aibioVir Biotechnology to receive $335 million from Astellas in VIR-5500 licensing deal
Tickers VIR
Vir Biotechnology agreed to co-develop VIR-5500 with Astellas for $335 million in upfront and near-term payments, plus up to $1.37 billion in later milestones. The drug is still in Phase 1, and the deal closes only after Hart-Scott-Rodino clearance.
Key facts
- Company
- Vir Biotechnology, Inc. (NASDAQ: VIR)
- News type
- Financings
- Primary source
- Vir Biotechnology, Inc. Form 8-K filed February 23, 2026 (SEC EDGAR)
Vir Biotechnology, Inc. (Nasdaq: VIR) agreed on February 19, 2026 to co-develop and co-commercialize its prostate cancer candidate VIR-5500 with Astellas US LLC. Vir will receive $335 million in upfront and near-term milestone payments, including $240 million in cash, a $75 million equity investment and a $20 million near-term milestone. It is also eligible for up to $1.37 billion in later milestones, plus royalties on sales outside the US. Vir disclosed the deal in a Form 8-K filed February 23, 2026.
The drug is early
VIR-5500 is a PRO-XTEN dual-masked T-cell engager that targets PSMA, prostate-specific membrane antigen. The filing says it is in Phase 1 development. Vir said it would present updated Phase 1 data at the 2026 ASCO Genitourinary Cancers Symposium on February 26, 2026. The 8-K gives no response rates or safety figures from that Phase 1 work, so the price is set against an asset whose efficacy is not yet shown. The joint press release calls VIR-5500 "a potentially best-in-class T-cell engager," a claim the early data in the filings do not test. Vir will run the ongoing Phase 1 trial until responsibility moves to Astellas, which then takes over all development.
Under the collaboration and license agreement, Vir grants Astellas an exclusive worldwide license to VIR-5500 and certain related compounds. That license is subject to intellectual property rights held by Sanofi S.A., and Vir will share a portion of certain collaboration proceeds with Sanofi.
Who pays for what
Global clinical development costs will be split 40% to Vir and 60% to Astellas. Costs of US-specific studies are shared equally, and Astellas bears the costs of ex-US studies alone. In the US, Vir can co-promote the drug and share profits and losses equally with Astellas if it is approved. Outside the US, Astellas gets exclusive commercialization rights and pays those costs.
Vir can opt out of development cost sharing and US profit sharing. If it does, it becomes eligible for up to $1.37 billion in milestones, or $1.60 billion if a pre-defined limited funding threshold has been met at the time of the opt-out, plus tiered, double-digit royalties on global net sales. The $20 million near-term milestone is due when manufacturing process technology transfer is complete, which the company expects in the second or third quarter of 2027.
The equity piece
Astellas agreed in a separate stock purchase agreement to buy 7,239,382 shares of Vir common stock for about $75 million, or $10.36 per share. The price is a 50% premium to the 30-day volume weighted average price as of February 17, 2026. The shares are sold in a private transaction that the company says is exempt from registration. Standstill, voting and lockup provisions run for one year after the anticipated closing. After that, Astellas can in some cases require Vir to register the shares for resale.
Advisers
Lazard acted as Vir's exclusive financial adviser on the transaction. The 8-K does not name legal counsel to either company, and it does not name a placement agent or underwriter for the stock purchase. Closing depends on customary conditions and clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which means the waiting period must expire or be terminated.
Naoki Okamura, President and Chief Executive Officer of Astellas Pharma Inc., is named in the joint press release, which also quotes Adam Pearson, Chief Strategy Officer of Astellas, and Marianne De Backer, Chief Executive Officer of Vir. De Backer signed the 8-K.
The company's losses
Vir's annual report on Form 10-K, filed February 23, 2026, reports a net loss of $438.0 million for 2025. Research and development expense was $456.0 million, down from $506.5 million in 2024, and Vir used $391.8 million in operations during 2025. The report describes Vir as a clinical-stage biopharmaceutical company working on serious infectious diseases and cancer. Of the $335 million headline figure, $240 million is cash. The collaboration only begins at closing, which depends on the antitrust waiting period ending.
Set against a net loss of $438.0 million and $391.8 million used in operations in a single year, the upfront cash is a partial offset, not a cure for the company's burn.