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

Good afternoon, everyone. My name is Mary Liu, and I'm one of the associates on the healthcare investment banking team at JPMorgan. It's my pleasure to introduce our next presentation from Vir Biotechnology. I'm joined by the company's CEO, Marianne De Backer, who will give a presentation on the business followed by a Q&A session. Marianne, thank you very much for being here. And with that, I will turn it over to you.

Okay. Good afternoon, everyone, and thank you, Mary. Thank you, JPMorgan, for the opportunity to present Vir Biotechnology to you today and the swift progress that we are making across our pipeline in infectious disease and in oncology. The presentation includes forward-looking statements. So I refer you to our website where we have a notice regarding legal disclaimers and regulatory filings. Our mission at Vir Biotechnology is really all about harnessing the power of the human immune system to fight disease. And that could be an infectious disease or it could be cancer. So we have a deep understanding of immunology since really our inception as a company. And what we are doing is enabling really innovative solutions to be developed across a series of very serious diseases. Our path is such that we sorry, our path is such that we are aiming to really deliver only transformational therapies and for unmet needs that are very, very serious. So we are aiming our powerful R&D engine that I will be talking about a little bit to changing not just some of the devastating diseases in infectious disease, but also trying to really aim to change the face of cancer treatment. Our strategy at Vir Biotechnology is really based on 3 pillars. The first is we believe we have a really compelling and superior Phase III candidate for chronic hepatitis delta. So we see this as a significant opportunity for our company, both as a commercial opportunity in the U.S. and in other key regions. And our registrational program for hepatitis delta is well underway in setting the stage for a potential regulatory review already next year in 2027. So we expect this program to be a really major driver of near-term sustainability for the company. Our second pillar is we are progressing a clinical stage lineup of dual-masked T-cell engagers. And this is aimed at solid tumors where patients currently have few options. And we believe that these programs could bring important new breakthroughs and add value over the next few years. In fact, we'll be sharing updated safety and efficacy data on VIR-5500, our PSMA targeting T-cell engager already in the first quarter of 2026. So a little bit more about that in just a moment. Third, we are really putting our discovery engine to work and are developing a series of potential best-in-class preclinical pipeline of T-cell engagers and cancer immunotherapies. And that can really fuel the company's value in the long term. Underpinning these 3 pillars is our strategic approach to partnering. So we believe that if we selectively partner certain drug candidates that, that can really allow us as a company to maximize our resources and again, unlock more value of the pipeline. And we believe that collaborations also in certain areas can allow us to potentially move faster, but also to reach more patients. And then finally, importantly, we have the capital to advance our key programs across key value inflection points, and we can accomplish this in the next few quarters and years. Next, I will be talking about our addressable market. So as I mentioned in the beginning, our clinical programs really address serious and hard-to-treat diseases that all are in need for new solutions. The numbers we're showing here reflect addressable patient populations in just the key territories. Starting on the left side with hepatitis delta, you can see that chronic hepatitis delta cases are rising likely because of increased awareness and also early diagnosis improving. And we estimate about 174,000 patients that are actively vireamic, again, in the key markets of Europe and United States. Moving from the left to right here on the slide and then also switching to oncology for the PSMA-expressing tumors, castration-resistant prostate cancer represents about 100,000 patients. And our Phase I program potentially also allows us to pursue hormone-sensitive prostate cancer. If that were the case, then again, the addressable patient population increases to about 160,000 patients. Then moving to HER2. So HER2, we are really focused there on predominantly urothelial and colorectal cancers, where the estimated addressable population is about 38,000 patients. And finally, on the right, for EGFR expressing tumors, our third clinical stage asset in the clinic. There we are really focused on non-small lung cancer, head and neck and colorectal cancers. And that is really a very significant addressable population of around 770,000 patients. So again, we're really focused on high unmet need of very serious diseases. I will start with focusing on our lead program now in hepatitis delta. We've just shared actually new data from our Phase II SOLSTIS trial study this week, and we put out a press release to highlight that. And our ECLIPSE program, again, our registrational program for hepatitis delta is well underway. Maybe again, briefly talking about delta. It's a devastating liver disease. Options for treatment are limited. There is no treatment available for hepatitis delta currently in the United States. More than 50% of the people once they are diagnosed with hepatitis delta really progress to liver-related death within a period of 10 years. And a lot of them suffer actually from liver-related failure sooner. So they're also about 3x more likely to develop liver cancer compared to patients that are just infected with hepatitis B virus alone. Globally, there are about 7 million people living with this disease. And we believe this is a big opportunity for us to step up as leaders in this space and make a difference in this area. Our combination regimen of tobevibart, which is a monoclonal antibody and elebsiran and siRNA is emerging as potentially best-in-class for hepatitis delta. It basically uses a two-pronged approach, 2 complementary mechanisms to fight the same virus, and it makes -- and that really allows it to stand out versus the rest. As mentioned before, hepatitis delta can really only exist if there's already hepatitis B. And tobevibart is a specialized antibody that really latches on to the hepatitis B surface antigen to prevent the entry of the delta virus into hepatocytes and neutralize the delta variants. Elebsiran on the other side, as I mentioned, is an siRNA molecule that basically allows to limit the production of HBV surface antigen. And the regimen sort of dual and complementary mechanism of action is quite unique and allows us to really come up with a differentiated approach. The key differentiators for our combination regimen are the deep and increasing rates of undetectable HBV RNA over time. I'll be talking about that a little bit more, also monthly dosing and a very favorable safety profile. Right now, our combination therapy is being tested both in a Phase II SOLSTIS trial as well as in our Phase III ECLIPSE clinical trials. In November, we shared impressive 48-week results at a major liver conference and published them as well in the New England Journal of Medicine. So this week, we provided updated data, positive updated 72-week data for all 65 patients in the Phase II trial, plus data for a subset of patients, 48 people, who've reached 96 weeks of treatment, showing ongoing improvements in patients getting our combination therapy versus those on monotherapy. And in this study, we are evaluating patients that are without and with cirrhosis and that got either, again, our combination therapy once a month or tobevibart alone, the antibody monotherapy twice a month. So if you take away one data slide from today's presentation, this is the one. Hepatitis delta is a viral disease. It's caused by a small virus hepatitis delta. And it's all really for this disease about inhibiting viral replication. That's really key to improving clinical -- so a most stringent measure of suppression of viral replication is what we call HBV target not detected, which means that you can no longer amplify the virus -- PCR amplify the virus from the patient's blood. So here, you see time points, 72 weeks and 96 weeks new data of our combination regimen where you can see that at 96 weeks, we achieved 88% of the patient's target not detected. So that is really unprecedented. And you see that for the monotherapy with an antibody alone, we achieved around 46%. So it really shows that a two-pronged approach of using a monoclonal antibody combined with an siRNA and really attacking the virus from 2 different directions allows you to reach these incredible antiviral efficacy results. Another important measure to look at is HBs antigen levels. So the delta virus is actually a defective virus, and it depends on the hepatitis B virus surface antigen to replicate. And so lowering this antigen is critical to controlling the delta virus. That's why our combination therapy results are actually so impressive. As you can see here, about 90% of the patients on the combination regimen reached very low levels of HBV surface antigen that were less than 10 IUs per ml very quickly actually already after 24 weeks of treatment and stay really at that level over up until 96 weeks of treatment. You can see that the same is not true for an antibody monotherapy treatment. There, you can only reach about 20% of the patients that get this deep reduction of HBs antigen levels. And this is a really important consideration, again, for potentially in the future finite therapy and improvements in long-term clinical outcomes for patients. So in summary, as you can see, the SOLSTIS results to date are extremely promising. They demonstrated that the monthly tobevibart plus electron combo could represent the best-in-class therapy for hepatitis delta. We're seeing clear and very substantial improvements in the combination therapy arm over time versus treatment with an antibody monotherapy alone. And in addition to the very high rates of delta RNA target not detected and reductions in serum HBV that I discussed, the combination therapy also demonstrated similar ALT normalization levels between cohorts at 48 weeks versus 17 weeks and all the way through 96 weeks. Now the combination of tobevibart and elebsiran also continues to be very well tolerated with no grade 3 or higher treatment-related adverse events and treatment-related adverse events in general were very mild, moderate and transient. So we plan to submit the full 96-week data set at a future medical meeting. Now turning our attention to our registrational program. Patient enrollment has been very strong. We have actually completed enrollment already for ECLIPSE-1 and ECLIPSE-3, which sort of speaks to the real need for new treatments in this space. And we anticipate initial top line data already in the fourth quarter of this year with additional top line data for ECLIPSE-2 and ECLIPSE-3 in the first quarter of 2027. We are also in discussions with the regulators to see if there's a potential faster path to market. And again, the results for our combination therapy that we have shown to date will be very helpful in that regard. Importantly also is that we have begun to unlock the value of our hepatitis delta program through a commercial license agreement with Norgine that we announced last month. Norgine is a top specialty pharmaceutical company in Europe. The transaction included an upfront of EUR 550 million in milestone payments. And as you can see here, healthy royalties on sales. Norgine is also covering about 1/4 of our ECLIPSE program costs going forward. Importantly, we've retained all commercialization rights for the regimen in the U.S. and other markets outside of the Greater China territory, which we see as a big area of future growth. And this collaboration should really help us to roll out tobevibart and elebsiran faster in Europe, Australia and New Zealand. And we believe Norgine is actually the perfect partner to help us reach more patients faster in these territories. Norgine has a lot of experience in the hepatology space, also a lot of experience in the rare disease space. So they were really an excellent strategic fit for this regimen. Now switching gears, let us turn our focus to our second strategic pillar and a unique portfolio of our T-cell engagers for cancer immunotherapy, where despite recent advances, there are many solid tumor indications where patients are vastly underserved and clinical outcomes do remain poor. We have an opportunity, we believe, with our platform and our assets to become a leader in cancer immunotherapy. Very briefly about T-cell engagers in general. So you probably know T-cell engagers are a very powerful modality, and they basically turn the body's own T-cells into cancer fighters, and they've already shown major promise. There's 10 T-cell engagers already in the market, mostly for blood cancers. And while this modality holds tremendous potential, the broad applicability really in solid tumors has been held back by toxicity and especially the appearance of cytokine release syndrome and off-tumor activation in healthy tissue. So our universal PRO-XTEN masking platform really addresses those shortcomings. It enables T-cell engagers to act as Trojan horses by shielding them and in effect, keeping them inactive while they are circulating in the patient's blood or they are in the patient's healthy tissue until they reach the tumor microenvironment. And the PRO X1 platform has been clinically validated via its use in an FDA-approved blockbuster drug, Altuviiio for the treatment of hemophilia A. So we use a universal -- we use the same universal masks and CD3 binding domain across all of our programs. So if you look at our clinical programs, you look at our preclinical programs, this is really a plug-and-play platform, and we have observed the same high level of protection across all our programs. So this provides us confidence that the expanded therapeutics that we are aiming for and what we see with masking translates really from one program to another. This is really about a platform technology that we really can very broadly and that can be translated across programs. With the PRO-XTEN platform, our T-cell engagers are designed to maximize the therapeutic index by reducing dose-limiting toxicity and extending the drug half-life. Very briefly about our platform. So the power of the Pro-XTEN platform really lies in the dual masking approach that binds the tumor on the one side and the T cell on the other side as depicted here in blue on the one hand and orange on the other. And this spaghetti-like shields that you see here serve as a steric hindrance and is made up of large hydrophilic polypeptides that elegantly mask the T-cell engagers. And again, they are shielding both the CD3 binding domain as the tumor-associated antigen binding domain and they only get cleaved off, the mas only get cleaved off once the masked T-cell engager reaches the tumor microenvironment. This is really the key differentiating factor. If you think about an unmasked T-cell engager, a single mask T-cell engager, this really allows again to have our T-cell engagers be very safe in the patient's blood in healthy tissues, but really only exerts its tumor killing effect in the tumor microenvironment. Now switching to our programs. We have 3 programs that are using this platform in Phase I, and we have been working very rapidly to advance these. VR-5500 on the left side is the only dual masked PSMA-targeted T-cell engager in development. VIR-5500 is currently being evaluated in a Phase I study as both a monotherapy and in combination with androgen receptor pathway inhibitors in patients with metastatic castration-resistant prostate cancer. VR-5500 has demonstrated very favorable efficacy and favorable safety profile. We shared initial data at the onset of last year, and we showed low rates and low grades of cytokine release syndrome, even in the absence of prophylactic steroids. So the next steps in this program are to continue Q3 week monotherapy, dose escalation in mCRPC and also in first-line taxane naive mCRPC combination with XTANDI. So those trials are actively ongoing. Our second target here in the middle is VIR-5818. It's the only masked HER2-targeted T-cell engager in development. It's being evaluated again as a monotherapy, but also in combination with KEYTRUDA in patients with advanced solid tumors. Earlier last year, we demonstrated with 5881, a 33% response and 100% biomarker response in Phase I dose escalation in metastatic colorectal cancer. And we've also observed at the time and shared with you 50% tumor shrinkage sort of across the board of a basket of HER2 tumors. These early signals of efficacy were accompanied by a very safety -- a very favorable safety profile, and we are continuing dose escalation in combination with KEYTRUDA, and we'll be evaluating next steps for dose expansion with this program. And then finally, our third target, VIR-5525. It's a PRO-XTEN masked EGFR targeted T-cell engager. This has really the potential, as mentioned earlier, to unlock multiple high-value indications like non-small cell lung, head and neck and colorectal cancers. Phase I dose escalation study evaluating 5525 started in July of last year for monotherapy, and we're also now studying it in combination with KEYTRUDA, which kicked off in the third quarter of 2025. Very briefly, again, about FIR-5500. So we -- last year, we presented the initial data, the initial Phase I data showing, as mentioned, promising early signs of efficacy as well as safety. And the Phase I trial is looking at mCRPC patients who have exhausted really all other lines of therapies. These are very severe patients. The images you see here on the right represent one case study that we shared with you before of a patient with a very high burden of disease, where a whole body MRI and PSMA PET scan showed very widespread and homogeneous changes indicating tumor cell death, exactly what we would like to see with our mechanism. And you saw this already by week 9. So that patient reported significant improvements in pain symptoms, and we saw rapid PSA declines, highlighting deep biochemical and physical responses to VIR-5500. In the broader data set at that time, we had 12 patients and all patients in the Phase I study experienced a measurable PSA decline, and we saw for all of them a very favorable safety profile. These were early data, but they were very promising and especially for the heavily pretreated patients, as I mentioned, being evaluated in our trials. These were all still very low doses at the time. So the favorable CRS profile that we saw at that time really reflected very well our intent of our dual masking platform. Looking ahead, though, we will provide updated data from VIR-5500 at the upcoming ASCO GU here in San Francisco in February. And for the upcoming VIR-5500 update, we plan to present a really substantive data set on our monotherapy dose escalation trial. So we will be sharing with you both weekly and Q3 weekly dosing in late-line monotherapy dose escalation. We will be sharing all our detailed safety data, including CRS, the treatment-related adverse events. When we shared the data initially at the beginning of last year, we were very -- we were still very early on, and we couldn't really show you dose response relationship. We will now be sharing much more information related to that. We will be sharing RECIST evaluations were evaluable and potential confirmations of RECIST over time. We will be sharing PSA responses with you, PSA 50, PSA 90s, longitudinal views of the PSA responses. So our data set in February is promising to be a very complete data set. We will also be discussing with you next steps for the program. related to dose selection and planning for expansion cohorts in late-line mCRPC. Now switching to our third strategic pillar, diving a little deeper there. Vir Bio's discovery engine is truly exceptional. We have really combined antibody -- the ability to come up with unique antibody therapeutics and protein engineering with our PRO Xtend masking technology. And we really believe that sets us apart to build a very promising pipeline going forward. So our discovery pipeline is really fueling the next generation of powerful medicines that we hope to bring to patients. So one, we have, as I mentioned, what we believe is world-class protein engineering capability, and that has been shown by -- we have 2 therapeutics that were discovered by scientists at Vir Bio that have gone all the way to market, Ebenga addressing Ebola infection and vud addressing COVID infection. And that capability for protein engineering has now become extremely handy as we are coming up with new T-cell engagers. Secondly, we have an antibody -- an AI engine that we are using for antibody and T-cell engager optimization. And I have been really impressed by how quickly that leads us to new starting points for antibody and T-cell engager therapeutics. And then thirdly, we have, as I mentioned, our Pro X10 universal plug-and-play masking technology, which allows us to really go very, very quickly because we do not need to redesign the masking -- the mask for each molecule. We can really use exact same PRO X10 mask across all our preclinical programs. We are also building on our learnings and our legacy in infectious disease to deliver the next generation of cancer immunotherapies. And again, the focus really is delivering superior therapeutic indices. It's these distinct capabilities altogether that have enabled us to develop a very powerful pipeline. As you can see here, it's a very differentiated pipeline. We believe our programs, both in infectious disease and in oncology will have a substantive impact on patients, and we have a pipeline that can deliver both in the near term with delta and also in the mid- to long term with our T-cell engager portfolio. In addition to the clinical programs that we have been discussing, we also have a burgeoning pipeline of 7 preclinical mass T-cell engagers. And these are across a range of solid tumors across lung, colorectal and bladder. And we have opted there to really look for targets that are biologically derisked, but again, where T-cell engagers have not really been able to reach its potential because of potential toxicity and where our masking technology can really offer that clear differentiation. These are our upcoming key milestones for this year and next year. So for hepatitis delta, we're well on track to report top line data, initial top line data for all 3 Phase III ECLIPSE studies starting in the fourth quarter of this year and then continuing in the first quarter of 2027. We will work, as I mentioned in the beginning, with regulators to rapidly file for marketing authorization with the goal of being prepared for commercial launch in the U.S. as soon as possible. For VR-5500, we look forward to reporting our Phase I data this quarter in February. For VIR-5518, we anticipate that we already have our full monotherapy data set, and we are still dose escalating in our combination with pembro. So we estimate that we will have the full data set ready in the second half of this year. And for VIR-5525, we will provide information once we are a little bit further along in our dose escalation. So entering 2026, we are at a very important point for Vir Biotechnologies maturation as we execute on the vision and execute on our clinical stage pipeline. Our hepatitis delta program, we really believe, is on a path to change the course of this debilitating disease and represent a significant revenue opportunity for us that we have started to begin to capitalize on through our ex-U.S. partnering strategy. And our pipeline of 3 clinical stage masked T-cell engager will offer value creation opportunities for the company as the data matures. Also, as mentioned, we believe that our Vir Bio drug discovery engine offers a lot of value -- a lot of potential for future value creation. We have worked also really hard to extend our cash runway. So we have now a cash runway into the fourth quarter of 2026 -- '27, and that is through both doing a strategic collaboration with Norgine, but also through disciplined resource deployment. We expect that this runway until, again, the fourth quarter of 2027 will see us through major clinical inflection points, including preparation for the commercial launch of our hepatitis delta program. So by rapidly advancing on all of these priorities, we are developing opportunities to really transform clinical outcomes for patients and creating significant value for all of our stakeholders. Thank you very much, and I'm really looking forward to doing the Q&A, answering any questions you might have. Thank you.

Great. Thanks very much. We will open the floor to questions.

So on the [indiscernible] stage, I have 2 question, the first is, which is the PSA reading [indiscernible] and then the second question if you want me to do it, [indiscernible] And then do you guys have a ...

Right. So first question was related to what do we think matters most PSA 50s vs PSA 90s? We're still learning a lot in the T-cell engager space. There's certainly some trend to seeing that PSA 90 is better correlate with durability over time, but time will tell. Also, obviously, PSA responses are not recognized as a regulatory endpoint as a reason for that, right? So if it was a perfect sort of biomarker, that would be the case. So I think we're still learning a lot, but obviously, it's a very easy to measure biomarker, and it does tell you a lot. And in combination with all the other things you're measuring, you're looking at RECIST, et cetera, it gives you a good perspective on whether you have a drug or not. Your second question was related to whether we are using prophylactic steroids. Is that correct?

Or managing CRS...

Or managing, right. Yes. So I can only speak to the to where we were when we last presented data at that moment in time, we did not use any prophylactic steroids, not any prophylactic IL-6. There was an opportunity for physicians when they saw CRS to potentially manage it in the way that they saw fit, but it wasn't really part of our protocol.

So as your mask engager data coming out, are you seeing any hint of immunogenicity there?

Sorry, could you repeat that question?

Are you seeing any hint of immunogenicity on your -- the mask engager as the Phase I data started coming...

Yes, I cannot really comment on the data that we will be sharing. So I can only refer to the data that we shared before where you could see that the CRS profile was very, very manageable. And also, we didn't see any elevations of immunomarkers.

I was asking immunogenicity, not CRS.

Okay. Yes, we haven't really -- we don't really have that data yet.

Maria, nice to meet you here. I want to know does Vir has other investment of BV planning in the HBV function cure here at current stage?

So we have a very full plate, as you can see from our clinical pipeline. So we are not looking to bring in any additional opportunities in hepatitis B. So we are really focused on our -- obviously, our registrational program for delta, getting that to patients as quickly as possible and then progressing our immuno-oncology portfolio.

As Vir continues to progress its programs from clinical to full deployment, what has been more challenging to scale than you initially thought, the science, the manufacturing capability or the partnerships that are necessary to sort of have an impact at a population level?

Yes. So I must say that we had expected that bringing together the capabilities that were already at Vir in, again, coming up with really unique T-cell engagers, antibody therapeutics and masking would be synergistic. I must say I've been pleasantly surprised how fast that has integrated and how quickly we are actually building a pipeline of preclinical assets. So there, actually, the whole point is that we cannot progress. We can create a lot of value from our platform, but we cannot progress those on our own because we really have to focus our cash on our late-stage programs. So there, we're really looking to partner. That is going to be very important. Certainly, scaling and manufacturing is always a topic. And luckily, we have inherited clinical stage assets that -- and we have not just inherited the assets, but also the people that have been with the assets from the onset and have deep CMC and manufacturing expertise related to it. So that has been -- when we took over these assets from Sanofi, we brought over about 50 people. And I don't think the scaling and the speed would have been possible if we hadn't done that. So we have the people who know the platform. We have the people who have been with the assets in the clinic from the beginning. We have the people who have the deep CMC and manufacturing capability. And so that has really helped. But certainly, there has been a lot of focus on the manufacturing piece because, again, once we have success, there's going to be a significant need to scale.

Some competitors have put out what I think the market would call disappointing data in the past. What do you think are the key shortcomings that are addressed by 5500 relative to what we've seen with some of the other TCs, [ NAC ] TCs specifically?

Yes. So what is really unique about VIR-5500 and again, any asset that we would have that is using our Pro-XTEN platform is that it's dual masked. And so we believe that the dual masking really allows us to reach a better therapeutic index. So better efficacy associated with more acceptable safety. That's really the whole aim of our platform. And we believe that, again, non-masked T-cell engagers such as the KLK2 shows great safety with high levels of steroids, but not so great efficacy data perhaps. And then you have unmasked T-cell engagers such as the [ STEEP ] where you see maybe great efficacy data, but associated with quite a bit of toxicity. So we really believe there's an opportunity to come up with a T-cell engager for prostate cancer where you can have a most optimized therapeutic index.

I have a follow-up question to that, if that's okay. Where do you think VIR-5500 could best fit into the mCRPC treatment paradigm?

Yes. Of course, everything will be data-driven, but we are, of course, investigating it in late-line metastatic mCRPC. We are also investigating it in combination with enzalutamide first line in taxane-naive patients. And as I mentioned earlier, our Phase I also allows us to potentially explore the asset in hormone-sensitive prostate cancer patients. So we really don't want to sort of pigeonhole us in any given area at this moment in time. It will be guided by the data. And we also realize that the speed is of the essence actually in this space.

In February, most of the patients have already -- In the updated data in February, will most of the patients already have seen a taxane? Or will you have any taxane naive patients?

Yes. So our monotherapy trial in late-line patients, again, these are very heavily pretreated patients. They have mostly exhausted all prior lines of therapy. So most of them have seen -- most of all have seen taxanes.

Great. Well, thank you so much again, Marianne.

My pleasure. Thank you.

Thanks, everyone, for joining.