Vir(VIR) - 2024 Q3 - Quarterly Results

Corporate Overview Vir Biotechnology's Q3 2024 was transformational, marked by Sanofi T-cell engager acquisition, a sharpened infectious disease focus, and new CFO appointment, with key data expected in late 2024 and early 2025 - Closed an exclusive worldwide licensing agreement with Sanofi for three clinical-stage dual-masked T-cell engagers, with initial clinical data expected in Q1 2025[1][2] - Appointed Jason O'Byrne as the new Chief Financial Officer, bringing extensive financial leadership experience to the company[1][2] - Key Phase 2 data for chronic hepatitis delta (SOLSTICE trial) will be presented at the AASLD conference in November 2024[1] Pipeline Programs Update The company provided updates on its clinical pipeline, advancing chronic hepatitis programs with late 2024 data readouts, progressing newly acquired solid tumor programs for Q1 2025 data, and continuing preclinical efforts Chronic Hepatitis Delta (CHD) The Phase 2 SOLSTICE study demonstrated high virologic response and ALT normalization with tobevibart, alone or combined with elebsiran, receiving FDA Fast Track Designation, with more data due in November 2024 - Preliminary Phase 2 SOLSTICE data demonstrated high rates of virologic response and ALT normalization with tobevibart monotherapy and in combination with elebsiran[3] - The combination of tobevibart and elebsiran was granted Fast Track Designation by the U.S. FDA[3] - Additional 24-week clinical data from the SOLSTICE trial, involving approximately 60 patients, will be presented at the AASLD meeting in November 2024[3] Chronic Hepatitis B (CHB) Vir plans to present end-of-treatment data from the Phase 2 MARCH Part B trial at AASLD in November 2024, evaluating triplet and doublet combinations, with functional cure data expected in Q2 2025 - End-of-treatment data from the Phase 2 MARCH Part B trial will be presented as a Late Breaking presentation at the AASLD meeting in November 2024[4] - Further data assessing a potential functional cure is planned for release in the second quarter of 2025[4] Solid Tumors The company is advancing three dual-masked T-cell engagers for solid tumors, with initial clinical data for VIR-5818 and VIR-5500 expected in Q1 2025, and a Phase 1 study for VIR-5525 planned for Q1 2025 - Initial clinical data for VIR-5818 (HER2-targeted T-cell engager) is expected in Q1 2025[5] - Initial clinical data for VIR-5500 (PSMA-directed T-cell engager) is also anticipated in Q1 2025[7] - The company plans to initiate a Phase 1 basket study of VIR-5525 (EGFR-targeted T-cell engager) in Q1 2025[8] Preclinical Pipeline Candidates Vir continues to advance preclinical assets, including RSV programs with GSK and an HIV cure program with the Bill & Melinda Gates Foundation - The company is advancing preclinical assets for respiratory syncytial virus (RSV) with GSK and pursuing an HIV cure with the Bill & Melinda Gates Foundation[9] Corporate Update The company finalized a Sanofi licensing agreement, initiated strategic restructuring with workforce reduction, and appointed a new CFO, with investor events planned for late 2024 and early 2025 - Announced an exclusive worldwide license from Sanofi for three clinical-stage T-cell engagers and the PRO-XTEN™ masking platform, which closed on September 9, 2024[10] - Announced a strategic restructuring, including the phase-out of clinical programs in influenza and COVID-19 and a workforce reduction of approximately 25% (around 140 employees)[10] - Appointed Jason O'Byrne as Executive Vice President and Chief Financial Officer, effective October 2, 2024[10] Financial Performance In Q3 2024, Vir reported $2.4 million in revenue and a $213.7 million net loss, driven by R&D expenses including a Sanofi payment, ending the quarter with $1.19 billion in cash, and updated 2024 operating expense guidance Third Quarter 2024 Financial Results Q3 2024 saw total revenues of $2.4 million, increased R&D expenses to $195.2 million due to a Sanofi payment, decreased SG&A, and a net loss of $213.7 million, with cash at $1.19 billion Q3 2024 Financial Highlights (vs. Q3 2023) | Financial Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenues | $2.4 million | $2.6 million | | R&D Expenses | $195.2 million | $145.0 million | | SG&A Expenses | $25.7 million | $40.9 million | | Net Loss | $(213.7) million | $(163.4) million | | Net Loss Per Share | $(1.56) | $(1.22) | - Cash, cash equivalents, and investments totaled approximately $1.19 billion as of September 30, 2024 The quarterly decrease of $245.1 million includes a $103.7 million upfront payment to Sanofi and a $75.0 million escrowed milestone payment[12] - The increase in R&D expenses was primarily driven by a $102.8 million upfront payment to Sanofi recognized as in-process R&D expense[14] 2024 Financial Guidance The company updated its full-year 2024 GAAP operating expense guidance to $660 million to $680 million, incorporating the Sanofi upfront payment, stock-based compensation, and restructuring charges Full-Year 2024 GAAP Operating Expense Guidance | Item | Amount (in millions) | | :--- | :--- | | GAAP Operating Expense Range | $660 to $680 | | Included Expenses: | | | Upfront payment to Sanofi (R&D) | $103 | | Stock-based compensation expense | $80 to $90 | | Restructuring charges | $30 to $40 | Detailed Financial Statements The condensed consolidated financial statements detail the company's financial position with $1.50 billion in total assets and $257.6 million in liabilities, and operational results showing a $213.7 million net loss for Q3 2024 Condensed Consolidated Balance Sheets As of September 30, 2024, Vir's total assets were $1.50 billion, a decrease from year-end 2023, while total liabilities decreased to $257.6 million due to lower deferred revenue and operating lease liabilities Balance Sheet Summary (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $168,350 | $241,576 | | Total current assets | $1,047,157 | $1,588,226 | | Total Assets | $1,498,356 | $1,919,060 | | Total current liabilities | $117,161 | $175,407 | | Total Liabilities | $257,629 | $328,824 | Condensed Consolidated Statements of Operations For Q3 2024, the company reported total revenues of $2.38 million, total operating expenses of $233.7 million, and a net loss attributable to Vir of $213.7 million Statement of Operations Summary (in thousands) | Account | Three Months Ended Sep 30, 2024 | | :--- | :--- | | Total revenues | $2,380 | | Total operating expenses | $233,684 | | Loss from operations | $(231,304) | | Total other income | $17,764 | | Net loss attributable to Vir | $(213,717) | Key Investigational Therapies The report details Vir's key investigational therapies, including tobevibart and elebsiran for chronic hepatitis, and newly licensed T-cell engagers (VIR-5818, VIR-5500, VIR-5525) utilizing masking technology for solid tumors About Tobevibart (VIR-3434) Tobevibart is an investigational monoclonal antibody designed to block hepatitis B and delta virus entry into liver cells and reduce viral particles, incorporating Xencor's Xtend™ technology - Tobevibart is a broadly neutralizing monoclonal antibody targeting the hepatitis B surface antigen to inhibit viral entry and reduce viral particles[21] About Elebsiran (VIR-2218) Elebsiran is an investigational small interfering RNA (siRNA) designed to degrade hepatitis B virus RNA and limit HBsAg production, developed in collaboration with Alnylam Pharmaceuticals - Elebsiran is an investigational siRNA that targets and degrades hepatitis B virus RNA to limit HBsAg production[22] About VIR-5818, VIR-5500, VIR-5525 These investigational T-cell engagers (TCEs) target HER2, PSMA, and EGFR for solid tumors, utilizing PRO-XTEN™ masking technology to activate specifically in the tumor microenvironment for improved efficacy and tolerability - These candidates are T-cell engagers (TCEs) that leverage PRO-XTEN™ masking technology to activate T-cells specifically in the tumor microenvironment, aiming to reduce toxicity and improve efficacy[23]