By Mackenzie Tatananni

Vir Biotechnology might be on its way to becoming a major player in the market for cancer drugs if Tuesday's stock reaction is any indication.

The San Francisco-based company has been publicly traded since 2019. Its market cap stands at just over $1 billion. Investors have begun taking notice.

Vir is developing a handful of treatments for hepatitis, HIV, and cancer. One lead candidate is a prostate cancer drug called VIR-5500 that works by directing the body's own immune cells to destroy tumor cells.

The company released promising trial results for VIR-5500 after the bell Monday. In a Phase 1 trial, 14 of 17 patients showed at least a 50% reduction in prostate-specific antigen, or PSA, a protein that indicates the presence of prostate cancer at elevated levels. Nine patients showed at least a 90% decrease in PSA.

It's worth noting that the clinical trial is in the early stages but the results appear to have compelled Astellas Pharma, a Japanese company, to sign a multi-million-dollar deal with the biotech.

Vir said late Monday that it had struck a license agreement with Astellas to co-develop and commercialize its prostate cancer treatment. The collaborators will share expenses and revenue.

Under the pact, described as a "global strategic collaboration," Astellas will be granted a license to manufacture and commercialize the drug. In return, Vir will receive $335 million in upfront and near-term milestone payments, comprising $240 million in cash and $75 million in equity payments.

An additional $20 million will be paid out upon the successful transfer of "manufacturing process technology," which is expected in the second or third quarter of 2027. Vir is also eligible for up to $1.37 billion in future milestone payments, along with tiered royalties on sales outside the U.S.

Astellas will obtain exclusive rights to commercialize VIR-5500 outside the U.S. and will be responsible for commercialization costs, while Vir will have the option to co-promote the treatment in the U.S. and share profits.

Along with the deal, Astellas has agreed to buy around 7.2 million Vir shares for $10.36 apiece. One year after the stock purchase agreement closes, Astellas will have the right to make Vir register the resale of the shares it purchased, turning them from private to public.

Vir shares began rising in after-hours trading Monday and continued their ascent, surging 35% to $10.04 in premarket trading Tuesday. There was even more contributing to the meteoric gains.

Vir late Monday posted results for its latest fourth quarter. The company logged a narrower-than-expected loss of 31 cents a share against analysts' projections for a loss of 47 cents. Revenue of $64.1 million also crushed the $19.9 million Wall Street had forecast.

Vir already has existing agreements with big-name pharmaceutical companies like Sanofi. Under this pact, Vir will share a portion of certain proceeds from the Astellas collaboration with Sanofi.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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February 24, 2026 09:00 ET (14:00 GMT)

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