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

Welcome, everyone, to the 40th Annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Malcolm Kuno, Priyanka Grover, and Caleb Smith from the team. Our next presenting company is Vir. Presenting on behalf of the company, we have CEO, George Scangos. [Operator Instructions] With that, George, take away.

Okay. Thank you, Anupam, and thank you to all of you who are tuning in. Thanks for your interest, and of course, thank you to JPMorgan for sponsoring the meeting and for inviting us. As you may know, Vir is a science, medicine, data-focused company that really is focused on a single goal, which is the elimination of infectious diseases. We've assembled a great team. We have amassed a powerful technology base, and we've aggressively moved our programs forward. We started operations about 5 years ago, and in my view, our progress has been quite remarkable. So I'm happy to be here today and to give you a few of the highlights of what's going on in the company. So if we can go to Slide 2. I will make some statements today about expectations and goals in the future. And of course, actual events may differ from our expectations. And for a full description of the risks, please see our regulatory filings on our website. So with that, the next slide, which is look back on 2021. This is Slide 3. 2021 is a terrible year for the world, but it was a spectacular year for Vir, right? We filed the EUA for sotrovimab in March, was authorized in May. And together with our partner, GSK, we made approximately 750,000 doses of sotrovimab available in 2021, which brought Vir revenue of approximately $1 billion. We completed a study of IM administration of sotrovimab, which met endpoint, and an EU application will be filed imminently. And of course, sotrovimab is the only authorized antibody to retain activity against the Omicron variant. So while putting the pedal to the metal on COVID, we also made substantial progress on our compelling program to find a functional cure for HBV. We expanded our collaboration with GSK to include flu and other respiratory viruses, and we initiated the first trial of our CMV-based HIV vaccine. So all in all, quite a productive year. So if we can switch now to the Slide 4. I think all of that brings us to really what is a pivotal moment for Vir. Sotrovimab, because of its continued activity brought in $1 billion of revenues in 2021. We expect to have more than that in 2022. All of that gives us a very strong balance sheet with which we can move our robust pipeline forward aggressively, both in COVID-19, in hep B, in flu, HIV. We can bring other programs into preclinical development and of course, continue to develop our already quite powerful technology base. So really interesting time for Vir. Next slide gives you an overview of our clinical pipeline. I think the important thing is that there are 13 graphs on this slide, representing 13 distinct clinical trials going after 4 different diseases: COVID, HBV, flu, and HIV. These are real trials. When they get beyond Phase I, they are controlled. They are big enough to generate data on which we can make decisions. Many of them have multiple dosing cohorts. So this is quite a diverse, quite a large and high-quality pipeline that's moving forward quite quickly. And we're going to each of these areas in a little more detail now and give you a better flavor of what we're doing in each of them. So Slide 6, just an introduction to our COVID program. Slide 7. I don't think I need to go through this. Everybody understands the need for COVID therapies. I think the important thing here is to realize that COVID isn't going away. This is not a pandemic that's just going to disappear. COVID is going to become endemic. There'll be periodic breakouts. And so there will be a continuing need for therapies and vaccines as we go into the future. So if we go to Slide 8. I'll show you a little bit of data, and I don't have too much data in this presentation, but I thought this was important. Across the axis on the bottom are [ rate ] all of the antibodies that have an EUA in the U.S. So [ treat sotrovimab ] and then a derivative of sotrovimab 7832 that recognizes the same epitope. And then antibodies from Celltrion, AstraZeneca, Regeneron and Lilly, both singly and in combination. The height of the bar represents the extent of loss of activity against Omicron. The assay caps out at a thousandfold. So every bar that's at the top represents an antibody or a combination that has lost at least the thousandfold activity. You can see that's true for all of the antibodies, except for the combination of antibodies from AstraZeneca, which has lost a hundredfold activity. So still a substantial loss of activity there. The only antibody that differs from those is sotrovimab. And as we've said before, it's about a threefold loss of activity. When [ I say it ] against the live virus, it looks like more like twofold activity loss, so somewhere between two and threefold loss of activity. We do not believe that is clinically meaningful, and we believe that sotrovimab continues to provide a major clinical benefit for the patients who take it. So if we can go now to Slide 9, just a little detail of this. Sotrov together with GSK, our partner, sotrovimab is now approved or has an EUA or EU Equivalent in over 40 countries around the world. In 2021, we were able to deliver more than 750,000 doses to patients, and already in the first quarter of 2022, we have hard orders for approximately 1 million doses. That includes the 600,000 from the U.S. government that we announced this morning, plus orders coming in from other countries around the world, and we're only sitting here on January 10. So I think it's reasonable to conclude that we'll have additional orders over the course of this year. In response to that, we've increased our production capacity, and we expect to be delivering more than 2 million or more doses in the first half of this year, with, of course, additional doses coming in the second half. And while all of the administration of sotrovimab now is IV, we anticipate being able to help even more patients with the IM EUA, which we're going to file imminently. And with the completion of trials for hospitalized patients and for use of prophylaxis which we expect to occur in the second half of this year. So we're thrilled to be able to help so many people in need, and as a result, to generate the substantial revenues that we will use to push our programs forward aggressively and hopefully, to save even more lives. So we move now to Slide 10. Just to make the point that our COVID program is much broader than sotrovimab. We are looking to the future for both next-generation COVID therapies and therapies that will cover other organisms with pandemic potential. We have next-generation antibodies, which are look quite remarkable. They are more potent than sotrovimab. They are even more broadly acting sotrovimab. Those are moving forward. They're in manufacturing now to in preparation for developed. We have been working on a pan-coronavirus vaccine. We've mentioned that before. We now have preclinical data that look quite good. Encouraging animal data that we are able to generate broad immunity, and we look forward to moving that forward. And then together with GSK, we are targeting cellular targets whose inhibition prevents infection with multiple respiratory viruses. So COVID, flu, RSV and potentially others, we believe these targets not only can be more broad in their application than viral-encoded proteins, but also are potentially more refractory to the development of resistance. So multiple approaches coming forward for the future of COVID and other coronaviruses and other pandemic-inducing agents. So if we can switch topics for a moment and talk about hepatitis B, introduction on Slide 11, and then move to Slide 12. This is obviously a huge medical need as well, 300 million patients infected -- chronically infected with hep B around the world. Many millions of those in the developed world. There are very poor therapies. There's a lifelong therapy or which often fails, but then for functional cure, there's only interferon, which has a very low cure rate and has basically intolerable side effects. So there's a huge need for better therapies. We have multiple trials going on different modalities, different agents, but they all have the same 2 goals: first, to reduce the level of circulating viral proteins because those proteins suppress the immune system; and second, to stimulate the production of new T cells to bring the infection under control. So Slide 13. It just gives an overview of what we're doing. On the left is the repressive data that were presented at EASL, and is showing dose-dependent knockdown of S-antigen VIR-2218. So our siRNA that we're developing in partnership with Alnylam. We've paired that siRNA with a number of agents in one trial interferon because interferon is the only agent that's shown any activity at all, and we'll have data on that trial as we go through the year. We have clinical collaboration with Gilead to test 2218 together with their TLR8 agonist and with nivolumab. That trial is going on being run by Gilead. We have collaboration with Brii Biosciences, which is testing 2218 in combination with the T cell vaccine in a trial going on in China. And their signature combination about which we're quite excited is a combination of 2218 together with our antibody 3434. 3434 Is a potent inhibitor of viral entry. So it's a very potent antiviral compound to reacting antiviral. In addition, it's been engineered to have strengthened interactions with dendritic cells to induce new T cell activity. And so we're excited about this combo, and we'll have meaningful data over the course of this year. So if we can go to Slide 14. It's just an overview of the trial testing 2218 in combination with 3434. It's a complicated trial, but across the horizontal access is just time, and these are different dose cohorts, testing different dosing regimens of 2218 and 3434. Each blue dot represents administration of 2218 siRNA. Each green dot is an administration of 3434. I think the main takeaway from this slide is that we're testing multiple dosing regimens that are involved in both short-term and longer-term administration of the agents. The trial, I think, will give us a detailed understanding of the potential of these 2 agents to induce functional cures in HBV patients. And again, these data will be available this year, many of them in the first half of the year. If we can now go to Slide 15. And it turn our attention to flu, HIV, and then a quick look at our technology base. Just Slide 16 is -- [ another ] rationale for the flu program. Worldwide, there are about 0.5 million deaths from flu each year, and about 30,000 to 50,000 of those are in the U.S. The vaccine works poorly anywhere between 10% and 60% efficacy in a given year, and it works even more poorly in the high-risk populations who need it most. So if we take a step back, we at Vir isolated our scientists, isolated a single antibody that's now approved for the treatment of Ebola. It's not marketed by Vir, but it was isolated by Vir' scientists. And of course, we have sotrovimab, which is a single antibody that retains activity against all of the variants of COVID that have risen so far. And we have a flu antibody with similar properties. It recognizes every strain of flu A that's arisen since the 1918 pandemic. Importantly, all pandemic strains have been flu A and about 70% to 80% of seasonal flu also was flu A, and a higher percentage of hospitalized patients that have flu A. So flu A is the major issue here. And since this antibody covers the last 100 years of evolution of flu A, I think it's reasonable to expect that it will cover the next years as well. We're developing this antibody as a prophylactic agent for high-risk patients. There are tens of millions of people in the U.S., the EU and Japan, who account for the large majority of hospitalizations, and as well as the majority of the 30,000 to 50,000 deaths that occur each year in the U.S. Flu vaccine works poorly in these high-risk patients for 2 reasons. Sometimes like this year, the vaccine is not well matched to the circulating strains of flu. And even when it is, many people in those high-risk groups fail to generate a good immune response. So giving a pan-flu antibody obvious the need to predict the circulating strains since it's a pan-flu antibody, and the antibody itself is the immune response. It's passive, and it's not dependent on a vigorous immune response on the part of the patient. So we believe this program has the potential to provide a meaningful benefit for the tens of millions of people in those high-risk groups. It's been through Phase I. We will start a Phase II trial in the fall of this year. As you know, that trial has been delayed because there has been no flu during COVID, but flu is now reappearing. And we are eager to test the potential of this antibody to provide better treatment for those patients who are so much in need. We can move to Slide 17. Now to turn our attention to HIV. There are still about 1.5 million new cases of HIV per year, and there are 35 million to 40 million people who are infected with HIV globally. So there's a need for both therapy and vaccine. Our CMV based vaccine platform is intended to program unique T cell responses to provide protection from HIV. We have really good preclinical data demonstrating that we can do that preclinically and we now have the first of those molecules VIR-1111 which is a CMV vector carrying and HIV in a Phase I trial, we are getting data from that trial real-time. There are no safety signals reported to date, and we will have the data on the first several of cohorts of that trial in the first half of 2022. We are just beginning of program to use broadly neutralizing HIV antibodies, which have been engineered to induce a T cell response as a potential cure for HIV as well. That program is moving forward. And if the preclinical data continue to be encouraging, we certainly will move those molecules into clinical development. We now turn to Slide 18. Which is just a quick overview of our technology base. It's been a while since we talked about our base. It's been all about COVID in the past years, couple of years. But for those of you who have been following the story for a while, you may remember the 4 technologies in the yellow boxes. They're all progressing well, all yielding molecules that are moving into development and into the clinic. For today, I want to draw your attention to the 2 boxes at the bottom. We have some great technology that can be used to modify B cells for use of cellular therapy. You probably know there are a number of B cell companies that have been formed, and we think we have a very exciting approach with substantial potential to use B cells as therapy for genetic diseases, for infectious diseases, and potentially, for other indications as well. We also have a remarkable data sciences group that's helping us with everything from target identification by making a sense of the complex biochemical networks inside of cells, to design of the molecules, to understanding the molecular interactions between our antibodies and their targets, and by selecting patients for trials. And as an example, by analyzing transcriptional patterns in blood cells, we can tell which patients are likely to have a bad outcome, and which patients are likely to have a milder course of disease with COVID. And if we look after administration of sotrovimab, for example, we can see the shift in the transcriptional patterns from those -- from one that's indicative of a bad outcome to one that's indicative of a good outcome. So that's quite remarkable, and we expect over the course of this year to talk more about those 2 platforms and their potential as well. So now if we can go to Slide -- well, 19 is just an introductory Slide. Slide 20. And these are the catalysts that we expect to have during 2022. There are 10 boxes on this slide, 8 of them represent important data readouts. So we expect to have multiple important data events this year, and of course, we will talk about those as they occur. So over the course of the year, we expect to have made substantial progress on our COVID, HBV, flu, and HIV vaccine programs, and we anticipate additional programs moving forward, and news of our evolving technology base as well. So 2021 was an amazing year for Vir. And standing here today, early in 2022, this appears also to have the potential to be equally transformative. So all of that brings us back to where we started. Sotrovimab is a great antibody. It's helping keep a lot of people out of the hospital, saving a lot of lives, it's generating revenue that we're using to move our COVID, HBV, flu, HIV programs forward as well as bringing additional molecules in development and further strengthening our technology base. So we'll, of course, keep you informed of all of this activity as we move through the year. So thanks for your attention, and we'll now open up the session for questions, where I'll be joined by Phil Pang, our CMO; and Bolyn Hubby, our Chief Corporate Affairs Officer; and Howard Horn, our CFO. Anupam, I think you're muted.

Oh, boy, yes, you think I would have figured that out by now. [Operator Instructions] I'll just start out with one question. I think we've talked about from May 2020 to May 2021 that there would be about 2 million doses available. On Slide 9, you talk about 1.7 million doses sold to date. That slide also talks about 1H22 increasing supply, 2 million doses. So just as a confirmation, that's 2 million extra doses that will be available between now and midyear? Or is there a risk of running out doses? Like how do we think about that?

There are 2 million doses that will be available in Q1 and Q2 of this year. That's what that means. That doesn't include doses that we made in 2021. Those are gone. These are new doses that we'll have available in the first half of 2022. We, of course, will have additional doses for the back half of 2022. But right now, we're -- obviously, with the Omicron surge, we're focused on what we can do near term.

We've got a couple of questions in the portal here. So curious on manufacturing and CMO manufacturing capacity for sotrovimab. Any plans to expand and grow over the course of the year?

Yes. Yes. There is an easy and quick answer to that question. We have already -- as you know, it takes a while to produce antibodies starting from scratch. It take some number of months. And so we've accelerated everything we have, and that's how we can get to 2 million doses in the first half of '22. At the same time, we are contracting for additional manufacturing capacity that we'll be able to supply doses in the second half of 2022. So we're being as aggressive as we can in that regard.

Another question. When you say you'll have additional doses in the second half, does that mean another 2 million doses? Is it more or less than that?

Look, the honest answer is, we can make more than that. And we are -- in the second half of the year, we have a little bit of time actually. And so we are playing that by year, but we can easily have more than 2 million doses available in the second half of the year, if they're needed.

Got it. Maybe I'll -- I've got a couple more questions on the e-mail portal, but maybe just thinking a little bit more about COVID here. What does your market research suggest about sort of intramuscular or IV administration, particularly in the context of maybe oral options?

Well, look, the oral option, obviously, Pfizer's drug looks like a very good drug, and I think we should all be thankful that it will be available. It is several pills a day for several days, and that is somewhat of a burden, and there raises some compliance concerns as to whether patients will actually do that course. The advantage of an antibody is that it's one and done. It's administered. There's no doubt that patient got it, and then the patient doesn't have to worry about it. So especially with the IM administration, we think it's a viable option for a lot of patients and physicians who would prefer just a one-and-done treatment rather than having to take the pill for several days.

We've got an e-mail question here, which is I understand your goal is to have the antibody administer intramuscularly. Any thoughts of pill formulations in the pipeline?

Well, of course, pill formulations for biologics are -- we'd like to work, but I think if the question is addressing small molecules. Yes, we have been doing a lot of CRISPR genetics to identify cellular targets whose inhibition can lead to either prevention or therapy of COVID and other respiratory diseases. We have identified targets that seem to have those properties, and together with GSK, we are working on small molecules that would, if they pan out the way we expect them to, and hope that they will, will provide not only protection against COVID, but perhaps, against COVID and flu, or COVID and other respiratory viruses as well, because they target fundamental cellular processes that are important for multiple respiratory viruses, not just a single. So we're excited about those.

We've got a couple of questions in here that are on the broader pipeline. But for VIR-1111, eventually could this agent be used prophylactically?

It's designed to be a vaccine, which, by definition, is prophylactic use, right? So this is something that we would -- that people would take prior to an HIV infection to prevent infection, right? And in -- I would say, in the animal models, it -- a single administration provides years of protection. And so we're hopeful that the human immune system will mimic the immune response that we've seen in the animals and that we'll be able to achieve that goal.

Another question in the e-mail portal here is, is your, can influenza antibody Fc-enhanced? If so, to which mutation?

Okay. It is not Fc-enhanced. We do have an Fc-enhanced the version of it, and we have -- okay, let me take a step back and talk about the flu program. 2482 is a very good antibody. It does have good effector function, and it is potent and broadly neutralizing. We have other antibodies that could be second-generation antibodies. One of those is 2482 with enhanced effector function. We have additional antibodies that cover both flu A and flu B. And so we anticipate or we hope that 2482 will provide a substantial benefit and that behind it, we can develop antibodies that are capable of providing a broader coverage as well.

We've got another question in the portal, which is, how do you think about pricing differences between antibody and oral pills? This is about COVID.

Yes. Look, I don't know exactly how to answer that question. I think there's a -- we think that the pricing for the antibodies represents a good value health economically, and we have seen as we've talked to governments around the world, not a huge amount of pressure on that. We are really focused on -- it's a pandemic. And so we're really focused on getting the antibody as widely used as we can to save as many lives as we can, and less so, obviously, we're focused on the price, but that is frankly in a pandemic, is a secondary consideration.

We have another question in the portal. What is the plan for VIR-7832 going forward? What if it becomes a similar treatment to 7831? And will it be used primarily in the outpatient setting? Is there a potential to use the 2 monoclonals in combination with one another?

Phil, do you want to take that?

Yes. Sure. Anupam, thank you for the question. The answer is, 7832 and 7831 are what was previously sotrovimab had the same epitope. So they would not be used in combination with each other. However, because 7832 is Fc-enhanced to be able to recruit potentially T cells, we believe that it can be useful in situations where 7831 may need extra potency, such as, for example, in severely hospitalized patients. So I think we're going to be exploring it in many different avenues, well, but that is probably going to be our first avenue that we've take -- that we've take on.

Got it. I want to sneak in a question here on HBV because that's an important program for you guys. I mean you guys do have catalysts coming up here. I guess the first question is, what are you trying to gain from -- interferon combination data, given I think a lot of folks are really focused on 2218 and 3434 combination?

Maybe I'll take that one, George?

Yes. Yes.

I think it's a question of both speed as well as a question of ensuring that we're really through [ cast a wide net that is possible ]. So Anupam, think of it this way. When we came out, we had 2218. 3434 was behind in development. And so one of the initial questions for 2218 was, if you knock down S-antigen, do you actually potentially the impact of an immunomodulator? So 2218 plus interferon allows us to ask that scientific question. And in the case that it's a home run, obviously, would allow us to get to market sooner. 2218 plus 3434 is therefore sort of like a next wave combination. Obviously, it's preferable if it's interferon alpha-free, but I think that the scientific learnings from the first really do inform the second and also offer opportunities to move quicker as was the case 1.5 years ago when we began those trials.

We've got more questions in the portal here. So what is the added benefit of the effector function for COVID monoclonal antibodies? Aren't they more or less acting on the viruses outside of the cells?

Well, maybe I can take that and then Phil, certainly, can add. Antibodies potentially have multiple modes of action. The one that everybody thinks about is that the antibody binds the virus and prevent the virus from entering the cell or prevent the virus from replicating in some way. But some antibodies, not all, have additional functions and that is through -- and those are called effector functions. So those to come from the Fc region of the antibody. And those Fc region interacts with receptors on the surface of myeloid cells, and can do 2 things in the near term, and it can recruit cells onto the surface of infected cells to kill them. And in the long term, it can interact with dendritic cells to induce T cell protection. And so -- and when we talk about an enhanced effector function, we talked about modifying that Fc region in a way that strengthens those interactions. So they're even better at recruiting cells in the near term, and more potent inducing a T cell response. And so there are data, and it's very clear that, that effector function is a critically important part of how antibodies function, and not just by neutralizing the virus, and that's the assay that everybody talks about, but it's only one aspect of what antibodies do. And so there are -- so anyway, I think it's important to realize the multiple activity. I don't know if you want to add anything, Phil.

Just maybe a couple of lines, George. Thank you. If we think about antibodies, as George's saying, there is multiple mechanisms. So think of it as both blocking entry and then actually killing or clearing infected cells once they've been infected. And I want to point that there are a huge number of publications that have now demonstrated at least in animal models that effector function can be as critical as neutralization. And in fact, antibodies that are more potently neutralizing aren't necessarily better in animal models, if they lack effector function. And in fact, less neutralizing antibodies with more potent effector function end up winning out when it comes to reducing viral load in the long, at least in animal models. So we believe that both of these activities are absolutely critical to making a good therapeutic.

Maybe just one more point. In addition, we've engineered these antibodies to also have a really extended half-life to be able to circulate for many months, and potentially provide protection for many months, which could be critical both in COVID, but also in things like flu, where we're looking at a single injection to protect for up to 6 months and throughout the flu season. So another aspect that's also influenced by that Fc region of the antibody.

We've got one more kind of e-mail question here in the portal. I understand the importance of the effector function in antibodies in general, but what evidence is there for effector function contributing to in-COVID specifically? What specifically in the clinical data gives you confidence?

Well. So, Anupam, it's a little bit challenging in the clinical sphere because what you would have to do to actually prove it would be to take an antibody without a effector function and compare it with an antibody with effector function at the same dose in the same patient population. So that obviously would be a scientific question that would cost you millions and millions of dollars to answer. So instead, what we're doing is the test of -- we already have effector function. If we further enhance it, can we get some impact in our clinical trials. And that's actually what we're doing in the AGILE trial in the U.K. where we are comparing 7832 to sotrovimab and being able to see does it illicit immune cells that are unique because of 7832' effector function and/or does it have a differential impact on viral load. So those are the questions we're trying to answer in the AGILE study. But I think that as we move forward, the wealth of preclinical data makes us very confident that this is an avenue that we -- should be pursued.

One more question came into the portal. Are your small molecule candidates from the CRISPR screen kinase inhibitors or nucleoside analogues? And when could we expect data?

Well, they're not necessarily either nucleoside analogues and kinase inhibitors are classes of drugs that act on viral proteins, right? And the reason those 2 are so common is that the viral genomes are relatively limited, and there's a limited number of targets that you can apply. When you ask across the mammalian cell, which targets are likely to provide a therapeutic benefit, the targets fall outside or most of them fall outside of those 2 classes. And so they're neither. And so I think that provides some unique opportunities, right? There's a much broader set of potential targets in the human cell than there is in the viral genome.

Okay. George and the team, I want to thank you guys so much for a productive session. And congrats, that was the most active portal session I've had so far in the conference. So thank you also to all the participants who sent in questions. And I hope you guys have a great rest of the conference.

Thank you, Anupam, and thanks, JPMorgan. We really appreciate it.

Thanks, guys.

Okay, bye.