Vir Biotechnology, Inc. (VIR) Q3 2025 Earnings Report, Transcript and Summary

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. [Operator Instructions] I will now turn the call over to Jason O'Byrne, Chief Financial Officer. Please go ahead. Jason O’Byrne: 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 time line, 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 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 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 time line 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 time line 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 need 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 need 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 need 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. Jason O’Byrne: 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.

[Operator Instructions] Our first question will come from the line of 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. Well, we do think we have a differentiated approach with the PRO-XTEN platform and in particular for VIR-5500 PSMA. I'll comment on the fact that we use a steric hindrance mechanism for masking both the CD3 and the PSMA side of the molecule. We have a dual-masking approach, which is unique in the masked PSMA space. It's a clinically validated approach. There's a product on the market called ALTUVIIIO that uses the PRO-XTEN masks. So we know it's safe in that setting. And we think we can get to a really exceptional therapeutic index, which would include both depth and durability of PSA response. But stay tuned for our Q1 update. Your other question is about HDV and the ECLIPSE program and what we think the bar is, particularly for ECLIPSE 1. Just to remind people, we showed in the SOLSTICE trial, 64% viral suppression target not detected at week 36, that was at week 36 that we presented back -- before, and we are going to be presenting the complete 48-week SOLSTICE Phase II data at AASLD very shortly. In terms of the bar, we think the combination of our tobevibart and elebsiran have exceptional ability to suppress HDV viral RNA and achieve target not detected. We can hit HB surface antigen down by 3 logs. So I'm not going to give you a specific number today, but we are expecting to have a very exceptional efficacy in terms of the virologic outcomes that 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?

So -- sure. So the first question is about the update and exactly the timing in quarter 1 and the setting for quarter 1. We haven't provided that guidance exactly what month for what it will be in the setting. It could be a company event. It could be an academic conference. That's to be announced at a subsequent time. In terms of the focus for AASLD and the SOLSTICE, we will be showing the complete 48-week data for tobevibart and elebsiran and tobevibart monotherapy arms. So this will provide a complete update for target not detected for HB surface antigen, safety. So you'll get a complete picture there, which I think will be a meaningful update from what we've shown before.

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. So your question, Paul, is about the Gilead announcement that they expect approval in H2 2026 and your question specifically about the 10-milligram dose. I mean we actually think it's a very net positive for Vir Bio that Gilead will launch bulevirtide ahead of us. We think that they will help to drive disease awareness. We think that they will help to focus on testing, HDV testing, which would make -- prepare the landscape for our launch. We don't see the 10-milligram or 2-milligram. We see those similarly. I mean we still think our regimen of tobevibart and elebsiran can achieve really, really strong virologic suppression compared to bulevirtide with either dose. In terms of regulatory implications, we feel very confident that our program is designed to secure regulatory approval with ECLIPSE 1 and ECLIPSE 2 as being the core of the regulatory package and ECLIPSE 3 is providing really strong head-to-head information, which will bolster the value proposition for patients and in particular, 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 PSM addition, albeit a tepid reaction [ at U.S. ], 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. So in terms of what to exactly expect in terms of the patient population for our update, just as a reminder, we are currently doing dose escalation in both mono -- in both [ q week ] and [ q3 week ] in the third-line plus mCRPC setting. That would include post-RLT patients as a population. We also started, as Marianne said, the frontline taxane-naive, although we won't have that data for the update. In terms of where we're ultimately going to position this asset in terms of the patient population, I mean, we are interrogating the full gamut and intend to the patient populations from late-line to earlier line to hormone sensitive. So we will -- this will ultimately be a data-driven decision by how we ultimately position the molecule. But just to get back to the update in Q1, that will be the later-line patients that were the Part 1 or are 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 code. 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.

Just a follow-up question on HDV. First, just in terms of the addressable patients in the U.S. that you believe the combination of tobevibart and elebsiran could be relevant for at the time of launch. I'm wondering if that would include the 61,000 patients estimated in the U.S. who are viremic with HDV? Or is there a subgroup of patients who would be best for treatment at the time of launch? And separately, just sort of what efforts are ongoing to identify these patients? I mean, I appreciate that ECLIPSE 1 enrolled 2 months ahead of schedule. So just curious if -- particularly as bulevirtide maybe gets approved, if there's just going to be more awareness and how you'll actually go about discovering those patients? And ultimately, how many patients do you think you can reach at the time of launch?

Yes. So excellent question. So in terms of the HDV addressable population and launch, I mean, we're estimating approximately 60,000 patients in the U.S. who are viremic with HDV. We really think we can -- our regimen -- the patients will be eligible for a regimen [ broadly ] because we can treat patients effectively with high viral loads or lower viral loads. We can treat patients with compensated cirrhosis or non-cirrhotic. So we expect to be able to treat a very broad population of patients who are viremic with HDV. So we don't feel that, that will be constrained to any kind of subgroup at all. We feel like it will be a broad population. In terms of the -- how are we approaching the launch? Well, first of all, I would note that -- I agree with you that the [ first ] enrollment of ECLIPSE 1 really speaks to the high unmet medical need for a regimen that like tobevibart and elebsiran that can meaningfully address the delta virus patient, the patients with HDV and their viremia and the liver disease that follows. We also think that Gilead launching bulevirtide ahead of us, like I said before, would be a real advantage because it will drive disease awareness, drive testing and those things. We are in active discussions with KOLs, with advocacy groups, diagnostic companies, et cetera, about the best way forward to make -- to driving awareness ourselves. And back to an earlier question in terms of what will be the impact of our SOLSTICE presentation at AASLD this year, I mean I think it's going to be very significant because this is the first time we'll present the 48-week complete data for the combination, which really undergirds our ECLIPSE program and provides further confidence, I think, in what we're trying to achieve with ECLIPSE, which is really high rates of target not detected, HBV surface antigen suppression and really hopefully driving good 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.