New Trade for November 18th, 2021

Stocks ticked higher this morning, starting the day a stone’s throw away from their record highs.  The Dow is 1.7% from its ATH, while the Nasdaq and the S&P 500 are 0.8% and 0.6% from their records.   

Meanwhile, economists are keeping an eye on a new wave of infection ripping through Europe.  Germany shattered a new record today, topping 65,000 new cases, but health officials warn that the actual number could be two to three times as many.  Containment efforts are underway as some countries have begun imposing partial lockdowns.  

Our trade for today highlights a biotech company with a recently approved Covid-19 treatment that’s gaining traction globally and a pipeline that’s chock-full of potential, with several possible catalysts on the horizon.  

New in Biotech:

The Guardian: “New pill could spell the end of all disease.”

This pill is set to completely change the lives of millions of Americans. And because just one tiny Brisbane company has virtually monopolized this technology with 140 foolproof patents…

Investors who get in on the ground floor stand to become rich beyond their wildest dreams. [Full Story…]

Vir Biotechnology (VIR) is a commercial-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent infectious diseases.  Its current development pipeline consists of product candidates targeting COVID-19, hepatitis B, influenza, and human immunodeficiency virus.   

The company’s partnership with GlaxoSmithKline (GSK) on Sotrovimab, a dual-action antibody, is helping increase the drug’s reach.  Sotrovimab was granted emergency authorization by the FDA in May after it was shown to reduce the risk of hospitalization or death by 79% in adults with mild-to-moderate Covid-19 at high risk of progressing to severe disease.  Yesterday, the Wall Street Journal reported that the U.S. would increase its recent order for 300,000 doses of the treatment, bringing its total contract to $1 billion up from $651.1 million.  Binding agreements have already been received for the sale of more than 720,000 doses of Sotrovimab worldwide.  Plus, the treatment is still undergoing review in several nations, which means plenty of untapped potential.  

Baird analyst Joel Beatty increased his projected 2021 total revenue projection for VIR from $426 million to $644 million upon announcement of the second contract with the U.S. government for additional doses of Sotrovimab.  He also raised his price target for the stock from $35 to $36 in light of the new contract.  

There’s much more to Vir’s pipeline than just their COVID antibody.  Along with some established collaborators, the company has made headway in some of the most profitable infectious diseases.  For instance, their stage 2 collaboration with Anyalam on siRNA (small interfering RNA) and antibody treatments for hepatitis B has produced VIR-2218; a treatment experts have touted as the potential best-in-class siRNA and a “backbone” of hepatitis B therapy.

Vir also has exciting prospects in HIV and influenza.  Their collaboration with the Bill & Melinda Gates Foundation on a T-cell treatment for HIV is rounding the corner into the second phase.  If all goes according to plan, Vir investors could have a huge victory on the horizon.

JPMorgan analyst Anupam Rama recently upgraded Vir, saying that the company’s broader pipeline (beyond COVID) should come into increasing focus in the next 12 months.  The analyst said he will be looking for the broader non-Covid pipeline to “emerge as a larger component value driver.”    The current consensus among 8 polled analysts is to Buy VIR.  There are 5 Buy ratings and 3 Hold ratings.  There are no Sell ratings for the stock.  A median 12-month price target of $67.75 represents a 92% increase from the last price.