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 second quarter 2020 financial results and provides a
corporate update.
William Collier, President and Chief Executive
Officer of Arbutus, stated, “Despite the challenging conditions
resulting from the COVID-19 pandemic, we continue to make steady
progress in our Phase 1a/1b clinical trial of AB-729, a
subcutaneously delivered RNAi agent, and have recently initiated an
additional AB-729 90 mg single-dose cohort in HBV DNA positive
subjects. We also intend to initiate two 90 mg multi-dose cohorts
in the second half of this year.”
Mr. Collier added, “Importantly, in March and
May of this year we announced positive preliminary results from
this trial, and we look forward to providing additional clinical
updates in the second half of 2020. We anticipate these updates
will include data from 60 mg multi-dose cohorts with dosing
intervals every four and eight weeks and 90 mg single-dose week 12
data in HBV DNA negative and positive subjects. We continue to
believe AB-729 is a potent RNAi agent capable of reducing HBsAg
plasma levels.”
Pipeline Update
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
(HBsAg), in preclinical models. Reducing HBsAg is thought to be
essential to enable the reawakening of a patient’s immune system so
that it can respond to the virus.
- 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.
- Preliminary positive safety data in single-dose cohorts of
healthy subjects and safety and efficacy data in the 60 mg and 180
mg single-dose cohorts in subjects with chronic HBV infection were
reported in March 2020. Additional follow-on week 12 data for the
60 mg single-dose cohort were reported in May 2020. The data
demonstrate the robust activity of AB-729 and, at week 12, the 60
mg single-dose achieved equivalent reductions in HBsAg as the 180
mg single-dose and did so while remaining generally safe and well
tolerated with no abnormal transaminase values in any of the six
subjects.
|
Mean HBsAg changes from baseline: |
|
|
60 mg Single-Dose Cohort (N=6) |
180 mg Single-Dose Cohort (N=4) |
|
Day 29 mean log10 IU/mL (Standard Error of the Mean) |
-0.24 (0.13) |
-0.8 (0.38) |
|
Week 12 (day 84) mean log10 IU/mL(Standard Error of the Mean) |
-0.99 (0.24) |
-0.98 (0.22) |
- Arbutus is dosing two 60 mg multi-dose cohorts of subjects with
chronic HBV infection with dosing intervals of every four and eight
weeks, respectively. Arbutus is also dosing subjects in a 90 mg
single-dose cohort. Results from these cohorts are expected in the
second half of 2020. We also intend to initiate two 90 mg
multi-dose cohorts in the second half of this year.
- Arbutus has also initiated an additional AB-729 90 mg
single-dose cohort in HBV DNA positive subjects with results
expected in the second half of 2020.
AB-836: Oral Capsid Inhibitor
- 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.
- In January 2020, Arbutus selected AB-836 as its next-generation
oral capsid inhibitor. AB-836 is from a novel chemical series
differentiated from Arbutus’ second generation capsid inhibitor
candidate, AB-506, as well as competitor compounds. AB-836 has the
potential for increased potency and an enhanced resistance profile
as compared to AB-506. Arbutus continues to expect completion of
IND-enabling studies by the end of 2020.
Early HBV R&D Programs
- Arbutus’ drug discovery efforts are focused on follow-on
compounds for its current HBV pipeline, including the development
of oral RNA-destabilizers that have shown compelling antiviral
effects in multiple HBV preclinical models. Arbutus is now focused
on advancing next-generation oral RNA-destabilizers with chemical
scaffolds distinct from Arbutus’ prior generation HBV RNA
destabilizer candidate, AB-452, through lead optimization. Arbutus
also has several oral anti-PD-L1 inhibitors in lead optimization
that are potentially capable of reawakening the immune response to
HBV in infected patients.
Research Efforts to Combat COVID-19 and Future
Coronavirus Outbreaks
- Earlier this year, the Company initiated an internal research
program to identify new small molecule antiviral medicines to treat
COVID-19 and future coronavirus outbreaks. Dr. Michael Sofia,
Arbutus’ Chief Scientific Officer, who was awarded the
Lasker-DeBakey Award for his discovery of sofosbuvir, brings
extensive antiviral drug discovery experience to this new program.
Arbutus has also joined forces with the COVID R&D consortium to
further support and expedite efforts to address the COVID-19
pandemic. At this time, Arbutus’ COVID-19 research program will
focus on the discovery and development of new molecular entities
that address specific viral targets including the nsp12 viral
polymerase and the viral protease. These targets are essential
viral proteins which Arbutus has experience in targeting. The
Company is actively screening multiple new oral molecular entities.
The establishment of the COVID-19 effort does not impact Arbutus’
current cash burn guidance for 2020 of $54 to $58 million.
Genevant Sciences Ltd.
Update
On July 23, 2020, the United States Patent and
Trademark Office before the Patent Trial and Appeal Board (PTAB)
announced their decision in Moderna Therapeutics, Inc.’s challenge
of the validity of U.S. Patent 8,058,069 (“the '069 Patent”). In
this decision, the PTAB determined no challenged claims were
unpatentable. While Arbutus is the patent holder, this patent has
been licensed to Genevant. The '069 Patent was included in this
license agreement between Genevant and Arbutus. Arbutus is
gratified by the recent decision of the PTAB, upholding the
validity of one of the patents protecting Arbutus’ LNP technology
that Arbutus licensed to Genevant. This decision reinforces
Arbutus’ continuing belief in the potential of this technology.
Arbutus is entitled to receive tiered low single
digit royalties on future sales of Genevant products covered by the
licensed patents. If Genevant sub-licenses the intellectual
property licensed by Arbutus to Genevant, Arbutus would receive
upon the commercialization of a product developed by such
sub-licensee the lesser of (i) twenty percent of the revenue
received by Genevant for such sublicensing and (ii) tiered low
single digit royalties on product sales by the sublicensee.
On July 31, 2020, Roivant recapitalized Genevant
through an equity investment and conversion of previously issued
convertible debt securities held by Roivant. Arbutus participated
in the recapitalization of Genevant with an equity investment of
$2.5 million. Following the recapitalization, Arbutus owns
approximately 16% of the common equity of Genevant. Arbutus’
entitlement to receive future royalties or sublicensing revenue
from Genevant remains unchanged.
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.
Financial Results
Cash, Cash Equivalents and
Investments
Arbutus had cash, cash equivalents and
investments totaling $84.0 million as of June 30, 2020, as
compared to $90.8 million as of December 31, 2019. During the
six months ended June 30, 2020, Arbutus used $24.3 million in
operating activities, which was partially offset by $17.4 million
of net proceeds from the issuance of common shares under Arbutus’s
ATM program. During July 2020, Arbutus fully utilized the remaining
availability under the ATM program resulting in an additional $36.5
million of net proceeds from the issuance of 9.5 million common
shares. The Company believes its ending second quarter cash, cash
equivalents and investments of $84.0 million plus the additional
$36.5 million of proceeds received under the ATM program during
July 2020 are sufficient to fund the Company’s operations into
mid-2022 versus prior guidance of mid-2021.
Net Loss
Net loss attributable to common shares for the
three months ended June 30, 2020 was $17.1 million ($0.25 basic and
diluted loss per common share) as compared to $26.1 million ($0.46
basic and diluted loss per common share) in 2019. Net loss
attributable to common shares for the three months ended June 30,
2020 and 2019 included non-cash expense for the accrual of coupon
on the Company’s convertible preferred shares of $3.0 million and
$2.8 million, respectively. Additionally, net loss attributable to
common shares for the three months ended June 30, 2019 included
$3.3 million of non-cash equity losses associated with our
investment in Genevant Sciences Ltd. (“Genevant”), a company
launched with Roivant Sciences Ltd., Arbutus’s largest shareholder,
in April 2018.
Operating Expenses
Research and development expenses were $10.5
million for the three months ended June 30, 2020 compared to $12.7
million in 2019. The decrease in research and development expenses
for the three months ended June 30, 2020 versus the same period in
2019 was due primarily to lower clinical expenses. General and
administrative expenses were $3.6 million for the three months
ended June 30, 2020 compared to $8.2 million in 2019. The decrease
in general and administrative expenses was due primarily to the
departure of the Company’s former President and Chief Executive
Officer in June 2019 and a decrease in legal fees. In accordance
with the terms of his legacy employment agreement, the Company’s
former President and Chief Executive Officer received $2.3 million
in cash severance and the Company recognized $1.1 million of
non-cash stock-based compensation expense for accelerated vesting
of his stock options in 2019.
Outstanding Shares
The Company had approximately 71.3 million
common shares issued and outstanding as of June 30, 2020.
During July 2020, Arbutus issued an additional 9.5 million common
shares under the ATM program. In addition, the Company had
approximately 11.0 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 23.0 million common shares on October 18, 2021.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF LOSS(in thousands, except share and
per share data)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
|
|
|
|
|
|
|
Collaborations and licenses |
$ |
825 |
|
|
$ |
398 |
|
|
$ |
1,660 |
|
|
$ |
814 |
|
Non-cash royalty revenue |
689 |
|
|
255 |
|
|
1,345 |
|
|
518 |
|
Total
Revenue |
1,514 |
|
|
653 |
|
|
3,005 |
|
|
1,332 |
|
Operating
expenses |
|
|
|
|
|
|
|
Research and development |
10,465 |
|
|
12,740 |
|
|
20,881 |
|
|
27,452 |
|
General and administrative |
3,566 |
|
|
8,189 |
|
|
7,119 |
|
|
12,601 |
|
Depreciation and amortization |
501 |
|
|
505 |
|
|
1,001 |
|
|
1,014 |
|
Change in fair value of contingent consideration |
116 |
|
|
130 |
|
|
228 |
|
|
255 |
|
Site consolidation |
7 |
|
|
(266 |
) |
|
64 |
|
|
(149 |
) |
Loss from
operations |
(13,141 |
) |
|
(20,645 |
) |
|
(26,288 |
) |
|
(39,841 |
) |
Other income
(loss) |
|
|
|
|
|
|
|
Interest income |
200 |
|
|
606 |
|
|
545 |
|
|
1,206 |
|
Interest expense |
(1,099 |
) |
|
(2 |
) |
|
(2,140 |
) |
|
(14 |
) |
Foreign exchange gain (loss) |
(47 |
) |
|
60 |
|
|
(65 |
) |
|
68 |
|
Equity investment loss |
— |
|
|
(3,334 |
) |
|
— |
|
|
(7,985 |
) |
Total other
loss |
(946 |
) |
|
(2,670 |
) |
|
(1,660 |
) |
|
(6,725 |
) |
Net loss |
$ |
(14,087 |
) |
|
$ |
(23,315 |
) |
|
$ |
(27,948 |
) |
|
$ |
(46,566 |
) |
Dividend accretion of
convertible preferred shares |
(2,995 |
) |
|
(2,762 |
) |
|
(5,973 |
) |
|
(5,477 |
) |
Net loss attributable
to common shares |
$ |
(17,082 |
) |
|
$ |
(26,077 |
) |
|
$ |
(33,921 |
) |
|
$ |
(52,043 |
) |
Loss per
share |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.25 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.49 |
) |
|
$ |
(0.92 |
) |
Weighted average
number of common shares |
|
|
|
|
|
|
|
Basic and diluted |
69,604,726 |
|
|
56,805,583 |
|
|
68,656,566 |
|
|
56,275,795 |
|
|
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
June 30, 2020 |
|
December 31, 2019 |
Cash and cash equivalents |
$ |
45,899 |
|
|
$ |
31,799 |
|
Investments in marketable
securities, current |
36,489 |
|
|
59,035 |
|
Accounts receivable and other
current assets |
3,148 |
|
|
2,994 |
|
Total current assets |
85,536 |
|
|
93,828 |
|
Property and equipment, net of
accumulated depreciation |
7,741 |
|
|
8,676 |
|
Investments in marketable
securities, non-current |
1,600 |
|
|
— |
|
Right of use asset |
2,575 |
|
|
2,738 |
|
Other non-current assets |
173 |
|
|
293 |
|
Total assets |
$ |
97,625 |
|
|
$ |
105,535 |
|
Accounts payable and accrued
liabilities |
$ |
5,813 |
|
|
$ |
7,235 |
|
Liability-classified options |
150 |
|
|
253 |
|
Lease liability, current |
364 |
|
|
340 |
|
Total current liabilities |
6,327 |
|
|
7,828 |
|
Liability related to sale of
future royalties |
19,739 |
|
|
18,992 |
|
Contingent consideration |
3,181 |
|
|
2,953 |
|
Lease liability, non-current |
2,867 |
|
|
3,018 |
|
Total stockholders’ equity |
65,511 |
|
|
72,744 |
|
Total liabilities and stockholders’ equity |
$ |
97,625 |
|
|
$ |
105,535 |
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW(in thousands)
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
Net loss |
$ |
(27,948 |
) |
|
$ |
(46,566 |
) |
Non-cash items |
5,114 |
|
|
13,936 |
|
Changes in working capital |
(1,420 |
) |
|
(1,555 |
) |
Net cash used in operating activities |
(24,254 |
) |
|
(34,185 |
) |
Net cash provided by investing activities |
20,970 |
|
|
71,005 |
|
Net cash provided by financing activities |
17,440 |
|
|
5,015 |
|
Effect of foreign exchange rate
changes on cash and cash equivalents |
(56 |
) |
|
95 |
|
Increase in cash and cash equivalents |
$ |
14,100 |
|
|
$ |
41,930 |
|
Cash and cash equivalents,
beginning of period |
31,799 |
|
|
36,942 |
|
Cash and cash equivalents, end of period |
$ |
45,899 |
|
|
$ |
78,872 |
|
Investments in marketable
securities |
38,089 |
|
|
16,410 |
|
Cash, cash equivalents and investments, end of
period |
$ |
83,988 |
|
|
$ |
95,282 |
|
Conference Call and Webcast Today
Arbutus will hold a conference call and webcast
today, Friday, August 7, 2020 at 8:45 AM Eastern Time to provide a
corporate update. You can access a live webcast of the call 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 4974547.
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 4974547.
About Arbutus
Arbutus Biopharma Corporation is a publicly
traded (Nasdaq: ABUS) biopharmaceutical company 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 Arbutus’ expectations regarding the timing and clinical
development of its product candidates, including Arbutus’
expectations that results from the multi-dose 60 mg cohorts and
single-dose 90 mg cohorts in HBV DNA negative and positive subjects
will be available in the second half of 2020 and that IND-enabling
studies for AB-836 will be complete by the end of 2020; Arbutus’
planned 2020 cash burn guidance; the potential safety and efficacy
of Arbutus’ product candidates, including the potential for AB-836
to have increase potency and an enhanced resistance profile
compared to AB-506; Arbutus’ expectations regarding its internal
and external research efforts to combat COVID-19 and future
coronavirus outbreaks; Arbutus’ expectation to dose two 90 mg
multi-dose cohorts in the second half of this year; the expected
sufficiency of Arbutus’ ending second quarter cash, cash
equivalents and investments plus additional proceeds received under
Arbutus’ ATM program during July 2020 are sufficient to fund
operations into mid-2022; Arbutus’ expectations regarding its
technology licensed to Genevant and Arbutus’ expectations regarding
the effect of the COVID-19 pandemic on its business.
With respect to the forward-looking statements
contained in this press release, Arbutus has made numerous
assumptions regarding, among other things: the timely receipt of
expected payments; 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 drug
candidate; changes in Arbutus’ 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; and market shifts may require a change in strategic
focus; and the ongoing COVID-19 pandemic could significantly
disrupt our 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
Arbutus Biopharma (NASDAQ:ABUS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Arbutus Biopharma (NASDAQ:ABUS)
Historical Stock Chart
From Apr 2023 to Apr 2024