Vir Technology has received a fair amount of press recently as a company that had a poor turnout at its IPO. It was referred to as a massive flop, but before you judge the company harshly, it’s worth taking a look at the reasons for the poor performance and examine the business as a whole with pros, cons and then perhaps, give it a second look. When this came to our attention, we felt obliged to look into the background of Vir Technology, the IPO and how something backed by Bill Gates himself could get off to such a rough start as a publicly-traded company. Here are 20 things you didn’t know about Vir Technology that you probably should.
1. Vir Technology is on a global mission
Imagine a world without infectious diseases. This is the ultimate goal of Vir Technology. It is a clinical state immunology company that utilizes the most current technologies for the prevention and treatment of serious infectious diseases. The staff is on a global mission to understand the immune system, identify the weaknesses within the very pathogens causing the diseases, and apply treatments that destroy them for the promotion of improved health throughout the entire world.
2. Vir Technology is a multi-platform business
One of the most unique things about Vir is the approach that it takes to achieve established goals. Vir employs the use of a variety of programs and platforms in reaching goals. It takes a broad approach to reach the ultimate goal of developing treatments that will rid the world of infectious disease. While this is a simply stated goal, the pathways to achievement include the use of a complex array of processes
3. Vir is working on commercialized treatments
From an investment perspective, it’s important to know that Vir Technology is working with the end goal of developing product candidates for the treatment of infectious diseases. It is developing drug candidates which show effectiveness in combatting and arresting infectious disease pathogens. Upon approval, the product candidates will be commercialized and marketed for sale in the pharmaceutical industry. This is a factor that makes the company attractive to potential investors.
4. Vir raised more than $543 million in 3 funding rounds
Vir Technology participated in three funding rounds to raise capital for the research and development stages of the operation, as well as for clinical trials of candidate products for the treatment of infectious diseases. The first round took place on January 6, 2017, with ARCH Venture Partners and the Bill & Melinda Gates Foundation taking the lead as investors. A total of 5 investors participated in the event which raised $150 million. This was followed by a Series A funding round in August of 2018, raising $66 million. The third round of Series B funding was led by the SoftBank Vision Fund with a total of 3 investors raising an additional $327.6 million for a total of $543.6 million over the three rounds.
5. Vir Technical acquired the Humabs company
Vir is expanding its reach through the acquisition of companies that provide the technology, products and services that will help them to more quickly reach their end goals. Humabs is like Vir, a company that uses proprietary technologies in the race to discover new treatments to combat bacterial and viral infections. These fall under the category of infectious diseases and the work that is done through Humabs fits in perfectly with the overarching goals of Vir Technology. The acquisition announcement was made on September 28, 2017, and has since been completed. Humabs is now a subsidiary organization under the Vir Technology umbrella.
6. It also acquired TomegaVax
Vir announced its acquisition of the TomegaVax organization on January 6, 2017. TomegaVax is a biotechnology company that conducts research for teh development of cures for a variety of viral diseases which include papillomavirus, hepatitis, malaria, herpes, tuberculosis, and AIDS. The acquisition of TomegaVax brings Vir one step closer to achieving their objectives and it has broadened the scope of their research and development of treatments to fight infectious disease.
7. Vir Technology went public in October of 2019
Vir recently launched its initial public offering. The offering raises $142.9 million, but this was far below the expectations of the company. The price range per share was set between $20-$22 per share for common stock which is held by the SoftBank Group Corp’s Vision Fund. The valuation of Vir is at $2.2 billion. It is 21% owned by the Vision Fund.
8. Vir Technologies has multiple co-founders
Big money came together to get this company up and running. Robert Nelson, a partner at Arch Venture Partners joined forces with SoftBank’s Vision Fund as well as the Bill & Melinda Gates Foundation. Without their assistance, Vir would not likely have gotten off the ground. Nelson brought George Scangos on board as the CEO, because of his former executive experience at the Biogen Inc corporation.
9. This isn’t the first setback for Softbank
Softbank has had a series of low performing IPOs. Vir is one of several. Uber Technologies with a current value which has declined by 35% of its IPO price and that was just in May of 2019. WeWork was set to go public, but in light of the current setbacks, they canceled the IPO planned prior to the event. Although it’s worth noting that SoftBank performed well with their handling of 10X Genomics in the IPO, as well as Guardant Health, an oncology firm. Sometimes companies realize it’s best to delay going public due to market volatility.
10. Fear is the cause of the underperformance
SoftBank is not to blame for the trading fiascos we’ve recently seen in the market. When it comes to pharmaceuticals and biotech companies, there is a great deal of market volatility because of a fear of the unknown. The current trade conditions between China and the United States have investors concerned about the outcomes. Some companies with the hope of going public are putting it off until there are smoother seas to tread in the market. Vir isn’t the only biotech to flounder at IPO and beyond. It is joined by BioNTech SE which sold shares at a lower rate than originally planned.
11. Vir Technology had all the right backers
Vir Technology has the firm backing of the Bill and Melinda Gates Foundation and others. It’s nothing that Vir did wrong, but rather, the market conditions affecting the lousy outcome for the IPO. The offering was led by Goldman Sachs, JPMorgan, Cowen, and Barclays as lead book-running managers for the deal.
12. Going public declined the valuation of Vir Tech
Going public is always a calculated risk for any company. Vir Technology supporters and founders had no way of knowing that the IPO was going to take them on a dive, or they would have probably waited. This is the nature of the beast. Bankers priced hares at $20 prior to Friday’s IPO, but the demand simply wasn’t there. The opening price of the offering ended up at $16.20 per share then decreased to a low of $14.02 by teh end of the first day of trading, which is a 30% loss for the initial investors. Vir Technology is listed on the Nasdaq Stock Exchange under the ticker symbol VIR.
13. Vir is not yet profitable
Any investment made in Vir Biotechnology would need to be a long-term one. It’s not currently a profitable company and there is no indication that it will be for several years. Its track record showed revenues of $10.7 million with a loss of $116 million. This represents a huge risk for investors, and this is one of the reasons why the demand on the opening day of the IPO was so uneventful for the company. There are those who will invest because they’re looking at the bigger, more long-term picture, but for the average amateur investor, the deal doesn’t show any immediate hope of ROI.
14. The science behind Vir is impressive
It’s worth noting that although Vir isn’t profitable, the science behind the work that is currently being done is quite impressive, and there is optimism that it will yield high returns if and when the candidate products have been approved and they reach the stage of commercialization and marketing.
15. Vir is a new company
The tech firm has only been in operation for just three short years. It’s made significant progress during this time, with Nelson funding $150 million for the upstart, then securing additional funding to get the operation in full swing. The failed IPO doesn’t mean that the company is going defunct or that it won’t achieve the pre-established goals. It just means that as of this time, there isn’t a high level of confidence on the part of new investors. Nelson has funded several pharmaceutical and biotech companies in the past including Juno Therapeutics, GRAIL, Sana Biotechnology, Sage Therapeutics, Editas Medicine and several others. He’s not new to the game and he knows precisely what he’s doing. He doesn’t mind betting large amounts of funding on research and development of medicines with the potential to change the face of science. Taking risks is how some of the greatest achievements in science have been made.
16. The pipeline for Vir Technology is loaded
A promising fact that those eying Vir Technology need to be aware of is that there are several candidate products already in the pipeline. If you’re familiar with the way that new treatments/drugs are developed then you know that there is a fact-finding stage, the developmental stage and then the clinical trials. These and many other more complex steps must be taken prior to submitting the product to the FDA for review and hopefully approval for commercialization and marketing. Vir has its pipeline fully loaded with a variety of new drugs in various stages of development. They’re on the way to something big, but this type of research takes time and money.
17. Vir is collaborating with a variety of organizations
Some of the candidate drugs are the property of Vir alone, but others are the result of the collaborative efforts of Vir staff and companies like Alnylam Pharmaceuticals. They’re conducting work on the IR-2218 candidate for the treatment of Hepatitis B. The candidate targets siRNA to inhibit the production of the HBV proteins, allowing the body’s own immune system to more effectively control the virus through therapy. VIR 3434 is an antibody-based treatment for Hepatitis B and it is another candidate in the pipeline.
18. Vir is working on an HIV treatment
Another important candidate drug in Vir’s arsenal is Vir-1111. It is an HIV T cell vaccine that can help the T cells in the body recognize HIV epitopes to stimulate the immune system to respond. This has the potential for becoming a power vaccine against the HIV virus but at its current stage, more modifications are needed and further clinical development is required.
19. VIr has Influenza A candidates
With the recent lack of accuracy in predicting the predominant strains for influenza outbreaks, Vir hs been working on an Influenza A drug which will serve as a universal influenza A vaccine. It will offer greater protection from illness because it covers a broader scope of the multiple strains which occur in outbreaks. The candidate is currently identified as VIR 2482.
20. Vir is also working on a TB candidate drug
Tuberculosis is another infectious disease that causes illness, suffering, and death throughout the world. Vir Technologies has a new candidate drug that is identified as VIR 2020. It is based upon a T-Cell platform and is planned to be used as a vaccine that stimulates T cells found in the lungs to stimulate the body’s natural immune response to ward off this infectious disease.