REUTERS: British drugmaker GlaxoSmithKline will invest US$250 million in Vir Biotechnology Inc and collaborate to develop potential treatments for COVID-19, the disease caused by the new coronavirus, the companies said on Monday.
Vir's shares jumped 35per cent before the bell, while GSK was up about 1per cent.
Drugmakers across the globe are rushing to develop a treatment or vaccine for the fast-spreading coronavirus that has killed over 68,400 people globally. There are currently no approved treatments for the disease.
The collaboration will bring Vir's monoclonal antibody platform technology and GSK's expertise in functional genomics under one umbrella.
The companies said initial focus will be to accelerate development of Vir's investigational treatments, VIR-7831 and VIR-7832, and plan to directly start with a mid-stage trial within the next three to five months.
Experts have said it could take 12 to 18 months to develop a coronavirus vaccine.
The equity investment from GSK is priced at US$37.73 per Vir share, a 30per cent premium to the stock's Friday close.
Vir's shares, trading at US$36.50 on Monday, have more than doubled in the year up to Friday's close.
GSK has so far focused on providing adjuvants, efficacy boosters that play a vital role in many vaccines, as part of its efforts to find potential vaccines against the coronavirus.
This is California-based Vir's second partnership with a major drugmaker for the development of a potential coronavirus treatment, having last month signed a letter of intent with Biogen Inc.
Gilead Sciences Inc is also testing its drug remdesivir as a potential coronavirus treatment.
Moderna Inc, which started testing its vaccine candidate in people last month, signed deals with the U.S. government in March to produce massive quantities of coronavirus vaccines.
(This story corrects premium to 30per cent from 10per cent in paragraph 7.)
(Reporting by Trisha Roy in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)