Michelle LaSpaluto - Senior Director, Accounting Michelle Berrey - President & CEO Garrett Nichols - CMO Linda Richardson - CCO Tim Trost - CFO.

David Lebowitz - Morgan Stanley Yigal Nochomovitz - Citigroup Phil Nadeau - Cowen and Company Katherine Xu - William Blair Jessica Fye - J.P. Morgan Ed White - FBR & Company Philomena Kamya - Stifel.

Good morning. Welcome to the Chimerix Conference Call discussing the Financial Results of the Fourth Quarter and the Full Year 2016. Please be advised that today's call is being recorded at Chimerix's request. I would now like to turn the conference over to Michelle LaSpaluto from Chimerix..

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 Investors 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 successful commercialized. In addition, Chimerix may be unable to fulfill 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's filings with the Securities and 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 and Exchange Commission.

All forward-looking statements are based on information currently available to Chimerix and Chimerix assumes no obligation to update any forward-looking statements. At this time, I would like to turn the call over to our President and CEO, Michelle Berrey..

Good morning, everyone, and thank you for joining us. This morning we will be reviewing financials and other updates for 2016. But I would like to set up our call this morning first what we believe are 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 anti-viral activity.

Our ability to now develop brinci with 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 has 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 countermeasure for the treatment of small pox, IV brinci for multi-viral prevention and high risk transplant recipients, IV brinci for the treatment of various viral infections such as BKV 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 in 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 virologic and clinical outcomes data from our trials in CMV and adenovirus, the antiviral activity of brinci was apparent that 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 a 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 an initiation of dose ranging studies in patients with BKV and CMV. We are actively pursuing plans to score 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 in these high risk patients is no longer only on CMV but on the cumulative risk of all of the DNA viruses including adenovirus, EBV, and HHV-6 as well as the polyomaviruses BK and JC.

We're continuing to build on our pipeline with our proprietary nucleotide CMX521 completing IND enabling studies and progressing to the clinic later this year as the first potential antiviral for norovirus prevention and treatment. We right sized our organization and focused our resources on our core priorities.

Tim will share with you our 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..

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 GI overexposure 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 and difficult-to-reach compartments in animals, which allows potential exploration of treatment indications not possible with oral dosing. Number four, oral brinci was associated with rapid clearance of adenovirus in the AdVise trial.

And finally, number five, rapid clearance of adenovirus was associated with a decrease in overall mortality and adenovirus-associated mortality in AdVise. Let's talk about these in a bit more detail.

The first of these learnings is that the GI toxicity we observed with oral brinci is related to brinci overexposure 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 GI toxicity observed with chronic dosing with the oral formulation. In contrast, IV brinci shown in green delivered comparable drug exposure to key organs in the rat avoiding overexposure of the gut with significant improvement in GI tolerability.

And that improvement in GI 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 treatments such as BK nephropathy after kidney transplantation. 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 several folds higher than we had ever achieved with oral dosing.

And despite those high drug concentrations we had no clinical findings of 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 was that 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 then 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 thus allowed explorations of treatment indications that might not have been possible with oral brincidofovir broadening the opportunity for success.

On Slide number 9 we see how these animal studies have translated to humans today. Late 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 milligrams, 25 milligrams, and 50 milligrams all given over a two hour infusion.

As presented at the JP Morgan Conference in January a 10 milligram dose of IV brinci provides similar drug exposures as 100 milligrams 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 milligram dose provided plasma drug exposures that are 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's known high barrier to resistance provides us with much broader opportunities for 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 1 or 2 on a scale of grade 1 to 5 in some subjects in the first three dosing cohorts. 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 milligrams or placebo.

In cohort 3, 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 milligrams resulted in about 20% of healthy subjects reporting diarrhea. The GI tolerability of single dose IV brinci observed through cohort 3 is improved compared to single dose or brincidofovir. In this study, we are also determining active drug levels in sales.

Given the known long intracellular halfway of the active antiviral cidofovir 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 switched 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 transplantations.

And on February 22, final data from the AdVise trial of brinci for the treatment of adenovirus infection in allo stem cell transplant recipients were presented at the BMT Tandem Meetings.

Recall the AdVise trial was an open label multi-center 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 after allo 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 led to quick clearance of adenovirus in the plasma. This effect was even more pronounced in pediatric patients who started with lower adenoviral loads than adults in part due to the regular screening that 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 in 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 three quarters 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's 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 clearness of adenovirus from the plasma in the majority of patients.

On Slide 12, as we previously highlighted responders who cleared adenovirus by viremia by week six had nearly doubled the survival rate in a lower adenovirus associated mortality compared with subjects who did not have an antiviral response.

In the pediatric patients with disseminated disease virologic responders had a much lower overall mortality of 25% compared with the 54% of non-responders. But importantly both pediatric and adults patients who cleared adeno were much less likely to die of an adeno attributable 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 allo stem cell transplants who were treated with either IV cidofovir 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 cidofovir.

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 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 or cord blood stem cell transplants. Children who are at highest risk of serious adeno infection.

Patients will be randomized two to one to oral brinci versus the current standard of care which from those patients will include off-label cidofovir. We will include pediatric patients who had confirmed plasma adenovirus of at least 1,000 copies in the first 100 days post-transplant.

Much like pre-emptive 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 of 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 formulations enables development across multiple indications and populations with a potential to address life threatening viral infections that currently have no approved therapy.

For oral brinci, short-course dosing for the treatment of adenovirus and small pox 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 their 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 small rapidly accruing study.

In addition, such trial could enable a secondary endpoint of prevention of 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 studies.

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

Thank you, Garrett. Good morning everyone. I'd like to highlight a few activities that we've initiated regarding market development and 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 allo transplant recipients Dr. Hill found that among the patients that reactivated 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 allo-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 Letermovir trial sponsored by Merck met its primary endpoint in preventing CMV reactivation in adult HCT recipients. Shire presented Phase 2 dose ranging data from Maribavir in resistant refractory CMV.

While it is encouraging to see progress in the fight against CMV infections, it is 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 activity, 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 continued to see strong demand for brinci in 2016, BR351 in 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 highlights 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 Advisory Board with EU experts and during the conference; we are sponsoring our first educational presentation. We are 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 and abstracts highlighting data from European Transplant Centers summarizing the use of brinci to treat adeno infections in their HCT recipients. We plan to share this information in greater detail with you following the public presentations at BMT.

While we know that there is a need for antiviral therapies beyond CMV, we also believe that ADV infections are a threat to immunocompromised 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 events which Michelle will discuss in her closing remarks. I will now turn the call over to Tim to discuss our 2016 financials..

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 approximately 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 BARDA.

Research and development expenses decreased to $11.7 million for 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 in 2015. The decrease results from a $2.4 million decrease in commercial preparation costs 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..

Thank you, Tim. Turning to our final Slide 21 outlining the potential catalyst for 2017 we hope we have 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 benefit of short-course oral brinci and serious adenovirus infection, and if positive, could support the first potential approval of brinci in Europe.

For small pox, we continue to work closely with BARDA to finalize study design elements for a second animal efficacy study for the treatment of small pox.

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 began 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 immunocompromised 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 and treatment of norovirus infection 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 dataset from our single ascending dose study of IV brinci and play-ins for our next studies in virally infected patients. We hope to see there. Operator, we will now open the line for any questions..

[Operator Instructions]. Our first question comes from David Lebowitz with Morgan Stanley..

Congrats for taking my question. Quick question on the IV BCV multiprevention, multi-viral prevention trial that you were discussing.

How far along is the design of this trial and has the FDA seemed amenable to looking at the trial to potentially assess not only for adeno as the primary endpoint but also potentially other CMV on secondary?.

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.

Sufficed to say that this is in planning stages at this point, but we are in active conversations with the key opinion leaders and investigators who support this type of a design to get back to the multi-viral prevention promise for brinci..

Okay. And another question on the 199 study, that it seems that that study has been designed to obtain potential approval in the EU.

Could you just also outline what next steps would be for seeking out that indication in the U.S.?.

So we hope to conduct a study in the U.S. as well. The Europe has mechanisms for conditional approval based on surrogate endpoints and we believe that the promise is 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 U.S.

but the study is primarily designed to fulfill conditional approval mechanisms be in Europe..

Our next question comes from Yigal Nochomovitz with Citigroup..

Hi guys, thanks for taking the question. Garrett, if you could just offer some general thoughts on return of your full data, now that you have seen it, was there any opportunities in that data set that you could exploit after seeing the full data.

And then more specifically with regard to the multi-viral prevention trial assuming that works obviously that you would have a success on a secondary endpoint for CMV and competing with which some of you would say the primary endpoint for CMV prevention.

So I was curious how you would position brinci with respect to physicians making the decision between those two drugs? Thank you..

Sure. So I think that what we have seen from some of your data we clearly we were down in Orlando watching the presentations. Clearly they met the primary endpoint of the study with regards to the prevention of clinically significant CMV infection and that is certainly good news for patients.

This was a study that was in adults and they have not done any dose range finding or any dosing in pediatric patients. And so we clearly see the pediatric subjects who are really at risk from 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 includes not just adenovirus, not just CMV, but also BK virus which causes hemorrhagic cystitis in this patient population.

So that's our direction and goal at the moment once we demonstrate that type of multi-viral prevention and can get IV to market then we will obviously also have a platform for here for adult patients as well.

We are planning on conducting as shown in the pipeline slide of dose range finding studies for CMV treatment and for BK treatment which again is a population with unique unmet medical need and we are also planning to develop Phase 3 studies once we complete those, those dose range finding studies for BK in particular..

Thank you very much..

I also think -- this is Linda. I also think there is 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 -- the products could cover multiple infections, I think we will be looking at a health economic dossier and a reimbursement dossier that would demonstrate the cause 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 antiviral would be something that we would consider pending our data..

And is value from a patient protection as well Linda the patients who take Letermovir because it's CMV only it doesn't cover Herpes virus, it doesn't cover -- it doesn't cover varicella zoster virus.

So the patients not only have to take pills once a day to prevent CMV, they also have to take pills twice a day to prevent Herpes and varicella zoster versus what we hope will be a single IV infusion once weekly to prevent those viruses and more..

Our next question comes from Phil Nadeau with Cowen and Company..

Good morning, thanks for taking my questions. First a follow-up to Dave's question, FDA in study 999 seems like you've been in discussions with the FDA over a pivotal trial design in adenovirus treatment for about a year. And so I'm sure that you have kind of proposed something like study 999 to them in the past.

What was their issues with the design, is it the endpoint do they want something more like a mortality endpoint rather than adenovirus clearance or is there something else that the FDA can get comfortable with?.

Yes, I will address that first and then hand off to Garrett. Certainly in our work with the antiviral division at the FDA over a number of decades, we have seen their acceptance of surrogate endpoints like viremia.

We do have ongoing discussions in agreement with the European regulators to accept that surrogate endpoint and our hope is that with additional data that that could be considered by the FDA for an approval.

And in addition though with the ability of IV to provide that longer-term prevention we think that 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 formulations. So this will be upcoming decisions excuse me discussions with the FDA as we move forward with the program..

Just I mean most of our conversations have been around the AdVise Trial. The results from the AdVise trial and applying these results in potentially treatment of adenovirus disease where the FDA has been focused on overall mortality as an endpoint.

Pretty difficult thing for us to do particularly with -- without the ability to do a placebo control and with off-label cidofovir being used in that patient population.

So really I think that the 999 study is our opportunity to conduct a -- the first comparative study head-to-head against current standard of care to demonstrate the both the virologic and clinical benefits that brinci can bring..

That's very helpful, thanks. Then second on the study that you are doing now, the single ascending dose study, it looks like you've seen good tolerability with a two hour infusion of IV brinci.

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

So the four hour infusion is as much as 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 and AUC relationships.

What we are looking at it is not just concentrations 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 that we're getting from the study is going to be cidofovir diphosphate concentrations in peripheral blood mononuclear cells and to look at the difference between two hour and four hour infusion on that key parameter which hopefully can help us understand better the whether weekly dosing or twice weekly dosing is going to be needed in treatment indications..

That's very clear, thank you. Then last question for Tim.

Tim on the small pox, small pox contract with BARDA is it still your expectation that you could see revenue once there is a budget passed or have your expectations changed?.

You are speaking about procurement revenue from a procurement contract, Phil?.

Yes, that's right..

Yes, well so I mean we've 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 and we would be in a position to do that within let's say the first one to two years they are after 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. We remain hopeful but predicting the future especially when it involves our federal government is pretty difficult thing..

Our next question comes from Katherine Xu with William Blair..

I'm just wondering -- hi morning. I'm just wondering with regards 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 and then patients check other hospitals before then and if it's a weekly let's say four hour infusion.

And also in the pediatrics study you are going for the IV for multi-viral prevention but also the orals for adenovirus treatment, is there some redundancy there?.

Well thanks, Katherine. So 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 transplantation.

And almost allogeneic stem cell transplant centers have the patients very close to the center after they discharge from the hospitals, 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 base, they are frequently receiving other IV administered products and so a two to four hour infusion during one of those visits via the Hickman catheter support that they have is really actually quite convenient for them when compared to the full burden that would be associated with other comparable prevention agents..

And in our preliminary I can pass that up with some of the preliminary market research that we did. When we were originally looking at the IV formulation and saying okay what do, we have here is it practical. And we had some positive feedback on that.

And I think as we are learning more about the potential additional benefits of IV as we do our single ascending dose when we get into this, the target product profile will become even more enhance.

So I think in addition to the practicality of those HTT patients being near the center and what benefits we may bring it will become less of an issue for sure..

I think your second question was on the redundancy of oral versus IV. We really see it as increased 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 a significant decrease in adeno associated mortality.

So we believe that it is important for this one last treat to clear study, study 999 to quickly get oral brinci on the market and probably gather the data that we now have an almost 1,000 individuals who have been treated with brinci for life threatening adenovirus infections.

Whether an IV that would be coming probably a year behind that would be preferable it's probably in some of the more advanced cases where you have concerns about absorption, we do know from our radiolabel study that IV brinci does provide drugs to the lumen of the gut. So we can get drug inside the gut even with an IV administration.

So certainly you could treat with either oral or IV for a gut infection. But 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 their first four months that are at their highest risk.

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

So again summarizes oral and IV availability we believe gives us flexibility in these different indications..

Great, thank you. And I have a couple of more if I may.

For the CNS indications that that you might pursue because of the CNS penetration of IV brinci, what are the most attractive and low hanging indications that are clinically and regulatory feasible? And also in terms of different reactions from pediatric population to drug of course there are lot of various explanations, but in particular with regards to diarrhea it has ratchet differently to brinci or brinci and then we also observed in other studies with different mechanism of drugs in the thesis.

Equivalent kind of a dosing would cause a severe diarrhea in adults like nothing in pediatric patients.

So just curios any insights that you have been on the mechanism potential explanations there?.

Well as far as the first question was concerned so what would be the most attractive CNS infections, certainly there is a lot of interest from investigators to look at Herpes simplex encephalitis that's one proposal that we have had for a number of years 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 a cycle of year.

So which obviously is a goal standard in that infection. So there is a lot of interest in that area. Other areas that are very interesting are JC virus. Obviously there is nothing to treat JC virus and is a particularly 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 that we've learned a lot from the animal studies by doing some of these radio labeled animal studies with IV and oral therapy.

What we do see is obviously that that when the drug is given intravenously there is comparable levels of brinci to get to a variety of tissues including the gut, so more even exposure. But when oral brinci has given you see most of the drug staying within the gut, some of the drug obviously gets into the plasma.

We know the amount of drug that gets into the plasma has been effective in reducing adenovirus in these patient populations. But we know that that's one of the key learnings from the IV and oral rat labeled studies. That's why is different in kids versus adult.

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's our working hypothesis as far as differences that we've absorbed there..

Our next question comes from Jessica Fye with J.P. Morgan..

Hey guys thanks for taking my question. With respect to the placebo control add no prevention studies for IV brinci.

The dimensions that better tolerability could allow for a longer duration of dosing in the high risk period and is 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 when you can give us more details of the Analyst Meeting that you're talking to regulators about the design in the very near-term?.

Well, I think what we will be talking about is the science behind the design. We have some strategies for enriching this population of patients for significant adenovirus infection based on some recent publications and work by a number of different investigators in the space.

And we will be spending some time talking through all of the science behind this and the rationale for the population that we propose to look at.

But the bottom-line is it patients pediatric patients with adenovirus infection after transplant usually carry the adenovirus infection into the transplant and so what that means is that 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..

Okay. And then pardon me if I mentioned this but, you talked about some Grade 1, 2 abnormalities with IV brinci.

What were those and were they dose dependent? I know you said you saw no liver pre-clinically so curious what those might have been?.

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

We will have more data at the April Investor Event.

As Garrett mentioned well 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 new trends, certainly no heme, no kidney toxicity and again well tolerated as Garrett's review.

So we will have all of the specifics that we can share at the end of April..

Our next question comes from Ed White with FBR & Company..

Hi guys, thanks for taking my questions.

Most of them have been answered but I do have a question on small pox, 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 have been having with the FDA?.

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 a small pox medical countermeasure 200 milligrams once a week for three doses.

As we submitted that last year, together with the rabbit pox efficacy study, both of those are actually coming out in the paired set of managed reps in the next couple of months, again so the safety and the efficacy.

We are waiting to hear back on a couple of key questions on the FDA's review of the rabbit pox efficacy model prior to initiating the second animal model. So there is just a couple of outstanding questions on design element 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's not -- it doesn't take a long time to run those studies. So we just want to make sure we get that nailed down prior to kicking off that study.

Again this should suffice with as a second animal efficacy model and once the data are available, our plan is to get in front of the FDA as quickly as possible to make sure there is nothing else that needs to be explored to fulfill a potential NDA which could be our first approval in the U.S. potentially for small pox.

So again we will keep you guys updated as soon as we hear back in on the timing of say conduct of that second efficacy study..

Our next question comes from Stephen Willey with Stifel..

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

It appears as though in study 999 there is an assumption of a standard of care of objective response rate of 40%; we were just sort of wondering how you derived at that those assumptions? And what you believe the components of standard of care will be particularly given that cidofovir is not available in Europe?.

It's a great question. Because when one looked at the literature and tried 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 and 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 is others that have basically looked at all kinds of other endpoints and they are starting at different places as well.

The standard care really is 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 10-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 but should be available soon. We hope that that will see some of that data presented at upcoming scientific conferences.

But those are the data that 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..

Thank you. And just by way of follow-up if the U.S.

sites are included into study 999 which you then have to adjust the assumptions to accommodate cidofovir usage and what are some of the baseline variables that you envision sort of stratifying in the study 999 trial?.

So some of the key, some of the key findings that we've talked about before the speed of viralogic clearance depends on where you start, it's also very important to look at in order to decrease variability to look at transplants that occur 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 to 10,000 range.

But we believe that there will be some patients that exceed that level and that's the key stratification factor for us to look at..

And just one last question, the results presented at BMT, at the BMT meetings demonstrated that a higher proportion of pediatrics patients were capable of decreasing viral loads to undetectable levels.

Often pediatric patients who attained these decreases in adenovirus viral load, what proportion of adults versus pediatric patients given that you're assuming that it's the reconstitution of the compartment that's sort of responsible for this, am I understanding that correctly?.

Well I think the differentiating factor for brinci when compared to IV cidofovir is that brinci is able to achieve rapid declines 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 where similar conclusion was made.

Again the lymphocyte at its time of virologic clearance was much, much lower in the patients treated with brincidofovir versus cidofovir. Cidofovir only could achieve virologic clearance once the 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 that we will be able to deliver positive results in the 999 study..

Just one clarification so in the adults, one thing that well both in pediatrics and adult patients we saw the strong correlation between clearance of adeno from the blood and the significant decrease in mortality the overall and adeno-associated mortality that was consolidated in those pediatric and adult patients.

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

So we did continue to see that same correlation in kids and adults, it's just that adults had many other competing risks for short-term mortality because we don't screen them. So they do tend to get diagnosed later. But those advantages are consistent across those populations.

And again in some of the data that Linda has shared earlier last year was that we see adenovirus infections and hospitalizations in both adults and pediatrics 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 are seeing in screening and earlier identification of adeno in adults..

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

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Go ahead..

And I was just letting know that I wasn't showing any further questions on the phone lines..

Okay, perfect, thank you very much.

Well thank you all for joining us this morning, again it's 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 accumulative risk that we're seeing in both adult and pediatric patients with viral -- DNA viral reactivation of CMB and beyond with the other DNA viruses.

We are excited to be moving forward with study 999 for short-course oral brinci with a treat to clear paradigm and again we will share more of the details on that study at our Investor Event.

We will also have the full details on the IV single ascending dose study with our four cohorts and again some exciting opportunities to look at the two hour versus four hour infusion and perhaps one of the first time that we have been able to understand the nuclear side pharmacokinetics and tease out some of those factors that can influence different compartment levels of active antiviral and how we can use the flexibility of IV brinci to prevent, to treat and to really make a positive impact of the outcomes in patients who are suffering from multiple DNA viral infections.

We have to see you all at the end of April and the 2017 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. Operator Ladies and gentlemen this concludes today's presentation. You may now disconnect and have a wonderful day..