Vir Biotechnology Pivots to Immunology and Oncology After COVID-19 Setback

Vir Biotechnology, once a rising star in the fight against COVID-19, has undergone a significant transformation under the leadership of CEO Marianne de Backer. The company is now refocusing its efforts on immunology and oncology, leveraging its expertise in immune system function to drive future growth.

Strategic Shift and Restructuring

After losing emergency authorization for its COVID-19 antibody sotrovimab in late 2022, Vir faced a critical juncture. De Backer, who took the helm in April 2023, initiated a comprehensive review of the company's strengths and future direction. This led to a strategic pivot away from viral infections and towards broader applications of the company's immunology expertise.

The restructuring process involved significant changes:

• Reduction of workforce by 200 employees (25% of staff)
• Closure of three sites, retaining headquarters in San Francisco and a research site in Bellinzona, Switzerland
• Discontinuation of COVID-19 and influenza programs
• Termination of the T cell-based viral vector platform

De Backer also rebuilt the management team, bringing in key executives including Jason O'Byrne as CFO, Mark Eisner as chief medical officer, and Jennifer Towne as chief medical officer.

Expansion into Oncology

A pivotal moment in Vir's transformation came in August 2024 with a deal struck with Sanofi. This agreement brought three masked T cell engagers to Vir's pipeline, along with approximately 50 skilled personnel. The deal, which de Backer described as "almost like an acquisition," provided Vir with biologically validated targets and compelling preclinical data.

Early clinical results have been promising:

• VIR-5818 (HER2-expressing cancers): 50% of 20 patients experienced tumor shrinkage, with confirmed partial responses in two out of six patients with HER2-positive colorectal cancer.
• VIR-5500 (metastatic castration-resistant prostate cancer): All 12 patients showed declines in prostate-specific antigen (PSA), with confirmed PSA response in seven individuals.
• VIR-5525 (EGFR tumors): Expected to enter clinical trials in the first half of 2025.

Ongoing Programs and Future Outlook

While pivoting towards oncology, Vir maintains select programs in infectious diseases:

• Hepatitis D: Three registrational trials planned for 2025, described by de Backer as "a core priority."
• Hepatitis B: Seeking a partner for the Phase II program, with potential market size estimated at $450-500 billion.
• HIV: Preclinical program, also seeking a partnership.

With approximately $1.1 billion in cash and investments, Vir has a runway extending into mid-2027. The company, now with about 430 full-time employees, is focused on clinical execution and potential dealmaking opportunities.

Analysts from H.C. Wainwright have expressed optimism about Vir's new direction, noting that the oncology pipeline shows signs of differentiation in the immuno-oncology space and represents an underappreciated asset with potential for long-term value creation.