Vir Biotechnology, Inc. ($VIR)

Thanks for joining the session with Vir Biotechnology. My name is Alec Stranahan. I cover SMID-cap biotech at Bank of America, and I'm the covering analyst for Vir. And it's my pleasure to introduce Marianne De Backer, Chief Executive Officer of Vir. Marianne, thanks for being here.

Yes, my pleasure. Thank you.

Looking forward to the discussion. I guess just jumping right into it, you've effectively built a 2-engine value story for Vir. You've got the near-term potential from HDV, which we can talk about and the longer-term oncology platform using the PRO-XTEN technology. I guess when you look at how the market is valuing the company today, where do you see the biggest opportunity for re-rating? Is it on HDV approval and launch? Is it on the VIR-5500 progress to registrational studies? Or is it maybe the broader platform as the TCE data matures?

Sure. Yes. Thank you. And thank you, Alec, for hosting us and Bank of America for hosting Vir Biotechnology. So we are very fortunate that at Vir Biotechnology, we have multiple pathways to value creation, as you point out. Obviously, our most advanced program is our delta program, already in registrational trial, initial data are going to read out starting fourth quarter of this year. So obviously, that's an important route to value creation near term. And then as you mentioned, we have a portfolio of 3 clinical assets, 3 clinical masked T-cell engagers. And just in February, we read out quite promising data for our prostate cancer program. So again, huge opportunity potentially. T-cell engagers have in the solid tumor space been very challenging, faced with a lot of toxicity. And we believe that with our PRO-XTEN platform, we can really address that and come up with T cell engagers that have a unique therapeutic index. And then thirdly, to your point, we have the platform. And we really think that the PRO-XTEN platform is like an IND machine. And so we have started 7 preclinical programs. Of course, we will not keep them all wholly owned. We are going to partner some of them. But again, that's going to be an important path to the future and more mid- and long-term value creation for the company.

Great. And obviously, we can get into the partnerships that you've already struck for VR-5500. But maybe just before we get there, in terms of capital allocation and prioritization within the pipeline, your cash runway is pretty extensive after the recent raise. I guess, how are you balancing the Phase III ECLIPSE trials, of which you've got three ongoing and the commercial build-out in HDV with maybe the dose expansion and the combination studies across the oncology TCE portfolio?

Sure. So at the end of the first quarter, we had $809 million. And because we entered into a partnership with Astellas, we will have about $315 million coming in. So one important aspect of the funding for the VIR-5500 program is that due to the partnership with Astellas, Astellas will be taking on 60% of the clinical development costs going forward. And that is very important because we really want to fully explore the potential of that asset, and we are doing a number of trials in parallel. And obviously, that's going to be quite funding intensive. On the other hand, again, our delta trial is in registrational phase. So that is really taking up the bulk of our investment at this moment in time. But you can sort of expect that over time, there will be a shift from investment into our delta program to floating more of that investment into our oncology portfolio.

Okay. Great. Well, maybe we can start with VIR-5500. You recently had an update at ASCO GU, which showed very good efficacy. I think 82% PSA 50, 53% PSA 90, 45% ORR at the go-forward dose. As you move into the expansion cohorts, I guess, which of these metrics, either the depth of the PSA response, the ORR by RECIST or durability or maybe a combination of these sort of stand out and give you the most confidence in moving these to Phase III study?

Yes. So as mentioned, the real crux of being able to come up with a best-in-class T cell engager for solid tumors is to get to a very favorable therapeutic index. If you look at a lot of T cell engagers, again, in that space, you can get to reasonable efficacy, but it's combined with pretty problematic toxicity. So it's really not just looking at efficacy, but it's the combination of efficacy and safety. The data that we showed in February were, of course, quite compelling to your point, very promising PSA data, and it was perfectly concordant with RECIST data with PSMA-PET evaluations -- with RECIST evaluations. So efficacy, very nice dose response, nice concordant data, but more importantly, it was combined with a very, very nice safety profile. So predominantly say only Grade 1 CRS. And that is really what we would want to see. The expansion cohort has actually already started for late-line mCRPC. We have selected our dose. And the idea there will be at one dose level to explore, obviously, a broader set of patients and then also explore a little bit more than we have done up to now what it looks like in pre-radioligand therapy and post-radioligand therapy patients.

I see. And I guess when you think about the durability of response, I think we have a few case studies that could speak to the long sort of deep response that's possible with 5500. What are these responses and the durability sort of suggests about the mechanism? And any initial thoughts on sort of PFS and what you want to see there?

Yes. So on the durability side, we had a number of case studies, as you pointed out, we had a patient that had been 8 months on study. We had a patient that had been a year on study. And then we had a number of patients where we had RECIST responses that confirmed post 27 weeks. So those were sort of the initial signs of durability. But the data set was still pretty much immature at the time of sharing it back in February. We will, in our expansion cohort and of course, in our existing cohort continue to look at durability. From our perspective, there's no reason why you wouldn't see durability. There's a number of other T-cell engagers in the prostate cancer space, STEAP1, KLK2 that have shown durability. So there's really no reason why PSMA-targeted T-cell engager would not show durability. And again, we have these early very promising signs. The other thing I would say is that given our technology, our masking technology, which is the same across all our clinical assets in our HER2 program where we use the same masking technology, we had a patient that we showed data on last year that also had been 18 months of treatment. So we also see that the masking technology across different targets actually allows us to get results and also allows us to show durability. Again, this is still sort of case specific. But as the data mature, we hope to show more. And as to your question on rPFS, again, our data sets in February was a bit early. But in our expansion cohort, it's, of course, absolutely the intent to look at our rPFS and share the data when available.

Okay. Great. And I guess when we think about the patients that respond well or respond less well, I think you had 2 early progressors with PSMA-negative lesions. I guess as you plan combinations with enzalutamide and explore earlier lines of therapy where PSMA expression may be more variable or could maybe be suppressed after Pluvicto, although I'm not sure that's well studied. But how are you thinking about prospectively monitoring antigen loss in your pivotal programs just to make sure that patients are expressing the target?

Yes, you're absolutely right. I mean you have obviously heterogeneity on PSA levels between patients. And then you have actually different levels of PSMA expression depending on which tumor within the patient. So you have intratumor variability. So it is something that we pay a lot of attention to. And our translational biomarker study using PSMA-PET is really looking to look at pretreatment, post-treatment and then again, across patients and intra-patient at potential variations in PSMA levels. I wanted to say, though, that in our earlier data set from February, we had about 7 patients that had been having PSMA radioligand therapy. And unfortunately, there was only one patient that was already at efficacious dose for which we had the data, but that patient showed incredible responses, PSA99s, very clear T cell infiltration in the lymph nodes. You could see on PSMA PET completely the lesions clearing up after 9 weeks. So it's not the case that if you have a PSMA directed therapy that it isn't possible anymore to use our T cell engager after that. And again, this is something that in our expansion cohort, late line monotherapy, we're going to explore a bit further.

Right. And you're obviously testing post-Pluvicto and also pre-Pluvicto, so?

Correct. Yes. And not just Pluvicto, also other actinium, et cetera, radioligand therapy.

Okay. And you alluded to this, but the CRS profiles look very good. I think 50% of patients were entirely grade 1 to 2 largely early cycle with no need for prophylaxis really. How much of this differentiated CRS profile would you attribute to the dual masked versus maybe patient population or dosing schedule?

Yes. We really believe that it is our masking technology that makes all of the difference. So our masking technology is basically this hydrophilic protein structure that we form around the T cell engager. And we mask both the CD3 binding domain and also the tumor-associated binding domain, so the PSMA binding domain. So the dual masking obviously is important, but the masking technology is really crucial because what the masking allows us to do is really -- again, the whole idea is that through creating this mask around the T cell engager, you can dose the patient. The mask T-cell engager gets a longer half-life in the case of VIR-5500, 8 to 10 days. It can safely sort of transport into the bloodstream of the patient. It can get to healthy tissues and nothing happens. But when it enters the tumor microenvironment, then the protease cleavable linkers are going to be cleaved -- being cleaved by proteases in the tumor that -- where they are dysregulated, the mask fall off and then the T-cell engager can exert its effect. And when the masks are removed, the half-life is really reduced to only a couple of hours. So that mechanism is really allowing us to dose up quite high, so you get a good efficacy and that you can combine with, again, a really differentiated safety profile because it's really protected outside of the tumor.

And I guess when you think about moving to earlier line patients, is there any reason to think that the CRS profile might be better or worse? Just thinking about tumor debulking sort of the cytokine release itself, how much pent-up cytokine is within the tumors? Any sort of biologic rationale for why a frontline or an earlier line patient might have better or worse CRS?

Yes. So we see in a very refractory patient population already really good results. And I just want to remind you that the patient set for VIR-5500, almost half of the patients had visceral metastasis. 1 in 5 had liver metastasis. So really patients with very bad prognosis. And in that data set, we showed really good efficacy. But what KOLs believe is that if you go to earlier lines, you even might have the possibility to see better efficacy because, obviously, there is a possibility that you have a healthier T cell repository there. And of course, for T cell engagers to be effective, you need good CD8 positive T cells. So we don't have that data yet, but it could be that it actually is going to be looking even more promising.

Okay. And maybe one more question, circling back on a point that you mentioned about the dual mask and the cleavage in the tumor. I think you showed 93% of patients had unmasked drug concentrations that were essentially undetectable in circulation. When you look at patients that have distant metastases, does the cleavage profile change at all across different tumor microenvironments? And I guess, how does that data sort of shape your confidence on expanding into broader, more heterogeneous population?

Yes. So first of all, we have designed our protease cleavable linker such that there is a level of promiscuity. So there's different protease families that can cleave the linker. And it is based on, of course, decades of understanding what proteases are upregulated in tumors. What we know now, and of course, we are learning as we go, but what we know now is that, obviously, we get effective cleavage in the prostate. We see that we get effective cleavage in the metastatic sites, you have seen evidence of that in the lung, in the lymph nodes, in the liver. So we have a lot of examples now. And also with our HER2 program, we have shown that we saw some effects in metastatic colorectal cancer, in the breast cancer patient. So I think this shows you that it's actually a very versatile platform and that the unmasking actually really does happen across a broad tumor -- set of tumor types.

Okay. Great. And I guess in terms of the dose optimization and sort of your strategy going into the pivotal, what does the expansion cohort data set really need to show to justify a particular go-forward dose? And I guess, given the 8- to 10-day half-life of the mask molecule, are you exploring maybe step-up dosing or other approaches to further flatten the CRS curve?

Yes. So we have selected a go-forward dose for our late-line monotherapy cohort. So we have selected indeed a step-up dosing of 800, 2,000, 3,500. So the way it works is that patients get dosed at 800 micrograms per kilogram, a week later at 2,000 micrograms per kilogram, then a week later at 3,500 micrograms per kilogram. And then actually, the therapy starts with every 3 weeks, 3,500 micrograms per kilogram. So that is the go-forward dose we have selected for monotherapy. We haven't shared yet the data around the go-forward dose for the combination cohorts. Those cohorts haven't been started up yet, but we will share that data as it becomes available. And we will also be doing some further optimization to satisfy Project Optimus.

Okay. Okay. Great. And maybe looking beyond 5500, obviously, having the Astellas collaboration kind of in your pocket for when you're releasing the data was a stroke of confidence, obviously, for the program. Does the Astellas collaboration kind of represent the ideal partnership archetype for other TCEs such as 5818 or 5525? Or will the partnership maybe vary depending on the tumor type or the stage of derisking in the clinic?

Yes. Whether we keep a program wholly owned or whether we partner and how we partner really depends on the program. And it depends on, okay, what is the unmet need, what other competitive regimens are there already there? How can we really come up with a differentiated offering, what would it take development-wise and what would it cost to get there? So there's a lot of considerations, I would say. So we will really be looking and we are strategically looking at each program, what might be optimal for the program. For VIR-5500, we think that the deal with Astellas is really optimal because it's a co-development, co-commercialization deal. We retained 50% of the profit in the U.S. This year, as I mentioned, 60% of the development cost going forward. And it allows us to really go faster and grow the pie bigger, faster. So we can now do late line, early line mCRPC and HSPC in parallel much faster than we would have been able to do on our own.

Okay. And I guess when you think about advancing new TCE assets forward in preclinical development and into the clinic, how do you sort of navigate the target -- potential target space? Obviously, it's a very flexible platform. There's a lot of ways you could take it. But do you have a preference to going after well-known targets or in like kind of well-studied indications? Or are you looking for going after something a little bit more novel?

Yes. I mean what we really want is to find an application for our technology that offers something that is really differentiating. And what we can really differentiate on is getting to T cell engagers with a broad therapeutic index, so much safer than any T cell engager that is unmasked or single masked or masked with a different technology. So what we have been looking at is largely targets where there is a clear biological rationale. So they are not novel, they're not unproven. There's some gradation in biological validation, but there is generally biological validation. But we're just given the targets, it has been difficult to come up with safe molecules. And again, that's where we really can make a difference.

Okay. And maybe on that last point, EGFR has been a difficult space to develop any sort of TCE against masked or unmasked. I guess does your view on partnering or portfolio prioritization change at all following the discontinuation of a competitor's EGFR TCE program?

Not really. So EGFR is certainly a more difficult target. So if you compare it to PSMA, for example, PSMA is, of course, expressed in prostate. It's also expressed in some other tissues, but it's relatively limited. If you look at an EGFR, of course, it's expressed in a lot of tumors, but it's also expressed in a lot of healthy tissues. So the bar for any masking technology is very, very high. We do believe that we have a very unique masking technology, and we are now putting it to the test in our clinical trials. So -- but yes, we will be continuing our monotherapy and the combination therapy. And then as soon as we have some meaningful data set, we will be sharing it with the public.

Okay. Okay. Great. I want to shift gears now to HDV. This is kind of the other arm of the pipeline. And the focus from investors from my conversations tends to shift back and forth between this and your TCE portfolio. So I do want to give it the time that it deserves. Maybe we can just start on the competitive landscape here. I guess, how do you view the broader competitive landscape? How did bulevirtide or I guess, the recent data from Mirum from the AZURE-1 data, particularly on, I guess, target not detected. How does this sort of shift your thinking around your program and execution or market expectations?

Yes. So obviously, because hepatitis delta is a viral disease, what you really want to get undetectable...

Let me shift gears now.

Really shifting gears -- so you're really trying to get to undetectable and undetectable virus. And the way that undetectable virus is measured is through target not detect, TND. So what we know now is Gilead is one of our competitors in the space. They are going to launch with a daily administration regimen probably very soon. And they get to target not detected rates of around 12% to 20% of 48 weeks. Then Mirum recently shared their data with their monthly regimen. They had a target not detected rates of 5%. And to just give you a comparison, we also have a monthly regimen and our target not detected rate at the same time point is 41% and it goes to 66% at 48 weeks and actually to 88% at 96 weeks. So I think from a monthly regimen perspective, we're by far efficacy. Mirum has a weekly regimen that has shown about 30% TND at 24 weeks. And again, that compares to 41% for us. Also on ALT normalization, which is a very aspecific marker, but nevertheless, we see now that competitors are getting normalizations between 40%, 45%. We had [ last week ] of 56%. So I think that we really are seeing the potential for our regimen to be best in class market....

That's great. And maybe the next question sort of around positioning versus -- that was nice. That was a lovely backdrop for that response. I guess just as we think about bulevirtide in the real world, obviously, this is approved in different geographies. We're thinking maybe it will expand. I guess as the efficacy and convenience contrast becomes clear for your asset versus bulevirtide, I guess, how do you expect prescribing to evolve? Will switching underresponders be common? Or is your primary launch opportunity to sort of bulevirtide in patients?

Yes. So the way that we have designed our trials is we have -- we can show actually how our regimen is doing in bulevirtide-naive patients. And we have our ECLIPSE-1 trial, which is comparing to a deferred treatment. So it's basically an almost placebo-controlled trial. And then we have ECLIPSE-2, where we look at patients that have been on bulevirtide but have not been adequately virologically controlled and that are switched to our regimen. And then we have a third trial where we compare head-to-head our regimen with bulevirtide. So we will really be equipped by the time that we get to market to obviously be prescribed for naive patients, treatment-naive patients, but also to really capture those patients that come off bulevirtide. Again, bulevirtide is a daily injection. Patients need to inject themselves daily. And as I mentioned, they get to about 12% to 20% undetectable after 48 weeks. With our regimen, it's monthly, so monthly 2 injections, and we get to 66% undetectable after 48 weeks. It also allows us with a monthly administration to have both at-home administration, so patients can dose themselves every month at home. But for those patients who prefer or unable to inject themselves, they can also have in office or in the hospitalization on a monthly basis. So it's really a very conveniently -- very convenient regimen in that regard that leaves up -- leaves open the option for at home or in office.

Okay. And I guess for those maybe less familiar with HDV, it is a fairly underserved patient group and maybe even underdiagnosed to a certain extent. I guess with Gilead likely to launch bulevirtide in the U.S. How does this -- we talked about the competitive differentiation. I think that will be proven out with ECLIPSE. But how does Gilead sort of building out the initial market kind of benefit you guys once ECLIPSE does read out and you're thinking about the launch next year?

Yes. So first of all, this is great for patients. The disease awareness is going to significantly increase is our estimation. Also, we believe that diagnosis rates will go up once -- at this moment in time, even though it's very easy to diagnose hepatitis delta, it's not happening. There's only 10% to 15% of the patients that are getting diagnosed. And the reason why it's not happening is because there's really nothing available in the U.S. to treat patients. So we believe that once a treatment is on the market, there will be an impetus to test patients. Again, testing is not difficult. There will be a possibility to do reflex testing. I think the patient journey and treatment pathways will become much clearer. So we think that Gilead launching ahead of us is actually very beneficial, again, for patients and also for us who are then coming with a regimen that is much more convenient and with a much more efficacious profile.

Okay. And obviously, you'll have ECLIPSE-3, which is the head-to-head versus bulevirtide. I think the top line from that is expected in 1Q of next year. You've said in the past that this is probably not required for an NDA. But I guess how critical do you expect this data set will be in sort of your payer conversations? And is there a risk that a strong head-to-head data becomes table stakes rather than upside?

Yes. I mean it's something that you just need to have, right? You need to be able to show what your value proposition is compared to what might be standard of care at that time. So we will have that. And again, given the Phase II data that we have and what we know about bulevirtide, it will not be very difficult to show that added value. But we think it's a very important study to do, and it will be even more important, we believe, in Europe, for example, as a region for pricing and reimbursement negotiations.

Okay. And you mentioned the cash position. It sounds like it's scaling even up to $1 billion currently. How do you see investments in the commercial build-out in HDV? What does that process look like? When do you start that process? And what does it leave for investing in TCE and other parts of the company?

Yes. So we have guided to a cash runway until the second half of [ 2028 ]. We have now a small commercial group. We have a number of medical science liaisons that have already been out for quite some time since last year that have been involved in the studies and are involved in insights generation. So we are really building this up very gradually. What is important is that Delta is a rare disease. It's an orphan disease. It's -- the patients are geographically quite concentrated in certain metropolitan areas. So it's not like you need this broad swath of sales or MSL people to put -- you have to take a very surgical approach. And that's exactly what we are preparing for.

Okay. A lot of exciting things happening at the company, especially over the next 12 months. So I really want to thank you, Marianne, for the great conversation. Looking forward to the updates. And thanks for bearing with us through the technical difficulties. More than that disruptive, hopefully. And thanks, everyone, for your attention. Thank you.

Thanks. Thank you, Alec.