In a Phase 1 study, 82% of patients on VIR-5500 achieved at least a 50% reduction in PSA levels—a result analysts praised as competitive in the prostate cancer space.
Astellas Pharma is committing $335 million and betting over a billion more to collaborate with Vir Biotechnology on a T cell engager that analysts at Truist Securities called a “robust competitor” in the prostate cancer market.
Under the terms of the agreement, Astellas will make a $240 million cash payment, a $75 million equity investment and pay a $20 million near-term award. Vir will also be eligible for up to $1.37 billion in development, regulatory and sales milestones, plus double-digit royalties on sales outside the U.S., according to a Monday release.
The deal’s centerpiece is VIR-5500, an investigational T cell engager that uses a bispecific molecule to bind to both the prostate-specific membrane antigen (PSMA) and CD3 proteins. Through this mechanism of action, the drug stimulates the immune system and directs its response to the target malignant cells.
VIR-5500 was developed using Vir’s PRO-XTEN masking technology, which renders therapies inactive until they are in the vicinity of a tumor. Phase 1 data, also released Monday, showed that VIR-5500 elicited a dose-dependent anti-tumor response, with 82% of treated patients achieving a 50% or greater decrease in prostate-specific antigen (PSA) levels, a biomarker of the cancer. Meanwhile, 53% saw at least a 90% PSA reduction.
Reacting to the early-stage readout, Truist said VIR-5500 “emerges as a more robust contender” among PSMA-targeting therapies. Vir’s masking technology, they continued, “enables high-dose VIR-5500 administration,” leading to stronger treatment responses than other treatments under development.
Under the terms of the agreement, Astellas will be responsible for 60% of VIR-5500’s global development costs, while Vir will shoulder the remaining 40%. Vir will continue to conduct the asset’s Phase 1 development, after which Astellas will take over all subsequent development activities.
Vir will have the option to co-promote VIR-5500 in the U.S., with profits and losses split evenly. Astellas will have exclusive rights abroad.
The deal for VIR-5500 beefs up Astellas’ prostate cancer portfolio, which currently is anchored by the oral drug Xtandi. In the first nine months of the company’s 2025 fiscal year, Xtandi made $4.72 billion. The biotech is also advancing abiraterone decanoate, a small-molecule drug in Phase 2 development.
Astellas’ other cancer products include the Pfizer-partnered bladder cancer drug Padcev and the stomach cancer therapy Vyloy.
For Vir, the Astellas agreement gives it access not just to additional capital but also to a proven market infrastructure. “Astellas’ established commercial footprint in prostate cancer through Xtandi further strengthens the strategic positioning of VIR-5500,” Truist said.
