Arbutus Biopharma Corporation (NASDAQ:ABUS) is a clinical-stage biopharmaceutical company at the forefront of developing novel therapeutics to potentially provide a functional cure for patients with chronic hepatitis B virus (cHBV) infection. The company's strategic focus on tackling this challenging disease through a multi-pronged approach has positioned it as a leader in the field.
Business Overview
Arbutus was co-founded over a decade ago with the goal of discovering and developing medicines that can improve the lives of patients living with cHBV. The company's pipeline consists of two proprietary clinical-stage assets - imdusiran, an RNAi therapeutic, and AB-101, an oral small molecule PD-L1 inhibitor. These candidates are designed to work in combination to suppress hepatitis B virus DNA (HBV DNA), reduce hepatitis B surface antigen (HBsAg), and boost HBV-specific immune responses - the three key elements believed necessary to achieve a functional cure for cHBV.Imdusiran, Arbutus' lead asset, has demonstrated promising results in reducing HBsAg and reawakening HBV-specific immunity in early-stage clinical trials. The company is currently evaluating imdusiran in three Phase 2a combination studies, pairing it with interferon, a therapeutic vaccine, and a PD-L1 inhibitor, respectively. These trials aim to identify the optimal combination regimen that can drive HBsAg to undetectable levels and potentially lead to a functional cure.
Complementing imdusiran, Arbutus is also advancing AB-101, its proprietary oral PD-L1 inhibitor. Unlike monoclonal antibody checkpoint inhibitors, AB-101 is designed to be liver-centric, have a shorter duration of effect, and act through a novel mechanism of action. The company recently initiated a Phase 1a/1b clinical trial to evaluate the safety, tolerability, and pharmacodynamics of AB-101, with plans to rapidly progress it into combination studies with imdusiran.
Financials
For the full year 2023, Arbutus reported annual revenue of $18.1 million and a net loss of $72.8 million. The company's annual operating cash flow was -$85.9 million, and its annual free cash flow was -$86.9 million. These financial results reflect the company's continued investment in the development of its cHBV pipeline.In the first quarter of 2024, Arbutus generated revenue of $1.5 million and incurred a net loss of $17.9 million. The company's quarterly operating cash flow was -$19.3 million, and its quarterly free cash flow was -$19.3 million. These quarterly figures demonstrate Arbutus' ongoing investment in advancing its clinical programs.
Liquidity
As of March 31, 2024, Arbutus had $137.9 million in cash, cash equivalents, and investments in marketable securities. In April 2024, the company received an additional $22.4 million in net proceeds from its at-the-market (ATM) offering program. Arbutus expects a net cash burn between $63 million and $67 million in 2024, excluding any further proceeds from the ATM program. The company believes its current cash position is sufficient to fund its operations through the second quarter of 2026.Intellectual Property and Litigation
Arbutus has an extensive portfolio of intellectual property related to its lipid nanoparticle (LNP) delivery technology, which is the subject of ongoing patent infringement lawsuits against Moderna and Pfizer/BioNTech. In the Moderna lawsuit, the court recently issued a claim construction ruling that was largely favorable to Arbutus, agreeing with the company's position on most of the disputed claim terms. The litigation process continues, with fact discovery ongoing and a trial date set for April 2025. The Pfizer/BioNTech lawsuit is also ongoing, with a claim construction hearing yet to be scheduled.Clinical Pipeline Update
Imdusiran, Arbutus' lead RNAi therapeutic, is currently being evaluated in three Phase 2a combination studies:1. AB-729-201: Imdusiran in combination with pegylated interferon-alpha-2a (Peg-IFNα-2a) and ongoing standard-of-care nucleos(t)ide analogue (NA) therapy in patients with cHBV. Preliminary data from this trial suggest that the addition of Peg-IFNα-2a to imdusiran treatment was generally well-tolerated and appears to result in continued HBsAg declines in some patients.
2. AB-729-202: Imdusiran in combination with Barinthus Biotherapeutics' HBV antigen-specific immunotherapy, VTP-300, and ongoing NA therapy in patients with cHBV. Preliminary data showed robust reductions in HBsAg during the imdusiran treatment period, and VTP-300 treatment appears to contribute to the maintenance of low HBsAg levels in the early post-treatment period.
3. AB-729-203: Imdusiran in combination with durvalumab, an approved anti-PD-L1 monoclonal antibody, and ongoing NA therapy in patients with cHBV. This trial is designed to evaluate the optimal timing of checkpoint inhibitor dosing in the context of surface antigen reduction during ongoing imdusiran treatment.
Arbutus also recently initiated the AB-101-001 Phase 1a/1b clinical trial to investigate the safety, tolerability, pharmacokinetics, and pharmacodynamics of its oral PD-L1 inhibitor, AB-101. Preliminary data from the single-ascending dose portion of the trial showed that AB-101 was well-tolerated with evidence of dose-dependent receptor occupancy.
Upcoming Milestones
In the second quarter of 2024, Arbutus expects to present end-of-treatment data from the AB-729-201 and AB-729-202 Phase 2a trials at the European Association for the Study of the Liver (EASL) Congress. Additionally, the company anticipates reporting preliminary end-of-treatment data from the nivolumab arm of the AB-729-202 trial and preliminary multiple-ascending dose data from the AB-101-001 Phase 1 trial in the second half of 2024.