What: Shares of the clinical-stage biopharma Chimerix (CMRX 0.27%) lost over 80% of their value this morning on exceptionally high volume due to the failure of its lead product candidate, brincidofovir (CMX001), in a late-stage study. Specifically, brincidofovir missed its primary endpoint as a potential preventative treatment for cytomegalovirus (CMV) infection in patients undergoing hematopoietic cell transplantation in a Phase 3 study called SUPPRESS.

The company suggested that these disappointing results may have been affected by cases of graft-versus-host-disease in the brincidofovir arm, whereby putting them at greater risk of contracting CMV. 

So what: Prior to today's news, the market seemed fairly confident that brincidofovir would prove to be an effective preventative treatment for CMV, and eventually go on to gain a regulatory approval for this indication, as evidenced by the company's $1.6 billion market cap heading into this top-line data release. As this late-stage study shows, though, investors should never take anything for granted when it comes to experimental-stage drugs. 

Now what: Per the press release, Chimerix's management said its short-term goal is to better understand the drug's late-stage results in the CMV setting, and assess how the drug performed in certain sub-populations such as T-cell depleted transplant recipients. Until then, however, investors will have to look toward the drug's other indications, such as adenovirus infections and smallpox, to create value going forward. I'm personally content to watch this small-cap biopharma from the safety of the sidelines for the moment.