Timothy Trost - CFO, SVP and Corporate Secretary Michelle Berrey - CEO, President and Director Linda Richardson - Chief Strategy and Commercial Officer Michelle LaSpaluto - Senior Director of Accounting Garrett Nichols - Chief Medical Officer.

Yu Xu - William Blair & Company Stephen Willey - Stifel, Nicolaus & Company David Lebowitz - Morgan Stanley Ryan Tochihara - JPMorgan Chase & Co. Philip Nadeau - Cowen and Company Yigal Nochomovitz - Citigroup.

Good morning. Welcome to the Chimerix conference call discussing the financial results of the second quarter 2017. Please be advised that today's call is being recorded at Chimerix' request. I would now like to turn the call over to Michelle LaSpaluto from Chimerix..

Thank you, and welcome to the Chimerix Second Quarter 2017 Financial Results Conference Call. This morning at 7:30 a.m., we issued a press release containing the financial results and other updates for the second quarter 2017. 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 2 hours after the conclusion of the event.

With me on today's call are Michelle Berrey, President and CEO; Garret Nichols, Chief Medical Officer; Linda Richardson, Chief Strategy and Commercial Officer; and Tim Trost, Chief Financial Officer.

Before we begin, I'd like to remind you that statements that are made on today's call include forward-looking statements within the Private Securities Litigation Reform Act of 1995 and are subject to risks, uncertainties and other factors, including the possibility there may not be a viable continued development for brincidofovir, that the FDA and other regulatory authorities may not approve brincidofovir or brincidofovir-based regimens and that marketing approval, if granted, may have significant limitations on their use.

As a result, brincidofovir may never be successfully commercialized. In addition, Chimerix may be unable to file for regulatory approval of brincidofovir with other regulatory authorities. These risks, uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements.

You are cautioned not to rely on these forward-looking statements.

These risks and uncertainties are described in detail in Chimerix' filings with the Securities and Exchange Commission, including in the Form 10-Q filed earlier today, its most recently filed reports on the 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 such forward-looking statements. At this time, I'd like to turn the call over to our President and CEO, Michelle Berrey..

Good morning, everyone, and thank you for joining us today. In recent weeks, we've made considerable progress as we continued to advance both the oral and IV formulations of brincidofovir.

As we outlined at our Investor Event in April, we have the opportunity to potentially launch oral brinci with the first indication for the treatment of adenovirus infection prior to introducing the IV formulation. I'm happy to report this morning that dosing in our multiple ascending dose study of IV brinci in healthy subjects has begun.

As Garrett will describe in great detail later in the call, data from this study will help inform the clinical development of the IV formulation, including the design of our planned MVP-Peds or Multi-Viral Prevention for pediatric patients trial.

Following Garrett's clinical update, Linda will outline our upcoming scientific presentations in the natural history study of adenovirus virus infections in Europe known as AdVance. After that, Tim will detail our strong balance sheet, which allows us to execute on our robust clinical development plans.

With that, I'll now turn the call over to Garrett for an update on clinical programs..

Thank you, Michelle. I'll begin this morning with a quick update on the progress we've made with our oral brincidofovir program. Start of activities are ongoing for our AdAPT trial, formally known as Study 999.

This study is designed to evaluate the efficacy and safety of short course brincidofovir versus the current standard-of-care for the treatment of adenovirus infections in pediatric stem-cell transplant recipients. We are in active discussions with U.S. and European regulators and plan to initiate AdAPT before the end of 2017.

It's worth noting that through July of this year, we've received 165 requests for brincidofovir for the treatment of adenovirus through our expanded access program, a fact that continues to highlight the tremendous unmet medical need for this indication. Let's move on to our IV brinci program.

As Michelle mentioned earlier, we have begun dosing in our multiple ascending dose study of IV brinci in healthy subjects.

This study follows on from data from our successful single ascending dose study of IV brinci in which a total of 40 healthy subjects were randomized to receive either a single dose of IV brinci or placebo in 1 of 4 cohorts, 10 milligrams, 25 milligrams, 50 milligrams given every 2 hours and 50 milligrams given every 4 hours.

IV brinci ad doses of 10 and 25 milligrams provided drug levels similar to the exposures achieved in the AdVise study and levels that should provide for the prevention of viral reactivation in virus patients. The 10 and 25-milligram doses demonstrated a favorable tolerability profile with no drug-related adverse events identified.

The multi-ascending dose study builds on this experience and is designed to demonstrate the safety, tolerability and pharmacokinetics associated with multiple doses of IV brinci given weekly or twice weekly in healthy subjects.

We are also evaluating options for a small study in virally-infected transplantations to generate multi-dose pharmacokinetic and safety data. These data are intended to inform the plan Phase II, III study of Multi-Viral Prevention of DNA viral infections in pediatric stem-cell transplant recipients, the study that we call MVP-Peds.

We look forward to reporting on the data from the multiple ascending dose study around year-end. Finally, we continue to progress towards the initiation of our first in-human study of CMX521 for the treatment of norovirus.

CMX521 is a nucleoside analog, which targets the norovirus polymerase, a part of the virus that is required for viral replication and which is conserved or common to the noroviruses that have been associated with the outbreaks in recent years.

CMX521 has demonstrated consistent in-vitro activity against genetically diverse norovirus strains that are associated with these norovirus outbreaks. We expect this first time in-human study of the first antiviral candidate for norovirus to begin around year-end. With that, I'll now turn the call over to Linda..

Thank you, Garrett, and good morning to all those joining us by phone. Today, I'll highlight some of our upcoming scientific communications involving brincidofovir. In September, at the European Society of Clinical Virology Meeting, we'll share a comparative PK data for the IV and oral formulations of brinci.

Next, during IDWeek in early October, we'll be presenting data on the PT -- PK and safety of IV brinci in healthy adults from our recently completed single ascending dose trial. These conferences will provide additional detail on our programs to the scientific and medical communities beyond what we have shared with you previously.

Our retrospective study, looking at the natural history of adenovirus infections in Allo transplant recipients in Europe is called AdVance.

This study involves approximately 40 transplant centers in 7 European countries and will significantly enhance the level of understanding we currently have involving adenovirus infections and treatment with the current standard-of-care, which is predominantly reducing immunosuppression and/or the off-label use of IV cidofovir.

AdVance will provide detailed information regarding the clinical progression and outcome of ADV infections in adult and pediatric HCT patients, including the incidence of ADV infection and co-infections with other DNA viruses.

Furthermore, AdVance will examine current practice patterns around the management of ADV infections and highlight any differences among these participating countries. The information obtained from AdVance will increase our understanding of ADV infections and enable us to apply these learnings to inform potential future trials and clinical approaches.

We expect to generate a series of scientific publications and presentations based on the findings in AdVance beginning in the first half of 2018. I'll now turn it over to Tim..

Thanks, Linda, and good morning, everyone. As Michelle LaSpaluto mentioned in her introductory remarks, earlier today, we issued a press release containing our financial results for the second quarter 2017.

Starting with our balance sheet at the end of second quarter 2017, we remained well capitalized with approximately $251 million in capital to fund operations. We also have approximately 47 million outstanding shares of common stock. Turning to our statement of operations.

The company reported a net loss of $16.7 million or $0.36 per basic and diluted share for the second quarter of 2017 compared with a net loss of $18.1 million or $0.39 per basic and diluted share in the second quarter of 2016.

Contract revenue for the quarter was approximately $0.7 million as compared with $1.8 million for the same period in 2016 due to a decrease in the second quarter of 2017 in reimbursable expenses associated with the company's ongoing development contract with BARDA.

Research and development expenses decreased to $11.6 million for the second quarter of 2017 compared with $13.8 million for the same period in 2016.

This decrease was due primarily to completion of the AdVise trial, a decrease of our BARDA reimbursable expenses; and a decrease in compensation expense, partially offset by an increase in expense related to CMX521 for norovirus.

General and administrative expenses decreased to $6.3 million for the second quarter of 2017 compared to $6.6 million for the same period in 2016. The decrease results from a reduction in compensation expense and other G&A expenses, partially offset by an increase in commercial preparation.

Loss from operations was $17.2 million for the second quarter of 2017 compared to a loss from operations of $18.5 million for the same period in 2016, due primarily to the decreased research and development expenses as previously discussed.

Looking forward to the remainder of 2017, we currently expect R&D expenses for the full year 2017 to remain relatively consistent with full year 2016, although there may be unevenness from quarter-to-quarter.

Key drivers of the 2017 R&D expense remain gearing up for our AdAPT trial, our work on IV leading to the MVP-Peds trial, our CMX521 program for norovirus and our smallpox development program. I'd like to close by again highlighting our strong balance sheet, which at the end of second quarter 2017 reflected $251 million in available capital.

We will also continue to maintain our rigorous emphasis on cost control as we move forward with these programs. With that, I'd now like to turn the call back to Michelle for final remarks..

Thank you, Tim. I trust this morning's updates have provided you with a better understanding of our continued work advancing both the oral and IV formulations of brincidofovir. We continue our development of brinci for smallpox in collaboration with BARDA.

On Friday, we received correspondence from the FDA that we will need to conduct a second rabbitpox study. We have to get clarity from the FDA in the near future.

We believe the following outcomes are possible, one, we may need to conduct a second rabbitpox study; two, we may be able to rely on the one pivotal rabbitpox study we have already conducted and filed; or a third alternative outcome. Once we have agreement on the development plan with BARDA and the FDA, we will certainly share those with you.

As we look toward the second half of this year, we anticipate several important milestones, including the initiation of our first in-human study of CMX521; data from our multiple ascending dose study of IV brinci; data from AdVance; our natural history study of adenovirus infections in Europe; and the most importantly, initiation of AdAPT, the trial of oral brinci for the treatment of adenovirus infection in the U.S.

and in Europe. Importantly, we remain well capitalized to execute on these key milestones. Operator, we'll now open the line for any questions. Thank you..

[Operator Instructions]. Our first question is from the line of Yigal Nochomovitz of Citigroup..

On AdVance, can you just give a little more color on the design of that study in terms of how many patients you're going to look at? And presumably, you might encounter patients that actually get brinci via the EAP in Europe, so how are you going to handle that in the context of the natural history study?.

This is Garrett, I'll take that one. The number of patients that we're targeting to get are over 100 patients with significant adenovirus infection, and that is confirmed adenovirus viremia. But we're capturing all adenovirus infections in Allo cell transplant patients that occurred over the last couple of years.

What we're looking at is a population of patients that is treated before the availability of brincidofovir via the expanded access program, so that will necessarily exclude the last 18 months or so when the brincidofovir was made available to them.

So it is capturing outcomes in patients that were treated with standard-of-care before the availability of brincidofovir via expanded access..

Okay, great. And then on the EAP, I think Michelle said you had 165 requests.

Was that all in Europe or was there any in -- outside of Europe or in the United States?.

No. That's a combination of both European and U.S. requests..

Good.

Can you say what the split is on that?.

It's about 50-50..

Okay, great.

And then for the multiple dose, ascending dose study, I'm not sure if you've outlined what doses you're going to be taking forward there?.

So we're looking at weekly and biweekly doses. We're planning on enrolling 3 cohorts of patients. Patients will be dosed at 10 milligrams or placebo dose weekly, 20 milligrams or placebo dose weekly and then 20 milligrams or placebo dose biweekly. But those dosing cohorts could change based on data that emerges from the initial cohorts..

Okay, great.

And then on the rabbitpox study, Michelle, did you get anything further from the FDA in terms of their thinking on why they would want to see another study?.

No. We don't have any further information at this time, but we hope to have clarity in the short term. And we'll certainly share that as soon as we know more..

Our next question is from David Leibowitz of Morgan Stanley..

Would you be able to elaborate on the data that you'll be presenting in September? As I understand, you were saying it's going to be comparative between IV and oral? What are we -- what should we be seeing?.

So it's similar to the data we've shared with you previously. This is information with regards to the pharmacokinetics of brincidofovir when dosed orally at 100 milligram-dose compared to the doses that we explored in the IV single ascending dose study. Those were 10 milligrams, 25 milligrams and 50 milligrams.

So we're looking at the concentrations in the plasma. We're looking at the concentrations in cells as well, so the intracellular concentrations of brincidofovir -- intracellular concentrations of brincidofovir and cidofovir diphosphate in cells, which is reflective of tissue exposures of cidofovir diphosphate, the active antiviral..

And then on the BARDA study, I guess did they elaborate specifically on why the first rabbit study was not sufficient and how the second rabbit study might be different? And were there other animal studies in the past, besides rabbit?.

Yes. So there has been -- so to your first question, we don't have any more information at this time, but, again, I hope to get clarity in the short term. We have done many studies in rabbits and in mice, and those are the 2 models that we've decided on.

We have done other studies in other animals, but those 2 animal models are the 2 that we have agreement with the FDA to use as our 2 pivotal efficacy study models..

Do you have any perspective on timing of when the study might start? And how long will it take?.

So the mouse work is continuing, and we are hoping again to get that study started once we get agreement on just the last couple of items that we're reviewing with the mouse model. We don't have any other information on the rabbitpox at this time..

Our next question is from Jessica Fye of JPMorgan..

This is Ryan on for Jess.

I guess continuing on with the sort of the smallpox study, I mean is the -- did you need the mouse data in order to start the rabbit study?.

No. No. So they're really running in parallel and are independent of each other. The rabbitpox model is a much more robust model. Because the rabbits actually developed clinical signs. You may remember that we had the trigger for beginning dosing in those animals with fever.

So very much like humans with smallpox, they have an incubation period during which they're asymptomatic, don't have any clinical signs. Then they developed fever and shortly thereafter, a rash just like humans do, about halfway through the disease course and then they progressed to disseminated disease.

The mouse model, the mice actually don't develop signs. So they are fine, don't exhibit any clinical signs that can be used to confirm their infection, and then die several days into the infection. So we have to use a different trigger for the infection.

Generally, that has been based on the past on a set number of days post inoculation, when we know that we have confirmation that all the animals are infected. So that's one of the differences. But the rabbitpox model is considered one of the, if not the, most robust animal model..

And would that need to be -- I mean, would it need to be a larger study? Or is there just not any clarity at this point?.

Not any clarity at this point. Again, we just received this on Friday last week. So we'll certainly share once we get clarity..

Our next question is from Phil Nadeau of Cowen and Company..

First, on the AdAPT study, could you maybe give us some understanding of what you are still discussing with U.S. and EU regulators? In particular, do you feel like there's a path to getting the U.S.

regulators to agree on the design before it's initiated?.

Yes, we do. As you know, we've designed AdAPT to investigate short course oral brinci versus standard-of-care therapy with the primary endpoint of clearance of adenovirus in the plasma at week 4. And we've now received scientific advice from the EMA, and we've also received protocol feedback from the FDA.

We're in the process of aligning the feedback on the protocol design, and once we have a final agreement on that protocol design, the company will initiate the study before year-end..

At one point, you were -- or over many points, you were skeptical or discouraged that the FDA would accept a trial design like this. It sounds like things have changed.

Are they more open to considering this pivotal trial now than they have been in the past?.

I think what we've -- what we're engineering is a study that can be conducted in both the U.S. and Europe is designed -- has been designed together with the European regulators to potentially deliver a conditional approval in Europe..

I guess what I'm asking about is, is the U.S.

-- how encouraged are you that this could also support an approval in the U.S.?.

We think this is very encouraging. We're looking forward to being able to conduct the study, both in the U.S.

and Europe, and being able to demonstrate for the first time comparative outcomes with oral brinci versus current standard-of-care, where we believe that we'll be able to clear adeno viremia significantly faster at which we'll ultimately deliver better outcomes for those patients..

That's very helpful.

And then second on CMX521, do you have remaining preclinical tox phase to complete before entering the clinic? Or at this point, is it just getting IRV approvals and signs offs on the Phase I protocol?.

Yes. We're completing the final preclinical studies that are required for the initiation of the first in-human study. We're writing up the application and are in the process of completing all the paperwork that is necessary for us to initiate that first time in-human study..

Our next question is from Katherine Xu of William Blair..

I'm just curious about the MAD study for brincidofovir IV, probably, it's a general question as well.

So I'm just wondering for those healthy [indiscernible], are they pediatric subjects or adult subjects?.

No. These are adult subjects..

So how do you bridge to pediatric subjects and also bridge to the pediatric patients, all Phase 2 patients?.

Sure. So that's what we -- what I indicated in my earlier comments. The purpose of multi-ascending dose in healthy subjects is really to get a clean look at safety, tolerability and multiple dose pharmacokinetics.

But we are planning on doing a small study in virally-infected transplant recipients adults in order to bridge from healthy subject experience to our patient populations and look at the efficacy also of brinci against adenovirus, for example.

Once we complete those studies, then it's on to the MVP-Ped study, which we have -- as we've indicated in the past is a Phase II, III study that will initiate -- that we will initiate next year..

And that initial Phase II part, that is the bridge. So that's where you sort of work your way down in age to the youngest of patients, then we can confirm which doses of the IV deliver the exposures that we know we need to target..

All right.

And then so that Phase II portion was also dose ranging?.

No, not necessarily. It's just a bridge from the adult exposures that we've achieved that have demonstrated efficacy to the pediatric patients and the doses that are necessary usually on a weight basis to achieve those exposures in pediatric patients..

All right. Okay, great. Another question is on AdVance.

So the learnings of AdVance, will that affect the designs of AdAPT, which is coming up really quickly and/or MVP-Peds?.

Well, I think it is. It will definitely inform our approach as far as MVP-Peds. So there are a number of different screening protocols that are in place in Europe.

Patients are screened either using plasma for the initiation of therapy, but there's also a growing use of screening of stool because stool reactive -- adenovirus reactivates in the gut prior to dissemination in the blood.

So as we've described before, this is probably the insight that we -- for us to be able to use to conduct a placebo-controlled trial in pediatric patients, where we would trigger the initiation of brincidofovir based on adenovirus detection in the stool and initiate brinci or placebo at that time point in order to prevent the development of adenovirus disease.

But further, I think it's important to reflect that AdVance is also going to be very helpful for us with regards to regulatory submission for -- based on the AdAPT trial because it really establishes the unmet medical need that is present with current standard-of-care..

Our next question is from Steven Wiley of Stifel..

I guess just a couple on the requests that are coming through the -- toward the expanded access program, you said 165 requests. Can you say what proportion of those patients would also have been eligible for AdAPT? I'm just kind of curious to understand if the inclusion, exclusion criteria for those 2 things are -- if they're harmonized or not..

Well, if anything, these patients that are receiving brinci via expanded access are sicker, are earlier or are later in the disease course. Because really, these are patients that basically have no other options per expanded access compassion-use criteria.

So these are individuals, who either can't take cidofovir because of contraindications or have failed prior cidofovir use. What AdAPT is looking at is preemptive therapy earlier in the disease course and, thus, the 165 number would likely expand as far as eligibility is concerned..

Okay. And then I guess it now sounds like you're incorporating some feedback from FDA into the design of AdAPT, and you have provided us before with a little bit of an outline with respect to what that trial might look like.

So I guess post some of this FDA feedback, should we expect the design to change meaningfully at all? I'm just kind of curious if what FDA has informed you is relatively in-line with what you guys were thinking about..

Yes. I think that we're looking at capturing a number of different virologic and clinical outcomes, but the basics of the study design are not likely to change..

Okay. And then just lastly on the bridging work that was mentioned for the IV formulation. I guess it was kind of previously described that the clinical efficacy with the IV formulation would be obtained in adults, who had cellular organ transplant infections. I think with CMV, viremia.

So should we now expect that Phase II portion should also include peds and also adenovirus infections?.

Sure. So we've had several conversations with regards to the ideal population for us to conduct a Phase II study for virally infected patients. Ultimately, the adenovirus infected patient population is the kind that we're seeking to make between healthy subjects and the MVP-Ped study.

So that I think that, that is the way that we are currently thinking about this. And we're looking to engineer the studies to basically answer questions about the efficacy of brinci in that patient population as well..

And it looks like we have a follow-up question from Yigal Nochomovitz..

Just to go back to Phil's question on AdAPT and how the FDA sees the study.

Is it the case that the FDA is potentially more amenable to the primary endpoint of a 4-week viral clearance to support some sort of accelerated approval? Or is that the wrong interpretation?.

I'm not sure that I would read into that. I think that what we've asked is the ability to conduct this study in the U.S. And I think that we've received feedback with regards to the protocol itself..

Our next question is from Jessica Fye of JPMorgan..

Maybe, Michelle, regarding the emergency access and expanded access care in the U.S., does that conflict or potentially need to get shut down, given the trial designs? And how would the FDA potentially deal with that? I think this is for the MVP-Peds study..

Yes. So for the AdAPT study, that's really the patient population that is currently receiving -- adenovirus infected patients, that's who's currently receiving brinci through our expanded access program 351.

And that's, again, as Garrett alluded to, a similar population although, again for AdAPT, we are hoping to capture these patients much earlier in their infection, the first few weeks after the transplant. So yes, we are looking at what the needs would be.

Certainly, if expanded access were available for the same patients, that would be their preference. So we are looking at a temporary pause on that for the patient population that would be enrolling in AdAPT..

That does conclude the Q&A session. I'd like to turn the call back over to Michelle for any further remarks..

Great, thank you very much. Thanks all for joining this morning. I appreciate it, and hope you have a good Monday. Thank you..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a great day..