Top Picks 2017: Chimerix

01/12/2017 6:00 am EST

Focus: STOCKS

Bill Mathews

Editor & Founder, The Cheap Investor

Our Top Pick for more speculative investors is a biopharmaceutical company that discovers, develops, and commercializes oral antivirals in areas of unmet medical needs in the United States, explains Bill Mathews, editor of The Cheap Investor.

The lead product candidate from Chimerix (CMRX) is brincidofovir (CMX001), a nucleotide analog.

The drug is in Phase III clinical trials for the prevention of cytomegalovirus (CMV) in allogeneic hematopoietic cell transplant (HCT) recipients and in kidney transplant recipients, as well as to treat adenovirus infection in allogeneic HCT patients.

It is also developing CMX157, a nucleotide analog that is in Phase II clinical stage for the treatment of HIV and hepatitis B virus infection. Its preclinical testing product is CMX669, a compound with in vitro activity for the treatment of BK virus and CMV.

It has a license agreement with ContraVir Pharmaceuticals (CTRV) for the development and commercialization of brincidofovir and CMX157 for certain antiviral indications; and BARDA for the development of brincidofovir for the treatment of smallpox.

Chimerix was a hot stock, trading at $58 per share in August 2015. By last November, it had fallen to $42.

On December 28, the stock plunged a massive 81% following the announcement of its failure to meet the primary endpoint of its Phase 3 SUPPRESS trial, which evaluated the effectiveness of brincidofovir in preventing cytomegalovirus infection in hematopoietic cell transplant (or stem cell transplant) patients.

The company has an excellent balance sheet with $288 million ($5.39 per share) in cash, a book value of $6.81 per share and no debt.

We like Chimerix because it has a large amount of cash, which should last about three years at the company’s current burn rate, and several products in various stages of FDA trials. 

Positive news on any of those products could move the stock price significantly higher. 

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