Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.

RESEARCH TRIANGLE PARK, N.C. – Chimerix, a 10-year-old biotech firm developing antivirals, or treatments, that can be delivered orally, has prevailed in a contract dispute that could be worth more than $2 billion.

The company has convinced a federal agency to overturn to sole source contract awarded to SIGA Technologies that could have given the Chimerix rival a deal for 12 million doses of a particular smallpox antiviral.

The Durham-based company already has won contracts potentially worth more than $80 million for development of antivirals to combat smallpox. If the antivirals under development are successful, they would be purchased and added to the U.S. “Strategic National Stockpile.”

Now, Chimerix is in position to bid for the additional doses in another category of development. The contract could be worth $2.4 billion, according to Chimerix Chief Executive Officer Kenneth Moch. The veteran life sciences executive who was promoted to the CEO job at the company just over a year ago took time out from meetings at the national BIO conference in Washington, to discuss his firm’s potential lucrative victory.

“We protested the sole source contract and they withdrew the option,” Moch said of the Biomedical Advanced Research and Development Authority, or BARDA. It is part of the Department of Health and Human Services.

However, the victory is no guarantee of future business for Chimerix. Moch said both companies must demonstrate the effectiveness of their drugs, but he was quite pleased that “we can now bid.”

“Whichever drug is most effective will win,” Moch added.

In February, Chimerix won a BARDA deal for development of the antiviral compound CMX001. Antivirals are treatments of a disease such as smallpox, not a vaccine which is a preventative measure. That funding was in addition to the $37 million Chimerix previously received from the National Institute of Allergy and Infectious Diseases (NIAID) for development of CMX001 for smallpox.
Moch and Chimerix researchers believe CMX001 also has the potential to treat smallpox among patients who have an impaired immune system. That category was covered by the contract awarded to SIGA. SIGA received another contract for development of 1.7 million doses. Chimerix didn’t protest that award.

“BARDA has concluded that it is in the U.S. government’s interest to delete the 12 million optional courses from the SIGA contract,” Chimerix noted in a statement. “Accordingly, Chimerix has withdrawn its [Government Accounting Office] protest of the SIGA sole source contract.”

CMX001 has already demonstrated evidence of antiviral activity against numerous double-stranded DNA (dsDNA) viruses. Such viruses include adenovirus, herpes viruses (cytomegalovirus, herpes simplex virus and Epstein Barr virus), polyoma viruses (BK virus and JC virus), and poxviruses, such as smallpox.

The sole contract victory is the latest in a year of good news for the company.

In February, Chimerix wrapped up a $45 million round of financing led by New Leaf Venture Partners and other investment firms. Investors participating include Pappas Ventures, which is based in RTP, and Morningside Group as well as Canaan Partners, Sanderling Ventures, Alta Partners, Asset Management Company and Frazier Healthcare Ventures.

Chimerix was launched in 2002. It utilizes proprietary drug development technology developed at the University of California at San Diego and the Veterans Administration Hospital in San Diego, CA.

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