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

Good morning, everyone. My name is Gena Wang. I'm senior biotech analyst at the Barclays. Welcome to Barclays Global Healthcare Conference. It is my great pleasure to introduce our next presenting company, Vir Biotechnology. With us today, we have Phillip Pang, Chief Medical Officer. We also have Howard Horn, our Chief Financial Officer. So maybe I will hand over to Phillip Pang to give a brief overview before I jump into Q&A.

Thank you, Gena. So as you know, Gena, we've been talking a lot over the last 6 years. So 2023 really poses to be a banner year for Vir. It's a very exciting year. We have 4 clinical programs reading out this year alone in HIV, hepatitis B, hepatitis delta and flu. And each one of these programs can drive transformative potential for patients and value to patients as well as to the company. Behind this clinical pipeline sits a robust research clinical, research program as well. And that research program has transformative potential in areas such as HPV-induced malignancy as well as a potential pan-respiratory small molecule. And behind that research pipeline sits what I think is our most strategic asset right now is $2.4 billion in cash.

Okay. Very good. I know you will have a new leadership. So maybe like any change in priority or vision for the company.

Well, let me begin by saying that the entire executive team is very excited to have Marianne join us in just a couple of weeks. And with her will come Sung, our new CFO. So with that excitement, I will say that our goals at Vir remain the same, which is to drive transformative growth, as I said, for the company, through driving tremendous value for patients.

Okay. Good. So maybe I will jump into your pipeline program, flu. We will have data soon second quarter, right? So maybe if you can walk us through like starting from the chemistry part, like what kind of modification you've done for the flu antibody to make it PML? And then the reason why you're selecting Flu A instead of like why not cover Flu B as well?

So as you know, Gena, this company was founded with a lot of optionality, and that optionality allows us to really focus on assets we believe will be transformative medicines. And the reason why 2482, our flu antibody, is a transformative medicine in our minds or at least a potential transformative medicine in our eyes, it's 3 things. First, it covers all 16 hemagglutinin types, which means it should cover strains of influenza A that have never been seen in humans. Second, it covers the last 105 years of influenza A evolution in humans. And third, it does so at a potency, which we believe can be administered in a single IM injection. So that's why we believe it's transporting. In terms of its value, I think we need to focus on the fact that right now, vaccines in high-risk patients, such as the elderly those greater than the age of 65, work only about 25% of the time. If we could go from 25% to 70% or 80%, I think that will bring tremendous value to patients and the company. With regard to now stepping back into its history, 2482 is able to cover 105 years of flu evolution because it binds to a very particular part of the hemagglutinin protein known as the step. So if you think about the hemagglutinin protein, it's like a broccoli. And basically, the head, which is very variable, is access a decoy to antibodies, whereas the STEM is highly conserved. And so if you can find a specific portion of the stem bind to that and find it a specific angle, you'll be able to achieve the kind of neutralization with the kind of potency that 2,482 has. With regard to why it is focused on influenza A, there's a couple of reasons. First, influenza A is 80% or more of the cases and hospitalizations worldwide. So it is where the unmet need is highest. It's also where the vaccine is the least efficacious generally speaking. And then finally, influenza A is the source of all the pandemics ever seen in the human population. And that's one of the reasons why, for example, BARDA is so excited about our program and is financially supporting it.

So I think the reason asking Flu B is when we look at the vaccine market and then WHO will give a fitting by 2 flu A and 2P Flu B. And usually, they wanted to see, say, whatever immunogenicity will be not invert to all 4 strengths. So that does improve Flu B. So in your case, do you think that there will be any disadvantage in terms of, say, FDA perspective or the general perception perspective?

I don't think so. And the reason why is because we're not in competition with vaccines, we're going to be an add to the vaccine market, which is to say vaccines are there for everyone else. They're for the billions of people across the planet regardless of age. Our monoclinical antibody is focused on those who are at high risk. And as I said, those high-risk patients usually are hospitalized due to influenza A. So I think that, that ability to address the unmet need is what the FDA and the EMEA and other regulatory bodies will be focused on. Finally, from a practical sense, in our Phase III study, we intend to be used on top of a vaccine and the vaccine will cover the Flu B strengths. So I think that by being able to demonstrate superiority to the vaccine in the combination with the vaccine makes it a straightforward regulatory path.

Okay. Very good. And then for your Phase II peninsular try, can you maybe remind us of the 2 doses you used?

Yes. So Gena, we have not disclosed the doses for competitive reasons. But at this time, I can tell you that the design is a 3-arm study, 3,000 patients, 1,000 patients actually technically, they're healthy volunteers, but 1,000 people in each of the 3 arms. And the study is fully enrolled, and we expect to have no problems in capturing enough events to have a clear readout this summer. And I think you mentioned previously wanted to wait into end of April to capture the whole flu season. So maybe walk us a little bit regarding the half-life of the antibody and the reason from the starting to the end and then the data readout? So as you noted, this antibody has been half-life extended, 2482, to have a half-life of about 60 days, which was shown in Phase I. And the importance of that is that we believe a single injection can last the entire flu season. With that, the reason to keep the study open through April is because you want to see whether or not the medicine continues to endure for the entire flood season. And that's obviously going to be important in demonstrating its protective efficacy.

So since you have 2 active dose, and I assume on low dose, on high dose and then you have a placebo arm. So when the study should be positive because you're comparing to the placebo? And what, in your view, would define as a positive? Like do you wanted to see dose response of low dose and high dose. And what is the efficacy you are looking for that, in your view, will position very well to go to Phase III?

So Gena, I was smiling because you say shouldn't the study be positive? And of course, from my perspective, I believe it should be positive, but of course, I can't guarantee a positive outcome. I will say that the 3 reasons that we were most concerned about any study in this particular field was, of course, would we be able to get the study enrolled on time before the flu season peaked and we did that. The second question would be, are there going to be enough flu cases? And yes, there are enough cases. And the third question goes back to your question, did we choose the right dose? And so from our perspective, we think by doing a dose ranging, we'll be able to definitely hopefully hit the primary endpoint. But of course, you can't guarantee success in any clinical trial. What was the second part of your question?

So I think that you covered because until the April time frame because you wanted to see the effectiveness Right? And I remember you said in the past that half-life is about 6 months or 60 days.

Hal-life is 60days But the idea is you give 4x as much as you think is necessary to be able the last 5 to 6 months.

I see. Okay. And then on the other hand, when we look at the trial design is only 3,000, 1,000 each arm and you do capture the actual events. And do you think of that -- like are you able to capture sufficient numbers events in maybe one way to see what is your powering assumption? And then do you feel confident on the blended base, do you see the events meeting your expectation?

So I'm not worried about the number of events that we are observing in a blinded fashion. I would say that's not surprising given how robust the flu season has been here in the United States where the trial is being run. In terms of power, when it was originally powered for 1,000 persons per arm, the idea was we wanted to have at least 80% power to show a 70% effect size. How that translates is that in practice, if you have 30 to 40 or 50 events, you're going to be able to see a positive study if the efficacy is greater than around 50%. What we hope to see, Gena, is this efficacy similar to what we've seen with other respiratory monoclonal antibodies in prophylaxis, which, for example, RSV and COVID was close to 70% to 80%.

Okay. So that's your goal, 70% to 80% and hopefully from the high dose or even maybe low dose.

Well, hopefully, from both doses.

That's good. So with that clinical profile, maybe walk us through a little bit? You mentioned a little bit about Phase III trial design. Maybe walk us through like if you were able to have that kind of clinical profile from Phase II, how would you design your Phase III?

So we think we're going to probably need -- so let me take a step back. The Phase II study as it exists right now is in patients 18 to 64 who do not have a high-risk condition. And the reason for that is, one, it allows for a smaller study because 2, you're going against placebo. You can't really offer no one in the vaccine if they're already a high risk of flu complications. But in the Phase III study, you want to go into the target population, which is going to be patients who are at high risk of complications of flu, which are largely those who are greater than the age of 65 for the comorbid condition. So in that setting and in that population, you have to offer the vaccine, but more importantly, you want to offer the vaccine because as I said, we want to have a transformative leap forward in efficacy. We want to show significant superiority over vaccine. So the trial design will be the monoclonal plus vaccine compared to vaccine in a superiority study. And that study will probably be somewhere between 10,000 to 15,000 patients in size.

Okay. Did I hear you correctly? It would be on top of vaccine or the our monoclonal against VXi.

On top of the back for Phase III.

Okay. Very good. The other question is the pricing assumption. I know the monoclonal antibody for Covid, the price was basically on par with others in the thousands, right? And here with flu monoclonal antibody, what is your thought process regarding the pricing, given the flu vaccine market price usually is below $100.

Yes. So Gena, I think it's a little early to talk about price. But I think what we can talk about is value. And really, the value is what should drive the price in the end in terms of what's most important. And in terms of value, remember, there are tens of millions of people in the United States alone who fall into a high-risk category when it comes to influenza. In that high-risk category, for example, a 65-year-old with lung disease, they have a 30% chance of being hospitalized. With that 30% chance of hospitalization, that hospitalization can cost anywhere between $20,000 to $40,000. And there are hundreds of thousands of patients who are hospitalized in that demographic in the U.S. alone every single year. So I think it's easy to do the math and say, that's a lot of patients. That's a lot of hospitalization costs. And if we can basically save the health care system that amount of money, that is something that will drive value to the health care system to patients and also a tremendous return to Vir.

Good. So for the Phase III trial design, the target patient population, can you narrow down a little bit? And how would that apply also with that trial design, the target patient population, how would that apply to the gen like once approval, the general population?

So I think that between -- remember the Phase II, which is in more healthy patients as well as the Phase III, which will be in likely be elderly with co-morbid conditions. For example, as I mentioned, chronic lung disease or heart disease. That's about in the Phase III alone, that covers a demographic of probably 20 million people in the U.S. alone. So we believe that we will be able to seek an indication not only for that population, but based on the Phase II potentially even broader.

Okay. Very helpful. So maybe we switch gears to HBV. So HBV, you will have plenty of data updates. You have multiple programs ongoing plenty data update. So maybe start with your 2218 and the pack interferon combo. So later this year, maybe second half this year, we will see the off-treatment data. So maybe give us the time line and expectation.

So to remind the audience, we have an extremely broad hepatitis B functional cure program, and that is combining our siRNA 2218 with interferon or with VIR-3434, which is a vaccine, a T cell therapeutic vaccine that is also a neutralizing antibody or what we call a vaccinal antibody. In the first half of this year, what you're going to be seeing is 2218 with interferon alpha and you're going to be seeing the off-treatment rates. Now to remind you, at ASLD last year at the November time frame, we showed that 2218 plus interferon resulted in an unprecedented 30% seroclearance. Importantly, that seroclearance was accompanied by every single one of those 4 out of 13 patients achieving sero conversion. And remember, the whole goal of functional cure is to reawakenimune system and the fact that these patients cell converted in addition to sterile cleared is a very -- and I think one of the best signs we could hope for in a clinical trial at this time. That data will then be fast forward in 6 months. We'll have stop therapy, and we're looking to see what happens. Is that response durable 6 months later, and that's the data we'll see at EASL this year for 2218 interferon. And then in the back half of this year, what we're going to be seeing is this 2218 plus 34, 34 and without interferon. And the idea of that part, which is the March Part B trial is to demonstrate on-treatment seroclearance and care conversion. Because what you want to see is that you can either replace interferon or you can you can even increase the rate of sale clearance even further by adding 3434 to the combination.

So maybe going back to 2218 and the painter. And then we know that intellectually in the real practice, but I think the doctor feedback was less than 1% a patient will take into fan. So even this regimen. So there are several layers questions. The first is, what is your goal when you're off treatment on treatment show 30% off treatment, what is the minimum bar you will be looking for that your clearance can maintain? And the second question is the commercial opportunity with interferon as being unfavorable regimen by the doctors? And how do you see this combination in the real world in the commercial setting?

So Gena, to answer your first question first. I think that -- or maybe I'll answer your second question first. So I agree with you, interferon is poorly tolerated. And we know that very few people are willing to take it usually in the Western Hemisphere at least. But remember, that's because interferon monotherapy hardly works. So it's not surprising to me that if you go out and canvass a bunch of doctors and you ask them, does interferon when I give my patient interferon monotherapy, a medication that barely works in most people, the patients are going to say no. So I think that's the wrong context. I think the question is, is it in the context of combination therapy, where you show that it does work, then the question becomes very different is a patient willing to take a medicine that does work and what would be the uptake. So I think it's a very different context. I don't think the reference point is necessarily where I would be pegging our mind to, which then brings up your first question, which is what would be that rate at which patients would start to say, you know what, I'm interested. And I think for an interferon containing regimen, somewhere around 30% or more is going to be necessary. I think for an interferon free regimen, it can definitely be lower.

Okay. Very helpful. So you're basically looking for maintaining minimum maintain current Q.

Exactly.

Okay. Good. And then now go back to the Conbo22183434. Given the interferon packaging Ferro already combo showed 30%. So what will be your bar for you to see this if we exclude interfere in the combo.

So as I mentioned, I think that the bar has to be commensurate with the efficacy and the efficacy is to be commensurate with the safety profile. So for example, imagine you were to say to a patient, you're going to have some side effects, and I give you a 1 in 3 chance of being cured. I think many people would be interested. If I were to say to you, I'm going to give you a medication with very little side effects is very tolerable and very safe, but you only have a 1 in 5 chance would you be interested? And I think they would say yes. So I think the bar is lower for an interferon-free regimens, 2218 3434 in a time when the only available therapy, as you pointed out, is interstate monotherapy, which is 48 weeks, poorly tolerated and get to a 3% cure rate. So I think somewhere around 20% would probably reasonable for an interferon-free regimen and probably north of 30% for an interferon-containing regimen. But there are some air bars around those numbers.

Okay. Very helpful. Can you lay out the timing of March study the data update?

Yes. So as I said, maybe I'll just take a step back and say, for hepatitis B in general, we expect our 221A interferon data off treatment to read out this half at EASL. At EASL, we will also have some data on Part A of March, which was 228 plus 3434 for a short duration of time. But that's, as I said, probably insufficient to achieve anything besides proof that the 2 drugs are safe on given together, and that the 2 drugs are additive when given together and we've already shown that. So then we are looking forward to most the 2218 interferon data in the first half and in the second half, 2218,plus3434 with and without interferon in the second half, and that will be on treatment data.

Okay. So that part b mainly is the second half?

Yes. Part b is March is the second half.

Okay. And you do have other regimen companies. Any thoughts what is the bar for you, for the other. And of course, all that depends on 218 plus 3434. How that looked like and you have additional regimens. So maybe tell us the rationale and what is the pressure you'll be looking for?

So we have 2 other combinations we're bringing forward, 2218, the siRNA with a BRII vaccine, and that vaccine is a therapeutic T cell vaccine. And we're going to be looking forward to what BRII has to say about that trial result. And I believe that's going to be in the first half of this year or sometime this year. And the rationale for that is, simply, if you go back to the larger rationale, it is a functional cure is achieved by reawakening the immune system. And that's what we've done with 2218 plus interferon. And the question is, can you do that also with 2218 plus a therapeutic vaccine. So that's the whole of that study. The second study that does not contain 3434 is the study underway with Gilead. That involves nivolumab had involved nivolumab plus their TLR8. As you know, they released a statement that nivolumab was being removed from that regimen due to safety concerns. So we're still very interested in seeing what that study reads out for the patients who were dosed as well as the patients who had to stop nivolumab, and we look forward to seeing that data when Gilead releases it.

Good. Maybe one question on competitive landscape. I think the one candidate maybe show pretty impressive on treatment therapy efficacy data that was from GSP and one, any thoughts on that through to your program?

So I think that the GSK data is interesting, as you mentioned, it's ASO. I would say from a biological proof of concept, what's very fascinating to me about it is that when their ASO was delivered to liver cells, meaning the actual hepatocytes themselves, they didn't see hardly any efficacy. In fact, they didn't hardly see any on-treatment decline in surface antigen. They only saw it when they removed the GalNAc and delivered it to the nonparenchymal cells within the liver. And that is mostly the immune cells. So I think that supports the notion that immune modulation is key towards achieving a functional cure. That's from a biological perspective. From an efficacy perspective, I think we need to wait and see how durable that regimen is and in whom that regimen is durable. As you know, the greatest impact was on those who had a low surface antigen to begin with, and we'll have to see if that's going to really meet a bar that is impressive to clinicians.

Okay. Lastly, quickly on HDV, maybe status and then where we are now. And their target profile.

So hepatitis don't remember and I just want to remind this audience, Unlike hepatitis B for which there is already chronic suppressive therapy and the bar is much higher, you need to achieve a functional cure, meaning that you can stop therapy and the patient is in remission. For hepatitis delta, there really isn't any chronic suppressive therapy other than Hepcludex which is available in the EU and is a subcutaneous injection that has to be given every single day with efficacy around 40% to 60%. So in that space, we believe we can come forward with a, again, transformative medicine that achieves even higher efficacy has a much greater tolerability profile and can be given once a month. So that's our goal, and we think we can get there with 2218 and 3434. And the reason for that is because hepatitis delta uses the same surface antigen as hepatitis B. So we believe that by knocking down the surface antigen with 2218 and blocking entry with our neutralizing antibody 3434, we're going to be able to achieve some impressive results, and we'll have to see that those data should be out in the second half of this year.

Thank you, very much Phillip.

Thank you, Gena.

Okay. Thank you, everyone.