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

Okay. We'll continue with the next session. Good afternoon, everyone. I'm Paul Choi, and I cover biotechnology here at the firm. It's my pleasure to welcome Vir to our next session here. To my immediate left is Marianne, CEO; and far left, Mark, CMO. Maybe what we'll do is let Marianne kick it off maybe with a little bit of overview of Vir and just sort of what is top of mind from a strategy and execution perspective over the course of 2025 and then we'll get into Q&A after that.

Okay. Excellent. Thank you, Paul. Really a pleasure to be here at Goldman Sachs Conference and talk about Vir Biotechnology. So for those of you not familiar, we are a clinical stage immunology company. And our most advanced asset is in hepatitis delta, where we are in registrational trials and where we have shown some really compelling data where only after 36 weeks of treatment, we could actually in 64% of the patients really eliminate the virus, so no longer detect the virus in the blood of patients. So that was a remarkable result in our SOLSTICE trial, and we are now in registrational trials in our ECLIPSE trials that are going to read out data first in -- at the end of 2026. We have also a clinical stage pipeline in oncology, addressing metastatic solid tumors, and that is really based on our PRO-XTEN platform, a masking platform. And we have 2 Phase I programs, one in PSMA, prostate cancer and then the other one in HER2 for a variety of different tumors where we read out data early in January and where we saw some very compelling early data on both programs. We are also due to dose our first patient in our EGFR T-cell engager program. So that is due this quarter, so this month coming up really imminently. And maybe also just to say that our PRO-XTEN platform is so versatile that we have started 7 preclinical programs, all addressing largely biologically validated targets in -- again, addressing high unmet needs in metastatic solid tumors. Underpinning all of that is a very healthy balance sheet. So we have about $1 billion in cash, and that gives us a cash runway into mid-2027.

Okay. Great. Thank you for that, Marianne. Maybe we'll start with what you began with, which is HDV. And can you maybe for investors who are unfamiliar with the space and the disease, just kind of frame for us what is the patient population in the U.S. and sort of the major markets? And how do you -- what is -- how is the disease treated? And what is the current unmet need? And then how do you think about the commercial opportunity ahead of you for Vir?

Sure. Yes. So hepatitis delta is an orphan disease. So it affects about 61,000 patients in the United States and a little bit less than double in Europe. And patients who are infected with the virus have to be co-infected already with hepatitis B. They progress -- actually patients that get diagnosed progress -- 50% of the patients progress to liver-associated death within a period of 10 years. So it's a very severe disease. It's highly underdiagnosed, and there's no treatments available here in the United States. So what we are doing is really developing a regimen, as I mentioned in my introduction that has very compelling efficacy but that also from a patient convenience perspective, is very attractive because it's a once-monthly dosing. And again, we have seen that progressively as we treat patients with our dual regimen that we see increases in what we call target not detected. So more and more virus gets -- more and more patients get rid of their virus. And we have shown really compelling efficacy both in non-cirrhotic and in cirrhotic patients. So if you look at the unmet need sort of more broadly, as I mentioned, here in the United States, there's really nothing available to patients. So there's not a lot of impetus to diagnose. In Europe, there's one treatment available, bulevirtide that is a daily subcu, also has only shown 12% target not detected after 48 weeks of treatment. So from an efficacy perspective and also convenience perspective, not really comparable to what we have to offer as a target product profile. But even with that regimen, again, the unmet need is so high that patients are going ahead and injecting themselves on a daily basis for basically the rest of their lives in order to potentially achieve a better outcome. So the unmet need is really high. Again, it has all the elements of an orphan disease with progression to severe outcomes very fast, very well-characterized patient populations, expert physicians that are treating the disease and again, price points that are really commensurate with all of that.

Okay. Great. You framed a little bit of my next question, which is just the different approaches in U.S. versus Europe, where in the latter, there is an approved therapeutic option even if it is sort of suboptimal in terms of outcomes. But given the different opportunities and setups in the U.S. and Europe, can you maybe talk a little bit about your clinical trial design, either you or Mark, if you want to jump in here and talk about the sort of the planning and thinking behind those studies.

Sure. Yes. So we have 3 studies, ECLIPSE 1, 2 and 3, and Paul, exactly like you said, we've designed them to take into account that in North America, there's no approved treatment, bulevirtide is not approved. So ECLIPSE 1 is a randomized study of our regimen, tobevibart and elebsiran versus a deferred treatment for a period of time with a 48-week endpoint. And then ECLIPSE 2 is a switch study where we take patients who've been on bulevirtide, who are still viremic and we randomize them to our regimen versus continued bulevirtide with a 24-week primary endpoint. So that's going to directly test our regimen versus continuation of bulevirtide. And then ECLIPSE 3, which is really more for European payers and HTAs is a head-to-head study of tobevibart and elebsiran versus bulevirtide and bulevirtide-naive patients. So we're going to be capturing the different populations, taking the regional differences into account. And so for both naive and experienced patients, we'll be generating those data. And I should say ECLIPSE 1 and 2 are really the primary filing package that we're planning.

Okay. Great. In terms of regulatory feedback, either Marianne or Mark, can you maybe talk about the different approaches the EMA and the FDA have maybe indicated to you or what their thinking is just given the difference in availability of treatment options and for the U.S., in particular, just sort of a delayed treatment model and evaluation. How does the agency think about that in these particularly rare infectious diseases?

Sure. So I think, as you said, in the U.S., where there's no approved treatment, they really wanted at least one trial compared to deferred treatment. Our deferred treatment period is actually only 12 weeks. And that's because essentially, with no treatment, nobody with delta is going to convert to undetectable on their own, certainly not in a 48-week or even a 12-week time point. But there are areas in Europe where bulevirtide is approved, but not widely available. So we'll be enrolling patients in ECLIPSE-1 in those studies as well. I think for Europe, there is interest both in all the study designs, but ECLIPSE 2 is particularly relevant because it looks at the switch from bulevirtide to our regimen versus bulevirtide continuation and also generates the head-to-head data of tobevibart, elebsiran versus bulevirtide, which I think is very directly answers the question of the incremental value our regimen will bring clinically.

Yes. And as you know, Paul, we have breakthrough designation in the U.S. and PRIME designation in Europe. So it really allows us to have very dynamic conversations with the regulators, and they really understand the unmet need.

Great. Your trials are kicking off, but maybe can you remind us how you're thinking about the likely cadence of enrollment and when you could get to a position where you might be able to top line your first study?

Sure. So ECLIPSE 1, we enrolled the first patient back in March, which was ahead of schedule. We had said Q2. It's enrolling very well. We're projecting complete enrollment by the end of the year and a primary completion date at the end of '26. ECLIPSE 2 and 3, we're in full study start-up mode. That's going very well. We haven't provided any more guidance on that, but expect to be able to do that in the near future.

Okay. Great. Maybe just in the interim, will you have any of your other additional updates from your earlier SOLSTICE program, any longer-term follow-ups that will help investors or clinicians get any more insight into how the combination performs maybe over the longer term in this hep D population?

Yes, we will. So the SOLSTICE Phase II study, as you'll recall, at every time point, the viral responses are getting better and better, deeper and deeper. And we reported the full 24-week data at the liver meeting last year in November. We expect to have the full 48-week data at AASLD in November of this year.

Yes. And in the case of infectious diseases in general, but also especially for RNA viruses, what you see is that -- what you see in your Phase II gets very nicely replicated typically in your Phase III. So I would argue that this is a highly derisked study.

Okay. Great. Maybe just in terms of -- at a high level, Marianne, as you think a little bit down the road for commercializing it in hep D, both in the U.S. and Europe, can you maybe paint in broad strokes for us how you're thinking about approaching that potentially? Do you want to do it directly here in the U.S. and partner in Europe? Or just given that the patient population is relatively compact and well identified, is that something you'd commercialize in Europe as well?

Yes. So we have decided to commercialize ourselves in the United States, especially because, again, it's a well-defined population of patients. We know where they're sort of based in the United States in metropolitan areas. Because it's an orphan disease, we really believe that we can take that on ourselves. However, outside of the United States, we will be seeking a partner. We have announced that earlier. And so we are very active in discussions related to that.

Okay. Great. I want to maybe switch gears and talk a little bit about your TCE programs and -- which I think you were probably instrumental, Marianne, in terms of searching and thinking about the BD process when you found these assets and licensed them in from Sanofi. Can you maybe just remind us why, I guess, you decided to focus on oncology and the T-cell engager space in particular as you thought about the range of sort of new verticals for Vir to enter in beyond your historical background in infectious diseases?

Sure. Yes. So it's important to understand that Vir was a very successful company during COVID. And with the sort of variant, SARS-CoV-2 variants coming online, sotrovimab, which was a very powerful antibody therapeutic during the pandemic was no longer active. So the company really had to think about post the very successful commercial period where there was a good deal of revenue coming in, what is going to be next for Vir. And so as we thought about that strategic pivot, we really wanted to go back to the core of what Vir was uniquely well equipped to do. And first, it is really the case that we have a very unique protein engineering platform, which has yielded already 2 antibody therapeutics, Fc engineered that made it all the way to market, one for Ebola, one for COVID and several in clinical trials. So we have a team of very world-class protein engineers. And of course, we're using a lot of AI lately to come up with the best possible molecules. So we really wanted to make sure that we were going to continue to use that deep knowledge. And secondly, we have a team that is deeply understanding how the immune system fights disease. I mean, and that could, of course, be infectious disease, but also cancer. And so as we were looking at external opportunities that could really bank on those capabilities, we quickly ended up in the area of bispecifics and BiTEs and T cell engagers and the opportunity that we identified with Sanofi of mask T-cell engagers, we thought was truly unique because on the one hand, we were able to bring in a number of clinical stage assets with biologically highly derisked targets but providing a whole new way to achieve a better therapeutic index through masking. And we could also bring in a PRO-XTEN for the masking platform for use in the entire field of oncology and infectious diseases. So it was really a perfect fit for us. And we see that already being played out. So we are now -- we have merged the team that came from Amunix. We brought about 50 people over from Amunix Sanofi with deep expertise in the platform and the assets and the manufacturing. And we have been really merging the discovery teams, again, our protein engineers with the people that have a deep understanding of how masking works. And we have already started 7 new preclinical discovery programs that we are going to deploy to high unmet needs in metastatic solid tumors.

Great. There are a couple of different schools of thoughts on how you should do masking here in the solid tumor oncology space. And first, can you maybe compare and contrast your double masking approach versus some of the other technologies that are out there? And then secondly, as you sort of think about the opportunity here, how do you guys ballpark when you think about the range of tumors, at least that you're initially investigating here with your 3 lead programs and just sort of what that opportunity is, maybe starting with the later line or as you think about development in earlier lines of solid tumors as well?

Sure. So the masking platform, we do think is quite unique for a couple of reasons. First of all, it's a universal mask and linkers. So across all of our clinical stage programs and across any of the next-generation targets that we're working on, and we have 7 in discovery now, it's the same masks and the same linkers. So it just really facilitates development of follow-on molecules. They are large polypeptides that provide steric hindrance for both the CD3 part of the molecule and the tumor-associated antigen binding part of the molecule, so HER2, PSMA, EGFR, et cetera. So they really provide kind of a shield around the binding sites. The other thing to note is that it's clinically validated in that ALTUVIIIO, which is a Sanofi factor VIII extended half-life for hemophilia uses the same masks with -- so they've been on the market, very safe, minimal immunogenicity. So I think that's an important thing. And then the last thing is the half-life we think is amenable to a q3 week dosing with the half-life in the range that would support that. So I think there are a lot of attributes of our masking that are really unique. And for example, with Janux in their PSMA program, it's single masked. So they mask the CD3, but not the PSMA. So that's probably why they have basically 100% cytokine release syndrome. It's also they have to engineer a peptide mask for every new molecule. So you have to get the right tightness looseness. So it's tight enough to prevent unmasking in the periphery, but not so tight that it won't unmask in the tumor. So from a next-generation point of view, that's complicated. So I think there's a lot of differentiating attributes to our masking platform, which is quite unique. In terms of how are we -- so in terms of PSMA, we are planning on developing it both in later and earlier line. Now was your question more about that or more about the next generation of tumors?

Maybe just more like market sizing, I guess, for the T cell engager class and just sort of what your rough math suggests in terms of ballparking the market opportunity here?

Yes. As Mark is saying, so currently, of course, our PSMA program is starting late line, but we are absolutely going to explore first-line therapy as well. Again, because of the way that the masking works, it allows us to explore a therapeutic index that is different from unmasked T-cell engagers, potentially much more safe with higher efficacy. And that is, of course, uniquely suited for us to move into earlier lines of therapy. Of course, initially, we will be looking at sort of the post PLUVICTO late-stage line, and that's an opportunity to get to market very quickly in an area of high unmet medical need, but we have the opportunity to actually quickly move also to the earlier lines.

Great. I guess it's also worth pointing out that PLUVICTO recently was approved for the pre-taxane setting. So it already sort of enlarged the earlier line opportunity...

Correct. Please go ahead.

Great. I think another thing that investors are trying to understand is just how durable these treatments could be potentially down the road here versus some of the either unmasked, naked antibodies or other modalities. And just so how do you think about the potential clinical benefit here? And how is -- since we have maybe one market analog out there in terms of the PSMA space, how is -- how are the patients treated with your program treating -- tracking versus those treated with the Janux asset?

Sure. So we think that our masking, our dual masking with the steric hindrance will allow us to achieve durable responses because we -- the unmasking occurs in the tumor microenvironment, kills the tumor. But when they're out of -- in the periphery, they're either fully masked if they're unmasked in the tumor and then they make it into the systemic circulation. So we're able to dose higher and achieve a really excellent therapeutic index, the ratio between efficacy and safety. And we had at our JPM presentation back in January, it was early days for the PSMA program. We were early in dose ranging, but we did have the one patient, Dr. De Bono presented that had a PSA 90 response that was looking towards being pretty durable. And then on the HER2 side, we had the patient with metastatic colorectal cancer who is on study for more than 18 months with durable responses, even though that patient had, had multiple prior lines of therapy. So we think as we dose escalate, we will achieve more deep and durable responses across the platform. And in terms of Janux, I feel like we were -- our last update was very much commensurate with their February update of last year, where we were both in similar ranges. We were about 30x our MABEL dose as were they, and we were having very comparable efficacy, whereas we had minimal CRS with no corticosteroid or anti-IL-6 prophylaxis, whereas they had CRS in most patients with prophylaxis across the board. So the reason I bring that up is I think we have a lot of room to keep escalating the dose to get to better therapeutic index.

Yes. And maybe also important to note that we have received IND clearance to move into earlier lines of therapy...

Yes. And that is including frontline metastatic CRPC in combination with ARPIs as a monotherapy, hormone sensitive as well. So we're going to be also interrogating those earlier lines of cohorts.

Abiraterone and enzalutamide combinations or background.

Yes.

Okay. Great. I want to ask maybe one theoretical question, which is that as investors think about it, there's potentially more variability in responses with these masked drugs. And just so how do you think about that in terms of heterogeneous outcomes where the drug may necessarily be hitting the tumor, but it's just sort of unknown if it's activating a tumor response here or not? Just sort of high-level thoughts on that, Mark.

Sure. So in terms of heterogeneity, I mean, a couple of points. I mean right now, we are enrolling late-line patients. And in the HER2 program, it's a basket design. So there's multiple tumor types. So there's inherent heterogeneity. But I think in terms of dose response, we're -- as we get to higher doses and as we achieve unmasking in the tumor microenvironment, we expect to have a more consistent efficacy and less heterogeneity actually of response, more consistent target engagement. We are going to take some steps to try to reduce heterogeneity in terms of the clinical program. We're looking now and we'll continue to look at what baseline factors are predicting response, clinical factors, mutational burden, what prior lines of treatment in the PSMA tumor, what ctDNA profiles, what PSMA PET looks like. So it's early days, and we don't have a large number of patients yet. So we don't have any definitive statements to make. But we are very keen across the platform to try to understand predictors of efficacy and response so that we can dial that in more precisely over time.

Okay. Great. You've shown the most data to date in your PSMA program. And as you pointed out earlier, you really haven't had any safety signals, no CRS and are apparently nowhere close to a DLT, so you can continue to dose up, but you're using also a reasonable amount of drug already here. And so I guess, as you think about that, how much further can you continue to dose up here? And then I guess, on that point, as you get to somewhat high levels of concentration of drugs into the system, what does that mean if you're not getting maybe the response rate you're ideally looking for?

Sure. So I mean, if we take PSMA, for instance, I mean, we were very early in dose escalation back in January, it was in November last year data cut. And we're continuing to escalate the dose in both Q1 and Q3 and -- with the idea there, we were aiming to show a dose response, show consistent unmasking and efficacy with very, very minimal CRS and tolerable safety profile. I mean we haven't ruled out using steroid prophylaxis as we get to much higher doses. I mean that will be a data-driven decision when we get there. But we feel very optimistic that we can get to a really, really excellent therapeutic index where we're getting deep, consistent, durable PSA responses in prostate cancer with very tolerable safety. And then the Q3 dosing, we do think is very important and differentiating because especially in earlier lines of treatment, I mean, you can imagine patients could be on this for months to even years and a q3 week is much more feasible than a q1 or even q2 week treatment regimen. So I think the q3 is going to be important, which is why we're really exploring that in a lot of depth.

Yes. And I would add that, I mean, sort of the absolute dose is really not an area of concern. There's a lot of very successful biologicals that are dosed at this level, so STELARA, there's many others. So that's really not an area of concern.

Yes. That's true. Mark, I want to just touch something on -- you mentioned there, which is the q3 dose -- q3 w dosing, which aligns with the typical PD-1 dosing schedule in most cases. And so can you maybe just remind us what is the status of your combination development program, I think, with pembrolizumab and just sort of the plans there?

Sure. So we're dose escalating the HER2-5818 program in combination with pembro. We intend to do the same in EGFR. I mean in prostate cancer, we're not doing that. The combos will be ARPIs primarily. The rationale particularly is that there could be -- by engaging the T cells, there could actually be some diminution of effector T cell exhaustion that could occur. And particularly in MSS colorectal cancer, where they're not typically sensitive to checkpoint inhibitors, they're very cold tumors, we think that by combining with a checkpoint inhibitor like pembro that we could, in theory, get better efficacy. So that's what we're exploring there. In terms -- the other thing about the q3 week dosing, which I think you're alluding to, Paul, is that by allowing a little more time, there may be time for T cell recovery in between the dosing intervals as opposed to a q1 where we're continually dosing the drug. So there actually could be, in theory, better efficacy with the q3 versus q1. But again, those will be data-driven decisions as we move forward with the program.

Okay. Marianne, maybe you can remind us in terms of updates for your 3 T-cell engager programs. What's sort of the cadence of updates that we should potentially expect over the course of this year or into '26?

Yes. So first of all, we should look at each program sort of individually. They're not linked together as it relates to potential data updates. Of course, for EGFR, we're due to dose the first patient this quarter. So that's imminent. And then for the PSMA and the HER2 programs, as you can tell, we're doing a lot of work. We're in the midst of dose escalation. We're exploring weekly dosing, q3 week dosing. We're exploring combination with pembro, et cetera. So all of that still needs to mature. And as soon as we have what we believe is a meaningful data set, we will be sharing it, of course. But I can't, at this moment in time, give you an exact timing because, again, we are really still in that dose escalation scheme.

Okay. Great. In terms of going to next stage programs, I guess, what is sort of the litmus test to thinking about pivotal trials or programs for each of those programs at this point? And if one program stood out versus the other, how would you think about prioritizing that one versus the other programs?

You mean from our clinical stage T cell engagement?

Yes.

Yes. So I mean, our PSMA program, of course, very compelling early data. So it's a high priority. We're trying to move that forward as fast as we possibly can. On the HER2 program, I mean, that's a basket trial. So what we have seen there thus far, and again, we are not mandating certain types of tumors, but what we have seen is a certain enrichment for good efficacy, actually very compelling efficacy in metastatic colorectal cancer. So as the data matures there, it would be sort of logical for us to explore potential expansion cohorts in metastatic colorectal cancer as a first next step in that program. And then, of course, for EGFR, it's a little bit early. I mean we are going to explore lung cancer, head and neck, colorectal, and that is going to sort of pan out in the course of this and next year.

Okay. Great. I want to shift a little bit gears in terms of sort of more corporate questions and thinking about particularly your cash runway and clinical development times. And so as you think about that and potential launch of late-stage studies for your T-cell engager programs, how should we think about where your capital allocation priorities are? Is it primarily focused on the internal development and pipeline -- clinical development? Or just how are you thinking about utilizing what is still a very large cash balance here?

Yes. So as mentioned, we have about $1 billion in cash with a cash runway until mid-2027. Our priorities are clearly progressing delta registrational trials. We are estimating that we can complete enrollment in ECLIPSE 1 by the end of the year, have a primary completion date end of 2026. So generating that data, making sure that our enrollment is on target is a very high priority for us. Secondly, as I mentioned, from a capital allocation prioritization perspective, our PSMA program, we're aiming to progress it as quickly as possible. It's a very competitive field. It's important that we generate that data as quickly as possible. And then, of course, our HER2 and our EGFR program, that's going to be gated based on the data we develop. As it relates to our preclinical programs there, we think that these are excellent opportunities for partnering. There's a lot of interest in our PRO-XTEN platform. And the type of targets that we are pursuing are really types of targets that large pharma partners have a very high interest in, typically biologically validated targets, but where a modality like engager has not worked because of toxicity and where our masking could really bring a differentiated profile.

Okay. And then just in terms of build-out of your internal commercial footprint, as your HDV program matures, when do you start thinking about ramping up commercial efforts and reaching out to payers and so forth and building out your commercial infrastructure?

Yes. So actually, we -- so first of all, we, as I mentioned, are going to focus on commercializing in the United States. We are actively looking for a partner outside of the U.S. and especially for Europe. That's going to be very important. We have actually already engaged a lot of stakeholders really trying to understand the landscape. We are -- again, as I mentioned, primary completion date for ECLIPSE 1 is end of next year. So we are gradually sort of gearing up to build some prelaunch activities and understanding the market as best as possible.

Okay. Great. We're coming off on time here. So I want to maybe put an open-ended question to you, Marianne, which is as you think about Vir and its prospects and your investor conversations or with the sell-side community, is there any aspect of the company you feel like is just misunderstood by the market or just underappreciated? And if you were to highlight 1 or 2, what would those be?

Yes. We are very bullish on our hepatitis delta program. We think we have a really unique regimen, great data, great also from a dosing convenience perspective for patients. We believe that with the trial designs that we have discussed, we can really be the best-in-class regimen out there and change the standard of care. And hepatitis delta just as a disease is underappreciated. But we believe, again, it's an orphan disease. It's -- the price target is very similar to what you would expect from an orphan disease with a high unmet need. So we think it's a very compelling commercial opportunity, and that is currently a little bit underrecognized, but we are hopeful that it is going to change as we progress. And then otherwise, the sort of potential that the PRO-XTEN masking platform holds, I think is tremendous. It's not just our 3 clinical stage programs. But again, it's a plug-and-play platform that we are deploying now to 7 discovery programs, but that we can really deploy quite broadly and holds a lot of potential to build a pipeline of the future.

Okay. Great. We're coming up on time. So we'll end it on that note. My thanks to Marianne and Mark for joining us.

Okay.

Thank you, Paul.

Thank you so much, Paul.

Appreciate it.