Vir(VIR) - 2024 Q2 - Quarterly Results

Overview and Strategic Highlights The company reported positive Phase 2 data, initiated a strategic restructuring, and ended Q2 with $1.43 billion - Ended the second quarter with $1.43 billion in cash, cash equivalents, and investments[1] - Announced a strategic restructuring to prioritize high-value clinical opportunities, which includes phasing out programs for influenza, COVID-19, and its T cell-based viral vector platform[1][5] - Reported positive preliminary Phase 2 data for its chronic hepatitis delta (CHD) study and received FDA IND clearance with Fast Track Designation for its combination therapy[1][2] - Entered into an exclusive license agreement with Sanofi, bolstering its clinical pipeline with T-cell engagers[1][5] - Lowered its full-year 2024 operating expense guidance following the restructuring[1] Pipeline Programs Update The company advanced its hepatitis pipeline with positive CHD data and full enrollment in its CHB study Chronic Hepatitis Delta (CHD) Positive preliminary Phase 2 data showed high virologic response, with FDA Fast Track designation granted - Presented positive preliminary data from the Phase 2 SOLSTICE study at EASL™ Congress 2024, showing high virologic response and ALT normalization with tobevibart monotherapy and in combination with elebsiran after 12 and 24 weeks[2] - Complete 24-week treatment data from the SOLSTICE study, involving approximately 60 participants, is expected to be reported in Q4 2024[3] - On June 26, the FDA cleared the Investigational New Drug (IND) application and granted Fast Track designation for the combination of tobevibart and elebsiran for treating chronic hepatitis delta[3] Chronic Hepatitis B (CHB) The Phase 2 MARCH Part B study is fully enrolled, with initial data from the PREVAIL platform expected in H1 2025 - The Phase 2 MARCH Part B study, evaluating tobevibart and elebsiran with and without peginterferon alpha, is fully enrolled, with 48-week end-of-treatment data expected in Q4 2024[4] - Initial data from the Phase 2 PREVAIL platform study and its THRIVE/STRIVE sub-protocols is anticipated in the first half of 2025[4] Corporate Update and Strategic Restructuring A restructuring initiative aims to save approximately $100 million annually by focusing on core programs - Signed an exclusive worldwide license agreement with Sanofi for multiple clinical-stage T-cell engagers and a protease-cleavable masking platform[5] - The restructuring includes phasing out programs in influenza, COVID-19, and the T cell-based viral vector platform, along with a workforce reduction of approximately 25% (approx 140 employees)[5] Projected Financial Impact of Restructuring | Metric | Amount | Timeline | | :--- | :--- | :--- | | Annual Workforce Cost Savings | ~$50 million | Starting in 2025 | | Program Discontinuation Savings | $50 million | Through end of 2025 | | Estimated Restructuring Expenses | $11 - $13 million | Primarily in H2 2024 | - Appointed Mark D Eisner, M D, M P H as Executive Vice President and Chief Medical Officer, effective June 3, 2024[8] Q2 2024 Financial Performance The company reported a reduced net loss of $138.4 million on $3.1 million in revenue for Q2 2024 Key Financial Results Summary The company ended Q2 with $1.43 billion in cash and reduced its net loss compared to the prior year - Cash, cash equivalents and investments totaled approximately $1.43 billion as of June 30, 2024[9] Q2 2024 vs. Q2 2023 Financial Highlights (in millions, except per share data) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues | $3.1 | $3.8 | | R&D Expenses | $105.1 | $168.1 | | SG&A Expenses | $30.3 | $45.5 | | Net Loss | $(138.4) | $(194.8) | | Net Loss Per Share | $(1.02) | $(1.45) | - The decrease in R&D expenses was primarily driven by lower clinical development and manufacturing costs for VIR-2482 and hepatitis programs, as well as lower personnel costs from 2023 cost-saving initiatives[10] Condensed Consolidated Statements of Operations The statement details revenues, operating expenses, and a net loss of $138.4 million for the quarter Statement of Operations (in thousands, for three months ended June 30) | Line Item | 2024 | 2023 | | :--- | :--- | :--- | | Total revenues | $3,075 | $3,797 | | Total operating expenses | $161,705 | $218,983 | | Loss from operations | $(158,630) | $(215,186) | | Total other income | $18,740 | $17,563 | | Net loss attributable to Vir | $(138,378) | $(194,775) | | Net loss per share | $(1.02) | $(1.45) | Condensed Consolidated Balance Sheets The balance sheet shows total assets of $1.67 billion and stockholders' equity of $1.43 billion as of June 30, 2024 Balance Sheet Highlights (in thousands) | Line Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $235,885 | $241,576 | | Short-term investments | $1,192,201 | $1,270,980 | | Total Assets | $1,669,555 | $1,919,060 | | Total Liabilities | $235,885 | $328,824 | | Total Stockholders' Equity | $1,433,670 | $1,590,236 | 2024 Financial Guidance Full-year 2024 GAAP operating expense guidance is lowered to a range of $580 million to $610 million Full-Year 2024 GAAP Operating Expense Guidance (in millions) | Item | Low End | High End | | :--- | :--- | :--- | | GAAP operating expense range | $580 | $610 | | Included Expenses: | | | | Stock-based compensation | $80 | $90 | | Restructuring charges | $30 | $40 | - The reduction in guidance is primarily due to savings from workforce restructuring and the phasing out of influenza, COVID-19, and T cell-based viral vector platform programs[13] - The guidance excludes the accounting impact of the upfront payment and an escrowed milestone payment in connection with the Sanofi agreement, which will be incorporated in the Q3 2024 earnings release[14]