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 |
|
|
|
75,668 |
|
Loss from operations |
|
(21,558 |
) |
|
|
(17,811 |
) |
|
|
(57,356 |
) |
|
|
(42,894 |
) |
Other income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
1,494 |
|
|
|
694 |
|
|
|
4,223 |
|
|
|
1,249 |
|
Interest expense |
|
(46 |
) |
|
|
(429 |
) |
|
|
(415 |
) |
|
|
(1,417 |
) |
Foreign exchange gain |
|
6 |
|
|
|
(21 |
) |
|
|
11 |
|
|
|
(18 |
) |
Total other income (loss) |
|
1,454 |
|
|
|
244 |
|
|
|
3,819 |
|
|
|
(186 |
) |
Loss before income taxes |
|
(20,104 |
) |
|
|
(17,567 |
) |
|
|
(53,537 |
) |
|
|
(43,080 |
) |
Income tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,444 |
) |
Net loss |
$ |
(20,104 |
) |
|
$ |
(17,567 |
) |
|
$ |
(53,537 |
) |
|
$ |
(47,524 |
) |
Net loss per common share |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.32 |
) |
Weighted average number of
common shares |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
167,512,708 |
|
|
|
150,995,191 |
|
|
|
165,085,243 |
|
|
|
149,385,999 |
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
September 30, 2023 |
|
December 31, 2022 |
Cash, cash equivalents and marketable securities, current |
$ |
134,180 |
|
$ |
146,913 |
Accounts receivable and other current assets |
|
7,427 |
|
|
4,226 |
Total current assets |
|
141,607 |
|
|
151,139 |
Property and equipment, net of accumulated depreciation |
|
5,033 |
|
|
5,070 |
Investments in marketable securities, non-current |
|
10,496 |
|
|
37,363 |
Right of use asset |
|
1,502 |
|
|
1,744 |
Other non-current assets |
|
3 |
|
|
103 |
Total assets |
$ |
158,641 |
|
$ |
195,419 |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
9,806 |
|
$ |
16,029 |
Deferred license revenue, current |
|
12,106 |
|
|
16,456 |
Lease liability, current |
|
412 |
|
|
372 |
Total current liabilities |
|
22,324 |
|
|
32,857 |
Liability related to sale of future royalties |
|
8,110 |
|
|
10,365 |
Deferred license revenue, non-current |
|
— |
|
|
5,999 |
Contingent consideration |
|
7,373 |
|
|
7,531 |
Lease liability, non-current |
|
1,497 |
|
|
1,815 |
Total stockholders’ equity |
|
119,337 |
|
|
136,852 |
Total liabilities and stockholders’ equity |
$ |
158,641 |
|
$ |
195,419 |
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(in
thousands)
|
Nine Months Ended September 30, |
|
2023 |
|
|
2022 |
|
Net loss |
$ |
(53,537 |
) |
|
$ |
(47,524 |
) |
Non-cash items |
|
4,613 |
|
|
|
3,429 |
|
Change in deferred license revenue |
|
(10,349 |
) |
|
|
25,463 |
|
Other changes in working capital |
|
(9,371 |
) |
|
|
266 |
|
Net cash (used in) operating activities |
|
(68,644 |
) |
|
|
(18,366 |
) |
Net cash provided by (used in) investing activities |
|
28,548 |
|
|
|
(87,624 |
) |
Issuance of common shares pursuant to Share Purchase Agreement |
|
— |
|
|
|
10,973 |
|
Issuance of common shares pursuant to the Open Market Sale
Agreement |
|
26,000 |
|
|
|
9,241 |
|
Cash provided by other financing activities |
|
840 |
|
|
|
516 |
|
Net cash provided by financing activities |
|
26,840 |
|
|
|
20,730 |
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
11 |
|
|
|
(18 |
) |
Decrease in cash and cash equivalents |
|
(13,245 |
) |
|
|
(85,278 |
) |
Cash and cash equivalents, beginning of period |
|
30,776 |
|
|
|
109,282 |
|
Cash and cash equivalents, end of period |
|
17,531 |
|
|
|
24,004 |
|
Investments in marketable securities |
|
127,145 |
|
|
|
166,150 |
|
Cash, cash equivalents and marketable securities, end of
period |
$ |
144,676 |
|
|
$ |
190,154 |
|
Conference Call and Webcast
Today
Arbutus will hold a conference call and webcast
today, Tuesday, November 7, 2023, at 8:45 AM Eastern Time to
provide a corporate update. To dial-in for the conference call by
phone, please register using the following link: Registration Link.
A live webcast of the conference call can be accessed through the
Investors section of Arbutus' website at www.arbutusbio.com.
An archived webcast will be available on the
Arbutus website after the event.
About imdusiran (AB-729)
Imdusiran is an RNA interference (RNAi)
therapeutic specifically designed to reduce all HBV viral proteins
and antigens including hepatitis B surface antigen, which is
thought to be a key prerequisite to enable reawakening of a
patient’s immune system to respond to the virus. Imdusiran targets
hepatocytes using Arbutus’ novel covalently conjugated
N-Acetylgalactosamine (GalNAc) delivery technology enabling
subcutaneous delivery. Clinical data generated thus far has shown
single and multiple doses of imdusiran to be generally safe and
well-tolerated, while also providing meaningful reductions in
hepatitis B surface antigen and hepatitis B DNA. Imdusiran is
currently in multiple Phase 2a clinical trials.
About AB-101
AB-101 is our oral PD-L1 inhibitor candidate
that we believe will allow for controlled checkpoint blockade while
minimizing the systemic safety issues typically seen with
checkpoint antibody therapies. Immune checkpoints such as
PD-1/PD-L1 play an important role in the induction and maintenance
of immune tolerance and in T-cell activation. Preclinical data
generated thus far indicates that AB-101 mediates re-activation of
exhausted HBV-specific T-cells from cHBV patients. We believe
AB-101, when used in combination with other approved and
investigational agents, could potentially lead to a functional cure
in patients chronically infected with HBV. AB-101 is currently
being evaluated in a Phase 1a/1b clinical trial. We have identified
compounds in our internal PD-L1 portfolio that could also be used
in oncology indications.
About HBV
Hepatitis B is a potentially life-threatening
liver infection caused by the hepatitis B virus (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 290 million people worldwide suffer from
chronic HBV infection, while other estimates indicate that
approximately 2.4 million people in the United States suffer from
chronic HBV infection. Approximately 820,000 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 (Nasdaq: ABUS) is
a clinical-stage biopharmaceutical company leveraging its extensive
virology expertise to identify and develop novel therapeutics with
distinct mechanisms of action, which can be combined to provide a
functional cure for patients with chronic hepatitis B virus (cHBV).
We believe the key to success in developing a functional cure
involves suppressing HBV DNA, reducing surface antigen, and
boosting HBV-specific immune responses. Our pipeline of internally
developed, proprietary compounds includes an RNAi therapeutic,
imdusiran (AB-729) and an oral PD-L1 inhibitor, AB-101. Imdusiran
has generated meaningful clinical data demonstrating an impact on
both surface antigen reduction and reawakening of the HBV-specific
immune response. Imdusiran is currently in two Phase 2a combination
clinical trials. AB-101 is currently being evaluated in a Phase
1a/1b clinical trial. Additionally, we have identified
compounds in our internal PD-L1 portfolio that could also be used
in oncology indications. 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 future development plans for our product candidates; our
program updates; our belief that checkpoint inhibitors may play a
key role in antiviral immune tolerance in cHBV; the expected cost,
timing and results of our clinical development plans and clinical
trials with respect to our product candidates; our expectations
with respect to clinical trial design and the release of data from
our clinical trials and the expected timing thereof; our
expectations and goals for our collaborations with third parties
and any potential benefits related thereto; the potential for our
product candidates to achieve success in clinical trials; our
expected financial condition, including the anticipated
duration of cash runways and timing regarding needs for additional
capital and our expected management changes.
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 patent litigation matters.
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: the risk that the program updates may not
materially extend the cash runway and may create a distraction or
uncertainty that may adversely affect our operating results,
business, or investor perceptions; 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; uncertainties associated
with litigation generally and patent litigation specifically; it
may take considerable time and expense to resolve the clinical hold
that has been placed on AB-101 by the FDA, and no assurance can be
given that the FDA will remove the clinical hold; Arbutus and its
collaborators may never realize the expected benefits of the
collaborations; and market shifts may require a change in strategic
focus; and risks related to the sufficiency of Arbutus’ cash
resources and its ability to obtain adequate financing in the
future for its foreseeable and unforeseeable operating expenses and
capital expenditures.
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
Lisa M. CaperelliVice President, Investor
RelationsPhone: 215-206-1822Email: lcaperelli@arbutusbio.com
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