GlaxoSmithKline, Vir Biotech Team Up in Hunt For Coronavirus Treatment
British drugmaker GlaxoSmithKline (GSK) and Vir Biotechnology Inc (VIR) on Monday announced a partnership to develop potential antibody treatments for COVID-19, the disease caused by the coronavirus.
As part of the collaboration agreement GSK will make an investment in Vir of $250 million, priced at $37.73, representing a 10% premium to the closing share price on March 27, 2020, according to the announcement. Vir’s shares soared as much as 34% rising to around $39 in early U.S. trading following the news of GSK’s investment.
Wall Street analysts take a cautious stance on Vir’s stock. The Hold analyst consensus rating is based on 2 Sells, 2 Buys and 1 Hold. The $31 average price target projects 16% downside potential in the shares in the next 12 months. (See Vir’s stock analysis on TipRanks)
In the initial phase of the collaboration, the target will be to accelerate the development of specific antibody candidates identified by Vir’s investigational treatments, VIR-7831 and VIR-7832, that have demonstrated high affinity for the SARS-CoV-2 spike protein and are highly potent in neutralising SARS-CoV-2. Then the two companies plan to proceed directly into a phase 2 clinical trial within the next three to five months, subject to regulatory approvals.
“We are transferring antibodies that recovered patients have made, that have presumably helped them recover, to new patients,” said Vir Chief Executive Officer George Scangos.
The collaboration will also make use of Vir’s screening and machine learning approach to identify cellular targets whose inhibition can prevent viral infection. Vir has found multiple potential targets against flu and other respiratory pathogens, as well as hepatitis B virus, and will now focus on SARS-CoV-2.
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