Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage
biopharmaceutical company primarily focused on developing a cure
for people with chronic hepatitis B virus (HBV) infection, as well
as therapies to treat coronaviruses (including COVID-19), today
reports its first quarter 2021 financial results and provides a
corporate update.
William Collier, President and Chief Executive
Officer of Arbutus, stated, “We had a productive first quarter of
2021. With the initiation of the Phase 1a/1b clinical trial of
AB-836, our oral capsid inhibitor, together with the ongoing
clinical development of AB-729, we now have two proprietary HBV
agents in development. This progress reflects our objective to
develop a combination regimen that provides a functional cure for
people living with HBV. We were also gratified to establish an
innovative collaboration with X-Chem, Inc. and Proteros
biostructures GmbH. The objective of this alliance is to expedite
our efforts to discover an effective oral antiviral therapy against
coronaviruses including SARS-CoV-2 targeting the main
protease.”
Mr. Collier added, “Looking ahead, we expect an
eventful 2021 including: continued longer term Phase 1a/1b dosing
results for AB-729; initiation of two Phase 2 proof-of-concept
clinical trials for AB-729 with one or more approved or
investigational agents; and initial Phase 1a/1b data from our
proprietary oral capsid inhibitor, AB-836.”
Pipeline Update
AB-729
- Arbutus is currently conducting a
single- and multi-dose Phase 1a/1b clinical trial to determine the
safety, tolerability, pharmacokinetics, and pharmacodynamics of
AB-729 in healthy subjects and in subjects with chronic HBV
infection.
- Results to date demonstrate that
treatment of AB-729 using the 60 mg and 90 mg doses has been well
tolerated after a single dose. Efficacy results to date suggest
that repeat dosing using the 60 mg dose every 4 weeks resulted in a
continuous and robust mean HBsAg decline at week 24 (-1.84 log10
IU/mL, N=7). Repeat dosing using the 60 mg dose every 8 weeks
results in comparable mean HBsAg declines relative to the 60 mg
dose every 4 weeks at week 16 (-1.39 log10 IU/mL vs -1.44 log10
IU/mL, p<0.7). In HBV DNA positive CHB subjects, a single 90 mg
AB-729 dose resulted in robust mean HBsAg (-1.02 log10 IU/mL) and
HBV DNA (-1.53 log10 IU/mL) declines at week 12, as well as
decreases in HBV RNA and core-related antigen.
- Arbutus expects to provide
additional data from ongoing cohorts of the Phase 1a/1b clinical
trial in the second quarter of 2021, including 60 mg multi-dose
data (dosing interval every 4 and 8 weeks) and 90 mg multi-dose
data (dosing interval every 8 weeks). Data from the 90 mg every 12
weeks in HBV DNA negative subjects and the 90 mg every 8 weeks in
the HBV DNA positive subjects is expected in the second half of
2021. Arbutus also intends to advance AB-729 into two additional
proof-of-concept Phase 2 combination trials with one or more
approved or investigational agents in the second half of 2021 with
dosing of AB-729 as infrequently as every 8 or 12 weeks.
- Arbutus and Assembly initiated a
Phase 2 proof-of-concept combination clinical trial to evaluate
AB-729 in combination with Assembly’s lead core (capsid) inhibitor
candidate VBR and an NrtI for the treatment of subjects with
chronic HBV infection. The randomized, multi-center, open-label
Phase 2 clinical trial will evaluate the safety, pharmacokinetics,
and antiviral activity of the triple combination of VBR, AB-729 and
an NrtI compared to the double combinations of VBR with an NrtI and
AB-729 with an NrtI. Approximately 60 virologically-suppressed
subjects with HBeAg negative chronic HBV are expected to be
enrolled in the first cohort of the trial. Subjects will be dosed
for 48 weeks with VBR 300 mg orally once daily and AB-729 60 mg
subcutaneously every 8 weeks, with a 48-week follow-up period.
AB-836: Oral Capsid
Inhibitor
- In January 2020, Arbutus selected
AB-836 as its next-generation oral capsid inhibitor. AB-836 is from
a novel chemical series differentiated from competitor compounds,
with the potential for increased efficacy and an enhanced
resistance profile. Arbutus completed CTA/IND-enabling studies in
the fourth quarter of 2020 and initiated a Phase 1a/1b clinical
trial for AB-836 in the first quarter of 2021, with initial data
expected in second half of 2021.
HBV Discovery Programs
- Arbutus’ drug discovery efforts are
focused on follow-on compounds for its current HBV pipeline.
Arbutus expects to continue to advance its research in its oral
PD-L1 inhibitor and RNA-destabilizer programs.
Research Efforts to Combat COVID-19 and
Future Coronavirus Outbreaks
- Based on its extensive antiviral
drug discovery experience, Arbutus has established an internal
research program to identify new small molecule antiviral medicines
to treat COVID-19 and future coronavirus outbreaks. This effort,
led by Dr. Michael Sofia, Arbutus’ Chief Scientific Officer, is
focused on the discovery and development of new molecular entities
that address specific viral targets including the nsp12 viral
polymerase and the nsp5 viral protease. These targets are essential
viral proteins which Arbutus has experience in targeting. Arbutus
recently entered into a discovery research and license agreement
with X-Chem, Inc. and Proteros biostructures GmbH focused on the
discovery of novel inhibitors targeting the SARS-CoV-2 nsp5 main
protease (Mpro). The agreement is designed to accelerate the
development of pan-coronavirus agents to treat COVID-19 and
potential future coronavirus outbreaks.
Financial Results
Cash, Cash Equivalents and
Investments
Arbutus had cash, cash equivalents and
investments totaling $132.0 million as of March 31, 2021, as
compared to $123.3 million as of December 31, 2020. During the
three months ended March 31, 2021, Arbutus used $17.9 million in
operating activities, which was offset by $26.4 million of net
proceeds from the issuance of common shares under Arbutus’s ATM
program. The Company believes its cash, cash equivalents and
investments of $132.0 million as of March 31, 2021 are sufficient
to fund the Company’s operations through the third quarter of
2022.
Net Loss
Net loss attributable to common shares for the
three months ended March 31, 2021 was $19.6 million ($0.21 basic
and diluted loss per common share) as compared to $16.8 million
($0.25 basic and diluted loss per common share) for the three
months ended March 31, 2020. Net loss attributable to common
shares for the three months ended March 31, 2021 and 2020 included
non-cash expense for the accrual of coupon on the Company’s
convertible preferred shares of $3.2 million and $3.0 million,
respectively.
Operating Expenses
Research and development expenses were $13.4
million for the three months ended March 31, 2021 compared to $10.4
million in the same period in 2020. The increase in research and
development expenses for the three months ended March 31, 2021
versus the same period in 2020 was due primarily to higher expenses
for the Company’s clinical development and discovery programs,
including activities under our collaboration with Assembly and
internal research efforts to treat COVID-19 and future coronavirus
outbreaks, both of which initiated in mid-2020. General and
administrative expenses were $3.8 million for the three months
ended March 31, 2021 compared to $3.6 million for the same period
in 2020. This increase was due primarily to an increase in non-cash
stock-based compensation expense.
Outstanding Shares
The Company had approximately 96.2 million
common shares issued and outstanding as of March 31, 2021. In
addition, the Company had approximately 13.4 million stock options
outstanding and 1.164 million convertible preferred shares
outstanding, which (including the annual 8.75% coupon) will be
mandatorily convertible into approximately 23 million common shares
on October 18, 2021.
COVID-19 Impact
In December 2019 an outbreak of a novel strain
of coronavirus (COVID-19) was identified in Wuhan, China. This
virus continues to spread globally, has been declared a pandemic by
the World Health Organization and has spread to nearly every
country in the world. The impact of this pandemic has been, and
will likely continue to be, extensive in many aspects of society.
The pandemic has resulted in and will likely continue to result in
significant disruptions to businesses. A number of countries and
other jurisdictions around the world have implemented extreme
measures to try and slow the spread of the virus. These measures
include the closing of businesses and requiring people to stay in
their homes, the latter of which raises uncertainty regarding the
ability to travel to hospitals in order to participate in clinical
trials. Additional measures that have had, and will likely continue
to have, a major impact on clinical development, at least in the
near-term, include shortages and delays in the supply chain, and
prohibitions in certain countries on enrolling subjects in new
clinical trials. While we have been able to progress with our
clinical and pre-clinical activities to date, it is not possible to
predict if the COVID-19 pandemic will negatively impact our plans
and timelines in the future.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF LOSS(in thousands, except share and
per share data)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Revenue |
|
|
|
Collaborations and licenses |
$ |
1,154 |
|
|
$ |
835 |
|
Non-cash royalty revenue |
959 |
|
|
656 |
|
Total Revenue |
2,113 |
|
|
1,491 |
|
Operating expenses |
|
|
|
Research and development |
13,370 |
|
|
10,416 |
|
General and administrative |
3,847 |
|
|
3,553 |
|
Depreciation |
443 |
|
|
500 |
|
Change in fair value of contingent consideration |
129 |
|
|
112 |
|
Site consolidation |
— |
|
|
57 |
|
Loss from operations |
(15,676 |
) |
|
(13,147 |
) |
Other income (loss) |
|
|
|
Interest income |
39 |
|
|
345 |
|
Interest expense |
(772 |
) |
|
(1,041 |
) |
Foreign exchange gain (loss) |
28 |
|
|
(18 |
) |
Total other loss |
(705 |
) |
|
(714 |
) |
Net loss |
$ |
(16,381 |
) |
|
$ |
(13,861 |
) |
Dividend accretion of convertible preferred shares |
(3,212 |
) |
|
(2,978 |
) |
Net loss attributable to common shares |
$ |
(19,593 |
) |
|
$ |
(16,839 |
) |
Loss per share |
|
|
|
Basic and diluted |
$ |
(0.21 |
) |
|
$ |
(0.25 |
) |
Weighted average number of common shares |
|
|
|
Basic and diluted |
93,434,378 |
|
|
67,683,586 |
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
March 31, 2021 |
|
December 31, 2020 |
Cash, cash equivalents and marketable securities, current |
$ |
131,961 |
|
|
$ |
123,268 |
|
Accounts receivable and other current assets |
|
5,380 |
|
|
4,436 |
|
Total current assets |
137,341 |
|
|
127,704 |
|
Property and equipment, net of accumulated depreciation |
6,584 |
|
|
6,927 |
|
Right of use asset |
2,315 |
|
|
2,405 |
|
Other non-current assets |
— |
|
|
44 |
|
Total assets |
$ |
146,240 |
|
|
$ |
137,080 |
|
Accounts payable and accrued liabilities |
$ |
6,063 |
|
|
$ |
8,901 |
|
Liability-classified options |
198 |
|
|
250 |
|
Lease liability, current |
432 |
|
|
390 |
|
Total current liabilities |
6,693 |
|
|
9,541 |
|
Liability related to sale of future royalties |
19,366 |
|
|
19,554 |
|
Contingent consideration |
3,555 |
|
|
3,426 |
|
Lease liability, non-current |
2,477 |
|
|
2,593 |
|
Total stockholders’ equity |
114,149 |
|
|
101,966 |
|
Total liabilities and stockholders’ equity |
$ |
146,240 |
|
|
$ |
137,080 |
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW(in thousands)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Net loss |
$ |
(16,381 |
) |
|
$ |
(13,861 |
) |
Other non-cash items |
2,222 |
|
|
2,448 |
|
Changes in working capital |
(3,722 |
) |
|
(4,040 |
) |
Net cash used in operating activities |
(17,881 |
) |
|
(15,453 |
) |
Net cash provided by (used in) investing
activities |
18,221 |
|
|
(2,401 |
) |
Net cash provided by financing activities |
26,874 |
|
|
12,481 |
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
(44 |
) |
|
(10 |
) |
Increase (decrease) in cash and cash
equivalents |
$ |
27,170 |
|
|
$ |
(5,383 |
) |
Cash and cash equivalents, beginning of period |
52,251 |
|
|
31,799 |
|
Cash and cash equivalents, end of period |
$ |
79,421 |
|
|
$ |
26,416 |
|
Investments in marketable securities |
52,540 |
|
|
61,690 |
|
Cash, cash equivalents and marketable securities, end of
period |
$ |
131,961 |
|
|
$ |
88,106 |
|
|
|
|
|
|
|
|
|
Conference Call and Webcast
Today
Arbutus will hold a conference call and webcast
today, Wednesday, May 5, 2021 at 8:45 AM Eastern Time to provide a
corporate update. You can access a live webcast of the call, which
will include presentation slides, through the Investors section of
Arbutus’ website at www.arbutusbio.com or directly at Live Webcast.
Alternatively, you can dial (866) 393-1607 or (914) 495-8556 and
reference conference ID 4445858.
An archived webcast will be available on the
Arbutus website after the event. Alternatively, you may access a
replay of the conference call by calling (855) 859-2056 or (404)
537-3406, and reference conference ID 4445858.
About AB-729
AB-729 is an RNA interference (RNAi) therapeutic
targeted to hepatocytes using Arbutus’ novel covalently conjugated
N-acetylgalactosamine (GalNAc) delivery technology that enables
subcutaneous delivery. AB-729 inhibits viral replication and
reduces all HBV antigens, including hepatitis B surface antigen in
preclinical models. Reducing hepatitis B surface antigen is thought
to be a key prerequisite to enable reawakening of a patient’s
immune system to respond to the virus. Based upon clinical data
generated thus far in an ongoing single- and multi-dose Phase 1a/1b
clinical trial, AB-729 has demonstrated positive safety and
tolerability data and meaningful reductions in hepatitis B surface
antigen.
About AB-836
AB-836 is an oral HBV capsid inhibitor. HBV core
protein assembles into a capsid structure, which is required for
viral replication. The current standard-of-care therapy for HBV,
primarily nucleos(t)ide analogues that work by inhibiting the viral
polymerase, significantly reduce virus replication, but not
completely. Capsid inhibitors inhibit replication by preventing the
assembly of functional viral capsids. They also have been shown to
inhibit the uncoating step of the viral life cycle thus reducing
the formation of new covalently closed circular DNA (cccDNA), the
genetic reservoir which the virus uses to replicate itself.
About HBV
Hepatitis B is a potentially life-threatening
liver infection caused by HBV. HBV can cause chronic infection
which leads to a higher risk of death from cirrhosis and liver
cancer. Chronic HBV infection represents a significant unmet
medical need. The World Health Organization estimates that over 250
million people worldwide suffer from chronic HBV infection, while
other estimates indicate that approximately 2 million people in the
United States suffer from chronic HBV infection. Approximately
900,000 people die every year from complications related to chronic
HBV infection despite the availability of effective vaccines and
current treatment options.
About Arbutus
Arbutus Biopharma Corporation is a publicly
traded (Nasdaq: ABUS) biopharmaceutical company primarily dedicated
to discovering, developing and commercializing a cure for people
with chronic hepatitis B virus (HBV) infection. The Company is
advancing multiple drug product candidates that may be combined
into a potentially curative regimen for chronic HBV infection.
Arbutus has also initiated a drug discovery and development effort
for treating coronaviruses (including COVID-19). For more
information, visit www.arbutusbio.com.
Forward-Looking Statements and
Information
This press release contains forward-looking
statements within the meaning of the Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
and forward-looking information within the meaning of Canadian
securities laws (collectively, “forward-looking statements”).
Forward-looking statements in this press release include statements
about our objective to develop a combination regimen that provides
a functional cure for people living with HBV; our expectation to
provide additional data from the ongoing cohorts of the Phase 1a/1b
clinical trials of AB-729 in the second quarter of 2021, including
60 mg multi-dose data (dosing interval every 4 and 8 weeks) and 90
mg multi-dose data (dosing interval every 8 weeks); our expectation
to provide data from the 90 mg every 12 weeks in HBV DNA negative
subjects and the 90 mg every 8 weeks in the HBV DNA positive
subjects of Phase 1a/1b clinical trial of AB-729 in the second half
of 2021; our intention to advance AB-729 into two additional
proof-of-concept Phase 2 combination trials with one or more
approved or investigational agents in the second half of 2021 with
dosing of AB-729 as infrequently as every 8 or 12 weeks; our plans
with respect to the Phase 2 proof-of-concept combination clinical
trial to evaluate AB-729 in combination with Assembly Biosciences’
lead core/capsid inhibitor candidate VBR and an NrtI inhibitor for
the treatment of subjects with chronic HBV infection, including the
expected trial design, the expected number and type of patients to
be enrolled in the trial and the expected dosing schedule; the
potential for AB-836 to have increased efficacy and an enhanced
resistance profile; our expectation for initial data from the Phase
1a/1b clinical trial for AB-836 in the second half of 2021; the
expected continued advancement of our research in the oral PD-LE
inhibitor and RNA-destabilizer programs; our expectations and goals
for the collaboration with X-Chem and Proteros and any potential
benefits related thereto, including our expectation that the
alliance will expedite our efforts to discover an effective oral
antiviral therapy against coronaviruses including SARS-CoV-2
targeting the main protease; our expected cash runway through the
third quarter of 2022; and our expectations regarding the impact of
the COVID-19 pandemic on our business and clinical trials.
With respect to the forward-looking statements
contained in this press release, Arbutus has made numerous
assumptions regarding, among other things: the effectiveness and
timeliness of preclinical studies and clinical trials, and the
usefulness of the data; the timeliness of regulatory approvals; the
continued demand for Arbutus’ assets; and the stability of economic
and market conditions. While Arbutus considers these assumptions to
be reasonable, these assumptions are inherently subject to
significant business, economic, competitive, market and social
uncertainties and contingencies, including uncertainties and
contingencies related to the ongoing COVID-19 pandemic.
Additionally, there are known and unknown risk
factors which could cause Arbutus’ actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements contained herein. Known risk factors
include, among others: anticipated pre-clinical studies and
clinical trials may be more costly or take longer to complete than
anticipated, and may never be initiated or completed, or may not
generate results that warrant future development of the tested
product candidate; Arbutus may elect to change its strategy
regarding its product candidates and clinical development
activities; Arbutus may not receive the necessary regulatory
approvals for the clinical development of Arbutus’ products;
economic and market conditions may worsen; Arbutus, X-Chem and
Proteros may never realize the expected benefits of the
collaboration; market shifts may require a change in strategic
focus; and the ongoing COVID-19 pandemic could significantly
disrupt Arbutus’ clinical development programs.
A more complete discussion of the risks and
uncertainties facing Arbutus appears in Arbutus’ Annual Report on
Form 10-K, Arbutus’ Quarterly Reports on Form 10-Q and Arbutus’
continuous and periodic disclosure filings, which are available at
www.sedar.com and at www.sec.gov. All forward-looking statements
herein are qualified in their entirety by this cautionary
statement, and Arbutus disclaims any obligation to revise or update
any such forward-looking statements or to publicly announce the
result of any revisions to any of the forward-looking statements
contained herein to reflect future results, events or developments,
except as required by law.
Contact Information
Investors and Media
William H. CollierPresident and CEOPhone:
267-469-0914Email: ir@arbutusbio.com
Pam MurphyInvestor Relations ConsultantPhone:
267-469-0914Email: ir@arbutusbio.com
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