A truncated SARS-CoV-2 nucleocapsid protein enhances virus fitness by evading antiviral responses

Viruses face a selective pressure to evade cellular antiviral responses to control the outcome of an infection. However, due to their limited genome size, viruses must adopt unique strategies to confront cellular sensors. Since emerging in humans, SARS-CoV-2 has accrued multiple mutations throughout its genome, some of which enhanced virus replication and led to the rise of viral variants. However, the biological consequences of many of these changes remain to be discovered. Here, we show that SARS-CoV-2 produces a truncated form of the nucleocapsid protein, called N* ^M210 . Due to the acquisition of a viral transcription regulatory sequence (TRS) in the N gene, certain variants, such as Omicron, produce a new viral mRNA that markedly increases N* ^M210 expression. We show that N* ^M210 is a dsRNA binding protein, which inhibits multiple arms of the cellular antiviral response, including blocking interferon induction and inhibiting stress granule formation. We created a panel of recombinant SARS-CoV-2 viruses (rSARS-2) with mutations in the N gene that increased or decreased N* ^M210 production. We show that N* ^M210 production increases virus fitness, as viruses that produce more N* ^M210 outcompeted wild-type rSARS-2. We demonstrate that the fitness advantage provided by N* ^M210 is partly due to its ability to potently block stress granules. We propose a model where, to evade the cellular antiviral response, SARS-CoV-2 has evolved a mechanism to increase the production of a truncated form of the N protein, which broadly limits the activation of dsRNA-induced antiviral responses, tipping the balance in favour of the virus in the battle for control of the cell.