Last year’s layoffs were just the start for Vir Biotechnology.
The company is now shifting the direction of its clinical and corporate operations by prioritizing clinical-stage hepatitis B and D programs, investing in new cancer therapies and divesting elsewhere.
Once known primarily as a Covid drug developer, Vir says it’s phasing out its flu, Covid and T cell-based viral vector programs, according to Thursday’s second-quarter earnings report. As a result, Vir is laying off another 25% of the team, resulting in about 140 employees departing. The company expects to have 435 employees by the end of the year, which is about 200 fewer than in the second quarter of 2023.
Not all programs are falling by the wayside. Vir will continue to advance its hepatitis B and hepatitis D work, with more data from ongoing Phase 2 trials for both programs expected before the end of the year.
The virology backpedal is paired with a major investment in new cancer therapies. Vir separately announced Thursday that it was acquiring rights to three clinical-stage T cell engagers from Sanofi, which originated from Amunix. The French pharma bought the smaller biotech for $1 billion upfront in 2021, but elected to divest from it earlier this year amid its own restructuring.
Mark EisnerNow, select assets have found a home at Vir. Two are in Phase 1, with another set to begin enrollment by the first quarter of 2025 or earlier. Vir will also have exclusive access to the protease-cleavable masking platform that produced the assets. Medical chief Mark Eisner told investors Thursday that the design of the trials will allow for “very intensive interrogation” of the assets as both monotherapies and in combinations.
Vir says that about 50 “key employees” with experience in T cell engagers are set to join the team. The biotech will pay Sanofi $100 million upfront, plus a $75 million near-term milestone.
CEO Marianne De Backer told investors that the company had been scouting deals in the last year that would include one or multiple clinical-stage assets where Vir has existing expertise.
“We have looked at a lot of opportunities that would fit that mold,” she said. “But I would say that we really believe this is a very, very unique fit.”
Vir expects to save $50 million in annual workforce expenses beginning in 2025, and another $50 million in total R&D savings by the end of 2025. The pipeline savings will be “substantially” reinvested in the new cancer programs.
The multi-pronged restructuring is undoubtedly the biggest corporate move since De Backer took over in April 2023. The longtime Bayer dealmaker has seen key execs depart and has teased for months that a major shift was coming. She told Endpoints News in an interview in October 2023 that Vir was “opening up the aperture.” By December, the company announced it was closing sites in St. Louis and Portland, OR, laying off 12% of the workforce.
Editor’s note: This story has been updated with comments from the investor call.