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

Ladies and gentlemen, thank you for standing by, and welcome to the Vir Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Heather Rowe Armstrong. Please go ahead, Ms. Heather.

Thank you, operator, and thank you all for joining us today for this important update on sotrovimab's role in neutralizing Omicron variant. My name is Heather Armstrong, and I'm the Vice President of Investor Relations at Vir. Joining me today are George Scangos, Ph.D. and Chief Executive Officer; Skip Virgin, M.D., Ph.D. and our Chief Scientific Officer; and Howard Horn, our Chief Financial Officer. The materials we will be referencing on today's conference call can be found under the Events section of the Investors page of our website. Before we begin, let me remind you that some of the statements we will make on this call today are forward-looking statements. These include statements that are not historical facts. These forward-looking statements, risks and uncertainties, and many factors may cause actual results to differ from current expectations. Other risks and uncertainties are described under the caption Risk Factors and elsewhere in Vir's SEC filings and reports. We undertake no duty or obligation to update any forward-looking statements that we make today. And with that, it's my pleasure to turn the call over to George.

Good morning, everyone. Thank you, Heather. Thanks, everybody, for joining us today. Vir was founded 5 years ago now to take on the most serious infectious diseases. And just with the viruses that we've been tackling, we've had to constantly evolve to meet the pressing global needs. And obviously, COVID has been devastating from a public health perspective as well as social and economic perspectives. And with sotrovimab, our monoclonal antibody, and together with GSK, our partner, we're very proud to do our part in helping patients avoid hospitalization in that. Notably, sotrovimab is 1 of only 3 monoclonal antibody treatments to receive an emergency use authorization from the U.S. FDA and granted marketing authorization in Australia, Japan, the U.K. and Saudi Arabia, and has received temporary use authorization in a dozen other countries. We recently submitted a marketing authorization application to the European Medicines Agency, and we're hopeful for approval there soon as well. In addition, we recently announced positive data demonstrating similar efficacy for sotrovimab when injected directly into the muscle compared to when it's administered intravenously. And that potentially offers a more convenient option and increased access for patients. So we're excited about that. Our sotrovimab manufacturing network will enable supply of approximately 2 million doses in the first year following the U.S. EUA. And to be clear, that is a period between May 2020 through May 2021. We're working very hard to increase supply so that we can continue to serve more patients as we move forward. Importantly, and the reason for the call today is that sotrovimab is the first monoclonal antibody to report demonstrated activity against all SARS-CoV-2 variants of concern and interest today, including Omicron and the still prevalent and highly contagious Delta variant. Sotrovimab was deliberately designed with the mutating virus in mind. And by targeting a highly conserved region of the spike protein that is less likely to mutate, we hope to address both the current SARS-CoV-2 virus and future variants that we expected would inevitably arise. This hypothesis is borne out repeatedly. And with its ongoing ability to maintain activity against all tested variants of concern and interest today, including, as we'll discuss today, against Omicron. So with that, I'll turn the call over to Skip Virgin, our Chief Scientific Officer, to provide more details. Skip, over to you.

Thank you, George. To summarize what I'm about to explain in more detail. I'm very excited to share with all of you our finding that sotrovimab maintains potent neutralizing activity against the pseudovirus of the Omicron spike protein. In my comments, I'll be referring to slides that are posted on our website, as referenced by Heather. Let's start on Slide 3, where we have tested sotrovimab against variants of concern and interest defined by the World Health Organization as well as many other variants. Sotrovimab retains potent neutralizing activity against all of them, including, as we will discuss, the new Omicron variant, which is also called B.1.1.529. Looking back to last week for a moment, we announced that initial preclinical data generated through pseudovirus testing demonstrated that sotrovimab retained in vitro activity against key individual mutations of the Omicron variant, including mutations found in the binding site of sotrovimab. Since our announcement last week, we use the most frequent Omicron haplotype, one containing 37 mutations in the spike protein as shown on Slide 4, to test sotrovimab's neutralization activity against the full combination of these mutations. We conducted 2 independent experiments, which showed an average of a 2.7-fold change in neutralizing activity for sotrovimab against the Omicron pseudovirus spike protein. This number is important because first, sotrovimab's FDA fact sheet, a less than fivefold change in neutralization indicates that sotrovimab retains potent activity against the variant. To conduct these experiments, we used a vesicular stomatitis pseudotyped virus assay as described by Lempp et al in the paper in Nature, which can be found in the literature archive of our website. This method utilizes a robust system that is employed for over a decade to evaluate the effects of antibody neutralization and viral entry inhibition against many key viral pathogens. Notably, evaluation of sotrovimab in vitro activity against spike variants using this system correlates with findings from live virus assays for SARS-CoV-2. I'm sorry, I'm having a little bit of a computer problem. We're back. Thank you. With findings from live virus assays for SARS-CoV-2 variants of concern and interest as shown in the Cathcart et al paper and bioRxiv, which is also available in the literature archived on our website. We intend to test sotrovimab against live Omicron virus as the next step. Additionally, as shown on Page 6 of the -- on the website, we conducted similar tests with VIR-7832, our antibody that shares binding and neutralization characteristics with sotrovimab but that has also been engineered to potentially be a therapeutic T-cell vaccine. VIR-7832 also showed a 2.7-fold change in neutralization activity against the Omicron pseudovirus spike protein. In sum, we are very excited about these findings, and we'd be happy to take any questions that you may have.

[Operator Instructions] Our first question comes from Gena Wang with Barclays. [Operator Instructions] Did you want me to move on to the next question?

I guess so, maybe we can come back to Gena, I can't hear her.

Okay. Our next question comes from Geoff Meacham with Bank of America.

This is Jason on for the call. Congratulations on the data. I appreciate it's a little bit early, but can you start to speculate what the implications are for the more in vivo human data, given the maybe slight reduction in neutralization activity?

I guess I can take that. Look, with this 2.7-fold reduction is not considered to be meaningful. And anything within a factor of 5 is it's going to be covered. That 500-milligram dose that we're giving is calculated to be a manyfold excess of what we need to inhibit the virus. And so I don't expect this to have any biologic impact at all.

Our next question comes from Phil Nadeau with Cowen and Company.

Congratulations on the data. Just first, in terms of the binding affinity to Omicron, is the 2.7-fold reduction the greatest reduction you've seen thus far versus any of the other variants in circulation? Or were there others of a similar magnitude?

Yes. It's similar to what we see with the Alpha variant, just in the same range. And again...

Perfect.

So it's consistent.

And then you mentioned that you're going to do a test against the Omicron virus itself. Just curious, when could we see that data? How long does such a study take?

Yes. weeks, not months, but it's still premature to be more specific than that.

Our next question comes from Joseph Stringer with Needham & Company.

Congrats on the data. Just curious, based on this data, so it's bigger picture here in terms of purchase agreements. And how does this -- I wonder if you could provide some additional color on -- as new data for these variants of concern, including Omicron, are coming in, how does this affect sort of discussion with, say, governments and things around? What implications do you think this has for those discussions on potential purchase agreements?

Again, this is George. Look, it doesn't obviously makes no sense for a government to purchase an antibody that does -- is not active against the most common circulating variant. We're all expecting Omicron to become the dominant variant and displace Delta. That hasn't happened yet, although I think -- so it may not, right? I mean, we're expecting that to be the case, but time will tell. So if Omicron becomes the dominant variant, then of course, only antibodies that retain activity against Omicron will be interesting to purchase moving into the future. So I think having activity against Omicron is table stakes moving into the future for government contracts. So we're very happy that we have activity.

Our next question comes from Patrick Trucchio with H.C. Wainright.

Congrats on the data. I actually have a follow-up question on VIR-7832. I'm just curious what the status of this program is, and how we should think about the program just in terms of being moved forward now that there's these new variants emerging? How we could think about the efficacy as compared to what's already been demonstrated? The 79% reduction in hospitalization or death with sotrovimab, how would you expect VIR-7832 to potentially improve on that? And how do we think about that just in terms of Omicron and just this program moving forward in that context?

Interesting question. 7832, of course, recognizes the same epitope as sotrovimab. It also retains activity against the Omicron variant. And so it is -- it remains a very interesting antibody, which, as you know, has enhanced the vector function and therefore, potentially the ability to induce a more potent -- to be more potent in the short term and induce T-cell response in the long term. So that's continuing in this clinical development program. We think it's an interesting molecule, and we want to exploit its -- well, not exploit but we wanted to test its potential to see if in humans, it is -- replicates the increased potency and T-cell induction that we see in animals.

Our next question comes from Anupam Rama with JPMorgan.

Congrats on quickly getting this data. George, can you expand on your earlier comment on the manufacturing side? And maybe give us a little bit more color on the progress there. Remind us how many doses you can fill kind of here in year 1, how much capacity has been taken up and how much remains?

Yes. I mean we've -- I don't have any update on what we've said publicly already. We have over 700,000 doses committed purchased in 2021. And we have contracts with the U.S. government for over $1 billion -- not over, approximately $1 billion. And of course, we're making more all the time. And we have manufacturing being done at multiple places now. And given these data, we are obviously looking to scale up and make as much roadmap as we can. So we'll have the 2 million doses in the first year, and we'll have substantially more beyond that. But not really prepared to say how many doses beyond that at this time. It's a work in progress. We know we're going to be able to make more than that. But how much more than that, not quite -- not sure yet.

Our next question comes from Paul Choi with Goldman Sachs.

Congratulations on the data. A couple from us, please. First, are there any other mutations, insertions, regulations that you find particularly interesting or concerning that you'll focus on, particularly with regard to the in vivo work? And then second, I was wondering if you could maybe offer your thoughts on how sotrovimab might perform in immunocompromised patients, just thinking about the potential risk for that population and thinking about how you think about using it prophylactically among these kinds of patients?

Yes. That's a question for Skip, but I think he just dropped. And he's having a...

George?

Let me take that -- are you on?

Yes, I'm back in. Could you repeat the question, please?

Skip, yes, 2 questions from us. First, are there any particular mutations, insertions or deletions that you find interesting or concerning as you move on to the in vivo stage of testing? And second, I want to ask, given Omicron's evolution in immunocompromised population, how do you think about sotrovimab performing among these kinds of patients? And how do you think about prophylactic use among immunocompromised populations?

Well, let's take the 2 questions separately. I think that the observation that we've retained potent neutralizing activity against the full set of mutations gives me confidence that there are not going to be individual mutations that have a greater effect than the sum of all the mutation. So we view the most rigorous test of the activity of sotrovimab to be a test against a spike protein, which contains all the mutations. So the answer is no, they're not particular mutations that I am concerned about going into the in vivo circumstance. In so far as the role of these antibody, 7832, or 7831 sotrovimab, those are in testing now, and we've made public our timing for when we expect data, and I can turn that over to Howard or Heather. We expect sotrovimab's activities to potentially be useful in prophylaxis as it is already effective in treatment. And so we are optimistic that we may have an activity in a prophylactic setting, but of course, we need to wait for those data.

And of course, remember that sotrovimab has an extended half life. And so that a single application of sotrovimab should provide protection for some months. And that -- again, those are data. How many months data that will come out of the clinical trials, but it has a long half-life, and we think it's a really good option for prophylaxis.

Okay. Great. And one more for us, which is, as you proceed through the testing and development against Omicron, how are you thinking about timing and updating the EUA fact sheet?

Let's say that our regulatory group is quite busy together with GSK's regulatory group. There are not just the EU fact sheet, but the U.K., the U.S. and all of the countries where sotrovimab has either a temporary or true approval. We have to update all of that now. And we have to update it with the IEM data as well. And so we are literally working long hours every day, getting those submissions in as quickly as possible. And it won't be very long now before those are all updated.

Your next question...

I'm sorry, go ahead.

Our next question comes from Joel Beatty with Baird.

Congrats on the data. First question is on the efficacy against variants compared against other antibodies that are being used. Are you able to comment on that?

Well, it's really kind of early to talk about other people's antibodies, but can just tell you what's known publicly. I think you know Regeneron publicly said its treatment may be less effective against Omicron. And then Jesse Bloom's lab published a data showing that the -- Lilly's antibody bam and -- were already in trouble with some variants and aren't going to do any better against new variants or Omicron variant. So time will tell. I think all that speculation is based on analysis of the sequence. And you can look at the sequence and know whether there are individual mutations that are known to affect the binding of a given antibody. And when we looked at the sequence, we didn't see antibodies like -- any mutations like that for sotrovimab. They are present for some of the other antibodies. But given that, there are so many mutations, 37, that it could be that the confirmation of the spike protein is different. So I don't think anybody can say anything definitive until the experiments are done. But I do think -- I can't say that having activity against Omicron, if it does become a dominant strain, obviously will be necessary for the antibodies to maintain efficacy. And so we'll see about those antibodies. I don't think it will be very long now before data are available. And so many labs around the world are testing all the antibodies.

Makes sense. Yes. Great. And then one other question. On the COMET-TAIL results from last month, where the intramuscular administration had about twice the rate of progression to hospitalization, seems to be considered statistically similar to small numbers, but the 2.7 rate of progression versus 1.3. And I guess my question is, have you looked at whether that could be potentially related to differences in PK, PD between IM and IV?

Really good question, and we are looking at all of that. I don't think we have anything definitive to say at this point.

Our next question comes from Geoffrey Porges with SVB Leerink.

Congratulations, George and Skip, for getting all this assay work done so quickly. I just want to wade into a controversy out there, which is given the number of mutations that we're seeing in Omicron, do you believe that this variant emerged in an individual who was actually receiving a monoclonal antibody as a result of being immunocompromised. And sort of whether that is true or not, do you think that you need to alter the dosing of sotrovimab now that you've seen this modest but not zero change in potency against Omicron to ensure that you don't risk losing the efficacy of sotrovimab in a similar situation with an immunocompromised individual where virus has the opportunity to adapt.

Yes, let me take the second half and then turn over the question of the origin of the virus to Skip. We don't think we need a higher dose. The 500-milligram dose is manyfold excess of what we think we need. And so there's very modest increase similar to what we saw with Alpha. We don't think has any impact at all. We, of course, can increase the dose, but we don't see any reason to do that at this point. We believe the 500-milligram dose will continue to be highly efficacious. Skip, the origin.

Yes. With regard to the question about the origin. So first, let me say that our view is that no one knows the origin of Omicron. And moreover, the question of what are the drivers for emergence of a virus with so many mutations. I think it's important not to try to pin this on a single cause. There's natural immunity, which drives variation. There is the potential for evolution of the virus into nonhuman species, other mammals. And there's, of course, random chance in the development of the mutations. And so I think that the question of where this particular mutation came from is an open question, but there are lots of drivers to evolution. I think if you look by perspective backwards and think about sotrovimab over the time of the pandemic, what you see is that its original design to be prepared for a virus that mutates has led to the activity that you hear about here, and that's been publicly disclosed for all of the previous variants of concern. And that is so regardless of the origin, targeting a conserved part of the viral protein that has potent activity, making sure you recruit the function of the immune system to help the patient at risk. That's a good strategy, we believe, for protection against this variant and potentially for future variants that are likely to emerge as well.

So -- and maybe let me just come back to the dosing question because it's come up a few times in the question. So I'd like to kind of put it to bed, if I can. When we developed sotrovimab, we developed it with the knowledge, actually, the conviction that variants would arise, right? And that's one of the reasons we've chosen and [indiscernible] sotrovimab. We have also developed it with the thought that some of those variants might vary a little bit in their potency. If something is off by 100-fold or even tenfold or 50-fold, you can't -- 100-fold, you can be sure, probably doesn't have activity. But if something is off 5 or 10-fold, you'd like your antibody still to provide activity against it. And you do that by choosing the dose and you don't choose the minimum dose that you think is required to inhibit the first strain, but we anticipated that there would be variants, as there were with Alpha, that are just altered in a minor way. There are some variants that actually seem to be more sensitive, too. So this is just normal variation around the mean. And so the dose was selected with those in mind. So we don't think this poses an issue at all.

George, if I may follow up, though. Isn't the point not what happens in the first month data shooting for, let's just say, once every 6-month dosing, where do you have adequate exposure in the last month because that's when the risk is. So in order to have a prophylaxis recommendation, surely, you have to know what the frequency of redosing is to maintain that concentration so you don't apply that -- create that selection environment.

Yes, that's absolutely true, right, that we need to have human data to see how long the antibody and used prophylactically will provide protection to patients and whether or not that interval is a little bit shorter with Omicron than it is with some of the other variants. And don't know if it's x months for Delta, and x minus 1 for Omicron, then we'll have to be protected for x minus 1, whatever that number turns out to be. So in a prophylactic mode, we'll have to assess that in the clinic. We don't think, in its current use therapeutically, will make any difference.

[Operator Instructions] And I'm not showing any further questions at this time. I'd like to turn the call back over to Dr. Scangos for any comments.

Okay. Thank you, operator. We thank you all for your attention and time this morning. I appreciate the interest and giving us the opportunity to discuss it a bit. And of course, we want to give thanks to the patients and investigators who participated in the studies, to our partner, GSK. And we are -- remain steadfast here in our commitment to take on serious infectious diseases, including COVID. I look forward to sharing additional data with you as it comes in, in the near future. So with that, I think we can end the call. Have -- I hope you all have a great rest of the day. Thanks.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect, and have a wonderful day.