Vir Biotechnology, Inc. (VIR) FY 2024 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. Unless the context requires otherwise, references in this Annual Report on Form 10-K to the “Company”, “VirBio,” “we,” “our” and “us” refer to Vir Biotechnology, Inc. and its consolidated subsidiaries.

Our discussion and analysis below are focused on our financial results and liquidity and capital resources for the years ended December 31, 2024 and 2023, including year-over-year comparisons of our financial performance and condition for these years. Discussion and analysis of the year ended December 31, 2022 specifically, as well as the year-over-year comparison of our financial results and liquidity and capital resources for the years ended December 31, 2023 and 2022, are located in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 26, 2024. For a detailed discussion on our business environment, please read Item 1. Business, included in this Annual Report on Form 10-K. For additional information on the risks that could negatively impact our business, please read Item 1A. Risk Factors, included in this Annual Report on Form 10-K.

Overview

We are a clinical-stage biopharmaceutical company focused on powering the immune system to transform lives by discovering and developing medicines for serious infectious diseases and cancer. At Vir, we have a bold vision – powering the immune system to transform lives. Our clinical-stage portfolio includes infectious disease programs for CHD and CHB infections and multiple dual-masked TCEs across validated targets in solid tumor indications. We also has a preclinical portfolio of programs across a range of infectious diseases and oncologic malignancies.

Our clinical development pipeline consists of investigational therapies targeting HDV and various solid tumors. In hepatitis delta, our phase 3 ECLIPSE registrational program evaluating the combination of tobevibart and elebsiran is scheduled to commence in the first half of 2025. Should the ECLIPSE program yield positive results that support regulatory approval and subsequent commercial launch, we believe the combination has the potential to be a new standard of care for hepatitis delta patients, for whom approved treatment options are either limited or unavailable. In oncology, we are advancing phase 1 clinical studies for our dual-masked TCEs: VIR-5818 in patients with HER2-expressing tumors and VIR-5500 in patients with PSMA-expressing mCRPC. We are also advancing our third TCE program,VIR-5525, in patients with EGFR-expressing tumors, with phase 1 clinical studies expected to begin in the first half of 2025. We are also developing therapeutic candidates in hepatitis B, HIV cure, and other solid tumors, leveraging our expertise and platform strengths.

We have an industry-leading management team and board of directors with significant immunology and infectious diseases and oncology experience, including a proven track record of progressing product candidates from early-stage research through clinical development, and worldwide regulatory approval and commercialization experience. Given the global impact of infectious diseases and cancer, we are committed to developing transformative therapies that can make a meaningful difference in patients’ lives.

Significant Developments

Following is a summary of significant developments affecting our business that have occurred and that we have reported since the filing of our Annual Report on Form 10-K for the year ended December 31, 2023.

Pipeline Programs

Chronic Hepatitis Delta (CHD)

•ECLIPSE Phase 3 registrational clinical program in CHD is advancing with the first patient in expected during the first half of 2025.

•Positive data from the SOLSTICE Phase 2 clinical trial were presented in at the AASLD The Liver Meeting® in November 2024. This data demonstrated the potential of the first-of-its-kind investigational combination to address a critical unmet need in CHD, showing rapid and sustained virologic suppression, using the most stringent measure of zero detectable hepatitis delta RNA in the blood or target not detected (TND defined as HDV RNA 0 IU/mL), and no treatment-related SAEs.

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•Tobevibart and elebsiran combination therapy has received multiple regulatory designations potentially supporting an expedited development and review process and recognizing the significant unmet need in CHD: U.S. FDA Breakthrough Therapy designation, U.S. FDA Fast Track designation, European PRIME designation and European Orphan Drug designation.

Solid Tumors

•In January 2025, we presented encouraging early safety and efficacy data in ongoing Phase 1 dose escalation trials for its dual-masked TCE programs.

◦VIR-5818, the only dual-masked HER2-targeting TCE in clinical trials, showed tumor shrinkage across various tumor types in 50% (10/20) of participants receiving doses ≥400 µg/kg, with cPRs in 33% (2/6) of participants with HER2-positive CRC.

◦VIR-5500, the only dual-masked PSMA-targeting TCE in clinical trials, showed PSA declines in 100% (12/12) of mCRPC patients after an initial dose ≥120 µg/kg. PSA50 response was confirmed in 58% (7/12) of participants.

◦Both clinical candidates have shown promising safety profiles, with MTD not yet reached, no dose-limiting CRS observed and no CRS greater than grade 2.

•Initial clinical data demonstrate PRO-XTEN™ masking technology’s potential to minimize systemic toxicity while enabling selective killing of cancer cells in the tumor microenvironment, minimizing CRS and expanding the therapeutic index compared to traditional therapeutic approaches.

•We are advancing VIR-5818 and VIR-5500 through ongoing Phase 1 dose escalation studies, aiming to further optimize dosing and efficacy. Additionally, we plan to initiate a Phase 1 study of VIR-5525, a dual-masked EGFR-targeting TCE, in the first quarter of 2025, evaluating its potential across a number of solid tumor indications.

Chronic Hepatitis B (CHB)

•We anticipate functional cure data from the 24-week follow-up of the MARCH Part B Phase 2 study in the second quarter of 2025.

•Positive end-of-treatment results of the MARCH Part B Phase 2 trial evaluating tobevibart and elebsiran in combination with PEG-IFNα or tobevibart and elebsiran alone were presented at AASLD The Liver Meeting® in November 2024. The data demonstrated compelling HBsAg loss and anti-HBs development at the end of treatment.

•Future advancement in CHB by us will be contingent on securing a worldwide development and commercialization partner outside of the China Territory to best enable further development in this area of high unmet need.

Preclinical Pipeline Candidates

•We are advancing multiple undisclosed dual-masked TCEs targeting clinically validated targets with potential applications across a variety of solid tumors. These preclinical candidates leverage the PRO-XTEN™ masking technology with novel TCEs discovered and engineered using our antibody discovery platform and our proprietary dAIsY™ AI engine.

•We will continue to advance our HIV broadly neutralizing antibody program for HIV cure in collaboration with the Gates Foundation.

Corporate Update

•In January 2025, we announced Maninder Hora, Ph.D. will assume the role of Executive Vice President, Chief Technical Operations in February 2025, on departure of our current Chief Technology Officer, Aine Hanley, Ph.D.

•In September 2024, we announced the appointment of Jason O’Byrne as Executive Vice President and Chief Financial Officer, effective October 2, 2024.

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•In August 2024 we announced an exclusive worldwide license to use of the proprietary PRO-XTEN™ universal masking technology for oncology and infectious disease and to three clinical-stage masked TCEs with potential applications in a range of cancers. The agreement became effective on September 9, 2024.

◦Certain former employees of Sanofi joined us following the closing of the agreement.

•In August 2024 we announced the phase-out of clinical programs in influenza, COVID-19, and its T-cell based viral vector platform. The Company is seeking partners to advance these clinical programs through further development. Additionally, the Company announced a workforce reduction of approximately 25%, or approximately 140 employees.

•In May 2024, we announced the appointment of Mark D. Eisner, M.D., M.P.H. as Executive Vice President and Chief Medical Officer, effective June 3, 2024.

•Effective May 3, 2024, Sung Lee, Executive Vice President and Chief Financial Officer stepped down from his role to pursue another career opportunity.

•In April 2024, we announced that founding board members Phillip Sharp, Ph.D. and Robert Perez would not stand for reelection. Effective May 29, 2024, two new independent directors were elected in their place, including Norbert Bischofberger, Ph.D., who brings close to 40 years of biotech leadership experience and Ramy Farid, Ph.D., whose pioneering work applying advanced computational methods to drug discovery has enabled high-quality, novel molecules for drug development and materials applications.

Financial Overview

We were incorporated in April 2016 and commenced principal operations later that year. To date, we have focused primarily on organizing and staffing our company, business planning, raising capital, identifying, acquiring, developing and in-licensing our technology platforms and product candidates, and conducting preclinical studies and clinical trials.

We have financed our operations primarily through sales of our common stock from our initial public offering, subsequent follow-on offering, and payments received under our grant and collaboration agreements. As of December 31, 2024, we had $1.1 billion in cash, cash equivalents, and investments. Based upon our current operating plan, we believe that the $1.1 billion will enable us to fund our operations for at least the next 12 months. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional financing to fund our long-term operations sooner than planned. In addition, as of December 31, 2024, we had $95.7 million in restricted cash and cash equivalents, which includes the $75.0 million subject to VIR-5525 achieving “first in human dosing” by 2026. See the section titled “Liquidity, Capital Resources and Capital Requirements—Funding Requirements and Conditions” below for additional information.

Our net loss was $522.0 million for the year ended December 31, 2024, compared to net loss of $615.1 million for the year ended December 31, 2023 and net income of $515.8 million for the year ended December 31, 2022, respectively. As of December 31, 2024, we had accumulated deficit of $759.8 million. Although we recorded net income for the years ended December 31, 2022 and 2021, we have otherwise incurred net losses since inception and may continue to incur net losses in the foreseeable future.

Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, conducting preclinical studies and clinical trials, and to a lesser extent, selling, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. In particular, we expect our expenses and losses to increase over time as we continue our research and development efforts, advance our product candidates through preclinical and clinical development, seek regulatory approval, and begin to prepare for commercialization. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials expenditures and our expenditures on other research and development activities.

We manufacture product candidates for three therapeutic modalities: mAbs, masked TCEs and siRNA. We have established our own internal process, analytical and pharmaceutical development, manufacturing, supply chain and quality organizations that work with our selected CDMOs, to develop, manufacture, test and supply our early- and late-stage product candidates developed with our proprietary and external technology platforms. Contract development and

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manufacturing of our antibody, TCE and siRNA product candidates is supported at our San Francisco, California, corporate headquarters for process, analytical and formulation development, small-scale non-GMP manufacturing for preclinical studies and selected quality control testing. Our headquarters also conducts cell line development for our antibody and TCE product candidates.

Our Collaboration, License and Grant Agreements

We have entered into collaboration, license and grant arrangements with various third parties. For details regarding these and other agreements, see the section titled “Business—Our Collaboration, License and Grant Agreements” and Note 5 Grant Agreements and Note 6 Collaboration and License Agreements to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Components of Operating Results

Revenues

Other than sotrovimab, we have not obtained regulatory approval for our product candidates, and we do not expect to generate any significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. Although we have previously recognized revenue from our profit-share related to sotrovimab under our definitive collaboration agreement with GSK executed in June 2020, or the 2020 GSK Agreement, we may continue to incur net operating losses for the foreseeable future. In December 2024, the FDA revoked EUA granted to sotrovimab in May 2021. Although certain countries outside the U.S. continue to maintain access to 500 mg IV while noting that the clinical efficacy is unknown or uncertain against existing and emerging variants, we cannot predict whether other countries will further limit the use of sotrovimab. We do not expect meaningful collaboration revenue in the future from the sale of sotrovimab for the treatment of COVID-19.

Our revenues consist of the following:

Collaboration revenue includes recognition of our profit-share from the sales of sotrovimab pursuant to the 2020 GSK Agreement. As the lead party for all manufacturing and commercialization activities, GSK incurs all of the manufacturing, sales and marketing expenses and is the principal on sales transactions with third parties. As the agent, we recognize our contractual share (72.5%) of the profit-sharing amounts as revenue, based on sales net of various estimated deductions such as rebates, discounts, chargebacks, credits and returns, less cost of sales and allowable expenses (including manufacturing, distribution, medical affairs, selling, and marketing expenses) in the period the sale occurs. To record collaboration revenue, we utilize certain information from our collaboration partner, including actual net product sales and costs incurred for sales activities, and make key judgments based on business updates related to commercial and clinical activities, such as expected commercial demand, commercial supply plan, manufacturing commitments, risks related to expired or obsolete inventories, and risks related to potential product returns or contract terminations.

Manufacturing costs include inventory revaluation adjustments, lower of cost or market inventory adjustments, inventory write-downs and write-offs, and binding purchase commitments with a third-party manufacturer, among other manufacturing costs. Our contractual share of the profit-sharing amounts is subject to potential future adjustments to allowable expenses, which we account for as a form of variable consideration. In 2023, GSK reported to us certain allowable manufacturing expenses related to excess sotrovimab supply and binding reserved manufacturing capacity not utilized, which we had previously reserved as a constraint on our cumulative profit-sharing amounts. GSK may continue to adjust allowable manufacturing expenses for our share of the excess supply write-offs and unused binding manufacturing capacity and report to us as cost-sharing amounts in future periods. We evaluate the latest available facts and circumstances to update our evaluation of whether any portion of profit-sharing amounts should continue to be constrained. We re-assess these estimates at each reporting period. Actual results could materially differ from estimates.

In 2025, we expect a nominal amount of collaboration revenue, if any, from our 2020 GSK Agreement, and we may incur negative collaboration revenue related to costs for ongoing required support efforts that our partner GSK leads.

Contract revenue includes recognition of revenue generated from license rights issued to GSK, from research and development services under third-party contracts, and from a third-party clinical supply agreement.

Grant revenue is comprised of revenue derived from grant agreements with government-sponsored and private organizations.

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License revenue from a related party is comprised of revenue related to Brii Bio’s exercise of its option to obtain exclusive rights to develop and commercialize compounds arising from tobevibart in China Territory recognized in the year ended December 31, 2022.

Operating Expenses

Cost of Revenue

Cost of revenue currently represents royalties earned by third-party licensors on net sales of sotrovimab. We recognize these royalties as cost of revenue when we recognize the corresponding revenue that gives rise to payments due to our licensors.

Research and Development

To date, our research and development expenses have related primarily to discovery efforts and preclinical and clinical development of our product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. We do not track all research and development expenses by product candidate.

Research and development expenses consist primarily of costs incurred for our product candidates in development and prior to regulatory approval, which include:

•expenses related to license and collaboration agreements, and change in fair value of certain contingent consideration obligations arising from business acquisitions;

•personnel-related expenses, including salaries, benefits and stock-based compensation for personnel contributing to research and development activities;

•expenses incurred under agreements with third-party contract manufacturing organizations, CROs, and consultants;

•clinical costs, including laboratory supplies and costs related to compliance with regulatory requirements; and

•other allocated expenses, including expenses for rent and facilities maintenance, and depreciation and amortization.

We expect our research and development expenses to increase substantially in absolute dollars over time as we advance our product candidates into and through preclinical and clinical studies and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical programs, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability.

In addition, under our license agreement with Sanofi, we may incur additional clinical, and regulatory milestone payments based on the development progress of certain oncology programs. We may also be required to pay commercial milestone payments and royalties in the event of a successful product launch and our receipt of commercial revenues. Therefore, we are unable to predict the timing or the final cost to complete our clinical programs or validation of our manufacturing and supply processes and delays may occur due to numerous factors. Factors that could cause or contribute to delays or additional costs include, but are not limited to, those discussed in the “Risk Factors” section of this Annual Report.

As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate significant revenue from the commercialization and sale of any of our product candidates. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical and clinical studies, regulatory developments, our ongoing assessments as to each product candidate’s commercial potential.. We cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured (if at all) and to what degree such arrangements will affect our development plans and capital requirements.

Our clinical development costs may vary significantly based on factors such as:

•whether a collaborator is paying for some or all of the costs;

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•per patient trial costs;

•the number of studies required for approval;

•the number of sites included in the studies;

•enrollment and retention of patients in studies in countries disrupted by geopolitical events, including civil or political unrest;

•the length of time required to enroll eligible patients;

•the number of patients that participate in the studies;

•the number of doses that patients receive;

•the drop-out or discontinuation rates of patients;

•potential additional safety monitoring requested by regulatory agencies;

•the duration of patient participation in the studies and follow-up;

•the cost and timing of manufacturing our product candidates;

•the phase of development of our product candidates; and

•the efficacy and safety profile of our product candidates.

Selling, General and Administrative

Our selling, general and administrative expenses consist primarily of personnel-related expenses for personnel in executive, finance and other administrative functions, facilities and other allocated expenses, other expenses for outside professional services, including legal, audit and accounting services, insurance costs and change in fair value of certain contingent consideration obligations arising from business acquisitions. Personnel-related expenses consist of salaries, benefits and stock-based compensation. In the long-term as we advance our research and development programs toward potential commercialization, we expect our selling, general, and administrative expenses to increase in absolute dollars to support commercialization activities and related expansion in research and development activities.

Restructuring, long-lived asset impairment and related charges

Restructuring, long-lived asset impairment and related charges consist primarily of charges incurred in connection with our cost saving initiatives implemented during the second half of 2024 and 2023, respectively, including severance and other employee-related expenses and long-lived assets impairment charges and disposal losses.

Change in Fair Value of Equity Investments

Change in fair value of equity investments consists of the remeasurement of our investment in Brii Biosciences Limited’s, or Brii Bio Parent, ordinary shares based on the quoted market price at each reporting date.

Interest Income

Interest income consists of interest earned on our cash, cash equivalents and investments.

Other (Expense) Income, Net

Other (expense) income, net consists of gains and losses from foreign currency transactions and the remeasurement of our contingent consideration obligation.

Benefit from (Provision for) Income Taxes

Benefit from (provision for) income taxes consists primarily of income taxes on our domestic and foreign operations.

Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest consists of net loss attributable to our noncontrolling interest in Encentrio Therapeutics, Inc., our subsidiary, during the three months ended March 31, 2023.

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Results of Operations

Comparison of Years Ended December 31, 2024 and 2023

The following table summarizes our results of operations for the years presented (in thousands):

Revenues

The decrease in collaboration revenue for the year ended December 31, 2024 compared to the same period in 2023 was due to lower revenues from the release of sotrovimab profit-sharing amount previously constrained under our 2020 GSK Agreement.

The increase in contract revenue for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to the recognition of $51.7 million revenue from the deferred revenue during the first quarter of 2024 when GSK’s rights to select up to two additional non-influenza target pathogens under the 2021 GSK Agreement expired on March 25, 2024.

The decrease in grant revenue for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to lower revenue recognized in accordance with our agreement with BARDA and to a lesser extent, lower revenue recognized from the Gates Foundation. In August 2024, we announced a strategic realignment that included phasing out certain research programs, which impacted certain programs funded by Gates Foundation grants. We continue to advance our HIV broadly neutralizing antibody program for HIV cure in collaboration with the Gates Foundation. We terminated our agreement with BARDA on December 31, 2024.

Cost of Revenue

The decrease in cost of revenue for the year ended December 31, 2024 compared to the same period in 2023 was due to lower third-party royalties owed based on the lower collaboration revenue under the 2020 GSK Agreement.

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Research and Development Expenses

The following table shows the primary components of our research and development expenses for the years presented (in thousands):

The decrease in research and development expenses for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to lower contract manufacturing costs and clinical costs associated with the wind down of our Phase 2 PENINSULA trial evaluating VIR-2482, lower contract manufacturing costs associated with elebsiran used in the our CHD and CHB clinical trials, and lower personnel costs associated with the reduction in the headcount resulting from the cost saving initiatives implemented in 2023 and 2024, partially offset by the increase in licenses, collaboration and contingent consideration expenses primarily due to a portion of the upfront payment made to Sanofi allocated to in-process research and development and expensed.

Selling, General and Administrative Expenses

The decrease in selling, general and administrative expenses for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to savings realized through headcount reductions and the closing of our St. Louis, Missouri and Portland, Oregon sites, as part of our cost saving initiatives implemented in 2023 and 2024.

Restructuring, long-lived assets impairment and related charges

The increase in restructuring, long-lived assets impairment and related charges for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to the right-of-use asset and leasehold improvement impairment charges related to closing our facilities in St. Louis, Missouri and Portland Oregon in 2024, which was previously announced on December 13, 2023, and severance charges incurred related to our strategic restructuring announcement in August 2024.

Change in Fair Value of Equity Investments

Our equity investment consisted solely of shares of Brii Bio Parent, which is a marketable equity investment and remeasured to fair value at each reporting period. For the year ended December 31, 2024, we recognized an unrealized loss of $5.5 million due to the change in fair value, compared to an unrealized loss of $21.9 million for the same period in 2023.

Interest Income

The decrease in interest income was primarily due to lower balances of cash, cash equivalents, and investments for the year ended December 31, 2024 compared to the same period in 2023.

Other Expense, Net

The decrease in other expense, net for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to a decrease in foreign exchange measurement loss related to the accrued liability recognized in connection with the profit-sharing amount constrained under the 2020 GSK Agreement.

Benefit from Income Taxes

The benefit from income taxes for the year ended December 31, 2024 was nomimal. The benefit from income taxes for the year ended December 31, 2023 was primarily due to a pre-tax loss and our ability to carry back the research and development credit to 2022.

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Liquidity, Capital Resources and Capital Requirements

Sources of Liquidity

To date, we have financed our operations primarily through sales of our common stock from our initial public offering and subsequent follow-on offering, sales of our convertible preferred securities, and payments received under our grant and collaboration agreements. As of December 31, 2024, we had $1.1 billion in cash, cash equivalents, and investments. In addition, as of December 31, 2024, we had $95.7 million in restricted cash and cash equivalents, which included the $75.0 million subject to VIR-5525 achieving “first in human dosing” by 2026. In November 2023, we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC, as sales agent (“TD Cowen”), pursuant to which the Company may from time to time offer and sell shares of its common stock for an aggregate offering price of up to $300.0 million, through or to TD Cowen, acting as sales agent or principal. The shares will be offered and sold under the shelf registration statement on Form S-3 and a related prospectus that we filed with the SEC on November 3, 2023. We will pay TD Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide TD Cowen with customary indemnification and contribution rights. As of December 31, 2024, no shares have been issued under the Sales Agreement.

Funding Requirements and Conditions

Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, selling, general and administrative expenditures.

In December 2024, the FDA revoked EUA granted to sotrovimab in May 2021. We do not expect to generate significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. We may continue to incur net losses for the foreseeable future. Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of December 31, 2024 as noted above will enable us to fund our operations for at least the next 12 months from the filing date of this Annual Report on Form 10-K.

However, our operating plan may change as a result of many factors currently unknown to us, and we may need to raise additional capital to complete the development and commercialization of our product candidates and fund certain of our existing manufacturing and other commitments. We expect to finance our cash needs through public or private equity or debt financings, third-party (including government) funding, and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. See the sections titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs—Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates.” and “Risk Factors—Risks Related to Our Financial Position and Capital Needs—We may require substantial additional funding to finance our operations. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate certain of our research and development programs or other operations” for a description of the risks that may be associated with any future capital raises.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements. See the section titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs” for a description of certain risks that will affect our future capital requirements.

We have various operating lease arrangements for office and laboratory spaces located in California and Switzerland with contractual lease periods expiring between 2033 and 2035. As of December 31, 2024, we expect to make total lease payments of $123.5 million through 2035.

To date, we have entered into collaboration, license and acquisition agreements where the payment obligations are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones, and we are required to make royalty payments in connection with the sale of products developed under those agreements. For additional information regarding these agreements, including our payment obligations thereunder, see the sections titled “Business—Our Collaboration, License and Grant Agreements,” as well as Note 6 Collaboration and License Agreements to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. For information related to our future commitments under our facilities and manufacturing agreements, see Note 9 Leases and

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Note 10 Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements.

Cash Flows

The following table summarizes our cash flows for the years presented (in thousands):

Operating Activities

Cash used in operating activities is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Cash used in operating activities decreased in 2024 compared to 2023 primarily due to lower payments to GSK related to profit-sharing amount constrained under the 2020 GSK Agreement, and lower clinical development and contract manufacturing activities related to the wind down of the Phase 2 PENINSULA trial evaluating VIR-2482, partially offset by the $103.7 million upfront payment made under our license agreement with Sanofi. Cash used in operating activities decreased in 2023 compared to 2022 primarily due to lower cash received for the sales of sotrovimab and higher cash payments made to GSK related to profit-sharing amount constrained as part of the 2020 GSK Agreement.

Investing Activities

Cash provided by investing activities during 2024 was primarily due to $1.7 billion in proceeds received from investments that matured or sold during the year, partially offset by purchases of investments of $1.2 billion.

Cash provided by investing activities during 2023 was primarily due to $2.2 billion in proceeds received from investments that matured or sold during the period, partially offset by purchases of investments of $2.0 billion and property and equipment of $21.6 million.

Financing Activities

Cash provided by financing activities during 2024 was primarily due to of proceeds from the issuance of common stock under our employee stock purchase plan of $3.8 million.

Cash provided by financing activities during 2023 was primarily due to of proceeds from the issuance of common stock under our employee stock purchase plan of $4.3 million and exercises of stock options of $3.5 million.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of our consolidated financial statements requires us to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. The critical accounting policies, estimates and judgments that we believe to have the most significant impacts on our consolidated financial statements are described below. For more details on our critical accounting policies, refer to Note 2 Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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Asset Acquisitions

We make certain judgments to determine whether acquisitions and other similar transactions should be accounted for as acquisitions of assets or business combinations using the guidance in Accounting Standard Codification, or ASC, Topic 805, Business Combinations, by first applying a screen test to assess if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If the screen test is met, the transaction is accounted for as an asset acquisition. If the screen test is not met, further assessment is required to determine whether we have acquired inputs and a substantive process that together significantly contribute to the ability to create outputs, which would meet the definition of a business.

If determined to be an asset acquisition, we account the transaction using the cost accumulation and allocation method. Under this method, the cost of the acquisition, including direct acquisition-related costs, is allocated to the assets acquired or liabilities assumed on a relative fair value basis. Goodwill is not recognized in an asset acquisition, and any difference between consideration transferred and the fair value of the net assets acquired is allocated to the certain identifiable assets acquired based on their relative fair values.

Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration payments are subject to guidance in ASC 480, Distinguishing Liabilities from Equity, or ASC 815, Derivatives and Hedging). Upon recognition of the contingent consideration payments, the amount is included in the cost of the acquired asset or group of assets.

Accrued R&D expenses

We expense all research and development costs in the periods in which they are incurred. Clinical development costs compose a significant component of research and development costs. We typically contract with third parties, including CROs and CDMOs to conduct and manage preclinical studies and clinical trials, research services, and clinical manufacturing services on our behalf. When billing terms under these contracts do not coincide with the timing of when the work is performed, we estimate our obligations for services provided but not yet billed as of the period end based on a number of factors that include, but are not limited to, our knowledge of the research and development programs and clinical manufacturing activities, the status of the programs and activities, invoicing to date, and the provisions in the contracts. We obtain information regarding unbilled services directly from outside service providers and perform procedures to support our estimates based on our internal understanding of the services provided to date. However, we may also be required to estimate these services based on information available to our internal clinical and manufacturing administrative staff if such information is not able to be obtained timely from our service providers. Accrued R&D expenses are included in accrued and other liabilities on the consolidated balance sheets. In the event that advance payments are made to a CRO, CDMO or other outside service providers, the payments are recorded within prepaid expenses and/or other current assets and other assets on the consolidated balance sheet and subsequently recognized as research and development expense when the associated services are performed. The status and timing of actual services performed may vary from our estimates, resulting in adjustments to expense in future periods. Changes in these estimates could materially affect our results of operations.

Contingent Consideration associated with a Business Combination

Contingent consideration related to a business combination are initially measured at their estimated fair values on the transaction date and subsequently remeasured each subsequent reporting period with changes recorded in the consolidated statement of operations.

The estimated fair value of the contingent consideration related to the Humabs acquisition is determined by calculating the probability-weighted clinical and regulatory milestone payments based on the assessment of the likelihood and estimated timing that certain milestones will be achieved, as well as by using a Monte Carlo simulation model that includes significant estimates and assumptions pertaining to commercialization events and sales targets. The estimated fair value uses certain significant unobservable inputs categorized within level 3 of the fair value hierarchy, including the probabilities of achieving clinical and regulatory approval of the development projects, the subsequent commercial success and discount rates.

Recent Accounting Pronouncements Not Yet Adopted

See Note 2 Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition or results of operations.

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