(Reuters) – British drugmaker GlaxoSmithKline will invest $250 million in Vir Biotechnology Inc and collaborate to develop potential antibody treatments for COVID-19, the disease caused by the new coronavirus, the companies said on Monday.
Vir’s shares rose as much as 34% following the news of GSK’s investment, priced at $37.73 per Vir share, a 30% premium to the stock’s Friday close. GSK was up about 2%.
Vir’s shares, trading at $35.60 on Monday, have more than doubled in the year up to Friday’s close.
Drugmakers across the globe are rushing to develop a treatment or vaccine for the fast-spreading coronavirus that has killed over 68,400 people globally. There is currently no approved treatment for the disease.
“We are transferring antibodies that recovered patients have made, that have presumably helped them recover, to new patients,” said Vir Chief Executive Officer George Scangos.
Vir’s approach, which is different from plasma therapy that involves giving newly infected patients the blood component that carries antibodies, lets it select the best antibodies out of the plasma, and makes it more convenient to administer.
Cowen analyst Phil Nadeau says GSK’s selection of Vir as its partner in the race to identify COVID-19 treatments is encouraging, adding that GSK’s expertise combined with Vir’s demonstrated ability to identify antibodies should help accelerate the collaborative programs.
Initial focus will be on accelerating development of Vir’s investigational treatments, VIR-7831 and VIR-7832, and then directly starting with a mid-stage trial within the next three to five months, the companies said.
GSK has so far focused on providing adjuvants, efficacy boosters that play a vital role in many vaccines, as part of its efforts to find potential vaccines against the coronavirus.
Experts have said it could take 12 to 18 months to develop a coronavirus vaccine.
This is California-based Vir’s second partnership with a major drugmaker for the development of a potential coronavirus treatment, having last month signed a letter of intent with Biogen Inc.
Gilead Sciences Inc is also testing its drug remdesivir as a potential coronavirus treatment.
Moderna Inc, which started testing its vaccine candidate in people last month, signed deals with the U.S. government in March to produce massive quantities of coronavirus vaccines.
(Reporting by Trisha Roy and Manas Mishra in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Shinjini Ganguli)