Good morning, ladies and gentlemen, and welcome to the Chimerix Third Quarter 2020 Earnings Conference Call. I would now like to introduce you to your host for today's call, Michelle LaSpaluto, Vice President of Strategic Planning and Investor Relations at Chimerix. Please proceed..

Thank you. Good morning, everyone, and welcome to the Chimerix Third Quarter 2020 Financial and Operating Results Conference Call. This morning, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release in our Investors section of the website.

With me on today's call are President and Chief Executive Officer, Mike Sherman; Chief Medical Officer, Allen Melemed; Chief Financial and Business Officer, Mike Andriole; and Chief Scientific Officer, Randall Lanier.

Before we begin, I would like to remind you that the statements made on today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties and other factors.

These risks and uncertainties and other factors could cause actual results to differ materially from those referred to in the forward-looking statements. Please refer to our filings with the SEC for a more complete disclosure of these risks and uncertainties.

At this time, I would like to turn the call over to our President and Chief Executive Officer, Mike Sherman..

Good morning, everyone, and thanks for joining us. You can imagine, we are very excited to have completed the filing of 2 separate NDAs, one for the Tablet and one for the suspension formulations of brincidofovir.

This is a culmination of years of effort alongside BARDA to satisfy their mandate to bring a second countermeasure to the strategic national stockpile for smallpox. As you know, this work was not without its challenges. So as I joined this team 1.5 years ago, it was not a milestone we took for granted.

There's an important need here, though, so we decided to narrow our focus to this indication. And as part of that decision, we out-licensed all other indications of brincidofovir to SymBio. The need for a second smallpox countermeasure is clear, and it's the reason BARDA has a mandate to deliver one.

It's critical to have an alternative mechanism that is not vulnerable to the emergence of resistant lethal strains intentionally developed and released or through natural selection. Brincidofovir addresses that need, and compelling resistance data is a strong element of our NDA submission.

It's imperative to have a therapy for which administration during a crisis is simple. The short course dosing of brincidofovir delivers on that. It's also important to have a therapy easily available for pediatric use as well as adults. The suspension formulation of brincidofovir satisfies that need.

It is likewise of value that the use of brincidofovir is compatible with the use of vaccines and potentially in combination with alternative countermeasures, maximizing the optionality for saving lives during an outbreak.

Our decision to enhance our focus on this work paid off as we have successfully generated the final elements of animal data to support the primary survival endpoint. We've confirmed an attractive resistance profile and provided evidence to support appropriate human dosing.

We are also keen to enhance our relationship with BARDA as the key partner in this program. And in reaching out to BARDA leadership just recently, I was very pleased with their continued engagement in the midst of their COVID work.

They are excited about this submission, and we had a very transparent conversation about the path forward to a potential procurement.

While there can be no assurances, of course, we came away from that conversation feeling very positive about the prospects that an RFP could be issued in the first quarter of next year with an execution of a procurement contract about the time of potential approval.

BARDA, of course, remains busy with our COVID activities, but it is very clear that obtaining a second smallpox antiviral is a priority for them. The next news flow we expect on this program is FDA's formal acceptance of the filing and a communication of a PDUFA date. We expect to hear from them late this month or early December.

FDA's decision on our requested priority review will obviously impact the PDUFA date. As I mentioned recently, we restarted our work to initiate the Phase III trial of DSTAT in acute myeloid leukemia or AML. We remain on track for first patient visits early next year.

As a reminder, this trial will be in 570 newly diagnosed adults with AML that are healthy enough to receive intensive chemotherapy. Importantly, we've designed an early efficacy analysis in this study at 80 patients. Recall that the primary endpoints on that trial are event-free survival and overall survival.

We have had detailed conversations with the FDA to ensure we're aligned on how we plan to assess MRD or minimal residual disease as well. This is a secondary endpoint and a key element of our 80-patient assessment.

Consistent with our own interpretation of historical data, we were encouraged by a recent meta-analysis published in the Journal of the American Medical Association, in which a strong link is suggested between MRD status and outcomes in patients with AML.

I'll let Allen expand on this, but the key takeaway is this data validates our choice of MRD as an early indicator of efficacy. Our 80-patient efficacy assessment of MRD, therefore, will be a meaningful data readout, providing both management and investors with a strong predictor of Phase III success and making it an important potential catalyst.

Now let me make a few comments about our DSTAT trial in COVID. As it has been for other study sponsors, this has been a challenging one to predict. We felt very good about our early momentum and investigator enthusiasm.

And in fact, we anticipated, partly based on investigator feedback, we would have the Phase II portion of this trial enrolled very quickly. I'll let Allen describe a little more detail about what we're seeing here, but let me make a couple of observations at a high level. First, we continue to believe there's a significant need here.

There's such heterogeneity in how this disease manifests in patients, it will most likely require multiple therapeutic tools tailored to a patient situation.

For the same reason, it's also more likely that a multi-targeted therapeutic like DSTAT may achieve better outcomes compared to highly specific therapies that are directed to a single narrow target. Second, the rationale for this drug to provide benefit is as compelling as any I've seen. Third, physician enthusiasm remains strong.

And fourth, we believe being able to share some data on DSTAT in this disease will support the decision of future patients to participate in the trial. So as a result, we plan to unblind data as it is available from each cohort. We were optimistic as we identified this opportunity, and we expect to see it through.

That said, we will not sacrifice the scientific rigor of our trial design by significantly expanding the patient population or switching to a single-arm trial, each of which would accelerate access to data, but data, we believe, would be low value. We will also not overextend the resources we put on this trial.

I'm speaking of both the investment of time and money. We're disciplined to ensure we have the right resources on the AML program, where we're building on strong randomized Phase II data.

Data will be our guide here, and we're just a couple of patients away from at least being able to assess the first cohort, which would help inform our actions going forward.

In the meantime, we have recently had a couple of new sites reach out to us unsolicited with both a patient population and a high level of interest in enrolling a growing patient population.

We'll be able to activate each of these sites in the next few days, and that should ensure we're in a position to provide both endpoint and biomarker data from at least the first cohort in the first quarter. With that, let me turn the call over to Allen..

Thank you, Mike. Let me first expand on the importance of MRD and the findings of this meta-analysis study. As Mike mentioned, the meta-analysis of 81 separate studies of 11,151 patients found a link between MRD outcomes in patients with AML.

The average hazard ratio for patients who are MRD-negative as compared to MRD-positive patients was 0.36 for overall survival and 0.37 for disease-free survival. What this means is patients who are MRD-negative, or leukemia cells were no longer detected, may have better overall and disease-free survival.

This effect was seen regardless of their age, AML subtype, time of assessment or detection method. The study suggests MRD evaluation may be an earlier assessment of therapy and could lead to acceleration in the development of novel therapeutics as it is for other forms of leukemia.

The Phase III study that Mike mentioned will specifically evaluate MRD's data following the first 80 evaluable patients enrolled to better evaluate the relapse-free survival and overall survival observed with DSTAT in the smaller Phase II study. We plan to have the first patient visit in the study early 2021.

Once we have better visibility on the inter-site activation timing, we can provide timelines on the study. I would now like to expand on our ongoing Phase II trial of DSTAT for patients with COVID. This has been a challenging time for everyone involved in COVID.

Our company has committed to conducting a clinical trial that will provide useful and relevant data on the effectiveness of DSTAT for COVID and ultimately, patients with acute lung injury.

We are fully engaged with all of our clinical trial sites and applaud the efforts of these frontline workers, the doctors and the patients we are working for with our enthusiasm of the potential DSTAT may offer. That being said, enrollment in this trial has been slower than we anticipated.

Some of the factors contributing to this are the competition from multiple other trials, particularly the drugs that have already been approved in those indications, the willingness for patients to participate in a placebo-controlled trial and rapidly changing clinical practice of COVID.

These factors impact overall enrollment, but we are looking for ways to bolster enrollment, including the addition of new clinical trial sites and have recently actually sought out for participation of sharing the data early. Even early day can help encourage enrollment.

Just recently, we published a manuscript in Advances in Therapy entitled Design and Rationale of a Randomized, Double-Blind, Placebo-Controlled Phase II/III Study Evaluating Dociparstat in Acute Lung Injury Associated with COVID-19. Publications like this and ongoing efforts with sites and doctors will help us to get across the goal line.

We expect to report an interim data from COVID study in the first quarter 2021. We also look forward to updating you on the continued clinical progress with AML indications later this year. With that, I'll now turn the call over to Michael Andriole for a review of the financials.

Mike?.

Thanks, Allen, and good morning, everyone. As Michelle mentioned in her introductory remarks, earlier today, we issued a press release containing our financial results for the third quarter of 2020.

Starting with our balance sheet at the end of the third quarter of 2020, we remain well capitalized with approximately $88 million in capital to fund operations and no debt. As we approach year-end, based on current projections, we expect to end the year with approximately $75 million in cash. Turning to our statement of operations.

The company reported a net loss of $11.4 million or $0.18 per basic and diluted share for the third quarter of 2020, compared with a net loss of $73.7 million or $1.26 per basic and diluted share in the third quarter of 2019. As you may recall, we recorded a DSTAT transaction in the third quarter of 2019 of $65 million.

Revenues for the third quarter of 2020 were $1.6 million compared to $2 million for the same period in 2019. Research and development expenses increased to $10 million for the third quarter of 2020 compared to $7.5 million for the same period in 2019. The main driver of this increase is clinical trial expenses for DSTAT.

General and administrative expenses decreased to $3.2 million for the third quarter of 2020 compared to $4 million for the same period in 2019. Loss from operations was $11.6 million for the third quarter of '20 compared to a loss from operations of $74.6 million for the same period in 2019.

Again, the main driver of the variance is the purchase of DSTAT, which was recorded in the third quarter of 2019. With several significant upcoming milestones in 2021, we continue to be thoughtful about our deployment of cash and are well capitalized to achieve these milestones.

With that overview, I'll now turn the call back to Mike for closing remarks.

Mike?.

Thanks, Mike. Let me wrap up by providing my thanks to the dedicated team at Chimerix, the health care professionals participating in our trials and those with whom we collaborated at BARDA. We exit this year poised to deliver on the brincidofovir smallpox program, satisfying an important public health need.

At the same time, potentially providing substantial value to shareholders and long-term capital to the company. We're also poised to take the final step with DSTAT in AML with the initiation of the Phase III trial and an important data readout after just 80 patients.

And then we set ourselves up with a modest investment to assess the potential of DSTAT in COVID with a read-through to other inflammatory indications. It's an inexpensive option with a big upside. With that, let me thank everyone for joining us this morning, and we thank -- we look forward to updating you in the coming months on our progress.

Thanks again..

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect..

End of Q&A:.