Chimerix Downgraded By Citi's Nochomovitz, Kidney Transplant Play 'Isn't Panning Out'

Citi’s Yigal Nochomovitz downgraded the rating for Chimerix Inc CMRX from Buy to Neutral, while reducing the price target from $13 to $9. He mentioned that the kidney transplant opportunity does not seem to be materializing.

Chimerix presented full data from the SUPPRESS trial. Brincidofovir exhibiting a benefit on kidney function / BK virus would have been important for differentiation versus Valcyte in the Phase III kidney transplant trials. However, the latest data did not support brincidofovir offering a differentiated profile in kidney transplant.

Analyst Yigal Nochomovitz wrote, “This result is surprising to us given 1) Ph2 data suggested a benefit on kidney function and 2) the in vitro potency of brincidofovir against BK virus showed good activity.”

Commenting on the company’s pipeline, Nochomovitz mentioned:

1. On brincidofovir in bone marrow transplant [BMT], management expects to meet with the FDA to discuss the path forward.
2. Smallpox data, from pivotal animal studies, are being submitted to the FDA for discussion and “could potentially secure a BARDA contract for procurement of brincidofovir.”
3. AdVise trial data, treatment of adenovirus, are expected to be submitted to the FDA in 2016 for discussion of next steps.

Nochomovitz added that the removal of kidney transplant revenues from the model results in a peak revenue estimate of ~$300M, down 65 percent from the prior estimate.