Morgan Stanley Doubles Vir Biotechnology Price Forecast - Here's Why

On Wednesday, Vir Biotechnology, Inc. VIR presented initial Phase 1 data from two of its dual-masked T-cell engagers (TCEs): VIR-5818, which targets a variety of HER2-expressing solid tumors, and VIR-5500, which targets PSMA in metastatic castration-resistant prostate cancer (mCRPC).

Data show encouraging preliminary safety and efficacy profiles with no dose-limiting cytokine release syndrome, maximum tolerated dose not yet reached as dose escalation continues, and early clinical response signals observed in heavily pretreated participants.

On Thursday, Morgan Stanley upgraded Vir Biotechnology, noting that “initial data provide early platform de-risking and see potential for activity to improve as dose escalation continues.”

Early efficacy data indicate that 50% (10/20) of participants receiving VIR-5818 doses ≥400 µg/kg experienced dose-dependent tumor shrinkage across multiple HER2-positive tumor types.

Analyst Michael E Ulz, citing management, writes that the response rate of ~33% is adequate to accelerate development.

The analyst upgrades Vir Biotechnology from Equal-weight to Overweight with a price target of $20, up from $10.

The Morgan Stanley analyst is optimistic about the early results, showing promising activity and manageable safety in both programs. They are awaiting data from higher doses to confirm safety and see stronger effectiveness.

Analyst Michael E Ulz writes that encouraging early results de-risks the TCE platform.

The model now includes VIR-5500 revenue projections for prostate cancer and slightly lower operating expenses based on revised cash guidance. However, the analyst has removed Hepatitis B revenues.

Price Action: VIR stock is up 0.24% at $12.51 at last check Friday.

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