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

Good morning, everyone. Welcome to Barclays Global Healthcare Conference. My name is Gena Wang. I cover [ SMid-Cap biotech ] in the U.S. It is my great pleasure to introduce our first presenting company Vir. We -- with us today, we have Marianne De Backer, Chief Executive Officer. So Marianne, before we dive into specific questions, maybe do you want to give a brief overview of Vir and then we can discuss specific topics.

Of course. Yes. So thank you, Gena. Thank you for hosting via Biotechnology technology here at the Barclays conference. Really appreciate it. And welcome to people here in the room, and of course, people listening in on the webcast. Yes, so Vir is an immunology company. And what we are -- our vision is really to power the immune system to transform patients' lives. And what that really means is that when people are suffering from an infection or other cancer cells that start developing in their body, it's really the -- often the immune system, the versatility of the immune system that determines the outcome and whether patients get sick or not. And what we are doing is we have a very unique technology platforms that allow us to bring tools to patients and to help the immune system redefine disease and to tip the balance in favor of patients. And the 2 main platforms that we have; one is antibody platform. So we have proven to be able to come up with very unique antibody therapeutics that we also engineer now using AI; and the second platform that we have is allowing us to generate in vivo, again, unique T cell responses against infections or cancer. So those are our 2 technology platforms. What is most important though is, of course, the therapeutic candidates that we have in our clinical pipeline. And we have this year some really, really important catalysts coming up for the company. Already in the second quarter, we will be reading out more data on our Phase II hepatitis delta trial. And then later in the year, in the fourth quarter, we will be reading out our full Phase II more than 60 participants. Also this year, already in the fourth quarter, we will be reading out our end of treatment, 48-week data on our Phase II hepatitis B trial, again, important data for the company. And then finally, we have a Phase I program based on our T cell-based viral vector platform for HIV. And also in the second half of the year, we will have proof-of-principle data and early immunogenicity data. That will tell us whether the platform works and EBITDA can be a springboard to other applications. So again, this year will be very important to us. And besides that, we have a number of preclinical programs that are within 9 to 24 months of going to IND.

Great. So maybe Marianne, as a new leader of the company, so like where do you see -- what is your vision for Vir? And you described what is Vir now? And what is your vision for Vir? And which are the important programs of candidates you think that can excel to the next level?

Yes. So 7 years ago, when Vir was founded, it was really founded on the premise of the fact that were a lot of -- there was a lot of unmet need in infectious diseases, and it was really not getting the attention that it needed. And so the company had an incredible path. And if you look at the drug discovery capability that we have within Vir 2 of the products that were discovered within the Vir labs need it all the way to patients. Sotravumab is the most known one for COVID and antibody that went to millions of patients and then Ebanga an antibody against Ebola was the other one. So I think the company has proven that the technology platform is really, really powerful. And so as I came in as a CEO, I have prioritized the antibody platform because I think that's an area where we are truly world-class and where we can really differentiate. And beyond using the technologies of the past, as I mentioned, we now also have an AI platform that allows us to really select therapeutic candidates much faster and with very unique properties. So the focus on the antibody platform has really been very important for us as a company. And then we have such unique technology platforms that it would be a shame to only focus in the area of infectious disease. We are already working on all the major unmet needs in infectious disease. We talked about hepatitis. We talked about HIV. We have an RSV preclinical program. We have an influenza prophylaxis preclinical program and so forth. But we really have the technology platform that allows us to open up the aperture and go beyond that. And so what we are really focusing on is [ other ] viral-associated diseases that could be for viral-associated cancers. And again, other areas where targeting the immune system really makes a difference because that's where our really unique expertise lies.

So Marianne, you also have like -- Vir has an extremely strong cash balance. That was a very unique for biotech companies. And then what is your vision to deploy this cash? And then putting a use for the investment? And what will be the direction you will be thinking?

Yes. So at the end of last year, we had a cash and investment balance of $1.63 billion. And we are, of course, as I mentioned, we have very important data readouts on our hepatitis delta program already coming up second quarter and then hepatitis B already coming up this year, fourth quarter. So the focus is really going to be depending on the data readouts to make sure that we can bring those programs to the next big value inflection points and really accelerate creating value from those programs. Beyond that, the great thing about having a healthy balance sheet is that you can also think about innovation and bringing innovation in from the outside. So our focus there is really to look at early clinical programs or programs that are close to the clinic, again, to bolster our pipeline and to create value inflection points for the company and also really address on that need for patients, that's really going to be important.

Could you give some direction like what kind of indication that could be?

Yes, I can share that, again, other viral-associated diseases is very obvious because we have deep knowledge in immunology, we have deep knowledge in virology, and we also have a world-class small discovery team in oncology. So for example, viral-associated cancers would be an area that we would be looking into. But again, we are looking at other areas where, again, the type of technology that we have or immune targeting really makes a difference and where our knowledge -- our deep knowledge in these fields can be an asset. And also, I wanted to add Gena that at the end of this year, actually in the fourth quarter, we're going to do an R&D Day. It's going to be an opportunity for us to show everything that is going on in the company. I think the quality of our science is really impressive. And I think it will also give you then a good idea of what our other areas where we can really drive value.

Okay. Great. Thank you. So now we can dive into your important data -- upcoming data HDV program. So maybe can you lay out the data set that will be shared for the Phase II update in second quarter?

Yes. So maybe to -- for people not as familiar with hepatitis delta. So it's the most severe weird form of viral hepatitis. And people who are infected with hepatitis delta virus, it's a virus that can only infect patients that are already infected with hepatitis B virus. And so what happens is if you're co-infected, you progress to cirrhosis, you progress to liver cancer and you progress to death much faster than if you're infective with hepatitis B alone. So it's a very serious disease. There is an estimation of about 12 million people in the world living with hepatitis delta, but it's a hugely under-diagnosed disease. So there's also an estimation that there might be 60 million more people actually in the world infected with Delta that just are not aware of it. If you look at United States, we estimate that there's about 100,000 patients here. And in Europe, the estimation is about 200,000. So there's a high unmet need. However, there's not a lot of options out there for patients. So in the United States, there's really nothing on the market. There's nothing available for patients. In Europe, there is one option available, which is the daily subcu. And so we have a regimen -- a treatment regimen that is a combination of an siRNA and antibody that we discovered within the Vir labs, that in 6 participants last year at AASLD, it showed initial data. And we treated 6 patients with a combination of our siRNA and our antibody, elebsiran and tobevibart, and only after 3 doses, so only after 12 weeks, we already saw very promising data in the sense that all 6 patients have their delta RNA, which is a measure of infection drop below the lower limit of quantification. So that was a promising sign. And so what we did is we have enrolled an additional 63 participants. And we just announced that we have actually enrolled those participants much faster than we had anticipated. So 4 weeks ahead of schedule. And that will allow us to read out data in the second quarter and also at the end of the year. In the second quarter, we will have 15 participants at 12 weeks of treatment of the doublet regimen, so the elebsiran and tobevibart, and also [ 50 ] participants that have been treated with tobevibart antibody alone. We will also already have 10 participants that have been treated for 24 weeks, again, both with the doublet and with the monotherapy. So that set of data, I think it will be very informative and will give us a good idea if the data that we have seen in the 6 participants that we reported on last year in November AASLD and earlier this year, if that is reproducible in a larger set of patients. And then again, the full set of 63 participants, we expect 24-week data in the fourth quarter.

Okay. That's super helpful. So maybe one question is the initial 6 patients and all of them were non-cirrhotic. So what makes you decided to include cirrhotic patient in the future?

Yes. So in the patients that we have enrolled now for the Phase II trial, about 50% of the participants are [ CPTa ] cirrhotic patients. And as is the case for any therapeutic that one wants to develop, the idea is, of course, to bring it to as many patients that possibly can that are in need of a therapy. And remember, what we're trying to do here is really develop a lifelong therapy. So this is a treatment that it's only once a month is lifelong. And it is really important to also look at cirrhotic patients because, of course, as I mentioned before, patients that have delta progress to cirrhosis faster than patients that have hepatitis B virus infection alone. So it's really important to see can we achieve the same efficacy safety in patients that are cirrhotic? What we have done before is a small hepatic impairment study. It was also presented at AASLD last year, where we looked at cirrhotic patients, and we looked at how the drug exposure is of elebsiran alone or tobevibart alone. And in that hepatic impairment study, we did not see any meaningful difference in safety or [ PTA ].

Okay. So then from the clinical benefit perspective, if they were able to reduce RNA level at a similar level, do you see any reason that clinical benefit will be different between cirrhotic patients versus non-cirrhotic patients?

Well, based on what we have seen just from drug exposure in cirrhotic patients, you might not expect any difference. However, we really have to wait for the data. And again, because we have been able to enroll 50% of the patients that are [ CPTa ] cirrhotic, our data in the second quarter will already give us a good view on that topic.

Okay. Good. And then when we look at the initial 6 patients data, we do see the baseline HDV RNA level need to slightly different benefit. And then the lower baseline seems like was able to achieve better reduction. So are you planning to enrich patients in that patient population or you still thinking more about the broad range?

Yes. Again, our ambition is really to come up, of course, with a regimen that can cover as broad possible population of patients that really need the regimen. And again, the unmet need is high, there's nothing available to patients here in the United States and a lot of places. And we think it's premature to start segmenting at this moment in time. But again, the data that we will get in the second quarter and of course, the data that we will develop over the year will give us a better insight for, of course, our potential registration of trials.

Very helpful. And when we look at the 2Q data and then also 4Q data later, do you have a minimum threshold in mind regarding, say, for the approval path in terms of the percentage of patients that reach below lower limit of quantification of 6...

Yes. So actually, the regulatory bar is not very high. The current guidelines say that if you have a too long decline in Delta RNA or you go below the level of detection compliance with ALT normalization, that is actually good enough for the regulators. So again, the data that we have seen in the 6 participants is really promising because -- again, it's only -- after 12 weeks of combination treatment. And we had actually 5 out of 6 participants dropped below the limit of detection. And as I mentioned, all of them dropped below the lower limit of quantification. So we will look at our data. We will have -- if the data looks promising, we will have conversations in the third quarter with regulators. And of course, you will have that conversation around trial design, expectation around the size of the trial, the primary end point. So we should be in a really good position if the data pans out to be positive to know much more by the third quarter of this year.

So I know you still have to talk to the regulators, but any initial thoughts on the approval path registration path for the HBV?

Yes. I think it's a little bit premature. What we do know, of course, is that there's a certain size in the trial that you need to get not so much determined by the efficacy side but more by the safety side. And so we will have to have the conversation with the regulators as to how large the trial will need to be for safety reasons. We have actually used, as you know, Gena, used the same combination of therapeutic candidates in our HBV trial. And so this is a regimen that has already been in quite a number of HBV patients. So the question will be, will the regulators want to see a certain number of patients that are delta or will they take into account already the safety data that we have in B. So again, a lot will determine on the data we have. The unmet need is clearly high, but of course, the regulators will need to give us some guidance there.

Okay. Very helpful. So maybe now move forward to your HBV program. We've seen quite some cohort data in the past. And it seems that longer treatment is necessary to achieve competitive heal rate. So for your next update, what is the bar for cure rate regarding, I think, the next update will be cohort 4, 6 and 8?

Correct. Yes.

Yes.

Yes. So again, maybe to set the scene hepatitis B or chronic hepatitis B is probably about 300 million people in the world living with chronic hepatitis B and over 50% of the liver cancers are thought to be caused by that virus. So again, it's an area of high unmet need. There isn't a functional cure available at this moment in time, despite a lot of attempts to find one. There's about an estimation of 2 million people with hepatitis B in the United States and about 3 million in the EU 5. So it's a sizable population. But again, the -- sort of goal is for us and for others to try and find a functional cure, meaning treating patients for a finite amount of time and then taking them off treatment, and they will have their viral disease in control. So to your question as to what it is you need to see. So what we have done up to now is we started actually with combining our siRNA with interferon alpha. And we looked at -- after 48 weeks, what is the level of S-antigen loss, which is a measure of activity that you see. And we got about 26% of S-antigen loss, which is a really good result. And 6 months after taking people off treatment, we ended up with a functional cure rate of 16%. And that might not seem a lot, but it's one of the best results out there. This was a trial in all comers, all comer HBV patients and 16% of the patients were functionally cured. So what we then did is we added our antibody tobevibart to that regimen actually to the [ siRNA ] elebsiran with and without interferon, and we're trying to determine is their additive effect here. And can we reach higher levels of functional cure by using this combination. So the data that we have shown in AASLD last year is were 24-week data. And you're absolutely correct, Gena. What we have seen is that certainly we need a longer duration of treatment. So what we saw, though, at 24 weeks is that the S-antigen loss, if you combine elebsiran via siRNA interferon alone versus adding tobevibart to it, that we got a threefold increase in S-antigen loss. So at least directionally, this is going in the right direction. So now the data that we will have at the end of this year, 48 weeks end of treatment, the question is what does that need to look like and what does [ function of cure ] need to look like for physicians and patients to be really interested. So we had originally set ourselves a goal of achieving a 30% functional cure rate. However, we were at AASLD November meeting with 11 of the top KOL hepatologists in the world, and we were asking them that question. I mean what is it that you need to see to really take a regimen and treat your patients -- start treating your patients. And the feedback that we received is that they would be looking at 25% functional cure rate approximately for a regimen that contains interferon. Again, interferon has some side effects, but that was the guidance that we were given. And if the regimen does not contain interferon, then actually that functional cure rate could actually be a little bit lower. Again, I think we are here at the start of hopefully a journey where functional cure rates will continue to increase, but the bar now is relatively low because this -- again, there's really nothing out there that can cure patients.

Okay. That's very good. So maybe we still have a little bit 2 minutes left. Really wanted to ask you out of all the pipeline, you did say HIV data update. So maybe like what will be the data sets we should be focusing on?

Yes. So for HIV Phase I program, 1388. Yes. So again, this is a viral-based T cell platform. And what we do is we bring a viral vector CMV into patients or into participants, and that vector carries an HIV insert. The idea is that by using this unique factor CMV that we will be generating a set of CD8 T cell responses that can have a long-term protection of patients for infection against HIV. So what we will be looking at to see in the second half of this year is really do we create those CD8 T cell responses? Do we create a factor memory CD8 T cells. If that is the case, that would be really promising. But we will be doing a full analysis of CD8 T cells, CD4 T cells, cytokines, chemokines, so that we really understand what the factor is inducing in the human body and how protected this could be against infection for HIV.

Okay. Last question, maybe how is the CMO searching ongoing?

Oh, yes. Yes, the search is well underway. Actually, in between all the meetings here, we are also having some interviews. So yes, we have a number of candidates also once we announced that our CMO is leaving that have reached out. So I think we have a really strong subset of candidates. And what we're really looking at is people that have brought -- that have late-stage development expertise have really brought important drugs through clinical developments and to patients and have that deep clinical development and regulatory expertise. So yes, but we have some good candidates and hopefully, we can progress the search in an expedited way.

Thank you very much, Marianne.

Yes, my pleasure. Thank you, Gena.

Thank you, everyone.