What changed in this filing

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Item 1. Financial Statements

2024-11-04 compared with 2024-08-01 · 207 added, 148 removed, 558 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

September 30,

2024 December 31,

27 unchanged sentences

Preferred stock, $ 0.0001 par value;

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

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

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

Common stock, $ 0.0001 par value;

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

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

136,706,350 and 134,781,286 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,894,781 1,828,862

Accumulated other comprehensive loss ( 2,879 ) ( 815 )

Accumulated other comprehensive gain (loss) 1,127 ( 815 )

Accumulated deficit ( 655,195 ) ( 237,824 )

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

13 unchanged sentences

Interest income 17,527 21,931 57,656 66,254

Other expense, net ( 535 ) ( 367 ) ( 822 ) ( 8,388 )

Other (expense) income, net ( 893 ) 882 ( 1,715 ) ( 7,506 )

Total other income 17,764 20,106 51,585 37,852

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

Loss before (provision for) benefit from income taxes ( 213,540 ) ( 166,626 ) ( 418,430 ) ( 507,437 )

(Provision for) benefit from income taxes ( 177 ) 3,213 1,059 8,293

Net loss ( 213,717 ) ( 163,413 ) ( 417,371 ) ( 499,144 )

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net loss $ ( 213,717 ) $ ( 163,413 ) $ ( 417,371 ) $ ( 499,144 )

Other comprehensive (loss) income:

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

Other comprehensive income:

Unrealized gain on investments 3,996 994 2,094 7,194

Amortization of actuarial gain (loss) 10 9 ( 152 ) 28

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

Total other comprehensive income 4,006 1,003 1,942 7,222

Comprehensive loss ( 209,711 ) ( 162,410 ) ( 415,429 ) ( 491,922 )

9 unchanged sentences

Comprehensive

Loss Accumulated

(Loss) Gain Accumulated

Deficit Noncontrolling

2 unchanged sentences

Shares Amount

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

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

Vesting of restricted common stock 81,415 — — — — — —

Exercise of stock options 34,838 — 71 — — — 71

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

Stock-based compensation — — 16,697 — — — 16,697

Other comprehensive loss — — — ( 482 ) — — ( 482 )

Other comprehensive income — — — 4,006 — — 4,006

Net loss — — — — ( 213,717 ) — ( 213,717 )

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

Balance at September 30, 2024 136,706,350 $ 14 $ 1,894,781 $ 1,127 $ ( 655,195 ) $ — $ 1,240,727

Vir Stockholders’ Equity

3 unchanged sentences

Loss Retained

Earnings Noncontrolling

Deficit) Noncontrolling

Interest Total

1 unchanged sentence

Shares Amount

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

Vesting of restricted common stock 73,351 — — — — — —

Exercise of stock options 194,041 — 343 — — — 343

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

Stock-based compensation — — 26,944 — — — 26,944

Other comprehensive income — — — 1,003 — — 1,003

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

Net loss — — — — ( 163,413 ) — ( 163,413 )

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

Balance at September 30, 2023 134,497,886 $ 13 $ 1,798,823 $ ( 1,900 ) $ ( 121,851 ) $ — $ 1,675,085

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

6 unchanged sentences

Comprehensive

Loss Accumulated Deficit Noncontrolling

(Loss) Gain Accumulated Deficit Noncontrolling

Interest Total

6 unchanged sentences

Stock-based compensation — — 62,616 — — — 62,616

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

Other comprehensive income — — — 1,942 — — 1,942

Net loss — — — — ( 417,371 ) — ( 417,371 )

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

Balance at September 30, 2024 136,706,350 $ 14 $ 1,894,781 $ 1,127 $ ( 655,195 ) $ — $ 1,240,727

Vir Stockholders’ Equity

3 unchanged sentences

Loss Retained

Earnings Noncontrolling

Deficit) Noncontrolling

Interest Total

10 unchanged sentences

Net loss — — — — ( 499,088 ) ( 56 ) ( 499,144 )

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

Balance at September 30, 2023 134,497,886 $ 13 $ 1,798,823 $ ( 1,900 ) $ ( 121,851 ) $ — $ 1,675,085

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

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

26 unchanged sentences

Maturities and sales of investments 1,437,499 1,486,677

Other ( 412 ) —

Net cash provided by investing activities 358,630 269,440

19 unchanged sentences

Vir Biotechnology, Inc.

(“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” or the “Company”) is a 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”), in addition to multiple oncology programs.

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).

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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 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.

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

As of September 30, 2024, the Company had $ 1.19 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 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.

The unaudited condensed consolidated results of operations for the three and nine months ended September 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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Actual results could materially differ from those estimates.

Concentration of Credit Risk, Credit Loss and Other Risks and Uncertainties

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 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.

Cash and cash equivalents are deposited in checking and sweep accounts at financial institutions.

Such deposits may, at times, exceed federally insured limits.

The Company has not experienced any losses on its deposits of cash and cash equivalents.

Management believes that the Company is not currently exposed to significant credit risk as the Company’s investments are held in custody at third-party financial institutions.

The Company’s investment policy limits investments to certain types of securities issued by the U.S.

government, its agencies, and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer.

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

Cash Equivalents

4 unchanged sentences

Generally, investments with original maturities beyond three months at the date of purchase and that mature at, or less than 12 months from, the unaudited condensed consolidated balance sheet date are considered short-term investments, with all others considered to be long-term investments.

Unrealized gains and losses deemed temporary in nature are reported as a component of accumulated other comprehensive loss.

Unrealized gains and losses deemed temporary in nature are reported as a component of accumulated other comprehensive gain (loss).

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the unaudited condensed consolidated statements of operations.

3 unchanged sentences

Otherwise, the investments in equity securities are measured at cost less impairment, adjusted for observable price changes for identical or similar investments of the same issuer unless the Company has significant influence or control over the investee.

Changes in fair value resulting from observable price changes are presented as change in fair value of equity investments, and changes in fair value resulting from foreign currency translation are included in other expense, net on the unaudited condensed consolidated statements of operations.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Changes in fair value resulting from observable price changes are presented as change in fair value of equity investments, and changes in fair value resulting from foreign currency translation are included in other (expense) income, net on the unaudited condensed consolidated statements of operations.

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.

Restricted cash and cash equivalents, current and noncurrent, primarily consist of funds placed in an escrow account under the Company's license agreement with Amunix Pharmaceuticals, Inc., 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

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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.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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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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.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified levels of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

4 unchanged sentences

Contributions are recognized as grant revenue when all donor-imposed conditions have been met.

Contingent Consideration Obligations

Asset Acquisitions

The Company evaluates acquisitions and other similar transactions using the guidance in ASC Topic 805, Business Combinations (“ASC 805”), to determine whether the transaction should be accounted for as a business combination or an acquisition of asset(s) by first applying a screen test to assess if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.

If the screen test is met, the transaction is accounted for as an acquisition of asset(s).

If the screen test is not met, further assessment is required to determine whether the Company has acquired inputs and a substantive processes that together significantly contribute to the ability to create outputs, which would meet the definition of a business.

If determined to be an acquisition of asset(s), the Company accounts the transaction using the cost accumulation and allocation method under ASC 805-50.

Under this method, the cost of the acquisition, including direct acquisition-related costs, is allocated to the assets acquired or liabilities assumed on a relative fair value basis.

Goodwill is not recognized in an asset acquisition and any difference between consideration transferred and the fair value of the net assets acquired is allocated to the identifiable assets acquired based on their relative fair values.

Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration payments are subject to guidance in ASC 480, Distinguishing Liabilities from Equity, or ASC 815, Derivatives and Hedging).

Upon recognition of the contingent consideration payments, the amount is included in the cost of the acquired asset or group of assets.

Research and Development Expenses

To date, research and development expenses have related primarily to discovery efforts and preclinical and clinical development of 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.

Research and development expenses include expenses related to license and collaboration agreements;

contingent consideration 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, facilities maintenance, and depreciation and amortization.

The Company has acquired and may continue to acquire the rights to develop and commercialize new product candidates from third parties.

Upfront payments and research and development milestone payments made in connection with acquired licenses or product rights are expensed as incurred, provided that they do not relate to a regulatory approval milestone or assets acquired in a business combination.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The Company’s expense accruals for clinical trials and manufacturing are based on estimates of contracted services provided by third-party vendors not yet billed.

When billing terms under these contracts do not coincide with the timing of when the work is performed, the Company is required to make estimates of its outstanding obligations to those third parties as of the period end.

The accrual estimates are based on a number of factors, including the Company’s knowledge of the research and development programs and clinical manufacturing activities, the status of the programs and activities, invoicing to date, and the provisions in the contracts.

The Company obtains information regarding unbilled services directly from these service providers and performs procedures to support its estimates based on its internal understanding of the services provided to date.

However, the Company may also be required to estimate these services based on information available to its internal clinical and manufacturing administrative staff if such information is not able to be obtained timely from its service providers .

Contingent Consideration Obligations in connection with Business Combinations

Contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date, are remeasured each subsequent reporting period until the related contingencies are resolved, and are classified as contingent consideration on the unaudited condensed consolidated balance sheets.

6 unchanged sentences

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.

6 unchanged sentences

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.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

New Accounting Pronouncement Not Yet Adopted

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires, among other things, the following:

(i) enhanced disclosures about significant segment expenses that are regularly provided to the Chief Operating Decision Maker and included within a segment’s reported measure of profit or loss;

(ii) disclosure of the amount and description of the composition of other segment items, as defined in ASU 2023-07, by reportable segment;

and (iii) reporting the disclosures about each reportable segment’s profit or loss and assets on an annual and interim basis.

ASU 2023-07 clarifies that public entities with a single reportable segment are also required to provide the new disclosures and all existing disclosures required by ASC 280 Segment Reporting.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

ASU 2023-07 is required to be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact the adoption of ASU 2023-07 may have on its consolidated financial statements and related disclosures.

In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

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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.

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

Fair Value Measurements

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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 June 30, 2024 and December 31, 2023 (in thousands):

June 30, 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 September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024

Hierarchy Amortized

22 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 $ 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.

Accrued interest receivable amounted to $ 5.3 million and $ 4.0 million as of September 30, 2024 and December 31, 2023, respectively.

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

The Company recognized total net unrealized gains of $ 3.0 million and $ 0.9 million in accumulated other comprehensive gain (loss) as of September 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 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.

government agency bonds and discount notes, and securities issued by institutions with investment-grade credit ratings as of September 30, 2024 and December 31, 2023 were nominal.

The Company determined that the gross unrealized losses on the investments as of September 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 June 30, 2024, no securities have contractual maturities (or weighted average life for asset-backed securities) of longer than two years .

As of September 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”).

As of September 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 June 30, 2024 and December 31, 2023.

As of September 30, 2024, the Company remeasured the equity investment at a fair value of $ 5.5 million.

The Company recognized an unrealized gain of $ 1.1 million for the three months ended September 30, 2024, and an unrealized loss of $ 4.4 million for the nine months ended September 30, 2024, respectively, and unrealized losses of $ 2.7 million and $ 20.9 million for the three and nine months ended September 30, 2023, respectively, as other income in the unaudited condensed consolidated statement of operations.

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

Contingent Consideration Obligations in connection with Business Combinations

Contingent consideration obligations in connection with business combinations 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 September 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 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:

As of September 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 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:

As of September 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 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.

As of September 30, 2024 and December 31, 2023, the estimated fair value of the contingent consideration related to the Humabs acquisition was $ 33.2 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.

3 unchanged sentences

Changes in fair value 7,209

Balance at June 30, 2024 $ 30,600

Balance at September 30, 2024 $ 33,170

VIR BIOTECHNOLOGY, INC.

9 unchanged sentences

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

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.

The Company recognized grant revenue of $ 1.6 million and $ 3.8 million for the three months ended September 30, 2024 and 2023, respectively, and $ 3.8 million and $ 10.5 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024 and December 31, 2023, the Company had deferred revenue of $ 13.7 million and $ 13.1 million, respectively.

As of September 30, 2024 and December 31, 2023, the Company had $ 9.7 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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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.

In September 2024, the Company and BARDA entered into Amendment No.

P00003 to the BARDA Agreement (the “Third Amended BARDA Agreement”), pursuant to which the parties agree to partially de-obligate certain funds from two of the exercised options related to the development of VIR-7229.

Under this Amendment the current BARDA commitment was decreased by $ 42.1 million.

The Company recognized grant revenue related to BARDA of $ 0.5 million and $ 2.9 million for the three months ended September 30, 2024 and 2023, respectively, and $ 5.6 million and $ 29.0 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, receivable from BARDA was no t material.

As of December 31, 2023, the Company had receivable from BARDA of $ 7.6 million, as part of prepaid expenses and other current assets.

As of September 30, 2024, $ 8.9 million of potential future reimbursement remains available under the Amended BARDA Agreement.

Collaboration and License Agreements

License Agreement with Sanofi

On September 9, 2024, the Company closed the license agreement (the “Sanofi Agreement”) with Amunix Pharmaceuticals, Inc., a Sanofi company (“Sanofi”) previously announced on August 1, 2024.

The Sanofi Agreement provides the Company with an exclusive worldwide license to use of the proprietary PRO-XTEN™ universal masking technology for oncology and infectious disease,excluding the ophthalmological field, and to three early clinical-stage dual-masked T-cell engagers (TCEs) that all leverage the PRO-XTEN TM universal masking platform within a range of cancer indications.

Under the Sanofi Agreement the Company made an upfront payment to Sanofi in the amount of $ 100.0 million and placed into escrow a $ 75.0 million milestone payment that is subject to VIR-5525 achieving “first in human dosing” by 2026.

The cash paid into escrow is under the control of the Company and is classified as restricted cash and cash equivalents, current in the unaudited condensed consolidated balance sheets.

Sanofi will also be eligible to receive up to an additional $ 323.0 million in future development and regulatory milestone payments, up to an additional $ 1.49 billion in commercial net sales-based milestone payments, and low single-digit to low double-digit tiered royalties on worldwide net sales.

Additionally, as part of the Sanofi Agreement, the Company paid $ 3.7 million to acquire certain lab equipment and cash deposits primarily related to contract manufacturing agreements.

Shortly after the closing of the transactions, the Company hired certain former Sanofi personnel.

The Company incurred approximately $ 4.6 million of transaction costs associated with the closing of Sanofi Agreement.

The following table summarizes the aggregate amount paid for the assets acquired by the Company in connection with the Sanofi Agreement (in thousands):

Upfront $ 100,000

Equipment 1,150

Deposits 2,580

Transaction costs 4,612

Total purchase consideration $ 108,342

The Company accounted for the transaction as an asset acquisition in accordance ASC 805-50 as substantially all of the fair value of the assets acquired is concentrated in a group of similar identifiable assets.

The three early clinical stage oncology TCEs use the same universal PRO-XTEN TM masking technology and have similar development timelines, probabilities of risk, and loss of patent exclusivity among other characteristics.

ASC 805-50 requires the acquiring entity in an asset acquisition to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, which includes consideration given.

The total purchase price was allocated to the acquired assets based on their relative fair values, as follows (in thousands):

In-process research and development ("IPR&D") $ 102,836

Property and Equipment 1,119

Prepaid expenses and other current assets (1)

Assembled workforce 412

Total purchase consideration $ 108,342

__________________________________________________________

(1) Includes acquired cash deposits primarily related to contract manufacturing agreements.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The fair value of the IPR&D was estimated using a multi-period excess earnings income approach that discounts expected cash flows to present value by applying a discount rate that represents the estimated rate that market participants would require for the intangible asset.

In accordance with ASC 730, as the three early clinical stage oncology TCEs have not achieved regulatory approval when acquired, the portion of the purchase price allocated to the IPR&D was immediately expensed to research and development as they had no alternative future use.

Contingent milestone payments were determined to be within the scope of ASC 450 and will be recognized when the contingency is resolved and the consideration is paid or becomes payable.

Any milestone payments made in the future will either be expensed as research and development or capitalized as a developed asset based on when regulatory approval is obtained.

The Company will recognize sales-based milestone and royalty payments in cost of sales as revenue from product sales is recognized.

The fair value of the assembled workforce was estimated using a replacement cost method.

The assembled workforce is classified as intangible assets, net and is amortized over an expected useful life of 5 years as research and development expense.

Collaboration Agreements with GSK

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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 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.

As of September 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 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):

During the three and nine months ended September 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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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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 $ 2.7 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.

Under the 2020 GSK Agreement, the Company recognized additional net research and development expenses of $ 1.0 million and $ 6.1 million during the three months ended September 30, 2024 and 2023, respectively, and $ 6.5 million and $ 18.6 million during the nine months ended September 30, 2024 and 2023, respectively.

VIR BIOTECHNOLOGY, INC.

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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 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.

Under the 2021 GSK Agreement, the Company recognized net reimbursement of research and development expenses of $ 0.2 million and $ 0.7 million, respectively, during the three and nine months ended September 30, 2024 and additional net research and development expenses of $ 0.6 million and $ 1.9 million, respectively, during the three and nine months ended September 30, 2023.

Balance Sheet Components

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

(in years) June 30,

(in years) September 30,

2024 December 31,

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Total property and equipment, net $ 64,791 $ 96,018

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.

Depreciation expenses were $ 2.9 million and $ 4.5 million for the three months ended September 30, 2024 and 2023, respectively, and $ 11.5 million and $ 14.6 million for the nine months ended September 30, 2024 and 2023, respectively.

VIR BIOTECHNOLOGY, INC.

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Accrued and other liabilities consist of the following (in thousands):

September 30,

2024 December 31,

Payroll and related expenses 31,369 41,322

Research and development expenses $ 26,330 $ 33,129

Operating lease liabilities, current 19,408 12,867

Payroll and related expenses 19,040 41,322

Excess funds payable under grant agreements 9,720 9,202

Other professional and consulting expenses 2,656 3,418

Accrued royalties 1,135 816

Accrued income taxes 17 149

Net profit-sharing amount 1,100 —

Other accrued expenses 4,075 4,282

1 unchanged sentence

Restructuring, Asset Impairment and Related Charges

2024 Restructuring Plan

In August 2024, the Company initiated a strategic restructuring to advance the development of its hepatitis programs and focus on the highest near-term value opportunities (“2024 Restructuring Plan”).

The organizational realignment and optimization included phasing out programs in influenza, COVID-19, and the Company's T cell-based viral vector platform, as well as a workforce reduction of approximately 25 % or approximately 140 employees.

The Company expects to recognize restructuring expenses of approximately $ 11 million to $ 13 million, primarily related to employee severance cash payouts, mostly in the second half of 2024.

During the three months ended September 30, 2024, the Company incurred severance and other employee-related expenses of $ 10.4 million, of which $ 8.2 million and $ 2.2 million is classified as research and development and selling, general and administrative expenses, respectively.

2023 Restructuring Plan

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”).

As part of the steps, the R&D facilities in St.

Louis, Missouri and Portland, Oregon will be closed in 2024.

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.

Louis, Missouri and Portland, Oregon were closed in 2024.

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

In the second quarter of 2024, due to the completion of R&D activities at the St.

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

In the third quarter 2024, the Company recognized restructuring charges of $ 2.3 million for long-lived assets primarily driven by a write-off of $ 1.4 million representing the remaining balance of ROU asset for Portland, Oregon site due to the cessation of R&D activities.

For the nine months ended September 30, 2024, total restructuring charges for long-lived assets amounted to $ 28.8 million.

All actions related to the 2023 Restructuring Plan have been substantially completed by the third quarter of 2024.

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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

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

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

Restructuring charges, net 10,379 2,333 12,712

Cash payment ( 301 ) — ( 301 )

Non-cash activity — ( 2,333 ) ( 2,333 )

Accrued restructuring charges at September 30, 2024 $ 10,982 $ — $ 10,982

Reconciliation of accrued restructuring charges to the condensed consolidated balance sheets

Accrued and other liabilities $ 10,982 $ — $ 10,982

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.

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

As of September 30, 2024, the Company had unaccrued unpaid commitments of approximately $ 15 million under the Tobevibart Agreements.

In the third 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 elebsiran (the “Elebsiran Agreements”).

As of September 30, 2024, the Company had unaccrued unpaid commitments of approximately $ 7 million under the Elebsiran 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

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To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of operations, or unaudited condensed consolidated statements of cash flows.

Related Party Transactions

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

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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Net loss attributable to Vir per share, basic and diluted $ ( 1.56 ) $ ( 1.22 ) $ ( 3.07 ) $ ( 3.73 )

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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Total 16,523,092 15,731,354 17,431,092 15,102,516

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):

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 and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

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

Loss before (provision for) benefit from income taxes $ ( 213,540 ) $ ( 166,626 ) $ ( 418,430 ) $ ( 507,437 )

(Provision for) benefit from income taxes $ ( 177 ) $ 3,213 $ 1,059 $ 8,293

Effective tax rate ( 0.1 %) 1.9 % 0.3 % 1.6 %

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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

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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 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.

The provision for income taxes for the three months ended September 30, 2024 was not material.

The benefit from income taxes for the nine months ended September 30, 2024 was primarily due to a favorable adjustment to estimated tax payable.

The benefit from income taxes for the three and nine months ended September 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 $ 14.8 million and $ 13.6 million as of September 30, 2024 and December 31, 2023, respectively, and if recognized, would favorably affect the effective tax rate in future periods.

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