On March 3, 2022 Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases, reported its fourth quarter and year end 2021 financial results and provides pipeline updates (Press release, Arbutus Biopharma, MAR 3, 2022, View Source [SID1234609474]).
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"2021 was a transformative year for Arbutus as we greatly expanded our development efforts in Hepatitis B and coronavirus infections, including SARS-CoV-2," said William Collier, Arbutus’ President and Chief Executive Officer. "We formed strategic and clinical partnerships that allowed us to explore several combination therapies with AB-729, our RNAi therapeutic, as a potential cornerstone agent in a functional cure for Hepatitis B, expand the reach of AB-729 to greater China and broaden our pipeline to include programs targeting coronaviruses. In addition, we have expanded our preclinical programs in HBV with our oral PD-L1 inhibitor, AB-101, and our oral RNA destabilizer, AB-161, both of which are expected to complete IND-enabling studies this year. Multiple key clinical trial data read-outs expected later this year for AB-729 and AB-836 will inform our go-forward clinical and regulatory strategy for HBV Phase 2b development."
Pipeline Update
AB-729 (RNAi Therapeutic)
Arbutus is currently dosing patients in the last cohort of its Phase 1a/1b clinical trial to evaluate the safety and tolerability of AB-729 in patients with chronic Hepatitis B (cHBV) infection (AB-729-001 Trial). Data observed to-date show that AB-729 continues to reduce HBsAg across all doses and dosing intervals with a favorable safety and tolerability profile. Additionally, long term dosing of AB-729 has increased HBV-specific immune responses in some patients.
The Company intends to present updated and new on-treatment data on multiple cohorts of patients included in the AB-729-001 Trial, as well as long-term follow-up data for patients in the AB-729-001 Trial who completed treatment and have discontinued AB-729 and standard-of-care nucleos(t)ide analogues (NA) therapy at a medical conference this year.
In-line with the Company’s strategy to combine multiple therapies that target different points of the viral replication cycle to develop a curative treatment regimen for cHBV, Arbutus is currently enrolling patients in its Phase 2a randomized, open-label, proof-of-concept clinical trial designed to evaluate the safety and tolerability of AB-729 in combination with ongoing NA therapy and short courses of PEG-IFNα-2a in 40 patients with cHBV infection. The Company is expecting initial data from this clinical trial in the second half of 2022.
Also, in line with the Company’s strategy, Arbutus has entered into separate clinical collaboration agreements with Assembly Biosciences, Inc. (Assembly), Vaccitech plc (Vaccitech) and Antios Therapeutics, Inc. (Antios) to evaluate AB-729 as the cornerstone agent in combination with Assembly’s capsid inhibitor, Vaccitech’s T-cell stimulating therapeutic vaccine, and Antios’ Active Site Polymerase Inhibitor Nucleotide (ASPIN), respectively, in patients with cHBV infection.
Enrollment is on-going in the Phase 2a proof-of-concept triple combination clinical trial evaluating AB-729, vebicorvir (VBR), Assembly’s lead HBV core inhibitor (capsid inhibitor), and an NA. Assembly is conducting this clinical trial and expecting initial data in the second half of 2022.
Arbutus is on-track to initiate a triple combination Phase 2a clinical trial in the first half of 2022 to evaluate AB-729, combined with VTP-300, Vaccitech’s therapeutic vaccine and an NA.
Enrollment is complete in a cohort of patients in Antios’ Phase 2a clinical trial evaluating AB-729, ATI-2173, Antios’ ASPIN, and Viread (tenofovir disoproxil fumarate). With the majority of patients in this cohort enrolled in Ukraine, which is currently in a state of war, they may be lost to follow-up before completing the trial. Therefore, Arbutus and Antios may report limited data on a reduced number of patients from this clinical trial.
AB-836 (Oral Capsid Inhibitor)
AB-836 is Arbutus’ novel, next generation oral capsid inhibitor with improved intrinsic potency, activity against resistant variants and an enhanced ability to starve replenishment of cccDNA, which is responsible for HBV persistence.
Arbutus is enrolling patients in part 3 of its on-going Phase 1a/1b clinical trial evaluating the safety and tolerability of multiple doses of AB-836 in patients with cHBV infection. The Company is on-track to report additional data from patients with cHBV infection in the first half of 2022.
AB-101 (Oral PD-L1 Inhibitor)
AB-101 is Arbutus’ oral PD-L1 inhibitor that is designed to reawaken the immune system, which the Company believes may be a key component in developing a functional cure for HBV.
Arbutus has commenced IND-enabling studies for AB-101 and intends to complete those studies in the second half of 2022.
AB-161 (Oral RNA destabilizer)
AB-161 is Arbutus’ next-generation oral HBV specific RNA destabilizer, which is being developed to create an all-oral treatment regimen to functionally cure HBV.
Arbutus has conducted extensive non-clinical safety evaluations with AB-161 that provide confidence in the molecule’s ability to circumvent the peripheral neuropathy findings seen in non-clinical safety studies with the Company’s first-generation oral RNA destabilizer, AB-452.
Arbutus has commenced IND-enabling studies for AB-161 and intends to complete those studies in the second half of 2022.
COVID-19 and Pan-Coronavirus Programs
Leveraging its extensive antiviral drug discovery experience, Arbutus is focused on the discovery and development of new pan-coronavirus molecular entities to treat COVID-19 and future coronavirus outbreaks by targeting essential viral proteins including the nsp12 viral polymerase and the nsp5 viral protease.
Arbutus intends to nominate a candidate that inhibits the SARS-CoV-2 nsp5 main protease (Mpro) in the first half of 2022 and advance that candidate into IND-enabling studies. In addition, the Company intends to continue lead optimization activities for an Nsp12 viral polymerase candidate.
Corporate Update
In April 2018, Arbutus entered into an agreement with Roivant Sciences Ltd. (Roivant), its largest shareholder, to launch Genevant Sciences Ltd. (Genevant), a company focused on a broad range of RNA-based therapeutics enabled by Arbutus’ LNP and ligand conjugate delivery technologies. Arbutus licensed rights to its LNP and ligand conjugate delivery platforms to Genevant for RNA-based applications outside of HBV, except to the extent certain rights had already been licensed to other third parties. Arbutus retained all rights to its LNP and conjugate delivery platforms for HBV and owns approximately 16% of the common equity of Genevant.
In February 2022, Arbutus and Genevant filed a lawsuit in the U.S. District Court for the District of Delaware against Moderna, Inc. and a Moderna affiliate seeking damages for infringement of U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19. The patents relate to nucleic acid-lipid particles and lipid vesicles, as well as compositions and methods for their use. Arbutus, and Genevant, do not seek an injunction or otherwise seek to impede the sale, manufacture or distribution of MRNA-1273. However, the parties seek fair compensation for Moderna’s use of their patented technology that was developed with great effort and at a great expense, without which Moderna’s COVID-19 vaccine would not have been successful.
Under the license agreement with Genevant, as amended, if Genevant receives proceeds from an action for infringement by any third parties of Arbutus’ intellectual property licensed to Genevant, Arbutus would be entitled to receive, after deduction of litigation costs, 20% of the proceeds received by Genevant or, if less, tiered low single-digit royalties on net sales of the infringing product (inclusive of the proceeds from litigation or settlement, which would be treated as net sales).
Financial Results
Cash, Cash Equivalents and Investments
As of December 31, 2021, the Company had cash and cash equivalents of $109.3 million and investments in marketable securities of $81.7 million, totaling $191.0 million, as compared to $123.3 million as of December 31, 2020. The ending cash, cash equivalents and marketable securities as of December 31, 2021 do not include a $40 million upfront payment and a $15 million equity investment from Qilu Pharmaceutical as part of an exclusive licensing agreement and strategic partnership to develop and commercialize AB-729 in China, received in January 2022.
During the year ended December 31, 2021, Arbutus used $67.5 million in operating activities, which was offset by $134.7 million of net proceeds from the issuance of common shares under Arbutus’s "at-the-market" offering program. Arbutus expects a net cash burn between $90 to $95 million in 2022 and believes its cash runway, including $55 million of gross proceeds received from Qilu Pharmaceutical in January 2022, will be sufficient to fund the Company’s operations into the second quarter of 2024.
Net Loss
For the year ended December 31, 2021, the Company’s net loss attributable to common shares was $88.4 million, or a loss of $0.83 per basic and diluted common share, as compared to a net loss of $75.9 million, or a loss of $1.00 per basic and diluted common share, for the year ended December 31, 2020. Net loss attributable to common shares for the year ended December 31, 2021 and 2020 included $12.1 million of non-cash expense in both periods for the accrual of coupon on the Company’s convertible preferred shares, which converted into 22.8 million common shares in October 2021.
Operating Expenses
Research and development expenses were $65.5 million for the year ended December 31, 2021 compared to $49.3 million for the same period in 2020. The increase of $16.2 million in research and development expenses for the year ended December 31, 2021 versus the same period in 2020 was due primarily to an increase in expenses related to the Company’s multiple, ongoing AB-729 clinical trials, including its collaboration with Assembly, an increase in expenses for its ongoing AB-836 Phase 1a/1b clinical trial, and an increase in expenses for its early stage development programs, including its coronavirus programs.
Outstanding Shares
As of December 31, 2021, the Company had approximately 145.0 million common shares issued and outstanding, as well as approximately 11.4 million stock options outstanding. Following the conversion of preferred shares in October 2021, Roivant owned approximately 27% of the Company’s outstanding common shares as of December 31, 2021.
COVID-19 Impact
The COVID-19 virus, first identified in December 2019, 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 and patients 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 materially impact our plans and timelines in the future.
Conference Call and Webcast Today
Arbutus will hold a conference call and webcast today, Thursday, March 3, 2022, 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. Alternatively, you can dial (866) 393-1607 or (914) 495-8556 and reference conference ID: 3977368.
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: 3977368.
About AB-729
AB-729 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. AB-729 targets hepatocytes using Arbutus’ novel covalently conjugated N-acetylgalactosamine (GalNAc) delivery technology that enables subcutaneous delivery. Clinical data generated thus far has shown single- and multi-doses of AB-729 to be generally safe and well-tolerated while providing meaningful reductions in hepatitis B surface antigen and hepatitis B DNA. AB-729 is currently in multiple Phase 2a clinical trials.
About AB-836
AB-836 is a next generation oral hepatitis B virus (HBV) capsid inhibitor that interacts with HBV core protein, which in turn is required for viral replication. The current standard-of-care therapy for HBV is primarily nucleos(t)ide analogues that inhibit the viral polymerase and significantly reduce, but do not eliminate viral replication. AB-836 in combination with nucleos(t)ide analogues is designed to completely eliminate viral replication in infected cells by preventing the assembly of functional viral capsids. In addition, AB-836 has been shown to inhibit the replenishment of covalently closed circular DNA (cccDNA), the viral genetic reservoir which the virus needs to replicate itself. Preliminary data from an on-going Phase 1a/1b clinical trial has shown that AB-836 is generally safe and well-tolerated and provides robust antiviral activity.
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.