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Vir Biotechnology, Inc.
Vir Biotechnology Provides Corporate Update and Reports Second Quarter 2022 Financial Results
Business
Aug 9 2022
3 min read

Vir Biotechnology Provides Corporate Update and Reports Second Quarter 2022 Financial Results

– More than $2.6 billion in cash, cash equivalents, investments and profit-share payments to be received from GSK expected to fund the company’s ongoing operations and liabilities for up to five years –

– Company provides update on COVID-19 development program and outlines multiple anticipated value drivers from its robust pipeline –

SAN FRANCISCO, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Vir Biotechnology, Inc. (Nasdaq: VIR) today provided a corporate update and reported financial results for the second quarter ended June 30, 2022.

“Vir closed the second quarter with a balance sheet that we believe is sufficient to fund the company for up to five years. During that time, we expect to generate meaningful Phase 2 and Phase 3 data from our programs in COVID-19, hepatitis B, hepatitis D and influenza A, while also advancing multiple early-stage programs into the clinic that have the potential to be significant value drivers,” said George Scangos, Ph.D., chief executive officer of Vir Biotechnology. “With the expectation that there will be an enduring unmet need in the prevention and treatment of COVID-19, we are shifting our strategy from rapidly developing pandemic medicines to a focus on long-term control. With several next-generation antibodies and small molecules moving through R&D, we believe that we are in a strong position to do so. In the near-term, we expect the second half of 2022 to hold many important milestones, including the initiation of our anticipated Phase 2 trial aimed at universal prophylaxis for influenza A, our first trial in hepatitis D and multiple data readouts from our hepatitis B and HIV programs.”

Corporate Update

During the quarter, the Company continued to deliver on its mission of addressing serious infectious diseases, including bringing sotrovimab to appropriate patients and actively investing in next-generation COVID-19 therapies while simultaneously advancing a robust clinical portfolio aimed at hepatitis B and D, influenza A and human immunodeficiency virus (HIV).

COVID-19

  • In the second quarter of 2022, approximately 265,000 sotrovimab doses were delivered, all to countries outside of the US. This exceeded expectations for delivery of approximately 100,000 doses in the quarter due to additional agreements with countries outside of the US.
  • Sotrovimab currently has Emergency Use Authorization (EUA), temporary authorization or marketing approval (under the brand name Xevudy®️) in more than 40 countries, and remains in use outside of the US.
  • The Company and GlaxoSmithKline (GSK) continue to conduct in vitro testing of sotrovimab against new variants and subvariants as they emerge and plan to submit data in the second half of 2022, including safety at a higher dose and real-world evidence, to regulatory authorities.
  • Due to the evolving COVID-19 landscape and based on discussions with the US Food and Drug Administration (FDA), the Company and GSK do not plan to file a Biologics License Application for sotrovimab at this time and do not intend to pursue the US-based Phase 3 COMET-STAR prophylaxis trial. Discussions with the FDA remain ongoing regarding the appropriate path forward for sotrovimab in the US.
  • As part of the ongoing COVID-19 development plan for sotrovimab:
    • The PROTECT-V prophylaxis trial, a Phase 3 platform trial of sotrovimab sponsored by Cambridge University Hospitals National Health Service (NHS) Foundation Trust, assessing the use of sotrovimab in uninfected individuals started in August. Initial data are expected in 2023.
    • Sotrovimab is being evaluated at a 1g dose among patients hospitalized with COVID-19 in the United Kingdom (UK) as part of the Randomized Evaluation of COVID-19 Therapy (RECOVERY) Trial. Timing of initial data will depend on continued rate of enrollment.
  • VIR-7832 is being evaluated in the Phase 2a portion of the UK’s NHS-supported AGILE initiative. To date, no safety signals have been reported in the Phase 1b or 2a portions of the trial. Additional safety data from the Phase 1b portion of the trial are expected in the second half of 2022.
  • To prepare for new waves of variants and future pandemics, the Company and GSK continue to actively pursue multiple next-generation broadly neutralizing and highly potent COVID-19 antibodies, leveraging the Company’s robust antibody platform, with the aim of generating a pipeline of variant-proof antibodies, as well as small molecules aimed at treating COVID-19 and potentially other respiratory diseases.

Hepatitis B Virus (HBV)         

  • In June, at the International Liver Congress™ 2022, the Annual Meeting of the European Association for the Study of the Liver (EASL), the Company announced encouraging new data from its robust HBV program.
    • Results from the Phase 2 monotherapy trial of VIR-2218 demonstrated that a six-dose regimen provided greater and more durable reductions in hepatitis B surface antigen (HBsAg) than a two-dose regimen, with all participants achieving a >1 log10 IU/mL reduction during the trial.
    • Results from the Phase 1 monotherapy trial of VIR-3434 demonstrated that a single dose (6 mg, 18 mg, 75 mg or 300 mg) resulted in a rapid reduction of HBsAg, with the largest and most durable response noted with the 300 mg dose. Pharmacokinetic (PK) analyses and HBsAg profiles support evaluation of monthly dosing of VIR-3434.
    • Preclinical in vivo data evaluating both VIR-2218 and VIR-3434 as monotherapy and in combination demonstrated that the combination of both compounds resulted in greater HBsAg and HBV DNA reductions than either alone.
  • In June, the first patient was dosed in Part B of the Phase 2 Monoclonal Antibody siRNA Combination against Hepatitis B (MARCH) trial evaluating VIR-2218 in combination with VIR-3434 for 24 and 48 weeks, and in triple combination with VIR-3434 and interferon. Initial data are expected in the second half of 2023. Previously reported results from Part A suggested that VIR-2218 and VIR-3434 are additive in reducing HBsAg, with no drug-related safety signals reported to date. Additional data from Part A are expected later this year.
  • In July, Brii Biosciences exercised its option to acquire exclusive development and commercialization rights to VIR-3434 in China, Hong Kong, Macau and Taiwan, providing the Company with an option exercise fee. Pending VIR-3434’s development progression in these regions, the Company could receive future milestone payments and royalties.
  • Additional HBV milestones expected in 2022 include:
    • Additional data from the Phase 2 trial of VIR-2218 alone and in combination with PEG-IFN-α.
    • Initial data from the Phase 2 trial led by Brii Biosciences evaluating VIR-2218 in combination with BRII-179, an investigational T cell vaccine, for the potential treatment of chronic HBV infection.
    • Initiation of a Phase 2 platform trial of VIR-2218 in combination with VIR-3434 in viremic patients (THRIVE/STRIVE sub-protocols), with initial data expected in the second half of 2023.

Hepatitis D Virus (HDV)

  • The Company expects to initiate a Phase 2 trial of VIR-2218 in combination with VIR-3434 for the treatment of chronic HDV infection called SOLSTICE in the second half of 2022, with initial data expected in 2023. Recent findings indicate that treatment approaches that reduce HBsAg production and block HDV entry into hepatocytes could provide an effective method for HDV management, thus supporting the investigation of the combination of VIR-3434 and VIR-2218 in this high unmet need disease.

Influenza

  • Aligned with the start of the North American influenza season in the second half of 2022, the Company expects to initiate a Phase 2 prophylaxis healthy volunteer trial evaluating the safety and efficacy of two different doses of VIR-2482, an intramuscularly administered influenza A-neutralizing monoclonal antibody, with the aim to reduce the rate of infection. The primary efficacy endpoint is confirmation of symptomatic influenza A illness with key secondary endpoints of severity and duration of illness due to influenza A. Initial data are expected in mid-2023.
  • Also in the second half of 2022, the Company expects to initiate a Phase 1b prophylaxis trial evaluating the safety of VIR-2482 in elderly (>65 years old) participants who will receive a flu vaccine. This population is representative of the Company’s anticipated Phase 3 trial population. Initial data are expected in mid-2023.  

HIV

  • Additional safety and immunology data from the proof-of-concept Phase 1 trial of VIR-1111, an HIV T cell vaccine based on human cytomegalovirus (HCMV), are expected in the second half of 2022. To date, no safety signals have been reported.

Management

  • In July, the Company announced that Herbert “Skip” Virgin, M.D., Ph.D., executive vice president, research and chief scientific officer, will step down effective August 30, 2022, to pursue a new position with Altos Labs. He will be a member of the Company’s Scientific Advisory Board. Phil Pang, M.D., Ph.D., executive vice president and chief medical officer, will take on overall responsibility for research and development on an interim basis while the Company identifies a permanent successor.

Second Quarter 2022 Financial Results

  • Revenues: Total revenues for the quarter ended June 30, 2022, were ($40.6 million), compared to $177.1 million for the same period in 2021.
    • The profit-sharing amount under the collaboration with GSK for the quarter ended June 30, 2022, was $342.5 million, which was offset by a non-cash charge of $397.4 million for potential write-offs related to excess sotrovimab supply and manufacturing capacity against uncertain future pandemic demand. As a result, collaboration revenue for the second quarter was ($54.9 million), compared with $5.3 million for the same period in 2021. Collaboration revenue reflects the delivery in the second quarter of approximately 265,000 sotrovimab doses, which exceeded expectations of approximately 100,000 doses due to additional agreements with countries outside the US. The $342.5 million profit-sharing amount due from GSK is expected to be received during the third quarter. Collaboration revenue is calculated by applying the Company’s contractual share of 72.5% to the revenue reported in the period by GSK, $551.9 million for the second quarter, net of cost of goods sold and allowable expenses from both GSK and the Company (e.g., medical affairs, selling and marketing expenses), and adding back the Company’s expenses that appear elsewhere in the consolidated statement of operations (e.g., cost of revenue).
    • Contract revenue for the quarter ended June 30, 2022, was $12.3 million, compared to $168.7 million for the same period in 2021. The decrease for the quarter was primarily due to $168.3 million of revenue related to the license granted to GSK under the Company’s 2021 agreement with GSK recognized in the quarter ended June 30, 2021, partially offset by $7.0 million related to the additional license granted to GSK applicable in mainland China, Hong Kong, Macau and Taiwan upon execution of Amendment No. 1 to the Company’s 2020 agreement with GSK in the quarter ended June 30, 2022.
    • Grant revenue for the quarter ended June 30, 2022, was $2.1 million, compared to $3.1 million for the same period in 2021. The decrease for the quarter was primarily due to the timing of research activities under the grant agreements with the Bill & Melinda Gates Foundation.
  • Cost of Revenue: Cost of revenue for the quarter ended June 30, 2022, was $27.9 million, compared with $1.1 million for the same period in 2021. The increase was due to third-party royalties owed based on the sales of sotrovimab.
  • Research and Development Expenses: Research and development expenses for the quarter ended June 30, 2022, were $115.1 million, which included $14.1 million of non-cash stock-based compensation expense, compared to $86.1 million for the same period in 2021, which included $10.9 million of non-cash stock-based compensation expense. The increase for the quarter was primarily due to higher personnel-related expenses resulting from higher headcount, the change in fair value of the contingent consideration from the acquisition of Humabs, an increase in manufacturing activities for the Company’s product candidates and an increase in the allocation of facilities and other costs, partially offset by a decrease in costs under the collaboration arrangements with GSK and other R&D collaborators and a decrease in clinical trial costs for sotrovimab.
  • Selling, General and Administrative Expenses: Selling, general and administrative expenses for the quarter ended June 30, 2022, were $41.6 million, which included $13.0 million of non-cash stock-based compensation expense, compared to $28.8 million for the same period in 2021, which included $10.1 million of non-cash stock-based compensation expense. The increase for the quarter was primarily due to higher personnel-related expenses related to additional headcount, external consulting services, business tax expenses related to increased revenue from the sale of sotrovimab and allocated facilities costs due to higher lease expense.
  • Other (Expense) Income: Other expense for the quarter ended June 30, 2022, was ($8.5 million), compared to income of $0.8 million for the same period in 2021. The increase for the quarter was primarily due to the unrealized loss of $11.4 million resulting from the change in fair value of the Company's equity investment in Brii Biosciences, partially offset by higher interest income.
  • Benefit from (Provision for) Income Taxes: Benefit from income taxes for the quarter ended June 30, 2022, was $157.2 million, compared to a ($53,000) provision for income taxes for the same period in 2021. The increase in benefit from income taxes for the quarter was primarily due to the Company’s pre-tax book loss and the decrease in the estimated 2022 annual effective tax rate.
  • Net (Loss) Income: Net loss for the quarter ended June 30, 2022, was ($76.5 million), or ($0.58) per share, basic and diluted, compared to net income of $61.8 million, or $0.48 per share, basic, and $0.46 per share, diluted, for the same period in 2021.
  • Cash, Cash Equivalents, Investments, and Profit-Share Payments: As of June 30, 2022, excluding restricted cash, the Company had more than $2.6 billion in cash, cash equivalents, investments and profit-share payments to be received from GSK.

Sotrovimab in the United StatesThe following is a summary of information for sotrovimab. Healthcare providers in the US should review the Fact Sheets for information about the authorized use of sotrovimab and mandatory requirements of the Emergency Use Authorization (EUA). Please see the Food and Drug Administration (FDA) Letter of Authorization, full Fact Sheet for Healthcare Providers and full Fact Sheet for Patients, Parents, and Caregivers.

Sotrovimab has been authorized by the FDA for the emergency use described below. Sotrovimab is not FDA-approved for this use.

Sotrovimab is authorized only for the duration of the declaration that circumstances exist justifying the authorization of the emergency use of sotrovimab under section 564(b)(1) of the Food, Drug, and Cosmetic Act, 21 U.S.C. § 360bbb-3(b)(1), unless the authorization is terminated or revoked sooner. Due to the continued proportion of COVID-19 cases caused by certain Omicron subvariants, sotrovimab is not currently authorized in any US region.

Authorized useThe FDA has issued an EUA to permit the emergency use of the unapproved product sotrovimab for the treatment of mild-to-moderate coronavirus disease 2019 (COVID-19) in adults and pediatric patients (12 years of age and older weighing at least 40kg) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.

Limitations of authorized use

Sotrovimab is not authorized for use in adult or pediatric patients who:

  • are hospitalized due to COVID-19, OR
  • require oxygen therapy and/or respiratory support due to COVID-19, OR
  • require an increase in baseline oxygen flow rate and/or respiratory support due to COVID-19 in those on chronic oxygen.

Benefit of treatment with sotrovimab has not been observed in patients hospitalized due to COVID-19. SARS-CoV-2 monoclonal antibodies may be associated with worse clinical outcomes when administered to hospitalized patients with COVID-19 requiring high flow oxygen or mechanical ventilation.

Important Safety Information

CONTRAINDICATIONSSotrovimab is contraindicated in patients who have a history of anaphylaxis to sotrovimab or to any of the excipients in the formulation.

WARNINGS AND PRECAUTIONSThere are limited clinical data available for sotrovimab. Serious and unexpected adverse events may occur that have not been previously reported with sotrovimab use.

Hypersensitivity Including Anaphylaxis and Infusion-Related ReactionsSerious hypersensitivity reactions, including anaphylaxis, have been observed with administration of sotrovimab. If signs and symptoms of a clinically significant hypersensitivity reaction or anaphylaxis occur, immediately discontinue administration and initiate appropriate medications and/or supportive care.

Infusion-related reactions, occurring during the infusion and up to 24 hours after the infusion, have been observed with administration of sotrovimab. These reactions may be severe or life-threatening.

Signs and symptoms of infusion-related reactions may include: fever, difficulty breathing, reduced oxygen saturation, chills, fatigue, arrhythmia (e.g., atrial fibrillation, sinus tachycardia, bradycardia), chest pain or discomfort, weakness, altered mental status, nausea, headache, bronchospasm, hypotension, hypertension, angioedema, throat irritation, rash including urticaria, pruritus, myalgia, vaso-vagal reactions (e.g., pre-syncope, syncope), dizziness and diaphoresis.

If an infusion-related reaction occurs, consider slowing or stopping the infusion and administer appropriate medications and/or supportive care. Clinically monitor patients for at least 1 hour after completion of the infusion for signs and symptoms of hypersensitivity. Hypersensitivity reactions occurring more than 24 hours after the infusion have also been reported with the use of SARS-CoV-2 monoclonal antibodies under Emergency Use Authorization.

Clinical Worsening After SARS-CoV-2 Monoclonal Antibody AdministrationClinical worsening of COVID-19 after administration of SARS-CoV-2 monoclonal antibody treatment has been reported and may include signs or symptoms of fever, hypoxia or increased respiratory difficulty, arrhythmia (e.g., atrial fibrillation, tachycardia, bradycardia), fatigue and altered mental status. Some of these events required hospitalization. It is not known if these events were related to SARS-CoV-2 monoclonal antibody use or were due to progression of COVID-19.

Limitations of Benefit and Potential for Risk in Patients with Severe COVID-19Benefit of treatment with sotrovimab has not been observed in patients hospitalized due to COVID-19. SARS-CoV-2 monoclonal antibodies may be associated with worse clinical outcomes when administered to hospitalized patients with COVID-19 requiring high flow oxygen or mechanical ventilation. Therefore, sotrovimab is not authorized for use in patients: who are hospitalized due to COVID-19, OR who require oxygen therapy due to COVID-19 OR who require an increase in baseline oxygen flow rate due to COVID-19 in those on chronic oxygen therapy due to underlying non-COVID-19 related comorbidity.

ADVERSE EVENTSInfusion-related reactions, including immediate hypersensitivity reactions, were observed in subjects treated with sotrovimab in COMET-ICE (1%) and in COMET-TAIL (