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Arbutus Reports Third Quarter 2023 Financial Results and Provides Corporate Update

Multiple data presentations upcoming at AASLD – The Liver Meeting®, including preliminary data from Phase 2a clinical trial combining imdusiran, our RNAi therapeutic, with VTP-300, an HBV antigen-specific immunotherapy

Dosing continues in two Phase 2a combination clinical trials with imdusiran and in a Phase 1a/1b clinical trial with AB-101, our oral PD-L1 checkpoint inhibitor

Reducing workforce by 24% as a result of recent pipeline optimization

Cash runway extended into first quarter 2026

Conference Call and Webcast Today at 8:45 AM ET

WARMINSTER, Pa., Nov. 07, 2023 (GLOBE NEWSWIRE) -- Arbutus Biopharma Corporation (NASDAQ:ABUS) ("Arbutus" or the "Company"), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop a cure for people with chronic hepatitis B virus (cHBV) infection, today reported third quarter 2023 financial results and provided a corporate update.

"We are looking forward to our upcoming data presentations at the American Association for the Study of Liver Diseases (AASLD) – The Liver Meeting® 2023, specifically the preliminary data from the Phase 2a clinical trial, AB-729-202, evaluating imdusiran, our RNAi therapeutic, in combination with VTP-300 and a nucleos(t)ide analogue in patients with chronic hepatitis B virus," said William Collier, President and Chief Executive Officer of Arbutus Biopharma. "These data have the potential to support our hypothesis that a functional cure for cHBV can be achieved by reducing surface antigen, suppressing HBV DNA and boosting the immune system. We continue to explore imdusiran as a cornerstone therapy as we dose patients in the additional treatment arm of the AB-729-202 trial that adds a low dose of nivolumab (Opdivo®), an anti-PD-1 monoclonal antibody, to the triple combination, as well as continuing to dose and follow patients in the on-going AB-729-201 clinical trial combining imdusiran with short durations of Peg-IFNα-2a and ongoing NA therapy. In addition, we have dosed our first group of healthy subjects in our Phase 1a/1b clinical trial with AB-101 and are on-track to report data from the first part of this trial in the first half of 2024. We look forward to sharing additional updates on our progress in the coming months."

Mr. Collier, continued, "Following our recent pipeline optimization, we made the difficult decision to reduce our workforce as we continue to manage our operating expenses. I'd like to thank our departing employees for their dedication and valuable contributions towards our mission. The Company remains committed to continuing discovery research in chronic HBV."

Pipeline Updates and Key Milestones

Imdusiran (AB-729, RNAi Therapeutic)

  • Arbutus will be presenting preliminary data at AASLD from the first group of patients in its Phase 2a clinical trial (AB-729-202) that is evaluating imdusiran, nucleos(t)ide analogue (NA) therapy and Barinthus Bio's (formerly Vaccitech plc) VTP-300, an HBV antigen-specific immunotherapy.

    Enrollment is ongoing in the expanded cohort of the AB-729-202 clinical trial that is designed to enroll 20 patients who will receive imdusiran (60mg every 8 weeks) plus NA therapy for 24 weeks followed by VTP-300 plus up to two doses of low-dose nivolumab. Preliminary data from this additional treatment arm are expected in 2024.
  • Follow-up is continuing in the Company's on-going Phase 2a clinical trial (AB-729-201), evaluating the safety, tolerability and antiviral activity of the combination of imdusiran and pegylated interferon alfa-2a (IFN) in patients with cHBV. Preliminary data presented at the EASL Congress in June 2023 suggest that the addition of IFN to imdusiran was generally well tolerated and appears to result in continued HBsAg declines in some patients. Arbutus plans to provide updates from this clinical trial in 2024.

AB-101 (Oral PD-L1 Inhibitor)

  • In September, the Company dosed the first subject in its Phase 1a/1b double-blind, randomized, placebo-controlled, clinical trial (AB-101-001) designed to investigate the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single and multiple oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV. The trial will be conducted in three parts starting with single ascending doses in healthy subjects, followed by multiple ascending doses in healthy subjects and culminating with multiple doses in patients with cHBV. Safety and PK/PD assessments will be performed prior to dose escalation in all trial parts. Initial data from part one of the trial are expected in the first half of 2024.

Corporate Updates

In connection with the Company's decision in September to focus its pipeline on its HBV clinical stage compounds and discontinue its research programs, Arbutus has taken steps to streamline its organization and has reduced its workforce by 24%, effective November 6, 2023, primarily affecting its research function. As a result, Arbutus will incur a one-time restructuring charge of approximately $1.1 million that will be recorded in the fourth quarter of 2023.

With the organizational changes announced today and its ongoing cost management efforts, the Company now expects its current cash, cash equivalents and investments will be sufficient to fund its operations into the first quarter of 2026. The Company remains committed to continuing discovery research in chronic HBV.

In a separate press release issued today, Arbutus announced that William Collier will be retiring as President and CEO, as well as a member of the Company's Board of Directors, at the end of 2023 and Michael J. McElhaugh, Arbutus Co-founder and COO, will serve as interim CEO and will join the Company's Board of Directors.

The above corporate updates do not affect the Company's pending litigations. Arbutus will continue to protect and defend its intellectual property, which is the subject of the on-going lawsuits against Moderna and Pfizer/BioNTech. The Company is seeking fair compensation for Moderna's and Pfizer/BioNTech's use of its patented LNP technology that was developed with great effort and at a great expense, without which Moderna and Pfizer/BioNTech's COVID-19 vaccines would not have been successful. Document production is currently on-going in the lawsuit against Moderna with the claim construction hearing scheduled for February 7, 2024. Document and written discovery in the lawsuit against Pfizer/BioNTech is ongoing and a date for a claim construction hearing has not been set.

Financial Results 

Cash, Cash Equivalents and Investments 

As of September 30, 2023, we had cash, cash equivalents and investments in marketable securities of $144.7 million compared to $184.3 million as of December 31, 2022. During the nine months ended September 30, 2023, we used $68.6 million in operating activities, which was partially offset by $26.0 million of net proceeds from the issuance of common shares under our "at-the-market" offering program. We expect our 2023 net cash burn to range from between $90 to $95 million, excluding any proceeds received from our "at the market program". We believe our cash runway will be sufficient to fund our operations into the first quarter of 2026. 

Revenue 

Total revenue was $4.7 million for the three months ended September 30, 2023, compared to $6.0 million for the same period in 2022. The decrease of $1.3 million was due primarily to a decrease in royalty revenue because of a decrease in Alnylam's sales of ONPATTRO.

Operating Expenses 

Research and development expenses were $20.2 million for the three months ended September 30, 2023 compared to $20.1 million for the same period in 2022. A decrease in expenses for drug supply manufacturing for our imdusiran Phase 2a clinical trials and expenses for our AB-836 Phase 1a/1b clinical trial, which was discontinued in the fourth quarter of 2022, were offset by an increase in expenses for our ongoing AB-101 clinical trial and our coronavirus program, which was discontinued in the third quarter of 2023. General and administrative expenses were $5.8 million for the three months ended September 30, 2023, compared to $3.5 million for the same period in 2022. This increase was due primarily to increases in employee-related costs, including non-cash stock-based compensation expense, and professional fees.

Net Loss 

For the three months ended September 30, 2023, our net loss was $20.1 million, or a loss of $0.12 per basic and diluted common share, as compared to a net loss of $17.6 million, or a loss of $0.12 per basic and diluted common share, for the three months ended September 30, 2022. 

Outstanding Shares 

As of September 30, 2023, we had approximately 167.7 million common shares issued and outstanding, as well as approximately 21.0 million stock options and unvested restricted stock units outstanding. Roivant Sciences Ltd. owned approximately 23% of our outstanding common shares as of September 30, 2023. 


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share and per share data)

  Three Months Ended September 30,     Nine Months Ended September 30,
  2023     2022     2023     2022  
Revenue                      
Collaborations and licenses $ 3,935     $ 3,607     $ 13,329     $ 27,381  
Non-cash royalty revenue   723       2,345       2,667       5,393  
Total revenue   4,658       5,952       15,996       32,774  
Operating expenses                      
Research and development   20,169       20,055       56,136       61,459  
General and administrative   5,842       3,493       17,374       13,585  
Change in fair value of contingent consideration   205       215       (158 )     624  
Total operating expenses   26,216       23,763       73,352    

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