GlaxoSmithKline (GSK, Financial) is betting big that a small San Francisco biotech company can successfully develop a treatment and vaccine against Covid-19. The British pharma giant has made a $250 million equity investment in Vir Biotechnology, Inc. (VIR, Financial), hoping Vir’s expertise in monoclonal antibody technology will lead to development of new antibodies that defuse the novel coronavirus.
In late March, Vir said it had identified a number of antibody candidates, two of which the company plans to test in a Phase 2 clinical trial in the next three to five months, according a news release.
Vir’s shares rallied on announcement of the Glaxo investment, climbing to more than $38 each, but eased to just more than $32 on April 7. In the past 52 weeks, the company has traded as high as $75. CNN Money reported that the four analysts who offered targets for Vir set the median at its current price, tabbing the high end at $41 and the low at $20. Its shares are rated a buy.
In a note to investors on Monday, Cowen analyst Phil Nadeau wrote that his firm was optimistic Glaxo and Vir could speed up testing based on their combined expertise.
He pointed out that Glaxo isn’t the only member of pharma impressed with Vir’s capabilities. Vir recently said it was expanding an existing partnership with Alnylam Pharmaceuticals (ALNY, Financial) to develop medicines for Covid-19.
Vir also has a research agreement working with privately held Generation Bio and partnered last month with Biogen (BIIB, Financial), which will handle cell line development, process development and clinical manufacturing for Vir's monoclonal antibodies. Vir said the antibodies it has discovered bind to the novel coronavirus, and it’s testing whether they can treat or prevent the infection. The company’s president and CEO, George Scangos, Ph.D. is a former CEO of Biogen.
Disclosure: The author has no positions in any of the companies mentioned in this article.
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