WARMINSTER, PA — Arbutus Biopharma Corporation (Nasdaq: ABUS) this week reported first quarter 2023 financial results and provided a corporate update.
“In the first quarter of 2023, we made meaningful progress advancing our pipeline of HBV and coronavirus assets to address large global market opportunities,” said William Collier, Arbutus’ President and Chief Executive Officer. “We reported data from our lead HBV-focused RNAi therapeutic, AB-729, showing low levels of HBsAg and HBV DNA in most patients persisting for at least a year and a half after their last dose of AB-729. In addition, we dosed the first healthy subject in our Phase 1 clinical trial with AB-161, our oral RNA destabilizer, for which we expect data in the second half of this year. We continue to advance our coronavirus programs and expect to initiate a Phase 1 clinical trial with our Mpro inhibitor candidate, AB-343, as well as IND-enabling studies for an nsp12 inhibitor candidate in the second half of this year.”
Pipeline Updates and Key Milestones
AB-729 (RNAi Therapeutic)
- At the Global Hepatitis Summit in April, the Company reported in an oral presentation additional off-treatment data from the patients in its Phase 1b clinical trial (AB-729-001) who have discontinued both AB-729 and nucleos(t)ide analogue (NA) therapy. These seven remaining patients continue to maintain low HBV DNA levels off all therapy, and HBsAg levels remain below baseline (-0.8 to -1.6 log10) up to one and a half years after the last dose of AB-729.
- The Company is continuing to evaluate the safety and tolerability of AB-729 in combination with ongoing NA therapy and short courses of PEG-IFNα-2a (IFN) in 43 patients with chronic hepatitis B virus (cHBV) infection in a Phase 2a clinical trial (AB-729-201). Preliminary data from the lead-in phase of the trial further validated AB-729’s capacity to reduce HBsAg. The Company expects to announce preliminary data from patients receiving the combination of AB-729, NA therapy and IFN in the second quarter of 2023.
- The Company is continuing to evaluate AB-729, NA therapy and Vaccitech’s HBV antigen-specific immunotherapeutic, VTP-300, in a Phase 2a clinical trial (AB-729-202). Once enrollment is complete in the initial portion of this trial, it will begin enrolling 20 patients in an additional arm of the trial. These patients will receive AB-729 (60mg every 8 weeks) plus NA therapy for 24 weeks, followed by VTP-300 plus one to two low doses of nivolumab (Opdivo®). The Company expects preliminary data from patients who receive AB-729, NA therapy and VTP-300 in the second half of 2023, and it expects to dose the first patient in the additional arm receiving AB-729, NA therapy, VTP-300 and nivolumab in the second quarter of 2023.
AB-161 (Oral RNA destabilizer)
- In March, the Company dosed the first healthy subject in its Phase 1 clinical trial with AB-161. The single-ascending dose data is expected in the second half of 2023. AB-161 is its next-generation oral HBV-specific RNA destabilizer, which is being developed as part of a potential all-oral treatment regimen to functionally cure HBV.
- At the Global Hepatitis Summit in April, the Company presented preclinical data showing that AB-161 provides robust anti-HBV activity including suppression of HBV RNA and HBsAg production in vitro and in vivo. The differentiated anti-HBV mode of action of AB-161 compared to other classes of HBV inhibitors, suggest that AB-161 may be an important component in combination to provide a functional cure for cHBV.
AB-101 (Oral PD-L1 Inhibitor)
- In April, the Company received verbal communication from the U.S. Food and Drug Administration (FDA) that the AB-101 Investigational New Drug (IND) application has been placed on clinical hold. For purposes of clarity, the Phase 1 clinical trial had not been initiated and it had not dosed any patients with AB-101. The FDA indicated they will provide an official clinical hold letter to Arbutus within 30 days of the verbal communication. Based on this communication, it no longer intends to report initial data from the single-ascending dose portion of a Phase 1 clinical trial in the second half of 2023. The Company is developing AB-101, its oral PD-L1 inhibitor, 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
- At the 36th International Conference on Antiviral Research in March, the Company presented pre-clinical data for AB-343, its lead coronavirus drug candidate that inhibits the main protease (Mpro). The antiviral potency, selectivity and favorable pharmacokinetic data support the further development of AB-343 as a potential ritonavir-free oral treatment for COVID-19 and other human coronaviruses. The Company currently conducting IND-enabling studies with AB-343, and on completion, it expects to initiate a Phase 1 clinical trial in the second half of 2023.
- The Company is continuing to direct its research efforts to identifying an nsp12 viral polymerase clinical candidate. Such a candidate could potentially be combined with AB-343 to achieve better patient treatment outcomes and for use in prophylactic settings. The Company expects to nominate an nsp12 clinical candidate and initiate IND-enabling studies in the second half of 2023.
Cash, Cash Equivalents and Investments
As of March 31, 2023, the Company had cash, cash equivalents and investments in marketable securities of $178.5 million compared to $184.3 million as of December 31, 2022. During the three months ended March 31, 2023, it used $27.3 million in operating activities, which was partially offset by $19.9 million of net proceeds from the issuance of common shares under its “at-the-market” offering program. Based on AB-101’s IND being placed on clinical hold by the FDA and a resulting shift in the timing of its AB-101 Phase 1 clinical trial, it is reducing its 2023 cash burn guidance from between $95 to $100 million to between $90 to $95 million. The Company believes its cash runway will be sufficient to fund its operations into the first quarter of 2025.
Total revenue was $6.7 million for the three months ended March 31, 2023 compared to $12.6 million for the same period in 2022. The decrease of $5.9 million was due primarily to less revenue recognition from its license agreement with Qilu compared to last year based on employee labor hours expended by the Company to perform its manufacturing obligations under the license agreement.
Research and development expenses were $18.3 million for the three months ended March 31, 2023 compared to $18.5 million for the same period in 2022. The decrease of $0.2 million was due primarily to a decrease in expenses for its AB-836 Phase 1a/1b clinical trial, which was discontinued in the fourth quarter of 2022, partially offset by an increase in expenses for its coronavirus program and other early-stage development programs.
For the three months ended March 31, 2023, its net loss was $16.3 million, or a loss of $0.10 per basic and diluted common share, as compared to a net loss of $15.8 million, or a loss of $0.11 per basic and diluted common share, for the three months ended March 31, 2022. Net loss for the three months ended March 31, 2022 included $4.4 million of income tax expense for withholding taxes paid to the Chinese taxing authority by Qilu on its behalf in connection with the upfront license fee Qilu paid us.
As of March 31, 2023, the Company had approximately 165.1 million common shares issued and outstanding, as well as approximately 19.7 million stock options and unvested restricted stock units outstanding. Roivant Sciences Ltd. owned approximately 23% of its outstanding common shares as of March 31, 2023.
|UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share and per share data)
|Three Months Ended March 31,|
|Collaborations and licenses||$||5,509||$||11,218|
|Non-cash royalty revenue||1,178||1,363|
|Research and development||18,275||18,462|
|General and administrative||5,552||4,892|
|Change in fair value of contingent consideration||273||201|
|Total operating expenses||24,100||23,555|
|Loss from operations||(17,413||)||(10,974||)|
|Other income (loss)|
|Foreign exchange gain||4||—|
|Total other income (loss)||1,074||(347||)|
|Loss before income taxes||(16,339||)||(11,321||)|
|Income tax expense||—||(4,444||)|
|Net loss per common share|
|Basic and diluted||$||(0.10||)||$||(0.11||)|
|Weighted average number of common shares|
|Basic and diluted||161,643,404||148,428,326|
|UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|March 31, 2023||December 31, 2022|
|Cash, cash equivalents and marketable securities, current||$||146,728||$||146,913|
|Accounts receivable and other current assets||6,126||4,226|
|Total current assets||152,854||151,139|
|Property and equipment, net of accumulated depreciation||4,853||5,070|
|Investments in marketable securities, non-current||31,790||37,363|
|Right of use asset||1,665||1,744|
|Other non-current assets||62||103|
|Accounts payable and accrued liabilities||$||9,653||$||16,029|
|Deferred license revenue, current||15,055||16,456|
|Lease liability, current||446||372|
|Total current liabilities||25,154||32,857|
|Liability related to sale of future royalties||9,384||10,365|
|Deferred license revenue, non-current||3,296||5,999|
|Lease liability, non-current||1,671||1,815|
|Total stockholders’ equity||143,915||136,852|
|Total liabilities and stockholders’ equity||$||191,224||$||195,419|
|UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|Three Months Ended March 31,|
|Change in deferred license revenue||(4,104||)||38,840|
|Other changes in working capital||(8,230||)||(4,098||)|
|Net cash (used in) provided by operating activities||(27,301||)||20,619|
|Net cash provided by (used in) investing activities||16,678||(60,056||)|
|Issuance of common shares pursuant to Share Purchase Agreement||—||10,973|
|Issuance of common shares pursuant to the Open Market Sale Agreement||19,862||268|
|Cash provided by other financing activities||555||244|
|Net cash provided by financing activities||20,417||11,485|
|Effect of foreign exchange rate changes on cash and cash equivalents||4||–|
|Increase (decrease) in cash and cash equivalents||9,798||(27,952||)|
|Cash and cash equivalents, beginning of period||30,776||109,282|
|Cash and cash equivalents, end of period||40,574||81,330|
|Investments in marketable securities||137,944||153,500|
|Cash, cash equivalents and marketable securities, end of period||$||178,518||$||234,830|
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