Please ensure Javascript is enabled for purposes of website accessibility

Why Chimerix's Shares Collapsed Today

By George Budwell - Dec 28, 2015 at 12:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The biopharma's shares imploded after the company's lead product candidate missed its primary endpoint in a late-stage study.

What: Shares of the clinical-stage biopharma Chimerix (CMRX -1.12%) 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. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Chimerix, Inc. Stock Quote
Chimerix, Inc.
$1.77 (-1.12%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.