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

Thanks for joining the session with Vir. My name is Alec Stranahan, and I'm Vice President and senior biotech analysts covering Vir here at BofA. And I'm pleased to be joined by Marianne De Backer, Chief Executive Officer of Vir. Marianne, thanks for being here.

My pleasure.

Great. So I believe Marianne is going to run through some high-level prepared remarks to start, and then we'll jump into the Q&A. So with that, Marianne, over to you.

Okay. Thank you, Alec. A real pleasure to be here. So Vir Biotechnology is a company with a vision to power the immune system to transform lives of patients. And what that really means is that we want to equip the immune system of patients with new tools to either fight infection or fight cancer. And at Vir, we have 2 very important platforms to do that. The first one is our antibody platform, which allows us to come up with very unique therapeutic antibody candidates that nowadays, of course, are really protein engineered using AI. And that platform has already been really productive. There are 2 antibodies that are already on the market, one for Ebola and one for COVID. And of course, our next antibody that is going to be really important is in development for hepatitis delta and hepatitis B. And we'll be talking more about tobevibart. Our other platform is based on a CMP vector, we call it our viral-based -- viral vector platform. And that is a platform that allows us to induce very unique T cell responses, that are very potent, broad and also durable. And so we have a program in Phase I development for HIV prophylaxis that is using that platform. So 2 very powerful platforms, certainly, the antibody platform that is proven. And for the CMV platform, we will have proof of immunology data coming up in the second half of this year. Now this year is really very much focused around our hepatitis delta and our hepatitis B programs, where we have critical data readouts coming up. And beyond that, we have a rich preclinical pipeline. We have 4 programs that could enter the clinic in the next 12 to 24 months. And all of that is really underpinned, as you know, with a very strong balance sheet. We have $1.5 billion in cash. And we have been doing a lot of effort in bringing down our operational expenses, really focusing our efforts on the programs that can drive the most value, both for patients and for shareholders. So yes, it's a really exciting time for Vir, and I'm also excited to talk with you more about our plans.

Perfect. Great. So now we'll jump into the Q&A. I've got a few here, but I encourage those in the audience, if you have questions, just raise your hand, someone will bring a mic around and you can ask your question. Marianne, maybe just to start on hepatitis delta since this is maybe the next data update we should be getting in 2Q. Maybe just to start, I think it would be helpful to first review the latest data we saw from SOLSTICE earlier this year at AASLD. Early days, 6 patients, but pretty encouraging early results.

Yes, absolutely. So maybe just to set the stage, hepatitis delta is the most severe form of viral hepatitis. And hepatitis delta is just a tiny RNA virus that requires hepatitis B for its replication. So a patient that has a delta infection already has a hepatitis B infection. And it's the most severe form of viral hepatitis because if you have that dual infection, you progress 4x faster to liver cancer and 2x faster to death. So it's really a very severe disease. The estimation is that there are about 12 million people in the world living with hepatitis delta. And if you look, for example, in the United States, if you were diagnosed tomorrow with hepatitis delta, and I hope not, there would really be no treatment option for you available. So it's a high unmet need, and there's really nothing available for patients in the U.S. There is a standard of care in Europe, that is certainly falling short in a couple of ways because people have to give themselves a daily subcu injection for the rest of their lives. And for those patients that actually can do this can adhere to such a regimen, they have less than 50% chance that they actually achieve a clinical benefit, and only 1 in 10 chance that they get to really undetectable delta virus RNA. And again, delta virus infection, it's a chronic viral infection. And in any chronic viral infection, also like in HIV, like in HBV, what you really want to achieve is undetectable viral DNA. So what we have set out to do is we use a combination of 2 products. As I mentioned, we have an investigational neutralizing antibody called tobevibart. And we have an siRNA targeting as antigen called elebsiran. So tobevibart used to be called 3434 and elebsiran elapse run was called 2218 just as reference. And what we have shown last year at AASLD in first 6 participants is that if you did a 12-week lead-in of treating patients with either elebsiran alone or tobevibart alone, and then after 12 weeks, you switched those patients that hadn't achieved the endpoint desired to a combination therapy, we saw that already after 12 weeks, and that is just 3 doses, because our dosing is once a month, that already after 12 weeks, we saw a very sharp decline in delta RNA. And 5 out of 6 patients achieved undetected achieved HDV RNA levels below -- lower limit of quantification and 6 out of 6 below lower limit of detection. So those were very impressive results, again, only 6 patients, as you mentioned. So what we are now looking to do, and we will have a late-breaker at EASL in June, on June 5 to be precise, we will be looking at a larger subset of patients. And we will be studying both the combination of tobevibart and elebsiran every month dosing and also tobevibart an antibody alone every 2 weeks dosing. And we will have about 30 participants that have been on treatment for 12 weeks with each of that regimen and then probably about 20 that will have been on 24 weeks of treatment, again with each regimen. So the data that we will be presenting at EASL, will be very informative in understanding, can we really replicate the results that we saw at AASLD with 6 participants. And if that would be the case, then this could be really transformational for patients.

Right. And I guess what is the ultimate goal of therapy in these patients? And is there any difference between cirrhotic versus non-cirrhotic patients in terms of how -- like the goals of treatment?

Yes. So our goal is a chronic therapy that, of course, is very efficacious and safe and also much more convenient for patients. So in our first study of the 6 participants, we actually did not include any cirrhotic patients. However, in the 60 participants that we have enrolled in the SOLSTICE trial that is going to read out, again, partially in -- at EASL, already 50% of the patients are CPTa cirrhotic. So we will be able to look at, is there a difference in efficacy, safety in that subset of patients. It is probably important to note, though, that we did a hepatic impairment study. So we looked at if you give either elebsiran or tobevibart to patients that are cirrhotic, is there a difference observed in safety or PK, and we haven't seen any meaningful difference. So based upon that, you wouldn't expect a big difference. But again, the data will have to show us.

Okay. And we'll get the 2Q update. What is your thought around [ having ] the registration once you have this data in hand? Will you want to wait for the 4Q data to approach the regulators in terms of a follow-up study or path to registration? Or do you think the 2Q data could inform those conversations?

Yes. So as mentioned, we will have data around 30 additional participants for each of the -- for 15 at 12 weeks for each of the regimen and then at 24 weeks for each of the regimen. And our hope is that depending, again, on the strength of the data, we can engage with regulators already in the third quarter. There wouldn't be any reason to wait until the end of the year. At the end of the year, of course, we will have, for all our 60 participants, 24-week data, and that will be the most complete informative data set. But again, depending on how the data look like at -- for the -- at EASL, this will really guide us in what kind of path to take with regulators.

Okay. And you mentioned that there is no drug approved in the U.S. There is one approved in the EU. I know there's a bit of history there. Any learnings that you could take or precedents that you'd point us to in terms of understanding how the FDA may view an accelerated approval path in HDV?

Yes. So for hepatitis delta in the U.S., there's really no precedent, right? There's nothing on the market, so we don't really have something that we can point to necessarily. What we know is that for Europe, and again, that was sort of the first entry, of course, there was a conditional approval based on 24-week data and then a more affirmative approval of the 48-week data. But again, we are planning to do trial that uses bulevirtide as a comparator in the study. And it's going to be a global study and what the design is going to look like will really be guided by our conversations with both the FDA and EMA, of course. Yes.

Okay. Maybe now we can turn to hep B. And I actually filled a script at CVS a few weeks ago, and they were heavily pushing their hep But vaccination campaign, so it's definitely a topical issue. But I guess, Marianne, at a high level, what gives you confidence that you can achieve a functional cure in HBV? Because, I think, that's your stated goal for these patients.

Yes. And maybe, again, to set the stage, there was a report that was released in March from the WHO that sort of reconfirmed that there's more than 250 million people in the world living with hepatitis But, about 1.6 million estimated in the United States, 2.8 million in Europe. And again, patients that are infected with hepatitis B, it's a bit of a silent killer. But eventually, of course, it leads in a large portion of those patients to cirrhosis, liver cancer, patients need to get liver transplants and so on. Of course, there is a therapy that is available right now, but there is nothing that really leads to a very high level of functional cure. And what we want to really achieve is a functional cure rate of about 30%. That is sort of our stated goal. And that 30% is really meaningful because again, the only thing that is available to patients right now for achieving a functional cure is a treatment for 48 weeks with interferon alpha. And after doing that for 48 weeks, the functional cure rates that are achieved are somewhere between 3% and 7%. So really not very impressive. Now why do we believe that we really have a shot on goal here with our assets? So first of all, we have started by the hypothesis that in order to really make a meaningful impact in hepatitis B, you need to have an approach that involves both antivirals and immunomodulators. And we have called it our stop-and-clear approach. So we use, really, our siRNA to stop the virus from producing more S antigen and really disrupting the transcripts of the virus. And then we have our investigational antibody that is both an entry inhibitor and also leading to immune clearance of the [ virulence ]. So by combining, again, the direct antiviral and an immunomodulator, we think we really have a shot at this. And the first data that give us some hope that this could actually really be true is when we started combining our siRNA elebsiran in initial stage with interferon alpha. So when we did that and we treated patients for 48 weeks, we achieved S antigen loss of about 26%. And you have to, again, remember, as I mentioned, if you treat patients 48 weeks with just interferon alpha, you get to a functional cure rate of 3% to 7%, and you get almost the same at 48 weeks end of treatment. And if you treat patients just with an siRNA alone for 48 weeks, you really achieve close to nothing. So the combination of the siRNA and the interferon clearly is doing something more given that we achieved 26% end of treatment S antigen loss. And then after 6 months, so functional cure rates was about 16%. And this was in all comers. We did not stratify patients. We really took patients of all S antigen levels to start with. And that 60% is really one of the best data that is out there. So that was a really good first insight into the fact that, indeed, combining an antiviral with an immunomodulator, this case, interferon alpha could lead to much better outcomes. What we then did in our March Part B trial is looking at what if we added our antibody, tobevibart, very part to that combination, either to elebsiran alone or to elebsiran plus interferon. And so we only have the data that we presented earlier at 24 weeks. But what we saw at 24 weeks is that we already had a 3x higher as antigen loss than just looking at siRNA with interferon alone. So again, clearly, the antibody is doing something in addition. And so what we're now looking out for is, really, our 48-week end of treatment data, and that's data that we will have available in the fourth quarter of this year. And then again, I think that will already be very informative because, again, our end goal is to get to around 30% functional cure. And then mid-next year, after a finite amount of treatment and then taking patients off the treatment for 6 months, we will have our functional cure readout. So again, both at the end of the year and then next year will be very important data readouts for our hepatitis B program.

Okay. And that kind of partially answers my next question. But I think it's worth drilling down a little bit further. How should we be thinking about the March B 24-week data that we've seen in the context of the upcoming 48-week data readout? Is there a deepening of response that you would expect over time? Or any read through from that 24-week data that we could extrapolate on?

Yes. So when we looked at 24-week data of elebsiran, so the siRNA with interferon alpha, we achieved only 5% S antigen loss. However, if we looked at 48 weeks, we had a 5x higher S antigen loss. So it went from around 5% to 26%. So clearly, something is happening between 24 and 48 weeks. The question now is what will that look like, for the combination of elebsiran with our antibody tobevibart and the same combination with interferon added. What we do know is that, again, interferon tends to achieve an effect later in the regimen. So you could imagine that also in the case of our combination or triple combination, you would see a later effect. But again, that's sort of guess work at this time, and we will need to look at the data. What, again, I think will be very informative is where do we land at the 48-week end of treatment data as to S antigen loss. So it is known that if you treat with interferon, at 48 weeks, if you have a certain outcome, again, 3% to 7%, you really don't have a drop off. Once you take patients off, you still have a functional cure rate that is approximately the same. However, that's not what we saw in our combination of interferon with elebsiran. So we saw a drop-off from 26% to 16%. So the question is now when we are going to look at our 48-week data, will we see a drop off or not. In any case, again, we have really consulted a lot with KOLs. And what they are seeing is, again, the unmet need for a functional cure in hepatitis B is really high. And they've actually put the bar for a functional cure rate at around 25% for an interferon-containing regimen. And it could actually be a little bit different and even lower for one that is without interferon. So again, the data that we will have at the end of the year will be very informative.

Okay. Yes, definitely looking forward to that. And I wanted to touch on your HIV program. I know hep delta and hep B are the majority of the focus for many investors. But I think HIV will begin to grow in importance from the pipeline, especially with the second half data readout for VR-1388. I think you said that this will mostly be immunogenicity data. Maybe you could just talk about your approach within HIV and how validating could this immunogenicity data actually be for the asset.

Sure. So as I mentioned at the beginning, we have 2 fundamental platforms. One is our antibody platform. And of course, we are building now to tobevibart and a number of other assets to further develop in the clinic. For our CMV platform, which is our second platform, our first application is really in HIV prophylaxis. And so VR-1388 is currently in clinical development. And the data that we will have in the second half of this year is the first, really, potential proof of concept data that we can achieve a virological immunological response that is very specific to HIV. Because what we have done is, again, the holy grail in HIV prophylaxis is that you would be able, with ideally one or only a couple of treatments in a lifetime, be able to generate a very strong, broad and durable protection against HIV infection in your lifetime. Now again, that's the Holy Grail. It's not easy to achieve. HIV vaccination has not proven to be successful. So what we are trying to do is we use the CMV vector because it has all those attributes. When CMV infects a person, you get those very -- again, very potent and broad and durable responses. And we have used CMV, really, as a vector, and we have inserted HIV portions of the genome. We call that immune programming so that the T cell response that potentially will be generated in a patient or in a person will be specific to HIV. And now again, second half of this year, we will see the initial data looking at CD8 T cell responses, CD4 T cell responses, specificity of T cell response. So that will be very informative for the HIV program. But also if that proves to work, then it is very important also for our platform, because we have a next-generation CMV-based asset preclinical that is targeting human papilloma, so for, really, HPV cancers. And again, the mechanism is very similar. It's using the CMV vector, introducing HPV-specific genes and then seeing if we can generate those very specific T cell responses against human papilloma virus. So again, for the platform, this will be a very important data we'd add.