Vir Biotechnology, Inc. Q3 FY2025 Earnings Call

Hello, and welcome to Vir Biotechnology's Third Quarter 2025 Financial Results and Corporate Update Call. As a reminder, this conference call is being recorded. I will now turn the call over to Jason O'Byrne, Chief Financial Officer. Please go ahead.

Thank you, and good afternoon. With me today are Dr. Marianne De Backer, our Chief Executive Officer; and Dr. Mark Eisner, our Chief Medical Officer. Before we begin, I would like to remind everyone that some of the statements we are making today are forward-looking statements under the securities laws. These forward-looking statements involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by such forward-looking statements. These risks and uncertainties and risks associated with our business are described in the company's reports filed with the Securities and Exchange Commission, including Forms 10-K, 10-Q and 8-K. I will now turn the call over to our CEO, Marianne De Backer. Please go ahead.

Good afternoon, everyone, and thank you for joining us for Vir Biotechnology's third quarter 2025 earnings call. Today's call will highlight the significant progress we've made and our clear path forward as an organization. We'll provide guidance on our VIR-5500 program timeline, discuss the upcoming SOLSTICE data presentation and highlight how our clinical execution this quarter positions us for the significant value-creating opportunities ahead. The third quarter has been marked by important achievements across both our hepatitis delta and T-cell engager programs that demonstrate our ability to execute on critical milestones. Our team remains committed to powering the immune system to transform patients' lives. And today, we'll outline how our recent accomplishments set the stage for what we believe will be a pivotal period for Vir Bio. I will now highlight the key accomplishments from this quarter that demonstrate this accelerating momentum. First, we completed enrollment in ECLIPSE 1, our first registrational Phase III study for hepatitis delta. Second, we're excited to provide guidance that we plan to share a comprehensive data update for VIR-5500, our PRO-XTEN masked PSMA-targeted T-cell engager in the first quarter of 2026. And third, we dosed the first patient in our first-line metastatic castration-resistant prostate cancer combination study with androgen receptor pathway inhibitors. Collectively, these achievements represent an acceleration in our development trajectory and provide a clear line of sight to multiple value-creating catalysts ahead. We're executing with precision while advancing towards multiple important data readouts and regulatory milestones. I will now provide more detail on our hepatitis delta program, where we've made exceptional progress this quarter. The completion of ECLIPSE 1 enrollment represents a pivotal step towards bringing our differentiated combination regimen to patients with hepatitis delta in the United States and beyond. This achievement accomplished ahead of our internal projections reflects both strong investigator confidence and the substantial unmet medical need in this devastating disease. With ECLIPSE 1 enrollment complete, we now expect primary completion in the fourth quarter of 2026, with top line data for all 3 ECLIPSE studies expected by the first quarter of 2027. This accelerated timeline positions us well for regulatory submissions and demonstrates our operational excellence in executing registrational studies. ECLIPSE 2 continues to enroll well across European sites and remains on track. Together, ECLIPSE 1 and ECLIPSE 2 are designed to form the backbone of our regulatory filing package. ECLIPSE 3, our Phase IIb head-to-head comparison against bulevirtide is progressing ahead of schedule with strong enrollment momentum and will provide valuable comparative data to support access and reimbursement discussions, particularly in European markets. The hepatitis delta market represents a compelling commercial opportunity with approximately 61,000 RNA-positive patients in the United States and 113,000 in EU markets. The patient population's geographic concentration, particularly in major U.S. urban centers, supports an efficient commercial approach with a target specialty sales organization focused on hepatologists and infectious disease specialists. Looking ahead to this month, we are preparing to present the complete 48-week SOLSTICE data set at AASLD on November 9. This presentation will provide important insights into the safety and efficacy profile of our combination regimen and is expected to provide supportive data that reinforces confidence in our registrational program. Turning to our oncology portfolio. We are excited to provide guidance that we plan to share a data update for VIR-5500, our PSMA-targeted T-cell engager in the first quarter of 2026. We've made substantial progress in our dose escalation across both weekly and every 3-week schedules, and this data set is expected to provide important insights into the program's potential. We are enthusiastic about this program and the differentiated PRO-XTEN dual-masking approach. As I mentioned, we recently dosed the first patient in our first-line metastatic castration-resistant prostate cancer combination study with ARPIs, a first step towards addressing a significant unmet need for patients in earlier treatment lines. For VIR-5818, our PRO-XTEN masked HER2-targeted T-cell engager, we are continuing dose escalation in combination with pembrolizumab, which is actively enrolling. For VIR-5525, our PRO-XTEN masked EGFR-targeted T-cell engager, our program continues to advance with enrollment in our Phase I study progressing as expected. We are leveraging the extensive learnings from both VIR-5818 and VIR-5500 to enable efficient development and accelerate decision-making. The clinical experience we are gaining across 3 distinct targets, PSMA, HER2 and EGFR is building evidence for the versatility of the PRO-XTEN universal masking platform. This emerging clinical validation gives us confidence as we advance our preclinical pipeline of additional T-cell engager candidates targeting various tumor-associated antigens, whether through internal development or strategic partnerships that leverage our platform technology. Finally, we ended the third quarter with approximately $810.7 million in cash, cash equivalents and investments. Based on our current operating plan, we continue to project our cash runway extending into mid-2027. This strong financial foundation enables us to advance our registrational hepatitis delta program and our oncology pipeline with confidence. With that, I'll now turn the call over to Mark to provide a more detailed update on our clinical development programs.

Thank you, Marianne. I'm pleased to provide detailed updates on our clinical development programs. Starting with our hepatitis delta program, ECLIPSE 1 enrollment was successfully completed with approximately 120 participants randomized 2:1 to our combination therapy versus deferred treatment. This achievement was accomplished approximately 2 months ahead of our aggressive internal enrollment assumptions, demonstrating exceptional execution by our study teams and reflecting the significant unmet medical need in this patient population. The strength of our enrollment reflects multiple factors. First, the robust SOLSTICE Phase II study results; second, strong engagement with our clinical investigator community; third, the absence of FDA-approved treatments for hepatitis delta in the United States and limited options globally; and fourth, the urgent need for more effective and convenient therapies for this devastating disease. Study team engagement throughout startup led to accelerated country and site activation, allowing us to complete study enrollment faster than originally projected. This was further reinforced by consistent enrollment momentum across regions with investigators actively identifying and referring patients. ECLIPSE 2 continues with enrollment progressing well across multiple European sites, demonstrating similar investigator enthusiasm and patient need. The study will enroll approximately 150 patients randomized 2:1, evaluating the switch to our combination therapy in patients who have not adequately responded to bulevirtide with a 24-week primary endpoint of HDV RNA target not detected. The strong enrollment momentum we're seeing reflects an important unmet need for inadequate bulevirtide responders, and we expect primary completion by year-end 2026 with top line data expected in the first quarter of 2027. ECLIPSE 3, our Phase IIb head-to-head comparison is progressing ahead of schedule with strong enrollment momentum. This study will enroll approximately 100 patients comparing our combination therapy to bulevirtide in treatment-naive patients and based on the strength of enrollment we're seeing is tracking toward a similar completion timeline as ECLIPSE 1 and 2. ECLIPSE 3 enrollment has progressed ahead of our projections, and this study will provide critical comparative data for access and reimbursement discussions with top line data expected in the first quarter of 2027 alongside the other ECLIPSE studies. Regarding our upcoming AASLD presentation, the complete SOLSTICE 48-week data set for the combination regimen of tobevibart and elebsiran represents an important clinical milestone. This additional follow-up provides important safety and efficacy insights and builds on our previously reported compelling Phase II results that demonstrated 64% of patients achieving HDV RNA target not detected at week 36 with our monthly combination regimen. Turning to our oncology programs. We continue to advance our PRO-XTEN masked T-cell engager portfolio across multiple targets. For VIR-5500, our masked PSMA-targeted T-cell engager, dose escalation is advancing in both weekly and every 3-week schedules. We have not reached a maximum tolerated dose, and escalation continues as planned. The half-life of 8 to 10 days potentially supports our every 3-week dosing evaluation with the potential for even longer dosing intervals. As Marianne mentioned, we achieved an important milestone this quarter with the first patient dosed in our first-line metastatic castration-resistant prostate cancer combination study with androgen receptor pathway inhibitors. This earlier line expansion offers the potential to address significant unmet needs for patients earlier in their treatment journey. We're planning for a comprehensive data update in the first quarter of 2026 with a meaningful data set across dose levels in late-line patients. We expect this will include safety assessments and efficacy measures, including PSA responses and kinetics, imaging and RECIST evaluations. The program is designed to leverage the potential advantages of the PRO-XTEN platform, including a favorable safety profile and extended half-life. Our approach seeks to maximize the therapeutic index of solid tumor T-cell engagers through selective tumor activation while minimizing systemic activity. For VIR-5818, our HER2-targeted T-cell engager, combination dose escalation with pembrolizumab is actively enrolling and progressing according to plan. For VIR-5525, our EGFR-targeted T-cell engager, Phase I study enrollment is also progressing as expected. The study design incorporates learnings from VIR-5818 and VIR-5500 to enable efficient dose escalation. We are evaluating both monotherapy and combination with pembrolizumab across multiple EGFR-expressing tumor types. As we've discussed on our second quarter call, we believe this program has the potential to address significant unmet needs for patients across multiple solid tumor types where current EGFR-targeted approaches have important limitations. We also continue to advance multiple preclinical T-cell engager candidates targeting various tumor-associated antigens. The clinical experience from our current programs is informing the development of these preclinical candidates, and we're taking a strategic approach that combines internal advancement with potential partnership opportunities to accelerate development and advance a broader pipeline that addresses unmet needs across multiple cancer types. We've made exceptional progress across our entire clinical portfolio during the third quarter. ECLIPSE 1 enrollment completion provides a clear path to pivotal data in early 2027 for all 3 ECLIPSE studies. Our upcoming VIR-5500 data update will provide important insights into our oncology pipeline's potential, and our platform leaves us well positioned to efficiently advance multiple future candidates. With that, I'll now hand the call over to Jason for a financial update.

Thank you, Mark. I am pleased to share our third quarter financial performance and overall financial position. R&D expense for the third quarter of 2025 was $151.5 million, which included $5.5 million of noncash stock-based compensation and a $75 million milestone payment triggered by first-in-human dosing of VIR-5525. This compares to $195.2 million for the same period in 2024, which included $8.9 million of stock-based compensation and a $102.8 million upfront payment made to Sanofi at the closing of our exclusive worldwide license agreement. The year-over-year decrease was primarily driven by lower license expense and cost savings from previously announced restructuring initiatives, partially offset by increased clinical development expenses associated with our hepatitis delta and oncology programs. SG&A expense for the third quarter of 2025 was $22.2 million, which included $5.8 million of stock-based compensation expense compared to $25.7 million for the same period in 2024, which included $7.8 million of stock-based compensation expense. The decrease was largely due to efficiencies and cost savings from previously announced restructuring initiatives. Our third quarter 2025 operating expenses totaled $173.7 million, representing a $46.2 million decrease from the same period in 2024. Net loss for the third quarter of 2025 was $163.1 million compared to a net loss of $213.7 million for the same period last year. Turning to cash. Our net change in cash and investments in the third quarter was approximately $81.4 million. During the third quarter, we also made certain cash payments from restricted cash, including a $75 million payment to former Amunix shareholders. As described earlier, this payment was triggered by dosing the first patient in our VIR-5525 study and was fully anticipated, having been held in escrow as restricted cash since we signed the Sanofi agreement last year. As a reminder, restricted cash is excluded from our reported balances of cash, cash equivalents and investments. As such, disbursements from restricted cash accounts do not affect our projected cash runway. We ended the third quarter with approximately $810.7 million in cash, cash equivalents and investments. Based on our current operating plan, we continue to project our cash runway extending into mid-2027. Our capital deployment strategy remains focused on our most promising programs. We are advancing our hepatitis delta ECLIPSE registrational program while also advancing our T-cell engager programs, including VIR-5500, VIR-5818 and VIR-5525. We continue to deploy capital strategically, prioritizing investments in programs with the greatest potential for both meaningful patient impact and value creation while also advancing business development opportunities that can further optimize our resource allocation. This concludes our prepared remarks. We will now initiate the Q&A session. Please limit questions to 2 per person so that we can get to all of our covering analysts. I'll turn it over to you, operator.

Our first question will come from Gena Wang with Barclays.

This is Kun Wang on behalf of Gena Wang from Barclays. We have 2 questions. First one for the PSMA, the GenX actually setting a higher bar for the PSA 50. However, the durability doesn't seem good. So how do you think the PSMA could show actual differentiation of your asset? And then we know the KOLs we spoke to actually focus on durability of the PSA control and more importantly, durability, the durable tumor response. The second question actually for the HDV. For the Phase III readout, what's your clinical bar as the key differentiation?

Yes. Thank you for those questions. So maybe on PSMA, I will just start by saying that we're really excited to provide the guidance and share a comprehensive data update for our lead asset, VIR-5500 in the first quarter of 2026. And of course, at that point, we will have a really meaningful data set across multiple dose levels, obviously, in the late-line patient setting. We will have data on both weekly and every 3-week dosing, and there will be certainly sufficient patient numbers to provide robust insights. Maybe I'll ask Mark to add anything.

Sure. Thanks, Marianne. We believe we have a unique approach with the PRO-XTEN platform, particularly with VIR-5500 PSMA. We employ a mechanism of steric hindrance to mask both the CD3 and the PSMA sides of the molecule. Our dual-masking strategy is distinct in the masked PSMA area and is clinically validated. The product ALTUVIIIO, which uses the PRO-XTEN masks, is already on the market, confirming its safety. We anticipate achieving an exceptional therapeutic index that includes both the depth and durability of PSA response. Please look forward to our Q1 update. Regarding your question about HDV and the ECLIPSE program, particularly ECLIPSE 1, I want to remind everyone that in the SOLSTICE trial, we reported a 64% viral suppression with targets not detected at week 36. We will soon present the complete 48-week SOLSTICE Phase II data at AASLD. In terms of what we are aiming for, the combination of tobevibart and elebsiran shows remarkable potential to suppress HDV viral RNA and reach the target of not detected. We can reduce HB surface antigen by 3 logs. While I can't provide a specific number today, we expect to demonstrate exceptional efficacy in the virologic outcomes I mentioned.

Our next question will come from the line of Mike Ulz with Morgan Stanley.

This is Rohit on for Mike. In terms of the VIR-5500 data, will that be presented at a conference in early January? Or do you think later in the quarter? And then secondly, is there anything you can point to that we should focus on, on the upcoming presentations at AASLD?

The first question is about the update and the timing for the first quarter. We haven't specified the exact month or the setting for the event, which could be a company event or an academic conference. That information will be announced later. Regarding AASLD and the SOLSTICE, we will present the complete 48-week data for tobevibart and elebsiran, as well as the tobevibart monotherapy arms. This will provide a full update on the target not detected for HB surface antigen and safety, giving you a comprehensive picture that I believe will be a significant update compared to what we've shared previously.

Our next question will come from the line of Paul Choi with Goldman Sachs.

My first is on VIR-5500 as well. Can you please clarify if your planned update in the first quarter of next year will be just the monotherapy patients? Or will you have any data with regard to the combination group that are being tested with ARPIs? And my second question is on hep D. Gilead announced that they're filing bulevirtide but at a 10-milligram dose versus the 2-milligram dose that is currently approved in Europe. Can you comment on how you think that might change the landscape here in the U.S. as you progress with your program? And also any potential regulatory implications, if any, if you think there are any there?

Thank you. Yes. Thank you, Paul. Maybe just on your first question. As you know, we only recently started the first-line mCRPC combination study with ARPIs. So that data will not be part of the first quarter 2026 update. And then on bulevirtide, Mark, do you want to take that?

Yes. Your question about Gilead's announcement regarding the expected approval in the second half of 2026 and the 10-milligram dose is noted. We actually consider it a very positive development for Vir Bio that Gilead plans to launch bulevirtide before our product. We believe this will increase disease awareness and emphasize the importance of HDV testing, which will prepare the market for our launch. We regard the 10-milligram and 2-milligram doses similarly. We are confident that our combination of tobevibart and elebsiran can achieve substantial virologic suppression compared to bulevirtide, regardless of the dose. Regarding regulatory implications, we are quite confident that our program is structured to achieve regulatory approval, with ECLIPSE 1 and ECLIPSE 2 forming the backbone of the regulatory submission, while ECLIPSE 3 will provide strong comparative data to enhance the value for patients and specifically for payers in the EU.

Our next question will come from the line of Cory Kasimov with Evercore ISI.

This is Josh Chazaro on for Cory Kasimov. Based off your PK and PD modeling data, are you surprised that you have not reached the maximum tolerated dose for VIR-5500? And can you share on whether you have seen any Grade 3 CRS events?

So are we surprised that we have not reached the maximum tolerated dose? Well, we've been going through dose escalation systematically, and that's been going very well. And I'm not really prepared to share any further details about dose escalation or results today. So stay tuned for our event in quarter 1 next year. And regarding more updated information on safety, again, we will be discussing that in quarter 1 next year at our data release.

Our next question will come from the line of Alec Stranahan with Bank of America.

This is Matthew on for Alec. In terms of the 48-week HDV data, can you maybe speak to how meaningful this data is for physician education ahead of a potential launch? And any reason to think that there would be a significant change from week 36 to 48?

So a great question. I do think that the data will be meaningful for educating physicians, clinicians and others who are interested in HDV about what our regimen can deliver at week 48. In terms of what we expect to show you, I mean, I would just say it's not going to be a long time. So stay tuned for our presentation, but we've been seeing deepening of responses over time to date. So we're excited to have the presentation and look forward to sharing it with you.

Our next question will come from the line of Ellen Horste with TD Cowen.

Just to drill down a little bit more on the TCE update. Can you talk a little bit more about how you're prioritizing the 3 TCE programs? Is there a world where you take all 3 of them forward? Or are you imagining that this will be a no-go/go decision for all 3 such that you only move forward with the best data? And maybe talk about the endpoints that you think are most important for that no-go/go decision, whether it's response rate or durability, safety, et cetera?

Thank you, Ellen. I'll start by saying our capital allocation priorities, as we have said, are really based on progressing our registrational study for hepatitis delta and then certainly accelerating as much as we can our VIR-5500 prostate cancer program. Our other T-cell engager programs, I mean, obviously, are gated based on data as is typical. And as we have also shared before, we have a number of preclinical programs that have garnered a lot of external interest. So we're also looking at potential business development opportunities across our pipeline.

Our next question will come from the line of Sean McCutcheon with Raymond James.

So how are you thinking about the optimal setting for the TCE program in prostate cancer? We got the results from PSMA addition, albeit a tepid reaction, but a lot more patients going to be PSMA radioligand exposed in the coming years. I know you've started the pre-taxane cohort that's up and running. But should we expect some proof-of-concept results post PSMA radioligand from your next update with more U.S. patients enrolled?

Sure. In terms of what to expect regarding the patient population for our update, we are currently conducting dose escalation in both weekly and every three weeks in the third-line plus mCRPC setting, which includes post-RLT patients. As Marianne mentioned, we have also started the frontline taxane-naive trials, although we won't have that data available for the update. Regarding how we will position this asset in the patient population, we are exploring a wide range and plan to include patient groups from late-line to earlier lines to hormone-sensitive cases. This decision will ultimately be driven by data. For the update in Q1, we will focus on the later-line patients that are part of Part 1 of the Phase I program.

Our next question will come from the line of Joseph Stringer with Needham & Company.

You've shown that your HDV combo therapy can reduce the hep B surface antigen level over time. I guess how well does this data resonate with KOLs and physicians? Is this something that you believe could be beneficial and potentially differentiator given the long-term chronic treatment paradigm for HDV? Or is it not nearly as important as, say, ALT and virological response?

Thanks for the question. I mean, firstly, I would state that the most important objective of our program with tobevibart and elebsiran is to suppress the virus to target not detected in a large proportion of patients because we know that suppressing delta virus to TND will translate into better outcomes for patients in terms of progression of the underlying liver disease. But I do think that the fact that we can reduce hepatitis B surface antigen levels by about 3 logs is important and does resonate with KOLs because as you recall, the surface antigen is critically important for the viral life cycle of delta. It needs the surface antigen to form its own viral coat. So the fact that we are starving the delta virus of the surface antigen is another mechanism by which we suppress the virus with our combination regimen. So we do think that is important and differentiating.

Our next question will come from the line of Patrick Trucchio with H.C. Wainwright.

I have a follow-up question regarding HDV. First, could you clarify the potential addressable patient population in the U.S. that might benefit from the combination of tobevibart and elebsiran at launch? Does this include the estimated 61,000 viremic patients with HDV in the U.S., or is there a specific subgroup that would be ideal for treatment at that time? Additionally, what ongoing efforts are being made to identify these patients? I understand that ECLIPSE 1 was enrolled two months ahead of schedule, so I'm interested in whether, particularly with the potential approval of bulevirtide, there will be greater awareness and how you plan to identify these patients. Ultimately, how many patients do you anticipate reaching at the time of launch?

Yes, that's a great question. We're estimating that there are about 60,000 patients in the U.S. who are viremic with HDV. Our treatment regimen should be applicable to a wide range of patients, as it can effectively treat those with both high and low viral loads, as well as patients with compensated cirrhosis or without cirrhosis. Therefore, we anticipate being able to reach a broad patient population suffering from HDV viremia, and we don’t believe our reach will be limited to any specific subgroup. Regarding our launch strategy, I agree that the initial enrollment of ECLIPSE 1 highlights the substantial unmet medical need for a treatment like tobevibart and elebsiran, which can effectively address the delta virus and the associated liver disease. We also see Gilead’s launch of bulevirtide as beneficial, as it will help to increase disease awareness and testing. We are actively engaging with key opinion leaders, advocacy groups, and diagnostic companies to enhance awareness. Additionally, I believe that our SOLSTICE presentation at AASLD this year will be very important, as it will showcase the complete 48-week data for our combination treatment, reinforcing our ECLIPSE program and boosting confidence in our goals of achieving high rates of target not detected and HBV surface antigen suppression, ultimately leading to better outcomes for patients.

Yes. And Patrick, as you know, I mean, both from an efficacy perspective and also from a patient convenience perspective, our regimen being monthly dosing, that is a very big differentiator.

This concludes the Q&A session of the call. Thank you for participating. I will now turn the call back over to Marianne.

Thank you, operator, and thank you all for joining us today. We look forward to updating you on our progress in the coming months. Operator, you may end the call.

This concludes our call today. Thank you for joining. You may now disconnect.