumulative risk that we are seeing in both adult and pediatric patients with DNA viral reactivation of CMV and beyond with the other DNA viruses.

We are excited to be moving forward with Study 999, for short course of oral brinci with a [treat] to clear paradigm. Again, we will share more of the details on that study at our investor event. We will also have a full details on the IV Single Ascending Dose study with all four cohort.

And again, some exciting opportunities to look at the two hour versus four hour infusion perhaps one of the first times we have been able to understand the nucleoside pharmaco kinetics and tease out some of those factors that can influence different compartments and levels of [acid] antiviral and how we can use the flexibility of IV brinci to prevent, to treat and to really make a positive impact on the outcomes in patients who are suffering from multiple DNA viral infections.

We hope to see you all at the end of April on the 27 at our investor event. Please feel free to reach out if you have any follow-up questions and again, thanks, everyone, for your attention this morning.

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Operator [62]

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Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.