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

Okay. Good morning. Welcome to the second day of the BofA Healthcare Conference. So my name is Geoff Meacham. I'm the senior biopharma analyst. We're thrilled today to have Vir Biotechnology. So Marianne De Backer, who is going to give -- is the CEO, going to give a few minutes of a presentation, then we're going to do with the rest of the team, some Q&A here on stage. Marianne? Thank you.

Hello. Good morning, everyone. It's a real pleasure to be representing Vir here today. Vir is in a very dynamic place right now. And I must say, after having been at large, pharma, predominantly for 30 years, predominantly at Johnson & Johnson. It's a true pleasure to be leading Vir here into the next phase of growth and driving patient value. So the disclaimer, obviously, I will be making forward-looking statements, [Audio Gap] might differ from what we discuss here. And for a full overview of the risks, you can, of course, look at our SEC filings, of which you can find links on our website. Now turning to Vir Biotechnology. So Vir was founded in 2016, actually with a very bold mission. It was really there to use the advances that people were seeing in immunology and to deploy it to infectious diseases. And the mission was really to create a world without infectious disease. And then, of course, the pandemic happened. So fear sprung into action. And in a period of 15 months, an antibody against COVID was going to patients and saving lives. So now obviously, the pandemic has waned, but we remain incredibly committed to be focused on driving patient value and addressing really truly large unmet medical needs that are out there. So we believe that Vir is positioned to deliver many more medicines in the future, that are going to have a huge impact and again, addressing large unmet medical need. And why is that? First of all, the company has a proven track record. So twice now, Vir has been bringing life-saving patients -- life-saving treatments to patients, one time for Ebola and the second time for COVID. So the company has a proven track record of being able to really designing, discovering and developing these medicines. Secondly, we are at a very exciting time in life cycle of our company. So 2023, we'll be reading out multiple catalysts, 3 of our Phase II assets in hepatitis B, in hepatitis delta and in flu, are going to read out this year. So a time where this could really be transformative for the company if one of those readouts would be positive, it would be impressive. If multiple would be positive, it would be transformative, not just for Vir, but of course, for patients that are waiting for solutions in these areas. Third, we are here really in for the long term. So we have a pipeline that has depth and breadth, and we have technology that has proven to be able to deliver new medicines and there's much more to come. So we are here really to drive long-term value, and that fueling of growth we can do through a lot of the technologies that we have in-house already. And then last but not least, we have an incredible strength in a very strong balance sheet. So we have $2.3 billion in cash and cash equivalents, and that will allow us to fund our strategic priorities. So as mentioned, while Vir is a relatively young company, just celebrated its seventh year, it has already brought 2 life-saving medicines to the market. One time, Ebanga, an antibody against Ebola; and one time with sotrovimab, an antibody against COVID trade name Xevudy, of which 2 million doses have been distributed, and sotrovimab is available in over 40 countries outside of the United States, still available for patients that are at high risk for hospitalization. So this is an incredible track record for a very young company, as I'm sure you will agree with. So the pipeline. The pipeline of Vir is incredible in its breadth and its depth. As you can see, it's focused on infectious diseases. If you would be in a large company, I think you would think this is an impressive pipeline. But again, we are a small company. And so what we have here is all the more impressive. These are all areas of high unmet need. Patients are waiting for solutions. So what we are doing is really working with high urgency in progressing these programs. In the next few minutes, I will be taking you through some of our key programs that are going to be reading out Phase II data later this year. So I will be talking about our hepatitis B program, hepatitis delta program and our influenza flu program. And again, these are all addressing very large patient populations and high unmet medical need. So let me start with hepatitis B. So what's the problem? The problem is that it is estimated at over 300 million people in the world are actually chronic carriers of hepatitis B. And if you are a chronic carrier of hepatitis B, it is like a silent killer. For the longest time, you have no symptoms, you don't notice anything. But 40% of the people actually go on to develop irreparable liver damage, cirrhosis and eventually also liver cancer. And if you look at how it is treated today, for sure, there's world treatments that patients can take lifelong. But what patients really want is a functional cure. Meaning you take a regimen, a treatment for a finite amount of time, and after that, you're cured from your disease. Unfortunately, with the current treatments available, the functional cure rate is really low. It's below 7%. So there's a lot of unmet need out there. And certainly, we have the ambition to do better. So what is the Vir solution? So we have 2 very unique assets that in combination, we are exploring in what we call a stop and clear approach. So we want to stop the virus and clearly infection. And the reason why we can do that is because we have VIR-2218, which is an siRNA, small inhibitory (sic) [interfering] RNA that targets all the transcripts of the virus; and we have an antibody, 3434, which is broadly neutralizing and targeting actually a conserved region on the S-antigen of hepatitis B. But it's also designed to create an immune awakening. So this is a new combination that in combination either with interferon or not, we believe, have the potential to drive a functional cure with a rate above 30%. We are evaluating it in a series of different patient populations because HBV populations do exist in different immune states. So we are exploring that in our trials. Now the reason why we believe we have a shot at this is based on some data that we have shared last year at AASLD in November. And there, we showed that on the left-hand side, a combination of our siRNA 2218 given in addition to interferon alfa, a general immunomodulator, was able, after 48 weeks of treatment, achieve 31% of seroclearance. This is one of the best results that has been shown out there and even more impressive from the patients that are actually serocleared, all of them seroconversed. So antibodies against the virus were present in the blood, showing that we could actually reawaken the immune system to fighting hepatitis B. So these are very promising results. And on the right-hand side, we show you an initial cut of data from the March trial, Part A. And the Part A trial was really looking at, can we actually combine 2218, the siRNA, and 3434, the antibody together, is that safe, and what does it do to efficacy. And what we saw in this trial is that it was only short treatment, 4 and 12 weeks concurrent, but we could already see in that short treatment regimen that the regimen is safe. So both 2218 and 3434 were safe, also in addition, and there was an additive effect on efficacy. So we saw almost 3 log decline in HBS-antigen, the marker for presence of the virus. And this again is one of the best results that has been seen out there. So what we are doing now is we are going to evaluate this combination, 2218 and 3434, with or without interferon in our March Part B trial that is ongoing, and that will be reading out later this year. So that will be very exciting data. But from everything we have seen thus far, it gives us confidence that we really have a shot at achieving a 30% functional curate that we had set ourselves as a goal. I will not go into this more. Again, what is important, I think what you have seen from the 2 data that I shared with you is that the ambition of using the stop and clear approach does make sense because we are seeing evidence that is really able to work. And second, the initial factors and signals that we have seen in the trials thus far, the seroclearance, the seroconversion, the additive effect of the assets gives us confidence that we can achieve that 30% goal of a functional cure. So switching to hepatitis D. We are not -- so we are focused on viral hepatitis, but we are not stopping at HBV. Because one of the most devastating forms of viral hepatitis is actually caused by hepatitis delta, which is a totally different virus from B, it can only exist in the presence of B. But when you have it -- when you have both viruses and you have hepatitis delta, you have a 4x increased risk of developing liver cancer. Also, your progression of disease looks much worse. And there are no treatments available in the United States. There's a treatment available in the U.S., where you have to have weekly injections -- daily injections -- sorry, for the rest of your life. So we think we can do better. And we are using the assets and the tools that we have to look at how can we really drive an impact for patients that are infected with hepatitis delta. So we are evaluating this in our SOLSTICE trial, which is also going to read out later this year. And our goal is to really come up with a once-a-month dosing. So more to come on this soon. And again, this is an area that hasn't developed that much. So depending on the data from our SOLSTICE trial, we think we can really drive a lot of patient impact in a multibillion-dollar market for hepatitis delta. Finally, a third program that I want to briefly touch upon is Influenza A. So we are developing a prevention, so a pre-exposure prophylaxis treatment based again on an antibody 2482 for Influenza A. And why does this matter? What is the problem? So as you probably noticed, more than -- estimated more than 1 billion of people every year that get infected with the flu. Millions of people actually go on to develop respiratory problems such that they have to be hospitalized. More than 600,000 people die every year. And this is like a serial killer. It comes back every single year. And every single year, of course, there's the opportunity for vaccination. But if you look at people that are at high risk for developing these complications, people 65-plus immunocompromised, the efficacy of vaccines is actually not very high. As you can see it here, the efficacy of vaccines of people above 65 lies somewhere between 10% and 40%. So there is a lot to be done here, and we believe we have a shot at coming up with an antibody medicine that can raise the bar and really get that to a protection of 70%. So the way this would work is that before the flu season starts, you get an administration of an antibody, 2482. We have modified it such that it actually in vitro protects against all the strains of influenza A that have been seen since the 1918 flu pandemic. So it's broadly neutralizing. You don't have to have an active immune because we're giving you the antibody to fight the influenza infection. And it is a product that you don't need to change every year. I mean it's there. It's broadly covering. And so this is a unique and different approach to protecting the devastating impact from influenza A. So we are evaluating 2482 in a trial called PENINSULA. We have recruited 3,000 participants into that trial. And when we were talking about this trial, we heard some concerns. We heard people say, well, will you be able to recruit these number of participants in such a short time. We did. We recruited actually 3,000 participants in a period of 8 weeks. Another concern was, will you see enough flu events in your trial to be able to make a determination of efficacy of 2482, and we did. So we are on a good track. Data are going to read out middle of this year on the PENINSULA trial. And we think this can really be something that if the data is positive, again, will be playing a very important role in a multibillion dollar influence preventive market. Okay. So turning to our catalyst. So we have a bolus of catalysts coming up this year, a lot of data readouts. In the interest of time, maybe just highlight the 3 which are related to the programs that I just discussed. So the first one is the readout of our influenza PENINSULA trial. Again, this is pre-exposure prophylaxis in 3,000 participants that is going to read out. We're also doing a Phase Ib trial actually in the elderly, but that's first to look at safety and PK. This is really the trial data to watch as it relates to efficacy of 2482. Next up is our March Part B trial. As I mentioned, this is for hepatitis B, looking at 24- and 48-week treatment of our siRNA 2218, our antibody 3434 plus minus interferon. And this data is also going to read out this year -- in the second half of this year. And then finally, again, as discussed, the SOLSTICE trial for hepatitis delta is going to read out second half of this year. So we have a platform that it's a gift that keeps on giving. It has yielded the Ebola antibody, it has yielded the COVID antibody. It has yielded the hepatitis B and hepatitis delta antibody, 3434. It has yielded 2482 with the antibody against influenza. We are working on an RSV/NPV antibody together with GSK, that is still preclinical. We are working with the Bill and Melinda Gates Foundation on an antibody cocktail for HIV cure. And there is so much more that is to come from this platform. So this is really a platform that has been proven and where we think there is much more potential in it. So in conclusion, I would like you to remember that the mission of Vir matters now more than ever, that we are a company despite being young, that has a proven track record twice, medicines have been brought to patients and have been saving lives. Second, we have multiple important catalysts coming up. We have a very strong clinical pipeline, 3 Phase II readouts. Third, we're in it for the long term. We -- having the breadth and depth of our existing pipeline, but there's much more to come, and we have a proven platform to be able to do that and technology to be able to do that. And then finally, we have the funding to really be able to put a lot of power behind our strategic priorities. So with that, I would like to thank you for being here and your interest in Vir Biotechnology. I also want to thank our team, our collaboration partners the patients and the nurses and the physicians that participate and help in our trials because without them, of course, we wouldn't be here today. So thank you all for your interest and attention and looking forward to the Q&A. Thank you.

So we have a couple of minutes to talk about some -- as a follow-up. Thank you, Marianne. So we have Sung Lee, who is the CFO; and Phil Pang, who is the Chief Medical Officer. So guys, thanks for joining. Let's just -- let's talk about HBV for a second. So if you put this in the context, your prior data, what do you -- what would you say is clinically meaningful? And can we talk about like the regulatory bar as you think about potential filing?

Yes. So I think that when we think about -- maybe to answer your question in reverse, the regulatory bar is very straightforward. For hepatitis B, it is loss of surface antigen, and in some regions, also loss of DNA 6 months after the end of therapy. So that is what we're defining as functional cure, and that is what we're going after in our clinical trials, such as the March Part B. So I think that the regulatory bar is relatively straightforward as far as the clinical bar. I think if you talk to KOLs, they basically reiterate the fact that, as Marianne said, we have only a less than 7% functional cure rate now, anything around 30% would be transformative. I think it's slightly different for an interferon-free regimen, the bar could be probably a little bit lower and maybe the bar needs to be a little bit higher for an interferon-containing regimen.

That's helpful. And in the context of the competitive landscape, you have a number of assets that hep B has not been an indication you've had like breakthrough efficacy. There's been sort of slow, but steady progress. You do now have a GSK as a theoretical competitor. So to put the context and the -- what we could expect to see relative to others in the marketplace.

Yes. So I think the competition -- I would reiterate the fact that the breadth and depth of our hepatitis B program is truly incredible. And I think it's all centered around this idea, as Marianne alluded to, of stop and clear. Stop the virus from replicating and then clear the infected cells by reawakening the immune system. When I look at the GSK data, I actually think it's supportive of the notion that really the only way to move forward is with an immunologic based regimen, which is what we have one of the broadest and, I think, deepest programs in. So [Audio Gap] is that an antisense that doesn't target hepatocytes, but rather the liver cells and the immune cells actually is better than one that targets the hepatocytes. So I think we're going in the right direction. And I think that, frankly, we'll have to see where the data lands.

Perfect. So on hepatitis D, sort of the same question. Like, what do you think is the bar for clinically -- for being clinically meaningful, and just in context of Gilead's asset, like just frame that -- frame the marketplace here.

I think that the important thing to remember is that for hepatitis delta, the standard of care is really nonexistent for the most part. And what you're trying to accomplish is chronic viral suppression. So you mentioned the Gilead data. And I would say, with Hepcludex, you get about 45% of patients meet the primary endpoint, which is a too long drop in RNA and normalization of ALT, a lack of liver inflammation. But as Marianne noted, you have to take a daily subcutaneous injection to get there for the rest of your life. That is not going to be easy. But remember, 45% is good, but it's not anywhere near where we would want to be. So we believe that the Vir cocktail of 2218 and 3434 can be transformative, both from a convenience perspective, instead of daily, maybe we can give it once a month. It can be also transformative from an efficacy and safety perspective because I think the 45% bar is an easy bar to overcome should we be able to get there.

It would be different, I think if this was a finite treatment, but this is a chronic treatment. And if you have to take daily injections, obviously, if we can move this to a monthly injections, same or better efficacy, I think this is a totally different level of...

And then lastly, on flu, if you frame sort of what the Phase III design could look like. There are obviously a lot of therapies, some vaccines out there. But it's still, in some patient populations, an unmet need. Talk about like what do you think you want to achieve in Phase III? And maybe what you're thinking about initially with respect to design?

So I would say that, remember, this is not a competition between vaccines and monoclonals. This is a way to be -- offer transformative value to patients. So as we know, vaccines, they're great. Unfortunately, their average efficacy in the elderly is about 30%. So what if we could take that 30% and make it 70% or 80%. That's what our end goal is. And so then the design in the Phase III will be relatively straightforward. If you want to show that you are offering a transformative value over vaccines, then you basically need to compare the vaccine. So the Phase III will be vaccine versus the vaccine plus the monoclonal antibody, and it will be a superiority study to demonstrate that transformative value.

That's helpful, yes.