February 24, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Durham, N.C.-based Chimerix has investors wondering if they will be a takeover target. In the last two months, the company has lost more than 90 percent of its market value, giving rise to speculation that it would be a good time to buy the company and its portfolio of drugs cheap.
On Dec. 28, 2015, the company announced that its oral antiviral drug brincidifovir failed its Phase III clinical trial. The drug was being evaluated for patients undergoing hematopoietic cell transplantation (HCT), and didn’t hit the primary endpoint for the prevention of clinically significant cytomegalovirus (CMV) infection.
“The population of allogeneic stem cell transplant recipients is heterogeneous and complex; we will be evaluating the sub-groups of patients within SUPPRESS, such as T-cell depleted transplant recipients who have a lower risk of GVHD, to better understand these results and inform our next steps,” said W. Garrett Nichols, Chimerix’s chief medical officer, in a statement.
The company presented further data updated findings yesterday at the BMT Tandem Meetings held in Honolulu, Hawaii. The upshot of the new data, or at least re-analyzed data, was that the patients taking brincidofovir may have benefited more than the placebo group, and that the disappointing December results may have had more to do with study protocol problems rather than actual drug results.
Writing for Forbes, Jake King says, “Essentially, doctors may have mis-diagnosed and mis-treated patients in the study who presented with diarrhea, a known side effect of brincidifovir but also a symptom of Graft-vs-Host-Disease. Chimerix believes that cortocosteroids, given to treat GVHD, may have contributed to the drug’s failure.”
That may be the case, but investors aren’t necessarily buying it. Chimerix traded for $7.63 on Friday, but it is currently trading for $4.46. Shares traded on Aug. 5, 2015 for $57.43, dropped to $36.44 on Dec. 21, then plunged to $7.37 on Dec. 29.
King wrote, “The capital markets don’t see this good news—from a scientific standpoint, at least—the same way. While the post-hoc analysis might hold water, it likely means that Chimerix needs to run another sizable study—perhaps two—to prove that out. That’s more money spent and a longer timeline to potential approval. And, post-hoc analyses have a way of disappointing later.”
Which is why some analysts wonder if the company might be a good deal for acquisition. Stock might be low, but the company has about $159 million in long-term investments, and the company has estimated its stockholder’s equity is $392 million, or about $8.50 per share. Writing for Triangle Business Journal, Jason deBruyn says, “In short, Chimerix’s investments alone value the company at $8.50 per share. However, Chimerix also has a ‘poison pill’ provision, which could scuttle any hostile takeover attempt.”
Major stakeholders include Fidelity Management & Research Co., with 15 percent of company shares, Sanderling Ventures, with 7.2 percent, Bridger Management LLC with 6.4 percent, and The Vanguard Group, Inc. with 6.3 percent. However, there is some disagreement among investors over the company’s actual value. deBruyn notes that Barclays, Citigroup and Morgan Stanley all recently downgraded Chimerix stock.
