Vir Biotechnology obliterated Wall Street's expectations for its Covid treatment in the third quarter, and Vir stock leaped above its 200-day line for the first time since August.
During the September quarter, the Covid antibody treatment generated $374.6 million in sales — nearly triple the $132.9 million analysts expected, according to FactSet. Vir also unveiled a new deal collaborating with GSK on its respiratory syncytial virus antibody. The respiratory virus is a growing target for biotech companies working on drugs and vaccines.
The news underscores "our belief that Vir's growing capabilities and diverse portfolio are ramping up meaningfully," SVB Securities analyst Rosanna Ruiz said in a report.
On today's stock market, Vir stock catapulted 17.7% to 25.66. GSK, formerly known as GlaxoSmithKline, saw shares rise a fraction to 32.99.
Vir Stock: Triple-Digit Sales Growth
On a year-over-year basis, sales of Vir's Covid antibody rocketed almost 262%.
The Covid antibody sells under the name Xevudy abroad and sotrovimab in the U.S. Almost all of its third-quarter sales came from abroad. In the U.S., its use is restricted to patients whose cases are likely to be caused by specific variants. Sotrovimab doesn't appear to be effective against the dominant sub-variants of omicron.
Still, Ruiz has an outperform rating on Vir stock. She notes the Covid antibody is in use in north of 40 countries outside the U.S. Vir partners with GSK on the drug.
Further, GSK signed a deal to collaborate on an RSV antibody treatment. RSV is a viral illness that tends to impact newborns and the elderly.
Slower Sales Expected In The Fourth Quarter
Needham analyst Joseph Stringer notes Vir expects significantly lower sales of its Covid treatment in the fourth quarter. GSK records sales of the treatment and Vir receives almost three-quarters of the profits. It records those profits as revenue.
For the current quarter, Stringer estimates $50 million in worldwide sales of the antibody drug. He expects Vir to report $97.9 million in sales next year, up from his prior forecast for $34.4 million. He kept his buy rating on Vir stock.
"We expect the vast majority of sales to come from ex-U.S. regions," he said. "Vir/GSK continue to evaluate sotrovimab activity vs. new Covid variants," he said in a report to clients. "It's possible sotrovimab could have activity against a future variant, which could put its U.S. use back in play, but we await further visibility."
The earnings news sent Vir stock rocketing above its 200-day moving average for the first time in three months, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
