Arbutus Biopharma Corporation — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. U.S. dollars; financial statements unaudited. Arbutus is a clinical-stage biopharmaceutical company focused on potential combination treatments for chronic hepatitis B (cHBV).
Financial performance and position
| Metric | Q1 2024 | Q1 2023 / prior period |
|---|---|---|
| Total revenue | $1.532 million | $6.687 million |
| Operating expenses | $20.895 million | $24.100 million |
| Operating loss | $19.363 million | $17.413 million |
| Net loss | $17.875 million; $0.10 per share | $16.339 million; $0.10 per share |
| Cash used in operations | $19.295 million | $27.301 million |
| Cash, cash equivalents and marketable securities | $137.917 million at March 31, 2024 | $132.287 million at December 31, 2023 |
Revenue comprised $0.939 million of collaboration and license revenue and $0.593 million of non-cash royalty revenue. Interest income was $1.545 million; total other income was $1.488 million. The company reported no outstanding debt. No meaningful gross-margin measure is presented for this clinical-stage business.
Total assets were $150.290 million and total liabilities were $35.653 million at quarter-end. Current assets were $135.872 million versus current liabilities of $20.296 million. The liability related to the sale of future royalties was $6.396 million; contingent consideration was $7.780 million.
Changes versus Q1 2023
- Revenue fell $5.155 million, mainly because Qilu license revenue recognized as manufacturing obligations were performed declined to $0.244 million from $4.104 million, and ONPATTRO-related royalty revenue was lower.
- Operating expenses decreased $3.205 million, including a $2.872 million reduction in R&D costs. The company attributed this chiefly to discontinuing its AB-161 and coronavirus programs in 2023, partly offset by higher AB-101 and imdusiran trial costs.
- Despite lower operating expenses, operating loss increased $1.950 million and net loss increased $1.536 million, as the revenue decline outweighed expense reductions.
- Operating cash use improved by $8.006 million. Cash and cash equivalents rose to $43.101 million, but the increase included $21.765 million in net proceeds from share sales under the Open Market Sale Agreement (ATM).
- Issued shares increased from 169.9 million at December 31, 2023 to 180.2 million at March 31, 2024. The company sold 8.666 million shares through the ATM in Q1; a further 7.834 million shares raised approximately $22.4 million in April. Shares outstanding were 188,717,409 as of April 30, 2024.
Outlook, programs and risks
- Management expects 2024 net cash burn of $63 million to $67 million, excluding ATM proceeds, and says available resources, including the April 2024 ATM proceeds, are expected to fund operations through the second quarter of 2026. The filing also says resources are sufficient for at least the next 12 months.
- Imdusiran is in three Phase 2a combination trials. Management expected end-of-treatment data from the imdusiran/Peg-IFN trial and the imdusiran/VTP-300 trial in June 2024, and preliminary data from the VTP-300 plus nivolumab cohort in the second half of 2024.
- AB-101 is being evaluated in a Phase 1a/1b trial in New Zealand. The FDA had placed its U.S. IND on clinical hold in 2023 over preclinical data and trial-design questions; the company said it was pursuing other regulatory pathways. Preliminary multiple-dose data were expected in the second half of 2024. A planned Phase 2 combination study with imdusiran depends on successful completion of the AB-101 trial.
- The company and Genevant are pursuing patent-infringement damages claims against Moderna and Pfizer/BioNTech involving LNP technology used in COVID-19 vaccines. In April 2024, the court adopted Arbutus’s position on most disputed claim terms in the Moderna case; fact discovery continues and a trial is scheduled for April 21, 2025, subject to change. The Pfizer/BioNTech case continues, with no claim-construction hearing date set. Outcomes are uncertain.
- Acuitas’s declaratory-judgment action challenging patent infringement and validity remained pending; the company’s motion to dismiss had not been decided. An EPO oral proceeding concerning a European patent was scheduled for June 6, 2024.
- Key uncertainties include clinical and regulatory outcomes, the need for additional financing, potential future ATM dilution, partner and royalty revenue variability, and costs or outcomes of patent disputes. The company reported no material changes in risk factors from its 2023 Form 10-K.
Important facts for investors to verify
- Whether expected 2024 clinical readouts were delivered and what they show about safety, HBsAg reduction and treatment durability.
- AB-101 trial progress, and whether the FDA clinical hold or future regulatory steps affect its U.S. development path.
- Actual cash burn relative to the $63–$67 million 2024 outlook, and whether management’s runway estimate remains on track.
- Further ATM share sales, remaining offering capacity, and the effect of additional issuance on per-share ownership.
- Qilu manufacturing and technology-transfer progress, future milestone prospects, and the trajectory of ONPATTRO-related royalties.
- Developments in the Moderna and Pfizer/BioNTech litigation and the pending Acuitas and European patent proceedings; favorable claim construction is not a final determination of infringement or damages.