On August 1, 2024 BridgeBio Pharma, Inc. (Nasdaq: BBIO) (BridgeBio or the Company), a commercial-stage biopharmaceutical company focused on genetic diseases, reported its financial results for the second quarter ended June 30, 2024, and provided an update on the Company’s operations (Press release, BridgeBio, AUG 1, 2024, View Source [SID1234645250]).

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"Our team has continued its preparation for the commercial launch of acoramidis while also executing against our goal of fully enrolling our three Phase 3 clinical programs by the end of 2024. We are well positioned to launch acoramidis and achieve three readouts in 2025. Our differentiated capability to develop multiple candidates for genetic-based diseases provides a unique opportunity to create significant value for patients and shareholders," said Dr. Neil Kumar, CEO and Founder of BridgeBio.

Pipeline overview:

Program Status Next expected milestone
Acoramidis for ATTR-CM NDA filed with FDA November 29, 2024 PDUFA date
Encaleret for ADH1 Enrolling CALIBRATE, Phase 3 study Enrollment completion in 2024
BBP-418 for LGMD2I/R9 Enrolling FORTIFY, Phase 3 study Enrollment completion in 2024
Low-dose infigratinib for achondroplasia Enrolling PROPEL 3, Phase 3 study Enrollment completion in 2024
Low-dose infigratinib for hypochondroplasia Enrolling observational run-in for ACCEL 2, Phase 2 study Enrollment completion date to be announced
BBP-631 for congenital adrenal hyperplasia (CAH) Dose finding / analysis in Phase 2 study Program update in August 2024
BBP-812 for Canavan disease Enrolling at high dose in Phase 1/2 study Key regulatory interactions

Program updates:

Acoramidis (AG10) – Transthyretin (TTR) stabilizer for transthyretin amyloid cardiomyopathy (ATTR-CM):
During the 2024 International Symposium of Amyloidosis (ISA), five new analyses were disclosed through oral presentations and posters, discussing the following:
Acoramidis treatment resulted in increased serum transthyretin (TTR) levels by Day 28 that were sustained and were correlated with a reduced risk of all-cause mortality (ACM), cardiovascular mortality (CVM), and cardiovascular hospitalization (CVH) in ATTR-CM participants through Month 30.
Acoramidis treatment resulted in a significant improvement in the composite endpoint of ACM and CVH in ATTR-CM participants, with benefit evident as early as Month 3.
In ATTRibute-CM, participants with at least one CVH had a significantly higher risk of mortality, highlighting the need for ATTR-CM treatments that reduce the risk of CVH.
BridgeBio also shared the rationale and design of ACT-EARLY, the acoramidis ATTR amyloidosis prevention trial, which it expects to initiate later this year.
At this year’s European Society of Cardiology Heart Failure (ESC-HF) Congress 2024, BridgeBio shared four positive analyses, which included the following data:
In a pre-specified Cochran-Mantel-Haenszel sensitivity analysis applied to the entire ITT population of the study (N=632), acoramidis significantly reduced ACM (p=0.04), with no safety signals of potential clinical concern.
Among ATTRibute-CM participants enrolled with Stage 4 chronic kidney disease (CKD) (N=21), acoramidis treatment was associated with proportionally fewer deaths compared with placebo, with no safety signals of potential clinical concern.
At Month 30 of the ATTRibute-CM study, acoramidis treatment resulted in a statistically significant and clinically important reduction in the progressive decline in health-related quality of life as assessed by the EuroQoL Health Outcomes Assessment tool, EQ-5D-5L.
Acoramidis treatment also reduced the decline in health status and quality of life as shown by statistically significant and clinically meaningful benefits in the Kansas City Cardiomyopathy Questionnaire (KCCQ) overall summary score and supported by numerical and consistent benefits in individual KCCQ domains.
In ATTRibute-CM, acoramidis significantly improved NT-proBNP indices that can be a signal of ATTR-CM disease progression and be predictive of subsequent mortality risk.
During the 2024 American College of Cardiology (ACC), BridgeBio presented cardiac magnetic resonance (CMR) imaging evidence consistent with clinical improvement observed in the ATTRibute-CM. The data demonstrate that targeting near-complete TTR stabilization with acoramidis may enable cardiac remodeling and functional recovery in patients with ATTR-CM.
Encaleret – Calcium-sensing receptor (CaSR) inhibitor for autosomal dominant hypocalcemia type 1 (ADH1):
CALIBRATE, the Phase 3 clinical trial of encaleret in ADH1, continues to enroll; the Company anticipates sharing topline data from CALIBRATE in 2025.
BBP-418 – Glycosylation substrate for limb-girdle muscular dystrophy type 2I/R9 (LGMD2I/R9):
BridgeBio has surpassed its interim analysis enrollment target for its Phase 3 FORTIFY study of BBP-418 in individuals living with LGMD2I/R9, with top-line results from the interim analysis expected in 2025.
Recent Type C interactions with U.S. FDA focused on the validated glycosylated alpha-dystroglycan (αDG) bioassay and our interim analysis plans reinforce BridgeBio’s belief that there is potential to pursue Accelerated Approval for BBP-418.
Rare Pediatric Disease Designation for BBP-418 highlights that LGMD2I/R9 is a rare disease with serious manifestations, which primarily impacts children. If BBP-418 is approved, BridgeBio may qualify for a Priority Review Voucher, which can be applied to another therapy in the Company’s pipeline for a shorter timeline during the review process of a NDA or can be sold to another company looking to receive priority review for one of its applications.
Low-dose infigratinib – FGFR1-3 inhibitor for achondroplasia and hypochondroplasia:
BridgeBio shared data from Month 12 and 18 for Cohort 5 of PROPEL 2 (0.25 mg/kg/day), its Phase 2 trial in achondroplasia with the oral treatment, infigratinib, with results including:
A statistically significant and sustained increase in AHV, with a mean change from baseline of +2.51cm/yr at Month 12, and +2.50 cm/yr at Month 18 (p=0.0015).
At Month 18, there was a statistically significant improvement in body proportionality (p-value of 0.001). The mean upper to lower body segment ratio was 1.88 at Month 18, as compared to 2.02 at baseline.
Infigratinib continues to be well-tolerated as a single daily oral therapy with no adverse events (AEs) assessed as treatment-related in any participant in Cohort 5.
Infigratinib for achondroplasia was granted Fast Track Designation and Rare Pediatric Drug Designation by the U.S. FDA. If infigratinib is approved, BridgeBio may qualify for a Priority Review Voucher.
In May 2024, the first participant consented to be part of ACCEL, the observational run-in study for infigratinib in children living with hypochondroplasia.
Second Quarter 2024 Financial Results:

Cash, Cash Equivalents, Marketable Securities and Short-term Restricted Cash

Cash, cash equivalents, marketable securities and short-term restricted cash, totaled $587.2 million as of June 30, 2024, compared to $392.6 million of cash, cash equivalents and short-term restricted cash as of December 31, 2023. The $194.6 million net increase in cash, cash equivalents, marketable securities and short-term restricted cash was primarily attributable to net proceeds received from the term loan under the credit facility with Blue Owl of $434.0 million, net proceeds received from various equity financings of $314.8 million, proceeds from the sale of investments in equity securities of $63.2 million, and special cash dividends received from investments in equity securities of $25.7 million. These were primarily offset by refinancing of the Company’s previous senior secured credit term loan, inclusive of prepayment fees and exit-related costs in aggregate of $473.4 million, net cash used in operating activities of $144.8 million, purchases of equity securities of $20.3 million, and repurchase of shares to satisfy tax withholdings of $4.7 million during the six months ended June 30, 2024.

Revenue

Revenue for the three and six months ended June 30, 2024 were $2.2 million and $213.3 million, respectively, as compared to $1.6 million and $3.5 million for the same periods in the prior year.

The increase of $0.6 million in revenue for the three months ended June 30, 2024, compared to the same period in the prior year, was primarily due to the recognition of services revenue under the exclusive license and collaboration agreements with Bayer and Kyowa Kirin. Revenue for the three months ended June 30, 2023 primarily consists of the recognition of services revenue under the Navire-BMS License Agreement, which terminated effective June 2024.

The increase of $209.8 million in revenue for the six months ended June 30, 2024, compared to the same period in the prior year, was primarily due to $202.9 million from recognition of non-refundable upfront payments and service revenue under the Bayer and the Kyowa Kirin exclusive license and collaboration agreements.

Operating Costs and Expenses

Operating costs and expenses for the three and six months ended June 30, 2024 were $177.7 million and $388.5 million, respectively, compared to $147.7 million and $275.7 million for the same periods in the prior year.

The overall increase of $30.0 million in operating costs and expenses for the three months ended June 30, 2024, compared to the same period in the prior year, was primarily due to an increase of $23.4 million in selling, general and administrative (SG&A) expenses mainly to support commercialization readiness efforts, an increase of $7.2 million in research and development and other expenses (R&D) to advance the Company’s pipeline of research and development programs, offset by a decrease of $0.6 million in restructuring, impairment and related charges.

The overall increase of $112.8 million in operating costs and expenses for the six months ended June 30, 2024, compared to the same period in the prior year, was primarily due to an increase of $58.1 million in SG&A expenses mainly to support commercialization readiness efforts, and an increase of $55.3 million in R&D expenses to advance the Company’s pipeline of research and development programs, offset by a decrease of $0.6 million in restructuring, impairment and related charges. Operating costs and expenses for the six months ended June 30, 2024, include $22.5 million of nonrecurring deal-related costs for transactions that were closed during the three months ended March 31, 2024.

Restructuring, impairment and related charges for the three and six months ended June 30, 2024 amounted to $2.9 million and $6.3 million, respectively. These charges primarily consisted of impairments and write-offs of long-lived assets, severance and employee-related costs, and exit and other related costs. Restructuring, impairment and related charges for the same periods in the prior year was $3.5 million and $6.9 million, respectively. These charges primarily consisted of winding down, exit costs, and severance and employee-related costs.

Stock-based compensation expenses included in operating costs and expenses for the three months ended June 30, 2024 were $21.5 million, of which $4.9 million is included in R&D expenses, $16.5 million is included in SG&A expenses, and $0.1 million is included in Restructuring expenses. Stock-based compensation expenses included in operating costs and expenses for the same period in the prior year were $27.2 million, of which $13.2 million is included in R&D expenses, and $14.0 million is included in SG&A expenses.

Stock-based compensation expenses included in operating costs and expenses for the six months ended June 30, 2024 were $50.3 million, of which $17.7 million is included in R&D expenses, $32.5 million is included in SG&A expenses, and $0.1 million is included in Restructuring expenses. Stock-based compensation expenses included in operating costs and expenses for the same period in the prior year were $50.7 million, of which $25.0 million is included in R&D expenses, and $25.7 million is included in SG&A expenses.

Total Other Income (Expense), net
Total other income (expense), net for the three and six months ended June 30, 2024 were $100.0 million and $63.5 million, respectively, compared to ($14.6) million and ($31.2) million for the same periods in the prior year.

The increase in total other income (expense), net of $114.6 million for the three months ended June 30, 2024, compared to the same period in the prior year, was primarily due to the Company’s gain on deconsolidation of a subsidiary of $126.3 million. This was partially offset by a net loss from an equity method investment of $7.9 million and an increase in interest expense of $2.3 million.

The increase in total other income (expense), net of $94.7 million for the six months ended June 30, 2024, compared to the same period in the prior year, was primarily due to the Company’s gain on deconsolidation of a subsidiary of $126.3 million and an increase in other income (expense), net of $8.1 million mainly from income or mark to market fair value adjustments from the Company’s investments in equity securities. These were partially offset by a loss on extinguishment of debt of $26.6 million, a net loss from an equity method investment of $7.9 million and an increase in interest expense of $5.7 million.

Net Loss Attributable to Common Stockholders of BridgeBio and Net Loss per Share

For the three months and six months ended June 30, 2024, the Company recorded a net loss attributable to common stockholders of BridgeBio of $73.5 million and $108.7 million, respectively, compared to $157.9 million and $298.1 million, respectively for the three months and six months ended June 30, 2023.

For the three months and six months ended June 30, 2024, the Company reported a net loss per share of $0.39 and $0.59, respectively compared to $0.98 and $1.90, respectively for the three months and six months ended June 30, 2023.

BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Operations
(in thousands, except shares and per share amounts)

Three Months Ended June 30, Six Months Ended June 30,
2024 2023 2024 2023
(Unaudited) (Unaudited)
Revenue $ 2,168 $ 1,641 $ 213,288 $ 3,467
Operating costs and expenses:
Research, development and other expenses 115,293 108,087 256,863 201,599
Selling, general and administrative 59,523 36,122 125,330 67,230
Restructuring, impairment and related charges 2,891 3,531 6,291 6,900
Total operating costs and expenses 177,707 147,740 388,484 275,729
Loss from operations (175,539 ) (146,099 ) (175,196 ) (272,262 )
Other income (expense), net:
Interest income 5,195 4,514 9,270 8,667
Interest expense (22,937 ) (20,594 ) (46,408 ) (40,715 )
Gain on deconsolidation of a subsidiary 126,294 — 126,294 —
Loss on extinguishment of debt — — (26,590 ) —
Net loss from equity method investment (7,925 ) — (7,925 ) —
Other income (expense), net (632 ) 1,476 8,851 875
Total other income (expense), net 99,995 (14,604 ) 63,492 (31,173 )
Net loss (75,544 ) (160,703 ) (111,704 ) (303,435 )
Net loss attributable to redeemable convertible noncontrolling interests and noncontrolling interests 2,088 2,804 3,032 5,380
Net loss attributable to common stockholders of BridgeBio $ (73,456 ) $ (157,899 ) $ (108,672 ) $ (298,055 )
Net loss per share, basic and diluted $ (0.39 ) $ (0.98 ) $ (0.59 ) $ (1.90 )
Weighted-average shares used in computing net loss per share, basic and diluted 187,586,680 160,535,435 183,145,995 156,645,838

Three Months Ended June 30, Six Months Ended June 30,
Stock-based Compensation 2024 2023 2024 2023
(Unaudited) (Unaudited)
Research, development and other expenses $ 4,937 $ 13,229 $ 17,716 $ 25,008
Selling, general and administrative 16,471 13,947 32,542 25,645
Restructuring, impairment and related charges 43 — 43 —
Total stock-based compensation $ 21,451 $ 27,176 $ 50,301 $ 50,653

BRIDGEBIO PHARMA, INC.
Condensed Consolidated Balance Sheets
(In thousands)

June 30, December 31,

2024 2023
Assets (Unaudited) (1)
Cash, cash equivalents and marketable securities $ 447,771 $ 375,935
Investments in equity securities — 58,949
Receivables from licensing and collaboration agreements 660 1,751
Short-term restricted cash 139,409 16,653
Prepaid expenses and other current assets 28,396 24,305
Investment in nonconsolidated entity 117,006 -
Property and equipment, net 9,840 11,816
Operating lease right-of-use assets 7,267 8,027
Intangible assets, net 25,123 26,319
Other assets 18,903 22,625
Total assets $ 794,375 $ 546,380
Liabilities, Redeemable Convertible Noncontrolling Interests and Stockholders’ Deficit
Accounts payable $ 18,126 $ 10,655
Accrued and other liabilities 96,517 122,965
Operating lease liabilities 11,682 13,109
Deferred revenue 32,059 9,823
2029 Notes, net 737,882 736,905
2027 Notes, net 544,270 543,379
Term loan, net 435,447 446,445
Other long-term liabilities 485 5,634
Redeemable convertible noncontrolling interests (223 ) 478
Total BridgeBio stockholders’ deficit (1,092,925 ) (1,354,257 )
Noncontrolling interests 11,055 11,244
Total liabilities, redeemable convertible noncontrolling interests and stockholders’ deficit $ 794,375 $ 546,380

(1 ) The condensed consolidated financial statements as of and for the year ended December 31, 2023 are derived from the audited consolidated financial statements as of that date.

BRIDGEBIO PHARMA, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

Six Months Ended June 30,
2024 2023
Operating activities:
Net loss $ (111,704 ) $ (303,435 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation 38,511 49,085
Loss on extinguishment of debt 26,590 —
Accretion of debt 3,683 4,580
Depreciation and amortization 3,170 3,270
Noncash lease expense 2,093 2,024
Accrual of payment-in-kind interest on term loan — 6,742
Net loss from equity method investment 7,925 —
Loss (gain) on deconsolidation of subsidiaries (126,294 ) 1,241
Gain from investment in equity securities, net (8,136 ) (2,399 )
Fair value adjustment of warrants — (222 )
Other noncash adjustments (1,911 ) (328 )
Changes in operating assets and liabilities:
Receivables from licensing and collaboration agreements 1,091 8,466
Prepaid expenses and other current assets (6,506 ) 1,057
Other assets 942 32
Accounts payable 8,858 (4,098 )
Accrued compensation and benefits (8,378 ) (11,071 )
Accrued research and development liabilities 7,067 (11,322 )
Operating lease liabilities (2,981 ) (2,443 )
Deferred revenue 22,236 (3,184 )
Accrued professional and other liabilities (1,090 ) 4,330
Net cash used in operating activities (144,834 ) (257,675 )
Investing activities:
Purchases of marketable securities (93,811 ) (19,754 )
Maturities of marketable securities 55,000 41,550
Purchases of investments in equity securities (20,271 ) (71,504 )
Proceeds from sales of investments in equity securities 63,229 67,068
Proceeds from special cash dividends received from investments in equity securities 25,682 —
Payment for an intangible asset (3,190 ) —
Purchases of property and equipment (749 ) (440 )
Decrease in cash and cash equivalents resulting from deconsolidation of subsidiaries (98 ) (503 )
Net cash provided by investing activities 25,792 16,417
Financing activities:
Proceeds from term loan under Financing Agreement 450,000 —
Issuance costs and discounts associated with term loan under Financing Agreement (15,986 ) —
Repayment of term loan under Loan and Security Agreement (473,417 ) —
Proceeds from issuance of common stock through public offerings, net 314,759 144,049
Proceeds from BridgeBio common stock issuances under ESPP 2,364 1,809
Proceeds from stock option exercises, net of repurchases 778 312
Repurchase of RSU shares to satisfy tax withholding (4,679 ) (1,715 )
Other financing activities — 4,563
Net cash provided by financing activities 273,819 149,018
Net increase (decrease) in cash, cash equivalents and restricted cash 154,777 (92,240 )
Cash, cash equivalents and restricted cash at beginning of period 394,732 416,884
Cash, cash equivalents and restricted cash at end of period $ 549,509 $ 324,644

Six Months Ended June 30,
2024 2023
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 49,046 $ 28,738
Supplemental Disclosures of Noncash Investing and Financing Information:
Unpaid public offering issuance costs $ 18 $ —
Deferred and unpaid issuance costs recorded to "Accrued and other liabilities" $ 74 $ —
Unpaid property and equipment $ 70 $ 131
Transfers to noncontrolling interests $ (1,929 ) $ (5,940 )
Reconciliation of Cash, Cash Equivalents and Restricted Cash:
Cash and cash equivalents $ 407,958 $ 302,438
Restricted cash 139,409 19,930
Restricted cash — Included in "Other assets" 2,142 2,276
Total cash, cash equivalents and restricted cash at end of period shown in the
condensed consolidated statements of cash flows $ 549,509 $ 324,644

On August 1, 2024 Blueprint Medicines Corporation (Nasdaq: BPMC) reported financial results, provided a business update for the second quarter ended June 30, 2024, and provided updated financial guidance (Press release, Blueprint Medicines, AUG 1, 2024, View Source [SID1234645249]).

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"This quarter marks a milestone, as we celebrate one full year since the U.S. approval of AYVAKIT for indolent systemic mastocytosis. We have delivered yet another very strong quarter of revenue as we continue to build this new rare disease market, and we are well on path to achieve more than $2 billion in potential peak sales. In addition, we have invested in our next pillars of growth, building on AYVAKIT as the cornerstone of a mast cell disease franchise. Our wild-type KIT inhibitor BLU-808 has entered a Phase 1 healthy volunteer study and we expect to initiate the registration-enabling HARBOR Part 2 study of our next-generation KIT D816V inhibitor elenestinib in indolent systemic mastocytosis later this year," said Kate Haviland, Chief Executive Officer of Blueprint Medicines. "With a significant and growing revenue base from AYVAKIT, a next wave of therapies in our pipeline that we believe can address even larger scale patient opportunities, and a financial profile anchored in sustainable topline revenue growth that enables us the flexibility to invest in the next wave of innovation, we are building Blueprint Medicines for long term value."

Second Quarter 2024 Highlights and Recent Progress

Mast cell disorders

· Achieved AYVAKIT net product revenues of $114.1 million for second quarter of 2024, representing more than 185 percent growth year-over-year.

· Achieved clearance of an Investigational New Drug application for BLU-808 by the U.S. Food and Drug Administration and initiated the healthy volunteer study. BLU-808 is a highly selective and potent investigational oral wild-type KIT inhibitor with best-in-class potential, for chronic urticaria and other mast cell disorders.

· Presented multiple datasets highlighting the long-term safety and durable clinical outcomes of AYVAKIT/AYVAKYT (avapritinib) across the spectrum of systemic mastocytosis (SM) at the 2024 European Academy of Allergy and Clinical Immunology (EAACI) and European Hematology Association (EHA) (Free EHA Whitepaper) conferences. Read the presentations here.

Cell cycle inhibition

· Presented data from the Phase 1 VELA study of BLU-222, an oral, potent and selective CDK2 inhibitor, at the 2024 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) meeting. This is the first positive combination safety data with signals of early clinical activity for a CDK2 inhibitor in combination with an approved CDK4/6 inhibitor, ribociclib, and fulvestrant, in patients with HR+/HER2- breast cancer. Read the presentation here.

2024 Financial Guidance

Blueprint Medicines now anticipates approximately $435 million to $450 million in global AYVAKIT net product revenues for all approved indications in 2024, an increase from the previous range of $390 million to $410 million. The company continues to expect that full-year operating expenses and cash burn will decline in 2024 as compared to 2023, and that its existing cash, cash equivalents and investments, together with anticipated product revenues, will enable the company to maintain a durable capital position to achieve a self-sustainable financial profile.

Key Upcoming Milestones

The company plans to achieve the following remaining milestones in the second half of 2024:

Mast cell disorders

· Initiate registration-enabling Part 2 of the HARBOR trial in indolent systemic mastocytosis (ISM).

Cell cycle inhibition

· Continue strategic business development discussions.

· Complete Phase 1 combination dose escalation for BLU-222 by end of year to inform registration plans.

Second Quarter 2024 Results

· Revenues: Revenues were $138.2 million for the second quarter of 2024, including $114.1 million of net product revenues from sales of AYVAKIT/AYVAKYT and $24.0 million in collaboration, license and other revenues. Revenues were $57.6 million in the second quarter of 2023, including $39.9 million of net product revenues from sales of AYVAKIT/AYVAKYT and $17.7 million in collaboration, license and other revenues.

· Cost of Sales: Cost of sales was $7.6 million for the second quarter of 2024, as compared to $2.3 million for the second quarter of 2023. The increase was primarily due to the sale of GAVRETO (pralsetinib) product to Rigel.

· R&D Expenses: Research and development expenses were $84.3 million for the second quarter of 2024, as compared to $110.1 million for the second quarter of 2023. This decrease was primarily due to operational efficiency across our portfolio as we execute across our top priority programs and the timing of manufacturing of clinical trial materials. Research and development expenses included $12.3 million in stock-based compensation expenses for the second quarter of 2024.

· SG&A Expenses: Selling, general and administrative expenses were $89.3 million for the second quarter of 2024, as compared to $71.9 million for the second quarter of 2023. This increase was primarily due to an increase in activities supporting the commercialization of AYVAKIT/AYVAKYT. Selling, general, and administrative expenses included $15.7 million in stock-based compensation expenses for the second quarter of 2024.

· Net Loss: Net loss was $50.0 million for the second quarter of 2024, as compared to a net loss of $132.8 million for the second quarter of 2023.

· Cash Position: As of June 30, 2024, cash, cash equivalents and investments were $868.5 million, as compared to $767.2 million as of December 31, 2023. This increase was primarily due to taking an additional draw under our 2022 debt facility with Sixth Street Partners. Blueprint Medicine’s cash and investments provide a durable capital position which, together with anticipated product revenues, the company believes will enable it to reach a self-sustainable financial profile.

Conference Call Information

Blueprint Medicines will host a live conference call and webcast at 8:00 a.m. ET today to discuss second quarter 2024 financial results and recent business activities. The conference call may be accessed by dialing 833-470-1428 (domestic) or 404-975-4839 (international), and referring to conference ID 299779. A webcast of the call will also be available under "Events and Presentations" in the Investors & Media section of the Blueprint Medicines website at View Source The archived webcast will be available on Blueprint Medicines’ website approximately two hours after the conference call and will be available for 30 days following the call.

On August 1, 2024 Biogen Inc. (NASDAQ: BIIB) reported second quarter 2024 financial results (Press release, Biogen, AUG 1, 2024, View Source [SID1234645248]). Commenting on the quarter, President and Chief Executive Officer Christopher A. Viehbacher said:

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"Biogen delivered strong financial performance in the second quarter thanks to solid execution against our business strategy, which is aimed at transforming the Company to deliver sustainable growth. We saw continued positive momentum across new product launches and are pleased with the trends we see with key products going into the third quarter. We believe we have created a strong mid- to late-stage development pipeline thanks to reprioritization efforts made last year and key acquisitions like HI-Bio, which was announced in the quarter. Our Fit for Growth program announced in early 2023 continues to deliver significant savings, allowing us to strategically reinvest a portion back into product launches and the pipeline."
Financial Highlights
Q2 ’24 Q2 ’23 △
r (CC*)
Total Revenue (in millions) $2,465 $2,456 0% 1%
GAAP diluted EPS $4.00 $4.07 (2)% —%
Non-GAAP diluted EPS $5.28 $4.02 31% —%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period.
* Percentage changes in revenue growth at constant currency (CC) are presented excluding the impact of changes in foreign currency exchange rates and hedging gains or losses. Foreign currency revenue values are converted into U.S. Dollars using the exchange rates from the end of the previous calendar year.

A reconciliation of GAAP to Non-GAAP financial measures can be found in Table 4 at the end of this news release.
Revenue Summary
(in millions) Q2 ’24 Q2 ’23 △
r (CC*)
Multiple sclerosis (MS) product revenue(1)
$1,150 $1,209 (5)% (5)%
Rare disease revenue(2)
$534 $438 22% 25%
Biosimilars revenue $198 $195 2% 1%
Other product revenue(3)
$18 $3 431% 441%
Total product revenue $1,900 $1,846 3% 4%
Revenue from anti-CD20 therapeutic programs $445 $433 3% 3%
Contract manufacturing, royalty and other revenue $121 $177 (32)% (32)%
Total revenue $2,465 $2,456 0% 1%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period. Numbers may not foot or recalculate due to rounding.
(1) Multiple sclerosis includes TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI and FAMPYRA.
(2) Rare disease includes SPINRAZA, SKYCLARYSand QALSODY.
(3) Other includes ADUHELM, FUMADERM and ZURZUVAE.
•Second quarter 2024 ZURZUVAE revenue was approximately $15 million.
Expense Summary
(in millions) Q2 ’24 Q2 ’23 △
GAAP cost of sales*
$546 $593 8%
% of Total Revenue 22% 24%
Non-GAAP cost of sales*
$504 $593 15%
% of Total Revenue 20% 24%
GAAP R&D expense $514 $584 12%
Non-GAAP R&D expense $464 $584 21%
GAAP SG&A expense $554 $548 (1)%
Non-GAAP SG&A expense $542 $534 (1)%

Note: Percent changes represented as favorable/(unfavorable) versus the prior year period
* Excluding amortization and impairment of acquired intangible assets

•There were no idle capacity charges in the second quarter of 2024. Second quarter 2023 GAAP and Non-GAAP cost of sales includes approximately $34 million of idle capacity charges. The decrease in second quarter 2024 GAAP and Non-GAAP cost of sales as a percentage of total revenue was driven primarily by product mix, particularly the year-over-year increase in revenue from new product launches and decrease in contract manufacturing revenue, as well as less idle capacity charges.

•In the second quarter 2024 as compared to the second quarter of 2023, the decrease in GAAP and Non-GAAP R&D of approximately $70 million and $120 million, respectively, was primarily due to savings achieved from the Company’s R&D portfolio prioritization and Fit for Growth initiatives.

•In the second quarter 2024 as compared to the second quarter of 2023, the increase in GAAP and Non-GAAP SG&A expense of approximately $6 million and $8 million, respectively, was primarily due to increased commercialization spend related to new product launches, partially offset by savings achieved from the Company’s Fit for Growth initiative.
Other Financial Highlights

•Second quarter 2024 GAAP and Non-GAAP collaboration profit sharing was a net expense of $62 million, which includes $56 million related to Biogen’s collaboration with Samsung Bioepis, and $6 million to Sage Therapeutics related to the commercialization of ZURZUVAE in the U.S.

•Second quarter 2024 GAAP and Non-GAAP priority review voucher gain on sale, net was approximately $89 million.

•Second quarter 2024 GAAP other expense was $85 million, primarily driven by net interest expense and net unrealized losses on strategic equity investments of $30 million. Second quarter 2024 Non-GAAP other expense was $55 million, primarily driven by net interest expense.

•Second quarter 2024 GAAP and Non-GAAP effective tax rates were 16.5% and 15.9%, respectively. Second quarter 2023 GAAP and Non-GAAP effective tax rates were 16.2% and 15.7%, respectively.
Financial Position

•Second quarter 2024 net cash flow from operations was $626 million. Capital expenditures were $34 million, and free cash flow, defined as net cash flow from operations less capital expenditures, was $592 million.

•As of June 30, 2024, Biogen had cash, cash equivalents, and marketable securities totaling approximately $1.9 billion and approximately $6.3 billion in total debt, resulting in net debt of approximately $4.4 billion. Subsequent to the end of the quarter, Biogen utilized $1.15 billion of cash to acquire HI-Bio, which is not included in these figures.

•As of June 30, 2024, the $1.0 billion 2023 Term Loan which was put in place at the time of the Reata acquisition has been repaid.

•No shares of the Company’s common stock were repurchased in the second quarter of 2024. As of June 30, 2024, there was $2.1 billion remaining under the share repurchase program authorized in October 2020.

•For the second quarter of 2024 the Company’s weighted average diluted shares were 146 million.

Full Year 2024 Financial Guidance

For the full year 2024, Biogen now expects a Non-GAAP diluted EPS guidance range as follows:
Prior FY 2024 Guidance Updated FY 2024 Guidance
Non-GAAP diluted EPS
$15.00 to $16.00
Reflecting growth of ~5% at the mid-point*
$15.75 to $16.25
Reflecting growth of ~9% at the mid-point*

*Versus reported full year 2023

Biogen now expects total revenue to decline by a low-single digit percentage (previously low to mid-single percentage), with core pharmaceutical revenue, defined as product revenue plus Biogen’s 50% share of net LEQEMBI product revenue and cost of sales, including royalties, to be relatively flat for 2024 compared to 2023 as further declines in multiple sclerosis product revenue are expected to be offset by increases in revenue from new product launches.

Biogen continues to expect an improvement in the cost of sales as a percentage of total revenue for 2024 compared to 2023 driven by product mix and significantly lower idle capacity charges.

Biogen expects to reinvest the proceeds from the sale of one of the Company’s two priority review vouchers in growth initiatives in 2024.

For 2024 compared to 2023, Biogen now expects operating income to grow at a mid- to high-teen percentage with mid-single digit percentage point operating margin improvement. This is expected to be driven by improved cost of sales as a percentage of revenue, as well as lower operating expenses as a result of the Company’s Fit for Growth and R&D prioritization programs.

This financial guidance does not include any impact from potential acquisitions or large business development transactions or pending and future litigation, as all are hard to predict, or any impact of potential tax or healthcare reform. Biogen may incur charges, realize gains or losses, or experience other events or circumstances in 2024 that could cause any of these assumptions to change and/or actual results to vary from this financial guidance.

This guidance also assumes that foreign exchange rates as of July 26, 2024, will remain in effect for the remainder of the year, net of hedging activities. Other modeling considerations will be provided on the conference call and webcast.

Biogen does not provide guidance for GAAP reported financial measures (other than revenue) or a reconciliation of forward-looking Non-GAAP financial measures to the most directly comparable GAAP reported financial measures because the Company is unable to predict with reasonable certainty the financial impact of items such as the transaction, integration, and certain other costs related to acquisitions or large business development transactions; unusual gains and losses; potential future asset impairments; gains and losses from our equity security investments; and the ultimate outcome of pending or future significant litigation without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the Company is unable to address the significance of the unavailable information, which could be material to future results.

Key Recent Events

•Today Biogen announced the termination of the Antibody Transport Vehicle (ATV): Amyloid beta program (ATV:Aβ) with Denali Therapeutics.

The Company’s earnings conference call for the second quarter will be broadcast via the internet at 8:30 a.m. ET on August 1, 2024 and will be accessible through the Investors section of Biogen’s website, www.biogen.com. Supplemental information in the form of a slide presentation is also accessible at the same location on the internet and will be subsequently available on the website for at least 90 days.

On August 1, 2024 Aurinia Pharmaceuticals Inc. (NASDAQ: AUPH) (Aurinia or the Company) reported its financial results for the second quarter and six months ended June 30, 2024 (Press release, Aurinia Pharmaceuticals, AUG 1, 2024, View Source [SID1234645247]). Amounts are expressed in U.S. dollars.

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Total net revenue was $57.2 million for the three months ended June 30, 2024, and $41.5 million for the same period in 2023, representing growth of approximately 38%. Year to date total net revenue was $107.5 million for the six months ended June 30, 2024, compared to $75.9 million for the same period in 2023, representing growth of approximately 42%.

Net product revenue was $55.0 million for the three months ended June 30, 2024, and $41.1 million for the same period in 2023, representing growth of approximately 34%. Net product revenue was $103.1 million for the six months ended June 30, 2024, and $75.4 million for the same period in 2023, representing growth of approximately 37%. Net product revenue in the second quarter included sales of semi-finished product to Otsuka Pharmaceutical Co., Ltd. (Otsuka) for distribution in Europe and in anticipation of product approval in Japan.

"Our quarter-over-quarter growth in the second quarter is a result of our continued focus on commercial execution and business fundamentals. We are well prepared as we exit the first half of 2024, with upcoming innovative commercial initiatives targeting rheumatologists, the advancement of our AUR200 pipeline asset, and the anticipated approval of LUPKYNIS in Japan. Additionally, achieving positive free cash flow ahead of our initial projections further strengthens our financial position and allows more flexibility to explore opportunities to diversify our portfolio," said Peter Greenleaf, President and Chief Executive Officer of Aurinia.

The Company anticipates Japanese regulatory authorities’ approval of LUPKYNIS in the second half of this year, based on the JNDA that Otsuka filed in November 2023 for approval of LUPKYNIS to treat adults with LN. Upon approval, the Company expects to receive a milestone payment of $10 million with low double-digit royalties on net sales once launched.

Additionally, the Company is moving forward with development of its pipeline asset AUR200, a differentiated, potential next generation therapy for autoimmune diseases that targets both BAFF (B-cell Activating Factor) and APRIL (A Proliferation-Inducing Ligand).

"We are thrilled to advance AUR200, which has the potential to serve as a best-in-class treatment in disease areas with high unmet need. We intend to develop it in disease states where there are currently few market entrants, including exploring one larger indication and one fast-to-market smaller indication that meets the FDA criteria for orphan and rare diseases," said Dr. Greg Keenan, Chief Medical Officer of Aurinia.

First patients are expected to enter the Phase 1 Single Ascending Dose (SAD) study of AUR200 in the third quarter of 2024. Data from the SAD study, including safety, tolerability, pharmacokinetics, and biomarkers, is anticipated in the first half of 2025. The Company anticipates funding this development program with available cash flow, which is not anticipated to impact previously announced post restructuring operating expense targets. As previously reported, the Company expects to recognize $50 to $55 million in annual cost savings following the restructuring, with approximately 75% of that recognized in 2024.

For the fiscal year 2024, the Company is narrowing its net product revenue guidance range to $210 to $220 million, from the previously established range of $200 to $220 million. The guidance range is based on assumptions regarding historical run rates for patient start forms (PSF), patients restarting therapy, hospital fills, conversion rates, time to convert, persistency, and pricing.

Second Quarter 2024 Highlights

In the second quarter of 2024 the Company:

Achieved 22% growth in patients on LUPKYNIS therapy, with approximately 2,336 patients on therapy as of June 30, 2024, compared to 1,911 as of June 30, 2023.
Added 428 PSFs and approximately 127 new patients who were either restarting LUPKYNIS or receiving it through a hospital pharmacy in the second quarter, compared to 451 PSFs in the prior year second quarter.
Added approximately 538 PSFs and approximately 155 new patients from restarts and the hospital channel from April 1, 2024, through July 31, 2024.
Sustained conversion rates, with approximately 85% of PSFs converted to patients on therapy.
Sustained time to convert, with approximately 60% of patients on therapy by 20 days.
Maintained high overall adherence rate at approximately 88%.
Continued strong persistency, with approximately 56% of patients remaining on therapy at 12 months, 51% at 15 months, and 46% at 18 months.
Financial Results for the Three and Six Months Ended June 30, 2024

Total net revenue was $57.2 million and $41.5 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Total net revenue was $107.5 million and $75.9 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

Net product revenue was $55.0 million and $41.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Net product revenue was $103.1 million and $75.4 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to an increase in sales of LUPKYNIS to the Company’s two main specialty pharmacies, driven predominantly by further penetration of the LN market. Additionally, Aurinia had sales of semi-finished product to Otsuka as Otsuka continues to commercialize in its territories.

The U.S. penetration can be demonstrated by a total of approximately 2,336 patients on therapy as of June 30, 2024, compared to approximately 1,911 patients on therapy as of June 30, 2023. Additionally, the 12-month persistency rate has increased to 56% at June 30, 2024 from approximately 54% at June 30, 2023.

License, collaboration and royalty revenue was $2.2 million and $0.4 million for the three months ended June 30, 2024 and June 30, 2023, respectively. License, collaboration and royalty revenue was $4.4 million and $0.5 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to manufacturing services revenue from Otsuka related to shared capacity services that commenced in late June 2023.

Total cost of sales and operating expenses, inclusive of a restructuring charge in the second quarter of 2024, were $58.7 million and $57.7 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Total cost of sales and operating expenses inclusive of a restructuring charge were $122.3 million and $121.7 million for the six months ended June 30, 2024 and June 30, 2023, respectively. Further breakdown of cost of sales and operating expense drivers and fluctuations are highlighted in the following paragraphs.

Cost of sales were $8.9 million and $1.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Cost of sales were $16.7 million and $2.0 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase is primarily due to the amortization of the monoplant finance right of use asset, which was placed into service in late June 2023, semi-finished product sales to Otsuka and increased sales of LUPKYNIS (voclosporin).

Gross margin was approximately 84% and 96% for the three months ended June 30, 2024 and June 30, 2023, respectively. Gross margin was approximately 85% and 97% for the six months ended June 30, 2024 and June 30, 2023, respectively.

SG&A expenses, inclusive of share-based compensation, were $44.9 million and $47.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. SG&A expenses, inclusive of share-based compensation, were $92.6 million and $97.2 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The decrease is primarily due to lower employee and overhead costs as a result of a reduction in general and administrative headcount, which occurred late in the first quarter of 2024 partially offset by an increase in legal fees.

Non-cash SG&A share-based compensation expense included within SG&A expenses was $8.1 million and $9.8 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Non-cash SG&A share-based compensation expense included within SG&A expenses was $15.6 million and $17.4 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

R&D expenses, inclusive of share-based compensation expense, were $4.1 million and $12.7 million for the three months ended June 30, 2024 and June 30, 2023, respectively. R&D expenses, inclusive of share-based compensation expense, were $9.6 million and $25.8 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The primary drivers for the decrease were lower employee costs due to a reduction in headcount, which occurred late in the first quarter of 2024, a decrease of CRO and developmental expenses related to ceasing development of Aurinia’s AUR300 program and timing of expenses related to AUR200.

Non-cash R&D share-based compensation expense included within R&D expense was $0.1 million and $2.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Non-cash R&D share-based compensation expense included within R&D expense was $(2.1) million and $3.7 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The non-cash R&D share-based compensation credit in the six months ended June 30, 2024 is due to the reversals of expense for forfeitures related to a reduction in headcount in the first quarter of 2024.

Restructuring expenses were approximately $1.1 million and nil for the three months ended June 30, 2024 and June 30, 2023, respectively. Restructuring expenses were approximately $7.8 million and nil for the six months ended June 30, 2024 and June 30, 2023, respectively. Restructuring expenses primarily included employee severance, one-time benefit payments and contract termination expenses.

Other income, net was $0.3 million and $3.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Other income, net was $4.4 million and $3.3 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The change is primarily driven by changes in the fair value assumptions related to Aurinia’s deferred compensation liability and the foreign exchange remeasurement of the monoplant lease liability, which commenced in June 2023 and is denominated in CHF.

Interest income was $4.2 million and $4.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Interest income was $8.7 million and $7.9 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

Interest expense was $1.2 million and $0.1 million for the three months ended June 30, 2024 and June 30, 2023, respectively. Interest expense was $2.5 million and $0.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The interest expense is due to the monoplant finance lease, which commenced in June 2023.

For the three months ended June 30, 2024, Aurinia recorded net income of $0.7 million or $0.01 net income per common share, as compared to a net loss of $11.5 million or $(0.08) net loss per common share for the three months ended June 30, 2023. For the six months ended June 30, 2024, Aurinia recorded a net loss of $10.0 million or $(0.07) net loss per common share, as compared to a net loss of $37.7 million or $(0.26) net loss per common share for the three months ended June 30, 2023.

Financial Liquidity at June 30, 2024

As of June 30, 2024, Aurinia had cash, cash equivalents, restricted cash and investments of $330.7 million compared to $350.7 million at December 31, 2023. The decrease is primarily related to the continued investment in commercialization activities and post approval commitments of our approved drug, LUPKYNIS, monoplant payments, share repurchases and restructuring related payments, partially offset by an increase in cash receipts from sales of LUPKYNIS and cash payments from Otsuka.

Cash generated from operations and non-GAAP free cash flow generated were $15.8 million for the three months ended June 30, 2024 compared to cash used in operations of $2.8 million and non-GAAP free cash flow used of $3.0 million for the three months ended June 30, 2023. Cash used in operations and non-GAAP free cash flow used were $2.8 million for the six months ended June 30, 2024 compared to cash used in operations of $34.5 million and non-GAAP free cash flow used of $35.0 million for the six months ended June 30, 2023.

Free cash flow is a non-GAAP financial measure calculated by subtracting purchases of property and equipment from net cash provided by or used in operating activities. Free cash flow reflects a view of Aurinia’s liquidity that, when viewed with the Company’s GAAP results, provides a more complete understanding of factors and trends affecting Aurinia’s cash flows. The Company believes it is a more conservative measure of cash flow since capital expenditures are necessary for ongoing operations. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not incorporate the principal portion of payments made or expected to be made on finance lease obligations. Therefore, the Company believes it is important to view free cash flow as a complement to its entire consolidated statements of cash flows.

A reconciliation of free cash flow to its most directly comparable GAAP measure, net cash provided by or used in operating activities, is set out in the Condensed Consolidated Statement of Cash Flows included at the end of this press release.

Share Repurchase Program

As previously announced, Aurinia’s Board of Directors approved a share repurchase program of up to $150 million common shares of the Company. Canadian securities regulators also granted exemptive relief for the Company’s share repurchase program, authorizing the Company to purchase up to 15 percent of its issued and outstanding shares in any 12-month period for up to 36 months. Through July 31, 2024 Aurinia has repurchased 3.4 million shares for approximately $18.6 million at an average cost of $5.36. The Company expects to fund any future discretionary share repurchases from cash flows from operations and cash currently on hand.

This press release is intended to be read in conjunction with the Company’s unaudited condensed consolidated financial statements and Management’s Discussion and Analysis for the quarter and six months ended June 30, 2024 in the Company’s Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, including risk factors disclosed therein, which will be accessible on Aurinia’s website at www.auriniapharma.com, on SEDAR at www.sedarplus.ca or on EDGAR at www.sec.gov/edgar.

Conference Call Details

Aurinia will host a conference call and webcast today, August 1, 2024, at 8:30 AM ET to discuss the quarter and six months ended June 30, 2024, financial results. The link to the audio webcast is available here or on Aurinia’s corporate website at www.auriniapharma.com under "News/Events" through the Investors section. To join the conference call, please dial +1 (866) 682-6100 / +1 (862) 298-0702 (Toll-free U.S. & Canada). A replay of the webcast will be available on Aurinia’s website.

On August 1, 2024 Arbutus Biopharma Corporation (Nasdaq: ABUS) ("Arbutus" or the "Company"), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop a functional cure for people with chronic hepatitis B virus (cHBV) infection, reported second quarter 2024 financial results and provides a corporate update (Press release, Arbutus Biopharma, AUG 1, 2024, View Source [SID1234645246]).

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"At the EASL Congress we reported impressive imdusiran data. I’m particularly excited that in the IM-PROVE I clinical trial we saw undetectable HBsAg in 67% of those patients with baseline HBsAg less than 1000 IU/mL who were treated with 48 weeks of imdusiran and 24 weeks of IFN," said Michael J. McElhaugh, Interim President and Chief Executive Officer of Arbutus Biopharma. "In addition, these patients stopped all therapy and in early follow-up have maintained undetectable HBsAg and HBV DNA, a precursor to a functional cure. With these encouraging data, we continue to be optimistic about imdusiran as a potential cornerstone therapeutic in a treatment regimen to functionally cure cHBV."

Mr. McElhaugh continued, "We intend to focus our existing resources on conducting a Phase 2b clinical trial with imdusiran, assuming continued positive data. This has the potential to create a true inflection point for both Arbutus and HBV patients. To ensure we have the resources to conduct such a program, we have made the difficult decision to discontinue our HBV research efforts and reduce our headcount leading to a projected cash runway into the fourth quarter of 2026. I want to express my sincere gratitude to those impacted by the workforce reduction for their invaluable contributions to our mission and their dedication to helping HBV patients."

Clinical Development Update

Imdusiran (AB-729, RNAi Therapeutic)

At the EASL Congress in June, end-of-treatment data was presented from IM-PROVE I (AB-729-201), a Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of the combination of imdusiran, nucleos(t)ide analogue (NA) therapy and pegylated interferon alfa-2a (IFN) in patients with cHBV. The data showed that 33.3% (n=4/12) of patients in Cohort A1 receiving 48 weeks of imdusiran combined with a short course of IFN (24-weeks) and NA therapy, achieved undetectable HBsAg at the end-of-treatment that was maintained in 100% of these patients 24 weeks after completing imdusiran and IFN treatment. Undetectable HBsAg was achieved in 67% of those patients with HBsAg less than 1000 IU/mL at baseline. A total of six patients who received 24 weeks of IFN (n=4 Cohort A1; n=2 Cohort A2) seroconverted, with HBsAg loss accompanied by high titers of anti-HBsAg antibodies. All six of these patients have stopped NA therapy, with two of those patients reaching 12 weeks off all therapy with sustained undetectable levels of HBsAg and HBV DNA. The combination of imdusiran and IFN in this clinical trial was generally safe and well-tolerated.
Also at the EASL Congress in June, end-of treatment data was presented from the IM-PROVE II (AB-729-202) Phase 2a clinical trial evaluating the safety and immunogenicity of imdusiran, NA therapy and Barinthus Bio’s VTP-300, an HBV antigen-specific immunotherapy. The data showed that at 24-weeks post-end of treatment with imdusiran and VTP-300, statistical significance (p<0.05) was achieved in HBsAg levels between the treatment arm (n=5) and placebo (n=6). In addition, more patients maintained HBsAg thresholds of <100 IU/mL and <10 IU/mL when administered VTP-300 vs. placebo at 24-weeks post end-of-treatment. The combination of imdusiran and VTP-300 in this clinical trial was generally safe and well-tolerated.
IM-PROVE II includes an additional cohort of patients who will receive imdusiran plus NA therapy for 24 weeks followed by VTP-300 plus up to two low doses of nivolumab, an approved anti-PD-1 monoclonal antibody. Arbutus is on-track to report preliminary end-of-treatment data from this additional cohort in the second half of 2024.
Arbutus has terminated its Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of imdusiran and NA therapy in combination with intermittent low doses of durvalumab, an approved anti-PD-L1 monoclonal antibody (IM-PROVE III, AB-729-203) prior to dosing any participants. This decision was based on a prioritization of resources and the projected availability of clinical data from this trial.
AB-101 (Oral PD-L1 Inhibitor)

AB-101-001 is a Phase 1a/1b double-blind, randomized, placebo-controlled clinical trial designed to investigate the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV. Part 1 of the clinical trial has enrolled four sequential cohorts of eight healthy subjects each (6 active:2 placebo) to date, each receiving a single dose of AB-101 at increasing dose levels up to 25 mg or placebo. Data from Part 1 of this trial showed that AB-101 was generally well-tolerated with evidence of dose-dependent receptor occupancy. In the 25 mg cohort, all five evaluable subjects showed evidence of receptor occupancy between 50-100%. Arbutus has moved into Part 2 of this clinical trial which evaluates multiple-ascending doses of AB-101 in healthy subjects and expects to report preliminary data in the second half of this year.
Corporate Updates

The Company has made the decision to streamline the organization to focus its efforts on advancing the clinical development of imdusiran and AB-101, and is therefore ceasing all discovery efforts and discontinuing its IM-PROVE III clinical trial. In taking these steps to streamline the organization, Arbutus is implementing a reduction in its workforce of 40%, primarily affecting the discovery and general and administrative functions. As a result, Arbutus will incur a one-time restructuring charge of approximately $3.0 – $4.0 million that will be recorded in the third quarter of 2024. With these organizational changes and its ongoing cost management efforts, the Company now expects its current cash, cash equivalents and investments in marketable securities will be sufficient to fund operations into the fourth quarter of 2026.
LNP Litigation Update

Next steps in the lawsuit against Moderna include expert reports and expert depositions. A trial date has been set for April 21, 2025, and is subject to change.
The lawsuit against Pfizer/BioNTech is ongoing and a date for a claim construction hearing has not been set. 
Arbutus continues 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’s and Pfizer/BioNTech’s COVID-19 vaccines would not have been successful.

Financial Results

Cash, Cash Equivalents and Investments

As of June 30, 2024, the Company had cash, cash equivalents and investments in marketable securities of $148.5 million compared to $132.3 million as of December 31, 2023. During the six months ended June 30, 2024, the Company used $33.8 million in operating activities, which was offset by $44.1 million of net proceeds from the issuance of common shares under its "at-the-market" offering program (ATM Program). The Company expects its 2024 cash burn to range from $63 million to $67 million. With the organizational changes announced today, the Company believes its cash, cash equivalents and investments in marketable securities will be sufficient to fund its operations into the fourth quarter of 2026.

Revenue

Total revenue was $1.7 million for the three months ended June 30, 2024 compared to $4.7 million for the same period in 2023. The decrease of $3.0 million was due primarily to: i) a decrease in license revenue recognized under our licensing agreement with Qilu Pharmaceutical; and ii) a decrease in license royalty revenue from Alnylam due to lower sales of ONPATTRO in 2024 compared to 2023.

Operating Expenses

Research and development expenses were $15.6 million for the three months ended June 30, 2024 compared to $17.7 million for the same period in 2023. The decrease of $2.1 million was due primarily to the discontinuation of the Company’s coronavirus and AB-161 programs in September 2023 as part of its efforts to focus on its lead HBV product candidates, partially offset by an increase in clinical expenses for the Company’s AB-101 Phase 1a/1b clinical trial and its multiple imdusiran Phase 2a clinical trials. General and administrative expenses were $7.5 million for the three months ended June 30, 2024 compared to $6.0 million for the same period in 2023. The increase of $1.5 million was due primarily to higher litigation costs, partially offset by a decrease in compensation-related expenses.

Net Loss

For the three months ended June 30, 2024, the Company’s net loss was $19.8 million, or a loss of $0.11 per basic and diluted common share, as compared to a net loss of $17.1 million, or a loss of $0.10 per basic and diluted common share, for the three months ended June 30, 2023.

Outstanding Shares

As of June 30, 2024, the Company had approximately 188.7 million common shares issued and outstanding. In addition, the Company had approximately 20.5 million stock options and unvested restricted stock units outstanding as of June 30, 2024. Roivant Sciences Ltd. owned approximately 21% of our outstanding common shares as of June 30, 2024.

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

Three Months Ended March 31, Six Months Ended June 30,
2024 2023 2024 2023
Revenue
Collaborations and licenses $ 1,155 $ 3,885 $ 2,094 $ 9,394
Non-cash royalty revenue 571 766 1,164 1,944
Total revenue 1,726 4,651 3,258 11,338
Operating expenses
Research and development 15,551 17,692 30,954 35,967
General and administrative 7,547 5,980 12,859 11,532
Change in fair value of contingent consideration 211 (636 ) 391 (363 )
Total operating expenses 23,309 23,036 44,204 47,136
Loss from operations (21,583 ) (18,385 ) (40,946 ) (35,798 )
Other income
Interest income 1,829 1,461 3,374 2,729
Interest expense (34 ) (171 ) (78 ) (369 )
Foreign exchange gain (8 ) 1 (21 ) 5
Total other income 1,787 1,291 3,275 2,365
Net loss $ (19,796 ) $ (17,094 ) $ (37,671 ) $ (33,433 )
Loss per share
Basic and diluted $ (0.11 ) $ (0.10 ) $ (0.21 ) $ (0.20 )
Weighted average number of common shares
Basic and diluted 188,041,489 166,063,284 181,842,519 163,855,661

Comprehensive loss
Unrealized gain on available-for-sale securities 63 166 113 1,020
Comprehensive loss $ (19,733 ) $ (16,928 ) $ (37,558 ) $ (32,413 )

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

June 30, 2024 December 31, 2023
Cash, cash equivalents and marketable securities, current $ 141,986 $ 126,003
Accounts receivable and other current assets 6,234 6,024
Total current assets 148,220 132,027
Property and equipment, net of accumulated depreciation 4,059 4,674
Investments in marketable securities, non-current 6,527 6,284
Right of use asset 1,237 1,416
Total assets $ 160,043 $ 144,401
Accounts payable and accrued liabilities $ 11,108 $ 10,271
Deferred license revenue, current 11,034 11,791
Lease liability, current 453 425
Total current liabilities 22,595 22,487
Liability related to sale of future royalties 5,859 6,953
Contingent consideration 7,991 7,600
Lease liability, non-current 1,144 1,343
Total stockholders’ equity 122,454 106,018
Total liabilities and stockholders’ equity $ 160,043 $ 144,401

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Six Months Ended June 30,
2024
2023
Net loss $ (37,671 ) $ (33,433 )
Non-cash items 3,973 2,911
Change in deferred license revenue (757 ) (7,128 )
Other changes in working capital 656 (9,210 )
Net cash used in operating activities (33,799 ) (46,860 )
Net cash provided by investing activities 21,523 18,119
Issuance of common shares pursuant to the Open Market Sale Agreement 44,124 24,604
Cash provided by other financing activities 4,676 555
Net cash provided by financing activities 48,800 25,159
Effect of foreign exchange rate changes on cash and cash equivalents (21 ) 3
Increase/(decrease) in cash and cash equivalents 36,503 (3,579 )
Cash and cash equivalents, beginning of period 26,285 30,776
Cash and cash equivalents, end of period 62,788 27,197
Investments in marketable securities 85,725 136,344
Cash, cash equivalents and marketable securities, end of period $ 148,513 $ 163,541

Conference Call and Webcast Today

Arbutus will hold a conference call and webcast today, Thursday, August 1, 2024, 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.

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 250 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.