JPMorgan has raised its price target for Vir Biotechnology (NASDAQ: VIR) to $14 from $10, maintaining a Neutral rating, following the presentation of initial clinical data for its in-house developed masked Tumor Cell Engagers (TCEs). The data, focusing on anti-HER2 VIR-5818 and anti-PSMA VIR-5500, suggest promising activity in solid tumor subsets, validating the strategic acquisition of the TCE platform from Sanofi in September of the previous year.
VIR-5818 Shows Promise in HER2+ Colorectal Cancer
Analysts highlighted the 33% objective response rate (ORR) observed with VIR-5818 in patients with HER2+ colorectal cancer (CRC). This result is comparable to data from the phase 2 MOUNTAINEER study, which involved tucatinib and trastuzumab. The potential for higher dosing with VIR-5818 was also noted as particularly significant.
VIR-5500's Safety Profile
VIR-5500's safety profile was recognized for its differentiated approach to cytokine release syndrome (CRS), potentially avoiding the need for prophylactic steroids. This could be advantageous in maintaining tumor response, a critical factor in cancer treatment.
Valuation and Future Prospects
JPMorgan's valuation model incorporates probability of success (PoS) assumptions ranging from 20-25% for VIR-5818 in HER2+ metastatic breast cancer (mBC) and 25-40% in metastatic CRC, to 35% for VIR-5500 in third-line or higher metastatic castration-resistant prostate cancer (mCRPC). This supports a fair valuation of $13 to $14 per share.
The analysts believe that for Vir's stock to maintain its upward trajectory, further evidence of safety across additional cohorts and a larger number of subjects evaluated in subsequent data readouts will be necessary. The timeline for these next steps, however, remains unspecified.
Additional Developments at Vir Biotechnology
Vir Biotechnology has also presented promising results from ongoing trials for its dual-masked T-cell engagers, VIR-5818 and VIR-5500, showing favorable safety and efficacy profiles. The company's investigational drugs, tobevibart and elebsiran, have also been granted Breakthrough Therapy designation by the FDA and Priority Medicines designation by the EMA for the treatment of chronic hepatitis delta.
TD Cowen has maintained a Buy rating on shares of Vir Biotechnology, highlighting the potential of the company's pipeline programs, particularly its treatments for hepatitis B and D. Furthermore, Vir Biotechnology's treatments for chronic hepatitis delta, tobevibart and elebsiran, have received a positive opinion for orphan drug designation from the EMA. Lastly, Vir Biotechnology has shared encouraging results from a Phase 2 clinical trial for chronic hepatitis B treatment.
