Vir Biotechnology (VIR) Could Be 54% Undervalued After Gilead Collaboration

Vir Biotechnology (VIR) has just signed a collaboration with Gilead that grants Gilead exclusive rights to develop three PRO-XTEN dual-masked T-cell engager candidates for solid tumors, supported by sizable upfront cash and milestone payments.

Vir Biotechnology’s latest moves are landing on a share price that closed at $9.96, with the stock giving up 4.87% on a 1-day share price basis and 14.87% over 7 days, even though the 90-day share price return is 7.91% and the year-to-date share price return is 67.68%. Over a longer horizon, total shareholder return is 72.32% over 1 year and 17.87% over 3 years, but a 5-year total shareholder return decline of 75.23% underlines how fragile confidence has been. Recent headlines, from FDA Fast Track status for VIR-5500 to the equity investment and licensing tie up with Gilead, are giving investors fresh reasons to reassess both the growth potential of Vir’s oncology and infectious disease pipeline and the risks that have kept the long run record uneven.

Scan how other oncology and biotech players are reacting to similar deal momentum by reviewing the hand-picked 20 high quality undiscovered gems alongside Vir Biotechnology’s latest moves.

Vir Biotechnology now has a fresh Gilead tie up on one side and a falling share price on the other. Is this latest swing pricing in business progress, or is it simply sentiment whiplash ahead of valuation work?

Most Popular Narrative: 54% Undervalued

At a last close of $9.96, the most followed narrative around Vir Biotechnology anchors on a fair value of $21.56. This frames the recent pullback as a pricing gap rather than a clean verdict on execution.

The analysts have a consensus price target of $21.56 for Vir Biotechnology based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $30.0, and the most bearish reporting a price target of just $16.0.

See why 13 investors see Vir Biotechnology as 54% undervalued.

Result: Fair Value of $21.56 (UNDERVALUED)

Still, the story for Vir Biotechnology can change quickly if unproven therapies stumble in trials or if regulatory decisions and partner disputes derail commercialization timelines.

Find out about the key risks to this Vir Biotechnology narrative.

Next Steps

Sentiment in this piece might sound cautious, yet your decision should rest on your own read of the numbers and risk flags. To pressure test Vir Biotechnology against that view, review the 3 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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