Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage
biopharmaceutical company leveraging its extensive virology
expertise to develop novel therapeutics that target specific viral
diseases, today reports its first quarter 2022 financial results
and provides pipeline updates.
“In the first quarter of 2022, we continued to
advance our efforts to develop a functional cure for hepatitis B
and to develop novel treatment options for coronavirus infections,
including SARS-CoV-2,” said William Collier, Arbutus’ President and
Chief Executive Officer. “We are on-track to achieve our goal of
reporting data later this year from four clinical trials with
chronically infected HBV patients being treated with either AB-729,
our RNAi therapeutic, or AB-836, our next generation oral capsid
inhibitor. Furthermore, our IND-enabling studies with our oral
PD-L1 inhibitor, AB-101, and our oral RNA destabilizer, AB-161, are
moving forward and we expect these to be completed in the second
half of 2022. Additionally, we have had seven abstracts accepted at
the EASL International Liver Congress™, which include some of these
data.”
Mr. Collier continued, “With respect to our
research efforts to develop a nsp5 main protease (Mpro) and nsp12
viral polymerase for SARS-CoV-2 and future coronavirus outbreaks,
we are on-track to initiate IND-enabling studies for a nsp5 Mpro
candidate later this year. Lead optimization activities are
continuing for a nsp12 viral polymerase candidate. Financially, we
are well-positioned to continue advancing all our current clinical
programs through important data milestones with a projected cash
runway into the second quarter of 2024.”
Anticipated Milestones in
2022:
- Dose first patient
in the AB-729-202 Phase 2a clinical trial evaluating AB-729, in
combination with VTP-300, Vaccitech plc’s (Vaccitech) therapeutic
vaccine and nucleos(t)ide analogue therapy (NA), in cHBV patients
in the first half of 2022.
- Present new
on-treatment data as well as long-term off-treatment data for cHBV
patients in the AB-729-001 clinical trial at a medical conference
later this year.
- Report initial data
from the AB-729-201 Phase 2a clinical trial evaluating AB-729 in
combination with ongoing NA therapy and short courses of
PEG-IFNα-2a in cHBV patients in the second half of 2022.
- Report initial data
from the Phase 2a clinical trial evaluating AB-729 in combination
with vebicorvir (VBR), Assembly Biosciences, Inc.’s (Assembly) lead
HBV core inhibitor (capsid inhibitor), and an NA in cHBV patients
in the second half of 2022.
- Report data set
from the AB-836-001 clinical trial evaluating multiple doses of
AB-836 in cHBV patients in the first half of 2022.
- Complete
IND-enabling studies for two oral compounds (PD-L1 inhibitor,
AB-101 and RNA destabilizer, AB-161) to treat HBV in the second
half of 2022.
- Advance an oral
compound that inhibits the SARS-CoV-2 nsp5 main protease into IND
enabling studies in the second half of 2022.
- Continue to explore
a potential oncology indication with our oral PD-L1 program.
Financial Results
Cash, Cash Equivalents and
Investments
As of March 31, 2022, the Company had cash, cash
equivalents and investments in marketable securities of $221.8
million, as compared to $191.0 million as of December 31, 2021.
During the three months ended March 31, 2022,
the Company received a $40.0 million (net of withholding taxes)
upfront payment from Qilu Pharmaceutical Co., Ltd. (“Qilu”) related
to a technology transfer and license agreement for AB-729 in
greater China, $15.0 million of gross proceeds from Qilu’s equity
investment and $0.3 million of net proceeds from the issuance of
common shares under Arbutus’s “at-the-market” offering program.
These cash inflows were partially offset by $23.4 million of cash
used in operations. The Company expects a net cash burn between $90
to $95 million in 2022, not including the $55 million of proceeds
received from Qilu, and believes its cash runway will be sufficient
to fund operations into the second quarter of 2024.
Revenue
Revenues were $12.6 million for the three months
ended March 31, 2022 compared to $2.1 million for the same period
in 2021. The increase of $10.5 million was due primarily to $9.6
million of revenue recognition from the Company’s license agreement
with Qilu based on employee labor hours expended by the Company
during the first quarter of 2022 to perform its manufacturing
obligations under the license agreement. Net
Loss
For the three months ended March 31, 2022, the
Company’s net loss attributable to common shares was $15.8 million,
or a loss of $0.11 per basic and diluted common share, as compared
to a net loss attributable to common shares of $19.6 million, or a
loss of $0.21 per basic and diluted common share, for the three
months ended March 31, 2021. Net loss attributable to common shares
for the three months ended March 31, 2021 included $3.2 million of
non-cash expense for the accrual 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 $18.5
million for the three months ended March 31, 2022 compared to $13.8
million for the same period in 2021. The increase of $4.7 million
was due primarily to an increase in expenses related to the
Company’s multiple, ongoing AB-729 Phase 2a clinical trials,
including its collaborations with Assembly and Vaccitech, an
increase in expenses for its ongoing AB-836-001 clinical trial, and
an increase in expenses for its early stage development programs,
including AB-101 and AB-161. General and administrative expenses
were $4.9 million for the three months ended March 31, 2022
compared to $3.9 million for the same period in 2021. This increase
was due primarily to increases in professional fees, employee
compensation and non-cash stock-based compensation expense.
Outstanding Shares
As of March 31, 2022, the Company had
approximately 148.7 million common shares issued and outstanding,
as well as approximately 15.7 million stock options outstanding.
Roivant Sciences Ltd. owned approximately 26% of the Company’s
outstanding common shares as of March 31, 2022.
COVID-19 Impact
The COVID-19 pandemic has resulted in and will
likely continue to result in significant disruptions to businesses.
Measures implemented around the world in attempts to slow the
spread of COVID-19 have had, and will likely continue to have, a
major impact on clinical development, at least in the near-term,
including 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.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF LOSS(in thousands, except share and
per share data)
|
Three Months Ended March 31, |
|
2022 |
|
|
2021 |
|
|
Revenue |
|
|
|
Revenue from collaborations and licenses |
$ |
11,218 |
|
|
|
$ |
1,154 |
|
|
Non-cash royalty revenue |
1,363 |
|
|
|
959 |
|
|
Total
revenue |
12,581 |
|
|
|
2,113 |
|
|
Operating
expenses |
|
|
|
Research and development |
18,462 |
|
|
|
13,782 |
|
|
General and administrative |
4,892 |
|
|
|
3,878 |
|
|
Change in fair value of contingent consideration |
201 |
|
|
|
129 |
|
|
Total operating
expenses |
23,555 |
|
|
|
17,789 |
|
|
Loss from
operations |
(10,974 |
) |
|
|
(15,676 |
) |
|
Other income
(loss) |
|
|
|
Interest income |
159 |
|
|
|
39 |
|
|
Interest expense |
(506 |
) |
|
|
(772 |
) |
|
Foreign exchange (losses) gains |
- |
|
|
|
28 |
|
|
Total other
loss |
(347 |
) |
|
|
(705 |
) |
|
Net loss before income
tax expense |
|
(11,321 |
) |
|
|
|
(16,381 |
) |
|
Income tax expense |
|
(4,444 |
) |
|
|
|
- |
|
|
Net loss |
$ |
(15,765 |
) |
|
|
$ |
(16,381 |
) |
|
Dividend accretion of convertible preferred shares |
- |
|
|
|
(3,212 |
) |
|
Net loss attributable
to common shares |
$ |
(15,765 |
) |
|
|
$ |
(19,593 |
) |
|
Net loss per common
share |
|
|
|
Basic and diluted |
$ |
(0.11 |
) |
|
|
$ |
(0.21 |
) |
|
Weighted average
number of common shares |
|
|
|
Basic and diluted |
148,428,326 |
|
|
|
93,434,378 |
|
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands)
|
March 31, 2022 |
|
December 31, 2021 |
Cash, cash equivalents and marketable securities, current |
$ |
165,477 |
|
|
$ |
155,317 |
|
Accounts receivable and other
current assets |
7,221 |
|
|
5,344 |
|
Total current assets |
172,698 |
|
|
160,661 |
|
Property and equipment, net of
accumulated depreciation |
5,664 |
|
|
5,983 |
|
Investments in marketable
securities, non-current |
56,318 |
|
|
35,688 |
|
Right of use asset |
2,007 |
|
|
2,092 |
|
Other non-current assets |
190 |
|
|
61 |
|
Total assets |
$ |
236,877 |
|
|
$ |
204,485 |
|
Accounts payable and accrued
liabilities |
$ |
8,715 |
|
|
$ |
10,838 |
|
Deferred revenue |
23,255 |
|
|
- |
|
Lease liability, current |
439 |
|
|
383 |
|
Total current liabilities |
32,409 |
|
|
11,221 |
|
Liability related to sale of
future royalties |
15,439 |
|
|
16,296 |
|
Deferred revenue,
non-current |
15,585 |
|
|
- |
|
Contingent consideration |
5,499 |
|
|
5,298 |
|
Lease liability, non-current |
2,100 |
|
|
2,231 |
|
Total stockholders’ equity |
165,845 |
|
|
169,439 |
|
Total liabilities and stockholders’ equity |
$ |
236,877 |
|
|
$ |
204,485 |
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOW(in thousands)
|
Three Months Ended March 31, |
|
2022 |
|
2021 |
Net loss |
$ |
(15,765 |
) |
|
|
$ |
(16,381 |
) |
|
Non-cash items |
1,642 |
|
|
|
2,222 |
|
|
Change in deferred license
revenue |
38,840 |
|
|
|
- |
|
|
Other changes in working
capital |
(4,098 |
) |
|
|
(3,722 |
) |
|
Net cash provided by (used in) operating
activities |
20,619 |
|
|
|
(17,881 |
) |
|
Net cash (used in) provided by investing
activities |
(60,056 |
) |
|
|
18,221 |
|
|
Issuance of common shares
pursuant to Share Purchase Agreement |
10,973 |
|
|
|
- |
|
|
Cash provided by other financing
activities |
512 |
|
|
|
26,874 |
|
|
Net cash provided by financing activities |
11,485 |
|
|
|
26,874 |
|
|
Effect of foreign exchange rate
changes on cash and cash equivalents |
- |
|
|
|
(44 |
) |
|
(Decrease) Increase in cash and cash
equivalents |
(27,952 |
) |
|
|
27,170 |
|
|
Cash and cash equivalents,
beginning of period |
109,282 |
|
|
|
52,251 |
|
|
Cash and cash equivalents, end of period |
81,330 |
|
|
|
79,421 |
|
|
Investments in marketable
securities |
140,465 |
|
|
|
52,540 |
|
|
Cash, cash equivalents and marketable securities, end of
period |
$ |
221,795 |
|
|
|
$ |
131,961 |
|
|
Conference Call and Webcast Today
Arbutus will hold a conference call and webcast
today, Thursday, May 5, 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: 6287124.
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: 6287124.
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.
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. In HBV, we are
developing an RNAi therapeutic, oral capsid inhibitor, oral PD-L1
inhibitor, and oral RNA destabilizer that we intend to combine to
provide 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,
AB-729, is the only RNAi therapeutic with evidence of immune
re-awakening, and is currently being evaluated in multiple phase 2
clinical trials. We have an ongoing drug discovery and development
program directed to identifying novel, orally active agents for
treating coronavirus (including SARS-CoV-2). 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; the potential for our product candidates
to achieve success in clinical trials; and our expected financial
condition, including 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 COVID-19 pandemic and 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;
Arbutus and its collaborators may never realize the expected
benefits of the collaborations; market shifts may require a change
in strategic focus; and the ongoing COVID-19 pandemic could
significantly disrupt Arbutus’ clinical development programs.
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
William H. CollierPresident and CEO Phone: 267-469-0914Email:
ir@arbutusbio.comLisa M. CaperelliVice President, Investor
RelationsPhone: 215-206-1822Email: lcaperelli@arbutusbio.com
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