Vir Biotechnology, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; unaudited. Vir is a clinical-stage immunology and biotechnology company developing treatments and vaccines, primarily for infectious diseases. Its clinical pipeline targets HDV, HBV and HIV, with additional preclinical programs.
Financial performance and position
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Total revenue | $56.4 million | $63.0 million |
| Operating expenses | $136.5 million | $206.3 million |
| Operating loss | $80.1 million | $143.4 million |
| Net loss attributable to Vir | $65.3 million | $140.9 million |
| Basic and diluted net loss per share | $0.48 | $1.06 |
| Cash used in operating activities | $109.4 million | $125.8 million |
| Cash, cash equivalents and investments at March 31, 2024 | $1.51 billion | — |
- Revenue comprised collaboration revenue of negative $1.0 million, contract revenue of $52.2 million and grant revenue of $5.2 million. The filing reports no product-sales revenue metric for the period.
- Research and development expense was $100.1 million, down $57.5 million year over year; selling, general and administrative expense was $36.3 million, down $10.5 million. No gross or operating margin is presented.
- At March 31, total assets were $1.79 billion, total liabilities $246.6 million and stockholders’ equity $1.55 billion. Vir reported no debt outstanding.
- Current assets were $1.21 billion and current liabilities $94.1 million. Cash, cash equivalents and restricted cash totaled $180.5 million; short- and long-term investments totaled approximately $1.34 billion.
Changes versus the prior comparable period
- Net loss narrowed by $75.6 million. Lower R&D spending, particularly clinical and contract manufacturing costs associated with winding down the VIR-2482 PENINSULA trial, was a major contributor.
- Contract revenue increased by $52.1 million, primarily because Vir recognized $51.7 million of deferred revenue when GSK’s rights to select two additional non-influenza pathogens expired in March 2024.
- Collaboration revenue fell by $47.6 million. Q1 2024 included a $0.3 million sotrovimab profit-sharing loss and a $0.7 million constraint on profit-sharing amounts; Q1 2023 included a $39.3 million release of previously constrained amounts.
- Grant revenue declined by $11.1 million, primarily due to lower BARDA revenue. Cash used in operations decreased by $16.4 million.
Outlook, developments and risks
- Management believes the $1.51 billion of cash, cash equivalents and investments at March 31, 2024 will fund operations for at least 12 months from the filing date. Vir expects continued losses and may need additional capital; it had not sold shares under its $300 million at-the-market sales agreement as of March 31.
- For 2024, Vir expects nominal collaboration revenue, if any, from the 2020 GSK agreement and says negative collaboration revenue remains possible. It does not expect meaningful future sotrovimab revenue, including if U.S. authorization were restored; the FDA has excluded use in all U.S. regions, and Vir and GSK do not plan to file a BLA at this time.
- Vir expects complete 24-week treatment data from the HDV SOLSTICE trial in Q4 2024; HBV MARCH Part B 48-week end-of-treatment data in Q4 2024; initial PREVAIL platform data in the first half of 2025; and initial VIR-1388 immunogenicity data in the second half of 2024. It expects to file multiple INDs within 18 months.
- In February 2024, Vir and GSK agreed to terminate the influenza program and GSK’s VIR-2482 option. The Phase 2 PENINSULA trial had not met its primary or secondary efficacy endpoints. Vir expects additional restructuring charges of approximately $25 million to $35 million, primarily related to facility closures; the plan includes closing two R&D facilities and eliminating approximately 75 net positions, with actions expected to be substantially completed in Q3 2024.
- Vir had approximately $20 million of unpaid commitments under new tobevibart manufacturing scopes of work at quarter-end. Key risks include clinical and regulatory failure, reliance on third-party manufacturers and collaborators, funding needs, and possible supply disruption or restrictions involving Chinese CDMO WuXi Biologics.
- CFO Sung Lee was scheduled to step down effective May 3, 2024, to pursue another opportunity; Vir had begun a successor search. Management reported disclosure controls were effective and no material change in internal control over financial reporting during the quarter. Vir reported no material legal proceedings.
Important facts for investors to verify
- Upcoming clinical readouts and whether timelines or trial results change, particularly for HDV, HBV and VIR-1388.
- Cash burn relative to the stated runway, future collaboration and grant receipts, and any use of the $300 million share-sale facility.
- Whether sotrovimab-related costs or adjustments produce further negative collaboration revenue or inventory charges.
- Execution and total cost of the restructuring plan, including the expected $25 million to $35 million of additional charges.
- Manufacturing commitments and exposure to CDMO availability, including potential U.S. restrictions affecting WuXi Biologics.