On February 29, 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 fourth quarter and year end 2023 financial results and provides a corporate update (Press release, Arbutus Biopharma, FEB 29, 2024, View Source [SID1234640650]).
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"I anticipate that 2024 will be a productive year for Arbutus as we continue to advance the development of our HBV assets: imdusiran, our RNAi therapeutic, and AB-101, our oral checkpoint inhibitor," said Michael J. McElhaugh, Interim President and Chief Executive Officer of Arbutus Biopharma. "To date, we have dosed more than 170 HBV patients with imdusiran and continue to see notable and sustained reductions in surface antigen. We believe that a combination therapy that reduces surface antigen, suppresses HBV DNA and boosts the host immune response will be necessary to functionally cure HBV. We are currently evaluating imdusiran with other immune modulators and expect multiple data readouts this year, including the potential to see undetectable surface antigen at end of treatment. These trials, in addition to our plans to initiate an imdusiran + durvalumab clinical trial, will help inform our later stage clinical development program in addition to the dose and dosing duration for AB-101, potentially expediting imdusiran + AB-101 combinations."
2024 Clinical Development Milestones
Imdusiran (AB-729, RNAi Therapeutic)
AB-729-201 is a Phase 2a clinical trial that is 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. 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 announce end-of-treatment data from this trial in the first half of 2024.
AB-729-202 is a Phase 2a clinical trial that is evaluating the safety and immunogenicity of imdusiran, NA therapy and Barinthus Bio’s (formerly Vaccitech plc) VTP-300, an HBV antigen-specific immunotherapy. Preliminary data presented at AASLD – The Liver Meeting in November 2023 showed that the combination of imdusiran and VTP-300 provided a meaningful reduction of HBsAg levels that are maintained well below baseline. In addition, a subset of patients given imdusiran and then VTP-300 showed early signs of immune activation. Arbutus plans to announce end-of-treatment data from this portion of the trial in the first half of 2024.
AB-729-202 was amended to include an additional cohort of 20 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. Preliminary data from this additional cohort are expected in the second half of 2024.
AB-729-203 is a Phase 2a clinical trial that Arbutus intends to initiate in the first half of 2024 to evaluate the safety, tolerability and antiviral activity of intermittent low doses of durvalumab, an approved anti-PD-L1 monoclonal antibody in combination with imdusiran and NA therapy. Insights gained from this clinical trial and the amended portion of the AB-729-202 clinical trial with nivolumab, may inform dosing for the planned imdusiran plus AB-101 Phase 2 clinical 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. Arbutus is advancing AB-101 into part two of this clinical trial which involves dosing healthy subjects with multiple-ascending doses of AB-101. Arbutus expects to report preliminary data from the healthy subject portion of this clinical trial, including target engagement and receptor occupancy data, in the first half of 2024.
LNP Litigation Update:
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 and Pfizer/BioNTech’s COVID-19 vaccines would not have been successful. With respect to the Moderna lawsuit, fact discovery is on-going and the claim construction hearing occurred on February 8, 2024. According to the Court Scheduling Order, which was issued on March 21, 2023, the court is expected to issue its claim construction order within 60 days of conclusion of the claim construction hearing. Expert testimony and depositions will then follow. A trial date has been set for April 21, 2025 and is subject to the Court’s availability. 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 December 31, 2023, the Company had cash, cash equivalents and investments in marketable securities of $132.3 million compared to $184.3 million as of December 31, 2022. During the year ended December 31, 2023, the Company used $85.9 million in operating activities, which was partially offset by $29.9 million of net proceeds from the issuance of common shares under its "at-the-market" offering program. The Company expects its 2024 net cash burn to range from between $63 million to $67 million, excluding any proceeds received from its "at the market" offering program. The Company believes its cash, cash equivalents and investments in marketable securities of $132.3 million as of December 31, 2023, are sufficient to fund its operations into the first quarter of 2026.
Revenue
Total revenue was $18.1 million for the year ended December 31, 2023, compared to $39.0 million for the same period in 2022. The decrease of $20.9 million was due primarily to a decrease in revenue recognition from the Company’s license agreement with Qilu, the Company’s collaboration partner in China, Hong Kong, Macau and Taiwan, based on a decrease in employee labor hours expended by the Company during 2023 compared to 2022 to perform its manufacturing obligations under the license agreement. Additionally, license royalty revenues decreased in 2023 compared to 2022 due to a decrease in Alnylam’s sales of ONPATTRO.
Operating Expenses
Research and development expenses were $73.7 million for the year ended December 31, 2023 compared to $84.4 million for the same period in 2022. The decrease of $10.7 million was due primarily to: (i) a decrease in manufacturing expenses associated with supplying drug for the Company’s clinical trials; and (ii) a decrease in clinical expenses due to the discontinuation of the Company’s AB-836 program in 2022; partially offset by (iii) an increase in clinical expenses for the Company’s ongoing AB-101 Phase 1a/1b clinical trial in 2023. General and administrative expenses were $22.5 million for the year ended December 31, 2023, compared to $17.8 million for the same period in 2022. This increase was due primarily to an increase in legal fees, non-cash stock-based compensation expense and employee compensation costs.
Net Loss
For the year ended December 31, 2023, our net loss was $72.8 million, or a loss of $0.44 per basic and diluted common share, as compared to a net loss of $69.5 million, or a loss of $0.46 per basic and diluted common share, for the year ended December 31, 2022.
Outstanding Shares
As of December 31, 2023, the Company had 169.9 million common shares issued and outstanding, as well as 20.4 million stock options and unvested restricted stock units outstanding. Roivant Sciences Ltd. owned approximately 23% of the Company’s outstanding common shares as of December 31, 2023.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share and per share data)
Year Ended December 31,
2023 2022
Revenue
Collaborations and licenses $ 14,274 $ 31,366
Non-cash royalty revenue 3,867 7,653
Total revenue 18,141 39,019
Operating expenses
Research and development 73,700 84,408
General and administrative 22,475 17,834
Change in fair value of contingent consideration 69 2,233
Total operating expenses 96,244 104,475
Loss from operations (78,103 ) (65,456 )
Other income (loss)
Interest income 5,688 2,192
Interest expense (459 ) (1,726 )
Foreign exchange gain 25 (22 )
Total other income 5,254 444
Loss before income taxes (72,849 ) (65,012 )
Income tax expense — (4,444 )
Net loss $ (72,849 ) $ (69,456 )
Net loss per common share
Basic and diluted $ (0.44 ) $ (0.46 )
Weighted average number of common shares
Basic and diluted 165,960,379 150,939,337
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31,
2023 December 31,
2022
Cash, cash equivalents and marketable securities, current $ 126,003 $ 146,913
Accounts receivable and other current assets 6,024 4,226
Total current assets 132,027 151,139
Property and equipment, net of accumulated depreciation 4,674 5,070
Investments in marketable securities, non-current 6,284 37,363
Right of use asset 1,416 1,744
Other non-current assets — 103
Total assets $ 144,401 $ 195,419
Accounts payable and accrued liabilities $ 10,271 $ 16,029
Deferred license revenue, current 11,791 16,456
Lease liability, current 425 372
Total current liabilities 22,487 32,857
Liability related to sale of future royalties 6,953 10,365
Deferred license revenue, non-current — 5,999
Contingent consideration 7,600 7,531
Lease liability, non-current 1,343 1,815
Total stockholders’ equity 106,018 136,852
Total liabilities and stockholders’ equity $ 144,401 $ 195,419
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended December 31,
2023 2022
Net loss $ (72,849 ) $ (69,456 )
Non-cash items 5,146 4,857
Change in deferred license revenue (10,664 ) 22,455
Other changes in working capital (7,569 ) 6,788
Net cash used in operating activities (85,936 ) (35,356 )
Net cash provided by (used in) investing activities 50,773 (74,942 )
Issuance of common shares pursuant to Share Purchase Agreement — 10,973
Issuance of common shares pursuant to the Open Market Sale Agreement 29,852 20,324
Cash provided by other financing activities 795 517
Net cash provided by financing activities 30,647 31,814
Effect of foreign exchange rate changes on cash and cash equivalents 25 (22 )
Decrease in cash and cash equivalents (4,491 ) (78,506 )
Cash and cash equivalents, beginning of period 30,776 109,282
Cash and cash equivalents, end of period 26,285 30,776
Investments in marketable securities 106,002 153,500
Cash, cash equivalents and marketable securities, end of period $ 132,287 $ 184,276
Conference Call and Webcast Today
Arbutus will hold a conference call and webcast today, Thursday, February 29, 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 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.