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Vir Biotechnology: Avoid This Overvalued Stock In March 2020

Mar. 03, 2020 11:47 AM ETVir Biotechnology, Inc. (VIR)ALNY, ARWR, GILD, INO, IONS, MRNA, REGN, SNY4 Comments
Healthcare on the Move profile picture
Healthcare on the Move


  • Vir Biotechnology lags significantly behind Gilead Sciences in development of Covid-19 treatment.
  • The current valuation does not leave much upside even if the company reports positive results from Phase 2 trial of VIR-2218.
  • Investors should wait for a much lower entry point.

The decision to buy or sell a stock is dependent not only on the company fundamentals but also on its trading price. Many strong businesses enter the avoid or sell zone, simply because of exaggerated prices and seemingly little to no upside potential. One such stock that a value investor needs to shy from is Vir Biotechnology (NASDAQ:VIR).

Today, we will see why fundamentals fail to justify Vir Biotechnology's valuation levels.

Company overview

Vir Biotechnology is a clinical-stage immunology company focused on developing novel treatments targeting infectious diseases. The company's four therapeutic platforms, antibody platform, T Cell platform, Innate immunity platform, and siRNA platform, are working on enhancing the immune response to pathogens. The company's lead asset, VIR-2218, is currently being evaluated in Phase 2 in HBV (hepatitis B) indication. Besides, the company also has multiple early-stage investigational drug candidates being evaluated in tuberculosis, influenza, and HIV indications.

Recently, though, the stock has jumped over 100% on news of its involvement in researching antibodies that can work against the novel coronavirus or COVID-19 virus strain.

Vir Biotechnology is deeply overvalued on coronavirus hype.

On February 12, Vir Biotechnology announced that it has identified two monoclonal antibodies that bind to the SARS-CoV-2 virus which causes the COVID-19 disease. These antibodies are targeting the SARS-CoV-2 spike protein in the region that the virus uses to enter cells through the cellular receptor ACE2. On February 25, the company announced a manufacturing collaboration with WuXi Biologics to advance and produce human monoclonal antibodies for the potential treatment of COVID-19.

Although these are promising developments especially in a world fighting a pandemic, the fact remains that the company is not even close to commencing first-in-human trials for the investigational COVID-19 therapeutic. The company has isolated antibodies from patients who survived SARS and is studying it for COVID-19

This article was written by

Healthcare on the Move profile picture
I am an MBA in finance and an engineering graduate. I have also completed the CFA certification.I am involved in international trade and have been passionately tracking global equity markets for more than 7 years. I mainly focus on spotting long-term value investments in biotechnology, pharmaceutical, hospital, and medical device sectors. In the last two years, I have also been studying cannabis and hemp sectors.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (4)

Trader of Orange profile picture
Buy zone is now imo.
what is happening to vbiv????
His mad because he missed the boat
A family member works for Vir Bio, in SF. There's much you're not aware of regarding this company.
Your thesis is incorrect, and your value analysis is flawed. That's all I'm going to say, and I won't respond to any replies on this venue.
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