Gilead will pay Vir $65 million in cash and buy $25 million of its stock for three solid-tumor T-cell engagers

Gilead Sciences agreed to pay Vir Biotechnology $65 million in cash and buy $25 million of its stock for exclusive rights to three T-cell engagers that Vir will design for solid tumors, Vir said on Wednesday. Up to $1.785 billion more in milestone payments is possible by TickerGrove's calculation, the sum of up to $45 million in near-term preclinical milestones and up to $1.74 billion in later milestones.

The terms

Vir will discover, design and optimize three T-cell engagers aimed at solid-tumor targets that the companies have not named. Gilead gets an exclusive license to nominate and advance candidates from that work and will handle later development, manufacturing and sales, Vir said in its announcement.

Vir gets $90 million upfront: $65 million in cash and a $25 million equity investment. It can earn up to $45 million more in near-term preclinical milestones, for as much as $135 million in early payments, plus up to $1.74 billion in later development, regulatory and commercial milestones. Royalties on net sales would be tiered from the high single digits to the low double digits. If every payment came due, the deal would be worth up to $1.875 billion before royalties, by TickerGrove's calculation.

The companies signed the agreement on Oct. 9, according to Vir's securities filing, and Vir announced it on Wednesday, Oct. 14.

Gilead's stake

Gilead agreed to buy 1,765,486 Vir shares at $14.16 each, about $25 million, subject to customary closing conditions, the filing says. Vir described the price as a 30% premium. It is about 42% above Vir's closing price of $9.96 on Friday, by TickerGrove's calculation. Based on the roughly 169.2 million shares Vir reported outstanding in late July, the purchase would give Gilead about 1% of the company.

The stock purchase agreement includes standstill, voting and lockup provisions that expire a year after the purchase is expected to close. After that, Gilead can, in some circumstances, require Vir to register the shares for resale.

What Vir is building

T-cell engagers are drugs designed to steer the immune system's T cells to destroy cancer cells. They have become an important treatment for blood cancers, but toxicity has limited their use in solid tumors, Vir said. Its PRO-XTEN mask is meant to keep the drug inactive until it reaches the tumor, where enzymes cut the mask off. Vir says that could limit toxicity and potentially allow less frequent dosing.

Vir licenses the masking technology from Amunix Pharmaceuticals, a Sanofi company, under a 2024 agreement for which it paid $100 million upfront, according to its latest quarterly report. Vir's chief executive, Marianne De Backer, said the Gilead deal "provides further external validation of Vir Biotechnology's integrated discovery capabilities and the broad potential of the PRO-XTEN platform."

An earlier-stage deal than Astellas

Gilead is Vir's second partner for the platform. In April, Vir closed a deal with Astellas for VIR-5500, a masked T-cell engager for prostate cancer that was already in a Phase 1 trial. Astellas paid $240 million upfront and bought about $75 million of Vir stock, and the two companies are sharing development costs and would split U.S. profits equally. Vir paid $48 million of that upfront money to Sanofi under its license terms.

The Gilead agreement starts further back. The three candidates have not yet been designed, and the targets have not been disclosed.

Analysts at H.C. Wainwright called the deal "incremental external validation of Vir's ability to monetize its oncology platform beyond a single clinical asset," BioSpace reported. They also noted that it brings no new clinical evidence and does not identify targets, writing that they view it "as strategic and financial validation rather than a basis to increase clinical probabilities of success."

Vir's shares closed at $10.41 on Wednesday, down 1.9%, and finished the week at $9.96, about 15% below the previous Friday's close of $11.70.

What comes next for Vir

Vir had about $1.01 billion in cash, cash equivalents and investments at the end of June. In August, it said it expected updated dose-escalation data in the second half of 2026 from a Phase 1 trial of VIR-5818, a HER2-targeted masked T-cell engager, and topline results in the fourth quarter from ECLIPSE 1, one of three late-stage trials of its hepatitis delta treatment.