Privately held Vir Biotechnology Inc. left no doubt about its intent to take a starring role in infectious diseases by initiating broad deals in the space with Alnylam Pharmaceuticals Inc. and Visterra Inc. Both partners are set to receive undisclosed up-front payments along with more than $1 billion apiece in potential milestone payments.

Separately, Vir disclosed the acquisition of Humabs Biomed SA, a Swiss company focused on discovering and developing fully human monoclonal antibodies (MAbs) that target serious infections, and reported that its capitalization surpassed $500 million.

Suffice to say, it was a big, big day for Vir.

"We are purposely going about our business model differently than many others," Howard Horn, Vir's chief financial officer, told BioWorld. "We're thinking in terms of multi-platform and multi-program. And we're purposely doing this because we think infectious diseases are complex. In many cases, you're trying to beat evolution, which is a tall order."

Launched this year with $150 million in funding from Arch Venture Partners and the Bill & Melinda Gates Foundation, San Francisco-based Vir is led by CEO George Scangos, who previously helmed Biogen Inc. Vir is focusing initial efforts in three therapeutic areas: chronic infectious diseases including HBV, tuberculosis and HIV; respiratory diseases, including influenza, RSV and metapneumovirus (MPV); and health care-acquired infections. Its inaugural technology portfolio included viral vectors, including cytomegalovirus (CMV)-based technologies, developed by a team at Oregon Health & Science University (OHSU) led by Gates Foundation grantees Louis Picker and Klaus Früh and obtained through the acquisition of their company, Tomegavax Inc. (See BioWorld Today, Jan. 9, 2017.)

In addition to the founding investors and seed investors Altitude Life Science Ventures and Alta Partners, Vir has attracted the Softbank Vision Fund, Temasek, Baillie Gifford, the Alaska Permanent Fund and undisclosed wealth funds, private individuals, family offices and institutional investors to its syndicate.

The company expects to combine therapies and, perhaps, modalities to squash bugs.

"When we thought about how we could build the best infectious disease company, we looked for best in breed," Horn said. "Humabs and Visterra represent that in the antibody space, and Alnylam is a very important partner in RNAi therapeutics, which is an emerging area."

Vir's alliance with Alnylam will focus on developing and commercializing RNAi therapeutics targeting chronic hepatitis B virus (HBV) infection and other infectious diseases. As part of the pact, the companies plan to advance Alnylam's HBV program and initiate a research collaboration to develop and advance up to four additional RNAi therapeutic programs for undisclosed infectious disease targets.

Last year, Alnylam moved its chronic HBV candidate, ALN-HBV, into a phase I/II trial. That asset, gained from the 2014 acquisition of erstwhile RNAi rival Sirna Therapeutics Inc. from previous owner Merck & Co. Inc., is being abandoned, however, in favor of ALN-HBV-02, which incorporates Alnylam's enhanced stabilization chemistry-plus, or ESC+, GalNAc conjugate technology. ESC+ conjugates are designed to improve target specificity with an expanded therapeutic index.

Alnylam will lead ALN-HBV-02 to IND filing and Vir is set to take the asset through human proof of concept, with the companies co-funding this portion of the program. Subsequently, Vir will fund and conduct development through completion of phase II studies, when Alnylam can opt into a profit-sharing arrangement prior to the start of phase III. Alnylam retained an option to opt into similar profit-sharing arrangements on the additional RNAi research programs at proof-of-concept. Should the Cambridge, Mass.-based company opt out, it stands to reap tiered royalties on products from the collaboration commercialized by Vir.

The up-front to Alnylam includes cash and shares of Vir's common stock.

With Alnylam focused on its own later-stage pipeline, "We see this as a smart partnership to retain its orphan disease focus and downstream economics on these programs," Piper Jaffray's Edward Tenthoff observed in a hot comment.

On Wednesday, Alnylam's shares (NASDAQ:ALNY) lost $1.15 to close at $117.55.

Partnering discussions 'evolved fairly quickly'

Vir's pact with Visterra – which earlier this month pulled down a $46.7 million series C – features an exclusive research collaboration, license and option agreement covering a phase II asset and up to five research programs in infectious diseases. (See BioWorld, Oct. 6, 2017.)

Vir gained a minority financial interest in VIS-410, a MAb in phase II development to treat hospitalized patients with influenza A. Following exercise of an option, Vir may elect to co-promote VIS-410 in certain territories.

In addition, Vir and Visterra, also of Cambridge, Mass., will advance three infectious disease antibodies developed with Visterra's novel Hierotope technology. VIS-FLX is a long-acting MAb to prevent influenza A in high-risk individuals, VIS-RSV is a bispecific MAb to treat respiratory syncytial virus (RSV) and VIS-FNG is a bispecific MAb targeting severe fungal infections, including Candida, Aspergillus and Cryptococcus. Vir may expand its license by up to two additional infectious disease research programs.

The Hierotope platform uses computational tools and technologies to identify specific epitopes that are critical to the function of given antigens and to design and engineer precision antibody-based biologics to target these epitopes, which are difficult to address using traditional techniques.

"Shortly after Vir launched earlier this year, we had some initial exploratory discussions, and both parties quickly realized there was a lot of potential to work together," David Arkowitz, Visterra's chief operating officer and chief financial officer, told BioWorld. "Discussions about collaboration evolved fairly quickly, given that our Hierotope platform generated a number of infectious disease programs that demonstrated strong potential in research studies but were beyond what we could pursue on our own."

In addition to its up-front payment, Visterra is set to receive reimbursement of costs related to the licensed programs until handing control to Vir, when Visterra will be eligible for development, regulatory and sales milestone payments for each licensed program. Visterra also is eligible for tiered royalties on global net sales of products emerging from the collaboration.

In the meantime, Visterra will continue to advance its candidates, VIS-410, which covers all known influenza A viruses; VIS-513, a MAb to treat dengue that's being advanced by Visterra's partner, the Serum Institute of India; VIS-705, an antibody-drug conjugate targeting treatment of Pseudomonas aeruginosa; and VIS-649, a MAb to treat IgA nephropathy that Visterra expects to advance to the clinic next year.

Because four of the programs in the Vir partnership are already underway, Visterra expects to manage the collaboration as well as its in-house assets without new hires. Since Vir has the option to bring in two additional programs, "we'll see how that plays out," Arkowitz said. "When that occurs, it may require additional staff on our part to meet those needs."

Nevertheless, the collaboration, on top of its recent financing, "enables us to make significant progress across all of our areas of business," he added.

'The need is absolutely enormous'

Horn, meanwhile, called Vir's acquisition, Humabs, "a little company from Switzerland that has done really big things," particularly in the discovery and development of fully human MAbs. "They're the best in the business," he said.

Humabs has existing relationships with big pharmas, and those economics will pass through without accruing to Vir. But the company will assume ownership of more than 15 antibody development candidates, including preclinical candidates aimed at HBV, RSV/MPV, Zika and dengue, as well as Humabs' antibody discovery platform. Humabs will retain its employees and operate as a wholly owned subsidiary of Vir from its facilities in Bellinzona, Switzerland.

Vir also expanded its sphere of influence in academia, inking a license agreement with Stanford University on the use of artificial intelligence to mine gene expression data for diagnostic predictions and target discovery, a five-year research alliance and exclusivity to negotiate licenses with Harvard University for infectious disease projects, an expanded relationship with OHSU for sponsored research and a similar new agreement on cell therapy with Fred Hutchinson Cancer Research Center.

The Gates Foundation is expected to provide funding to execute the company's CMV-based HIV and tuberculosis vaccine programs.

Vir is growing nearly as fast as its partnerships. When Horn joined the company in March, "you could count the employees on one hand," he said. The company now employs 65 and expects additional hires in its senior and mid-level ranks.

Despite historic commercialization challenges in infectious disease space, the timing is right for Vir's approach, Horn maintained.

"A number of things in terms of science, technology and medical advances are breaking all at the same time," he said. "We know more now about the biology of pathogens. We know more about the immune system. We know more about how to engineer antibodies and how to manufacture them at costs that make them more accessible around the globe. RNAi is another really exciting area that's an important addition to the space, and data sciences – implemented in the right way – can be enormously impactful to diagnostics and identifying better candidates.

"In many cases," Horn added, "these factors have been proven out in the oncology space, but people haven't taken the time to apply them to infectious disease. We got into this space because we believe the need is absolutely enormous. Literally everyone is susceptible to infectious diseases, and we want to be part of the solution there."