Vir Biotechnology, Inc. (VIR) Earnings Call Transcript & Summary

Welcome back, everyone, to the Second Annual H.C. Wainwright HBV Conference. My name is Patrick Trucchio, and I'm a senior biotech analyst at H.C. Wainwright. It's my pleasure to introduce our next presenter, Phil Pang, Chief Medical Officer of Vir Biotechnology, a commercial-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. So Phil, if we could first start with some background on the HBV program, specifically on VIR-2218, including mechanism of action, the relevant target.

Definitely. And again, thank you, Patrick, and thanks to H.C. Wainwright for having the Vir company here today. I'd like to begin with just maybe a little bit of a bigger picture before I answer your question, which is just, obviously, we're talking about HBV functional cure. And I really want to emphasize what is Vir's approach, which is that we are thinking of HBV not just a viral disease but as a disease-causing immune dysfunction. And we believe we can restore immune control by knocking down hepatitis B antigens with VIR-2218, which will remove the block on the immune system and then, in the setting of an immunomodulator, achieve that immune control. So therefore, when we designed VIR-2218, to answer your question more directly, we wanted it to be something that knocked down all the HBV proteins that includes X polymerase S and core as well as obviously not be genotype-specific. So it covers all 10 genotypes. It is GalNAc-conjugated, therefore, it can be given subcutaneously. And the goal, again, is to reduce those proteins to allow B and T cells to regain their normal activity. In this setting, we also believe that safety would be key. Therefore, we incorporated Alnylam's latest ESC+ technology which we believe increases the therapeutic index by removing or rather reducing the likelihood of off-target activity. So that, in a nutshell, is VIR-2218.

Yes. That's helpful. And just if you could tell us why was 1 siRNA trigger appropriate for HBV? And is there any thought or concern around viral escape?

That's a great question, Patrick. And maybe I'll begin by saying, certainly, if we were to give a single siRNA by itself, and only by itself as a pure, I think that, that might be a concern. But remember, we're going to be giving this as part of a cocktail. And as part of that cocktail, most of the time, it's going to include a nucleoside reverse transcriptase inhibitor. And those have incredibly high barriers to resistance. So in the setting of a NUC, I have pretty much no concern about viral escape to the siRNA. And on top of that, of course, we've chosen a highly conservative sequence. But I would also point out that 1 versus 2 with regard to viral escape may be a confusing point for some, and I just want to remind this audience that companies that are going with 2 triggers aren't doing so necessarily to reduce resistance. It might have that effect but probably won't matter in the setting of a NUC. Really, it's because 1 trigger would -- they needed 2 triggers to be able to attack both integrated and cccDNA. We were able to find a single trigger that affect both of those sources of HBV protein.

Yes, it makes sense. And so do you believe a robust antiviral mechanism should be expressing variants and/or subviral particles generated by both cccDNA and integrated DNA? And if so -- and is VIR-2218 doing so?

Yes is the short answer. VIR-2218 knocks down surface antigen and proteins from cccDNA as well as surface antigen from integrated DNA. But I do want to point out, Patrick, that it's important to clarify that the goal is to reduce these HBV proteins. It does act, therefore, as an antiviral. But the most important goal is to remove these immuno-tolerogens so that the immune system can be reawakened.

Right. Yes. That makes sense. And so in June, Vir presented data from the Phase II trial that's evaluating VIR-2218. Can you discuss the study in more detail, the baseline characteristics of the patients enrolled and key takeaways from a safety and efficacy perspective?

Definitely. So maybe let's begin with what was the study about. And the study was a monotherapy trial of 2218, first in-human then rolled over into a Phase II study where we looked at the durability of 2218 in its ability to knock down surface protein but after only 2 doses. So remember, these people are just getting 2 doses. And what was revealed in June at EASL was what was the long-term follow-up. In that context, let me share what I think we saw. Population-wise, just for everyone's setting, a level set, it is again a NUC-suppressed patient population. It was a mixture of e-antigen and negative and positive patients, and they were enrolled in the Asia Pac region. So therefore, the ethnicity and the genotypes were consistent with that region. What I believe we showed was 3 things, Patrick. First, as a first principle, we wanted to be able to demonstrate that, of course, 2218 knocked down surface antigen in the majority of patients by over a log and sometimes by over 2 logs in most patients. So the first thing we learned was proof of biology. The second thing we learned was around durability. We did see that in many patients that lasted up to 48 weeks, which is perhaps not surprising given how siRNAs work against host targets, but it was the first time for a viral target that we were able to show 2218 was able to really have a prolonged PD, or pharmacodynamic, effect. And the third thing we showed was that so far, and again, in small numbers, limited data set, the safety profile has been very -- we're viewing the safety profile very positively, and we're excited about the ESC+ technology. Where we're going from there, just to be clear, is now that we've looked at this monotherapy is now we want to know with combination therapy is actually knocking down that surface antigen actually result in something clinically meaningful. And that's why we brought forward, as you know, Patrick, a very broad Phase II program that looks at 4 different combinations.

Yes. So is the expectation on patients who demonstrate surface antigen reduction less than 100 IU per ml at week 24 would eventually clear surface antigen entirely?

That is a very interesting point. And I would not characterize -- or I would say I'd be very cautious about calling it an expectation. Certainly, the lower the better. And the hypothesis is, again, in this immune world, that the lower it is, the more likely it is your immune system will be able to kick in. I will say that 100, it does have meaning, but we need to be contact specific. For example, in [ The Apostle ] guidelines, they've recently said that if you have an S antigen less than 100, you may be able to stop your NUC. But remember, that's in the setting of naturally getting to less than 100. It's not clear if that's relevant to siRNA therapy. Of course, we hope it's the case, but that's something that remains to be determined.

Got it. And so we heard earlier today that there appears to be a resurgence in interferon. And there did appear to be synergy between VIR-2218 and interferon in the separate Phase II trial. So I'm wondering if you can maybe discuss why this combination is being evaluated and then discuss the outcome in the study that was presented at EASL.

Certainly. So maybe to level set, I think that a couple of years -- it's almost been a couple of years now, the pandemic sort of fried my sense of time, Patrick. But originally, the first combination with an siRNA that was ever evaluated was an siRNA with a capsid, if you remember, right, excluding the NUCs, right? And to my knowledge, although we haven't seen the larger data set, that early data failed to show that adding a capsid to an siRNA had any on-treatment effect with regard to surface energy. So the first question we wanted to know is if you add a different compound to an siRNA, does that make a difference. And specifically, we wanted to ask instead of adding an antiviral to an siRNA, what if you added an immunomodulator to an siRNA. That is what led us to our study of 2218 plus interferon because, obviously, the interferon is an immunomodulator unlike a capsid. And the idea there is, again, let's reawaken the immune system and allow for control. So we were really excited by the data that we presented at EASL, which was the first 12 weeks of data of 2218 with interferon because it showed at least additive benefit, which had previously never been shown for a cocktail with an siRNA, showing that the decline greater than 1 would have expected with interferon alone or with 2218 alone. And I think that, that was, as I'm noting, a little bit underappreciated. So that was really the first 12 weeks of data. And really, what we can learn hopefully from the next 12 weeks of data is does it matter when interferon is given, which is still a key question because we don't know exactly what the dose duration and frequency yet is or the order of these compounds. And of course, eventually, we want to see, can we get patients to LLOQ and keep them there.

Yes. So just on the safety and tolerability side, can you discuss rates and magnitudes of any ALT flares? I haven't seen any of the data that's been generated to date.

Yes. Let me answer that in a slightly different way, Patrick and say let's talk about ALT flares in general, all right? And I actually really would encourage everyone to look at the EASL 2020 poster by Gilead actually. They had an amazing poster that looked at over 2,000 patients and asked, "Of the people who had a liver flare, how many of them cleared? And of those who never had a liver flare, how many of them cleared?" So here's some interesting data for you that comes out of that poster. They had 91 patients who achieved hepatitis B surface antigen loss, so "functional cure." But only 34 of these 91, or around 30%, actually had a liver flare, which meant that 60% of patients who cured themselves of hepatitis B did not require a liver flare. So the liver flare is not necessary to achieve a functional cure. If you look at it the other way around and ask of the people who had a liver flare, what was their chance of actually clearing surface antigen, and that was about 10%. So certainly, that's better than the historic 3% to 5% or 3% to 7% you would get with just treating with interferon. If you know that they have a liver flare, it's increased. But that's still a pretty small number. So my whole belief is yes, a liver flare is interesting. A liver flare is probably predisposing a patient to -- a good liver flare, I should say, is predisposing patients to have a higher chance of cure. But I worry that sometimes that when people see an ALT elevation, they automatically say it must be good and it has to be beneficial when it's just as likely to be some type of concern about toxicity. So I think that I would encourage people to be careful about the interpretation of ALT abnormalities.

And then just with 2218, what you've seen.

With 2218, we have seen a very good safety profile. Not surprisingly, we had dosed patients all the way up to 900 milligrams in healthy volunteers, and we are dosing at 200 milligrams times 6 for 6 monthly doses. And so far, things have looked as positive as we had expected.

Great. And then so there's additional data on 2218 and the interferon combination expected later this year. Maybe if you can give us a sense of the timing and what would be the ideal outcome from Vir's perspective.

Well, what we want to do, Patrick, is we really want to progress the science as well as the product. And I certainly don't want to, at this call, preempt any data that's going to come out of AASLD. So maybe I'll speak a little bit more generally and say what we want to see next in the study is do we understand when is the ideal time to intervene with interferon, is it at the same time you give the siRNA or later. That's one of the interesting questions we hope to answer with our trial design and what we're looking forward to in general in the future. I would also say that I think I was on for a little bit with [ Harry Anderson ] earlier today when he was talking. And I would say, of course, the goal is to get people to LLOQ and keep them there. And up to date, there have been very few, if any, incidences of people getting to less than LLOQ. And so I think that, that is another thing that we're keeping our close eye on. And then, of course, as you mentioned, the lower the better. And if we can get patients to less than 100 then that's certainly better than not.

Yes. Yes, makes sense. So I'd like to shift to VIR-3434. Here, too, can we maybe get some of the background on this program as well as the mechanism and target or targets?

Great. So as you mentioned, so VIR-3434, just what is it? First, it's a monoclonal antibody that is administered subcutaneously that is currently in 2 studies, a Phase Ib study, single ascending dose; and in a combination study with VIR-2218 as part of our March study. So that's where it is, and that's technically what it is. But I want to remind people that it has been modified in the Fc domain to be able to allow it to act also as a potential T-cell axon. So really, VIR-3434 has 3 mechanisms of action. First, by binding to a conserved region of the surface antigen, it is able to neutralize and prevent infection of hepatocytes, which I think is important in the pathogenesis of this disease. So it's an entry inhibitor. Second, it obviously binds to surface antigen in [indiscernible] and sucks them -- not sucks them, but captures them out of the blood and reduces those levels. And third, as I said, it would deliver them those antigens to a dendritic cell and allow that dendritic cell to stimulate HBV-specific T cells, or at least that's the theory that we are working with.

Yes. I'm particularly interested in the effector function piece because I don't think there's any other -- and I guess maybe you can answer that, too -- I don't think there's any other compound quite like this one with this type of adjustment. And so maybe you could talk about that and then just how you've been able to thread the needle on tolerability and safety and efficacy, specifically with this effector function, which is attracting the NK cells and T cells to the hepatocytes?

Yes. So let me try and break that one down, Patrick. That's going to be a lengthy answer. So there's the effector function question. I think you've also mentioned entry inhibitor and then you also mentioned safety. So let me first start with the safety aspect of it, which is that, first, when we say effector function, what do we mean? We mean at least 2 things. The first is your classical effector function, which is known in oncology, which is ADCC, right? You take the monoclonal antibody, it binds to the cell and it targets it with an NK cell or it brings an NK cell to target the cell for cell death. In the case of hepatitis C -- hepatitis B rather, it is not clear how much surface antigen is actually on the surface of hepatocytes. This actually remains controversial. Some people say it's obviously there. You talk to experts like [ Frank Jüngerkes ], he says, "Well, I'm still unconvinced." So do we believe that ADCC will happen if it's on the surface of the cell, the surface antigen is on the surface of hepatocyte? Yes. But that is not the primary effector function we're talking about. We're talking about a novel effector function which, as you pointed out, Patrick, is unique to VIR-3434, at least to our knowledge, and unique in the sense that it incorporates Jeff Ravetch's proprietary Fc mutation, which enhances its binding to what's called the Fc gamma 2a receptor and diminishes binding to the Fc gamma 2b receptor. That's important because A is activating and B is inhibitory. And by having that combination, when it plugs into a dendritic cell, it actually stimulates that dendritic cell to mature. Now in terms of safety then, one can say, "Well, aren't you worried about having too good of an immune response?" And I'll answer that in both a serious way and a tongue-in-cheek way. The tongue-in-cheek way is to say, "No one's ever gotten too much of an immune response yet. So hopefully, we can get a good immune response." In terms of safety, it is something we think about a lot, Patrick. And the answer is we took our guiding principle from the clinical literature. If you take a patient fulminant hepatitis, so they have a massive overloaded immune response, you can actually give them a nucleoside reverse transcriptase inhibitor and pull them out of that fulminant hepatitis. Therefore, an overexuberant immune response can be attenuated by knocking down replication and antigen. So now we're going to be starting only with patients who are on a NUC in the setting of an siRNA, which will knock down antigen and replication and, therefore, we believe will prevent an overexuberant immune response. To answer your last part, I do want to highlight why 3434's entry inhibition is important in my mind. And that's actually data that I think is underappreciated in the field, which is data in the co-infection space. This is hepatitis Delta plus hepatitis B. And that was data showing that -- where cludex plus interferon was actually able to cure a large -- no, not a large, but a handful of patients who had co-infection simply by putting an entry inhibitor with an immunomodulator. So I think entry inhibitors have an underappreciated possibility within this space.

Yes. Yes, it's interesting. So then just with 3434, I'm wondering what assays or methods you evaluated potential emergence of escape mutants? And what did that work demonstrate?

Yes. So Patrick, first off, again, I want to remind everyone that patients are going to be on a NUC, and a NUC has a high barrier to resistance. So this is not monoclonal antibody monotherapy, right? I mean in the single ascending dose it is, but in practice, it will be used in combination. So I don't think escape mutations are going to be a big problem. That having been said, in terms of the actual in vitro work, we are doing what we call mutational scanning, putting in different mutations and seeing how that impacts binding. Part of this can be predicted from using just an alignment of all 10 genotypes and trying to figure out which amino acids are part of the footprint and, therefore, which can mutate and which are conserved. But I will say that, that is somewhat slow work. It's actually hard to select for resistance in vivo or in vitro in a tissue culture just because the assay systems are just not robust the way they are for other viral diseases.

Yes. So then in the initial Phase I data, 3434 appeared to generate this robust decline in surface antigen in many of the patients. Maybe a handful of patients had less of a decline versus others and then others may be rebounded. So I'm wondering what were the differences or what did the data kind of show you as far as the strong response that you've had, I think, overall versus maybe some of these individual patients that didn't respond as well.

So let me take that into 3. So first, of course, we were very excited by the data generated by 3434. At only 6 milligrams, we saw almost a long decline which was unexpected. We had expected to require more than 60 or 70 milligrams. And with that, we now wanted to answer the next couple of questions, which is do you achieve a deeper decline with higher doses and do you achieve a more prolonged decline with higher doses. And those are questions that we are obviously very excited to learn the answers to. I want to point out that the durability of the response will not only be important for helping to understand if the immune system has kicked in. But from a practical perspective, it may allow us to dose 3434 every 4 weeks, for example, which would be very useful in the setting of, for example, 2218. So if we can have both of these drugs being given every 4 weeks, that would be really convenient from a product perspective. As far as the variability, I actually think that the variability may be a red herring. I don't know the answers to it all. But I would say that I think that what variability there exists, for example, in the 18-milligram cohort, and it appears at least to be due to some lack of -- the patient having received the correct amount of drug, possibly, right, because of their levels of 3434 in their blood just didn't make any sense to us for the dose that they received.

Got it. That's interesting. So then we do have the Phase II program called MARCH, that's the combined 2218 and 3434. So I'm wondering what are the expectations in terms of potential functional cure rates. And when would we have the first clue that this regimen is, in fact, generating a stronger functional cure?

Well, in terms of potential, of course, Patrick, the sky is the limit, right? But realistically, I would say that right now, we have a functional cure rate of 3% to 7%. And I think most key opinion leaders would say that anything above 30 is a home run in this space. But certainly, until we try it, I don't know that we can know the expectation other than that we -- it is our signature cocktail. We believe it has what it takes to get the functional cure. It has 2218, which will remove the tolerogens. And it has 3434, which can stimulate the immune system. And I think as we've said publicly before, we expect initial on-treatment data in the first half of 2022.

Can you talk about kind of the rates of enrollment in your HBV studies and how it's been impacted by the COVID pandemic? And is it still being impacted by the COVID pandemic?

It is, Patrick. But I would say we're addressing it as best we can. So COVID is everywhere. And ultimately, it's not just is the site willing to see patients, it's are the patients willing to come in to be seen, right? I mean hepatitis B is a chronic disease they've lived with for years. A lot of them are saying, "Well, you know what, I'll just wait another 6 months till the pandemic is a little bit more tame in my area before I start going to monthly clinic visits that aren't even "necessary" at this time," right? So it's an optional thing to enroll in a clinical study. That having been said, Vir takes this very seriously. We have an incredible operations group. And what we've done is we've actually doubled and then sometimes tripled the number of sites that we are -- our CFO doesn't like it when I do that, but we've been basically tripling our sites to be able to ensure that we meet our enrollment expectations.

Yes. Terrific. Okay. So there's a whole bunch of other combinations that Vir is assessing, including with collaborators Brii and Gilead. Can you discuss some of those combinations and studies and expectations around those trials?

Okay. So to put this broad portfolio program into context, we have the first combination we've been talking about, 2218 plus interferon. The advantage there is, of course, interferon is readily available and we could get to it as soon as possible. Our signature cocktail, as we discussed, is 2218 plus 3434. But it's always good in drug development not to put all your eggs in one basket, and we want to explore one of the main immunomodulator mechanisms that would be important. And that's why we were excited to partner with Gilead, which is a leader in the hepatitis B field, and combine it specifically with their TLR8, which has shown some very interesting activity in its ability to act as an immunomodulator. TLR8 is both an innate as well as an adaptive immune response stimulant. And that's, of course, going to be given with PD-1, which has also shown some interesting activity in terms of some of the early studies by Ed Gane. So that is one cocktail, a third cocktail. And then the fourth cocktail is a study that's already begun, which was to do with Brii's 179 T cell vaccine. And the combination there is, to ask the original question, add 2218 then give a vaccine, has 2218 modulated the immune environment, allowing a T cell vaccine to be actually effective in this space? And those are the 4 programs. And I think, as I like to say, we're still just getting started.

Yes. I think it's one of the most exciting group of programs out there, and we're really excited for the 2218 and 3434 combo. So we look forward to that data. And Phil, it's always a pleasure to catch up with you and hear what Vir is up to, and we look forward to your study outcomes, and good luck getting everything enrolled. And thank you and thanks to Vir for participating in our conference. And everyone else, have a great rest of your conference.

Thank you, Patrick.