Shares of Chimerix (NASDAQ:CMRX), a clinical-stage biotech company with a focus on oral antiviral drugs, continued to crush the market in July, rising more than 17% during the month, according to data from S&P Capital IQ.
During July, the company announced clinical results for their lead compound brincidofovir as a treatment against smallpox, a disease without a currently approved antiviral treatment. The company is performing animal testing with the drug, which showed reduced mortality rates in rabbits versus those that were given a placebo.
While smallpox has been eradicated thanks to global vaccination efforts, it's possible that the virus could be used as a bioterror weapon, so the company was awarded a government contract to study a medical countermeasure.
Beyond smallpox, Chimerix believes that brincidofovir could be a treatment option for a variety of diseases, especially those that relate to transplantation. The company is currently running a phase 3 clinical trial using brincidofovir as a treatment against cytomegalovirus, or CMV, which is a major complication that can arise after a hematopoietic cell transplantation, more commonly known as a bone marrow transplant.
Brincidofovir is also in phase 3 trails as a treatment against adenovirus infection, or ADV, which is a common respiratory illness, though people who have weakened immune systems, such as transplant patients, can fall seriously ill.
The clinical information released thus far for brincidofovir certainly looks promising, and the FDA appears to have taken an interest in this compound as well, having granted fast-track approval status for the drugs against smallpox, CMV, and ADV.
Chimerix certainly has been a great stock since coming public in 2013, having gained more than 200% during that time period.
The company is certainly entering an exciting time in its history, as the company should have data from these phase 3 trials, which are currently under way, in 2016. If all goes well, regulatory submissions could happen soon after, creating a pathway for the company to begin to generate revenue.
The company appears to be in great financial shape as well, having recently completed a secondary offering that raised approximately $170 million. Add in the $267 million that it held on its balance sheet at the end of the first quarter, and the company appears to be well capitalized as it ramps up spending on clinical trial efforts and prepares for regulatory submission and, eventually, commercialization.
Analysts are certainly excited about the potential of brincidofovir, as peak sales are currently estimated to be around $2.4 billion, which represents an enormous revenue opportunity for a company that currently sports a market cap around $2.6 billion. If Chimerix can successfully navigate brincidofovir through the regulatory process and bring it to market, then the company should continue to reward patient shareholders.
Brian Feroldi has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.