What happened
Shares of Vir Biotechnology (VIR 0.37%) were skyrocketing 19.4% higher as of 12:33 p.m. ET on Wednesday. The big jump came after S&P Global announced that Vir will replace Matador Resources on the S&P SmallCap 600 index effective before the market open on April 4. Matador is moving up to the S&P MidCap 400 index.
So what
The addition of Vir to the S&P SmallCap 600 index is good news for one simple reason: Any mutual funds or exchange-traded funds (ETFs) that track the index will have to buy the biotech stock. This buying activity could create upward pressure on Vir's share price.
Inclusion on the S&P SmallCap600 warrants increased enthusiasm among Vir shareholders. However, there are more important things to watch with the company.
In particular, the rise of the coronavirus omicron BA.2 subvariant could weigh on Vir's revenue. The U.S. Food and Drug Administration (FDA) recently revised the Emergency Use Authorization for Vir's and GlaxoSmithKline's sotrovimab antibody therapy because it was found to be ineffective against BA.2.
Image source: Getty Images.
Now what
Vir has other programs in development beyond sotrovimab. The company expects to report results from several clinical studies within the next three months. These include interim data from a phase 2 study of a VIR-2218/VIR-3434 monoclonal antibody combo and additional phase 2 data for VIR-2218 in combination with PEG-IFN-alpha. Both combo therapies are targeting hepatitis B.
