Last April, the duo hooked up to develop antibody treatments and preventive options for COVID-19. As part of the deal, GlaxoSmithKline took a $250 million stake in Vir.
The giant British drugmaker must have liked what it saw in the American biotech because it is expanding its relationship with Vir to include treatments for influenza. The deal gives GlaxoSmithKline an exclusive option to co-develop Vir's lead flu treatment, VIR-2482, and includes a three-year research collaboration on next-generation antibodies for the prevention or treatment of the flu, as well as antibody treatments for up to three undisclosed targets. The companies are also expanding their functional genomics collaboration beyond the coronavirus into other respiratory virus targets.
Vir will get a $225 million payment up front, and GlaxoSmithKline is also investing another $120 million in the biotech. If GlaxoSmithKline exercises its license to co-develop VIR-2482 at the end of phase 2 development, Vir will get another $300 million. Vir will also be eligible for up to $200 million in regulatory milestone payments.
It's easy to imagine that GlaxoSmithKline might just buy Vir outright at some point, considering it already owns a big chunk of the biotech and it's on the hook for some major payments. But complicating such a potential marriage are Vir's other relationships with Alnylam Pharmaceuticals (ALNY 1.88%) and Gilead Sciences (GILD 1.37%). GlaxoSmithKline may not be interested in an acquisition that comes with extra baggage.
Whether the relationship ends in a full union or not, Vir's shareholders are justifiably excited about GlaxoSmithKline's increased interest in the company. As of 2:10 pm EST, shares of Vir were up by 16.2%.