10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-39083

Vir Biotechnology, Inc.

(Exact name of registrant as specified in its charter)

Delaware	81-2730369
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
499 Illinois Street, Suite 500, San Francisco, California	94158
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (415) 906-4324

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	VIR	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes ☐ No ☒    

As of August 2, 2021, the registrant had 130,611,795 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	4
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	80
Item 3.	Defaults Upon Senior Securities	80
Item 4.	Mine Safety Disclosures	80
Item 5.	Other Information	80
Item 6.	Exhibits	81
Signatures		82

1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future financial condition, future operations, research and development, planned clinical trials and preclinical studies, technology platforms, the timing and likelihood of regulatory filings and approvals for our product candidates, our ability to commercialize our product candidates, the potential benefits of collaborations, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology.

We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions described in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report. Other sections of this report may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur at all. You should refer to the section titled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

2

RISK FACTOR SUMMARY

Investing in our securities involves a high degree of risk. Below is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be found under the heading “Risk Factors” in Part II of this Quarterly Report on Form 10-Q.

Our business is subject to a number of risks of which you should be aware before making a decision to invest in our common stock. These risks include, among others, the following:

We have incurred significant net losses since inception and anticipate that we will continue to incur substantial net losses for the foreseeable future and may never achieve or maintain profitability.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We will 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 development programs or other operations.

We are committing substantial financial resources and personnel and making substantial capital commitments with third parties in furtherance of our pursuit of a potential therapy for COVID-19, the disease caused by the virus SARS-CoV-2, and we may be unable to secure sufficient capital, market demand or manufacturing capacity to successfully develop and commercialize a therapy that treats the virus in a timely manner, if at all.

Our future success is substantially dependent on the successful clinical development, regulatory approval and commercialization of EUA product(s) and our product candidates in a timely manner. If we are not able to obtain required regulatory approvals and marketing authorizations, we will not be able to commercialize our product candidates and our ability to generate product revenue will be adversely affected.

We are a party to strategic collaboration and license agreements pursuant to which we are obligated to make substantial payments upon achievement of milestone events and, in certain cases, have relinquished important rights over the development and commercialization of certain current and future product candidates. We also intend to explore additional strategic collaborations, which may never materialize or may require that we relinquish rights to and control over the development and commercialization of our product candidates.

Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials and we cannot assure you that any ongoing, planned or future clinical trials will lead to results sufficient for the necessary regulatory approvals.

Clinical product development involves a lengthy and expensive process. We may incur additional costs and encounter substantial delays or difficulties in our clinical trials.

Our business could be materially adversely affected by the effects of health pandemics or epidemics, including the current COVID-19 pandemic and future outbreaks of the disease.

The market price of our common stock has been, and in the future, may be, volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

We intend to rely on third parties to produce clinical and commercial supplies of our product candidates.

If we are unable to obtain and maintain patent protection for our product candidates and technology, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our product candidates and technology may be adversely affected.

We are highly dependent on our key personnel, and if we are not able to retain these members of our management team or recruit and retain additional management, clinical and scientific personnel, our business will be harmed.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

	June 30, 2021			December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	741,951		$	436,575
Short-term investments		84,107			300,286
Restricted cash and cash equivalents, current		7,004			7,993
Prepaid expenses and other current assets		29,233			27,511
Total current assets		862,295			772,365
Intangible assets, net		33,554			33,820
Goodwill		16,937			16,937
Long-term investments		50,680			—
Property and equipment, net		20,251			17,946
Operating right-of-use assets		58,972			61,947
Restricted cash and cash equivalents, noncurrent		7,002			6,919
Other assets		7,890			8,827
TOTAL ASSETS	$	1,057,581		$	918,761
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	11,032		$	5,077
Accrued and other liabilities		64,074			76,936
Deferred revenue, current portion		44,718			6,451
Contingent consideration, current portion		26,200			10,600
Total current liabilities		146,024			99,064
Deferred revenue, noncurrent		55,496			3,815
Operating lease liabilities, noncurrent		68,938			66,556
Contingent consideration, noncurrent		42,692			25,374
Deferred tax liability		3,253			3,253
Other long-term liabilities		3,853			3,847
TOTAL LIABILITIES		320,256			201,909
Commitments and contingencies (Note 8)
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of June 30, 2021 and    December 31, 2020; no shares issued and outstanding as of June 30, 2021 and    December 31, 2020		—			—
Common stock, $0.0001 par value; 300,000,000 shares authorized as of June 30, 2021 and    December 31, 2020; 130,479,975 and 127,416,740 shares issued and outstanding as    of June 30, 2021 and December 31, 2020, respectively		13			13
Additional paid-in capital		1,512,928			1,385,301
Accumulated other comprehensive loss		(1,334	)		(1,278	)
Accumulated deficit		(774,282	)		(667,184	)
TOTAL STOCKHOLDERS’ EQUITY		737,325			716,852
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,057,581		$	918,761

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Revenue:
Collaboration revenue	$	5,333		$	—		$	5,333		$	—
Contract revenue		168,653			43,522			169,266			44,009
Grant revenue		3,082			719			4,453			5,950
License revenue from a related party		—			22,747			—			22,747
Total revenue		177,068			66,988			179,052			72,706
Operating expenses:
Cost of revenue		1,144			—			1,152			—
Research and development		86,126			79,653			220,996			144,632
Selling, general and administrative		28,781			16,386			54,520			29,035
Total operating expenses		116,051			96,039			276,668			173,667
Income (loss) from operations		61,017			(29,051	)		(97,616	)		(100,961	)
Other income (expense):
Interest income		97			825			261			2,580
Other income (expense), net		752			(2,895	)		(9,494	)		(9,964	)
Total other income (expense)		849			(2,070	)		(9,233	)		(7,384	)
Income (loss) before provision for income taxes		61,866			(31,121	)		(106,849	)		(108,345	)
Provision for income taxes		(53	)		(46	)		(249	)		(62	)
Net income (loss)	$	61,813		$	(31,167	)	$	(107,098	)	$	(108,407	)
Net income (loss) per share, basic	$	0.48		$	(0.27	)	$	(0.83	)	$	(0.97	)
Net income (loss) per share, diluted	$	0.46		$	(0.27	)	$	(0.83	)	$	(0.97	)
Weighted-average shares outstanding, basic		130,121,943			114,980,652			128,938,851			111,684,283
Weighted-average shares outstanding, diluted		133,789,977			114,980,652			128,938,851			111,684,283

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net income (loss)	$	61,813		$	(31,167	)	$	(107,098	)	$	(108,407	)
Other comprehensive income (loss):
Unrealized gain (loss) on investments		(44	)		(549	)		(84	)		295
Amortization of actuarial loss		14			6			28			11
Other comprehensive income (loss)		(30	)		(543	)		(56	)		306
Comprehensive income (loss)	$	61,783		$	(31,710	)	$	(107,154	)	$	(108,101	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)

(unaudited)

							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Share		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at March 31, 2021		129,891,856	$	13	$	1,488,337	$	(1,304	)	$	(836,095	)	$	650,951
Vesting of restricted common stock		34,446		—		—		—			—			—
Exercise of stock options		553,673		—		3,593		—			—			3,593
Stock-based compensation		—		—		20,998		—			—			20,998
Other comprehensive loss		—		—		—		(30	)		—			(30	)
Net income		—		—		—		—			61,813			61,813
Balance at June 30, 2021		130,479,975	$	13	$	1,512,928	$	(1,334	)	$	(774,282	)	$	737,325
							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Share		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at March 31, 2020		108,350,368	$	11	$	825,833	$	248		$	(445,759	)	$	380,333
Issuance of common stock in connection with the   achievement of a milestone		1,111,111		—		—		—			—			—
Issuance of common stock in connection with a   collaboration agreement		6,626,027		1		206,698		—			—			206,699
Issuance of common stock for cashless exercise   of warrant		211,774		—		—		—			—			—
Vesting of restricted common stock		612,546		—		462		—			—			462
Exercise of stock options		815,260		—		2,245		—			—			2,245
Stock-based compensation		—		—		5,750		—			—			5,750
Other comprehensive loss		—		—		—		(543	)		—			(543	)
Net loss		—		—		—		—			(31,167	)		(31,167	)
Balance at June 30, 2020		117,727,086	$	12	$	1,040,988	$	(295	)	$	(476,926	)	$	563,779

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share amounts)

(unaudited)

							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Share		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at December 31, 2020		127,416,740	$	13	$	1,385,301	$	(1,278	)	$	(667,184	)	$	716,852
Issuance of common stock in connection with a   collaboration agreement		1,924,927		—		85,213		—			—			85,213
Vesting of restricted common stock		87,409		—		—		—			—			—
Exercise of stock options		1,050,899		—		5,945		—			—			5,945
Stock-based compensation		—		—		36,469		—			—			36,469
Other comprehensive loss		—		—		—		(56	)		—			(56	)
Net loss		—		—		—		—			(107,098	)		(107,098	)
Balance at June 30, 2021		130,479,975	$	13	$	1,512,928	$	(1,334	)	$	(774,282	)	$	737,325
							Accumulated
					Additional		Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Stockholders'
	Share		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at December 31, 2019		107,648,925	$	11	$	793,051	$	(601	)	$	(368,519	)	$	423,942
Reclassification of derivative liability to additional   paid-in capital		—		—		29,245		—			—			29,245
Issuance of common stock in connection with the   achievement of a milestone		1,111,111		—		—		—			—			—
Issuance of common stock in connection with a   collaboration agreement		6,626,027		1		206,698								206,699
Issuance of common stock for cashless exercise   of warrant		211,774		—		—		—			—			—
Vesting of restricted common stock		1,230,625		—		889		—			—			889
Exercise of stock options		898,624		—		2,388		—			—			2,388
Stock-based compensation		—		—		8,717		—			—			8,717
Other comprehensive income		—		—		—		306			—			306
Net loss		—		—		—		—			(108,407	)		(108,407	)
Balance at June 30, 2020		117,727,086	$	12	$	1,040,988	$	(295	)	$	(476,926	)	$	563,779

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

VIR BIOTECHNOLOGY, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(107,098	)	$	(108,407	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,538			2,061
Amortization of intangible assets		266			612
Amortization of premiums on investments, net		(238	)		818
Noncash lease expense		2,973			1,646
Change in estimated fair value of contingent consideration		42,918			27,790
Payment of contingent consideration in excess of acquisition date fair value		—			(6,453	)
Change in estimated fair value of derivative liability		—			16,796
Stock-based compensation		36,469			8,717
Other		32			11
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		521			(2,159	)
Other assets		(857	)		(361	)
Accounts payable		4,933			(1,342	)
Accrued liabilities and other long-term liabilities		(22,287	)		6,791
Operating lease liabilities		(93	)		(1,557	)
Deferred revenue		90,452			(4,011	)
Net cash provided by (used in) operating activities		50,529			(59,048	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,744	)		(2,645	)
Purchases of investments		(55,729	)		(129,899	)
Maturities of investments		221,382			247,168
Proceeds from disposal of an asset held for sale		—			180
Net cash provided by investing activities		162,909			114,804
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock in connection with a collaboration agreement		85,213			206,699
Payment of contingent consideration		—			(3,547	)
Payment of principal on financing lease obligation		(126	)		(115	)
Proceeds from exercise of stock options		5,945			2,388
Net cash provided by financing activities		91,032			205,425
Net increase in cash, cash equivalents and restricted cash and cash equivalents		304,470			261,181
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period		451,487			122,816
Cash, cash equivalents and restricted cash and cash equivalents at end of period	$	755,957		$	383,997
NONCASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment purchases included in accounts payable and accrued liabilities	$	2,485		$	312
Reclassification of derivative liability to additional paid-in capital	$	—		$	29,245
Deferred offering costs in accounts payable and accrued liabilities	$	—		$	690
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED    CASH TO THE CONDENSED CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	741,951		$	371,781
Restricted cash and cash equivalents, current		7,004			11,024
Restricted cash and cash equivalents, noncurrent		7,002			1,192
Total cash, cash equivalents and restricted cash	$	755,957		$	383,997

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization

Vir Biotechnology, Inc. (“Vir” or the “Company”) is a clinical-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. Its development pipeline consists of product candidates targeting the current coronavirus disease 2019 (“COVID-19”), hepatitis B virus (“HBV”), influenza A virus, and human immunodeficiency virus (“HIV”). Vir has assembled four technology platforms that are designed to stimulate and enhance the immune system by exploiting critical observations of natural immune processes. In May 2021, the Company received an Emergency Use Authorization (“EUA”) from the U.S. Food and Drug Administration for sotrovimab (previously VIR-7831) for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.

Follow-On Offering

On July 10, 2020, the Company issued and sold 8,214,285 shares of the Company’s common stock pursuant to a registration statement on Form S-1 (File No. 333-239689) and a registration statement on Form S-1 filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”) (File No. 333-239747) (collectively, the “Registration Statements”). The Registration Statements became effective on July 7, 2020. The price of the shares sold in the follow-on offering was $42.00 per share and the Company received total gross proceeds from the offering of approximately $345.0 million. After deducting underwriting discounts and commissions of $20.7 million and offering expenses of $1.1 million, the net proceeds were $323.2 million.

Sales Agreement

In November 2020, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which the Company may from time to time offer and sell shares of its common stock, par value $0.0001 per share, having an aggregate offering price of up to $300.0 million, through or to Cowen, acting as sales agent or principal. The shares will be offered and sold under the Company’s shelf registration statement on Form S-3 and a related prospectus filed with the Securities and Exchange Commission (the “SEC”) on November 10, 2020. The Company will pay 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 Cowen with customary indemnification and contribution rights. As of June 30, 2021, no shares have been issued under the Sales Agreement.

Need for Additional Capital

The Company has incurred net losses since inception and expects such losses to continue over the next several years. As of June 30, 2021, the Company had an accumulated deficit of $774.3 million. Management expects to incur additional losses in the future to conduct research and development and recognizes the need to raise additional capital to fully implement its business plan. The Company had, excluding restricted cash, $876.7 million of cash, cash equivalents, and investments at June 30, 2021. Based on the Company’s business plans, management believes that its cash, cash equivalents, and investments as of June 30, 2021 will be sufficient to fund its operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. The condensed consolidated financial statements include the accounts of Vir and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial information. The condensed consolidated results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other future annual or interim period.

10

VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Certain information and footnote disclosures typically included in the Company’s annual consolidated financial statements have been condensed or omitted. As such, these interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Concentration of Credit Risk, Credit Loss and Other Risks and Uncertainties

With the global spread of the ongoing COVID-19 pandemic, the Company has implemented a number of plans and policies designed to address and mitigate the impact of the COVID-19 pandemic on its business. The Company anticipates that the COVID-19 pandemic will continue to have an impact on the clinical development timelines for some of its clinical programs. The extent to which the COVID-19 pandemic impacts the Company’s business, clinical development and regulatory efforts, corporate development objectives and the value of and market for its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease.

In addition, the Company is subject to a number of other challenges and risks similar to other biopharmaceutical companies in the early stage, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s products and protection of proprietary technology. If the Company does not successfully obtain regulatory approval, commercialize or partner any of its product candidates, it will be unable to generate revenue from product sales or achieve profitability. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and investments. Cash and cash equivalents are deposited in checking and sweep accounts at a financial institution. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments, and issuers of the investments to the extent recorded on the condensed consolidated balance sheets. As of June 30, 2021, the Company has no off-balance sheet concentrations of credit risk.

The Company is exposed to credit losses primarily through receivables from customers and collaborators and through its available-for-sale debt securities. The Company’s expected loss allowance methodology for the receivables is developed using historical collection experience, current and future economic market conditions, a review of the current aging status and financial condition of the entities. Specific allowance amounts are established to record the appropriate allowance for customers that have a higher probability of default. Balances are written off when determined to be uncollectible. The Company’s expected loss allowance methodology for the debt securities is developed by reviewing the extent of the unrealized loss, the size, term, geographical location, and industry of the issuer, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted. During the six months ended June 30, 2021 and 2020, there was no allowance for losses on available-for-sale debt securities attributable to credit risk.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Investments

Investments include available-for-sale debt securities and are carried at estimated fair value. The Company’s valuations of marketable securities are generally derived from independent pricing services based on quoted prices in active markets for similar securities at period end. Generally, investments with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the condensed consolidated balance sheet date are considered short-term investments, with all others considered to be long-term investments. Unrealized gains and losses deemed temporary in nature are reported as a component of accumulated comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the condensed consolidated statements of operations. The Company’s policy is not to measure an allowance for credit losses for interest receivable and to write off any uncollectible interest receivable as a reversal of interest income in the period in which it determines the interest will not be collected.

The Company, through its investment in Brii Biosciences Limited, holds privately held equity securities in which the Company does not have a controlling interest or significant influence. The Company’s investment in Brii Biosciences Limited is recorded at cost and adjusted for impairments and observable price changes with the same or similar security from the same issuer. The valuation of the Company’s investment in Brii Biosciences Limited utilizes significant unobservable inputs or data in an inactive market and the valuation requires the Company’s judgment due to the absence of market prices and inherent lack of liquidity. Additionally, the determination of whether an orderly transaction is for the same or similar investment requires significant management judgment including the nature of the rights and obligations of its investments, the extent to which differences in those rights and obligations would affect the fair values of those investments, and the impact of any differences based on the stage of operational development of the investee. See Note 6—Collaboration and License Agreements for additional information on the Company’s investment in Brii Biosciences Limited.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents represent money market funds to secure standby letters of credit and security deposits with financial institutions, both under office and laboratory space lease agreements. Additionally, funds received from certain grants are restricted as to their use and are therefore classified as restricted cash and cash equivalents.

Revenue Recognition

Collaboration, License and Contract Revenue

In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the Company’s customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation.

For collaborative arrangements that fall within the scope of ASC 808, Collaborative Arrangements (“ASC 808”), the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are not subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate. The Company has entered into a number of license and collaboration agreements that fall within the scope of ASC 606. The Company evaluates the promised goods or services in these agreements to determine which ones represent distinct performance obligations. These agreements may include the following types of promised goods or services: (i) grants of licenses, (ii) performance of research and development services, and (iii) participation on joint research and/or development committees. They also may include options to obtain licenses to the Company’s intellectual property.

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are re-assessed each reporting period as required. These agreements may include the following types of consideration: non-refundable upfront payments, reimbursement for research services, research, development or regulatory milestone payments, profit-sharing arrangements and royalty and commercial sales milestone payments.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on their estimated standalone selling prices (“SSP”). For performance obligations satisfied over time, the Company estimates the efforts needed to complete the performance obligation and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligation using an input measure.

For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified level of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Achievement of these royalties and commercial milestones may solely depend upon performance of the licensee.

Grant Revenue

Grants received, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution. An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred. Contributions are recognized as grant revenue when all donor-imposed conditions have been met.

Acquisitions

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired, including in-process research and development (“IPR&D”) projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date. Any excess fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with the business combination are recorded at their fair values on the acquisition date and are remeasured each subsequent reporting period until the related contingencies are resolved and are classified as contingent consideration on the condensed consolidated balance sheets. The changes in fair values of contingent consideration related to the achievement of various development milestones related to product candidates are recorded within research and development expense.

When the Company determines that entities acquired do not meet the definition of a business, the transaction is accounted for as an acquisition of assets. Therefore, the consideration paid to acquire IPR&D is expensed, and no goodwill is recorded. Any contingent consideration is generally recognized only when it becomes payable or is paid.

Embedded Derivatives

The Company evaluates its acquisitions, collaborative arrangements and other business development transactions to determine if embedded components of these contracts meet the definition of a derivative under ASC 815, Derivatives and Hedging. In general, embedded derivatives are required to be bifurcated from the host instrument if (i) the embedded feature is not clearly and closely related to the host contract and (ii) the embedded feature, if considered a freestanding instrument, meets the definition of a derivative. Embedded derivatives are reported on the condensed consolidated balance sheets at their estimated fair values. Contingent consideration related to asset acquisitions that meet the definition of an embedded derivative is classified as contingent consideration on the condensed consolidated balance sheets. Any change in estimated fair values, as determined at each measurement period, are recorded in the condensed consolidated statements of operations based on the nature of the related contingencies. Changes in fair values of embedded derivatives related to the achievement of various development milestones for product candidates are recorded within research and development expense. Otherwise, changes in fair values are recorded within other income (expense), net. 

3. Fair Value Measurements

The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

 Level 1: Inputs which include quoted prices in active markets for identical assets and liabilities.

 Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities approximate fair value due to their relatively short maturities.

The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis by level within the fair value hierarchy:

		June 30, 2021
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds(1)	Level 1	$	739,286	$	—	$	—		$	739,286
Bank time deposits	Level 2		5,000		—		—			5,000
U.S. government treasuries(2)	Level 2		129,786		8		(7	)		129,787
Total financial assets		$	874,072	$	8	$	(7	)	$	874,073

(1) Includes $14.0 million of restricted cash equivalents.

(2) Includes $50.7 million classified as long-term investments.

		December 31, 2020
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds(1)	Level 1	$	421,835	$	—	$	—		$	421,835
U.S. government treasuries	Level 2		300,201		91		(6	)		300,286
Total financial assets		$	722,036	$	91	$	(6	)	$	722,121

(1) Includes $14.9 million of restricted cash equivalents.

Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale securities is presented within prepaid expenses and other current assets, and other assets in the condensed consolidated balance sheets, and amounted to $0.6 million and $0.8 million as of June 30, 2021 and December 31, 2020, respectively. The Company did not write off any accrued interest receivable during the six months ended June 30, 2021 and 2020.

As of June 30, 2021, there were no investments that have been in a continuous unrealized loss position for longer than 12 months. Total net unrealized gains recorded in accumulated other comprehensive income (loss) were immaterial at June 30, 2021. All investments with gross unrealized losses as of June 30, 2021 have been in a loss position for less than 12 months and were temporary in nature. The Company currently does not intend, and it is highly unlikely that it will be required to sell these securities before recovery of their amortized cost basis. As of June 30, 2021, no securities have contractual maturities of longer than two years.

Level 3 liabilities consist of contingent consideration as of June 30, 2021 and December 31, 2020.

Contingent Consideration

Contingent consideration includes potential milestone payments in connection with the acquisitions of Humabs Biomed SA (“Humabs”) and TomegaVax, Inc. (“TomegaVax”). See further discussion in Note 4—Acquisitions.

The estimated fair value of the contingent consideration related to the Humabs acquisition was determined by calculating the probability-weighted clinical, regulatory and commercial milestone payments based on the assessment of the likelihood and estimated

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

timing that certain milestones would be achieved. As of June 30, 2021, the Company calculated the estimated fair value of the clinical and regulatory milestones using the following significant unobservable inputs:

Unobservable input	Range (Weighted-Average)1
Discount rates	4% - 8% (5%)
Probability of achievement	21% - 76% (62%)

(1)Unobservable inputs were weighted based on the relative fair value of the clinical and regulatory milestone payments.

For the commercial milestones, the Company used a Monte Carlo simulation because of the availability of a discrete revenue forecast and the increased likelihood that the clinical trials would commence. As of June 30, 2021, the Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecast, as well as the following significant unobservable inputs:

Unobservable input	Value or Range (Weighted-Average)1
Volatility	60%
Discount rate	11%
Probability of achievement	21% - 76% (66%)

(1)Unobservable inputs were weighted based on the relative fair value of the commercial milestone payments.

The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. As of June 30, 2021 and December 31, 2020, the estimated fair value of the contingent consideration related to the Humabs acquisition was $62.5 million and $29.2 million, respectively, with changes in the estimated fair value recorded in research and development expense in the condensed consolidated statements of operations.

The estimated fair value of the contingent consideration related to the TomegaVax acquisition was determined by using a Monte Carlo simulation model which included estimates of both the probability and timing to achieve the required per-share price of the Company’s common stock, and incorporates assumptions as to expected volatility and discount rate. The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. Although the TomegaVax acquisition was accounted for as an asset acquisition, such contingent consideration met the definition of an embedded derivative financial instrument. In February 2021, the Company achieved one of the milestones related to a specified per-share price of its common stock resulting in a $10.0 million payable to the former TomegaVax’s stockholders which was paid out in July 2021. As of June 30, 2021, the fair value of the remaining contingent consideration was estimated using the following significant unobservable inputs:

Unobservable input	Value or Range (Weighted-Average)1
Volatility	95%
Discount rates	0% - 0.1% (0.1%)

(1)Unobservable inputs were weighted based on the relative fair value of the underlying milestones.

As of June 30, 2021 and December 31, 2020, the estimated fair value of the contingent consideration related to the TomegaVax acquisition was $6.4 million and $6.8 million, respectively, with changes in the estimated fair value recorded in other income (expense), net in the condensed consolidated statements of operations.

The estimated fair value of the contingent consideration related to the Humabs and TomegaVax acquisitions involves significant estimates and assumptions which give rise to measurement uncertainty.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The following table sets forth the changes in the estimated fair value of the Company’s Level 3 financial liabilities (in thousands):

	Contingent Consideration
Balance at December 31, 2020	$	35,974
Changes in fair value recognized in research and development expenses		33,300
Changes in fair value recognized in other income (expense), net		9,618
Reclassification of contingent consideration to accrued liabilities upon   achievement of milestone		(10,000	)
Balance at June 30, 2021	$	68,892

4. Acquisitions

Acquisition of TomegaVax

In September 2016, the Company entered into an agreement and plan of merger (“TomegaVax Merger Agreement”) to acquire all of the equity interests of TomegaVax. The primary asset purchased in the acquisition was an in-process cytomegalovirus vector-based vaccine platform for use in HBV, HIV, and tuberculosis. The acquisition was accounted for as an asset purchase.     

In connection with the entry into the TomegaVax Merger Agreement, the Company also entered into a letter agreement with TomegaVax (the “TomegaVax Letter Agreement”), which provides for certain payments to TomegaVax’s former stockholders before September 2024, in each case so long as the Company is continuing to pursue the development of the TomegaVax technology. Under the terms of the TomegaVax Letter Agreement, the Company will be required to pay to the former stockholders of TomegaVax milestone payments of up to an aggregate of $30.0 million if the per-share price of the Company’s publicly traded common stock, or implied price per share of the Company’s Series A-1 convertible preferred stock (or common stock upon conversion) upon a certain asset sale, merger or stock sale, is at least $45 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization), with the amount of such payments determined by the share price and/or the stage of the Company’s clinical development at the time of the relevant event triggering the payment. The share price of the Company’s publicly traded common stock will be determined using the average of the daily volume-weighted average trading price of the Company’s common stock for each trading day during a consecutive 90-day period. The foregoing payments are payable (i) during any date after the completion of an initial public offering by the Company or any successor or affiliate controlling the TomegaVax technology, provided that no payment will be due before the first anniversary of the initial public offering, (ii) upon the sale of all assets related to the TomegaVax technology or (iii) upon a merger or stock sale of the Company or any successor or affiliate controlling the TomegaVax technology, in each case subject to certain conditions with respect to the timing of the payments. The payments under the TomegaVax Letter Agreement can be made in cash or shares of the Company’s common stock, at the discretion of the Company’s board of directors.

In February 2021, the Company achieved one of the milestones related to the specified per-share price of its common stock, which resulted in a $10.0 million payable to TomegaVax’s former stockholders. In July 2021, the Company made the milestone payment to the former TomegaVax stockholders through a combination of $8.1 million cash payment and issuance of 42,737 shares of common stock with a total fair value of $1.9 million. The remaining milestone payments of up to $20.0 million in the aggregate will be triggered if (i) the per-share price of the Company’s publicly traded common stock is at least $45 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization) and upon the achievement of a certain milestone related to the stage of the Company’s clinical development at the time of the relevant event triggering the payment and/or (ii) the per-share price of the Company’s publicly traded common stock is at least $90 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization). 

The Company determined that the future milestone payments contain net settlement provisions and therefore, they were required to be accounted for as embedded derivatives under the relevant accounting guidance. As of June 30, 2021, the estimated fair value of the embedded derivative was $6.4 million.

Acquisition of Humabs

In August 2017, the Company acquired all of the outstanding equity of Humabs, a private Swiss company which discovers and develops monoclonal antibodies (“mAbs”) derived from individuals whose immune systems have successfully responded to major diseases. The Company acquired all of Humabs’ rights, title and interest in and to substantially all of the assets of Humabs except for rights under certain license agreements with third parties. The Company is obligated to pass-through to the former Humabs shareholders any amounts received by Humabs under such license agreements, net of any program expenses. The transaction was accounted for as an acquisition of a business. In addition to the cash payment and issuance of common stock to the former Humabs shareholders at the acquisition date, the Company also agreed to pay additional amounts in cash upon the achievement of specified milestone events: (i) up to $135.0 million upon the achievement of clinical, regulatory and commercial milestones for an HBV

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

product; and (ii) up to $105.0 million upon the achievement of clinical, regulatory and commercial milestones for another product, which the Company elected as a SARS-CoV-2 product.

In May 2020, the Company achieved one of the specified clinical milestones for the HBV product. As such, the Company paid $10.0 million related to this milestone event in June 2020. In October 2020, the Company achieved another specified clinical milestone for the SARS-CoV-2 product and paid $10.0 million related to this milestone event. The estimated fair value of the remaining contingent consideration was $62.5 million as of June 30, 2021.

Acquisition of Agenovir

In January 2018, the Company entered into an agreement and plan of merger with Agenovir Corporation (“Agenovir”), under which the Company purchased all equity interests of Agenovir. The primary assets purchased in the acquisition were in-process research and development programs in human papillomavirus and HBV using CRISPR/Cas9. The acquisition was accounted for as an asset purchase.

At the acquisition date, the Company paid cash and issued shares of Series A-2 convertible preferred stock to the former Agenovir stockholders. During a specified period following the closing of the Agenovir acquisition, the Company will be required to pay Agenovir’s former stockholders up to $135.0 million in the aggregate for the achievement of specified development, regulatory and commercial milestones for the first HBV product.

None of the milestones have been achieved as of June 30, 2021, therefore no amounts were recognized relating to the contingent consideration.

5. Grant Agreements

Bill & Melinda Gates Foundation Grants

Human Immunodeficiency Virus (“HIV”) Grant

On January 26, 2018, the Company entered into a grant agreement with the Bill & Melinda Gates Foundation under which it was awarded a grant totaling up to $12.2 million for its HIV program (the “HIV Grant”). In February 2020, the parties amended the HIV Grant under which the Company was awarded a supplemental grant of $8.6 million. In June 2021, the parties further amended the agreement under which the grant term was extended from December 31, 2021 to October 31, 2022, unless earlier terminated by the Bill & Melinda Gates Foundation for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the Bill & Melinda Gates Foundation reasonably believes may threaten the success of the project.

Payments received in advance that are related to future research activities are deferred and recognized as revenue when the donor-imposed conditions are met, which is as the research and development activities are performed. The Company recognized grant revenue of $0.9 million and $0.5 million for the three months ended June 30, 2021 and 2020, and $1.6 million and $5.4 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, the Company has deferred revenue of $3.7 million and $3.8 million, respectively, under this grant agreement.

Tuberculosis (“TB”) Grant

On March 16, 2018, the Company entered into a grant agreement with the Bill & Melinda Gates Foundation under which it was awarded a grant totaling up to $14.9 million for its TB program (the “TB Grant”). The parties amended the agreement in June 2021 under which the grant term was extended from February 28, 2021 to January 31, 2022, unless earlier terminated by the Bill & Melinda Gates Foundation for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the Bill & Melinda Gates Foundation reasonably believes may threaten the success of the project. As of June 30, 2021, the Company had $2.0 million of unused funds received in advance and previously recorded as deferred revenue within accrued and other liabilities. As of June 30, 2021 and December 31, 2020, the Company has deferred revenue of $1.3 million and $2.6 million, respectively, under this grant agreement.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Payments received in advance that are related to future research activities are deferred and recognized as revenue when the donor-imposed conditions are met, which is as the research and development activities are performed. The Company recognized grant revenue of $2.1 million and nil for the three months ended June 30, 2021 and 2020, and $2.8 and $0.1 million for the six months ended June 30, 2021 and 2020, respectively.  

6. Collaboration and License Agreements

Collaboration Agreements with GSK

2020 GSK Collaboration

On June 9, 2020, the Company, Glaxo Wellcome UK Limited and Beecham S.A. (referred to individually and together, as “GSK”) entered into a definitive collaboration agreement under the terms set forth in the preliminary collaboration agreement entered into by the Company and certain GSK entities in April 2020 (the “2020 Preliminary Agreement”) (such definitive collaboration agreement, the “2020 GSK Agreement”). Concurrently with the execution of the 2020 Preliminary Agreement, the Company entered into a stock purchase agreement (the “2020 Stock Purchase Agreement”) with Glaxo Group Limited (“GGL”), an affiliate of GSK, under which GGL purchased 6,626,027 shares of the Company’s common stock on April 29, 2020, at a price per share of $37.73, for an aggregate purchase price of approximately $250.0 million. After receipt of antitrust clearance on April 22, 2020, the Preliminary Agreement became effective as of April 29, 2020, which was also the closing date for the associated 2020 Stock Purchase Agreement between the parties (“Effective Date”). Under the terms of the 2020 GSK Agreement, the Company and GSK agreed to collaborate to research, develop and commercialize products for the prevention, treatment and prophylaxis of diseases caused by SARS-CoV-2, the virus that causes COVID-19, and potentially other coronaviruses. The collaboration is focused on the development and commercialization of three types of collaboration products under three programs: (1) antibodies targeting SARS-CoV-2, and potentially other coronaviruses (the “Antibody Program”); (2) vaccines targeting SARS-CoV-2, and potentially other coronaviruses (the “Vaccine Program”), and (3) products based on genome-wide CRISPR screening of host targets expressed in connection with exposure to SARS-CoV-2, and potentially other coronaviruses (the “Functional Genomics Program”).

For four years following the Effective Date, the parties will conduct certain research and development activities under mutually agreed development plans and associated budgets for each of the three programs, and under the oversight of a joint steering committee (“JSC”). The Company will be primarily responsible for the development and clinical manufacturing activities for the Antibody Program, and for conducting the initial development activities directed to a vaccine in the Vaccine Program. GSK will be primarily responsible for the commercialization activities for the Antibody Program (except in connection with sales of antibody products licensed to WuXi Biologics (Hong Kong) Limited in greater China), the later-stage development, manufacturing and commercialization activities for the Vaccine Program and the development, manufacturing and commercialization activities for the Functional Genomics Program. Subject to an opt-out mechanism, the parties will share all development costs, manufacturing costs and costs and expenses for the commercialization of the collaboration products, with the Company bearing 72.5% of such costs for the antibody products, 27.5% of such costs for the vaccine products, and equal sharing of such costs for the functional genomics products.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

On a collaboration product-by-collaboration product basis, each party will have the one-time right, at specified points in development, to opt-out of its co-funding obligations, and the other party may, at its election, either pursue such program unilaterally, or also cease research and development activities and funding of such collaboration product. If the opt-out provisions are not exercised by either party subject to the terms of the 2020 GSK Agreement, the parties would share all profits and losses arising from any collaboration product in the same ratios in which the parties bore development costs for such collaboration program. For each collaboration product as to which a party exercises its opt-out right, the commercializing party will pay to the opt-out party royalties on net sales of the applicable collaboration product at rates based on factors such as the stage of development of such collaboration product at the time the opt-out party exercises such right, and whether the opt-out party is the lead party, or a portion of the sublicense revenue if the commercializing party chooses to sublicense or otherwise divest rights to such collaboration product. On an antibody product-by-antibody product basis, the Company has a co-promotion right for such antibody product in the United States, under which the Company will have the right to perform up to 20% of details in connection with such antibody product.

The 2020 GSK Agreement will remain in effect with respect to each collaboration program for as long as there is a collaboration product being developed or commercialized by the lead party, or the non-opt-out party, in such program. Either party has the right to terminate the 2020 GSK Agreement in the case of the insolvency of the other party, an uncured material breach of the other party with respect to a collaboration program or collaboration product, or as mutually agreed by the parties. The 2020 GSK Agreement superseded and replaced the 2020 Preliminary Agreement between the parties.

The Company considered the ASC 606 criteria for combining contracts and determined that the 2020 GSK Agreement and 2020 Stock Purchase Agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The fair market value of the common stock issued to GGL was $206.7 million, based on the closing stock price of $36.70 on the date of execution of the 2020 Preliminary Agreement and 2020 Stock Purchase Agreement and taking into account a discount for the lack of marketability due to the restrictions in place on the underlying shares, resulting in a $43.3 million premium received by the Company. The Company accounted for the common stock issued to GGL based on its fair market value on the transaction date and determined that the premium paid by GSK should be attributed to the transaction price of the 2020 GSK Agreement.

The Company concluded that the 2020 GSK Agreement contained four units of account: (i) the license granted to GSK under the Antibody Program (the “Antibody License”); (ii) the research and development activities (including clinical manufacturing) under the Antibody Program; (iii) the research and development activities under the Vaccine Program; and (iv) the research and development activities under the Functional Genomics Program. The Company considered the guidance in ASC 606 to determine which of these elements of the 2020 GSK Agreement are performance obligations with a customer. The Company determined that the Antibody License is within the scope of ASC 606 and accordingly, accounted for the Antibody License as a distinct performance obligation under ASC 606. The Antibody License is a functional intellectual property and is distinct from the associated research and development activities to be performed under the program due to its significant standalone functionality. All other elements of the 2020 GSK Agreement including the research and development activities, and participation in the JSC and subcommittees for each collaboration program were not determined to be distinct performance obligations with a customer.

The transaction price for the Antibody License at inception was determined to be $43.3 million, representing the premium on the sale of common stock to GSK. The Company determined that GSK can benefit from the Antibody License at the time of grant and therefore, the related performance obligation is satisfied at a point in time. As such, the Company recognized the $43.3 million as contract revenue during the second quarter of 2020. Additionally, the Company is entitled to consideration from GSK related to profit and loss sharing arrangements (including royalties) contingent upon future sales of collaboration products under the Antibody Program.

The remaining units of account of the 2020 GSK Agreement were determined to be within the scope of ASC 808 as the Company and GSK are both active participants in the development, manufacturing and commercialization activities and are exposed to significant risks and rewards that are dependent on the commercial success of the activities of the arrangement. Furthermore, the Company and GSK participate in the commercial profit and loss sharing arrangement for each program commensurate with each party’s cost-sharing responsibilities during research and development. Because ASC 808 does not provide recognition and measurement guidance, the Company determined that the guidance in ASC 730, Research and Development, was appropriate to analogize to, based on the nature of the cost-sharing provisions of the agreement. The Company has concluded that payments to or reimbursements from GSK related to these services will be accounted for as an increase to or reduction of research and development expenses, respectively. The Company also concluded that any payments from GSK related to the profit and loss sharing arrangement (including royalties) contingent upon the commercialization of the products under the Vaccine and Functional Genomics Programs will be analogized to ASC 606 and therefore, will be recognized when the related sales occur.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

In May 2021, the Company and GSK received an EUA for sotrovimab, the first collaboration product under the Antibody Program. As the lead party for all commercialization activities, GSK incurs all of the sales and marketing expenses and is the principal on sales transactions with third parties. As the Company is the agent under the agreement, the Company recognizes its contractual share of the profit sharing amounts or royalties (in case of an opt-out) as revenue, net of any cost of sales and allowable expenses (including distribution, selling and marketing expenses) in the period the sale occurs. During the three months ended June 30, 2021, the Company recorded its share of net profit of $5.3 million as collaboration revenue in the condensed consolidated statement of operations.

Costs associated with co-development activities performed under the agreement are included in research and development expenses on the condensed consolidated statements of operations, with any reimbursement of costs by GSK reflected as a reduction of such expenses. Under the 2020 GSK Agreement, the Company recognized additional research and development expense of $17.9 million and $36.4 million during the three and six months ended June 30, 2021, respectively. The Company recognized a reduction of research and development expense of $3.8 million during the three and six months ended June 30, 2020. The Company has a payable to GSK of $12.7 million and $28.0 million included in accrued and other liabilities as of June 30, 2021 and December 31, 2020, respectively.

2021 Expanded GSK Collaboration

On February 14, 2021, the Company and GSK entered into a binding preliminary collaboration agreement (the “2021 Preliminary Agreement”), under which the parties agreed to expand the 2020 GSK Agreement to collaborate on three separate programs: (1) a program to research, develop and commercialize mAbs for the prevention, treatment or prophylaxis of the influenza virus (the “Influenza Program”), excluding VIR-2482 unless GSK exercises its option as described below; (2) an expansion of the parties’ current Functional Genomics Program to focus on functional genomics screens directed to targets associated with respiratory viruses (the “Expanded Functional Genomics Program”); and (3) additional programs to develop neutralizing mAbs directed to up to three non-influenza target pathogens selected by GSK (the “Selected Pathogens” and such programs, the “Additional Programs”).

Concurrently with the execution of the 2021 Preliminary Agreement, the Company entered into a stock purchase agreement (the “2021 Stock Purchase Agreement”) with GGL under which GGL agreed to purchase shares of the Company’s common stock for an aggregate purchase price of approximately $120.0 million. The consummation of the transactions under each of the 2021 Preliminary Agreement and the 2021 Stock Purchase Agreement were subject to the satisfaction of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which expiration was effective on March 24, 2021. The 2021 Preliminary Agreement and 2021 Stock Purchase Agreement consummated on March 25, 2021, which the Company used as the measurement date for accounting purposes. On March 31, 2021, the Company closed the sale of 1,924,927 shares of its common stock to GGL.

The 2021 Preliminary Agreement was superseded on May 18, 2021 upon execution of the definitive collaboration agreement (the “2021 GSK Agreement”, or collectively with the 2021 Preliminary Agreement, the “2021 GSK Collaboration”). The material terms of the 2021 GSK Agreement, including the promised goods and services, are discussed below and is consistent with those of the 2021 Preliminary Agreement.

Under the 2021 GSK Collaboration, the parties will conduct certain research and development activities under mutually agreed development plans and associated budgets for the programs within the expanded collaboration for a period of three years following the effective date. Under the Influenza Program, the parties will collaborate to research, develop and commercialize mAbs for the prevention, treatment or prophylaxis of influenza, including the Company’s influenza mAbs (with respect to VIR-2482, only if GSK exercises its option). The Company may conduct the development and clinical manufacturing activities for VIR-2482 up to completion of a Phase 2 clinical trial. Provided that the Company conducts and completes a Phase 2 clinical trial for VIR-2482, GSK will have the exclusive option to obtain exclusive rights to co-develop and commercialize VIR-2482 under the Influenza Program (the “VIR-2482 Option”). GSK will be the lead party for development, clinical and commercial manufacturing and commercialization activities for products under the Influenza Program (other than VIR-2482 unless and until GSK exercises the VIR-2482 Option, if applicable). The parties will mutually agree upon the allocation of responsibility for development of products under the Expanded Functional Genomics Program, and for development and early-stage manufacturing of products under the Additional Programs if and when GSK decides which Selected Pathogens to pursue. GSK will be primarily responsible for commercial manufacturing and commercialization activities for products under the Expanded Functional Genomics Program and Additional Programs, if and when selected by GSK. For each collaboration program, upon execution of the definitive agreement, the Company will grant GSK certain license rights related to the development, manufacturing and commercialization of products arising from the program.

The parties will share 50% of all development costs in accordance with the budget for each of the collaboration programs (other than for the Selected Pathogens and VIR-2482 unless GSK exercises the VIR-2482 Option), with each party having the right to opt-out of its co-funding obligations at specified points in development. In such case, the party continuing with the program will pay to

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

the opt-out party a royalty on net sales of products arising from such program at specified rates based on the stage of development at which the opt-out is exercised. Following the exercise of an opt-out right by a party, the other party may, at its election, either pursue development and commercialization of such product or program unilaterally, or also cease the conduct and funding of such collaboration product or program. In the absence of any opt-out, the parties will also share 50% of all profits and losses arising from any collaboration product.

GSK was obligated to make an upfront payment to the Company of $225.0 million, 50% of which became payable at the effective date of the 2021 Preliminary Agreement and 50% of which became payable following execution of the 2021 GSK Agreement. If GSK exercises the VIR-2482 Option, GSK will pay the Company an option exercise fee of $300.0 million unless certain agreed product criteria for VIR-2482 are not met, in which case the parties will negotiate an alternative option exercise fee. Upon achievement of a pre-defined regulatory milestone for the first product in the Influenza Program, which may be (i) VIR-2482 (if GSK exercised the VIR-2482 Option), (ii) a next-generation mAb, or (iii) any other influenza mAb approved by the JSC to be included in the collaboration, arising from the Influenza Program, GSK will make a milestone payment to the Company of up to $200.0 million.

The Company concluded that the 2021 GSK Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Agreements, under which certain elements are required to be accounted for under ASC 606 where the counterparty is a customer for a good or service that is a distinct unit of account. In addition, the 2021 GSK Agreement is considered a contract modification to the 2021 Preliminary Agreement and will be accounted for prospectively, as a termination of the 2021 Preliminary Agreement and commencement of a new contract. There was no impact to the accounting assessment of the original contract as no goods or services had been delivered to GSK, no performance obligations were satisfied, and accordingly, no contract revenue was recognized under ASC 606 prior to the execution of the 2021 GSK Agreement.

The Company considered the ASC 606 criteria for combining contracts and determined that the 2021 GSK Collaboration and 2021 Stock Purchase Agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The fair market value of the common stock issued to GGL was $85.2 million, based on the closing stock price of $52.70 on March 25, 2021 and taking into account a discount for the lack of marketability due to the restrictions in place on the underlying shares, resulting in a $34.8 million premium received by the Company. The Company accounted for the common stock issued to GGL based on its fair market value on the transaction date and determined that the premium paid by GSK should be attributed to the transaction price of the 2021 GSK Agreement.

The Company concluded that the 2021 GSK Agreement contained the following units of account: (i) the VIR-2482 Option; (ii) three distinct rights granted to GSK related to the Selected Pathogens (each, a “Selected Pathogens Right”); (iii) the license and know-how to the next-generation mAbs under the Influenza Program (the “Next Gen License”); (iv) the research and development activities for next-generation mAbs under the Influenza Program; and (v) the research and development activities, including license rights and know-how, under the Expanded Functional Genomics Program. The Company considered the guidance in ASC 606 to determine which of these elements of the 2021 GSK Agreement are performance obligations with a customer. The Company determined that the distinct performance obligations under ASC 606 consisted of: (i) the Next Gen License and (ii) the three Selected Pathogens Rights, each representing a material right. All other elements of the 2021 GSK Agreement including the VIR-2482 Option, research and development activities, and participation in the JSC and subcommittees for each collaboration program were not determined to be distinct performance obligations with a customer.

The transaction price for the 2021 GSK Agreement included fixed consideration consisting of $225.0 million upfront fee paid by GSK and $34.8 million, representing the premium on the sale of common stock to GSK for a total of $259.8 million. All potential future milestones and other payments under the 2021 GSK Agreement are constrained since the Company could not conclude it was probable that a significant reversal in the amount recognized would not occur.

The respective estimated SSP for each of the performance obligations was determined to allocate the transaction price. The estimated SSP of each performance obligation was determined considering relevant market conditions, entity-specific factors and information about the customer, while maximizing the use of available observable inputs. For the Next Gen License, the Company determined that GSK can benefit from the license at the time the license is granted and therefore, the related performance obligation is satisfied at a point in time. If any of the Selected Pathogens Rights are exercised, the Company will evaluate the related promises to identify the performance obligations to be transferred and the timing of revenue recognition. If any of the Selected Pathogens Rights expire prior to being exercised, the Company will recognize any deferred revenue allocated to that right as revenue at the time of expiration.

The research and development activities for the next generation mAbs under the Influenza Program and the Expanded Functional Genomics Program were determined to be within the scope of ASC 808 as the Company and GSK are both active participants in the development, manufacturing and commercialization activities and are exposed to significant risks and rewards that are dependent on

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

the commercial success of the activities of the arrangement. Furthermore, the Company and GSK participate in the commercial profit and loss sharing arrangement for each program commensurate with each party’s cost-sharing responsibilities during research and development. Because ASC 808 does not provide recognition and measurement guidance, the Company determined that the guidance in ASC 730, Research and Development, was appropriate to analogize to based on the nature of the cost-sharing provisions of the agreement. The Company has concluded that payments to or reimbursements from GSK related to these services will be accounted for as an increase to or reduction of research and development expenses, respectively. The Company also concluded that any payments from GSK related to the profit and loss sharing arrangement (including royalties) contingent upon the commercialization of the related products will be analogized to ASC 606 and therefore, will be recognized when the related sales occur.

Upon execution of the 2021 GSK Agreement, the Company granted the Next Gen License to GSK and therefore, recognized $168.3 million as contract revenue during the three months ended June 30, 2021. As of June 30, 2021, of the total unrecognized transaction price of $91.5 million, $39.8 million and $51.7 million is classified as current and noncurrent deferred revenue, respectively, on the Company's condensed consolidated balance sheet related to the remaining performance obligations, being the material rights resulting from the Selected Pathogens Rights.

Costs associated with co-development activities performed under the agreement are included in research and development expenses in the condensed consolidated statements of operations, with any reimbursement of costs by GSK reflected as a reduction of such expenses. During the three and six months ended June 30, 2021, the Company recognized a reduction of research and development expense of $0.1 million under the 2021 GSK Agreement.

Brii Biosciences

In May 2018, the Company entered into a collaboration, option and license agreement (the “Brii Agreement”) with Brii Biosciences Limited (previously named BiiG Therapeutics Limited) (“Brii Bio Parent”) and Brii Biosciences Offshore Limited (“Brii Bio”), pursuant to which the Company granted to Brii Bio, with respect to up to four of the Company’s programs, an exclusive option to obtain exclusive rights to develop and commercialize compounds and products arising from such programs in China, Taiwan, Hong Kong and Macau (collectively, the “China Territory”) for the treatment, palliation, diagnosis, prevention or cure of acute and chronic diseases of infectious pathogen origin or hosted by pathogen infection (the “Field of Use”). The Company’s HBV siRNA program being developed under the Alnylam Agreement (described below) is included within the Brii Agreement as a program for which Brii Bio may exercise one of its options. In partial consideration for the options granted by the Company to Brii Bio, Brii Bio Parent and Brii Bio granted the Company, with respect to up to four of Brii Bio Parent’s or Brii Bio’s programs, an exclusive option to be granted exclusive rights to develop and commercialize compounds and products arising from such Brii Bio programs in the United States for the Field of Use. The number of options that the Company may exercise for a Brii Bio program is limited to the corresponding number of options that Brii Bio exercises for a Vir program.

As partial consideration for the Company’s entry into the Brii Agreement, upon closing of Brii Bio Parent’s Series A preferred stock financing, the Company received ordinary shares equal to 9.9% of the outstanding shares in Brii Bio Parent. As a result of Brii Bio’s right to exercise one of its options for the Company’s HBV siRNA program, under the terms of the Alnylam Agreement, as amended, the Company transferred to Alnylam a specified percentage of such equity consideration allocable to such program under a share transfer agreement in February 2020.

With respect to programs for which Brii Bio exercises its options, Brii Bio will be required to pay the Company an option exercise fee for each such Vir program ranging from the mid-single-digit millions up to $20.0 million, determined based on the commercial potential of the licensed program. Brii Bio will also be required to pay regulatory milestone payments on a licensed product-by-licensed product basis ranging from the mid-single-digit millions up to $30.0 million, also determined based on the commercial potential of such program. Following commercialization, Brii Bio will be required to make sales milestone payments based on certain specified levels of aggregate annual net sales of products arising from each licensed program in the China Territory, up to an aggregate of $175.0 million per licensed program. Brii Bio also will pay royalties to the Company that range from the mid-teens to the high-twenties, as described below.

Upon exercise of each option for a Brii Bio program, the Company will be required to pay to Brii Bio an option exercise fee ranging from the low tens of millions to up to $50.0 million, determined based on the commercial potential of the licensed program. The Company will be required to make regulatory milestone payments to Brii Bio on a licensed product-by-licensed product basis ranging from the low tens of millions up to $100.0 million, also determined based on the commercial potential of such program. The Company will also be required to make sales milestone payments based on certain specified levels of aggregate annual net sales of products in the United States arising from each licensed program, up to an aggregate of $175.0 million per licensed program.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

In addition, the Company is obligated under the Brii Agreement to pay Brii Bio tiered royalties based on net sales of products arising from the licensed programs in the United States, and Brii Bio is obligated to pay the Company tiered royalties based on net sales of products arising from the licensed programs in the China Territory. The rates of royalties payable by the Company to Brii Bio, and by Brii Bio to the Company, on net sales range from mid-teens to high-twenties. Each party’s obligations to pay royalties expires, on a product-by-product and territory-by-territory basis, on the latest of 10 years after the first commercial sale of such licensed product in the United States or China Territory, as applicable; the expiration or abandonment of licensed patent rights that cover such product in the United States or China Territory, as applicable; and the expiration of regulatory exclusivity in the United States or the China Territory, as applicable. Royalty rates are subject to specified reductions and offsets.

The Brii Agreement will remain in force until the expiration of all options or, if any option is exercised, expiration of all royalty payment obligations for all licensed products within such licensed program, unless terminated in its entirety or on a program-by-program basis by either party. Each party may terminate for convenience all rights and obligations with respect to any program for which it has an option, with 30 days’ written notice (if the terminating party has not exercised an option for such program) or 180 days’ notice (following the exercise of an option for such program). The Brii Agreement may also be terminated by either party for insolvency of the other party, and either party may terminate the Brii Agreement in its entirety or on a program-by-program basis for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice following failure to make payment).

The Company has determined that Brii Bio Parent and its wholly-owned subsidiary Brii Bio are variable interest entities due to their reliance on future financing and having insufficient equity at risk. However, the Company does not have the power to direct activities that most significantly impact the economic success of these entities and is not considered the primary beneficiary of these entities. Therefore, the Company does not consolidate Brii Bio Parent or Brii Bio. The Company also determined that it does not exercise significant influence over Brii Bio Parent or Brii Bio. As of June 30, 2021 and December 31, 2020, the investment in Brii Bio Parent has a carrying value of $5.7 million, which is included in other assets on the condensed consolidated balance sheets. The Company also has a contract liability of $3.8 million within deferred revenue which represents deferred consideration for the remaining three options that the Company granted to Brii Bio. The deferred consideration will be recognized when Brii Bio exercises its options or the options expire. The Company accounts for its investment in Brii Bio Parent’s ordinary shares at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment in Brii Bio Parent.

The Company’s maximum exposure to loss under the Brii Agreement is represented by options to acquire licenses to develop and commercialize potential products and future milestone payments. The ultimate expense that the Company incurs under the Brii Agreement cannot be quantified at this time as the amount will vary based on the timing and outcome of research activities.

Option Exercise by Brii Bio

In June 2020, Brii Bio exercised its option to obtain exclusive rights to develop and commercialize compounds and products arising from VIR-2218 in the China Territory. In consideration of the Company’s grant to Brii Bio of an exclusive license related to VIR-2218 in the China Territory, the Company received a $20.0 million option exercise fee in connection with the option exercise. Also, the Company is eligible to receive the following payments related to VIR-2218 in the China Territory: a $30.0 million regulatory milestone payment, up to $175.0 million in sales-based milestone payments, and royalties on net sales ranging from high-teens to high-twenties.

The Company evaluated the transaction under ASC 606 and identified one performance obligation consisting of the license granted to Brii Bio. Under the Brii Agreement, Brii Bio is responsible for performing all research and development activities and the Company does not have any other performance obligations within the context of ASC 606 under the arrangement after the option exercise. The transaction price is determined to be $22.7 million which consists of the $20.0 million option exercise fee and $2.7 million of the deferred revenue allocated to the VIR-2218 option at the inception of the Brii Agreement. The Company determined that the license is considered a functional intellectual property that is a distinct performance obligation under ASC 606. Specifically, the Company believes the license is capable of being distinct, as Brii Bio has the capabilities to develop the license either on its own or by contracting other third parties. Brii Bio can benefit from the license at the time of grant and therefore, the related performance obligation is satisfied at a point in time. Additionally, all potential future milestones and other payments are constrained because the Company cannot conclude it is probable that a significant reversal in the amount recognized would not occur. The Company will re-evaluate the transaction price in each reporting period.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

During the three and six months ended June 30, 2021, the Company recognized zero and $0.4 million, respectively, as contract revenue from the supply of biological materials to Brii Bio. During the three and six months ended June 30, 2020, the Company recognized the $22.7 million as license revenue from a related party. The Company separately paid $10.0 million, half of the option exercise proceeds, to Alnylam in connection with the Alnylam Agreement that was recognized as research and development expense during the same period.

Alnylam

October 2017 Agreement

In October 2017, the Company entered into the Alnylam Agreement for the development of siRNA products for the treatment of HBV and following the exercise of certain program options, the development and commercialization of siRNA therapeutic products directed to up to four other infectious disease targets selected by the Company. The technology licensed under the Alnylam Agreement forms the basis of the Company’s siRNA technology platform.

Under the Alnylam Agreement, the Company obtained a worldwide, exclusive license to develop, manufacture and commercialize the HBV siRNA product candidates, including VIR-2218, for all uses and purposes other than agricultural, horticultural, forestry, aquaculture and other residential applications, such excluded fields, the Excluded Fields. In addition, Alnylam granted the Company an exclusive option, for each of the infectious disease siRNA programs directed to the Company’s selected targets, to obtain a worldwide, exclusive license to develop, manufacture and commercialize siRNA products directed to the target of each such program for all uses and purposes other than the Excluded Fields. On a product-by-product basis for each product arising from the HBV and, following the Company’s option exercise, the infectious disease programs, Alnylam has an exclusive option, exercisable during a specified period prior to the initiation of a Phase 3 clinical trial for each such product, to negotiate and enter into a profit-sharing agreement for such product.

The Company and Alnylam are jointly responsible for funding the initial research and development activities for VIR-2218 through the completion of proof of concept trials. Prior to the exercise of the Company’s option for each siRNA program directed to one of the Company’s selected infectious disease targets, Alnylam is responsible for conducting all development activities, at the Company’s expense, in accordance with an agreed upon development plan. Following the Company’s exercise of an option for a program and payment of the program option exercise fee and any outstanding program costs due to Alnylam, the Company is solely responsible, at the Company’s expense (subject to Alnylam’s exercise of a profit-sharing option), for conducting all development, manufacture and commercialization activities for products arising from each such program. If Alnylam exercises a profit-sharing option for a product, the Company will negotiate the terms of such profit-sharing agreement, which will include sharing equally with Alnylam all subsequent costs associated with the development of such product, as well as the profits and losses in connection with such product, subject to reimbursement by Alnylam of a portion of specified development costs in certain circumstances.

Under the Alnylam Agreement, the Company paid Alnylam an upfront fee of $10.0 million and issued to Alnylam 1,111,111 shares of the Company’s common stock. Additionally, the receipt of consideration from Brii Bio as discussed above triggered a requirement under the Alnylam Agreement to transfer a portion of the consideration, consisting of equity in Brii Bio Parent valued at $0.8 million, to Alnylam .

Upon the achievement of a certain development milestone, as further discussed below, the Company was obligated to issue shares of the Company’s common stock equal to the lesser of (i) 1,111,111 shares or (ii) a certain number of shares based on the Company’s stock price at the time such milestone is achieved (the “Milestone Shares”). The Company will be required to pay Alnylam up to $190.0 million in the aggregate for the achievement of specified development and regulatory milestones by the first siRNA product directed to HBV, and up to $115.0 million for the achievement of specified development and regulatory milestones by the first product directed to the target of each infectious disease siRNA program for which the Company exercised its option. Following commercialization, the Company will be required to pay to Alnylam up to $250.0 million in the aggregate for the achievement of specified levels of net sales by siRNA products directed to HBV and up to $100.0 million for the achievement of specified levels of net sales by products directed to the target of each infectious disease siRNA program for which the Company exercised its option. The Company may also be required to pay Alnylam tiered royalties at percentages ranging from the low double-digits to mid-teens on annual net sales of HBV products, and tiered royalties at percentages ranging from the high single-digits to the sub-teen double-digits on annual net sales of licensed infectious disease products, in each case subject to specified reductions and offsets. The royalties are payable on a product-by-product and country-by-country basis until the later of the expiration of all valid claims of specified patents covering such product in such country and 10 years after the first commercial sale of such product in such country.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The term of the Alnylam Agreement will continue, on a product-by-product and country-by-country basis, until the expiration of all royalty payment obligations under the Alnylam Agreement. If the Company does not exercise its option for an infectious disease program directed to one of its selected targets, the Alnylam Agreement will expire upon the expiration of the applicable option period with respect to such program. However, if Alnylam exercises its profit-sharing option for any product, the term of the Alnylam Agreement will continue until the expiration of the profit-sharing arrangement for such product. The Company may terminate the Alnylam Agreement on a program-by-program basis or in its entirety for any reason on 90 days’ written notice. Either party may terminate the agreement for cause for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice for payment breach), or if the other party challenges the validity or enforceability of any patent licensed to it under the Alnylam Agreement on 30 days’ notice.

In March 2020, the Company achieved the specified development milestone relating to the Milestone Shares, which was accounted for as an embedded derivative. Consequently, the Company remeasured and reclassified the derivative liability to additional paid-in capital based on the estimated fair value of $29.2 million. The Company issued Alnylam 1,111,111 shares of its common stock and paid Alnylam $15.0 million in the second quarter of 2020.

Second and Third Amendments

In March and April 2020, the Company and Alnylam entered into the second and third amendments to the Alnylam Agreement (as amended, the “Amended Alnylam Agreement”) to expand the parties’ existing collaboration to include the development and commercialization of siRNA products targeting SARS-CoV-2, and potentially other related coronaviruses, and up to three targeting human host factors for SARS-CoV-2 (collectively, the “COVID Collaboration Targets”).

In December 2020, the Company and Alnylam entered into a letter amendment (the “Letter Agreement”), amending the Amended Alnylam Agreement, to modify certain funding and governance provisions in connection with the siRNA products directed to the COVID Collaboration Targets, including VIR-2703 (the “COV Target”), and to modify certain rights of each party with respect to products arising from such programs. Pursuant to the Letter Agreement, Alnylam were responsible for conducting pre-clinical research activities set forth in the existing workplan for the COV Target (the “COV Workplan”) at its discretion and sole expense, and the Company was no longer obligated to reimburse Alnylam for any share of costs incurred by Alnylam in conducting activities under the COV Workplan after July 1, 2020. In July 2021, Alnylam elected to discontinue the development of the COV Target, and all other related research and development activities in accordance with their rights under the Letter Agreement. As a result, the COV Target and related siRNA program is no longer included within the Amended Alnylam Agreement and all rights to the siRNA program directed to the COV Target reverted to Alnylam.  

Research and Development Expenses Recognized for the Period

The Company incurred expenses under the Alnylam Agreement of $0.8 and $1.7 million during the three and six months ended June 30, 2021, respectively. In addition to the Milestone Shares and $15.0 million milestone payable to Alnylam in the first quarter of 2020, and the $10.0 million payment resulting from Brii Bio’s option exercise in the second quarter of 2020, the Company incurred expenses of $2.5 million and $4.8 million under the Alnylam Agreement during the three and six months ended June 30, 2020, respectively.

WuXi Biologics

In February 2020, the Company entered into a development and manufacturing collaboration agreement with WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”) (the “WuXi Biologics Collaboration Agreement”), for the clinical development, manufacturing, and commercialization of the Company’s proprietary antibodies developed for SARS-CoV-2. Under the WuXi Biologics Collaboration Agreement, WuXi Biologics will conduct cell-line development, process and formulation development, and initial manufacturing for clinical development. WuXi Biologics will have the right to commercialize products incorporating such antibodies in greater China under an exclusive license granted for the selected antibodies that have been developed. The Company will have the right to commercialize such products in all other markets worldwide.

WuXi Biologics will perform mutually agreed development and manufacturing activities, under individual statements of work. In addition, the parties agreed that WuXi Biologics will pay the Company tiered royalties at percentages ranging from the high single-digits to mid-teens on annual net sales of all products sold by WuXi Biologics in greater China. The royalties are payable for a specified, standard royalty term. In addition, if WuXi Biologics sublicenses its commercialization rights to a third party, WuXi Biologics will pay the Company a percentage of the sublicense revenue received from such third party. The WuXi Biologics Collaboration Agreement will continue until the expiration of WuXi Biologics’ payment obligations to the Company, unless

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Notes to Unaudited Condensed Consolidated Financial Statements

terminated earlier. If terminated earlier, the WuXi Biologics Collaboration Agreement may be terminated by (i) the written agreement of both parties, (ii) WuXi Biologics following the one year anniversary of the WuXi Biologics Collaboration Agreement effective date with respect to the entire agreement or on a product by product basis with 90 days’ prior written notice or (iii) by either party if the other party materially breaches the WuXi Biologics Collaboration Agreement and fails to cure such breach within sixty days.

Rockefeller University

In July 2018, the Company entered into an exclusive license agreement with The Rockefeller University (“Rockefeller”), which was amended in May 2019, in September 2020, and in March 2021 (the “Rockefeller Agreement”). Under the Rockefeller Agreement, Rockefeller granted the Company a worldwide exclusive license under certain patent rights, and a worldwide non-exclusive license under certain materials and know-how covering certain antibody variants relating to a specified mutation leading to enhanced antibody function and utility, to develop, manufacture and commercialize infectious disease products covered by the licensed patents, or that involve the use or incorporation of the licensed materials and know-how, in each case for all uses and purposes for infectious diseases. The Company uses technology licensed under the Rockefeller Agreement in the Company’s antibody platform and in the Company’s product candidates VIR-3434 and VIR-7832.

The Company paid Rockefeller an upfront fee of $0.3 million for entry into the Rockefeller Agreement, and is required to pay annual license maintenance fees of $1.0 million. In addition, for the achievement of specified development, regulatory and commercial success milestone events, the Company will be required to pay up to $80.3 million, in the aggregate, for up to six infectious disease products. Any follow-on products beyond six products may result in additional milestone event payments. The Company will also be required to pay to Rockefeller a royalty at a low single-digit percentage rate on net sales of licensed products, subject to certain adjustments. The Company’s obligation to pay royalties to Rockefeller will terminate, on a product-by-product and jurisdiction-by-jurisdiction basis, upon the latest of the expiration of the last valid claim of a licensed patent in such jurisdiction, the expiration of all regulatory exclusivity in such jurisdiction or 12 years following the first commercial sale of the applicable licensed product in such jurisdiction.

Under the Rockefeller Agreement, the Company recognized a total of $4.0 million and $1.3 million during the three and six months ended June 30, 2021 and 2020, respectively, as research and development expenses related to certain development milestone payments, annual license maintenance fees, and estimated sublicense fees.

The Rockefeller Agreement will remain in force, absent earlier termination, until the expiration of all of the Company’s obligations to pay royalties to Rockefeller in all jurisdictions. The Company has the right to terminate the Rockefeller Agreement in its entirety, or in part, for any reason on 60 days’ written notice to Rockefeller. Rockefeller may terminate the Rockefeller Agreement on 90 days’ written notice for the Company’s uncured material breach, or if the Company challenges the validity or enforceability of any of the licensed patents, or immediately in the event of the Company’s insolvency. Rockefeller may also terminate the Rockefeller Agreement if the Company ceases to carry on business with respect to the rights granted to the Company under the agreement.

MedImmune

In September 2018, the Company entered into a license agreement, which was amended in September 2020 (the “MedImmune Agreement”), with MedImmune, LLC (“MedImmune”), under which the Company obtained a worldwide, exclusive license to develop and commercialize half-life extended versions of two specified antibodies under development by MedImmune that target influenza A and influenza B, respectively, for all uses in humans and animals. The Company is developing VIR-2482 using technology licensed under the MedImmune Agreement.

In consideration for the grant of the licenses under the MedImmune Agreement, the Company made an upfront payment to MedImmune of $10.0 million.

The Company will be obligated to make development, regulatory, and commercial milestone payments of up to $331.5 million, of which $5.0 million was paid in the third quarter of 2019, in the aggregate relating to influenza A and influenza B products. MedImmune will also be entitled to receive tiered royalties based on net sales of products containing half-life extended versions of antibodies directed to influenza A and/or influenza B at percentages ranging from the mid-single-digits to sub-teen double-digits.

The MedImmune Agreement will remain in force until the expiration on a country-by-country and product-by-product basis of all of the Company’s obligations to pay royalties to MedImmune. The Company may terminate the MedImmune Agreement in its entirety or on a product-by-product basis, for convenience, upon 120 days’ notice. Either party may terminate the MedImmune Agreement for cause for the other party’s uncured material breach on 60 days’ notice or immediately in the event of bankruptcy of the other party.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Additionally, MedImmune may terminate the MedImmune Agreement for cause on 30 days’ written notice if the Company challenges the validity or enforceability of the patents to which the Company has obtained a license under the MedImmune Agreement.

Xencor

August 2019 License Agreement

In August 2019, the Company entered into a patent license agreement, which was amended in February 2021 (the “2019 Xencor Agreement”) with Xencor, Inc., (“Xencor”). Under the 2019 Xencor Agreement, as amended, the Company obtained a non-exclusive, sublicensable (only to its affiliates and subcontractors) license to incorporate Xencor’s licensed technologies into, and to evaluate, antibodies that target influenza A and HBV, and a worldwide, non-exclusive, sublicensable license to develop and commercialize products containing such antibodies incorporating such technologies for all uses, including the treatment, palliation, diagnosis and prevention of human or animal diseases, disorders or conditions. The Company is obligated to use commercially reasonable efforts to develop and commercialize an antibody product that incorporates Xencor’s licensed technologies, for each of the influenza A and HBV research programs. These technologies are used in the Company’s VIR-2482, incorporating Xencor’s Xtend technology, and VIR-3434, incorporating Xencor’s Xtend and other Fc technologies, product candidates.

In consideration for the grant of the license, the Company paid Xencor an upfront fee. For each of the influenza A and HBV research programs, the Company will be required to pay Xencor development and regulatory milestone payments of up to $17.8 million in the aggregate, and commercial sales milestone payments of up to $60.0 million in the aggregate, for a total of up to $77.8 million in aggregate milestones for each program and $155.5 million in aggregate milestones for both programs. On a product-by-product basis, the Company will also be obligated to pay tiered royalties based on net sales of licensed products ranging from low- to mid-single-digits. The royalties are payable, on a product-by-product and country-by-country basis, until the expiration of the last to expire valid claim in the licensed patents covering such product in such country.

In August 2019, the Company achieved one of the specified development milestones related to the influenza A program. As such, the Company paid $0.8 million related to the upfront fee and this milestone event in September 2019. In May 2020, the Company achieved one of the specified development milestones related to the HBV program. As such, the Company paid $0.3 million related to this milestone event in June 2020. The milestone payments are expensed to research and development.

March 2020 License Agreement

In March 2020, the Company entered into a patent license agreement, which was amended in February 2021 (the “2020 Xencor Agreement”) with Xencor under which the Company obtained a non-exclusive, sublicensable (only to the Company’s affiliates and subcontractors) license to incorporate Xencor’s licensed technologies into, and to evaluate, antibodies that target any component of a coronavirus, including SARS-CoV-2, SARS-CoV and MERS-CoV, and a worldwide, non-exclusive, sublicensable license to develop and commercialize products containing such antibodies incorporating such technologies for all uses, including the treatment, palliation, diagnosis and prevention of human or animal diseases, disorders or conditions. The Company is obligated to use commercially reasonable efforts to develop and commercialize an antibody product that incorporates Xencor’s licensed technologies, for each of the coronavirus research programs. These technologies are used in the Company’s sotrovimab, incorporating Xencor’s Xtend technology, and VIR-7832, incorporating Xencor’s Xtend and other Fc technologies, product candidates.

In consideration for the grant of the license, the Company will be obligated to pay royalties based on net sales of licensed products at the mid-single-digits. The royalties are payable, on a product-by-product and country-by-country basis, until the later of the expiration of the last to expire valid claim in the licensed patents covering such product in such country or 12 years. During the three months ended June 30, 2021, the Company recognized $0.9 million of royalties due to Xencor from the sale of sotrovimab.

The amended 2020 Xencor Agreement and 2019 Xencor Agreement will remain in force, on a product-by-product and country-by-country basis, until the expiration of all royalty payment obligations under each of the respective agreements. The Company may terminate each agreement in its entirety, or on a target-by-target basis, for convenience upon 60 days’ written notice. Either party may terminate each agreement for the other party’s uncured material breach upon 60 days’ written notice (or 30 days in the case of non-payment) or in the event of bankruptcy of the other party immediately upon written notice. Xencor may terminate each agreement immediately upon written notice if the Company challenges, or upon 30 days’ written notice if any of the Company’s sublicensees challenge, the validity or enforceability of any patent licensed to the Company under each respective agreement.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

7. Balance Sheet Components

Property and Equipment, net

Property and equipment, net consists of the following:

	June 30, 2021			December 31, 2020
	(in thousands)
Laboratory equipment	$	18,168		$	16,769
Computer equipment		580			556
Furniture and fixtures		1,444			1,444
Leasehold improvements		7,281			7,274
Construction in progress		4,544			1,135
Property and equipment, gross		32,017			27,178
Less accumulated depreciation and amortization		(11,766	)		(9,232	)
Total property and equipment, net	$	20,251		$	17,946

Depreciation and amortization expenses was $1.3 million and $2.5 million for the three and six months ended June 30, 2021, and $1.1 million and $2.1 million for the three and six months ended June 30, 2020, respectively.   

Accrued and Other Liabilities

Accrued and other liabilities consist of the following:

	June 30, 2021		December 31, 2020
	(in thousands)
Research and development expenses	$	30,952	$	49,384
Milestone payable		10,000		—
Payroll and related expenses		10,353		17,060
Excess funds payable under grant agreements		2,046		3,467
Operating lease liabilities, current		3,522		3,625
Other professional and consulting expenses		3,867		2,595
Other expenses		3,334		805
Total accrued and other liabilities	$	64,074	$	76,936

8. Commitments and Contingencies

Lease Agreements

The Company has various lease arrangements for office and laboratory spaces located in California, Oregon, Missouri and Switzerland with contractual lease periods expiring between 2021 and 2033. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain lease agreements also provide the Company with the option to renew for additional periods ranging from one to five years. Most of these renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. In February 2021, the Company entered into a new lease arrangement for office and laboratory spaces in Oregon. The lease is expected to commence in the fourth quarter of 2021 when the Company obtains access to the leased space. In addition to the operating lease agreements, the Company entered into a sale-leaseback transaction in August 2019.

Throughout the term of the lease agreements, the Company is responsible for paying certain operating costs, in addition to rent, such as common area maintenance, taxes, utilities and insurance. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred.   

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The maturity of the Company’s operating lease liabilities as of June 30, 2021 was as follows (in thousands):

	Amounts
2021 (excluding the six months ended June 30, 2021)	$	3,428
2022		9,713
2023		11,387
2024		10,564
2025		8,042
Thereafter		67,466
Total lease payments		110,600
Less: imputed interest		(38,140	)
Less: net tenant improvement allowance yet to be received		(10,287	)
Present value of operating lease liabilities	$	62,173

The following amounts were recorded in the condensed consolidated balance sheets for the periods ended:

	June 30, 2021		December 31, 2020
	(in thousands)
Operating Leases
Current operating lease liabilities, net of tenant    improvement allowances (1)	$	10,287	$	7,913
Operating right-of-use assets		58,972		61,947
Accrued and other liabilities	$	3,522	$	3,625
Operating lease liabilities, noncurrent		68,938		66,556
Total operating lease liabilities	$	72,460	$	70,181

(1)Current portion of lease liabilities recorded in prepaid expenses and other current assets for which the lease incentives to be received exceed the minimum lease payments to be paid over the next twelve months.

Manufacturing and Supply Letter Agreements

In April 2020, the Company and Samsung Biologics Co., Ltd. (“Samsung”) entered into a binding letter agreement (the “Samsung Letter Agreement”), pursuant to which Samsung will perform development and manufacturing services for the Company’s SARS-CoV-2 antibody program. In August 2020, the Company, GlaxoSmithKline Trading Services Limited (“GSKTSL”) and Samsung entered into an Assignment and Novation Agreement effective as of July 31, 2020 pursuant to which the Company assigned and transferred to GSKTSL all of the Company’s right, title, and interest in, to and under the Samsung Letter Agreement, and GSKTSL became the Company’s successor in interest in and to all of the Company’s rights, duties, and obligations in, to and under the Samsung Letter Agreement.

In June 2020, the Company and WuXi Biologics entered into a binding letter of intent (the “WuXi Biologics Letter Agreement”), pursuant to which WuXi Biologics will perform certain development and manufacturing services for the Company’s SARS-CoV-2 antibody program. In August 2020, the Company, GSKTSL and WuXi Biologics entered into an Assignment and Novation Agreement effective as of July 29, 2020 pursuant to which the Company assigned and transferred to GSKTSL all of the Company’s right, title, and interest in, to and under the WuXi Biologics Letter Agreement, and GSKTSL became the Company’s successor in interest in and to all of the Company’s rights, duties, and obligations in, to and under the WuXi Biologics Letter Agreement.

In August 2020, GSKTSL entered into a Master Services Agreement with Samsung (the “Samsung MSA”) and a non-exclusive Master Services Agreement for Commercial Manufacture of Drug Substance with WuXi Biologics (the “WuXi Biologics MSA”) in connection with the performance of the obligations of the Company and GSK, pursuant to the 2020 GSK Agreement. In accordance with the terms of the 2020 GSK Agreement, the Company will continue to be responsible for 72.5% of the costs under each of the Samsung MSA and the WuXi Biologics MSA, and GSK will bear 27.5% of such costs under each of the Samsung MSA and the WuXi Biologics MSA, subject to certain conditions and exceptions.

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification obligation will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations, or condensed consolidated statements of cash flows.  

9. Related Party Transaction

As a result of the Brii Agreement in May 2018, the Company holds a minority equity interest in Brii Bio through its parent company, Brii Bio Parent. Additionally, a member of the Company’s board of directors serves on Brii Bio Parent’s board of directors. Effective June 22, 2021, the Company's Chief Executive Officer is no longer a member of Brii Bio Parent's board of directors.

10. Stock-Based Awards

Stock Option Activity

Activity under the Company’s stock option plans is set forth below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(Years)		(in thousands)
Outstanding at December 31, 2020		9,798,282		$	5.25		8.5
Granted		2,583,490		$	61.99
Exercised		(1,050,899	)	$	5.66
Forfeited		(628,801	)	$	28.19
Outstanding at June 30, 2021		10,702,072		$	30.24		8.5	$	223,581
Vested and expected to vest at June 30, 2021		10,702,072		$	30.24		8.5	$	223,581
Vested and exercisable at June 30, 2021		3,262,612		$	13.40		7.7	$	110,878

As of June 30, 2021, the Company expects to recognize the remaining unamortized stock-based compensation expense of $203.1 million related to stock options, over an estimated weighted average period of 2.7 years.

Stock Options Granted to Employees

The fair value of stock options granted to employees was estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Expected term of options (in years)	5.5 - 6.1		5.5 - 6.1		5.5 - 6.1		5.5 - 6.1
Expected stock price volatility	106.0% - 110.2%		95.7% - 100.6%		103.1% - 110.2%		88.8% - 100.6%
Risk-free interest rate	1.0% - 1.1%		0.4% - 0.5%		0.6% - 1.2%		0.4% - 1.2%
Expected dividend yield		—		—		—		—

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

The valuation assumptions were determined as follows:

Expected Term— The expected term represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term.

Expected Volatility— The expected volatility was determined by examining the historical volatilities for industry peers and using an average of historical volatilities of the Company’s industry peers as the Company does not have a sufficient historical trading history for its own stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-Free Interest Rate— The Company based the risk-free interest rate over the expected term of the options based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of the grant.

Expected Dividend Rate— The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its profit interest units in the foreseeable future.

Restricted Stock Awards and Restricted Stock Units Activities

The Company’s restricted stock awards (RSAs”) and restricted stock units (“RSUs”) were summarized as follows:

	Shares						Weighted Average Grant Date Fair Value
	RSU			RSA			RSU		RSA
Unvested as of December 31, 2020		—			89,261		$	—	$	1.48
Granted		1,050,995			—		$	64.25	$	—
Vested		—			(87,409	)	$	—	$	1.48
Cancelled		(28,550	)		—		$	67.38	$	—
Unvested as of June 30, 2021		1,022,445			1,852		$	64.16	$	1.53

The unvested shares of RSA and RSU have not been included in the shares issued and outstanding.

As of June 30, 2021, there was $59.7 million of total unrecognized compensation cost related to unvested RSUs, all of which is expected to be recognized over a remaining weighted-average period of 3.6 years.

Stock-Based Compensation Expense

The following table sets forth the total stock-based compensation expense for all awards granted to employees and non-employees and the Company's Employee Stock Purchase Plan ("ESPP") in the condensed consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Research and development	$	10,860	$	2,700	$	19,290	$	4,188
Selling, general and administrative		10,138		3,050		17,179		4,529
Total stock-based compensation	$	20,998	$	5,750	$	36,469	$	8,717

11. Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) by the sum of the weighted average number of common shares outstanding during the period plus any potential dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the treasury stock method. The following is a calculation of the basic and diluted net income (loss) per share (in thousands, except share and per share data):

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VIR BIOTECHNOLOGY, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021			2020
Net income (loss), basic and diluted	$	61,813	$	(31,167	)	$	(107,098	)	$	(108,407	)
Weighted-average shares outstanding, basic		130,121,943		114,980,652			128,938,851			111,684,283
Weighted-average effect of dilutive securities:
Options to purchase common stock		3,635,656		—			—			—
Restricted shares subject to future vesting		19,409		—			—			—
Contingently issuable shares		12,969		—			—			—
Weighted-average shares outstanding, diluted		133,789,977		114,980,652			128,938,851			111,684,283
Net income (loss) per share, basic	$	0.48	$	(0.27	)	$	(0.83	)	$	(0.97	)
Net income (loss) per share, diluted	$	0.46	$	(0.27	)	$	(0.83	)	$	(0.97	)

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options issued and outstanding		6,164,036		8,932,845		10,702,072		8,932,845
Estimated shares issuable under the ESPP		71,582		—		71,582		—
Restricted shares subject to future vesting		933,870		844,886		1,024,297		844,886
Contingently issuable shares		—		—		39,340		—
Total		7,169,488		9,777,731		11,837,291		9,777,731

12. Subsequent Event

Investment in Brii Bio Parent

On July 13, 2021, Brii Bio Parent became a publicly traded company on the Stock Exchange of Hong Kong Limited. As such, the Company's investment in shares of Brii Bio Parent became a marketable equity investment with readily determinable price, which will then be measured at fair value at each reporting period going forward.

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Item 2. 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 unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included as part of our Annual Report on Form 10-K for the year ended December 31, 2020. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company”, “Vir,” “we,” “us” and “our” refer to Vir Biotechnology, Inc. and its consolidated subsidiaries.

Overview

We are a clinical-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. Infectious diseases are among the leading causes of death worldwide and can cause trillions of dollars of direct and indirect economic burden each year – as evidenced by the COVID-19 pandemic. We believe that now is the time to apply the recent and remarkable advances in immunology to combat infectious diseases. Our approach begins with identifying the limitations of the immune system in combating a particular pathogen, the vulnerabilities of that pathogen and the reasons why previous approaches have failed. We then bring to bear powerful technologies that we believe, individually or in combination, will lead to effective therapies.

Our current development pipeline consists of product candidates targeting COVID-19, hepatitis B virus, or HBV, influenza A virus, and human immunodeficiency virus, or HIV. We have assembled four technology platforms, focused on antibodies, T cells, innate immunity and small interfering ribonucleic acid, or siRNA, through internal development, collaborations and acquisitions. We have built an industry-leading team that has deep experience in immunology, infectious diseases, and product development and commercialization. Given the global impact of infectious diseases, we are committed to developing cost-effective treatments that can be delivered at scale.

COVID-19

Sotrovimab (previously VIR-7831) is an investigational severe acute respiratory syndrome coronavirus 2, or SARS-CoV-2, neutralizing monoclonal antibody, or mAb, that incorporates Xencor’s Xtend™ technology.

During and after the quarter, sotrovimab was authorized for emergency use in the U.S., received a positive Committee for Human Medicinal Products, or CHMP, scientific opinion in the European Union, or EU, and was granted interim, emergency or conditional authorization in Bahrain, Canada, Italy, Kuwait, Qatar, Singapore and the United Arab Emirates.

Together with GlaxoSmithKline plc, or GSK, we have established supply agreements with multiple governments around the world and continue to work actively to make sotrovimab available to patients in need. In July, the companies also signed a Joint Procurement Agreement with the European Commission to supply up to 220,000 doses of sotrovimab. 

Updated in vitro data, published in bioRxiv, demonstrate that sotrovimab retains activity against currently circulating variants of concern and interest of the SARS-CoV-2 virus including Alpha (B.1.1.7), Beta (B.1.351), Delta (B.1.617.2), Delta Plus (AY.1 or AY.2), Epsilon (B.1.427/B.1.429), Eta (B.1.525), Gamma (P.1), Iota (B.1.526), Kappa (B.1.617.1) and Lambda (C.37), as well as new variants from Bristol (B.1.1.7+E484K) and Cameroon (B.1.619), which predominantly includes both N440K and E484K mutations that may lead to reduced activity for other neutralizing mAbs against the SARS-CoV-2 virus. We and GSK are continuing to evaluate the ability of sotrovimab to maintain activity against new and emerging variants through in vitro studies.

In May, the European Medicines Agency’s, or EMA, CHMP initiated a rolling review of data on sotrovimab that will continue until enough evidence is available to support a formal marketing authorization application. The rolling review process is expected to be complete in the second half of 2021.

In May, the EMA’s CHMP issued a positive scientific opinion on sotrovimab for the treatment of adults and adolescents (aged 12 years and over and weighing at least 40 kg) with COVID-19 who do not require oxygen supplementation and who are at risk of progressing to severe COVID-19. The CHMP opinion under Article 5(3) can now be considered by the national authorities in EU member states when making evidence-based decisions on the early use of the medicine prior to marketing authorization.

33

In May, the U.S. Food and Drug Administration, or FDA, granted an Emergency Use Authorization, or EUA, to sotrovimab for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death. Together with GSK, we plan to submit a Biologics License Application, or BLA, to the FDA in the second half of 2021.

In June, we and GSK announced confirmatory full results for the Phase 3 COMET-ICE (COVID-19 Monoclonal antibody Efficacy Trial - Intent to Care Early) trial, which resulted in a 79% reduction (adjusted relative risk reduction) (p<0.001) in all-cause hospitalization for more than 24 hours or death due to any cause by Day 29 compared to placebo, meeting the primary endpoint of the trial.

In June, the U.S. National Institutes of Health, or NIH, updated its COVID-19 treatment guidelines to recommend sotrovimab for non-hospitalized patients with mild-to-moderate COVID-19 who are at high risk of clinical progression. The NIH guidelines note that sotrovimab appears to retain activity against current variants of concern and interest. The Infectious Disease Society of America also updated its treatment guidelines in June to recommend use of sotrovimab in the same patient population.

We and GSK are continuing to advance additional trials of sotrovimab:

oThe Phase 2 COMET-PEAK (Patient SafEty, TolerAbility, PharmacoKinetics) pharmacokinetic trial in outpatients with mild-to-moderate COVID-19 is investigating intramuscular, or IM, administration of sotrovimab (500 mg intravenous, or IV, vs. 500 mg IM and 250 mg IM). Enrollment is complete and initial data are expected in the fall of 2021.

oThe Phase 3 COMET-TAIL (Treatment of Acute COVID-19 with Intramuscular monocLonal antibody) trial for early treatment of mild-to-moderate COVID-19 in high-risk, non-hospitalized adult and pediatric patients is evaluating the role of IM-administered sotrovimab (500 mg IV vs. 500 mg IM vs 250 mg IM). The trial was initiated in June and data are now expected in the second half of 2021.

oA prophylaxis trial is planned in uninfected immunocompromised adults to determine whether sotrovimab can prevent symptomatic COVID-19 infection.

We and GSK have established a strategic manufacturing network that will enable the manufacture of approximately two million doses to support emergency supply in the first year following U.S. EUA, with approximately 450,000 doses currently on hand.

VIR-7832 is an investigational vaccinal SARS-CoV-2-neutralizing mAb that incorporates Xencor’s Xtend and other Fc technologies. In April, the first patient was dosed in the United Kingdom National Health Service-supported AGILE initiative. The trial initiative is the first to evaluate VIR-7832 in a Phase 1b/2a trial of adults with mild-to-moderate COVID-19. VIR-7832 shares the same characteristics as sotrovimab and has been engineered to potentially be a therapeutic T cell vaccine to further help treat and/or prevent COVID-19. Initial safety data are expected in the second half of 2021. Additionally, in July, the FDA cleared our investigational new drug application for VIR-7832.

HBV

VIR-2218, an investigational HBV-targeting siRNA, is currently in a Phase 2 trial. We also continued to progress a Phase 2 combination trial of VIR-2218 with pegylated interferon-alpha (PEG-IFN-α) to evaluate the potential for this combination to result in a functional cure for HBV. In June, one year response durability data for VIR-2218 as monotherapy and initial clinical data for the combination of VIR-2218 with PEG-IFN-α were presented at the European Association for the Study of the Liver, or EASL, International Liver Conference 2021. We expect additional data in the second half of 2021.

Data demonstrated a promising safety profile and the potential durable response of VIR-2218 through 48 weeks.

In a separate analysis evaluating VIR-2218 in combination with PEG-IFN-α for 12 weeks from Day 1, a more rapid and substantial decline in hepatitis B surface antigen, or HBsAg, was observed compared to VIR-2218 alone. The treatment regimen resulted in no new safety signals.

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VIR-3434, an investigational HBV-neutralizing mAb that incorporates Xencor’s Xtend and other Fc technologies, is currently in a Phase 1 trial.

In June, additional safety and efficacy data were presented at the EASL International Liver Conference 2021. Two new analyses from the ongoing Phase 1 trial of VIR-3434 showed no safety signals in healthy volunteers dosed with up to 3,000 mg, and a rapid reduction in HBsAg levels one week after subcutaneous administration of VIR-3434 to virally suppressed patients with chronic HBV infection. We also expect additional data in the second half of 2021.

In July, we initiated a Phase 2 trial to evaluate the combination of VIR-2218 and VIR-3434 as a functional cure regimen for chronic HBV infection. Initial data are expected in the first half of 2022.

Influenza A virus

VIR-2482, an investigational mAb designed for the prevention of influenza A that incorporates Xencor’s Xtend technology, is currently in a Phase 1/2 trial and has been generally well-tolerated. In May 2021, we signed a collaboration agreement, or the 2021 GSK Agreement, with GSK to expand our existing collaboration to include the research and development of new therapies for influenza and other respiratory viruses. The expanded collaboration, which builds on the agreement signed in 2020 to research and develop therapies for coronaviruses, provides GSK exclusive rights to collaborate with us on the development of potential best-in-class mAbs for the prevention or treatment of influenza. As part of the agreement, we and GSK will also engage in two additional research programs: 1) an expansion of the current functional genomics collaboration to include other respiratory virus targets; and 2) the development of up to three neutralizing mAbs identified using our antibody technology platform to target non-influenza pathogens during a three-year research period. Given the relatively low incidence of influenza during the COVID-19 pandemic, and the current rise in COVID-19 cases due to variants, we and GSK are currently evaluating potential timelines for advancing VIR-2482 and other influenza therapies covered under the expanded agreement. Under the terms of the agreement, GSK paid $345.0 million in a combination of an upfront payment and a further equity investment in us. For details regarding this agreement, see Note 6—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

HIV

VIR-1111, an investigational HIV T cell vaccine based on human cytomegalovirus, or HCMV, is currently in a Phase 1 trial. This proof-of concept trial is designed to test the hypothesis that this new approach can elicit potentially protective immune responses that differ from other HIV vaccines. If observed, this T cell vaccine could potentially have utility in additional types of infections and other challenging areas, including cancer. Initial clinical data are expected in the second half of 2021.

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 early clinical trials.

We have financed our operations primarily through sales of our common stock from our initial public offering and subsequent follow-on offering and convertible preferred securities and payments received under our grant and collaboration agreements. As of June 30, 2021, excluding restricted cash, we had $876.7 million in cash, cash equivalents and investments. Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of June 30, 2021 will enable us to fund our operations through at least the next 12 months from the issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future. Although we received an EUA for sotrovimab in May 2021, have recently entered into procurement agreements to supply sotrovimab and began recognizing revenue for sotrovimab, the extent of future revenue remains uncertain. We have not obtained regulatory approval for any other product candidates, and 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. Our net losses were $107.1 million and $108.4 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, we had an accumulated deficit of $774.3 million. 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 early clinical trials, and to a lesser extent, 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. Although we recently began recognizing revenue for sotrovimab and have a substantial deferred revenue under our 2021 GSK Agreement, we expect to continue to incur net operating losses for at least the next several years as the extent of future revenue remains uncertain. In particular, we expect our expenses and losses to increase as we continue our research and development efforts,

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advance our product candidates through preclinical and clinical development, seek regulatory approval, prepare for commercialization, as well as hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company. We also expect to increase the size of our administrative function to support the growth of our business. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

We are currently manufacturing product candidates from three of our platforms: antibodies, T cells and siRNAs. We have established our own internal chemistry, manufacturing and control capabilities and are working with contract development and manufacturing organizations, or CDMOs, to supply our early stage product candidates in the near-term. We have completed our internal capacity build in process development, analytical development, quality, manufacturing and supply chain. Specifically, our San Francisco, California and Portland, Oregon facilities include laboratories that support process development, production of HCMV research viral seed stock and selected quality control testing for our product candidates. We have established relationships with multiple CDMOs and have produced material to support preclinical studies and Phase 1 through Phase 3 clinical trials. Material for Phase 3 clinical trials and commercial supply will generally require large-volume, low-cost-of-goods production. For example, for our COVID-19 program, we and our partner GSK have executed manufacturing agreements with large-scale CDMOs to support future scale-up and capacity, particularly for potential commercialization.

COVID-19 Business Update

With the global spread of the current COVID-19 pandemic, we have implemented a number of plans and policies designed to address and mitigate the impact of the COVID-19 pandemic on our employees and our business. We continue to closely monitor the COVID-19 situation and will evolve our plans and policies as needed going forward. As a result of these developments, in March 2020, we implemented work-from-home policies for most of our employees. We have also implemented plans, which continue to evolve based on the current climate and response to the ongoing COVID-19 pandemic, to reopen our offices to allow employees to return when appropriate. Although these plans are based on a phased approach consistent with local government requirements, and focused on employee safety, and contemplate returning to remote work should new restrictions be implemented, there is uncertainty regarding recent phased reopening, which may be rolled back, and restrictions re-implemented. We are also working to provide our employees with the support they need to ensure continuity of business operations. We are working closely with our CDMOs to manage our supply chain activities and mitigate any potential disruptions to our clinical trial supplies as a result of the COVID-19 pandemic. If the COVID-19 pandemic persists for an extended period of time and begins to impact essential distribution systems, we could experience disruptions to our supply chain and operations, and associated delays in the manufacturing of clinical trial supply. For some of our clinical development programs, we are experiencing, and may continue to experience, a disruption or delay in our ability to initiate trial sites and enroll and assess patients. In addition, we rely on contract research organizations or other third parties to assist us with clinical trials, and we cannot guarantee that they will continue to perform their contractual duties in a timely and satisfactory manner as a result of the COVID-19 pandemic.

Our License, Collaboration and Grant Agreements

We have entered into grant, license and collaboration arrangements with various third parties. For details regarding these and other agreements, see Note 5—Grant Agreements and Note 6—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Components of Operating Results

Revenue

In May 2021, we received an EUA for sotrovimab in the U.S. and have recently entered into procurement agreements to supply sotrovimab and begun recognizing revenue from our profit share under our 2020 GSK Agreement. However, the extent of future revenue remains uncertain. We have not obtained regulatory approval for any other 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.

Our revenue consists of the following:

Collaboration revenue includes recognition of our profit share from the sales of sotrovimab pursuant to the 2020 GSK Agreement. Our contractual share of 72.5% from the sales of sotrovimab is based upon the revenue reported to us by GSK , net of cost of sales and allowable expenses (including distribution, selling and marketing expenses) in the period.

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Contract revenue includes recognition of the upfront fees from license rights issued to GSK and revenue generated from research and development services.

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

License revenue from a related party comprised of revenue related to Brii Biosciences Offshore Limited’s, or Brii Bio’s, exercise of its option to obtain exclusive rights to develop and commercialize compounds arising from VIR-2218 in greater China recognized in prior year.

Operating Expenses

Cost of Revenue

Cost of revenue currently represents payments due to certain of our third-party licensors, who are entitled to future royalties based on net sales of sotrovimab by us or our collaboration partners. 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 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 contingent consideration 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, contract research organizations, 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 for the foreseeable future as we advance our product candidates into and through preclinical studies and clinical trials 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. We have only recently received EUA for sotrovimab and we may never succeed in achieving BLA for sotrovimab or any of our product candidates. 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 sotrovimab or 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 studies and clinical trials, regulatory developments, our ongoing assessments as to each product candidate’s commercial potential and the impact of public health epidemics, such as the COVID-19 pandemic. In addition, 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 would 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;

per patient trial costs;

the number of trials required for approval;

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the number of sites included in the trials;

the countries in which the trials are conducted;

the length of time required to enroll eligible patients;

the number of patients that participate in the trials;

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 trials 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, and other expenses for outside professional services, including legal, audit and accounting services, and insurance costs. Personnel-related expenses consist of salaries, benefits and stock-based compensation.

We expect our selling, general and administrative expenses to increase substantially in absolute dollars for the foreseeable future as we continue to support our continued research and development activities, grow our business and commercialization activities for our EUA product or any of our product candidates, if approved. We also anticipate incurring additional expenses associated with operating as a public company, including increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to companies listed on a national securities exchange, additional insurance expenses, investor relations activities and other administrative and professional services.

Interest Income

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

Other Income (Expense), Net

Other income (expense), net consists of gains and losses from foreign currency transactions and the remeasurement of contingent consideration related to our acquisition of TomegaVax, Inc., or TomegaVax.

Provision for Income Taxes

Provision for income taxes consisted of international income tax.

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Results of Operations

Comparison of the Three and Six Months Ended June 30, 2021 and 2020

The following table summarizes our results of operations for the periods presented:

	Three Months Ended June 30,									Six Months Ended June 30,
	2021			2020			Change			2021			2020			Change
	(in thousands)
Revenue:
Collaboration revenue	$	5,333		$	—		$	5,333		$	5,333		$	—		$	5,333
Contract revenue		168,653			43,522			125,131			169,266			44,009			125,257
Grant revenue		3,082			719			2,363			4,453			5,950			(1,497	)
License revenue from a related party		—			22,747			(22,747	)		—			22,747			(22,747	)
Total revenue		177,068			66,988			110,080			179,052			72,706			106,346
Operating expenses:
Cost of revenue		1,144			—			1,144			1,152			—			1,152
Research and development		86,126			79,653			6,473			220,996			144,632			76,364
Selling, general and administrative		28,781			16,386			12,395			54,520			29,035			25,485
Total operating expenses		116,051			96,039			20,012			276,668			173,667			103,001
Income (loss) from operations		61,017			(29,051	)		90,068			(97,616	)		(100,961	)		3,345
Other income (expense):
Interest income		97			825			(728	)		261			2,580			(2,319	)
Other income (expense), net		752			(2,895	)		3,647			(9,494	)		(9,964	)		470
Total other income (expense)		849			(2,070	)		2,919			(9,233	)		(7,384	)		(1,849	)
Income (loss) before provision for income taxes		61,866			(31,121	)		92,987			(106,849	)		(108,345	)		1,496
Provision for income taxes		(53	)		(46	)		(7	)		(249	)		(62	)		(187	)
Net income (loss)	$	61,813		$	(31,167	)	$	92,980		$	(107,098	)	$	(108,407	)	$	1,309

Revenue

The increase in collaboration revenue for the three and six months ended June 30, 2021 compared to the same periods in 2020 was due to $5.3 million of revenue from our profit-sharing arrangement with GSK for the sale of sotrovimab under our 2020 GSK Agreement, for which there were no comparable revenues recognized in prior year. Our contractual share of 72.5% from the sales of sotrovimab is based upon the revenue reported to us by GSK, net of cost of sales and allowable expenses (including distribution, selling and marketing expenses) in the period.

The increase in contract revenue for the three and six months ended June 30, 2021 compared to the same periods in 2020 was primarily due to $168.3 million from deferred revenue related to the license granted to GSK upon execution of our 2021 GSK Agreement, partially offset by $43.3 million related to the license granted to GSK upon execution of our 2020 GSK Agreement in prior year.

The increase in grant revenue for the three months ended June 30, 2021 compared to the same period in 2020 was primarily due to the timing of research activities under the HIV and TB grants with the Bill & Melinda Gates Foundation. The decrease in grant revenue for the six months ended June 30, 2021 compared to the same period in 2020 was primarily due to a supplemental award received in the first quarter of 2020 under the HIV grant for reimbursement, in part, of prior period costs.

The decrease in license revenue from a related party was due to the $22.7 million of revenue related to Brii Bio’s exercise of its option to obtain exclusive rights to develop and commercialize compounds arising from VIR-2218 in greater China recognized in prior year.

Cost of Revenue

The increase in cost of revenue for the three and six months ended June 30, 2021 compared to the same periods in 2020 was due to third-party royalties owed based on the sales of sotrovimab, that received an EUA in May 2021, under our 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 periods presented:

	Three Months Ended June 30,							Six Months Ended June 30,
	2021		2020		Change			2021		2020		Change
	(in thousands)
Licenses, collaborations and contingent consideration	$	18,058	$	26,563	$	(8,505	)	$	71,071	$	59,558	$	11,513
Personnel		28,025		14,756		13,269			53,828		29,165		24,663
Contract manufacturing		4,322		19,959		(15,637	)		15,642		21,644		(6,002	)
Clinical costs		16,413		4,278		12,135			46,147		7,499		38,648
Other		19,308		14,097		5,211			34,308		26,766		7,542
Total research and development expenses	$	86,126	$	79,653	$	6,473		$	220,996	$	144,632	$	76,364

Comparison of three months ended June 30, 2021 and 2020

This increase in research and development expenses for the three months ended June 30, 2021 compared to the same period in 2020 was primarily due to the following factors:

personnel-related expenses increased by $13.3 million, which was primarily attributable to an increase in our headcount;

clinical costs increased by $12.1 million, which was primarily attributable to activities related to our sotrovimab and VIR-2218 clinical trials;

other research and development expenses increased by $5.2 million, which was primarily attributable to increases of $2.7 million in sublicense fees due under a license agreement, and $2.0 million in the allocation of facilities and other costs due to an increase in our headcount and higher lease expense;

contract manufacturing expense decreased by $15.6 million, which was primarily related to completion of manufacturing activities for our COVID-19 product candidates in the third quarter of 2020; and

licenses, collaborations and contingent consideration expenses decreased by $8.5 million, which was primarily attributable to decreases of $18.8 million related to the change in fair value of the contingent consideration from our acquisition of Humabs Biomed SA, or Humabs, $10.0 million payment to Alnylam Pharmaceuticals, Inc., or Alnylam, resulting from Brii Bio’s exercise of its option for VIR-2218 in the second quarter of 2020, and $1.3 million in costs under our collaboration agreement with Alnylam, or Alnylam Agreement, partially offset by an increase of $21.6 million in costs under our collaboration arrangements with GSK.

Comparison of six months ended June 30, 2021 and 2020

This increase in research and development expenses for the six months ended June 30, 2021 compared to the same period in 2020 was primarily due to the following factors:

clinical costs increased by $38.6 million, which was primarily attributable to activities related to our sotrovimab and VIR-2218 clinical trials;

personnel-related expenses increased by $24.7 million, which was primarily attributable to an increase in our headcount;

licenses, collaborations and contingent consideration expenses increased by $11.5 million, which was primarily attributable to increases of $40.1 million in costs under our collaboration arrangements with GSK and $15.0 million related to the change in fair value of the contingent consideration from our acquisition of Humabs, partially offset by decreases of $31.8 million due to achievement of the first development milestone under our Alnylam Agreement in the first quarter of 2020, $10.0 million payment to Alnylam resulting from Brii Bio's exercise of its option for VIR-2218 in the second quarter of 2020, and $1.8 million in collaboration costs under our Alnylam Agreement;

other research and development expenses increased by $7.5 million, which was primarily attributable to increases of $4.4 million in the allocation of facilities and other costs due to an increase in our headcount and higher lease expense, and $2.7 million in sublicense fees due under a license agreement; and

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contract manufacturing expense decreased by $6.0 million, which was primarily related to completion of manufacturing activities for our COVID-19 product candidates in the third quarter of 2020.

Selling, General and Administrative Expenses

The increase in selling, general and administrative expenses for the three and six months ended June 30, 2021 compared to the same periods in 2020 was primarily due to increases in personnel-related expenses related to additional headcount, external consulting services and recruiting expenses.

Interest Income

The decrease in interest income was primarily due to lower interest rates and higher amortization of premium on investment balances in the three and six months ended June 30, 2021 compared to the same periods in 2020.

Other Income (Expense), Net

The decrease in other expense for the three and six months ended June 30, 2021 compared to the same periods in 2020 was primarily related to the change in fair value of the contingent consideration related to our acquisition of TomegaVax.

Liquidity, Capital Resources and Capital Requirements

Sources of Liquidity

As of June 30, 2021, excluding restricted cash, we had $876.7 million in cash, cash equivalents and investments, and an accumulated deficit of $774.3 million. To date, we have financed our operations primarily through sales of our common stock from our initial public offering and follow-on offering; sales of our convertible preferred securities; and payments received under our grant and collaboration agreements.

In November 2020, we entered into a sales agreement, or the Sales Agreement, with Cowen and Company, LLC, or Cowen, pursuant to which we may from time to time offer and sell shares of our common stock for an aggregate offering price of up to $300.0 million, through or to Cowen, acting as sales agent or principal. As of June 30, 2021, no shares have been issued under the Sales Agreement.

In March 2021, in connection with the 2021 Preliminary Agreement with GSK, we issued 1,924,927 shares of our common stock to Glaxo Group Limited (an affiliate of GSK), or GGL, for an aggregate purchase price of approximately $120.0 million. In the second quarter of 2021, we received $225.0 million of upfront fee under the 2021 GSK Agreement.

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 early clinical trials, and to a lesser extent, general and administrative expenditures.

Future Funding Requirements

Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of June 30, 2021 will enable us to fund our operations through at least the next 12 months from the issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned. Moreover, it is particularly difficult to estimate with certainty our future expenses given the dynamic and rapidly evolving nature of our business and the COVID-19 pandemic environment generally. We will also 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 anticipate raising additional capital through the sale of our equity securities, incurring debt, entering into collaboration, licensing or similar arrangements with third parties, or receiving research contributions, grants or other sources of financing to fund our operations. 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. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. There can be no assurance that sufficient

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funds will be available to us on attractive terms or at all. If we are unable to obtain additional funding from these or other sources, it may be necessary to significantly reduce our rate of spending through reductions in staff and delaying, scaling back, or stopping certain research and development programs. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. In addition, the COVID-19 pandemic continues to rapidly evolve and has already resulted in a significant disruption of global financial markets. If the disruption persists and deepens, we could experience an inability to access additional capital, which could in the future negatively affect our capacity for certain corporate development transactions or our ability to make other important, opportunistic investments.

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. Our future funding requirements will depend on many factors, including, but not limited to:

the timing, progress and results of our ongoing preclinical studies and clinical trials of our product candidates;  

the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials of other product candidates that we may pursue;

our ability to establish and maintain collaboration, license, grant and other similar arrangements, and the financial terms of any such arrangements, including the timing and amount of any future milestone, royalty or other payments due thereunder;

the costs, timing and outcome of regulatory review of our product candidates;

the costs and timing of commercialization activities, including product manufacturing, marketing, sales and distribution, for our EUA product and any of our product candidates for which we receive marketing approval;

the amount of revenue received from commercial sales of our EUA product or any product candidates for which we receive marketing approval;

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

any expenses needed to attract, hire and retain skilled personnel;

the costs of operating as a public company; and

the extent to which we acquire or in-license other companies’ product candidates and technologies.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Six Months Ended June 30,
	2021		2020
	(in thousands)
Net cash provided by (used in):
Operating activities	$	50,529	$	(59,048	)
Investing activities		162,909		114,804
Financing activities		91,032		205,425
Net increase in cash and cash equivalents and restricted     cash and cash equivalents	$	304,470	$	261,181

Operating Activities

During the six months ended June 30, 2021, net cash provided by operating activities was $50.5 million. This consisted primarily of a net loss of $107.1 million, offset by a decrease in our net operating assets of $72.7 million and non-cash charges of $85.0 million. The change in our net operating assets of $72.7 million was primarily due to an increase in deferred revenue by $90.5 million driven by the upfront fee received under the 2021 GSK Agreement, and increase in accounts payable by $4.9 million, which was partially offset by decreases in accrued liabilities and other long-term liabilities by $22.3 million due to timing of payments. The non-cash charges of $85.0 million primarily consisted of $42.9 million for revaluation of contingent consideration, $36.5 million for stock-based compensation expense, and $2.5 million for depreciation and amortization.

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During the six months ended June 30, 2020, net cash used in operating activities was $59.0 million. This consisted primarily of a net loss of $108.4 million, an increase in our net operating assets of $2.6 million, and a payment on contingent consideration of $6.5 million related to a milestone achieved under our Humabs acquisition, partially offset by non-cash charges of $58.5 million. The change in our net operating assets of $2.6 million was primarily due to a decrease in deferred revenue of $4.0 million related to revenue recognized from the Bill & Melinda Gates Foundation grants, an increase of $2.2 million in prepaid expenses and other current assets related to a receivable under our 2020 GSK Agreement, a decrease in operating lease liabilities of $1.6 million due to lease payments, and a decrease in accounts payable of $1.3 million, which was partially offset by an increase in accrued liabilities and other long-term liabilities by $6.8 million due to higher research and development activities. The non-cash charges of $58.5 million primarily consisted of $27.8 million for revaluation of contingent consideration, $16.8 million for the change in fair value of the derivative liability under the Alnylam Agreement, $8.7 million for stock-based compensation expense, and $2.1 million for depreciation and amortization.

Investing Activities

During the six months ended June 30, 2021, net cash provided by investing activities was $162.9 million. This consisted primarily of $221.4 million in proceeds received from investments which matured during the period, partially offset by purchases of investments of $55.7 million and property and equipment of $2.7 million.

During the six months ended June 30, 2020, net cash provided by investing activities was $114.8 million. This consisted primarily of $247.2 million in proceeds received from investments which matured during the period, partially offset by purchases of investments of $129.9 million and property and equipment of $2.6 million.

Financing Activities

During the six months ended June 30, 2021, net cash provided by financing activities was $91.0 million. This consisted primarily of proceeds received from the issuance of our common stock to GGL of $85.2 million in March 2021 and from exercises of stock options of $5.9 million.

During the six months ended June 30, 2020, net cash provided by financing activities was $205.4 million. This consisted primarily of proceeds received from the issuance of our common stock to GGL of $206.7 million in April 2020 and from exercises of stock options of $2.4 million, partially offset by a payment of contingent consideration related to our Humabs acquisition of $3.5 million.

Contractual Obligations and Commitments

There have been no material changes from the contractual obligations previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

Off-Balance Sheet Arrangements

During the periods presented we did not have, nor do we currently have, any off-balance sheet arrangements as defined under the rules of the SEC. Brii Biosciences Limited, or Brii Bio Parent, and its wholly owned subsidiary, Brii Bio, are variable interest entities due to their reliance on future financing and insufficient equity at risk. However, we do not have the power to direct activities that most significantly impact the economic success of these entities and are not the primary beneficiary, and therefore we do not consolidate Brii Bio Parent or Brii Bio.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of our unaudited condensed 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.

There have been no significant changes in our critical accounting policies during the six months ended June 30, 2021, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. These risks primarily relate to interest rate sensitivities.

Interest Rate Risk

We had cash, cash equivalents and restricted cash and cash equivalents of $756.0 million as of June 30, 2021, which consisted of money market funds and bank time deposits. We also had short- and long-term investments of $134.8 million as of June 30, 2021. The primary objective of our investment activities is to preserve capital to fund our operations. We also seek to maximize income from our investments without assuming significant risk. Because our investments are primarily short-term in duration and our holdings in U.S. government treasury bonds mature prior to our expected need for liquidity, we believe that our exposure to interest rate risk is not significant, and a 1% movement in market interest rates would not have a significant impact on the total value of our portfolio. We had no debt outstanding as of June 30, 2021.

Foreign Currency

The functional currency of our foreign subsidiaries is the U.S. dollar. Monetary assets and liabilities of our foreign subsidiaries are translated into U.S. dollars at period-end exchange rates and non-monetary assets and liabilities are translated to U.S. dollars using historical exchange rates. Revenue and expenses are translated at average rates throughout the respective periods. As of the date of this Quarterly Report on Form 10-Q, we are exposed to foreign currency risk related to the operations of our Swiss and Australian subsidiaries and consequently the Swiss Franc and Australian dollar. Transaction gains and losses are included in other income (expenses), net on the condensed consolidated statements of operations and were not material for the six months ended June 30, 2021 and 2020.

Effects of Inflation

Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation has had a material effect on our results of operations during the periods presented.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our second fiscal quarter ended June 30, 2021 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.

Item 1A. Risk Factors.

An investment in shares of our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our common stock. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and/or prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and those we may make from time to time. In such an event, the market price of our common stock could decline and you may lose all or part of your investment. You should consider all of the risk factors described when evaluating our business.

Risks Related to Our Financial Position and Capital Needs

We have incurred significant net losses since inception and anticipate that we will continue to incur substantial net losses for the foreseeable future and may never achieve or maintain profitability.

Since inception in April 2016, we have incurred significant net losses and have never generated any significant revenue from product sales. Our net loss was $107.1 million and $108.4 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, we had an accumulated deficit of $774.3 million. Although we have recently entered into procurement agreements to supply sotrovimab and began to recognize revenue for sotrovimab, the extent of future revenue remains uncertain.

 We expect to continue to incur significant expenses and increasing net losses for the foreseeable future. Since inception, we have devoted substantially all of our efforts to identifying, researching and conducting preclinical and clinical activities of our product candidates, acquiring and developing our technology platforms and product candidates, organizing and staffing our company, business planning, raising capital and establishing our intellectual property portfolio. To date, we have only obtained Emergency Use Authorization, or EUA, for sotrovimab. It could be several years, if ever, before we are able to commercialize any of our other products. The net losses we incur may fluctuate significantly from quarter to quarter and year to year. To become and remain profitable, we must succeed in developing and eventually commercializing products that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of our current and future product candidates, obtaining regulatory approval, procuring commercial-scale manufacturing, marketing and selling any products for which we obtain regulatory approval (including through third parties), as well as discovering or acquiring and developing additional product candidates. We are only in the preliminary stages of most of these activities. We may never succeed in these activities and, even if we do, may never generate revenue that is sufficient to offset our expenses and achieve profitability.

Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will be able to achieve profitability. If we are required by regulatory authorities to perform studies and trials in addition to those currently expected, or if there are any delays in the initiation and completion of our clinical trials or the development of any of our product candidates, our expenses could increase.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

We are a clinical-stage company founded in April 2016 and our operations to date have been largely focused on identifying, researching and conducting preclinical and clinical activities of our product candidates, acquiring and developing our technology platforms and product candidates, organizing and staffing our company, business planning, raising capital and establishing our intellectual property portfolio. We have only recently received an EUA from the U.S. Food and Drug Administration, or the FDA, for sotrovimab and are in the early stages of seeking approval under a BLA and expanding our commercialization capabilities for sotrovimab. As an organization, we have not yet demonstrated an ability to obtain marketing approvals, successfully manufacture a

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commercial-scale product or conduct sales and marketing activities necessary for successful commercialization or arrange for a third party to conduct these activities on our behalf. Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history.

We currently have four technology platforms and eight product candidates in our development pipeline. We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives, including with respect to our technology platforms and product candidates.

We will 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 development programs or other operations.

As of June 30, 2021, excluding restricted cash, we had cash, cash equivalents and investments of $876.7 million. Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of June 30, 2021 will fund our current operating plans through at least the next 12 months from the issuance date of our consolidated financial statements for the period ended June 30, 2021. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned. Moreover, it is particularly difficult to estimate with certainty our future expenses given the dynamic and rapidly evolving nature of our business and the COVID-19 pandemic environment generally. We will also need to raise additional capital to complete the development and commercialization of our EUA product or 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. Our future capital requirements will depend on many factors, including:

the timing, progress and results of our ongoing preclinical studies and clinical trials of our product candidates;

the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials of other product candidates that we may pursue;  

our ability to establish and maintain collaboration, license, grant and other similar arrangements, and the financial terms of any such arrangements, including timing and amount of any future milestones, royalty or other payments due thereunder;

the costs, timing and outcome of regulatory review of our product candidates;

the costs and timing of commercialization activities, including product manufacturing, marketing, sales and distribution, for our EUA product and any of our product candidates for which we receive marketing approval;

the amount of revenue received from commercial sales of our EUA product or any product candidates for which we receive marketing approval;

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

any expenses needed to attract, hire and retain skilled personnel;

the costs of operating as a public company; and

the extent to which we acquire or in-license other companies’ product candidates and technologies.

The COVID-19 pandemic and the evolution of new and existing variants of COVID-19 has resulted in a significant disruption of global financial markets. If the disruption persists and deepens, we could experience an inability to access additional capital, which could in the future negatively affect our capacity for certain corporate development transactions or our ability to make other important, opportunistic investments. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether terminate our research and development programs or commercialization efforts, which may adversely affect our business, financial condition, results of operations and prospects. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through public or private equity or debt financings, third-party (including government) funding and collaborations and strategic alliances, or any combination of these approaches. To the extent that we raise additional capital through the sale of equity or convertible debt securities,

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your ownership interest in our company may be diluted and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt and equity financings, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as redeeming our shares, making investments, incurring additional debt, making capital expenditures, declaring dividends or placing limitations on our ability to acquire, sell or license intellectual property rights.

If we raise additional capital through future collaborations or strategic alliances, we may have to relinquish valuable rights to our intellectual property, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional capital when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise develop and market ourselves.

We received an EUA from the FDA for sotrovimab (previously VIR-7831). If the FDA revokes or terminates our EUA for sotrovimab for the early treatment of COVID-19, such as when the federally-declared COVID-19 public health emergency ends, we will be required to stop commercial distribution of sotrovimab unless we can obtain FDA approval for this product and its currently authorized uses.

Sotrovimab is currently made available pursuant to an EUA we received from the FDA on May 26, 2021 for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at risk for progression to severe COVID-19, including hospitalization or death. We cannot predict how long this EUA will remain effective for, and we may not receive advance notice from the FDA regarding revocation of our EUA. If our EUA is terminated or revoked, sotrovimab will no longer be available until and if we have obtained FDA approval of a biologics license application, or BLA. Changing policies and regulatory requirements could limit, delay or prevent further commercialization sotrovimab and could adversely impact our business, financial condition, results of operations and prospects.

Our near-term success is dependent on the successful roll-out and commercialization of sotrovimab for the early treatment of COVID-19. If we are unable to successfully roll-out and commercialize sotrovimab, our business, financial condition, results of operations and prospects may be adversely affected.

Our near-term success is dependent on the successful roll-out and commercialization of sotrovimab, which is our only currently available product. The commercial success of sotrovimab will depend on a number of factors, some of which are outside of our control, including the following: 

our ability to comply with all regulatory requirements applicable to our EUA, including applicable FDA marketing, manufacturing and post-market requirements and other requirements of our EUA;

whether we are required by the FDA or other similar regulatory authorities to conduct additional clinical trials or to modify the design of our current trials to support the approval of sotrovimab;

the receipt of additional marketing authorizations and approvals from the FDA and other similar regulatory authorities;

our ability to achieve and maintain compliance with all regulatory requirements applicable to sotrovimab;

perceptions by the public and members of the medical community, including physicians, as to the safety and efficacy of sotrovimab;

demand from the public and members of the medical community for sotrovimab;

the availability, perceived advantages, relative cost, relative convenience and relative efficacy of sotrovimab compared to other COVID-19 therapies;

the ability of sotrovimab to be effective in patients with COVID-19 and its variants;

positive or negative media coverage of sotrovimab;

the effectiveness of our marketing and sales efforts;

our ability to raise additional capital on acceptable terms, or at all, if needed to support the commercialization of sotrovimab;

the ability to enter into additional procurement contracts with government entities or be approved for inclusion in government stockpile programs, and our ability to meet our obligations under such contracts and programs;

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our reliance on GSK and other partners for development, commercialization and manufacturing of sotrovimab;

our ability to obtain, maintain and enforce our intellectual property rights;

our ability to maintain a continued supply of sotrovimab that meets our quality control requirements;

the ability of third-party manufacturing partners to meet demand in a timely manner, in accordance with our specifications, and in compliance with applicable regulatory requirements;

limitation on use or warnings required by the FDA;

our current and future arrangements with healthcare providers, physicians and third-party payors; and

availability of, or changes in, coverage or reimbursement rates for sotrovimab from government or other commercial or healthcare payors.

In addition, COVID-19 treatment standards are susceptible to rapid clinical developments. Sotrovimab may be rendered inferior or obsolete, even if it were to gain widespread market acceptance initially. If we are unable to successfully roll-out and commercialize sotrovimab, our business, financial condition, results of operations and prospects may be adversely affected.

We are committing substantial financial resources and personnel and making substantial capital commitments with third parties in furtherance of our pursuit of a potential therapy for COVID-19, the disease caused by the virus SARS-CoV-2, and we may be unable to secure sufficient capital, market demand or manufacturing capacity to successfully develop and commercialize a therapy that treats the virus in a timely manner, if at all.

In response to the ongoing outbreak of COVID-19, the disease caused by the virus SARS-CoV-2, we are pursuing various potential therapies to address the disease, including through mAbs using our antibody platform (in collaboration with several partners), such as sotrovimab and VIR-7832. Although we have received EUA from the FDA for sotrovimab for the early treatment of COVID-19, and positive scientific opinion from the European Medicines Agency, or EMA, related to the use of sotrovimab for the early treatment of COVID-19 and recently entered into procurement agreements to supply sotrovimab, we have not obtained regulatory approval for sotrovimab or any other product candidates, and we may be unable to successfully develop and commercialize a therapy that treats the virus in a timely manner, if at all.

We are also committing substantial financial resources, both internally and externally, and personnel to the development of a potential therapy for COVID-19, which may cause delays in or otherwise negatively impact our other development programs, despite uncertainties surrounding the market demand and role that antibody therapies will play in the treatment COVID-19. There are no assurances that there will be sufficient market demand for our COVID-19 therapies. Market demand and utilization of our COVID-19 therapies may be adversely impacted by factors such as the rollout of vaccines, the emergence of new viral variants, and the current challenges in the delivery and administration of mAbs to patients. 

Our ability to develop a successful therapy will also depend on the success of our manufacturing capabilities, for which we are dependent on third-party manufacturing organizations and which will require significant additional funding. Our current estimated aggregate commitments to GSK under two separate master services agreements with Samsung Biologics Co., Ltd. and WuXi Biologics (Hong Kong) Limited, or WuXi Biologics, for drug substance, drug product and raw material were approximately $365 million as of June 30, 2021, excluding the approximate “access fee” payable to Biogen, Inc. that is payable only if we use Biogen, Inc.’s technology. For additional information regarding our obligations under these agreements, see the section titled “Business—Our Collaboration, License and Grant Agreements” and “Business—Manufacturing—Manufacturing Agreements” in our Annual Report on Form 10-K for the year ended December 31, 2020, or 2020 Form 10-K.

While we believe securing such manufacturing capacity and technological expertise is essential to the potential success of our SARS-CoV-2 antibody development programs, such capital commitments plus any future commitments, in the aggregate, may, in the future, exceed our available cash and cash equivalents and investments. We may also need to enter into additional manufacturing arrangements in the future in order to create an effective supply chain for sotrovimab and our other COVID-19 product candidates that will adequately support demand. In the event that there is not enough demand for the manufacturing capacity that we have already secured or regulatory approval of our product candidates is delayed or unsuccessful, we may remain obligated to pay for such excess manufacturing capacity, which could adversely affect our business, financial condition, results of operations and prospects. We will need to raise substantial additional capital to fund the development of sotrovimab and our product candidates and meet our capital commitments to our manufacturing partners in connection therewith. There can be no assurance that sufficient funds will be available to us on attractive terms or at all and our ability to obtain additional capital could be adversely affected if there is a significant decline in the demand for our products or other significantly unfavorable changes in economic conditions. If we are unable to obtain additional funding from these or other sources, it may be necessary to significantly reduce our rate of spending through reductions in

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staff and delaying, scaling back, or stopping certain research and development programs. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. Our business could be negatively impacted by our allocation of significant resources to a global health threat that is unpredictable or against which our potential therapies, if developed, may not be partially or fully effective, and may ultimately prove unsuccessful or unprofitable. Furthermore, there are no assurances that we will secure significant supply commitments from governments or that our therapy will be approved for inclusion in government stockpile programs, which may be material to the commercial success of sotrovimab and our product candidates, either in the United States or abroad.

In addition, another party may be successful in producing a more efficacious therapy for SARS-CoV-2 or in producing a therapy that is easier to deliver and administer to patients in a timelier manner, which may also lead to the diversion of funding away from us and toward other companies or lead to decreased demand for our potential therapies. Numerous large and small pharmaceutical and biotechnology companies are developing COVID-19 therapy programs, including prophylactic vaccines, oral antivirals, immunomodulators, and antibodies some of which are further along in the development process than we are. For example, in November 2020, Regeneron Pharmaceuticals, Inc., or Regeneron, received EUA from the FDA for REGEN-COV (casirivimab with imdevimab), a cocktail of two monoclonal antibodies, which has been shown to reduce hospitalization and death risk by 70% in clinical trials. Other companies like AstraZeneca plc, or AstraZeneca, and Adagio Therapeutics, or Adagio, have been successful in securing government support and funding, respectively, and are in the process of developing antibody treatments that, if successful, could be effective against known viral variants and be administered via intramuscular, or IM, injection. There are also efforts by other companies in developing prophylactic vaccines against COVID-19. For example, in December 2020, Pfizer Inc. and Moderna, Inc. and in February 2021, Janssen Biotech Inc. received EUA from the FDA for their COVID-19 vaccines which have been proven to be 95%, 94% and 85% effective, respectively, in clinical trials. In addition, there are potential small molecule therapies being developed by others such as Merck & Co, Inc. These other entities may be more successful at developing, manufacturing or commercializing a therapy for COVID-19. Several of these other organizations are much larger than we are and have access to larger pools of capital, including U.S. government funding, and broader manufacturing infrastructure. There are no assurances that there will be sufficient market demand for our COVID-19 therapies, that we will secure U.S. government funding, that our manufacturing and supply chain infrastructure will remain uninterrupted and reliable, or that the third parties we rely on to manufacture our COVID-19 therapies will be able to satisfy our demand and not have stock-outs due to raw material shortages and/or greater than anticipated demand or quality issues given the operational challenges and raw material shortages that have been experienced during the COVID-19 pandemic, all of which may adversely impact our ability to commercialize a therapy for COVID-19. In addition, several organizations have already secured significant commitments from governments to purchase COVID-19 antibodies and vaccines. The success or failure of other entities, or perceived success or failure, may adversely impact our ability to obtain any future funding for our development and manufacturing efforts or to successfully commercialize a therapy for COVID-19. Additionally, the availability of superior or competitive therapies, or preventative measures such as vaccines, coupled with the transient nature of pandemics, could negatively impact or eliminate demand for our COVID-19 therapies. For additional information regarding our competition see the section below titled “—Risks Related to the Development and Commercialization — We face substantial competition, which may result in others developing or commercializing products before or more successfully than us.”

Risks Related to the Development and Commercialization

Our future success is substantially dependent on the successful clinical development, regulatory approval and commercialization of our EUA product and product candidates in a timely manner. If we are not able to obtain required regulatory approvals, we will not be able to commercialize our product candidates and our ability to generate product revenue will be adversely affected.

We have invested a significant portion of our time and financial resources in the development of our product candidates. Our business is dependent on our ability to successfully complete development of, obtain regulatory approval for, and successfully commercialize our EUA product and product candidates, if approved, in a timely manner. We may face unforeseen challenges in our product development strategy, and we can provide no assurances that our product candidates will be successful in clinical trials or will ultimately receive regulatory approval.

We initiated clinical trials for multiple product candidates, have obtained EUA for sotrovimab, but have not obtained BLA approval for any product candidate to date. We operate in a highly regulated field, and it is possible that any product candidate we may seek to develop in the future will not obtain regulatory approval.

Prior to obtaining approval to commercialize any product candidate in the United States or abroad, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidate is safe and effective for its intended uses. Results from preclinical studies and clinical trials can be interpreted in different ways. Even if we believe that the preclinical or clinical data for our product candidates are promising, such data may not be sufficient to support approval for further development, manufacturing or commercialization of our product candidates by the FDA and other regulatory authorities. The FDA may also require us to conduct additional preclinical studies or

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clinical trials for our product candidates either prior to or post-approval, or it may object to elements of our clinical development program, requiring their alteration.

Even if we eventually complete clinical testing and receive approval of a new drug application, or NDA, BLA, or foreign marketing application for our product candidates, the FDA or the comparable foreign regulatory authorities may grant approval or other marketing authorization contingent on the performance of costly additional clinical trials, including post-market clinical trials. The FDA or the comparable foreign regulatory authorities also may approve or authorize for marketing a product candidate for a more limited indication or patient population than we originally request, and the FDA or comparable foreign regulatory authorities may not approve or authorize the labeling that we believe is necessary or desirable for the successful commercialization of a product candidate. Any delay in obtaining, or inability to obtain, applicable regulatory approval or other marketing authorization would delay or prevent commercialization of that product candidate and would adversely impact our business and prospects.

In addition, the FDA or comparable foreign regulatory authorities may change their policies, adopt additional regulations or revise existing regulations or take other actions, which may prevent or delay approval of our future product candidates under development on a timely basis. Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain applicable regulatory approvals, increase the costs of compliance or restrict our ability to maintain any marketing authorizations we may have obtained.

Furthermore, even if we obtain regulatory approval for our product candidates, we may still need to develop a commercial organization, establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors, including government health administration authorities. If we are unable to successfully commercialize our product candidates or if there is an insufficient demand for our product candidates, we may not be able to generate sufficient revenue to continue our business.

The development of additional product candidates is risky and uncertain, and we can provide no assurances that we will be able to replicate our approach for other diseases.

A core element of our business strategy is to expand our product candidate pipeline. Efforts to identify, acquire or in-license, and then develop product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. Our efforts may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development, approved products or commercial revenue for many reasons.

We have limited financial and management resources and, as a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater market potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in circumstances under which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. In addition, we may not be successful in replicating our approach to development for other disease indications. If we are unsuccessful in identifying and developing additional product candidates or are unable to do so, our business may be harmed.

We are developing, and in the future may develop, other product candidates in combination with other therapies, which exposes us to additional risks.

We are developing VIR-2218 and VIR-3434 for the functional cure of hepatitis B virus, or HBV. Each of these product candidates has the potential to stimulate an effective immune response and also has direct antiviral activity against HBV. We believe that a functional cure for HBV will require an effective immune response, in addition to antiviral activity, based on the observation that severe immunosuppression can reactivate HBV disease. Monotherapy with each of these agents may provide a functional cure in some patients, while combination therapy may be necessary for others. We initiated a Phase 2 clinical trial to combine VIR-2218 with pegylated interferon-alpha and a Phase 2 clinical trial that combine VIR-2218 with VIR-3434. We are also evaluating additional combinations with other immunotherapy agents and direct acting antiviral agents. Even if any product candidate we develop were to receive marketing approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our product candidate. There is also a risk that safety, efficacy, manufacturing or supply issues could arise with these other existing therapies. This could result in our own products being removed from the market or being less successful commercially.

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We may also evaluate our future product candidates in combination with one or more other therapies that have not yet been approved for marketing by the FDA or similar regulatory authorities outside of the United States. We will not be able to market any product candidate we develop in combination with any such unapproved therapies that do not ultimately obtain marketing approval.

If the FDA or similar regulatory authorities outside of the United States do not approve these other drugs or revoke their approval of, or if safety, efficacy, manufacturing or supply issues arise with, the drugs we choose to evaluate in combination with any product candidate we develop, we may be unable to obtain approval.

Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials and we cannot assure you that any ongoing, planned or future clinical trials will lead to results sufficient for the necessary regulatory approvals and market authorizations.

Success in preclinical testing and earlier clinical trials does not ensure that later clinical trials will generate the same results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate. Success in preclinical studies and earlier clinical trials does not ensure that later efficacy trials will be successful, nor does it predict final results. Our product candidates may fail to show the desired characteristics in clinical development sufficient to obtain regulatory approval, despite positive results in preclinical studies or having successfully advanced through earlier clinical trials.

A trial design that is considered appropriate for regulatory approval includes a sufficiently large sample size with appropriate statistical power, as well as proper control of bias, to allow a meaningful interpretation of the results. If we do not conduct clinical trials with a large enough patient sample size, we may not achieve statistically significant results or the same level of statistical significance, if any, that would have been possible to achieve in a larger trial.

As an organization, we have limited experience designing clinical trials and may be unable to design and execute a clinical trial to support regulatory approval which could mean we will suffer setbacks. Any such setbacks could negatively impact our business, financial condition, results of operations and prospects.

Interim, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim, “top-line” or preliminary data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data is available. Differences between preliminary or interim data and final data could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly.

Clinical product development involves a lengthy and expensive process. We may incur additional costs and encounter substantial delays or difficulties in our clinical trials.

We may not commercialize, market, promote or sell any product candidate without obtaining marketing approval from the FDA or other comparable regulatory authority, and we may never receive such approvals. It is impossible to predict when or if any of our product candidates will prove effective or safe in humans and will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, is difficult to design and implement, can take many years to complete and is uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. We may experience numerous unforeseen events prior to, during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue from future product sales or other sources. In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional testing to bridge our modified product candidate to earlier versions. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates, if approved, or allow our competitors to bring competing products to market before we do, which could impair our ability

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to successfully commercialize our product candidates and may harm our business, financial condition, results of operations and prospects. 

Additionally, if the results of our clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with our product candidates, we may:

be delayed in obtaining marketing approval, or not obtain marketing approval at all;

obtain approval for indications or patient populations that are not as broad as intended or desired;

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

be subject to additional post-marketing testing requirements;

be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements;

have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a risk evaluation and mitigation strategy, or REMS;

be subject to the addition of labeling statements, such as warnings or contraindications;

be sued; or

experience damage to our reputation.

Our product development costs will also increase if we experience delays in testing or obtaining marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, need to be restructured or be completed on schedule, if at all.

Furthermore, our product candidates are based on certain innovative technology platforms, which makes it even more difficult to predict the time and cost of product candidate development and obtaining necessary regulatory approvals, particularly for our small interfering ribonucleic acid, or siRNA, and cytomegalovirus, or CMV, vector technologies. Relatively few siRNA product candidates have ever been tested in humans and to date very few have received regulatory approval and market authorizations. In addition, the compounds we are developing may not demonstrate in patients the chemical and pharmacological properties ascribed to them in preclinical studies, and they may interact with human biological systems in unforeseen, ineffective or harmful ways.

As part of our T cell platform, our approach is to use human cytomegalovirus, or HCMV, as a vaccine vector to potentially treat and prevent pathogens refractory to current vaccine technologies because HCMV may induce potent and long-lasting T cell responses to a broader range of epitopes than observed for other viral vaccines. Safety and toxicity trials for this technology have so far only been conducted in animal species, in which HCMV has limited ability to replicate. If our first clinical trial for VIR-1111 causes unexpected side effects that are not tolerable in the treatment of the relevant patient group, the further development of the product candidates and any other potential products based on HCMV-vector technology may be significantly limited or become impossible. Also, because our HCMV-vector technology is novel, regulatory agencies may lack experience with product candidates such as VIR-1111, which may lengthen the regulatory review process, increase our development costs and delay or prevent commercialization of our product candidates. In addition, our HCMV-vector technology utilizes live-attenuated, genetically-modified organisms for which the FDA, the EMA, and other comparable foreign regulatory authorities and other public health authorities, such as the Centers for Disease Control and Prevention and hospitals involved in clinical trials, have established additional safety and contagion rules and procedures, which could establish additional hurdles for the development, manufacture or use of our vectors. These hurdles may lead to delays in the conduct of clinical trials or in obtaining regulatory approvals for further development, manufacturing or commercialization of our product candidates.

Further, we, the FDA, a foreign regulatory authority or an institutional review board may suspend our clinical trials at any time if it appears that we or our collaborators are failing to conduct a trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice, or GCP, regulations, that we are exposing participants to unacceptable health risks, or if the FDA or foreign regulatory authority finds deficiencies in our INDs, or clinical trial applications, or CTAs, respectively, or the conduct of these trials. Moreover, we may not be able to file INDs to commence additional clinical trials on the timelines we expect because our filing schedule is dependent on further preclinical and manufacturing progress. Therefore, we cannot predict with any certainty the schedule for commencement and completion of future clinical trials. If we experience delays in the commencement or completion of our clinical trials, or if we terminate a clinical trial prior to completion, the commercial prospects of our product candidates could be negatively impacted, and our ability to generate revenue from our product candidates may be delayed.

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Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be delayed, made more difficult or rendered impossible by multiple factors outside our control.

Identifying and qualifying patients to participate in our clinical trials is critical to our success. We are developing sotrovimab and VIR-7832 for the treatment of COVID-19, VIR-2218 and VIR-3434 for the treatment of HBV, VIR-2482 for the prevention of influenza A, and VIR-1111 for the prevention of human immunodeficiency virus, or HIV. In particular, clinical trials for prophylaxis tend to require enrollment of a larger number of subjects than clinical trials for treatments. We may encounter difficulties in enrolling patients in our clinical trials, thereby delaying or preventing development and approval of our product candidates. Even once enrolled, we may be unable to retain a sufficient number of patients to complete any of our trials. Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data, the number and nature of competing treatments and ongoing clinical trials of competing therapies for the same indication, the proximity of patients to clinical sites and the eligibility criteria for the trial. In addition, enrollment and retention of patients in clinical trials could be disrupted by man-made or natural disasters, or public health pandemics or epidemics or other business interruptions, including, the current COVID-19 pandemic and future outbreaks of the disease.

Our efforts to build relationships with patient communities may not succeed, which could result in delays in patient enrollment in our clinical trials. Any negative results we may report in clinical trials of our product candidates may make it difficult or impossible to recruit and retain patients in other clinical trials of that same product candidate. Delays or failures in planned patient enrollment or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop our product candidates or could render further development impossible. In addition, we may rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will be limited in our ability to ensure their actual performance.

The continued spread of COVID-19 globally, or the evolution of new variants of COVID-19 that are more contagious, have more severe effects or are resistant to treatments or vaccinations, could adversely impact our preclinical or clinical trial operations in the U.S., including our ability to enroll and retain patients as well as CROs and clinical trial site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following any potential marketing approval.

During the conduct of clinical trials, patients report changes in their health, including illnesses, injuries and discomforts, to their doctor. Often, it is not possible to determine whether or not the product candidate being studied caused these conditions. Regulatory authorities may draw different conclusions and may require us to pause our clinical trials or require additional testing to confirm these determinations, if they occur.

In addition, it is possible that as we test our product candidates in larger, longer and more extensive clinical trials, or as use of these product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects or patients. Many times, side effects are only detectable after investigational products are tested in large-scale pivotal trials or, in some cases, after they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that any of our product candidates have side effects or cause serious or life-threatening side effects, the development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval may be revoked, which would harm our business, financial condition, results of operations and prospects.  

We are a party to strategic collaboration and license agreements pursuant to which we are obligated to make substantial payments upon achievement of milestone events and, in certain cases, have relinquished important rights over the development and commercialization of certain current and future product candidates. We also intend to explore additional strategic collaborations, which may never materialize or may require that we relinquish rights to and control over the development and commercialization of our product candidates.

We are a party to various strategic collaboration and license agreements that are important to our business and to our current and future product candidates pursuant to which we license a number of technologies to form our technology platforms. These agreements contain obligations that require us to make substantial payments in the event certain milestone events are achieved. We may in the future be required to make these payments, which could adversely affect our financial condition. In addition, we cannot be certain that we will achieve the results or benefits that justifies entering into these agreements. For additional information regarding these and other collaboration, license and grant agreements, see the section titled “Business—Our Collaboration, License and Grant Agreements” in our 2020 Form 10-K.

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A core element of our business strategy also includes continuing to acquire or in-license additional technologies or product candidates for the treatment and prevention of serious infectious diseases. As a result, we intend to periodically explore a variety of possible strategic collaborations or licenses in an effort to gain access to additional product candidates, technologies or resources.

At this time, we cannot predict what form such strategic collaborations or licenses might take in the future. We are likely to face significant competition in seeking appropriate strategic collaborators, and strategic collaborations and licenses can be complicated and time-consuming to negotiate and document. We may not be able to negotiate strategic collaborations on acceptable terms, or at all. We are unable to predict when, if ever, we will enter into any additional strategic collaborations or licenses because of the numerous risks and uncertainties associated with establishing them. Any delays in entering into new strategic collaborations or licenses related to our product candidates could delay the development and commercialization of our product candidates in certain geographies for certain indications, which would harm our business prospects, financial condition and results of operations.

Our current and future collaborations and licenses could subject us to a number of risks, including the following:

we may be required to undertake the expenditure of substantial operational, financial and management resources;

we may be required to assume substantial actual or contingent liabilities;

we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our product candidates;

strategic collaborators may select indications or design clinical trials in a way that may be less successful than if we were doing so;

strategic collaborators may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new version of a product candidate for clinical testing;

strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs;

disputes may arise between us and our strategic collaborators that result in costly litigation or arbitration that diverts management’s attention and consumes resources;

strategic collaborators may experience financial difficulties;

strategic collaborators may not properly maintain, enforce or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation; and

strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and may increase the cost of developing our product candidates.

Furthermore, license agreements we enter into in the future may not provide exclusive rights to use intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology and products. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses.

If the market opportunities for our product candidates are smaller than we believe they are or any approval we obtain is based on a narrower definition of the patient population, our business may suffer.

We currently focus our product development on product candidates for the treatment and prevention of serious infectious diseases. Our eligible patient population, pricing estimates and available coverage and reimbursement may differ significantly from the actual market addressable by our product candidates. Our estimates of the number of people who have these diseases, the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, and the market demand for our product candidates are based on our beliefs and analyses. These estimates have been derived from a variety of sources, including the scientific literature, patient foundations or market research, and may prove to be incorrect. Further, new trials may change the estimated incidence or prevalence of the diseases we are targeting. The number of patients may turn out to be lower than expected. Likewise, the potentially addressable patient population for each of our product candidates may be limited or may not be receptive to treatment with our product candidates, and new patients may become increasingly difficult to identify or access. Additionally, the availability of superior or competitive therapies from our competitors could negatively impact or eliminate market demand for our product candidates. If the market opportunities for our product candidates are smaller than we estimate, it could have an adverse effect on our business, financial condition, results of operations and prospects.  

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We face substantial competition, which may result in others developing or commercializing products before or more successfully than us.

The biopharmaceutical industry is characterized by rapidly advancing technologies, intense competition and an emphasis on proprietary products. We face potential competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. The availability of superior or competitive therapies, or preventative measures such as vaccines, coupled with the unpredictable nature of pandemics and the prevalence of new variants of COVID-19, could negatively impact or eliminate demand for our COVID-19 therapies. Product candidates that we successfully develop and commercialize may compete with existing therapies, including prophylactic vaccines, competing antibody therapies, small-molecule drugs, oral antivirals, and new therapies that may become available in the future. In addition, one or more of our competitors may be successful in producing a more efficacious therapy for SARS-CoV-2 and current and future variants or in producing a therapy that is easier to deliver and administer to patients in a timelier manner. 

Our commercialization potential could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than products that we may develop. The key competitive factors affecting the success of all our programs are likely to be efficacy, safety, convenience and timing. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. For example, there are FDA-approved treatments for COVID-19 including an intravenously administered antiviral, remdesivir, marketed by Gilead Sciences, Inc., which is FDA approved for the treatment of COVID-19 in hospitalized settings, and several treatments and prophylactic vaccines are available under EUA. Currently, the antibody combination of casirivimab and imdevimab by Regeneron are available under EUA, for intravenously administered regimen in the mild-to-moderate setting. Convalescent plasma is also available under EUA. Additionally, COVID-19 vaccines are available in the U.S. under EUA from Janssen Biotech, Inc., Moderna, Inc. and Pfizer Inc. (in partnership with BioNTech SE). Numerous large and small pharmaceutical and biotechnology companies are developing programs with various mechanisms of actions, including prophylactic vaccines, oral antivirals, immunomodulators, and antibodies. Companies with antibodies in clinical development include AbbVie, Inc., Adagio, AstraZeneca, Brii Bio, Celltrion Healthcare Co., Ltd., Eli Lilly and Regeneron. Companies with oral antivirals in clinical development include Merck & Co., Pfizer Inc., and Roche Holding AG,. Companies with prophylactic vaccines in clinical development include AstraZeneca, GSK, Novavax, Inc. and Sanofi S.A.

In addition, regulatory incentives to develop products for treatment of infectious diseases have increased interest and activity in this area and may lead to increased competition for clinical investigators and clinical trial subjects, as well as for future prescriptions, if any of our product candidates are successfully developed and approved.

Our competitors may have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific, sales, marketing and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Additional mergers and acquisitions may result in even more resources being concentrated in our competitors.

As a result of these factors, our competitors may achieve patent protection or obtain regulatory approval of their products before we are able to, which may limit our ability to develop or commercialize our product candidates. Our competitors may also develop therapies that are safer, more effective, more widely accepted or less expensive than ours, and may also be more successful than we are in manufacturing and marketing their products. These advantages could render our product candidates obsolete or non-competitive before we can recover the costs of such product candidates’ development and commercialization. For additional information regarding our competitors, see the section titled “Business—Competition” in our 2020 Form 10-K. 

Even if any product candidates receive marketing approval, they may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success.

Even if any product candidates receive marketing approval, they may fail to gain market acceptance by physicians, patients, third-party payors and others in the medical community. If such product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including but not limited to:

the convenience and ease of administration compared to alternative treatments and therapies;

the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

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the efficacy and potential advantages compared to alternative treatments and therapies;

the effectiveness of sales and marketing efforts;  

the strength of our relationships with patient communities;

the cost of treatment in relation to alternative treatments and therapies, including any similar generic treatments;

our ability to offer such product for sale at competitive prices;

the strength of marketing and distribution support;

the availability of third-party coverage and adequate reimbursement, and patients’ willingness to pay out-of-pocket in the absence of third-party coverage or adequate reimbursement;

the prevalence and severity of any side effects; and

any restrictions on the use of the product together with other medications.

If any of our product candidates are approved but fail to achieve market acceptance among physicians, patients, third-party payors and others in the medical community, we will not be able to generate significant revenue, which would compromise our ability to become profitable.

Even if we obtain regulatory approvals for our product candidates, they will remain subject to ongoing regulatory oversight.

Even if we obtain regulatory approval in a jurisdiction, the regulatory authority may still impose significant restrictions on the indicated uses or marketing of our product candidates, or impose ongoing requirements for potentially costly post-approval trials, post-market surveillance or patient or drug restrictions. Additionally, the holder of an approved BLA is required to comply with FDA rules and is subject to FDA review and periodic inspections, in addition to other potentially applicable federal and state laws, to ensure compliance with current good manufacturing practices, or cGMP, and adherence to commitments made in the BLA.

If we or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. Moreover, product labeling, advertising and promotion for any approved product will be subject to regulatory requirements and continuing regulatory review. For example, a company may not promote “off-label” uses for its drug products. An off-label use is the use of a product for an indication that is not described in the product’s FDA-approved label in the U.S. or for uses in other jurisdictions that differ from those approved by the applicable regulatory agencies. Physicians, on the other hand, may prescribe products for off-label uses. Although the FDA and other regulatory agencies do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment, they do restrict promotional communications from companies or their sales force with respect to off-label uses of products for which marketing clearance has not been issued. Failure to comply with such requirements, when and if applicable, could subject us to a number of actions ranging from warning letters to product seizures or significant fines, among other actions. For additional information regarding regulatory approval and ongoing regulatory oversight, see the section titled “Business—Government Regulation and Product Approval” in our 2020 Form 10-K.

Any government investigation of alleged violations of laws or regulations could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue.

If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be successful in commercializing them, if and when they are approved.

To successfully commercialize any product candidate that may result from our development programs, we will need to build out our sales and marketing capabilities, either on our own or with others. The establishment and development of our own commercial team or the establishment of a contract sales force to market any product candidate we may develop will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability, and have no experience as a company in commercializing products. Establishing sales and marketing capabilities will be particularly important to the commercial success of our product candidates that target diseases with large patient populations throughout the world. We may seek to enter into collaboration agreements with other entities to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If any current or future collaborators do not commit sufficient time or resources to commercialize our product candidates, or we are unable to develop the necessary capabilities on our own, we may be unable to generate sufficient revenue to sustain our business. We compete with many

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companies that currently have extensive, experienced and well-funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel, and will have to compete with those companies to recruit, hire, train and retain any of our own marketing and sales personnel. We will likely also face competition if we seek third parties to assist us with the sales and marketing efforts of our product candidates. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.

Even if we obtain and maintain approval for our product candidates from the FDA, we may never obtain approval outside the United States, which would limit our market opportunities.

Approval of a product candidate in the United States by the FDA does not ensure approval of such product candidate by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Sales of our product candidates outside the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a product candidate, comparable foreign regulatory authorities also must approve the manufacturing and marketing of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, including additional preclinical studies or clinical trials. In many countries outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for any product candidates, if approved, is also subject to approval. Obtaining approval for our product candidates in the European Union, or EU, from the European Commission following the opinion of the EMA if we choose to submit a marketing authorization application there, would be a lengthy and expensive process. Even if a product candidate is approved, the EMA may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Approval of certain product candidates outside of the United States, particularly those that target diseases that are more prevalent outside of the United States will be particularly important to the commercial success of such product candidates. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our product candidates in certain countries.

Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for our product candidates may be withdrawn. If we fail to comply with the applicable regulatory requirements, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed and our business, financial condition, results of operations and prospects could be harmed.

If we commercialize our product candidates outside the United States, a variety of risks associated with international operations could harm our business.

We intend to seek approval to market our product candidates outside the United States, and may also do so for future product candidates. If we market approved products outside the United States, we expect that we will be subject to additional risks in commercialization.

We have no prior experience in these areas. In addition, there are complex regulatory, tax, labor and other legal requirements imposed by many of the individual countries in which we may operate, with which we will need to comply. Many biopharmaceutical companies have found the process of marketing their products in foreign countries to be challenging.

Negative developments and negative public opinion of new technologies on which we rely may damage public perception of our product candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our product candidates.

The clinical and commercial success of our product candidates will depend in part on public acceptance of the use of new technologies for the prevention or treatment of human diseases. For example, we use CMV, a commonly occurring virus in humans, as a vaccine vector to prevent and treat pathogens refractory to current vaccine technologies. We also use CRISPR gene-editing technology as a research tool to systematically identify human genes that control infection.

Public perception may be influenced by claims that CMV technology is unsafe and products incorporating this technology may not gain the acceptance of the public or the medical community, or that CRISPR gene-editing technology is unethical or immoral. Adverse public attitudes may adversely impact our ability to enroll clinical trials. Moreover, our success will depend upon physicians specializing in our targeted diseases prescribing, and their patients being willing to receive, our product candidates as treatments in lieu of, or in addition to, existing, more familiar, treatments for which greater clinical data may be available. Any increase in negative perceptions of the technologies that we rely on may result in fewer physicians prescribing our products or may reduce the willingness of patients to utilize our products or participate in clinical trials for our product candidates. 

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Increased negative public opinion or more restrictive government regulations in response thereto, would have a negative effect on our business, financial condition, results of operations or prospects and may delay or impair the development and commercialization of our product candidates or demand for such product candidates. Adverse events in our preclinical studies or clinical trials or those of our competitors or of academic researchers utilizing similar technologies, even if not ultimately attributable to product candidates we may discover and develop, and the resulting publicity could result in increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of potential product candidates we may identify and develop, stricter labeling requirements for those product candidates that are approved, a decrease in demand for any such product candidates and a suspension or withdrawal of approval by regulatory authorities of our product candidates.

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidate that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in clinical trials and may face an even greater risk if we commercialize any product candidate that we may develop. If we cannot successfully defend ourselves against claims that any such product candidates caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

decreased demand for any product candidate that we may develop;

loss of revenue;

substantial monetary awards to trial participants or patients;

significant time and costs to defend the related litigation;

withdrawal of clinical trial participants;

increased insurance costs;

the inability to commercialize any product candidate that we may develop; and

injury to our reputation and significant negative media attention.

Any such outcomes could negatively impact our business, financial condition, results of operations and prospects.

Our insurance policies may be inadequate and potentially expose us to unrecoverable risks.

Although we maintain product liability insurance coverage, such insurance may not be adequate to cover all liabilities that we may incur. We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate. Insurance availability, coverage terms and pricing continue to vary with market conditions. We endeavor to obtain appropriate insurance coverage for insurable risks that we identify such as cybersecurity-related issues; however, we may fail to correctly anticipate or quantify insurable risks, we may not be able to obtain appropriate insurance coverage and insurers may not respond as we intend to cover insurable events that may occur. Conditions in the insurance markets relating to nearly all areas of traditional corporate insurance change rapidly and may result in higher premium costs, higher policy deductibles and lower coverage limits. For some risks, we may not have or maintain insurance coverage because of cost or availability.

Risks Related to Regulatory Compliance

The regulatory pathways for our product candidates targeting SARS-CoV-2, the virus that causes COVID-19, are continually evolving, and may result in unexpected or unforeseen challenges.

Our product candidates targeting SARS-CoV-2, the virus that causes COVID-19, are in various development stages. We were granted an EUA on May 26, 2021 for sotrovimab for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at risk for progression to hospitalization or death. Sotrovimab is also currently in a Phase 2 clinical trial evaluating an IM formulation. In the second quarter of 2021, we initiated an additional Phase 3 clinical trial evaluating an IM formulation of sotrovimab and a Phase 1b/2a clinical trial for VIR-7832, also a SARS-CoV-2-neutralizing mAb. The speed at which companies and institutions are acting to create and test many therapeutics and vaccines for COVID-19 is unusual, and evolving or changing plans or priorities within the FDA, including changes based on new knowledge of COVID-19 and how the disease affects the human body, may significantly affect the regulatory timelines for our COVID-19 product candidates. Results from our continued development and planned clinical trials may raise new questions and require us to redesign proposed clinical trials, including revising proposed endpoints or adding new clinical trial sites or cohorts of subjects. As part of these ongoing discussions, the FDA may require us to conduct additional preclinical studies

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and/or clinical trials than we originally anticipated, which could result in significant delay in our development program for these product candidates.

The FDA has the authority to grant an EUA to allow unapproved medical products to be used in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when, based on the totality of scientific evidence, there is evidence of effectiveness of the medical product, and there are no adequate, approved, and available alternatives. Our EUA for sotrovimab, for example, allows us to commercialize sotrovimab prior to FDA approval. However, the FDA may revoke an EUA where it is determined that the underlying health emergency no longer exists or warrants such authorization, and we cannot predict how long, if ever, an EUA would remain in place. Such revocation could adversely impact our business in a variety of ways, including if one of our COVID-19 product candidates, such as sotrovimab, is not yet approved by the FDA and if we and our commercialization and manufacturing partners have invested in the commercialization and manufacturing of such product candidate under an EUA.

If any of our future small molecule product candidates obtain regulatory approval, additional competitors could enter the market with generic versions of such products, which may result in a material decline in sales of affected products.

Under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, a pharmaceutical manufacturer may file an abbreviated new drug application, or ANDA, seeking approval of a generic version of an approved, small molecule innovator product. Under the Hatch-Waxman Act, a manufacturer may also submit an NDA under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act that references the FDA’s prior approval of the small molecule innovator product. A 505(b)(2) NDA product may be for a new or improved version of the original innovator product. The Hatch-Waxman Act also provides for certain periods of regulatory exclusivity, which preclude FDA approval (or in some circumstances, FDA filing and review) of an ANDA or 505(b)(2) NDA. In addition to the benefits of regulatory exclusivity, an innovator NDA holder may have patents claiming the active ingredient, product formulation or an approved use of the drug, which would be listed with the product in the FDA publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” known as the Orange Book, see the section titled “—Risk Related to Our Intellectual Property— Patent terms may be inadequate to protect our competitive position on our product candidates or any products approved in the future for an adequate amount of time and additional competitors could enter the market with generic or biosimilar versions of such products.”.

Accordingly, if any of our future small molecule product candidates are approved, competitors could file ANDAs for generic versions of these products or 505(b)(2) NDAs that reference our products. If competitors are able to obtain marketing approval for generics referencing our small molecule product candidates, such competitive products may be able to immediately compete with us in each indication for which our product candidates may have received approval. For additional information regarding competition, see the section titled “Business—Competition” in our 2020 Form 10-K.

Any biologic, or large molecule, product candidates for which we intend to seek approval may face competition sooner than anticipated.

If we are successful in achieving regulatory approval to commercialize any biologic product candidate faster than our competitors, such product candidates may face competition from biosimilar products. In the United States, large molecule product candidates are regulated by the FDA as biologic products subject to approval under the BLA pathway. The Biologics Price Competition and Innovation Act of 2009, or BPCIA, creates an abbreviated pathway for the approval of biosimilar and interchangeable biologic products following the approval of an original BLA. For additional information regarding biosimilars and exclusivity, see the section titled “Business—Government Regulation and Product Approval—Biosimilars and Exclusivity” in our 2020 Form 10-K.

If competitors are able to obtain marketing approval for biosimilars referencing our large molecule product candidates, if approved, such products may become subject to competition from such biosimilars, with the attendant competitive pressure and potential adverse consequences. Such competitive products may be able to immediately compete with us in each indication for which our product candidates may have received approval. For additional information regarding competition, see the section titled “Business—Competition” in our 2020 Form 10-K.

Our relationships with customers, physicians, and third-party payors are subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and other healthcare laws and regulations. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Healthcare providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of our EUA product and will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals,

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principal investigators, consultants, customers and third-party payors subject us to various federal and state fraud and abuse laws and other healthcare laws.

These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our EUA product and additional product candidates, if approved. For additional information regarding these laws, see the section titled “Business—Government Regulation and Product Approval” in our 2020 Form 10-K. Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations will likely be costly. It is possible that governmental authorities will conclude that our business practices, including our relationships with physicians and other healthcare providers, some of whom are compensated in the form of stock options for consulting services provided, may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government-funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our operations.  

If the physicians or other providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to significant civil, criminal or administrative sanctions, including exclusions from government-funded healthcare programs. Even if resolved in our favor, litigation or other legal proceedings relating to healthcare laws and regulations may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development, manufacturing, sales, marketing or distribution activities. Uncertainties resulting from the initiation and continuation of litigation or other proceedings relating to applicable healthcare laws and regulations could have an adverse effect on our ability to compete in the marketplace.

Coverage and adequate reimbursement may not be available for our EUA product and any product candidates that we commercialize, if approved, which could make it difficult for us to sell profitably.

Market acceptance and sales of our EUA product and any product candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement for these product and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and other private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. While no uniform policy for coverage and reimbursement exists in the United States, third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for our EUA product and any product candidates that we develop will be made on a payor-by-payor basis. Therefore, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage, and adequate reimbursement, for the product. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs and biological products, or formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products. In addition, because our EUA product and certain of our product candidates are physician-administered, separate reimbursement for the product itself may or may not be available. Instead, the administering physician may only be reimbursed for providing the treatment or procedure in which our product is used.

Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for our EUA product or any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, our EUA product or any product for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only at limited levels, we may not be able to successfully commercialize our EUA product or any product candidates that we develop.

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Healthcare legislative reform measures may have a negative impact on our business, financial condition, results of operations and prospects.

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our EUA product or any product candidates for which we obtain marketing approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare

We expect that additional U.S. federal healthcare reform measures will be adopted in the future, particularly in light of the new Presidential administration, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our current or any future product candidates or additional pricing pressures. It is possible that additional governmental action is taken in response to the COVID-19 pandemic. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively the ACA, is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Thus, the ACA will remain in effect in its current form. Additionally, In August 2011, the President signed into law the Budget Control Act of 2011, as amended, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which began in 2013 and, following passage of subsequent legislation, including the Bipartisan Budget Act of 2018, will continue through 2030 unless additional Congressional action is taken. However, COVID-19 relief support legislation suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2021. Further, in February 2021, the FDA issued guidance strongly recommending that individual monoclonal antibody products be developed with the expectation that they will be combined with one or more monoclonal antibody products that bind to different epitopes to minimize the risk of losing activity against emergent variants. This type of government action could have a negative impact on our business, financial condition, results of operations and prospectus. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United States or any other jurisdiction. If we or any third parties we may engage are slow or unable to adapt to changes in existing or new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our current or any future product candidates we may develop may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability. For additional information regarding other healthcare legislative reform measures, see the section titled “Business—Government Regulation and Product Approval—Healthcare Reform” in our 2020 Form 10-K.

We expect that these and other healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for our EUA product and any approved product, which could have an adverse effect on demand for our EUA product and product candidates. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.

We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act and other anti-bribery and anti-money laundering laws in the countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies and their employees and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We interact with officials and employees of government agencies and government-affiliated hospitals, universities and other organizations. In addition, we may engage third-party intermediaries to promote our clinical research activities abroad or to obtain necessary permits, licenses and other regulatory approvals. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities.

While we have policies and procedures to address compliance with such laws in the United States, we cannot assure you that all of our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Detecting, investigating and resolving actual or alleged violations can require a significant diversion of time, resources and attention from senior management. In addition, noncompliance with anti-corruption, anti-bribery or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail

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in any possible civil or criminal litigation, our business, financial condition, results of operations and prospects could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Enforcement actions and sanctions could further harm our business, financial condition, results of operations and prospects.

Risks Related to Our Dependence on Third Parties

We intend to rely on third parties to produce clinical and commercial supplies of our product candidates.

We are currently manufacturing material for product candidates of three different modalities: mAbs, HCMV-based vaccines and siRNAs. Except for limited process development and quality control testing capabilities in certain of our facilities, we do not own or operate facilities for product manufacturing, storage and distribution, or testing. We are dependent on third parties to manufacture the clinical supplies of our current and any future product candidates. We have established relationships with multiple contract development and manufacturing organizations, or CDMOs, that have produced material to support our preclinical, Phase 1, 2, and 3 clinical trials. We have limited experience manufacturing our product candidates on a commercial scale, and we do not yet have sufficient information to reliably estimate the cost of the commercial manufacturing of our future product candidates. Certain of our product candidates may have to compete with existing and future products, such as the annual flu vaccine or any current or future COVID-19 vaccine, that may have a lower price point. The actual cost to manufacture our product candidates could materially and adversely affect the commercial viability of our product candidates.

The facilities used by our contract manufacturers to manufacture our product candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our NDA or BLA to the FDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturing partners for compliance with the cGMP requirements. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, we will not be able to secure and/or maintain regulatory approval for our product candidates. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. Any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates.

We also intend to rely on third-party manufacturers to supply us with sufficient quantities of our product candidates to be used, if approved, for commercialization. There is, however, no assurance that our third-party manufacturers will meet our working assumptions of manufacturing titer and yield per batch of our product candidates. Any reduction in anticipated manufacturing titer and yield delay may adversely impact our ability to meet market demand for any approved product. Furthermore, if we are not able to produce supply at low enough costs, it would negatively impact our ability to generate revenue, harm our reputation, and could have an adverse effect on our business, financial condition, results of operations and prospects. 

In addition, we currently rely on foreign CDMOs, including a CDMO in China which we rely on for the clinical development, manufacturing, and commercialization of our proprietary antibodies developed for SARS-CoV-2, and will likely continue to rely on foreign CDMOs in the future. Foreign CDMOs may be subject to trade restrictions and other foreign regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement of such material or have an adverse effect on our ability to secure significant commitments from governments to purchase our potential therapies.

Additionally, the biopharmaceutical industry in particular in China is strictly regulated by the Chinese government. Changes to Chinese regulations or government policies affecting biopharmaceutical companies are unpredictable and may have a material adverse effect on our collaborators in China which could have an adverse effect on our business, financial condition, results of operations and prospects. Evolving changes in China’s economic, political, and social conditions and the uncertainty around China’s relationship with other governments, such as the United States and the United Kingdom could also negatively impact our ability to manufacture our product candidates for our planned clinical trials or have an adverse effect on our ability to secure government funding , which could adversely affect our financial condition and cause us to delay our clinical development programs.

Further, our reliance on third-party suppliers and manufacturers entails risks to which we would not be exposed to if we manufactured product candidates ourselves, including:

delay or inability to procure or expand sufficient manufacturing capacity;

delays in process development;

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issues related to scale-up of manufacturing;

excess manufacturing capacity due to insufficient market demand for our product candidates and responsibility for the associated costs;

costs and validation of new equipment and facilities required for scale-up;

inability of our third-party manufacturers to execute technology transfers, manufacturing procedures and other logistical support requirements appropriately;

inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all;  

breach, termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us;

reliance on single sources for product components;

lack of qualified backup suppliers for those components that are currently purchased from a sole or single-source supplier;

lack of ownership to the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates;

disruptions to operations of our third-party manufacturers or suppliers by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier;

disruptions caused by man-made or natural disasters or public health pandemics or epidemics, including, for example, the ongoing COVID-19 pandemic; and

carrier disruptions or increased costs that are beyond our control.

We cannot be sure that single source suppliers for our product components will remain in business or that they will not be purchased by one of our competitors or another company that is not interested in continuing to produce these components for our intended purpose. In addition, the lead time needed to establish a relationship with a new supplier can be lengthy and we may experience delays in meeting demand in the event we must switch to a new supplier. The time and effort to qualify a new supplier could result in additional costs, diversion of resources or reduced manufacturing yields, any of which would negatively impact our operating results.

Furthermore, there are a limited number of suppliers and manufacturers that supply synthetic siRNAs. Alnylam is currently supplying clinical material for our VIR-2218 Phase 1/2 clinical trial through its CDMOs. We will assume responsibility for technology transfer and manufacturing ahead of any Phase 3 clinical trials for VIR-2218. Alnylam currently relies on a limited number of CDMOs for our supply of synthetic siRNAs. There are risks inherent in pharmaceutical manufacturing that could affect the ability of Alnylam and Alnylam’s CDMOs to meet our delivery time requirements or provide adequate amounts of synthetic siRNAs to meet our needs. Included in these risks are potential synthesis and purification failures and/or contamination during the manufacturing process, as well as other issues with the CDMO’s facility and ability to comply with the applicable manufacturing requirements, including use of the proper raw material components, which could result in unusable product. This would cause delays in our manufacturing timelines and ultimately delay our clinical trials and potentially put at risk commercial supply, as well as result in additional expense to us. To fulfill our siRNA requirements, we may need to secure alternative suppliers of synthetic siRNAs and such alternative suppliers are limited and may not be readily available, or we may be unable to enter into agreements with them on reasonable terms and in a timely manner.

In addition, manufacturers may have little or no experience with viral vector products and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our HCMV vector-based product candidates. The challenges to HCMV-based vaccine manufacturing include the large size of the virus, which precludes terminal sterile filtration, and the attenuation of the engineered human virus, which dramatically reduces high growth yields during manufacturing. To address these challenges, we have made significant internal investments in process development and scale-up, largely funded by grants from the Bill & Melinda Gates Foundation. We have established a cGMP process in support of Phase 1 and Phase 2 clinical trials that has been successfully transferred and executed at two CDMOs specializing in live vaccine manufacturing (IDT Biologika and Advanced Bioscience Laboratories, Inc.). However, the existing process will require scale-up for later stages of clinical development and commercial supply.

Any of these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize our current or any future product candidates once approved. Some of these events could be the basis for FDA action, including injunction, request for recall, seizure or total or partial suspension of production.

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Changes in U.S. and international trade policies, particularly with respect to China, may adversely impact our business and operating results.

The U.S. government has made statements and taken actions in recent years that have led to certain changes and may lead to additional changes to U.S. and international trade policies, including imposing several rounds of tariffs affecting certain products manufactured in China. In March 2018, the Trump administration announced the imposition of tariffs on steel and aluminum entering the United States and in June 2018 announced further tariffs targeting goods imported from China. Both China and the United States have each imposed tariffs indicating the potential for further trade barriers. It is unknown whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry, and it is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives. While we have only recently started commercialization of sotrovimab under EUA, any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, may affect the demand for our drug products, the competitive position of our drug products, and import or export of raw materials used in our drug development, particularly with respect to raw materials that we import from China, including pursuant to our manufacturing arrangements with WuXi Biologics. If any new tariffs, export controls, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition and results of operations.

Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental, health and safety laws and regulations, which can be expensive and restrict how we do, or interrupt our, business.

Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the generation, storage, use and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds and wastes. We and our manufacturers and suppliers are subject to environmental, health and safety laws and regulations governing, among other matters, the use, manufacture, generation, storage, handling, transportation, discharge and disposal of these hazardous materials and wastes and worker health and safety. In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We cannot eliminate the risk of contamination or injury, which could result in an interruption of our commercialization efforts, research and development efforts and business operations, damages and significant cleanup costs and liabilities under applicable environmental, health and safety laws and regulations. We also cannot guarantee that the safety procedures utilized by our third-party manufacturers for handling and disposing of these materials and wastes generally comply with the standards prescribed by these laws and regulations. We may be held liable for any resulting damages costs or liabilities, which could exceed our resources, and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental, health and safety laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. Failure to comply with these environmental, health and safety laws and regulations may result in substantial fines, penalties or other sanctions. We do not currently carry hazardous waste insurance coverage.

We rely on third parties to conduct, supervise and monitor our preclinical studies and clinical trials, and if those third parties perform in an unsatisfactory manner, it may harm our business.

We do not currently have the ability to independently conduct any clinical trials. We intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our preclinical studies and clinical trials, and we expect to have limited influence over their actual performance. We rely on CROs to monitor and manage data for our clinical programs, as well as the execution of future preclinical studies. We expect to control only certain aspects of our CROs’ activities. Nevertheless, we will be responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We and our CROs are required to comply with the good laboratory practices, or GLPs, and GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development. The regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. Although we rely on CROs to conduct GCP-compliant clinical trials, we remain responsible for ensuring that each of our GLP preclinical studies and clinical trials is conducted in accordance with its investigational plan and protocol and applicable laws and regulations. If we or our CROs fail to comply with GCPs, the clinical data generated in our clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. Accordingly, if our CROs fail to comply with these regulations or fail to recruit a sufficient number of subjects, we may be required to repeat clinical trials, which would delay the regulatory approval process. 

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Our reliance on third parties to conduct clinical trials will result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Communicating with CROs and other third parties can be challenging, potentially leading to mistakes as well as difficulties in coordinating activities. If our CROs do not successfully carry out their contractual duties or obligations, fail to meet expected deadlines or fail to comply with regulatory requirements, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for, or successfully commercialize, any product candidate that we develop. As a result, our financial results and the commercial prospects for any product candidate that we develop would be harmed, our costs could increase, and our ability to generate revenue could be delayed. While we will have agreements governing their activities, our CROs will not be our employees and we will not control whether or not they devote sufficient time and resources to our future clinical and preclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other product development activities which could harm our business. We face the risk of potential unauthorized disclosure or misappropriation of our intellectual property by CROs, which may reduce our trade secret protection and allow our potential competitors to access and exploit our proprietary technology.

If our relationship with any of these CROs terminates, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. Switching or adding additional CROs involves substantial cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can negatively impact our ability to meet our desired clinical development timelines. While we intend to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a negative impact on our business, financial condition, results of operations and prospects.

In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA. The FDA may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial. The FDA may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval or rejection of our marketing applications by the FDA and may ultimately lead to the denial of marketing approval of our product candidates.

Risks Related to Our Intellectual Property

If we breach our license agreements or any of the other agreements under which we acquired, or will acquire, the intellectual property rights to our product candidates, we could lose the ability to continue the development and commercialization of the related product candidates.

We license a number of technologies to form our antibody platform and T cell platform, and the technology we use in our siRNA platform is licensed from Alnylam. We have also developed certain product candidates using intellectual property licensed from third parties. A core element of our business strategy includes continuing to acquire or in-license additional technologies or product candidates for the treatment and prevention of serious infectious diseases.

If we fail to meet our obligations under these agreements, our licensors may have the right to terminate our licenses. If any of our license agreements are terminated, and we lose our intellectual property rights under such agreements, this may result in a complete termination of our product development and any commercialization efforts for the product candidates which we are developing under such agreements. While we would expect to exercise all rights and remedies available to us, including seeking to cure any breach by us, and otherwise seek to preserve our rights under such agreements, we may not be able to do so in a timely manner, at an acceptable cost or at all. We may also be subject to risks related to disputes between us and our licensors regarding the intellectual property subject to a license agreement.

If we are unable to obtain and maintain patent protection for our product candidates and technology, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our product candidates and technology may be adversely affected.

Our success depends, in large part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to our product candidates and our technology. We and our licensors have sought, and intend to seek, to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates and our technology that are important to our business.

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The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has, in recent years, been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or product candidates or which effectively prevent others from commercializing competitive technologies and product candidates. Because patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued, we cannot be certain that we or our licensors were the first to file a patent application relating to any particular aspect of a product candidate. Furthermore, if third parties have filed such patent applications with a priority date before March 16, 2013, an interference proceeding in the United States can be initiated by such third party, or by the U.S. Patent and Trademark Office, or USPTO, itself, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications.

The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. In addition, changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Similarly, changes in patent law and regulations in other countries or jurisdictions, changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we own or have licensed or that we may obtain in the future.

We or our licensors have not pursued or maintained, and may not pursue or maintain in the future, patent protection for our product candidates in every country or territory in which we may sell our products, if approved. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from infringing our patents in all countries outside the United States, or from selling or importing products that infringe our patents in and into the United States or other jurisdictions.

Moreover, the coverage claimed in a patent application can be significantly reduced before the patent is issued and its scope can be reinterpreted after issuance. Even if the patent applications we license or own do issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products in a non-infringing manner.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and product candidates. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. In addition, if the breadth or strength of protection provided by the patents and patent applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates.

Furthermore, our owned and in-licensed patents may be subject to a reservation of rights by one or more third parties. For example, the research resulting in certain of our owned and in-licensed patent rights and technology was funded in part by the U.S. government. As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a nonexclusive license authorizing the government to use the invention for noncommercial purposes. These rights may permit the government to disclose our confidential information to third parties and to exercise march-in rights to use or allow third parties to use our licensed technology. The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government-funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could harm our competitive position, business, financial condition, results of operations and prospects.

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Obtaining and maintaining our patent rights depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. In addition, periodic maintenance fees, renewal fees, annuity fees and various other government fees on patents and/or patent applications will have to be paid to the USPTO and various government patent agencies outside the United States over the lifetime of our owned and licensed patents and/or applications and any patent rights we may own or license in the future. We rely on our service providers or our licensors to pay these fees. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and we are also dependent on our licensors to take the necessary action to comply with these requirements with respect to our licensed intellectual property. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, nonpayment of fees and failure to properly legalize and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering our product candidates or technologies, we may not be able to use such patents and patent applications or stop a competitor from marketing products that are the same as or similar to our product candidates, which would have an adverse effect on our business. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market and this circumstance could harm our business.

In addition, if we fail to apply for applicable patent term extensions or adjustments, we will have a more limited time during which we can enforce our granted patent rights. In addition, if we are responsible for patent prosecution and maintenance of patent rights in-licensed to us, any of the foregoing could expose us to liability to the applicable patent owner.

Patent terms may be inadequate to protect our competitive position on our product candidates or any products approved in the future for an adequate amount of time and additional competitors could enter the market with generic or biosimilar versions of such products.

Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after its first effective filing date. Although various extensions may be available, the life of a patent and the protection it affords is limited. In addition, although upon issuance in the United States a patent’s life can be increased based on certain delays caused by the USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. If we do not have sufficient patent life to protect our products, our business and results of operations could be adversely affected.

Given the amount of time required for the development, testing and regulatory review of our product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. We expect to seek extensions of patent terms in the United States and, if available, in other countries where we have or will obtain patent rights. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the normal expiration of the patent, provided that the patent is not enforceable for more than 14 years from the date of drug approval, which is limited to the approved indication (or any additional indications approved during the period of extension). Furthermore, only one patent per approved product can be extended and only those claims covering the approved product, a method for using it or a method for manufacturing it may be extended. However, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

Also, there are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the FDA publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” known as the Orange Book. We may be unable to obtain patents covering our product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. Even if we submit a patent for listing in the Orange Book, the FDA may decline to list the patent, or a manufacturer of generic drugs may challenge the listing. If one of our product candidates is approved and a patent covering that product candidate is not listed in the Orange Book, a manufacturer of generic drugs would not have to provide advance notice to us of any abbreviated new drug application, or ANDA, filed with the FDA to obtain permission to sell a generic version of such product candidate. We cannot predict which, if any, patents in our current portfolio or patents we may obtain in the future will be eligible for listing in the Orange Book, how any generic competitor would address such patents, whether we would sue on any such patents or the outcome of any such suit.

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For additional information regarding the Hatch-Waxman Act and exclusivity, see the section titled “Business—Government Regulation and Product Approval—Hatch-Waxman Amendments and Exclusivity” in our 2020 Form 10-K.

We may not be successful in securing or maintaining proprietary patent protection for products and technologies we develop or license. Moreover, if any of our owned or in-licensed patents are successfully challenged by litigation, the affected product could immediately face competition and its sales would likely decline rapidly. Any of the foregoing could harm our competitive position, business, financial condition, results of operations and prospects.

Third parties may initiate legal proceedings alleging that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business.

Our commercial success depends, in part, upon our ability and the ability of others with whom we may collaborate to develop, manufacture, market and sell our current and any future product candidates and use our proprietary technologies without infringing, misappropriating or otherwise violating the proprietary rights and intellectual property of third parties. The biotechnology and pharmaceutical industries are characterized by extensive and complex litigation regarding patents and other intellectual property rights. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others. We may in the future become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our current and any future product candidates and technology, including interference proceedings, derivation proceedings, post grant review and inter partes review before the USPTO. If we are found to infringe a third party’s valid and enforceable intellectual property rights, we could be required to obtain a license from such third party to continue developing, manufacturing and marketing our product candidate(s) and technology. Under any such license, we would most likely be required to pay various types of fees, milestones, royalties or other amounts. Moreover, we may not be able to obtain any required license on commercially reasonable terms or at all, and if such an instance arises, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business. Parties making claims against us may also seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates.

The licensing or acquisition of third-party intellectual property rights is a competitive area, and more established companies may also pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or product candidate, which could have an adverse effect on our business, financial condition, results of operations and prospects. Furthermore, even if we were able to obtain a license, it could be nonexclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and it could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease developing, manufacturing and commercializing the infringing technology or product candidate. We may also have to redesign our products, which may not be commercially or technically feasible or require substantial time and expense. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent or other intellectual property right. We may be required to indemnify collaborators or contractors against such claims. A finding of infringement could prevent us from manufacturing and commercializing our current or any future product candidates or force us to cease some or all of our business operations, which could harm our business. Even if we are successful in defending against such claims, litigation can be expensive and time-consuming and would divert management’s attention from our core business. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common stock.

Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects.

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We may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.

Certain of our employees, consultants or advisors are currently, or were previously, employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees, consultants and advisors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, we may in the future be subject to claims by our former employees or consultants asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Although it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own, and we cannot be certain that our agreements with such parties will be upheld in the face of a potential challenge or that they will not be breached, for which we may not have an adequate remedy. The assignment of intellectual property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.

We may be involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe, misappropriate or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorized use, we may be required to file legal claims, which can be expensive and time-consuming and are likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities.

In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our owned or licensed patents at risk of being invalidated or interpreted narrowly and could put our owned or licensed patent applications at risk of not issuing. The initiation of a claim against a third party might also cause the third party to bring counterclaims against us, such as claims asserting that our patent rights are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. Third parties may also challenge inventorship through a derivation proceeding or other litigation proceeding challenging inventorship, which can include claims of misappropriation of intellectual property, filing a patent application without authorization of the true inventor, not listing inventors, or listing non-inventors as inventors. The outcome following legal assertions of invalidity and unenforceability is unpredictable. We cannot be certain that there is or will be no invalidating prior art, of which we and the patent examiner were unaware during prosecution. For the patents and patent applications that we have licensed, we may have limited or no right to participate in the defense of any licensed patents against challenge by a third party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of any future patent protection on our current or future product candidates. Such a loss of patent protection could harm our business.

We may not be able to prevent, alone or with our licensors, misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license, or if the license offered as a result is not on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail and, even if successful, may result in substantial costs and distract our management and other employees.

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common stock.

We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating or from successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have an adverse effect on our ability to compete in the marketplace.

We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.

Filing, prosecuting and defending patents covering our current and any future product candidates and technology platforms in all countries throughout the world would be prohibitively expensive. Competitors may use our technologies in jurisdictions where we or our licensors have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we may obtain patent protection but where patent enforcement is not as strong as that in the United States. These products may compete with our products in jurisdictions where we do not have any issued or licensed patents, and any future patent claims or other intellectual property rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our intellectual property and proprietary rights generally. Proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

If the U.S. government, the World Trade Organization, or WTO, or other governmental body imposes an intellectual property rights waiver, our ability to successfully commercialize our COVID-19 product candidates and protect our related technology could be adversely affected.

The WTO is currently considering a waiver of intellectual property rights for COVID-19 vaccines and the U.S. government recently took a stance in support of the waiver. The current proposal is for a temporary waiver of intellectual property rights that cover COVID-19 vaccines, however, the ultimate timing and scope of the waiver, if approved, is unknown. The scope and timing of such waiver will likely be subject to extensive negotiations given the complexity of the matter, which may result in prolonged uncertainty, which could adversely affect our business. If a waiver is approved and covers COVID-19 treatments or prophylactics, such as sotrovimab and VIR-7832, our ability to successfully commercialize our COVID-19 product candidates and protect our related technology could be adversely affected.

The current waiver proposal is the result of public health concerns from the COVID-19 pandemic and an effort to make vaccines more widely available worldwide. This proposal may also lead to similar waivers of intellectual property rights in the future in connection with other public health pandemics or epidemics or other situations of public health concern. Given that our business is focused on treating and preventing infectious diseases, there is a risk that our business and our ability to protect our technology could be adversely affected in situations beyond COVID-19.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. Because we rely on third

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parties to help us discover, develop and manufacture our current and any future product candidates, or if we collaborate with third parties for the development, manufacturing or commercialization of our current or any future product candidates, we must, at times, share trade secrets with them. We may also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development partnerships or similar agreements.

We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of these parties to use or disclose our confidential information, including our trade secrets. We also enter into invention or patent assignment agreements with our employees, advisors and consultants. Despite our efforts to protect our trade secrets, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. Moreover, we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our confidential information or proprietary technology and processes. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. If any of the collaborators, scientific advisors, employees, contractors and consultants who are parties to these agreements breaches or violates the terms of any of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a result. Moreover, if confidential information that is licensed or disclosed to us by our partners, collaborators or others is inadvertently disclosed or subject to a breach or violation, we may be exposed to liability to the owner of that confidential information. Enforcing a claim that a third-party illegally or unlawfully obtained and is using our trade secrets, like patent litigation, is expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets.

In addition, our competitors may independently develop knowledge, methods and know-how equivalent to our trade secrets. Competitors could purchase our products and replicate some or all of the competitive advantages we derive from our development efforts for technologies on which we do not have patent protection. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure could have an adverse effect on our business, financial condition, results of operations and prospects.

We also seek to preserve the integrity and confidentiality of our data and other confidential information by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and detecting the disclosure or misappropriation of confidential information and enforcing a claim that a party illegally disclosed or misappropriated confidential information is difficult, expensive and time-consuming, and the outcome is unpredictable. Further, we may not be able to obtain adequate remedies for any breach. In addition, our confidential information may otherwise become known or be independently discovered by competitors, in which case we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.

Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.

We expect to rely on trademarks as one means to distinguish any of our product candidates that are approved for marketing from the products of our competitors. Additionally, the process of obtaining trademark protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable trademark applications at a reasonable cost or in a timely manner or obtain trademark protection in all jurisdictions that we consider to be important to our business. Once we select trademarks and apply to register them, our trademark applications may not be approved. Third parties may oppose our trademark applications or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks, and we may not have adequate resources to enforce our trademarks.

In addition, any proprietary product name we propose to use with our current or any other product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

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The exercise by the Bill & Melinda Gates Foundation of its licenses to certain of our intellectual property and its development and commercialization of products that we are also developing and commercializing could have an adverse impact on our market position.

We entered into a letter agreement with the Bill & Melinda Gates Foundation, or the Gates Agreement, in December 2016 in connection with the Bill & Melinda Gates Foundation’s investment in us through the purchase of $20.0 million of shares of our convertible preferred stock. We are obligated to use the proceeds of the Bill & Melinda Gates Foundation’s investment in furtherance of its charitable purposes to perform certain activities set forth in the Gates Agreement. For additional information regarding our obligations under the Gates Agreement, see the section titled “Business—Our Collaboration, License and Grant Agreements—Letter Agreement with the Bill & Melinda Gates Foundation” in our 2020 Form 10-K.

If we fail to comply with (i) our obligations to use the proceeds of the Bill & Melinda Gates Foundation’s investment for the purposes described in the paragraph above and to not use such proceeds for specified prohibited uses, (ii) specified reporting requirements or (iii) specified applicable laws, or if we materially breach our specified global access commitments (any such failure or material breach, a Specified Default), we will be obligated to redeem or arrange for a third party to purchase all of our stock purchased by the Bill & Melinda Gates Foundation under the Gates Agreement, at the Bill & Melinda Gates Foundation’s request, at a price equal to the greater of (1) the original purchase price plus 5% compounding interest or (2) the fair market value as determined by an independent third-party, which amount may increase in the event of certain underwritten public offerings of our common stock or a sale of our company or all of our material assets relating to the Gates Agreement. Additionally, if a Specified Default occurs or if we are unable or unwilling to continue the HIV program, tuberculosis program or, if applicable, the mutually agreed additional program (except for scientific or technical reasons), or if we institute bankruptcy or insolvency proceedings, then the Bill & Melinda Gates Foundation will have the right to exercise a non-exclusive, fully-paid license (with the right to sublicense) under our intellectual property to the extent necessary to use, make and sell products arising from such programs, in each case solely to the extent necessary to benefit people in the developing countries in furtherance of the Bill & Melinda Gates Foundation’s charitable purpose.

The exercise by the Bill & Melinda Gates Foundation of any of its non-exclusive licenses to certain of our intellectual property (or its right to obtain such licenses), and its development and commercialization of product candidates and products that we are also developing and commercializing, could have an adverse impact on our market position.

Risks Related to Our Business Operations, Employee Matters and Managing Growth

We are highly dependent on our key personnel, and if we are not able to retain these members of our management team or recruit and retain additional management, clinical and scientific personnel, our business will be harmed.

We are highly dependent on our management, scientific and medical personnel, including our Chief Executive Officer, Dr. Scangos. Our key personnel may currently terminate their employment with us at any time. The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives. Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees.

Recruiting and retaining other senior executives, qualified scientific and clinical personnel and, if we progress the development of any of our product candidates, commercialization, manufacturing and sales and marketing personnel, will be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our product candidates. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high-quality personnel, our ability to pursue our growth strategy will be limited.

Our future performance will also depend, in part, on our ability to successfully integrate newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management. Our failure to integrate these individuals and create effective working relationships among them and other members of management could result in inefficiencies in the development and commercialization of our product candidates, harming future regulatory approvals, sales of our product candidates and our results of operations.

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We have in the past and may in the future acquire or invest in other companies or technologies, which could divert our management’s attention, result in dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.

We have in the past and may in the future seek to acquire or invest in additional businesses and/or technologies that we believe complement or expand our product candidates, enhance our technical capabilities or otherwise offer growth opportunities in the United States and internationally. The pursuit of potential acquisitions and investments may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

For example, we acquired TomegaVax, Inc., or TomegaVax, in September 2016, Humabs BioMed SA, or Humabs, in August 2017, Agenovir Corporation, or Agenovir, in January 2018 and Statera Health, LLC, or Statera, in February 2018. Realizing the benefits of these acquisitions will depend upon the successful integration of the acquired technology into our existing and future product candidates. Furthermore, we may not be able to integrate the acquired personnel, operations and technologies successfully, or effectively manage the combined business following the acquisition. We also may not realize the anticipated benefits from any acquired business. We face many risks in connection with acquisitions and investments, whether or not consummated. A significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. If our acquisitions do not yield expected returns, we may in the future be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our business, financial condition, results of operations and prospects.

In addition, in connection with our acquisitions of TomegaVax, Humabs and Agenovir, we are required to make future contingent payments upon the achievement of certain milestones. We may in the future be required to make these payments, which could adversely affect our financial condition. For additional information regarding our obligations under these agreements, see the section titled “Business—Our Acquisition Agreements” in our 2020 Form 10-K.

Furthermore, acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business fails to meet our expectations, our business, financial condition, results of operations and prospects may suffer. We cannot assure you that we will be successful in integrating the businesses or technologies we may acquire. The failure to successfully integrate these businesses could have a material adverse effect on our business, financial condition, results of operations and prospects.

We expect to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

As of June 30, 2021, we had 367 full-time employees. As the clinical development of our product candidates progresses, we also expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, development, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution. In addition, we also expect to hire additional personnel in order to operate as a public company. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities, and continue to recruit and train additional qualified personnel all within the context of the rapidly evolving global pandemic of COVID-19. We continue to closely monitor the COVID-19 situation and will evolve our expansion plans as needed. As a result of the global pandemic, the majority of our workforce has been working from home since March 2020. Despite this, we must continue to effectively integrate, develop and motivate a growing number of new employees, and maintain the beneficial aspects of our corporate culture. We have implemented plans to reopen our offices to allow employees to return when appropriate. Although these plans are consistent with local government requirements, and focused on employee safety, and contemplate returning to remote work should the COVID-19 situation change, there is uncertainty regarding the long-term impact that the COVID-19 pandemic has had on the nature of the office environment and remote working, which could present operational and workplace culture challenges as we seek to expand our organization. The expansion of our operations may lead to significant costs and may divert our management and business development resources. We may not be able to effectively manage the expansion of our operations, recruit and train additional qualified personnel, or succeed at effectively integrating employees that have joined during the global pandemic. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.  

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our CDMOs, CROs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, public health pandemics or epidemics (including, for example, the ongoing COVID-19 pandemic), and other natural or man-made disasters or

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business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

Our ability to develop our product candidates could be disrupted if our operations or those of our suppliers are affected by man-made or natural disasters or other business interruptions. Our corporate headquarters are located in California near major earthquake faults and fire zones. The ultimate impact on us, our significant suppliers and our general infrastructure of being located near major earthquake faults and fire zones and being consolidated in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major earthquake, fire or other natural disaster.

Our business could be materially adversely affected by the effects of health pandemics or epidemics, including the current outbreak of COVID-19 pandemic and future outbreaks of the disease.

Our business could be materially adversely affected by the effects of health pandemics or epidemics, including the current COVID-19 pandemic, the multiple SARS-CoV-2 variants that have further complicated the fight to subdue the global pandemic and any future outbreaks of the disease. The COVID-19 pandemic has resulted in travel restrictions, quarantines orders and other restrictions by governments to reduce the spread of the disease. As a result, the majority of our workforce has been working from home since March 2020.

The effects of the restrictions related to the COVID-19 pandemic and our work-from-home policies, including the evolving nature of such policies, may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. In addition, due to the COVID-19 pandemic and our remote workforce, we have experienced an increased risk to our information technology assets and data. We have implemented plans to reopen our offices when appropriate. We may face several challenges or disruptions upon a return back to the workplace, including re-integration challenges by our employees and distractions to management related to such transition. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

Quarantines, shelter-in-place and similar government orders, or the perception that such orders or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at third-party manufacturing facilities in the United States and other countries, or the availability or cost of materials, which would disrupt our supply chain. In particular, some of our CDMOs that we use to supply our early-stage product candidates are located in China, where the COVID-19 outbreak was first reported and where there have been government-imposed quarantines. While many of these materials may be obtained by more than one supplier, including suppliers outside of China, port closures and other restrictions resulting from the coronavirus outbreak in the region or other regions may disrupt our supply chain or limit our ability to obtain sufficient materials for our product candidates.

In addition, our clinical trials have been affected by the ongoing COVID-19 pandemic. Site initiation and patient enrollment has been and may be further delayed due to prioritization of hospital resources toward the COVID-19 pandemic, and some patients may not be able or willing to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, has been delayed or disrupted, which has adversely impacted our clinical trial operations.

The continued spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic, may be difficult to assess or predict, it has already resulted in significant disruption of global financial markets. This disruption, if sustained or recurrent, could make it more difficult for us to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

The global pandemic of COVID-19 and the evolution of new and existing variants of COVID-19 that are resistant to existing treatments or vaccinations continue to rapidly evolve. The ultimate impact of the ongoing COVID-19 pandemic or a similar health pandemic or epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole. These effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

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If our information systems, or those maintained on our behalf, fail or suffer security breaches, such events could result in, without limitation, the following: a significant disruption of our product development programs; an inability to operate our business effectively; unauthorized  access to or disclosure of the personal information we process; and other adverse effects on our business, financial condition, results of operations and prospects.

Our computer and information technology systems, cloud-based computing services and those of our current and any future collaborators, service providers and other parties upon whom we rely are potentially vulnerable to malware, computer viruses, denial-of-service attacks (such as credential stuffing), ransomware attacks, user error or malfeasance, data corruption, cyber-based attacks, natural disasters, public health pandemics or epidemics (including, for example, the ongoing COVID-19 pandemic), terrorism, war and telecommunication and electrical failures that may result in damage to or the interruption or impairment of key business processes, or the loss or corruption of our information, including intellectual property, proprietary business information and personal information collectively, Sensitive Information. We may also experience server malfunction, software or hardware failures, supply-chain cyber-attacks, loss of data or other computer assets and other similar issues. We have recently experienced security breaches of our information technology systems, such as through business email compromises. The techniques used to sabotage or to obtain unauthorized access to information systems, and networks in which cyber threat actors store data or through which they transmit data change frequently and we may be unable to implement adequate preventative measures. Any significant system failure, accident or security breach could have a material adverse effect on our business, financial condition and operations.

We may be required to expend significant resources (including financial), fundamentally change our business activities and practices, or modify our operations, including our clinical trial activities, or information technology in an effort to protect against security breaches and to mitigate, detect, and remediate actual and potential vulnerabilities. Relevant laws, regulations, industry standards and contractual obligations, may require us to implement specific security measures or use industry-standard or reasonable measures to protect against security breaches. The costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, data loss or corruption, delays, cessation of service and other harm to our business and our competitive position. If the information technology systems of our third-party vendors become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring. Although we maintain cybersecurity insurance coverage, such insurance may not be adequate to cover all liabilities that we may incur. Furthermore, if a security breach were to occur and cause interruptions in our operations, it could result in a disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other proprietary information or other similar disruptions.

For example, we and one of our third-party vendors have experienced social engineering schemes designed to gain access to our systems, including recent business email compromises through phishing attacks, and may be a target of other phishing attacks, social engineering attacks or other cyber-attacks in the future. If a data security breach affects our or third parties’ systems upon which we rely, corrupts our data or results in the unauthorized disclosure or release of personally identifiable information, our reputation could be materially damaged or our operations, disrupted. In addition, such a breach may require notification to governmental agencies, supervisory bodies, credit reporting agencies, the media, individuals, collaborators or others pursuant to various federal, state and foreign data protection, privacy and security laws, regulations and guidelines, industry standards, our policies and our contracts, if applicable. Such laws may include the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the Health Information Technology for Economic and Clinical Health Act, or HITECH. Under these laws specifically, notice of certain security breaches must be made to affected individuals, the Secretary of the Department of Health and Human Services, or the HHS, and for extensive breaches, to the media or state attorneys general. Such a notice could further harm our reputation and our ability to compete. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to a material adverse effect on our reputation, business, or financial condition. Furthermore, a data security breach could result in fines, increased costs or loss of revenue and we could incur liability (such as through regulatory fines and penalties as well as private claims), our competitive position could be harmed and the further development and commercialization of our product candidates could be delayed. Additionally, federal, state and foreign laws and regulations can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties and significant legal liability, if our information technology security efforts fail. 

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We receive, process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations, liability and risks related to privacy, security, and data protection, and our actual or perceived failure to comply with such obligations could lead to government enforcement actions (that could include fines and penalties), a disruption of our clinical trials or commercialization of our products, private litigation, harm to our reputation, or other adverse effects on our business or prospects.

We receive, process, store and use personal information and other data about our clinical trial participants, employees, partners and others. We are, or may become, subject to numerous domestic and foreign laws and regulations regarding privacy, data protection, and data security, industry standards, as well as policies, contracts and other obligations that apply to the processing of personal information by us and on our behalf, the scope of which is changing, subject to differing applications and interpretations and may be inconsistent among countries, or conflict with other rules. We strive to comply with all applicable data protection requirements and obligations; however new laws, policies, codes of conduct and legal obligations may arise, continue to evolve, be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and conflict with one another. Any failure or perceived failure by us or third parties working on our behalf to comply with applicable data protection requirements may result in governmental enforcement actions (including fines, penalties, judgments, settlements, additional reporting requirements and/or oversight, temporary or permanent bans on all or some processing of personal information, orders to destroy or not use personal information, imprisonment of company officials and public censure), civil claims, litigation, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, operations and financial performance, interrupt or stop clinical trials, limit our ability to develop or commercialize our products, or require us to revise or restructure our operations. With substantial uncertainty over the interpretation and application of these laws, regulations and other obligations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in our efforts to do so. For additional information regarding these laws, see the section titled “Business—Government Regulation and Product Approval—Privacy Laws” in our 2020 Form 10-K.

Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.

We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and commercial partners. Misconduct by these parties could include intentional failures, reckless and/or negligent conduct or unauthorized activities that violates (i) the laws and regulations of FDA and other regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities, (ii) manufacturing standards, (iii) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad and (iv) laws that require the true, complete and accurate reporting of financial information or data. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Such misconduct also could involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, creating fraudulent data in our preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation. It is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. Additionally, we are subject to the risk that a person or government could allege such fraud or other misconduct, even if none occurred. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government-funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our operations, any of which could have a negative impact on our business, financial condition, results of operations and prospects.

Our ability to use our net operating losses, or NOLs, to offset future taxable income may be subject to certain limitations.

We have incurred substantial losses since inception and have no assurances that we will become profitable in the near future, if ever. As of December 31, 2020, we had net operating loss carryforwards of $483.7 million for federal tax purposes and $216.8 million for state tax purposes. If not utilized, federal carryforwards will begin expiring in 2035 and state carryforwards will begin expiring in 2031. Our ability to use our federal and state net operating losses to offset potential future taxable income is dependent upon our generation of future taxable income before any expiration dates of the net operating losses, and we cannot predict with certainty when, or whether, we will generate sufficient taxable income to use all of our net operating losses.

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In general, under Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. We may have experienced ownership changes in the past or as a result of the IPO and may experience ownership changes as a result of future offerings and/or subsequent changes in our stock ownership (some of which shifts are outside our control). In addition, Agenovir has experienced at least one ownership change in the past resulting in a limitation under Section 382 of the Code, which has been accounted for in calculating our available NOL carryforwards. As a result, if, and to the extent that we earn net taxable income, our ability to use our pre-change NOLs to offset such taxable income may be subject to limitations.

The Tax Act and the Coronavirus Aid, Relief and Economic Security Act include, among other things, changes to U.S. federal tax rates and the rules governing NOL carryforwards. For example, NOLs arising in tax years ending after December 31, 2017 can be carried forward indefinitely, but the deductibility of such federal NOLs may be limited to 80% of current year taxable income for tax years beginning on or after January 1, 2021. Deferred tax assets for NOLs will need to be measured at the applicable tax rate in effect when the NOL is expected to be utilized. The changes in the carryforward periods, as well as the new limitation on use of NOLs may impact our ability to utilize our NOLs to offset taxable income in the future. Because we have been generating taxable losses since inception, we do not expect any changes resulting from the new NOL provision to the current tax benefit and valuation allowance.

Risks Related to Ownership of Our Common Stock

Our financial condition and results of operations may fluctuate from quarter to quarter and year to year, which makes them difficult to predict.

We expect our financial condition and results of operations to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.

The market price of our common stock has been, and in the future, may be, volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

Our stock price has been, and in the future, may be, subject to substantial volatility. From October 11, 2019, our first day of trading on The Nasdaq Global Select Market, through July 30, 2021, the closing price of our stock ranged from $11.83 per share to $83.07 per share. As a result of the volatility in our stock price, our stockholders could incur substantial losses.

The stock market in general and the market for biopharmaceutical and pharmaceutical companies in particular, has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. The ongoing COVID-19 pandemic, for example, has negatively affected some sectors of the stock market and investor sentiment and has resulted in significant volatility. As a result of this volatility, you may not be able to sell your common stock at or above the price you paid for your shares. Market and industry factors may cause the market price and demand for our common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their shares at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common stock.

In addition, public statements by us, government agencies, the media or others relating to the ongoing COVID-19 pandemic (including regarding our and others’ efforts to develop COVID-19 therapies) have in the past resulted, and may in the future result, in significant fluctuations in our stock price. Given the global focus on the COVID-19 pandemic, information in the public arena on this topic, whether or not accurate, has had and will likely continue to have an outsized impact (positive or negative) on our stock price. Information related to our development, manufacturing, regulatory and commercialization efforts with respect to sotrovimab and VIR-7832, or information regarding such efforts by competitors with respect to their potential therapies, may meaningfully impact our stock price.

Some companies that have experienced volatility in the trading price of their shares have been the subject of securities class action litigation. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our business practices. Defending against litigation is costly and time-consuming, and could divert our management’s attention and our resources. Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our common stock.

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Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions.

Our executive officers, directors and stockholders who own more than 5% of our outstanding common stock beneficially own a significant percentage of our outstanding common stock. If these persons acted together, they may be able to significantly influence all matters requiring stockholder approval, including the election and removal of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. The concentration of voting power and transfer restrictions could delay or prevent an acquisition of our company on terms that other stockholders may desire or result in the management of our company in ways with which other stockholders disagree.

If research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or financial analysts publish about us or our business. If any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if the clinical trials and operating results fail to meet the expectations of analysts, our stock could decline. If analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

You should not rely on an investment in our common stock to provide dividend income. We have never declared or paid cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

We have incurred and we will continue incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we have incurred and we will continue to incur significant legal, accounting, investor relations and other expenses. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and Nasdaq have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted, pursuant to which the SEC adopted rules and regulations related to corporate governance and executive compensation, such as “say on pay” and proxy access. Emerging growth companies are permitted to implement many of these requirements over time, however, we are no longer an emerging growth company as of December 31, 2020 and expect to incur additional compliance-related expenses as a result.

Stockholder activism, the current political environment and the current high level of U.S. government intervention and regulatory reform may also lead to substantial new regulations and disclosure obligations, which may in turn lead to additional compliance costs and impact the manner in which we operate our business in ways we do not currently anticipate. Our management and other personnel will need to devote a substantial amount of time to comply with these requirements. Moreover, these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.

As a public company, we may also be subject to more stringent state law requirements, such as California Senator Bill 826, which generally requires public companies with principal executive offices in California to have a minimum number of females on the company’s board of directors, and California Assembly Bill 979, which generally requires public companies with principal executive offices in California to include specified numbers of directors from “underrepresented communities.” We are currently compliant with the requirements, but there are no assurances that we will be compliant in the future. which generally requires public companies with principal executive offices in California to include specified numbers of directors from “underrepresented communities.” If we fail to comply with either Senator Bill 826 or Assembly Bill 979, we could be fined by the California Secretary of State, with a $100,000 fine for the first violation and a $300,000 for each subsequent violation, and our reputation may be adversely affected.

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If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.

Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting, including an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. We were previously not required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting while we were an emerging growth company. However, we are no longer an emerging growth company as of December 31, 2020. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. To comply with the Sarbanes-Oxley Act, the requirements of being a reporting company under the Exchange Act and any complex accounting rules in the future, we may need to upgrade our information technology systems; implement additional financial and management controls, reporting systems and procedures; and hire additional accounting and finance staff. We are currently in the process of hiring additional accounting and finance staff as we grow our business. If we are unable to hire the additional accounting and finance staff necessary to comply with these requirements, we may need to retain additional outside consultants. If we or, if required, our auditors, are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.

We cannot assure you that there will not be material weaknesses in our internal control over financial reporting in the future. Our previous acquisitions and strategic transactions and resulting international operations have increased the complexity of our accounting, and additional acquisitions and transactions and further geographic expansion will likely increase this complexity and the related accounting challenges. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, or FASB, or the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, may retroactively affect previously reported results, could cause unexpected financial reporting fluctuations and may require us to make costly changes to our operational processes and accounting systems.

Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions also could limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. For a summary of these provisions, see the section titled “Anti-Takeover Provisions of Delaware Law and Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws—Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws” in Exhibit 4.3 Description of Capital Stock filed as part of our 2020 Form 10-K.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of

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Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

any derivative action or proceeding brought on our behalf;

any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders;

any action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws;

any action or proceeding to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws; and

any action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine.

This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction. Furthermore, Section 22 of the Securities Act of 1933, as amended, or the Securities Act, creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, unless we consent in writing to the selection of an alternative forum. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage these types of lawsuits. Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable. If a court were to find the exclusive-forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could harm our business. 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

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Item 6. Exhibits.

(a) Exhibits.

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-39083), filed with the SEC on October 16, 2019).
3.2	Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-39083), filed with the SEC on October 16, 2019).
10.1+	Amended and Restated Employment Letter Agreement between the Company and Ann M. Hanly, dated May 4, 2021 (incorporated herein by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q (File No. 001-39083), filed with the SEC on May 6, 2021).
10.2†	Definitive Collaboration Agreement between the Company, GlaxoSmithKline Intellectual Property Development Limited and GlaxoSmithKline Biologicals SA, dated May 18, 2021.
10.3†	Amendment No. 5 to the Grant Agreement between the Company and the Bill & Melinda Gates Foundation, dated June 2, 2021.
10.4†	Amendment No. 4 to the Grant Agreement between the Company and the Bill & Melinda Gates Foundation, dated June 16, 2021.
31.1	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

+ Indicates a management contract or compensatory plan.

† Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to confidential treatment.

* The certification attached as Exhibit 32.1 accompanies this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

81

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VIR BIOTECHNOLOGY, INC.
Date: August 5, 2021	By:	/s/  George Scangos
		George Scangos, Ph.D.
		President, Chief Executive Officer and Director (Principal Executive Officer)
Date: August 5, 2021	By:	/s/ Howard Horn
		Howard Horn
		Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

82

EX-10.2

Exhibit 10.2

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT VIR BIOTECHNOLOGY, INC. TREATS AS PRIVATE OR CONFIDENTIAL.

Definitive COLLABORATION AGREEMENT

By and Between

Glaxo Wellcome UK Limited;

And

Vir Biotechnology, Inc.

Table of Contents

Page

ARTICLE 1	DEFINITIONS	2
ARTICLE 2	EFFECTIVENESS; OVERVIEW; EXCLUSIVITY	26
2.1	Effectiveness of the Agreement	26
2.2	Overview	26
2.3	Collaboration Program Leads	27
2.4	Exclusivity Obligations	27
2.5	Compassionate Use Programs.	30
2.6	Parties’ Assets	30
2.7	Compliance with Applicable Law	31
ARTICLE 3	MANAGEMENT OF THE COLLABORATION	31
3.1	Joint Steering Committee	31
3.2	Joint Research and Development Committee	32
3.3	Joint Commercialization Committee	34
3.4	Joint Patent Committee	35
3.5	Joint Manufacturing Committee	35
3.6	Financial Working Group	36
3.7	Other Subcommittees	37
3.8	Membership, Meetings and Meeting Minutes	37
3.9	Decision-Making	38
3.10	Alliance Managers	40
3.11	Most Conservative Approach and Internal Policies	41
ARTICLE 4	INFLUENZA PROGRAM	41
4.1	General	41

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4.2	GSK’s Option to VIR-2482	41
4.3	VIR-2482XX2 and Other VIR Influenza mAbs	42
ARTICLE 5	EXPANDED FUNCTIONAL GENOMICS PROGRAM	43
5.1	General	43
5.2	Pre-Expanded Functional Genomics Target Selection	43
5.3	Screening Data	43
5.4	Selection of Expanded Functional Genomics Targets	44
5.5	Independent Programs	44
5.6	Rejected Targets	44
5.7	Database Technology	45
ARTICLE 6	ADDITIONAL PATHOGEN PROGRAMS	45
6.1	General	45
6.2	Selection of Additional Pathogen	45
6.3	Selection of Program mAbs	46
ARTICLE 7	DEVELOPMENT ACTIVITIES; OPT-OUT OPTIONS	46
7.1	Development Plans	46
7.2	Development Efforts	48
7.3	Development Records; Exchange of Information	48
7.4	Performance by Affiliates; Subcontracting	48
7.5	Clinical Studies	49
7.6	Rights to Opt-Out	50
ARTICLE 8	REGULATORY ACTIVITIES	54
8.1	Generally	54
8.2	Meetings and Communications	54
8.3	Regulatory Submissions	54

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8.4	Exchange of Development Data	55
8.5	Lead Party Opt-Out	55
ARTICLE 9	COMMERCIALIZATION	56
9.1	General	56
9.2	[***]	56
9.3	Commercialization Plan	56
9.4	Commercialization Efforts	57
9.5	Right to Subcontract Commercialization Activities; Distribution	57
9.6	Commercialization Reports	57
9.7	GSK Opt-Out	57
ARTICLE 10	PHARMACOVIGILANCE AND MEDICAL AFFAIRS	57
10.1	Pharmacovigilance Technical Agreement	57
10.2	Costs	57
10.3	Medical Inquiries	58
ARTICLE 11	FINANCIAL PROVISIONS	58
11.1	Upfront Payment	58
11.2	Option Exercise Fee	58
11.3	Milestone Payments	58
11.4	Development Costs	59
11.5	Profit/Loss Sharing	59
11.6	[***]	59
11.7	Reconciliation Procedures	59
11.8	Opt-Out Royalties and Payments	62
11.9	Third Party Technologies and [***]	62
11.10	Audits	64

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11.11	Tax Matters	64
11.12	General Payment Terms	66
11.13	Blocked Payments	66
11.14	Reporting; Financial Records	66
11.15	[***]	67
11.16	Resolution of Financial Disputes	67
11.17	Specific Finance Disputes	67
ARTICLE 12	LICENSES	67
12.1	Collaboration Programs	67
12.2	Following Opt-Out Option	68
12.3	Rejected Collaboration Product License	69
12.4	Sublicenses	70
12.5	Licensing Program Technology	70
12.6	No Implied Licenses	70
12.7	Retained Rights	70
12.8	Rights in Bankruptcy	70
12.9	Existing Third Party Agreements	71
ARTICLE 13	MANUFACTURING AND SUPPLY	71
13.1	General	71
13.2	Manufacturing Party	71
13.3	Collaboration Programs	71
13.4	Transition of Manufacturing and Supply	73
ARTICLE 14	SCIENTIFIC PUBLICATIONS AND PRESENTATIONS	73
14.1	Research and Pre-Clinical Publications	73
14.2	Clinical Development Publications	73

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14.3	Review by the Parties	74
14.4	Third Parties	74
14.5	Lead Party Publication	74
14.6	Publication after Opt-Out	75
ARTICLE 15	MATERIALS TRANSFER; INTELLECTUAL PROPERTY; INFORMATION TECHNOLOGY	75
15.1	Materials Transfer	75
15.2	Ownership of Intellectual Property	77
15.3	Prosecution, Maintenance and Defense	78
15.4	Enforcement Rights	80
15.5	Joint Patent Committee	82
15.6	Third Party Technologies	82
15.7	Infringement Claims by Third Parties	82
15.8	Product Marks	83
15.9	Information Technology Requirements	84
ARTICLE 16	TERM AND TERMINATION	84
16.1	Term	84
16.2	Mutual Termination	85
16.3	Termination for Cause	85
16.4	Termination for Insolvency	86
ARTICLE 17	EFFECTS OF EXPIRATION OR TERMINATION	86
17.1	Accrued Obligations	86
17.2	Effects of Termination by Mutual Agreement	86
17.3	Effects of Termination for Material Breach or Insolvency	86
17.4	Other Termination Consequences	87

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17.5	Survival	88
17.6	Termination Not Sole Remedy	88
ARTICLE 18	CONFIDENTIALITY	88
18.1	Confidentiality	88
18.2	Authorized Disclosure	89
18.3	Injunctive Relief	90
18.4	Return of Confidential Information	90
18.5	Press Releases and Other Public Statements	90
ARTICLE 19	REPRESENTATIONS AND WARRANTIES AND COVENANTS	91
19.1	Mutual Representations and Warranties	91
19.2	Representations and Warranties of Vir (Existing Influenza Program mAbs)	93
19.3	[***] Representations, Warranties and Covenants	95
19.4	Post-Closing Covenants	95
19.5	[***]	96
19.6	Disclaimer of Warranty	96
ARTICLE 20	INDEMNIFICATION	96
20.1	Indemnification	96
20.2	Insurance	97
20.3	LIMITATION OF CONSEQUENTIAL DAMAGES	98
ARTICLE 21	ANTI-BRIBERY AND ANTI-CORRUPTION	98
ARTICLE 22	MISCELLANEOUS	98
22.1	Dispute Resolution	98
22.2	Equitable Relief	99
22.3	Governing Law	99
22.4	Assignment	99

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22.5	Change of Control of Vir	99
22.6	Force Majeure	100
22.7	Notices	100
22.8	Export Clause	101
22.9	Waiver	101
22.10	Severability.	101
22.11	Entire Agreement; Amendments	101
22.12	Independent Contractors	102
22.13	Headings	102
22.14	Further Actions	102
22.15	Books and Records	102
22.16	Construction of Agreement	102
22.17	Supremacy	102
22.18	Counterparts	103
22.19	No Third Party Beneficiaries	103

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SCHEDULES

Schedule 1.88 Existing Third Party Agreements

Schedule 1.99 Financial Schedule

Schedule 1.125 GSK Specified Internal Policies

Schedule 1.135 Influenza Product Criteria

Schedule 1.274 Sequences of Vir-2482 and Vir-2482XX2

Schedule 4.1 Vir-2482 & Vir-2482XX2 Clinical Development Plans

Schedule 4.2.1 Vir-2482 Option Data Package

Schedule 5.1 Expanded Functional Genomics Program Flow Chart

Schedule 6.1 [***]

Schedule 6.2.1 Listed Target Pathogens

Schedule 7.6.5 Animal Welfare

Schedule 10.1 Key Terms for Pharmacovigilance Technical Agreement

Schedule 11.3.2 [***]

Schedule 11.8.2 Royalties Following Opt-Out

Schedule 11.8.3 [***]

Schedule 11.9.1 Existing Third Party Payment Obligations

Schedule 13.3.2 [***]

Schedule 15.1.1 Form of Material Transfer Record

Schedule 22.1 Arbitration

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Definitive COLLABORATION AGREEMENT

This Definitive Collaboration Agreement (“Agreement”) is made and entered into as of May 18, 2021 (“ExecutionDate”), by and between Glaxo Wellcome UK Limited, a private company limited by shares organized under the laws of England having an office at 980 Great West Road, Brentford, Middlesex TW8 9GS, England, registered under company number 00480080 (“GSK”), and Vir Biotechnology, Inc., a Delaware corporation having an office at 499 Illinois Street, Suite 500, San Francisco, CA 94158 (“Vir”). GSK and Vir are sometimes referred to herein, individually, as a “Party” and, collectively, as the “Parties”.

BACKGROUND

WHEREAS, GSK, among other things, conducts programs to discover, develop, manufacture and commercialize innovative pharmaceutical medicines, vaccines and consumer healthcare products;

WHEREAS, Vir, among other things, conducts programs to develop and commercialize therapeutic products for the treatment and prevention of serious infectious diseases;

WHEREAS, GSK, together with an Affiliate, entered into a Definitive Collaboration Agreement with Vir on June 9, 2020, for the development and commercialization of certain products for diseases caused by SARS-COV-2 and other Coronaviruses (as defined below) (the “Existing Collaboration Agreement”);

WHEREAS, an Affiliate (as defined below) of GSK and Vir have entered into a new Stock Purchase Agreement, dated February 14, 2021 (the “SPA”), pursuant to which it has purchased certain additional voting shares of Vir;

WHEREAS, concurrent with the SPA, GSK and Vir entered into a binding Preliminary Collaboration Agreement, dated February 14, 2021 (the “PCA Execution Date,”, as amended by the waiver and extension agreement dated as of May 16, 2021, and such agreement, the “Preliminary Collaboration Agreement”), outlining the transactions contemplated therein, which include (a) an antibody program directed towards Influenza Viruses (as defined below), (b) functional genomics approaches to Respiratory Viral Diseases (as defined below), and (c) antibody programs directed towards additional pathogens, each, as further described below;

WHEREAS, as contemplated under the Preliminary Collaboration Agreement, GSK and Vir desire to enter into this Agreement containing a more detailed set of terms governing the collaboration established under the Preliminary Collaboration Agreement, consistent with the terms and conditions set forth therein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

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ARTICLE 1
Definitionstc "ARTICLE 1 DEFINITIONS"

Capitalized terms used in this Agreement, whether used in the singular or plural, shall have the meanings set forth below, unless otherwise specifically indicated herein.

1.1 “Accounting Standards”means, with respect to GSK, IFRS, and with respect to Vir, GAAP, in each case as consistently applied by the applicable Party and its Affiliates, as the same may be changed from time to time by the Parties; provided that each Party shall promptly notify the other Party in the event that such Party changes its Accounting Standards pursuant to which such Party’s records are maintained, and it being understood that each Party may only use internationally recognized accounting principles (e.g., IFRS, GAAP).

1.2 “[***]” has the meaning set forth in [***].

1.3 “[***]” means, with respect to [***].

1.4 “Additional Pathogen Product” has the meaning set forth in Section 2.2.

1.5 “Additional Pathogen Program” has the meaning set forth in Section 2.2.

1.6 “Additional Products” has the meaning set forth in Section 7.1.4.

1.7 “[***]” has the meaning set forth in [***].

1.8 “Adverse Event” means any untoward medical occurrence in a patient or subject who is administered a product, whether or not considered related to such product, including any undesirable sign (including abnormal laboratory findings of clinical concern), symptom or disease temporally associated with the use of such product.

1.9 “Affiliate” means, with respect to a given Party or Third Party, any corporation, firm, limited liability company, partnership or other entity which directly or indirectly controls, or is controlled by, or is under common control with such Party or such Third Party, respectively. For the purposes of this Section 1.9, “control” means ownership, directly or indirectly through one or more Affiliates, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interests in the case of any other type of legal entity, or status as a general partner in the case of any partnership, or any other arrangement whereby a corporation or other entity controls or has the right to control the Board of Directors or equivalent governing body or management of another corporation or other entity. [***].

1.10 “Agreement” has the meaning set forth in the preamble.

1.11 “Alliance Manager” has the meaning set forth in Section 3.10.

1.12 “Allowable Expenses” has the meaning set forth in the Financial Schedule.

1.13 “[***]” has the meaning set forth in [***].

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1.14 “Applicable Internal Policies” means those Internal Policies of either Party applicable to a Party by virtue of application of Section 3.11.

1.15 “[***]” means [***].

1.16 “Balancing Payment” has the meaning set forth in Section 11.7.3(b).

1.17 “Biologic” means any composition of matter comprising proteins, nucleic acids, carbohydrates, or any combination of these substances, including antibodies (derivatives or fragments thereof), other binding proteins, peptide molecules, RNA molecules, DNA molecules, viruses, gene therapy vectors, genetically engineered cells, and chemically modified cells.

1.18 “Biosimilar” means, with respect to a Collaboration Product or a Sole Development Product, any product containing a Biologic sold in a country by a Third Party that receives Regulatory Approval (including via Emergency Use Authorization) and is claimed to be biosimilar to, or interchangeable with, such Collaboration Product or Sole Development Product (including a product that is the subject of an application submitted under Section 351(k) of the Public Health Service Act in the United States or under Article 10(4) of Directive 2001/83/EC in the European Union or any member state thereof, in each case citing such Collaboration Product or Sole Development Product as the reference product) or for which the BLA otherwise references or relies on such Collaboration Product or Sole Development Product, including any product containing an active substance with the same core nonproprietary name as the active substance in the Collaboration Product or Sole Development Product.

1.19 “BLA” means a Biologics License Application (as defined in 21 C.F.R. 600 et seq.) or an equivalent application for marketing authorization with respect to a Collaboration Product or Sole Development Product in any jurisdiction in the world.

1.20 “Blocking Third Party IP Agreement” has the meaning set forth in Section 11.9.1.

1.21 “Blocking Third Party IP Costs” has the meaning set forth in the Financial Schedule.

1.22 “BPCIA” has the meaning set forth in Section 15.4.1.

1.23 “Business Day” means a day, other than (a) Saturday or Sunday, or any other day on which banking institutions in New York, New York, London, England and Brussels, Belgium are not open for business, (b) [***], or (c) [***], provided that in the case of (b) and (c), [***].

1.24 “[***]” has the meaning set forth in [***].

1.25 “Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.26 “Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on December 31.

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1.27 “Change of Control” means, with respect to either Party, an event or transaction or series of events or transactions by which: (a) any Third Party (or group of Third Parties acting in concert) becomes the beneficial owner, directly or indirectly, of more than fifty percent (50%) of the outstanding securities of such Party or the total voting power of such securities normally entitled to vote in elections of directors; (b) (i) such Party reorganizes, consolidates or comes under common control with, or merges into another entity, or (ii) any entity reorganizes, consolidates or comes under common control with, or merges into such Party, in either event of the foregoing ((i) or (ii)) where more than fifty percent (50%) of the total voting power of the securities outstanding of the surviving entity normally entitled to vote in elections of directors is not held by the parties holding at least fifty percent (50%) of the outstanding shares of such Party immediately preceding such consolidation or merger; (c) such Party conveys, transfers or leases to a Third Party (i) all or substantially all of its assets or the control thereof, or (ii) all or substantially all of its assets or business relating to this Agreement or the control thereof; or (d) any other arrangement whereby a Third Party (or group of Third Parties acting in concert) obtains control or the right to control the board of directors or equivalent governing body that has the ability to cause the direction of the management, policies or affairs of such Party.

1.28 “Change of Control Group” means, with respect to a Party, the Person, or group of Persons, that is the acquirer of, or successor to, such Party in connection with a Change of Control of such Party, together with all of the Affiliates of such Persons, in each case that are not Affiliates of such Party immediately prior to the closing of such Change of Control of such Party.

1.29 “[***]” has the meaning set forth in [***].

1.30 “China Territory” means mainland China, Hong Kong, Macau and Taiwan.

1.31 “Clinical Development Publication Strategy” has the meaning set forth in Section 14.2.

1.32 “Clinical Facility” means a facility for Clinical Manufacture of any Collaboration Product.

1.33 “Clinical Manufacture” means Manufacture for clinical use in Clinical Studies, including (a) reservation of Manufacturing capacity for use in Manufacture for clinical use; (b) selection and use of contract manufacturers; (c) selection of the Clinical Facilities; and (d) subject to the terms of any existing Third Party agreements and as applicable, technology transfer of the then-current Manufacturing process for Collaboration Product to Clinical Facilities.

1.34 “Clinical Study” means any human clinical study, including any Phase I Clinical Study, Phase I/IIa Clinical Study, Phase II Clinical Study, Phase II/III Clinical Study, Phase III Clinical Study, Pivotal Clinical Study, or Phase IV Clinical Study.

1.35 “CMO” has the meaning set forth in Section 13.2.

1.36 “Co-Chair” has the meaning set forth in Section 3.8.1.

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1.37 “Collaboration” means, for each Collaboration Program, (a) any Research activities conducted under the Development Plans, and (b) the Development, Manufacture and Commercialization activities with respect to the Collaboration Products during the Term pursuant to and in accordance with the terms of this Agreement and the Development Plans and Commercialization Plans.

1.38 “Collaboration Product” means (a) an Influenza Product, (b) an Expanded Functional Genomics Product, or (c) an Additional Pathogen Product, in each case ((a) - (c)), for which a Party has not exercised its Opt-Out Option. For clarity, (i) [***]; and (ii) a Sole Development Product shall not be a Collaboration Product for purposes of this Agreement.

1.39 “Collaboration Program” means each of the following programs: (a) the Influenza Program; (b) the Expanded Functional Genomics Program; and (c) the Additional Pathogen Programs.

1.40 “Collaboration Screening Data” has the meaning set forth in Section 5.3.2.

1.41 “Commercialization” means any and all activities directed to the preparation for sale of (but excluding Development and, other than for purposes of the Manufacturing Plan to be included in the Commercialization Plan and accounted for in the Commercialization Budget, excluding Commercial Manufacture or other Manufacture), offering for sale of, or sale of a Collaboration Product, including activities related to obtaining pricing and reimbursement approvals, as applicable, marketing, promoting, selling, distributing, importing and exporting such Collaboration Product, and interacting with Regulatory Authorities regarding any of the foregoing. “Commercialize” and “Commercializing” shall have their correlative meanings.

1.42 “Commercialization Budget” means the annual budget for conducting Commercialization (including the budget for Commercial Manufacture) pursuant to a Collaboration Program for a given Collaboration Product as prepared by GSK as the LCP and reviewed and approved by the JSC, the JCC and the JMC, as applicable, in accordance with ARTICLE 3 and as updated on a Calendar Year basis by the LCP concurrently with the Commercialization Plan in accordance with Sections 3.3.2(a), 3.1.2(n), 3.5.2(c) and 9.3. Each annual Commercialization Budget shall include (a) a budget, [***], for the estimated FTE Costs and out-of-pocket external costs and expenses expected to be incurred by each Party in the given Calendar Year with respect to such Commercialization Plan, including [***], and (b) a good faith non-binding forecasted budget, [***], for the [***] period following the Calendar Year covered by the budget in (a), of the estimated FTE Costs and out-of-pocket external costs and expenses expected to be incurred by each Party in connection with activities under the applicable Commercialization Plan during such [***].

1.43 “Commercialization Plan” has the meaning set forth in Section 9.3.

1.44 “Commercially Reasonable Efforts” means, such efforts that are consistent with the efforts and resources normally used by GSK (in the case of GSK) or a biopharmaceutical company (in the case of Vir) in the exercise of its reasonable business discretion relating to a research program, pharmaceutical product or target owned by it or to which it has exclusive rights, with similar product characteristics, which is of similar market potential at a similar stage in its

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development or product life as the Collaboration Program, Collaboration Product, Target, or, where applicable, Sole Development Product, taking into account issues of [***].

1.45 “Commercial Facility” means a facility for Commercial Manufacture of any Collaboration Product.

1.46 “Commercial Manufacture” means Manufacture for commercial sale, including (a) reservation of Manufacturing capacity for use in Manufacture for commercial sale; (b) selection and use of contract manufacturers; (c) selection of the Commercial Facilities; (d) subject to the terms of any existing Third Party agreements, technology transfer of the Manufacturing process for Collaboration Product to Commercial Facilities; (e) conduct of process performance qualification batches and other process qualification and validation activities required for Regulatory Approval for Commercial Manufacture of Collaboration Product at the Commercial Facility(ies); and (f) obtaining pre-approval inspection and required licenses and permits for Commercial Facilities.

1.47 “[***]” has the meaning set forth in [***].

1.48 “Committee” means, individually, the JSC, JRDC, JMC, JCC, JPC, the Financial Working Group and the Program Team or any other Subcommittee established as set forth in Section 3.7.

1.49 “Committee Deadlock” has the meaning set forth in Section 3.9.1.

1.50 “Companion Diagnostic” means a product designed for use in a diagnostic biomarker assay tailored or optimized for use with a Collaboration Product or a Sole Development Product, for predicting or monitoring the suitability of such Collaboration Product for prophylactic or therapeutic use in human patients or defined subpopulations thereof. A Companion Diagnostic shall be intended for use (a) as a means to select or monitor the patient population for the conduct of Clinical Studies of such Collaboration Product or Sole Development Product, (b) to predict predisposition to treatment in clinical use with such Collaboration Product or Sole Development Product, or (c) to predict or monitor potential safety considerations in clinical use with such Collaboration Product or Sole Development Product. Use of a Companion Diagnostic to guide use of the Collaboration Product will be contingent on appropriate Regulatory Approvals for such uses as deemed necessary by the FDA or other similar Regulatory Authority with appropriate jurisdiction.

1.51 “[***]” has the meaning set forth in [***].

1.52 “[***]” means, [***].

1.53 “Confidential Information” means any technical, business, or other information provided by or on behalf of one Party of any of its Affiliates (the “Disclosing Party”) to the other Party or any of its Affiliates (the “Receiving Party”) in connection with this Agreement or the Collaboration (including, with respect to the Expanded Functional Genomics Program, information relating to Screening Data and Targets screened under the Existing Collaboration Agreement), whether prior to, on, or after the Effective Date of this Agreement, including information relating to the GSK Licensed Technology, where GSK is the Disclosing

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Party, and information relating to the Vir Licensed Technology, where Vir is the Disclosing Party, any inventions, Know-How or other information developed in connection with the Collaboration with respect thereto by or on behalf of the Disclosing Party (including GSK Program Technology, where GSK is the Disclosing Party, Vir Program Technology, where Vir is the Disclosing Party, and Joint Program Technology, where both Parties will be deemed to be both Disclosing Party and Receiving Party), or the scientific, regulatory or business affairs or other activities of the Disclosing Party. For clarity, (i) [***], and (ii) except as otherwise pursuant to subclause (i), Confidential Information [***] related to any Collaboration Product or [***] shall be Confidential Information of both Parties.

1.54 “Contribution” (including variations such as “Contribute” and the like) has the meaning set forth in Section 2.6.2.

1.55 “Control” (including variations such as “Controlled,” “Controlling” and the like) means, with respect to any material, information, or intellectual property, the possession (whether by ownership or license, other than the licenses granted hereunder) of the ability to grant a license or sublicense or other right to exploit, as provided herein, without violating the terms of any agreement or other arrangement with any Third Party, or any applicable Law.

1.56 “Controlling Party” has the meaning set forth in Section 15.4.3.

1.57 “Coronavirus” means any spherical or pleomorphic enveloped virus of the family Coronaviridae containing single-stranded (positive-sense) RNA associated with a nucleoprotein within a capsid comprised of matrix protein, including SARS-COV-2.

1.58 “CRISPR” means the gene editing and engineering technology known as “clustered regularly interspaced short palindromic repeats”.

1.59 “CRO” has the meaning set forth in Section 7.4.2.

1.60 “Currency Gains and Losses” means the gain or loss resulting from changes in exchange rates between the functional currency and the foreign currency in which the transaction is denominated, to the extent specifically identifiable to a Collaboration Product and shall only include the currency gains and losses realized between the end of a Calendar Quarter and the date of invoice payment for that Calendar Quarter.

1.61 “Data” means preclinical data (including computational validation, genetic data (including genotype, phenotype and genetic sequencing data), in vitro and in vivo data), clinical data (including broad data sets, study and investigator reports, both preliminary and final, statistical analyses, expert opinions and reports, safety and other electronic databases), and regulatory, Manufacturing, marketing, pricing, biological, chemical, pharmacological, toxicological, pharmaceutical, physical, analytical, safety and quality control data, information and documentation, whether in written or electronic form.

1.62 “Data Exclusivity” means, on a country-by-country basis, with respect to a product, any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to such product other than a Patent right, including in the European Union, Regulation (EC) No 726/2004 and Directive 2001/83/EC (as amended).

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1.63 “[***]” has the meaning set forth in [***].

1.64 “Defending Party” means any Party participating in the defense of a Third Party Infringement Claim.

1.65 “[***]” means, [***].

1.66 “Development” means any and all Research and development activities conducted to develop or seek, obtain or maintain Regulatory Approvals for the Collaboration Products, which include Non-Clinical GLP Studies, Clinical Studies, quality of life assessments, pharmacoeconomics, Manufacturing process development, Manufacture of Research, non-clinical and clinical supplies, regulatory affairs, and such other activities related to the Collaboration Products as are set forth in the applicable Development Plan approved by the JSC. “Develop” and “Developing” shall have their correlative meanings. For clarity, Development does not include any of the foregoing activities with respect to Vir-2482 unless GSK exercises the Option, and then only after the Vir-2482 Program Effective Date.

1.67 “Development Budget” means on a Collaboration Program-by-Collaboration Program basis, the budget of Development Costs for conducting activities under such Collaboration Program pursuant to the applicable Development Plan during a given Calendar Year, as prepared by the applicable Lead Party, with input from the other Party with respect to Development Costs to be borne by the other Party, and reviewed by the JRDC in accordance with Section 3.2.2(c) and the JMC in accordance with Section 3.5.2(c) and approved by the JSC in accordance with Section 3.1.2(m), which budget shall be updated and amended (if necessary) on a Calendar Year basis concurrently with the Development Plan in accordance with Sections 3.2.2(c), 3.5.2(c) and 3.1.2(m), and at any other time in accordance with Section 7.1.3(a). Each Development Budget shall include (a) a budget, [***] (with the assistance of the JMC with respect to Manufacturing activities), for the estimated Development FTE Costs and out-of-pocket external costs and expenses expected to be incurred by each Party in the given Calendar Year with respect to such Development Plan, and (b) a nonbinding good faith forecasted budget, [***], of the estimated Development Costs to be incurred in connection with activities under the applicable Development Plan, (i) with respect to any [***], for the [***], and (ii) with respect to any [***], for the time period [***].

1.68 “Development Candidate” means, with respect to the Influenza Program, the Expanded Functional Genomics Program or the Additional Pathogen Programs, an Influenza Product, an Expanded Functional Genomics Product or an Additional Pathogen Product, respectively, that is selected by the JRDC pursuant to Section 3.2.2(d) as suitable to progress into further Development, including in Non-Clinical GLP Studies.

1.69 “Development Costs” has the meaning set forth in the Financial Schedule.

1.70 “Development FTE Costs” has the meaning set forth in the Financial Schedule.

1.71 “Development FTE Rate” has the meaning set forth in the Financial Schedule.

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1.72 “Development Plan” means a detailed plan and budget mutually agreed to govern the conduct of Development activities for the applicable Collaboration Program. For clarity, the Parties intend that there will be one Development Plan for all Collaboration Products in a given Collaboration Program, for a total of three Development Plans, but there may be sub-plans for individual Collaboration Products. For clarity, Development Plan does not apply to or govern the conduct of development activities for Vir-2482 unless GSK exercises the Option, and then only after the Vir-2482 Program Effective Date.

1.73 “Development Summary” has the meaning set forth in Section 7.6.2.

1.74 “Disclosing Party” has the meaning set forth in the definition of “Confidential Information.”

1.75 “Discontinued Vir Influenza mAb” has the meaning set forth in Section 2.4.1.

1.76 “Drug Approval Application” means a BLA, NDA or any corresponding application in the applicable country or jurisdiction outside of the United States, including, with respect to the European Union, an application for marketing authorization approval filed with the EMA pursuant to the centralized approval procedure, or with the applicable national Regulatory Authority of a country in the European Union with respect to the mutual recognition procedure, decentralized procedure or any other national approval.

1.77 “[***]” has the meaning set forth in [***].

1.78 “Effective Date” shall have the meaning set forth in Section 2.1.

1.79 “EMA” means the European Medicines Agency, or any successor entity thereto performing similar functions.

1.80 “Emergency Use Authorization” or “EUA” means an emergency use authorization issued by the FDA pursuant to Section 564 of the FDCA.  The duration of an EUA depends in part on the duration of the declaration of the U.S. Department of Health and Human Services (“HHS”) that supports the EUA. The HHS declaration must be current for an EUA to remain in effect. The HHS declaration terminates upon the earlier of (a) HHS determining that the circumstances justifying the EUA’s issuance no longer exist or (b) a change in the approval status of the product such that an EUA would no longer be needed. For the purposes of this definition, any references to the FDA, HHS, statutes, or declaration, duration and termination of an EUA, or approval status of a given product, shall, in each case, include any equivalent Regulatory Authority, agency, statute, or declaration, duration and termination of an EUA in any jurisdiction other than the United States.

1.81 “Entity” has the meaning set forth in Section 11.11.4.

1.82 “European Union” means the economic, scientific and political organization of member states in Europe, as it may be constituted from time to time.

1.83 “Excess Costs” has the meaning set forth in Section 11.7.2(c)(i).

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1.84 “Exclusivity Period” has the meaning set forth in Section 2.4.2(b).

1.85 “Execution Date” has the meaning set forth in the preamble.

1.86 “Existing Collaboration Agreement” has the meaning set forth in the preamble.

1.87 “Existing Influenza Program mAbs” means Vir-2482, Vir-2482XX2, [***].

1.88 “Existing Third Party Agreements” means Vir’s existing agreements with Third Parties relating to any Collaboration Program existing as of the PCA Execution Date, as set forth on Schedule 1.88.

1.89 “Existing Third Party IP Agreement” has the meaning set forth in the Financial Schedule.

1.90 “ExistingThird Party Payment Obligations” has the meaning set forth in Section 11.9.1.

1.91 “Expanded Functional Genomics Development Plan” has the meaning set forth in Section 5.1.

1.92 “Expanded Functional GenomicsIndependent Program” means, with respect to a Party and [***] under the Expanded Functional Genomics Program, a program of such Party or its Affiliates outside the Collaboration that is [***], and under which program there are [***], in each case, at the time [***]. For avoidance of doubt, [***].

1.93 “Expanded Functional Genomics Product” has the meaning set forth in Section 2.2.

1.94 “Expanded Functional Genomics Program” has the meaning set forth in Section 2.2.

1.95 “Expanded Functional Genomics Target” means any Target identified to be associated with Respiratory Viral Disease(s) and approved by the JSC for inclusion in the Collaboration for which Expanded Functional Genomics Products will be further Developed.

1.96 “FDA” means the U.S. Food and Drug Administration, or any successor entity thereto performing similar functions.

1.97 “Field” means the prevention, treatment and prophylaxis of diseases in humans, including those caused by Influenza Virus, other Respiratory Viruses or Selected Pathogens, or associated with Expanded Functional Genomics Targets, but excluding [***], unless [***], in which case, [***].

1.98 “Financial Report” has the meaning set forth in Section 11.7.1(a).

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1.99 “Financial Schedule” means the schedule set forth in Schedule 1.99 attached hereto, as the same may be amended from time to time by the written agreement of the Parties.

1.100 “Financial Working Group” has the meaning set forth in Section 3.6.

1.101 “First Commercial Sale” means, with respect to a given product in a country, the first commercial sale for use or consumption by the general public in an arms-length transaction of such product by or on behalf of a Party, its Affiliate or its licensee or Sublicensee in such country following receipt of all applicable Regulatory Approvals of such product in such country or, if applicable, following receipt of Emergency Use Authorization for such product; provided that the following shall not constitute a First Commercial Sale: (a) any sale or inter-company transfers to an Affiliate or sublicensee unless the Affiliate or sublicensee is the last entity in the distribution chain of such product, (b) any use of such product in Clinical Studies, preclinical activities or other research or Development activities, or (c) disposal or transfer of such products for a bona fide charitable purpose, compassionate use, so called “treatment IND sales” and “named patient sales” or use under the Temporary Authorisation for Use system in France or other equivalent systems, other than under an EUA.

1.102 “[***]” has the meaning set forth in [***].

1.103 “Force Majeure” means any event beyond the reasonable control of the affected Party including: embargoes; war or acts of war, including terrorism; insurrections, riots, or civil unrest; strikes, lockouts or other labor disturbances; epidemics (including pandemics), fire, floods, earthquakes or other acts of nature; unavailability of, or impossibility to obtain, materials, components, drug substance, drug product, utilities, equipment, supplies, fuel or other required materials, receipt of warning letters, or loss, infection or failure of cell banks (in each case due to reasons other than the affected Party’s negligence or willful misconduct or any other cause within the reasonable control of the affected Party); or acts, omissions or delays in acting by any Governmental Authority (including the refusal of any Regulatory Authority to issue required Regulatory Approvals due to reasons other than the affected Party’s negligence or willful misconduct or any other cause within the reasonable control of the affected Party), and failure of plant or machinery (provided that such failure could not have been prevented by the exercise of skill, diligence, and prudence that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances).

1.104 “FTE” means, with respect to a Person who is an employee or an individual who is an independent contractor of a Party or its Affiliates, the equivalent of the work of one (1) such Person directly engaged in performing Development, Commercialization or Manufacturing activities under this Agreement full time for one (1) year (consisting of a total of [***] hours per year, or such other number as may be agreed to by the Parties). [***].

1.105 “FTE Costs” has the meaning set forth in the Financial Schedule.

1.106 “GAAP” means United States generally accepted accounting principles applied on a consistent basis.

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1.107 “GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable, (a) FDA regulations and guidelines for good clinical practice, as promulgated by the FDA under 21 CFR Parts 50, 54, 56, 312 and 812, (b) as set forth in European Commission Directive 2001/20/EC relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use, and brought into law by European Commission Directive 2005/28/EC laying down the principles and detailed guidelines for good clinical practice for investigational medicinal products, (c) the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (“ICH”) Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products in the EU, (d) the Declaration of Helsinki (2008), and (e) any further amendments or clarifications with respect to any of the foregoing and any equivalents thereto in the country in which pre-clinical or clinical studies of a product are conducted.

1.108 “General Principles” means the General Principles set forth in Section 1 of the Financial Schedule.

1.109 “Generic Entry” means, with respect to a product in a country in the Territory, such time that, if there are one or more Biosimilars or Generic Products (as applicable) sold in such country, the market penetration of the Biosimilars or Generic Products (as applicable) in such country is equal to or greater than [***], as determined by dividing (a) the aggregate number of units of all Biosimilars or Generic Products (as applicable) sold in such country by (b) the sum of the aggregate number of units of such product and the aggregate number of units of all Biosimilars or Generic Products (as applicable) sold in such country, where unit volume sales will be identified and calculated based on relevant information published by [***].

1.110 “Generic Product” means, with respect to a Collaboration Product or Sole Development Product in a country in the Territory, any product sold by a Third Party (not licensed, supplied or otherwise authorized by a Party or its Affiliates or Sublicensees) that (a) contains the same active ingredient as such Collaboration Product or Sole Development Product, (b) is sold under a Regulatory Approval that (i) is based upon or relies upon the Regulatory Approval granted to a Party or any of its Affiliates or Sublicensees for such Collaboration Product or Sole Development Product or (ii) is otherwise granted by a Regulatory Authority pursuant to an expedited or abbreviated approval process, and (c) is categorized by the applicable Regulatory Authority in such country to be therapeutically equivalent to, or interchangeable with such Collaboration Product or Sole Development Product.

1.111 “[***]” means [***].

1.112 “[***]” means [***].

1.113 “GLP” means all applicable Good Laboratory Practice standards, including, as applicable: (a) FDA regulations and guidelines for good laboratory practice, as promulgated by the FDA under 21 CFR Part 58; (b) European Commission Directive 2004/10/EC relating to the application of the principles of good laboratory practices, as may be amended from time to time as well as any Rules Governing Medicinal Products in the European Community Vol.

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III, ISBN 92.825 9619-2 (ex - OECD principles of GLP); and (c) any further amendments or clarifications with respect to any of the foregoing and any equivalents thereto in the country in which pre-clinical or clinical studies of a product are conducted.

1.114 “GMP” means all applicable Good Manufacturing Practices, including: (a) the applicable part of quality assurance to ensure that products are consistently produced and controlled in accordance with the quality standards appropriate for their intended use, as defined in European Commission Directive 2003/94/EC laying down the principals and guidelines of good manufacturing practice; (b) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Sections 210, 211, 601, 610 and 820; (c) the Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products; (d) the principles detailed in the ICH Q7A guidelines; and (e) the equivalent Laws in any relevant country, each as may be amended and applicable from time to time.

1.115 “Governmental Authority” means any federal, state, provincial, local, municipal, foreign or other governmental or quasi-governmental authority, including any arbitrator and applicable securities exchanges, or any department, minister, agency, commission, commissioner, board, subdivision, bureau, agency, instrumentality, court or other tribunal of any of the foregoing.

1.116 “GSK Asset” has the meaning set forth in Section 2.6.1(b).

1.117 “[***]” means any [***].

1.118 “[***]” means [***].

1.119 “[***]” has the meaning set forth in [***].

1.120 “GSK Indemnitees” has the meaning set forth in Section 20.1.1.

1.121 “[***]” means [***].

1.122 “GSK Licensed Patent” means any Patent included in the GSK Licensed Technology.

1.123 “GSK Licensed Technology” means, (a) in the case of Expanded Functional Genomics Program, [***], and (b) on a Collaboration Program-by-Collaboration Program basis, all Patents and Know-How that are both (i) Controlled by GSK or its Affiliates as of the Effective Date or during the Term, and (ii) [***], provided that GSK Licensed Technology shall not include (A) any GSK Program Technology, or (B) [***]. For clarity, any technology that GSK includes within GSK Licensed Technology for a given Collaboration Program shall not be deemed included in GSK Licensed Technology for any other Collaboration Program, unless GSK expressly agrees to such inclusion in the applicable Development Plan for such other Collaboration Program.

1.124 “GSK Program Technology” means, on a Collaboration Program-by-Collaboration Program basis, GSK’s right and interest in any Program Technology generated under such Collaboration Program.

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1.125 “GSK Specified Internal Policies” means the Internal Policies set forth in Schedule 1.125 herein, and such other Relevant Internal Policies of GSK as are provided to Vir during the Term.

1.126 “Hatch-Waxman Act” has the meaning set forth in Section 15.4.1.

1.127 “IFRS” means the International Financial Reporting Standards, the set of accounting standards and interpretations and the framework in force on the Effective Date and adopted by the European Union or the United Kingdom, as applicable, as issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRS IC), and as adopted by the European Union or the United Kingdom, as applicable, as such accounting standards may be amended from time to time.

1.128 “[***]” has the meaning set forth in [***].

1.129 “Inclusion Notice” has the meaning set forth in Section 2.4.2(b).

1.130 “IND” means an Investigational New Drug Application (including any amendments thereto) filed with the FDA pursuant to 21 CFR Part 312 before the Initiation of Clinical Studies of a product, or any equivalent filing with any relevant Regulatory Authority in any jurisdiction.

1.131 “Indemnifying Party” has the meaning set forth in Section 20.1.3.

1.132 “Indemnitee” has the meaning set forth in Section 20.1.3.

1.133 “Influenza Development Plan” has the meaning set forth in Section 4.1.

1.134 “Influenza Product” has the meaning set forth in Section 2.2. For clarity, Influenza Product shall not include Vir-2482 unless and until the Vir-2482 Program Effective Date if GSK exercises the Option in accordance with the terms of this Agreement.

1.135 “Influenza Product Criteria” means the profile criteria for each Influenza Product, including (a) [***] and (b) [***], in each case, as further described on Schedule 1.135.

1.136 “Influenza Program” has the meaning set forth in Section 2.2. For clarity, Influenza Program shall not include Vir’s activities in connection with Vir-2482 unless and until the Vir-2482 Program Effective Date if GSK exercises the Option in accordance with the terms of this Agreement.

1.137 “Influenza Virus” means any influenza virus that belongs to the family orthomyxoviridae, a family of negative strand RNA viruses, including subtypes A, B, C, and D.

1.138 “Infringement” has the meaning set forth in Section 15.4.1.

1.139 “Infringement Notice” has the meaning set forth in Section 15.4.1.

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1.140 “[***]” has the meaning set forth in [***].

1.141 “Initial Development Term” means the period from the Effective Date through the third (3rd) anniversary thereof, unless otherwise extended by mutual agreement of the Parties.

1.142 “Initiation” means, with respect to a Clinical Study, the first dosing of the first human subject in such Clinical Study. “Initiating” means the act of Initiating a Clinical Study.

1.143 “Institutional Review Board” means an institutional review board or independent ethics committee that reviews the methods proposed for research and development activities to ensure such methods satisfy ethical requirements.

1.144 “Intellectual Property Rights” means Patents, design rights, copyrights, trademarks, services marks, trade secret rights, or other rights in Know-How, database rights, and all other intellectual property rights or similar proprietary rights of whatever nature, whether registered or not, and including applications to register or rights to apply for registration or renewals or extensions of, and rights to claim priority from, which may now or in the future subsist anywhere in the world.

1.145 “Internal Policies” means, with respect to a Party, such Party’s health care compliance, ethical, reputational, anti-bribery and corruption and other policies applicable to such Party’s activities under this Agreement, and any standard operating procedures implementing such policies, including the codes of conduct of any self-regulatory body of which that Party is a member. Internal Policies includes the Vir Specified Internal Policies and the GSK Specified Internal Policies.

1.146 “[***]” means [***].

1.147 “Joint Commercialization Committee” or “JCC” has the meaning set forth in Section 3.3.1.

1.148 “Joint Manufacturing Committee” or “JMC” has the meaning set forth in Section 3.5.

1.149 “Joint Patent Committee” or “JPC” has the meaning set forth in Section 3.4.1.

1.150 “Joint Research and Development Committee” or “JRDC” has the meaning set forth in Section 3.2.1.

1.151 “Joint Steering Committee” or “JSC” has the meaning set forth in Section 3.1.1.

1.152 “Joint Technology” means any and all Program Technology that is jointly owned by the Parties pursuant to Section 15.2.2.

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1.153 “Key Product Event” means any event with respect to the Collaboration Program or any Collaboration Product, that: (a) is determined by an independent safety review committee overseeing the safety of the relevant clinical trial to be directly related to the Collaboration Product, and (i) to have resulted in death, (ii) been life-threatening, (iii) required inpatient hospitalization or a significant prolongation of existing hospitalization, (iv) resulted in persistent or significant disability or incapacity, (v) resulted in a congenital anomaly or birth defect or (vi) required significant intervention to prevent permanent impairment or damage; and (b) results in a clinical hold being imposed on such program by the FDA or any comparable state, foreign or other Regulatory Authority to which the Collaboration Program or Collaboration Products are subject.

1.154 “Know-How” means proprietary and confidential trade secrets, models, discoveries, ideas, Data and other types of data, databases, results, assays, instructions, processes, techniques, formulas, algorithms, Materials, inventions, computational models, human-relevant disease models, computer software (including source code), predictive model implementations, data analytic tools, biotechnology hardware and associated algorithms and methodologies, methods of use, expert knowledge and information.

1.155 “Knowledge” means, with respect to a particular fact or matter and a Party, the knowledge [***].

1.156 “Law” means, individually and collectively, any and all laws, ordinances, rules, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.

1.157 “LCP” has the meaning set forth in Section 2.3.

1.158 “Lead Party” means the Party that is the lead Party and primarily responsible for the Development or Commercialization of a Collaboration Product, as set forth in Section 2.3.

1.159 “Legal Requirement” has the meaning set forth in Section 18.5.

1.160 “Licensed Technology” means (a) GSK Licensed Technology or (b) Vir Licensed Technology, as applicable.

1.161 “Listed Target Pathogens” has the meaning set forth in Section 6.2.1.

1.162 “Losses” has the meaning set forth in Section 20.1.1.

1.163 “mAb” means any monoclonal antibody that binds to an applicable pathogen and [***]. “mAb” also includes [***]. For clarity, mAbs shall not include any Vaccine.

1.164 “Major Market” has the meaning set forth in Section 9.4.

1.165 “Malwares” has the meaning set forth in Section 15.9.

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1.166 “Manufacturing” means all activities related to the synthesis, making, production, processing, purifying, formulating, filling, finishing, packaging, labeling, shipping, and holding of any Collaboration Product, or any component or intermediate thereof, and all activities performed in support of the CMC (chemistry, manufacturing and controls, or equivalent) section of an IND, NDA or BLA and other Regulatory Filing, including process and formulation development, process qualification and validation, scale-up, qualification, validation, pre-clinical, clinical and commercial production and analytic development, product characterization, stability testing, quality assurance, and quality control. “Manufacture” shall have a correlative meaning. For clarity, Manufacture does not include any of the foregoing activities with respect to Vir-2482 unless GSK exercises the Option, and then only after the Vir-2482 Program Effective Date.

1.167 “Manufacturing Party” has the meaning set forth in Section 13.2.

1.168 “Manufacturing Plan” means, with respect to Development and Commercialization under the applicable Collaboration Program, a separate plan governing the Manufacturing activities to be included in the Development Plan (with respect to Clinical Manufacturing) and the Commercialization Plan (with respect to Commercial Manufacturing), respectively, including with respect to Manufacturing process, physical product, supply chain for launch and commercial supply and solutions for technical issues.

1.169 “Material Receiving Party” means the Party receiving Materials from the other Party as contemplated in Section 15.1.

1.170 “Materials” means any chemical or biological substances, including any biological or chemical compounds, drug products, human samples, or other materials, regardless of the route of transfer, which are supplied by a Party or its nominee to the other Party or its nominee for use in the conduct of activities under this Agreement. Notwithstanding the foregoing, clinical or commercial supplies delivered pursuant to a Supply Agreement and Collaboration Product inventory and other materials (including the Working Cell Bank and Master Cell Bank) transferred pursuant to a Manufacturing technology transfer shall not constitute “Materials” for purposes of this Agreement.

1.171 “Materials Transferring Party” has the meaning set forth in Section 15.1.1.

1.172 “Medical Affairs Activities” means activities directed to interacting with physicians and other healthcare professionals who utilize or conduct research related to a drug or biological product, including [***]. For the avoidance of doubt, Medical Affairs Activities do not include any activities involving the marketing, promotion or sale of any Collaboration Product.

1.173 “Milestone Payment” has the meaning set forth in Section 11.3.1.

1.174 “[***]” has the meaning set forth in [***].

1.175 “Most Conservative Approach” means the approach or position offered by a Party in its Internal Policies, which approach or position, in the aggregate, is [***].

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1.176 “MTR” or “Material Transfer Record” has the meaning set forth in Section 15.1.

1.177 “NDA” means a New Drug Application (as more fully defined in 21 C.F.R. 314.5 et seq. or its successor regulation) and all amendments and supplements thereto filed with the FDA.

1.178 “Net Sales” has the meaning set forth in the Financial Schedule.

1.179 “Non-Clinical GLP Studies” means those studies conducted under GLP to produce data intended for inclusion in an IND, including IND-enabling toxicology studies.

1.180 “Non-Lead Party” means, with respect to a given Collaboration Program, the Party that is not the Lead Party.

1.181 “Non Opt-Out Notice” has the meaning set forth in Section 7.6.4(a).

1.182 “Non Opt-Out Party” has the meaning set forth in Section 7.6.4(a).

1.183 “Option” has the meaning set forth in Section 4.2.2.

1.184 “Option Exercise Fee” has the meaning set forth in Section 11.2.

1.185 “Option Exercise Period” has the meaning set forth in Section 4.2.2.

1.186 “Opt-Out Effective Date” has the meaning set forth in Section 7.6.3(a).

1.187 “Opt-Out Notice” has the meaning set forth in Section 7.6.1.

1.188 “Opt-Out Option” has the meaning set forth in Section 7.6.1.

1.189 “Opt-Out Party” has the meaning set forth in Section 7.6.1.

1.190 “Opt-Out Point” has the meaning set forth in Section 7.6.1.

1.191 “Orange Book” means the FDA publication titled “Approved Drug Products with Therapeutic Equivalence Evaluations.”

1.192 “[***]” has the meaning set forth in [***].

1.193 “[***]” has the meaning set forth in [***].

1.194 “[***]” has the meaning set forth in [***].

1.195 “Party Asset” has the meaning set forth in Section 2.6.1(b).

1.196 “[***]” has the meaning set forth in [***].

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1.197 “Patents” means all patents and pending patent applications (including inventor’s certificates and utility models) and any patents issuing therefrom, in any country in the Territory, including any and all provisionals, non-provisionals, substitutions, continuations, continuations-in-part, divisional and other continuing applications, supplementary protection certificates, renewals, and any and all reissues, extensions, registrations, reexaminations, extensions, confirmations, registrations and patents of addition on any of the foregoing.

1.198 “Payee” has the meaning set forth in Section 11.11.2.

1.199 “Payor” has the meaning set forth in Section 11.11.2.

1.200 “PCA Effective Date” means the date on which the Preliminary Collaboration Agreement became effective, which is March 25, 2021.

1.201 “Permitted Overage” has the meaning set forth in Section 11.7.2(b).

1.202 “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government, or any agency or political subdivisions thereof.

1.203 “Personally Identifiable Information” or “PII” means information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual, including: (a) a first and last name; (b) a home or other physical address, including street name and name of city or town; (c) an email address or other online contact information, such as an instant messaging user identifier or a screen name that reveals an individual’s email address; (d) a telephone number; (e) a social security number; (f) a bank, loan, or credit card account number; or (g) a persistent identifier, such as a customer number held in a “cookie” or processor serial number, that is combined with other available data that identifies an individual consumer.

1.204 “Pharmacovigilance Technical Agreement” has the meaning set forth in Section 10.1.

1.205 “Phase I Clinical Study” means, with respect to a given product, any clinical study administering such product to humans, whether healthy volunteers or patients, for the first time as a single or repeated dose for a given indication.

1.206 “[***]” has the meaning set forth in [***].

1.207 “Phase I/IIa Clinical Study” means, with respect to a given product, any clinical study of such product, for the purpose of studying pharmacology/pharmacodynamics effects or mechanism of action when administered to humans, whether healthy volunteers or patients, preliminarily determining dose or a range of doses or evaluating preliminary safety and which is not a Phase I Clinical Study.

1.208 “Phase II Clinical Study” means, with respect to a given product, any clinical study of such product, which provides for the trial of such product on a limited number of

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patients for the purpose of determining dose or a range of doses and evaluating safety and preliminary efficacy in the proposed therapeutic indication.

1.209 “[***]” has the meaning set forth in [***].

1.210 “Phase II/III Clinical Study” means, with respect to a given product, any clinical study of such product, for the purpose of determining a dose or dose ranges of such product and evaluating safety and effectiveness of dose ranges of such product in patients with the disease or condition being studied for the purposes of filing for Regulatory Approval with the FDA or other applicable Regulatory Authority.

1.211 “Phase III Clinical Study” means, with respect to a given product, any Pivotal Clinical Study of such product for the purpose of establishing to establish safety and efficacy of such product in patients with the disease or condition being studied for purposes of filing for Regulatory Approval with the FDA or other applicable Regulatory Authority, as described under 21 C.F.R. §312.21(c) with respect to the United States, or, with respect to a jurisdiction other than the United States, a similar clinical study.

1.212 “Phase IV Clinical Study” means of such product for the purpose of establishing any clinical study conducted for such product after such product has received Regulatory Approval for marketing in a particular jurisdiction, including trials the principal purpose of which is to (a) continue testing such product to collect information about (i) its safety or efficacy to provide comprehensive data confirming the benefit-risk balance is positive to convert to a standard Regulatory Approval for marketing in broader or various populations, (ii) its long term safety and side effects associated with long term use, or (iii) its use in additional diseases or conditions other than those for which Regulatory Approval was previously granted where the product is likely to be used “off label” in the disease or condition as a result of a similar mechanism of action, (b) obtain or widen reimbursement coverage, (c) improve the product’s competitive position, or (d) improve the standard of care. For clarity, Phase IV Clinical Studies do not include investigator-initiated trials.

1.213 “Pivotal Clinical Study” means, with respect to a product, a Clinical Study for the purpose of establishing any randomized, well-controlled, appropriately powered study of product as described in 21 C.F.R. §312.21(c) that is either a Phase II Clinical Study (including any Phase II Clinical Study as described in 21 C.F.R. §312.84(b)), Phase II/III Clinical Study or any Phase III Clinical Study, the results of which, if the pre-defined primary endpoint(s) is met or where the weight of evidence or totality of data provide sufficient data on safety and effectiveness to support a marketing approval (including any conditional approval) of the relevant product in the Territory.

1.214 “Plan” means any Development Plan or Commercialization Plan.

1.215 “[***]” has the meaning set forth in [***].

1.216 “Pre-Tax Profit or Loss” has the meaning set forth in the Financial Schedule.

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1.217 “Product Mark Controlling Party” has the meaning set forth in Section 15.8.1.

1.218 “Product Mark Non-Controlling Party” has the meaning set forth in Section 15.8.1.

1.219 “Product Marks” means the trademarks for use in connection with the Commercialization of any Collaboration Product or Sole Development Product, including trademarks, generic names, international nonproprietary names, trade dress, style of packaging and Internet domain names used in connection with the Commercialization of such Collaboration Product or Sole Development Product.

1.220 “Program Teams” has the meaning set forth in Section 3.2.2(p).

1.221 “Program Technology” means, on a Collaboration Program-by-Collaboration Program basis, all Patents and Know-How generated under such Collaboration Program, including, in the case of Expanded Functional Genomics Program, any Collaboration Screening Data.

1.222 “[***]” has the meaning set forth in [***].

1.223 “Public Statement” has the meaning set forth in Section 18.5.

1.224 “Receiving Party” has the meaning set forth in the definition of “Confidential Information.”

1.225 “Regulatory Approval” means, with respect to a country or jurisdiction in the Territory, all approvals, licenses, registrations or authorizations of any Regulatory Authority (including approvals of Drug Approval Applications), necessary for the Manufacturing, use, storage, import, export, transport, marketing and sale of a product, as applicable, in such country or jurisdiction. For purposes of this Agreement, (a) an Emergency Use Authorization shall not be deemed as a Regulatory Approval, and (b) for clarity, approval of an IND by a Regulatory Authority in any jurisdiction shall not constitute a Regulatory Approval.

1.226 “Regulatory Authority” means the FDA, the EMA or any regulatory body with similar regulatory authority in any other jurisdiction anywhere in the world.

1.227 “[***]” has the meaning set forth in [***].

1.228 “Regulatory Filing” means any filing or regulatory application or submission related to a product with the FDA or any other Regulatory Authority within or outside the United States, including authorizations, approvals or clearances arising from the foregoing, and all correspondence with a Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with such Regulatory Authority in each case with respect to such product.

1.229 “Rejected Target” means, with respect to the Expanded Functional Genomics Program, any Target that has been reviewed but not approved by the JRDC for

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progression into Target Validation Studies, or reviewed but not selected by the JSC to be an Expanded Functional Genomics Target for inclusion in the applicable Expanded Functional Genomics Development Plan.

1.230 “Rejected Target Product” has the meaning set forth in Section 5.6.4.

1.231 “Relevant Internal Policies” has the meaning set forth in Section 3.11.

1.232 “Research” means non-clinical and pre-clinical research activities, excluding any Clinical Studies or other clinical Development activities.

1.233 “Research and Pre-Clinical Publication Strategy” has the meaning set forth in Section 14.1.

1.234 “Respiratory Viral Disease” means any disease in human that is caused by a Respiratory Virus.

1.235 “Respiratory Viral Functional Genomic Screens” means any functional genomics screens (including CRISPR screens) using cell lines incorporating or infected with a Respiratory Virus to identify Targets associated with such Respiratory Viruses. For clarity, Respiratory Viral Functional Genomic Screens [***].

1.236 “Respiratory Virus” means any virus that leads to primary pathology, disease or symptoms in the respiratory system, including Influenza Virus, respiratory syncytial virus (RSV), human rhinovirus, parainfluenza, metapneumovirus (MPV), adenovirus, but excluding Coronavirus.

1.237 “[***]” has the meaning set forth in [***].

1.238 “[***]” means [***].

1.239 “Royalty Term” means, with respect to a product in a country, the period beginning from the First Commercial Sale of such product in such country, and ending on the later of (a) [***] years from the First Commercial Sale of such product in such country and (b) [***] of (i) [***] to such product in such country, and (ii) [***] to such product in such country.

1.240 “[***]” means [***].

1.241 “SARS-COV-2” means the severe acute respiratory syndrome Coronavirus 2.

1.242 “Screening Data” means data, know-how and information resulting from Respiratory Viral Functional Genomic Screens, including any analysis thereof.

1.243 “Screening Data Analysis” has the meaning set forth in Section 5.2.2.

1.244 “Selected Pathogen” has the meaning set forth in Section 6.1.

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1.245 “Selected Pathogen Development Plan” has the meaning set forth in Section 6.1.

1.246 “Senior Managers” has the meaning set forth in Section 22.1.1.

1.247 “[***]” means, [***].

1.248 “[***]” has the meaning set forth in [***].

1.249 “[***]” has the meaning set forth in [***].

1.250 “SPA” has the meaning set forth in the preamble.

1.251 “Sole Development Product” means (a) an Influenza Product, (b) an Additional Pathogen Product, or (c) an Expanded Functional Genomics Product, in each case ((a) - (c)), upon which one Party has exercised its Opt-Out Option and the Non Opt-Out Party has elected to pursue such product unilaterally pursuant to Section 7.6.4(b). In the event GSK has exercised its Opt-Out Option and Vir has elected to pursue such product unilaterally, such product thereafter becomes a “Vir Sole Development Product” and ceases to be a Collaboration Product. Similarly, in the event Vir has exercised its Opt-Out Option and GSK has elected to pursue such product unilaterally, such Collaboration Product becomes a “GSK Sole Development Product” and ceases to be a Collaboration Product.

1.252 “Subcommittee” has the meaning set forth in Section 3.7.

1.253 “Subcommittee Deadlock” has the meaning set forth in Section 3.9.1.

1.254 “Sublicensee” means any Third Party that is granted a sublicense by a Party under the licenses such Party receives from the other Party pursuant to the terms of this Agreement.

1.255 “Target” means a biological product of a human host cell, including a protein or gene, having a biological or chemical activity or function that may be modulated by one or more active compounds (including small molecules, monoclonal antibodies, oligonucleotides, gene therapies, or other biomolecules or modalities) or by exposure to pathogens such as viruses.

1.256 “[***]” has the meaning set forth in [***].

1.257 “[***]” has the meaning set forth in [***].

1.258 “[***]” means [***]. For clarity, [***].

1.259 “Target Validation Studies” has the meaning set forth in Section 5.2.2.

1.260 “Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties and additions thereto), but not including any taxes, levies, imposts, duties, charges, assessments or fees taken into account in the determination of Pre-Tax Profit or Loss pursuant to the Financial Schedule.

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1.261 “Term” has the meaning set forth in Section 16.1.

1.262 “Terminated Collaboration Product(s)” has the meaning set forth in Section 17.3.1.

1.263 “Terminated Party” has the meaning set forth in Section 17.3.1.

1.264 “Terminating Party” has the meaning set forth in Section 17.3.1.

1.265 “Territory” means all countries and territories in the world.

1.266 “Third Party” means a person or entity other than (a) Vir and its Affiliates, and (b) GSK and its Affiliates.

1.267 “Third Party Infringement Claim” has the meaning set forth in Section 15.7.1.

1.268 “Third Party Patent Rights” means any Patents owned or controlled by a Third Party.

1.269 “United States” or “U.S.” means the United States and its territories and possessions.

1.270 “U.S. Bankruptcy Code” means Title 11 of the United States Code.

1.271 “USD”, “United States Dollar” or “$” means the official currency of the United States of America.

1.272 “Vaccine” means any biological product, including nucleic acid(s), protein(s), peptide(s), polysaccharide(s), conjugated polysaccharide(s), live, live-attenuated or inactivated microorganism(s) including replication-competent and replication defective virus(es), bacteriophages(s) and bacteria, in each case comprising or encoding an antigen derived from the pathogen or the disease to be prevented or treated, optionally in combination with one or more biological or non-biological product(s) and that when administered to an subject induces, increases, decreases or qualitatively modifies, an immune response intended to prevent or treat the target disease or condition.

1.273 “[***]” means, [***].

1.274 “Vir-2482” means the Vir Influenza mAb the sequence of which is set forth on Schedule 1.274.

1.275 “Vir-2482XX2” means the Vir Influenza mAb the sequence of which is set forth on Schedule 1.274.

1.276 “Vir 2482 Licensed Technology” means all Patents and Know-How that are Controlled by Vir or its Affiliates as of the PCA Execution Date or thereafter at any time up to and including the Execution Date, and with respect to VIR-2482, if GSK exercises the

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Option, the VIR-2482 Program Effective Date, and that are necessary or reasonably useful for the Development, Manufacture and Commercialization of Vir-2482 or Vir-2482XX2.

1.277 “Vir-2482 Program Effective Date” has the meaning set forth in Section 4.2.3(a).

1.278 “Vir Acquired Asset” means any Vir Asset that is in-licensed or acquired by Vir from a Third Party after the Effective Date.

1.279 “[***]” has the meaning set forth in [***].

1.280 “[***]” has the meaning set forth in [***].

1.281 “Vir Asset” has the meaning set forth in Section 2.6.1(b).

1.282 “[***]” means [***].

1.283 “[***]” means [***].

1.284 “Vir Existing mAb Program” means, with respect to a Selected Pathogen, any of Vir’s neutralizing mAb program directed to such Selected Pathogen existing prior to or as of the date such target pathogen is selected by GSK pursuant to Section 6.2 (including such programs directed to the Listed Target Pathogens but excluding, for clarity, any programs that are Vir Acquired Assets or mAbs in such Vir Acquired Assets).

1.285 “[***]” means [***].

1.286 “Vir Indemnitees” has the meaning set forth in Section 20.1.2.

1.287 “[***]” has the meaning set forth in [***].

1.288 “Vir Influenza mAbs” means all mAbs for the prevention, treatment, or prophylaxis of diseases caused by Influenza Viruses that are Controlled by Vir or any of its Affiliates as of the Effective Date and during the Term (for clarity, subject to any pre-existing restrictions set forth in the Existing Third Party Agreements), including Vir-2482 and Vir-2482 XX2.

1.289 “Vir License Agreement” means any license or other agreement between Vir or any of its Affiliates and a Third Party regarding any Existing Influenza Program mAbs or Vir Licensed Technology, as amended, as of the applicable date.

1.290 “Vir Licensed Technology” means, on a Collaboration Program-by-Collaboration Program basis,

(a) in the case of the Influenza Program, all Patents and Know-How that are (i) Controlled by Vir or its Affiliates as of the Effective Date or during the Term, and (ii) necessary or reasonably useful for the Development, Manufacture and Commercialization of the Influenza Products containing Vir Influenza mAbs ([***]) (“Vir Influenza IP”);

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(b) in the case of the Expanded Functional Genomics Program, (i) [***]; and (ii) any Patents Controlled by Vir or its Affiliates and [***] and any Know-How Controlled by Vir or its Affiliates and [***];

(c) in the case of [***];

provided that in each case ((a) through (c)), Vir Licensed Technology shall not include any Vir Program Technology or, [***]. For clarity, any technology that Vir includes within Vir Licensed Technology for a given Collaboration Program shall not be deemed included in Vir Licensed Technology for any other Collaboration Program, unless Vir expressly agrees to such inclusion in the applicable Development Plan for such other Collaboration Program.

1.291 “[***]” has the meaning set forth in [***].

1.292 “[***]” means [***].

1.293 “Vir Preexisting Rights” has the meaning set forth in Section 12.1.1(a).

1.294 “Vir Program Technology” means, on a Collaboration Program-by-Collaboration Program basis, Vir’s right and interest in any Patent and Know-How generated under such Collaboration Program.

1.295 “Vir Specified Internal Policies” means Relevant Internal Policies of Vir as are provided by Vir to GSK during the Term.

ARTICLE 2
EffectiveNess; Overview; Exclusivitytc "ARTICLE 2 EFFECTIVENESS; OVERVIEW; EXCLUSIVITY"

2.1 Effectiveness of the Agreement TC "2.1 Effectiveness of the Agreement" \f C \l "2" . This Agreement is effective as of the PCA Effective Date (the “Effective Date”).

2.2 Overview TC "2.2 Overview" \f C \l "2" . Generally, the Parties shall, in accordance with the terms of this Agreement, collaborate to Develop pharmaceutical or biological products for the prevention, treatment and prophylaxis of diseases caused by Influenza Virus, other Respiratory Viruses, and Selected Pathogens, each, in accordance with an applicable Development Plan, and collaborate to further Manufacture and Commercialize such products under the terms set forth herein and in accordance with an applicable Development Plan (with respect to Clinical Manufacture and Development) and Commercialization Plan (with respect to Commercial Manufacture and Commercialization). The Collaboration is comprised of the following three Collaboration Programs for the Development, Manufacture and Commercialization of three types of products: (a) a program for the Development, Manufacture and Commercialization of products containing mAbs targeting Influenza Viruses, including Vir-2482 (if and after the Vir-2482 Program Effective Date if the Option is exercised by GSK in accordance with the terms herein), Vir-2482XX2, and any other Vir Influenza mAb that is approved by the JSC for inclusion in an Influenza Development Plan, excluding, for clarity, any Discontinued Vir Influenza mAb (each, an “Influenza Product”, and such program, an “Influenza Program”); provided that, for clarity,

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[***]; (b) additional programs for the Development, Manufacture and Commercialization of products containing any neutralizing mAb that is directed to a Selected Pathogen, for up to three (3) Selected Pathogens (each, an “Additional Pathogen Product” and each such program, an “Additional Pathogen Program”); provided that, for clarity, [***]; and (c) a program for the Development, Manufacture and Commercialization of products in any modality directed to Respiratory Viral Diseases, based on Respiratory Viral Functional Genomic Screens, (each an “Expanded Functional Genomics Product,” and such program, an “Expanded Functional Genomics Program”), provided that, (i) if a product containing a mAb arises from the Expanded Functional Genomics Program rather than the Influenza Program or an Additional Pathogen Program, such product shall not be considered an Influenza Product or Additional Pathogen Product, and shall be considered as an Expanded Functional Genomics Product; and (ii) although the Expanded Functional Genomics Program will be focused on Targets associated with Respiratory Viral Diseases, [***]. During the Initial Development Term, the Parties will collaborate, under mutually agreed Development Plan(s) for each Collaboration Program, to generate and evaluate Development Candidates under such Collaboration Program. With respect to each Collaboration Product under an applicable Collaboration Program, the Parties will conduct Development, Manufacturing, and regulatory activities in accordance with a Development Plan and Commercialization activities in accordance with a Commercialization Plan.

2.3 Collaboration Program Leads TC "2.3 Collaboration Program Leads" \f C \l "2" .Generally, and subject to Section 2.6.2, (a) GSK shall be the Lead Party for the Development of Influenza Products (and, for clarity, with respect to Vir-2482, after the Vir-2482 Program Effective Date, if GSK exercises the Option) under the oversight of the JRDC, the JSC and other applicable Committees in accordance with the terms of this Agreement; (b) with respect to the Expanded Functional Genomics Program and the Additional Pathogen Programs, the Parties, through the JSC, will determine which Party will be the Lead Party for the Development of a Collaboration Product under the oversight of the JRDC, the JSC and other applicable Committees in accordance with the terms of this Agreement, provided that if the Parties cannot agree at the JSC with respect to the determination of the Lead Party, GSK shall have final decision-making authority to determine the Lead Party; and (c) with respect to each Collaboration Program, GSK shall be the Lead Party for Commercialization and Commercial Manufacture activities with respect to each Collaboration Product under such Collaboration Program (the “LCP”), under the oversight of the JCC, the JSC, the JMC and other applicable Committees in accordance with the terms of this Agreement, and, shall have the final decision-making authority with respect to the Commercialization and Commercial Manufacture under such Collaboration Program.

2.4 Exclusivity Obligations TC "2.4 Exclusivity Obligations" \f C \l "2" .

2.4.1 Influenza Program.During the Term, for any Vir Influenza mAb (a) that is not approved by the JSC for inclusion in an Influenza Development Plan, or (b) that has been approved by the JSC for inclusion in an Influenza Development Plan (which, for clarity, includes Vir-2482, if GSK exercises the Option, and Vir-2482XX2), but then the Development under such Influenza Development Plan ceases with respect to such Vir Influenza mAb (each in the case of (a) or (b), a “Discontinued Vir Influenza mAb”), the following shall apply:

(i) if there is, and for so long as there continues to be, another Vir Influenza mAb being Developed or Commercialized by the Parties or their respective Affiliates as

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a Collaboration Product, or by either Party or its Affiliate as a Sole Development Product, then Vir shall not, either by itself or via an Affiliate, or by partnering with a Third Party, further Develop or Commercialize such Discontinued Vir Influenza mAb without GSK’s consent, and

(ii) if there is no longer any Vir Influenza mAb being Developed or Commercialized by the Parties or their respective Affiliates as a Collaboration Product, or by either Party or its Affiliate as a Sole Development Product, then Vir shall have the right to, either by itself or via an Affiliate, or by partnering with a Third Party, further Develop and Commercialize such Discontinued Vir Influenza mAb without GSK’s consent.

2.4.2 Expanded Functional Genomics Program.

(a) During the Initial Development Term, neither Party shall, by itself or via an Affiliate, or by partnering with a Third Party, conduct Development activities on any Respiratory Viral Functional Genomic Screens for Targets associated with Respiratory Viruses or Respiratory Viral Diseases outside of the Collaboration without the other Party’s prior written consent, provided that, (i) with respect to GSK, the foregoing restrictions shall not apply to [***], and (ii) with respect to Vir, the foregoing restrictions shall not apply to [***].

(b) With respect to each Expanded Functional Genomics Target, following the Effective Date, and until the earlier of (x) a Party exercising its Opt-Out Option with respect to such Expanded Functional Genomics Target, or (y) five (5) years following such Target being designated by the JSC as an Expanded Functional Genomics Target (“Exclusivity Period”), neither Party shall, by itself or via an Affiliate, or by partnering with a Third Party, Develop or Commercialize any compounds or product directed to such Expanded Functional Genomics Target in [***] outside the Expanded Functional Genomics Program, provided that, during the Exclusivity Period, if either Party [***] that is then being progressed within the Expanded Functional Genomics Program, alone or via an Affiliate or partnering with a Third Party, in each case, that would otherwise conflict with the restrictions set forth in this Section 2.4.2(b), such Party shall, prior to initiation of such program, first notify the other Party in writing, and offer to include such program in the Collaboration (an “Inclusion Notice”), which Inclusion Notice shall, where applicable, include [***] in the Collaboration (“[***]”). Such offering Party shall also [***] include the program under the Collaboration. Upon receipt of an Inclusion Notice from the offering Party, the following shall apply:

(i) The other Party shall have [***] from the date on which it receives the Inclusion Notice to determine whether or not it will accept such offer to include such program in the Collaboration and to notify the offering Party of its decision.

(ii) If within such [***] period such other Party notifies the offering Party in writing that such other Party accepts such offer to include such program in the Collaboration, then such program shall be included in the Collaboration, the scope of which will be included in the applicable Development Plan, and shall constitute part of the Expanded Functional Genomics Program, and the terms and conditions of this Agreement shall apply, subject to any additional terms and conditions as may be agreed by the Parties.

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(iii) If such other Party declines, or fails to notify the offering Party in writing within such [***] period that it wishes to include such program in the Collaboration, then the offering Party or its Affiliates shall have the right to exploit such program outside of the Collaboration solely to the extent [***], and such exploitation shall not constitute a breach of this Section 2.4.2(b) by such offering Party, provided that (A) such offering Party shall have no right to Develop or Commercialize any compound or product within such program that is directed to [***] associated with such Expanded Functional Genomics Target [***] for which an Expanded Functional Genomics Product directed to such Expanded Functional Genomics Target is being progressed at the time the Inclusion Notice was provided, and (B) the offering Party shall ensure that no Confidential Information of the other Party (including Confidential Information that is the Confidential Information of both Parties, but for clarity excluding any Confidential Information that is the Confidential Information of only the offering Party) generated from the Collaboration with respect to such Expanded Functional Genomics Target (including the Collaboration Screening Data with respect to such Expanded Functional Genomics Target) is used for such program, compound or product outside the Collaboration.

(c) During the Initial Development Term, except as provided in Section 5.6 with respect to Rejected Targets, [***].

(d) Notwithstanding Section 2.4.2(b) and Section 2.4.2(c), with respect to an Expanded Functional Genomics Independent Program of a Party directed to a Target that exists as of the date the Screening Data Analysis for such Target is provided to the JRDC, such Party may, in its discretion: (i) continue with such Expanded Functional Genomics Independent Program, subject to the limitations set forth in Section 5.5.1 with respect to the use of the Collaboration Screening Data, provided that such Party shall not, [***]; or (ii) subject to any pre-existing obligation to a Third Party and agreement of such Party, offer to include such Expanded Functional Genomics Independent Program in the Collaboration, at which time the Parties will negotiate in good faith the terms upon which such Expanded Functional Genomics Independent Program will be included in the Collaboration. [***].

2.4.3 Additional Pathogen Programs.During the Initial Development Term, with respect to the Selected Pathogen under each Additional Pathogen Program, prior to the applicable Party exercising its Opt-Out Option for an Additional Pathogen Product directed at such Selected Pathogen, the following shall apply with respect to all Additional Pathogen Products directed to such Selected Pathogen, (a) Vir shall not, alone or via an Affiliate or partnering with a Third Party, Develop or Commercialize any compound or product (whether or not such compound or product is an antibody) directed to such Selected Pathogen, and (b) GSK shall not, alone or via an Affiliate or partnering with a Third Party, Develop or Commercialize any neutralizing mAb therapeutic product directed to such Selected Pathogen, in each case ((a) and (b)), outside the Collaboration. Notwithstanding the foregoing, if at the time a Selected Pathogen is selected pursuant to Section 6.2, a Party has, either alone or via an Affiliate or partnering with a Third Party, a program directed to such Selected Pathogen, then such Party may, in its discretion: (i) continue with such program, provided that such Party shall not, [***]; or (ii) subject to any pre-existing obligation to a Third Party and agreement of such Party, offer to include such program in the Collaboration, at which time the Parties will negotiate in good faith the terms upon which such program would be included in the Collaboration.

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2.4.4 No Other Exclusivity Obligations. Other than the exclusivity restrictions set forth in this Section 2.4Section 2.6.3 and Section 4.2.2, and Section 6.2.1, there will be no exclusivity provisions applicable to either Party for the Influenza Program, the Expanded Functional Genomics Program, or the Additional Pathogen Programs. In addition, none of the exclusivity restrictions set forth in those Sections specified above in this Section 2.4.4 shall apply to (a) [***].

2.5 [***]. TC "2.5 Compassionate Use Programs." \f C \l "2" With respect to each Collaboration Product, the Parties shall, through the JMC, the JRDC and the JSC, discuss and agree on [***].

2.6 Parties’ Assets TC "2.6 Parties’ Assets" \f C \l "2" .

2.6.1 For each Collaboration Program,

(a) GSK is not required to include any antibodies, compounds or products, including platform technologies (collectively, “Assets”), Controlled by GSK or its Affiliates (“GSK Assets”) in the Collaboration for use in any such Collaboration Program, [***];

(b) Vir is not required to include any Assets Controlled by Vir or its Affiliates (“Vir Assets”) in the Collaboration for use in any such Collaboration Program, except for (i) Vir Influenza mAbs which, (A) with respect to Vir-2482XX2, shall be included in the Influenza Program as of the Effective Date, (B) with respect to Vir-2482, shall be included in the Influenza Program as of the Vir-2482 Program Effective Date if GSK exercises the Option, and (C) with respect to each other Vir Influenza mAb that becomes an Influenza Product, shall be included in the Influenza Program as of the date such Vir Influenza mAb is approved by the JSC for inclusion in an Influenza Development Plan, (ii) [***], and (iii) Vir Existing mAb Programs directed to a Selected Pathogen, which shall be included in the applicable Additional Pathogen Program following the selection of such Selected Pathogen in accordance with Section 6.2. Vir Assets and GSK Assets, with respect to Vir and GSK, respectively, are referred to as “Party Assets.”

2.6.2 Except for the Party Assets that are required to be included in the applicable Collaboration Program pursuant to Section 2.6.1, if the Parties agree to include any Party Asset in the Collaboration, then the Parties shall mutually agree on the relevant terms, including relevant intellectual property terms and financial terms (which, for clarity, shall govern the financial terms for the Collaboration Products Developed from such Party Asset under the applicable Collaboration Program) with respect to such Party Asset, before such Party Asset can be included in the Collaboration (“Contribution”), and the scope of such Party Asset Contributed by such Party (including any applicable intellectual property terms and financial terms) shall be further set forth in the applicable Development Plan pursuant to Section 7.1 or an amendment to this Agreement pursuant to Section 22.11, provided that, for the Expanded Functional Genomics Program, with respect to any Party Asset provided by a Party to the other Party pursuant to Section 15.1.1, as described in the applicable MTR, for purposes of conducting Screening Data Analysis and Target Validation Studies, the Materials Transferring Party with respect to such Party Asset shall grant and hereby grants to the Materials Receiving Party a limited, non-exclusive, non-sublicenseable, and non-transferrable license under any Patents and Know-How Controlled by the

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Materials Transferring Party with respect to such Party Asset, solely to the extent necessary for, and for the purposes of, allowing the Materials Receiving Party to conduct Screening Data Analysis and Target Validation Studies using such Party Asset, which license will terminate upon completion of the relevant Screening Data Analysis and Target Validation Studies. For clarity, (a) the foregoing provisions in this Section 2.6.2 shall not apply to [***], and (b) if GSK Contributes [***], GSK shall, [***]. Notwithstanding the foregoing, and subject to [***].

2.6.3 Vir further agrees that following the Effective Date, and until the date on which GSK [***], Vir [***]. For clarity, without limiting Vir’s exclusivity obligations hereunder, the foregoing sentence is not intended to restrict Vir from [***].

2.7 Compliance with Applicable Law TC "2.7 Compliance with Applicable Law" \f C \l "2" . Each Party shall, and shall cause their Affiliates, Sublicensees, permitted subcontractors and distributors to conduct its or their activities under this Agreement in compliance with applicable Law. Without limiting the foregoing, any information exchanged between the Parties under this Agreement shall be subject to, and limited to the extent permitted by any applicable Law, including any applicable competition Law.

ARTICLE 3
Management of the Collaborationtc "ARTICLE 3 MANAGEMENT OF THE COLLABORATION"

3.1 Joint Steering Committee TC "3.1 Joint Steering Committee" \f C \l "2" .

3.1.1 Establishment of JSC. Prior to the Execution Date, the Parties established a Joint Steering Committee (“Joint Steering Committee” or “JSC”), which is constituted in accordance with Section 3.8. The JSC shall operate in accordance with the provisions of Section 3.8 and Section 3.9. At its meetings, the JSC shall discuss the matters described below and such other matters as are reasonably requested by either Party’s Alliance Managers.

3.1.2 Responsibilities of the JSC. The JSC shall perform the following functions:

(a) oversee, guide and approve the overall strategic direction of the Collaboration (but without modifying or limiting the rights or obligations of either Party as otherwise set forth herein);

(b) discuss and determine which Party will be the Lead Party for the Development of a Collaboration Product under the Expanded Functional Genomics Program and the Additional Pathogen Programs;

(c) facilitate communications between the Parties regarding the identification and evaluation of Collaboration Products;

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(d) with respect to Vir Influenza mAbs other than Vir-2482 and Vir 2482XX2, approve each such other Vir Influenza mAb for inclusion in an Influenza Development Plan based on agreed candidate criteria;

(e) with respect to the Expanded Functional Genomics Program, approve selection of Expanded Functional Genomics Targets (including in connection with reconsideration of a Rejected Target resubmitted by a Party);

(f) with respect to the Additional Pathogen Programs, facilitate the discussion with respect to the selection of each Selected Pathogen and approve such selection;

(g) establish, as appropriate, additional sub-committees or working groups responsible for managing specific aspects of the Collaboration as contemplated herein;

(h) delegate decision-making authority with respect to specified issues to the applicable subcommittees, provided that any such delegated decision-making shall remain subject to Section 3.9;

(i) oversee and supervise the subcommittees and resolve issues or Dispute elevated to it by any subcommittee, Program Team or working group the JSC may establish;

(j) serve as a forum for each Party to communicate regarding each Party’s interest in participation in further Development of each Collaboration Product, including approval of proposals from the JRDC for the inclusion of, and terms for, Third Party assets or Intellectual Property Rights within a given Collaboration Program;

(k) serve as a forum for the Parties to discuss any proposal from either Party for inclusion of programs in the Collaboration in accordance with Section 2.4.2(b), Section 2.4.2(d) or Section 2.4.3, as applicable;

(l) [***];

(m) for each Collaboration Product, review and approve the initial Development Plan (and the Development Budget therein) in accordance with Section 7.1.2 and any material updates or amendments thereto in accordance with Section 7.1.3;

(n) for each Collaboration Product, review and approve the initial Commercialization Plan (including the associated Commercialization Budget) and proposed material updates and amendments thereto [***];

(o) [***];

(p) with respect to any Additional Pathogen Program, determine which Party shall have Manufacturing responsibility for supply of the applicable Additional Pathogen Product for preclinical studies, Phase I Clinical Studies and Phase II Clinical Studies of such Additional Pathogen Product;

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(q) review to determine whether any additional Internal Policy of a Party shall be included as a Relevant Internal Policy; and

(r) perform such other functions as are assigned to the JSC in this Agreement, or otherwise agreed by the Parties in writing.

3.2 Joint Research and Development Committee TC "3.2 Joint Research and Development Committee" \f C \l "2" .

3.2.1 Establishment of JRDC. The Parties shall, [***], establish a joint research and development committee (“Joint Research and Development Committee” or “JRDC”) to oversee Development of Collaboration Products and to coordinate Development activities of both Parties with respect to such Collaboration Products.

3.2.2 Responsibilities of the JRDC. The JRDC shall perform the following functions:

(a) oversee, review and coordinate the conduct, implementation and progress of the Development (including any Research) activities of each Collaboration Product with respect thereto under this Agreement, as described in the applicable Development Plan;

(b) discuss and develop the Development (including Research) strategy for the Collaboration, including any next-generation Collaboration Products;

(c) review and approve the applicable initial Development Plan and proposed updates and amendments thereto, in each case, as prepared by the Lead Party in conjunction with the Program Teams with respect to clinical Development of any Collaboration Product, including the applicable Development Budget and the allocation of responsibilities between the Parties, from time to time, and submit such Development Plan, updates, and other amendments to the JSC for review and approval in accordance with Section 7.1.2 or Section 7.1.3, as applicable;

(d) review and evaluate any results or reports delivered to the JRDC with respect to the Research activities, including validation and designation of each Development Candidate;

(e) with respect to the Expanded Functional Genomics Program, determine to progress a Target to Target Validation Studies, and submit Targets to the JSC for the designation of Expanded Functional Genomics Targets;

(f) review and evaluate any results or reports delivered to the JRDC with respect to further Development activities in addition to Research activities under the Development Plans, including the protocol concepts for Clinical Studies of the Collaboration Products and any revision of such protocols with respect to issues that are referred to the JRDC, in each case pursuant and subject to Section 7.5.3;

(g) address issues escalated from Program Teams, [***], and oversee risk mitigation plans proposed by Program Teams;

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(h) [***];

(i) approve CROs and other subcontractors in accordance with Section 7.4.2, excluding manufacturing subcontractors, which shall be approved by the JMC;

(j) [***] under applicable Collaboration Programs;

(k) [***];

(l) for each Collaboration Program, discuss each Party’s interest in participation in further Development activities in connection with the applicable Opt-Out Points;

(m) review and approve any Research and Pre-Clinical Publication Strategy or Clinical Development Publication Strategy proposed by the Lead Party of a Collaboration Program, pursuant to Section 14.1 or Section 14.2;

(n) [***]

(o) provide periodic updates to the JSC and otherwise supporting the JSC’s decision-making;

(p) establish a working functional teams for each Collaboration Program (each, a “Program Team”) to oversee the Development activities under each Collaboration Program, and delegate one or more of its functions under this Section 3.2.2 to such Program Team, with the supervision of the JRDC; and

(q) perform such other functions as are specifically designated to the JRDC in this Agreement, or as the Parties otherwise agree in writing are appropriate to further the purposes of this Agreement.

3.3 Joint Commercialization Committee TC "3.3 Joint Commercialization Committee" \f C \l "2" .

3.3.1 Establishment of JCC. The Parties shall establish a joint commercialization committee (“Joint Commercialization Committee” or “JCC”), by [***], to oversee and review progress of Commercialization activities with respect to such Collaboration Products.

3.3.2 Responsibilities of the JCC. The JCC shall perform the following functions:

(a) review and approve the initial Commercialization Plan, including the associated Commercialization Budget, and proposed material updates thereto proposed by either Party (including any updates to the Commercialization Budget), in each case, as prepared by the LCP, with respect to Commercialization of each Collaboration Product, and submit the initial Commercialization Plan (including the associated Commercialization Budget) for each Collaboration Product to the JSC for review and approval and submit proposed material updates thereto [***] to the JSC for review and approval in accordance with Section 9.3;

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(b) provide a forum for discussing the need for significant updates to Commercialization Plan and [***], as applicable;

(c) review and discuss the [***] forecast for the Commercialization Budget, in conjunction with the Financial Working Group;

(d) review reports delivered to the JCC with respect to material Commercialization activities conducted by GSK and, [***];

(e) to the extent not addressed by a Program Team, [***]; and

(f) perform such other functions as are specifically designated to the JCC in this Agreement, as applicable, or as the Parties otherwise agree in writing are appropriate to further the purposes of this Agreement.

3.4 Joint Patent Committee TC "3.4 Joint Patent Committee" \f C \l "2" .

3.4.1 Establishment of JPC.[***], the Parties shall establish a joint patent committee (“Joint Patent Committee” or “JPC”) to oversee patent matters relating to the Collaboration, as more specifically described below.

3.4.2 Responsibilities of the JPC. The JPC shall perform the following functions.

(a) serve as a forum for the discussion of the overall intellectual property strategies for the Collaboration, including the prosecution, maintenance, defense and enforcement of Program Patents, GSK Licensed Patents and Vir Licensed Patents, and submission of patent information to the FDA for listing in the Orange Book, “Purple Book” (or Orange Book-equivalent framework document for Biologics) or any foreign equivalents thereof;

(b) [***];

(c) [***];

(d) review proposed publication by the Parties for any Patent-related issues;

(e) [***]; and

(f) perform such other functions regarding Patents included in the Program Patents, GSK Licensed Patents and Vir Licensed Patents that are specifically designated to the JPC in this Agreement, or as the Parties otherwise agree in writing are appropriate to further the purposes of this Agreement.

3.4.3 Decision-Making of the JPC. For matters relating to prosecution, maintenance or defense of a Patent, the Party [***]. For matters relating to submission of patent information for listing in the Orange Book or any foreign equivalents thereof, the LCP shall have the final decision-making authority pursuant to Section 8.3. For matters relating to whether to

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enter into a Blocking Third Party IP Agreement (and the agreement on the material terms thereof), any dispute shall be resolved in accordance with Section 11.9.1. For matters relating to whether to include any Third Party Intellectual Property Rights under a Third Party IP Agreement, any dispute shall be resolved in accordance with Section 12.9. [***]. For all other matters under the JPC authority, if the JPC cannot resolve a dispute with respect to such matter, the JPC shall be submitted such dispute to the JSC for resolution in accordance with Section 3.9.

3.5 Joint Manufacturing Committee TC "3.5 Joint Manufacturing Committee" \f C \l "2" .

3.5.1 Establishment of the JMC.[***] the Parties shall establish a joint Manufacturing committee (“Joint Manufacturing Committee” or “JMC”) to oversee matters relating to Manufacturing (including Clinical Manufacturing and Commercial Manufacturing and technology transfer) of any Collaboration Product under the Collaboration. The JMC shall be chaired by [***].

3.5.2 Responsibilities of the JMC. The JMC shall perform the following functions:

(a) serve as a forum for the discussion of the overall Manufacturing strategies and plans for the Collaboration, including [***];

(b) review and approve each Manufacturing Plan included in a Development Plan and Commercialization Plan and proposed updates and amendments thereto;

(c) assist the JRDC, the JCC and the JSC in review and approval of the Development Budget and Commercialization Budget and proposed updates and amendments thereto to the extent relating to Manufacturing activities;

(d) provide recommendations to JSC for the selection of CMOs for Clinical Manufacturing and Commercial Manufacturing and the terms and conditions of the proposed CMO agreement; and

(e) perform such other functions as are specifically designated to the JMC in this Agreement, or as the Parties otherwise agree in writing are appropriate to further the purposes of this Agreement.

3.5.3 Decision-Making of the JMC. The JMC shall operate in accordance with Section 3.8, and the JMC shall make decisions generally in accordance with Section 3.9. If the JMC is unable, despite the good faith efforts of all members, to resolve any dispute relating to matters within the JMC’s authority within [***] after a disputed issue has been referred to the JMC by either Party, the disputed issue shall be referred to the JRDC, and shall be resolved in accordance with Section 3.9.

3.6 Financial Working Group TC "3.6 Financial Working Group" \f C \l "2" .Within thirty (30) days following the Effective Date, the JSC will establish a financial working group subcommittee (“Financial Working Group”) that will be responsible for initially reviewing all budgets included as part of the Development Plans and Commercialization Plans,

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and for overseeing the operational aspects of all co-funding and payment activities under this Agreement. The JSC shall determine the appropriate number of representatives of each Party that will constitute the Financial Working Group. Promptly following the Effective Date, each Party shall designate their respective initial representatives to the Financial Working Group to allow such Financial Working Group to begin organizing information for the initial meetings of each of the JRDC and JSC. Unless otherwise specified by the JSC, the Financial Working Group shall operate generally in accordance with the provisions of Section 3.8, and shall have no authority to alter or amend the terms and conditions of this Agreement. Both Parties’ representatives on the Financial Working Group shall make decisions and act in accordance with the General Principles.

3.7 Other Subcommittees TC "3.7 Other Subcommittees" \f C \l "2" . From time to time, the JSC and the JRDC may establish other subcommittees to oversee particular projects or activities under this Agreement, and such subcommittees shall be constituted and have such responsibility as the JSC or JRDC approves (such subcommittees, along with the other subcommittees established hereunder, each referred to herein as a “Subcommittee”). The Subcommittees shall operate in accordance with the provisions of Section 3.8, and shall have no authority to alter or amend the terms and conditions of this Agreement.

3.8 Membership, Meetings and Meeting Minutes TC "3.8 Membership, Meetings and Meeting Minutes" \f C \l "2" .

3.8.1 Membership. Except as otherwise stated herein, each Committee shall be composed of [***] in each case from each of Vir and GSK, or such other equal number of representatives as the Parties may agree. As of the Effective Date, the Parties anticipate that the JSC will be composed of [***] representatives of each Party, and the JRDC will be composed of [***] representatives of each Party. Either Party may replace its respective Committee representatives at any time with prior written notice to the other Party, provided that such replacement is of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing. Each Party’s representatives to each Committee shall be individuals suitable in seniority and experience and amongst such representatives shall be [***] from each Party with relevant decision-making authority to make decisions within the scope of the applicable Committee’s responsibilities, provided that it is understood that [***]. For each Committee, or where applicable, Subcommittees, each Party shall designate one of its representatives on such Committee to co-chair the meetings for such Committee (each, a “Co-Chair”). The Co-Chairs shall, with and through the assistance of the Alliance Managers, coordinate and prepare the agenda for, and ensure the orderly conduct of, the meetings of such Committee. The Co-Chairs shall, with and through the assistance of the Alliance Managers, solicit agenda items from Committee members and provide an agenda, along with appropriate information for such agenda, reasonably in advance of any meeting, including [***]. Such agenda shall include all items requested by either Co-Chair for inclusion therein. In the event the Co-Chairs or another Committee member from either Party is unable to attend or participate in a meeting of such Committee, the Party whose Co-Chair or member is unable to attend may designate a substitute co-chair or other representative for the meeting. For clarity, while the Alliance Managers may attend meetings of all Committees, the Alliance Managers shall not: (a) serve as a voting member of any such Committee; nor (b) be counted towards either Party’s representation on any such Committee.

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3.8.2 Meetings. The JSC shall meet at least [***] per year, or at a frequency determined by the JSC, for so long as the Parties are engaging in Development activities as part of the Collaboration or a Collaboration Product is in Development or being Commercialized, in each case, for clarity, not as a Sole Development Product, and JSC meetings can be called at other times to resolve Committee Deadlocks in accordance with Section 3.9.1. [***] will be in-person, unless the JSC members agree to meet by an alternative mechanism (e.g., telephone or videoconference). The JRDC and the JCC, once formed, shall meet [***], or in each case at a frequency determined by the JRDC or JCC, as applicable. The Financial Working Group, Program Teams and other Subcommittees, if any, shall each meet at least quarterly after the Subcommittee is formed, or as more or less often as otherwise agreed by the applicable Subcommittee; provided that the Financial Working Group will meet as and when necessary to carry out its responsibilities set forth in Section 11.6. During the [***]. Committee meetings may be conducted by telephone, videoconference or in person. Any in-person Committee meetings shall be held on an alternating basis between Vir’s and GSK’s facilities, unless otherwise agreed by the Parties. Each Party shall be responsible for its own expenses in attending such meetings. As appropriate, the Committee may [***]. Each Party may also call for special meetings of a Committee to discuss particular matters requested by such Party. The Alliance Managers shall provide the members of each Committee with no less than [***] notice of each regularly scheduled meeting and, to the extent reasonably practicable under the circumstances, no less than [***] notice of any special meetings called by either Party.

3.8.3 Meeting Minutes. Minutes will be kept of all Committee meetings by one of the Alliance Managers (or his or her designees), or by one of the Co-Chairs (if an Alliance Manager is not present) on a rotating basis (commencing with GSK’s representative) and sent to all members of the Committee by facsimile or e-mail for review and approval within [***] after each meeting. The Parties may agree at the JSC on the format of the meeting minutes for the JSC and each other Committee. If a Party’s Alliance Manager (or his or her designee) is not present at a Committee meeting and that Party is responsible for keeping minutes, such Party shall designate one of its Committee members to keep minutes. Minutes shall record all action items and decisions of the applicable Committee. The Committee shall formally accept the minutes of the previous Committee meeting [***]. Minutes will be deemed approved unless any member of the Committee objects to the accuracy of such minutes by [***]. Minutes shall list action items and shall designate any issues that need to be resolved by the JSC or applicable dispute resolution process. In the event of any such objection to the minutes that is not resolved by mutual agreement of the Parties, such minutes will be amended to reflect such unresolved dispute.

3.9 Decision-Making TC "3.9 Decision-Making" \f C \l "2" .

3.9.1 Committee Decision Making. Decisions of each Committee shall be made by unanimous vote, with each Party having one vote. To the extent a Party has voted in favor of a particular action, after commencement of the implementation of such action it shall not be permitted to reverse such vote absent changed facts and circumstances that were not present at the time of the initial vote. In order to make any decision, any Committee must have present (in person or via telephone or videoconference) and voting at least one representative of each Party. Representatives of each Party under each Committee shall use reasonable efforts to resolve any dispute within the authority of such Committee in good faith. If (a) the JRDC, the JCC, the Financial Working Group, or the JPC (subject to Section 3.4.3) cannot or does not reach consensus

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with respect to a bona fide dispute within the authority of such Subcommittee (a “Subcommittee Deadlock”) after endeavoring for [***] to do so, such matter shall be referred to the JSC for discussion and attempted resolution, and (b) any Program Team or other Subcommittee cannot or does not reach consensus with respect to Subcommittee Deadlock after endeavoring for [***] to do so, then such Subcommittee Deadlock shall be first referred to the JRDC (in case of Program Teams and the JMC) or the applicable establishing Committee for resolution before they are submitted to the JSC pursuant to subsection (a). In the event that the JSC does not reach a decision with respect to a Subcommittee Deadlock, or if the JSC cannot or does not reach consensus with respect to any other matter within its authority, in each case, after endeavoring for [***] to do so, then such matter (a “Committee Deadlock”) shall be decided by the Parties in accordance with Section 3.9.2 below. For clarity, all commitments and other matters decided by the JSC or any other Committee between the Effective Date and the Execution Date (inclusive), to the extent that such commitments and other matters are actually approved and documented in the JSC meeting minutes, shall be deemed to be approved by and mutually agreed through the JSC and such other Committee, respectively, for purposes of this Agreement.

3.9.2 Decision Making Authority. The Committee Deadlock shall be submitted by either Party to the Senior Managers of both Parties. The Senior Managers of each Party, or their respective designees, shall attempt to resolve such Committee Deadlock within [***] after submission. If the Senior Managers (or their respective designees) cannot resolve the Committee Deadlock, then GSK, as the Lead Party and the LCP for the applicable Collaboration Product, shall have the final decision-making authority, except that:

(a) if the JSC determines (with GSK having the final decision-making authority) that Vir shall be the Lead Party for the Development of a Collaboration Product under the Expanded Functional Genomics Program or any Additional Pathogen Program, then, prior to the first filing for Drug Approval Application of such Collaboration Product, if a Committee Deadlock is with respect to Development and regulatory matters regarding such Collaboration Product, including clinical Manufacturing and supply of clinical trial material for Clinical Studies, then Vir, as the Lead Party for such Collaboration Product, shall have the final decision making authority [***];

(b) [***];

(c) with respect to the Expanded Functional Genomics Program,

(i) if at the time a Target is submitted by the JRDC to the JSC for approval as an Expanded Functional Genomics Target, [***];

(ii) if [***];

(iii) if the Parties [***].

(d) with respect to the Additional Pathogens Program,

(i) except with respect to the [***] designated by GSK from the Listed Target Pathogens and any Program mAbs directed to such Selected Pathogen (for which, for clarity, GSK shall have the final decision-making authority), [***] (A) [***], or (B) [***], and,

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in each case ((A) or (B)), such decision shall [***]; provided that, the foregoing [***] (x) [***], or (y) [***];

(ii) GSK shall not have the right [***];

(iii) GSK shall not have the right [***];

(e) with respect to inclusion of any additional Internal Policy of a Party as a Relevant Internal Policy, Section 3.11 shall apply;

(f) with respect to the [***] for each Collaboration Product, if the Committee Deadlock is with respect to (i) [***], or (ii) [***] (A) [***]; and (B) [***], in each case ((A) and (B)) to the extent that [***], in each case ((x) or (y)), [***], then GSK shall have the final decision-making authority, but [***].

3.9.3 Limits on Decision-Making Authority.Notwithstanding Section 3.4.3 and Section 3.9.2, (a) neither Party may exercise its final decision-making authority to (i) impose additional obligations upon the other Party not otherwise provided in this Agreement without such Party’s consent, (ii) cause the other Party to violate any applicable Law, or the terms of any agreement it may have with any Third Party entered into prior to the Execution Date, or (iii) modify, violate, breach or waive compliance with this Agreement, or cause the other Party to do so, (b) a Party may only exercise its final decision-making authority with respect to a matter after giving good faith consideration to the other Party’s comments (through its JSC members or its Senior Manager, as applicable) on such matter, and (c) if a Party elects its Opt-Out Option at any time with respect to a Collaboration Product, then thereafter, to the extent suchOpt-Out Partywould have the final decision-making authority pursuant to Section 3.9.2, then, such Opt-Out Party shall no longer have such final decision-making authority with respect to such Collaboration Product and, without limiting the preceding clauses (a) and (b), any dispute that would be subject to such Opt-Out Party’s final decision-making authority shall then be subject to the Non Opt-Out Party’s final decision-making authority.

3.9.4 Day-to-Day Decision-Making Authority. Each Party shall have decision-making authority with respect to the day-to-day activities of such Party (and such Party’s employees, agents and subcontractors) under this Agreement in accordance with this Agreement, including applicable Development Plan or Commercialization Plan, provided that such decisions are not inconsistent with the terms and conditions of this Agreement (including any applicable Plan) or the decisions and actions of the JSC, the JRDC, the JCC, the JMC, the Financial Working Group or any other Subcommittee, as applicable. Subject to the foregoing, each Party shall keep the relevant Committees reasonably informed of material developments regarding the Collaboration Products.

3.9.5 Limitation of Powers. Each Committee will have only the powers as are specifically delegated to it under this Agreement. The JSC is not a substitute for the rights of the Parties under this Agreement and is intended to coordinate and facilitate the activities of the Parties during the Term. The JSC will not be involved with the day-to-day management of activities to be performed by a Party under this Agreement. Matters explicitly reserved to the consent, approval or other decision-making authority of one or both Parties, as expressly provided

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in this Agreement, are outside the jurisdiction and authority of the JSC, including amendment, modification or waiver of compliance with the Agreement, which shall be made by the Parties in accordance with Section 22.11.

3.10 Alliance Managers TC "3.10 Alliance Managers" \f C \l "2" . [***], each Party shall designate an individual to serve as the main point of contact for each Party [***] to exchange information, facilitate communication and coordinate the Parties’ activities hereunder (each, an “Alliance Manager”). [***]. The applicable Alliance Managers shall attend the JSC meetings (or designate an appropriate representative to attend JSC meetings on the Alliance Manager’s behalf). For all other Committees, the Alliance Managers may participate in meetings but are not required to participate. The Alliance Managers shall not be counted as members of any Committee (and shall not vote on matters discussed at any Committee meeting). Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party.

3.11 Most Conservative Approach and Internal Policies TC "3.11 Most Conservative Approach and Internal Policies" \f C \l "2" .For all activities with respect to Collaboration Products, each Party will provide the other with copies of Internal Policies that are relevant and material to the activities being conducted by the Parties hereunder (the “Relevant Internal Policies”) [***], and will provide updates of such Relevant Internal Policies as appropriate. [***]. If there is a conflict between the Relevant Internal Policies with respect to a particular issue, the Parties shall [***], and, except as otherwise set forth in an applicable Development Plan, each Party shall [***] with respect to Development, Manufacturing and Commercialization activities hereunder.

ARTICLE 4
Influenza Program TC "ARTICLE 4 INFLUENZA PROGRAM" \f C \l "1"

4.1 General TC "4.1 General" \f C \l "2" .The Influenza Program shall include Vir-2482XX2 and, subject to any restrictions set forth in the Existing Third Party Agreements, shall include all other Vir Influenza mAbs that are approved by the JSC for inclusion in Influenza Development Plan(s), except for Vir-2482, which shall not be part of the Influenza Program unless and until GSK exercises the Option pursuant to Section 4.2.2. During the Term, the Parties shall discuss and agree, through the JRDC and the JSC, on Development Plans for Influenza Products under the Influenza Program in accordance with Section 7.1 (each, an “Influenza Development Plan”). Without limiting the foregoing, the Influenza Development Plan will set forth (a) [***]; (b) [***]; (c) [***]; and (d) [***]. An initial Development Plan for Vir-2482XX2 as of the Effective Date is set forth on Schedule 4.1. As the Lead Party, GSK shall be primarily responsible for the Development, Clinical Manufacturing and Commercialization of the Influenza Products (for clarity, not including Vir-2482 unless GSK exercises the Option, and then only after the Vir-2482 Program Effective Date), under the oversight of the JRDC, JMC, JCC and the JSC.

4.2 GSK’s Option to Vir-2482 TC "4.2 GSK’s Option to VIR-2482" \f C \l "2" .

4.2.1 Vir may conduct development activities with respect to Vir-2482 up to completion of Phase II Clinical Studies of Vir-2482, without support of GSK. For clarity, Vir is not obligated to conduct, and may in its discretion elect not to proceed with, development

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of Vir-2482 through completion of Phase II Clinical Studies. If Vir elects to conduct such development, Vir will be responsible for the development activities set forth on Schedule 4.1 through completion of Phase II Clinical Studies at its own cost and expense, and [***], Vir shall provide to GSK a package of data and results for such Phase II Clinical Studies completed by Vir in accordance with the development plan for Vir-2482 (the “Option Data Package”). The Option Data Package shall include the data and information [***].

4.2.2 GSK shall have, and Vir hereby grants to GSK, an exclusive option (the “Option”) to exclusively collaborate with Vir on the Development, Manufacture and Commercialization of Vir-2482, provided it is understood that such Option shall only be exercisable provided that Vir completes Phase II Clinical Studies for Vir-2482. The Option is exercisable in GSK’s sole discretion during the period between the date on which GSK receives the Option Data Package and [***] thereafter (the “Option Exercise Period”). If, upon receipt of the Option Data Package, GSK [***], provided that neither Party shall be required to conduct further development activities to support any inquiry about any data or results included in such Option Data Package, and to the extent [***], the Option Exercise Period shall be [***].

4.2.3 If the Option is exercised by GSK in accordance with Section 4.2.2, then:

(a) subject to Section 11.2.2, on the date on which GSK gives written notice of exercise of the Option or, if any antitrust approvals in connection with exercise of such Option are required, on the date on which all such approvals have been obtained (such date, the “Vir-2482 Program Effective Date”), the licenses granted by Vir to GSK under Section 12.1.1 will be deemed to have been automatically expanded to include the right to Develop, Manufacture, and Commercialize Vir-2482 in the Field in the Territory; and

(b) following the Vir-2482 Program Effective Date, (i) GSK will pay, as applicable, the Option Exercise Fee to Vir in accordance with Section 11.2; (ii) the Influenza Program shall be automatically expanded to include Vir-2482; (iii) Vir and GSK will collaborate on the Phase III trials of Vir-2482 and for any future Development, Manufacturing and Commercialization of Vir-2482, with GSK being the Lead Party; and (iv) each Party will share fifty percent (50%) of the Development Costs and Pre-Tax Profits or Losses for Vir-2482 incurred following the Vir-2482 Program Effective Date in accordance with applicable Influenza Development Plan and Commercialization Plan, subject to each Party’s applicable Opt-Out Option set forth in Section 7.6.

4.2.4 If GSK elects not to exercise the Option with respect to Vir-2482 or fails to exercise the Option during the Option Exercise Period (subject to any extension, where applicable), then Vir shall have the right to further Develop and Commercialize Vir-2482 independently, alone or via an Affiliate or with a Third Party, provided that in such case,

(a) [***], and, without limiting the foregoing, [***], and

(b) [***].

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4.3 Vir-2482XX2 and Other Vir Influenza mAbs TC "4.3 VIR-2482XX2 and Other VIR Influenza mAbs" \f C \l "2" .

4.3.1 GSK shall have, and Vir hereby grants to GSK, effective as of the Effective Date, the exclusive right to collaborate with Vir on the Development, Manufacture and Commercialization of Vir-2482XX2 and other Influenza Products on and after the Effective Date. Without limiting the foregoing, the JSC may agree to pursue another Vir Influenza mAb (other than Vir-2482 or Vir-2482XX2) [***].

4.3.2 Either Party may identify a Vir Influenza mAb, which, if approved by the JSC for inclusion in an Influenza Development Plan, shall be an Influenza Product included in the Influenza Program, subject to any restrictions set forth in the Existing Third Party Agreements, and thereafter, the Parties will further Develop such Influenza Product in accordance with the applicable Influenza Development Plan (including an associated Development Budget) consistent with the diligence obligations of each Party as set forth in Section 7.2.

ARTICLE 5
Expanded functional genomics Program TC "ARTICLE 5 EXPANDED FUNCTIONAL GENOMICS PROGRAM" \f C \l "1"

5.1 General TC "5.1 General" \f C \l "2" .Promptly following the Screening Data Analysis, the Parties will, through the JRDC, discuss and mutually agree on the Development Plan for the Expanded Functional Genomics Program in accordance with Section 7.1 (the “Expanded Functional Genomics Development Plan”). Without limiting the foregoing, the Expanded Functional Genomics Development Plan will include (a) [***], (b) [***]; (c) [***], and (d) [***]. A flowchart of the work stream for the Expanded Functional Genomics Program is set forth on Schedule 5.1 attached hereto.

5.2 Pre-Expanded Functional Genomics Target Selection TC "5.2 Pre-Expanded Functional Genomics Target Selection" \f C \l "2" .

5.2.1 Following the Effective Date, the Parties will, under the oversight of the JRDC, collaborate on identifying Targets of interest associated with a Respiratory Viral Disease [***] (such process, the “Screening Data Analysis”). [***].

5.2.2 Following the Screening Data Analysis, if the JRDC agrees to progress such Target and to further conduct target validation activities, the Parties will agree on an the Expanded Functional Genomics Development Plan to include applicable target validation activities for such Target (“Target Validation Studies”). Any Target evaluated by the JRDC on the basis of the Screening Data Analysis that the Parties do not elect to progress into Target Validation Studies shall become a Rejected Target. For clarity, Target Validation Studies may also include additional Respiratory Viral Functional Genomic Screens with respect to such Target,

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which will be agreed by the Parties and provided in the applicable Expanded Functional Genomics Development Plan. [***].

5.3 Screening Data TC "5.3 Screening Data" \f C \l "2" .

5.3.1 With respect to each Target or the associated Respiratory Viral Disease that becomes the subject of Screening Data Analysis, each Party will contribute, at its discretion [***], data, information and Know-How Controlled by such Party and relevant to the Respiratory Viral Disease associated with such Target, to be used in the Screening Data Analysis and, if the JRDC decides to progress such Target to the Target Validation Studies, in addition to data, information and Know-How, each Party may, subject to Section 2.6.2, contribute, at its discretion, compounds or products to be used in Target Validation Studies for the screening, selection, and validation of such Target. For clarity, Vir shall Contribute to the Expanded Functional Genomics Program [***] and, [***], GSK shall Contribute to the Expanded Functional Genomics Program [***]. The Parties may, upon approval by the JRDC, (i) [***], or (ii) [***]. For clarity, neither Party shall, nor shall either Party be required to, contribute to the Expanded Functional Genomics Program any Screening Data not related to Respiratory Viral Diseases. Each Party shall [***]. For clarity, as between the Parties, [***].

5.3.2 All Screening Data arising from activities conducted within the Expanded Functional Genomics Program, including such Screening Data [***] (such Screening Data, “Collaboration Screening Data”). The Parties shall coordinate, through the Joint Patent Committee, with respect to the filing of any patent applications disclosing or claiming the Collaboration Screening Data.

5.4 Selection of Expanded Functional Genomics Targets TC "5.4 Selection of Expanded Functional Genomics Targets" \f C \l "2" .

5.4.1 Following the Target Validation Studies with respect to a Target, the JRDC will deliver the results and data from the Screening Data Analysis and Target Validation Studies for such Target to the JSC for further evaluation. The JSC will select Expanded Functional Genomics Targets based on [***].

5.4.2 Following the selection of an Expanded Functional Genomics Target by the JSC, the Parties will, through the JSC and in accordance with an Expanded Functional Genomics Development Plan (including associated budget), further Develop and Commercialize Expanded Functional Genomics Product directed to such Expanded Functional Genomics Target, with the primary focus on Respiratory Viral Diseases. If the Parties identify other diseases associated with an Expanded Functional Genomics Target, then, [***].

5.4.3 Following the selection of an Expanded Functional Genomics Target by the JSC (as may be further determined pursuant to Section 3.9.2), neither Party shall [***] outside the Expanded Functional Genomics Program, until [***].

5.5 Independent Programs TC "5.5 Independent Programs" \f C \l "2" .

5.5.1 If, at the time a Target becomes an Expanded Functional Genomics Target, such Target is the subject of an Expanded Functional Genomics Independent Program of

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a Party (either by itself, through an Affiliate or with a Third Party) outside the Expanded Functional Genomics Program, then, such Party shall have the right to continue with such Expanded Functional Genomics Independent Program, provided such Party and its Affiliates, Third Party licensees and Sublicensees shall not have the right to [***] of the other Party in connection with such Expanded Functional Genomics Independent Program.

5.5.2 If, at the time a Target becomes an Expanded Functional Genomics Target, either Party has [***]. For clarity, neither Party has an obligation to Contribute to the Expanded Functional Genomics Program [***].

5.6 Rejected Targets TC "5.6 Rejected Targets" \f C \l "2" .

5.6.1 Subject to Section 5.6.3, either Party may progress a Rejected Target independently, either alone or via an Affiliate or partnering with a Third Party (each, a “Rejected Target Program”), and [***], provided that except as set forth in Section 5.6.2, neither Party shall [***] until [***]. For clarity, except for [***], either Party shall have the right to [***] (except as set forth in Section 5.6.4), in any Rejected Target Program.

5.6.2 Notwithstanding Section 5.6.1, during [***], subject to Section 5.6.3, if a Party wishes to pursue further development activities [***] with respect to a Rejected Target [***] then such Party shall be permitted to do so; provided that (a) if a Party Develops [***], and wishes to continue further Development, or (b) if such Party wishes to [***] in connection with a [***]; then in each case ((a) or (b)) such Party shall be [***] as an Expanded Functional Genomics Target, including [***], then the offering Party shall have the right to progress a Rejected Target Program with respect to such Rejected Target [***], itself or with any Affiliate or Third Party. For clarity, either Party shall have the right to [***].

5.6.3 If a Target [***] within the Expanded Functional Genomics Program, and at such time, such Target is the subject of an Expanded Functional Genomics Independent Program of GSK (and not of Vir), then (a) GSK shall have the right to continue with such Expanded Functional Genomics Independent Program, provided GSK shall not have the right to [***], and (b) Vir may progress a Rejected Target Program, [***], including in relation to [***], subject to the payment of royalties to GSK on Net Sales of the Rejected Target Product(s) arising from such Rejected Target Program pursuant to Section 5.6.4.

5.6.4 If a Party elects to progress a Rejected Target in accordance with the terms of this Section 5.6 with respect to any Respiratory Viral Disease, and (a) [***], and (b) [***] for a product directed to such Rejected Target [***] (the “Rejected Target Product”), then following such Regulatory Approval, such Party shall pay to the other Party a royalty of [***] on Net Sales of such Rejected Target Product starting from the First Commercial Sale of such Rejected Target Product [***], for so long as such Rejected Target Product is [***]. In addition, on a Rejected Target Product-by-Rejected Target Product basis, the royalty reductions set forth in Section 11.8.3 and Section 11.9.4 shall apply, mutatis mutandis, with respect to royalties due on Net Sales of each applicable Rejected Target Product in each Calendar Quarter, provided that such

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deductions, in the aggregate, shall not reduce the royalties payable in each applicable Calendar Quarter for such applicable Rejected Target Product [***] on such Net Sales. [***].

5.7 Database Technology TC "5.7 Database Technology" \f C \l "2" . Any databases and data mining technologies [***] shall only be included in the Expanded Functional Genomics Program to the extent agreed by the applicable Party in its sole discretion and [***], and in each case shall be subject to any applicable Third Party agreements, including, [***].

ARTICLE 6
Additional Pathogen Programs TC "ARTICLE 6 ADDITIONAL PATHOGEN PROGRAMS" \f C \l "1"

6.1 General TC "6.1 General" \f C \l "2" .Three (3) target pathogens (other than Influenza Viruses) will be selected in accordance with Section 6.2 (each a “Selected Pathogen”) to be included in the Collaboration as Additional Pathogen Programs. Notwithstanding the foregoing, the Parties agree that [***] set forth on Schedule 6.1 attached hereto [***]. Promptly following the selection of a Selected Pathogen and, where applicable, the associated Program mAbs, the Parties will, through the JRDC, discuss and mutually agree on the Development Plan for each Selected Pathogen under the Additional Pathogen Program in accordance with Section 7.1 (the “Selected Pathogen Development Plan”). Without limiting the foregoing, the Selected Pathogen Development Plan for each Selected Pathogen will set forth (a) [***]; (b) [***]; (c) [***]; (d) [***]; and (e) [***].

6.2 Selection of Additional Pathogen TC "6.2 Selection of Additional Pathogen" \f C \l "2" .

6.2.1 During the period of [***], GSK shall have the right, but not the obligation, to select [***] from the list of target pathogens set forth on Schedule 6.2.1 (the “Listed Target Pathogens”), and during such [***]. For clarity, if GSK does not select [***] from the Listed Target Pathogens within such [***], it shall still have the right to select up to three (3) target pathogens pursuant to the remainder of this Section 6.2.

6.2.2 GSK shall have the right to select [***] at any time between the Effective Date and [***] from any target pathogen [***], subject in each case to Section 3.9.2(d).

6.2.3 Except as otherwise provided pursuant to Section 3.9.2(d)(i) or Section 3.9.2(d)(ii), GSK shall have final decision-making authority with respect to the selection of the Selected Pathogens. For clarity, subject to Vir’s exclusivity obligations under Section 2.4.3 and Section 6.2.1, Vir shall not be restricted with respect to the conduct of its internal antibody programs (or from acquiring or in-licensing any antibody program from a Third Party) prior to GSK selecting the Selected Pathogens, provided that [***].

6.3 Selection of Program mAbs TC "6.3 Selection of Program mAbs" \f C \l "2" .For each Selected Pathogen, the Parties will agree via the JSC, to select neutralizing mAbs directed to such Selected Pathogen (such mAbs selected by the JSC, “Program mAbs”). The JSC may select Program mAbs from a Vir Existing mAb Program or from a Vir Acquired Asset, subject to Section 3.9.2(d). In addition, Vir and GSK will collaborate to identify novel neutralizing mAbs outside of Vir Existing mAb Programs and Vir Acquired Assets that broadly neutralize strains of

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the Selected Pathogen (including mAbs disclosed in the literature or brought in by a Party from outside the Collaboration in its sole discretion, subject to any obligations to a Third Party), and the Parties will collaborate to test and validate activity of such neutralizing mAbs in accordance with a Selected Pathogen Development Plan, upon which time [***] to include such mAbs in the applicable Additional Pathogen Program as Program mAbs. If the JSC cannot agree on the selection of a Program mAb, then, [***].

ARTICLE 7
Development Activities; OPT-Out Options TC "ARTICLE 7 DEVELOPMENT ACTIVITIES; OPT-OUT OPTIONS" \f C \l "1"

7.1 Development Plans TC "7.1 Development Plans" \f C \l "2" .

7.1.1 The Parties shall conduct Development activities under each Collaboration Program in accordance with applicable Development Plans. Each Development Plan shall (a) [***], and (b) set forth (i) [***], (ii) [***], (iii) [***], (iv) [***], (v) [***]. For clarity, the Development Plan will [***].

7.1.2 The JRDC, [***], shall review and approve each initial Development Plan (to the extent not approved prior to the Execution Date) within [***], and shall submit such Development Plan to the JSC for the JSC to review and approve, except that the JMC shall review and approve the Manufacturing Plan (and associated Manufacturing budget) included in the Development Plan [***]. If the JRDC or the JMC, as applicable, cannot agree on the Development Plan within such [***], then such dispute shall also be submitted to the JSC. If the JSC cannot agree on such proposed Development Plan within [***], then such dispute shall be resolved in accordance with Section 3.9.2, subject to Section 3.9.3. The proposed Development Plan (including the initial Development Budget that is part of the Development Plan) will go into effect once approved by the JSC in accordance with Section 3.9. Once approved by the JSC, the Parties shall conduct Development activities under the Development Plan in accordance with this Agreement. All such Development activities shall be conducted under the supervision of the JRDC, as applicable and in accordance with the approved Development Plan. Activities of a Party’s Affiliates, licensees or Sublicensees shall be considered activities of such Party for purposes of this Agreement.

7.1.3 Following approval by the JSC of the initial Development Plan (including the associated Development Budget) for a Collaboration Program in accordance with Section 7.1.2, such Development Plan shall be updated or amended as follows:

(a) the JRDC [***] and the JMC (with respect to the Manufacturing Plan included in the Development Plan) shall review each Development Plan not less frequently than [***] and the Lead Party shall prepare [***] Development Plan updates, which shall include, as applicable, updates to the existing Development Budget, including to provide for the Development Budget for the [***] for the particular Collaboration Program. The Lead Party shall submit all such updates to the JRDC [***] and to the JMC (with respect to the Manufacturing Plan included in the Development Plan) for review and approval no later than [***] and the JRDC and the JMC shall submit such updated Development Plan to the JSC for review and approval. If the JSC cannot agree on such proposed updated Development Plan within [***], then such dispute

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shall be resolved in accordance with Section 3.9.2, subject to Section 3.9.3. Upon the JSC’s preliminary approval, such updates shall be submitted to each Party for its internal budgeting process with a target for final approval no later than [***], at which time any such approved updates shall be appended to the Development Plan, provided that, [***].

(b) The Lead Party may also develop and submit to the JRDC [***] and JMC (if applicable) from time to time other proposed amendments to the Development Plan, which the JRDC [***] and/or the JMC (as applicable) will review and approve. The JRDC or the JMC (with respect to the Manufacturing Plan included in the Development Plan) shall submit all [***] amendments to the Development Plan [***] to the JSC for review and approval and, if the JRDC or JMC, as applicable, cannot agree with respect to any matter in any other proposed amendments to the Development Plan within [***], the JRDC or JMC shall submit such amendments to the JSC for review and approval. If the JSC cannot agree on such proposed amendments to the Development Plan within [***], then such dispute shall be resolved in accordance with Section 3.9.2, subject to Section 3.9.3. Proposed amendments to the Development Plan shall not go into effect until approved by the JRDC or the JMC (with respect to the Manufacturing Plan included in the Development Plan) or, if applicable, the JSC, at which time such approved amendments shall be appended to the Development Plan.

(c) For clarity, when providing the JRDC with information regarding the projected Development Budget anticipated to be expended under a particular Collaboration Program, the Lead Party shall provide to the JRDC the level and quality of information that the Parties have agreed through the Financial Working Group, which level and quality of information shall be agreed to by the Financial Working Group within [***].

7.1.4 The Development Plan may include [***], in each case, solely if the Parties mutually agree to include such product in the applicable Development Plan or an amendment to such Development Plan (each agreed product, an “Additional Products”). For clarity, with respect to any portion of an Additional Product that is [***] the Development Plan for such Additional Product. [***]. The Development Plan may also include [***] the Development and Commercialization of Collaboration Products, for which the Parties will mutually agree on any Development activities associated therewith. For clarity, unless otherwise agreed by the Parties, the sharing of Development Costs applicable to [***] such Development Plan. If the Parties agree to include in the Collaborationan Additional Product that is [***].

7.2 Development Efforts TC "7.2 Development Efforts" \f C \l "2" .Each Party shall use its Commercially Reasonable Efforts to (a) perform the obligations assigned to it under each Development Plan, and (b) enable GSK to seek and obtain Regulatory Approval for any Collaboration Product progressed thereunder in the United States, the European Union, and the United Kingdom. Each Party shall conduct its Development activities in good scientific manner and in compliance with all applicable Law, including Laws regarding the environment, safety and industrial hygiene, and GMP, GLP, GCP, informed consent and Institutional Review Board regulations, current standards for pharmacovigilance practice, and all applicable requirements relating to the protection of human subjects.

7.3 Development Records; Exchange of Information TC "7.3 Development Records; Exchange of Information" \f C \l "2" .

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7.3.1 Each Party shall maintain, in good scientific manner, complete and accurate books and records pertaining to its activities under each Development Plan, in sufficient detail to verify compliance with its obligations under this Agreement and which books and records shall (a) be appropriate for Patent and regulatory purposes, (b) be kept and maintained in compliance with applicable Law, (c) properly reflect all work done and results achieved in the performance of its activities hereunder and (d) record only such activities and not include or be commingled with records of activities outside the scope of this Agreement (such books and records, “Program Records”). As part of keeping the Program Records, each Party shall maintain records in sufficient detail as will properly reflect all work done, in the performance of activities arising out of, in conducting, or otherwise in connection with the Development Plan. Program Records specifically related to a Collaboration Product shall be retained by the applicable Party for at least [***] after the expiration or termination of the applicable Collaboration Program with respect to such Collaboration Product, or for such longer period as may be required by applicable Law. The JRDC shall have the right, during normal business hours and upon reasonable notice, to inspect and copy all Program Records kept by a Party, which inspection will not be more than once per Calendar Year, unless for quality or safety issues. Each Party shall provide the JRDC with detailed reports relating to its activities under each Collaboration Program each Calendar Quarter for the applicable Collaboration Program.

7.3.2 With respect to any Collaboration Program, within [***] of each year, each Party shall prepare and provide to the other Party a written report that summarizes the Development activities (including Manufacturing-related development activities) performed and the status of activities and progress with respect to the information included the Development Plan, [***]. The Parties may agree that minutes or presentations from Committee meetings may be used to satisfy this reporting requirement. Each Party shall have the right to review all reports related to any Clinical Studies for a Collaboration Product, whether such reports are generated by or on behalf of GSK, Vir or a CRO or subcontractor, provided that such Party has not exercised its Opt-Out Option.

7.4 Performance by Affiliates; Subcontracting TC "7.4 Performance by Affiliates; Subcontracting" \f C \l "2" .

7.4.1 Each Party conducting any Development activities under each Development Plan shall have the right to subcontract any of the activities assigned to it under any Development Plan to any of its Affiliates without further approval of the JRDC or the other Party; provided that no such permitted subcontracting shall relieve the subcontracting Party of any obligation hereunder and the subcontracting Party shall cause its permitted subcontractors to comply with its applicable obligations under this Agreement.

7.4.2 Subject to Section 7.4.3, each Party conducting any Development activities under each Development Plan may subcontract any of the activities assigned to it under any Development Plan to a Third Party subcontractor, including clinical research organizations (“CROs”), contract manufacturing organizations, subject to the following terms and conditions: (a) any such subcontracting to a Third Party shall be approved by the JRDC; (b) none of the rights of the other Party hereunder are diminished or otherwise adversely affected as a result of such subcontract; (c) such Third Party subcontractor shall be bound by a written agreement that is consistent with terms and conditions of this Agreement, including applicable confidentiality,

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publication and intellectual property ownership and assignment provisions; and (d) such Party shall remain responsible under this Agreement for ensuring, and shall be liable to the other Party for, the compliance of such Third Party subcontractor with this Agreement. Notwithstanding the foregoing, at the time of preparation of the Development Plan for a given Collaboration Product, where reasonably practicable, the Parties will discuss through the JRDC and agree upon any Third Party subcontractors that the Non-Lead Party anticipates it may wish to use to perform activities for or on behalf of such Non-Lead Party. Such pre-approved Third Party subcontractors will be listed in the Development Plan, and, no separate approval by the JRDC shall be required for the Non-Lead Party to use such Third Parties to perform activities with respect to any Collaboration Product under the same Collaboration Program. [***].

7.4.3 Notwithstanding Section 7.4.1 and Section 7.4.2, the Parties agree that [***], provided that for clarity, (a) [***], and (b) [***].

7.5 Clinical Studies TC "7.5 Clinical Studies" \f C \l "2" .

7.5.1 Generally. All Clinical Studies of the Collaboration Products conducted by the applicable Party shall be conducted only pursuant to this Agreement and the applicable Development Plan. Any Clinical Studies of the Collaboration Product will be conducted in accordance with the Applicable Internal Policies and GCP standards and involve investigators of recognized competence. If agreed to by the Parties in writing or approved by the JRDC, or if a Party has a reasonable basis to believe a violation of applicable Law has occurred with respect to a given Clinical Study, each Party shall have the right, at its own expense and subject to the terms and conditions of any applicable agreements, to audit all Clinical Study sites used by the other Party, and have all other audit rights to ensure that any necessary compliance standards are upheld. Such audit shall be made at reasonable times during regular business hours and upon [***] prior notice to such other Party and the Clinical Study site. Summaries of results of all Clinical Studies conducted by either Party with respect to any Collaboration Product shall be published on GSK’s clinical trial register, unless GSK has exercised its Opt-Out Option and is not conducting or funding any activity with regard to the applicable Collaboration Program.

7.5.2 Investigator-Initiated Studies. The Lead Party shall determine, and the Development Plan shall set forth any sponsorship of investigator-initiated studies of the Collaboration Products. All sponsorship of such investigator-initiated studies shall be subject to approval by the JRDC or, where applicable, the JSC.

7.5.3 Clinical Study Protocol. All Clinical Studies conducted under a Development Plan will first be approved in concept by the JRDC. For any Clinical Studies that are to be conducted solely by a Party (including through an affiliated entity or a subsidiary) or its contractors, the protocol and related investigator’s brochures shall be designed by such Party in accordance with the approved Development Plan with review and input from the other Party within [***] after submission to the JRDC of the draft protocol; provided, that if the other Party identifies a material issue in the protocol, it may refer the issue to the JRDC for revision. Except as otherwise specified in the applicable Development Plan, the Lead Party will secure any required approvals from any Institutional Review Boards, safety boards or the like. Notwithstanding the foregoing, the Party conducting the Clinical Study may make modifications to the protocol on an emergency

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basis for patient safety reasons and in such case, shall notify the JRDC and the other Party as promptly as practical.

7.6 Rights to Opt-Out TC "7.6 Rights to Opt-Out" \f C \l "2" .

7.6.1 Opt-Out Points. On a Collaboration Product-by-Collaboration Product basis with respect to the Influenza Program and each Additional Pathogen Program, and on an Expanded Functional Genomics Target-by-Expanded Functional Genomics Target basis with respect to the Expanded Functional Genomics Program, each Party (whether the Lead Party or the Non-Lead Party, such Party, an “Opt-Out Party”) will have the one-time right to elect, pursuant to the procedures set forth in this Section 7.6 to cease funding its share of the Development Costs for a Collaboration Product (in the case of the Influenza Program and Additional Pathogen Programs), or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of Expanded Functional Genomics Program) in all indications (unless the Parties mutually agree otherwise) (each, an “Opt-Out Option”), as further provided in this Section 7.6.

(a) With respect to each Collaboration Product in the Influenza Program or an Additional Pathogen Program, either Party may exercise its Opt-Out Option by providing the required written notice (an “Opt-Out Notice”) to the other Party on or prior to each of the following milestone events (collectively, the “Opt-Out Points”):

[***].

For clarity, with respect to the Influenza Product containing Vir-2482, if GSK exercises the Option pursuant to Section 4.2.2, [***].

(b) With respect to each Expanded Functional Genomics Target in the Expanded Functional Genomics Program,

(i) if, [***], then, without limiting [***], Vir shall [***] with respect to [***]; and

(ii) either Party may exercise its Opt-Out Option with respect to an Expanded Functional Genomics Target by providing the Opt-Out Notice to the other Party on or prior to each of the following Opt-Out Points: [***].

7.6.2 Share of Data and Materials.Within [***] for a Collaboration Product, the Lead Party (and the Non-Lead Party if applicable) conducting Development activities with respect to such Collaboration Product shall submit to the JRDC a summary of the [***] derived from the Development activities conducted by such Party for such Collaboration Product from last Opt-Out Point (if any) to such Opt-Out Point (the “Development Summary”). The Development Summary shall include, where applicable, [***]. Following presentation and discussion between the Parties, and within [***] after submission of the Development Summary to the JRDC, [***] shall be provided by the Party conducting the Development activities upon reasonable request by the other Party, provided that [***]. For clarity, this Section 7.6.2 shall apply with respect to [***].

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7.6.3 Exercise of Opt-Out Option.

(a) Except with respect to the Target-Selection Opt-Out Option, either Party may exercise an Opt-Out Option by delivering an Opt-Out Notice at any time prior to, and no later than [***] following the receipt of the Development Summary by the JRDC with respect to the applicable Collaboration Product [***]. Except with respect to the Target-Selection Opt-Out Option, the Opt-Out Option shall be deemed to be exercised upon (i) [***], or (ii) [***] (such date in (i) or (ii), the “Opt-Out Effective Date”).

(b) [***] may exercise the [***] by providing the Opt-Out Notice within [***] following the applicable [***], and the date of delivery of such Opt-Out Notice shall be deemed as the Opt-Out Effective Date with respect to such [***].

(c) If a Party exercises an Opt-Out Option with respect to a Collaboration Product (in the case of the Influenza Program or the Additional Pathogen Programs) or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of the Expanded Functional Genomics Program), in each case, in accordance with Section 7.6.3(a), or, where applicable, Section 7.6.3(b), then:

(i) The Opt-Out Party shall be responsible for [***], in each case, [***].

(ii) Notwithstanding the foregoing, an Opt-Out Party delivering [***] shall not be liable for any [***]. For clarity, [***].

(iii) The Opt-Out Party shall also be responsible for [***].

(iv) if such exercised Opt-Out Option is with respect to an Expanded Functional Genomics Target (including, with respect to Vir, the Target-Selection Opt-Out Option) under the Expanded Functional Genomics Program, and at the time such Party opts out, [***], then unless the Parties mutually agree otherwise, exercise of such Opt-Out Option shall apply to [***]. Subject to the foregoing, after a Party exercises the Opt-Out Option with respect to an Expanded Functional Genomics Target, such Opt-Out Party shall have the right, either alone or via an Affiliate or partnering with a Third Party, to develop programs and exploit products and compounds directed to such Target outside the Collaboration provided that (A) such Party shall not use the Collaboration Screening Data to initiate or conduct such programs, and (B) [***].

(d) If a Party does not elect to exercise its Opt-Out Option at one of the above Opt-Out Points within the specified time periods in accordance with Section 7.6.3(a), or, where applicable, Section 7.6.3(b), it will be obligated to continue to fund all Development Costs for such Collaboration Product(s) in accordance with Section 11.4, until such time as the next Opt-Out Point becomes available, if any; [***] existing at the time the Opt-Out Notice or Early Opt-Out Notice is delivered.

7.6.4 Parties’ Rights after Opt-Out.

(a) Upon receipt of any Opt-Out Notice timely delivered by the Opt-Out Party in accordance with Section 7.6.3 with respect to a Collaboration Product (in the

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case of the Influenza Program or the Additional Pathogen Programs) or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of the Expanded Functional Genomics Program), the other Party (the “Non Opt-Out Party”) shall have the right, at any time after the Opt-Out Effective Date with respect to such Collaboration Product(s), as applicable, to elect either to (i) continue with the Development and Commercialization of such Collaboration Product(s), at its own cost; or (ii) subject to the remainder of this Section 7.6.4, cease bearing Development Costs for future Development activities with respect to such Collaboration Product(s), in which case the Non Opt-Out Party may wind down the Development activities with respect to such Collaboration Product(s), or (iii) subject to the Opt-Out Party’s agreement, propose to out-license or otherwise divest such Collaboration Product(s). After the Opt-Out Party exercises its Opt-Out Option with respect to any Collaboration Product(s), the Non Opt-Out Party shall notify the Opt-Out Party of its decision to elect subsection (i), (ii) or (iii) in the foregoing within [***] following the Opt-Out Effective Date for such Collaboration Product(s) (the “Non Opt-Out Notice”), provided that, [***], the election by the Non Opt-Out Party of subsections (i), (ii) or (iii) in the Non Opt-Out Notice shall not [***]. The Opt-Out Party shall, upon reasonable request by the Non Opt-Out Party, discuss with the Non Opt-Out Party in good faith, and cooperate to facilitate its decision-making, including by [***].

(b) If, after the Opt-Out Party exercises its Opt-Out Option with respect to a Collaboration Product (in the case of the Influenza Program or the Additional Pathogen Programs) or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of the Expanded Functional Genomics Program), the Non Opt-Out Party elects to continue with the Development and Commercialization of such Collaboration Product(s) (which shall thereafter become Sole Development Product(s) and cease being Collaboration Product(s)), then:

(i) the Opt-Out Party’s rights to share any Pre-Tax Profit or Loss in such Collaboration Product(s) pursuant to Section 11.5 shall cease upon receipt of the Non Opt-Out Notice and the Opt-Out Party shall be entitled to receive royalties from the Non Opt-Out Party on Net Sales of such Sole Development Product(s) in accordance with Section 11.8, as applicable;

(ii) the Non Opt-Out Party shall continue to [***] to perform such activities with respect to such Sole Development Product(s), similar to the Commercially Reasonable Efforts used with respect to the corresponding Collaboration Product prior the Opt-Out Party opting out and taking into the account the fact that the Non Opt-Out Party will be solely funding the Development,

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Manufacture and Commercialization of such Sole Development Product;

(iii) the Opt-Out Party shall, subject to Section 12.2, provide reasonable assistance requested by the Non Opt-Out Party to (A) transfer or transition to the Non Opt-Out Party (or wind down, if applicable) all activities for which such Opt-Out Party was responsible prior to the exercise of the Opt-Out Option, including [***]; (B) transfer to the Non Opt-Out Party relevant Data, information and materials [***], in each case ((A) or (B)), to the extent necessary for the Non Opt-Out Party’s continued conduct of Development, Manufacturing and Commercialization of such Sole Development Product(s), [***];

(iv) with respect to [***], the Opt-Out Party shall, at the Non Opt-Out Party’s request and [***], if the Opt-Out Party is required to [***] with respect to the Development, Manufacture and Commercialization of any Sole Development Product(s), then [***]; and

(v) the JRDC, the JSC or other Committees shall no longer have authority over such Sole Development Product(s), and the applicable Development Plan and Development Budget will be of no further effect with respect to such Sole Development Product other than with respect to costs incurred prior to the Opt-Out Effective Date.

(c) If, after the Opt-Out Party exercises its Opt-Out Option with respect to a Collaboration Product (in the case of the Influenza Program or the Additional Pathogen Programs) or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of the Expanded Functional Genomics Program), the Non Opt-Out Party elects, [***], to cease and wind down the Development activities with respect to such Collaboration Product(s), the Non Opt-Out Party shall conduct winding down activities in accordance with all applicable Law, and the Opt-Out Party shall, upon Non Opt-Out Party’s reasonable request, provide reasonable assistance with such winding down activities. [***].

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(d) If, after the Opt-Out Party exercises its Opt-Out Option with respect to a Collaboration Product (in the case of the Influenza Program or the Additional Pathogen Programs) or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of the Expanded Functional Genomics Program), (i) the Non Opt-Out Party elects to, [***], or (ii) [***], and the Non Opt-Out Party elects to, [***], in either case ((i) or (ii)), cease any further funding of, or Development or Commercialization activities with respect to such Collaboration Product(s), and out-license or otherwise divest such Collaboration Product(s), then (A) [***], (B) [***], and (C) [***].

(e) If, after the Opt-Out Party exercises its Opt-Out Option with respect to a Collaboration Product (in the case of the Influenza Program or the Additional Pathogen Programs) or all Collaboration Products directed to an Expanded Functional Genomics Target (in the case of the Expanded Functional Genomics Program), (i) the Non Opt-Out Party elects to, at any time [***], cease any further funding of, or Development or Commercialization activities with respect to such Sole Development Product(s), and out-license or otherwise divest such Sole Development Product(s), and (ii) [***], then (A) [***], (B) [***], and (C) [***].

7.6.5 Animal Welfare. With respect to any Development activities conducted by either Party under this Agreement that involve the use of animals, including any animal studies, such Party agrees to comply with the terms of Schedule 7.6.5. For the avoidance of doubt, during the Term, [***].

ARTICLE 8
Regulatory Activities TC "ARTICLE 8 REGULATORY ACTIVITIES" \f C \l "1"

8.1 Generally TC "8.1 Generally" \f C \l "2" . Generally, the Parties will discuss and seek to agree upon the appropriate regulatory strategy for each Collaboration Product.

8.2 Meetings and Communications TC "8.2 Meetings and Communications" \f C \l "2" . During the Term, each Party shall keep the other Party reasonably informed of any material communications from, or meetings with, any Regulatory Authority pertaining to such Party’s Development activities performed under this Agreement. To the extent relating to a Collaboration Product, the Party that is the regulatory sponsor or, following the release of headline data of the relevant Clinical Study, the applicant for the Drug Approval Application with respect to such Collaboration Product, shall provide the other Party with: (a) to the extent allowable by applicable Laws and the relevant Regulatory Authority and to the extent practicable, an opportunity to have one or more of its representatives attend and observe [***] in substantive discussions and meetings with the FDA or any other Regulatory Authority with respect to any Clinical Studies or other matters (e.g., CMC or non-clinical issues); (b) a copy of any material documents, reports or correspondence submitted to the FDA or any other Regulatory Authority; and (c) reasonable advanced notice (to the extent practicable) of substantive meetings, scheduled or unscheduled, with the FDA or any other Regulatory Authority. All such documents or reports described in subclause (b) above shall be provided to the JRDC at least [***] prior to their submission to the applicable Regulatory Authority (or such later date as the Parties may reasonably agree). To the extent a Party receives material written or oral communications from the FDA or any other Regulatory Authority relating to a Collaboration Product or activities under this

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Agreement with respect to a Collaboration Product, such Party shall notify the other Party and provide a copy of any such written communications to the other Party [***]. In addition, upon a reasonable request from the other Party, each Party shall provide copies of other documents, reports or communications from or to Regulatory Authorities relating to Collaboration Products.

8.3 Regulatory Submissions TC "8.3 Regulatory Submissions" \f C \l "2" .

8.3.1 Regulatory Filings. For each Collaboration Product, the Lead Party (and the LCP) for such Collaboration Product shall, in its own name, obtain and maintain all Regulatory Filings and Regulatory Approvals for Development, Manufacture and Commercialization of such Collaboration Products, including INDs, NDAs, BLAs, Regulatory Approvals for product labeling or promotional materials and other items filed with the FDA or other Regulatory Authorities with respect to any Collaboration Product under such Collaboration Program, provided that, with respect to Vir-2482, if GSK exercises the Option pursuant to Section 4.2.2, then, within [***], Vir shall assign to GSK, with no additional costs, all Regulatory Filings relating to Vir-2482 Controlled by Vir as of the Vir-2482 Program Effective Date, including the IND, and thereafter, GSK, as the Lead Party, shall be responsible for obtaining and maintaining all Regulatory Filings and Regulatory Approvals for Vir-2482.

8.3.2 Other Filings. The Parties may discuss, through the JPC, regarding submission of patent information to the FDA as required for listing in the Orange Book (as required by 21 C.F.R. §214.53 (d)(2) and 35 U.S.C. §156 (Hatch-Waxman Act)), the “Purple Book” (or other Orange Book-equivalent database or listing for Biologics), or any foreign equivalents thereof, provided that the LCP shall have the decision-making authority and shall be responsible for such submission. Additionally, the LCP shall be responsible for all acts required of the reference product sponsor under the US Biologicals Price Competition and Innovation Act of 2009 (42 U.S.C. § 262) (“Biologics Act”), or any foreign equivalents thereof. The Lead Party for each Collaboration Product will control all of the actions, filings, and communications with any follow-on biologic applicant under the Biologics Act with respect to such Collaboration Product, including generating the following documents: [***].

8.4 Exchange of Development Data TC "8.4 Exchange of Development Data" \f C \l "2" . Without limiting the other provisions of this Agreement, at the request of the Lead Party, or upon direction by the JSC or JRDC, the Non-Lead Party shall provide to the Lead Party [***] pertinent Data developed by or on behalf of the Non-Lead Party, as applicable, in connection with the Development of a Collaboration Product this Agreement or the performance of other activities under the applicable Development Plans [***] for the Lead Party to satisfy Regulatory Approval requirements for application or maintenance of Regulatory Approvals of such Collaboration Product. The format of, and media for exchanging, such Data shall be decided by the JRDC. Each Party shall have the right, without obtaining the approval of the other Party and without additional payment to such other Party (other than payments expressly provided in this Agreement), to reference, access and use such Data, and all reports, documents and other information developed by any Party that is derived from such Data, (a) for purposes of preparing and submitting INDs, NDAs, BLAs and other Regulatory Filings for the Collaboration Products in the applicable Collaboration Program,and (b) preparing and filing patent applications, in each case ((a) and (b)) in accordance with this Agreement, and, with respect to such Data, reports,

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documents and other information developed by the other Party, solely to the extent permitted under this Agreement.

8.5 Lead Party Opt-Out TC "8.5 Lead Party Opt-Out" \f C \l "2" . If the Lead Party exercises its Opt-Out Option with respect to any Collaboration Product(s) pursuant to Section 7.6, and the Non-Lead Party elects to continue with the Development and Commercialization of such Collaboration Product(s) as Sole Development Product(s), then the Non-Lead Party shall notify the Lead Party in writing of such election, and thereafter shall be solely responsible for any Regulatory Filing or other regulatory activities with respect to such product. The Lead Party shall, upon reasonable request of the Non-Lead Party and to the extent permissible under applicable Law, transfer all regulatory documentation, including any Regulatory Filing or Regulatory Approval for such product Controlled by such Lead Party to the Non-Lead Party, and the Parties shall share the cost of such regulatory transfer in accordance with the profit-share percentages set forth in Section 11.5, as applicable. To the extent that such regulatory transfer is not permissible under applicable Law, the Parties shall discuss in good faith, and agree on a regulatory strategy to maintain such regulatory documentation for such Collaboration Product.

ARTICLE 9
Commercialization TC "ARTICLE 9 COMMERCIALIZATION" \f C \l "1"

9.1 General TC "9.1 General" \f C \l "2" . Subject to the remainder of this ARTICLE 9, GSK shall be the LCP for each Collaboration Product, and GSK or its Affiliates shall have the sole right and responsibility for (a) Commercializing all Collaboration Products in the Territory, including [***]; and (b) all decisions for all Commercialization activities relating to each Collaboration Product, including [***].

9.2 [***] TC "9.2 Commercialization Budget Caps" \f C \l "2" . With respect to each Collaboration Product, [***], GSK will propose to Vir a good faith estimate of the [***]. If Vir [***] considers, [***], that [***], and the Parties are unable to agree on the [***], then Vir shall [***]. At the time GSK provides the initial Commercialization Plan (and Commercialization Budget) for such Collaboration Product to the JCC pursuant to Section 9.3.1, the Parties shall [***], which shall be equal to [***]. The remainder of [***] associated with activities under the applicable Commercialization Plan (and in connection with any subsequent amended Commercialization Plan and Commercialization Budget) that [***].

9.3 Commercialization Plan TC "9.3 Commercialization Plan" \f C \l "2" .

9.3.1 With respect to each Collaboration Product, in connection with the determination to file the first Drug Approval Application for such Collaboration Product, GSK shall prepare and provide to the JCC a commercialization plan (the “Commercialization Plan”) for such Collaboration Product. GSK shall provide the initial Commercialization Plan for each Collaboration Product to the JCC [***]. Each such initial Commercialization Plan shall include, (a) [***]; (b) [***]; (c) [***]; (d) [***]; and (e) [***]. With respect to the initial Commercialization Plan (including the associated Commercialization Budget) for each Collaboration Product, the JCC shall review and approve such Commercialization Plan and shall submit such Commercialization Plan to the JSC for the JSC to review and approve, except that the JMC shall review and approve the Manufacturing Plan (and associated budget) included in the

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initial Commercialization Plan prior to submission to the JSC for review and approval. If the JSC cannot agree on the Commercialization Plan submitted by the JCC or the JMC [***], then such dispute shall be resolved in accordance with Section 3.9.2, subject to Section 3.9.3.

9.3.2 GSK shall prepare and submit to the JCC for review and approval, on an annual basis, any material changes to each Commercialization Plan, including any updates to the Commercialization Budget for each Collaboration Product, no later than [***] of each Calendar Year. With respect to the Commercialization Plan (including the associated Commercialization Budget) for each Collaboration Product, the JCC and the JMC (with respect to the Manufacturing Plan included in the Development Plan) shall review and approve such annual updates and shall submit such updates to the JSC for review and approval. If the JSC cannot agree on such updates submitted by the JCC or the JMC [***], then such dispute shall be resolved in accordance with Section 3.9.2, subject to Section 3.9.3. Upon the JSC’s preliminary approval, such updates shall be submitted to each Party for its internal budgeting process with a target for final approval no later than [***], at which time any such approved update shall be appended to the Commercialization Plan for the applicable Collaboration Product, provided that, [***]. Any material updates to the Commercialization Plans, including any updates to the associated Commercialization Budgets, for each Collaboration Product shall not be effective without the approval of the JSC, subject to the terms and conditions of Section 3.9.

9.4 Commercialization Efforts TC "9.4 Commercialization Efforts" \f C \l "2" .The LCP, by itself or through its Affiliates or Sublicensees, shall, following the receipt of Regulatory Approval for each Collaboration Product by the applicable Regulatory Authority in the applicable jurisdiction, use Commercially Reasonable Efforts to seek pricing and reimbursement approvals for and Commercialize such Collaboration Product in accordance with the Commercialization Plan in the United States, [***] and the United Kingdom (each, a “Major Market”). With respect to any Collaboration Product, the LCP shall be responsible for and have the exclusive right to seek and attempt to obtain pricing and reimbursement approvals for each Collaboration Product.

9.5 Right to Subcontract Commercialization Activities; Distribution TC "9.5 Right to Subcontract Commercialization Activities; Distribution" \f C \l "2" . GSK shall have the right to (sub) contract, license or sublicense to its Affiliates or Third Parties with respect to the performance of any or all of its Commercialization activities. GSK and its Affiliates shall book all sales of Collaboration Products and [***]. Vir and its Affiliates shall not accept orders for any Collaboration Products or sell any Collaboration Products for its or their own account or for GSK’s or its Affiliate’s account, and if Vir or its Affiliates receive any order for Collaboration Products in the Territory, they shall refer such orders to GSK or its designated Affiliate(s) for acceptance or rejection.

9.6 Commercialization Reports TC "9.6 Commercialization Reports" \f C \l "2" . GSK shall provide a written report to the JCC describing material Commercialization activities with respect to all Collaboration Products Commercialized by GSK or any of its Affiliates, Sublicensees or distributors [***]. Such reports shall include [***].

9.7 GSK Opt-Out TC "9.7 GSK Opt-Out" \f C \l "2" . If GSK exercises its Opt-Out Option with respect to a Collaboration Product pursuant to Section 7.6, and if Vir, as the

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Non Opt-Out Party, elects to continue with Commercialization of such Collaboration Product, then, notwithstanding anything to the contrary in this ARTICLE 9, Vir shall be the LCP for the Sole Development Product(s) corresponding to such Collaboration Product(s), and the rights and obligations of GSK set forth in this ARTICLE 9, shall apply to Vir mutatis mutandis.

ARTICLE 10
Pharmacovigilance and Medical Affairs TC "ARTICLE 10 PHARMACOVIGILANCE AND MEDICAL AFFAIRS" \f C \l "1"

10.1 Pharmacovigilance Technical Agreement TC "10.1 Pharmacovigilance Technical Agreement" \f C \l "2" . For each Collaboration Product the Parties shall enter into, no later than such date as required to comply with applicable Law, an appropriate agreement setting forth the processes and procedures for the collection, management, assessment and reporting of Adverse Event with respect to such Collaboration Product and [***] (each, a “Pharmacovigilance Technical Agreement”), which shall include the terms set forth on Schedule 10.1. For clarity, this Section 10.1 shall not apply with respect to Vir-2482 unless and until GSK exercises the Option pursuant to Section 4.2.2.

10.2 Costs TC "10.2 Costs" \f C \l "2" . The incremental portion of the Parties’ costs and expenses incurred in maintaining the databases described in Section 10.1 attributable to the Collaboration Product and the Parties’ costs and expenses incurred in conducting audits pursuant to a Pharmacovigilance Technical Agreement shall [***].

10.3 Medical Inquiries TC "10.3 Medical Inquiries" \f C \l "2" . The Lead Party for a Collaboration Product shall handle all medical questions or inquiries from members of the medical profession for such Collaboration Product. In the event a Non-Lead Party receives any medical questions or inquiries, the Non-Lead Party shall refer the question or inquiry to the Lead Party within [***] of receipt (or such other timeframe as the Parties may agree in writing) in accordance with the relevant policies of the Lead Party as provided to the Non-Lead Party from time to time.

ARTICLE 11
Financial Provisions TC "ARTICLE 11 FINANCIAL PROVISIONS" \f C \l "1"

11.1 Upfront Payment TC "11.1 Upfront Payment" \f C \l "2" . In partial consideration of the rights granted by Vir to GSK hereunder, and subject to the terms and conditions of this Agreement, GSK shall pay Vir a one-time upfront payment of $225 Million USD ($225,000,000) as follows: (a) if not already paid by GSK, $112.5 Million USD ($112,500,000) shall be payable within [***]; and (b) $112.5 Million USD ($112,500,000) shall be payable within [***]e; provided that, in each case ((a) and (b)), [***].

11.2 Option Exercise Fee TC "11.2 Option Exercise Fee" \f C \l "2" . Subject to the terms and conditions of this Agreement, if GSK elects to exercise the Option, then following the Vir-2482 Program Effective Date, GSK shall pay Vir a one-time option exercise fee (the “Option Exercise Fee”) as follows:

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11.2.1 If, at the time GSK exercises the Option in accordance with Section 4.2.2, Vir-2482 has satisfied the Influenza Product Criteria, the Option Exercise Fee shall be $300 Million USD ($300,000,000);

11.2.2 If, at the time GSK exercises the Option in accordance with Section 4.2.2, Vir-2482 has not satisfied the Influenza Product Criteria, then the Parties will negotiate in good faith for a period of [***] to agree upon the applicable Option Exercise Fee.

(a) If the Parties agree the Option Exercise Fee within such [***] period, then the Vir-2482 Program Effective Date shall be the date on which such agreement is made, or, if any antitrust approvals in connection with exercise of such Option are required, on the date on which all such approvals have been obtained.

(b) If the Parties are unable to agree within such [***] period, then it will be deemed that GSK has withdrawn its Option exercise, and there shall be no Option Exercise Fee payable by GSK, in which case, Vir may continue the Development and Commercialization of Vir-2482, alone, via an Affiliate or in partnership with a Third Party, without further obligation to GSK, provided that if, [***], Vir [***]. If GSK [***], then [***].

11.2.3 [***].

11.3 Milestone Payments TC "11.3 Milestone Payments" \f C \l "2" .

11.3.1 Subject to Section 11.3.2, GSK will pay Vir a one-time milestone payment of $200 Million USD ($200,000,000) upon [***] (the “Milestone Payment”). GSK shall make the Milestone Payment (or where applicable pursuant to Section 11.3.2, each applicable milestone payment) in accordance with [***].

11.3.2 If [***], then instead of the Milestone Payment, GSK will pay to Vir a milestone payment determined as follows, but in no event shall such payment exceed $200 Million USD:

(a) The Parties shall negotiate in good faith at the time of [***], the amount of the applicable milestone to be paid for such Influenza Product under this Section 11.3.2. If the Parties cannot agree on the amount of such milestone payment within [***].

(b) If GSK [***], and subsequently, another Vir Influenza mAb [***], then GSK shall [***] $200 Million USD.

11.3.3 If [***], then, [***] GSK will [***].

11.3.4 The maximum aggregate amount payable by GSK under Section 11.3.1, Section 11.3.2 and Section 11.3.3 shall not exceed $200 Million.

11.4 Development Costs TC "11.4 Development Costs" \f C \l "2" . Unless otherwise agreed by the Parties in writing with respect to a Party Asset contributed by a Party at its sole discretion in accordance with Section 2.6.2, prior to a Party exercising its Opt-Out Option with respect to a Collaboration Product or Expanded Functional Genomics Target under a

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Collaboration Program, or thereafter as required by Section 7.6.3, as applicable, the Parties will share equally (50%/50%) all Development Costs associated with activities under the applicable Development Plan for such Collaboration Program, in accordance with the existing Development Budget therefor. The calculation of the Development Costs shall be in accordance with the provisions set out in the Financial Schedule attached hereto. Any Development Costs incurred in excess of the agreed upon Development Budget (including any Permitted Overage and Excess Costs) in a Collaboration Program will be subject to the terms set forth in Section 11.7.

11.5 Profit/Loss Sharing TC "11.5 Profit/Loss Sharing" \f C \l "2" .Unless otherwise agreed by the Parties in writing with respect to a Party Asset contributed by a Party at its sole discretion in accordance with Section 2.6.2, and subject to either Party becoming an Opt-Out Party pursuant to Section 7.6.1 in respect of a particular Collaboration Product or Expanded Functional Genomics Target, as applicable, [***], share equally (50%/50%) all Pre-Tax Profit or Loss for each Collaboration Product in a particular Collaboration Program in the Territory. The calculation of the Pre-Tax Profit or Loss shall be in accordance with the provisions set out in the Financial Schedule.

11.6 [***] TC "11.6 Adjustment of Actual Profits " \f C \l "2" . If, with respect to any Collaboration Product, the JSC cannot agree [***], then the following shall apply [***]:

[***]

11.7 Reconciliation Procedures TC "11.7 Reconciliation Procedures" \f C \l "2" .

11.7.1 Reporting.

(a) Reporting Generally. On a Collaboration Product-by-Collaboration Product basis, within [***], each Party shall provide to the Financial Working Group a report of its actual Development Costs incurred with respect to such Collaboration Product for such [***] and, beginning with the first [***] in which the First Commercial Sale of such Collaboration Product occurs, a report of its calculation of actual Pre-Tax Profit or Loss with respect to such Collaboration Product for such [***] (each, a “Financial Report”), [***] in accordance with its Accounting Standards; provided, that the Financial Report of a Party’s calculation of Pre-Tax Profit or Loss for the [***] in which the First Commercial Sale of a Collaboration Product occurs will include any Allowable Expenses incurred by such Party with respect to such Collaboration Product prior to such [***]. Each Financial Report shall specify in reasonable detail, as applicable, [***] for such Collaboration Product in the corresponding [***] received and incurred by the reporting Party or any of its Affiliates or (sub)licensees in accordance with this Agreement in such [***]. [***].

(b) Net Sales Reporting. Without limiting the generality of Section 11.7.1(a), within [***] after the end of each [***], beginning with the first Calendar Quarter in which the First Commercial Sale of such Collaboration Product occurs, GSK shall provide the Financial Working Group with a report of the Net Sales for the preceding [***].

(c) [***].

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(d) [***].

(e) Vir Reporting. In the event that GSK exercises its Opt-Out Option with respect to a Collaboration Product pursuant to Section 7.6, the reporting obligations that GSK is subject to as set out in this Section 11.7.1(a)-(d) shall apply to Vir mutatis mutandis in respect of the Vir Sole Development Product that corresponds to such Collaboration Product for which Vir undertakes Commercialization as a Vir Sole Development Product.

11.7.2 Overruns.

(a) Each Party shall notify the other Party [***] that the anticipated Development Costs or Allowable Expenses to be incurred by such Party for a Collaboration Product for a given Calendar Year shall be in excess of the applicable approved Development Budget or Commercialization Budget, respectively, for such Collaboration Product for such Calendar Year.

(b) Following such notification, the Financial Working Group shall discuss the causes of any such increase and evaluate potential mitigation measures to prevent a further increase of Development Costs or Allowable Expenses, as applicable. To the extent, based on this discussion, the Financial Working Group concludes that the anticipated amount of the concerned category of Development Costs or Allowable Expenses is likely not to exceed [***] of the aggregate annual amounts budgeted (the “Permitted Overage”) to be incurred by or on behalf of the concerned Party for its activities for the Collaboration Product in such Calendar Year as set forth in the then-current applicable Development Budget or Commercialization Budget, respectively, such anticipated costs or expenses shall be included in the calculation of the applicable Development Costs or applicable Allowable Expenses for the purposes of calculating the Development Cost sharing pursuant to Section 11.4 or calculating the profit or loss sharing pursuant to Section 11.5, provided that:

(i) [***]; and

(ii) [***].

(c) If the Financial Working Group concludes that:

(i) the anticipated amount of the applicable Development Costs or Allowable Expenses is likely to exceed the Permitted Overage (such amount the “Excess Costs”); and

(ii) there are no mitigation measures to prevent such Excess Costs, the JSC shall discuss in good faith a corresponding amendment of the concerned Development Budget or Commercialization Budget, as applicable, to reflect the anticipated Excess Costs. [***].

(d) [***].

(e) [***].

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(f) [***].

11.7.3 Reconciliation and Payment.

(a) Reconciliation Discussion.In the event that either Party has any questions or concerns regarding the Development Costs or calculation of Pre-Tax Profit or Loss reported by the other Party in a Financial Report pursuant to Section 11.7.1, the Financial Working Group shall endeavor to resolve such questions and concerns of either Party [***]. Additionally, the Financial Working Group may by mutual agreement adjust the timing for notification or payment of any reconciliation payments hereunder.

(b) [***]. Unless such timing is otherwise modified by the Financial Working Group, within [***] after receipt of each Party’s Financial Report provided pursuant to Section 11.7.1, the Financial Working Group shall confer and agree in writing on a reconciliation report setting out the calculation of any payment to be paid by Vir to GSK or by GSK to Vir, as the case may be, (“Balancing Payment”) in order to effect the sharing of Development Costs in accordance Section 11.4 and the sharing of Pre-Tax Profit or Loss in accordance with Section 11.5, [***]. In the event of any dispute regarding any Balancing Payment due, the Parties shall use good faith efforts to resolve the dispute provided that, if not so resolved within [***], such dispute shall be resolved pursuant to Section 11.16. Each Party that is owed a Balancing Payment shall invoice the other Party for the amount of the Balancing Payment due and the other Party shall pay such invoiced amount within [***] after delivery of such invoice; provided that, in the event of any dispute regarding the Balancing Payment due, the undisputed portion of such Balancing Payment shall be paid in accordance with the foregoing timetable by the applicable Party, and the remaining, disputed portion shall be paid in accordance with Section 11.16.

11.8 Opt-Out Royalties and Payments TC "11.8 Opt-Out Royalties and Payments" \f C \l "2" .

11.8.1 General. In the event that a Party exercises its Opt-Out Option in respect of a Collaboration Product pursuant to Section 7.6, from the Opt-Out Effective Date with respect to such Collaboration Product, the Opt-Out Party’s rights to share in future Pre-Tax Profit or Loss in respect of such Collaboration Product shall cease, and the Opt-Out Party shall be entitled to royalties and payments pursuant to this Section 11.8.

11.8.2 Net Sales Royalties. With respect to any Sole Development Product, on a country-by-country basis, commencing on the First Commercial Sale of the applicable Sole Development Product in the Territory, during the applicable Royalty Term, the Non Opt-Out Party shall pay to the Opt-Out Party royalties (determined by the timing of the exercise of the Opt-Out Option) on Net Sales of such Sole Development Product in the Territory during each Calendar Year at the rates set forth in Schedule 11.8.2. In addition, [***], if GSK [***], then, [***].

11.8.3 [***].[***], the Parties will discuss, [***], an equitable reduction to the royalties payable to the Opt-Out Party pursuant to Section 11.8.2, [***].

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11.8.4 Royalty Payment and Reporting.The paying Party shall, within [***], pay to the receiving Party the royalties due for such [***]. At the same time as such payment, the paying Party shall furnish to the receiving Party a written report showing on a Sole Development Product-by-Sole Development Product and country-by-country basis the total Net Sales of a Sole Development Product in a country in the Territory for that [***] stated in U.S. Dollars and the royalties due thereon. The paying Party will keep complete and accurate records in sufficient detail to enable the royalties payable to be determined and the information provided to be verified. With respect to Net Sales of Sole Development Products invoiced in a currency other than U.S. Dollars, such amounts and the royalty amounts payable under this Agreement shall be expressed in U.S. Dollar equivalent calculated using [***].

11.9 Third Party Technologies and [***] TC "11.9 Third Party Technologies and Government Funding" \f C \l "2" .

11.9.1 Vir has disclosed to GSK and the Parties have agreed on all payments payable to Third Parties under Existing Third Party IP Agreements in connection with the Existing Influenza Program mAbs existing as of the Execution Date, as set forth on Schedule 11.9.1 (“ExistingThird Party Payment Obligations”). Vir shall disclose to GSK [***] with respect to [***]. All Existing Third Party Payment Obligations incurred after the Effective Date with respect to Vir-2482XX2, (and, with respect to Vir-2482, after the Vir-2482 Program Effective Date if the Option is exercised by GSK) to the extent relating to Influenza Products containing Vir-2482XX2 (or Vir-2482, if the Option is exercised by GSK) Developed, Manufactured or Commercialized under the Influenza Program will be included as Development Costs and/or Pre-Tax Profits or Losses and shared by the Parties in accordance with the terms of this Agreement, in each case, subject to any applicable opt-out mechanics set forth in Section 7.6. In addition, any royalties and other payments payable to Third Parties in connection with rights or licenses to Intellectual Property Rights with respect to any [***] that are disclosed by Vir and that are agreed to be included by the Parties pursuant to Section 11.9.2 or Section 12.9 (or, if the Parties cannot agree, determined to be [***] pursuant to Section 11.9.2 or Section 12.9, as applicable) [***] shall be Third Party IP Payments to the extent relating to Collaboration Products Developed, Manufactured or Commercialized under such Collaboration Program and will be included as Development Costs and/or Pre-Tax Profits or Losses and shared by the Parties in accordance with the terms of this Agreement, in each case, subject to any applicable opt-out mechanics set forth in Section 7.6. For clarity, Vir shall [***]. Notwithstanding the foregoing, Vir shall [***].

11.9.2 If, during the Term, in connection with a Collaboration Program, either Party determines, [***], that it is [***] to (a) obtain rights under any Third Party Intellectual Property Rights, or (b) [***], in order to Develop, Manufacture or Commercialize any Collaboration Products pursuant to this Agreement, then it shall notify the JPC of such Third Party Intellectual Property Rights, along with (where reasonably practical) a proposal of the terms upon which such Third Party Intellectual Property Rights are available to license or acquire for use in connection with the applicable Collaboration Products [***]. The JPC, and if the JPC cannot agree, then upon escalation, the JSC, shall determine whether or not to seek a license under or to acquire or [***] (as applicable) such Third Party Intellectual Property Rights for purposes of Developing, Manufacturing or Commercializing such Collaboration Products. If the JPC or the JSC, as applicable, determines to seek such a license or acquisition, then, the Lead Party shall take the lead in negotiating the agreement pursuant to which a license under or acquisition of such Third

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Party Intellectual Property Rights would be obtained (the “Blocking Third Party IP Agreement”), provided that [***]. If the Parties cannot agree through the JPC or the JSC on whether to enter into a Blocking Third Party IP Agreement, [***] or upon the terms of such Blocking Third Party IP Agreement, then, (a) with respect to any Third Party Intellectual Property Rights that [***], and (b) with respect to any Third Party Intellectual Property Rights that [***].

11.9.3 If a Blocking Third Party IP Agreement is entered into in accordance with Section 11.9.2 with respect to a Collaboration Product, any amounts paid by the Lead Party to any Third Party under such Blocking Third Party IP Agreement that are attributable or allocable to such Collaboration Product shall be deemed Blocking Third Party IP Costs and included within Development Costs (to the extent applicable to Development or Manufacturing for Development) for purposes of Development Cost sharing or included within Allowable Expenses (to the extent applicable to Commercialization and Commercial Manufacture) for calculating Pre-Tax Profits or Loss pursuant to the Financial Schedule.

11.9.4 If, following the Opt-Out Effective Date for a Collaboration Product, the Non Opt-Out Party has elected to continue with the Development and Commercialization of such Collaboration Product in accordance with Section 7.6.4(a), then:

(a) If, with respect to a Sole Development Product, the Non Opt-Out Party determines, [***], that it is [***] to obtain rights under any Third Party Intellectual Property Rights in order to Develop, Manufacture or Commercialize such Sole Development Product, the Non Opt-Out Party shall have right, but not the obligation, to take the lead in negotiating the agreement pursuant to which a license under such Third Party Intellectual Property Rights would be obtained. If the Non Opt-Out Party (i) obtains a license to or acquires any such Third Party Intellectual Property Rights that are [***] for the Development, Manufacture or Commercialization of a Sole Development Product (i.e. where the Opt-Out Party is receiving only royalties in the Territory and not a share of Pre-Tax Profits or Loss) or (ii) is required to make payments under (A) any Existing Third Party IP Agreement, or (B) any Blocking Third Party IP Agreement existing as of the effective date of the applicable Opt-Out Option, in each case ((A) and (B)) with respect to a Sole Development Product, then the Non Opt-Out Party shall be permitted to offset [***] paid to the applicable Third Party in consideration for the grant of such a license (in the case of subclause (i)), and under such Existing Third Party IP Agreement or Blocking Third Party IP Agreement [***], against the royalties payable to the Opt-Out Party in accordance with Section 11.8, provided that, in each case ((i) or (ii)), [***].

(b) If the Opt-Out Party is required to make payments under any Existing Third Party IP Agreement or any Blocking Third Party IP Agreement entered into by the Opt-Out Party prior the effective date of the applicable Opt-Out Option with respect to the Development, Manufacture or Commercialization of the Non Opt-Out Party’s Sole Development Product, then the Non Opt-Out Party shall reimburse the Opt-Out Party for all such payments and the Non Opt-Out Party shall be permitted to offset [***] reimbursed to the Opt-Out Party [***] against the royalties payable to the Opt-Out Party in accordance with Section 11.8 with respect to such Sole Development Product, provided that, [***].

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11.9.5 If, during the Term on a Collaboration Program-by-Collaboration Program basis, either Party wishes to [***], unless such Party exercises its Opt-Out Options with respect to a Collaboration Program, it shall [***].

11.10 Audits TC "11.10 Audits" \f C \l "2" . Each Party shall, and shall ensure that its Affiliates and licensees and Sublicensees, keep complete and accurate records of [***]. Each Party will have the right, at its own expense and [***], to have an independent, certified public accountant, selected by such Party [***], review any such records of the other Party in the location(s) where such records are maintained by the other Party upon [***] prior written notice and during regular business hours and under obligations of confidentiality, for the sole purpose of verifying the basis and accuracy of payments made under this Agreement, with respect to any Calendar Year ending not more than [***] prior to the request of the auditing Party. If the review of such records reveals that the other Party has failed to accurately report financial information required to be reported hereunder, or to make any payment (or portion thereof) required under this Agreement, then the other Party shall pay, within [***], to the auditing Party any underpaid amounts due hereunder, together with interest calculated in the manner provided in Section 11.12. If any such discrepancies are greater than [***] of the amounts actually due for the audited period, the other Party shall pay all reasonable costs incurred in conducting such review. Once a Party has conducted a review and audit of the other Party pursuant to this Section 11.10 in respect of any given period, it may not subsequently re-inspect the other Party’s records in respect of such period, unless [***]. For clarity, however, if a discrepancy is identified by the accountant during the course of an audit and the Parties do not agree upon a resolution of such discrepancy, then the auditing Party’s accountant may re-inspect the books and records to the extent reasonably relevant to resolving such discrepancy.

11.11 Tax Matters TC "11.11 Tax Matters" \f C \l "2" .Each Party will make all payments to each other under this Agreement without deduction or withholding for Taxes (as that term is defined below) except to the extent that any such deduction or withholding is required by applicable Law in effect at the time of payment. The Parties shall [***] cooperate with one another to reduce or minimize any such deduction or withholding required by applicable Law, including by providing reasonable advance notice of such deduction or withholding by providing any forms or other certifications necessary to reduce the amount of such withholding. Each Party (including successors and assignees) shall, [***], provide the other Parties [***].

11.11.1 Any amount payable by one Party to the other under this Agreement is deemed to be exclusive of any amount in respect of any VAT chargeable on the supply for which that sum is the consideration (in whole or in part) for VAT purposes. If anything done by one Party under this Agreement constitutes, for VAT purposes, the making of a supply to the other Party and VAT is or becomes chargeable on that supply, the Party receiving the supply shall pay the other Party, in addition to any amount otherwise payable under this Agreement by the Party receiving the supply, a sum equal to the amount of the VAT chargeable on that supply against delivery of a valid VAT invoice to the Party receiving the supply. “VAT” means any value added, goods and services, sales, use, purchase, turnover or consumption tax as may be applicable in any relevant jurisdiction, including but not limited to value added tax chargeable under legislation implementing EU Council Directive 2006/112/EC.

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11.11.2 Any Tax required to be withheld on amounts payable under this Agreement will be [***] paid by the Party making the payment (the “Payor”) on behalf of the Party receiving the payment (the “Payee”) to the appropriate Governmental Authority, and Payor will furnish Payee with proof of payment of such Tax. Any such Tax required to be withheld will be an expense of and borne by Payee and any amounts withheld and paid to the applicable Tax authority shall be treated as paid to the applicable Party for purposes of this Agreement. Notwithstanding anything to the contrary in this Agreement, if a Payor redomiciles, assigns, transfers, sublicenses or otherwise disposes of some or all of its rights and obligations to any Person (without the prior written consent of the Payee) (including an assignment of this Agreement as permitted under Section 22.4 of this Agreement) and if, as a result of such action, the withholding or deduction of tax required by applicable Law with respect to payments under this Agreement is increased (the “Increased Withholding Taxes”), then any amount payable to the Payee under this Agreement shall be increased to take into account such Increased Withholding Taxes as may be necessary so that, after making all required withholdings (including withholdings on the withheld amounts), the Payee receives an amount equal to the sum it would have received had no such action occurred. For the avoidance of doubt, [***].

11.11.3 The Parties will reasonably cooperate with respect to all documentation required by any taxing authority or reasonably requested by either Party to secure a reduction in the rate of applicable withholding Taxes or an exemption from withholding Taxes. Notwithstanding the foregoing, if a Party is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, or recovery of, applicable withholding tax, then it may deliver to the other Party or the appropriate Governmental Authority the prescribed forms necessary to reduce the applicable rate of withholding or to relieve the payor of its obligation to withhold tax. If a Payee [***] delivers to the Payor a validly executed form establishing a reduced rate or exemption from withholding, the Payor shall apply the reduced rate of withholding, or not withhold, as the case may be, provided that the Payor is in receipt of evidence, in a form reasonably satisfactory to the Payor. If, in accordance with the foregoing, the Payor withholds any amount, then it will pay to the Payee the balance when due, [***] remit to the proper taxing authority of the withheld amount, and send the Payee proof of such remittance within [***] following the Payee’s request for such proof of remittance.

11.11.4 No Partnership. Nothing contained in this Agreement shall be deemed or construed by the Parties, any of their Affiliates, a Third Party, or any third person to treat the relationship between the Parties contemplated by this Agreement as a partnership, joint venture or other business entity under Treasury Regulations Section 301.7701-1(a)(2) (or any corresponding provision under state, local or non-U.S. tax Law) (an “Entity”). Without the prior written consent of the Parties (such consent not to be unreasonably withheld, delayed or conditioned), no Party (or successor or assignee) shall, for Tax purposes, report the relationships established by this Agreement as an Entity, including either (a) making any disclosure that the relationships established by this Agreement may give rise to an Entity (whether on a U.S. Internal Revenue Service Form 8275 or otherwise) or (b) withholding any amounts from payments made to the other Party pursuant to Section 1446 of the Code (or any corresponding provision under state, local or non-U.S. tax law), unless required by a tax authority on audit or other examination.

11.11.5 Independent Parties. The Parties agree and acknowledge that they are acting for their own account and do not intend this Agreement to result in an Entity. Each Party

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is acting on its own behalf and has obtained its own legal, tax, and investment advice regarding the execution of this Agreement and the rights and obligations arising herein. The Parties shall not maintain joint bank accounts and shall not commingle funds. No Party shall hold itself out as being an agent of any other Party or as having the legal right to bind or act on behalf of any other Party.

11.12 General Payment Terms TC "11.12 General Payment Terms" \f C \l "2" .Unless otherwise expressly set forth herein, including in respect of the payment of Balancing Payments (which shall be paid in accordance with Section 11.7.3(b)) and in respect of the payment of royalties (which shall be paid in accordance with Section 11.8), [***].

11.12.1 Without limiting either Party’s remedies under this Agreement, if a Party fails to pay any amount due under this Agreement by the relevant payment date when such amounts are due, the other Party may, [***].

11.12.2 Except as otherwise agreed by the Parties, all payments to be made by either Party to the other Party under this Agreement shall be made by such Party or its Affiliate in U.S. Dollars to the account designated by the Party to which the relevant payment is due. In the case of any amounts designated in another currency, then each Party shall convert such foreign currency into U.S. Dollars [***].

11.13 Blocked Payments TC "11.13 Blocked Payments" \f C \l "2" . In the event that, by reason of applicable Laws in any country, it becomes impossible or illegal for a Party or its Affiliate, licensee or Sublicensee to transfer, or have transferred on its behalf, payments to the other Party, such Party shall [***] notify the other Party of the conditions preventing such transfer and such payments shall [***].

11.14 Reporting; Financial Records TC "11.14 Reporting; Financial Records" \f C \l "2" . Unless otherwise defined or stated, financial terms shall be calculated by the accrual method under the applicable Party’s Accounting Standards. Financial records shall be maintained (in such form as may be available) for a period of no less than [***] following the end of the period to which they pertain.

11.15 [***] TC "11.15 Cooperation on Inter-Party Structure" \f C \l "2" .The Parties will [***].

11.16 Resolution of Financial Disputes TC "11.16 Resolution of Financial Disputes" \f C \l "2" . In the event there is a dispute, claim or controversy relating to any financial obligation by one Party to the other Party pursuant to this Agreement, such Party shall provide such other Party with a written notice setting forth in reasonable detail the nature and factual basis for such good-faith dispute and, unless the Financial Working Group has already attempted to resolve the dispute, each Party agrees that it shall seek to resolve such dispute within [***] within the Financial Working Group after the date such written notice is received. If no resolution is reached by the Financial Working Group, the dispute shall be referred to the JSC for resolution, and if the JSC is unable to reach resolution within [***], then (a) if such dispute relates to[***], and (b) if such dispute relates to [***], then such dispute shall be subject to the dispute resolution process set forth in Section 11.17. Notwithstanding any other provision of this Agreement to the

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contrary, the obligation to pay any reasonably disputed amount shall not be deemed to have been triggered until such dispute is resolved hereunder, provided that any undisputed portion of such payment shall be paid by the paying Party in accordance with the payment terms set forth in this Agreement including as set forth in Section 11.12 (General Payment Terms). Any disputed portion of any payment shall be paid by the responsible Party within [***] after the date on which the Parties, using good faith efforts, or the JSC (as applicable) resolve the dispute or, if not so resolved within [***], within [***] after such dispute is resolved pursuant to Section 22.1.

11.17 Specific Finance Disputes TC "11.17 Specific Finance Disputes" \f C \l "2" .If the Parties are unable to reach a mutually acceptable resolution of any dispute falling within Section 11.16(b) within [***], the dispute shall be submitted for resolution to [***]. Any amounts owed by one Party to the other Party as a result of such resolution shall be paid or reimbursed by the owing Party within [***].

ARTICLE 12
Licenses TC "ARTICLE 12 LICENSES" \f C \l "1"

12.1 Collaboration Programs TC "12.1 Collaboration Programs" \f C \l "2" .

12.1.1 License Grant to GSK. On a Collaboration Program-by-Collaboration Program basis, Vir hereby grants to GSK as of the Effective Date the following:

(a) a co-exclusive (with Vir), worldwide, sublicensable (subject to Section 12.4) license under the Vir Licensed Technology and Vir Program Technology to Develop and Manufacture Collaboration Products arising from such Collaboration Program in the Field in the Territory (which license shall remain in effect for any Collaboration Product that becomes a Sole Development Product of GSK but shall become [***] with respect to such product, as further modified by Section 12.2.1), subject in each case (including where modified by Section 12.2.1) to (i) (A) in the case of the Existing Influenza mAbs, [***], and (B) in the case of any other Vir Influenza mAbs, the Expanded Functional Genomics Program and each Additional Pathogen Program, any rights granted by Vir to Third Parties [***] under agreements with respect to the applicable Vir Licensed Technology that are in existence as of [***] for such Collaboration Program; and (ii) any modified or additional IP terms with respect to applicable Vir Assets pursuant to Section 2.6.2 (collectively, (i) and (ii), the “Vir Preexisting Rights”);

(b) an exclusive, worldwide, sublicensable (subject to Section 12.4) license under the Vir Licensed Technology and Vir Program Technology to Commercialize Collaboration Products arising from such Collaboration Program in the Field in the Territory (which license shall remain in effect for any Collaboration Product that becomes a Sole Development Product of GSK, as further modified by Section 12.2.1), subject in each case (including where modified by Section 12.2.1) to the Vir Preexisting Rights; and

(c) a non-exclusive, worldwide, royalty-free, perpetual license under the Vir Program Technology for GSK’s Research purposes only, subject to any modified or additional IP terms with respect to applicable Vir Asset pursuant to Section 2.6.2 [***].

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12.1.2 License Grant to Vir. On a Collaboration Program-by-Collaboration Program basis, GSK hereby grants to Vir as of the Effective Date the following:

(a) a non-exclusive, worldwide, sublicensable (subject to Section 12.4) license under the GSK Licensed Technology to Develop and Manufacture Collaboration Products arising from such Collaboration Program in the Field in the Territory (which license shall remain in effect for each Collaboration Product that becomes a Sole Development Product of Vir, as further modified by Section 12.2.2), subject in each case (including where modified by Section 12.2.2) to, for each Collaboration Program, (i) any rights granted by GSK to Third Parties [***] under agreements with respect to the applicable GSK Licensed Technology that are in existence as of [***] for such Collaboration Program and (ii) any modified or additional IP terms with respect to applicable GSK Asset pursuant to Section 2.6.2;

(b) a co-exclusive (with GSK), worldwide, sublicensable (subject to Sections 7.4 and Section 12.4) license under GSK Program Technology to Develop and Manufacture Collaboration Products arising from such Collaboration Program in the Field in the Territory (which license shall remain in effect for any Collaboration Product that becomes a Sole Development Product of Vir and shall become [***] with respect to such product, as further modified by Section 12.2.2), subject in each case (including where modified by Section 12.2.2) to any modified or additional IP terms with respect to applicable GSK Asset pursuant to Section 2.6.2; and

(c) a non-exclusive, worldwide, royalty-free, perpetual license under the GSK Program Technology for Vir’s Research purposes only, subject to any modified or additional IP terms with respect to any applicable GSK Asset pursuant to Section 2.6.2 [***].

12.1.3 The licenses set forth in Sections 12.1.1(a) and (b) and Sections 12.1.2(a) and (b) shall remain in effect for each Collaboration Program until termination of this Agreement with respect to such Collaboration Program (but shall be adjusted as specified above and in Section 12.2).

12.2 Following Opt-Out Option TC "12.2 Following Opt-Out Option" \f C \l "2" .

12.2.1 GSK Sole Development Product. The licenses granted to GSK pursuant to Sections 12.1.1(a) and (b) with respect to any GSK Sole Development Product shall be automatically adjusted to include only any Vir Licensed Technology or Vir Program Technology that (a) was used to conduct Development, Manufacturing or Commercialization activities in connection with such GSK Sole Development Product prior to Vir exercising its Opt-Out Option for such Collaboration Product and such Collaboration Product being designated as a GSK Sole Development Product, and (b) is necessary for continued Development, Manufacturing or Commercialization of such GSK Sole Development Product, [***].

12.2.2 Vir Sole Development Product.The licenses granted to Vir pursuant to Sections 12.1.2(a) and (b) with respect to any Vir Sole Development Product shall be automatically adjusted to include only any GSK Licensed Technology or GSK Program Technology that (a) was used to conduct Development, Manufacture or Commercialization

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activities in connection with such Vir Sole Development Product prior to GSK exercising its Opt-Out Option for such Collaboration Product and such Collaboration Product being designated as a Vir Sole Development Product, and (b) is necessary for continued Development, Manufacture or Commercialization of such Vir Sole Development Product, but [***]. In addition, the licenses granted to Vir pursuant to Sections 12.1.2(a) and (b) with respect to any Vir Sole Development Product shall be modified to include the right to Commercialize such Vir Sole Development Product.

12.3 Rejected Collaboration Product License TC "12.3 Rejected Collaboration Product License" \f C \l "2" . In the event that, following the exercise of the Opt-Out Option by one Party for a Collaboration Product, the other Party does not wish to continue the further Development, Manufacturing or Commercialization of the applicable Collaboration Product (“Rejected Collaboration Product”), then,

12.3.1 if the Non Opt-Out Party has elected to wind down Development activities and has the right to take the lead on winding down Development activities with respect to such Rejected Collaboration Product in accordance with Section 7.6.4(c), then, except to the extent necessary for the purposes of winding down all Development activities with respect to such Collaboration Product, neither Party or its Affiliates shall have the right to use, infringe or otherwise exploit the Program Technology, GSK Licensed Technology and Vir Licensed Technology, in each case, with respect to the Rejected Collaboration Product, and neither such Party or its Affiliates shall grant the right to any Third Party to engage in any activities with respect to such Rejected Collaboration Product.

12.3.2 if the Non Opt-Out Party has proposed to out-license or otherwise divest such rejected Collaboration Product and has the right to take the lead on (sub)licensing or otherwise divesting rights to such Rejected Collaboration Product pursuant to Section 7.6.4(d), then neither Party or its Affiliates shall have the right to use or otherwise exploit the Program Technology, GSK Licensed Technology and Vir Licensed Technology, in each case, with respect to the Rejected Collaboration Product, and, except for purposes of such (sub)licensing or divestiture, neither such Party or its Affiliates shall grant the right to any Third Party to engage in any activities with respect to such Rejected Collaboration Product, in each case without the consent of the other Party.

12.4 Sublicenses TC "12.4 Sublicenses" \f C \l "2" .Subject to Sections 7.4, 9.5 and 12.5, each Party shall have the right to grant sublicenses to its Affiliates or a Third Party, provided that, [***]. Any and all sublicenses granted by either Party to its Affiliates or Sublicensees shall be in writing and shall be subject to, and consistent with, the terms and conditions of this Agreement (including the Development Plan) applicable to such Affiliates or Sublicensees. The Party granting the sublicense shall be responsible for ensuring the compliance of its applicable Affiliates and Sublicensees with all obligations owed to the other Party under this Agreement.

12.5 Licensing Program Technology TC "12.5 Licensing Program Technology" \f C \l "2" . For purposes of the licenses granted to Program Technology hereunder, unless otherwise agreed by the Parties in writing, such licenses are not intended to include any Program Technology arising from the other Party’s activities with respect to any Sole

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Development Product after the date on which the Opt-Out Option is exercised. For clarity, with respect to a Collaboration Program, solely to the extent agreed by the JPC and the JRDC, the licenses granted to Program Technology shall include Program Technology arising from any other Collaboration Program.

12.6 No Implied Licenses TC "12.6 No Implied Licenses" \f C \l "2" . Each Party acknowledges that the licenses granted under this ARTICLE 12 are limited to the scope expressly granted, and all other rights to Patents and Know-How licensed hereunder are expressly reserved to the Party granting the license to such Patents or Know-How. Without limiting the foregoing, it is understood that where an exclusive license under Patents or Know-How is granted to a Party under this ARTICLE 12 for a particular purpose, the Party granting such license retains all of its rights to such Patents or Know-How for all other purposes not expressly stated herein.

12.7 Retained Rights TC "12.7 Retained Rights" \f C \l "2" . Any rights of a Party not expressly granted to the other Party under the provisions of this Agreement will be retained by such first Party.

12.8 Rights in Bankruptcy TC "12.8 Rights in Bankruptcy" \f C \l "2" . The Parties intend to take advantage of the protections of Section 365(n) (or any successor provision) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction to the maximum extent permitted by law. All rights and licenses granted under or pursuant to this Agreement, but only to the extent they constitute licenses of a right to “intellectual property” as defined in Section 101 of the U.S. Bankruptcy Code, shall be deemed to be “intellectual property” for the purposes of Section 365(n) or any analogous provisions in any other country or jurisdiction. The Parties shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, including the right to obtain the intellectual property from another entity. In the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party that is not subject to such proceeding shall be entitled to [***] all such intellectual property [***], which, if not already in the non-subject Party’s possession, shall be [***] delivered to it [***]. [***]. In the case of an insolvency that is governed by non-U.S. bankruptcy law, the Parties agree that, to the extent not prohibited by the applicable insolvency law, the non-subject Party will be entitled to at least the same rights and protections afforded by the U.S. Bankruptcy Code, including survival of the licenses granted hereunder even if the subject Party revokes or terminates this Agreement and a copy of the embodiments of such intellectual property, without conditions other than any legally required payment of royalties.

12.9 Existing Third Party Agreements TC "12.9 Existing Third Party Agreements" \f C \l "2" . Each Party shall have the right to [***] in accordance with Section 7.1 (as further described in Section 4.1, Section 5.1, or Section 6.1, as applicable), and such [***]. If the Parties cannot agree [***], then, (a) with respect to any such Third Party Intellectual Property Rights that are [***] to Develop, Manufacture or Commercialize any Collaboration Product pursuant to this Agreement, [***], and (b) with respect to any such Third Party Intellectual Property Rights that are [***] to Develop, Manufacture or Commercialize any Collaboration Product pursuant to this Agreement, [***].

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ARTICLE 13
Manufacturing and Supply TC "ARTICLE 13 MANUFACTURING AND SUPPLY" \f C \l "1"

13.1 General TC "13.1 General" \f C \l "2" .For each Collaboration Program, the Parties will jointly through the JMC (and subject to GSK’s applicable final decision-making authority) determine a Manufacturing strategy with respect to the Manufacture and supply of any Collaboration Product, which may as appropriate include Clinical Manufacturing capabilities of both Parties or contract manufacturers. Following commencement of each Collaboration Program, if agreed by the JMC with respect to Clinical Manufacture, and if agreed by the JMC with respect to Commercial Manufacture, no later than [***], the Parties shall negotiate in good faith and execute any supply agreements between GSK and Vir required for the supply from GSK to Vir, or vice versa (each, a “Supply Agreement”) for the applicable Collaboration Products under applicable Collaboration Program(s), each, in accordance with the terms set forth herein, [***]. The Parties will, in connection with each such Supply Agreement, either (a) enter into a new quality agreement (each, a “Quality Agreement”) that governs the quality of the applicable Collaboration Products supplied by one Party to the other Party thereunder or (b) amend the existing Quality Agreement entered into by the Parties under the Existing Collaboration Agreement to include the Collaboration Products supplied by one Party to the other Party under this Agreement.

13.2 Manufacturing Party TC "13.2 Manufacturing Party" \f C \l "2" . The Party that has the right to conduct Manufacturing and supply for a particular Collaboration Product hereunder shall be referred to as the “Manufacturing Party” with respect to such Collaboration Program. Except as may be otherwise specified in a Supply Agreement or in this Agreement, the Manufacturing Party may Manufacture and supply the applicable Collaboration Product by itself and through Affiliates or through one or more contract manufacturers (each, a “CMO”) provided that any such subcontracting to a CMO shall be approved by the JMC. The Manufacturing Party for a Collaboration Product shall keep the JMC apprised regarding any material developments relating to the Manufacture and supply of such Collaboration Product. For clarity, Vir-2482 is not a Collaboration Product unless and until the Vir-2482 Program Effective Date, if GSK exercises the Option in accordance with the terms of this Agreement, and the terms of Section 13.3.1(a) govern the Manufacture of Vir-2482 prior to the Vir-2482 Program Effective Date.

13.3 Collaboration Programs TC "13.3 Collaboration Programs" \f C \l "2" .

13.3.1 Parties’ Roles. GSK shall be the Manufacturing Party for all Manufacturing activities (including Clinical Manufacture and Commercial Manufacture) for the Influenza Program, Expanded Functional Genomics Program and the Additional Pathogen Programs, except as follows:

(a) With respect to Vir-2482, Vir shall be responsible, and shall have final decision-making authority, for all Manufacturing activities for any Clinical Studies for Vir-2482 prior to the Option exercise and, if such Option is exercised by GSK, until the Vir-2482 Program Effective Date [***]; provided that, (i) [***]; and (ii) if GSK exercises the Option, then, prior to the Vir-2482 Program Effective Date, [***]. Without limiting the foregoing, prior to the

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Option exercise and, if such Option is exercised by GSK, until the Vir-2482 Program Effective Date: (A) [***], Vir shall [***]; and (B) GSK shall, [***]; provided, in each case, ((A) and (B)), GSK shall [***]. For clarity, if GSK exercises the Option pursuant to Section 4.2.2, GSK shall be the Manufacturing Party for Vir-2482 after the Vir-2482 Program Effective Date and shall have the final decision-making authority on the Manufacturing process for Vir-2482 thereafter. If GSK elects not to or fails to exercise the Option (subject to Section 11.2.2(b)), then Vir shall have the sole right with respect to and the sole responsibility for Manufacturing of Vir-2482 and thereafter the terms of this Section 13.3.1(a) shall not apply.

(b) With respect to a Collaboration Product that is an Additional Pathogen Product, the JSC shall determine the Manufacturing Party for preclinical, Phase I Clinical Studies and Phase II Clinical Studies for such Collaboration Product, provided that, if the JSC cannot agree, then GSK shall have the final decision-making authority. With respect to each such Collaboration Product for preclinical, Phase I Clinical Studies and Phase II Clinical Studies, the Party that is responsible for Manufacturing shall [***].

13.3.2 Manufacturing Technology Transfer. With respect to Vir-2482, if GSK exercises the Option, and with respect to any applicable Additional Pathogen Product that is a Program mAb Controlled by Vir and for which the JSC determines that GSK will be responsible for Clinical Manufacture for the pre-clinical studies, Phase I Clinical Studies and Phase II Clinical Studies, [***], in each case, as applicable, Vir shall, upon GSK’s request, use reasonable efforts to facilitate a Manufacturing technology transfer to GSK or its designee to enable GSK to conduct its Clinical Manufacture activities with respect to Vir-2482 or such Additional Pathogen Product, including, [***]. Without limiting the foregoing, with respect to (a) Vir-2482, following GSK’s exercise of the Option, and (b) any Additional Pathogen Product that is a Program mAb Controlled by Vir and for which the JSC determines that GSK will be responsible for Clinical Manufacture for the pre-clinical studies, Phase I Clinical Studies and Phase II Clinical Studies, [***], in each case ((a) and (b)), [***], Vir shall [***]. All costs incurred by Vir (x) with respect to Vir-2482, if GSK exercises the Option, after the VIR-2482 Program Effective Date or (y) with respect to any applicable Additional Pathogen Product, [***]. Without limiting the foregoing, GSK shall have the right [***]. In addition, if GSK exercises the Option, the Parties shall, upon GSK’s request, discuss and agree on a plan to transfer any inventory of Vir-2482 to GSK, [***]. Further, as and when agreed by the Parties and set forth in a Manufacturing Plan or other written document, Vir will [***].

13.3.3 Reservation of Manufacturing Capacity. Unless agreed by the Parties through the JMC and where applicable, the JSC, and except in accordance with Section 13.3.1(a) with respect to Vir-2482, [***], Vir shall [***]. If the JSC, prior to Vir entering into any agreement to acquire Manufacturing capacity, approves Vir’s request to contract for Manufacturing capacity with a specific CMO, the costs for acquiring such Manufacturing capacity will be shared as Development Costs or Allowable Expenses, as applicable, [***].

13.4 Transition of Manufacturing and Supply TC "13.4 Transition of Manufacturing and Supply" \f C \l "2" . If the Manufacturing Party for a Collaboration Product elects to exercise its Opt-Out Option pursuant to Section 7.6.4(b), then promptly following the exercise of such Opt-Out Option by the Manufacturing Party, the Parties shall discuss through the JMC and agree upon a Manufacturing technology transfer plan, including a reasonable allocation

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of costs, for (a) the transfer to the new Manufacturing Party of responsibility for Manufacture of the applicable Collaboration Product for Development and Commercialization, including (i) the transfer of the required Manufacturing process, (ii) transfer of physical possession of the applicable Master Cell Bank and Working Cell Bank (including transfer of title and risk of loss), and (iii) transfer and assignment to the new Manufacturing Party of any existing agreement (or portion thereof) relating to the Manufacturing and supply of the Collaboration Products, and the terms of Section 13.3.2 shall apply mutatis mutandis, (b) any technical assistance agreed in such Manufacturing technology transfer plan and assumption of Manufacturing by the new Manufacturing Party or its designee, and (c) any licenses required to be granted to the new Manufacturing Party in connection with such Manufacturing. During the period following the exercise of the applicable Opt-Out Option by the Manufacturing Party, and until Manufacturing for the applicable Collaboration Product is transferred in accordance with the foregoing subclauses (a) through (c), but in no event for longer than a period of [***], the previous Manufacturing Party shall continue to Manufacture and supply (itself or through an Affiliate or Third Party) the applicable Collaboration Product to the new Manufacturing Party, [***].

ARTICLE 14
Scientific Publications and Presentations TC "ARTICLE 14 SCIENTIFIC PUBLICATIONS AND PRESENTATIONS" \f C \l "1"

14.1 Research and Pre-Clinical Publications TC "14.1 Research and Pre-Clinical Publications" \f C \l "2" .For each Collaboration Program, within 120 days after JSC approval of the applicable Development Plan, the Lead Party shall propose to the JRDC a global publication strategy for the Research and pre-clinical Development activities conducted with respect to such Collaboration Program (the “Research and Pre-Clinical Publication Strategy”) that is consistent with the applicable Development Plan. The JRDC (with consultation from the JPC, where applicable) shall review and approve such Research and Pre-Clinical Publication Strategy for each Collaboration Program, and may amend it from time to time. The Parties shall have no right to publish in relation to any Research or pre-clinical Development activities conducted hereunder other than as specified in the Research and Pre-Clinical Publication Strategy; provided that either Party shall have the right to re-publish or reference any publication (or information therein) previously published in accordance with the Research and Pre-Clinical Publication Strategy and any publication (or information therein) published prior to the Execution Date. If a Party desires to make a publication relating to activities being conducted under the applicable Development Plan, then it shall make such request to the other Party through the JRDC, and such publication shall be subject to review under Section 14.3 and the consent of such other Party, which shall not be unreasonably withheld.

14.2 Clinical Development Publications TC "14.2 Clinical Development Publications" \f C \l "2" .For each Collaboration Program, the Lead Party shall propose to the JRDC a global publication strategy for the clinical Development activities related to the Collaboration Product(s) Developed under such Collaboration Program (the “Clinical Development Publication Strategy”) that is consistent with the Development Plan. The JRDC (with consultation from the JPC, where applicable) shall review and approve such Clinical Development Publication Strategy, and may amend it from time to time upon mutual agreement of the Parties. The Parties shall have no right to publish in relation to any clinical Development activities other than as specified in the Clinical Development Publication Strategy; provided that

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either Party shall have the right to re-publish or reference any publication (or information therein) previously published in accordance with the Clinical Development Publication Strategy and any publication (or information therein) published prior to the Execution Date. If a Party desires to make a publication relating to a Clinical Study that is being conducted under the Development Plan, then it shall make such request to the other Party through the JRDC, and such publication shall be subject to review under Section 14.3, and the consent of such other Party, which shall not be unreasonably withheld.

14.3 Review by the Parties TC "14.3 Review by the Parties" \f C \l "2" . Except as required by applicable Law or court order, any proposed scientific or medical publications or public scientific or medical presentations covered by Section 14.1 or Section 14.2 shall be subject to the provisions of this Section 14.3. For any such publication or presentation, the publishing Party shall submit a copy of the proposed publication or presentation (including manuscripts, abstracts, posters, slides, scheduled interviews or the like) to the representative of the other Party designated to receive such proposed publications [***] prior to any submission or disclosure to any Third Party to allow the other Party to review such proposed publication or presentation. The reviewing Party shall provide the publishing Party with its comments, if any, in writing within [***] after receipt of such proposed publication. The publishing Party shall consider [***] any comments thereto provided by the reviewing Party and shall comply with the reviewing Party’s request to remove any and all of the reviewing Party’s Confidential Information from the proposed publication. In addition, upon the reviewing Party’s reasonable request, the publishing Party shall delay the submission for a period up to forty [***] to permit the preparation and filing of a patent application. If the reviewing Party fails to provide its comments to the publishing Party within such [***], the reviewing Party shall be deemed to not have any comments. Each Party shall not, and shall cause each of its Affiliates and its and their Sublicensees not to, from and after the Execution Date, make any publications or public disclosures regarding any Collaboration Product, Development Candidate or Target under the Collaboration Programs in accordance with this Section 14.3.

14.4 Third Parties TC "14.4 Third Parties" \f C \l "2" . With respect to any agreements between a Party and Third Parties (including clinical investigators) that a Party enters into after the Effective Date relating to the Development of any Collaboration Product or otherwise relating to Development activities under this Agreement, such Party shall use reasonable efforts to include publication provisions regarding results of preclinical studies or Clinical Studies for such Collaboration Products that allow such Party to receive and provide a copy of any proposed publications or public presentations to the other Party, which such Party shall submit to the other Party with a reasonable amount of time for review as described in this ARTICLE 14.

14.5 Lead Party Publication TC "14.5 Lead Party Publication" \f C \l "2" . Notwithstanding the provisions of ARTICLE 18 and Sections 14.1 and 14.2, subject to the review process and each Party’s obligations set forth in Section 14.3, the Lead Party for a given Collaboration Program (such Party, as applicable, the “Lead Publication Party”) or its Affiliates shall have the right as required by applicable Law or the Lead Publication Party’s or its Affiliates’ policies and standard operating procedures to (a) publish protocol summaries, results summaries, protocols, clinical study reports, plain language summaries and other study documents of all Clinical Studies conducted by or on behalf of such Lead Publication Party with respect to any Collaboration Product during the Term of this Agreement in any clinical trial register; (b) publish

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the results at scientific congresses and in peer-reviewed journals; (c) publicly disclose results from other Clinical Studies where the Lead Party determines that the results are scientifically important or relevant for patient care; and (d) make any other public disclosures of clinical Data that become required of the Lead Publication Party due to its internal policies and procedures or applicable Laws. Any publication or disclosure made by either Party pursuant to this Section 14.5 shall contain appropriate acknowledgements of the contribution of the other Party or Third Party to the Research or Development activities that are the subject of such publication, in accordance with generally accepted academic practice.

14.6 Publication after Opt-Out TC "14.6 Publication after Opt-Out" \f C \l "2" .With respect to a Sole Development Product, the Opt-Out Party shall not have the right to make any publication following its delivery of an Opt-Out Notice with respect to such Sole Development Product without the Non Opt-Out Party’s prior written consent; provided that the Opt-Out Party shall have the right, without the Non Opt-Out Party’s prior written consent, to re-publish or reference any publication (or information therein) previously published in accordance with this ARTICLE 14 and any publication (or information therein) published prior to the Execution Date. The Non Opt-Out Party shall have the right to make any publication relating to the pre-clinical or clinical Development activities with respect to such Sole Development Product, subject to review in accordance with Section 14.3.

ARTICLE 15
Materials Transfer; Intellectual Property; Information Technology TC "ARTICLE 15 MATERIALS TRANSFER; INTELLECTUAL PROPERTY; INFORMATION TECHNOLOGY" \f C \l "1"

15.1 Materials Transfer TC "15.1 Materials Transfer" \f C \l "2" .

15.1.1 During the course of a Collaboration Program, either Party (or such Party’s designee) (the “Materials Transferring Party”) may transfer to the other Party or its designee (the “Materials Receiving Party”) certain Materials for use in connection with activities contemplated under this Agreement. Such Materials will be provided under the terms and conditions of this Agreement and in such amount as described in the material transfer record for the particular transfer (“MTR”), in the form attached hereto as Schedule 15.1.1, which MTR shall set forth the type and name of the Materials transferred, the amount of the Materials transferred, the date of the transfer of such Materials and the proposed use of such Materials by the Material Receiving Party.

15.1.2 MATERIALS SUPPLIED BY THE MATERIALS TRANSFERRING PARTY HEREUNDER ARE SUPPLIED IN “AS IS” CONDITION WITH NO WARRANTY, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT, EXCLUSIVITY, OR FITNESS FOR A PARTICULAR PURPOSE. ANY MATERIAL DELIVERED PURSUANT TO THIS AGREEMENT IS UNDERSTOOD TO BE EXPERIMENTAL IN NATURE AND MAY HAVE HAZARDOUS PROPERTIES. THE MATERIALS RECEIVING PARTY WILL HANDLE THE MATERIAL ACCORDINGLY AND WILL INFORM THE MATERIALS TRANSFERRING PARTY IN WRITING OF ANY ADVERSE EFFECTS EXPERIENCED BY PERSONS HANDLING THE MATERIAL.

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15.1.3 The Materials Receiving Party acknowledges that, except for the licenses and other express rights granted herein, it does not have any claim to the Materials supplied by the Materials Transferring Party, or any license or rights to any proprietary information or intellectual property rights in or to the Materials. For clarity, the Materials (and any Intellectual Property Rights, including Patents, relating thereto) shall remain the sole and exclusive property of the Materials Transferring Party and shall be returned or destroyed at the request of the Materials Transferring Party.

15.1.4 The Materials Receiving Party agrees that the Material(s):

(a) will be used solely for, and in compliance with, the applicable Development Plan or in the MTR, and to conduct analyses to confirm identity and purity as may be reasonable required for the purposes of the applicable Collaboration Program;

(b) will be used in compliance with all applicable Laws;

(c) will not be used in human subjects, in Clinical Studies, or for diagnostic purposes involving human subjects;

(d) will not be used in animals intended to be kept as domestic pets;

(e) will be used only by the Materials Receiving Party and only in the Materials Receiving Party’s laboratory, except with the prior written consent of the Materials Transferring Party; and

(f) will not be transferred to a Third Party without the prior written consent of the Materials Transferring Party.

The Materials Receiving Party shall not reverse engineer or attempt to determine the chemical structure, make-up or sequence of, or determine the chemical or biological properties of, or make or attempt to make any analogues, progeny or derivatives of, or modifications to, such Materials except as may be necessary to carry-out such Party’s obligations hereunder, including its activities pursuant to any Development Plan. In the event that the Materials Receiving Party identifies or reasonably believes that there are any safety concerns related to the Material provided by the Materials Transferring Party, the Materials Receiving Party shall promptly notify the Materials Transferring Party in writing of such concerns and upon receiving such notification, the Materials Receiving Party shall promptly conduct investigations to address such concerns and shall keep the Materials Receiving Party reasonably informed of such investigation.

15.1.5 The Materials Receiving Party assumes all liability for damages which may arise from its use, storage or disposal of the Materials. The Materials Transferring Party shall not be liable to the Materials Receiving Party for any loss, claim or demand made by the Materials Receiving Party, or made against the Materials Receiving Party by any Third Party, due to or arising from the use of the Materials, except to the extent permitted by applicable Law when caused by the gross negligence or willful misconduct of the Materials Transferring Party. Upon the expiration or the earlier termination of a Collaboration Program, as applicable, except for any continuing rights as set forth in this Agreement, the Materials Receiving Party shall

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discontinue its use of any Materials and shall, upon direction of the Materials Transferring Party, return or destroy (and certify destruction of) any remaining Material.

15.2 Ownership of Intellectual Property TC "15.2 Ownership of Intellectual Property" \f C \l "2" .

15.2.1 Ownership of Intellectual Property.

(a) Each Party shall retain all right, title and interest to its respective Licensed Technology and, except as expressly set forth in this Agreement, no right or license to such Patents or, Know-How included in such Licensed Technology is granted by either Party to the other Party.

(b) Except as otherwise agreed by the Parties with respect to Intellectual Property Rights related to applicable Party Assets contributed by such Party pursuant to Section 2.6.2, and subject to [***], (i) all patentable inventions within the Program Technology, and all Patents claiming such inventions, and (ii) all other Know-How and other Intellectual Property Rights in such Program Technology, in each case ((i) and (ii)) discovered, created or developed solely by a Party’s employees, Affiliates, agents or independent contractors in connection with their activities under a Collaboration Program shall be owned solely by the inventing, discovering, creating or developing Party, and if discovered, created or developed jointly by both Party’s employees, Affiliates, agents or independent contractors shall be owned jointly and deemed Joint Technology.

(c) With respect to the Expanded Functional Genomics Program, subject to [***], each Party shall be the exclusive owner of the Compound Specific Program Technology related to the Party Asset Contributed by such Party to the Collaboration, and the Parties shall jointly own the Target Specific Program Technology, provided that, [***].

(d) For purposes of this Agreement, the determination of inventorship of any Know-How, whether or not patentable, first invented, discovered, created or developed in the course of performing activities under the Collaboration pursuant to this Agreement, and whether solely or jointly by or on behalf of a Party, including by its employees, Affiliates, agents or independent contractors, shall be made in accordance with United States patent Law without regard to conflict of law, irrespective of where or when such invention, discovery, creation or development occurs. Each Party shall, and does hereby, assign and shall cause its Affiliates and its and their subcontractors and Sublicensees, where applicable, to assign, to the other Party without additional compensation of the other Party, such right, title and interest in and to any Patents and Know-How, as well as any other Intellectual Property Rights with respect thereto, as is necessary to fully effect, the ownership of applicable Intellectual Property Rights provided in this Section 15.2.1 and Section 15.2.2.

15.2.2 [***]. Except (i) as otherwise agreed by the Parties with respect to Intellectual Property Rights related to applicable Party Assets contributed by such Party pursuant to Section 2.6.2, and (ii) with respect to the ownership of Compound Specific Program Technology and Target Specific Program Technology arising from the Expanded Functional Genomics

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Program, which is provided pursuant to Section 15.2.1(c), [***], then the following provisions shall apply.

(a) [***].

(b) [***].

(c) [***];

(d) [***]; and

15.2.3 Party Technology. Notwithstanding [***]

(a) [***].

(b) [***].

15.2.4 Joint Technology.Except as otherwise agreed by the Parties with respect to Intellectual Property Rights related to applicable Party Assets contributed by such Party pursuant to Section 2.6.2, and subject to the licenses granted under this Agreement, exclusivity obligations set forth in Section 2.4 and any other express restrictions set forth in this Agreement, each Party (or its Affiliates):

(a) may assign and transfer its interest in the Joint Technology in connection with a divestiture of the applicable Collaboration Program to a Third Party or in the case of a permitted assignment of this Agreement with respect to the applicable Collaboration Program, but may not otherwise assign or transfer its interest in the Joint Technology, whether within or outside the Collaboration, without the prior written consent of the other Party;

(b) may license its interest in the Joint Technology to (i) a permitted Sublicensee pursuant to Section 12.4, (ii) a Third Party in accordance with Section 12.3 with respect to a Rejected Collaboration Product, (iii) a Third Party as otherwise permitted under this Agreement (e.g., Section 7.4 and Section 9.5), or (iv) with respect to Collaboration Screening Data, to an Affiliate or a Third Party pursuant to Section 5.6 in connection with further Development or Commercialization of a Rejected Target; but may not otherwise license or transfer its interest in the Joint Technology to a Third Party, whether within or outside the Collaboration, without the other Party’s prior written consent.

15.3 Prosecution, Maintenance and Defense TC "15.3 Prosecution, Maintenance and Defense" \f C \l "2" .Except as otherwise agreed by the Parties with respect to Intellectual Property Rights related to applicable Party Assets contributed by such Party pursuant to Section 2.6.2, the following provisions shall apply with respect to the prosecution, maintenance and defense of any Patent included in Licensed Technology or Program Technology.

15.3.1 Program Patents. As between the Parties, the Lead Party in respect of each Collaboration Program shall be entitled to direct the prosecution, maintenance and defense (including patent term extensions and supplementary protection certificates) of all Patents within the Program Technology (“Program Patents”) for the relevant Collaboration Program

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worldwide using mutually acceptable outside counsel appointed by the Parties. The Parties shall [***], through the JPC, to ensure that the Party not entitled to direct the prosecution, maintenance and defense of a particular Program Patent is kept reasonably informed on a regular basis regarding, and provided with reasonable opportunity to comment and consult on, all such activities in respect of such Program Patent. The costs associated with prosecution, maintenance and defense of Program Patents, including the fees of jointly-appointed outside counsel, shall be allocated between the Parties as set forth in Section 11.4 or Section 11.5, irrespective of which Party incurs such costs. The Party with the right to direct the prosecution, maintenance and defense of a particular Program Patent will give reasonable notice to the other Party before determining to abandon the prosecution, maintenance or defense of such Program Patent, and the other Party would, upon receipt of such notice or the first Party’s otherwise abandoning the prosecution, maintenance or defense of the Program Patent, be entitled to assume and thereafter direct such prosecution, maintenance or defense activities, at its own cost and expense. In such circumstances, the Party relinquishing direction of the prosecution, maintenance or defense activities will still be kept reasonably informed on a regular basis regarding, and provided with reasonable opportunity to comment and consult on, all such activities.

15.3.2 Other Patents.

(a) Vir shall have the right to pursue and direct the prosecution, maintenance and defense of Patents within the Vir Licensed Technology (“Vir Licensed Patents”) (including patent term extensions and supplementary protection certificates), provided that Vir will keep GSK reasonably informed through the JPC on a regular basis regarding, and provided with reasonable opportunity to comment and consult on, all such activities. The costs associated with such activities will be allocated between the Parties as set forth in Section 11.4 or Section 11.5. [***].

(b) GSK shall have the right to pursue and direct, at its own cost, the prosecution, maintenance and defense of GSK Licensed Patents (including patent term extensions and supplementary protection certificates), provided that GSK will keep Vir reasonably informed through the JPC on a regular basis regarding, and provided with reasonable opportunity to comment and consult on, all such activities. The costs associated with such activities will be allocated between the Parties as set forth in Section 11.1 or Section 11.5.

15.3.3 Cooperation. The Party not directing the prosecution, maintenance or defense of a particular Patent as set forth in this Section 15.3 will cooperate with the other Party, including furnishing a power of attorney, inventor declaration or assignment documentation, to allow such prosecution, maintenance or defense activities to be carried out effectively and expeditiously.

15.3.4 Patent Prosecution after Opt-Out. If a Party exercises its Opt-Out Option with respect to a Collaboration Product, and the Non Opt-Out Party elects to continue to Develop, Manufacture and Commercialize the corresponding Sole Development Product in accordance with Section 7.6.4(a), then with respect to any Program Patent Controlled by the Opt-Out Party that is solely related to such Sole Development Product, the Non Opt-Out Party shall have the right, but not the obligation to be responsible for the prosecution, maintenance and defense of such Program Patent, at its own cost and expense, in its sole discretion. The Non

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Opt-Out Party shall keep the Opt-Out Party [***] informed of any [***] development and communications with applicable intellectual property offices with respect to any such Program Patent solely or jointly owned by the Opt-Out Party, and in the event the Non Opt-Out Party determines to abandon the prosecution, maintenance or defense of any such Program Patent, the Non Opt-Out Party will give reasonable notice to the Opt-Out Party and Opt-Out Party would, upon receipt of such notice or the Non Opt-Out Party’s otherwise abandoning the prosecution, maintenance or defense of such Program Patent, be entitled to assume and thereafter direct such prosecution, maintenance or defense activities with respect to such Program Patents. For clarity, the Non Opt-Out Party shall have the sole right, but not the obligation, to be responsible for the prosecution, maintenance and defense of Program Patents that are solely owned by the Non Opt-Out Party, at its own cost and expense, in its sole discretion.

15.4 Enforcement Rights TC "15.4 Enforcement Rights" \f C \l "2" .Except as otherwise agreed by the Parties with respect to Intellectual Property Rights related to applicable Party Assets contributed by such Party pursuant to Section 2.6.2, the following provisions shall apply with respect to the enforcement of any Patent included in Licensed Technology or Program Technology.

15.4.1 Notification of Infringement. If either Party learns of any infringement or threatened or suspected infringement, or misappropriation or threatened or suspected misappropriation, of any (i) Program Technology, Vir Licensed Technology, or GSK Licensed Technology, by the manufacture, use, development or commercialization by a Third Party of a product that competes with a Collaboration Product (“Competing Product”) or (ii) any Joint Technology, whether or not relating to a Competing Product (each of (i) and (ii), an “Infringement”), such Party shall promptly provide notice to the JPC describing such Infringement (each, an “Infringement Notice”) and, in the case of any certification filed under the “U.S. Drug Price Competition and Patent Term Restoration Act of 1984” (the “Hatch-WaxmanAct”) or notification of the submission of an Abbreviated Biologics License Application wherein a Collaboration Product is the “Reference Product” under the Biologics Price Competition and Innovation Act of 2009 (the “BPCIA”) or receipt of manufacturing process from a subsection (k) applicant or other similar procedure where a response is required under applicable Law (in order to avoid waiving rights), such Party shall provide notice as quickly as possible and in no event later than thirty (30) days prior to the applicable deadline for filing a response. For clarity, any certification filed under the Hatch-Waxman Act or notification or submission under the BPCIA shall constitute an Infringement for the purposes of this Agreement.

15.4.2 Enforcement and Recoveries.

(a) The Party having the right to direct the prosecution, maintenance and defense of Program Patents as set forth in Section 15.3.1 (the “Program Patent Controlling Party”) shall have the right, at its cost and expense, to pursue and direct enforcement of such Program Patents with respect to any Infringement, provided that such Program Patent Controlling Party would provide written notice to the other Party and consult with the other Party, in advance of commencing any enforcement activities in respect of a Program Patent with respect to the Collaboration, subject to Section 15.5. The Program Patent Controlling Party would keep the other Party reasonably informed on a regular basis regarding, and provide such other Party with reasonable opportunity to consult and comment on, all enforcement activities in respect of

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the Program Patents. The other Party shall have the right, to the extent permitted by applicable Laws and procedural rules to join, at its own cost and using its own counsel, as a party to the enforcement actions included in such enforcement activities. Any damages or other monetary awards recovered from the settlement of or judgment from such enforcement actions shall be allocated first to reimburse the Parties for the costs and expenses incurred by it in connection with such enforcement actions (excluding any cost of separate counsel engaged by the other Party pursuant to the preceding sentence). Any amounts remaining will be allocated between the Parties in a manner consistent with the applicable split of Pre-Tax Profit or Loss percentages as set forth in Section 11.5.

(b) Vir shall have the right to pursue and direct, at its own cost, enforcement of Vir Licensed Patents with respect to any Infringement, provided that Vir would provide written notice to GSK and consult with GSK, in advance of commencing any such enforcement activities with respect to the Collaboration, subject to Section 15.5. Vir shall keep GSK reasonably informed on a regular basis regarding, and provide GSK with reasonable opportunity to consult and comment on, all enforcement activities in respect of each Vir Licensed Patent with respect to the Collaboration. Any damages or other monetary awards recovered from the settlement of or judgment from such enforcement actions shall be allocated first to reimburse Vir for the costs and expenses incurred by it in connection with such enforcement actions. Any amounts remaining will be allocated between the Parties in a manner consistent with the applicable split of Pre-Tax Profit or Loss percentages as set forth in Section 11.5.

(c) GSK shall have the right to pursue and direct, at its own cost, enforcement of GSK Licensed Patents with respect to any Infringement, provided that GSK would provide written notice to Vir and consult with Vir, in advance of commencing any such enforcement activities with respect to the Collaboration, subject to Section 15.5. GSK shall keep Vir reasonably informed on a regular basis regarding, and provide Vir with reasonable opportunity to consult and comment on, all enforcement activities in respect of each GSK Licensed Patent with respect to the Collaboration. Any damages or other monetary awards recovered from the settlement of or judgment from such enforcement actions shall be allocated first to reimburse GSK for the costs and expenses incurred by it in connection with such enforcement actions. Any amounts remaining will be allocated between the Parties in a manner consistent with the applicable split of Pre-Tax Profit or Loss percentages.

15.4.3 Cooperation.If the Party having the right to pursue and direct the enforcement as set forth in each of subclauses (a), (b) and (c) in Section 15.4.2 (collectively, the “Controlling Party”) brings an enforcement action or proceeding with respect to any Infringement in accordance with Section 15.4.2, then the other Party shall cooperate as reasonably requested, at such Controlling Party’s reasonable expense, in the pursuit of such enforcement action, including if necessary by joining as a party to any such enforcement action for which it is a necessary or indispensable party or taking such other actions as are necessary for standing, furnishing a power of attorney, or for the Controlling Party to otherwise maintain or pursue such enforcement action effectively and expeditiously.

15.4.4 Settlement with a Third Party. The Controlling Party for an enforcement action with respect to any Infringement shall also have the right to control the settlement of such enforcement action; provided that the Controlling Party shall not admit the

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unenforceability or invalidity of Patents Controlled by the other Party, or of Patents within the Joint Technology without such other Party’s prior written consent.

15.4.5 Invalidity and Unenforceability. For any invalidity and unenforceability claims arising in such enforcement action, the Controlling Party for the enforcement action shall control the response thereto (but may not admit invalidity or unenforceability of any Patent owned by the other Party). Any other proceeding involving an invalidity or unenforceability challenge, including inter partes review, post-grant review, and any other post-grant proceedings for any issued Patent within the Program Patents, Vir Licensed Patents or GSK Licensed Patents, including reexamination, reissue, opposition, revocation and other similar proceedings, shall be controlled by the Controlling Party that would have the right under this Section 15.4 if it were to have arisen in an enforcement action.

15.4.6 Other Enforcement Activities. The Non Opt-Out Party pursuing any Sole Development Product assumes responsibility for enforcement against any infringement of Program Patents to the extent it relates to such Sole Development Product at its own costs and expense, in its sole discretion.

15.5 Joint Patent Committee TC "15.5 Joint Patent Committee" \f C \l "2" . GSK and Vir shall, in advance of taking any actions to enforce Program Patents, GSK Licensed Patents or Vir Licensed Patents with respect to a Competing Product, present the proposed enforcement to the JPC for discussion and reasonably consider comments from members of the JPC representing the other Party.

15.6 Third Party Technologies TC "15.6 Third Party Technologies" \f C \l "2" . For any in-licensed technologies of either Party, the foregoing provisions of this ARTICLE 15 shall be subject to and limited by the terms and conditions of the applicable existing agreements and any agreement entered into after the Effective Date pursuant to which the in-licensing Party has acquired rights to the applicable Patent. Each Party agrees with respect to such agreements as to which it is a party to take such actions and exercise such rights under any such agreements as reasonably necessary to give effect to the foregoing provisions of Section 15.3 and Section 15.4 and, where such agreements are inconsistent with any term of this Agreement, such Party shall notify the other Party in writing, including a description of the difference.

15.7 Infringement Claims by Third Parties TC "15.7 Infringement Claims by Third Parties" \f C \l "2" .

15.7.1 Notice; Control. Each Party shall promptly notify the other Party in writing of (a) any allegation by a Third Party that any Development, Manufacture or Commercialization or other activities with respect to any Collaboration Product pursuant to this Agreement infringes or misappropriates or may infringe or misappropriate the Intellectual Property Rights of such Third Party (a “Product Third Party Infringement Claim”), or (b) any allegation by a Third Party of infringement or misappropriation of its Intellectual Property Rights with respect to the activities hereunder that is not covered by subclause (a) of this Section 15.7.1 (a “Non-Product Third Party Infringement Claim”, and collectively with any Product Third Party Infringement Claim, “Third Party Infringement Claim”). For any Product Third Party Infringement Claim, [***] shall be the “Defending Party” and shall have the right to control the

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defense of the Third Party Infringement Claim, but the other Party shall have the right to control its own defense of any such Third Party Infringement Claim brought against it, by counsel of its own choice. In such case, the Parties shall coordinate in good faith. For any Non-Product Third Party Infringement Claim, each Party that is a defendant in such claim shall be the “Defending Party” and shall have the right to defend itself against such claim. For clarity, the Non Opt-Out Party shall have the right to control the defense of any Product Third Party Infringement Claim alleged against a Sole Development Product.

15.7.2 Cooperation; Settlement. Except with respect to a Sole Development Product, each Defending Party shall keep the other Party reasonably informed of all material developments in connection with any Third Party Infringement Claim. Each Defending Party agrees to provide the other Party with copies of all pleadings filed in any suit or proceeding relating to such Third Party Infringement Claim. The Defending Party may enter into a settlement or compromise of any Third Party Infringement Claim, provided, that if such settlement or compromise would admit liability on the part of the non-Defending Party or any of its Affiliates or would otherwise have a material adverse effect on the rights or interests of the non-Defending Party or its Affiliates, the Defending Party shall not enter into such settlement or compromise without the prior written consent of the non-Defending Party. In the event a proposed settlement involves obtaining a license under Third Party Patent Rights, the applicable provisions of ARTICLE 12 shall apply. Any counterclaims of Infringement shall be handled as set forth in Section 15.4.

15.7.3 Costs; Recoveries. All out-of-pocket expenses incurred by a Defending Party in defending a Third Party Infringement Claim (including outside counsel fees), and all amounts payable by either Party as a judgment based on a Third Party Infringement Claim or in settlement of such Third Party Infringement Claim, shall be included in the Pre-Tax Profit or Loss calculation. For clarity, the terms of this Section 15.7.3 shall not apply to a Third Party Infringement Claimalleged against a Sole Development Product.

15.8 Product Marks TC "15.8 Product Marks" \f C \l "2" .

15.8.1 (a)GSK shall have the sole right to select, obtain and maintain any Product Marks for Collaboration Products and GSK Sole Development Products. (b) Vir shall have the sole right to select, obtain and maintain any Product Marks for Vir Sole Development Products. In the case of (a) and (b), respectively, GSK and Vir are each referred to as the “Product Mark Controlling Party”, while the other Party is referred to as the “Product Mark Non-Controlling Party.” The costs associated with such activities for the Collaboration Products shall be included in the Development Costs and Pre-Tax Profit or Loss calculations for the applicable Collaboration Product (excluding Sole Development Products). Upon reasonable request of the Product Mark Controlling Party, the Product Mark Non-Controlling Party shall provide reasonable assistance in the selection of Product Marks for a Collaboration Product. As between the Parties, GSK shall be the owner of the Product Marks for any Collaboration Product. In the case in which a Collaboration Product becomes a Vir Sole Development Product, then Vir may continue to use Product Marks selected by GSK and approved by the FDA or other applicable Regulatory Authority, provided that Vir shall not have the right to use any trademarks owned or controlled by GSK (other than the Product Marks), or that are confusingly similar to such trademarks owned or controlled by GSK.

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15.8.2 If the Product Mark Non-Controlling Party has a reasonable basis to believe that a Third Party is engaging in infringement of a Product Mark, such Party shall promptly notify the Product Mark Controlling Party in writing and provide it with any evidence of such infringement that is reasonably available. As between the Parties, the Party owning the infringed Product Mark, or its designee, shall have the sole right and option, at its sole expense, to respond to any infringement or potential infringement with respect to such Product Mark by appropriate steps, including filing an infringement suit or taking other similar action. The non-owning Party shall provide reasonable assistance to the other Party, or the other Party’s designee, at such other (owning) Party’s expense, with respect to any enforcement activities with respect to such Product Mark, including providing access to relevant documents and other evidence, making its employees reasonably available during business hours, and joining the action to the extent necessary to maintain the action. Any amounts recovered pursuant to this Section 15.8 whether by settlement or judgment, shall first be used to reimburse the applicable Party(ies) for their costs and expenses in making such recovery, and any remaining recovery shall be retained by the Product Mark Controlling Party except to the extent included in the Pre-Tax Profit or Loss calculation.The Product Mark Controlling shall solely control any infringement claim brought by any Third Party with regard to the Product Marks and the costs thereof shall be included in the Pre-Tax Profit or Loss calculated.

15.9 Information Technology Requirements TC "15.9 Information Technology Requirements" \f C \l "2" .Each Party shall use all reasonable efforts, including operating commercially available anti-virus applications (and maintaining up to date virus definitions for such applications), to ensure that no portion of the activities conducted under this Agreement comprising software will contain any unauthorized code, or virus, Trojan horse, worm, or any other software routine or hardware component designed to permit, either automatically or through externally applied controls, unauthorized access or use to disable, erase, or otherwise harm software, hardware, or data (collectively “Malwares”). To the extent that any Party, in conducting activities under this Agreement, uses any system or software belonging to the other Party, such Party shall use its best efforts to avoid the introduction of any Malwares into such systems or software.

15.9.1 To the extent that any Malwares are discovered in any deliverables provided under this Agreement or is introduced to a Party’s systems or software by the other Party (or is reasonably likely to have been so introduced), such other Party shall use all reasonable efforts to assist the Party to which the Malware was delivered in removing such Malware from the software in question and shall be responsible for the costs of such removal.

15.9.2 Each Party shall ensure that it has up to date information on all personnel who have access to the other Party’s IT systems and agrees to provide periodic updates on the names of such personnel. Each Party shall, no more than [***] after any change in such information or any new information, notify the other Party promptly of any individual IT user access change.

15.9.3 Both Parties agree to maintain reasonable security measures, in line with industry best practices for systems storing, accessing, or otherwise processing any Data. The Parties agree to coordinate in good faith regarding any requested updates or modifications to the security practices of the other Party as applicable to the Collaboration.

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ARTICLE 16
Term and Termination TC "ARTICLE 16 TERM AND TERMINATION" \f C \l "1"

16.1 Term TC "16.1 Term" \f C \l "2" . This Agreement shall be effective as of the Effective Date and, unless terminated under this ARTICLE 16 (in its entirety, on a Collaboration Program basis or a Collaboration Product basis, as the case may be),shall remain in effect (a) with respect to the Influenza Program, unless and until such time as there is no Influenza Product being Developed or Commercialized by the Lead Party or the LCP, or in the case of a corresponding Sole Development Product, by the Non Opt-Out Party, (b) with respect to each Additional Pathogen Program, unless and until such time as there is no Additional Pathogen Product with respect to such Additional Pathogen Program being Developed or Commercialized by the Lead Party or the LCP, or in the case of a corresponding Sole Development Product, by the Non Opt-Out Party, and (c) with respect to the Expanded Functional Genomics Program, unless and until (i) the end of the Initial Development Term if no Expanded Functional Genomics Targets are selected by the JSC during the Initial Development Term or (ii) if there is at least one Expanded Functional Genomics Target selected by the JSC during the Initial Development Term, then until such time as there is no Expanded Functional Genomics Product being Developed or Commercialized by the Lead Party or the LCP, or in the case of a corresponding Sole Development Product, by the Non Opt-Out Party (the “Term”).

16.2 Mutual Termination TC "16.2 Mutual Termination" \f C \l "2" . The Parties may terminate this Agreement in its entirety or with respect to a particular Collaboration Program or Collaboration Product at any time by mutual written agreement.

16.3 Termination for Cause TC "16.3 Termination for Cause" \f C \l "2" . In addition to any other remedies conferred by this Agreement or by applicable Law or in equity, either Party (the “Non-Breaching Party”) may terminate this Agreement with respect to a particular Collaboration Program or a particular Collaboration Product upon written notice to the other Party (the “Breaching Party”) if there is an uncured material breach by the Breaching Party that impacts such Collaboration Program or such Collaboration Product. To exercise its termination rights under this Section 16.3, the Non-Breaching Party shall provide the Breaching Party with written notice identifying the material breach [***] and indicating whether the Non-Breaching Party is intending to terminate this Agreement with respect to the applicable Collaboration Program or Collaboration Product. If the Breaching Party, upon receiving such written notice identifying such material breach in reasonable detail, fails to cure such material breach within [***] after the date of such notice of breach is received, then this Agreement with respect to such particular Collaboration Program or Collaboration Product shall terminate. Notwithstanding the foregoing, if such breach is curable but cannot reasonably be cured within such [***], such cure period shall be extended if the Breaching Party provides the Non-Breaching Party with a written plan for curing such breach and uses Commercially Reasonable Efforts to cure such breach in accordance with such written plan; provided that no such extension shall exceed [***] without the consent of the Non-Breaching Party. If the existence or materiality of such alleged breach or if the failure to cure is contested in good faith by the alleged Breaching Party in writing within [***] after the delivery of the breach notice, then the dispute resolution procedure pursuant to Section 22.1 may be initiated by either Party to determine whether a material breach or a failure to cure has actually occurred. If either Party so initiates the dispute resolution

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procedure, then the Non-Breaching Party shall not have the right to terminate this Agreement under this Section 16.3 until such time as (a) the dispute is resolved pursuant to Section 22.1 with a determination that the Breaching Party has materially breached this Agreement or has failed to cure such breach, and (b) the Breaching Party has failed to cure such material breach within [***] thereafter (or within such other cure period prescribed by the arbitrators). It is understood and agreed that, during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

16.4 Termination for Insolvency TC "16.4 Termination for Insolvency" \f C \l "2" . Either Party may terminate this Agreement in its entirety or with respect to a Collaboration Program or Collaboration Product, effective immediately upon written notice to the other Party if, at any time such other Party (or any Affiliate that controls such Party) (a) files in any court or agency pursuant to any statute or regulation of any state or country a petition in bankruptcy or insolvency or for reorganization (except for solvent reorganization or solvent reconstruction) or for an arrangement or for the appointment of a receiver or trustee of the Party or of substantially all of its assets, (b) proposes a written agreement of composition or extension of substantially all of its debts, (c) is served with an involuntary petition against it, filed in any insolvency proceeding, and such petition is not be dismissed within [***] after the filing thereof, (d) proposes to be a party to any dissolution or liquidation, (e) admits in writing its inability generally to meet its obligations as they fall due in the general course or (f) makes an assignment of substantially all of its assets for the benefit of creditors.

ARTICLE 17
Effects of Expiration or Termination TC "ARTICLE 17 EFFECTS OF EXPIRATION OR TERMINATION" \f C \l "1"

17.1 Accrued Obligations TC "17.1 Accrued Obligations" \f C \l "2" . The expiration or termination of this Agreement (in whole or in part) for any reason shall not release either Party from any liability that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will any early termination of this Agreement preclude either Party from pursuing any and all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement.

17.2 Effects of Termination by Mutual Agreement TC "17.2 Effects of Termination by Mutual Agreement" \f C \l "2" . In the case of a termination under Section 16.2 of this Agreement with respect to a particular Collaboration Program or Collaboration Product by mutual written agreement, the Parties shall also agree on the consequences of such a termination, including winding down of any Development activities with respect to any Collaboration Products.

17.3 Effects of Termination for Material Breach or Insolvency TC "17.3 Effects of Termination for Material Breach or Insolvency" \f C \l "2" . If this Agreement is terminated, in whole or in part pursuant to Section 16.3 or Section 16.4, then:

17.3.1 Regardless whether the Party that is subject to such termination (the “Terminated Party”) is a Lead Party at the time of such termination, (a) except to the extent set

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forth in Section 17.3.2 below with respect to payments owed to the Terminated Party following such termination, such termination shall be treated as though the Terminated Party had exercised an Opt-Out Option with respect to the Collaboration Product(s) subject to such termination (the “Terminated Collaboration Product(s)”) on the effective date of such termination; (b) the licenses granted to the Party terminating this Agreement (the “Terminating Party”) under Section 12.1 shall remain in effect only to the extent actually used for or incorporated in such terminated Collaboration Product(s) on or prior to the effective date of such termination, and subject to the terms and conditions (including any financial terms for such licenses) and any rights granted to a Third Party in a Third Party agreement with respect to such Terminated Collaboration Product existing prior to the effective date of such termination; (c) the Terminating Party may continue with the Development and Commercialization of such Terminated Collaboration Product(s) at its discretion, and shall retain the sole right to out-license or otherwise divest the Terminated Collaboration Product(s) at its discretion in accordance with Section 7.6.4, including by sublicensing to Third Parties, subject to any applicable terms in the license granted with respect to such Terminated Collaboration Product; (d) following the effective date of such termination, the Terminating Party shall [***]; and (e) the Terminated Party shall [***].

17.3.2 If the Terminating Party elects to continue with the Development and Commercialization of the Terminated Collaboration Product(s), [***].

17.3.3 Without limiting Section 17.3.1, if the Party that is subject to the termination is the Lead Party, the Terminating Party shall have the right to assume the role of the Lead Party in the manner otherwise set forth in this Agreement with respect to any Terminated Collaboration Product(s). Subject to the proviso in Section 17.3.1(c), the terminated Party shall, in accordance with the terms of this Agreement, effect transfer of relevant regulatory documentation and Manufacturing solely with respect to the Terminated Collaboration Product(s) to the Terminating Party in accordance with Section 8.5 or Section 13.4, as applicable.

17.4 Other Termination Consequences TC "17.4 Other Termination Consequences" \f C \l "2" .If this Agreement is terminated for any reason pursuant to Sections 16.2 through 16.4, then the following provisions shall apply:

17.4.1 Development Costs and Pre-Tax Profit or Loss.There shall be a final accounting for any Development Costs and Pre-Tax Profits or Losses that are required to be shared by the Parties hereunder for the Collaboration Program or Collaboration Product that is terminated, which shall include any such Development Costs and Pre-Tax Profits or Losses that are incurred (a) prior to the effective date of such termination of this Agreement, in whole or in part, (b) after the effective date of termination of this Agreement, in whole or in part, but relating to activities conducted during the Term (including any non-cancellable commitments incurred pursuant to the terminated Collaboration Program(s) in accordance with this Agreement), and (c) after the effective date of termination of this Agreement, in whole or in part, and required to be conducted in order to wind-down activities under the terminated Collaboration Program(s) in a manner compliant with applicable Law.

17.4.2 [***].

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(a) If, upon (i) [***], (ii) [***], or (iii) [***], in each case ((i)-(iii)), with respect to a Collaboration Product, there are [***] (“[***]”), then such [***], and such [***].

(b) In the case of [***].

(c) In the case of [***] for (i) [***] or (ii) [***], in each case ((i) or (ii)), [***], provided that, in the case of Section 17.4.2(c)(i), if [***], then [***].

17.4.3 Unaffected Programs or Products.If this Agreement is terminated only with respect to a particular Collaboration Program or Collaboration Product, then all unaffected Collaboration Programs and Collaboration Products shall remain in effect in accordance with and subject to the terms and conditions of this Agreement. Without limiting the foregoing, the rights granted by each Party to the other Party with respect to such Collaboration Programs and Collaboration Product that are not subject to the termination shall remain in effect in accordance with and subject to terms and conditions of this Agreement.

17.5 Survival TC "17.5 Survival" \f C \l "2" .The following provisions shall survive expiration or termination of this Agreement inits entirety, or with respect to a particular Collaboration Program or Collaboration Product: Sections 5.6 (excluding 5.6.2, except that the first sentence of 5.6.2 before the proviso (but none of the remainder of 5.6.2 including the proviso) shall survive, if the Agreement is terminated during the Restricted Data Period), 7.3.1 (for the applicable time period set forth therein), 11.7.1 (for payment obligations accruing during the Term and for costs required to be shared hereunder following expiration or termination), 11.7.3 (only with respect to payment obligations accruing during the Term and for amounts accruing after expiration or termination that are required to be shared hereunder), 11.8 (as applied in connection with any final accounting, and with respect to payment obligations accruing during the Term and after termination in accordance with Section 17.3), 11.9.4 (as applied in connection with any final accounting, and with respect to payment obligations accruing during the Term and after termination in accordance with Section 17.3), 11.10 (for the applicable time period set forth therein), 11.11, 11.12 (only with respect to payment obligations accruing during the Term and for costs required to be shared hereunder following expiration or termination), 11.13 (solely with respect to payments owed as of the effective date of termination), 11.14,11.16(b), 11.17, 12.1.1(c), 12.1.2(c), 12.2, 12.4,12.5, 12.8 (each, as relating to any surviving licenses hereunder), 12.6, 12.7, 14.3 (solely with respect to the obligation to remove the other Party’s Confidential Information) 14.5 (last sentence), 15.1 (excluding 15.1.1), 15.2, 20.1,20.2 (as required to stand-by any post-termination liabilities), 20.3, 22.1, 22.2, 22.3, 22.6 (solely with respect to the performance by a Party of its obligations under this Agreement that survive expiration or termination) 22.7, 22.9, 22.11, 22.12 and 22.13, ARTICLE 1 (to the extent applicable to other surviving provisions), ARTICLE 17, ARTICLE 18, ARTICLE 19 (solely with respect to claims for breaches occurring prior to the end of the Term), Schedule 1.99 (with respect to any post-termination calculations), and any applicable definitions of any capitalized terms. In the event of expiration or termination, each Party shall remain obligated to share in any costs as to which it is committed as of the date of expiration or termination and where applicable, Section 13.3.3 shall apply with respect to both Parties.

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17.6 Termination Not Sole Remedy TC "17.6 Termination Not Sole Remedy" \f C \l "2" . Termination is not the sole remedy under this Agreement and, whether or not termination is effected, all other remedies at equity or law shall remain available to the Parties except as agreed to otherwise herein.

ARTICLE 18
Confidentiality TC "ARTICLE 18 CONFIDENTIALITY " \f C \l "1"

18.1 Confidentiality TC "18.1 Confidentiality" \f C \l "2" . Except to the extent expressly authorized by this Agreement or otherwise agreed by the Parties in writing, during the Term and for a period of [***] following termination or expiration thereof, each Party will be obligated to keep confidential and not publish or otherwise disclose to a Third Party, and not to use, directly or indirectly, for any purpose other than the Collaboration, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement, or is reasonably necessary or useful for the performance of, or the exercise of such Party’s rights under, this Agreement. The confidentiality and non-use obligations with respect to a Party’s Confidential Information in this Section 18.1 will not include any information that:

(a) Is or becomes part of the public domain through no wrongful act, fault or negligence on the part of the Receiving Party;

(b) can be demonstrated by competent proof to have been in the Receiving Party’s possession prior to disclosure by the Disclosing Party without any obligation of confidentiality with respect to such information;

(c) is subsequently received by the Receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

(d) has been published by a Third Party or otherwise enters the public domain through no fault of the Receiving Party in breach of its contractual obligations to the Disclosing Party; or

(e) can be demonstrated by competent proof to have been independently developed (outside the scope of the Collaboration) by or for the Receiving Party without reference to the Disclosing Party’s Confidential Information.

18.2 Authorized Disclosure TC "18.2 Authorized Disclosure" \f C \l "2" .The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent that such disclosure is:

(a) made in response to a valid order of a court or other Governmental Authority or, if in the reasonable opinion of the Receiving Party, such disclosure is otherwise required by Law, including by reason of filing with securities regulators; providedthat the Receiving Party shall, to the extent permitted by Law, first have given notice to the Disclosing Party and given the Disclosing Party a reasonable opportunity, at the Disclosing Party’s expense, to quash such order or to obtain a protective order or confidential treatment; and provided further that the Confidential Information disclosed in response to such court or governmental order shall

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be limited to that information which is legally required to be disclosed in response to such court or governmental order;

(b) made by or on behalf of the Receiving Party to Regulatory Authorities as required in connection with any filing, application or request for marketing or other Regulatory Approval; provided that reasonable measures shall be taken to assure confidential treatment of such information to the extent practicable and consistent with applicable Law;

(c) made by or on behalf of the Receiving Party to a patent authority as may be reasonably necessary or useful for purposes of obtaining or enforcing a Patent; provided that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available; or

(d) made by the Receiving Party to its attorneys, auditors, advisors, consultants, contractors, existing or prospective collaboration partners, licensees, sublicensees, existing or prospective investors, prospective acquirers, or other Third Parties as may be necessary or useful in connection with exploitation of Collaboration Products as contemplated by the Collaboration or otherwise in connection with the performance of its obligations or exercise of its rights as contemplated by this Agreement; provided that such Persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the Receiving Party set forth herein.

18.3 Injunctive Relief TC "18.3 Injunctive Relief" \f C \l "2" . Each Party, as a Receiving Party, acknowledges and agrees that due to the unique nature of a Disclosing Party’s Confidential Information, there may be no adequate remedy at law for any breach of its obligations hereunder and that any such breach may allow a Receiving Party or Third Parties unfairly to compete with the Disclosing Party, resulting in irreparable harm to the Disclosing Party. Therefore, notwithstanding the provisions of Section 22.1, the Parties agree that upon any such breach or any threat thereof, the Disclosing Party shall be entitled to seek appropriate equitable relief at the Disclosing Party’s option in either (a) a court of competent jurisdiction where such Disclosing Party resides, or (b) as provided in Section 22.1, as applicable, in addition to whatever remedies it might have at law in connection with any breach or enforcement of a Receiving Party’s obligations hereunder for the unauthorized use or release of any such Confidential Information.

18.4 Return of Confidential Information TC "18.4 Return of Confidential Information" \f C \l "2" . At the written request of the Disclosing Party promptly following the termination of this Agreement, the Receiving Party shall (and shall cause its Affiliates and their respective representatives to) return to the Disclosing Party or destroy all originals of documents (in paper or electronic form) and physical materials then in its possession, and copies thereof, containing Confidential Information received from the Disclosing Party and constituting its exclusive Confidential Information, and destroy all documents and other materials that it created including any such Confidential Information; provided that the Receiving Party may retain in confidence (a) one (1) archival copy of the Confidential Information in its legal files solely to permit the Receiving Party to determine compliance with its obligations hereunder; (b) any portion of the Confidential Information of the other Party which is contained in the Receiving Party’s laboratory notebooks; (c) any portion of the Confidential Information of the other Party which a

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Receiving Party is required by applicable Law to retain; and (d) any Confidential Information that the Receiving Party has the right to continue to use after the date of the Disclosing Party’s request after termination or expiration of this Agreement, as applicable. Notwithstanding the return or destruction of the documents and tangible items described above, the Parties will continue to be bound by their obligations under this ARTICLE 18.

18.5 Press Releases and Other Public Statements TC "18.5 Press Releases and Other Public Statements" \f C \l "2" .Except for any publications or presentations that are made consistent with ARTICLE 14 and those certain press releases made in connection with the execution of the SPA and the Preliminary Collaboration Agreement, neither Party nor its Affiliates will make any public announcements, press releases, regulatory filing or other public disclosures, written or oral, whether to the public, the press, stockholders or otherwise, concerning this Agreement or the terms and conditions or the subject matter hereof, the performance hereof or the Parties’ activities hereunder, or any results or data arising hereunder (a “Public Statement”), except: (a) with the prior written consent of the other Party (which may be conditional upon certain restrictions as to the content or distribution of such Public Statement); or (b) for such Public Statements, as in the opinion of the Party intending to make such Public Statement, are required to comply with applicable Law, regulation, rule or legal process (including the regulations of any stock exchange) (a “Legal Requirement”) and which in any event contain only the minimum disclosure necessary to comply with the relevant Legal Requirement. Each Party agrees, to the extent permitted by Legal Requirements, in any event to provide the other Party with a copy of any proposed Public Statement as soon as reasonably practicable under the circumstances prior to its scheduled release. Except under extraordinary circumstances, when the following notice may not be possible but in which event the proposed Public Statement will still be provided to the other Party for comment before release (which the releasing Party shall use reasonable efforts to provide at least forty-eight (48) hours prior to the intended time of publication), and to the extent permitted by Legal Requirements, each Party shall provide the other Party with an advance copy of any such Public Statement at least seven (7) days prior to its scheduled release. Each Party furthermore shall have the right to review and recommend changes to any such announcement and, except as otherwise required by Legal Requirement, the Party whose announcement has been reviewed shall remove any Confidential Information of the reviewing Party that the reviewing Party reasonably deems to be inappropriate for disclosure, subject to the exceptions in Section 18.2(a). Each Party agrees in any event to give the other Party a reasonable opportunity (to the extent consistent with Legal Requirements) to review all [***] Public Statements required by Legal Requirements to be filed with the Securities and Exchange Commission or similar body prior to submission of such filings, and will give due consideration to any reasonable comments by the non-filing Party relating to such filing, including the provisions of this Agreement for which confidential treatment should be sought.

ARTICLE 19
Representations and Warranties AND COVENANTS TC "ARTICLE 19 REPRESENTATIONS AND WARRANTIES AND COVENANTS" \f C \l "1"

19.1 Mutual Representations and Warranties TC "19.1 Mutual Representations and Warranties" \f C \l "2" . Each Party represents and warrants to the other Party as of the Execution Date and the Effective Date, that:

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19.1.1 such Party is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and has full corporate power and authority and legal right to enter into this Agreement and to carry out the provisions hereof;

19.1.2 such Party has the right to grant the licenses to the other Party purported to be granted pursuant to this Agreement;

19.1.3 such Party has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;

19.1.4 such Party has received all necessary laboratory licenses and certificates with respect to facilities within such Party’s ownership or control sufficient to allow such Party to conduct the activities assigned to such Party under this Agreement, and such Party is in compliance with the requirements of such licenses and certificates;

19.1.5 this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with the terms and conditions hereof, subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance and general principles of equity (whether enforceability is considered a proceeding at law or equity);

19.1.6 the execution, delivery and performance of this Agreement by such Party (i) will not constitute a default under, or conflict with, any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, (ii) violate any Law or regulation of any court, governmental body or administrative or other agency having jurisdiction over such Party; and (iii) is not prohibited or limited by, and shall not result in the breach of or a default under, any provision of the certificate or articles of incorporation or bylaws of such Party;

19.1.7 except for any filings that may be required to comply with the HSR Act or any other applicable antitrust law, no government authorization, consent, approval, license, exemption of or filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, under any applicable Laws, rules or regulations currently in effect, is or will be necessary for, or in connection with, the transaction contemplated by this Agreement or any other agreement or instrument executed in connection herewith, or for the performance by it of its obligations under this Agreement and such other agreements;

19.1.8 such Party and its Affiliates have not employed (and, to its knowledge, has not used a (sub)contractor or consultant that has employed) and, during the Term, will not knowingly employ (or, to its knowledge, use any (sub)contractor or consultant that employs, provided that such Party may reasonably rely on a representation made by such (sub)contractor or consultant) any Person debarred by the FDA (or subject to a similar sanction of EMA or foreign equivalent), or any Person which is the subject of an FDA debarment investigation or proceeding (or similar proceeding of EMA or foreign equivalent);

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19.1.9 such Party and its Affiliates performing activities under the Collaboration has in place or will have in place prior to its conduct of its activities under the Collaboration a written agreement with its employees and other personnel it appoints to perform such activities hereunder sufficient to ensure that such Party has sufficient ownership or license rights to any Program Technology developed or created by such Party to grant the rights to the other Party as required to be granted under this Agreement;

19.1.10 with respect to any Research and Development activities conducted by such Party or its Affiliates under this Agreement that involve the use of animals, including any animal studies, such Party and its Affiliates agree to comply with the terms of Schedule 7.6.5;

19.1.11 to the knowledge of such Party, as it is relevant to this Agreement:

(a) such Party respects the human rights of its staff and does not employ child labor, forced labor, unsafe working conditions, or cruel or abusive disciplinary practices in the workplace;

(b) such Party does not discriminate against any workers on any ground (including race, religion, disability, gender, sexual orientation or gender identity);

(c) such Party pays each employee at least the minimum wage, provides each employee with all legally mandated benefits, and complies with the laws on working hours and employment rights in the countries in which it operates; and

(d) such Party is respectful of its employees right to freedom of association; and

19.1.12 such Party is in material compliance with (a) all applicable Laws relating to data privacy and data security, including with respect to the collection, use, storage, sharing, transfer, disposition, protection and processing of PII; (b) all privacy policies and other related policies, programs and other notices of such Party relating to the privacy, protection and security of PII; and (c) all contractual and other legal requirements to which such Party is subject with respect to the privacy, protection, and security of PII; and has in place reasonable safeguards to protect the confidentiality and security of PII, including from unauthorized access or misuse, based on applicable Law.

19.2 Representations and Warranties of Vir (Existing Influenza Program mAbs) TC "19.2 Representations and Warranties of Vir (Existing Influenza Program mAbs)" \f C \l "2" . Vir represents and warrants to GSK, as of the Execution Date and the Effective Date, and, with respect to Vir-2482, if GSK exercises the Option, the Vir-2482 Program Effective Date, each as follows:

19.2.1 [***];

19.2.2 except as reasonably disclosed by Vir [***], Vir or one of its Affiliates solely owns or exclusively licenses and Controls the Existing Influenza Program mAbs and Vir 2482 Licensed Technology;

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19.2.3 except as reasonably disclosed by Vir [***], neither Vir nor any of its Affiliates has entered into any agreement (other than agreements with subcontractors) granting any right, interest or claim in or to, any Existing Influenza Program mAbs or Vir 2482 Licensed Technology that would conflict with the rights and licenses to GSK granted or required to be granted in this Agreement;

19.2.4 except as reasonably disclosed by Vir [***], neither Vir nor any of its Affiliates has previously entered into any agreement, whether written or oral, to assign, transfer, license, convey or otherwise encumber its right, title or interest in or to any Patent or other Know-How that is necessary for the Development, Manufacture, or Commercialization of any Existing Influenza Program mAbs, in each case, where such Patent or other Know-How would be Vir 2482 Licensed Technology but for such assignment, transfer, license, conveyance or encumbrance;

19.2.5 except as reasonably disclosed by Vir [***];

19.2.6 except as reasonably disclosed by Vir [***], Vir has not granted any right to any Third Party that would conflict with the rights granted to GSK hereunder with respect to the Existing Influenza Program mAbs and Vir 2482 Licensed Technology;

19.2.7 each Person who has or has had any rights in or to any Vir 2482 Licensed Technology owned by Vir and that is [***] has assigned and has executed an agreement assigning its entire right, title and interest in and to such Vir 2482 Licensed Technology to Vir or one of its Affiliates;

19.2.8 all Vir Licensed Patents are subsisting and all Vir Licensed Patents for which Vir controls prosecution and maintenance activities are being diligently prosecuted in the patent offices in accordance with applicable Law and, to Vir’s Knowledge, are not invalid or unenforceable in whole or in part;

19.2.9 to Vir’s Knowledge, no Person is infringing or threatening to infringe or misappropriating or threatening to misappropriate any Vir 2482 Licensed Technology and there are no activities by Third Parties that would constitute infringement or misappropriation of the Vir 2482 Licensed Technology;

19.2.10 except as reasonably disclosed by Vir [***], no claim or litigation has been brought or threatened in writing by any Person against Vir or any of its Affiliates alleging, and Vir has no Knowledge of any reasonable basis for any such claim or allegation, whether or not asserted, that (a) any Vir Licensed Patents are invalid or unenforceable, or (b) the use or practice of any Vir 2482 Licensed Technology, or the disclosing, copying, making, assigning or licensing of any Vir 2482 Licensed Technology, or the exploitation of the Existing Influenza Program mAbs, does or will violate, infringe, misappropriate or otherwise conflict or interfere with, any Patent or other intellectual property or proprietary right of any Third Party;

19.2.11 [***];

19.2.12 Vir has provided or made available to GSK all material adverse information with respect to the safety and efficacy of the Existing Influenza Program mAbs of

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which Vir is aware and to Vir’s Knowledge is or could be reportable to the applicable Regulatory Authorities;

19.2.13 [***];

19.2.14 [***];

19.2.15 except as reasonably disclosed by Vir [***];

19.2.16 except as reasonably disclosed by Vir [***], Vir or one of its Affiliates has obtained the right (including under any Patents and other intellectual property rights) to use all information and all other materials (including any formulations and manufacturing processes and procedures) developed or delivered by any Third Party under any agreements between Vir or one of its Affiliates and any such Third Party with respect to any Existing Influenza Program mAbs to the extent necessary to provide GSK with the rights granted to it hereunder, and Vir or one of its Affiliates has the rights to grant GSK the right to use such information or other materials in the Development or Commercialization of the Program mAbs as contemplated in this Agreement;

19.2.17 [***];

19.2.18 Vir is in material compliance with (i) all applicable laws relating to data privacy and data security, including with respect to the collection, use, storage, sharing, transfer, disposition, protection and processing of personally identifiable information (PII); (ii) all privacy policies and other related policies, programs and other notices of Vir relating to the privacy, protection and security of PII; and (iii) all contractual and other legal requirements to which Vir is subject with respect to the privacy, protection, and security of PII; and has in place reasonable safeguards to protect the confidentiality and security of PII, including from unauthorized access or misuse, based on applicable law;

19.2.19 [***];

19.2.20 [***]; and

19.2.21 [***].

19.3 [***] Representations, Warranties and Covenants TC "19.3 China Territory Representations, Warranties and Covenants" \f C \l "2" .

19.3.1 Vir hereby represents and warrants that, as of the Execution Date and the Effective Date, with respect to [***] that are subject to this Agreement [***], other than [***], Vir has not [***]; and

19.3.2 Following the Execution Date, Vir covenants that it will not [***]. Vir acknowledges and agrees that, [***].

19.4 Post-Closing Covenants TC "19.4 Post-Closing Covenants" \f C \l "2" .

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19.4.1 Negative Covenants. After the Effective Date and during the Term, neither Party shall, and shall cause its Affiliates not to, without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed):

(a) enter into any agreement with any Third Party, whether written or oral, with respect to, or otherwise assign, transfer, license or convey its right, title or interest in or to, (i) the Vir Licensed Technology or GSK Licensed Technology, as applicable, relating to any Collaboration Program or Collaboration Product, (ii) [***] or (iii) [***], in each case, in a manner that creates a material conflict with the rights granted or purported to be granted by such Party to the other Party under this Agreement;

(b) (i) sell, out-license or otherwise dispose of any assets or rights relating to (1) any Collaboration Program or Collaboration Product, (2) [***] or (3) [***], in each case, in a manner that creates a material conflict with the rights granted or purported to be granted by such Party to the other Party under this Agreement, (ii) amend any agreements, licenses or other rights of such Party or any of its Affiliates, including, for clarity, any Existing Third Party Agreements, relating to (1) any Collaboration Program or Collaboration Product, (2) [***] or (3) [***], in each case, in a manner that creates a material conflict with the rights granted or purported to be granted by such Party to the other Party under this Agreement, or (iii) grant any security interest or otherwise encumber material assets and properties (including Vir Licensed Technology or GSK Licensed Technology, as applicable), relating to (1) any Collaboration Program or Collaboration Product, (2) [***] or (3) [***];

(c) [***].

19.4.2 Affirmative Covenants. After the Effective Date and during the Term, each Party covenants that:

(a) it shall, and shall cause its Affiliates and its and their respective contractors, licensees and consultants to, conduct the Collaboration Programs and all other activities undertaken pursuant to this Agreement in accordance with applicable Law;

(b) with respect to all intellectual property that it purports to license to the other Party under this Agreement that is, may be or becomes subject to the Bayh-Dole Act, it shall, and shall cause its Affiliates and the relevant research partners to, continue to comply with the applicable provisions of the Bayh-Dole Act, in a manner that protects and preserves such Party’s right, title and interest in the subject intellectual property to the maximum extent permitted by applicable Law;

(c) it shall promptly notify the other Party of the occurrence of a Key Product Event, and in no event more than [***] after such occurrence; and

(d) [***].

19.5 [***] TC "19.5 Disclosure" \f C \l "2" . If Vir [***].

19.6 Disclaimer of Warranty TC "19.6 Disclaimer of Warranty" \f C \l "2" . EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY

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SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT ANY PLAN WILL BE SUCCESSFUL, IN WHOLE OR IN PART. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, AND BOTH PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

ARTICLE 20
Indemnification TC "ARTICLE 20 INDEMNIFICATION" \f C \l "1"

20.1 Indemnification TC "20.1 Indemnification" \f C \l "2" .

20.1.1 Indemnification by Vir. Vir hereby agrees to indemnify, defend and hold harmless GSK and its Affiliates and their respective directors, officers, employees and agents, and the respective successors and assigns any of the foregoing (“GSK Indemnitees”), from and against any and all suits, claims, actions, demands, losses, damages, liabilities, settlements, penalties, fines, costs and expenses (including reasonable attorneys’ fees and other expenses of litigation) (collectively, “Losses”) asserted by a Third Party to the extent arising from [***], except in each case ((i) to (iv)), to the extent such Losses are indemnifiable by GSK under Section 20.1.2.

20.1.2 Indemnification by GSK. GSK hereby agrees to indemnify, defend and hold harmless Vir and its Affiliates and their respective directors, officers, employees and agents, and the respective successors and assigns of any of the foregoing (“Vir Indemnitees”), from and against any and all Losses asserted by a Third Party to the extent arising from [***]; except in each case ((i) to (v)), to the extent such Losses are indemnifiable by Vir under Section 20.1.1.

20.1.3 Indemnification Procedures. Upon becoming aware or receipt of notice of any Third Party claim that may be subject to indemnification by the other Party (the “Indemnifying Party”) under this Section 20.1, any GSK Indemnitee or any Vir Indemnitee (each, an “Indemnitee”), as the case may be, shall [***] notify the Indemnifying Party in writing (it being understood and agreed, however, that the failure by an Indemnitee to timely give such notice shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that the Indemnifying Party is actually prejudiced as a result of such failure to give timely notice). The Indemnifying Party shall have the right, but not the obligation, to conduct and control, through counsel of its choosing, any action for which indemnification is sought, and if the Indemnifying Party elects to assume the defense thereof, the Indemnifying Party shall not be liable to the Indemnitee for any legal expenses of other legal counsel or any other expenses subsequently incurred by such Indemnitee in connection with the defense thereof. The Indemnifying Party may not settle any action, claim or suit for which the Indemnitee is seeking indemnification without such Indemnitee’s prior written approval, such approval not to be unreasonably withheld, conditioned or delayed. The Parties and their employees shall cooperate fully with each other and their legal representatives in the investigation, defense, prosecution, negotiation, or settlement of any such claim or suit. The Indemnitee shall not settle or compromise any action, claim or suit for which the Indemnitee is seeking indemnification

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without the prior written consent of the Indemnifying Party. In no event shall the Indemnifying Party settle or abate any Third Party claim in a manner that would diminish the rights or interests of the Indemnitee or obligate the Indemnitee to make any payment, take any action, or refrain from taking any action, without the prior written approval of the Indemnitee. Notwithstanding the foregoing, no party shall settle any action, claim, or suit with respect to Taxes that are indemnified pursuant to this Agreement without the prior written approval of the other Party, such approval not to be unreasonably withheld, conditioned or delayed.

20.2 Insurance TC "20.2 Insurance" \f C \l "2" .

20.2.1 Vir’s Insurance Obligations. Vir shall maintain, at its cost, reasonable insurance against liability and other risks associated with its activities contemplated by this Agreement, including its indemnification obligations herein, in such amounts and on such terms as are determined to be advisable by Vir, based on advice from insurance professionals, for companies of similar size and with similar resources for the activities to be conducted by Vir under this Agreement taking into account the scope of the activities for which Vir is responsible hereunder. [***]. Vir shall furnish to GSK evidence of such insurance, upon reasonable request.

20.2.2 GSK’s Insurance Obligations. GSK shall maintain, at its cost, insurance or self-insurance with respect to liabilities and other risks associated with its activities and obligations under this Agreement, including its indemnification obligations herein, in such amounts and on such terms as are customary for prudent practices for large companies in the pharmaceutical industry for the activities to be conducted by GSK under this Agreement. GSK shall furnish to Vir evidence of such insurance or self-insurance, upon reasonable request.

20.3 LIMITATION OF CONSEQUENTIAL DAMAGES TC "20.3 LIMITATION OF CONSEQUENTIAL DAMAGES" \f C \l "2" . EXCEPT FOR A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 20.1, [***], OR A BREACH OF A PARTY’S CONFIDENTIALITY OBLIGATIONS IN ARTICLE 18, NEITHER VIR NOR GSK, NOR ANY OF THEIR AFFILIATES OR SUBLICENSEES WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT, ITS AFFILIATES OR ANY OF THEIR SUBLICENSEES, FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR OTHER INDIRECT DAMAGES, LOST PROFITS, OR LOST DATA WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY) OR CONTRIBUTION, AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE.

ARTICLE 21
Anti-Bribery and Anti-Corruption TC "ARTICLE 21 ANTI-BRIBERY AND ANTI-CORRUPTION" \f C \l "1"

21.1 Each Party shall comply fully at all times with all applicable Laws and regulations, including anti-corruption Laws. Neither Party has, and covenants that it will not, in connection with the performance of this Agreement, directly or indirectly, make, promise, authorize, ratify, offer to make, or take any act in furtherance of any payment or transfer of

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anything of value for the purpose of influencing, inducing or rewarding any act, omission or decision to secure an improper advantage, or improperly assisting it or the other Party in obtaining or retaining business, or in any way with the purpose or effect of public or commercial bribery, and each Party warrants that it has taken reasonable measures to prevent subcontractors, agents or any other Third Parties subject to its control or determining influence from doing so. For the avoidance of doubt, the foregoing includes facilitating payments which are unofficial, improper small payments or gifts offered or made to government officials to secure or expedite a routine or necessary action to which other Party is legally entitled.

ARTICLE 22
Miscellaneous TC "ARTICLE 22 MISCELLANEOUS" \f C \l "1"

22.1 Dispute Resolution TC "22.1 Dispute Resolution" \f C \l "2" . Except as otherwise pursuant to Section 3.9 or with respect to any matter for which a Party has a final-decision making authority as expressly provided herein, any dispute arising out of or relating to the Agreement, or the breach, termination or validity thereof (a “Dispute”), shall be finally resolved pursuant to the following provision:

22.1.1 In the event a Dispute arises, the parties agree that they shall attempt in good faith to resolve the Dispute by negotiation between [***] (or their respective designee with power and authority to resolve such dispute) (each, a “Senior Manager”). Either Party may refer a Dispute to the applicable Senior Manager of the other Party by serving notice that Dispute has arisen and demand that negotiations commence. If the Senior Managers of both Parties are unable for any reason to resolve a Dispute within [***] after service of the notice, either party shall [***].

22.1.2 The Parties agree that they shall try in good faith to resolve the Dispute by [***] shall be finally resolved by arbitration in accordance with the procedures set forth on Schedule 22.1.

22.2 Equitable Relief TC "22.2 Equitable Relief" \f C \l "2" . Notwithstanding anything in this Agreement to the contrary, each Party has the right to pursue provisional equitable relief from any court to avoid irreparable harm, maintain the status quo, or preserve the subject matter of any Dispute, prior to the commencement of, or while the Parties are engaged in, the escalation process or dispute resolution process set forth above.

22.3 Governing Law TC "22.3 Governing Law" \f C \l "2" . This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to conflicts of laws principles. The Parties acknowledge that this Agreement evidences a transaction involving interstate commerce and a foreign (non-U.S.) Party. Notwithstanding the provision in the preceding sentence with respect to the applicable substantive law, any arbitration, decision, or award rendered hereunder and the validity, effect, and interpretation of the arbitration provision shall be governed by the Federal Arbitration Act.

22.4 Assignment TC "22.4 Assignment" \f C \l "2" . Subject to any restrictions in the case of subcontracting set forth herein, this Agreement shall not be assignable by either Party in whole or in part without the prior written consent of the other Party(ies) hereto. Notwithstanding

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the foregoing, and subject (in the case of Vir) to Section 22.5, (a) GSK may assign its rights and delegate its obligations under this Agreement, in whole or in part, without consent of Vir, to an Affiliate of GSK, or a Third Party that acquires all or substantially all of the business or assets of GSK to which the subject matter of this Agreement pertains (whether by merger, reorganization, acquisition, sale of assets or otherwise); (b) Vir may assign this Agreement, without consent of GSK, but with written notice to GSK, to an Affiliate of Vir, or a Third Party that acquires all or substantially all of the business or assets of Vir (whether by merger, reorganization, acquisition, sale of assets or otherwise). All validly assigned rights of a Party shall inure to the benefit of and be enforceable by, and all validly delegated obligations of such Party shall be binding on and be enforceable against, the permitted successors and assigns of such Party.

22.5 Change of Control of Vir TC "22.5 Change of Control of Vir" \f C \l "2" . If there is a Change of Control of Vir in which Vir is acquired by an acquirer, then Vir shall [***] notify GSK in writing of such Change of Control within [***] following the consummation of such Change of Control, and upon consummation of such Change of Control of Vir, the following provisions shall apply:

22.5.1 All Vir Licensed Technology and Vir Program Technology Controlled by Vir or any of its Affiliates immediately before such Change of Control shall continue to be Vir Licensed Technology and Vir Program Technology, as applicable, for purposes of this Agreement. The Intellectual Property Rights of such acquirer and its Affiliates that existed prior to the Change of Control transaction shall not be included within the Vir Licensed Technology or Vir Program Technology licensed to GSK hereunder and shall not otherwise become subject to this Agreement, except to the extent such Intellectual Property Rights were so included in or subject to this Agreement prior to the consummation of such Change of Control or are used by such acquirer after the consummation of such Change of Control in the Development, Manufacture or Commercialization of Collaboration Products pursuant to this Agreement.

22.5.2 Each of the Committees, subcommittees and working groups shall be disbanded, and ARTICLE 3 (except for Section 3.11) shall terminate and be of no further force and effect. Any matters within the authority of a Committee, subcommittee or working group shall be determined, approved or resolved solely by the Lead Party for the applicable Collaboration Program. [***]. Any functions assigned to the Committees, subcommittees or working groups under this Agreement shall be performed solely by the Lead Party.

22.5.3 [***].

22.5.4 Any reports or information that one Party is obligated to provide to a Committee in connection with the Development and Commercialization of any Collaboration Product shall be provided instead to the other Party, provided that (a) [***], and (b) [***].

22.5.5 [***].

22.5.6 Vir may retain its existing rights to any Vir Sole Development Product following a Change of Control.

22.6 Force Majeure TC "22.6 Force Majeure" \f C \l "2" . Both Parties shall be excused from the performance of their obligations, and have no liability under this Agreement

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for failure or delay in performance of their obligations, to the extent such performance is hindered, delayed or prevented by a Force Majeure and the nonperforming Party promptly provides notice to the other Party. Such excuse shall be continued so long as the condition constituting Force Majeure continues and the non-performing Party takes reasonable efforts to remove the condition, for up to a maximum of [***], after which time the Parties will negotiate in good faith any modifications of the terms and conditions of this Agreement, to the extent possible, that may be necessary to arrive at an equitable solution. To the extent possible, each Party shall use reasonable efforts to minimize the duration of any Force Majeure.

22.7 Notices TC "22.7 Notices" \f C \l "2" . Any notice required or permitted to be given by either Party under this Agreement shall be in writing and shall be personally delivered or sent by a nationally recognized private express courier, or by first class mail (registered or certified), or by facsimile confirmed by first class mail (registered or certified), to the respective Parties as set forth below. Notices will be deemed effective (a) [***]; (b) [***]. Either Party may change its address for purposes hereof by written notice to the other in accordance with the provisions of this Section 22.7.

If to GSK:

[***]

Attn: [***]

Each, with a copy (which shall not constitute notice) to:

[***]

Attn: [***]

If to Vir:

Vir Biotechnology, Inc.
499 Illinois Street, Suite 500
San Francisco, CA 94158
Attention: [***]
E-mail: [***]

and

Vir Biotechnology, Inc.
499 Illinois Street, Suite 500
San Francisco, CA 94158
Attention: [***]
E-mail: [***]

With a copy (which shall not constitute notice) to:

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Cooley LLP
3175 Hanover Street
Palo Alto, CA 94304-1130
Attention: [***]
E-mail: [***]

22.8 Export Clause TC "22.8 Export Clause" \f C \l "2" . Each Party acknowledges that the Laws and regulations of the United States and other applicable Laws restrict the export and re-export of certain commodities and technical data. Each Party agrees that it will not export or re-export restricted commodities or technical data of the other Party in any form without the appropriate United States or foreign government licenses.

22.9 Waiver TC "22.9 Waiver" \f C \l "2" . The terms and conditions of this Agreement may be waived or released only by a written instrument executed by the Party or Parties waiving or releasing compliance. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver or subsequent waiver of such condition or term or of another condition or term.

22.10 Severability. TC "22.10 Severability." \f C \l "2" If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

22.11 Entire Agreement; Amendments TC "22.11 Entire Agreement; Amendments" \f C \l "2" . Subject to Section 2.1, this Agreement, together with the Schedules attached hereto, the Supply Agreements, Quality Agreements, and the SPA constitute the entire agreement between the Parties with respect to the subject matter hereof and thereof. Except for the SPA, this Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter hereof, including the Preliminary Collaboration Agreement; provided that the following provisions in the Preliminary Collaboration Agreement shall be incorporated by reference in this Agreement and shall only apply with respect to any acts, omissions or events occurring between the PCA Execution Date and the Effective Date: Sections 1-3, and 18-24 of the Preliminary Collaboration Agreement (together with the appendices referenced in such sections), provided further that ARTICLE 20 shall apply with respect to any indemnification claim a Party may have against the other Party with respect to any acts, omissions or events occurring between the PCA Execution Date and the Effective Date relating to the Preliminary Collaboration Agreement. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of both Parties.

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22.12 Independent Contractors TC "22.12 Independent Contractors" \f C \l "2" . Nothing herein shall be construed to create a partnership, or any relationship of employer and employee, agent and principal, or joint venture between the Parties. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability of or for the other Party. Neither Party shall have the authority to bind or obligate the other Party, and neither Party shall represent that it has such authority.

22.13 Headings TC "22.13 Headings" \f C \l "2" . Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement.

22.14 Further Actions TC "22.14 Further Actions" \f C \l "2" . Each Party shall execute, acknowledge and deliver such further instruments, and do all such other acts, as may be reasonably necessary or appropriate in order to carry out the expressly stated purposes and the clear intent of this Agreement.

22.15 Books and Records TC "22.15 Books and Records" \f C \l "2" .

22.15.1 Any books and records to be maintained under this Agreement by a Party or its Affiliates or Sublicensees shall be maintained in accordance with the Accounting Standards applicable to such Party or its Affiliates in the jurisdiction in which it operates and need not be audited.

22.15.2 In the event a legal matter arises requiring preservation of certain records, each Party will suspend the destruction of such records as requested by the other Party or as requested by any governmental body. During the Term and thereafter, in accordance with any such applicable records retention notice period(s), in the event that a Party has reasonable cause to conduct an audit of the other Party, such Party requesting the audit shall have the right upon reasonable notice (which shall be not less than [***] prior written notice) and during normal working hours to inspect, copy and audit such records. Each Party shall cooperate in any such inspection or audit of its records.

22.16 Construction of Agreement TC "22.16 Construction of Agreement" \f C \l "2" . Section 11.5 of the SPA is hereby incorporated herein, mutatis mutandis.

22.17 Supremacy TC "22.17 Supremacy" \f C \l "2" . In the event of any express conflict or inconsistency between this Agreement and any Schedule hereto, the terms and conditions of this Agreement shall control. The Parties understand and agree that the Schedules hereto are not intended to be the final and complete embodiment of any terms or conditions of this Agreement, and are to be updated from time to time during the Term, as appropriate and in accordance with the provisions of this Agreement.

22.18 Counterparts TC "22.18 Counterparts" \f C \l "2" . This Agreement may be executed and delivered (including by facsimile transmission or PDF or any other electronically transmitted signatures) in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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22.19 No Third Party Beneficiaries TC "22.19 No Third Party Beneficiaries" \f C \l "2" . This Agreement is intended for the benefit of the Parties, their respective permitted successors and assigns, and is not for the benefit of, nor many any provision hereof be enforced by, any other Person.

[Signature page follows]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Execution Date by their respective duly authorized representatives as set forth below.

Glaxo Wellcome UK Limited

By:  /s/ John Sadler

Its: Authorized Signatory

For and on behalf of Edinburgh

Pharmaceutical Industries Limited

Vir Biotechnology, Inc.

By:  /s/ George Scangos

Its: President and Chief Executive Officer

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SCHEDULE 1.88

Existing Third Party Agreements

[***]

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SCHEDULE 1.99

FINANCIAL SCHEDULE

General Principles

Pre-tax profit or loss for the Territory (“Pre-Tax Profit or Loss”) and Development Costs shall be calculated in accordance with this Schedule 1.99. Unless otherwise agreed by the Financial Working Group, Pre-Tax Profit or Loss shall [***], and any other cost not specifically included in Allowable Expenses and Development Costs shall exclude any cost not specifically included in the definition of “Development Costs”, including, [***].

Principles for Calculation of Development Costs, Pre-Tax Profit or Loss

1. Pre-Tax Profit or Loss shall be calculated for each [***] by determining [***] incurred during such [***]. Notwithstanding the foregoing, on a [***] basis, the terms of Section 11.7.2 shall apply.

2. No cost item shall be allocated to more than one cost category, i.e., [***], [***].

3. Costs incurred by a Party in connection with Commercialization or Commercial Manufacture shall be allocated to the appropriate category of Allowable Expenses in accordance with [***].

4. Where a Party incurs costs under this Agreement that apply to (a) more than one Collaboration Product, (b) more than one Collaboration Program, or (c) one or more Collaboration Programs as well as products or programs that are not included under this Agreement then such Party shall [***].

5. All undefined terms shall be construed in accordance with such Accounting Standards, but only to the extent consistent with their usage and the other definitions in this Schedule 1.99 and the Agreement. To the extent [***] requested by the Non-Lead Party, the Lead Party shall provide the Non-Lead Party the appropriate back-up detail for Development Costs and Pre-Tax Profit or Loss to enable the Non-Lead Party to state its share of such Development Costs and Pre-Tax Profit or Loss in its applicable Accounting Standard. In addition, following the Effective Date, each Party shall consider in good faith reasonable procedures proposed by the other Party for sharing financial information in order to permit each Party to close its books periodically in a timely manner.

6. The Parties shall comply with any reporting requirements under securities law. For the avoidance of doubt, income and withholding Taxes imposed on either of the Parties shall not be included in the calculation of Pre-Tax Profit or Loss.

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Financial Definitions

The following definitions shall apply for the purposes of calculating Pre-Tax Profit or Loss, and other financial terms in the Agreement, including Development Cost sharing. If a financial term is not defined in this Schedule 1.99, then such term shall, on a Collaboration Product-by-Collaboration Product basis, be defined by the Financial Working Group. For purposes for the following definitions, the terms “costs” and “expenses” shall mean all direct Third Party invoiced costs and FTE Costs, unless otherwise expressly provided herein.

“Allowable Expenses” means the sum of the following costs and expenses incurred during the Term by the Parties or their Affiliates, in the conduct of Commercial Manufacture and Commercialization of the Collaboration Products in the Territory, in accordance with this Agreement during the applicable [***]:

[***]

Allowable Expenses shall, subject the annual Commercialization Budget and the terms of Section 11.7.2, include all Third Party invoiced expenses as well as FTE Costs reasonably necessary and identifiable to the Collaboration Products, either direct expenses or expenses that shall be allocated based on [***]. Upon request by either Party, the Financial Working Group shall review the methodology used to allocate expenses in connection with the calculation of Allowable Expenses. If the Financial Working Group does not approve such methodology, the Financial Working Group shall agree upon a revised methodology. Notwithstanding any other clauses in this Schedule 1.99, [***].

“[***]” means [***].

“Blocking Third Party IP Costs” means [***] attributable or allocable to, Development, Manufacture, and Commercialization of the applicable Collaboration Product and paid to a Third Party to license or acquire Intellectual Property Rights for the Development, Manufacture or Commercialization of the applicable Collaboration Product in accordance with Section 11.9 or as otherwise set forth in this Agreement.

“Development Costs” means the following costs incurred by the Parties following the Effective Date in conducting Development under the applicable Collaboration Programs, in each case to the extent incurred in accordance with this Agreement and the applicable Development Plan and Development Budget (as may be amended and approved by the JSC in accordance with Section 7.1.3)and [***]:

[***]

“[***]” means [***].

“[***]” means [***].

“Existing Third Party IP Agreement” means any license, acquisition or other agreement pursuant to which a Party has obtained any Intellectual Property Rights included within Licensed

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Technology, which agreement is existing, as applicable, (a) as of the Effective Date, including the agreements listed on Schedule 11.9.1, (b) [***], or (c) [***].

“FTE Costs” means, as applicable with respect to any period, [***].

“[***]” means, [***].

“[***]” means [***].

“Manufacturing Cost” means, with respect to a Collaboration Product, a Party’s reasonable and necessary FTE Costs and Third Party invoiced cost, determined in accordance with GAAP for Vir and IFRS for GSK, as applicable and consistently applied, and the terms and conditions of this Agreement (including approval by the JSC), incurred in Manufacturing or acquisition or securing Manufacturing capacity for such Collaboration Product. Manufacturing Costs are comprised of [***]:

[***]

Manufacturing Cost shall [***]. For clarity, Blocking Third Party IP Costs shall not be included in Manufacturing Cost. Notwithstanding the foregoing or anything to the contrary herein, [***].

“[***]” means [***]:

[***]

“[***]” means [***].

“Net Sales” means the actual gross amount invoiced by the LCP or the Non Opt-Out Party (with respect to a Sole Development Product), or the selling Party (with respect to a Rejected Target Product), or its respective Affiliates, licensee or permitted Sublicensee, for sales or other commercial disposition of a Collaboration Product, Sole Development Product, or Rejected Target Product, as the case may be, [***] to a Third Party purchaser, excluding sales between or among the LCP, Non Opt-Out Party or the selling Party and its respective Affiliates, or its licensees or Sublicensees, less the following deductions (if not already deducted from the amount invoiced), in each case to the extent [***]

“[***]” means [***].

“[***]” means [***].

“[***]” means [***].

“[***]” means [***].

“[***]” means [***].

“[***]”means:

[***]

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“[***]” means [***].

“[***]” means [***].

“[***]” means [***].

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SCHEDULE 1.125

GSK SPECIFIED INTERNAL POLICIES

(See Attached)

[***]

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SCHEDULE 1.135

Influenza Product Criteria

[***]

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Schedule 1.274

Sequences of Vir-2482 and Vir-2482XX2

[***]

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Schedule 4.1

Vir-2482 & Vir-2482XX2 Clinical Development Plans

[***]

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Schedule 4.2.1

Vir-2482 Option Data Package

[***]

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Schedule 5.1

Expanded Functional Genomics Program Flow Chart

[***]

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Schedule 6.1

[***]

[***]

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Schedule 6.2.1

Listed Target Pathogens

[***]

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SCHEDULE 7.6.5ANIMAL WELFARE

[***]

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SCHEDULE 10.1KEY TERMS FOR PHARMACOVIGILANCE TECHNICAL AGREEMENT

[***]

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Schedule 11.3.2

[***]

[***]

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SCHEDULE 11.8.2

ROYALTIES FOLLOWING OPT-OUT

[***]

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SCHEDULE 11.8.3

[***]

[***]

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SCHEDULE 11.9.1

EXISTING THIRD PARTY PAYMENT OBLIGATIONS

[***]

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SCHEDULE 13.3.2

[***]

[***]

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SCHEDULE 15.1.1

FORM OF MATERIAL TRANSFER RECORD

Material Transfer Record

[***]

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Schedule 22.1

Arbitration

[***]

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EX-10.3

Exhibit 10.3

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT VIR BIOTECHNOLOGY, INC. TREATS AS PRIVATE OR CONFIDENTIAL.

AMENDMENT INFORMATION
Agreement to be Amended:	Grant agreement between the Bill & Melinda Gates Foundation and Vir Biotechnology, Inc. effective January 26, 2018, as amended, and bearing Investment ID INV-010344 (formerly OPP1187970)
Amendment Purpose:	No Cost Extension and Reporting & Payment Schedule Change
Amendment Date:	Date of this email
Amended “End Date”:	The term of the Agreement is extended by changing the End Date to October 31, 2022

THIS AMENDMENT amends, and is made part of, the above-referenced Agreement and is effective as of the date of this email. Capitalized terms not defined in this Amendment will have the meaning provided in the Agreement. Except as modified by this Amendment, all other terms and conditions of the Agreement remain in full force and effect. In the event of a conflict between the Agreement and this Amendment, the terms of this Amendment will prevail.

UPDATED REPORTING & PAYMENT SCHEDULE

This Amendment notifies You that the reporting and/or payment schedule for Your grant has changed. Your updated Reporting & Payment Schedule is deleted and replaced with the following:

REPORTING & PAYMENT SCHEDULE
[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]
[***]	[***]	[***]
	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]
	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]	[***]	[***]
[***]	[***]	[***]
Amended Total Grant Amount				Up to $20,776,349.00

EX-10.4

Exhibit 10.4

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT VIR BIOTECHNOLOGY, INC. TREATS AS PRIVATE OR CONFIDENTIAL.

AMENDMENT INFORMATION
Agreement to be Amended:	Grant agreement between the Bill & Melinda Gates Foundation and Vir Biotechnology Inc effective March 16, 2018, as amended, and bearing Investment ID INV-009475/OPP1182112
Amendment Purpose:	No Cost Extension
Amendment Date:	Date of this email
Amended “End Date”:	The term of the Agreement is extended by changing the End Date to January 31, 2022

THIS AMENDMENT amends, and is made part of, the above-referenced Agreement and is effective as of the date of this email. Capitalized terms not defined in this Amendment will have the meaning provided in the Agreement. Except as modified by this Amendment, all other terms and conditions of the Agreement remain in full force and effect. In the event of a conflict between the Agreement and this Amendment, the terms of this Amendment will prevail.
UPDATED REPORTING & PAYMENT SCHEDULE
This Amendment notifies You that the reporting and/or payment schedule for Your grant has changed. Your updated Reporting & Payment Schedule is deleted and replaced with the following:
REPORTING & PAYMENT SCHEDULE
[***]		[***]	[***]	[***]	[***]
	[***]		[***]	[***]	[***]
[***]	[***]		[***]	[***]	[***]
	[***]		[***]	[***]	[***]
[***]	[***]		[***]
[***]	[***]		[***]
	[***]			[***]	[***]
[***]	[***]		[***]
Total Grant Amount					Up to $14,882,418.08

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, George Scangos, Ph.D., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Vir Biotechnology, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2021	/s/  George Scangos
	George Scangos, Ph.D.
	President, Chief Executive Officer and Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Howard Horn, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Vir Biotechnology, Inc;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2021	/s/ Howard Horn
	Howard Horn
	Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350),George Scangos, Ph.D., President, Chief Executive Officer and Director of Vir Biotechnology, Inc. (the “Company”), and Howard Horn, Chief Financial Officer and Secretary of the Company, each hereby certifies that, to the best of his knowledge:

1.The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2021, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

2.The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned have set their hands hereto as of the 5th day of August 2021.

/s/ George Scangos	/s/ Howard Horn
George Scangos, Ph.D.	Howard Horn
President, Chief Executive Officer and Director	Chief Financial Officer and Secretary
(Principal Executive Officer)	(Principal Financial and Accounting Officer)

“This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Vir Biotechnology, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.”

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 02, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Trading Symbol	VIR
Title of 12(b) Security	Common stock, par value $0.0001 per share
Security Exchange Name	NASDAQ
Entity Registrant Name	Vir Biotechnology, Inc.
Entity Central Index Key	0001706431
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		130,611,795
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-39083
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-2730369
Entity Address, Address Line One	499 Illinois Street, Suite 500
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94158
City Area Code	415
Local Phone Number	906-4324

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash and cash equivalents	$ 741,951	$ 436,575
Short-term investments	84,107	300,286
Restricted cash and cash equivalents, current	7,004	7,993
Prepaid expenses and other current assets	29,233	27,511
Total current assets	862,295	772,365
Intangible assets, net	33,554	33,820
Goodwill	16,937	16,937
Long-term Investments	50,680
Property and equipment, net	20,251	17,946
Operating right-of-use assets	58,972	61,947
Restricted cash and cash equivalents, noncurrent	7,002	6,919
Other assets	7,890	8,827
TOTAL ASSETS	1,057,581	918,761
CURRENT LIABILITIES:
Accounts payable	11,032	5,077
Accrued and other liabilities	64,074	76,936
Deferred revenue, current portion	44,718	6,451
Contingent consideration, current portion	26,200	10,600
Total current liabilities	146,024	99,064
Deferred revenue, noncurrent	55,496	3,815
Operating lease liabilities, noncurrent	68,938	66,556
Contingent consideration, noncurrent	42,692	25,374
Deferred tax liability	3,253	3,253
Other long-term liabilities	3,853	3,847
TOTAL LIABILITIES	320,256	201,909
Commitments and contingencies (Note 8)
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of June 30, 2021 and December 31, 2020; no shares issued and outstanding as of June 30, 2021 and December 31, 2020
Common stock, $0.0001 par value; 300,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 130,479,975 and 127,416,740 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	13	13
Additional paid-in capital	1,512,928	1,385,301
Accumulated other comprehensive loss	(1,334)	(1,278)
Accumulated deficit	(774,282)	(667,184)
TOTAL STOCKHOLDERS’ EQUITY	737,325	716,852
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 1,057,581	$ 918,761

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	130,479,975	127,416,740
Common stock, shares outstanding	130,479,975	127,416,740

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenues:
Total revenue	$ 177,068	$ 66,988	$ 179,052	$ 72,706
Operating expenses:
Cost of revenue	1,144	0	1,152	0
Research and development	86,126	79,653	220,996	144,632
Selling, general and administrative	28,781	16,386	54,520	29,035
Total operating expenses	116,051	96,039	276,668	173,667
Income (loss) from operations	61,017	(29,051)	(97,616)	(100,961)
Other income (expense):
Interest income	97	825	261	2,580
Other income (expense), net	752	(2,895)	(9,494)	(9,964)
Total other income (expense)	849	(2,070)	(9,233)	(7,384)
Income (loss) before provision for income taxes	61,866	(31,121)	(106,849)	(108,345)
Provision for income taxes	(53)	(46)	(249)	(62)
Net income (loss)	$ 61,813	$ (31,167)	$ (107,098)	$ (108,407)
Net income (loss) per share, basic	$ 0.48	$ (0.27)	$ (0.83)	$ (0.97)
Net income (loss) per share, diluted	$ 0.46	$ (0.27)	$ (0.83)	$ (0.97)
Weighted Average Number of Shares Outstanding, Basic	130,121,943	114,980,652	128,938,851	111,684,283
Weighted Average Number of Shares Outstanding, Diluted	133,789,977	114,980,652	128,938,851	111,684,283
Collaboration Revenue [Member]
Revenues:
Total revenue	$ 5,333	$ 0	$ 5,333	$ 0
Contract Revenue [Member]
Revenues:
Total revenue	168,653	43,522	169,266	44,009
Grant Revenue
Revenues:
Total revenue	$ 3,082	719	4,453	5,950
License [Member]
Revenues:
Total revenue		$ 22,747	$ 0	$ 22,747

XML

Condensed Consolidated Statements of Comprehensive Income (Loss )(Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Net income (loss)	$ 61,813	$ (31,167)	$ (107,098)	$ (108,407)
Other comprehensive income (loss):
Unrealized gain (loss) on investments	(44)	(549)	(84)	295
Amortization of actuarial loss	14	6	28	11
Other comprehensive income (loss)	(30)	(543)	(56)	306
Comprehensive income ( loss)	$ 61,783	$ (31,710)	$ (107,154)	$ (108,101)

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance at Dec. 31, 2019	$ 423,942	$ 11	$ 793,051	$ (601)	$ (368,519)
Beginning balance (in shares) at Dec. 31, 2019		107,648,925
Reclassification of derivative liability to additional paid-in capital	29,245		29,245
Issuance of common stock in connection with the achievement of a milestone (in shares)		1,111,111
Issuance of common stock in connection with a collaboration agreement	206,699	$ 1	206,698
Issuance of common stock in connection with a collaboration agreement (in shares)		6,626,027
Issuance of common stock for cashless exercise of warrant (in shares)		211,774
Vesting of restricted common stock	889		889
Vesting of restricted common stock (in shares)		1,230,625
Exercise of stock options	2,388		2,388
Exercise of stock option (in shares)		898,624
Stock-based compensation	8,717		8,717
Other comprehensive income (loss)	306			306
Net income (loss)	(108,407)				(108,407)
Ending balance at Jun. 30, 2020	563,779	$ 12	1,040,988	(295)	(476,926)
Ending balance (in shares) at Jun. 30, 2020		117,727,086
Beginning balance at Mar. 31, 2020	380,333	$ 11	825,833	248	(445,759)
Beginning balance (in shares) at Mar. 31, 2020		108,350,368
Issuance of common stock in connection with the achievement of a milestone (in shares)		1,111,111
Issuance of common stock in connection with a collaboration agreement	206,699	$ 1	206,698
Issuance of common stock in connection with a collaboration agreement (in shares)		6,626,027
Issuance of common stock for cashless exercise of warrant (in shares)		211,774
Vesting of restricted common stock	462		462
Vesting of restricted common stock (in shares)		612,546
Exercise of stock options	2,245		2,245
Exercise of stock option (in shares)		815,260
Stock-based compensation	5,750		5,750
Other comprehensive income (loss)	(543)			(543)
Net income (loss)	(31,167)				(31,167)
Ending balance at Jun. 30, 2020	563,779	$ 12	1,040,988	(295)	(476,926)
Ending balance (in shares) at Jun. 30, 2020		117,727,086
Beginning balance at Dec. 31, 2020	$ 716,852	$ 13	1,385,301	(1,278)	(667,184)
Beginning balance (in shares) at Dec. 31, 2020	127,416,740	127,416,740
Issuance of common stock in connection with a collaboration agreement	$ 85,213		85,213
Issuance of common stock in connection with a collaboration agreement (in shares)		1,924,927
Vesting of restricted common stock (in shares)		87,409
Exercise of stock options	5,945		5,945
Exercise of stock option (in shares)		1,050,899
Stock-based compensation	36,469		36,469
Other comprehensive income (loss)	(56)			(56)
Net income (loss)	(107,098)				(107,098)
Ending balance at Jun. 30, 2021	$ 737,325	$ 13	1,512,928	(1,334)	(774,282)
Ending balance (in shares) at Jun. 30, 2021	130,479,975	130,479,975
Beginning balance at Mar. 31, 2021	$ 650,951	$ 13	1,488,337	(1,304)	(836,095)
Beginning balance (in shares) at Mar. 31, 2021		129,891,856
Vesting of restricted common stock (in shares)		34,446
Exercise of stock options	3,593		3,593
Exercise of stock option (in shares)		553,673
Stock-based compensation	20,998		20,998
Other comprehensive income (loss)	(30)			(30)
Net income (loss)	61,813				61,813
Ending balance at Jun. 30, 2021	$ 737,325	$ 13	$ 1,512,928	$ (1,334)	$ (774,282)
Ending balance (in shares) at Jun. 30, 2021	130,479,975	130,479,975

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (107,098)	$ (108,407)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	2,538	2,061
Amortization of intangible assets	266	612
Amortization of premiums on investments, net	(238)	818
Noncash lease expense	2,973	1,646
Change in estimated fair value of contingent consideration	42,918	27,790
Payment of contingent consideration in excess of acquisition date fair value	0	(6,453)
Change in estimated fair value of derivative liability	0	16,796
Stock-based compensation	36,469	8,717
Other	32	11
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	521	(2,159)
Other assets	(857)	(361)
Accounts payable	4,933	(1,342)
Accrued liabilities and other long-term liabilities	(22,287)	6,791
Operating lease liabilities	(93)	(1,557)
Deferred revenue	90,452	(4,011)
Net cash provided by (used in) operating activities	50,529	(59,048)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(2,744)	(2,645)
Purchases of investments	(55,729)	(129,899)
Maturities of investments	221,382	247,168
Proceeds from disposal of an asset held for sale	0	180
Net cash provided by investing activities	162,909	114,804
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of contingent consideration	0	(3,547)
Payment of principal on financing lease obligation	(126)	(115)
Proceeds from exercise of stock options	5,945	2,388
Net cash provided by financing activities	91,032	205,425
Net increase in cash, cash equivalents and restricted cash and cash equivalents	304,470	261,181
Cash, cash equivalents and restricted cash and cash equivalents at beginning of period	451,487	122,816
Cash, cash equivalents and restricted cash and cash equivalents at end of period	755,957	383,997
NONCASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment purchases included in accounts payable and accrued liabilities	2,485	312
Reclassification of derivative liability to additional paid-in capital	0	29,245
Deferred offering costs in accounts payable and accrued liabilities	0	690
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONDENSED CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	741,951	371,781
Restricted cash and cash equivalents, current	7,004	11,024
Restricted cash and cash equivalents, noncurrent	7,002	1,192
Cash, cash equivalents and restricted cash and cash equivalents at end of period	755,957	383,997
Collaboration Agreement
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	$ 85,213	$ 206,699

XML

Organization

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Organization

1. Organization

Vir Biotechnology, Inc. (“Vir” or the “Company”) is a clinical-stage immunology company focused on combining immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. Its development pipeline consists of product candidates targeting the current coronavirus disease 2019 (“COVID-19”), hepatitis B virus (“HBV”), influenza A virus, and human immunodeficiency virus (“HIV”). Vir has assembled four technology platforms that are designed to stimulate and enhance the immune system by exploiting critical observations of natural immune processes. In May 2021, the Company received an Emergency Use Authorization (“EUA”) from the U.S. Food and Drug Administration for sotrovimab (previously VIR-7831) for the treatment of mild-to-moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct SARS-CoV-2 viral testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.

Follow-On Offering

On July 10, 2020, the Company issued and sold 8,214,285 shares of the Company’s common stock pursuant to a registration statement on Form S-1 (File No. 333-239689) and a registration statement on Form S-1 filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”) (File No. 333-239747) (collectively, the “Registration Statements”). The Registration Statements became effective on July 7, 2020. The price of the shares sold in the follow-on offering was $42.00 per share and the Company received total gross proceeds from the offering of approximately $345.0 million. After deducting underwriting discounts and commissions of $20.7 million and offering expenses of $1.1 million, the net proceeds were $323.2 million.

Sales Agreement

In November 2020, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”), under which the Company may from time to time offer and sell shares of its common stock, par value $0.0001 per share, having an aggregate offering price of up to $300.0 million, through or to Cowen, acting as sales agent or principal. The shares will be offered and sold under the Company’s shelf registration statement on Form S-3 and a related prospectus filed with the Securities and Exchange Commission (the “SEC”) on November 10, 2020. The Company will pay 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 Cowen with customary indemnification and contribution rights. As of June 30, 2021, no shares have been issued under the Sales Agreement.

Need for Additional Capital

The Company has incurred net losses since inception and expects such losses to continue over the next several years. As of June 30, 2021, the Company had an accumulated deficit of $774.3 million. Management expects to incur additional losses in the future to conduct research and development and recognizes the need to raise additional capital to fully implement its business plan. The Company had, excluding restricted cash, $876.7 million of cash, cash equivalents, and investments at June 30, 2021. Based on the Company’s business plans, management believes that its cash, cash equivalents, and investments as of June 30, 2021 will be sufficient to fund its operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. The condensed consolidated financial statements include the accounts of Vir and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial information. The condensed consolidated results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other future annual or interim period.

Certain information and footnote disclosures typically included in the Company’s annual consolidated financial statements have been condensed or omitted. As such, these interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Concentration of Credit Risk, Credit Loss and Other Risks and Uncertainties

With the global spread of the ongoing COVID-19 pandemic, the Company has implemented a number of plans and policies designed to address and mitigate the impact of the COVID-19 pandemic on its business. The Company anticipates that the COVID-19 pandemic will continue to have an impact on the clinical development timelines for some of its clinical programs. The extent to which the COVID-19 pandemic impacts the Company’s business, clinical development and regulatory efforts, corporate development objectives and the value of and market for its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease.

In addition, the Company is subject to a number of other challenges and risks similar to other biopharmaceutical companies in the early stage, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s products and protection of proprietary technology. If the Company does not successfully obtain regulatory approval, commercialize or partner any of its product candidates, it will be unable to generate revenue from product sales or achieve profitability. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and investments. Cash and cash equivalents are deposited in checking and sweep accounts at a financial institution. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments, and issuers of the investments to the extent recorded on the condensed consolidated balance sheets. As of June 30, 2021, the Company has no off-balance sheet concentrations of credit risk.

The Company is exposed to credit losses primarily through receivables from customers and collaborators and through its available-for-sale debt securities. The Company’s expected loss allowance methodology for the receivables is developed using historical collection experience, current and future economic market conditions, a review of the current aging status and financial condition of the entities. Specific allowance amounts are established to record the appropriate allowance for customers that have a higher probability of default. Balances are written off when determined to be uncollectible. The Company’s expected loss allowance methodology for the debt securities is developed by reviewing the extent of the unrealized loss, the size, term, geographical location, and industry of the issuer, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted. During the six months ended June 30, 2021 and 2020, there was no allowance for losses on available-for-sale debt securities attributable to credit risk.

Investments

Investments include available-for-sale debt securities and are carried at estimated fair value. The Company’s valuations of marketable securities are generally derived from independent pricing services based on quoted prices in active markets for similar securities at period end. Generally, investments with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the condensed consolidated balance sheet date are considered short-term investments, with all others considered to be long-term investments. Unrealized gains and losses deemed temporary in nature are reported as a component of accumulated comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the condensed consolidated statements of operations. The Company’s policy is not to measure an allowance for credit losses for interest receivable and to write off any uncollectible interest receivable as a reversal of interest income in the period in which it determines the interest will not be collected.

The Company, through its investment in Brii Biosciences Limited, holds privately held equity securities in which the Company does not have a controlling interest or significant influence. The Company’s investment in Brii Biosciences Limited is recorded at cost and adjusted for impairments and observable price changes with the same or similar security from the same issuer. The valuation of the Company’s investment in Brii Biosciences Limited utilizes significant unobservable inputs or data in an inactive market and the valuation requires the Company’s judgment due to the absence of market prices and inherent lack of liquidity. Additionally, the determination of whether an orderly transaction is for the same or similar investment requires significant management judgment including the nature of the rights and obligations of its investments, the extent to which differences in those rights and obligations would affect the fair values of those investments, and the impact of any differences based on the stage of operational development of the investee. See Note 6—Collaboration and License Agreements for additional information on the Company’s investment in Brii Biosciences Limited.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents represent money market funds to secure standby letters of credit and security deposits with financial institutions, both under office and laboratory space lease agreements. Additionally, funds received from certain grants are restricted as to their use and are therefore classified as restricted cash and cash equivalents.

Revenue Recognition

Collaboration, License and Contract Revenue

In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the Company’s customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation.

For collaborative arrangements that fall within the scope of ASC 808, Collaborative Arrangements (“ASC 808”), the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are not subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate. The Company has entered into a number of license and collaboration agreements that fall within the scope of ASC 606. The Company evaluates the promised goods or services in these agreements to determine which ones represent distinct performance obligations. These agreements may include the following types of promised goods or services: (i) grants of licenses, (ii) performance of research and development services, and (iii) participation on joint research and/or development committees. They also may include options to obtain licenses to the Company’s intellectual property.

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are re-assessed each reporting period as required. These agreements may include the following types of consideration: non-refundable upfront payments, reimbursement for research services, research, development or regulatory milestone payments, profit-sharing arrangements and royalty and commercial sales milestone payments.

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on their estimated standalone selling prices (“SSP”). For performance obligations satisfied over time, the Company estimates the efforts needed to complete the performance obligation and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligation using an input measure.

For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified level of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Achievement of these royalties and commercial milestones may solely depend upon performance of the licensee.

Grant Revenue

Grants received, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution. An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred. Contributions are recognized as grant revenue when all donor-imposed conditions have been met.

Acquisitions

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired, including in-process research and development (“IPR&D”) projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date. Any excess fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with the business combination are recorded at their fair values on the acquisition date and are remeasured each subsequent reporting period until the related contingencies are resolved and are classified as contingent consideration on the condensed consolidated balance sheets. The changes in fair values of contingent consideration related to the achievement of various development milestones related to product candidates are recorded within research and development expense.

When the Company determines that entities acquired do not meet the definition of a business, the transaction is accounted for as an acquisition of assets. Therefore, the consideration paid to acquire IPR&D is expensed, and no goodwill is recorded. Any contingent consideration is generally recognized only when it becomes payable or is paid.

Embedded Derivatives

The Company evaluates its acquisitions, collaborative arrangements and other business development transactions to determine if embedded components of these contracts meet the definition of a derivative under ASC 815, Derivatives and Hedging. In general, embedded derivatives are required to be bifurcated from the host instrument if (i) the embedded feature is not clearly and closely related to the host contract and (ii) the embedded feature, if considered a freestanding instrument, meets the definition of a derivative. Embedded derivatives are reported on the condensed consolidated balance sheets at their estimated fair values. Contingent consideration related to asset acquisitions that meet the definition of an embedded derivative is classified as contingent consideration on the condensed consolidated balance sheets. Any change in estimated fair values, as determined at each measurement period, are recorded in the condensed consolidated statements of operations based on the nature of the related contingencies. Changes in fair values of embedded derivatives related to the achievement of various development milestones for product candidates are recorded within research and development expense. Otherwise, changes in fair values are recorded within other income (expense), net. 

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Fair Value Measurements

6 Months Ended

Jun. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

The Company determines the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

 Level 1: Inputs which include quoted prices in active markets for identical assets and liabilities.

 Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities approximate fair value due to their relatively short maturities.

The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis by level within the fair value hierarchy:

		June 30, 2021
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds(1)	Level 1	$	739,286	$	—	$	—		$	739,286
Bank time deposits	Level 2		5,000		—		—			5,000
U.S. government treasuries(2)	Level 2		129,786		8		(7	)		129,787
Total financial assets		$	874,072	$	8	$	(7	)	$	874,073

(1) Includes $14.0 million of restricted cash equivalents.

(2) Includes $50.7 million classified as long-term investments.

		December 31, 2020
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds(1)	Level 1	$	421,835	$	—	$	—		$	421,835
U.S. government treasuries	Level 2		300,201		91		(6	)		300,286
Total financial assets		$	722,036	$	91	$	(6	)	$	722,121

(1) Includes $14.9 million of restricted cash equivalents.

Accrued interest receivable excluded from both the fair value and amortized cost basis of the available-for-sale securities is presented within prepaid expenses and other current assets, and other assets in the condensed consolidated balance sheets, and amounted to $0.6 million and $0.8 million as of June 30, 2021 and December 31, 2020, respectively. The Company did not write off any accrued interest receivable during the six months ended June 30, 2021 and 2020.

As of June 30, 2021, there were no investments that have been in a continuous unrealized loss position for longer than 12 months. Total net unrealized gains recorded in accumulated other comprehensive income (loss) were immaterial at June 30, 2021. All investments with gross unrealized losses as of June 30, 2021 have been in a loss position for less than 12 months and were temporary in nature. The Company currently does not intend, and it is highly unlikely that it will be required to sell these securities before recovery of their amortized cost basis. As of June 30, 2021, no securities have contractual maturities of longer than two years.

Level 3 liabilities consist of contingent consideration as of June 30, 2021 and December 31, 2020.

Contingent Consideration

Contingent consideration includes potential milestone payments in connection with the acquisitions of Humabs Biomed SA (“Humabs”) and TomegaVax, Inc. (“TomegaVax”). See further discussion in Note 4—Acquisitions.

The estimated fair value of the contingent consideration related to the Humabs acquisition was determined by calculating the probability-weighted clinical, regulatory and commercial milestone payments based on the assessment of the likelihood and estimated

timing that certain milestones would be achieved. As of June 30, 2021, the Company calculated the estimated fair value of the clinical and regulatory milestones using the following significant unobservable inputs:

Unobservable input	Range (Weighted-Average)1
Discount rates	4% - 8% (5%)
Probability of achievement	21% - 76% (62%)

(1)Unobservable inputs were weighted based on the relative fair value of the clinical and regulatory milestone payments.

For the commercial milestones, the Company used a Monte Carlo simulation because of the availability of a discrete revenue forecast and the increased likelihood that the clinical trials would commence. As of June 30, 2021, the Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecast, as well as the following significant unobservable inputs:

Unobservable input	Value or Range (Weighted-Average)1
Volatility	60%
Discount rate	11%
Probability of achievement	21% - 76% (66%)

(1)Unobservable inputs were weighted based on the relative fair value of the commercial milestone payments.

The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. As of June 30, 2021 and December 31, 2020, the estimated fair value of the contingent consideration related to the Humabs acquisition was $62.5 million and $29.2 million, respectively, with changes in the estimated fair value recorded in research and development expense in the condensed consolidated statements of operations.

The estimated fair value of the contingent consideration related to the TomegaVax acquisition was determined by using a Monte Carlo simulation model which included estimates of both the probability and timing to achieve the required per-share price of the Company’s common stock, and incorporates assumptions as to expected volatility and discount rate. The discount rate captures the credit risk associated with the payment of the contingent consideration when earned and due. Although the TomegaVax acquisition was accounted for as an asset acquisition, such contingent consideration met the definition of an embedded derivative financial instrument. In February 2021, the Company achieved one of the milestones related to a specified per-share price of its common stock resulting in a $10.0 million payable to the former TomegaVax’s stockholders which was paid out in July 2021. As of June 30, 2021, the fair value of the remaining contingent consideration was estimated using the following significant unobservable inputs:

Unobservable input	Value or Range (Weighted-Average)1
Volatility	95%
Discount rates	0% - 0.1% (0.1%)

(1)Unobservable inputs were weighted based on the relative fair value of the underlying milestones.

As of June 30, 2021 and December 31, 2020, the estimated fair value of the contingent consideration related to the TomegaVax acquisition was $6.4 million and $6.8 million, respectively, with changes in the estimated fair value recorded in other income (expense), net in the condensed consolidated statements of operations.

The estimated fair value of the contingent consideration related to the Humabs and TomegaVax acquisitions involves significant estimates and assumptions which give rise to measurement uncertainty.

The following table sets forth the changes in the estimated fair value of the Company’s Level 3 financial liabilities (in thousands):

	Contingent Consideration
Balance at December 31, 2020	$	35,974
Changes in fair value recognized in research and development expenses		33,300
Changes in fair value recognized in other income (expense), net		9,618
Reclassification of contingent consideration to accrued liabilities upon   achievement of milestone		(10,000	)
Balance at June 30, 2021	$	68,892

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Acquisitions

6 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Acquisitions

4. Acquisitions

Acquisition of TomegaVax

In September 2016, the Company entered into an agreement and plan of merger (“TomegaVax Merger Agreement”) to acquire all of the equity interests of TomegaVax. The primary asset purchased in the acquisition was an in-process cytomegalovirus vector-based vaccine platform for use in HBV, HIV, and tuberculosis. The acquisition was accounted for as an asset purchase.     

In connection with the entry into the TomegaVax Merger Agreement, the Company also entered into a letter agreement with TomegaVax (the “TomegaVax Letter Agreement”), which provides for certain payments to TomegaVax’s former stockholders before September 2024, in each case so long as the Company is continuing to pursue the development of the TomegaVax technology. Under the terms of the TomegaVax Letter Agreement, the Company will be required to pay to the former stockholders of TomegaVax milestone payments of up to an aggregate of $30.0 million if the per-share price of the Company’s publicly traded common stock, or implied price per share of the Company’s Series A-1 convertible preferred stock (or common stock upon conversion) upon a certain asset sale, merger or stock sale, is at least $45 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization), with the amount of such payments determined by the share price and/or the stage of the Company’s clinical development at the time of the relevant event triggering the payment. The share price of the Company’s publicly traded common stock will be determined using the average of the daily volume-weighted average trading price of the Company’s common stock for each trading day during a consecutive 90-day period. The foregoing payments are payable (i) during any date after the completion of an initial public offering by the Company or any successor or affiliate controlling the TomegaVax technology, provided that no payment will be due before the first anniversary of the initial public offering, (ii) upon the sale of all assets related to the TomegaVax technology or (iii) upon a merger or stock sale of the Company or any successor or affiliate controlling the TomegaVax technology, in each case subject to certain conditions with respect to the timing of the payments. The payments under the TomegaVax Letter Agreement can be made in cash or shares of the Company’s common stock, at the discretion of the Company’s board of directors.

In February 2021, the Company achieved one of the milestones related to the specified per-share price of its common stock, which resulted in a $10.0 million payable to TomegaVax’s former stockholders. In July 2021, the Company made the milestone payment to the former TomegaVax stockholders through a combination of $8.1 million cash payment and issuance of 42,737 shares of common stock with a total fair value of $1.9 million. The remaining milestone payments of up to $20.0 million in the aggregate will be triggered if (i) the per-share price of the Company’s publicly traded common stock is at least $45 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization) and upon the achievement of a certain milestone related to the stage of the Company’s clinical development at the time of the relevant event triggering the payment and/or (ii) the per-share price of the Company’s publicly traded common stock is at least $90 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization). 

The Company determined that the future milestone payments contain net settlement provisions and therefore, they were required to be accounted for as embedded derivatives under the relevant accounting guidance. As of June 30, 2021, the estimated fair value of the embedded derivative was $6.4 million.

Acquisition of Humabs

In August 2017, the Company acquired all of the outstanding equity of Humabs, a private Swiss company which discovers and develops monoclonal antibodies (“mAbs”) derived from individuals whose immune systems have successfully responded to major diseases. The Company acquired all of Humabs’ rights, title and interest in and to substantially all of the assets of Humabs except for rights under certain license agreements with third parties. The Company is obligated to pass-through to the former Humabs shareholders any amounts received by Humabs under such license agreements, net of any program expenses. The transaction was accounted for as an acquisition of a business. In addition to the cash payment and issuance of common stock to the former Humabs shareholders at the acquisition date, the Company also agreed to pay additional amounts in cash upon the achievement of specified milestone events: (i) up to $135.0 million upon the achievement of clinical, regulatory and commercial milestones for an HBV

product; and (ii) up to $105.0 million upon the achievement of clinical, regulatory and commercial milestones for another product, which the Company elected as a SARS-CoV-2 product.

In May 2020, the Company achieved one of the specified clinical milestones for the HBV product. As such, the Company paid $10.0 million related to this milestone event in June 2020. In October 2020, the Company achieved another specified clinical milestone for the SARS-CoV-2 product and paid $10.0 million related to this milestone event. The estimated fair value of the remaining contingent consideration was $62.5 million as of June 30, 2021.

Acquisition of Agenovir

In January 2018, the Company entered into an agreement and plan of merger with Agenovir Corporation (“Agenovir”), under which the Company purchased all equity interests of Agenovir. The primary assets purchased in the acquisition were in-process research and development programs in human papillomavirus and HBV using CRISPR/Cas9. The acquisition was accounted for as an asset purchase.

At the acquisition date, the Company paid cash and issued shares of Series A-2 convertible preferred stock to the former Agenovir stockholders. During a specified period following the closing of the Agenovir acquisition, the Company will be required to pay Agenovir’s former stockholders up to $135.0 million in the aggregate for the achievement of specified development, regulatory and commercial milestones for the first HBV product.

None of the milestones have been achieved as of June 30, 2021, therefore no amounts were recognized relating to the contingent consideration.

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Grant Agreements

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Grant Agreements

5. Grant Agreements

Bill & Melinda Gates Foundation Grants

Human Immunodeficiency Virus (“HIV”) Grant

On January 26, 2018, the Company entered into a grant agreement with the Bill & Melinda Gates Foundation under which it was awarded a grant totaling up to $12.2 million for its HIV program (the “HIV Grant”). In February 2020, the parties amended the HIV Grant under which the Company was awarded a supplemental grant of $8.6 million. In June 2021, the parties further amended the agreement under which the grant term was extended from December 31, 2021 to October 31, 2022, unless earlier terminated by the Bill & Melinda Gates Foundation for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the Bill & Melinda Gates Foundation reasonably believes may threaten the success of the project.

Payments received in advance that are related to future research activities are deferred and recognized as revenue when the donor-imposed conditions are met, which is as the research and development activities are performed. The Company recognized grant revenue of $0.9 million and $0.5 million for the three months ended June 30, 2021 and 2020, and $1.6 million and $5.4 million for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021 and December 31, 2020, the Company has deferred revenue of $3.7 million and $3.8 million, respectively, under this grant agreement.

Tuberculosis (“TB”) Grant

On March 16, 2018, the Company entered into a grant agreement with the Bill & Melinda Gates Foundation under which it was awarded a grant totaling up to $14.9 million for its TB program (the “TB Grant”). The parties amended the agreement in June 2021 under which the grant term was extended from February 28, 2021 to January 31, 2022, unless earlier terminated by the Bill & Melinda Gates Foundation for the Company’s breach, failure to progress the funded project, in the event of the Company’s change of control, change in the Company’s tax status, or significant changes in the Company’s leadership that the Bill & Melinda Gates Foundation reasonably believes may threaten the success of the project. As of June 30, 2021, the Company had $2.0 million of unused funds received in advance and previously recorded as deferred revenue within accrued and other liabilities. As of June 30, 2021 and December 31, 2020, the Company has deferred revenue of $1.3 million and $2.6 million, respectively, under this grant agreement.

Payments received in advance that are related to future research activities are deferred and recognized as revenue when the donor-imposed conditions are met, which is as the research and development activities are performed. The Company recognized grant revenue of $2.1 million and nil for the three months ended June 30, 2021 and 2020, and $2.8 and $0.1 million for the six months ended June 30, 2021 and 2020, respectively.

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Collaboration and License Agreements

6 Months Ended

Jun. 30, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Collaboration and License Agreements

6. Collaboration and License Agreements

Collaboration Agreements with GSK

2020 GSK Collaboration

On June 9, 2020, the Company, Glaxo Wellcome UK Limited and Beecham S.A. (referred to individually and together, as “GSK”) entered into a definitive collaboration agreement under the terms set forth in the preliminary collaboration agreement entered into by the Company and certain GSK entities in April 2020 (the “2020 Preliminary Agreement”) (such definitive collaboration agreement, the “2020 GSK Agreement”). Concurrently with the execution of the 2020 Preliminary Agreement, the Company entered into a stock purchase agreement (the “2020 Stock Purchase Agreement”) with Glaxo Group Limited (“GGL”), an affiliate of GSK, under which GGL purchased 6,626,027 shares of the Company’s common stock on April 29, 2020, at a price per share of $37.73, for an aggregate purchase price of approximately $250.0 million. After receipt of antitrust clearance on April 22, 2020, the Preliminary Agreement became effective as of April 29, 2020, which was also the closing date for the associated 2020 Stock Purchase Agreement between the parties (“Effective Date”). Under the terms of the 2020 GSK Agreement, the Company and GSK agreed to collaborate to research, develop and commercialize products for the prevention, treatment and prophylaxis of diseases caused by SARS-CoV-2, the virus that causes COVID-19, and potentially other coronaviruses. The collaboration is focused on the development and commercialization of three types of collaboration products under three programs: (1) antibodies targeting SARS-CoV-2, and potentially other coronaviruses (the “Antibody Program”); (2) vaccines targeting SARS-CoV-2, and potentially other coronaviruses (the “Vaccine Program”), and (3) products based on genome-wide CRISPR screening of host targets expressed in connection with exposure to SARS-CoV-2, and potentially other coronaviruses (the “Functional Genomics Program”).

For four years following the Effective Date, the parties will conduct certain research and development activities under mutually agreed development plans and associated budgets for each of the three programs, and under the oversight of a joint steering committee (“JSC”). The Company will be primarily responsible for the development and clinical manufacturing activities for the Antibody Program, and for conducting the initial development activities directed to a vaccine in the Vaccine Program. GSK will be primarily responsible for the commercialization activities for the Antibody Program (except in connection with sales of antibody products licensed to WuXi Biologics (Hong Kong) Limited in greater China), the later-stage development, manufacturing and commercialization activities for the Vaccine Program and the development, manufacturing and commercialization activities for the Functional Genomics Program. Subject to an opt-out mechanism, the parties will share all development costs, manufacturing costs and costs and expenses for the commercialization of the collaboration products, with the Company bearing 72.5% of such costs for the antibody products, 27.5% of such costs for the vaccine products, and equal sharing of such costs for the functional genomics products.

On a collaboration product-by-collaboration product basis, each party will have the one-time right, at specified points in development, to opt-out of its co-funding obligations, and the other party may, at its election, either pursue such program unilaterally, or also cease research and development activities and funding of such collaboration product. If the opt-out provisions are not exercised by either party subject to the terms of the 2020 GSK Agreement, the parties would share all profits and losses arising from any collaboration product in the same ratios in which the parties bore development costs for such collaboration program. For each collaboration product as to which a party exercises its opt-out right, the commercializing party will pay to the opt-out party royalties on net sales of the applicable collaboration product at rates based on factors such as the stage of development of such collaboration product at the time the opt-out party exercises such right, and whether the opt-out party is the lead party, or a portion of the sublicense revenue if the commercializing party chooses to sublicense or otherwise divest rights to such collaboration product. On an antibody product-by-antibody product basis, the Company has a co-promotion right for such antibody product in the United States, under which the Company will have the right to perform up to 20% of details in connection with such antibody product.

The 2020 GSK Agreement will remain in effect with respect to each collaboration program for as long as there is a collaboration product being developed or commercialized by the lead party, or the non-opt-out party, in such program. Either party has the right to terminate the 2020 GSK Agreement in the case of the insolvency of the other party, an uncured material breach of the other party with respect to a collaboration program or collaboration product, or as mutually agreed by the parties. The 2020 GSK Agreement superseded and replaced the 2020 Preliminary Agreement between the parties.

The Company considered the ASC 606 criteria for combining contracts and determined that the 2020 GSK Agreement and 2020 Stock Purchase Agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The fair market value of the common stock issued to GGL was $206.7 million, based on the closing stock price of $36.70 on the date of execution of the 2020 Preliminary Agreement and 2020 Stock Purchase Agreement and taking into account a discount for the lack of marketability due to the restrictions in place on the underlying shares, resulting in a $43.3 million premium received by the Company. The Company accounted for the common stock issued to GGL based on its fair market value on the transaction date and determined that the premium paid by GSK should be attributed to the transaction price of the 2020 GSK Agreement.

The Company concluded that the 2020 GSK Agreement contained four units of account: (i) the license granted to GSK under the Antibody Program (the “Antibody License”); (ii) the research and development activities (including clinical manufacturing) under the Antibody Program; (iii) the research and development activities under the Vaccine Program; and (iv) the research and development activities under the Functional Genomics Program. The Company considered the guidance in ASC 606 to determine which of these elements of the 2020 GSK Agreement are performance obligations with a customer. The Company determined that the Antibody License is within the scope of ASC 606 and accordingly, accounted for the Antibody License as a distinct performance obligation under ASC 606. The Antibody License is a functional intellectual property and is distinct from the associated research and development activities to be performed under the program due to its significant standalone functionality. All other elements of the 2020 GSK Agreement including the research and development activities, and participation in the JSC and subcommittees for each collaboration program were not determined to be distinct performance obligations with a customer.

The transaction price for the Antibody License at inception was determined to be $43.3 million, representing the premium on the sale of common stock to GSK. The Company determined that GSK can benefit from the Antibody License at the time of grant and therefore, the related performance obligation is satisfied at a point in time. As such, the Company recognized the $43.3 million as contract revenue during the second quarter of 2020. Additionally, the Company is entitled to consideration from GSK related to profit and loss sharing arrangements (including royalties) contingent upon future sales of collaboration products under the Antibody Program.

The remaining units of account of the 2020 GSK Agreement were determined to be within the scope of ASC 808 as the Company and GSK are both active participants in the development, manufacturing and commercialization activities and are exposed to significant risks and rewards that are dependent on the commercial success of the activities of the arrangement. Furthermore, the Company and GSK participate in the commercial profit and loss sharing arrangement for each program commensurate with each party’s cost-sharing responsibilities during research and development. Because ASC 808 does not provide recognition and measurement guidance, the Company determined that the guidance in ASC 730, Research and Development, was appropriate to analogize to, based on the nature of the cost-sharing provisions of the agreement. The Company has concluded that payments to or reimbursements from GSK related to these services will be accounted for as an increase to or reduction of research and development expenses, respectively. The Company also concluded that any payments from GSK related to the profit and loss sharing arrangement (including royalties) contingent upon the commercialization of the products under the Vaccine and Functional Genomics Programs will be analogized to ASC 606 and therefore, will be recognized when the related sales occur.

In May 2021, the Company and GSK received an EUA for sotrovimab, the first collaboration product under the Antibody Program. As the lead party for all commercialization activities, GSK incurs all of the sales and marketing expenses and is the principal on sales transactions with third parties. As the Company is the agent under the agreement, the Company recognizes its contractual share of the profit sharing amounts or royalties (in case of an opt-out) as revenue, net of any cost of sales and allowable expenses (including distribution, selling and marketing expenses) in the period the sale occurs. During the three months ended June 30, 2021, the Company recorded its share of net profit of $5.3 million as collaboration revenue in the condensed consolidated statement of operations.

Costs associated with co-development activities performed under the agreement are included in research and development expenses on the condensed consolidated statements of operations, with any reimbursement of costs by GSK reflected as a reduction of such expenses. Under the 2020 GSK Agreement, the Company recognized additional research and development expense of $17.9 million and $36.4 million during the three and six months ended June 30, 2021, respectively. The Company recognized a reduction of research and development expense of $3.8 million during the three and six months ended June 30, 2020. The Company has a payable to GSK of $12.7 million and $28.0 million included in accrued and other liabilities as of June 30, 2021 and December 31, 2020, respectively.

2021 Expanded GSK Collaboration

On February 14, 2021, the Company and GSK entered into a binding preliminary collaboration agreement (the “2021 Preliminary Agreement”), under which the parties agreed to expand the 2020 GSK Agreement to collaborate on three separate programs: (1) a program to research, develop and commercialize mAbs for the prevention, treatment or prophylaxis of the influenza virus (the “Influenza Program”), excluding VIR-2482 unless GSK exercises its option as described below; (2) an expansion of the parties’ current Functional Genomics Program to focus on functional genomics screens directed to targets associated with respiratory viruses (the “Expanded Functional Genomics Program”); and (3) additional programs to develop neutralizing mAbs directed to up to three non-influenza target pathogens selected by GSK (the “Selected Pathogens” and such programs, the “Additional Programs”).

Concurrently with the execution of the 2021 Preliminary Agreement, the Company entered into a stock purchase agreement (the “2021 Stock Purchase Agreement”) with GGL under which GGL agreed to purchase shares of the Company’s common stock for an aggregate purchase price of approximately $120.0 million. The consummation of the transactions under each of the 2021 Preliminary Agreement and the 2021 Stock Purchase Agreement were subject to the satisfaction of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which expiration was effective on March 24, 2021. The 2021 Preliminary Agreement and 2021 Stock Purchase Agreement consummated on March 25, 2021, which the Company used as the measurement date for accounting purposes. On March 31, 2021, the Company closed the sale of 1,924,927 shares of its common stock to GGL.

The 2021 Preliminary Agreement was superseded on May 18, 2021 upon execution of the definitive collaboration agreement (the “2021 GSK Agreement”, or collectively with the 2021 Preliminary Agreement, the “2021 GSK Collaboration”). The material terms of the 2021 GSK Agreement, including the promised goods and services, are discussed below and is consistent with those of the 2021 Preliminary Agreement.

Under the 2021 GSK Collaboration, the parties will conduct certain research and development activities under mutually agreed development plans and associated budgets for the programs within the expanded collaboration for a period of three years following the effective date. Under the Influenza Program, the parties will collaborate to research, develop and commercialize mAbs for the prevention, treatment or prophylaxis of influenza, including the Company’s influenza mAbs (with respect to VIR-2482, only if GSK exercises its option). The Company may conduct the development and clinical manufacturing activities for VIR-2482 up to completion of a Phase 2 clinical trial. Provided that the Company conducts and completes a Phase 2 clinical trial for VIR-2482, GSK will have the exclusive option to obtain exclusive rights to co-develop and commercialize VIR-2482 under the Influenza Program (the “VIR-2482 Option”). GSK will be the lead party for development, clinical and commercial manufacturing and commercialization activities for products under the Influenza Program (other than VIR-2482 unless and until GSK exercises the VIR-2482 Option, if applicable). The parties will mutually agree upon the allocation of responsibility for development of products under the Expanded Functional Genomics Program, and for development and early-stage manufacturing of products under the Additional Programs if and when GSK decides which Selected Pathogens to pursue. GSK will be primarily responsible for commercial manufacturing and commercialization activities for products under the Expanded Functional Genomics Program and Additional Programs, if and when selected by GSK. For each collaboration program, upon execution of the definitive agreement, the Company will grant GSK certain license rights related to the development, manufacturing and commercialization of products arising from the program.

The parties will share 50% of all development costs in accordance with the budget for each of the collaboration programs (other than for the Selected Pathogens and VIR-2482 unless GSK exercises the VIR-2482 Option), with each party having the right to opt-out of its co-funding obligations at specified points in development. In such case, the party continuing with the program will pay to

the opt-out party a royalty on net sales of products arising from such program at specified rates based on the stage of development at which the opt-out is exercised. Following the exercise of an opt-out right by a party, the other party may, at its election, either pursue development and commercialization of such product or program unilaterally, or also cease the conduct and funding of such collaboration product or program. In the absence of any opt-out, the parties will also share 50% of all profits and losses arising from any collaboration product.

GSK was obligated to make an upfront payment to the Company of $225.0 million, 50% of which became payable at the effective date of the 2021 Preliminary Agreement and 50% of which became payable following execution of the 2021 GSK Agreement. If GSK exercises the VIR-2482 Option, GSK will pay the Company an option exercise fee of $300.0 million unless certain agreed product criteria for VIR-2482 are not met, in which case the parties will negotiate an alternative option exercise fee. Upon achievement of a pre-defined regulatory milestone for the first product in the Influenza Program, which may be (i) VIR-2482 (if GSK exercised the VIR-2482 Option), (ii) a next-generation mAb, or (iii) any other influenza mAb approved by the JSC to be included in the collaboration, arising from the Influenza Program, GSK will make a milestone payment to the Company of up to $200.0 million.

The Company concluded that the 2021 GSK Agreement is a collaboration arrangement as defined in ASC 808, Collaborative Agreements, under which certain elements are required to be accounted for under ASC 606 where the counterparty is a customer for a good or service that is a distinct unit of account. In addition, the 2021 GSK Agreement is considered a contract modification to the 2021 Preliminary Agreement and will be accounted for prospectively, as a termination of the 2021 Preliminary Agreement and commencement of a new contract. There was no impact to the accounting assessment of the original contract as no goods or services had been delivered to GSK, no performance obligations were satisfied, and accordingly, no contract revenue was recognized under ASC 606 prior to the execution of the 2021 GSK Agreement.

The Company considered the ASC 606 criteria for combining contracts and determined that the 2021 GSK Collaboration and 2021 Stock Purchase Agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The fair market value of the common stock issued to GGL was $85.2 million, based on the closing stock price of $52.70 on March 25, 2021 and taking into account a discount for the lack of marketability due to the restrictions in place on the underlying shares, resulting in a $34.8 million premium received by the Company. The Company accounted for the common stock issued to GGL based on its fair market value on the transaction date and determined that the premium paid by GSK should be attributed to the transaction price of the 2021 GSK Agreement.

The Company concluded that the 2021 GSK Agreement contained the following units of account: (i) the VIR-2482 Option; (ii) three distinct rights granted to GSK related to the Selected Pathogens (each, a “Selected Pathogens Right”); (iii) the license and know-how to the next-generation mAbs under the Influenza Program (the “Next Gen License”); (iv) the research and development activities for next-generation mAbs under the Influenza Program; and (v) the research and development activities, including license rights and know-how, under the Expanded Functional Genomics Program. The Company considered the guidance in ASC 606 to determine which of these elements of the 2021 GSK Agreement are performance obligations with a customer. The Company determined that the distinct performance obligations under ASC 606 consisted of: (i) the Next Gen License and (ii) the three Selected Pathogens Rights, each representing a material right. All other elements of the 2021 GSK Agreement including the VIR-2482 Option, research and development activities, and participation in the JSC and subcommittees for each collaboration program were not determined to be distinct performance obligations with a customer.

The transaction price for the 2021 GSK Agreement included fixed consideration consisting of $225.0 million upfront fee paid by GSK and $34.8 million, representing the premium on the sale of common stock to GSK for a total of $259.8 million. All potential future milestones and other payments under the 2021 GSK Agreement are constrained since the Company could not conclude it was probable that a significant reversal in the amount recognized would not occur.

The respective estimated SSP for each of the performance obligations was determined to allocate the transaction price. The estimated SSP of each performance obligation was determined considering relevant market conditions, entity-specific factors and information about the customer, while maximizing the use of available observable inputs. For the Next Gen License, the Company determined that GSK can benefit from the license at the time the license is granted and therefore, the related performance obligation is satisfied at a point in time. If any of the Selected Pathogens Rights are exercised, the Company will evaluate the related promises to identify the performance obligations to be transferred and the timing of revenue recognition. If any of the Selected Pathogens Rights expire prior to being exercised, the Company will recognize any deferred revenue allocated to that right as revenue at the time of expiration.

The research and development activities for the next generation mAbs under the Influenza Program and the Expanded Functional Genomics Program were determined to be within the scope of ASC 808 as the Company and GSK are both active participants in the development, manufacturing and commercialization activities and are exposed to significant risks and rewards that are dependent on

the commercial success of the activities of the arrangement. Furthermore, the Company and GSK participate in the commercial profit and loss sharing arrangement for each program commensurate with each party’s cost-sharing responsibilities during research and development. Because ASC 808 does not provide recognition and measurement guidance, the Company determined that the guidance in ASC 730, Research and Development, was appropriate to analogize to based on the nature of the cost-sharing provisions of the agreement. The Company has concluded that payments to or reimbursements from GSK related to these services will be accounted for as an increase to or reduction of research and development expenses, respectively. The Company also concluded that any payments from GSK related to the profit and loss sharing arrangement (including royalties) contingent upon the commercialization of the related products will be analogized to ASC 606 and therefore, will be recognized when the related sales occur.

Upon execution of the 2021 GSK Agreement, the Company granted the Next Gen License to GSK and therefore, recognized $168.3 million as contract revenue during the three months ended June 30, 2021. As of June 30, 2021, of the total unrecognized transaction price of $91.5 million, $39.8 million and $51.7 million is classified as current and noncurrent deferred revenue, respectively, on the Company's condensed consolidated balance sheet related to the remaining performance obligations, being the material rights resulting from the Selected Pathogens Rights.

Costs associated with co-development activities performed under the agreement are included in research and development expenses in the condensed consolidated statements of operations, with any reimbursement of costs by GSK reflected as a reduction of such expenses. During the three and six months ended June 30, 2021, the Company recognized a reduction of research and development expense of $0.1 million under the 2021 GSK Agreement.

Brii Biosciences

In May 2018, the Company entered into a collaboration, option and license agreement (the “Brii Agreement”) with Brii Biosciences Limited (previously named BiiG Therapeutics Limited) (“Brii Bio Parent”) and Brii Biosciences Offshore Limited (“Brii Bio”), pursuant to which the Company granted to Brii Bio, with respect to up to four of the Company’s programs, an exclusive option to obtain exclusive rights to develop and commercialize compounds and products arising from such programs in China, Taiwan, Hong Kong and Macau (collectively, the “China Territory”) for the treatment, palliation, diagnosis, prevention or cure of acute and chronic diseases of infectious pathogen origin or hosted by pathogen infection (the “Field of Use”). The Company’s HBV siRNA program being developed under the Alnylam Agreement (described below) is included within the Brii Agreement as a program for which Brii Bio may exercise one of its options. In partial consideration for the options granted by the Company to Brii Bio, Brii Bio Parent and Brii Bio granted the Company, with respect to up to four of Brii Bio Parent’s or Brii Bio’s programs, an exclusive option to be granted exclusive rights to develop and commercialize compounds and products arising from such Brii Bio programs in the United States for the Field of Use. The number of options that the Company may exercise for a Brii Bio program is limited to the corresponding number of options that Brii Bio exercises for a Vir program.

As partial consideration for the Company’s entry into the Brii Agreement, upon closing of Brii Bio Parent’s Series A preferred stock financing, the Company received ordinary shares equal to 9.9% of the outstanding shares in Brii Bio Parent. As a result of Brii Bio’s right to exercise one of its options for the Company’s HBV siRNA program, under the terms of the Alnylam Agreement, as amended, the Company transferred to Alnylam a specified percentage of such equity consideration allocable to such program under a share transfer agreement in February 2020.

With respect to programs for which Brii Bio exercises its options, Brii Bio will be required to pay the Company an option exercise fee for each such Vir program ranging from the mid-single-digit millions up to $20.0 million, determined based on the commercial potential of the licensed program. Brii Bio will also be required to pay regulatory milestone payments on a licensed product-by-licensed product basis ranging from the mid-single-digit millions up to $30.0 million, also determined based on the commercial potential of such program. Following commercialization, Brii Bio will be required to make sales milestone payments based on certain specified levels of aggregate annual net sales of products arising from each licensed program in the China Territory, up to an aggregate of $175.0 million per licensed program. Brii Bio also will pay royalties to the Company that range from the mid-teens to the high-twenties, as described below.

Upon exercise of each option for a Brii Bio program, the Company will be required to pay to Brii Bio an option exercise fee ranging from the low tens of millions to up to $50.0 million, determined based on the commercial potential of the licensed program. The Company will be required to make regulatory milestone payments to Brii Bio on a licensed product-by-licensed product basis ranging from the low tens of millions up to $100.0 million, also determined based on the commercial potential of such program. The Company will also be required to make sales milestone payments based on certain specified levels of aggregate annual net sales of products in the United States arising from each licensed program, up to an aggregate of $175.0 million per licensed program.

In addition, the Company is obligated under the Brii Agreement to pay Brii Bio tiered royalties based on net sales of products arising from the licensed programs in the United States, and Brii Bio is obligated to pay the Company tiered royalties based on net sales of products arising from the licensed programs in the China Territory. The rates of royalties payable by the Company to Brii Bio, and by Brii Bio to the Company, on net sales range from mid-teens to high-twenties. Each party’s obligations to pay royalties expires, on a product-by-product and territory-by-territory basis, on the latest of 10 years after the first commercial sale of such licensed product in the United States or China Territory, as applicable; the expiration or abandonment of licensed patent rights that cover such product in the United States or China Territory, as applicable; and the expiration of regulatory exclusivity in the United States or the China Territory, as applicable. Royalty rates are subject to specified reductions and offsets.

The Brii Agreement will remain in force until the expiration of all options or, if any option is exercised, expiration of all royalty payment obligations for all licensed products within such licensed program, unless terminated in its entirety or on a program-by-program basis by either party. Each party may terminate for convenience all rights and obligations with respect to any program for which it has an option, with 30 days’ written notice (if the terminating party has not exercised an option for such program) or 180 days’ notice (following the exercise of an option for such program). The Brii Agreement may also be terminated by either party for insolvency of the other party, and either party may terminate the Brii Agreement in its entirety or on a program-by-program basis for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice following failure to make payment).

The Company has determined that Brii Bio Parent and its wholly-owned subsidiary Brii Bio are variable interest entities due to their reliance on future financing and having insufficient equity at risk. However, the Company does not have the power to direct activities that most significantly impact the economic success of these entities and is not considered the primary beneficiary of these entities. Therefore, the Company does not consolidate Brii Bio Parent or Brii Bio. The Company also determined that it does not exercise significant influence over Brii Bio Parent or Brii Bio. As of June 30, 2021 and December 31, 2020, the investment in Brii Bio Parent has a carrying value of $5.7 million, which is included in other assets on the condensed consolidated balance sheets. The Company also has a contract liability of $3.8 million within deferred revenue which represents deferred consideration for the remaining three options that the Company granted to Brii Bio. The deferred consideration will be recognized when Brii Bio exercises its options or the options expire. The Company accounts for its investment in Brii Bio Parent’s ordinary shares at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment in Brii Bio Parent.

The Company’s maximum exposure to loss under the Brii Agreement is represented by options to acquire licenses to develop and commercialize potential products and future milestone payments. The ultimate expense that the Company incurs under the Brii Agreement cannot be quantified at this time as the amount will vary based on the timing and outcome of research activities.

Option Exercise by Brii Bio

In June 2020, Brii Bio exercised its option to obtain exclusive rights to develop and commercialize compounds and products arising from VIR-2218 in the China Territory. In consideration of the Company’s grant to Brii Bio of an exclusive license related to VIR-2218 in the China Territory, the Company received a $20.0 million option exercise fee in connection with the option exercise. Also, the Company is eligible to receive the following payments related to VIR-2218 in the China Territory: a $30.0 million regulatory milestone payment, up to $175.0 million in sales-based milestone payments, and royalties on net sales ranging from high-teens to high-twenties.

The Company evaluated the transaction under ASC 606 and identified one performance obligation consisting of the license granted to Brii Bio. Under the Brii Agreement, Brii Bio is responsible for performing all research and development activities and the Company does not have any other performance obligations within the context of ASC 606 under the arrangement after the option exercise. The transaction price is determined to be $22.7 million which consists of the $20.0 million option exercise fee and $2.7 million of the deferred revenue allocated to the VIR-2218 option at the inception of the Brii Agreement. The Company determined that the license is considered a functional intellectual property that is a distinct performance obligation under ASC 606. Specifically, the Company believes the license is capable of being distinct, as Brii Bio has the capabilities to develop the license either on its own or by contracting other third parties. Brii Bio can benefit from the license at the time of grant and therefore, the related performance obligation is satisfied at a point in time. Additionally, all potential future milestones and other payments are constrained because the Company cannot conclude it is probable that a significant reversal in the amount recognized would not occur. The Company will re-evaluate the transaction price in each reporting period.

During the three and six months ended June 30, 2021, the Company recognized zero and $0.4 million, respectively, as contract revenue from the supply of biological materials to Brii Bio. During the three and six months ended June 30, 2020, the Company recognized the $22.7 million as license revenue from a related party. The Company separately paid $10.0 million, half of the option exercise proceeds, to Alnylam in connection with the Alnylam Agreement that was recognized as research and development expense during the same period.

Alnylam

October 2017 Agreement

In October 2017, the Company entered into the Alnylam Agreement for the development of siRNA products for the treatment of HBV and following the exercise of certain program options, the development and commercialization of siRNA therapeutic products directed to up to four other infectious disease targets selected by the Company. The technology licensed under the Alnylam Agreement forms the basis of the Company’s siRNA technology platform.

Under the Alnylam Agreement, the Company obtained a worldwide, exclusive license to develop, manufacture and commercialize the HBV siRNA product candidates, including VIR-2218, for all uses and purposes other than agricultural, horticultural, forestry, aquaculture and other residential applications, such excluded fields, the Excluded Fields. In addition, Alnylam granted the Company an exclusive option, for each of the infectious disease siRNA programs directed to the Company’s selected targets, to obtain a worldwide, exclusive license to develop, manufacture and commercialize siRNA products directed to the target of each such program for all uses and purposes other than the Excluded Fields. On a product-by-product basis for each product arising from the HBV and, following the Company’s option exercise, the infectious disease programs, Alnylam has an exclusive option, exercisable during a specified period prior to the initiation of a Phase 3 clinical trial for each such product, to negotiate and enter into a profit-sharing agreement for such product.

The Company and Alnylam are jointly responsible for funding the initial research and development activities for VIR-2218 through the completion of proof of concept trials. Prior to the exercise of the Company’s option for each siRNA program directed to one of the Company’s selected infectious disease targets, Alnylam is responsible for conducting all development activities, at the Company’s expense, in accordance with an agreed upon development plan. Following the Company’s exercise of an option for a program and payment of the program option exercise fee and any outstanding program costs due to Alnylam, the Company is solely responsible, at the Company’s expense (subject to Alnylam’s exercise of a profit-sharing option), for conducting all development, manufacture and commercialization activities for products arising from each such program. If Alnylam exercises a profit-sharing option for a product, the Company will negotiate the terms of such profit-sharing agreement, which will include sharing equally with Alnylam all subsequent costs associated with the development of such product, as well as the profits and losses in connection with such product, subject to reimbursement by Alnylam of a portion of specified development costs in certain circumstances.

Under the Alnylam Agreement, the Company paid Alnylam an upfront fee of $10.0 million and issued to Alnylam 1,111,111 shares of the Company’s common stock. Additionally, the receipt of consideration from Brii Bio as discussed above triggered a requirement under the Alnylam Agreement to transfer a portion of the consideration, consisting of equity in Brii Bio Parent valued at $0.8 million, to Alnylam .

Upon the achievement of a certain development milestone, as further discussed below, the Company was obligated to issue shares of the Company’s common stock equal to the lesser of (i) 1,111,111 shares or (ii) a certain number of shares based on the Company’s stock price at the time such milestone is achieved (the “Milestone Shares”). The Company will be required to pay Alnylam up to $190.0 million in the aggregate for the achievement of specified development and regulatory milestones by the first siRNA product directed to HBV, and up to $115.0 million for the achievement of specified development and regulatory milestones by the first product directed to the target of each infectious disease siRNA program for which the Company exercised its option. Following commercialization, the Company will be required to pay to Alnylam up to $250.0 million in the aggregate for the achievement of specified levels of net sales by siRNA products directed to HBV and up to $100.0 million for the achievement of specified levels of net sales by products directed to the target of each infectious disease siRNA program for which the Company exercised its option. The Company may also be required to pay Alnylam tiered royalties at percentages ranging from the low double-digits to mid-teens on annual net sales of HBV products, and tiered royalties at percentages ranging from the high single-digits to the sub-teen double-digits on annual net sales of licensed infectious disease products, in each case subject to specified reductions and offsets. The royalties are payable on a product-by-product and country-by-country basis until the later of the expiration of all valid claims of specified patents covering such product in such country and 10 years after the first commercial sale of such product in such country.

The term of the Alnylam Agreement will continue, on a product-by-product and country-by-country basis, until the expiration of all royalty payment obligations under the Alnylam Agreement. If the Company does not exercise its option for an infectious disease program directed to one of its selected targets, the Alnylam Agreement will expire upon the expiration of the applicable option period with respect to such program. However, if Alnylam exercises its profit-sharing option for any product, the term of the Alnylam Agreement will continue until the expiration of the profit-sharing arrangement for such product. The Company may terminate the Alnylam Agreement on a program-by-program basis or in its entirety for any reason on 90 days’ written notice. Either party may terminate the agreement for cause for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice for payment breach), or if the other party challenges the validity or enforceability of any patent licensed to it under the Alnylam Agreement on 30 days’ notice.

In March 2020, the Company achieved the specified development milestone relating to the Milestone Shares, which was accounted for as an embedded derivative. Consequently, the Company remeasured and reclassified the derivative liability to additional paid-in capital based on the estimated fair value of $29.2 million. The Company issued Alnylam 1,111,111 shares of its common stock and paid Alnylam $15.0 million in the second quarter of 2020.

Second and Third Amendments

In March and April 2020, the Company and Alnylam entered into the second and third amendments to the Alnylam Agreement (as amended, the “Amended Alnylam Agreement”) to expand the parties’ existing collaboration to include the development and commercialization of siRNA products targeting SARS-CoV-2, and potentially other related coronaviruses, and up to three targeting human host factors for SARS-CoV-2 (collectively, the “COVID Collaboration Targets”).

In December 2020, the Company and Alnylam entered into a letter amendment (the “Letter Agreement”), amending the Amended Alnylam Agreement, to modify certain funding and governance provisions in connection with the siRNA products directed to the COVID Collaboration Targets, including VIR-2703 (the “COV Target”), and to modify certain rights of each party with respect to products arising from such programs. Pursuant to the Letter Agreement, Alnylam were responsible for conducting pre-clinical research activities set forth in the existing workplan for the COV Target (the “COV Workplan”) at its discretion and sole expense, and the Company was no longer obligated to reimburse Alnylam for any share of costs incurred by Alnylam in conducting activities under the COV Workplan after July 1, 2020. In July 2021, Alnylam elected to discontinue the development of the COV Target, and all other related research and development activities in accordance with their rights under the Letter Agreement. As a result, the COV Target and related siRNA program is no longer included within the Amended Alnylam Agreement and all rights to the siRNA program directed to the COV Target reverted to Alnylam.  

Research and Development Expenses Recognized for the Period

The Company incurred expenses under the Alnylam Agreement of $0.8 and $1.7 million during the three and six months ended June 30, 2021, respectively. In addition to the Milestone Shares and $15.0 million milestone payable to Alnylam in the first quarter of 2020, and the $10.0 million payment resulting from Brii Bio’s option exercise in the second quarter of 2020, the Company incurred expenses of $2.5 million and $4.8 million under the Alnylam Agreement during the three and six months ended June 30, 2020, respectively.

WuXi Biologics

In February 2020, the Company entered into a development and manufacturing collaboration agreement with WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”) (the “WuXi Biologics Collaboration Agreement”), for the clinical development, manufacturing, and commercialization of the Company’s proprietary antibodies developed for SARS-CoV-2. Under the WuXi Biologics Collaboration Agreement, WuXi Biologics will conduct cell-line development, process and formulation development, and initial manufacturing for clinical development. WuXi Biologics will have the right to commercialize products incorporating such antibodies in greater China under an exclusive license granted for the selected antibodies that have been developed. The Company will have the right to commercialize such products in all other markets worldwide.

WuXi Biologics will perform mutually agreed development and manufacturing activities, under individual statements of work. In addition, the parties agreed that WuXi Biologics will pay the Company tiered royalties at percentages ranging from the high single-digits to mid-teens on annual net sales of all products sold by WuXi Biologics in greater China. The royalties are payable for a specified, standard royalty term. In addition, if WuXi Biologics sublicenses its commercialization rights to a third party, WuXi Biologics will pay the Company a percentage of the sublicense revenue received from such third party. The WuXi Biologics Collaboration Agreement will continue until the expiration of WuXi Biologics’ payment obligations to the Company, unless

terminated earlier. If terminated earlier, the WuXi Biologics Collaboration Agreement may be terminated by (i) the written agreement of both parties, (ii) WuXi Biologics following the one year anniversary of the WuXi Biologics Collaboration Agreement effective date with respect to the entire agreement or on a product by product basis with 90 days’ prior written notice or (iii) by either party if the other party materially breaches the WuXi Biologics Collaboration Agreement and fails to cure such breach within sixty days.

Rockefeller University

In July 2018, the Company entered into an exclusive license agreement with The Rockefeller University (“Rockefeller”), which was amended in May 2019, in September 2020, and in March 2021 (the “Rockefeller Agreement”). Under the Rockefeller Agreement, Rockefeller granted the Company a worldwide exclusive license under certain patent rights, and a worldwide non-exclusive license under certain materials and know-how covering certain antibody variants relating to a specified mutation leading to enhanced antibody function and utility, to develop, manufacture and commercialize infectious disease products covered by the licensed patents, or that involve the use or incorporation of the licensed materials and know-how, in each case for all uses and purposes for infectious diseases. The Company uses technology licensed under the Rockefeller Agreement in the Company’s antibody platform and in the Company’s product candidates VIR-3434 and VIR-7832.

The Company paid Rockefeller an upfront fee of $0.3 million for entry into the Rockefeller Agreement, and is required to pay annual license maintenance fees of $1.0 million. In addition, for the achievement of specified development, regulatory and commercial success milestone events, the Company will be required to pay up to $80.3 million, in the aggregate, for up to six infectious disease products. Any follow-on products beyond six products may result in additional milestone event payments. The Company will also be required to pay to Rockefeller a royalty at a low single-digit percentage rate on net sales of licensed products, subject to certain adjustments. The Company’s obligation to pay royalties to Rockefeller will terminate, on a product-by-product and jurisdiction-by-jurisdiction basis, upon the latest of the expiration of the last valid claim of a licensed patent in such jurisdiction, the expiration of all regulatory exclusivity in such jurisdiction or 12 years following the first commercial sale of the applicable licensed product in such jurisdiction.

Under the Rockefeller Agreement, the Company recognized a total of $4.0 million and $1.3 million during the three and six months ended June 30, 2021 and 2020, respectively, as research and development expenses related to certain development milestone payments, annual license maintenance fees, and estimated sublicense fees.

The Rockefeller Agreement will remain in force, absent earlier termination, until the expiration of all of the Company’s obligations to pay royalties to Rockefeller in all jurisdictions. The Company has the right to terminate the Rockefeller Agreement in its entirety, or in part, for any reason on 60 days’ written notice to Rockefeller. Rockefeller may terminate the Rockefeller Agreement on 90 days’ written notice for the Company’s uncured material breach, or if the Company challenges the validity or enforceability of any of the licensed patents, or immediately in the event of the Company’s insolvency. Rockefeller may also terminate the Rockefeller Agreement if the Company ceases to carry on business with respect to the rights granted to the Company under the agreement.

MedImmune

In September 2018, the Company entered into a license agreement, which was amended in September 2020 (the “MedImmune Agreement”), with MedImmune, LLC (“MedImmune”), under which the Company obtained a worldwide, exclusive license to develop and commercialize half-life extended versions of two specified antibodies under development by MedImmune that target influenza A and influenza B, respectively, for all uses in humans and animals. The Company is developing VIR-2482 using technology licensed under the MedImmune Agreement.

In consideration for the grant of the licenses under the MedImmune Agreement, the Company made an upfront payment to MedImmune of $10.0 million.

The Company will be obligated to make development, regulatory, and commercial milestone payments of up to $331.5 million, of which $5.0 million was paid in the third quarter of 2019, in the aggregate relating to influenza A and influenza B products. MedImmune will also be entitled to receive tiered royalties based on net sales of products containing half-life extended versions of antibodies directed to influenza A and/or influenza B at percentages ranging from the mid-single-digits to sub-teen double-digits.

The MedImmune Agreement will remain in force until the expiration on a country-by-country and product-by-product basis of all of the Company’s obligations to pay royalties to MedImmune. The Company may terminate the MedImmune Agreement in its entirety or on a product-by-product basis, for convenience, upon 120 days’ notice. Either party may terminate the MedImmune Agreement for cause for the other party’s uncured material breach on 60 days’ notice or immediately in the event of bankruptcy of the other party.

Additionally, MedImmune may terminate the MedImmune Agreement for cause on 30 days’ written notice if the Company challenges the validity or enforceability of the patents to which the Company has obtained a license under the MedImmune Agreement.

Xencor

August 2019 License Agreement

In August 2019, the Company entered into a patent license agreement, which was amended in February 2021 (the “2019 Xencor Agreement”) with Xencor, Inc., (“Xencor”). Under the 2019 Xencor Agreement, as amended, the Company obtained a non-exclusive, sublicensable (only to its affiliates and subcontractors) license to incorporate Xencor’s licensed technologies into, and to evaluate, antibodies that target influenza A and HBV, and a worldwide, non-exclusive, sublicensable license to develop and commercialize products containing such antibodies incorporating such technologies for all uses, including the treatment, palliation, diagnosis and prevention of human or animal diseases, disorders or conditions. The Company is obligated to use commercially reasonable efforts to develop and commercialize an antibody product that incorporates Xencor’s licensed technologies, for each of the influenza A and HBV research programs. These technologies are used in the Company’s VIR-2482, incorporating Xencor’s Xtend technology, and VIR-3434, incorporating Xencor’s Xtend and other Fc technologies, product candidates.

In consideration for the grant of the license, the Company paid Xencor an upfront fee. For each of the influenza A and HBV research programs, the Company will be required to pay Xencor development and regulatory milestone payments of up to $17.8 million in the aggregate, and commercial sales milestone payments of up to $60.0 million in the aggregate, for a total of up to $77.8 million in aggregate milestones for each program and $155.5 million in aggregate milestones for both programs. On a product-by-product basis, the Company will also be obligated to pay tiered royalties based on net sales of licensed products ranging from low- to mid-single-digits. The royalties are payable, on a product-by-product and country-by-country basis, until the expiration of the last to expire valid claim in the licensed patents covering such product in such country.

In August 2019, the Company achieved one of the specified development milestones related to the influenza A program. As such, the Company paid $0.8 million related to the upfront fee and this milestone event in September 2019. In May 2020, the Company achieved one of the specified development milestones related to the HBV program. As such, the Company paid $0.3 million related to this milestone event in June 2020. The milestone payments are expensed to research and development.

March 2020 License Agreement

In March 2020, the Company entered into a patent license agreement, which was amended in February 2021 (the “2020 Xencor Agreement”) with Xencor under which the Company obtained a non-exclusive, sublicensable (only to the Company’s affiliates and subcontractors) license to incorporate Xencor’s licensed technologies into, and to evaluate, antibodies that target any component of a coronavirus, including SARS-CoV-2, SARS-CoV and MERS-CoV, and a worldwide, non-exclusive, sublicensable license to develop and commercialize products containing such antibodies incorporating such technologies for all uses, including the treatment, palliation, diagnosis and prevention of human or animal diseases, disorders or conditions. The Company is obligated to use commercially reasonable efforts to develop and commercialize an antibody product that incorporates Xencor’s licensed technologies, for each of the coronavirus research programs. These technologies are used in the Company’s sotrovimab, incorporating Xencor’s Xtend technology, and VIR-7832, incorporating Xencor’s Xtend and other Fc technologies, product candidates.

In consideration for the grant of the license, the Company will be obligated to pay royalties based on net sales of licensed products at the mid-single-digits. The royalties are payable, on a product-by-product and country-by-country basis, until the later of the expiration of the last to expire valid claim in the licensed patents covering such product in such country or 12 years. During the three months ended June 30, 2021, the Company recognized $0.9 million of royalties due to Xencor from the sale of sotrovimab.

The amended 2020 Xencor Agreement and 2019 Xencor Agreement will remain in force, on a product-by-product and country-by-country basis, until the expiration of all royalty payment obligations under each of the respective agreements. The Company may terminate each agreement in its entirety, or on a target-by-target basis, for convenience upon 60 days’ written notice. Either party may terminate each agreement for the other party’s uncured material breach upon 60 days’ written notice (or 30 days in the case of non-payment) or in the event of bankruptcy of the other party immediately upon written notice. Xencor may terminate each agreement immediately upon written notice if the Company challenges, or upon 30 days’ written notice if any of the Company’s sublicensees challenge, the validity or enforceability of any patent licensed to the Company under each respective agreement.

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Balance Sheet Components

6 Months Ended

Jun. 30, 2021

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

7. Balance Sheet Components

Property and Equipment, net

Property and equipment, net consists of the following:

	June 30, 2021			December 31, 2020
	(in thousands)
Laboratory equipment	$	18,168		$	16,769
Computer equipment		580			556
Furniture and fixtures		1,444			1,444
Leasehold improvements		7,281			7,274
Construction in progress		4,544			1,135
Property and equipment, gross		32,017			27,178
Less accumulated depreciation and amortization		(11,766	)		(9,232	)
Total property and equipment, net	$	20,251		$	17,946

Depreciation and amortization expenses was $1.3 million and $2.5 million for the three and six months ended June 30, 2021, and $1.1 million and $2.1 million for the three and six months ended June 30, 2020, respectively.   

Accrued and Other Liabilities

Accrued and other liabilities consist of the following:

	June 30, 2021		December 31, 2020
	(in thousands)
Research and development expenses	$	30,952	$	49,384
Milestone payable		10,000		—
Payroll and related expenses		10,353		17,060
Excess funds payable under grant agreements		2,046		3,467
Operating lease liabilities, current		3,522		3,625
Other professional and consulting expenses		3,867		2,595
Other expenses		3,334		805
Total accrued and other liabilities	$	64,074	$	76,936

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Lease Agreements

The Company has various lease arrangements for office and laboratory spaces located in California, Oregon, Missouri and Switzerland with contractual lease periods expiring between 2021 and 2033. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain lease agreements also provide the Company with the option to renew for additional periods ranging from one to five years. Most of these renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. In February 2021, the Company entered into a new lease arrangement for office and laboratory spaces in Oregon. The lease is expected to commence in the fourth quarter of 2021 when the Company obtains access to the leased space. In addition to the operating lease agreements, the Company entered into a sale-leaseback transaction in August 2019.

Throughout the term of the lease agreements, the Company is responsible for paying certain operating costs, in addition to rent, such as common area maintenance, taxes, utilities and insurance. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred.   

The maturity of the Company’s operating lease liabilities as of June 30, 2021 was as follows (in thousands):

	Amounts
2021 (excluding the six months ended June 30, 2021)	$	3,428
2022		9,713
2023		11,387
2024		10,564
2025		8,042
Thereafter		67,466
Total lease payments		110,600
Less: imputed interest		(38,140	)
Less: net tenant improvement allowance yet to be received		(10,287	)
Present value of operating lease liabilities	$	62,173

The following amounts were recorded in the condensed consolidated balance sheets for the periods ended:

	June 30, 2021		December 31, 2020
	(in thousands)
Operating Leases
Current operating lease liabilities, net of tenant    improvement allowances (1)	$	10,287	$	7,913
Operating right-of-use assets		58,972		61,947
Accrued and other liabilities	$	3,522	$	3,625
Operating lease liabilities, noncurrent		68,938		66,556
Total operating lease liabilities	$	72,460	$	70,181

(1)Current portion of lease liabilities recorded in prepaid expenses and other current assets for which the lease incentives to be received exceed the minimum lease payments to be paid over the next twelve months.

Manufacturing and Supply Letter Agreements

In April 2020, the Company and Samsung Biologics Co., Ltd. (“Samsung”) entered into a binding letter agreement (the “Samsung Letter Agreement”), pursuant to which Samsung will perform development and manufacturing services for the Company’s SARS-CoV-2 antibody program. In August 2020, the Company, GlaxoSmithKline Trading Services Limited (“GSKTSL”) and Samsung entered into an Assignment and Novation Agreement effective as of July 31, 2020 pursuant to which the Company assigned and transferred to GSKTSL all of the Company’s right, title, and interest in, to and under the Samsung Letter Agreement, and GSKTSL became the Company’s successor in interest in and to all of the Company’s rights, duties, and obligations in, to and under the Samsung Letter Agreement.

In June 2020, the Company and WuXi Biologics entered into a binding letter of intent (the “WuXi Biologics Letter Agreement”), pursuant to which WuXi Biologics will perform certain development and manufacturing services for the Company’s SARS-CoV-2 antibody program. In August 2020, the Company, GSKTSL and WuXi Biologics entered into an Assignment and Novation Agreement effective as of July 29, 2020 pursuant to which the Company assigned and transferred to GSKTSL all of the Company’s right, title, and interest in, to and under the WuXi Biologics Letter Agreement, and GSKTSL became the Company’s successor in interest in and to all of the Company’s rights, duties, and obligations in, to and under the WuXi Biologics Letter Agreement.

In August 2020, GSKTSL entered into a Master Services Agreement with Samsung (the “Samsung MSA”) and a non-exclusive Master Services Agreement for Commercial Manufacture of Drug Substance with WuXi Biologics (the “WuXi Biologics MSA”) in connection with the performance of the obligations of the Company and GSK, pursuant to the 2020 GSK Agreement. In accordance with the terms of the 2020 GSK Agreement, the Company will continue to be responsible for 72.5% of the costs under each of the Samsung MSA and the WuXi Biologics MSA, and GSK will bear 27.5% of such costs under each of the Samsung MSA and the WuXi Biologics MSA, subject to certain conditions and exceptions.

Indemnification

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. In some cases, the indemnification obligation will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. In addition, the Company has entered into indemnification agreements with its directors and certain officers that may require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. To date, no demands have been made upon the Company to provide indemnification under these agreements, and thus, there are no indemnification claims that the Company is aware of that could have a material effect on the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations, or condensed consolidated statements of cash flows.

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Related Party Transaction

6 Months Ended

Jun. 30, 2021

Related Party Transactions [Abstract]

Related Party Transaction

9. Related Party Transaction

As a result of the Brii Agreement in May 2018, the Company holds a minority equity interest in Brii Bio through its parent company, Brii Bio Parent. Additionally, a member of the Company’s board of directors serves on Brii Bio Parent’s board of directors. Effective June 22, 2021, the Company's Chief Executive Officer is no longer a member of Brii Bio Parent's board of directors.

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Stock-Based Awards

6 Months Ended

Jun. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Awards

Stock-Based Awards

Stock Option Activity

Activity under the Company’s stock option plans is set forth below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(Years)		(in thousands)
Outstanding at December 31, 2020		9,798,282		$	5.25		8.5
Granted		2,583,490		$	61.99
Exercised		(1,050,899	)	$	5.66
Forfeited		(628,801	)	$	28.19
Outstanding at June 30, 2021		10,702,072		$	30.24		8.5	$	223,581
Vested and expected to vest at June 30, 2021		10,702,072		$	30.24		8.5	$	223,581
Vested and exercisable at June 30, 2021		3,262,612		$	13.40		7.7	$	110,878

As of June 30, 2021, the Company expects to recognize the remaining unamortized stock-based compensation expense of $203.1 million related to stock options, over an estimated weighted average period of 2.7 years.

Stock Options Granted to Employees

The fair value of stock options granted to employees was estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Expected term of options (in years)	5.5 - 6.1		5.5 - 6.1		5.5 - 6.1		5.5 - 6.1
Expected stock price volatility	106.0% - 110.2%		95.7% - 100.6%		103.1% - 110.2%		88.8% - 100.6%
Risk-free interest rate	1.0% - 1.1%		0.4% - 0.5%		0.6% - 1.2%		0.4% - 1.2%
Expected dividend yield		—		—		—		—

The valuation assumptions were determined as follows:

Expected Term— The expected term represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term.

Expected Volatility— The expected volatility was determined by examining the historical volatilities for industry peers and using an average of historical volatilities of the Company’s industry peers as the Company does not have a sufficient historical trading history for its own stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Risk-Free Interest Rate— The Company based the risk-free interest rate over the expected term of the options based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of the grant.

Expected Dividend Rate— The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its profit interest units in the foreseeable future.

Restricted Stock Awards and Restricted Stock Units Activities

The Company’s restricted stock awards (RSAs”) and restricted stock units (“RSUs”) were summarized as follows:

	Shares						Weighted Average Grant Date Fair Value
	RSU			RSA			RSU		RSA
Unvested as of December 31, 2020		—			89,261		$	—	$	1.48
Granted		1,050,995			—		$	64.25	$	—
Vested		—			(87,409	)	$	—	$	1.48
Cancelled		(28,550	)		—		$	67.38	$	—
Unvested as of June 30, 2021		1,022,445			1,852		$	64.16	$	1.53

The unvested shares of RSA and RSU have not been included in the shares issued and outstanding.

As of June 30, 2021, there was $59.7 million of total unrecognized compensation cost related to unvested RSUs, all of which is expected to be recognized over a remaining weighted-average period of 3.6 years.

Stock-Based Compensation Expense

The following table sets forth the total stock-based compensation expense for all awards granted to employees and non-employees and the Company's Employee Stock Purchase Plan ("ESPP") in the condensed consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Research and development	$	10,860	$	2,700	$	19,290	$	4,188
Selling, general and administrative		10,138		3,050		17,179		4,529
Total stock-based compensation	$	20,998	$	5,750	$	36,469	$	8,717

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Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

11. Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net income (loss) per common share is computed by dividing the net income (loss) by the sum of the weighted average number of common shares outstanding during the period plus any potential dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the treasury stock method. The following is a calculation of the basic and diluted net income (loss) per share (in thousands, except share and per share data):

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021			2020
Net income (loss), basic and diluted	$	61,813	$	(31,167	)	$	(107,098	)	$	(108,407	)
Weighted-average shares outstanding, basic		130,121,943		114,980,652			128,938,851			111,684,283
Weighted-average effect of dilutive securities:
Options to purchase common stock		3,635,656		—			—			—
Restricted shares subject to future vesting		19,409		—			—			—
Contingently issuable shares		12,969		—			—			—
Weighted-average shares outstanding, diluted		133,789,977		114,980,652			128,938,851			111,684,283
Net income (loss) per share, basic	$	0.48	$	(0.27	)	$	(0.83	)	$	(0.97	)
Net income (loss) per share, diluted	$	0.46	$	(0.27	)	$	(0.83	)	$	(0.97	)

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options issued and outstanding		6,164,036		8,932,845		10,702,072		8,932,845
Estimated shares issuable under the ESPP		71,582		—		71,582		—
Restricted shares subject to future vesting		933,870		844,886		1,024,297		844,886
Contingently issuable shares		—		—		39,340		—
Total		7,169,488		9,777,731		11,837,291		9,777,731

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Subsequent Events

6 Months Ended

Jun. 30, 2021

Subsequent Events [Abstract]

Subsequent Events

12. Subsequent Event

Investment in Brii Bio Parent

On July 13, 2021, Brii Bio Parent became a publicly traded company on the Stock Exchange of Hong Kong Limited. As such, the Company's investment in shares of Brii Bio Parent became a marketable equity investment with readily determinable price, which will then be measured at fair value at each reporting period going forward.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. The condensed consolidated financial statements include the accounts of Vir and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial information. The condensed consolidated results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other future annual or interim period.

Certain information and footnote disclosures typically included in the Company’s annual consolidated financial statements have been condensed or omitted. As such, these interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021.

Use of Estimates

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Concentration of Credit Risk, Credit Loss and Other Risks and Uncertainties

Concentration of Credit Risk, Credit Loss and Other Risks and Uncertainties

With the global spread of the ongoing COVID-19 pandemic, the Company has implemented a number of plans and policies designed to address and mitigate the impact of the COVID-19 pandemic on its business. The Company anticipates that the COVID-19 pandemic will continue to have an impact on the clinical development timelines for some of its clinical programs. The extent to which the COVID-19 pandemic impacts the Company’s business, clinical development and regulatory efforts, corporate development objectives and the value of and market for its common stock, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease.

In addition, the Company is subject to a number of other challenges and risks similar to other biopharmaceutical companies in the early stage, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s products and protection of proprietary technology. If the Company does not successfully obtain regulatory approval, commercialize or partner any of its product candidates, it will be unable to generate revenue from product sales or achieve profitability. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and investments. Cash and cash equivalents are deposited in checking and sweep accounts at a financial institution. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company’s investment policy limits investments to certain types of securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The Company is exposed to credit risk in the event of a default by the financial institutions holding its cash, cash equivalents and investments, and issuers of the investments to the extent recorded on the condensed consolidated balance sheets. As of June 30, 2021, the Company has no off-balance sheet concentrations of credit risk.

The Company is exposed to credit losses primarily through receivables from customers and collaborators and through its available-for-sale debt securities. The Company’s expected loss allowance methodology for the receivables is developed using historical collection experience, current and future economic market conditions, a review of the current aging status and financial condition of the entities. Specific allowance amounts are established to record the appropriate allowance for customers that have a higher probability of default. Balances are written off when determined to be uncollectible. The Company’s expected loss allowance methodology for the debt securities is developed by reviewing the extent of the unrealized loss, the size, term, geographical location, and industry of the issuer, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted. During the six months ended June 30, 2021 and 2020, there was no allowance for losses on available-for-sale debt securities attributable to credit risk.

Investments

Investments

Investments include available-for-sale debt securities and are carried at estimated fair value. The Company’s valuations of marketable securities are generally derived from independent pricing services based on quoted prices in active markets for similar securities at period end. Generally, investments with original maturities beyond three months at the date of purchase and which mature at, or less than 12 months from, the condensed consolidated balance sheet date are considered short-term investments, with all others considered to be long-term investments. Unrealized gains and losses deemed temporary in nature are reported as a component of accumulated comprehensive income (loss). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the condensed consolidated statements of operations. The Company’s policy is not to measure an allowance for credit losses for interest receivable and to write off any uncollectible interest receivable as a reversal of interest income in the period in which it determines the interest will not be collected.

The Company, through its investment in Brii Biosciences Limited, holds privately held equity securities in which the Company does not have a controlling interest or significant influence. The Company’s investment in Brii Biosciences Limited is recorded at cost and adjusted for impairments and observable price changes with the same or similar security from the same issuer. The valuation of the Company’s investment in Brii Biosciences Limited utilizes significant unobservable inputs or data in an inactive market and the valuation requires the Company’s judgment due to the absence of market prices and inherent lack of liquidity. Additionally, the determination of whether an orderly transaction is for the same or similar investment requires significant management judgment including the nature of the rights and obligations of its investments, the extent to which differences in those rights and obligations would affect the fair values of those investments, and the impact of any differences based on the stage of operational development of the investee. See Note 6—Collaboration and License Agreements for additional information on the Company’s investment in Brii Biosciences Limited.

Restricted Cash and Cash Equivalents

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents represent money market funds to secure standby letters of credit and security deposits with financial institutions, both under office and laboratory space lease agreements. Additionally, funds received from certain grants are restricted as to their use and are therefore classified as restricted cash and cash equivalents.

Revenue Recognition

Revenue Recognition

Collaboration, License and Contract Revenue

In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when the Company’s customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when or as the Company satisfies a performance obligation.

For collaborative arrangements that fall within the scope of ASC 808, Collaborative Arrangements (“ASC 808”), the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are not subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate. The Company has entered into a number of license and collaboration agreements that fall within the scope of ASC 606. The Company evaluates the promised goods or services in these agreements to determine which ones represent distinct performance obligations. These agreements may include the following types of promised goods or services: (i) grants of licenses, (ii) performance of research and development services, and (iii) participation on joint research and/or development committees. They also may include options to obtain licenses to the Company’s intellectual property.

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. These estimates are re-assessed each reporting period as required. These agreements may include the following types of consideration: non-refundable upfront payments, reimbursement for research services, research, development or regulatory milestone payments, profit-sharing arrangements and royalty and commercial sales milestone payments.

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on their estimated standalone selling prices (“SSP”). For performance obligations satisfied over time, the Company estimates the efforts needed to complete the performance obligation and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligation using an input measure.

For arrangements that include sales-based royalties, including commercial milestone payments based on pre-specified level of sales, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Achievement of these royalties and commercial milestones may solely depend upon performance of the licensee.

Grant Revenue

Grants received, including cost reimbursement agreements, are assessed to determine if the agreement should be accounted for as an exchange transaction or a contribution. An agreement is accounted for as a contribution if the resource provider does not receive commensurate value in return for the assets transferred. Contributions are recognized as grant revenue when all donor-imposed conditions have been met.

Acquisitions

Acquisitions

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired, including in-process research and development (“IPR&D”) projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date. Any excess fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with the business combination are recorded at their fair values on the acquisition date and are remeasured each subsequent reporting period until the related contingencies are resolved and are classified as contingent consideration on the condensed consolidated balance sheets. The changes in fair values of contingent consideration related to the achievement of various development milestones related to product candidates are recorded within research and development expense.

When the Company determines that entities acquired do not meet the definition of a business, the transaction is accounted for as an acquisition of assets. Therefore, the consideration paid to acquire IPR&D is expensed, and no goodwill is recorded. Any contingent consideration is generally recognized only when it becomes payable or is paid.

Embedded Derivatives

Embedded Derivatives

The Company evaluates its acquisitions, collaborative arrangements and other business development transactions to determine if embedded components of these contracts meet the definition of a derivative under ASC 815, Derivatives and Hedging. In general, embedded derivatives are required to be bifurcated from the host instrument if (i) the embedded feature is not clearly and closely related to the host contract and (ii) the embedded feature, if considered a freestanding instrument, meets the definition of a derivative. Embedded derivatives are reported on the condensed consolidated balance sheets at their estimated fair values. Contingent consideration related to asset acquisitions that meet the definition of an embedded derivative is classified as contingent consideration on the condensed consolidated balance sheets. Any change in estimated fair values, as determined at each measurement period, are recorded in the condensed consolidated statements of operations based on the nature of the related contingencies. Changes in fair values of embedded derivatives related to the achievement of various development milestones for product candidates are recorded within research and development expense. Otherwise, changes in fair values are recorded within other income (expense), net. 

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]

Summary of Financial Assets Measured at Fair Value on a Recurring Basis

The following tables summarize the Company’s Level 1 and Level 2 financial assets measured at fair value on a recurring basis by level within the fair value hierarchy:

		June 30, 2021
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds(1)	Level 1	$	739,286	$	—	$	—		$	739,286
Bank time deposits	Level 2		5,000		—		—			5,000
U.S. government treasuries(2)	Level 2		129,786		8		(7	)		129,787
Total financial assets		$	874,072	$	8	$	(7	)	$	874,073

(1) Includes $14.0 million of restricted cash equivalents.

(2) Includes $50.7 million classified as long-term investments.

		December 31, 2020
	Valuation Hierarchy	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Aggregate Fair Value
		(in thousands)
Assets:
Money market funds(1)	Level 1	$	421,835	$	—	$	—		$	421,835
U.S. government treasuries	Level 2		300,201		91		(6	)		300,286
Total financial assets		$	722,036	$	91	$	(6	)	$	722,121

(1) Includes $14.9 million of restricted cash equivalents.

Summary of Changes in Estimated Fair Value of Financial Liabilities

The following table sets forth the changes in the estimated fair value of the Company’s Level 3 financial liabilities (in thousands):

	Contingent Consideration
Balance at December 31, 2020	$	35,974
Changes in fair value recognized in research and development expenses		33,300
Changes in fair value recognized in other income (expense), net		9,618
Reclassification of contingent consideration to accrued liabilities upon   achievement of milestone		(10,000	)
Balance at June 30, 2021	$	68,892

Humabs | Clinical and Regulatory Milestones

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]

Estimated Fair Value of Significant Unobservable Inputs

As of June 30, 2021, the Company calculated the estimated fair value of the clinical and regulatory milestones using the following significant unobservable inputs:

Unobservable input	Range (Weighted-Average)1
Discount rates	4% - 8% (5%)
Probability of achievement	21% - 76% (62%)

(1)Unobservable inputs were weighted based on the relative fair value of the clinical and regulatory milestone payments.

Humabs | Commercial Milestones

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]

Estimated Fair Value of Significant Unobservable Inputs

As of June 30, 2021, the Monte Carlo simulation assumed a commercial product launch and associated discrete revenue forecast, as well as the following significant unobservable inputs:

Unobservable input	Value or Range (Weighted-Average)1
Volatility	60%
Discount rate	11%
Probability of achievement	21% - 76% (66%)

Unobservable inputs were weighted based on the relative fair value of the commercial milestone payments.

TomegaVax

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]

Estimated Fair Value of Significant Unobservable Inputs

As of June 30, 2021, the fair value of the remaining contingent consideration was estimated using the following significant unobservable inputs:

Unobservable input	Value or Range (Weighted-Average)1
Volatility	95%
Discount rates	0% - 0.1% (0.1%)

(1)Unobservable inputs were weighted based on the relative fair value of the underlying milestones.

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Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2021

Balance Sheet Related Disclosures [Abstract]

Schedule of Property and Equipment Net

Property and equipment, net consists of the following:

	June 30, 2021			December 31, 2020
	(in thousands)
Laboratory equipment	$	18,168		$	16,769
Computer equipment		580			556
Furniture and fixtures		1,444			1,444
Leasehold improvements		7,281			7,274
Construction in progress		4,544			1,135
Property and equipment, gross		32,017			27,178
Less accumulated depreciation and amortization		(11,766	)		(9,232	)
Total property and equipment, net	$	20,251		$	17,946

Schedule of Accrued and Other Liabilities

Accrued and other liabilities consist of the following:

	June 30, 2021		December 31, 2020
	(in thousands)
Research and development expenses	$	30,952	$	49,384
Milestone payable		10,000		—
Payroll and related expenses		10,353		17,060
Excess funds payable under grant agreements		2,046		3,467
Operating lease liabilities, current		3,522		3,625
Other professional and consulting expenses		3,867		2,595
Other expenses		3,334		805
Total accrued and other liabilities	$	64,074	$	76,936

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2021

Commitments And Contingencies Disclosure [Abstract]

Schedule of Maturities of Operating Lease Liabilities

The maturity of the Company’s operating lease liabilities as of June 30, 2021 was as follows (in thousands):

	Amounts
2021 (excluding the six months ended June 30, 2021)	$	3,428
2022		9,713
2023		11,387
2024		10,564
2025		8,042
Thereafter		67,466
Total lease payments		110,600
Less: imputed interest		(38,140	)
Less: net tenant improvement allowance yet to be received		(10,287	)
Present value of operating lease liabilities	$	62,173

Schedule of Operating Lease Amounts Recorded in Condensed Consolidated Balance Sheets

The following amounts were recorded in the condensed consolidated balance sheets for the periods ended:

	June 30, 2021		December 31, 2020
	(in thousands)
Operating Leases
Current operating lease liabilities, net of tenant    improvement allowances (1)	$	10,287	$	7,913
Operating right-of-use assets		58,972		61,947
Accrued and other liabilities	$	3,522	$	3,625
Operating lease liabilities, noncurrent		68,938		66,556
Total operating lease liabilities	$	72,460	$	70,181

(1)Current portion of lease liabilities recorded in prepaid expenses and other current assets for which the lease incentives to be received exceed the minimum lease payments to be paid over the next twelve months.

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Stock-Based Awards (Tables)

6 Months Ended

Jun. 30, 2021

Summary of Stock Option Plans Activity

Activity under the Company’s stock option plans is set forth below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(Years)		(in thousands)
Outstanding at December 31, 2020		9,798,282		$	5.25		8.5
Granted		2,583,490		$	61.99
Exercised		(1,050,899	)	$	5.66
Forfeited		(628,801	)	$	28.19
Outstanding at June 30, 2021		10,702,072		$	30.24		8.5	$	223,581
Vested and expected to vest at June 30, 2021		10,702,072		$	30.24		8.5	$	223,581
Vested and exercisable at June 30, 2021		3,262,612		$	13.40		7.7	$	110,878

Summary of Assumptions Used for Estimating the Fair Value of Stock Options Granted

he fair value of stock options granted to employees was estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Expected term of options (in years)	5.5 - 6.1		5.5 - 6.1		5.5 - 6.1		5.5 - 6.1
Expected stock price volatility	106.0% - 110.2%		95.7% - 100.6%		103.1% - 110.2%		88.8% - 100.6%
Risk-free interest rate	1.0% - 1.1%		0.4% - 0.5%		0.6% - 1.2%		0.4% - 1.2%
Expected dividend yield		—		—		—		—

Summary of Restricted Stock Activity and Restricted Stock Units

The Company’s restricted stock awards (RSAs”) and restricted stock units (“RSUs”) were summarized as follows:

	Shares						Weighted Average Grant Date Fair Value
	RSU			RSA			RSU		RSA
Unvested as of December 31, 2020		—			89,261		$	—	$	1.48
Granted		1,050,995			—		$	64.25	$	—
Vested		—			(87,409	)	$	—	$	1.48
Cancelled		(28,550	)		—		$	67.38	$	—
Unvested as of June 30, 2021		1,022,445			1,852		$	64.16	$	1.53

Summary of Stock-based Compensation Expense

The following table sets forth the total stock-based compensation expense for all awards granted to employees and non-employees and the Company's Employee Stock Purchase Plan ("ESPP") in the condensed consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Research and development	$	10,860	$	2,700	$	19,290	$	4,188
Selling, general and administrative		10,138		3,050		17,179		4,529
Total stock-based compensation	$	20,998	$	5,750	$	36,469	$	8,717

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income (loss) Per Share

The following is a calculation of the basic and diluted net income (loss) per share (in thousands, except share and per share data):

	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021			2020
Net income (loss), basic and diluted	$	61,813	$	(31,167	)	$	(107,098	)	$	(108,407	)
Weighted-average shares outstanding, basic		130,121,943		114,980,652			128,938,851			111,684,283
Weighted-average effect of dilutive securities:
Options to purchase common stock		3,635,656		—			—			—
Restricted shares subject to future vesting		19,409		—			—			—
Contingently issuable shares		12,969		—			—			—
Weighted-average shares outstanding, diluted		133,789,977		114,980,652			128,938,851			111,684,283
Net income (loss) per share, basic	$	0.48	$	(0.27	)	$	(0.83	)	$	(0.97	)
Net income (loss) per share, diluted	$	0.46	$	(0.27	)	$	(0.83	)	$	(0.97	)

Schedule of Potentially Dilutive Securities Not Included in the Diluted Per Share Calculations

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Options issued and outstanding		6,164,036		8,932,845		10,702,072		8,932,845
Estimated shares issuable under the ESPP		71,582		—		71,582		—
Restricted shares subject to future vesting		933,870		844,886		1,024,297		844,886
Contingently issuable shares		—		—		39,340		—
Total		7,169,488		9,777,731		11,837,291		9,777,731

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Organization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	6 Months Ended
	Jul. 10, 2020	Nov. 30, 2020	Jun. 30, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Common stock price per share			$ 0.0001	$ 0.0001
Accumulated deficit			$ (774,282)	$ (667,184)
Cash, cash equivalents and investments			$ 876,700
Common Stock | Sales Agreement
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common stock, shares			0
Common stock price per share		$ 0.0001
Common Stock | Sales Agreement | Maximum
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Percentage of aggregate gross proceeds from sale of shares		3.00%
Aggregate offering price		$ 300,000
Follow-on Offering | Common Stock
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Issuance of common stock, shares	8,214,285
Common stock price per share	$ 42.00
Gross proceeds from the offering	$ 345,000
Payments of underwriting discounts and commissions	20,700
Offering expenses	1,100
Net proceeds after deducting underwriting discounts, commissions and offering expenses	$ 323,200

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	Jun. 30, 2021	Jun. 30, 2020
Accounting Policies [Abstract]
Allowance for losses on available-for-sale debt securities	$ 0	$ 0

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Fair Value Measurements - Financial Assets Measured at Fair Value on a Recurring Basis by Level Within Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Jun. 30, 2021		Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets, Amortized Cost	$ 874,072		$ 722,036
Financial Assets, Gross Unrealized Holding Gains	8		91
Financial Assets, Gross Unrealized Holding Losses	(7)		(6)
Financial Assets, Aggregate Fair Value	874,073		722,121
Level 1 | Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets, Amortized Cost	739,286	[1]	421,835	[2]
Financial Assets, Aggregate Fair Value	739,286	[1]	421,835	[2]
Level 2 | Bank Time Deposits
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets, Amortized Cost	5,000
Financial Assets, Aggregate Fair Value	5,000
Level 2 | U.S. Government Treasuries
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial Assets, Amortized Cost	129,786	[3]	300,201
Financial Assets, Gross Unrealized Holding Gains	8	[3]	91
Financial Assets, Gross Unrealized Holding Losses	(7)	[3]	(6)
Financial Assets, Aggregate Fair Value	$ 129,787	[3]	$ 300,286

[1] Includes $14.0 million of restricted cash equivalents.

[2] Includes $14.9 million of restricted cash equivalents.

[3] Includes $50.7 million classified as long-term investments.

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Fair Value Measurements - Financial Assets Measured at Fair Value on a Recurring Basis by Level Within Fair Value Hierarchy (Parenthetical) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Long-term Investments	$ 50,680
Level 1 | Money Market Funds
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Restricted cash equivalents	14,000	$ 14,900
Level 2 | U.S. Government Treasuries
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Long-term Investments	$ 50,700

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Fair Value Measurements - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Feb. 28, 2021	Dec. 31, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Write off of accrued interest receivable	$ 0	$ 0
Humabs
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Estimated fair value of contingent consideration	62,500,000			$ 29,200,000
TomegaVax
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Estimated fair value of contingent consideration	$ 6,400,000			6,800,000
TomegaVax | TomegaVax Letter Agreement
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Estimated fair value of contingent consideration			$ 10,000,000.0
Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities contractual term	2 years
Prepaid Expenses and Other Current Assets
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Accrued interest receivable excluded from fair value and amortized cost basis of available for sale securities	$ 600,000			$ 800,000
Contingent Consideration Liability | TomegaVax | TomegaVax Letter Agreement
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Estimated fair value of contingent consideration			$ 10,000,000.0

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Fair Value Measurements - Estimated Fair Value of Significant Unobservable Inputs (Details)	Jun. 30, 2021
Humabs | Clinical and Regulatory Milestones | Discount Rates | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.04	[1]
Humabs | Clinical and Regulatory Milestones | Discount Rates | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.08	[1]
Humabs | Clinical and Regulatory Milestones | Discount Rates | Weighted Average
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.05	[1]
Humabs | Clinical and Regulatory Milestones | Probability of Achievement | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.21	[1]
Humabs | Clinical and Regulatory Milestones | Probability of Achievement | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.76	[1]
Humabs | Clinical and Regulatory Milestones | Probability of Achievement | Weighted Average
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.62	[1]
Humabs | Commercial Milestones | Discount Rates
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.11	[2]
Humabs | Commercial Milestones | Probability of Achievement | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.21	[2]
Humabs | Commercial Milestones | Probability of Achievement | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.76	[2]
Humabs | Commercial Milestones | Probability of Achievement | Weighted Average
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.66	[2]
Humabs | Commercial Milestones | Volatility
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.60	[2]
TomegaVax | Discount Rates | Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0	[3]
TomegaVax | Discount Rates | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.001	[3]
TomegaVax | Discount Rates | Weighted Average
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.001	[3]
TomegaVax | Volatility
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value contingent consideration measurement input	0.95	[3]

[1] Unobservable inputs were weighted based on the relative fair value of the clinical and regulatory milestone payments.

[2] Unobservable inputs were weighted based on the relative fair value of the commercial milestone payments.

[3] Unobservable inputs were weighted based on the relative fair value of the underlying milestones.

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Fair Value Measurements - Summary of Changes in Estimated Fair Value of Financial Liabilities (Details) - Level 3 - Contingent Consideration Liability $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance at December 31, 2020	$ 35,974
Reclassification of contingent consideration to accrued liabilities upon achievement of milestone	(10,000)
Balance at March 31, 2021	68,892
Research and Development Expense
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Changes in fair value recognized	33,300
Other Expense
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Changes in fair value recognized	$ 9,618

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Acquisitions - Additional Information (Details)	1 Months Ended				6 Months Ended
	Feb. 28, 2021 USD ($) Milestone	Oct. 31, 2020 USD ($) Milestone	May 31, 2020 USD ($) Milestone	Sep. 30, 2016 USD ($) $ / shares	Jun. 30, 2021 USD ($) Milestone	Jul. 01, 2021 USD ($) shares	Dec. 31, 2020 USD ($)	Jan. 31, 2018 USD ($)	Aug. 31, 2017 USD ($)
TomegaVax
Business Acquisition [Line Items]
Minimum common stock conversion price for milestone payments consideration | $ / shares				$ 90
Payment made for business combination milestone						$ 8,100,000
Common stock shares Issued for milestone payment| shares | shares						42,737
Value of common stock shares Issued for milestone payment						$ 1,900,000
TomegaVax | Clinical Development
Business Acquisition [Line Items]
Minimum common stock conversion price for milestone payments consideration | $ / shares				$ 45
TomegaVax | TomegaVax Letter Agreement
Business Acquisition [Line Items]
Milestone payments aggregate amount payable, maximum				$ 30,000,000.0
Minimum common stock conversion price for milestone payments consideration | $ / shares				$ 45
Milestone payments related terms					the Company will be required to pay to the former stockholders of TomegaVax milestone payments of up to an aggregate of $30.0 million if the per-share price of the Company’s publicly traded common stock, or implied price per share of the Company’s Series A-1 convertible preferred stock (or common stock upon conversion) upon a certain asset sale, merger or stock sale, is at least $45 (as adjusted in the case of any stock dividend, stock split or other similar recapitalization), with the amount of such payments determined by the share price and/or the stage of the Company’s clinical development at the time of the relevant event triggering the payment.
Number of milestones achieved | Milestone	1
Contingent consideration payable	$ 10,000,000.0
Estimated fair value of embedded derivative					$ 6,400,000
TomegaVax | Maximum
Business Acquisition [Line Items]
Remaining payment made for business combination milestone						$ 20,000,000.0
Humabs
Business Acquisition [Line Items]
Contingent consideration payable					62,500,000		$ 29,200,000
Humabs | HBV Product
Business Acquisition [Line Items]
Contingent consideration payable					$ 62,500,000
Additional consideration payable upon achievement of specified milestone events, maximum									$ 135,000,000.0
Number of specified clinical milestones achieved | Milestone			1
Specified clinical development milestones payment			$ 10,000,000.0
Humabs | Another Product
Business Acquisition [Line Items]
Additional consideration payable upon achievement of specified milestone events, maximum									$ 105,000,000.0
Humabs | SARS-CoV-2 Product
Business Acquisition [Line Items]
Number of specified clinical milestones achieved | Milestone		1
Specified clinical development milestones payment		$ 10,000,000.0
Agenovir
Business Acquisition [Line Items]
Number of milestones achieved | Milestone					0
Contingent consideration payable					$ 0
Agenovir | HBV Product
Business Acquisition [Line Items]
Milestone payments aggregate amount payable, maximum								$ 135,000,000.0

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Grant Agreements - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Feb. 29, 2020	Mar. 16, 2018	Jan. 26, 2018
Grant Revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue from grants	$ 3,082,000	$ 719,000	$ 4,453,000	$ 5,950,000
Human Immunodeficiency Virus ('HIV') Grant
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Grant awarded amount						$ 8,600,000
Grant agreement amended expiration date			Oct. 31, 2022
Human Immunodeficiency Virus ('HIV') Grant | Bill And Melinda Gates Foundation
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Deferred revenue	3,700,000		$ 3,700,000		$ 3,800,000
Human Immunodeficiency Virus ('HIV') Grant | Grant Revenue | Bill And Melinda Gates Foundation
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue from grants	900,000	500,000	1,600,000	5,400,000
Human Immunodeficiency Virus ('HIV') Grant | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Grant awarded amount. maximum								$ 12,200,000
Tuberculosis ('TB') Grant
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Unused funds received in advance	2,000,000.0		$ 2,000,000.0
Grant agreement amended expiration date			Jan. 31, 2022
Tuberculosis ('TB') Grant | Bill And Melinda Gates Foundation
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Deferred revenue	1,300,000		$ 1,300,000		$ 2,600,000
Tuberculosis ('TB') Grant | Grant Revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue from grants	$ 2,100,000	$ 0	$ 2,800,000	$ 100,000
Tuberculosis ('TB') Grant | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Grant awarded amount. maximum							$ 14,900,000

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Collaboration and License Agreements - Additional Information (Details)							1 Months Ended									3 Months Ended				6 Months Ended
	Mar. 25, 2021 USD ($) $ / shares	Feb. 14, 2021 USD ($) Program	Feb. 14, 2021 USD ($)	Apr. 29, 2020 Unit $ / shares	Apr. 29, 2020 USD ($) $ / shares shares	May 31, 2018 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Aug. 31, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jul. 31, 2018 USD ($)	May 31, 2018 USD ($)	Oct. 31, 2017 USD ($) shares	Jun. 30, 2021 USD ($)	Mar. 31, 2021 shares	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Current deferred revenue																$ 44,718,000				$ 44,718,000		$ 6,451,000
Deferred revenue, noncurrent																55,496,000				55,496,000		3,815,000
Research and development																86,126,000		$ 79,653,000		220,996,000	$ 144,632,000
Contract Revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																168,653,000		43,522,000		169,266,000	44,009,000
Collaboration Revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																5,333,000		0		5,333,000	0
License
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																		22,747,000		0	22,747,000
2020 GSK | Collaboration Revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																5,300,000
2021 GSK
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Deferred revenue																91,500,000				91,500,000
Current deferred revenue																39,800,000				39,800,000
Deferred revenue, noncurrent																51,700,000				$ 51,700,000
2020 Stock Purchase Agreement | GGL
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Issuance of common stock, shares | shares					6,626,027
Share purchase price per share | $ / shares				$ 37.73	$ 37.73
Issuance of common stock, value					$ 250,000,000.0
Preliminary Collaboration Agreement | 2020 GSK
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Number of years conduct certain research and development activities under mutually agreed development plans					4 years
Maximum percentage of right to perform details in connection with antibody product					20.00%
Termination description																				Either party has the right to terminate the 2020 GSK Agreement in the case of the insolvency of the other party, an uncured material breach of the other party with respect to a collaboration program or collaboration product, or as mutually agreed by the parties.
Number of units of account | Unit				4
Additional research and development expense																17,900,000				$ 36,400,000
Reduction of research and development expense																		3,800,000			3,800,000
Preliminary Collaboration Agreement | 2020 GSK | Accrued and Other Liabilities
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Payable																12,700,000				12,700,000		28,000,000.0
Preliminary Collaboration Agreement | 2020 GSK | Antibody Program
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Percentage of development costs					72.50%
Antibody license transaction price					$ 43,300,000
Total revenue																					43,300,000
Preliminary Collaboration Agreement | 2020 GSK | Vaccine Program
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Percentage of development costs					27.50%
Preliminary Collaboration Agreement | 2021 GSK
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Number of separate programs | Program		3
Upfront payment receivable		$ 225,000,000.0	$ 225,000,000.0
Percentage of upfront payment receivable at effective date of agreement		50.00%	50.00%
Option exercise fee to be received		$ 300,000,000.0	$ 300,000,000.0
Preliminary Collaboration Agreement | 2021 GSK | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Pre-defined regulatory milestone payment		$ 200,000,000.0	$ 200,000,000.0
2020 Preliminary Collaboration Agreement and Stock Purchase Agreement | GGL | ASC 606
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Fair market value of the common stock issued					$ 206,700,000
Common stock price per share | $ / shares				$ 36.70	$ 36.70
Premium received on sale price of common stock					$ 43,300,000
Definitive Collaboration Agreement | 2021 GSK
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Percentage of upfront payment receivable at effective date of agreement		50.00%	50.00%
2021 Stock Purchase Agreement | GGL
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Issuance of common stock, value			$ 120,000,000.0
2021 Stock Purchase Agreement | GGL
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Issuance of common stock, shares | shares																	1,924,927
2021 Preliminary Collaboration Agreement and Stock Purchase Agreement | GGL | ASC 606
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Fair market value of the common stock issued	$ 85,200,000
Common stock price per share | $ / shares	$ 52.70
Premium received on sale price of common stock	$ 34,800,000
2021 GSK Collaboration
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Number of years conduct certain research and development activities under mutually agreed development plans			3 years
Percentage of share development costs		50.00%
Percentage of share Profit and loss		50.00%
2021 GSK Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Reduction of research and development expense																100,000				$ 100,000
Fixed consideration			$ 225,000,000.0
Premium paid on sale price of common stock		$ 34,800,000
Consideration			$ 259,800,000
2021 GSK Agreement | Contract Revenue
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																168,300,000
Brii Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Termination description																				Each party may terminate for convenience all rights and obligations with respect to any program for which it has an option, with 30 days’ written notice (if the terminating party has not exercised an option for such program) or 180 days’ notice (following the exercise of an option for such program). The Brii Agreement may also be terminated by either party for insolvency of the other party, and either party may terminate the Brii Agreement in its entirety or on a program-by-program basis for the other party’s uncured material breach on 60 days’ written notice (or 30 days’ notice following failure to make payment).
Written notice period for not exercising an option														30 days
Written notice period for exercise an option														180 days
Written notice period for uncured material breach														60 days
Written notice period for failure to make payment														30 days
Brii Agreement | Licensed Product-By-Licensed Product | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payment on basis of ranging from low tens						$ 100,000,000.0								$ 100,000,000.0
Brii Agreement | Brii Bio Parent
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Percentage of ordinary share equal to outstanding share														9.90%
Option exercise fee ranging from mid-single-digit							$ 20,000,000.0	$ 20,000,000.0										20,000,000.0			20,000,000.0
Milestone payment on basis ranging from mid-single-digit							20,000,000.0	20,000,000.0										20,000,000.0			20,000,000.0
Sales milestone receivable							175,000,000.0	175,000,000.0										175,000,000.0			175,000,000.0
Contract liability							2,700,000	2,700,000										2,700,000			2,700,000
Option exercise fee received								20,000,000.0
Determined transaction price							22,700,000
Milestone payments paid.																		10,000,000.0
Brii Agreement | Brii Bio Parent | Licensed Product-By-Licensed Product
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payment on basis ranging from mid-single-digit							$ 30,000,000.0	$ 30,000,000.0										30,000,000.0			30,000,000.0
Brii Agreement | Brii Bio Parent | Biological Materials
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																0				$ 400,000
Brii Agreement | Brii Bio Parent | License
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Total revenue																		22,700,000
Brii Agreement | Brii Bio
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Option exercise fee of ranging from low tens description						low tens of millions
Royalty payment obligation expiration period after first commercial sales																				10 years
Contract liability						$ 3,800,000								$ 3,800,000
Brii Agreement | Brii Bio | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Option exercise fee of ranging from low tens						50,000,000.0								50,000,000.0
Brii Agreement | Brii Bio | United States | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Sale milestone payments						$ 175,000,000.0								$ 175,000,000.0
Brii Agreement | Brii Bio | Other Assets
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Carrying value of investment																5,700,000				$ 5,700,000		$ 5,700,000
Brii Agreement | Alnylam Pharmaceuticals Inc | Research and Development Expense
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Proceeds from options exercised																				$ 10,000,000.0
Alnylam Agreement | Alnylam Pharmaceuticals Inc
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Issuance of common stock, shares | shares									1,111,111						1,111,111
Royalty payment obligation expiration period after first commercial sales																				10 years
Written notice period for exercise an option															90 days
Written notice period for uncured material breach															60 days
Written notice period for failure to make payment															30 days
Upfront fee paid															$ 10,000,000.0
Recognized liability															$ 800,000
Maximum shares to be issued | shares															1,111,111
Written notice period for licensed program other party challenges validity or enforceability of patent license.															30 days
Estimated fair value of the derivative liability									$ 29,200,000										$ 29,200,000
Contractual payments																		15,000,000.0
Milestone payments paid.																			$ 15,000,000.0
Expenses incurred under agreement																800,000		2,500,000		$ 1,700,000	4,800,000
Alnylam Agreement | Alnylam Pharmaceuticals Inc | First siRNA product
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum milestone payment for achievement of specified development and regulatory															$ 190,000,000.0
Alnylam Agreement | Alnylam Pharmaceuticals Inc | Each Infectious Disease siRNA
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum milestone payment for achievement of specified development and regulatory															115,000,000.0
Alnylam Agreement | Alnylam Pharmaceuticals Inc | Commercialization
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum sales milestone payment															100,000,000.0
Maximum aggregate sales milestone payment															$ 250,000,000.0
Development and Manufacturing Collaboration Agreement | WuXi Biologics
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Termination description																				the WuXi Biologics Collaboration Agreement may be terminated by (i) the written agreement of both parties, (ii) WuXi Biologics following the one year anniversary of the WuXi Biologics Collaboration Agreement effective date with respect to the entire agreement or on a product by product basis with 90 days’ prior written notice or (iii) by either party if the other party materially breaches the WuXi Biologics Collaboration Agreement and fails to cure such breach within sixty days.
Rockefeller Agreement | Rockefeller
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Termination description																				The Company has the right to terminate the Rockefeller Agreement in its entirety, or in part, for any reason on 60 days’ written notice to Rockefeller. Rockefeller may terminate the Rockefeller Agreement on 90 days’ written notice for the Company’s uncured material breach, or if the Company challenges the validity or enforceability of any of the licensed patents, or immediately in the event of the Company’s insolvency. Rockefeller may also terminate the Rockefeller Agreement if the Company ceases to carry on business with respect to the rights granted to the Company under the agreement.
Upfront fee paid													$ 300,000
Royalty obligation period from date of first commercial sale																				12 years
Rockefeller Agreement | Rockefeller | Commercialization
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Payment of annual license maintenance fees													1,000,000.0
Rockefeller Agreement | Rockefeller | First Infectious Disease Product
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum milestone payment for achievement of specified development and regulatory													$ 80,300,000
Rockefeller Agreement | Rockefeller | HBV Program | Research and Development Expense
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Specified development milestones and annual license maintenance fees																4,000.0		$ 1,300,000		$ 4,000.0	$ 1,300,000
MedImmune Agreement | MedImmune
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Termination description																				The Company may terminate the MedImmune Agreement in its entirety or on a product-by-product basis, for convenience, upon 120 days’ notice. Either party may terminate the MedImmune Agreement for cause for the other party’s uncured material breach on 60 days’ notice or immediately in the event of bankruptcy of the other party. Additionally, MedImmune may terminate the MedImmune Agreement for cause on 30 days’ written notice if the Company challenges the validity or enforceability of the patents to which the Company has obtained a license under the MedImmune Agreement.
License agreement upfront payment												$ 10,000,000.0
MedImmune Agreement | MedImmune | Influenza A and Influenza B
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Development, regulatory, and commercial milestone payments maximum amount												331,500,000
Development, regulatory, and commercial milestone payments												$ 5,000,000.0
2019 Xencor Agreement | Xencor
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Written notice period for uncured material breach																				60 days
Written notice period for failure to make payment																				30 days
Written notice period for termination of licensed program																				60 days
Written notice period for termination of licensed program based on challenge																				30 days
2019 Xencor Agreement | Xencor | Influenza A Research Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum aggregate development and regulatory milestone payments											$ 17,800,000
Maximum aggregate commercial sales milestone payments											60,000,000.0
Maximum aggregate milestone payments											77,800,000
Specified development milestones payment										$ 800,000
2019 Xencor Agreement | Xencor | HBV Research Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum aggregate milestone payments											77,800,000
Specified development milestones payment										$ 300,000
2019 Xencor Agreement | Xencor | Influenza A and HBV Research Programs
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum aggregate milestone payments											$ 155,500,000
2020 Xencor Agreement | Xencor
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Written notice period for uncured material breach																				60 days
Written notice period for failure to make payment																				30 days
Licensed patents expiration period																				12 years
Written notice period for termination of licensed program																				60 days
Written notice period for termination of licensed program based on challenge																				30 days
Royalties																$ 900,000

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Balance Sheet Components - Schedule of Property and Equipment Net (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 32,017	$ 27,178
Less accumulated depreciation and amortization	(11,766)	(9,232)
Total property and equipment, net	20,251	17,946
Laboratory Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	18,168	16,769
Computer Equipment
Property Plant And Equipment [Line Items]
Property and equipment, gross	580	556
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	1,444	1,444
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	7,281	7,274
Construction in Progress
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 4,544	$ 1,135

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Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Balance Sheet Related Disclosures [Abstract]
Depreciation and amortization expenses	$ 1,300	$ 1,100	$ 2,538	$ 2,061

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Balance Sheet Components - Schedule of Accrued and Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Research and development expenses	$ 30,952	$ 49,384
Milestone payable	10,000
Payroll and related expenses	10,353	17,060
Excess funds payable under grant agreements	2,046	3,467
Operating lease liabilities, current	3,522	3,625
Other professional and consulting expenses	3,867	2,595
Other expenses	3,334	805
Total accrued and other liabilities	$ 64,074	$ 76,936

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Commitments and Contingencies - Additional Information (Details)	1 Months Ended	6 Months Ended
	Aug. 31, 2020	Jun. 30, 2021
Commitments And Contingencies [Line Items]
Lease arrangement, contractual expiration period, beginning year		2021
Lease arrangement, contractual expiration period, ending year		2033
Lessee, operating lease, existence of option to extend [true false]		true
Lessee, operating lease, option to extend		These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain lease agreements also provide the Company with the option to renew for additional periods ranging from one to five years.
GSKTSL | WuXi Biologics MSA and Samsung MSA | Antibody Program
Commitments And Contingencies [Line Items]
Percentage of development costs	72.50%
GSK | WuXi Biologics MSA and Samsung MSA | Antibody Program
Commitments And Contingencies [Line Items]
Percentage of development costs	27.50%
Minimum [Member]
Commitments And Contingencies [Line Items]
Lessee, operating lease, renewal term		1 year
Maximum
Commitments And Contingencies [Line Items]
Lessee, operating lease, renewal term		5 years

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Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2021 (excluding the six months ended June 30, 2021)	$ 3,428
2022	9,713
2023	11,387
2024	10,564
2025	8,042
Thereafter	67,466
Total lease payments	110,600
Less: imputed interest	(38,140)
Less: net tenant improvement allowance yet to be received	(10,287)
Present Value Of Operating Lease Liabilities	$ 62,173

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Commitments and Contingencies - Schedule of Operating Lease Amounts Recorded in Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands		Jun. 30, 2021	Dec. 31, 2020
Operating Leases
Current operating lease liabilities, net of tenant improvement allowances	[1]	$ 10,287	$ 7,913
Operating right-of-use assets		58,972	61,947
Operating lease liabilities, current		$ 3,522	$ 3,625
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]		Accrued and other liabilities	Accrued and other liabilities
Operating lease liabilities, noncurrent		$ 68,938	$ 66,556
Total operating lease liabilities		$ 72,460	$ 70,181

[1] Current portion of lease liabilities recorded in prepaid expenses and other current assets for which the lease incentives to be received exceed the minimum lease payments to be paid over the next twelve months.

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Stock-Based Awards - Summary of Stock Option Plans Activity (Details) - Stock Option $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2021 USD ($) $ / shares shares	Dec. 31, 2020 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Options,Outstanding, Beginning Balance | shares	9,798,282
Number of Options,Granted | shares	2,583,490
Number of Options,Exercised | shares	(1,050,899)
Number of Options,Forfeited | shares	(628,801)
Number of Options,Outstanding, Ending Balance | shares	10,702,072	9,798,282
Number of Options,Vested and expected to vest | shares	10,702,072
Number of Options,Vested and exercisable | shares	3,262,612
Weighted Average Exercise Price, Beginning Balance | $ / shares	$ 5.25
Weighted Average Exercise Price, Granted | $ / shares	61.99
Weighted Average Exercise Price, Exercised | $ / shares	5.66
Weighted Average Exercise Price, Forfeited | $ / shares	28.19
Weighted Average Exercise Price, Ending Balance | $ / shares	30.24	$ 5.25
Weighted Average Exercise Price,Vested and expected to vest | $ / shares	30.24
Weighted Average Exercise Price,Vested and exercisable | $ / shares	$ 13.40
Weighted Average Remaining Contractual Term	8 years 6 months	8 years 6 months
Weighted Average Remaining Contractual Term,Vested and expected to vest	8 years 6 months
Weighted Average Remaining Contractual Term,Vested and exercisable	7 years 8 months 12 days
Aggregate Intrinsic Value, Balance | $	$ 223,581
Aggregate Intrinsic Value, Vested and expected to vest | $	223,581
Aggregate Intrinsic Value, Vested and exercisable | $	$ 110,878

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Stock-Based Awards - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unamortized stock-based compensation expense related to stock option	$ 203.1
Estimated weighted average period	2 years 8 months 12 days
RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Estimated weighted average period	3 years 7 months 6 days
Unrecognized compensation cost related to unvested restricted stock	$ 59.7

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Stock-Based Awards - Summary of Assumptions Used for Estimating the Fair Value of Stock Options Granted (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected stock price volatility, minimum	106.00%	95.70%	103.10%	88.80%
Expected stock price volatility, maximum	110.20%	100.60%	110.20%	100.60%
Risk-free interest rate, minimum	1.00%	0.40%	0.60%	0.40%
Risk-free interest rate, maximum	1.10%	0.50%	1.20%	1.20%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term of options (in years)	5 years 6 months	5 years 6 months	5 years 6 months	5 years 6 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term of options (in years)	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days

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Stock-Based Awards - Summary of Restricted Stock Activity and Restricted Stock Units (Details)	6 Months Ended
	Jun. 30, 2021 $ / shares shares
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Unvested, Beginning Balance | shares	0
Number of Shares, Granted | shares	1,050,995
Number of Shares, Vested | shares	0
Number of Shares, Cancelled | shares	(28,550)
Number of Shares, Unvested, Ending Balance | shares	1,022,445
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 0
Weighted Average Grant Date Fair Value, Granted | $ / shares	64.25
Weighted Average Grant Date Fair Value, Vested | $ / shares	0
Weighted Average Grant Date Fair Value, Cancelled | $ / shares	67.38
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 64.16
Restricted Stock Awards (RSAs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Unvested, Beginning Balance | shares	89,261
Number of Shares, Granted | shares	0
Number of Shares, Vested | shares	(87,409)
Number of Shares, Cancelled | shares	0
Number of Shares, Unvested, Ending Balance | shares	1,852
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares	$ 1.48
Weighted Average Grant Date Fair Value, Granted | $ / shares	0
Weighted Average Grant Date Fair Value, Vested | $ / shares	1.48
Weighted Average Grant Date Fair Value, Cancelled | $ / shares	0
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 1.53

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Stock-Based Awards - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 20,998	$ 5,750	$ 36,469	$ 8,717
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	10,860	2,700	19,290	4,188
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total stock-based compensation	$ 10,138	$ 3,050	$ 17,179	$ 4,529

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Net Income (Loss) Per Share - Schedule of Basic and Diluted Net Income (loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings Per Share [Abstract]
Net income (loss)	$ 61,813	$ (31,167)	$ (107,098)	$ (108,407)
Weighted-average shares outstanding, basic	130,121,943	114,980,652	128,938,851	111,684,283
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Options to purchase common stock	3,635,656
Restricted shares subject to future vesting	19,409
Contingently issuable shares	12,969
Weighted-average shares outstanding, diluted	133,789,977	114,980,652	128,938,851	111,684,283
Net income (loss) per share, basic	$ 0.48	$ (0.27)	$ (0.83)	$ (0.97)
Net income (loss) per share, diluted	$ 0.46	$ (0.27)	$ (0.83)	$ (0.97)

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Net Income (Loss) Per Share - Schedule of Potentially Dilutive Securities Not Included in Diluted Per Share Calculations (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted net loss per share (in shares)	7,169,488	9,777,731	11,837,291	9,777,731
Options Issued and Outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted net loss per share (in shares)	6,164,036	8,932,845	10,702,072	8,932,845
Estimated shares issuable under the ESPP
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted net loss per share (in shares)	71,582	0	71,582	0
Restricted Shares Subject to Future Vesting
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted net loss per share (in shares)	933,870	844,886	1,024,297	844,886
Contingently issuable shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive shares excluded from calculation of diluted net loss per share (in shares)	0	0	39,340	0