GlaxoSmithKline has agreed to invest $250 million in infectious disease specialist Vir Biotechnology to launch a COVID-19 R&D alliance that the companies say could advance two experimental therapies to clinical testing this summer.
The partnership will leverage antibody technology from Vir (NASDAQ: VIR) and genomics expertise from GSK (NYSE: GSK). The companies will work together to develop drugs and vaccines for the novel coronavirus. According to financial terms of the preliminary agreement, GSK will acquire shares of its San Francisco-based partner at the price of $37.73 each, which is a 10 percent premium to Vir’s closing stock price on Friday.
Shares of Vir opened at $36.50 after the agreement was announced Monday morning, a more than 25 percent increase from Friday’s close.
Vir has technology that identifies antibodies in people who are protected from or who have recovered from infectious disease. These antibodies could be engineered to become therapies that either neutralize a pathogen or prompt an immune response against it. To date, Vir has used its technology to identify and develop therapeutic antibodies for Ebola, hepatitis B, influenza A, and malaria.
The GSK/Vir alliance will initially focus on two antibodies developed by Vir, VIR-7831 and VIR-7832. The company says both antibodies have shown an affinity for binding to the spike protein, one of the proteins on the outer layer of the novel coronavirus. Vir says these antibodies have been “highly potent” in neutralizing SARS-CoV-2 in lab tests employing the live virus. The company has previously said it envisions its antibodies could be used to prevent coronavirus infection in those at high risk, such as healthcare workers and the elderly. Other potential applications include preventing an infection from becoming more severe or treating the disease once it becomes severe. Vir has also said its antibodies could help develop a vaccine.
Vir and GSK plan to take the two Vir antibodies directly into Phase 2 testing in the next three to five months, if they get the regulatory go-ahead. Those compounds are part of the antibody portion of the R&D partnership, which is broken out into three separate programs, according to a Vir securities filing. The second program will focus on vaccines targeting the novel coronavirus and potentially others in the same virus family. The third, a functional genomics program, will develop new products by screening the genomes of those exposed to the novel coronavirus.
According to the Vir filing, the partners will work on the three programs for four years. The companies are sharing development costs with Vir taking on 72.5 percent of the expenses for the antibody program and GSK shouldering 72.5 percent of the vaccine program’s costs. The partners will share equally in the expenses for the functional genomics program.
Vir’s main responsibility is development and clinical manufacturing work for the antibody program. It will also be responsible for the initial development work for a vaccine under the vaccine portion of the alliance. GSK will handle commercialization of products that come out of the antibody program, except in China where Vir already has a development and commercialization agreement with WuXi Biologics covering antibody therapies for the novel coronavirus. GSK will also handle later-stage development, manufacturing, and commercialization work for the vaccine program, as well as manufacturing and commercialization of products that emerge from the functional genomics program.
If the alliance yields commercialized antibody therapies, Vir has a right to co-promote them in the US. The agreement also permits either partner to opt out of its funding obligations at certain points in a program’s development, which would give the other company to pursue further work on its own or to stop work altogether. If one of the companies commercializes a product on its own, it would pay royalties to the partner that opted out.
The partnership with GSK is Vir’s latest in COVID-19 R&D. In addition to the WuXi pact that was announced in February, Vir this month added COVID-19 to a prior RNA interference alliance with Alnylam Pharmaceuticals (NASDAQ: ALNY). The company also has a research partnership with the National Institutes of Health Vaccines Research Center.