Infectious Disease Player Vir Biotech Has Limited Near Term Upside, Analyst Downgrades

BofA Securities has downgraded Vir Biotechnology Inc VIR to Neutral from Buy with a price target of $14, down from $23.

Analysts Geoff Meacham, Charlie Yang, Susan Chor, Hao Shen, and Alexandria Hammond note that VIR's stock performance YTD has been lackluster, with a decline of 54%, compared to the NBI index's marginal decrease of 4% primarily attributed to disappointing influenza A and HBV data

However, the analysts maintain a positive outlook on Vir's antibody platform and recognize its long-term potential.

In terms of its pipeline, Vir encountered some challenges in 2023. However, it's worth noting that Vir is actively developing a next-generation flu antibody. 

Additionally, several upcoming Hepatitis B virus trial readouts are featuring various combination regimens over the next 18 months. However, these are unlikely to change investor sentiment materially.

BofA anticipates results for the Vir-2218 + Vir-3434 + PEG-INF (triple combo) with 24 weeks of treatment data in HBV (March Part B) in Q4 2023.

Insights from key opinion leaders suggest that the triple combo must demonstrate a substantial functional cure rate to achieve commercial success, ideally exceeding 40-50% clearance. However, functional cure data won't be available until Q2 of 2024.

Also, initial data from the SOLSTICE trial of VIR-2218 + VIR-3434 in the Hepatitis D virus is expected. The analysts will monitor this combination's efficacy, aiming for results comparable to Gilead Sciences Inc's GILD bulevirtide, which achieved a response rate of 45-48%. 

Price Action: VIR shares are down 5.62% at $10.91 on the last check Friday.

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