Arbutus Biopharma Corporation (Nasdaq: ABUS) (“Arbutus” or the
“Company”), a clinical-stage biopharmaceutical company leveraging
its extensive virology expertise to develop novel therapeutics that
target specific viral diseases, today reported second quarter 2023
financial results and provided a corporate update.
“In the second quarter of 2023, we achieved two
important milestones in our Phase 2a clinical trials that support
our efforts in developing AB-729 (imdusiran), our lead RNAi
therapeutic, as a cornerstone therapy in a functional cure
treatment regimen for HBV,” said William Collier, Arbutus President
and Chief Executive Officer. “First, we reported data from our
Phase 2a clinical trial showing that imdusiran in combination with
interferon, is well tolerated and appears to result in continued
HBsAg declines in some patients. Second, we made solid progress
towards our goal of further stimulating host HBV-associated
immunity, as we dosed the first patient in the additional treatment
arm of the ongoing Phase 2a trial assessing the addition of
low-dose nivolumab, a PD-1 monoclonal antibody, to VTP-300 and
imdusiran.”
Mr. Collier continued, “Regarding our
early-stage HBV assets, we are now prepared to move AB-101 forward
into a Phase 1 clinical trial in New Zealand, which we expect to
initiate this quarter, and AB-161, our oral RNA destabilizer, is in
an on-going Phase 1 clinical trial. Additionally, we are on-track
to complete IND-enabling studies with our coronavirus Mpro
inhibitor candidate, AB-343, as well as initiate IND-enabling
studies for a coronavirus nsp12 inhibitor candidate in the second
half of this year.”
Pipeline Updates and Key
Milestones
Imdusiran (AB-729, RNAi
Therapeutic)
- At the European Association for the
Study of the Liver (EASL) Congress, we presented data from our
on-going Phase 2a clinical trial (AB-729-201), evaluating the
safety, tolerability and antiviral activity of the combination of
imdusiran and pegylated interferon alfa-2a (IFN) in patients with
chronic hepatitis B virus (cHBV). Preliminary data suggests that
the addition of IFN to imdusiran was generally well tolerated and
appears to result in continued HBsAg declines in some patients. The
mean HBsAg decline from baseline during the imdusiran lead-in phase
was 1.6 log10 at week 24 of treatment which is comparable to what
was previously seen in other imdusiran clinical trials. Four
patients reached HBsAg below the lower limit of quantitation (LLOQ)
at some point during IFN treatment. We plan to provide a further
update on this clinical trial when we have additional meaningful
patient data.
- We have completed enrollment in the
first group of our Phase 2a clinical trial (AB-729-202) that is
evaluating imdusiran, nucleos(t)ide analogue (NA) therapy and
Vaccitech’s HBV antigen-specific immunotherapeutic, VTP-300.
Preliminary data from patients in the clinical trial are expected
in the second half of 2023.We recently expanded the AB-729-202
clinical trial to enroll 20 patients who will receive imdusiran
(60mg every 8 weeks) plus NA therapy for 24 weeks followed by
VTP-300 plus up to two doses of low-dose nivolumab (Opdivo®). In
June 2023, we announced that the first patient received the first
dose of imdusiran in this additional arm. Preliminary data from
this additional treatment arm are expected in 2024.
AB-161 (Oral RNA
destabilizer)
- The Phase 1
clinical trial with AB-161 is on-going with single-ascending dose
data expected in the second half of 2023. AB-161 is our
next-generation oral HBV-specific RNA destabilizer, which is being
developed as part of a potential all-oral treatment regimen to
functionally cure HBV. Recently reported preclinical data showed
that AB-161 provides robust anti-HBV activity including suppression
of HBV RNA and HBsAg production in vitro and in vivo.
AB-101 (Oral PD-L1
Inhibitor)
- In April 2023, AB-101 was placed on
clinical hold by the U.S. Food and Drug Administration (FDA) during
the Investigational New Drug (IND) application review process prior
to dosing subjects. In July 2023, the New Zealand Medicine and
Medical Device Safety Authority (Medsafe) approved our CTA
application for a Phase 1 clinical trial in New Zealand for AB-101,
and we believe the protocol approved by Medsafe adequately
addresses the clinical trial design and safety monitoring issues
raised by the FDA. We are planning to initiate the Phase 1 clinical
trial this quarter. We are developing AB-101 to reawaken and boost
the immune system of patients with cHBV. Preclinical data generated
thus far indicates that AB-101 is highly potent and mediates
activation and reinvigoration of HBV-specific T-cells from cHBV
patients.
COVID-19 and Pan-Coronavirus
Programs
- We are continuing to conduct
IND-enabling studies with AB-343 and are on track to complete those
studies in the second half of 2023.
- We are continuing to direct our
research efforts to identifying an nsp12 viral polymerase inhibitor
clinical candidate. Such a candidate could potentially be combined
with AB-343 to achieve better patient treatment outcomes and for
use in prophylactic settings. We expect to nominate an nsp12
inhibitor clinical candidate and initiate IND-enabling studies in
the second half of 2023.
Corporate Updates
- In July 2023, we announced that
Melissa V. Rewolinski, PhD was appointed to the Board of Directors.
Melissa brings to the Board more than 20 years of strategic,
operational and drug development experience within the
pharmaceutical industry.
- In July 2023, we announced the
promotion of Karen Sims, MD, PhD to Chief Medical Officer. Karen is
a board-certified infectious disease physician with more than 12
years of industry experience in conducting and overseeing early
stage through global Phase 2 clinical trials. She joined Arbutus in
April 2017 and has held positions of increasing seniority,
including most recently as Vice President, Clinical Development,
before being promoted to Chief Medical Officer.
- In July 2023, we also announced the
appointment of Christopher Naftzger as General Counsel and Chief
Compliance Officer. Chris succeeds Dr. Elizabeth Howard who will
continue in an advisory role with respect to the on-going patent
infringement litigations. Chris brings more than 25 years of legal
experience, including over a decade of experience serving in senior
in-house counsel positions with life science companies.
Financial Results
Cash, Cash Equivalents and
Investments
As of June 30, 2023, we had cash, cash
equivalents and investments in marketable securities of $163.5
million compared to $184.3 million as of December 31, 2022.
During the six months ended June 30, 2023, we used $46.9 million in
operating activities, which was partially offset by $24.6 million
of net proceeds from the issuance of common shares under our
“at-the-market” offering program. We expect our 2023 net cash burn
to range from between $90 to $95 million, excluding any proceeds
received from our “at the market program”. We believe our cash
runway will be sufficient to fund our operations into the first
quarter of 2025.
Revenue
Total revenue was $4.7 million for the three
months ended June 30, 2023 compared to $14.2 million for the same
period in 2022. The decrease of $9.5 million for the 2023 period
was due primarily to lower revenue recognition from our license
agreement with Qilu compared to the 2022 period based on lower
employee labor hours expended by us in the 2023 period compared to
the 2022 period to perform our manufacturing obligations under the
license agreement.
Operating Expenses
Research and development expenses were $17.7
million for the three months ended June 30, 2023 compared to $22.9
million for the same period in 2022. The decrease of $5.2 million
was due primarily to a decrease in expenses for drug supply
manufacturing for our imdusiran, AB-101 and AB-161 clinical trials,
as well as a decrease in expenses related to our AB-836 Phase 1a/1b
clinical trial, which was discontinued in the fourth quarter of
2022. These were partially offset by an increase in expenses for
our coronavirus program, including drug supply manufacturing.
General and administrative expenses were $6.0 million for the three
months ended June 30, 2023, compared to $5.2 million for the same
period in 2022. This increase was due primarily to increases in
non-cash stock-based compensation expense and professional
fees.
Net Loss
For the three months ended June 30, 2023, our
net loss was $17.1 million, or a loss of $0.10 per basic and
diluted common share, as compared to a net loss of $14.2 million,
or a loss of $0.10 per basic and diluted common share, for the
three months ended June 30, 2022.
Outstanding Shares
As of June 30, 2023, we had approximately 166.9
million common shares issued and outstanding, as well as
approximately 20.2 million stock options and unvested restricted
stock units outstanding. Roivant Sciences Ltd. owned approximately
23% of our outstanding common shares as of June 30, 2023.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF LOSS(in thousands, except share and
per share data)
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Collaborations and licenses |
$ |
3,885 |
|
|
$ |
12,556 |
|
|
$ |
9,394 |
|
|
$ |
23,774 |
|
Non-cash royalty revenue |
|
766 |
|
|
|
1,685 |
|
|
|
1,944 |
|
|
|
3,048 |
|
Total
revenue |
|
4,651 |
|
|
|
14,241 |
|
|
|
11,338 |
|
|
|
26,822 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
17,692 |
|
|
|
22,942 |
|
|
|
35,967 |
|
|
|
41,404 |
|
General and administrative |
|
5,980 |
|
|
|
5,200 |
|
|
|
11,532 |
|
|
|
10,092 |
|
Change in fair value of contingent consideration |
|
(636 |
) |
|
|
208 |
|
|
|
(363 |
) |
|
|
409 |
|
Total operating
expenses |
|
23,036 |
|
|
|
28,350 |
|
|
|
47,136 |
|
|
|
51,905 |
|
Loss from operations |
|
(18,385 |
) |
|
|
(14,109 |
) |
|
|
(35,798 |
) |
|
|
(25,083 |
) |
Other income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
1,461 |
|
|
|
396 |
|
|
|
2,729 |
|
|
|
555 |
|
Interest expense |
|
(171 |
) |
|
|
(482 |
) |
|
|
(369 |
) |
|
|
(988 |
) |
Foreign exchange gain |
|
1 |
|
|
|
3 |
|
|
|
5 |
|
|
|
3 |
|
Total other income (loss) |
|
1,291 |
|
|
|
(83 |
) |
|
|
2,365 |
|
|
|
(430 |
) |
Loss before income taxes |
|
(17,094 |
) |
|
|
(14,192 |
) |
|
|
(33,433 |
) |
|
|
(25,513 |
) |
Income tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,444 |
) |
Net loss |
$ |
(17,094 |
) |
|
$ |
(14,192 |
) |
|
$ |
(33,433 |
) |
|
$ |
(29,957 |
) |
Net loss per common share |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.20 |
) |
Weighted average number of common
shares |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
166,063,284 |
|
|
|
148,750,048 |
|
|
|
163,855,661 |
|
|
|
148,589,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
|
June 30, 2023 |
|
December 31, 2022 |
Cash, cash equivalents and marketable securities, current |
|
$ |
152,484 |
|
$ |
146,913 |
Accounts receivable and other current assets |
|
|
6,316 |
|
|
4,226 |
Total current assets |
|
|
158,800 |
|
|
151,139 |
Property and equipment, net of accumulated depreciation |
|
|
5,370 |
|
|
5,070 |
Investments in marketable securities, non-current |
|
|
11,057 |
|
|
37,363 |
Right of use asset |
|
|
1,585 |
|
|
1,744 |
Other non-current assets |
|
|
11 |
|
|
103 |
Total assets |
|
$ |
176,823 |
|
$ |
195,419 |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
8,805 |
|
$ |
16,029 |
Deferred license revenue, current |
|
|
15,327 |
|
|
16,456 |
Lease liability, current |
|
|
397 |
|
|
372 |
Total current liabilities |
|
|
24,529 |
|
|
32,857 |
Liability related to sale of future royalties |
|
|
8,787 |
|
|
10,365 |
Deferred license revenue, non-current |
|
|
— |
|
|
5,999 |
Contingent consideration |
|
|
7,168 |
|
|
7,531 |
Lease liability, non-current |
|
|
1,646 |
|
|
1,815 |
Total stockholders’ equity |
|
|
134,693 |
|
|
136,852 |
Total liabilities and stockholders’ equity |
|
$ |
176,823 |
|
$ |
195,419 |
|
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(in
thousands)
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss |
|
$ |
(33,433 |
) |
|
$ |
(29,957 |
) |
Non-cash items |
|
|
2,911 |
|
|
|
3,154 |
|
Change in deferred license revenue |
|
|
(7,128 |
) |
|
|
27,815 |
|
Other changes in working capital |
|
|
(9,210 |
) |
|
|
(686 |
) |
Net cash (used in) provided by operating
activities |
|
|
(46,860 |
) |
|
|
326 |
|
Net cash provided by (used in) investing activities |
|
|
18,119 |
|
|
|
(73,886 |
) |
Issuance of common shares pursuant to Share Purchase Agreement |
|
|
— |
|
|
|
10,973 |
|
Issuance of common shares pursuant to the Open Market Sale
Agreement |
|
|
24,604 |
|
|
|
268 |
|
Cash provided by other financing activities |
|
|
555 |
|
|
|
357 |
|
Net cash provided by financing activities |
|
|
25,159 |
|
|
|
11,598 |
|
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
|
3 |
|
|
|
— |
|
Decrease in cash and cash equivalents |
|
|
(3,579 |
) |
|
|
(61,962 |
) |
Cash and cash equivalents, beginning of period |
|
|
30,776 |
|
|
|
109,282 |
|
Cash and cash equivalents, end of period |
|
|
27,197 |
|
|
|
47,320 |
|
Investments in marketable securities |
|
|
136,344 |
|
|
|
153,329 |
|
Cash, cash equivalents and marketable securities, end of
period |
|
$ |
163,541 |
|
|
$ |
200,649 |
|
|
|
|
|
|
|
|
|
|
Conference Call and Webcast
Today
Arbutus will hold a conference call and webcast
today, Thursday, August 3, 2023, at 8:45 AM Eastern Time to provide
a corporate update. To dial-in for the conference call by phone,
please register using the following link: Registration Link. A live
webcast of the conference call can be accessed through the
Investors section of Arbutus' website at
www.arbutusbio.com.
An archived webcast will be available on the
Arbutus website after the event.
About imdusiran
(AB-729)
Imdusiran is an RNA interference (RNAi)
therapeutic specifically designed to reduce all HBV viral proteins
and antigens including hepatitis B surface antigen which is thought
to be a key prerequisite to enable reawakening of a patient’s
immune system to respond to the virus. Imdusiran targets
hepatocytes using Arbutus’ novel covalently conjugated
N-Acetylgalactosamine (GalNAc) delivery technology enabling
subcutaneous delivery. Clinical data generated thus far has shown
single- and multi-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 lead oral PD-L1 inhibitor
candidate that we believe will allow for controlled checkpoint
blockade and enable oral dosing, 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 activation and reinvigoration of 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 HBV chronically infected
patients. We are also exploring oncology applications for our
internal PD-L1 portfolio.
About AB-161
AB-161 is our next generation oral small
molecule RNA destabilizer, specifically designed to target the
liver. Mechanistically, RNA destabilizers target the host proteins
PAPD5/7, which are involved in regulating the stability of HBV RNA
transcripts. In doing so, RNA destabilizers lead to the selective
degradation of HBV RNAs, thus reducing HBsAg levels and inhibiting
viral replication. To provide a proprietary all-oral treatment
regimen for patients with cHBV, we believe inclusion of a small
molecule RNA destabilizer is key.
About AB-343
AB-343 is our lead coronavirus drug candidate
that inhibits the SARS-CoV-2 main protease (Mpro), a validated
target for the treatment of COVID-19 and potential future
coronavirus outbreaks. In our pre-clinical research conducted to
date, AB-343 has shown pan-coronavirus antiviral activity, no
reduction in potency against known SARS-CoV-2 variants, robust
activity against SARS-CoV-2 Mpro resistant strains, and a favorable
drug-drug interaction profile with no need for ritonavir boosting.
We see an opportunity to pursue a potential combination therapeutic
strategy focusing on Mpro and nsp12 viral polymerase targets to
reduce hospitalizations, achieve better patient treatment outcomes
and provide pre-exposure prophylactic therapy.
About HBV
Hepatitis B is a potentially life-threatening
liver infection caused by the hepatitis B virus (HBV). HBV can
cause chronic infection which leads to a higher risk of death from
cirrhosis and liver cancer. Chronic HBV infection represents a
significant unmet medical need. The World Health Organization
estimates that over 290 million people worldwide suffer from
chronic HBV infection, while other estimates indicate that
approximately 2.4 million people in the United States suffer from
chronic HBV infection. Approximately 820,000 people die every year
from complications related to chronic HBV infection despite the
availability of effective vaccines and current treatment
options.
About Coronaviruses
Coronaviruses are a large family of viruses that
range from the common cold to more severe diseases such as severe
acute respiratory syndrome (SARS), Middle East respiratory syndrome
(MERS), and COVID-19. COVID-19 has caused approximately 7.2 million
deaths globally according to an analysis by the Institute for
Health Metrics and Evaluation (IHME). As we strive to identify and
develop new antiviral small molecules to treat COVID-19 and future
coronavirus outbreaks, we have focused our research efforts on two
essential targets critical for replication across all coronaviruses
– nsp5 protease and nsp12 polymerase.
About Arbutus
Arbutus Biopharma Corporation (Nasdaq: ABUS) is
a clinical-stage biopharmaceutical company leveraging its extensive
virology expertise to develop novel therapeutics that target
specific viral diseases. Our current focus areas include Hepatitis
B virus (HBV), SARS-CoV-2, and other coronaviruses. To address HBV,
we are developing a RNAi therapeutic, an oral PD-L1 inhibitor, and
an oral RNA destabilizer to potentially identify a combination
regimen with the aim of providing a functional cure for patients
with chronic HBV by suppressing viral replication, reducing surface
antigen and reawakening the immune system. We believe our lead
compound, imdusiran (AB-729), is the only RNAi therapeutic with
evidence of immune re-awakening. Imdusiran is currently being
evaluated in multiple phase 2 clinical trials. We also have an
ongoing drug discovery and development program directed to
identifying novel, orally active agents for treating coronaviruses,
(including SARS-CoV-2), for which we have nominated a compound and
have begun IND-enabling pre-clinical studies. In addition, we are
also exploring oncology applications for our internal PD-L1
portfolio. For more information, visit
www.arbutusbio.com.
Forward-Looking Statements and
Information
This press release contains forward-looking
statements within the meaning of the Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
and forward-looking information within the meaning of Canadian
securities laws (collectively, forward-looking statements).
Forward-looking statements in this press release include statements
about our future development plans for our product candidates; the
expected cost, timing and results of our clinical development plans
and clinical trials with respect to our product candidates; our
expectations with respect to the release of data from our clinical
trials and the expected timing thereof; our expectations and goals
for our collaborations with third parties and any potential
benefits related thereto; statements regarding our plans for AB-101
in light of the FDA’s clinical hold; the potential for our product
candidates to achieve success in clinical trials; and our expected
financial condition, including our anticipated net cash burn, the
anticipated duration of cash runways and timing regarding needs for
additional capital.
With respect to the forward-looking statements
contained in this press release, Arbutus has made numerous
assumptions regarding, among other things: the effectiveness and
timeliness of preclinical studies and clinical trials, and the
usefulness of the data; the timeliness of regulatory approvals; the
continued demand for Arbutus’ assets; and the stability of economic
and market conditions. While Arbutus considers these assumptions to
be reasonable, these assumptions are inherently subject to
significant business, economic, competitive, market and social
uncertainties and contingencies, including uncertainties and
contingencies related to the ongoing patent litigation
matters.
Additionally, there are known and unknown risk
factors which could cause Arbutus’ actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements contained herein. Known risk factors
include, among others: anticipated pre-clinical studies and
clinical trials may be more costly or take longer to complete than
anticipated, and may never be initiated or completed, or may not
generate results that warrant future development of the tested
product candidate; Arbutus may elect to change its strategy
regarding its product candidates and clinical development
activities; Arbutus may not receive the necessary regulatory
approvals for the clinical development of Arbutus’ products;
economic and market conditions may worsen; uncertainties associated
with litigation generally and patent litigation specifically; it
may take considerable time and expense to resolve the clinical hold
that has been placed on AB-101 by the FDA, and no assurance can be
given that the FDA will remove the clinical hold; Arbutus and its
collaborators may never realize the expected benefits of the
collaborations; and market shifts may require a change in strategic
focus.
A more complete discussion of the risks and
uncertainties facing Arbutus appears in Arbutus’ Annual Report on
Form 10-K, Arbutus’ Quarterly Reports on Form 10-Q and Arbutus’
continuous and periodic disclosure filings, which are available at
www.sedar.com and at www.sec.gov. All forward-looking statements
herein are qualified in their entirety by this cautionary
statement, and Arbutus disclaims any obligation to revise or update
any such forward-looking statements or to publicly announce the
result of any revisions to any of the forward-looking statements
contained herein to reflect future results, events or developments,
except as required by law.
Contact Information
Investors and Media
Lisa M. Caperelli Vice President, Investor
Relations Phone: 215-206-1822 Email:
lcaperelli@arbutusbio.com
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