Vir Biotechnology (NASDAQ: VIR) soared 27.7% today after the company announced a global collaboration with Japanese pharma giant Astellas Pharma (OTCBB: ALPMF)  to co-develop and co-commercialize its experimental prostate cancer therapy, VIR-5500.

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Under the terms of the deal, Astellas agreed to pay $335 million up front and in near-term milestones to Vir, and Vir stands to earn up to $1.37 billion more in development, regulatory, and sales milestone payments – plus royalties. Astellas also invested roughly $75 million at a premium to buy Vir shares as part of the deal.

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This is not trivial.

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Astellas will now lead commercialization outside the U.S., with Vir having the option to co-promote in the U.S. and share profits in that territory.

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If you’re unfamiliar, VIR-5500 is an investigational PSMA-targeted, dual-masked T-cell engager designed to activate a patient’s own immune system to attack metastatic prostate cancer cells. The “masking” is intended to reduce off-target effects and make the therapy both more effective and safer.

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The Phase 1 data so far are noteworthy:

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  • In the highest dose groups, ~82 % of patients saw their PSA (a marker of tumor activity) drop by at least 50 %, and over 50 % saw a 90 % decline — early signs that the drug is hitting its biological target hard.

  • The safety profile at this stage appears manageable, with no unexpected dose-limiting toxicities seen yet.

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Prostate cancer, especially metastatic castration-resistant prostate cancer (mCRPC), remains tough to treat, with limited options and poor survival rates once the disease progresses. This makes any promising therapy a serious focus for both patients and Big Pharma alike. Thus explaining the premium Astellas paid for access. 

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Worth noting: this news came on the heels of Vir reporting better-than-expected fourth-quarter revenue, partly boosted by licensing revenue tied to other pipeline deals, and a solid cash position heading into 2026. And with the Astellas deal, Vir’s runway now extends into mid-2028. 

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