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, today
reports second quarter 2024 financial results and provides a
corporate update.
“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.
About Arbutus
Arbutus Biopharma Corporation (Nasdaq: ABUS) is
a clinical-stage biopharmaceutical company leveraging its extensive
virology expertise to develop novel therapeutics with distinct
mechanisms of action, which can potentially be combined to provide
a functional cure for patients with chronic hepatitis B virus
(cHBV). We believe the key to success in developing a functional
cure involves suppressing HBV DNA, reducing surface antigen, and
boosting HBV-specific immune responses. Our pipeline of internally
developed, proprietary compounds includes an RNAi therapeutic,
imdusiran (AB-729), and an oral PD-L1 inhibitor, AB-101. Imdusiran
has generated meaningful clinical data demonstrating an impact on
both surface antigen reduction and reawakening of the HBV-specific
immune response. Imdusiran is currently in two Phase 2a combination
clinical trials. AB-101 is currently being evaluated in a Phase
1a/1b clinical trial. 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; our expectations regarding our
organizational changes; the potential for our product candidates to
achieve success in clinical trials; our expectations regarding our
pending litigation matters; 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 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; Arbutus may not realize
the anticipated benefits from the organizational changes; Arbutus
may incur additional unexpected expenses in connection with the
organizational changes; Arbutus may experience additional employee
turnover as a result of the organizational changes; uncertainties
associated with litigation generally and patent litigation
specifically; and Arbutus and its collaborators may never realize
the expected benefits of the collaborations; 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. CaperelliVice President, Investor RelationsPhone:
215-206-1822Email: lcaperelli@arbutusbio.com
Arbutus Biopharma (NASDAQ:ABUS)
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Arbutus Biopharma (NASDAQ:ABUS)
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