The vaccine development market has caught fire in the past year as multiple companies rushed to produce a solution to end the global COVID-19 pandemic. Interestingly, before COVID-19’s onset, the vaccine market was often viewed as a low-return environment, with the best minds in the field focusing their attention on larger, more lucrative markets such as novel oncology treatments.

The returns generated from developing a vaccine pale in comparison to the profits that can accrue for more advanced treatments. The most dominant entities in the field are Big Pharma players Glaxo SmithKline (GSK) and Pfizer (PFE) as the colossal R&D budgets allow for lower return projects due to the lower cost of capital.

That said, Vir Biotechnology (VIR) has positioned itself to tackle the noble endeavor of vanquishing infectious disease from the world, with it focused on producing the most cost-effective delivery method. The team's lead product, VIR-7831, is a novel treatment for the SARS-CoV-2 virus that binds to an epitope the virus shares with the SARS-CoV-1 virus. It should be noted that the CoV-1 variant caused the SARS outbreak in 2002.

VIR-7831 came as part of a collaboration with GSK, with the product designed to prevent infection in an outpatient setting as well as treat hospitalized patients. The product is in Phase 3 testing, but the companies hit a roadblock when an Independent Data Monitoring Committee (IDMC) recommended a halt to additional enrollment given the doubt of the potential benefit of the treatment. The committee further stated that the data thus far does not indicate a safety signal, and they will continue to gather data on the current patient population.

The news is a major blow to the duo, and GSK/VIR remains woefully behind more prominent players such as PFE, biotech Moderna (MRNA), Johnson and Johnson (JNJ) in the US, and AstraZeneca's (AZN) product in Europe.

Taking all of this into consideration, the real value of VIR will be determined by the productivity of its remaining pipeline, with VIR-2218 (its potential treatment of chronic hepatitis B virus infection) representing the most promising candidate. In collaboration with Alnylam Pharmaceuticals (ALNY), VIR has posted some impressive Phase 2 data that indicates a reduction in hepatitis B surface antigen. The team is using surface antigen reduction as a sign of active disease. VIR-2218 is delivered via a twice-monthly subcutaneous injection, which so far holds promise.

Executive Team

The depth, quality, and experience of the VIR talent bench are genuinely outstanding, headlined by George Scangos, the former CEO of Biotech behemoth Biogen (BIIB). Scangos led Biogen through a transformation, with significant emphasis placed on neurological assets such as Tecfidra and Aducanumab for Alzheimer's Disease. Scangos is an experienced hand that helps smooth out the inevitable ups and downs of a research-based entity such as VIR.