Shares of Chimerix dropped 81 percent and hit an all-time low Monday after the Durham drug developer announced that patients who took the company’s antiviral drug in a clinical trial died at higher rates than those who took a placebo.
As a result of the unexpected news, the 130-employee company halted enrollment in two other clinical trials for the drug, brincidofovir, but executives said they remain committed to developing the product.
As shares plummeted to $6.62, Wall Street analysts promptly downgraded Chimerix and expressed doubts about the company’s future prospects.
Investment banking firm Cowen and Co. slashed its expected trading price for Chimerix shares from $65 to $8 and said that Chimerix is not likely to recover from the setback.
“Unfortunately this morning’s data suggest that the odds are against brincidofovir’s successful development in either stem cell transplants or solid organ transplant,” Cowen analysts wrote.
Chimerix is developing brincidofovir for the prevention and the treatment of infections from a class of viruses that are often harmless to healthy people but can be fatal to patients with compromised immune systems.
Chimerix had tested its medication in a trial with 452 adults who had undergone stem cell transplants at more than 40 transplant centers in the United States, Canada and Europe. The drug was effective in suppressing cytomegalovirus infection initially, but the infection returned.
Chimerix said the increased mortality rate among patients who took brincidofovir was not statistically significant, meaning that the deaths were not caused by the medication.
Chimerix executives were blindsided by the unexpected failure of the drug, because it had previously proven effective in a Phase 2 clinical trial and in other experiments. The company suspects brincidofovir’s effectiveness was undermined by graft-versus-host disease, a common complication caused by the transplanted immune system attacking the new cells in the patient. The disease is treated with corticosteroids, which exposes patients to greater risk of viral infection.
“We have much work to do to understand why this trial was not successful,” chief medical officer Garrett Nichols told analysts in a conference call.
Chimerix CEO M. Michelle Berrey assured analysts the company had $378 million in capital as of Sept. 30 and still hopes to develop brincidofovir as a treatment for adenovirus infection and against smallpox used as a bioterrorism agent.
As recently as 2014, brincidofovir was touted by some as the nation’s best best against the Ebola virus, but earlier this year Chimerix withdrew its drug from all global clinical trials for an Ebola treatment as the deadly epidemic subsided.
John Murawski: 919-829-8932