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

Thank you. Hello and welcome to VEER Biotechnology's second quarter 2026 financial results and corporate update conference call. As a reminder, this call is being recorded. At this time, all participants are in a listen-only mode. After the speaker's prepared remarks, there will be a question and answer session. I will now turn the call over to Kiki Patel, Head of Investor Relations. You may begin, Kiki.

Thank you, Operator, and welcome, everyone. Earlier today, we issued a press release reporting our second quarter 2026 financial results and corporate update. Before we begin, I would like to remind everyone that some of the statements we are making today are forward-looking statements under applicable securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause our clinical development programs, collaboration outcomes, future results, performance, or achievements to differ significantly from those expressed or implied in such forward-looking statements. Forward-looking statements include but are not limited to statements regarding the potential for new therapies to improve awareness, testing, and access to care for the chronic hepatitis delta community, the therapeutic and commercial potential of our CHD program, the therapeutic and commercial potential of VIR 5500, and the other clinical and preclinical assets in our oncology solid tumor program. as well as the ProX10 masking technology, our development plans and timelines, the potential benefits of our collaborations with other companies, including financial terms and milestone payments, and our cash runway and capital allocation priorities. These risks and uncertainties and risks associated with our business are described in the company's reports filed with the Securities and Exchange Commission, including our forms 10-K, 10-Q, and 8-K. Joining me on today's call from Vier Biotechnology are Dr. Marianne DeBacher, our Chief Executive Officer, and Brent Sabatini, our Interim Principal Financial Officer. The agenda for our call today is as follows. First, Mary Ann will provide an update on the meaningful progress we've achieved across our Hepatitis Delta program and outline how we're positioning the program for a successful regulatory submission. Next, she will provide an update on our dual-mass T-cell engager programs utilizing our best-in-class Pro X10 platform. Then Brent will provide a summary of our second quarter 2026 financial results. And finally, Marianne will close the call and will open the line for Q&A.

With that, I'll now turn the call over to Marianne. Thank you, Kiki. Good afternoon, everyone. And thank you for joining us for Vierbouw Technologies' second quarter 2026 earnings call. During the quarter, we continue to execute across our portfolio, demonstrating meaningful progress in both hepatitis delta and oncology, while further strengthening our regulatory and commercial readiness. In the second quarter, we presented compelling data for our hepatitis delta program on the complete a 26-week solstice trial at the ESL Congress in Barcelona. These data generated excitement from leading KOLs across the US and Europe, emphasizing the potential best-in-class profile of our hepatitis delta regimen. Against this backdrop, our focus remained on executing our registrational program. We are pleased to share that we completed enrollment in Eclipse 2 during the second quarter. With enrollment now complete across all three registrational ECLIPPS studies, we are entering a catalyst-rich period for hepatitis delta, with top-line data expected first from ECLIPPS 1 in the fourth quarter of this year, followed by readouts from ECLIPPS 2 and ECLIPPS 3 in the first quarter of 2026. In parallel, we are rapidly advancing our oncology pipeline and have entered the next phase of development for our ProX10 dual-masked PSMA-targeted T-cell engager VIR5500 in partnership with Astellas. We are accelerating our clinical development plan in prostate cancer. and have started enrolling patients into multiple expansion cohorts, both as monotherapy and combination therapy in parallel. We believe these efforts can inform future registrational development while positioning VIR5500 as a potential best-in-class therapy across the prostate cancer landscape. I'll begin with updates on our Hepatitis Delta program. Patients living with chronic hepatitis delta continue to face significant unmet need. Importantly, the recent approval of bulevertide marks a major milestone for the hepatitis delta field and serves as a meaningful tailwind for the entry of our regimen. We know from the European experience that the approval of the first hepatitis delta therapy led to a substantial increase in disease awareness, with testing and diagnosis rates reportedly increasing by as much as 5 to 10 fold in certain territories. That experience underscores how therapeutic innovation can catalyze activity across the entire care ecosystem. During independent investor events this quarter involving leading hepatitis delta KOLs from across the US and Europe, experts highlighted the updated AASLD guidelines addressing HDV screening and treatment are expected in the near term. They also emphasize the potential impact of double reflex testing, in which hepatitis B surface antigen positive patients automatically receive HDV antibody testing, and if antibody positive, reflex directly to HDV RNA testing without additional physician order. Taken together, we believe the availability of the first approved therapy in the US, expected updates to AASLD screening and treatment guidelines, and the implementation of double refrex testing have the potential to meaningfully accelerate disease awareness, expand patient identification and diagnosis, and improve the quality of care for patients with ASLD. establish treatment pathways for a disease that has historically been significantly underdiagnosed and undertreated. Against this evolving backdrop, we believe it is important to consider the ultimate goal of therapy. hepatitis delta as with other chronic viral diseases, the objective is not simply viral suppression, but viral clearance. In conjunction with our easel presentation, we conducted an advisory board with leading hepatitis delta experts from the US and Europe, and a clear theme emerged these discussions. Physicians consistently viewed undetectable virus as the most meaningful measure of disease control and the endpoint most predictive of favorable long-term outcomes, including lower rates of cirrhosis, of hepatocellular carcinoma, liver transplantation, and mortality. Several experts described target not detected, or TND, as the gold standard endpoint in hepatitis delta, with 1KOL emphasizing that the only good virus is a dead virus. Notably, our clinical data package continues to show progress toward this elevated treatment goal. At this year's EASL Congress, we presented complete week 96 results from our Phase II solstice study during an oral presentation. The data show robust rates of undetectable virus with Elapsiran and Tubavibard, reinforcing our confidence in the potential of our dual acting regimen. Overall, the results continue to show durable viral suppression, a favorable safety profile, and increasing rates of undetectable virus over time. By week 96, 88% of patients in the intention-to-treat analysis receiving Elapseron and Tobevibart achieved undetectable virus, compared with 53% of patients receiving Tobevibart monoclonal antibody therapy alone. The last observation carried forward analysis, 97% of patients receiving the combination achieved undetectable virus at week 96. This underscores the scientific rationale of combining two drugs with complementary mechanisms of action to inhibit both entry of HDV and production of hepatitis B surface antigen. HDV relies on circulating hepatitis B surface antigen to replicate and complete its life cycle. observed rapid and durable reductions in hepatitis B surface antigen with the combination regimen compared with tobevibart antibody monotherapy. By week 96, approximately 90% of patients receiving combination therapy achieved hepatitis B surface antigen levels below 10 IUs per ml, versus only 25% with antibody monotherapy alone. Importantly, the antiviral activity observed with the combination therapy was accompanied by an ALT normalization rate of 53%. These effects were observed in a study population in which approximately 50% of patients had cirrhosis as defined by Child Pew Class A, underscoring the activity of the regimen in patients with more advanced liver disease. ALT declines remained durable through week 96, further supporting the overall clinical activity of the regimen. Overall, the combination continues to be generally well tolerated. The most common treatment emergent adverse event was flu-like symptoms, which were mild to moderate in severity, transient and resolved after the first dose of treatment. There have been no treatment-related serious adverse event or discontinuations. Taken together, we believe the complete solstice dataset presented at EASL reinforces Elapseron and Tobevibar's best-in-class potential. As one leading hepatologist emphasized in a recent independent investor event, 88% target not detected at week 96 with the VIR combination is the best ever target not detected rate in 50 years of HDV treatment experience. It is something that must be acknowledged. Looking ahead, given how swiftly we have been able to enroll patients in our ECLIPPS trials, we can now file one of the most comprehensive clinical data packages in CHD, drawing on data from all three ECLIPPS studies. Collectively, Eclipse 1, 2 and 3 are designed to provide evidence across key patient populations, including treatment-naive patients, patients switching from Belavertide, and patients enrolled in a head-to-head comparison against Belavertide. We continue to maintain close engagement regulatory authorities in both the US and Europe, including a formal interaction with the FDA for a Type B CMC meeting in July. Together, we believe these interactions and breadth of evidence positions us well to support broad regulatory submissions globally. As I mentioned earlier, we have completed enrollment in Eclipse II, our Phase III study, evaluating elapserone and tobevibart in patients who have not achieved viral suppression with bulevertide therapy. The Belevertide Switch cohort is an important component of our overall data package because it is designed to provide information on outcomes in patients transitioning from the only approved therapy for CHD. This dataset is relevant given the boxed warning on the current Belavertide label regarding the risk of severe acute exacerbations of hepatitis D and hepatitis B following treatment discontinuation. To our knowledge, no competing CHD development program is expected to have comparable switch data at launch, which we believe represents a meaningful point of differentiation for the Eclipse program and could further strengthen our overall package. Beyond regulatory execution, we continue to advance our manufacturing and commercial readiness activities. Our commercial strategy is designed to support both at-home administration and healthcare provider administration, providing flexibility for both patients and physicians. Through our ongoing interactions with the FDA under Breakthrough Therapy designation, we are currently conducting human factor studies intended to support at-home administration, we believe could further enhance patient convenience and access. In addition, we are pursuing co-packaging of Elapseron and Tobevibard in the US to help streamline the treatment experience. We believe this could further differentiate the regimen and support adoption. As for manufacturing readiness, we are pleased to report that the drug substance process performance qualification, or PPQ, manufacturing activity is now complete for both Elapsiran and Tobevibart. Successfully completing drug substance manufacturing represents a major accomplishment for the program. Looking ahead, we are now progressing on the drug product PPQ batches as planned. Furthermore, following the license agreement with Norgene late last year, launch preparation activities are well underway across Europe, Australia and New Zealand. Based on the team in place and collaboration to date, we believe Norgene is well positioned to support a successful launch of Elapseron and Tobevibard in these territories if approved in the EU. Overall, we believe the strength of our efficacy and safety package, coupled with once-monthly subcutaneous dosing and the ability to support both at-home and in-office administration, if approved, could drive strong adoption in the evolving CHD treatment landscape. Even with a new treatment option now available in the US, KOLs continue to highlight limitations, including the burden of daily administration, treatment fatigue, and uncertainty around treatment discontinuation. Given these dynamics, we believe that, if approved, Elapsron and Tobivibart will be well positioned to set a new standard of care in CHD with a differentiated profile that addresses key physician and patient needs. Turning now to our oncology portfolio, where we are building a differentiated and increasingly robust T-cell engager portfolio, powered by a proprietary ProX10 dual masking platform. We believe this technology represents a meaningful advancement in the field and positions us to develop next generation T-cell engager. engagers across a broad range of cancers. I'll begin with VIR5500, our ProX10 dual-mass PSMA-targeted T-cell engager, which we are advancing in collaboration with Astellas. Following encouraging data at our go-forward dose showing potent anti-tumor activity, favorable early safety data, and no observed dose-limiting toxicities, we are actively enrolling patients across expansion cohorts with the ambition to initiate phase 3 registration trials as as next year. Currently, we have dosed our first patients with VIR5500 across three monotherapy populations, Taxe-naive MCRPC, radioligand therapy naive MCRPC, and radioligand therapy exposed MCRPC. In parallel, we are advancing three combination cohorts. One cohort in Taxe Naive MCRPC evaluating VIR5500 with enzalutamide, which is currently enrolling patients. The second cohort, Intex-A-Naive MCRPC, evaluating VIR5500 with docetaxel, which will be initiated in the coming months. and the third cohort in metastatic hormone-sensitive prostate cancer, evaluating VIR5500 with darolutamide, which will be initiated in the coming months. We are evaluating step-up dosing at 800, 2,000 and 3,500 micrograms per kilogram, Q3 weekly across both monotherapy and combination therapy cohorts. We believe this development plan builds upon the opportunity to unlock VR5500's potential across the prostate cancer treatment continuing. Together with Astellas, we have launched scale-up efforts and have secured a manufacturing contract to support the VR5500 phase 3 program. Our goal has been to ensure that CMC readiness advances in parallel with clinical development so that manufacturing does not become rate-limiting as the program progresses. Moving to VR5818, our ProX10 dual-masked HER2 targeted T-CEN engager. Dr. 5818 is the first MASS T-cell engager in clinical development for HER2-expressing tumors. We view the ongoing phase 1 trial as a the signal finding study given the early stage of development and the basket design where multiple tumor types are evaluated in parallel. expect to report updated dose escalation data evaluating VIR5818 monotherapy and combination therapy with pembrolizumab in the second half of 2026. This update is intended to inform the dosing regimen we will take forward and help identify which HER2-expressing populations may warrant further study, particularly in areas of high unmet medical need. In parallel, we are also advancing VIR5525, our ProX10 dual-MAS eGFR targeted T-cell engager. We are continuing dose escalation in the phase 1 study, evaluating VIR5525 as both a monotherapy and a combination with pembrolizumab across multiple EGFR expressing tumor types. The study incorporates learnings from both VIR 5500 and VIR 5818 to support efficient clinical development. The dose escalation is tracking well to plan and we look forward to sharing updates as the program matures. Beyond our three clinical stage T-cell engagers, we have a pipeline of seven preclinical assets underscoring both the breadth and scalability of the platform. Importantly, the encouraging clinical data generated to date serves as early validation of our platform, reinforcing our confidence in its ability to deliver differentiated profiles across multiple programs. We expect to nominate additional development candidates in 2027, further accelerating the expansion of our pipeline. With that, I'll now hand the call over to Brent for our financial update.

Thank you, Marianne. I am pleased to share that we saw significant improvement in our cash position over the second quarter of 2026. We ended the quarter with approximately $1.01 billion in cash, cash equivalents, and investments, representing an increase of $198.5 million. During the second quarter, the company received payments of $315 million from Astellas, consisting of a $240 million upfront payment and a $75 million equity investment payment. I would like to note that since December 2025, our collaborations with Astellas and Norgene, together with our follow-on expectations, offering have generated more than half a billion dollars in cash, meaningfully strengthening our balance sheet and positioning us to execute across multiple value creating milestones. Based on Based on our current operating plan, we continue to project cash runway into the second half of 2028. Now moving to financial performance. We recognized $238.9 million in license and collaboration revenue during the second quarter of 2026, largely related to the $240 million upfront payment we received from Astellas. R&D expense for the second quarter of 2026 was $135.3 million, which included $5.5 million of stock-based compensation expense and $48 million of expense associated with a milestone payment to Sanofi, representing 20% of the $240 million upfront payment we received from Astellas. This compares to $97.5 million for the same period in 2025, which included $6.9 million of non-cash stock-based compensation expense. The year-over-year increase was primarily driven by the milestone payment to Sanofi, and to a lesser extent, hepatitis delta qualification manufacturing costs. SG&A expense for the second quarter of 2026 was $30.2 million, which included $6.9 million of stock-based compensation expense. compared to $22.3 million for the same period in 2025, which included $5.5 million of stock-based compensation expense. The increase was primarily due to one-time advisory and legal expenses in connection with the closing of our STELUS agreement in the second quarter of 2026. Net income for the second quarter of 2026 was $80.1 million compared to a net loss of $111.0 million for the same period last year. The same period last year, A significant improvement in net income was primarily driven by the previously mentioned $238.9 million in Estella's license and collaboration revenue recognized this quarter. With that, I'll turn it back over to Mary Ann to close the call.

Thank you, Brent. In summary, I am incredibly proud of the strong execution we have delivered in the first half of the year, highlighted by the deal with Astellas on our lead clinical oncology program and the integration of our teams since the close and enrollment of the Eclipse studies. Looking ahead, we are positioned for a meaningful sequence of upcoming milestones in hepatitis delta, beginning with top line data for eclipse one in the fourth quarter of this year, followed by eclipse two and three in the first quarter of 2027. Based on the totality of data generated to date, including our recent presentation at EASL, we believe the dual acting mechanism of Elapseron and Tobevibard has the potential to define a best-in-class profile in an emerging commercial market. In oncology, our collaboration with Astellas in prostate cancer has enabled a rapid advancement of your 5500 into expansion cohorts, and we are focused on generating the data needed to support our planned transition into registrational trials next year. We believe VIR5500 has the potential to become a foundational therapy in prostate cancer, with broad applicability across both monotherapy and combination treatment settings. Taken together, we believe we are entering a period of sustained value creation, supported by a strong balance sheet and financial discipline, multiple near and mid-term catalysts, and a focused approach to execution. We look forward to updating you on our progress over the coming quarters.

With that, the Q&A session. Thank you, Mary Ann. This concludes our prepared remarks. We will now start the Q&A session. Joining me from the Q&A are Marianne and Brent. Please limit questions to two per person so we can get to all of our covering analysts. I'll turn it over to you, operator.

At this time we will begin conducting our analyst Q&A session. If you would like to ask a question, please press star 1 to raise your hand and to withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question for optimum sound quality and if muted, Locally, remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Paul Choi with Goldman Sachs. Your line is open. Please go ahead.

Hey, thank you. This is Eric for Paul Choi, and thanks for taking the question. The question about, you know, after the initial Eclipse 1 readout, what is the plan and timing for long-term extension data, and will the follow-up assess the durability of TND and whether patients could.

eventually discontinue treatment. Thank you for that question. I thought a second one was coming, but maybe not. Yes, so thanks, Eric. So we have in our trial design for Eclipse 2 and Eclipse 3 incorporated the exploration of the potential for finite treatment. This is not something that is incorporated in our Eclipse 1 trial design where we're really comparing the treatment with elapsed run. and to bevipart versus the deferred treatment. But it is something in our overall Eclipse program that we will be exploring.

Oh, thank you. Your next question comes from the line of Rowana Ruiz with LeRinc Partners.

Your line is now open. Please go ahead. Okay. Hey, everyone. So with the enrollment completed for Eclipse 2, can you talk a bit about what thresholds you're hoping to see on both efficacy and safety from that particular study and how the data on switching from the lever tide could help inform future physician prescribing?.

Yes, thank you, Rana. So Eclipse 2, just for everyone, is the trial where we really are looking at patients that fail on the lever tide and then are switched to our combination regimen of Elapsed Run and to Vivipart. And what we're looking at there as an end result is that we're looking at the patient's condition. point is after 24 weeks really target not detected. So we think that the bar is considered to be low because our target not detected rates compared to Belevertide are significantly higher, as you recall. So that's really the outcome that we will be watching. And maybe just to add that given the black box warning that Beléver-Tide has now for switches or discontinuations of Beléver-Tide, we believe that the Eclipse 2 data will be very, very valuable. And as mentioned in the prepared remarks, we believe that we are the only company that will have that data at the time of launch.

Yes, got it. And as another question for 5818, could you talk about how much you hope to share with the upcoming data set in second half 26, help frame, you know, the potentially number of patients or any other insights that you really hope to share? hoping to think about as you kind of narrow it down on different tumor types for that program.

Sure. So 5818, I heard to study just for everyone's recollection is a basket trial. So it contains a lot of different tumor types. And we have a monotherapy escalation cohort and a combination cohort with pamburizumab. So we will be sharing. those escalation data. We see it as a signal-seeking study, again, given the heterogeneity of the data. Rana is really a good insight into the dose for any potential next steps and then also insight into what exploration, what indications might really be valuable for the program.

Okay, got it. Thanks. Thank you. Your next question comes from the line of Corey Kazimov with Evercore. Your line is open. Please go ahead.

Hi, this is Josh on for Corey. Question for you, Marianne, and I realize this is a difficult question to answer, but we figured it'd be best to ask it here. There's been a significant amount of management turnover this past year. How confident are you that you have the team in place to effectively manage both the two important in the distinct clinical programs? And how do you envision best bolstering the C-suite rings in the coming months? Thank you.

Yes, thank you for that question, Joss. I'm very confident that we have a very strong team in place, as I think is evident from the progress that we are making quarter to quarter. We are looking to bring in a new CMO. And as mentioned before, we are looking there for a very strong profile in medical oncology because beyond Delta, where we are close to having registrational data coming out this quarter and the fourth quarter and then the first quarter next year, the future of our pipeline will nearly entirely be in immuno-oncology. So we're looking for a very strong leader in that field. And for the CFO, yes, we have actually started started interviews last week. And again, you know, we have a roster of, I think, what are very strong candidates to move forward in the process.

Great, thank you. Sure. Your next question comes from the line of Alex Strawnahan with Bank of America. Your line is open. Please go ahead. Hey, guys. Thanks for taking my questions.

one on HCV and one on 5500. So first on HCV, after the Belever Tide approval and pricing here in the US, I guess, how is your thinking around competitive positioning for your combo and pricing change, if at all? And then on 5500, just thinking towards the phase three, starting next year, I guess, how much will the early line data, including the doxotaxel combo, kind of feed into how you design the path forward for Pimple. Thank you.