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Chimerix, Inc. (NASDAQ:CMRX) is a great speculative biotech that should be on your radar. While it is still a risky longer-term play, I believe it could have value based on established proof of concept using ONC201 for the treatment of patients with H3 K27M-mutant glioma. In a phase 2 study, it showed to improve overall survival rates in this specific population, which I will show below. The only downside is that the first interim analysis is not expected until early 2025 with final data not coming out until 2026. However, ONC201 is also being explored in a phase 2 study in neuroendocrine tumors. Such neuroendocrine tumors being explored are Pheochromocytoma/paraganglioma. Initial data was revealed which established some proof of concept of the mechanism of action. Even then, it is working on a second generation imipridone known as ONC206 which is much improved compared to 1st generation ONC201.
It is believed that ONC206 provides greater anti-tumor activity compared to ONC201 and thus it is also being advanced in the pipeline. The biotech also entered into an agreement with Emergent BioSolutions (EBS) for the sale of worldwide rights to TEMBEXA for a $225 million upfront payment, potential milestone payments and double-digit royalties on net sales as well. It is important to note that this agreement is still in the process of being completed. This agreement relies on additional items being executed. If the agreement goes through with EBS, then the biotech will have enough cash into 2027. Lastly, it is in the process of developing an improved oral formulation of CMX521 as a prophylactic and treatment of SARS-CoV-2 (Covid-19) in collaboration with the Rapidly Emerging Antiviral Drug Development Initiative (READDI).
While early in the process and already many approved treatments in this space, I believe it could still act as a catalyst if it is successfully advanced. It is believed that animal data will be released in the 2nd half of 2022 on such an improved oral formulation for CMX521 for Covid-19. With a growing pipeline, plus some established proof of concept of ONC201 in a rare brain glioma and neuroendocrine tumors, I believe it is a great speculative biotech play to look into.
Imipridone ONC201 Could Possibly Greatly Improve Overall Survival Rates For Rare Gliomas
The main drug in Chimerix’s pipeline would be ONC201, which is being developed for the treatment of patients with gliomas who harbor the H3 K27M mutation. What occurs with respect to this specific type of glioma? What occurs is the H3K27M mutation itself puts in a new amino acid known as H3, which promotes a gene expression that enable tumor growth to occur. Patients with this type of glioma have poor prognosis and definitely need new types of treatments to be approved.
Before diving into ONC201 clinical results, it’s important to understand what the drug actually is. Again, it is an imipridone which targets G protein-coupled receptors (GPCRs) and mitochondrial caseinolytic protease p (ClpP), resulting in cancer death. Cell death happens with the induction of the integrated stress response and upregulation pathway of apoptotic (cell death) factors, such as tumor necrosis factor (TNF) related apoptosis-inducing ligand (TRAIL). More specifically, it selectively induces cell death by binding and altering activity of DRD2 (Selectively coupled G-protein receptor) and ClpP. This is further established with the following action:
- DRD2 antagonism is responsible for inhibiting Ras signaling pathway that cancer has
- ClpP degrades excess amount of mitochondrial proteins which are important for the cancer cell to be viable
Remember above when I stated that H3 K27M mutation uses amino acid H3 to promote gene expression for the cancer? Well, ONC201 was established to alter this gene expression making it sensitive to the drug itself. All these actions are what are put in place to specifically treat glioma patients who harbor the H3 K27M mutation.
Moving onto the program advancement at hand, the company intends to initiate a phase 3 study in the 2nd half of 2022 known as ACTION. This is going to be a randomized late-stage study using ONC201 for the treatment of newly diagnosed diffuse glioma patients whose tumors harbor the H3 K27M mutation. It is expected that about 450 patients will be randomized 1:1:1 to receive doses as followed:
- 625 mg ONC201 once per week
- 625 mg ONC201 twice per week
- Placebo
The primary endpoint of this study is overall survival (OS). Patients will first be treated with radiation and then be randomized to one of the dosing groups noted directly above. As far as catalysts go for this study, it could be quite some time to see data. It is said that the first interim analysis for results is not expected until 2025. From there, final data from this ACTION study is not expected until 2026.
The thing is that it may be a good market to tap into despite the fact how rare the H3 K27M mutation glioma is. Chimerix believes it can earn above $500 million in sales annually should it ultimately get ONC201 to market for this specific population. Despite results taking time to come out, it’s important to note that there is a great shot at clinical success. That’s because ONC201 monotherapy was able to achieve an overall response rate (ORR) of 30% by RANO HGG and/or LGG by dual reader BICR. Even better, is what those treated with this drug obtained in terms of overall survival rates. For the H3 K27M recurrent glioma patients given ONC201, overall survival at 12 months and 24 months was 57% and 35%, respectively, whereas historical control at 12 months and 24 months was 27.5% and 6.4%, respectively. What does this show? This shows that with the biotech specifically targeting patients with this H3 K27M mutation by using ONC201, it can improve overall survival for them.
Proof Of Concept For ONC201 In Treatment Of Patients With Neuroendocrine Tumors
In addition to some proof of concept being established in a phase 2 study with ONC201 in patients with H3 K27M mutated gliomas, the drug had also seen some mechanism of action in patients with neuroendocrine tumors. One neuroendocrine tumor being explored is paraganglioma. A paraganglioma is a type of neuroendocrine tumor that forms near certain blood vessels and nerves outside of the adrenal glands. The adrenal glands being affects is not a very good thing, considering they are responsible for making hormones which control many functions in the body. In an open-label phase 2 investigator-initiated study with 30 patients, treatment with ONC201 performed pretty well. The cohort of paraganglioma patients who were dosed with ONC201 once a week performed better than the other cohort of patients dosed twice a week with ONC201. For these patients who were dosed once weekly with ONC201, the outcome was as follows:
- 5 out of 10 patients (50%) achieved a partial response (PR)
- 2 out of 10 patients achieved stable disease (SD)
The other neuroendocrine tumor also being evaluated with the use of this drug is Pheochromocytoma, which is a hormone secreting tumor that can occur in the adrenal glands.
Additional Shots On Goal With Imipridones ONC206 And ONC212
There are additional imipridones being developed in the pipeline. ONC206 is a second-generation drug type which is a DRD2 antagonist and ClpP agonist. It has shown in preclinical models to offer improved anti-tumor activity compared to ONC201. The current use of ONC206 is that it is being explored in a phase 1 dose escalation study together with the National Institutes of Health (NIH) and with the Pacific Pediatric Neuro-Oncology Consortium (PNOC). What Chimerix believes it will use this drug for are solid tumors. Specifically, it is looking to go after tumor types such as: Endometrial cancer, adrenal tumors and central nervous system (CNS) tumors. ONC212 on the other hand still targets ClpP, but the G-coupled protein receptor it targets instead is GPR132. This drug is currently in IND-enabling toxicology studies to see if the drug will be safe enough to advance to phase 1 clinical testing. This IND-enabling study is expected to conclude Q4 of 2022 and if all goes well, then clinical studies in humans could begin in the 1st half of 2023. The goal for ONC212 is to go after both hematological malignancies (AML first) and solid tumors (pancreatic cancer first).
CMX521 As Prophylactic And Treatment Option for Patients With Covid-19
Covid-19 will always be with us and there are many vaccines which have been approved. Such options would be Pfizer (PFE)/BioNTech (BNTX) with COMIRNATY and then Moderna (MRNA) with Spikevax. However, Chimerix wants to develop an improved oral drug with development of CMX521. The goal is to be able to develop such a drug that can be used both as a prophylactic and as a treatment for SARS-CoV-2 (Covid-19). It is in the process of working with the Rapidly Emerging Antiviral Drug Development Initiative (READDI) at the University of North Carolina at Chapel Hill (UNC). If the company can successfully develop an oral drug versus and inhaled one, then it would be a great advancement. A catalyst opportunity exists. It is expected that the biotech will release animal data for CMX521 for an improved formulation in the 2nd half of 2022. If the results of such a formulation are viewed in a positive manner by the market, then if anything this could offer a great trade opportunity on the back of such news.
Financials
According to the 10-Q SEC Filing, Chimerix had $42.8 million of capital to fund its operations as of June 30, 2022. The proforma cash balance at June 30, 2022, which includes the revenue recognized to date from the two international TEMBEXA revenue contracts, is approximately $70 million. An additional $225 million is possible pending the closing sale of TEMBEXA to EBS. This will only occur once the final terms of agreement are established with BARDA. If the sale of TEMBEXA to EBS does close without incident, then Chimerix believes it will have enough cash to fund its operations into 2027. This is plenty of cash runway, more than enough to achieve many clinical milestones, including the data readouts that would likely come from the phase 3 ACTION study using ONC201 for the treatment of patients with H3 K27M mutant gliomas. Again, results from this late-stage study as part of an interim analysis are expected in 2025, with final results expected in 2026.
Risks To Business
There are several risks that investors should be aware of before investing in this biotech. The biggest risk relates to the main program of the pipeline, which involves the data readout of the phase 3 ACTION study using ONC201 for the treatment of H3 K27M mutant glioma patients. Even though phase 2 proof of concept was established, there is no guarantee that a similar result will be achieved with so many more patients being recruited into this study. A good thing is that again results are not anticipated for several years now, so it is not an immediate near-term risk.
A second risk involves the expected closing sale of TEMBEXA for smallpox to EBS. There are stipulations for the sale to close and if not achieved then this transaction won’t go through. At the moment negotiations with BARDA for the procurement of TEMBEXA into the Strategic National Stockpile is now in the final stages. Hopefully, this is done successfully. One thing to note is that the expected cash to last until 2027 is contingent upon this transaction going through. If it doesn’t, then that means Chimerix will have to find other means to raise cash, either through the sale of common stock or by other means.
Conclusion
The final conclusion is that Chimerix is a great speculative biotech play to look into. I think this is the case because it has already established proof of concept in using ONC201 for the treatment of H3 K27M mutant glioma patients. As I laid out above, it achieved 12 month and 24 month overall survival rates of 57% and 35% respectively. I believe going after a specific mutation of gliomas is a good thing. This targeted approach may ultimately pay off once the trial results are readout in several years.
In addition to providing proof of concept with this patient population, it also established mechanism of action for ONC201 in neuroendocrine tumors, specifically in patients with a paraganglioma. It also has additional shots on goal with other imipridones in its pipeline which are ONC206 and ONC212. Lastly, I believe there is a great trade opportunity with the development of CMX521 as an oral prophylactic and treatment option for patients with SARS-CoV-2 (Covid-19). That’s because a positive development in this space may yield a temporary surge in the stock price. This is not guaranteed to happen, but is possible based on how good the results are.
With an extensive pipeline of imipridones to move forward with (ONC201, ONC206, ONC212), plus proof of concept with ONC201 in H3 K27M mutant glioma patients, these are the reasons why I believe that Chimerix is a great speculative biotech play to look into.
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