Antiviral drug developer Chimerix (NASDAQ: CMRX), which recently received the regulatory go-ahead to begin human tests of a potential Ebola drug, is launching a stock offering that could pay for those clinical trials.
The Durham, NC company on Wednesday announced plans to sell $105 million in stock, part of a $150 million shelf offering. Chimerix says underwriters also would have a 30-day option to purchase up to $15.7 million in additional shares.
Chimerix disclosed on Oct. 16 that the Food and Drug Administration had cleared the company to start Phase 2 clinical trials studying its antiviral drug brincidofovir in Ebola. Chimerix plans to conduct those trials in Europe and the United States. Studies of the drug in West Africa are also being considered.
While a shelf offering does not mean a company will raise the entire amount listed in the offering, Chimerix is disclosing some details about what it expects to spend for Ebola clinical trials. In documents filed with securities regulators on Wednesday, Chimerix says that $52 million of the net proceeds from the stock offering would pay for current and planned clinical trials of brincidofovir, as well as manufacturing of the antiviral drug.
“We plan to increase our research and development expenses for the foreseeable future as we expand the development of brincidofovir and our brincidofovir commercial manufacturing,” Chimerix says in the filing. “In particular, we expect our research and development expenses for 2015 to increase substantially relative to current levels.”
Chimerix may not need to raise up to the $105 million target. Brincidofovir’s early development was funded by a Biomedical Advanced Research and Development Authority (BARDA) contract, awarded in 2011, valued at up to $81.1 million. That contract, which was for developing a medical countermeasure against weaponized smallpox, was extended in September with an additional $17 million.
Chimerix says in its latest filings how it would spend money raised from an offering would depend in part on whether it would be able to further extend its BARDA agreement. If the federal government is willing to finance part or even all of brincidofovir’s Ebola development, Chimerix will be able to reduce the amount of money it will need to raise by selling stock.
Brincidofovir was initially developed as a treatment for cytomegalovirus, a potentially fatal infection in patients with weakened immune systems, such as transplant patients. But Chimerix has long touted the antiviral’s broad spectrum of potential activity against other viruses. The Chimerix drug popped up on the radar as a potential Ebola treatment in early September, when the company disclosed that lab tests in Ebola yielded positive results. Those tests were conducted by the Viral Special Pathogens Branch of the Centers for Disease Control and Prevention and the National Institutes of Health.
Brincidofovir is based on Gilead Science’s (NASDAQ: GILD) injectable antiviral cidofovir (Vistide). Like the Gilead drug, brincidofovir works by interfering with the process by which viruses make copies of themselves. But cidofovir has also been linked to higher risks of kidney damage. With brincidofovir, Chimerix has attached cidofovir to lipids, a type of fat. That makes the drug absorbable in the gut, which in turn makes development of the compound in a tablet form possible. The lipids also mitigate the risk of toxic effects on the kidneys from the drug.
Because Chimerix has already studied brincidofovir through Phase 3 clinical trials in cytomegalovirus, the company has plenty of information on the drug’s safety in humans. That safety data cleared the way for Chimerix to start brincidofovir right away in Phase 2 trials for Ebola.
Chimerix’s filing gave no date for the stock offering, nor did it specify the number of shares that would be sold.