Vir Biotechnology Corporate Update and Third Quarter 2026 Financial Results - VIR BIOTECHNOLOGY INC

Financial Performance:

• R&D expenses decreased to $80 million in Q3 2026 from $151 million in the same period of 2025, primarily due to a one-time $75 million milestone payment recognized in Q3 2025.
• SG&A expenses rose to $24 million from $22 million, driven by increased advisory and legal fees.
• The company ended Q3 2026 with $901 million in cash, cash equivalents, and investments (excluding the $90 million Gilead upfront payment received in October).
• Total liquidity including the Gilead transaction places the company on a cash runway extending into the second half of 2028.
• The Gilead collaboration provided $65 million in upfront cash and a $25 million equity investment (30% premium), with eligibility for up to $45 million in preclinical milestones.

Guidance and Future Outlook:

• Top-line data for the Phase 3 Eclipse 1 trial in Hepatitis Delta is expected to be reported in the fourth quarter of 2026.
• Top-line data for Phase 3 trials Eclipse 2 and Eclipse 3 are projected for the first quarter of 2027.
• Expanded Phase 2 SOLSTICE data (96-week results) will be presented at the AASLD conference.
• Registration planning for the oncology program VIR-5500 is underway, with plans to initiate multiple Phase 3 trials in 2027.
• A comprehensive virtual investor event is scheduled for Q1 2027 to outline the future immuno-oncology franchise strategy.
• Management aims to prioritize first-line metastatic castration-resistant prostate cancer (MCRPC) settings for VIR-5500 to establish it as a foundational therapy.

Business Segments and Product Lines:

• Hepatitis Delta: The ECLIPSE program consists of three pivotal trials (Eclipse 1, 2, and 3) evaluating the combination of elapseran and bevibart. Eclipse 1 focuses on treatment-naive patients; Eclipse 2 on switching from bulevirtide; Eclipse 3 is a head-to-head comparison against bulevirtide in treatment-naive patients.
• Oncology (VIR-5500): A ProX10 dual-masked PSMA-targeted T-cell engager in co-development with Astellas. The FDA granted Fast-Track designation for late-line metastatic castration-resistant prostate cancer (MCRPC). Astellas has confirmed proof-of-concept.
• Oncology (VIR-5818 & VIR-5825): VIR-5818 (HER2-targeted) and VIR-5825 (EGFR-targeted) are in Phase 1 dose-escalation studies. VIR-5818 is being refined to add backfill cohorts per FDA Project Optimus guidelines for better dose optimization.
• Collaborations: Announced a preclinical collaboration with Gilead to develop up to three new ProX10 masked T-cell engagers, utilizing VireBio's DAISY AI platform. A separate co-development/commercialization agreement exists with Astellas for VIR-5500.
• Leadership: Added Dr. David Liu as Chief Medical Officer and Aziz Sawaf as Chief Financial Officer.

Market and Competitive Landscape:

• Chronic Hepatitis Delta is a severe, underserved market with a 2-6x higher risk of liver cancer compared to Hepatitis B alone; World Hepatitis Alliance emphasizes elimination as liver cancer prevention.
• Current standard of care (bulevirtide/Hepcludex) faces limitations with low undetectable HDV RNA rates (12-20% at 48 weeks) and daily injection requirements.
• VireBio's Phase 2 SOLSTICE data demonstrated 66% target not detected (TND) rates, positioning the regimen as a potential best-in-class alternative.
• Competitive differentiation includes a once-monthly subcutaneous regimen versus daily injections, and the unique ability to switch patients with inadequate responses to bulevirtide.
• Increased testing for HDV RNA following recent market entries (e.g., Gilead's Hepcludex) is expanding the identified patient population.

Risks and Challenges:

• Clinical Execution: VIR-5818 trial design has been modified due to FDA feedback, delaying data maturity for the monotherapy arm.
• Competitive Bar: Competitors have recently released Phase 3 data; VireBio must prove superiority in viral elimination and convenience.
• Regulatory: Finite treatment exploration in Eclipse 2 and 3 requires careful alignment with FDA expectations to demonstrate long-term efficacy.
• Capital Allocation: Management emphasizes disciplined capital deployment given the breadth of pipeline opportunities versus internal resources.

Management Commentary and Tone:

• Tone is confident and strategic, emphasizing a "pivotal period" for transforming Hepatitis Delta treatment and building a differentiated oncology franchise.
• Management expresses strong confidence in the scientific rationale for elapseran/bevibart to achieve deep viral suppression and redefine treatment paradigms.
• CFO Aziz Sawaf highlighted the strategic value of the Gilead deal in increasing financial flexibility and validating the platform.
• CEO Marianne DeBacher noted the leadership team is strengthened to execute against near-term catalysts and long-term goals.

Analyst Questions and Answers:

• VIR-5500 Durability: Management declined to share specific response durability data yet, noting further updates will follow proof-of-concept validation in the coming year.
• Competitive Positioning: Reiterated that VireBio's 66% TND rate significantly outperforms the ~17% TND seen at 24 weeks by competitors, with the added benefit of monthly dosing.
• Proof of Concept Criteria: Astellas and VireBio jointly determined proof-of-concept was achieved based on a holistic view of efficacy, safety, pharmacology, and biomarkers.
• Pre-Launch Activities: VireBio has initiated market research, payer engagement, and distribution channel planning for both in-home and healthcare provider administration.
• Eclipse 3 Success Criteria: While specific statistical thresholds were not disclosed, management highlighted the potential for fundamental differentiation given current bulevirtide TND rates of 12-20%.
• Eclipse 1 Data Expectations: The top-line release will include the primary composite endpoint (TND + ALT), secondary TND data, cirrhosis subgroup results, and full safety/tolerability profiles.

Other Key Points:

• The 20% pass-through economics to Sanofi regarding the previous partnership has expired, meaning all future milestone payments from the Gilead deal are retained solely by VireBio.
• VIR-5500 is being evaluated in early-line MCRPC settings, reflecting a strategic shift to capture value across the full treatment continuum.
• The Gilead collaboration leverages the DAISY AI platform for multi-parameter optimization of T-cell engagers, reinforcing the company's integrated discovery capabilities.