Joe Schepers - Executive Director, Investor Relations and Corporate Communications Michelle Berrey - President and Chief Executive Officer Garrett Nichols - Chief Medical Officer Tim Trost – Senior Vice President and Chief Financial Officer, Corporate Secretary Linda Richardson - Chief Commercial Officer Peter Payne - Senior Vice President, Business Development and Corporate Strategy..

Geoff Meacham - Barclays Phil Nadeau - Cowen and Company Katherine Xu - William Blair Jessica Fye - JP Morgan Yigal Nochomovitz - Citigroup Stephen Willey - Stifel Nicolaus.

Good morning and welcome to the Chimerix Third Quarter Financial Results Conference Call. Today’s call is being recorded. All lines have been placed on mute. [Operator Instructions] At this time, I would like to turn the call over to the Company’s Executive Director of Investor Relations and Corporate Communications, Joe Schepers. Please go ahead, sir..

Thank you and welcome to Chimerix third quarter 2015 financial results conference call. On the call today are, Michelle Berrey, President and CEO; Garrett Nichols, Chief Medical Officer, Tim Trost, Chief Financial Officer, Linda Richardson, Chief Commercial Officer; and Peter Payne, Senior Vice President, Business Development and Corporate Strategy.

Before we begin, allow me to read Chimerix Safe Harbor regarding forward-looking statements.

During the course of this conference call, the Company will be making certain forward-looking statements such as statements relating to certain R&D programs, including our SUPPRESS, AdVise, SUSTAIN and SURPASS trials and future clinical trials of brincidofovir, also known as brinci and related matters.

These statements involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements.

These risks and uncertainties are discussed more fully in Chimerix filings with the Securities and Exchange Commission, including without limitation its most recent quarterly report on Form 10-Q filed earlier today, its most recently filed reports on Form 8-K and other documents subsequently filed with or furnished to the Securities and Exchange Commission.

All forward-looking statements made on this call speak only as of the time they are made and Chimerix undertakes no obligation to update these statements to reflect subsequent events or circumstances. We issued a press release this morning containing financial results and other updates for the third quarter 2015.

The press release is available on the Company’s website at www.chimerix.com. Dr. Michelle Berrey will begin with an overview of our recent key events, Dr.

Garrett Nichols will discuss the progress of our clinical development programs, Linda Richardson will highlight some of the commercial initiatives and Tim Trost will review our third quarter financial results. Dr. Berrey will have closing remarks before we take questions. At this time, I would like to turn the call over to Michelle Berrey..

Thank you, Joe and welcome to our call today. This morning I will provide a brief overview of our most important recent events at Chimerix, many of which we highlighted at our Third Annual Investor Meeting in New York just two weeks ago.

First, as most of you know, we completed the targeted enrollment in our brincidofovir Phase III SUPPRESS trial to prevent cytomegalovirus or CMV infection in stem cell transplant recipients. As previously stated, we plan to provide top-line data in early 2016.

In August, we also completed enrollment of our targeted 200 patients in our AdVise trial for the treatment of serious adenovirus infection. Since the close of enrollment in AdVise, we’ve seen a significant increase in the number of requests for access to brinci from physicians in the US and in Europe.

We are enthusiastic about the significant progress that's been made in our smallpox development program. This summer, we announced that brincidofovir demonstrated a clinically and statistically significant survival benefit in a pivotal study in a lethal animal model in small pox infection.

100% survival was observed in the rabbits that received brinci immediately following the confirmation of infection. Importantly, animals that received brinci 24 or 48 hours after confirmed infection also showed statistically significant improvements in survival when compared to placebo.

In September, we’ve received a continued vote of confidence from BARDA, the Biomedical Advanced Research and Development Authority in the form of a $13 million contract extension to progress the final steps of our smallpox development program.

If approved, Brincidofovir will be the first FDA approved antiviral for the treatment of smallpox, an important addition to our country’s potential defense strategy in the event of a bio-terror effect.

In parallel, we have continued in active discussions with BARDA, regarding the potential procurement of brinci to the CDC's Strategic National Stockpile. In July, BARDA issued a Request For a Proposal or RFP for the procurement of brincidofovir as a second antiviral for our stockpile.

In August, we submitted a proposal to supply Brincidofovir that we believe satisfy the requirements of the RFP. We understand that BARDA had intended to make a contract award prior to the end of the US government's fiscal year towards September 30.

We had continued to communicate with our colleagues at BARDA and are optimistic that we will be able to reach agreement on final terms to supply brinci to the stockpile once BARDA is able to secure the requisite budgetary funding.

In October, we initiated dosing in our Kidney Transplant program, a patient population with significant unmet medical need, both for the prevention of CMV, the most common infection in kidney transplant recipients, and also the need for improved renal function and long-term graft survival.

Each year, over 5000 kidney transplant recipients in the US return to dialysis, because of a failed graft often caused by viral infections. If Brincidofovir can mitigate the negative impacts of viral infections on the new kidney, we may be able to keep a greater number of kidney transplant patients off dialysis.

The Phase III SUSTAIN and SURPASS trials of brincidofovir in kidney transplant recipients are now enrolling in the US and will soon be having for enrollment in Europe. Garrett will discuss these trials later in the call.

As the key part of our Chimerix 2020 initiatives, we are continuing to explore potential indications for brincidofovir with in vitro activity across all five families of DNA viruses, there are many additional opportunities for brinci in stem cell transplant recipients and solid organ transplants and in other patient populations who are imminent suppress.

We will be exploring additional therapeutic areas that we may want to pursue including as an adjuvant therapy in oncology indications. At this point, I'd like to turn the call over to Garrett Nichols to provide an update on our clinical development programs. .

Thank you, Michelle. Let me provide you with a quick recap of our brinci clinical development program, including the SUPPRESS and AdVise trials and our recently initiated SUSTAIN and SURPASS trials for the prevention of CMV in patients who have received kidney transplants. First a few comments on SUPPRESS.

The SUPPRESS study has been designed on the basis of a successful Phase IIB study, in which the selected dose of Brincidofovir achieved statistical significance over placebo on the primary end-point of prevention of CMV reactivation with fewer than 60 patients in each arm. We are dosing earlier in SUPPRESS than we did in the Phase II study.

As we now have evidence of brinci does not negatively impact stem cell engraftment. This provides a greater opportunity for brinci to prevent early CMV reactivation and further separate from placebo.

But it also provides opportunities for brinci to prevent infections with other DNA viruses that tend to reactivate early after transplant as well, such as BK virus, HHV-6 or EBV.

The prevention of clinical complications with these other viruses, such as BK virus associated bladder infection or HHV-6 infection of the brain also known as encephalitis are important secondary end-points that will be captured in SUPPRESS.

BK virus related disease occurs in approximately 15% of stem cell transplant recipients and can be severe in one of three of these patients with disease. And HHV-6 infections of the brain are associated with mortality or permanent neurologic dysfunction in over half of the patients who develop these infections.

As we’ve discussed previously, any reactivation of CMV is associated with a two-fold increase in the hazard of non-relapse related mortality after stem cell transplantation.

Thus the prevention of CMV reactivation avoiding the bone marrow suppression that's associated with the current standard of care for treatment and the prevention of disease is caused by other double-stranded DNA viruses has the potential to improve survival over the current preemptive approach.

Gut entry and cleaning continue apace and we look forward to sharing these data with you early 2016.

I know that many of you on the call today attended or listened to our webcast at our recent Investor Meeting in New York, where we were happy to announce that we had initiated our Phase III brinci SUSTAIN and SURPASS trials in kidney transplant recipients.

SUSTAIN is designed to demonstrate the safety and efficacy of brinci for the prevention of CMV disease and kidney transplant recipients at high risk of CMV disease. It is a blinded head-to-head study of brinci versus valganciclovir in kidney transplant recipients who have not previously been infected with CMV.

These CMV seronegative patients who receive a kidney from a CMV seropositive donor are at high risk of CMV infection and disease. The primary end-point of the study is CMV disease with secondary end-points related to renal function at one year which is closely correlated with long-term kidney graft survival.

The trial is expected to enroll approximately 750 patients with one-to-one randomization to brinci or valganciclovir for 200 days following the transplant. SUSTAIN is an important study as it will determine the safety and efficacy of brinci in the population that is at highest risk for CMV disease.

However it’s important to note that this is a small subset of the total population receiving kidney transplants annually. As less than 20% of transplants are in the donor positive recipient negatives settings. A majority of kidney transplant recipients in the US and Europe are actually CMV seropositive.

These patients are at increased risk of CMV reactivation and disease due to the immunosuppressive medicines that they receive to decrease the risk of rejecting the new kidney. The SURPASS trial will enroll these CMV seropositive transplant recipients at the same clinical sites as the SUSTAIN trial.

SURPASS is a blinded head-to-head study of brincidofovir versus valganciclovir in CMV seropositive kidney transplant recipients. The primary end-point is CMV disease with secondary end-points related to renal function at six months which is also closely correlated with long-term kidney graft survival.

The trial is expected to enroll approximately 520 patients with one-to-one randomization to brinci or valganciclovir for 100 days following the transplant. The same dose of brinci that was studied in the SUPPRESS trial in stem cell transplant recipients 100 milligrams twice weekly will be studied in both the SUSTAIN and the SURPASS trials.

At our Investor Meeting in New York Dr. Atul Humar, Director of The Multi-Organ Transplant Program at The University of Toronto emphasized the high unmet medical need in kidney transplant patients. I want to underscore a few of the key points that he made during his presentation.

Immunosuppressive regimens have improved greatly over the past few decades resulting in very low rates of acute kidney rejection. Over the last twenty years however, we have not seen a corresponding improvement in the rates of long-term graft survival. Less than 50% of kidney transplants are still functioning ten years after the transplant.

Patients lose their kidneys for a variety of reasons, but most often because of chronic injury that occurs within the kidney. And the leading viral causes of such injury are DNA viruses, including CMV and BK virus, both of which have become more problematic with more potent immunosuppressive regimens.

With activity against these DNA viruses, brinci has the potential to improve long-term kidney function with corresponding benefits to both the patient and the healthcare system. Turning now to our AdVise study for the treatment of adenovirus infection.

In August, we announced that we completed enrollment of our targeted 200 patients in the AdVise study. As we complete the treatment and follow-up of patients in AdVise, we are now identifying patients in the match historical control study that will serve as our comparative.

These historic controls will come from the same medical centers who treated patients in AdVise but from a time point when brincidofovir was not available. Survival is the primary end-point with key secondary end-points including reduction of viral load and adenovirus-related mortality.

As our initial NDA submission will now be CMV only, we now plan to conduct the adenovirus analysis at study conclusion, when all subjects have completed 24 weeks of follow-up following dosing with brinci. Release of the final results of the AdVise trials with matching control is planned for the second half of 2016.

In October, at IDWeek, we presented preliminary data on patients from AdVise's Cohort C and compassionate use recipients of liver transplantation who received brinci for adenovirus infection.

Twelve pediatric patients and one adult patient who were infected with adenovirus following receipt of a liver transplant were identified from the AdVise trial and the brinci expanded access program..

Eight of the 13 patients had disseminated adenovirus disease with high levels of adenovirus in the blood and/or adenovirus recovered from multiple organ systems.

In ten of these 11 patients for whom viral load data were available, adenovirus levels in the blood were either below quantifiable levels or were undetectable by the end of treatment with median time to minimal viral load of 15 days.

Eleven of the twelve pediatric liver transplant patients with adenovirus infection who received brinci survived which compares favorably to the reported mortality rate of up to 50% in this population in the literature.

Only two of these subjects had serious treatment-related AEs Grade 3 diarrhea in one patient and Grade 2 increased stool volume in one patient. Both of these are events results. This is a really exciting time for the company and we continue to achieve important milestones for brinci.

With the completion of SURPASS enrollment, we are closer to the evidence needed to support our lead indication as potentially the first and only product for the prevention of CMV in stem cell transplantation.

And excitingly, we are now enrolling kidney transplant patients in our Phase III SUSTAIN and SURPASS trials, where we hope to make a difference in allograft survival. Now I’d like to turn the call over to Linda Richardson for a commercial update. .

Thanks, Garrett and good morning, everyone. Today I will provide a commercial update following on from our recent Investor Day presentation. The global market for stem cell and organ transplants continues to grow with approximately 8300 allogeneic stem cell transplants in the US in 2013 and 18,000 kidney transplants in 2014.

On average, we are seeing compounded annual growth of about 6% to 7% in the adult stem cell segment and 3% or 4% in pediatrics. Clearly, there is a sizable market opportunity as many of these patients are at risk to CMV and other DNA viral infections.

We’ve been reporting this type of information in our recent abstract at ICAAC and IDSA and we will be continuing to raise awareness of the clinical and economic impact of DNA viral infections in stem cell transplants at upcoming conferences, including ASH in December and at BMT in February 2016.

Educating the transplant community on this information is a key component of our market development platform. The commercial team has done a great deal of work profiling transplant centers and we have identified 84 that are performing approximately 85% of the stem cell transplants and over half of the kidney transplants in the US.

Through our existing trials in EINDs we already have relationships with approximately two-thirds of these centers and this number will increase as we progress with our two kidney trials SURPASS and SUSTAIN.

Furthermore, as the medical liaison team expands under Garrett’s direction, we will be establishing a ground-level presence for Chimerix in these institutions. It’s important that we understand not just the volume of procedures, but the dynamics at each center.

And as I shared two weeks ago, we are profiling these transplant centers to gain detailed insights into the decision-makers and the processes used for obtaining formulary and protocol inclusion. We are also evaluating the influence level of certain centers on other centers.

So that we can best acquire market access and sales professionals to ensure rapid uptake of brinci at launch. We don’t believe that we are going to need a large sales force, given the focus nature of hospital initiated prescribing in this market.

Our current estimate is approximately 40 sales professionals and we are awaiting results of our sales force strategy and structure assessment to further respond this projection. We want to ensure that we have enough critical mass to get off to a strong start at securing formulary and protocol inclusion are mission-critical to update.

In terms of market reaction to brinci we have interacted with over 1200 global physicians, pharmacists and payers in our market research program and are really seeing excitement regarding the potential to prevent CMV infections with antiviral that can be used prophylactically without bone marrow suppression or the risk of kidney toxicity.

The reaction to our early open-label adenovirus treatment data is pretty much universally positive given that it’s few as one-in-five immunocompromise patients with adenovirus infections survive, a tragic situation often seen in pediatric patients.

Brincidofovir’s high barrier to existence is also potentially strong selling point as is the benefit of multi-viral protection. That said, it’s important to establish just how prevalent these other DNA viral infections are in both allogeneic and kidney transplant patients.

Representing Chimerix generated data on this but also working with topnotch transplant centers in the US and EU to have them analyze their existing serum banks and current patients and then publish to present the findings.

This is all part of our commitment to education not only on the escalated mortality risk of allowing CMV to reactivate in allogeneic stem cell patients but in understanding the real threat of concomitant DNA viral infections in patients and the real risks of allowing CMV to reactivate in immuno compromise patients.

Transplants are very expensive and the figure that the independent Milliman Group generated on average, total billed charges per patient undergoing an allogeneic stem cell transplant in the US in 2014 was approaching $1 million.

As we build the value proposition for brinci with payers, it’s critical that we look to combine potentially clinical benefits of proactive protection with brinci and the chance to perhaps offset some of the cost related to treating other infections and reducing hospital stays and re-admission rates.

Following the availability of our SUPPRESS data, we hope to demonstrate the cost of not using brinci, both clinically and economically. Now, I'll turn it over to Tim Trost..

Thanks, Linda, and good morning. Starting with our balance sheet. At the end of the quarter, we had approximately $378 million in capital available to fund operations $0.4 million in debt and approximately 46.1 million outstanding shares of common stock. Turning to our statement of operations.

Chimerix reported a net loss of $32.4 million or $0.70 per basic and diluted share for the third quarter of 2015. During the same period in 2014, the company recorded a net loss of $17 million or $0.47 per basic and diluted share.

Revenues for the third quarter of 2015 increased to $2.3 million compared to $1.2 million for the same period in 2014 due to an increase in the third quarter of 2015 in reimbursable expenses associated with the company’s ongoing development contract with BARDA.

Research and development expenses increased to $26.4 million for the third quarter of 2015, compared to $13.3 million for the same period in 2014.

This increase was primarily due to the effect of costs related to the ongoing SUPPRESS and AdVise trials, costs of the Phase III SUSTAIN and SURPASS and growth of the company’s clinical, regulatory development and manufacturing groups.

We have consistently stated that we expect significant increase in R&D expenses for the full year 2015, compared to full year 2014 due to the costs related to our ongoing SUPPRESS and AdVise III trials, the two kidney transplant trials SUSTAIN and SURPASS, continued development on our manufacturing process and preparing for the anticipated NDA filing in 2016.

We’ve now incurred $65.6 million in R&D expenses for the first three quarters of 2015 versus $45.4 million for the full year 2014. R&D expenses may continue to be uneven from quarter-to-quarter. General and administrative expenses increased to $8.6 million for the third quarter of 2015, compared to $4.7 million for the same period in 2014.

The increase was primarily due to the growth in the company’s infrastructure and areas supporting commercial pre-launch activities. For the full year 2015, we expect an increase in G&A expense as compared to the full year 2014, based on these same factors.

Loss from operations was $32.7 million for the third quarter of 2015, compared to a loss from operations of $16.9 million for the same period in 2014. The variance was due primarily to the increased research and development and general and administrative expenses, as previously discussed.

As Joe mentioned in his introductory remarks, earlier today, we issued a press release containing our financial results for the third quarter of 2015. Now I’d like to turn the call back to Michelle. .

Thank you, Tim. With only eight weeks remaining in 2015, we are preparing to deliver top-line data from the pivotal SUPPRESS trial in early 2016 preparing for our first NDA and MAA and continuing our brinci commercial pre-launch initiatives.

If approved, brinci will be the first and only therapy for the prevention of CMV in patients following a stem cell transplant. As Garrett highlighted, we are identifying matched historical control for the AdVise trial and anticipate full data in the second half of 2016.

We’ve initiated enrollment in our two kidney transplant trials SUSTAIN and SURPASS which will expand our development footprint into Europe. For our small pox program, we anticipate meeting with the FDA in the first half of 2016 to discuss the data from the pivotal rabbit pox study and data from the mouse study which we’ll read out in early 2016.

At that time, we will determine if any additional studies will necessary to support an approval for brinci as a treatment for small pox.

As Tim mentioned, we remain in a solid financial position with approximately $378 million – pharmacoeconomic and outcomes data at upcoming conferences in Europe and in the US, as well as some new data on the incidence and burden of DNA viral infections including multiple DNA viral infections.

We are continuing to educate physicians, payers and hospital administrators about the substantial risk to patients and the cost associated with these DNA viral infections.

We believe that brinci is not simply an improved means of delivery for a potent antiviral, but an innovative solution to address the significant negative impacts of DNA viruses in these immunosuppressed patients.

Before we take questions, I wanted to let you know why all of us at Chimerix are passionate about what we do and what drives our employees everyday to advance the development and potential commercialization of brinci.

Many of our patients suffer from leukemia, lymphoma and myeloma, received chemotherapy, radiation and other medications that leaves in vulnerable to life-threatening infections. During the first three months after transplants are at highest risk for viral infections including CMV, BK and other DNA viruses.

Many patients who are offered a potentially - infections that can require prolonged hospitalizations and can lead to death. Nearly one in five patients die from infection or other non-cancer complications in the first year after a transplant.

In spite of the significant advances in transplant medicine, we still do not have an antiviral that is safe and effective enough to prevent CMV infections as we prevent so many other infections in these patients. Brincidofovir has the potential to make a meaningful difference in the lives of these vulnerable patients and their families.

With that, I would like to personally thank each of you for dialing into our final earnings and update call for 2015, the last call prior to our top-line SUPPRESS data, enjoy the last few weeks of 2015. At this point, I’ll turn the call over to the operator for any questions. .

[Operator Instructions] Our first question or comment comes from the line of Geoff Meacham from Barclays. Your line is open..

Good morning, Geoff..

So you guys covered a lot, you are into incidence, so I wanted to ask you outside of brinci, maybe with regard to priorities for 669 or biz dev activities like, how would you guys, beyond brinci prioritize what you are looking for as kind of back-ups and to expand the pipeline? I have one more follow-up..

Okay. Thanks. So, outside of brinci, other things that we are moving forward but from our discovery program and from within our chemical library, you mentioned 669 which we are continuing to move forward and anticipate some important conversations with the FDA about our intended development program.

We will certainly be updating you when we have those conversations and are moving forward. Also want to highlight norovirus, we have previously stated that we identified a lead and we are continuing to move that forward and we’ll have some more updates.

Norovirus is increasingly recognized as one of the key causes of chronic diarrhea in the transplant population. It’s certainly prevalent among immunocompetent patients as well immunocompetent individuals as well, but in the transplant patients can quickly convert to a chronic viral infection with long seeming diarrhea up to hundreds of days.

So we will be giving some updates later in 2016 on both of those programs. .

And then just on brinci and – in smallpox, I know you have some data ongoing right now, or some studies ongoing in animal models, but I wanted to kind of ask you, Michelle, what - if we are going to hear about along the way, any progress with discussions on the stockpile or is that dependent on, maybe getting more color from FDA and next steps?.

That’s a great question and an opportunity for us to reemphasize that those two programs are completely independent. So, yes, we are continuing to progress with our animal model data and anticipate having a conversation with the FDA in the first half of 2016 once we get the mouse model data in hand.

So that would obviously then lead toward a potential approval for brinci as the first approved antiviral for small pox in the event of a serious attack or acetone release. Your second question about the stockpile.

So, BARDA has the ability to stockpile compounds, vaccines, et cetera that are felt to be in the interest of our US National Security independent of whether they are approved for a specific indication. So those conversations with BARDA are ongoing in parallel to that approval.

As there are some earlier conversations with other allied government outside the US that could present an additional possibility for a stockpiling in the future. We had anticipated the ability to finalize that contract by end of fiscal year 2015, which was September 30.

As you are aware, we did not have a federal budget until just last week or earlier this week actually when it finally was inked. And I hope that with the availability of fiscal year 2016 finds that we can reinitiate those final negotiations on the contract. .

Okay, great. Thanks a lot..

Thank you..

Thank you. Our next question or comment comes from the line of Phil Nadeau from Cowen & Company. Your line is open..

Good morning. Thanks for taking my question and congratulations on the progress. First, on the AdVise timelines, you are saying that the data is now in H2.

I am trying to understand what is going to happen from the end of dosing on the patients presumably in Q1, suppose the data out to H2 is it you need the time to identify the historical controls after the patients are done dosing? Or kind of what's going to take those three to six months?.

I can take that question. Thanks. The planned analysis is now planned for the second half of 2016 because we want to conduct the analysis when the trial is complete.

And that is 12 weeks of dosing in the study followed by 24 weeks of follow-up which as we’ve talked about before is what the FDA prefers to the final analysis for that study, because we are no longer planning to include adenovirus in our initial NDA and interim analysis what not necessary and so we’ll do the final analysis when the final data is available.

And have that data available for discussion with the FDA in the second half of the year. .

Okay.

actually, so, given that the patients were enrolled in August, twelve weeks of dosing probably takes you to somewhere right around now, and then 24 weeks of follow-up would get through, call it, May, is that fair? And then it will just take couple months to analyze the data, is that?.

That’s exactly right..

Okay. And then on SUPPRESS, I think in the past, you've given us some idea of how the diarrhea management plan is reducing the rates of dropouts in the trial.

Can you remind me what those figures were and what point of data you have on diarrhea and SUPPRESS?.

So we haven’t discussed any specific numbers. But the rate of diarrhea leading to discontinuation is, is lower than that we saw in Phase II at the 100 milligram twice weekly dose.

This has obviously been an area of focus for the data safety monitoring board for both the AdVise and the SUPPRESS trials and as we discussed for the AdVise preliminary analysis we only had three patients of the initial 85 who are treated who discontinued due to GI events. They were related to brincidofovir..

And are you using the exact same diarrhea management plan in SUSTAIN and SURPASS, as you did in SUPPRESS or did you make any changes to it?.

No, it’s the same plan..

Same plan. Okay, great. Thanks for taking my questions..

Thanks, Phil..

Thank you. .

Thank you. Our next question or comment comes from the line of Katherine Xu from William Blair. Your line is open..

Great, thank you. Good morning. I also want to ask on the timeline of AdVise, previously somehow it felt like the data should come out of soon after SUPPRESS and now it's second half 2016.

I understand the timeline on that, but, from the timing of the analysis perspective, what exactly have changed?.

What – as just discussed, I think that the biggest difference was the intent to conduct an interim analysis of the AdVise data in order to have that data available for the initial NDA filing. As the initial NDA filing is now intended to include CMV, but not the AdVise data. We are simply going to conduct the analysis when the trial is complete..

Right, I understand that, but I thought, even with this study to be complete, it would be already – but never mind, I got it now..

Yes, just a clarification Katherine, so we had talked about having data that we would be discussing publicly and with the FDA in the first half of 2016, you are correct there, but, now with the clarity that we are filing our initial NDA with CMV only, we are pushing that release of the top-line data and our discussions with the FDA to the second half of 2016 when we will have that final 36 week follow-up..

Okay, all right. And then, just, another question on the side-effects side.

Can you just give us a kind of brief summary on how the diarrhea is distinguished from GvHD and how, so far in, this study, previous studies and also the ongoing studies, on the GvHd side arising or in the studies?.

Sure, so,.

Or being occurred in the studies..

Some of our most experienced clinicians have developed in conjunction with our internal team, the algorithm to manage the patients who have developed GI side-effects in the studies. In essence, that involves, holding at a dose of the study drug.

So if the study drug was scheduled to be given on the Thursday, then you are observing whether the holding of the dose in the following days after that Thursday, it’s associated with improvement in the symptoms.

Simultaneously, you are exploring for other causes of diarrhea which could include intercurrent infection things like Clostridium difficile infections or other infections that could be resulting, if it’s graft versus host diseases generally then at the holding of a dose does not improves.

The side-effects and investigation for graft versus host disease then occurs. But if subject basically improve after holding of that dosing consolidation, is what is recommended consolidation to 200 milligrams once weekly and this is a dose that has also proven to be effective in the Phase II study.

It is important to reflect that nearly all allogeneic stem cell transplant patients have diarrhea and so this is a very common side-effect, but the algorithms that I just discussed is helping patients basically stay on drug via the safety monitoring and management plan..

Is that helpful, Katherine?.

Yes, thank you..

I think, as we’ve previously stated, we anticipate that the discontinuation rate within SUPPRESS following the SMMP vary similar to what we saw in our AdVise data that we – that Garrett mentioned from earlier this year where we had only three permanent discontinuations.

We believe the discontinuation rate within SUPPRESS would be less than 10% in a real world rate maybe even lower as obviously they won’t be blinded to whether or not patients are on brinci or on placebo. So we don’t see those as a problem moving forward.

Any other questions?.

No, thank you..

Great, thanks, Katherine..

Thank you. Our next question or comment comes from the line of Jessica Fye from JP Morgan. Your line is open..

Hey guys, good morning. Thanks for taking my questions. I have a couple. First one is for Garrett.

I think you noted the potential for brinci to improve survival given any CMV reactivation is associated with the substantial increase in mortality and I've seen that data over 12 months But I am trying to think about six months and what you could show in your study.

So, can you talk about how we should think about the mortality rate over six months for the patient population that you are studying in SUPPRESS.

We are just trying to understand what that background rate could be for the control arm? What you could show for brinci? And then if you want to talk about your expectations around the potential to demonstrate a statistically significant mortality benefit? And then, I've got one more, but maybe we will start with that..

Sure, sure.

The data that we presented probably most frequently is looking at the hazard for mortality that we’ve demonstrated in the six year cohort study that was conducted at the Fred Hutch Cancer Research Center that show that two-fold increase in the hazard for mortality for any reactivation of CMV and once you got to a 1000 copies per mil the hazard for mortality was increased four-fold,.

The underlying mortality rate in that patient population, the non-relapse related mortality rate at one year was 18% and the majority of that mortality really occurs in the first six months after transplant. It’s definitely front-loaded. Most of that non-relapse related mortality is infection-based.

And so, we are definitely hopeful that by – what CMV reactivation by avoiding the myelotoxicity of valganciclovir, so valganciclovir decreases neutrophil counts and immune reconstitution which can predispose patients to invasive bacterial and fungal infections thereby avoiding that toxicity that we could benefit patients with regard to mortality.

The Fred Hutch obviously is a specialized cancer center. We have a variety of different transplants regimens that are occurring in this study. And so, extrapolating the Fred Hutch data to the entire SUPPRESS population is not necessarily something that we can do.

And that’s why it’s really difficult for us to comment on specific estimates of what mortality was planned to be. So we did not power the study based on a mortality end-point, but we are looking forward to the SUPPRESS data being available in just a short couple of months when we’ll be able to discuss these data with you. .

Okay. Can I just follow-up on that? So, you said 18% over one year and the majority of that's probably in the first six months. Does that mean, like two-thirds, so we can think about 12% and then, I recognize there is probably differences between the population you are enrolling in that Hutch data.

But should we think of their data, their mortality rate is being like better or worse, just directionally relative to the patients generally in SUPPRESS?.

Well, I think, at the Hutch transplant high risk populations of patients everything, that would probably be considered at the median or at the high end. So that’s probably the reason why we are not able to estimate given that we’ve enrolled patients from upwards of 40 transplant centers with varying rates of mortality at their individual centers.

And then, as far as the – as far as what proportion of mortality occurs in the first six months, it’s hard for me to say that precisely, but it’s greater than 50%..

Okay, got it. And my next one is, sort of a commercial one for Linda. I think at the Analyst Meeting you mentioned a substantial percentage of stem cell transplants are actually paid for on a fee for service basis as opposed to under a DRG.

And I just want to make sure I am understanding that correctly and what that means for you guys, did that mean that you were, I guess the hospital might not be subject to that payment cap for those procedures that would allow more capacity to pay for things like brinci.

And specifically, was there a difference in that sort of reimbursement mix for older versus younger patients? And how do you think about that in the context of the demographics you are expecting for your brinci patient population..

Great questions and yes, you nailed it on the head with the fee for service versus DRG and one of our large projects where we will be able to track patients and their journeys through centers, obviously blinded.

We could see all the billings and how that was paid for and a two-thirds or more where in the fee for service and to your point, then drug cost does not come under the DRG type payment. So, it allows for more flexibility and they are getting paid a percentage on all the charges and on the billable.

So, that is good news, I think for us and we were happy to see that. Of course, we are doing additional work to see if this study is validated by others. And then in terms of the mix, and what we’ve really looked at is, what’s the difference in stem cell versus SOT.

So, in stem cell, we have a younger patient, I think the average age was around 42 or 45, we see 54% of the business in the commercial segment NHCT. And then 25% Medicare, 15% Medicaid and when you flip that for kidney, it’s two-thirds Medicare and then a quarter commercial and it fall out from there.

So, in our initial going in strategy will be in fee for service and under commercial payers primarily. So, I think that’s a great way for us to start..

Okay, and so, did you say that data was coming from the centers that you have experience with? I am curious about what the mix of DRG versus fee for service procedures in those centers or you surpass these existing relationships?.

Well, this was done in – as part of our profiling work. So, that would be obviously, we have relationships with a lot of those who look at the key centers like, I honestly haven’t matched it up in the way you described. .

Okay, got it. Thank you..

Thanks, Jess. .

Thank you. Our next question or comment comes from the line of Yigal Nochomovitz from Citigroup. Your line is open..

Yes, hi guys. Thanks for taking the questions.

Can you hear me?.

Yes. .

Just on BK virus, obviously, that's important from a value proposition perspective not only for stem cell transplant, but potentially more importantly, for kidney transplant. So I just wondered what you know about the details on the mechanism of action there.

As far as I understand it's still not clear whether brinci is hitting the polymerase or a different target despite what's evidently very good in-vitro activity in cell killing? So let's get your thoughts there. Thanks..

Sure, you got – so, as you might know the BK virus does not encode its own DNA polymerase since that’s part of the reason that our questions of mechanism of action.

What is thought at the moment is, it’s possibly due to one of the proteins call T-antigen, which is encoded by BK virus which unwinds the DNA and against which brinci and cidofovir appear to have activity.

This has been demonstrated in another polyomavirus called Sv40 and we have ongoing work with a number of polyomaviruses with collaborators in order to verify that..

So, you mentioned that in-vitro data and Garrett went through some of the mechanism of action work that we are doing, but I also want to highlight that we have clinical data from a post-hoc analysis of that 201 stem cell transplant Phase II study, where we showed improving GFR that was statistically significant across the populations even though that was a smaller study.

So in the 100 mg twice weekly the same dose that we are taking into SUPPRESS, a statistically significant improvement in GFR and it was more significant in those patients seropositive for BK at baseline.

So, that it was a post-hoc analysis that was our first confirmation of clinical activity in addition to that in-vitro data and some of the NF1 work that had been done through our expanded access and the emergency IND.

We do obviously have a keen interest in seeing what that read out is for SUPPRESS, not just for the multi viro protection that we know it’s important for the stem cell transplant patients, but also as a potential read through for the kidney transplant studies that was just initiated. .

Okay, thanks. And then, just going back to the reimbursement questions on the DRG and fee for service, as mentioned, you have done some work in the stem cell population looking at that mix.

But, regarding the kidney transplant population, what work have you done to look at how much of that is going through DRG versus fee for service and the overall cost on a per patient basis? And how does that compare to the $1 million you cited for stem cell transplant?.

Yes, I think we’ve been – it’s a great question and I think we’ve really been focused, because our initial pricing will have to be based on what data we have from SUPPRESS and that will be in the allogeneic stem cell patient population.

We’ve really been looking and focusing on those charges, because that’s where you are, I think value-based pricing is going to be evaluated vis-à-vis other agents that are available there. So I want to make sure that we nail that correctly and then we will spend to your point, the same amount of time doing the due diligence in the kidney section.

But since we won't be able to market for that with an efficient indication for several years. Hopefully, we will get it sooner but, that’s going to be our focus seems to be on getting traction in the allogeneic stem cell population. .

Got it. Thank you..

Thank you..

Thank you. We have one more question in the queue that is from Stephen Willey from Stifel. Your line is open..

Yes, hi, good morning. Thanks for taking the question.

I think, Michelle, you mentioned that the federal budget was put in place and just wondering if, within that budget you know what the amount of dollars that are actually allocated to defense stockpiling are flat or up and also along the same lines, just wondering if the price that would be implied by any stockpiling order would have the influence in terms of pricing discussions or pricing decisions launched.

Then I just ask the question because I know that there are some parts of CMS, I guess, that work on a best price model..

Yes, good questions. And thanks, Steve. The federal budget was approved. We do not yet have clarity on the specifics for BARDA and even more relevant obviously how much of that would be able to support our contracts as we’ve been negotiating with BARDA that has to have some clarity on that very soon.

The price which is obviously an important component is something that we are obviously actively discussing with BARDA as part of our proposal that was submitted this summer. Remember that BARDA has funded much of the development work for brinci for small pox.

So the price that is negotiated with the government for stockpiling is completely independent of our potential commercial pricing which as Linda has gone through will be based on the value that we are able to see in the SUPPRESS, AdVise and in future obviously on our kidney transplant population.

So, those are independent, and I would also add to that that the price negotiated with the US government is also independent of any price that may be agreed with external governments, obviously, preferentially arrives there, but because of the US government’s funding of brinci’s development for small pox, they do get potential preferential price there.

.

Okay, that’s helpful. And then, just I think you made a comment in your closing - in your closing remarks with respect to there being a fairly significant percentage of patients who choose not to undergo stem cell transplant.

And just wondering if you happen to know what that may look like? And if you have any inclination as to what percentage of those patients are choosing not for reasons related to infection-related mortality?.

Yes, the data that we’ve seen is up to half of patients who are offered a potentially life saving a curative stem cell transplantation up to half of those patients are walking away from the opportunity.

We also recently seen some data that 70% of patients who are looking toward a – again, potentially curative stem cell transplant don’t have a family match. So they are increasingly going towards non-related matches as Garrett talked about, this is these higher risk patients.

So, as we increase the number of patients who are receiving unrelated transplants, those patients are obviously at higher risk.

I think that’s one of the reasons why we are so intent on and looking closely at the impact of brinci not just on CMV but on these other viruses and the potential to see improved mortality when half of patients are walking away from a transplant because of the one in five risk of mortality in the first year.

If we can have an impact on that, even a positive trend that is, one additional factor that they may want to consider as they are deciding whether or not to go forward with this transplant and that’s why we are hopeful that we can at least have a trend toward improve mortality within the SUPPRESS study. .

Okay, thanks for taking the questions. .

Thank you..

Thank you and I would like to turn the call back over to Ms. Michelle Berrey for any closing remarks. .

Thank you Howard. So, I just want to recap. So, we have an eight week left in 2015, that’s all has sneaked up on. We anticipate our top-line SUPPRESS data in early 2016. And presentation of the full data from SUPPRESS in February at BMT Tandem in Honolulu by the way.

We are continuing to go forward with presentations and publications regarding the incidents and the impacts of multiple viral infections which we had previously appreciated in our pediatric population, but increasing data showing the impact of multiple viral infections, even in adults, transplant recipients with stem cell and potentially solid organ patients.

The AdVise study, as Garrett has highlighted for us, our historic controls or matching is ongoing and we anticipate top-line data and clarity on a filing strategy in the second half of 2016. Enrollment in our kidney transplant program SUSTAIN and SURPASS has begun.

Small pox, we will be sitting down with the FDA in the first half of 2016 and independent of that, hope to have some progress with a potential stockpiling agreement with BARDA. And lastly, just again want to thank you all for participating in today’s call, our last call prior to top-line data read out in early 2016.

Enjoy the last few weeks of 2015 and we will speak with you all in the New Year. Thank you..