ARCH, SoftBank-backed Vir Biotechnology underwhelms with $143 million IPO
George Scangos went back to Wall Street, and came back 700 million pennies short.
Scangos’ vaunted startup Vir Biotechnology raised $143 million in an IPO they hoped would earn $150 million. Shares were priced at $20, the low-end of the $20-$22 target.
Launched with backing from ARCH Venture’s Robert Nelsen, Masayoshi Son’s SoftBank Vision Fund, and the Bill & Melinda Gates Foundation, the infectious disease startup was one of a new wave of well-resourced biotechs that emerged with deep enough coffers to pursue a full R&D line rather than slowly build their case by picking off a single lead program.
By the time they were a year old, they had bagged $500 million in financing and four academic partnerships, agreed to two separate deals worth more than $1 billion apiece in potential milestones, and landed a prominent ex-Biogen chief in Scangos as CEO. They had lofty goals to match, aiming at such marquee and elusive diseases as HIV and hep B and touting a feel-good “global” business model by which they would sell their drugs in countries that could pay and let the Gates Foundation distribute them in countries that couldn’t.
The IPO promised investors a peek into the details and progress on those deals, while giving Vir cash to fuel their clinical trials.
Evidently, the investors were slightly underwhelmed.
The S-1 shows Vir had burned through $256 million and had $356.5 million on hand as of June. Proceeds from the IPO are intended to fund early trials for hep B candidates VIR-2218 and VIR-3434, along with the flu vaccine VIR-2482. Filings also showed their R&D deal with Alnylam — initially announced under its $1 billion-plus maximum payout — was worth only $10 million upfront.
Before the offering, Nelsen owned the biggest chunk of the biotech at 27%, followed by the SoftBank Vision Fund at 21%. Vir’s haul adds another IPO disappointment for SoftBank, although it’s a gentle one compared to the CEO-toppling WeWork quake. Vir is one of eight biotechs SoftBank is invested in, including Vivek Ramaswamy’s Roivant.
Scangos came to the company with a high-profile but less-than-flawless record. Although he helped make Tecfidera a multiple sclerosis blockbuster at Biogen, he left the company in 2016 with a thin pipeline.