VIR - Vir rises as Goldman Sachs upgrades to Buy citing post-COVID narrative

Vir Biotechnology ( NASDAQ: VIR ) gained ~9% on Tuesday after Goldman Sachs upgraded the COVID-19 treatment maker to Buy from Hold, citing a post-pandemic leg to its story given its experimental flu vaccine.

The upgrade comes as Vir ( VIR ) prepares to report initial data for its universal flu vaccine candidate VIR-2482 in mid-2023 for the prevention of influenza A illness from a Phase 2 trial involving healthy volunteers.

The readout is expected “to show meaningfully better efficacy than currently approved and rival pipeline-stage flu vaccines and consequently to drive material upward revisions to consensus estimates,” Goldman Sachs analyst Paul Choi wrote.

Choi argues that Vir’s ( VIR ) strategy of targeting a “highly conserved” region of the flu virus will help the company avoid the current practice of forecasting which strains to target in each flu season.

For 2030, Goldman projects $2.3B in sales for VIR-2482 compared to $700M risk-adjusted sales in the consensus.

With VIR-2482 making up less than 20% of 2030 risk-adjusted sales on the Street, “we see a real second, post-COVID leg to the story emerging and think the current valuation presents a compelling risk/reward,” Choi added, raising the price target on VIR to $53 from $41 per share.

The upgrade comes days after GSK ( GSK ) ended a partnership with Vir ( VIR ) for ongoing R&D into COVID treatments and vaccines. However, the British pharma giants agreed to continue their collaboration for studies targeted at influenza and other respiratory diseases.

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