Vir Falls as Traders Assess Market for Another Covid Treatment

Vir Biotechnology Inc. fell for the first time in three days as investors assessed the potential market for a third antibody treatment, after the biotech company and GlaxoSmithKline Plc received U.S. emergency-use authorization for their Covid-19 drug.

Vir shares dropped as much as 6.1% on Thursday, reversing premarket gains, while Glaxo slid as much as 1.4% in U.S. trading. As the U.S. approaches the halfway point in vaccinations and cases slow, analysts raised questions about prospects for the companies’ treatment.

“We maintain a cautious outlook on the commercial potential for sotrovimab, both near-term (unclear how many doses are available and increasing vaccination rates) and long-term,” JPMorgan analyst Anupam Rama wrote in a note.

The U.S. Food and Drug Administration cleared the drug, called VIR-7831 or sotrovimab, for people older than 12 with mild to moderate infection who are at risk of progressing to severe Covid-19, the agency said in a letter on Wednesday.

The impact on Glaxo should be negligible “given the late timing of their approval in developed markets, the decline in cases due to vaccination, the established competition and large inventories of unused products,” Geoffrey Porges, an SVB Leerink analyst, wrote. He viewed the authorization as validating for Vir’s development capabilities.

The companies applied for authorization in March based on interim data showing the drug reduced hospitalizations and deaths by 85% compared with a placebo. Europe’s drugs regulator endorsed the treatment for use in May and is conducting an accelerated review of the product in parallel to potentially support a full marketing authorization.

“As concern grows about the variants, we’re seeing more and more interest in the antibody,” George Scangos, Vir’s chief executive, said in an interview before the authorization was announced. Discussions are happening with governments around the world including the U.S., he said.

Glaxo and Vir also reported positive results in March for low-risk patients from a study combining their antibody treatment with a drug from Eli Lilly & Co. The cocktail of VIR-7831 with Lilly’s bamlanivimab reduced the amount of virus present in patients with mild-to-moderate Covid infection by 70% after seven days.

Setbacks

All three companies have suffered setbacks with their antibody studies.

Authorization for Lilly’s drug on its own was revoked in April as concerns arose of reduced effectiveness against Covid variants; bamlanivimab is now cleared for use only in tandem with another Lilly antibody.

Glaxo and Vir halted a late-stage study in March looking at the effects of VIR-7831 in already hospitalized patients after an independent monitoring board raised concerns about the extent of the potential benefit.

As Covid cases and restrictions ease in the U.S., there’s still a need for new treatments, Goldman Sachs analyst Paul Choi said. “While the overall Covid-19 market has diminished in regions with significant vaccine programs, we note that still others (e.g., Europe, India) may benefit from an effective therapeutic for early treatment following diagnosis,” he wrote in a note.

The duo’s antibody treatment targets SARS and a whole family of coronaviruses, a broad range of activity that should mean new variants will be less likely to evade the treatment, according to Vir’s Scangos. The therapy may have an advantage on how long it lasts in the body as well as lower dosing than other antibody products.

Vir said an injectable version is also being tested as current treatments are done by more onerous infusions.

AstraZeneca Plc is also testing a long-acting antibody combination to both treat and prevent Covid-19. Initial data from some of its five advanced-stage trials is expected in the coming weeks.

While Vir’s stock has peeled back from its late January record high, Scangos is skeptical that the world can put Covid-19 behind it quickly.

Demand for treatments is “going to persist for a long time,” he said. “Not enough people are going to get vaccinated to lead to herd immunity, that means there are going to continue to be a meaningful number of infections. People are going to need therapy.”

“We’re going to continue to see a lot of infections for a lot of years,” Scangos said.

©2021 Bloomberg L.P.

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