8-K: Arbutus Biopharma Reports Positive Q1 2025 Results, Highlights Functional Cure in Hepatitis B Patients

Arbutus Biopharma announces Q1 2025 financial results and provides a corporate update, highlighting functional cures in chronic hepatitis B patients and progress with its oral PD-L1 inhibitor.

Summary

• Arbutus Biopharma reported its first quarter 2025 financial results and provided a corporate update on May 14, 2025.
• The company highlighted that eight patients with chronic hepatitis B (cHBV) have achieved functional cure following imdusiran combination therapy, including two patients who did not receive interferon.
• Arbutus's oral PD-L1 inhibitor, AB-101, showed 100% receptor occupancy in 11 of 13 evaluable healthy volunteers in a Phase 1a/1b clinical trial at the 40 mg dose.
• Andrew J. Sung has joined Arbutus as General Counsel.
• The company's cash, cash equivalents, and marketable securities totaled $112.7 million as of March 31, 2025.
• Total revenue for the quarter was $1.8 million, compared to $1.5 million for the same period in 2024.
• The net loss for the quarter was $24.5 million, or $0.13 per share, compared to a net loss of $17.9 million, or $0.10 per share, for the same period in 2024.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. Positive clinical trial results and a new General Counsel are offset by a larger net loss and restructuring costs.

Positives

• Imdusiran combination therapy has resulted in functional cures for eight patients with chronic hepatitis B.
• AB-101 demonstrates promising receptor occupancy in early-stage clinical trials.
• The company maintains a strong financial position with $112.7 million in cash, cash equivalents, and marketable securities.
• The appointment of Andrew J. Sung as General Counsel brings significant life sciences deal experience to the company.
• Revenue increased to $1.8 million for the quarter ended March 31, 2025, compared to $1.5 million for the same period in 2024.

Negatives

• The company reported a net loss of $24.5 million for the quarter ended March 31, 2025, which is higher than the $17.9 million loss for the same period in 2024.
• Research and development expenses decreased due to the company's decision to streamline the organization, ceasing discovery efforts, discontinuing the IM-PROVE III clinical trial, and reducing the workforce.
• The company used $13.4 million in operating activities during the quarter ended March 31, 2025.

Risks

• Clinical trials may be more costly or take longer to complete than anticipated.
• 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 its product candidates.
• Uncertainties are associated with litigation generally and patent litigation specifically.
• Economic and market conditions may worsen.
• Arbutus' workforce reduction and plans to reduce its net cash burn may not materially extend the cash runway and may create a distraction or uncertainty that may adversely affect its operating results, business, or investor perceptions.
• There are risks related to the sufficiency of Arbutus' cash resources for its foreseeable and unforeseeable operating expenses and capital expenditures.

Future Outlook

The press release contains forward-looking statements regarding the potential for functional cure of HBV, the success of Arbutus' product candidates in clinical trials, and the company's plans with respect to ongoing patent litigation matters.

Management Comments

• Lindsay Androski, President and CEO of Arbutus, stated that the functional cure data, in patients who successfully discontinued all cHBV treatments including NUCs, is an exciting milestone for Arbutus, clinicians, and patients.
• Lindsay Androski also mentioned that AB-101 achieved 100% receptor occupancy in 11 of 13 evaluable healthy volunteers in the Phase 1a/1b clinical trial at the 40 mg dose.
• Lindsay Androski announced that Andrew Sung has joined Arbutus as General Counsel.

Industry Context

Arbutus is operating in the competitive biopharmaceutical industry, specifically targeting infectious diseases like chronic hepatitis B. The company's focus on developing a functional cure for HBV and its progress with AB-101, an oral PD-L1 inhibitor, positions it within the innovative landscape of HBV therapeutics.

Comparison to Industry Standards

• The reported functional cure rate of 25% (2/8) in patients with baseline HBsAg <1000 IU/mL who received low dose nivolumab in the IM-PROVE II Phase 2a clinical trial is a notable result compared to standard treatments.
• Companies like Gilead Sciences and Vir Biotechnology are also developing HBV therapeutics, but Arbutus' approach with RNAi and PD-L1 inhibitors offers a differentiated strategy.
• The ongoing LNP litigation against Moderna and Pfizer/BioNTech places Arbutus in a unique position, seeking compensation for the use of its patented technology in their COVID-19 vaccines, similar to how companies like Alnylam have successfully licensed RNAi technology.

Management Changes

Legal Proceedings

• Arbutus is involved in ongoing lawsuits against Moderna and Pfizer/BioNTech regarding the use of its patented LNP technology in their COVID-19 vaccines.
• The claim construction hearing for the lawsuit against Pfizer/BioNTech occurred in December 2024, and the court is expected to provide its ruling and issue a further scheduling order in 2025.
• The jury trial in the Moderna U.S. litigation is scheduled for September 29, 2025.
• In March 2025, the Company, alongside Genevant Sciences, filed five international lawsuits against Moderna and its affiliates seeking to enforce patents protecting the Companys patented LNP technology across 30 countries.

Stakeholder Impact

• Shareholders may be impacted by the financial performance and clinical trial results.
• Employees were impacted by the workforce reduction and restructuring.
• Patients with chronic hepatitis B may benefit from the development of new therapies.
• Genevant Sciences is a key partner in protecting and defending Arbutus' intellectual property.

Next Steps

• The company will continue the Phase 1a/1b clinical trial of AB-101 in cHBV patients.
• The court is expected to provide its ruling on the claim construction and issue a further scheduling order in 2025 regarding the LNP litigation against Pfizer/BioNTech.
• The jury trial in the Moderna U.S. litigation is scheduled for September 29, 2025.
• Modernas Statement of Defense is due on July 8, 2025, in the Unified Patent Court.
• Substantially all of the termination severance payments and other employee benefits costs are expected to be paid during the second quarter of 2025, with the remainder to be paid in the second half of 2025.

Key Dates

Keywords

Arbutus Biopharma, Hepatitis B, Imdusiran, AB-101, PD-L1 inhibitor, Functional cure, Clinical trial, Financial results, LNP litigation, Genevant Sciences