Vir Biotechnology, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included as part of our Annual Report on Form 10-K for the year ended December 31, 2023. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company”, “Vir,” “we,” “us” and “our” refer to Vir Biotechnology, Inc. and its consolidated subsidiaries. Overview We are an immunology company focused on combining cutting-edge technologies to treat and prevent serious infectious diseases and other serious conditions, including viral-associated diseases. At Vir, we have a bold vision – powering the immune system to transform lives. We aim to achieve this in two fundamental ways – first through developing powerful antibody therapeutics and second by generating unique T cell responses in vivo through our T cell-based viral vector platform. Our growth and pursuit of scientific innovation is fueled by our world-class leading monoclonal antibody (mAb) platform that has a proven track record and is further strengthened by our artificial intelligence-led mAb optimization and engineering capabilities. Our current clinical development pipeline consists of product candidates targeting hepatitis delta virus (HDV), hepatitis B virus (HBV), and human immunodeficiency virus (HIV). The most advanced preclinical candidates in our pipeline include those targeting influenza A and B, coronavirus disease 2019 (COVID-19), respiratory syncytial virus (RSV) and human metapneumovirus (MPV), and human papillomavirus (HPV). We have assembled two technology platforms that modulate the immune system by exploiting critical observations of natural immune processes— a mAb discovery platform and a T cell-based viral vector platform. Additionally, Vir is evaluating a small interfering RNA (siRNA) through a collaboration with Alnylam in our hepatitis clinical trials. We have established our own internal process development, analytical development, manufacturing, supply chain and quality capabilities and work with contract development and manufacturing organizations (CDMOs) to develop, manufacture, test and supply our early- and late-stage product candidates. We have an industry-leading management team and board of directors with significant immunology and infectious diseases experience, including a proven track record of progressing product candidates from early-stage research through clinical development, and worldwide regulatory approval and commercialization experience. Given the global impact of infectious diseases and other serious conditions, we are committed to providing broad access to our therapeutics. Significant Developments Following is a summary of selected significant developments affecting our business that occurred since the filing of our Annual Report on Form 10-K for the year ended December 31, 2023 . Pipeline Programs Chronic Hepatitis Delta (CHD) • On March 5, 2024, we announced our Phase 2 chronic hepatitis delta SOLSTICE trial completed enrollment of its current cohorts one month ahead of schedule with over 60 participants enrolled in two additional cohorts. ◦ The trial is evaluating the safety, tolerability and efficacy of tobevibart and elebsiran for the treatment of people living with chronic hepatitis delta. ◦ One cohort is evaluating the combination of tobevibart and elebsiran given every 4 weeks with a second cohort evaluating tobevibart monotherapy given every 2 weeks. ◦ Approximately 50% of participants have compensated cirrhosis. • We will report data on a subset of SOLSTICE participants in a late breaker poster presentation at the European Association for the Study of the Liver (EASL) Congress 2024. This includes additional 12-week treatment data on approximately 30 participants (~15 per regimen) and 24-week treatment data on approximately 20 participants (~10 per regimen). 22 Table of Contents • Additional follow-up data for the initial six SOLSTICE trial participants will also be shared at the EASL Congress 2024. • Complete 24-week treatment data is expected in the fourth quarter of 2024. Chronic Hepatitis B (CHB) • Two abstracts have been accepted for poster presentation at the EASL Congress 2024. • The Phase 2 MARCH Part B trial is fully enrolled with 48-week end of treatment data expected in the fourth quarter of 2024. The trial is evaluating the safety, tolerability and antiviral activity of the combination of tobevibart and elebsiran with and without peginterferon alpha. • Initial data from the Phase 2 PREVAIL platform trial and its THRIVE/STRIVE sub-protocols is expected in the first half of 2025. These trials are evaluating combinations of tobevibart, elebsiran and/or peginterferon alpha in two patient populations: immune-active but treatment-naïve and inactive carriers. Human Immunodeficiency Virus (HIV) • Part A of the Phase 1 trial of VIR-1388, an investigational novel T cell vaccine for the prevention of HIV, is fully enrolled with initial immunogenicity data expected in the second half of 2024. ◦ The trial is supported by the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, and the Bill & Melinda Gates Foundation, and is being conducted by the HIV Vaccine Trials Network. Influenza • On April 4, 2024, we published the full data analysis from the Phase 2 PENINSULA trial evaluating VIR-2482 on medRxiv. Preclinical Pipeline Candidates • We are continuing to advance next-generation antibodies using our proprietary platform, which leverages dAIsY™ ( d ata AI s tructure and antibod y ), our proprietary AI engine, enabling us to bring high-quality drug candidates to the clinic more efficiently. • We expect the filing of multiple investigational new drug applications within the next 18 months, including: ◦ VIR-1949, an investigational therapeutic T cell vaccine based on our human cytomegalovirus (HCMV) vector platform that is designed to treat precancerous lesions caused by the human papillomavirus. ◦ VIR-7229, a next-generation COVID monoclonal antibody candidate that has been AI-engineered to have increased potency, breadth and resistance to viral escape. The development of VIR-7229 has been supported in part with federal funds from the Department of Health and Human Services (HHS); Administration for Strategic Preparedness and Response (ASPR); Biomedical Advanced Research and Development Authority (BARDA), under Other Transaction Number: 75A50122C00081. ◦ VIR-2981, an investigational neuraminidase-targeting monoclonal antibody against both influenza A and B viruses. ◦ VIR-8190 and other investigational monoclonal antibodies against respiratory syncytial virus and/or metapneumovirus as part of the collaboration established with GSK in May of 2021. Corporate Update • Effective May 3, 2024, Sung Lee, Executive Vice President and Chief Financial Officer will be stepping down from his role to pursue another career opportunity. We have initiated a search for a successor. 23 Table of Contents Our Collaboration, License and Grant Agreements We have entered into collaboration, license and grant arrangements with various third parties. For details regarding these and other agreements, see Note 4—Grant Agreements and Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 7—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 26, 2024. Components of Operating Results Revenues To date, sotrovimab has been granted emergency authorization, temporary authorization or marketing approval (under the brand name Xevudy®), and has been supplied in more than 30 countries. Although we have previously recognized revenue from our profit-share related to sotrovimab under our definitive collaboration agreement with GSK executed in June 2020, or the 2020 GSK Agreement, we may continue to incur net operating losses for at least the next several years as the extent of future revenue from the sale of sotrovimab remains uncertain. While we have an EUA from the U.S. Food and Drug Administration, or FDA, for sotrovimab, the FDA has excluded the use of sotrovimab in all U.S. regions due to the continued proportion of COVID-19 cases caused by certain Omicron subvariants. With this EUA revision, sotrovimab is not currently authorized for use in any U.S. region. Although certain countries outside the U.S. continue to maintain access to 500 mg IV while noting that the clinical efficacy is unknown or uncertain against existing and emerging variants, we cannot predict whether other countries will further limit the use of sotrovimab. Due to the evolving COVID-19 landscape and based on discussions with the FDA, we and GSK do not plan to file a Biologics License Application, or BLA, for sotrovimab at this time. In light of these developments, we cannot predict whether (if at all) or to what extent sotrovimab may be reauthorized for use by the FDA in any U.S. region in the future, and we do not expect meaningful collaboration revenue in the future from the sale of sotrovimab for the treatment of COVID-19 even if it were reauthorized by the FDA. In addition, we have not obtained regulatory approval for any other product candidates, and we do not expect to generate any significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. Collaboration revenue Collaboration revenue includes recognition of our profit-share from the sales of sotrovimab pursuant to the 2020 GSK Agreement. Our contractual share of 72.5% from the sales of sotrovimab is applied to the net sales reported in the period by GSK, net of cost of goods sold and allowable expenses from both GSK and us (e.g., manufacturing, distribution, medical affairs, selling, and marketing expenses). In order to record collaboration revenue, we utilize certain information from our collaboration partner, including actual net product sales and costs incurred for sales activities, and make key judgments based on business updates related to commercial and clinical activities, such as expected commercial demand, commercial supply plan, manufacturing commitments, risks related to expired or obsolete inventories, and risks related to potential product returns or contract terminations. In 2024, we expect a nominal amount of collaboration revenue, if any, from our 2020 GSK Agreement, and we may incur negative collaboration revenue related to costs for ongoing required support efforts that our partner GSK leads. Constraint on variable consideration In May 2021, the FDA granted an EUA in the U.S. for sotrovimab. In April 2022, the FDA excluded the use of sotrovimab in all U.S. regions due to the continued proportion of COVID-19 cases caused by certain Omicron subvariants. As the lead party for all manufacturing and commercialization activities, GSK incurs all of the manufacturing, sales and marketing expenses and is the principal on sales transactions with third parties. Our accounting policy related to the profit-share is to consider the agreed-upon share of the profit-sharing amounts each quarter and evaluate whether those amounts are subject to potential future adjustments based on the latest available facts and circumstances, subject to the terms of the 2020 GSK Agreement. 24 Table of Contents As we are the agent under the 2020 GSK Agreement, we recognize our contractual share of the profit-sharing amounts or royalties (in case of an opt-out) as revenue, based on sales net of various estimated deductions such as rebates, discounts, chargebacks, credits and returns, less cost of sales and allowable expenses (including manufacturing, distribution, medical affairs, selling, and marketing expenses) in the period the sale occurs. Manufacturing costs include inventory revaluation adjustments, lower of cost or market inventory adjustments, inventory write-downs and write-offs, and binding purchase commitments with a third-party manufacturer, among other manufacturing costs. Our contractual share of the profit-sharing amounts is subject to potential future adjustments to allowable expenses, which we account for as a form of variable consideration. In 2023, GSK reported to us certain allowable manufacturing expenses related to excess sotrovimab supply and binding reserved manufacturing capacity not utilized, which we had previously reserved as a constraint on our cumulative profit-sharing amounts. GSK may continue to adjust allowable manufacturing expenses for our share of the excess supply write-offs and unused binding manufacturing capacity and report to us as cost-sharing amounts in future periods. We evaluate the latest available facts and circumstances to update our evaluation of whether any portion of profit-sharing amounts should continue to be constrained. We re-assess these estimates at each reporting period. Actual results could materially differ from estimates. Contract revenue Contract revenue includes recognition of revenue generated from license rights issued to GSK, from research and development services under third-party contracts, and from a third-party clinical supply agreement. Grant revenue Grant revenue is comprised of revenue derived from grant agreements with government-sponsored and private organizations. Operating Expenses Cost of Revenue Cost of revenue currently represents royalties earned by third-party licensors on net sales of sotrovimab. We recognize these royalties as cost of revenue when we recognize the corresponding revenue that gives rise to payments due to our licensors. Research and Development To date, our research and development expenses have related primarily to discovery efforts and preclinical and clinical development of our product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. We do not track all research and development expenses by product candidate. Research and development expenses consist primarily of costs incurred for our product candidates in development and prior to regulatory approval, which include: • expenses related to license and collaboration agreements, and change in fair value of certain contingent consideration obligations arising from business acquisitions; • personnel-related expenses, including salaries, benefits and stock-based compensation for personnel contributing to research and development activities; • expenses incurred under agreements with third-party contract manufacturing organizations, contract research organizations, and consultants; • clinical costs, including laboratory supplies and costs related to compliance with regulatory requirements; and • other allocated expenses, including expenses for rent and facilities maintenance, and depreciation and amortization. We expect our research and development expenses to increase substantially in absolute dollars over time as we advance our product candidates into and through preclinical studies and clinical trials and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical programs, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability. 25 Table of Contents As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate significant revenue from the commercialization and sale of any of our product candidates. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, our ongoing assessments as to each product candidate’s commercial potential and the impact of public health epidemics, such as the COVID-19 pandemic. In addition, our existing collaborators have significant discretion in determining the efforts and resources that they will apply to our collaborations and may not pursue further development and commercialization of products resulting from our collaboration arrangements or may elect to not to continue or renew research and development programs, which would delay the development and may increase the cost of developing our product candidates and may result in a need for additional capital or a suitable replacement collaborator. For those product candidates where there is not a current collaboration arrangement in place, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured (if at all) and to what degree such arrangements will affect our development plans and capital requirements. Our clinical development costs may vary significantly based on factors such as: • whether a collaborator is paying for some or all of the costs; • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • enrollment and retention of patients in trials in countries disrupted by geopolitical events, including civil or political unrest; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing our product candidates; • the phase of development of our product candidates; and • the efficacy and safety profile of our product candidates. Selling, General and Administrative Our selling, general and administrative expenses consist primarily of personnel-related expenses for personnel in executive, finance and other administrative functions, facilities and other allocated expenses, other expenses for outside professional services, including legal, audit and accounting services, insurance costs and change in fair value of certain contingent consideration obligations arising from business acquisitions. Personnel-related expenses consist of salaries, benefits and stock-based compensation. We expect our selling, general and administrative expenses to increase in absolute dollars over time as we continue to support our research and development activities, and commercialization activities for any of our product candidates, if approved, and to grow our business. Change in Fair Value of Equity Investments Change in fair value of equity investments consists of the remeasurement of our investment in Brii Biosciences Limited’s, or Brii Bio Parent, ordinary shares based on the quoted market price at each reporting date. Interest Income Interest income consists of interest earned on our cash, cash equivalents and investments. 26 Table of Contents Other Expense, Net Other expense, net consists of gains and losses from foreign currency transactions and the remeasurement of our contingent consideration obligation. (Provision for) Benefit from Income Taxes (Provision for) benefit from income taxes consists primarily of income taxes on our domestic and foreign operations. Net Loss Attributable to Noncontrolling Interest Net loss attributable to noncontrolling interest consists of net loss attributable to the noncontrolling interest owners of Encentrio Therapeutics, Inc., our subsidiary, during the three months ended March 31, 2023. Results of Operations Comparison of the Three Months Ended March 31, 2024 and 2023 The following table summarizes our results of operations for the periods presented (in thousands): Three Months Ended March 31, 2024 2023 Change Revenues: Collaboration revenue $ (987) $ 46,574 $ (47,561) Contract revenue 52,191 138 52,053 Grant revenue 5,172 16,245 (11,073) Total revenues 56,376 62,957 (6,581) Operating expenses: Cost of revenue 59 1,907 (1,848) Research and development 100,125 157,643 (57,518) Selling, general and administrative 36,273 46,778 (10,505) Total operating expenses 136,457 206,328 (69,871) Loss from operations (80,081) (143,371) 63,290 Other income: Change in fair value of equity investments (5,915) (13,103) 7,188 Interest income 21,283 21,307 (24) Other expense, net (287) (8,021) 7,734 Total other income 15,081 183 14,898 Loss before (provision for) benefit from income taxes (65,000) (143,188) 78,188 (Provision for) benefit from income taxes (276) 2,232 (2,508) Net loss (65,276) (140,956) 75,680 Net loss attributable to noncontrolling interest — (56) 56 Net loss attributable to Vir $ (65,276) $ (140,900) $ 75,624 Revenues The decrease in collaboration revenue for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to lower revenues from the release of profit-sharing amount previously constrained and from the sales of sotrovimab under the 2020 GSK Agreement. The negative collaboration revenue for the three months ended March 31, 2024 consisted of $0.3 million profit-sharing loss from the sale of sotrovimab and $0.7 million profit-sharing amount constrained. 27 Table of Contents The increase in contract revenue for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to $51.7 million of deferred revenue recognized during the three months ended March 31, 2024 as GSK’s rights to select up to two additional non-influenza target pathogens under the 2021 GSK Agreement expired on March 25, 2024. The decrease in grant revenue for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to lower revenue recognized in accordance with our agreement with BARDA. Cost of Revenue The decrease in cost of revenue for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to lower third-party royalties owed based on the sales of sotrovimab under the 2020 GSK Agreement. Research and Development Expenses The following table shows the primary components of our research and development expenses for the periods presented (in thousands): Three Months Ended March 31, 2024 2023 Change Licenses, collaborations and contingent consideration $ 5,696 $ 7,746 $ (2,050) Personnel 46,190 43,944 2,246 Contract manufacturing 9,669 37,553 (27,884) Clinical costs 11,607 39,838 (28,231) Other 26,963 28,562 (1,599) Total research and development expenses $ 100,125 $ 157,643 $ (57,518) The decrease in research and development expenses for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to lower clinical costs and contract manufacturing costs associated with the wind down of the Company’s Phase 2 PENINSULA trial evaluating VIR-2482. Selling, General and Administrative Expenses The decrease in selling, general and administrative expenses for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to cost saving initiatives implemented during the second half of 2023. Change in Fair Value of Equity Investments Our investment consisted solely of shares of Brii Bio Parent is a marketable equity investment and remeasured to fair value at each reporting period. For the three months ended March 31, 2024, we recognized an unrealized loss of $5.9 million due to the change in fair value, compared to an unrealized loss of $13.1 million for the same period in 2023. Interest Income The decrease in interest income for the three months ended March 31, 2024 compared to the same period in 2023 was not material. Other Expense, Net The decrease in other expense, net for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to a decrease in foreign exchange measurement loss related to the accrued liability recognized in connection with the profit-sharing amount constrained under the 2020 GSK Agreement. (Provision for) Benefit from Income Taxes The provision for income taxes for the three months ended March 31, 2024 was not material. The benefit from income taxes for the three months ended March 31, 2023 was primarily due to a pre-tax loss and the Company’s ability to carry back the research and development credit to 2022. 28 Table of Contents Liquidity, Capital Resources and Capital Requirements Sources of Liquidity To date, we have financed our operations primarily through sales of our common stock from our initial public offering and subsequent follow-on offering, sales of our convertible preferred securities, and payments received under our grant and collaboration agreements. As of March 31, 2024, we had $1.51 billion in cash, cash equivalents, and investments. As of March 31, 2024, we had accumulated deficit of $303.1 million. We entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or TD Cowen, in November 2023 pursuant to which we may from time to time offer and sell shares of our common stock for an aggregate offering price of up to $300.0 million, through or to TD Cowen, acting as sales agent or principal. The shares will be offered and sold under the shelf registration statement on Form S-3 and a related prospectus that we filed with the SEC on November 3, 2023. We will pay TD Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide TD Cowen with customary indemnification and contribution rights. As of March 31, 2024, no shares have been sold under the Sales Agreement. Funding Requirements and Conditions Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, selling, general and administrative expenditures. We have not obtained regulatory approval for any product candidates other than sotrovimab, and we do not expect to generate significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. We may continue to incur net losses for the foreseeable future. Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of March 31, 2024 as noted above will enable us to fund our operations for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to raise additional capital to complete the development and commercialization of our product candidates and fund certain of our existing manufacturing and other commitments. We expect to finance our cash needs through public or private equity or debt financings, third-party (including government) funding and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. See the sections titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs—Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates” and “Risk Factors—Risks Related to Our Financial Position and Capital Needs—We may require substantial additional funding to finance our operations. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate certain of our development programs or other operations” for a description of the risks that may be associated with any future capital raises. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements. See the section titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs” for a description of certain risks that will affect our future capital requirements. We have various operating lease arrangements for office and laboratory spaces located in California, Oregon, Missouri and Switzerland with contractual lease periods expiring between 2024 and 2034. As of March 31, 2024, we expect to make total lease payments of $152.1 million through 2034. 29 Table of Contents To date, we have entered into collaboration, license and acquisition agreements where the payment obligations are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones, and we are required to make royalty payments in connection with the sale of products developed under those agreements. For additional information regarding these agreements, including our payment obligations thereunder, see Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 7—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024. For information related to our future commitments under our facilities and manufacturing agreements. see Note 10—Commitments and Contingencies to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024. In the first quarter of 2024, the Company and a third-party contract development manufacturing organization entered into various scopes of work with respect to the manufacturing of tobevibart (the Tobevibart Agreements). As of March 31, 2024, the Company had a balance of unpaid commitments of approximately $20 million under the Tobevibart Agreements. We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements. Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Three Months Ended March 31, 2024 2023 Net cash (used in) provided by: Operating activities $ (109,390) $ (125,782) Investing activities 28,420 98,079 Financing activities 152 2,344 Net decrease in cash, cash equivalents and restricted cash and cash equivalents $ (80,818) $ (25,359) Operating Activities Cash used in operating activities is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Cash used in operating activities during the three months ended March 31, 2024 decreased compared to the same period in 2023 primarily due to lower clinical development and contract manufacturing activities related to the wind down of the Phase 2 PENINSULA trial evaluating VIR-2482, lower payments for third-party royalties based on the sales of sotrovimab under the 2020 GSK Agreement, and higher interest receipts, partially offset by lower receipts for grant and collaboration revenues. Investing Activities Cash provided by investing activities during the three months ended March 31, 2024 decreased compared to the same period in 2023 primarily due to lower proceeds from investments maturities and sales net of investments purchases. Financing Activities Cash provided by financing activities during the three months ended March 31, 2024 decreased compared to the same period in 2023 primarily due to lower proceeds from the exercises of stock options. Critical Accounting Policies and Estimates Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of our unaudited condensed consolidated financial statements requires us to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. There have been no significant changes in our critical accounting policies during the three months ended March 31, 2024, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024. 30 Table of Contents