US earmarks up to $680M for Chimerix's smallpox drug Tembexa, clearing way for Emergent buyout

During the latest monkeypox outbreak, doctors in the U.S. have been treating patients with Siga Technologies’ smallpox drug Tpoxx. Now, the U.S. government may have a second potential antiviral option at its disposal.

HHS’ Biomedical Advanced Research and Development Authority (BARDA) has signed a 10-year contract worth up to $680 million for Chimerix to supply up to 1.7 million courses of FDA-approved smallpox drug Tembexa and to conduct certain “post-marketing activities,” the company said Monday.

The signing of the BARDA deal clears a major hurdle for Emergent BioSolutions’ offer to acquire Tembexa for $225 million upfront. That deal previously won a go-ahead from the U.S. antitrust watchdog.

Tembexa followed Tpoxx with an FDA approval mid-2021, satisfying HHS’ goal to have two approved smallpox antivirals to avoid a single point of failure in the supply chain.

The BARDA contract includes an initial purchase of 319,000 treatment courses for about $115 million. An additional $551 million is up for grabs if BARDA exercises all its options for 1.7 million courses of both tablet and suspension formulations of Tembexa. Plus, the contract includes $13 million in funding to support post-marketing activities as required by the FDA when the drug was approved.

Monkeypox and smallpox are closely related viruses. Bavarian Nordic’s vaccine Jynneos is currently approved in the U.S. against both smallpox and monkeypox.

Since the first reported monkeypox cases in the current outbreak, the U.S. government has made Siga’s Tpoxx available under an expanded access program to treat monkeypox patients. Earlier this month, BARDA exercised an option to purchase additional doses of an intravenous formulation of Tpoxx in a procurement deal valued at about $26 million.

Tembexa isn’t approved in monkeypox, but the Tpoxx situation suggests that the Chimerix drug may also be utilized against monkeypox.

Meanwhile, monkeypox cases have started to decline in Europe, where the virus was first spotted in the latest outbreak. In the U.S., early signs of declining cases in some cities have prompted cautious optimism.

As for Chimerix, the BARDA deal suggests it might soon be able to offload Tembexa duties. Emergent is expected to pay Chimerix $238 million upon signing a Tembexa subcontract, which is also subject to BARDA approval. Emergent is also on the hook to pay up to $31 million for each of the remaining BARDA options, adding to $124 million in potential milestone payments.