With $500M-plus, a buy­out and two new bil­lion-dol­lar pacts, up­start Vir is ready to roll on in­fec­tious dis­eases

George Scan­gos has been busy since leav­ing Bio­gen’s helm and jump­ing to the start­up Vir Biotech­nol­o­gy in San Fran­cis­co. Now it’s time for the com­ing out par­ty, which in­volves de­vel­op­ment al­liances with two of the biotechs back at his for­mer base in Cam­bridge, MA. And ac­cord­ing to Scan­gos, Vir is still just get­ting start­ed in build­ing a whole new com­pa­ny.

To­day Scan­gos un­veiled a biotech buy­out, two bil­lion-dol­lar drug de­vel­op­ment deals to build the pipeline, more than $500 mil­lion in fi­nanc­ing from some high-rolling tech gam­blers and four aca­d­e­m­ic part­ner­ships at Vir, which has set out to cre­ate a new pipeline for in­fec­tious dis­ease drug de­vel­op­ment.

Let’s kick this off with the part­ner­ships.

Robert Nelsen, Arch Ven­tures

Al­nyam gets it start­ed with a pact cov­er­ing RNAi drugs for in­fec­tious dis­eases, with Vir bag­ging de­vel­op­ment rights for a next-gen he­pati­tis B drug along with rights to four oth­er pro­grams that go in­to the pack­age. Sig­nif­i­cant­ly, Al­ny­lam si­mul­ta­ne­ous­ly said it’s ax­ing its orig­i­nal ear­ly-stage hep B pro­gram for ALN-HBV and re­plac­ing it with an amped up suc­ces­sor dubbed ALN-HBV02.

In the Al­ny­lam pact, Vir will pick up the pro­gram for the first hu­man proof-of-con­cept study, with the part­ners co-fund­ing the work. Vir takes con­trol in Phase II and Al­ny­lam has an op­tion to jump in­to a prof­it-shar­ing pact ahead of Phase III.

Al­ny­lam gets an un­spec­i­fied up­front in cash and stock in Vir, with $1 bil­lion-plus in mile­stones.

Then there’s Vis­ter­ra. This biotech has built a plat­form us­ing an epi­tope-tar­get­ing tech that can be used for pre­ci­sion an­ti­body de­vel­op­ment.

Vir has bagged an op­tion on mi­nor­i­ty rights to VIS410 for in­fluen­za A hos­pi­tal cas­es with a shot at a re­gion­al co-pro­mo­tion li­cense, plus pro­grams for RSV, fun­gal in­fec­tions and two oth­er pro­grams to be de­cid­ed on. Vis­ter­ra al­so gets more than a bil­lion dol­lars in po­ten­tial mile­stones.

Build­ing its own plat­form, Vir has ac­quired Switzer­land’s Hum­abs Bio­Med SA for an un­spec­i­fied amount, adding its op­er­a­tions and staff, who will re­main in Eu­rope.

The four new aca­d­e­m­ic deals cov­er an AI col­lab­o­ra­tion for drug dis­cov­ery with Stan­ford; a part­ner­ship with Har­vard that will give Vir an in-li­cens­ing edge for fu­ture pro­grams; an ex­pand­ed pact with OHSU and an al­liance with the Fred Hutchin­son Can­cer Re­search Cen­ter for cell ther­a­pies.

Pay­ing for all this is a syn­di­cate that was led by Arch Ven­tures’ Robert Nelsen, who seed­ed the com­pa­ny, along with the Bill & Melin­da Gates Foun­da­tion, Al­ti­tude Life Sci­ence Ven­tures and Al­ta Part­ners. They’re joined by Soft­Bank Vi­sion Fund, Temasek, Bail­lie Gif­ford, the Alas­ka Per­ma­nent Fund, and se­lect sov­er­eign wealth funds, pri­vate in­di­vid­u­als, fam­i­ly of­fices and in­sti­tu­tion­al in­vestors.

Scan­gos calls Vir a sci­ence-dri­ven com­pa­ny, but it’s very much fo­cused on clin­i­cal stage de­vel­op­ment. In a state­ment, he not­ed:

“We ex­pect to move sev­er­al com­pounds in­to clin­i­cal de­vel­op­ment in the next 18 months and we have an op­tion to ac­quire a por­tion of a Phase II com­pound tar­get­ing flu. We al­so con­tin­ue to eval­u­ate sev­er­al near-term op­por­tu­ni­ties to ac­quire ad­di­tion­al mid- and late-stage clin­i­cal com­pounds, as well as ex­pand our tech­nol­o­gy base even fur­ther. We have hired an ex­pe­ri­enced man­age­ment team and built in­ter­nal tech­nol­o­gy de­vel­op­ment ca­pa­bil­i­ties re­quired for the pro­duc­tion of bi­o­log­i­cal prod­ucts. I am pleased that in our first year we have been able to align lead­ing ideas, tech­nol­o­gy, and ex­per­tise fo­cused on trans­form­ing the care of peo­ple with se­ri­ous in­fec­tious dis­eases and pro­vid­ing a re­turn to our in­vestors.”


George Scan­gos pic­tured dur­ing a TV in­ter­view on Jan­u­ary 12, 2016. David Paul Mor­ris/Bloomberg via Get­ty Im­ages

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