Q4 2023 Chimerix Inc Earnings Call
Participants
Will O'Connor; IR; Stern Investor Relations
Mike Androile; President and CEO; Chimerix Inc
Thomas Riga; Chief Operating Officer, Chief Commercial Officer; Chimerix Inc
Josh Allen; CTO; Chimerix Inc
Michelle LaSpaluto; CFO; Chimerix Inc
Allen Melemed; Chief Medical Officer; Chimerix Inc
Maury Raycroft; Analyst; Jefferies LLC
Ed White; Analyst; H.C. Wainwright & Co., LLC
Soumit Roy; Analyst; JonesTrading Institutional Services LLC
Presentation
Operator
Good morning, ladies and gentlemen, and welcome to the Chimerix Fourth Quarter and Year End 2023 earnings conference call. I would now like to introduce you to your host for today's call, Bill O'Connor of Stern Investor Relations. Please proceed.
Will O'Connor
Thank you, operator. Good morning, everyone, and welcome to the Chimerix Fourth Quarter and Year End 2023 financial and operating results conference call. This morning, we issued a press release related to our fourth quarter operating update. You can access the press release in our Investors section of the website.
With me on today's call are President and Chief Executive Officer, Mike and real Chief Operating and Commercial Officer, Tom Riga, Chief Financial Officer. Michel as Boliden Chief Medical Officer, Alan Merriman, and Chief Technology Officer, Josh Allen.
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 filing 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 Andreotti.
Mike Androile
Thanks, Will, and good morning, everyone, and thank you for joining us. We're excited to be with you this morning to share the considerable corporate and clinical progress made throughout 2023, highlighted by key management appointments and meaningful advancements across our liquid owned pipeline. During the fourth quarter, we welcomed Dr. Lisa Decker to our Board of Directors. Dr. Decker brings 25 years of drug development and strategic partnership and corporate transaction experience to our Board. We also continued to strengthen our management team with the additions of Tom Riga as Chief Operating and Commercial Officer, Michelle Aspen, Alto as Chief Financial Officer, and Dr. Pablo Lee is Vice President of Medical Affairs. They have collectively made a strong and immediate impact on the organization, and I'm confident their collective expertise will be invaluable as we seek to maximize our future growth potential for both patients and shareholders.
Before I jump into an operational update, I want to share some insights since becoming CEO last August. I joined Chimerix five years ago, and I am as confident now in our future and the positive impact, I expect us to have on patients as at any point during that time. This confidence is guided by the very real impact our team is having against this lethal disease and the meaningful progress I see us making put our number one objective to bring off to a one to patients as soon as fast For context, when I started in this role, I heard about a number of challenges Chimerix might face. I heard about the challenges of operating in an indication where the mere existence of the mutation early program is intended to treat confers an automatic rate for by WHO criteria, the most aggressive form of brain cancer.
I also heard about the difficulty and operated in the brain cancer field in general. And even when developing an agent with activity, the difficulty of enrolling studies in rare diseases, any rare disease and all of this in many respects is true. It's true that the field of neuro oncology really is the last frontier in cancer research, a subspecialty. It's arguably the one that has advanced at least in the last 25 years as the mortality rate of most other cancers has improved meaningfully over that time. But I've also heard about the resilience that patients and their families who participate in our studies demonstrate that resilience continues to amaze me, and it motivates our team to bring the best version of themselves every day rather than be intimidated by these challenges, our team is energized and motivated by them. It's a team that is working tirelessly to enroll the action study to bring a definitive answer for this patient population and I'm proud to say we're on track to do just that as early as next year.
So turning to our operational update, we remain laser focused on advancing the Phase three action study of up to a one and completing off to a six dose escalation studies to identify a recommended Phase two dose and schedule later this year. And I'll begin with an update on the Tier one programs. Our team is focused on the disciplined execution of the action study as our top priority. And while 2023 was largely centered on site activation for most of the year 2024 is the year we expect to hit our full stride enrollment rate for this study. We're currently opening over 130 sites across 13 countries when you consider the number of sites we opened last year, we're proud of where we stand today, not just in terms of the quantity of sites and the geographic coverage, but as importantly, the quality of those sites and engagement with our investigators, we expect continued acceleration of enrollment this year as data indicate that a site becomes productive typically in the second quarter following activation. This is largely due to the frontline study protocol, where the radiation window, combined with any necessary temozolomide washout takes approximately three months from treatment start. Additionally, we've observed that the recent publication of the onto a one Phase two data in the Journal of Clinical Oncology has accelerated broader awareness of the program, especially outside of the US and is providing yet another tailwind to enrollment early this year. This publication provides additional patient-level detail and attributes of response, which Josh will delve deeper into during this call.
The guidance we reiterated today for first interim data readout in 2025 reflects our current enrollment trends. Importantly, the enrollment rate in event rate error bars, while still wide are beginning to narrow as the study continues to progress and mature. There are scenarios where the first OS interim occurs earlier in 2025 and scenarios where it occurs later in the year. We're encouraged by early indicators, but also understand the importance of continued execution of the study to get the data as quickly as possible while continuing to narrow our guidance as the error bars come into focus during the year. As the study has progressed, we've been heartened by the global demand we've experienced even beyond the 13 countries. We're currently operating in, for example, we currently have patients traveling from South America to the Southeastern United States to participate in the study. We're also experiencing a similar dynamic in Southeast Asia, where parents or patients are traveling between countries to gain access to onto a one. This is a reminder that the unmet need in this population knows no borders in an attempt to address this global demand. We are in the process of assessing the feasibility of expanding the ACTION study into the specific parts of the world where demand is high and the catchment area isn't readily convenient to our current action footprint. We intend to be prudent in our evaluation. We understand we can't address every situation that we are receptive to opening a limited number of additional sites. For example, Brazil, Argentina, Hong Kong, Singapore are among geographies where the proactive outreach has been significant. The population density is high and where there is a high likelihood to expand catchments. These geographies will not only accelerate time to data, but will also be beneficial to the regulatory process within these strategic markets around the world, we expect any potential expansion to be with highly productive sites in these key markets and limited to 10 to 15 additional sites. Strong execution of the action study is our top priority, and we're excited to be in a position to have potentially pivotal data next year for this first-in-class agent and the first potential approval in this aggressive form of high-grade glioma, which represents an unmet need as high as any across the field of oncology.
With that, I'd like to turn the call over to Tom Regan, who joined us last November, just in time to accompany the team to the Society of Neuro-Oncology conference.
Thomas Riga
Thanks, Mike, and it's great to be with all of you today. It's been an inspiring and fast-paced entry into Chimerix. In fact, my first day, I was in Vancouver at the snow meeting, and I'm thrilled to be a part of the team. Special thanks to the Board, my management team and all of the Chimerix employees who have welcomed me into the company with open arms. It's truly been a seamless transition. I expected my operational commercial and business development experience will continue to contribute to the mission of the company to help bring solutions to cancer patients in need.
Since joining, I had the pleasure of meeting virtually or live the majority of our global investigators, patient advocacy groups and other key stakeholders who play an integral role in the patient's journey from those engagements. There are three insights that fuel our passion to execute the action study with urgency. First, the unmet medical need is undeniable. High-grade glioma patients who have the H. three K. 27 M. mutation have very few options and are in desperate need of new solutions. Second, there is an extremely high level of support and commitment for the action study by our investigators and an authentic hope for what our tool one could potentially mean for their patients.
And finally, given the rarity of the mutation, the network of caregivers who impact the patient journey are equally as important to ensure both awareness and alignment to our study in addition to the neuro oncologist, neurosurgery, neuro pathology, radiation oncology and patient advocacy are all important stakeholders to engage. Chimerix has established a strong presence across the treatment ecosystem, and I'm looking forward to helping to accelerate those efforts throughout 2024 and beyond.
The leading edge of brand development starts with medical affairs.
In addition to the hiring of Dr. Pablo Lee, we will be expanding our medical affairs footprint, both within and outside the United States. These strategic additions will further support our enrollment efforts with the action study and enhance our relationships across the treatment landscape. Our focus is clear to execute the action study with both discipline and urgency operationally. That is where my initial focus will be as the year progresses. We will also look to ready the organization for commercialization. Key elements such as brand development, payer engagement, pricing, research, qualitative and quantitative message development and sales force size and structure will progress throughout 2024 and accelerate. As our launch window comes into focus, we will use gated milestones to guide our activity and spend to ensure our preparation efforts are both timely and cost effective. In the meantime, we will be deepening our relationships across neuro oncology and executing the action study.
In closing, it's a powerful combination when you have a passionate and talented employee base combined with a committed group of investigators all aligned to help a group of patients in need. That is exactly what I believe we have at Chimerix with that, I'll turn the call over to Josh.
Josh Allen
Thank you, Tom, and welcome to the team earlier this month, the previously announced Phase two results from our Ontario one program in H. three K. 27 M. mutant glioma was published in the Journal of Clinical Oncology, a peer-reviewed journal of the American Society of Clinical Oncology. This integrated efficacy analysis evaluated the monotherapy activity of our tool one in 50 patients with recurrent H. three K. 27 M. mutant diffuse midline glioma. You may recall that these results represented the first demonstration of bona fide durable objective responses in this disease setting that were rigorously evaluated by blinded independent central review and isolated away from prior or concurrent confounding therapies. Consistent benefit was seen across the range of efficacy endpoints examined, including a 20% response rate using renal criteria that quantities enhancing tumor regions. That response rate extended up to 30% when additional renal criteria was considered that is inclusive of non enhancing regions as well.
Other notable observations were a 40% disease control rate, approximately 1.5 years of clinical benefit amongst responders. When considering both onset and duration of response as well as concentration of responders among the 35% two year survival tail in addition to other forms of clinical benefit such as performance status improvement and tapering of steroids. All of this was accompanied by a favorable safety profile with rare instances of dose modification. This publication goes into further detail and prior data releases on patient level data as well as subgroup analyses that include several aspects that increase our confidence in the ACTION study. One consideration is dosing is nearly all patients in the Phase two analysis received up to a one at a once weekly frequency. So the twice weekly frequency incorporated into the action study has the potential to enhance the probability of patient benefit or duration of benefit or both. In addition, subgroup analyses suggest that response associations that were baked into the design of the actual trial to enrich for those characteristics. This includes performance status inclusion criteria as well as movement to the front-line setting where disease burden and progression kinetics are expected to be less acute.
The JCO publication follows our publication last year in Cancer Discovery, which reported on the mechanism of onto a one in H. three K. 27 M. mutant glioma. In addition to its activity in the plan setting where the action study is focused together. These publications strongly suggest that onto a one is a first-in-class targeted agent that addresses the core oncogenic mechanism of H. three K. 27 in mutant glioma and appears to be associated with durable benefit as a single agent while being well-tolerated, the survival outcomes of patients are favorable relative to historical controls in multiple retrospective analyses, which adds to our enthusiasm for its prospective evaluation in action. I will also point out that this joins a recent wave of publications related to onto a one and this disease in the journal neuro oncology as one of our many initiatives emerging from our emerging from our medical affairs function that is dedicated to raising global awareness for this compound and for this disease Turning to the LTO six program, dose escalation continues at the increased dosing frequency of six times per week, which follows our prior experience with once weekly dosing at a high level there have been no surprises to date on this clinical program, and we continue to escalate towards the top dose of 200 milligrams BID is expected to be well within the therapeutic range. We expect preliminary safety and PK data to arise from this program first, after the conclusion of dose escalation that is expected in the middle of this year in interpretation of any activity likely to follow after adequate maturity preclinical evaluation of this drug for candidate. These two indications is in full swing. The scope is focused on advanced solid tumor indications within and outside of the central nervous system that do not involve the H. three K. 27 M. mutation. This evaluation folds in our deepening knowledge of the first in class CP. and DRD. two targets of methadone growing set of empirical Article six data as well as the vast translational and clinical experience that we've gained with our tool one. We continue to believe that our tool sets holds promise as a potential treatment for unmet needs in oncology with distinct opportunities from the parent compound that could benefit from its sharply increased potency and dosing frequency while maintaining favorable safety and oral administration features. Along these lines, one of our collaborators reported last December at the San Antonio Breast Cancer Symposium, strong monotherapy tumor regressions in a patient-derived xenograft of chemo refractory breast cancer Of equal importance, diverse efficacy was observed across a spectrum of additional patient-derived xenografts. That is the focus of ongoing biomarker work, as is the case in many other advanced solid tumors that we are evaluating with an eye towards precision oncology.
With that overview, I'll now turn the call over to Michelle for a review of the financials. Micha?
Michelle LaSpaluto
Thank you, guys. Today we issued a press release containing our financial results for the fourth quarter and full year 2023. We remain highly disciplined in the fiscal management of the Company during 2023, ending the year with just over $204 million in capital. We will continue to be measured and efficient with our capital allocation in 2024.
For the fourth quarter of 2023, the company reported a net loss of $18.2 million or $0.2 per basic and diluted share compared to a net loss of $21 million or $0.24 per basic and diluted share in the fourth quarter of 2022.
Research and development expenses decreased to $15.6 million for the fourth quarter of 2023 compared with $19.3 million for the same period in 2022. This decrease is primarily driven by costs associated with the reduction of workforce related to the divestiture of Tembec's during the comparable 2022 quarter.
General and administrative expenses of $5.2 million were essentially flat year on year compared to $5.3 million for the same period in 2022. Last year, we recorded a net burn of approximately $61.5 million or just over $15 million a quarter. We continue to expect our cash balance to be sufficient to support operations into Q4 of 2026 this year. This runway may be further extended with potential additional non-dilutive capital arising from milestones and royalties earned associated with Tembec's U.S. through our partnership with the merchant and or with potential proceeds from monetizing a pediatric rare disease priority review voucher for which the Ontario one program is currently eligible, should it receive US approval. While we continue enrollment in our Phase 3 action trial, we do expect a modest increase in burn as we expand our medical affairs efforts and commercial preparations in anticipation of the interim data readout next year.
With that, I will now turn the call back over to Mike for closing results.
Mike Androile
We want to maybe start with the Jericho. Any additional questions.
Question and Answer Session
Operator
Maury Raycroft, Jefferies.
Maury Raycroft
Hi. Good morning and thanks for taking my question. I'm just going to start off with one on a two oh six and for the Phase one dose escalation, can you talk about where you're at in enrollment for the higher-dose cohorts seven through 11 and for safety and PK top line? Can you talk more about what you plan to report midyear and will that be at a medical conference? And will you have enough at that point to and expand one or more dose cohorts and maybe just talk about next steps.
Mike Androile
Yes. Thanks, Maury, for the question. So we're on track. We previously talked about beginning Dose Level seven. We've graduated from their head into dose level 11 expected by the middle part of the year. And so we're not giving a play-by-play on exactly where we are in that continuum and there are to be sure two different Phase one studies ongoing one at the NIH and one at P. knock that are operating independently. And so we'll have in the middle part of this year, preliminary safety data and PK data arising from that. And we don't expect that that will be delivered at a medical conference, but rather likely at an upcoming earnings call later in the year. Josh, anything you would add to that summary?
Josh Allen
No. That covers it.
Maury Raycroft
Okay. That's helpful. And for the Phase three action study on Navi use, our reach your cycle with 100,000 sites? And can you provide any more perspective on when you need to reach full enrollment in order to be on track for the first interim overall survival readout in 2025 and on what gating factors can lead to an interim readout in early 2025? Maybe just talk a little bit more about that.
Mike Androile
Yes, to get to early 2025 more that we'd need to probably see an acceleration of enrollment or productivity from any expanded markets and or earlier a more frequent event rates than we're seeing now so there's a couple of scenarios where we could. We could see that and certainly we are not at it. We're what I would consider an enrollment rate that is hitting full potential. It's on track and good, and it has the potential to accelerate even further to accomplish that. So there's a few levers that could get us to the first part of 25 as opposed to to the middle part of that year.
Maury Raycroft
Got it. And I don't know if there's any more perspective you can provide on that. Is it something due to study design arm? Is it more seasonality or any more perspective on just getting patients into the study?
Mike Androile
Yes. Demand in the study, as we've talked about, is really strong this is a it's a rare, a rare mutation to be sure. But the identification of this mutation is almost reflexively done at almost all sites currently, whether that's via NGS. or IHC. And so funneling those patients into the study, the potential patients that are in our pipeline are well identified early. We're seeing really good our throughput going from potential patient identification through screening and into randomization and have really good visibility on that over the next two or three months. So there's not not more I would say in terms of root causes for and for the current trend, in fact, it's if anything tracking ahead of expectations for the current enrollment rate. I don't know if Alan, would you add anything to that.
Allen Melemed
And the only thing I'll add is that early on in the study on patients, some sometimes aren't able to travel to site. And so they can't go long distances to get to the disease. Now that we have have a wider spread and a wider catchment area, we feel that we will be capturing these patients as these are mainly referral centers, so we can capture more patients.
Maury Raycroft
Understood. Okay. Thanks for taking my questions. I'll be back in the queue.
Operator
Ed White with H.C. Wainwright.
Ed White
Good morning. Thanks for taking my questions. I guess just a follow up to the questions that were just asked And Mike, you mentioned that and the patients are traveling between countries to get into the studies. I'm just wondering if there's any difficulty with some follow are anticipated or it's additional cost or time for the company to be treating these patients that are traveling across borders?
Mike Androile
No, it's a good question. And Alan, you want to make any preliminary comments on just.
Allen Melemed
Now in the island, I would say that the study was designed so we can actually travel a paper on regional travel. And then from that, we are covering for that as we are covering both airfare or bus share, depending or train or whatever it is and hotel for patients to travel. However, we are also expecting most of these countries to reopen soon, so they can then actually transfer their care to their regional center. So that was built in with are at the beginning.
Ed White
Okay. Thanks, Alan. And then Tom, you had mentioned the building up of the sales team potentially later in the year. I'm just wondering if you can give us your thoughts on the size of the of the sales team and marketing team that you're going to need and maybe a little bit more on your strategy?
Thomas Riga
Yes. Thanks for the question. I see this very much a lean and efficient commercial infrastructure. And I think that's guided by a few things I think one, the unaided awareness of our tool one throughout this particular specialty is exceptionally high. The prevalence we know it to 2000 patients roughly in the United States. We know where those patients are treated. So when we think about commercial infrastructure, we think the value is significant for the asset and the commercial infrastructure could be done very efficiently. So we will use gated milestones to advance our commercial efforts, especially at the FTE. level. I think we have a lot of financial discipline in our current plan, and we want to make sure that we're both timely and prudent with our resources to make sure the focus stays on getting to that pivotal data to enable us to capitalize on the full potential of our tool.
Ed White
Okay, great. Thanks for taking my questions.
Operator
John Barnes with TD Conor tolerant. Please go ahead.
It's Joe. Thank you for taking my my questions. Maybe the first one, just on the overall geographic differences. I guess, is there when you think about expanding new sites on different regions, kind of handle the care of these patients differently so that that might be a potential risk when expanding to new territories? Or is the enrollment criteria sufficient enough that you know that kind of streamline things. And then second patients are allowed to have those as NAB before entering the study. I guess what proportion of patients do have that bevacizumab in the in the overall population, I guess, is this a headwind for enrollment? And when you think about the commercial opportunity, what does that sort of shake out like? Thank you.
Mike Androile
Thanks, Alan. You want to talk about how we're assessing sites and different standards of care and harmonizing that.
Allen Melemed
Absolutely. Thanks, Mike. That is definitely one of the consideration and look at the centers that we're picking were only picking centers that have the ability to do the proper NeurogesX from neuro surgical approach, proper radiation therapy.
And then the proper follow-up. As you know, the standard of care in this patient population is that surgery and radiation, and that's it. However, we need to make sure that they're qualified centers that can actually follow these patients and have appropriate care. And that is a very critical assessment that we use to that. Whether center will be one that we would choose, Bill, not suspended that we did, I think have that kind of better in regards to bevacizumab, most patients don't come up with bevacizumab is not allowed. And this we do allow for some concurrent some Keno dolomite, though there is a wash, and we know that patients need to be off of that prior starting on the actions.
Okay. Thank you very much.
Operator
Soumit Roy with Jones Research.
Soumit Roy
Good morning, everyone, and thank you for providing the details on the progress. One question on the of the two off to a one are you see or seeing the screening versus from the screening versus enrollment data still at 30% of the midline glioma to BHCK. seven 27 mutation and in U.S. versus ex U.S., are you seeing any difference in the treatment regimen prior to enrollment fairly similar?
Mike Androile
Alan, you want to talk about those geographic differences, if any?
Allen Melemed
Yes. So on the one of the main difference that we do see is there is a high utilization of temozolomide outside the US and the US population. Temozolomide is used more in the adult population and not as much in pediatric use a little more frequently in outside the US, however, and there has been very little concerns about stopping this asset that we see within current radiation therapy.
Soumit Roy
Okay. And you are still seeing from the screening versus enrollment like about some the mutation person mutation rate is still in line with your prior expectations?
Allen Melemed
Yes. So the what we're seeing is it is on par with where expectations are.
Soumit Roy
Okay. On the fire to the top line data next year, would you be giving us the following for the enrollment would you be giving us some baseline characteristics of these patients enrolled like tumor size of sites of the tumor? Any CO mutational status?
Mike Androile
Allen?
Allen Melemed
Can you repeat your question on a follow-up You're asking or come up for a.
Soumit Roy
Prior to the up to data update next year, the top line data, would you be providing us any granular details on the patient characteristics treated like sites, tumor size or size of the tumor for mutational status? Or will these all come out after the top-line data is announced?
Allen Melemed
Thank you, Sumit, I think that will all depend on how we plan to release the. So as you know, since this is a double-blind study, the only thing we'll be able to look at would be aggregate data, which should be all three arms combined. And that data we could potentially discuss that. But we have to discuss internally how best to share those results. But it won't be able to look at a per arm evaluation until we actually show the results.
Mike Androile
Yes, just to reiterate Alan's commentary that we won't know that and advance at the farm level, Sumit. And so it's likely or a level of detail that will come out when full data is disclosed following top line data, we've had a chance to analyze it.
Soumit Roy
Thirdly and Sam, I'll have one last question from so much interest in the ex U.S. territories. Would you be considering any business development or partnership activities in the near future perhaps?
Mike Androile
Tom?
Thomas Riga
Yes. So it's a great question. Thank you. I think as we look at this, the vast majority of the value of around two one we see in the US and we are more than capable and ready to commercialize with a lean and efficient for us.
And secondly, I think as a reminder, we do have partners in Japan and China for Omtool one of two or six, by the way, is totally unencumbered. But in other geographies, whether it be Europe or South America, especially Europe, there are some challenges in our commercializing there and we don't take that lightly. And there very well may be an alternate partner that could do it more efficiently, but we'll evaluate that once we get the pivotal data we'll look to maximize value either as a standalone, doing a commercially or finding a partner that allows us to retain some of the economics for those geographies. And I think really that decision will come down to what we see when we get that pivotal data.
Soumit Roy
Okay. Thank you again for taking all the questions and congratulations on the progress.
Mike Androile
Thanks, Soumit.
Operator
Since there are no further questions at this time. I'll turn the call back over to Mike Andrew.
Mike Androile
Thank you, everyone, for joining the call today, and we look forward to additional updates next quarter.
