Vir Biotechnology, Inc. — Q1 2023 Form 10-Q
Business context and reporting period. Unaudited results cover the three months ended March 31, 2023, compared with the same period in 2022. Vir is a commercial-stage immunology company developing therapies and vaccines for infectious diseases. Sotrovimab (Xevudy) is its only currently available commercial product; the rest of the pipeline is in development.
Key financial metrics
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Total revenue | $63.0 million | $1,232.5 million |
| Operating expenses | $206.3 million | $218.6 million |
| Operating income (loss) | $(143.4) million | $1,013.8 million |
| Net income (loss) attributable to Vir | $(140.9) million | $518.6 million |
| Basic and diluted EPS | $(1.06) | $3.93 basic; $3.85 diluted |
| Net cash from (used in) operating activities | $(125.8) million | $550.1 million |
- Q1 2023 revenue included $46.6 million of collaboration revenue—$7.2 million of sotrovimab profit share and a $39.3 million release of previously constrained profit share—and $16.2 million of grant revenue, including $14.3 million under BARDA.
- Research and development expense was $157.6 million, up from $90.2 million, primarily reflecting higher manufacturing, clinical, personnel and facility costs. Selling, general and administrative expense was $46.8 million, versus $38.3 million.
- Cash, cash equivalents and investments totaled approximately $2.3 billion at March 31, 2023. Cash, cash equivalents and restricted cash were $842.6 million. The company reported no debt outstanding.
- Total assets were $2.666 billion and total liabilities were $695.1 million. Accrued and other liabilities included $329.4 million of net constrained profit-sharing amounts.
Changes versus the prior comparable period
- Revenue fell $1.170 billion year over year, chiefly because sotrovimab profit-share was substantially lower than in Q1 2022. The $39.3 million constraint release supported Q1 2023 collaboration revenue and reflects updated estimates, not equivalent current-period product sales.
- Vir moved from substantial operating and net income in Q1 2022 to operating and net losses in Q1 2023. The comparison also reflects a $403.3 million income-tax provision in Q1 2022 versus a $2.2 million tax benefit in Q1 2023.
- Operating cash flow shifted from $550.1 million provided to $125.8 million used. Cash and restricted cash decreased by $25.4 million during Q1 2023.
- The fair-value loss on the Brii Biosciences equity investment was $13.1 million, compared with $95.0 million in Q1 2022; Q1 2023 interest income rose to $21.3 million from $0.4 million.
Outlook, management commentary and key risks
- Management said the $2.3 billion of cash, cash equivalents and investments should fund operations for at least 12 months from the financial-statement issuance date. It expects significant R&D spending and net losses may continue; additional financing could be needed depending on plans and commitments.
- Management expected PENINSULA Phase 2 VIR-2482 influenza-prevention data and Phase 1b data in adults age 65 and older in mid-2023. Data from multiple HBV trials and the Phase 2 HDV SOLSTICE trial were expected in 2023; initial PREVAIL HBV platform data were expected in the first half of 2024.
- Sotrovimab was not authorized for use in any U.S. region at the time of the filing, and Vir and GSK did not plan to file a U.S. BLA at that time. Use remained subject to limitations in some markets outside the U.S.; future sales and profit share were uncertain.
- In February 2023, Vir and GSK removed the vaccine program from their 2020 collaboration and narrowed the antibody collaboration, while retaining sotrovimab and VIR-7832 and certain variants. GSK had not exercised its VIR-2482 option as of March 31, 2023.
- BARDA could provide up to an estimated $1.0 billion under an agreement with options and specified conditions; the initial period included approximately $55 million to support VIR-2482 development. The full amount is not assured funding.
- Key risks include clinical and regulatory failure or delay, dependence on collaborators and third-party manufacturers, variable sotrovimab demand and manufacturing commitments, and the need for additional capital. The filing reported no material legal proceedings and no material changes to disclosure controls or internal control over financial reporting.
Important facts for investors to verify
- Whether sotrovimab retains authorization and meaningful demand in markets outside the U.S., and how that affects Vir’s collaboration revenue and future supply-related charges.
- Whether the $39.3 million profit-share constraint release is followed by further adjustments to allowable manufacturing expenses.
- Clinical readouts, trial timing and subsequent regulatory updates for VIR-2482, VIR-2218, VIR-3434 and other pipeline programs.
- BARDA option exercises and actual reimbursements, as well as R&D spending, operating cash burn and management’s funding runway against future commitments.