Chimerix: Piper's 'Post-Blow-Up' Play

On Monday Piper Jaffray issued a company note on Chimerix, Inc.

after a disappointing clinical trial, calling the company a "post-blow-up opportunity." Currently, Piper Jaffray rates Chimerix as Overweight and increased their price target from $11 to $18. Joshua Schimmer, Steven Breazzano, and Jerry Yang wrote, "After capitulation by analysts/investors has left the stock trading with a sub-zero enterprise value (and large cash position), we see a number of clear paths to value creation. Some of the best biotech investment opportunities present themselves after seemingly "fatal" setbacks which prove anything but, and we believe this is the case with CMRX...We are lowering our discount rate from 12% to 11% to reflect our confidence in brinci's path forward in adenovirus, smallpox and other active infections." Senior research analysts at Piper Jaffray noted that Chimerix's development of brinci has many applicable uses including treating smallpox prophylaxis, adeno viral infections, and BK nephropathy. This may be a positive catalyst going forward as the company has multiple avenues of monetizing their drugs and achieving top-line growth. Further, analysts at Piper Jaffray believe that Chimerix may achieve pricing power with brinci as a treatment for active infections and other rare respiratory diseases which could help the company achieve margin expansion going forward. Currently, Chimerix is trading at $7.60, up 6.00 percent.