Vir Biotechnology’s workforce changes alone are expected to bring in around $50 million of annual cost savings from next year. Vir Biotechnology’s second-quarter earnings report wasn’t short of big news. The company welcomed a trio of clinical-stage T-cell engagers (TCEs) from Sanofi while discarding a quarter of its workforce and a clutch of preclinical vaccine programs.This “strategic restructuring” is designed to push more resources into Vir’s hepatitis program “and focus on the highest near-term value opportunities,” the biotech explained.It means phasing out some preclinical programs like VIR-7229, a next-generation COVID monoclonal antibody that was being developed with funds from the U.S. government, as well as VIR-2981, a neuraminidase-targeting monoclonal antibody against influenza A and B.Also being thrown on the scrap heap is Vir’s T cell-based viral vector platform. The platform produced a preclinical therapeutic cancer vaccine called VIR-1949 as well as a HIV vaccine dubbed VIR-1388 that had made it into a phase 1 trial. These R&D changes will save $50 million through to the end of 2025, money that Vir plans to reinvest in candidates it licensed from Sanofi today.That deal, announced alongside yesterday’s earnings, sees Vir paying an undisclosed upfront fee and potential milestone payments for three masked TCEs in phase 1. SAR446309 is a dual-masked HER2-targeted TCE, while SAR446329 is a dual-masked PSMA-targeted TCE and SAR446368 is a dual-masked EGFR-targeted TCE.The deal also gives Vir exclusive use of the protease-cleavable masking platform that Sanofi acquired as part of its $1 billion buyout of Amunix Pharmaceuticals in 2021. The platform “can be applied to TCEs, cytokines, and other molecules by exploiting the intrinsically high protease activity of the tumor microenvironment to specifically activate drugs in tumor tissues,” Vir explained in an accompanying release.Alongside these pipeline changes, Vir is waving goodbye to around 140 employees—equivalent to 25% of its workforce. It means the company is set to end the year with about 435 employees—a decrease of around 200 from Vir’s “peak headcount” a year ago, the company explained.“This decision was not taken lightly yet is essential to ensure that our resources are aligned with our evolving strategy and that Vir is positioned for sustainable growth and long-term success,” Vir CEO Marianne De Backer, Ph.D., said in the Aug. 1 earnings report.These workforce changes alone are expected to bring in around $50 million of annual cost savings from next year. Combined with the elimination of 75 positions and the biotech’s small-molecule group back in December, it means the company will have reduced its costs by around $90 million since 2023 and will be able to use a portion of these savings to take on some key personnel tied to the Sanofi deal. Carving off a chunk of its workforce doesn’t come cheap, though, and Vir expects related expenses to land between $11 million and $13 million, primarily from severance payouts.It’s not like Vir was short of cash to begin with, either, having ended June with $1.43 billion in the bank.At the forefront of the restructured Vir will be its hepatitis program. In June, the company shared early data from a phase 2 trial suggesting that its hepatitis D cocktail—comprising tobevibart or elebsiran—may have an edge over Gilead Sciences' bulevirtide.“The positive preliminary SOLSTICE phase 2 study together with the recent FDA IND clearance and fast track designation for tobevibart and elebsiran for the treatment of chronic hepatitis delta infection highlight the encouraging momentum we’re building towards addressing the substantial unmet medical need for patients affected by this life-threatening disease,” De Backer said in yesterday’s release.“In addition, we are taking decisive steps to strategically restructure our organization and prioritize our resources to focus on the highest value near-term opportunities,” she added. “These key strategic decisions will enable us to drive sustainable growth and accelerate patient impact as we advance in our mission of powering the immune system to transform lives.”