Chimerix, Inc. (CMRX) Q3 2024 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call reveals mixed signals. Financial performance shows slight improvements with reduced net loss and decreased G&A expenses, but increased R&D expenses and ongoing net loss pose financial risks. The cash runway until 2026 is positive, but regulatory and operational risks remain. The Q&A highlights management's preparation for NDA submissions and commercialization efforts, but analysts' sentiment is cautious due to unclear responses on certain risks. Overall, the sentiment is neutral as positive and negative factors balance each other out.

Key Financial Performance

Net Loss $22.9 million (decreased from $24 million), showing an improvement in loss year-over-year.

Research and Development Expenses $19.6 million (increased from $17.4 million), primarily driven by increased spending in the ACTION study.

General and Administrative Expenses $5.2 million (decreased from $9.3 million), due to a one-time non-cash expense related to historical grants recognized during the same period in 2023.

Cash and Cash Equivalents Just over $152 million, with a modest increase in cash burn rate, but a cash runway extending into the fourth quarter of 2026.

Contract Value from BARDA $2.7 million due from a partial exercise of a contract option valued at $67.4 million, expected to be recorded next quarter.

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Operating Highlights

Dordaviprone: Continued enrollment in the global Phase 3 ACTION study, with an interim data readout expected in less than a year. The study is active in 15 countries and has passed an interim safety review.

ONC206: Nearing completion of Phase 1 dose escalation studies, with plans to announce next steps in the coming months.

Market Opportunity for Dordaviprone: Forecasting a potential global market opportunity over $750 million upon potential commercialization.

NDA Submission in Australia: Preparing to file for provisional approval in Australia by year-end, which may aid in timelines for other markets.

Cash Management: Ended Q3 with over $152 million in cash, with a cash runway extending into Q4 2026.

Research and Development Expenses: Increased to $19.6 million in Q3 2024, primarily due to spending in the ACTION study.

Commercialization Strategy: Preparing for potential commercialization of Dordaviprone, focusing on payer engagement and internal infrastructure.

Leadership Change: Josh Allen promoted to Chief Scientific Officer, enhancing leadership in research and development.

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Risk or Challenges

Regulatory Risks: The company is preparing for the submission of a New Drug Application (NDA) for provisional approval in Australia, which may also aid in submissions to other regulatory agencies. However, the efficacy component for this application will depend on the Phase 2 response rate data, introducing uncertainty in regulatory approval timelines.

Market Competition: Chimerix is entering a market with no approved therapies specific to the patient population for Dordaviprone, which presents both an opportunity and a risk. The potential for rapid uptake upon commercialization is contingent on successful clinical outcomes and market readiness.

Financial Risks: The company reported a net loss of $22.9 million for Q3 2024, with increased research and development expenses primarily due to the ACTION study. The cash burn rate has increased, although they maintain a cash runway extending into Q4 2026, indicating a need for careful cash management.

Supply Chain Challenges: The company is preparing for commercialization of Dordaviprone, which may involve supply chain complexities as they scale operations and ensure product availability in multiple markets.

Economic Factors: The ongoing economic environment may impact funding and investment opportunities, which could affect the company's ability to finance its operations and clinical trials.

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Guidance & Outlook

Phase 3 ACTION Study: Continued enrollment in the global Phase 3 ACTION study of Dordaviprone, with first interim data readout potentially less than a year away.

NDA Submission in Australia: Preparing to file for provisional approval in Australia, with an NDA document ready for submission around year-end.

Commercialization Preparation: Preparing for potential commercialization of Dordaviprone, expecting rapid uptake due to lack of approved therapies in the patient population.

Market Opportunity: Forecasting a potential global market opportunity over $750 million for Dordaviprone.

ONC206 Development: Nearing completion of Phase 1 dose escalation studies for ONC206, with plans to announce next steps in the coming months.

Cash Runway: Cash runway extending into the fourth quarter of 2026.

Net Loss: Reported a net loss of $22.9 million for Q3 2024, compared to $24 million in Q3 2023.

Research and Development Expenses: Increased to $19.6 million for Q3 2024, primarily driven by spending in the ACTION study.

General and Administrative Expenses: Decreased to $5.2 million for Q3 2024, down from $9.3 million in Q3 2023.

TEMBEXA Milestone: Chimerix is due approximately $2.7 million related to the BARDA exercise of a contract option for TEMBEXA.

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Shareholder Return Plan

Contract Value for TEMBEXA: EBS announced the execution of contract options for $67.4 million to acquire TEMBEXA for national preparedness efforts. Chimerix is eligible to receive approximately $2.7 million related to that exercise.

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Key Q&A

Q:Can you talk about how you’re preparing the submission of the NDA for Australia and the potential launch by the end of ‘25? How are you using these commercialization efforts to potentially scale the organization for a potential U.S. launch too? Do you plan to leverage that NDA submission to dovetail into conversations with other regulatory agencies for accelerated approval paths as well?

A:On the regulatory side, having the backbone of the new drug application complete for Australia has great utility in other markets around the world. There’s a lot of overlap between that backbone and what might be needed or expected in other markets around the world. We see synergy there in having this ready. The efficacy component for this application will be predicated on the Phase 2 response rate data that we’ve previously announced. In terms of where we might utilize that in other markets around the world, we continue to look at the ACTION study as the first opportunity for registration in other markets around the world, but should that change, we will update the market accordingly.

Q:EBS announced the execution of contract options for $67.4 million to acquire TEMBEXA for national preparedness efforts. How much of that total contract value would Chimerix be eligible to receive? And what will be the timing for receiving that milestone? Do you have any insight into how the monkeypox outbreak has affected the U.S. government’s initiative to stockpile TEMBEXA for smallpox?

A:From a monkeypox perspective, yes, Emergent did announce participation in a randomized monkeypox study at the end of business yesterday. They’re best positioned to answer questions on that. That is an ongoing new study to explore TEMBEXA’s utility in that population. We will see how that unfolds in the coming years. That could lead to potential royalties to Chimerix when and if there could be international sales associated with that indication. Michelle, comments on the milestone?

Q:What is the expected timeline for the first interim data readout from the ACTION study?

A:We are nearing complete enrollment of our Phase 1 dose escalation studies for our second-generation imipridone ONC206. The Phase 3 ACTION study is active in 15 countries worldwide, and our first interim data readout is potentially less than a year away.

Q:Can you provide more details on the safety profile of Dordaviprone?

A:Passing this IDMC safety review with no change to study conduct to any arm is a meaningful milestone and underscores the well-documented safety profile of Dordaviprone that makes it both a promising profile as a potential monotherapy, but also an ideal candidate as a potential backbone therapy.

Q:Review of Unclear Management Responses

A:Management's response regarding the potential royalties from TEMBEXA sales related to monkeypox was vague, lacking specific details on timing and the impact of the monkeypox outbreak on U.S. government initiatives.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

CMRX Transcript

Chimerix, Inc. (CMRX) Q3 2024 Earnings Call Transcript

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The earnings call shows mixed signals. While financial health is strong with no debt and sufficient capital, the net loss is slightly increasing. The Phase 3 ACTION study progresses, but concerns arise due to unclear management responses regarding commercial potential and regulatory timelines. Stable R&D expenses and cost management are positive, yet the lack of detailed guidance tempers optimism. Given these factors, the stock price is likely to remain stable in the short term.

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The earnings call reveals mixed signals. Financial performance shows reduced net loss and disciplined fiscal management, but with limited commercial infrastructure and challenges in patient accessibility. The Q&A section highlights optimism in study enrollment and potential for partnerships but lacks specific details. Overall, the company is in a stable position, but uncertainties in study execution and commercialization impact sentiment, leading to a neutral outlook.

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