Vir Biotechnology and GlaxoSmithKline extend their partnership

Vir Biotechnology (NASDAQ: VIR) and GlaxoSmithKline (NYSE: GSK) went from a romantic relationship to a full-fledged one in less than a year. Could a wedding be next?

Last April, the duo plugged to develop antibody treatments and preventive options for COVID-19. As part of the deal, GlaxoSmithKline took a $ 250 million stake in Vir.

The British pharmaceutical giant must have liked what it saw in American biotechnology as it expands its relationship with Vir to include treatments for the flu. The agreement gives GlaxoSmithKline an exclusive option to co-develop Vir’s leading influenza treatment, VIR-2482, and includes a three-year research collaboration on next-generation antibodies for the prevention or treatment of influenza, as well as as antibody treatments up to three undisclosed targets. The companies are also expanding their collaboration in functional genomics beyond the coronavirus to other respiratory virus targets.

Image source: Getty Images.

Vir will receive an upfront payment of $ 225 million and GlaxoSmithKline is also investing an additional $ 120 million in biotechnology. If GlaxoSmithKline exercises its license to co-develop VIR-2482 at the end of phase 2 development, Vir will receive an additional $ 300 million. Vir will also be eligible for regulatory milestone payments of up to $ 200 million.

It’s easy to imagine that GlaxoSmithKline might just buy Vir at some point, given that it already owns a lot of the biotech and is about to make some big payments. But what complicates such a potential marriage are Vir’s other relationships with Alnylam Pharmaceuticals (NASDAQ: ALNY) and Gilead Sciences (NASDAQ: GILD). GlaxoSmithKline may not be interested in purchasing with additional baggage.

Whether or not the relationship ends in a full union, Vir shareholders are rightly excited about GlaxoSmithKline’s increased interest in the company. As of 2:10 p.m. EST, shares of Vir were up 16.2%.

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