|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
33-0903395
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
2505 Meridian Parkway, Suite 340
|
|
|
Durham, North Carolina
|
|
27713
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
|
|
Page
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
55,605
|
|
|
$
|
128,462
|
|
Short-term investments, available-for-sale
|
|
118,898
|
|
|
106,114
|
|
||
Accounts receivable
|
|
977
|
|
|
106
|
|
||
Prepaid expenses and other current assets
|
|
1,780
|
|
|
2,775
|
|
||
Total current assets
|
|
177,260
|
|
|
237,457
|
|
||
Long-term investments
|
|
95,239
|
|
|
52,973
|
|
||
Property and equipment, net of accumulated depreciation
|
|
1,329
|
|
|
1,310
|
|
||
Other long-term assets
|
|
297
|
|
|
138
|
|
||
Total assets
|
|
$
|
274,125
|
|
|
$
|
291,878
|
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
6,920
|
|
|
$
|
5,938
|
|
Accrued liabilities
|
|
6,630
|
|
|
6,833
|
|
||
Loan payable, net
|
|
2,892
|
|
|
4,296
|
|
||
Total current liabilities
|
|
16,442
|
|
|
17,067
|
|
||
Long-term liabilities
|
|
161
|
|
|
175
|
|
||
Total liabilities
|
|
16,603
|
|
|
17,242
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
|
||
Preferred stock, $0.001 par value, 10,000,000 shares authorized at March 31, 2015 and December 31, 2014; no shares issued and outstanding as of March 31, 2015 and December 31, 2014
|
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 200,000,000 shares authorized at March 31, 2015 and December 31, 2014; 41,310,063 and 41,031,770 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively
|
|
41
|
|
|
41
|
|
||
Additional paid-in capital
|
|
501,130
|
|
|
496,602
|
|
||
Accumulated other comprehensive gain, net
|
|
659
|
|
|
35
|
|
||
Accumulated deficit
|
|
(244,308
|
)
|
|
(222,042
|
)
|
||
Total stockholders’ equity
|
|
257,522
|
|
|
274,636
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
274,125
|
|
|
$
|
291,878
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
||||
Revenues:
|
|
|
|
|
|
|
||
Contract revenue
|
|
$
|
1,238
|
|
|
$
|
780
|
|
Total revenues
|
|
1,238
|
|
|
780
|
|
||
Operating expenses:
|
|
|
|
|
|
|
||
Research and development
|
|
17,444
|
|
|
8,292
|
|
||
General and administrative
|
|
6,123
|
|
|
2,672
|
|
||
Loss from operations
|
|
(22,329
|
)
|
|
(10,184
|
)
|
||
Other income (expense):
|
|
|
|
|
|
|
||
Interest income (expense), net
|
|
63
|
|
|
(196
|
)
|
||
Net loss
|
|
(22,266
|
)
|
|
(10,380
|
)
|
||
Other comprehensive loss:
|
|
|
|
|
|
|
||
Unrealized gain (loss) on investments, net
|
|
625
|
|
|
(32
|
)
|
||
Comprehensive loss
|
|
$
|
(21,641
|
)
|
|
$
|
(10,412
|
)
|
Per share information:
|
|
|
|
|
|
|
||
Net loss per common share, basic and diluted
|
|
$
|
(0.54
|
)
|
|
$
|
(0.39
|
)
|
Weighted-average shares outstanding, basic and diluted
|
|
41,220,989
|
|
|
26,762,264
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(22,266
|
)
|
|
$
|
(10,380
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
||
Depreciation of property and equipment
|
|
114
|
|
|
50
|
|
||
Amortization of debt costs
|
|
26
|
|
|
42
|
|
||
Amortization of premium/discount on investments
|
|
425
|
|
|
108
|
|
||
Share-based compensation
|
|
2,402
|
|
|
772
|
|
||
Amortization of deferred lease obligation
|
|
(12
|
)
|
|
3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(871
|
)
|
|
159
|
|
||
Prepaid expenses and other assets
|
|
832
|
|
|
1,064
|
|
||
Accounts payable and accrued liabilities
|
|
511
|
|
|
(934
|
)
|
||
Net cash used in operating activities
|
|
(18,839
|
)
|
|
(9,116
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Purchase of property and equipment
|
|
(133
|
)
|
|
(99
|
)
|
||
Purchase of short-term investments
|
|
(26,709
|
)
|
|
(62,640
|
)
|
||
Purchase of long-term investments
|
|
(65,232
|
)
|
|
—
|
|
||
Sales of short-term investments
|
|
1,003
|
|
|
—
|
|
||
Maturities of short-term investments
|
|
36,352
|
|
|
—
|
|
||
Net cash used in investing activities
|
|
(54,719
|
)
|
|
(62,739
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Proceeds from exercise of stock options
|
|
665
|
|
|
496
|
|
||
Proceeds from employee stock purchase plan stock purchases
|
|
461
|
|
|
229
|
|
||
Proceeds from exercise of warrants
|
|
1,000
|
|
|
—
|
|
||
Repayment of debt
|
|
(1,425
|
)
|
|
(1,425
|
)
|
||
Net cash provided by (used in) financing activities
|
|
701
|
|
|
(700
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(72,857
|
)
|
|
(72,555
|
)
|
||
Cash and cash equivalents:
|
|
|
|
|
||||
Beginning of period
|
|
128,462
|
|
|
109,976
|
|
||
End of period
|
|
$
|
55,605
|
|
|
$
|
37,421
|
|
|
|
|
|
|
||||
Supplemental disclosure cash flow information:
|
|
|
|
|
|
|
||
Cash paid for interest
|
|
$
|
70
|
|
|
$
|
198
|
|
•
|
Level 1
— Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
|
•
|
Level 2
— Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and models for which all significant inputs are observable, either directly or indirectly.
|
•
|
Level 3
— Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
|
Fair Value Measurements
|
||||||||||||||
|
March 31, 2015
|
||||||||||||||
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Cash equivalents
|
|
|
|||||||||||||
Money market funds
|
$
|
41,867
|
|
|
$
|
41,867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificates of deposit
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
Commercial paper
|
9,997
|
|
|
—
|
|
|
9,997
|
|
|
—
|
|
||||
Total cash equivalents
|
52,104
|
|
|
41,867
|
|
|
10,237
|
|
|
—
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
18,434
|
|
|
—
|
|
|
18,434
|
|
|
—
|
|
||||
Corporate bonds
|
41,109
|
|
|
$
|
—
|
|
|
$
|
41,109
|
|
|
$
|
—
|
|
|
Commercial paper
|
6,246
|
|
|
—
|
|
|
6,246
|
|
|
—
|
|
||||
U.S. Treasury securities
|
53,109
|
|
|
53,109
|
|
|
—
|
|
|
—
|
|
||||
Total short-term investments
|
118,898
|
|
|
53,109
|
|
|
65,789
|
|
|
—
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
12,973
|
|
|
—
|
|
|
12,973
|
|
|
—
|
|
||||
U.S. Treasury securities
|
79,758
|
|
|
79,758
|
|
|
—
|
|
|
—
|
|
||||
Preferred stock of U.S. corporation
|
2,508
|
|
|
—
|
|
|
—
|
|
|
2,508
|
|
||||
Total long-term investments
|
95,239
|
|
|
79,758
|
|
|
12,973
|
|
|
2,508
|
|
||||
Total assets
|
$
|
266,241
|
|
|
$
|
174,734
|
|
|
$
|
88,999
|
|
|
$
|
2,508
|
|
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurements
|
||||||||||||||
|
December 31, 2014
|
||||||||||||||
|
Total
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
125,606
|
|
|
$
|
125,606
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Certificates of deposit
|
480
|
|
|
—
|
|
|
480
|
|
|
—
|
|
||||
Total cash equivalents
|
126,086
|
|
|
125,606
|
|
|
480
|
|
|
—
|
|
||||
Short-term investments
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
16,982
|
|
|
—
|
|
|
16,982
|
|
|
—
|
|
||||
Corporate bonds
|
69,892
|
|
|
—
|
|
|
69,892
|
|
|
—
|
|
||||
Commercial paper
|
11,240
|
|
|
—
|
|
|
11,240
|
|
|
—
|
|
||||
U.S. Treasury securities
|
8,000
|
|
|
8,000
|
|
|
—
|
|
|
—
|
|
||||
Total short-term investments
|
106,114
|
|
|
8,000
|
|
|
98,114
|
|
|
—
|
|
||||
Long-term investments
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
10,996
|
|
|
—
|
|
|
10,996
|
|
|
—
|
|
||||
U.S. Treasury securities
|
40,196
|
|
|
40,196
|
|
|
—
|
|
|
—
|
|
||||
Preferred stock of U.S. corporation
|
1,781
|
|
|
—
|
|
|
—
|
|
|
1,781
|
|
||||
Total long-term investments
|
52,973
|
|
|
40,196
|
|
|
10,996
|
|
|
1,781
|
|
||||
Total assets
|
$
|
285,173
|
|
|
$
|
173,802
|
|
|
$
|
109,590
|
|
|
$
|
1,781
|
|
|
Fair Value Measurements
(Level 3) |
||
Preferred stock of U.S. corporation:
|
|
||
Fair value at December 31, 2014
|
$
|
1,781
|
|
Fair value increase recorded in other comprehensive gain, net
|
727
|
|
|
Fair value at March 31, 2015
|
$
|
2,508
|
|
|
|
March 31, 2015
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Corporate bonds
|
|
$
|
41,127
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
$
|
41,109
|
|
Certificates of deposit
|
|
31,399
|
|
|
17
|
|
|
(10
|
)
|
|
31,406
|
|
||||
U.S. Treasury securities
|
|
132,897
|
|
|
17
|
|
|
(46
|
)
|
|
132,868
|
|
||||
Commercial paper
|
|
6,246
|
|
|
—
|
|
|
—
|
|
|
6,246
|
|
||||
Preferred stock of U.S. corporation
|
|
1,545
|
|
|
963
|
|
|
—
|
|
|
2,508
|
|
||||
Total investments
|
|
$
|
213,214
|
|
|
$
|
997
|
|
|
$
|
(74
|
)
|
|
$
|
214,137
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31, 2014
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Corporate bonds
|
|
$
|
69,947
|
|
|
$
|
—
|
|
|
$
|
(56
|
)
|
|
$
|
69,891
|
|
Certificates of deposit
|
|
28,039
|
|
|
1
|
|
|
(62
|
)
|
|
27,978
|
|
||||
U.S. Treasury securities
|
|
48,279
|
|
|
—
|
|
|
(82
|
)
|
|
48,197
|
|
||||
Commercial paper
|
|
11,242
|
|
|
—
|
|
|
(2
|
)
|
|
11,240
|
|
||||
Preferred stock of U.S. corporation
|
|
1,545
|
|
|
236
|
|
|
—
|
|
|
1,781
|
|
||||
Total investments
|
|
$
|
159,052
|
|
|
$
|
237
|
|
|
$
|
(202
|
)
|
|
$
|
159,087
|
|
|
March 31, 2015
|
||
Maturing in one year or less
|
$
|
118,898
|
|
Maturing after one year through two years
|
95,239
|
|
|
Total investments
|
$
|
214,137
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Research and development expense
|
|
$
|
1,025
|
|
|
$
|
376
|
|
General and administrative expense
|
|
1,377
|
|
|
396
|
|
||
Total share-based compensation expense
|
|
$
|
2,402
|
|
|
$
|
772
|
|
•
|
Fees paid to consultants and contract research organizations (CROs), including in connection with our preclinical and clinical trials, and other related clinical trial fees, such as for investigator grants, patient screening, laboratory work, clinical trial database management, clinical trial material management and statistical compilation and analysis;
|
•
|
Salaries and related overhead expenses, which include stock option and employee stock purchase program compensation and benefits, for personnel in research and development functions;
|
•
|
Payments to third-party manufacturers, which produce, test and package our drug substance and drug product (including continued testing of process validation and stability);
|
•
|
Costs related to legal and compliance with regulatory requirements; and
|
•
|
License fees for and milestone payments related to, licensed products and technologies.
|
|
|
Three Months Ended March 31, 2015
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(unaudited)
(in thousands)
|
||||||
Direct research and development expenses
|
|
$
|
12,064
|
|
|
$
|
5,018
|
|
Research and direct personnel costs
|
|
4,419
|
|
|
2,632
|
|
||
Indirect research and development expenses
|
|
961
|
|
|
642
|
|
||
Total research and development expenses
|
|
$
|
17,444
|
|
|
$
|
8,292
|
|
•
|
the uncertainty of the scope, rate of progress and expense of our ongoing, as well as any additional or planned, clinical trials and other research and development activities;
|
•
|
the potential benefits of our product candidates over other therapies;
|
•
|
the ability to market, commercialize and achieve market acceptance for any of our product candidates that we are developing or may develop in the future;
|
•
|
the results of ongoing or future clinical trials;
|
•
|
the timing and receipt of any regulatory approvals; and
|
•
|
the filing, prosecuting, defending and enforcing of patent claims and other intellectual property rights, and the expense of doing so.
|
•
|
manufacturing to produce, test and package our drug substance and drug product for brincidofovir;
|
•
|
initiation, enrollment, and conduct of SUPPRESS;
|
•
|
initiation, enrollment, and conduct of AdVise; and
|
•
|
initiation, enrollment and conduct of our proposed solid organ transplant trials: SUSTAIN and SURPASS.
|
|
|
Three Months Ended March 31, 2015
|
|
Dollar Change
|
|
% Change
|
|||||||||
|
|
2015
|
|
2014
|
|
Increase/(Decrease)
|
|||||||||
|
|
(unaudited)
(in thousands)
|
|
|
|
|
|
|
|||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Contract revenue
|
|
$
|
1,238
|
|
|
$
|
780
|
|
|
$
|
458
|
|
|
58.7
|
%
|
Total revenues
|
|
1,238
|
|
|
780
|
|
|
458
|
|
|
58.7
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Research and development
|
|
17,444
|
|
|
8,292
|
|
|
9,152
|
|
|
110.4
|
%
|
|||
General and administrative
|
|
6,123
|
|
|
2,672
|
|
|
3,451
|
|
|
129.2
|
%
|
|||
Loss from operations
|
|
(22,329
|
)
|
|
(10,184
|
)
|
|
12,145
|
|
|
119.3
|
%
|
|||
Interest income (expense), net
|
|
63
|
|
|
(196
|
)
|
|
(259
|
)
|
|
(132.1
|
)%
|
|||
Net loss
|
|
$
|
(22,266
|
)
|
|
$
|
(10,380
|
)
|
|
$
|
11,886
|
|
|
114.5
|
%
|
•
|
an increase in clinical trial expenses of $4.7 million related to our ongoing Phase 3 SUPPRESS trial and the Phase 3 AdVise study for the treatment of AdV infection during the three months ended
March 31, 2015
;
|
•
|
an increase in total compensation costs of $1.8 million of which $980,000 relates to the addition of 18 new employees and $650,000 relates to an increase of share-based compensation as we continue to grow our clinical, regulatory and manufacturing departments;
|
•
|
an increase of $1.4 million in drug manufacturing costs as we continue to develop brincidofovir for commercialization; and
|
•
|
an increase of $460,000 in consultant expense as we begin to prepare our new drug application for brincidofovir for submission to the FDA.
|
•
|
an increase in total compensation costs of $1.5 million, of which $980,000 related to an increase of stock based compensation and $450,000 related to the addition of seven new employees to support the overall growth of the company;
|
•
|
an increase in costs of $1.2 million as we begin our commercialization preparations to launch brincidofovir; and
|
•
|
an increase of professional fees related to compliance with provisions of the Sarbanes-Oxley Act of 2002.
|
|
|
Three Months Ended March 31, 2015
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(unaudited)
(in thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
(18,839
|
)
|
|
$
|
(9,116
|
)
|
Investing activities
|
|
(54,719
|
)
|
|
(62,739
|
)
|
||
Financing activities
|
|
701
|
|
|
(700
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(72,857
|
)
|
|
$
|
(72,555
|
)
|
•
|
continue the development of our lead product candidate, brincidofovir, for the prevention of cytomegalovirus (CMV) infection in hematopoietic cell transplant recipients and solid organ transplant recipients;
|
•
|
continue the development of brincidofovir for the treatment of adenovirus (AdV) infection;
|
•
|
seek to obtain regulatory approvals for brincidofovir;
|
•
|
prepare for the potential commercialization of brincidofovir;
|
•
|
scale-up manufacturing capabilities to commercialize brincidofovir for any indications for which we receive regulatory approval;
|
•
|
begin outsourcing of the commercial manufacturing of brincidofovir for any indications for which we receive regulatory approval;
|
•
|
establish an infrastructure for the sales, marketing and distribution of brincidofovir for any indications for which we receive regulatory approval;
|
•
|
expand our research and development activities and advance our clinical programs;
|
•
|
maintain, expand and protect our intellectual property portfolio;
|
•
|
continue our research and development efforts and seek to discover additional product candidates; and
|
•
|
add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and operations as a public company.
|
•
|
obtaining favorable results for and advancing the development of brincidofovir, initially for the prevention of CMV in hematopoietic cell transplant (HCT) recipients, including successfully completing Phase 3 clinical development;
|
•
|
obtaining regulatory approval in the United States for brincidofovir, initially for the prevention of CMV infection in HCT recipients;
|
•
|
obtaining United States and foreign regulatory approvals for brincidofovir for the treatment of adenovirus infection;
|
•
|
launching and commercializing brincidofovir, including establishing a sales force and collaborating with third parties;
|
•
|
achieving broad market acceptance of brincidofovir in the medical community and with third-party payers;
|
•
|
obtaining traditional approval in the United States for brincidofovir for CMV prevention; and
|
•
|
generating a pipeline of product candidates which progress to clinical development.
|
•
|
significantly delay, scale back or discontinue the development or commercialization of our product candidates, including brincidofovir;
|
•
|
seek corporate partners for brincidofovir or any of our other product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; or
|
•
|
relinquish or license on unfavorable terms, our rights to technologies or product candidates that we otherwise would seek to develop or commercialize ourselves.
|
•
|
successful completion of nonclinical studies and successful enrollment and completion of clinical trials;
|
•
|
receipt of marketing approvals from the FDA and corresponding regulatory authorities outside the United States for our product candidates;
|
•
|
establishing commercial manufacturing capabilities, either by building such facilities ourselves or making arrangements with third-party manufacturers;
|
•
|
launching commercial sales of the product, whether alone or in collaboration with others;
|
•
|
acceptance of the product by patients, the medical community and third-party payers;
|
•
|
effectively competing with other therapies;
|
•
|
a continued acceptable safety profile of the product following approval; and
|
•
|
obtaining, maintaining, enforcing and defending intellectual property rights and claims.
|
•
|
regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
|
•
|
clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
|
•
|
we might be required to change one of our clinical research organizations (CROs) during ongoing clinical programs;
|
•
|
the number of subjects required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate or subjects may drop out of these clinical trials at a higher rate than we anticipate;
|
•
|
our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
|
•
|
we might have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the subjects are being exposed to unacceptable health risks;
|
•
|
regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
|
•
|
the cost of clinical trials of our product candidates may be greater than we anticipate;
|
•
|
agency or judicial enforcement actions which impact our clinical trials;
|
•
|
the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and
|
•
|
our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators to suspend or terminate the trials.
|
•
|
inability to raise funding necessary to initiate or continue a trial;
|
•
|
delays in obtaining regulatory approval to commence a trial;
|
•
|
delays in reaching agreement with the FDA and foreign health authorities on final trial design;
|
•
|
imposition of a clinical hold following an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authorities:
|
•
|
delays caused by disagreements with existing CROs and/or clinical trial sites;
|
•
|
delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;
|
•
|
delays in obtaining required institutional review board approval at each site;
|
•
|
delays in recruiting suitable patients to participate in a trial;
|
•
|
delays in having subjects complete participation in a trial or return for post-treatment follow-up;
|
•
|
delays caused by subjects dropping out of a trial due to side effects or otherwise;
|
•
|
clinical sites dropping out of a trial to the detriment of enrollment;
|
•
|
agency or judicial enforcement actions against us;
|
•
|
time required to add new clinical sites; and
|
•
|
delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.
|
•
|
regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution in a form of a modified risk evaluation and mitigation strategy (REMS);
|
•
|
regulatory authorities may require the addition of labeling statements, such as warnings or contraindications;
|
•
|
we may be required to change the way the product is administered or to conduct additional clinical studies;
|
•
|
we could be sued and held liable for harm caused to patients; and
|
•
|
our reputation may suffer.
|
•
|
issue an untitled or warning letter asserting that we are in violation of the law;
|
•
|
seek an injunction or impose civil or criminal penalties or monetary fines;
|
•
|
suspend or withdraw regulatory approval;
|
•
|
suspend any ongoing clinical trials;
|
•
|
refuse to approve a pending application or supplements to an application submitted by us;
|
•
|
recall and/or seize product; or
|
•
|
refuse to allow us to enter into supply contracts, including government contracts.
|
•
|
the federal healthcare anti-kickback statute which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid;
|
•
|
the federal civil and criminal false claims laws and civil monetary penalties, including civil whistleblower or
qui tam
actions, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval that are false or fraudulent or from knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the federal government;
|
•
|
the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) which, among other things, imposes criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payer (e.g., public or private) and knowingly or willfully falsifying, concealing or covering up by any trick or device
|
•
|
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) and its implementing regulations, and as amended again by the final HIPAA omnibus rule, Modifications to the HIPAA Privacy, Security, Enforcement, and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act; Other Modifications to HIPAA, published in January 2013, which imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, clearinghouses and healthcare providers;
|
•
|
the federal Food, Drug and Cosmetic Act (FDCA) which prohibits, among other things, the adulteration or misbranding of drugs and devices;
|
•
|
the federal transparency law, enacted as part of the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act of 2010 (collectively, the Health Care Reform Law), and its implementing regulations, which requires manufacturers of drugs, devices, biologicals and medical supplies to report to the U.S. Department of Health and Human Services information related to payments and other transfers of value made to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and
|
•
|
analogous state laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by state governmental and non-governmental third-party payers, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; and state laws and regulations that require manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities.
|
•
|
inability to meet our product specifications and quality requirements consistently;
|
•
|
delay or inability to procure or expand sufficient manufacturing capacity;
|
•
|
manufacturing and product quality issues related to scale-up of manufacturing;
|
•
|
costs and validation of new equipment and facilities required for scale-up;
|
•
|
failure to comply with cGMP and similar foreign standards;
|
•
|
inability to negotiate manufacturing agreements with third parties under commercially reasonable terms;
|
•
|
termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;
|
•
|
reliance on a limited number of sources, and in some cases, single sources for product components, such that if we are unable to secure a sufficient supply of these product components, we will be unable to manufacture and sell our product candidates in a timely fashion, in sufficient quantities or under acceptable terms;
|
•
|
lack of qualified backup suppliers for those components that are currently purchased from a sole or single source supplier;
|
•
|
operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;
|
•
|
carrier disruptions or increased costs that are beyond our control; and
|
•
|
failure to deliver our products under specified storage conditions and in a timely manner.
|
•
|
does not devote sufficient time and resources to the development and commercialization of CMX157;
|
•
|
develops, either alone or with others, products that compete with CMX157;
|
•
|
fails to gain the requisite regulatory approvals for CMX157;
|
•
|
does not successfully commercialize CMX157;
|
•
|
does not conduct its activities in a timely manner;
|
•
|
terminates its license with us;
|
•
|
does not effectively pursue and enforce intellectual property rights relating to CMX157; or
|
•
|
merges with a third-party that wants to terminate the collaboration.
|
•
|
demonstration of clinical safety and efficacy in our clinical trials;
|
•
|
relative convenience, ease of administration and acceptance by physicians, patients, pharmacists and health care payers;
|
•
|
prevalence and severity of any AEs;
|
•
|
limitations or warnings contained in the FDA-approved label for the relevant product candidate;
|
•
|
availability of alternative treatments;
|
•
|
pricing and cost-effectiveness;
|
•
|
effectiveness of our or any future collaborators’ sales and marketing strategies;
|
•
|
ability to obtain hospital formulary approval;
|
•
|
ability to ensure availability for product through appropriate channel manager;
|
•
|
ability to maintain adequate inventory; and
|
•
|
ability to obtain and maintain sufficient third-party coverage or reimbursement, which may vary from country to country.
|
•
|
recruiting and retaining talented people;
|
•
|
training employees that we recruit;
|
•
|
establishing compliance standards;
|
•
|
setting the appropriate system of incentives;
|
•
|
managing additional headcount; and
|
•
|
integrating a new business unit into an existing corporate architecture.
|
•
|
different regulatory requirements for drug approvals in foreign countries;
|
•
|
reduced protection for intellectual property rights;
|
•
|
unexpected changes in tariffs, trade barriers and regulatory and labor requirements;
|
•
|
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
•
|
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
|
•
|
foreign taxes, including withholding of payroll taxes;
|
•
|
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;
|
•
|
workforce uncertainty in countries where labor unrest is more common than in the United States;
|
•
|
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
|
•
|
business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
|
•
|
discover and develop medicines that are superior to other products in the market;
|
•
|
demonstrate through our clinical trials that our product candidates, including brincidofovir, are differentiated from existing and future therapies;
|
•
|
evaluate new potential indications across the lifecycle of brincidofovir;
|
•
|
attract qualified scientific, product development and commercial personnel;
|
•
|
obtain and successfully defend and enforce patent and/or other proprietary protection for our medicines and technologies;
|
•
|
obtain required regulatory approvals;
|
•
|
successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new medicines; and
|
•
|
negotiate competitive pricing and reimbursement with third-party payers.
|
•
|
our research methodology or that of our collaboration partners may be unsuccessful in identifying potential product candidates;
|
•
|
our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; and
|
•
|
our collaboration partners may change their development profiles for potential product candidates or abandon a therapeutic area.
|
•
|
audit and object to any BARDA contract-related costs and fees on grounds that they are not allowable under the FAR, and require us to reimburse all such costs and fees;
|
•
|
suspend or prevent us for a set period of time from receiving new contracts or extending our existing contract based on violations or suspected violations of laws or regulations;
|
•
|
claim nonexclusive, nontransferable rights to product manufactured and intellectual property developed under the BARDA contract and may, under certain circumstances, such as circumstances involving public health and safety, license such inventions to third parties without our consent;
|
•
|
cancel, terminate or suspend our BARDA contract based on violations or suspected violations of laws or regulations;
|
•
|
terminate our BARDA contract in whole or in part for the convenience of the government for any reason or no reason, including if funds become unavailable to the applicable governmental agency;
|
•
|
reduce the scope and value of our BARDA contract;
|
•
|
decline to exercise an option to continue the BARDA contract;
|
•
|
direct the course of a development program in a manner not chosen by the government contractor;
|
•
|
require us to perform the option segments even if doing so may cause us to forego or delay the pursuit of other opportunities with greater commercial potential;
|
•
|
take actions that result in a longer development timeline than expected; and
|
•
|
change certain terms and conditions in our BARDA contract.
|
•
|
FAR, and agency-specific regulations supplements to the FAR, which comprehensively regulate the procurement, formation, administration and performance of government contracts and implement federal procurement policy in numerous areas, such as employment practices, protection of the environment, accuracy and retention periods of records, recording and charging of costs, treatment of laboratory animals and human subject research;
|
•
|
business ethics and public integrity obligations, which govern conflicts of interest and the hiring of former government employees, restrict the granting of gratuities and funding of lobbying activities and incorporate other requirements such as the Anti-Kickback Act and the Foreign Corrupt Practices Act;
|
•
|
export and import control laws and regulations; and
|
•
|
laws, regulations and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.
|
•
|
termination of contracts;
|
•
|
forfeiture of profits;
|
•
|
suspension of payments;
|
•
|
fines; and
|
•
|
suspension or prohibition from conducting business with the U.S. government.
|
•
|
impairment of our business reputation and significant negative media attention;
|
•
|
withdrawal of participants from our clinical studies;
|
•
|
significant costs to defend the related litigation and related litigation;
|
•
|
distraction of management’s attention from our primary business;
|
•
|
substantial monetary awards to patients or other claimants;
|
•
|
inability to commercialize our product candidates, including brincidofovir; and
|
•
|
decreased demand for our product candidates, if approved for commercial sale.
|
•
|
results of clinical trials of our product candidates or those of our competitors;
|
•
|
any delay in filing an application for any of our product candidates and any adverse development or perceived adverse development with respect to regulatory review of that application;
|
•
|
failure to successfully develop and commercialize our product candidates, including brincidofovir;
|
•
|
termination of any of our license or collaboration agreements;
|
•
|
any agency or judicial enforcement actions against us;
|
•
|
inability to obtain additional funding;
|
•
|
regulatory or legal developments in the United States and other countries applicable to our product candidates;
|
•
|
adverse regulatory decisions;
|
•
|
changes in the structure of healthcare payment systems;
|
•
|
inability to obtain adequate product supply for our product candidates, or the inability to do so at acceptable prices;
|
•
|
introduction of new products, services or technologies by our competitors;
|
•
|
failure to meet or exceed financial projections we provide to the public;
|
•
|
failure to meet or exceed the estimates and projections of the investment community;
|
•
|
changes in the market valuations of similar companies;
|
•
|
market conditions in the pharmaceutical and biotechnology sectors, and the issuance of new or changed securities analysts’ reports or recommendations;
|
•
|
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
|
•
|
significant lawsuits (including patent or stockholder litigation), and disputes or other developments relating to proprietary rights (including patents, litigation matters and our ability to obtain patent protection for our technologies);
|
•
|
additions or departures of key scientific or management personnel;
|
•
|
sales of our common stock by us or our stockholders in the future;
|
•
|
trading volume of our common stock;
|
•
|
general economic, industry and market conditions; and
|
•
|
the other factors described in this “Risk Factors” section.
|
•
|
authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors;
|
•
|
allowing the authorized number of our directors to be changed only by resolution of our board of directors;
|
•
|
limiting the removal of directors;
|
•
|
creating a staggered board of directors;
|
•
|
requiring that stockholder actions must be effected at a duly called stockholder meeting and prohibiting stockholder actions by written consent;
|
•
|
eliminating the ability of stockholders to call a special meeting of stockholders; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at duly called stockholder meetings.
|
Number
|
|
Description
|
|
3.1(1)
|
|
|
Amended and Restated Certificate of Incorporation of the Registrant.
|
|
|
|
|
3.2(1)
|
|
|
Amended and Restated Bylaws of the Registrant.
|
|
|
|
|
4.1(2)
|
|
|
Form of Common Stock Certificate of the Registrant.
|
|
|
|
|
4.2(2)
|
|
|
Form of Warrant to Purchase Stock issued to participants in the Registrant's Series F Preferred Stock financing dated February 7, 2011.
|
|
|
|
|
4.3(2)
|
|
|
Amended and Restated Investor Rights Agreement dated February 7, 2011 by and among the Registrant and certain of its stockholders.
|
|
|
|
|
4.4(3)
|
|
|
Amendment to Amended and Restated Investor Rights Agreement dated October 29, 2014 by and among the Registrant and certain of its stockholders.
|
|
|
|
|
10.1(4)
|
|
|
Contract Modification No. 24, dated February 19, 2015, to the contract by and between the Registrant at the Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services dated February 16, 2011, as amended.
|
|
|
|
|
10.2
|
|
|
Sixth Amendment to Office Lease dated April 28, 2015 by and between the Registrant and IVC Meridian TT O, LLC.
|
|
|
|
|
10.3
|
|
|
Contract modification No. 25, dated March 26, 2015, to the contract by and between the Registrant and the Biomedical Advanced Research and Development Authority of the United States Department of Health and Human Services dated February 16, 2011, as amended.
|
|
|
|
|
31.1
|
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
31.2
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
32.1
|
|
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.2
|
|
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.INS*
|
|
|
XBRL Instance Document.
|
|
|
|
|
101.SCH*
|
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
101.CAL*
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
101.DEF*
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
101.LAB*
|
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
101.PRE*
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Incorporated by reference to Chimerix, Inc.’s Current Report on Form 8-K (No. 001-35867), filed with the SEC on April 16, 2013.
|
(2)
|
Incorporated by reference to Chimerix, Inc.’s Registration Statement on Form S-1 (No. 333-187145), as amended.
|
(3)
|
Incorporated by reference to Chimerix, Inc.'s Current Report on Form 8-K (No. 001-35867) filed with the SEC on October 29, 2014.
|
(4)
|
Incorporated by reference to Chimerix, Inc.'s Annual Report on Form 10-K (No. 001-35867) filed with the SEC on March 6, 2015.
|
|
CHIMERIX, INC.
|
|
|
|
|
May 11, 2015
|
By:
|
/s/ M. Michelle Berrey
|
|
|
M. Michelle Berrey, MD, MPH
|
|
|
President and Chief Executive Officer
|
|
|
|
May 11, 2015
|
By:
|
/s/ Timothy W. Trost
|
|
|
Timothy W. Trost
|
|
|
Senior Vice President, Chief Financial Officer and Corporate Secretary
|
4.
|
Third Additional Premises; TAP Commencement Date.
|
5.
|
Fourth Additional Premises; FoAP Commencement Date
|
6.
|
Fifth Additional Premises; FiAP Commencement Date.
|
7.
|
"As-Is" Condition; Improvements to the Premises; Refurbishment Allowance.
|
8.
|
Base Rent.
|
9.
|
Tenant's Share of Increases in Taxes and Expenses.
|
3.
|
Tenant confirms that:
|
a.
|
it has accepted possession of the Third Additional Premises as provided in the Sixth Amendment;
|
b.
|
Landlord is not required to perform any further work or furnish any further improvements to the Third Additional Premises under the Lease;
|
c.
|
Landlord has fulfilled all of its obligations under the Lease as of the date hereof;
|
d.
|
the Lease is in full force and effect and has not been modified, altered, or amended, except as follows:___________________________ ; and
|
e.
|
there are no set-offs or credits against Rent, and no Security Deposit or prepaid Rent has been paid except as provided by the Lease.
|
2.
|
Tenant confirms that:
|
a.
|
it has accepted possession of the Fourth Additional Premises as provided in the Sixth Amendment;
|
b.
|
Landlord is not required to perform any further work or furnish any further improvements to the Fourth Additional Premises under the Lease;
|
c.
|
Landlord has fulfilled all of its obligations under the Lease as of the date hereof;
|
d.
|
the Lease is in full force and effect and has not been modified, altered, or amended, except as follows: ; and
|
e.
|
there are no set-offs or credits against Rent, and no Security Deposit or prepaid Rent has been paid except as provided by the Lease.
|
2.
|
Intentionally Omitted.
|
CONTINUATION SHEET
|
REFERENCE NO. OF DOCUMENT BEING CONTINUED
HHSO100201100013C/0019
|
PAGE OF
|
||||||
2
|
2
|
|||||||
NAME OF OFFEROR OR CONTACTOR
CHIMERIX, INC. 1377270
|
||||||||
ITEM NO.
(A)
|
SUPPLIES/SERVICES
(B)
|
QUANTITY
(C)
|
UNIT
(D)
|
UNIT PRICE
(E)
|
AMOUNT
(F)
|
|||
|
2. The total amount, scope and period of performance of all other CLINs that are currently being performed under the contract remain unchanged. This modification does not exercise any unexercised Option CLINs under the contract and deos not authorize any performance of efforts under any unexercised Option CLINs under the contract. In addition, the total amount, scope and period of performance of all unexercised Option CLINs under the contract remain unchanged.
|
|
|
|
|
|||
|
B. This is a no cost bilateral modification. All other terms and conditions of contract number HHS0100201100013C remain unchanged.
|
|
|
|
|
|
|
|
|
Period of Performance: 02/16/2011 to 11/30/2015
|
|
|
|
|
|
|
Date:
|
May 11, 2015
|
/s/ M. Michelle Berrey
|
|
|
M. Michelle Berrey, M.D., MPH
|
|
|
President and Chief Executive Officer
|
Date:
|
May 11, 2015
|
/s/ Timothy W. Trost
|
|
|
Timothy W. Trost
|
|
|
Senior Vice President, Chief Financial Officer and Corporate Secretary
|
By:
|
/s/ M. Michelle Berrey
|
|
|
Name:
|
M. Michelle Berrey, M.D., MPH
|
|
Title:
|
President and Chief Executive Officer
|
|
|
|
Date:
|
May 11, 2015
|
By:
|
/s/ Timothy W. Trost
|
|
|
Name:
|
Timothy W. Trost
|
|
Title:
|
Senior Vice President, Chief Financial Officer
and Corporate Secretary
|
|
||
Date:
|
May 11, 2015
|