Chimerix turns $39m into $935m

Back in early 2021 the struggling antivirals player Chimerix pivoted into oncology through the low-key acquisition of a private biotech called Oncoceutics. This week the move paid off as dordaviprone, the lead asset that Oncoceutics brought with it, prompted Jazz Pharmaceuticals to acquire Chimerix for $935m.

For recent investors this is a big win, with the takeover price representing a 72% overnight premium, and a severalfold improvement over where Chimerix traded for the entirety of 2023 and 2024. Even more remarkable is that Oncoceutics had cost Chimerix only $39m in cash, plus $39m in equity, so with the benefit of hindsight that 2021 takeover looks like a masterstroke.

That said, it should be noted that the Jazz takeout price of $8.55 per share is almost exactly where Chimerix was trading when it bought Oncoceutics, so on this harsh basis all the target company has done is tread water. Of course, much has changed in the meantime regarding biotech sentiment in general, and in Chimerix's shareholding in particular.

Approval imminent?

The attraction of dordaviprone, a DRD2 antagonist, is that it could soon be US approved. Just last month the FDA accepted a filing for H3K27-mutant diffuse glioma, and is due to rule on its approvability by an 18 August PDUFA date.

In announcing the takeover Jazz made it clear that it was dordaviprone that sparked its interest. Approval, if granted, would bring with it a valuable rare paediatric disease priority review voucher, and would make the drug the first to target H3K27-mutant diffuse glioma specifically; a confirmatory phase 3 study called Action is under way and said to be substantially enrolled.

While there might not be any drugs approved for this type of cancer, the treatment of paediatric tumours more generally has seen a recent advance with the approval of Day One's Ojemda, for second-line BRAF-positive low-grade glioma.

For Jazz the acquisition fits with a dual neuroscience/cancer focus, and the company has previously used deals to gain oncology assets, for instance buying Celator for the AML drug Vyxeos, and licensing Pharmamar's SCLC therapy Zepzelca and Zymeworks' anti-HER2 bispecific zanidatamab.

Buying Chimerix also endorses dordaviprone's patent exclusivity, which had been questioned before, but which Jazz says is good until at least 2037. It was perhaps issues such as these that prompted Oncoceutics to let dordaviprone go for such a low price. At the time Chimerix's lead project, brincidofovir, had failed in cytomegalovirus infection, prompting the company to turn its hand to cancer.

If nothing else the Jazz takeover shows that the path to success in biotech is rarely straightforward. By 18 August Jazz will find out whether it's made the right move.