What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-03 · 223 added, 100 removed, 483 unchanged (40% of the section changed)

25 unchanged sentences

Total current liabilities 96,412 175,407

Deferred revenue, noncurrent 1,526 1,526

Operating lease liabilities, noncurrent 95,018 111,673

5 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

no shares issued and outstanding as of March 31, 2024 and December 31, 2023

10,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

no shares issued and outstanding as of June 30, 2024 and December 31, 2023

Common stock, $ 0.0001 par value;

300,000,000 shares authorized as of March 31, 2024 and December 31, 2023;

135,843,560 and 134,781,286 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

300,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

136,590,097 and 134,781,286 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,878,013 1,828,862

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Collaboration revenue $ 55 $ ( 13,779 ) $ ( 932 ) $ 32,795

6 unchanged sentences

Selling, general and administrative 30,265 45,512 66,586 92,290

Restructuring, long-lived assets impairment and related charges 26,275 5,366 26,227 5,366

Total operating expenses 161,705 218,983 298,162 425,311

5 unchanged sentences

Total other income 18,740 17,563 33,821 17,746

Loss before (provision for) benefit from income taxes ( 65,000 ) ( 143,188 )

(Provision for) benefit from income taxes ( 276 ) 2,232

Loss before benefit from income taxes ( 139,890 ) ( 197,623 ) ( 204,890 ) ( 340,811 )

Benefit from income taxes 1,512 2,848 1,236 5,080

Net loss ( 138,378 ) ( 194,775 ) ( 203,654 ) ( 335,731 )

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net loss $ ( 138,378 ) $ ( 194,775 ) $ ( 203,654 ) $ ( 335,731 )

1 unchanged sentence

Unrealized (loss) gain on investments ( 491 ) 307 ( 1,902 ) 6,201

Amortization of actuarial (loss) gain ( 171 ) 9

Amortization of actuarial gain (loss) 9 9 ( 162 ) 18

Total other comprehensive (loss) income ( 482 ) 316 ( 2,064 ) 6,219

14 unchanged sentences

Stockholders’

Balance at December 31, 2023 134,781,286 $ 13 $ 1,828,862 $ ( 815 ) $ ( 237,824 ) $ — $ 1,590,236

Shares Amount

Balance at March 31, 2024 135,843,560 $ 14 $ 1,852,839 $ ( 2,397 ) $ ( 303,100 ) $ — $ 1,547,356

Vesting of restricted common stock 289,451 — — — — — —

Exercise of stock options 141,255 — 410 — — — 410

Issuance of common stock under employee stock purchase plan 315,831 — 2,602 — — — 2,602

Stock-based compensation — — 22,162 — — — 22,162

1 unchanged sentence

Net loss — — — — ( 138,378 ) — ( 138,378 )

Balance at June 30, 2024 136,590,097 $ 14 $ 1,878,013 $ ( 2,879 ) $ ( 441,478 ) $ — $ 1,433,670

Vir Stockholders’ Equity

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Noncontrolling

Interest Total

Stockholders’

Shares Amount

Balance at March 31, 2023 133,930,957 $ 13 $ 1,737,626 $ ( 3,219 ) $ 236,337 $ 44 $ 1,970,801

Vesting of restricted common stock 100,292 — — — — — —

Exercise of stock options 84,342 — 742 — — — 742

Issuance of common stock under employee stock purchase plan 114,903 — 2,605 — — — 2,605

Stock-based compensation — — 30,619 — — — 30,619

Other comprehensive income — — — 316 — — 316

Increase in ownership interest in a subsidiary — — ( 56 ) — — ( 44 ) ( 100 )

Net loss — — — — ( 194,775 ) — ( 194,775 )

Balance at June 30, 2023 134,230,494 $ 13 $ 1,771,536 $ ( 2,903 ) $ 41,562 $ — $ 1,810,208

The accompanying notes are an integral part of these condensed consolidated financial statements.

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except shares amounts)

Vir Stockholders’ Equity

2 unchanged sentences

Comprehensive

Loss Accumulated Deficit Noncontrolling

Interest Total

Stockholders ’

Shares Amount

Balance at December 31, 2023 134,781,286 $ 13 $ 1,828,862 $ ( 815 ) $ ( 237,824 ) $ — $ 1,590,236

Vesting of restricted common stock 1,239,705 1 — — — — 1

Exercise of stock options 253,275 — 630 — — — 630

Issuance of common stock under employee stock purchase plan 315,831 — 2,602 — — — 2,602

Stock-based compensation — — 45,919 — — — 45,919

Other comprehensive loss — — — ( 2,064 ) — — ( 2,064 )

Net loss — — — — ( 203,654 ) — ( 203,654 )

Balance at June 30, 2024 136,590,097 $ 14 $ 1,878,013 $ ( 2,879 ) $ ( 441,478 ) $ — $ 1,433,670

Vir Stockholders’ Equity

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

2 unchanged sentences

Stockholders’

Shares Amount

Balance at December 31, 2022 133,236,687 $ 13 $ 1,709,835 $ ( 9,122 ) $ 377,237 $ — $ 2,077,963

1 unchanged sentence

Exercise of stock options 261,444 — 3,052 — — — 3,052

Issuance of common stock under employee stock purchase plan 114,903 — 2,605 — — — 2,605

Stock-based compensation — — 56,100 — — — 56,100

1 unchanged sentence

Contributions from noncontrolling interest owners — — — — — 100 100

Increase in ownership interest in a subsidiary — — ( 56 ) ( 44 ) ( 100 )

Net loss — — — — ( 335,675 ) ( 56 ) ( 335,731 )

Balance at March 31, 2023 133,930,957 $ 13 $ 1,737,626 $ ( 3,219 ) $ 236,337 $ 44 $ 1,970,801

Balance at June 30, 2023 134,230,494 $ 13 $ 1,771,536 $ ( 2,903 ) $ 41,562 $ — $ 1,810,208

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

8 unchanged sentences

Stock-based compensation 45,919 56,100

In-process research and development impairment 3,512 6,899

Long-lived assets impairment and disposal loss 26,467 5,366

Change in deferred income taxes ( 363 ) —

Other non-cash items, net — 172

17 unchanged sentences

Proceeds from exercise of stock options 630 3,052

Issuance of common stock under ESPP 2,602 2,605

Contributions from noncontrolling interest owners — 100

Increase in ownership interest in a subsidiary — ( 100 )

Net cash provided by financing activities 3,094 5,523

Net decrease in cash, cash equivalents and restricted cash and cash equivalents ( 80,818 ) ( 25,359 )

Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents 55,884 ( 181,112 )

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period 261,292 867,968

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Vir Biotechnology, Inc.

(“Vir” or the “Company”) is an immunology company focused on powering the immune system to transform lives by treating and preventing infectious diseases and other serious conditions, including viral-associated diseases.

Vir has assembled two technology platforms that are designed to modulate the immune system by exploiting critical observations of natural immune processes.

Its current clinical development pipeline consists of product candidates targeting hepatitis delta virus (“HDV”), hepatitis B virus (“HBV”), and human immunodeficiency virus (“HIV”).

Vir has several preclinical candidates in its pipeline, including those targeting influenza A and B, coronavirus disease 2019 (“COVID-19”), respiratory syncytial virus and human metapneumovirus (“RSV” and “MPV”, respectively), and human papillomavirus (“HPV”).

(“Vir” or the “Company”) is clinical-stage biopharmaceutical company focused on powering the immune system to transform lives by discovering and developing medicines for serious infectious diseases and cancer.

Its current clinical development pipeline consists of product candidates targeting hepatitis delta virus (“HDV”) and hepatitis B virus (“HBV”).

Vir also has a preclinical portfolio of programs across a range of other infectious diseases, including respiratory syncytial virus and human metapneumovirus (“RSV” and “MPV”, respectively).

In January 2023, a majority-owned subsidiary, Encentrio Therapeutics, Inc.

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The Company 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.

As of March 31, 2024, the Company had $ 1.51 billion in cash, cash equivalents, and investments, which the Company believes will be sufficient to fund its operations for a period through at least twelve months from the issuance date of these unaudited condensed consolidated financial statements.

As of June 30, 2024, no shares have been sold under the Sales Agreement.

As of June 30, 2024, the Company had $ 1.43 billion in cash, cash equivalents, and investments, which the Company believes will be sufficient to fund its operations for a period through at least twelve months from the issuance date of these unaudited condensed consolidated financial statements.

Summary of Significant Accounting Policies

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The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial information.

The unaudited condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period.

The unaudited condensed consolidated results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other future annual or interim period.

Certain information and footnote disclosures typically included in the Company’s annual consolidated financial statements have been condensed or omitted.

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The Company is subject to a number of challenges and risks similar to other biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of product candidates, and protection of proprietary technology.

If the Company does not successfully obtain regulatory approval, commercialize or partner any of its product candidates, it will be unable to generate revenue from product sales or maintain profitability.

If the Company does not successfully obtain regulatory approval or commercialize or partner any of its product candidates, it will be unable to generate revenue from product sales or maintain profitability.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and investments.

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The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments and issuers of the investments to the extent recorded on the unaudited condensed consolidated balance sheets.

As of March 31, 2024, the Company has no off-balance sheet concentrations of credit risk.

As of June 30, 2024, the Company has no off-balance sheet concentrations of credit risk.

Cash Equivalents

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Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents represent money market funds to secure standby letters of credit and security deposits with financial institutions, both under office and laboratory space lease agreements.

Additionally, funds received from certain grants are restricted as to their use and are therefore classified as restricted cash and cash equivalents.

Restricted cash and cash equivalents, current and noncurrent, primarily consist of funds received from certain grants that are restricted as to their use and money market funds to secure standby letters of credit and security deposits with financial institutions under office and laboratory space lease agreements.

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation and amortization and, if applicable, impairment charges.

Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets, generally three to five years .

Leasehold improvements are amortized over the lesser of their useful lives or the remaining life of the lease.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the balance sheet, and the resulting gain or loss is reflected in operations in the period realized.

Maintenance and repairs are charged to operations as incurred.

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (group) may not be recoverable.

Recoverability is measured by comparing the carrying amount to the future net undiscounted cash flows that the asset (group) is expected to generate.

If such asset (group) is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset (group) exceeds its fair value.

Revenue Recognition

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The Company uses these estimates to determine whether payments due to it under its collaboration arrangements, such as profit-share payments, should be recognized as revenue in the period that they become due or whether any portion of the payments due should be constrained from revenue recognition because it is not probable that recognizing such amounts will not result in a significant reversal of cumulative revenues recognized in future reporting periods.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company has entered into a number of license and collaboration agreements that fall within the scope of ASC 606.

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Developing certain assumptions (e.g., treatable patient population, expected market share, probability of success and product profitability, and discount rate based on weighted-average cost of capital) to estimate the SSP of a distinct performance obligation requires significant judgment.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

For performance obligations satisfied over time, the Company estimates the efforts needed to complete the performance obligation and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligation using an input measure.

8 unchanged sentences

The changes in fair values of contingent consideration related to the achievement of various milestones are recorded within research and development expenses or selling, general and administrative expenses based on the nature of the relevant underlying activities.

In accordance with ASC 842, Leases, the Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term.

ROU assets are based on the measurement of the lease liability, include any lease payments made prior to or on lease commencement, and exclude lease incentives and initial direct costs incurred, as applicable.

On the lease commencement date, the Company estimates and includes in its lease payments any lease incentive amounts based on future events when (1) the events are within the Company’s control and (2) the event triggering the right to receive the incentive is deemed reasonably certain to occur.

If the lease incentive received is greater or less than the amount recognized at lease commencement, the Company recognizes the difference as an adjustment to ROU asset and/or lease liability, as applicable.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

As the implicit rate in the Company’s leases is generally unknown, the Company uses an incremental borrowing rate estimated based on the information available at the lease commencement date in determining the present value of future lease payments.

When calculating its estimated incremental borrowing rates, the Company considers its credit risk, the lease term, the total lease payments and the impact of collateral, as necessary.

The lease terms may include options to extend or terminate the lease when the Company is reasonably certain it will exercise such options.

ROU assets and lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification.

Rent expense for the Company’s operating leases is recognized on a straight-line basis within operating expenses over the reasonably assured lease term.

The Company elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for the lease and non-lease components as a single lease component.

The Company also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less.

ROU assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (group) may not be recoverable, like that of property and equipment.

New Accounting Pronouncement Not Yet Adopted

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The Company is currently evaluating the impact the adoption of ASU 2023-09 may have on its consolidated financial statements and related disclosures.

Reclassification

Certain reclassifications have been made to prior period amounts on the Company’s condensed consolidated balance sheets to conform to the current period presentation and enhance comparability.

As a result, the prior period amounts from deferred revenue, noncurrent were reclassified to other long-term liabilities .

These reclassifications had no impact on previously reported total assets, total liabilities, or total stockholders' equity.

Certain reclassifications have been made to prior period amounts on the Company’s condensed consolidated statements of operations to conform to the current period presentation and enhance comparability.

As a result, certain amounts related to long-lived assets impairment, previously reflected in research and development and selling, general and administrative , were reclassified to restructuring, long-lived assets impairment and related charges .

These reclassifications had no impact on previously reported total revenues, total operating expenses, or net loss,

There were no reclassifications made to the condensed consolidated statements of comprehensive loss, condensed consolidated statements of stockholders’ equity or consolidated consolidated statements of cash flows.

Fair Value Measurements

The Company determines the fair value of financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

Inputs which include quoted prices in active markets for identical assets and liabilities.

Inputs that include quoted prices in active markets for identical assets and liabilities.

Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

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Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities.

Cash Equivalents and Available-for-Sale Securities

The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis within the fair value hierarchy as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis within the fair value hierarchy as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

Hierarchy Amortized

4 unchanged sentences

government agency bonds and discount notes Level 2 96,270 50 ( 68 ) 96,252

Yankee bonds Level 2 10,967 — ( 12 ) 10,955

Asset-backed securities Level 2 23,196 11 ( 4 ) 23,203

16 unchanged sentences

Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale debt securities are presented within prepaid expenses and other current assets in the unaudited condensed consolidated balance sheets.

Accrued interest receivable amounted to $ 5.7 million and $ 4.0 million as of March 31, 2024 and December 31, 2023, respectively.

The Company did not write off any accrued interest receivable during the three months ended March 31, 2024 and 2023.

The Company recognized total net unrealized losses of $ 0.5 million and total net unrealized gains of $ 0.9 million in accumulated other comprehensive loss as of March 31, 2024 and December 31, 2023, respectively.

Accrued interest receivable amounted to $ 6.2 million and $ 4.0 million as of June 30, 2024 and December 31, 2023, respectively.

The Company did not write off any accrued interest receivable during the six months ended June 30, 2024 and 2023.

The Company recognized total net unrealized losses of $ 1.0 million and total net unrealized gains of $ 0.9 million in accumulated other comprehensive loss as of June 30, 2024 and December 31, 2023, respectively.

The gross unrealized losses related to U.S.

government treasuries, U.S.

government agency bonds and discount notes, and securities issued by institutions with investment-grade credit ratings as of March 31, 2024 and December 31, 2023 were due to changes in interest rates.

The Company determined that the gross unrealized losses on the investments as of March 31, 2024 were temporary in nature.

government agency bonds and discount notes, and securities issued by institutions with investment-grade credit ratings as of June 30, 2024 and December 31, 2023 were due to changes in interest rates.

The Company determined that the gross unrealized losses on the investments as of June 30, 2024 were temporary in nature.

The Company currently does not intend, and it is highly unlikely that it will be required, to sell these securities before recovery of their amortized cost basis.

As of March 31, 2024, no securities have contractual maturities of longer than two years .

As of March 31, 2024, the Company’s equity investment consisted solely of ordinary shares of Brii Biosciences Limited (“Brii Bio Parent”).

The equity securities of Brii Bio Parent are listed on the The Stock Exchange of Hong Kong Limited and are considered to be marketable equity securities and measured at fair value at each reporting date.

As of March 31, 2024, the Company remeasured the equity investment at a fair value of $ 3.9 million.

The Company recognized an unrealized loss of $ 5.9 million and $ 13.1 million, for the three months ended March 31, 2024 and 2023, respectively, as other income in the unaudited condensed consolidated statement of operations.

For the three months ended March 31, 2024 and 2023, the unrealized losses related to foreign currency translation for the respective periods were not material.

As of June 30, 2024, no securities have contractual maturities (or weighted average life for asset-backed securities) of longer than two years .

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

As of June 30, 2024, the Company’s equity investment consisted solely of ordinary shares of Brii Biosciences Limited (“Brii Bio Parent”).

The equity securities of Brii Bio Parent are listed on the The Stock Exchange of Hong Kong Limited, are considered to be marketable equity securities, and measured at fair value at each reporting date.

As of June 30, 2024, the Company remeasured the equity investment at a fair value of $ 4.4 million.

The Company recognized an unrealized gain of $ 0.4 million and an unrealized loss of $ 5.1 million, for the three months ended June 30, 2024 and 2023, respectively, and an unrealized loss of $ 5.5 million and $ 18.2 million for the six months ended June 30, 2024 and 2023, respectively, as other income in the unaudited condensed consolidated statement of operations.

For the three and six months ended June 30, 2024 and 2023, the unrealized gains or losses related to foreign currency translation were not material.

Contingent Consideration Obligations

Contingent consideration obligations include potential milestone payments in connection with the acquisition of Humabs Biomed SA (“Humabs”).

The Company classifies the contingent consideration as Level 3 financial liabilities within the fair value hierarchy as of March 31, 2024 and December 31, 2023.

The Company classifies the contingent consideration as Level 3 financial liabilities within the fair value hierarchy as of June 30, 2024 and December 31, 2023.

The estimated fair value of the contingent consideration related to the Humabs acquisition was determined by calculating the probability-weighted clinical, regulatory and commercial milestone payments based on the assessment of the likelihood and estimated timing that certain milestones would be achieved.

As of March 31, 2024, the Company calculated the estimated fair value of the remaining clinical and regulatory milestones related to tobevibart (formally as VIR-3434), an investigational subcutaneously administered HBV-neutralizing monoclonal antibody, or mAb, using the following significant unobservable inputs:

As of June 30, 2024, the Company calculated the estimated fair value of the remaining clinical and regulatory milestones related to tobevibart (formerly as VIR-3434), an investigational subcutaneously administered HBV-neutralizing monoclonal antibody, or mAb, using the following significant unobservable inputs:

Unobservable input Range

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For the commercial milestones, the Company used a Monte Carlo simulation.

As of March 31, 2024, the Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecasts, as well as the following significant unobservable inputs for the remaining commercial milestones related to tobevibart:

As of June 30, 2024, the Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecasts, as well as the following significant unobservable inputs for the remaining commercial milestones related to tobevibart:

Unobservable input Value

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The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due.

As of March 31, 2024 and December 31, 2023, the estimated fair value of the contingent consideration related to the Humabs acquisition was $ 27.6 million and $ 26.0 million, respectively, with changes in the estimated fair value recorded in research and development expenses in the unaudited condensed consolidated statements of operations.

As of June 30, 2024 and December 31, 2023, the estimated fair value of the contingent consideration related to the Humabs acquisition was $ 30.6 million and $ 26.0 million, respectively, with changes in the estimated fair value recorded in research and development expenses in the unaudited condensed consolidated statements of operations.

The estimated fair value of the contingent consideration related to the Humabs acquisition involves significant estimates and assumptions that give rise to measurement uncertainty.

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Changes in fair value 4,639

Balance at March 31, 2024 $ 27,610

Balance at June 30, 2024 $ 30,600

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Grant Agreements

Bill & Melinda Gates Foundation Grants

The Company has entered into various grant agreements with the Bill & Melinda Gates Foundation (“BMGF”), under which it was awarded grants totaling up to $ 49.9 million to support its HIV vaccine program, tuberculosis vaccine program, HIV vaccinal antibody program and malaria vaccinal antibody program.

The Company has entered into various grant agreements with the Bill & Melinda Gates Foundation (“BMGF”), under which it is currently awarded grants totaling up to $ 49.9 million to support its HIV vaccine program, tuberculosis vaccine program, HIV vaccinal antibody program and malaria vaccinal antibody program.

The term of the grant agreements will expire at various dates through June 2027, unless terminated earlier by the BMGF for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the BMGF reasonably believes may threaten the success of the projects.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Concurrently with the execution of the grant agreement for the vaccinal antibody program, the Company entered into a stock purchase agreement with the BMGF, under which the BMGF purchased 881,365 shares of the Company’s common stock on January 13, 2022, at a price per share of $ 45.38 , for an aggregate purchase price of approximately $ 40.0 million.

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The premium received by the Company is deferred and recognized over the same period as the grant proportionally.

The Company recognized grant revenue of $ 1.9 million and $ 1.9 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Company had deferred revenue of $ 14.6 million and $ 13.1 million, respectively.

As of March 31, 2024 and December 31, 2023, the Company had $ 7.6 million and $ 9.2 million, respectively, within accrued and other liabilities, which may need to be refunded to the BMGF.

The Company recognized grant revenue of $ 0.3 million and $ 4.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 2.2 million and $ 6.6 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company had deferred revenue of $ 15.2 million and $ 13.1 million, respectively.

As of June 30, 2024 and December 31, 2023, the Company had $ 7.6 million and $ 9.2 million, respectively, within accrued and other liabilities, which may need to be refunded to the BMGF.

Biomedical Advanced Research and Development Authority

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The Base Period for the BARDA Agreement includes government funding of approximately $ 55.0 million to reimburse a portion of expenses incurred by the Company to support the development of VIR-2482, an investigational prophylactic monoclonal antibody designed with the aim to protect against seasonal and pandemic influenza, including expenses related to the Phase 2 pre-exposure prophylaxis trial of VIR-2482.

The BARDA Agreement also provides for additional BARDA funding after the exercise by BARDA of up to twelve options to further support the development of pre-exposure prophylactic antibodies including and beyond VIR-2482 for the prevention of influenza illness and supporting medical countermeasures for other pathogens of pandemic potential.

The BARDA Agreement also provides for additional funding after the exercise by BARDA of up to twelve options to further support the development of pre-exposure prophylactic antibodies including and beyond VIR-2482 for the prevention of influenza illness and supporting medical countermeasures for other pathogens of pandemic potential.

In September 2023, the Company and BARDA entered into Amendment No.

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The Company will use $ 40.0 million to support the development of VIR-7229 through a Phase 1 clinical trial and $ 10.1 million to support the discovery of new monoclonal antibody against a second pathogen of pandemic potential.

The Company may also receive up to $ 11.2 million of additional funding for the Base Period under the Amended BARDA Agreement to wind down activities related to the Phase 2 pre-exposure prophylaxis trial of VIR-2482.

The Company may also receive up to $ 11.2 million additional funding for the Base Period under the Amended BARDA Agreement to wind down activities related to the Phase 2 pre-exposure prophylaxis trial of VIR-2482.

The Amended BARDA Agreement will expire in July 2027 and may be extended by mutual written agreement of the Company and BARDA, if funding is available and research opportunities within scope reasonably warrant, or, if any of the options are exercised (as described above), to cover the period of such exercised option set forth in the Amended BARDA Agreement.

The Amended BARDA Agreement is terminable by the Company and BARDA at any time under specified circumstances, including for convenience.

The Company recognized grant revenue related to BARDA of $ 3.3 million and $ 14.3 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Company had receivables from BARDA of $ 4.1 million and $ 7.6 million, respectively, as part of prepaid expenses and other current assets.

As of March 31, 2024, $ 53.3 million of potential future reimbursement remains available under the Amended BARDA Agreement.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company recognized grant revenue related to BARDA of $ 1.8 million and $ 11.8 million for the three months ended June 30, 2024 and 2023, respectively, and $ 5.1 million and $ 26.1 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company had receivables from BARDA of $ 1.0 million and $ 7.6 million, respectively, as part of prepaid expenses and other current assets.

As of June 30, 2024, $ 51.4 million of potential future reimbursement remains available under the Amended BARDA Agreement.

Collaboration and License Agreements

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Either party has the right to terminate the 2020 GSK Agreement in the case of the insolvency of the other party, an uncured material breach of the other party with respect to a collaboration program or collaboration product, or as mutually agreed by the parties.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

In May 2021, the U.S.

1 unchanged sentence

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.

regions due to the continued proportion of COVID-19 cases caused by certain variants.

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.

2 unchanged sentences

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.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

In periods when allowable expenses exceed amounts recognized for net product sales of sotrovimab, negative revenue would be reported in our consolidated statements of operations.

In periods when allowable expenses exceed amounts recognized for net product sales of sotrovimab, negative revenue will be reported in our consolidated statements of operations.

The Company’s contractual share of the profit-sharing amounts is subject to potential future adjustments to allowable expenses, which represents a form of variable consideration.

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The Company evaluated the latest available facts and circumstances to update its evaluation of profit-sharing amounts to be constrained.

As of March 31, 2024, the Company’s share of the remaining estimated manufacturing expenses related to excess sotrovimab supply and binding reserved manufacturing capacity not utilized is $ 0.7 million.

As of June 30, 2024, the Company’s share of the remaining estimated manufacturing expenses related to excess sotrovimab supply and binding reserved manufacturing capacity not utilized is not material.

The Company re-assesses these estimates each reporting period.

During the three months ended March 31, 2024 and 2023, the Company recorded profit-sharing amount, profit-sharing amount constrained, and profit-sharing amount previously constrained, released as components of collaboration revenue in the unaudited condensed consolidated statements of operations, as follows (in thousands):

During the three and six months ended June 30, 2024 and 2023, the Company recorded profit-sharing amount, profit-sharing amount constrained, and profit-sharing amount previously constrained, released as components of collaboration revenue in the unaudited condensed consolidated statements of operations, as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Profit-sharing amount $ 55 $ ( 8,396 ) $ ( 232 ) $ ( 1,160 )

3 unchanged sentences

Costs associated with co-development activities performed under the 2020 GSK Agreement are included in research and development expenses on the unaudited condensed consolidated statements of operations, with any reimbursement of costs by GSK reflected as a reduction of such expenses.

Under the 2020 GSK Agreement, the Company recognized additional net research and development expenses of $ 2.8 million and $ 7.3 million during the three months ended March 31, 2024 and 2023, respectively.

Under the 2020 GSK Agreement, the Company recognized additional net research and development expenses of $ 2.7 million and $ 5.3 million during the three months ended June 30, 2024 and 2023, respectively, and $ 5.5 million and $ 12.5 million during the six months ended June 30, 2024 and 2023, respectively.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

2021 Expanded GSK Collaboration

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On February 21, 2024, the Company and GSK entered into a letter agreement (the “Letter Agreement”) pursuant to which the Company and GSK agreed to terminate the Influenza Program and GSK’s VIR-2482 Option from the 2021 GSK Agreement and to wind down and terminate the cost-sharing arrangements and all ongoing activities in relation to the Influenza Program.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The parties mutually agree upon the allocation of responsibility for the development of products under the Expanded Functional Genomics Program, and for the development and early-stage manufacturing of products under the Additional Programs if and when GSK decides which Selected Pathogens to pursue.

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GSK selected RSV as its first pathogen under the Additional Programs in 2022.

During the three months ended March 31, 2024, the Company recognized contract revenue of $ 51.7 million as GSK’s rights to select the remaining two additional non-influenza target pathogens expired on March 25, 2024.

During the first quarter of 2024, the Company recognized contract revenue of $ 51.7 million as GSK’s rights to select the remaining two additional non-influenza target pathogens expired on March 25, 2024.

The Company had no other remaining performance obligations under the 2021 GSK Agreement.

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Costs associated with co-development activities performed under the 2021 GSK Agreement are included in research and development expenses in the unaudited condensed consolidated statements of operations, with any reimbursement of costs by GSK reflected as a reduction of such expenses.

Under the 2021 GSK Agreement, the additional net research and development expenses were not material during the three months ended March 31, 2024 and 2023.

Under the 2021 GSK Agreement, the Company recognized net reimbursement of research and development expenses of $ 0.5 million during the three and six months ended June 30, 2024 and additional net research and development expenses of $ 0.9 million and $ 1.3 million, respectively, during the three and six months ended June 30, 2023.

Balance Sheet Components

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Property and equipment, net consists of the following (in thousands):

(in years) June 30,

2024 December 31,

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Leasehold improvements 10 - 12

Construction in progress 506 226

53,132 80,290

Construction in progress N/A 267 226

Property and equipment, gross 99,029 129,914

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Total property and equipment, net $ 66,063 $ 96,018

Depreciation expenses were $ 4.4 million and $ 5.5 million for the three months ended March 31, 2024 and 2023, respectively.

Depreciation expenses were $ 4.2 million and $ 4.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 8.6 million and $ 10.1 million for the six months ended June 30, 2024 and 2023, respectively.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Accrued and Other Liabilities

2 unchanged sentences

Research and development expenses $ 22,286 $ 33,129

Payroll and related expenses 17,508 41,322

Operating lease liabilities, current 19,495 12,867

Payroll and related expenses 19,040 41,322

Excess funds payable under grant agreements 7,603 9,202

1 unchanged sentence

Accrued royalties 1,135 816

Net profit-sharing amount 287 —

Accrued income taxes 17 149

1 unchanged sentence

Total accrued and other liabilities $ 75,321 $ 104,220

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Restructuring, Impairment and Other Costs

Restructuring, Asset Impairment and Related Charges

In December 2023, the Company initiated strategic steps to reduce operating expenses and focus its capital allocation on programs with the highest potential for patient impact and value creation (“2023 Restructuring Plan”).

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In addition, approximately 75 net positions, or 12 % of the workforce, will be eliminated, which includes reductions from the Company’s discontinuation of its innate immunity small molecule group that was initiated in the third quarter of 2023.

The following table is a summary of restructuring charges incurred during the three and six months ended June 30, 2024 and a roll forward of accrued restructuring costs from December 31, 2023 to June 30, 2024 (in thousands).

During the three months ended June 30, 2024, due to the completion of R&D activities at the St.

Louis, Missouri site the Company assessed the related long-lived assets at the site for impairment.

As a result, the Company recorded non-cash impairment charges of $ 24.2 million primarily related to the the write-off of the remaining balance of ROU asset and leasehold improvements and non-cash disposal losses of $ 2.3 million related to certain lab equipment held for sale.

For the three and six months ended June 30, 2024, the Company did not incur material contract termination costs or other associated exit costs.

As of June 30, 2024, the Company expects to incur additional restructuring charges of approximately $ 2 million, primarily related to facility closures in the future under the 2023 Restructuring Plan.

The Company expects all actions related to the 2023 Restructuring Plan to be substantially completed in the third quarter of 2024.

During the year ended December 31, 2023, the Company incurred severance and other employee-related expenses of $ 5.9 million, of which $ 4.0 million was included in research and development expense and $ 1.9 million was included in selling, general and administrative expense.

As of December 31, 2023, the Company recorded $ 4.5 million as accrued and other liabilities related to restructuring costs.

In addition to severance and other employee-related expenses, the Company also recorded one-time non-cash impairment charges and disposal losses on ROU assets, leasehold improvements, and equipment of $ 7.7 million for the year ended December 31, 2023, primarily related to the consolidation of facilities and disposal of equipment used in the small molecule platform that was discontinued.

Of the $ 7.7 million, $ 5.6 million was included in research and development expense, and $ 2.1 million was included in selling, general and administrative expense.

The following table is a summary of restructuring related severance and other employee-related expenses incurred during the three months ended March 31, 2024 and a roll forward of accrued restructuring costs from December 31, 2023 to March 31, 2024 (in thousands).

Severance and other employee-related expenses

Severance and other employee-related expenses Long-lived assets impairment charges and disposal losses Total

Accrued restructuring charges at December 31, 2023 $ 4,454 $ — $ 4,454

Restructuring charges, net ( 48 ) — ( 48 )

Research and development

Selling, general and administrative

Total restructuring charges, net ( 48 )

Cash payment ( 2,592 ) — ( 2,592 )

Accrued restructuring charges at March 31, 2024 $ 1,814 $ — $ 1,814

Restructuring charges, net ( 200 ) 26,475 26,275

Cash payment ( 710 ) — ( 710 )

Non-cash activity — ( 26,475 ) ( 26,475 )

Accrued restructuring charges at June 30, 2024 $ 904 $ — $ 904

Reconciliation of accrued restructuring charges to the condensed consolidated balance sheets

Accrued and other liabilities $ 904 $ — $ 904

For the three months ended March 31, 2024, the Company did not incur material contract termination costs, other associated exit costs, impairment charges, or long-lived assets disposal losses related to restructuring activities.

As of March 31, 2024, the Company continues to expect to incur additional restructuring charges of approximately $ 25 million to $ 35 million, primarily related to facility closures in the future.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

During the three months ended June 30, 2023, the Company ceased to use the leased space at 499 Illinois Street, San Francisco, California, former corporate headquarter.

As a result, the Company assessed the related long-lived assets at the site for impairment and recognized $ 5.4 million impairment charges, primarily related to the write-off of the remaining balance of ROU asset and leasehold improvements.

Commitments and Contingencies

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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.

As of June 30, 2024, the Company had unaccrued unpaid commitments of approximately $ 19 million under the Tobevibart Agreements.

Legal Proceedings

The Company may from time to time be party to claims and legal proceedings that arise in the normal course of its business and that may or may not have, individually or in the aggregate, a material adverse effect on its results of operations, financial condition or liquidity.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Indemnification

7 unchanged sentences

The Company holds a minority equity interest in Brii Biosciences Offshore Limited through Brii Bio Parent.

As of March 31, 2024, one member of the Company’s board of directors serves on Brii Bio Parent’s board of directors.

As of June 30, 2024, one member of the Company’s board of directors serves on Brii Bio Parent’s board of directors.

Stock-Based Awards

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Expected term of options (in years) 5.5 - 6.1

1 unchanged sentence

99.6 % - 101.5 %

89.2 % - 91.8 %

99.6 % - 101.5 %

Risk-free interest rate 4.4 % - 4.6 %

3.5 % - 3.9 %

4.3 % - 4.6 %

3.4 % - 4.1 %

Expected dividend yield — — — —

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The valuation assumptions for stock options were determined as follows:

4 unchanged sentences

• Expected Dividend Rate — The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its profit interest units in the foreseeable future.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Stock-Based Compensation Expense

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Research and development $ 13,073 $ 17,112 $ 26,679 $ 30,465

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net loss attributable to Vir $ ( 138,378 ) $ ( 194,775 ) $ ( 203,654 ) $ ( 335,675 )

1 unchanged sentence

Net loss attributable to Vir per share, basic and diluted $ ( 1.02 ) $ ( 1.45 ) $ ( 1.50 ) $ ( 2.51 )

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Options issued and outstanding 11,671,732 10,223,201 12,284,822 10,419,357

1 unchanged sentence

Total 15,251,369 13,845,292 17,056,319 13,485,680

The table below presents our loss before (provision for) benefit from income taxes, (provision for) benefit from income taxes and effective tax rate for the three months ended March 31, 2024 and 2023 (in thousands):

The table below presents our loss before benefit from income taxes, benefit from income taxes and effective tax rate for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended

Loss before (provision for) benefit from income taxes $ ( 65,000 ) $ ( 143,188 )

(Provision for) benefit from income taxes $ ( 276 ) $ 2,232

June 30, Six Months Ended

2024 2023 2024 2023

Loss before benefit from income taxes $ ( 139,890 ) $ ( 197,623 ) $ ( 204,890 ) $ ( 340,811 )

Benefit from income taxes $ 1,512 $ 2,848 $ 1,236 $ 5,080

Effective tax rate 1.1 % 1.4 % 0.6 % 1.5 %

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company is subject to income taxes in the United States and foreign jurisdictions.

1 unchanged sentence

Accordingly, the Company’s effective tax rates will vary depending on the relative proportion of foreign to United States income/loss, the utilization of net operating loss and tax credit carry forwards and carrybacks, changes in jurisdictional mix of income and expense, changes in management’s assessment of matters such as the ability to realize deferred tax assets, and changes in tax laws.

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.

Unrecognized tax benefits were $ 13.9 million and $ 13.6 million as of March 31, 2024 and December 31, 2023, respectively, and if recognized, would favorably affect the effective tax rate in future periods.

The benefit from income taxes for the three and six months ended June 30, 2024 was primarily due to a favorable adjustment in estimated tax payable.

The benefit from income taxes for the three and six months ended June 30, 2023 was primarily due to a pre-tax loss and the Company’s ability to carry back the research and development credit to 2022.

Unrecognized tax benefits were $ 14.4 million and $ 13.6 million as of June 30, 2024 and December 31, 2023, respectively, and if recognized, would favorably affect the effective tax rate in future periods.

Subsequent events

2024 Restructuring Plan

On July 29, 2024, the Company, by its duly authorized officer, approved a strategic restructuring plan (“2024 Restructuring Plan”) to advance the development of its clinical portfolio and focus on the highest-value near-term opportunities.

The 2024 Restructuring Plan is designed to optimize the Company’s cost structure by reducing the size of its workforce in alignment with the Company’s current goals and strategy.

The Company is prioritizing investment in the clinical execution of its chronic hepatitis delta and chronic hepatitis B programs, as well as the T-cell engager assets subject to the recently announced exclusive worldwide license agreement with Amunix Pharmaceuticals, Inc., a Sanofi Company (“Sanofi”).

The organizational realignment and optimization include phasing out programs in influenza, COVID-19 and the Company’s T cell-based viral vector platform.

Notifications to employees impacted by the strategic restructuring plan were completed on July 31, 2024.

Such employees represent approximately 25 % of the Company’s workforce, or approximately 140 employees.

The reduction will be substantially complete by the fourth quarter of 2024.

As a result of these changes, the Company expects to incur restructuring charges between $ 11 million to $ 13 million, primarily related to employee severance cash expenditures.

The Company anticipates recognizing these expenses through the fourth quarter of 2024.

The estimated restructuring charges are contingent upon various assumptions, and actual results may differ materially.

The Company may also incur additional costs not currently contemplated due to events related to or resulting from these strategic steps.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

License Agreement with Sanofi

On July 31, 2024, the Company and Sanofi entered into a License Agreement (the “Agreement”).

Upon closing of the transaction contemplated by the Agreement (the “Closing” and the “Transaction”, respectively), the Company will obtain an exclusive (even as to Sanofi and its affiliates), worldwide, royalty-bearing, sublicensable (through multiple tiers in accordance with the Agreement), transferable (to the extent permitted under the Agreement) license to research, develop, manufacture, commercialize and otherwise exploit (i) three clinical-stage masked T-cell engagers of Sanofi, for all therapeutic, prophylactic, palliative, and diagnostic uses, excluding the ophthalmological field, and (ii) the protease-cleavable masking platform of Sanofi for oncology and infectious disease, excluding the ophthalmological field.

At Closing, the Company will make an upfront payment to Sanofi in the amount of $ 100 million plus $ 75 million in an escrowed milestone payment that is subject to SAR446368 (AMX-525) achieving “first in human dosing” by 2026.

Sanofi will also be eligible to receive up to an additional $ 323 million in future development and regulatory milestone payments, up to an additional $ 1.488 billion in commercial net sales-based milestone payments, and low single-digit to low double-digit tiered royalties on worldwide net sales.

The consummation of the Transaction is subject to the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The Company is in the process of assessing the accounting treatment of the Transaction.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements