What happened

Shares of biopharma company Vir Biotechnology (VIR) are up 18.9% as of 3:42 p.m. ET Friday following Thursday's post-close release of its third-quarter results. Earnings dramatically exceeded expectations due to strong sales of a COVID-19 treatment, but it's Vir's pipeline and partnerships that may be doing the bulk of today's bullish work.

So what

For the three-month stretch ending in September, Vir Biotechnology turned $374.6 million worth of sales into earnings of $1.30 per share. The top line more than tripled year over year, and profits handily topped expectations ranging from a small profit to a few cents' worth of loss.

The vast majority of the company's revenue was driven by proceeds linked to a partnership with drugmaker GSK (GSK 0.31%). The two companies are cooperating on COVID-19 treatment Sotrovimab, or Xevudy, which has been approved for emergency use in over 40 countries.

Those proceeds aren't expected to persist, however. The analyst community anticipates an 80% sales decline in 2023, which would push the company back into the red.

But investors have good reason to look beyond that slowdown. For instance, in September Vir came to an agreement with the U.S. Department of Health and Human Services to collaborate on drugs aimed to curbing communicable diseases like influenza. Vir Biotechnology is also making encouraging developmental progress with multiple hepatitis B drugs currently in phase 2 trials. The partnership with GSK is also still intact "in preparation for new waves of COVID-19 variants and for future pandemics," should the need arise.

Now what

Like so many other biopharma stocks of its size and age, Vir Biotechnology poses above-average risk to investors. Much of the stock's value is rooted in the prospective value of a pipeline that's difficult to handicap. In the meantime, while future pandemics or an extension of the COVID-19 pandemic could drive sales not unlike last quarter's, such scenarios are impossible to predict.

For investors capable of stomaching above-average risk though, today's bullish bump highlights the fact that shares are still well down from December's peak. This leaves room for more upside built on several potential tailwinds, even if continued volatility can be expected. Just bear in mind it's still more of a speculative investment.