What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-04 · 123 added, 147 removed, 123 unchanged (69% of the section changed)

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You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included as part of our Annual Report on Form 10-K for the year ended December 31, 2024.

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company”, “Vir,” “we,” “us” and “our” refer to Vir Biotechnology, Inc.

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company”, “Vir Bio,” “we,” “us” and “our” refer to Vir Biotechnology, Inc.

and its consolidated subsidiaries.

We are 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..

At Vir, we have a bold vision – powering the immune system to transform lives.

Our growth and pursuit of scientific innovation is fueled by our world-class leading monoclonal antibody (mAb) platform that has a proven track record and is further strengthened by our artificial intelligence-led mAb optimization and engineering capabilities.

Our current clinical development pipeline consists of product candidates targeting hepatitis delta virus (HDV), hepatitis B virus (HBV), in addition to multiple oncology programs.

The most advanced preclinical candidate in our pipeline includes respiratory syncytial virus (RSV) and human metapneumovirus (MPV).

We have established our own internal process development, analytical development, manufacturing, supply chain and quality capabilities and worked with contract development and manufacturing organizations (CDMOs) to develop, manufacture, test and supply our early- and late-stage product candidates.

We have an industry-leading management team and board of directors with significant immunology and infectious diseases experience, including a proven track record of progressing product candidates from early-stage research through clinical development, and worldwide regulatory approval and commercialization experience.

Given the global impact of infectious diseases and other serious conditions, we are committed to providing broad access to our therapeutics.

Our clinical-stage portfolio includes infectious disease programs for Chronic Hepatitis Delta (CHD) and Chronic Hepatitis B (CHB) infections and multiple dual-masked T-cell engagers (TCEs) across validated targets in solid tumor indications.

We also has a preclinical portfolio of programs across a range of infectious diseases and oncologic malignancies.

Our clinical development pipeline consists of investigational therapies targeting hepatitis delta virus (HDV) and various solid tumors.

In HDV, we enrolled the first patient in our phase 3 ECLIPSE registrational program in the first quarter of 2025.

Should the ECLIPSE program yield positive results that support regulatory approval and subsequent commercial launch, we believe the combination has the potential to be a new standard of care for hepatitis delta patients, for whom approved treatment options are either limited or unavailable.

In oncology, we are advancing phase 1 clinical studies for our dual-masked TCEs:

VIR-5818 in patients with HER2-expressing tumors and VIR-5500 in patients with PSMA-expressing metastatic castration-resistant prostate cancer (mCRPC).

We are also advancing our third TCE program,VIR-5525, in patients with EGFR-expressing tumors, with phase 1 clinical studies expected to begin in the second quarter of 2025.

We are also developing therapeutic candidates in hepatitis B, HIV cure, and other solid tumors, leveraging our expertise and platform strengths.

We have an industry-leading management team and board of directors with significant immunology, infectious diseases, and oncology experience, including a proven track record of progressing product candidates from early-stage research through clinical development, and worldwide regulatory approval and commercialization experience.

Given the global impact of infectious diseases and cancer, we are committed to developing transformative therapies that can make a meaningful difference in patients’ lives.

Significant Developments

Following is a summary of selected significant developments affecting our business that occurred since the filing of our Quarterly Report on Form 10-Q for the period ended June 30, 2024.

For additional developments or for a more comprehensive discussion of certain developments below, see our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q for the period June 30, 2024.

Pipeline Programs

Following is a summary of selected significant developments affecting our business that occurred since the filing of our Annual Report on Form 10-K for the period ended December 31, 2024.

For additional developments or for a more comprehensive discussion of certain developments below, see our Annual Report on Form 10-K for the year ended December 31, 2024.

Chronic Hepatitis Delta (CHD)

• We plan to present additional data from the Phase 2 chronic hepatitis delta SOLSTICE trial, including 24-week clinical data for both study cohorts in approximately 60 patients and further data data for those patients who were on study beyond 24 weeks at the time of data cut-off at the American Association for the Study of Liver Diseases (AASLD), "The Liver Meeting", in November 2024.

◦ One cohort assesses the combination of tobevibart and elebsiran administered every four weeks, while a second cohort evaluates tobevibart monotherapy administered every two weeks.

◦ The SOLSTICE trial is evaluating the safety, tolerability and efficacy of tobevibart and elebsiran for the treatment of chronic hepatitis delta.

• ECLIPSE 1, the first Phase 3 trial of our registrational program in CHD enrolled its first patient in March 2025 and is progressing as planned.

The clinical trial will assess the efficacy and safety of tobevibart and elebsiran compared to deferred treatment in regions such as the U.S.

where bulevirtide is not available or other regions where its access is limited.

• We are advancing plans for the initiation of ECLIPSE 2, a Phase 3 trial that will evaluate the efficacy and safety of switching to tobevibart and elebsiran in people with CHD who have not achieved viral suppression with bulevirtide therapy.

• We plan to share Phase 2 SOLSTICE subgroup analysis data in CHD in a poster presentation at the European Association for the Study of the Liver (EASL) Congress 2025.

The poster was selected by EASL to be highlighted during the poster tour on May 8, 2025.

• Tobevibart and elebsiran combination therapy is supported by multiple U.S.

and EU regulatory designations, including U.S.

Food and Drug Administration (FDA) Breakthrough Therapy designation, U.S.

FDA Fast Track designation, European Priority Medicines (PRIME) designation and European Orphan Drug designation, signifying the significant unmet need in CHD.

• VIR-5818, the only dual-masked HER2-targeting TCE in clinical trials, continues to advance through dose escalation as a monotherapy, and in combination with pembrolizumab, in multiple tumor types, including metastatic breast cancer and metastatic colorectal cancer.

◦ In early Phase 1 data reported in January 2025, VIR-5818 showed tumor shrinkage across various tumor types in 50% (10/20) of participants receiving doses ≥400 µg/kg, with confirmed partial responses in 33% (2/6) of participants with HER2-positive colorectal cancer (CRC).

• VIR-5500, the only dual-masked PSMA-targeting TCE in clinical trials, continues to advance through dose escalation aiming to further optimize dosing and efficacy.

◦ In early Phase 1 data reported in January 2025, VIR-5500 showed PSA reductions in 100% (12/12) of metastatic castration resistant prostate cancer (mCRPC) patients after an initial dose ≥120 µg/kg.

PSA 50 response was confirmed in 58% (7/12) of participants.

• Early Phase 1 data for VIR-5818 and VIR-5500 reported in January 2025 showed promising safety profiles for both clinical candidates, with maximum tolerated dose not yet reached, no dose-limiting cytokine release syndrome (CRS) observed and no CRS greater than grade 2 reported.

• Initial clinical data demonstrate the PRO-XTEN™ masking technology’s potential to minimize systemic toxicity while enabling selective killing of cancer cells in the tumor microenvironment, minimizing CRS and expanding the therapeutic index compared to traditional therapeutic approaches.

PRO-XTEN™ is a trademark of Amunix Pharmaceuticals, Inc., a Sanofi company.

• We plan to initiate a Phase 1 study of VIR-5525, our PRO-XTEN™ dual-masked EGFR-targeting TCE, in the second quarter of 2025, to evaluate its potential across a number of solid tumor indications.

Chronic Hepatitis B (CHB)

• We plan to share end-of-treatment data from the Phase 2 MARCH Part B trial as a Late Breaking presentation at the AASLD in November 2024.

◦ The MARCH-B trial is evaluating the safety, tolerability and antiviral activity of the triplet combination of tobevibart and elebsiran plus peginterferon alfa-2a in approximately 30 participants, and approximately 50 participants treated with the doublet combination of tobevibart and elebsiran.

◦ We also plan to share further data assessing a potential functional cure in the second quarter of 2025.

• VIR-5818 is a dual-masked HER2-targeted T-cell engager in clinical development and is designed to minimize off-tumor toxicity, potentially allowing for higher doses and increased efficacy to address the significant unmet needs of patients with HER2 expressing cancers.

◦ A Phase 1 basket study of VIR-5818 as a monotherapy, and in combination with pembrolizumab, is on-going in multiple tumor types, including metastatic breast cancer and metastatic colorectal cancer.

◦ We plan to share initial clinical data for VIR-5818 in the first quarter of 2025.

• VIR-5500 is a dual-masked PSMA directed T-cell engager in clinical development and is designed to minimize off-tumor toxicity and potentially improve efficacy relative to existing approved PSMA-targeted therapies.

◦ A Phase 1 dose escalation study of VIR-5500 is ongoing to assess its safety profile and optimal doses for future development in metastatic-castration resistant prostate cancer.

◦ We plan to share initial clinical data for VIR-5500 in the first quarter of 2025.

• VIR-5525 is a dual-masked EGFR targeted T-cell engager with a cleared Investigational New Drug Application (IND) from the U.S.

◦ We plan to initiate a Phase 1 basket study of VIR-5525 in the first quarter of 2025 in patients across a number of solid tumor indications of high unmet need, which may include metastatic head and neck squamous cell carcinoma, metastatic adenocarcinoma, squamous non-small cell lung cancer, and metastatic colorectal cancer.

• We will present functional cure data from the 24-week follow-up of the MARCH Part B Phase 2 clinical study evaluating combinations of tobevibart and elebsiran, alone, or in combination with pegylated interferon alfa (PEG-IFNα) at the EASL Congress 2025 on May 9, 2025.

• Future advancement in CHB by us will be contingent on securing a worldwide development and commercialization partner outside China Territory (People’s Republic of China, Hong Kong, Taiwan, and Macau).

Preclinical Pipeline Candidates

• We continue to advance pre-clinical assets in respiratory syncytial virus in partnership with GSK, and pursue HIV cure in collaboration with the Bill & Melinda Gates Foundation.

• We continue to progress multiple undisclosed PRO-XTEN™ dual-masked TCEs against clinically validated targets with potential applications across a number of solid tumors.

These preclinical candidates integrate the PRO-XTEN™ masking technology with novel TCEs discovered and engineered using Vir Biotechnology’s antibody discovery platform and our proprietary dAIsY™ ( d ata AI s tructure and antibod y ) AI engine.

• We have advanced a broadly neutralizing antibody to development candidate status in our HIV cure program in collaboration with the Gates Foundation.

Corporate Update

• On August 1, 2024 we announced an exclusive worldwide license to use of the proprietary PRO-XTEN™ universal masking technology for oncology and infectious disease and to three clinical-stage masked TCEs with potential applications in a range of cancers.

The agreement became effective on September 9, 2024.

◦ Certain former employees of Sanofi joined us following the closing of the agreement.

• On August 1, 2024 we announced the phase-out of clinical programs in influenza, COVID-19, and its T-cell based viral vector platform.

The Company is seeking partners to advance these clinical programs through further development.

Additionally, the Company announced a workforce reduction of approximately 25%, or approximately 140 employees.

• On September 10, 2024, we announced the appointment of Jason O’Byrne as Executive Vice President and Chief Financial Officer, effective October 2, 2024.

O’Byrne is an accomplished executive with more than 20 years of experience in finance and operations and brings leadership in capital allocation and formation, corporate strategy and operational excellence.

• In January 2025, we announced positive initial Phase 1 dose escalation data for two of our PRO-XTEN™ dual-masked TCEs.

• During the quarter, Vir Biotechnology and Alnylam Pharmaceuticals, Inc.

(Alnylam) amended and restated their collaboration agreement (Restated Alnylam Agreement), with Alnylam electing not to opt-in to its profit-sharing option for elebsiran in CHB and CHD indications.

The amended agreement provides us with the flexibility to pursue commercialization partners in markets outside the U.S.

Our Collaboration, License and Grant Agreements

We have entered into collaboration, license and grant arrangements with various third parties.

For details regarding these and other agreements, see Note 4—Grant Agreements and Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 7—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or SEC, on February 26, 2024.

For details regarding these and other agreements, see Note 4—Grant Agreements and Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 6—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Components of Operating Results

Other than sotrovimab, we have not obtained regulatory approval for our product candidates, and we do not expect to generate any significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever.

Although we have previously recognized revenue from our profit-share related to sotrovimab under our definitive collaboration agreement with GSK executed in June 2020, or the 2020 GSK Agreement, we may continue to incur net operating losses for at least the next several years as the extent of future revenue from the sale of sotrovimab remains uncertain.

While we have an EUA from the FDA for sotrovimab, the FDA has excluded the use of sotrovimab in all U.S.

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

With this EUA revision, sotrovimab is not currently authorized for use in any U.S.

In December 2024, the FDA revoked EUA granted to sotrovimab in May 2021.

Although certain countries outside the U.S.

continue to maintain access to 500 mg IV while noting that the clinical efficacy is unknown or uncertain against existing and emerging variants, we cannot predict whether other countries will further limit the use of sotrovimab.

Due to the evolving COVID-19 landscape and based on discussions with the FDA, we and GSK do not plan to file a Biologics License Application, or BLA, for sotrovimab at this time.

In light of these developments, we cannot predict whether (if at all) or to what extent sotrovimab may be reauthorized for use by the FDA in any U.S.

region in the future, and we do not expect meaningful collaboration revenue in the future from the sale of sotrovimab for the treatment of COVID-19 even if it were reauthorized by the FDA.

Collaboration revenue

Collaboration revenue includes recognition of our profit-share from the sales of sotrovimab pursuant to the 2020 GSK Agreement.

Our contractual share of 72.5% from the sales of sotrovimab is applied to the net sales reported in the period by GSK, net of cost of goods sold and allowable expenses from both GSK and us (e.g., manufacturing, distribution, medical affairs, selling, and marketing expenses).

In order to record collaboration revenue, we utilize certain information from our collaboration partner, including actual net product sales and costs incurred for sales activities, and make key judgments based on business updates related to commercial and clinical activities, such as expected commercial demand, commercial supply plan, manufacturing commitments, risks related to expired or obsolete inventories, and risks related to potential product returns or contract terminations.

In 2024, we expect a nominal amount of collaboration revenue, if any, from our 2020 GSK Agreement, and we may incur negative collaboration revenue related to costs for ongoing required support efforts that our partner GSK leads.

Constraint on variable consideration

In May 2021, the FDA granted an EUA in the U.S.

for sotrovimab.

In April 2022, the FDA excluded the use of sotrovimab in all U.S.

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

We do not expect meaningful collaboration revenue in the future from the sale of sotrovimab for the treatment of COVID-19.

Our revenues consist of the following:

Collaboration revenue includes recognition of our profit-share from the sales of sotrovimab pursuant to our 2020 collaboration agreement with GlaxoSmithKline plc (together with its affiliates, GSK, and 2020 GSK Agreement).

As the lead party for all manufacturing and commercialization activities, GSK incurs all of the manufacturing, sales and marketing expenses and is the principal on sales transactions with third parties.

Our accounting policy related to the profit-share is to consider the agreed-upon share of the profit-sharing amounts each quarter and evaluate whether those amounts are subject to potential future adjustments based on the latest available facts and circumstances, subject to the terms of the 2020 GSK Agreement.

As we are the agent under the 2020 GSK Agreement, we recognize our contractual share of the profit-sharing amounts or royalties (in case of an opt-out) as revenue, based on sales net of various estimated deductions such as rebates, discounts, chargebacks, credits and returns, less cost of sales and allowable expenses (including manufacturing, distribution, medical affairs, selling, and marketing expenses) in the period the sale occurs.

Manufacturing costs include inventory revaluation adjustments, lower of cost or market inventory adjustments, inventory write-downs and write-offs, and binding purchase commitments with a third-party manufacturer, among other manufacturing costs.

As the agent, we recognize our contractual share (72.5%) of the profit-sharing amounts as revenue, based on sales net of various estimated deductions such as rebates, discounts, chargebacks, credits and returns, less cost of sales and allowable expenses (including manufacturing, distribution, medical affairs, selling, and marketing expenses) in the period the sale occurs.

To record collaboration revenue, we utilize certain information from our collaboration partner, including actual net product sales and costs incurred for sales activities, and make key judgments based on business updates related to commercial and clinical activities.

Our contractual share of the profit-sharing amounts is subject to potential future adjustments to allowable expenses, which we account for as a form of variable consideration.

In 2023, GSK reported to us certain allowable manufacturing expenses related to excess sotrovimab supply and binding reserved manufacturing capacity not utilized, which we had previously reserved as a constraint on our cumulative profit-sharing amounts.

GSK may continue to adjust allowable manufacturing expenses for our share of the excess supply write-offs and unused binding manufacturing capacity and report to us as cost-sharing amounts in future periods.

We evaluate the latest available facts and circumstances to update our evaluation of whether any portion of profit-sharing amounts should continue to be constrained.

We re-assess these estimates at each reporting period.

In previous years, GSK reported to us certain adjustments to allowable manufacturing expenses, which we had previously reserved as a constraint on our cumulative profit-sharing amounts.

GSK may continue to adjust allowable manufacturing expenses in future periods.

We evaluate the latest available facts and circumstances at each reporting period to re-assess whether any portion of profit-sharing amounts should continue to be constrained.

Actual results could materially differ from estimates.

Contract revenue

In 2025, we expect a nominal amount of collaboration revenue, if any, from our 2020 GSK Agreement, and we may incur negative collaboration revenue related to costs for ongoing required support efforts that our partner GSK leads.

Contract revenue includes recognition of revenue generated from license rights issued to GSK, from research and development services under third-party contracts, and from a third-party clinical supply agreement.

Grant revenue

Grant revenue is comprised of revenue derived from grant agreements with government-sponsored and private organizations.

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• 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;

• expenses incurred under agreements with third-party contract manufacturing organizations, contract research organizations (CROs), and consultants;

• clinical costs, including laboratory supplies and costs related to compliance with regulatory requirements;

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the safety and efficacy of our product candidates, early clinical data, investment in our clinical programs, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability.

In addition, under our license agreement with Sanofi, we may incur additional clinical, and regulatory milestone payments based on the development progress of certain oncology programs.

In addition, under our some of our license agreements , we may incur additional clinical, and regulatory milestone payments based on the development progress of certain clinical programs.

We may also be required to pay commercial milestone payments and royalties in the event of a successful product launch and our receipt of commercial revenues.

Therefore, we are unable to predict the timing or the final cost to complete our clinical programs or validation of our manufacturing and supply processes and delays may occur due to numerous factors.

Factors that could cause or contribute to delays or additional costs include, but are not limited to, those discussed in the “Risk Factors” section of the Quarterly Report.

Factors that could cause or contribute to delays or additional costs include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report.

As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate significant revenue from the commercialization and sale of any of our product candidates.

Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations.

We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical and clinical studies, regulatory developments, our ongoing assessments as to each product candidate’s commercial potential and the impact of public health epidemics, such as the COVID-19 pandemic.

In addition, our existing collaborators have significant discretion in determining the efforts and resources that they will apply to our collaborations and may not pursue further development and commercialization of products resulting from our collaboration arrangements or may elect to not to continue or renew research and development programs, which would delay the development and may increase the cost of developing our product candidates and may result in a need for additional capital or a suitable replacement collaborator.

For those product candidates where there is not a current collaboration arrangement in place, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured (if at all) and to what degree such arrangements will affect our development plans and capital requirements.

We cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured (if at all) and to what degree such arrangements will affect our development plans and capital requirements.

Our clinical development costs may vary significantly based on factors such as:

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Restructuring, long-lived asset impairment and related charges

Restructuring, long-lives asset impairment and related charges consist primarily of charges incurred in connection with our cost saving initiatives implemented during the second half of 2024 and 2023, respectively, including severance and other employee-related expenses and long-lived assets impairment charges and disposal losses.

Restructuring, long-lived asset impairment and related charges consist primarily of charges incurred in connection with our cost saving initiatives implemented in 2024 and 2023.

Change in Fair Value of Equity Investments

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Interest income consists of interest earned on our cash, cash equivalents and investments.

Other (Expense) Income, Net

Other (expense) income, net consists of gains and losses from foreign currency transactions and the remeasurement of our contingent consideration obligation.

(Provision for) Benefit from Income Taxes

(Provision for) benefit from income taxes consists primarily of income taxes on our domestic and foreign operations.

Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest consists of net loss attributable to the noncontrolling interest owners of Encentrio Therapeutics, Inc., our subsidiary, during the three months ended March 31, 2023.

Other Expense, Net

Other expense, net consists of gains and losses from foreign currency transactions and investment management expenses.

Provision for Income Taxes

Provision for income taxes consists primarily of income taxes on our domestic and foreign operations.

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our results of operations for the periods presented (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 Change 2024 2023 Change

2025 2024 Change

Collaboration revenue $ (70) $ (987) $ 917

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Selling, general and administrative 23,944 36,321 (12,377)

Restructuring, long-lived assets impairment and related charges 12,712 3,372 9,340 38,939 8,738 30,201

Restructuring, long-lived assets impairment and related charges, net (10) (48) 38

Total operating expenses 142,579 136,457 6,122

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Interest income 12,288 21,283 (8,995)

Other (expense) income, net (893) 882 (1,775) (1,715) (7,506) 5,791

Other expense, net (72) (287) 215

Total other income 18,598 15,081 3,517

Loss before (provision for) benefit from income taxes (213,540) (166,626) (46,914) (418,430) (507,437) 89,007

(Provision for) benefit from income taxes (177) 3,213 (3,390) 1,059 8,293 (7,234)

Loss before provision for income taxes (120,949) (65,000) (55,949)

Provision for income taxes (16) (276) 260

Net loss $ (120,965) $ (65,276) $ (55,689)

Net loss attributable to noncontrolling interest — — — — (56) 56

Net loss attributable to Vir $ (213,717) $ (163,413) $ (50,304) $ (417,371) $ (499,088) $ 81,717

The lower negative collaboration revenue for the three months ended September 30, 2024 compared to the same period in 2023 was primarily due to reduced loss from the sales of sotrovimab.

The decrease in collaboration revenue for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to lower revenues from the release of profit-sharing amount previously constrained.

The increase in contract revenue for the three months ended September 30, 2024 compared to the same period in 2023 was not material.

The increase in contract revenue for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to $51.7 million of deferred revenue recognized during the first quarter of 2024 when GSK’s rights to select up to two additional non-influenza target pathogens under the 2021 GSK Agreement expired on March 25, 2024.

The decrease in grant revenue for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was primarily due to lower revenue recognized in accordance with our agreement with BARDA and to a lesser extent, lower revenue recognized from the Bill and Melinda Gates Foundation.

Cost of Revenue

The increase in cost of revenue for the three months ended September 30, 2024 compared to the same period in 2023 was not material.

The decrease in cost of revenue for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to lower third-party royalties owed based on the sales of sotrovimab under the 2020 GSK Agreement.

The change in collaboration revenue for the three months ended March 31, 2025 compared to the same period in 2024 was nominal.

The decrease in contract revenue for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to $51.7 million of deferred revenue recognized during the first quarter of 2024 when GSK’s rights to select up to two additional non-influenza target pathogens expired on March 25, 2024.

The decrease in grant revenue for the three months ended March 31, 2025 compared to the same periods in 2024 was primarily due to lower revenue recognized in accordance with our agreement with BARDA and the Gates Foundation.

We terminated our agreement with BARDA on December 31, 2024.

The decrease in cost of revenue for the three months ended March 31, 2025 compared to the same period in 2024 was nominal.

Research and Development Expenses

The following table shows the primary components of our research and development expenses for the periods presented (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 Change 2024 2023 Change

Licenses, collaborations and contingent consideration $ 112,532 $ 8,223 $ 104,309 $ 123,410 $ 23,520 $ 99,890

Personnel 35,885 46,691 (10,806) 125,745 140,724 (14,979)

Three Months Ended March 31,

2025 2024 Change

Contract manufacturing $ 9,336 $ 9,669 $ (333)

Clinical costs 20,606 11,607 8,999

Personnel 33,718 46,190 (12,472)

Licenses, collaborations and contingent consideration 36,591 5,696 30,895

Other 18,394 26,963 (8,569)

Total research and development expenses $ 118,645 $ 100,125 $ 18,520

The increase in research and development expenses for the three months ended September 30, 2024 compared to the same period in 2023 was primarily due to the expensing of the in-process research and development obtained as part of our license agreement with Sanofi, partially offset by lower clinical costs and contract manufacturing costs associated with the wind down of the Company’s Phase 2 PENINSULA trial evaluating VIR-2482, lower contract manufacturing costs associated with tobevibart and elebsiran used in the Company's CHD and CHB clinical trials, and lower personnel costs associated with the reduction in the headcount resulting from the cost saving initiatives implemented during the second half of 2023.

The decrease in research and development expenses for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to lower clinical costs and contract manufacturing costs associated with the wind down of the Company’s Phase 2 PENINSULA trial evaluating VIR-2482, lower contract manufacturing costs associated with tobevibart and elebsiran used in the Company's CHD and CHB clinical trials, and lower personnel costs associated with the reduction in the headcount resulting from the cost saving initiatives implemented during the second half of 2023 partially offset by a portion of the upfront payment made to Sanofi being allocated to in-process research and development.

The increase in research and development expenses for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to:

• higher license, collaborations and contingent consideration expenses related to a $30.0 million expense (paid in April 2025) in connection with signing the Restated Alnylam Agreement and milestone payments due upon the enrollment of the first patient in phase 3 ECLIPSE registrational program for CHD.

As part of the Restated Alnylam Agreement, Alnylam had elected to not opt-in to the profit-sharing arrangement for elebsiran, resulting in a milestone and royalty-based structure rather than a profit-sharing model.

We are solely responsible for the development, manufacturing, and commercialization activities associated with elebsiran;

• higher clinical cost due to the initiation of our phase 3 ECLIPSE registrational program and newer oncology programs;

partially offset by:

• lower contract manufacturing expenses related to our de-prioritized programs partially offset by activities associated with our newer oncology programs;

• lower personnel expenses associated with headcount reductions;

• lower other R&D expenses related to de-prioritized R&D programs and other ongoing cost savings, including the closing of our St.

Louis, Missouri and Portland, Oregon sites.

Selling, General and Administrative Expenses

The decrease in selling, general and administrative expenses for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was primarily due to cost saving initiatives implemented during the second half of 2023.

The decrease in selling, general and administrative expenses for the three months ended March 31, 2025 compared to the same periods in 2024 was primarily due to ongoing cost saving realized through headcount reductions and other initiatives.

Restructuring, long-lived assets impairment and related charges

The increase in restructuring, long-lived assets impairment and related charges for the three months ended September 30, 2024 compared to the same period in 2023 was primarily due to severance charges incurred related to our strategic restructuring announcement in August 2024 and, to a lesser extent, the right-of-use asset impairment charges related to closing our Portland, Oregon facility, which was previously announced on December 13, 2023.

The increase in restructuring, long-lived assets impairment and related charges for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to the right-of-use asset and leasehold improvement impairment charges related to closing our St.

Louis, Missouri facility, which was previously announced on December 13, 2023, and severance charges incurred related to our strategic restructuring announcement in August 2024.

The decrease in restructuring, long-lived assets impairment and related charges for the three months ended March 31, 2025 compared to the same period in 2024 was nominal.

Our restructuring plans implemented in prior years were substantially completed by the end of 2024.

Change in Fair Value of Equity Investments

Our investment consisted solely of shares of Brii Bio Parent, which is a marketable equity investment and remeasured to fair value at each reporting period.

We 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, due to the change in fair value.

For the same periods in 2023, we recognized unrealized losses of $2.7 million and $20.9 million, respectively.

Our equity investment consisted solely of shares of Brii Bio Parent, which is a marketable equity investment and remeasured to fair value at each reporting period.

For the three months ended March 31, 2025, we recognized an unrealized gain of $6.4 million due to the change in fair value, compared to an unrealized loss of $5.9 million for the same period in 2024.

Interest Income

The decrease in interest income for the three and nine months ended September 30, 2024 compared to the same periods in 2023 was primarily due to lower balances of cash, cash equivalents, and investments.

Other (Expense) Income, Net

The change in other (expense) income, net for the three months ended September 30, 2024 compared to the same period in 2023 was not material.

The decrease in other (expense) income, net for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to a decrease in foreign exchange measurement loss related to the accrued liability recognized in connection with the profit-sharing amount constrained under the 2020 GSK Agreement.

(Provision for) Benefit from Income Taxes

The provision for income taxes for the three months ended 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.

The decrease in interest income for the three months ended March 31, 2025 compared to the same periods in 2024 was primarily due to lower balances of cash, cash equivalents, and investments.

Other Expense, Net

The change in other expense, net for the three months ended March 31, 2025 compared to the same period in 2024 was nominal.

Provision for Income Taxes

The decrease in the provision for income taxes for the three months ended March 31, 2025 compared to the same periods in 2024 was nominal.

Liquidity, Capital Resources and Capital Requirements

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To date, we have financed our operations primarily through sales of our common stock from our initial public offering and subsequent follow-on offering, sales of our convertible preferred securities, and payments received under our grant and collaboration agreements.

As of September 30, 2024, we had $1.19 billion in cash, cash equivalents, and investments.

As of September 30, 2024, we had accumulated deficit of $655.2 million.

We entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or TD Cowen, in November 2023 pursuant to which we may from time to time offer and sell shares of our common stock for an aggregate offering price of up to $300.0 million, through or to TD Cowen, acting as sales agent or principal.

The shares will be offered and sold under the shelf registration statement on Form S-3 and a related prospectus that we filed with the SEC on November 3, 2023.

As of March 31, 2025, we had $1.02 billion in cash, cash equivalents, and investments and $94.4 million in restricted cash and cash equivalents, which included the $75.0 million subject to VIR-5525 achieving “first in human dosing” by 2026.

As of March 31, 2025, our accumulated deficit was $880.7 million.

In November 2023, we entered into a sales agreement (Sales Agreement) with Cowen and Company, LLC, as sales agent (TD Cowen), pursuant to which the Company may from time to time offer and sell shares of its common stock for an aggregate offering price of up to $300.0 million, through or to TD Cowen, acting as sales agent or principal.

The shares will be offered and sold under the shelf registration statement on Form S-3 and a related prospectus that we filed with the U.S.

Securities and Exchange Commission (SEC) on November 3, 2023.

We will pay TD Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide TD Cowen with customary indemnification and contribution rights.

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

As of March 31, 2025, no shares have been issued under the Sales Agreement.

Funding Requirements and Conditions

Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, and conducting preclinical and clinical studies, and to a lesser extent, selling, general and administrative expenditures.

We have not obtained regulatory approval for any product candidates other than sotrovimab, and we do not expect to generate significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever.

Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, selling, general and administrative expenditures.

In December 2024, the FDA revoked EUA granted to sotrovimab in May 2021.

We do not expect to generate significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever.

We may continue to incur net losses for the foreseeable future.

Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of September 30, 2024 as noted above will enable us to fund our operations for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q.

Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of March 31, 2025 as noted above will enable us to fund our operations for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q.

However, our operating plan may change as a result of many factors currently unknown to us, and we may need to raise additional capital to complete the development and commercialization of our product candidates and fund certain of our existing manufacturing and other commitments.

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See the sections titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs—Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates” and “Risk Factors—Risks Related to Our Financial Position and Capital Needs—We may require substantial additional funding to finance our operations.

If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate certain of our development programs or other operations” for a description of the risks that may be associated with any future capital raises.

If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate certain of our research and development programs or other operations” for a description of the risks that may be associated with any future capital raises.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect.

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See the section titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs” for a description of certain risks that will affect our future capital requirements.

We have various operating lease arrangements for office and laboratory spaces located in California, Oregon, Missouri and Switzerland with contractual lease periods expiring between 2025 and 2035.

As of September 30, 2024, we expect to make total lease payments of $140.7 million through 2035.

Our primary operating lease arrangements are for office and laboratory spaces located in California and Switzerland with contractual lease periods expiring between 2033 and 2035.

As of March 31, 2025, we expect to make total lease payments of approximately $120.5 million through 2035.

To date, we have entered into collaboration, license and acquisition agreements where the payment obligations are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones, and we are required to make royalty payments in connection with the sale of products developed under those agreements.

For additional information regarding these agreements, including our payment obligations thereunder, see Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 7—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.

For additional information regarding these agreements, including our payment obligations thereunder, see Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 6—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

For information related to our future commitments under our facilities and manufacturing agreements.

see Note 10—Commitments and Contingencies to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.

In the first quarter of 2024, the Company and a third-party contract development manufacturing organization entered into various scopes of work with respect to the manufacturing of tobevibart (the “Tobevibart Agreements”).

As of September 30, 2024, the Company had a balance of 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.

see Note 10—Commitments and Contingencies to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements.

The following table summarizes our cash flows for the periods indicated (in thousands):

Nine Months Ended September 30,

The following table summarizes our cash flows for the periods presented (in thousands):

Three Months Ended

Net cash (used in) provided by:

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Cash used in operating activities is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities.

Cash used in operating activities during the nine months ended September 30, 2024 decreased compared to the same period in 2023 primarily due to lower payments to GSK related to profit-sharing amount constrained under the 2020 GSK Agreement, and lower clinical development and contract manufacturing activities related to the wind down of the Phase 2 PENINSULA trial evaluating VIR-2482, partially offset by the payment made under our license agreement with Sanofi.

Cash used in operating activities during the three months ended March 31, 2025 decreased compared to the same period in 2024 primarily due to ongoing cost saving realized through headcount reductions, the closing of our St.

Louis, Missouri and Portland, Oregon sites and de-prioritized R&D programs.

Investing Activities

Cash provided by investing activities during the nine months ended September 30, 2024 increased compared to the same period in 2023 primarily due to higher cash provided by maturities and sales of investment, net of investment purchases.

Cash provided by investing activities during the three months ended March 31, 2025 increased compared to the same period in 2024 primarily due to higher cash provided by maturities and sales of investment, net of investment purchases.

Cash provided by investing activities during three months ended March 31, 2025 was primarily due to $301.9 million in proceeds received from investments that matured or sold during the year, partially offset by purchases of investments of $173.7 million.

Cash provided by investing activities during three months ended March 31, 2024 was primarily due to $592.7 million in proceeds received from investments that matured or sold during the period, partially offset by purchases of investments of $562.9 million.

Financing Activities

Cash provided by financing activities during the nine months ended September 30, 2024 decreased compared to the same period in 2023 primarily due to lower proceeds from the exercises of stock options.

The change in cash provided by financing activities during the three months ended March 31, 2025 compared to the same period in 2024 was nominal.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates.

There have been no significant changes in our critical accounting policies during the nine months ended September 30, 2024, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024 other than disclosed below.

Asset Acquisitions

We make certain judgments to determine whether acquisitions and other similar transactions should be accounted for as acquisitions of assets or business combinations using the guidance in Accounting Standard Codification, or ASC, Topic 805, Business Combinations 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 asset acquisition.

If the screen test is not met, further assessment is required to determine whether we have 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 asset acquisition, we account the transaction using the cost accumulation and allocation method.

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.

For more details on our critical accounting policies, refer to Note 2 Summary of Significant Accounting Policies to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no significant changes in our critical accounting policies during the three months ended March 31, 2025, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

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 2. Management’s Discussion and Analysis