Vir goes Grinch, eliminating 75 posts and shuttering 2 US sites to slow erosion of $1.7B cash pile
Vir Biotechnology has delivered unseasonably gloomy news to its employees, outlining plans to eliminate 75 positions and shutter two U.S. facilities to save more than $40 million a year.
San Francisco-based Vir is sitting on a $1.7 billion COVID-19 windfall but revenues from its collaboration with GSK have collapsed in 2023. Marianne De Backer, Ph.D., who took over as CEO in April, has moved to reset the company, closing its innate immunity small molecule group and expanding its focus to autoimmune diseases and immuno-oncology.
Vir followed up with news of more changes after the market closed on Wednesday. The biotech is set to eliminate 75 positions, around 12% of its headcount, and close sites in St. Louis, Missouri and Portland, Oregon next year. Work will continue at sites in San Francisco and Switzerland. The 75 eliminated positions include posts at the innate immunity small molecule group.
“While these decisions are difficult, they will enable us to prioritize investment in the clinical execution of our chronic hepatitis delta and chronic hepatitis B programs, as well as on broadening the long-term applicability of our world-class monoclonal antibody platform beyond infectious diseases to autoimmune diseases and oncology,” De Backer said in a statement.
In its annual report for 2022, Vir said it leased 60,649 square feet of office, R&D and laboratory space in St. Louis. The biotech only entered into a sublease agreement on some of the space in October 2021. That lease, one of two covering the St. Louis site, is set to expire at the end of 2028.
The Portland site is smaller, covering 7,536 square feet of office, R&D, engineering and laboratory space that is leased through 2027. There is overlap between the work done in Portland and San Francisco, with Vir stating that the two locations include laboratories for process development, production of human cytomegalovirus research viral seed stock and selected quality control testing for product candidates.
Shuttering the two facilities will leave Vir heavily focused on its corporate headquarters in San Francisco, where it leases 179,566 square feet of office, R&D, engineering and laboratory space. Work is continuing at Vir’s site in Bellinzona, Switzerland but that is a smaller operation, covering 15,642 square feet.
Vir expects the closures and layoffs to cost up to $40 million. The biotech is hoping to recoup that outlay quickly, forecasting annual savings of at least $40 million as a result of the efforts to cut its costs.