Investing.com - Leerink Partners raised its price target on Vir Biotechnology (NASDAQ:VIR) to $20 from $16 while maintaining an Outperform rating on the shares. The stock has surged 125% over the past six months, currently trading at $9.24 with analyst targets ranging from $15 to $30.
The firm updated its model following Phase 1 data for the company's PSMA T-cell engager VIR-5500, a strategic partnership with Astellas, and a recent capital raise. Leerink now separately values VIR-5500 in the U.S. and ex-U.S. markets.
The firm projects approximately $2 billion in non-risk adjusted U.S. peak sales in 2038, with about $1 billion going to Vir Biotechnology after a 50/50 U.S. profit split with Astellas Pharma. Leerink estimates approximately $200 million in non-risk adjusted ex-U.S. royalties to Vir Biotechnology in 2038, with Astellas handling commercial launches outside the U.S.
The updated model reflects a 50/50 split of U.S. commercial costs and a 40/60 global development cost-sharing arrangement between Vir Biotechnology and Astellas. Leerink incorporated the company's recently announced public offering of $150 million into its projections. According to InvestingPro analysis, while the company holds more cash than debt on its balance sheet, it continues burning through cash as it advances its pipeline -- one of 15+ ProTips available to subscribers.
The firm rolled its discounted cash flow analysis forward to 2026 and noted that the company's HDV/HBV franchise provides medium-term optionality, with ECLIPSE-1 Phase 3 HDV data expected in the fourth quarter of 2026.
In other recent news, Vir Biotechnology announced the pricing of an underwritten public offering of 17,647,058 shares at $8.50 per share, aiming to raise $150 million in gross proceeds. The company has also provided underwriters a 30-day option to purchase an additional 2,647,058 shares at the same price. This offering is part of a broader plan to raise $200 million in total through the sale of common stock. In related developments, Needham has raised its price target for Vir Biotechnology from $14 to $18, maintaining a Buy rating based on updated trial data from the VIR-5500 program. Raymond James also upgraded the stock to Strong Buy from Outperform, increasing its price target to $19. This upgrade was prompted by new data from the VIR-5500 treatment and a partnership with Astellas for its development. These recent developments reflect significant financial and strategic moves by Vir Biotechnology.