EX-99.1 3 tm2226769d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

CHIMERIX, INC.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

Sale of TEMBEXA

 

On September 26, 2022 (the “Closing Date”), Chimerix, Inc. (the “Company”), completed the previously announced sale of the Company’s exclusive worldwide rights to brincidofovir, including TEMBEXA and related assets (the “EBS Agreement”) to Emergent BioSolutions, Inc. (“EBS”). Based on the terms of the EBS Agreement, EBS is expected to pay to the Company: (i) an upfront payment of $238 million; (ii) up to an aggregate of $124 million in milestone payments payable upon the exercise of the options under the procurement contract (the “BARDA Agreement”) with the Biomedical Advanced Research and Development Authority (“BARDA”) for the delivery of up to 1.7 million treatment courses of tablet and suspension formulations of TEMBEXA® to the U.S. government; (iii) royalty payments equal to 15% of the gross profits from the sales of TEMBEXA made outside of the United States; (iv) royalty payments equal to 20% of the gross profits from the sales of TEMBEXA made in the United States in excess of 1.7 million treatment courses; and (v) up to an additional $12.5 million upon the achievement of certain other developmental milestones.

 

Unaudited Pro Forma Consolidated Financial Statements

 

The sale of TEMBEXA constitutes a significant disposition of a business for purposes of Item 2.01 of Form 8-K. As a result, the following unaudited pro forma consolidated statements of operations and comprehensive loss for the six months ended June 30, 2022 and the year ended December 31, 2021 are presented as if the disposition had occurred immediately prior to January 1, 2021. The following unaudited pro forma consolidated balance sheet as of June 30, 2022 is presented as if the disposition had occurred on June 30, 2022. The Company determined the disposition does not represent a strategic shift, and accordingly, the Company has not accounted for the disposition as a discontinued operation. The effects of recording certain adjustments associated with contingent consideration related to TEMBEXA have been excluded as the Company has made a policy election to account for these amounts when the contingency has been resolved in accordance with Accounting Standards Codification 450, Contingencies.

 

The unaudited pro forma consolidated financial statements have been derived from historical financial statements prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and are presented based on assumptions, adjustments, and currently available information described in the accompanying notes. They are intended for informational purposes only and are not intended to represent the Company’s financial position or results of operations had the disposition occurred on the dates indicated, or to project the Company’s financial performance for any future period. Pro forma adjustments have been made for events that are directly attributable to the disposition and factually supportable.

 

The unaudited pro forma consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and should be read in conjunction with the following: (i) the accompanying notes to the unaudited pro forma consolidated financial statements; (ii) the Company’s audited consolidated financial statements for the year ended December 31, 2021 and related notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2022; and (iii) the Company’s unaudited consolidated financial statements as of and for the six month period ended June 30, 2022 and related notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 8, 2022.

 

 

 

 

CHIMERIX, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of June 30, 2022

(In thousands of US dollars, except share data)

                
   As
Reported
   Pro Forma
Adjustments
   Notes  Pro Forma 
Assets                  
Current assets                  
Cash and cash equivalents  $28,086   $233,347   (a)  $261,433 
Short-term investments, available-for-sale   14,705           14,705 
Inventories   4,126    (4,126)  (b)    
Prepaid expenses and other current assets   3,853    (259)  (b)   3,594 
                   
Total current assets   50,770    228,962       279,732 
                   
Property and equipment, net of accumulated depreciation   205           205 
Operating lease right-of-use assets   2,189           2,189 
Other long-term assets   399           399 
                   
Total assets  $53,563   $228,962      $282,525 
                   
Liabilities and Stockholders’ Equity                  
Current liabilities                  
Accounts payable  $1,743   $(84)  (b)  $1,659 
Accrued liabilities   16,682    3,198   (b)   19,880 
Income tax payable       198   (c)   198 
Deferred revenue   4,846    (4,640)  (b)   206 
                   
Total current liabilities   23,271    (1,328)      21,943 
                   
Loan fees   250           250 
Lease-related obligations   2,114           2,114 
                   
Total liabilities   25,635    (1,328)      24,307 
                   
Stockholders’ equity                  
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding at June 30, 2022               
Common stock, $0.001 par value, 200,000,000 shares authorized, 87,436,180 shares issued and outstanding at June 30, 2022   87           87 
Additional paid-in capital   961,740           961,740 
Accumulated other comprehensive loss, net   (68)          (68)
Accumulated deficit   (933,831)   230,290   (d)   (703,541)
                   
Total stockholders’ equity   27,928    230,290       258,218 
                   
Total liabilities and stockholders’ equity  $53,563   $228,962      $282,525 

 

 

 

 

 

CHIMERIX, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Six Months Ended June 30, 2022

(In thousands of US dollars, except share data)

                
   As
Reported
   Pro Forma
Adjustments
   Notes  Pro Forma 
Revenues:                  
Licensing revenue  $455   $(9)  (e)  $446 
Total revenues   455    (9)      446 
Cost of goods sold   114    (114)  (e)    
Gross profit   341    105       446 
Operating expenses:                  
Research and development   37,087    (538)  (e)   36,549 
General and administrative   11,472    (1,340)  (e)   10,132 
                   
Total operating expenses   48,559    (1,878)      46,681 
                   
Loss from operations   (48,218)   1,983       (46,235)
Other loss:                  
Interest income and other, net   (17)          (17)
                   
Net loss   (48,235)   1,983       (46,252)
Other comprehensive loss:                  
Unrealized loss on debt investments, net   (47)          (47)
                   
Comprehensive loss  $(48,282)  $1,983      $(46,299)
                   
Per share information:                  
Net loss, basic and diluted  $(0.55)          $(0.53)
Weighted-average shares outstanding, basic and diluted   87,263,452            87,263,452 

 

 

 

 

 

CHIMERIX, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

For the Year Ended December 31, 2021

(In thousands of US dollars, except share data)

                
   As
Reported
   Pro Forma
Adjustments
   Notes  Pro Forma 
Revenues:                  
Contract and grant revenue  $1,928   $(1,557)  (e)  $371 
Licensing revenue   51    (5)  (e)   46 
Total revenues   1,979    (1,562)      417 
Operating expenses:                  
Research and development   73,817    (3,410)  (e)   70,407 
General and administrative   18,672    (1,129)  (e)   17,543 
Acquired in-process research and development   82,890           82,890 
                   
Total operating expenses   175,379    (4,539)      170,840 
                   
(Loss) gain from operations   (173,400)   2,977       (170,423)
Other income:                  
Interest income and other, net   164           164 
Net gain on sale of business       233,692   (f)   233,692 
                   
(Loss) income before income tax expense   (173,236)   236,669       63,433 
Income tax expense       317   (g)   317 
Net (loss) income   (173,236)   236,352       63,116 
Other comprehensive (loss) income:                  
Unrealized loss on debt investments, net   (21)          (21)
                   
Comprehensive (loss) income  $(173,257)  $236,352      $63,095 
                   
Per share information:                  
Net (loss) income, basic  $(2.04)          $0.75 
Weighted-average shares outstanding, basic   84,930,255            84,390,255 
Net (loss) income, diluted  $(2.04)          $0.71 
Weighted-average shares outstanding, diluted   84,930,255            89,603,114 

 

 

 

 

CHIMERIX, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The following adjustments have been reflected in the unaudited pro forma consolidated financial statements:

 

(a) Adjustment reflects estimated cash proceeds from the upfront payment of $238.0 million less an upfront payment of $4.6 million received for a procurement of TEMBEXA which was not fulfilled prior to June 30, 2022.

 

(b) Adjustment reflects assets and liabilities transferred to EBS as a part of the disposition.

 

(c) Adjustment reflects the income tax payable that relates to the estimated gain arising on the disposition.

 

(d) Adjustment reflects the estimated gain of $230.5 million arising from the disposition net of $0.2 million in income tax expense related to the gain. The actual net gain on the disposition will be recorded in the Company’s financial statements for the third quarter of 2022 and may differ from the current estimate.

 

(e) Adjustment reflects the elimination of revenues, cost of goods sold and operating expenses which are specific to TEMBEXA.

 

(f) Adjustment reflects the estimated gain of $233.7 million arising from the disposition. The actual net gain on the disposition will be recorded in the Company’s financial statements for the third quarter of 2022 and may differ from the current estimate.

 

(g) Adjustment reflects the income tax expense related to the net change in revenues and operating expenses, including the net gain on sale of business, that arises from the disposition. The tax effect of the pro forma adjustment was calculated using the historical statutory rates in effect for the periods presented.