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Glaxo (GSK) & Vir to Supply More COVID Antibody Doses in US

GlaxoSmithKline GSK and partner Vir Biotechnology VIR announced that they have signed an agreement with the U.S. government to supply an additional 600,000 doses of their monoclonal antibody, sotrovimab. These doses will be supplied throughout the first quarter of 2022.

We remind investors that sotrovimab was granted emergency use authorization (EUA) by the FDA last May to treat mild-to-moderate COVID-19 in high-risk adults and pediatric patients (aged at least 12 years and weighing at least 40 kg). The drug is administered intravenously and marketed under the trade name Xevudy.

The agreement also allows the government to further procure additional doses of sotrovimab during second-quarter 2022. After taking into account this supply agreement with the U.S. government, both Glaxo and Vir have secured agreements with various entities across the world to supply nearly 1.7 million doses of sotrovimab.

The press release indicates that Glaxo and Vir could produce 2 million doses of sotrovimab in first-half 2022. Both the companies also expect to produce additional doses of their antibody treatment in second-half 2022.

Please note that this new supply agreement entered by Glaxo and Vir with the U.S. government is an amendment to a contract agreement signed between the same parties in November 2021 for the supply of sotrovimab doses for approximately $1 billion to the U.S. government by Dec 17, 2021.

The signing of the supply agreement for sotrovimab is beneficial for both the companies, especially the small but growing pharma company, Vir Biotechnology, whose current revenue source is the supply of sotrovimab doses.

For the trailing 12 months, Glaxo’s shares have risen 20.2% compared with the industry’s 19.1% increase.

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Shares of Vir have risen 8.5% in the same period against the industry’s 31.3% decline.

Image Source: Zacks Investment Research

Last month, the European Commission (EC) granted marketing authorization to sotrovimab for the early treatment of COVID-19. Glaxo and Vir procured a Joint Procurement Agreement in July 2021 with the EC to supply 220,000 doses of sotrovimab to the member states of the European Union.

In December 2021, Glaxo and Vir reported that sotrovimab demonstrated activity against the rapidly spreading Omicron variant and all other currently tested variants of concern and interest.

While sotravimab holds promise, it faces stiff competition from other monoclonal antibodies developed by Eli Lilly LLY and Regeneron REGN.

Lilly’s COVID-19 antibody cocktail comprises two monoclonal antibodies, bamlanivimab and etesevimab, which were initially granted EUA by the FDA in February 2021 to treat mild-to-moderate COVID-19 in high-risk adult and pediatric patients (aged at least 12 years and weighing at least 40 kg). The EUA was later expanded to include all pediatric patients including newborns.

Lilly’s cocktail medicine generated revenues of $217.1 million in third-quarter 2021.

Regeneron’s antibody cocktail, REGEN-COV comprises two monoclonal antibodies, casirivimab and imdevimab. It was granted EUA by the FDA in November 2020 to treat mild-to-moderate COVID-19 in high-risk adults and pediatric patients (aged at least 12 years and weighing at least 40 kg).

Sales from REGEN-COV have become a significant contributor to Regeneron’s overall top line in the recent quarters. For the first nine months of 2021, Regeneron recorded $4.7 billion in sales from REGEN-COV.

Both Lilly and Regeneron’s antibody cocktails have also received EUA from the FDA as post-exposure prevention (prophylaxis) for COVID-19 indication.

Zacks Rank

While Vir Biotechnology sports a Zacks Rank #1 (Strong Buy), GlaxoSmithKline carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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