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Pharma Co. To Provide HHS With Smallpox Drug
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Chimerix Inc. shares traded 8% higher after the company reported it has entered into a 10-year, $680 million contract with a U.S. Government health agency to deliver up to 1.7 million treatment courses of its TEMBEXA for use as a medical countermeasure for smallpox.

Biopharmaceutical company Chimerix Inc. (CMRX:NASDAQ), which is focused on the development of medicines for use in treating deadly diseases in the areas of biodefense and oncology, today announced that "it has signed a multi-year contract with the Biomedical Advanced Research and Development Authority (BARDA) in the U.S. Department of Health and Human Services' Administration for Strategic Preparedness and Response (ASPR), for the delivery of up to 1.7 million treatment courses of tablet and suspension formulations of TEMBEXA® to the U.S. government."

The company stated that BARDA had awarded Chimerix the contract for TEMBEXA for use as a medical countermeasure for smallpox. The firm advised that under the terms of the agreement, it has agreed to initially provide the ASPR with 319,000 treatment courses for a total price of about $115 million.

The contract with BARDA is to run for a period of 10 years and, at BARDA's discretion, includes options and provisions for additional orders of $551 million. The agreement also allows for future payments of approximately $13 million in marketing costs and, in total, offers a maximum potential value of $680 million over 10 years.

Chimerix's CEO Mike Sherman remarked, "Our collaboration with BARDA for the development of TEMBEXA has provided the United States government with a second therapeutic option to ensure the federal government's readiness for a potential smallpox emergency. TEMBEXA's simple two-dose oral regimen is the first approved smallpox treatment for all ages, including infants."

"TEMBEXA also may provide protection for patients should a strain of variola virus emerge that is resistant to other antivirals," CEO Sherman added.

The company noted that the U.S. Food and Drug Administration (FDA) granted authorization for TEMBEXA (brincidofovir) in June 2021 as a medical countermeasure treatment for smallpox, which is caused by the variola virus and is found in newborn, pediatric, and adult patients. The firm indicated that TEMBEXA is administered once weekly for a period of two weeks and is available in either 100 mg tablets or as a 10 mg/mL oral suspension.

The report noted that in May 2022, Chimerix had signed a worldwide licensing agreement with Emergent BioSolutions Inc. (EBS) to sell TEMBEXA in exchange for an upfront payment of $225 million and additional milestones totaling up to $100 million. The company pointed out that the licensing arrangement with EBS was contingent upon "adjustment upon finalization of a procurement agreement for TEMBEXA with BARDA."

The firm advised that according to the terms specified in the agreement with BARDA, upon signing the pre-novation agreement, EBS will be required to pay Chimerix an upfront payment of $238 million and other potential milestone payments of up to $124 million.

In addition, the agreement provides that EBS will pay Chimerix a 15% royalty on gross profit from sales of TEMBEXA outside of the U.S. and a 20% royalty on gross profit from U.S. TEMBEXA sales exceeding 1.7 million treatment courses as well as other payments totaling $12.5 million if certain milestones are met.

The company advised that that transaction remains pending and is subject to final approval by BARDA after the agency has completed its review of the pre-novation agreement entered into by Chimerix and EBS.

Chimerix is a biopharma firm headquartered in Durham, N.C., that concentrates its work on advancing medicines to treat cancer and other serious diseases. In addition to its efforts in providing countermeasure treatments for combatting smallpox, the company is also engaged in conducting advanced clinical trials of its ONC201 for use in treating H3 K27M-mutant glioma and neuroendocrine tumors.

Chimerix has a market cap of around $189.3 million with approximately 87.6 million shares outstanding and a short interest of about 4.3%. CMRX shares opened 1% lower today at $2.14 (-$0.02, -0.93%) from Friday's $2.16 closing price. The stock traded today between $2.10 and $2.68 per share and closed for trading at $2.33 (+$0.17, +7.87%).

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