British drugmaker GlaxoSmithKline will invest $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 35 percent before the bell, while GSK was up about 1 percent.
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 $37.73 per Vir share, a 10 percent premium to the stock's Friday close.
Vir's shares, trading at $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 US government in March to produce massive quantities of coronavirus vaccines.