Financial Data and Key Metrics Changes - As of June 30, 2019, the company had a cash and investments balance of $95.3 million, down from $124.6 million at December 31, 2018 [13] - Cash used in operating activities during the first half of 2019 was $34.1 million, and the company believes its cash balance plus net proceeds from a recent royalty monetization is sufficient to fund operations into the second half of 2020 [14][15] Business Line Data and Key Metrics Changes - The company is focused on advancing two lead compounds, AB-506 and AB-729, through clinical trials, with preliminary results expected in early 2020 [6][12] - AB-506 showed a decrease in mean HBV DNA and HBV RNA at the end of treatment, with reductions ranging from minus 2 logs for the 160-milligram dose to minus 2.8 logs for the 400-milligram dose [8][10] Market Data and Key Metrics Changes - The company is targeting chronic hepatitis B patients for its clinical trials, with plans to initiate a combination proof-of-concept Phase II trial in the second half of 2020 if both lead compounds progress as expected [12][16] Company Strategy and Development Direction - The company's objective is to improve the existing standard of care in hepatitis B by developing a curative combination regimen that includes multiple mechanisms of action [6] - The combination of AB-506 and AB-729 is believed to have the potential for profound inhibition of HBV replication and higher rates of sustained S-antigen loss compared to current treatments [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to advance its pipeline and achieve significant clinical milestones, with results from ongoing trials expected later in the year [16][30] - The management highlighted the importance of the upcoming data from the Phase Ia/Ib trials for both AB-506 and AB-729 in shaping the future direction of the company's clinical development [12][16] Other Important Information - A severance charge of $4.5 million was recorded in the second quarter of 2019 due to the retirement of the former CEO, impacting general and administrative expenses [14][15] Q&A Session Summary Question: How many chronic hepatitis B patients will have data by the end of the year? - The company expects to have data from 24 chronic hepatitis B patients, divided into two cohorts of 12 [18] Question: Any update on the progress for the RNA destabilizer? - The company is conducting a 90-day study in two species, with data expected by the first quarter of 2020 to inform future decisions [20] Question: Update on AB-506 and its Phase I trial on safety and efficacy? - The company reported satisfactory results with HBV DNA drops of 2 logs and 2.9 logs, with plans to continue dosing based on the outcomes of the healthy volunteer study [22][23] Question: Is seeing a surface antigen response a competitive advantage? - The company believes its capsid inhibitor may be unique in showing drops in surface antigen and e-antigen, but more data is needed to confirm any competitive advantage [24][25] Question: Will there be protocol amendments for AB-729 to include hep-B patients? - The protocol already includes plans for single ascending doses in chronic hepatitis B patients, so no amendments are necessary [26][27]

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents Arbutus Biopharma Corporation's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | Metric | June 30, 2019 (in thousands) | December 31, 2018 (in thousands) | | :----------------------------------- | :--------------------------- | :----------------------------- | | Total Current Assets | $99,583 | $129,229 | | Total Assets | $192,570 | $227,905 | | Total Current Liabilities | $8,799 | $11,239 | | Total Liabilities | $28,104 | $27,671 | | Total Stockholders' Equity | $164,466 | $200,234 | - **Total current assets** **decreased** from **$129.2 million** at December 31, 2018, to **$99.6 million** at June 30, 2019, primarily due to a reduction in short-term investments[5](index=5&type=chunk) - **Total stockholders' equity** **decreased** from **$200.2 million** at December 31, 2018, to **$164.5 million** at June 30, 2019[5](index=5&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's revenues, expenses, and net income or loss over specific reporting periods | Metric (in thousands) | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $653 | $1,244 | $1,332 | $2,680 | | Total Expenses | $21,168 | $23,290 | $40,918 | $43,131 | | Loss from operations | $(20,515) | $(22,046) | $(39,586) | $(40,451) | | Net (loss) income | $(23,315) | $3,091 | $(46,566) | $(14,338) | | Net (loss) income attributable to common shares | $(26,077) | $550 | $(52,043) | $(19,215) | | Basic EPS | $(0.46) | $0.01 | $(0.92) | $(0.35) | | Diluted EPS | $(0.46) | $0.01 | $(0.92) | $(0.35) | - **Revenue** **decreased** by **$0.6 million** for the three months ended June 30, 2019, and by **$1.3 million** for the six months ended June 30, 2019, compared to the same periods in 2018[7](index=7&type=chunk) - The company reported a **net loss** of **$23.3 million** for the three months ended June 30, 2019, compared to a **net income** of **$3.1 million** in the prior year period, and a **net loss** of **$46.6 million** for the six months ended June 30, 2019, compared to a **net loss** of **$14.3 million** in the prior year period[7](index=7&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the company's net income or loss and other comprehensive income or loss components | Metric (in thousands) | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(23,315) | $3,091 | $(46,566) | $(14,338) | | Other comprehensive loss: Share of other comprehensive loss of equity method investment | $(52) | — | $(74) | — | | Comprehensive income (loss) | $(23,367) | $3,091 | $(46,640) | $(14,338) | - **Comprehensive loss** for the three months ended June 30, 2019, was **$23.4 million**, compared to **comprehensive income** of **$3.1 million** for the same period in 2018[9](index=9&type=chunk) [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) This section details changes in the company's stockholders' equity, including net loss, stock-based compensation, and share issuances | Metric (in thousands) | December 31, 2018 | June 30, 2019 | | :-------------------- | :---------------- | :------------ | | Total Stockholders' Equity | $200,234 | $164,466 | | Common Shares Outstanding | 55,518,800 | 56,850,172 | | Net Loss (Six months ended June 30, 2019) | N/A | $(46,566) | | Stock-based compensation (Six months ended June 30, 2019) | N/A | $5,580 | | Issuance of common shares (Six months ended June 30, 2019) | N/A | $4,725 | - **Total stockholders' equity** **decreased** by **$35.8 million** from December 31, 2018, to June 30, 2019, primarily due to a **net loss** of **$46.6 million**, partially offset by **stock-based compensation** and common share issuances[10](index=10&type=chunk)[11](index=11&type=chunk) - The number of **common shares outstanding** **increased** from **55,518,800** at December 31, 2018, to **56,850,172** at June 30, 2019, due to issuances from the **Open Market Sale Agreement** and option exercises[10](index=10&type=chunk)[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flow](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) This section reports the cash inflows and outflows from operating, investing, and financing activities | Metric (in thousands) | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(17,605) | $(17,622) | $(34,185) | $(37,589) | | Net cash provided by (used in) investing activities | $9,972 | $14,980 | $71,005 | $(60,686) | | Net cash provided by financing activities | $2,479 | $735 | $5,015 | $55,102 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(5,097) | $(2,268) | $41,930 | $(44,099) | | Cash, cash equivalents, and restricted cash, end of period | $78,872 | $10,193 | $78,872 | $10,193 | - **Net cash used in operating activities** **decreased** slightly to **$34.2 million** for the six months ended June 30, 2019, from **$37.6 million** in the prior year, primarily due to lower site consolidation cash outflows[14](index=14&type=chunk)[146](index=146&type=chunk) - **Investing activities** provided **$71.0 million** in cash for the six months ended June 30, 2019, a significant **increase** from a **$60.7 million** use in the prior year, mainly due to the disposition of **short-term investments**[14](index=14&type=chunk)[147](index=147&type=chunk) - **Financing activities** provided **$5.0 million** in cash for the six months ended June 30, 2019, primarily from common share sales, compared to **$55.1 million** in the prior year which included proceeds from preferred share financing[14](index=14&type=chunk)[148](index=148&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements, covering business, accounting policies, fair value, equity, assets, liabilities, leases, and key events [1. Nature of business and future operations](index=11&type=section&id=1.%20Nature%20of%20business%20and%20future%20operations) This note describes Arbutus Biopharma's focus on developing a cure for chronic hepatitis B infection and its future operational outlook - **Arbutus Biopharma Corporation** is a biopharmaceutical company focused on discovering, developing, and commercializing a cure for chronic **hepatitis B infection (HBV)**[15](index=15&type=chunk) - The company's pipeline includes **AB-506** (oral **capsid inhibitor** in **Phase 1a/1b**), **AB-729** (**RNAi therapeutic** in **Phase 1a/1b**), and **AB-452** (oral **HBV RNA destabilizer** in **pre-clinical** testing)[15](index=15&type=chunk) - The company's success depends on regulatory approvals, achieving profitable operations, and securing adequate financing for research and development[16](index=16&type=chunk) [2. Significant accounting policies](index=12&type=section&id=2.%20Significant%20accounting%20policies) This note outlines the key accounting principles and methods used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial statements and should be read with the 2018 Form 10-K[17](index=17&type=chunk) - The company adopted **ASU No. 2016-02, Leases (Topic 842)**, on January 1, 2019, using the modified retrospective approach, resulting in recording operating lease right-of-use assets and lease liabilities of approximately **$3.2 million** and **$4.1 million**, respectively[31](index=31&type=chunk) - The company follows the two-class method for **EPS** calculation due to participating convertible preferred shares, which do not participate in losses[19](index=19&type=chunk) [3. Fair value of financial instruments](index=14&type=section&id=3.%20Fair%20value%20of%20financial%20instruments) This note details the fair value measurements of financial instruments using a three-level hierarchy - The company measures certain financial instruments at fair value using a three-level hierarchy based on input observability[33](index=33&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) | Financial Instrument (in thousands) | Level 1 (June 30, 2019) | Level 3 (June 30, 2019) | Total (June 30, 2019) | | :---------------------------------- | :---------------------- | :---------------------- | :-------------------- | | Cash and cash equivalents | $78,872 | — | $78,872 | | Short-term investments | $16,410 | — | $16,410 | | Liability-classified options | — | $141 | $141 | | Contingent consideration | — | $3,381 | $3,381 | - Liability-classified options **decreased** from **$479 thousand** at December 31, 2018, to **$141 thousand** at June 30, 2019, while **contingent consideration** **increased** from **$3,126 thousand** to **$3,381 thousand**[37](index=37&type=chunk) [4. Equity method investment](index=16&type=section&id=4.%20Equity%20method%20investment) This note describes the company's equity investment in Genevant, a joint venture for RNA-based applications outside HBV - In April 2018, the company launched **Genevant** with **Roivant Sciences Ltd.**, licensing its **LNP** and ligand conjugate delivery platforms for **RNA-based applications** outside of **HBV**[41](index=41&type=chunk) - As of June 30, 2019, **Arbutus** held approximately **40% equity interest** in **Genevant**, with a carrying value of **$14.4 million**[43](index=43&type=chunk) - The company recorded **equity investment losses** of **$3.3 million** and **$8.0 million** for the three and six months ended June 30, 2019, respectively, representing its share of **Genevant's net loss**[43](index=43&type=chunk) [5. Intangible assets and goodwill](index=16&type=section&id=5.%20Intangible%20assets%20and%20goodwill) This note details the company's intangible assets, including IPR&D and goodwill, and their impairment evaluations - Acquired **in-process research and development (IPR&D)** related to the **cccDNA** program is classified as indefinite-lived and not amortized[44](index=44&type=chunk) - **Goodwill** represents the excess of purchase price over the value of net tangible and identifiable intangible assets of **Arbutus Inc.**[44](index=44&type=chunk) - The company performs annual evaluations of intangible assets and **goodwill** for impairment, with no new indicators identified during the three and six months ended June 30, 2019[45](index=45&type=chunk) [6. Accounts payable and accrued liabilities](index=16&type=section&id=6.%20Accounts%20payable%20and%20accrued%20liabilities) This note provides a breakdown of the company's accounts payable and various accrued liabilities | Category (in thousands) | June 30, 2019 | December 31, 2018 | | :---------------------- | :------------ | :---------------- | | Trade accounts payable | $685 | $3,192 | | Research and development accruals | $2,528 | $2,716 | | Professional fee accruals | $566 | $871 | | Payroll accruals | $4,159 | $2,341 | | Other accrued liabilities | $2 | $309 | | Total | $7,940 | $9,429 | - **Total accounts payable and accrued liabilities** **decreased** from **$9.4 million** at December 31, 2018, to **$7.9 million** at June 30, 2019, primarily due to a **decrease** in **trade accounts payable**[46](index=46&type=chunk) - **Payroll accruals** significantly **increased** from **$2.3 million** to **$4.2 million** during the period[46](index=46&type=chunk) [7. Site consolidation](index=17&type=section&id=7.%20Site%20consolidation) This note details the expenses and progress related to the company's 2018 site consolidation and restructuring efforts - In 2018, the company completed a **site consolidation** and organizational restructuring, including a **35%** workforce reduction and closure of its Burnaby facility[48](index=48&type=chunk) - Total estimated **site consolidation expenses** are **$4.9 million**, with **$4.7 million** incurred as of June 30, 2019[48](index=48&type=chunk) | Category (in thousands) | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :---------------------- | :----------------------------- | :----------------------------- | | Employee severance and relocation | $197 | $3,201 | | Facility and other expenses | $(346) | $1,001 | | Total site consolidation expenses | $(149) | $4,202 | [8. Leases](index=17&type=section&id=8.%20Leases) This note explains the company's adoption of new lease accounting standards and its lease obligations - The company adopted **ASU No. 2016-02, Leases (Topic 842)**, on January 1, 2019, recognizing operating lease right-of-use assets and lease liabilities[52](index=52&type=chunk) - As of June 30, 2019, the weighted average remaining lease term was **7.2 years**, and the weighted average discount rate was **8.7%**[54](index=54&type=chunk) | Lease Maturities (in thousands) | As of June 30, 2019 | | :------------------------------ | :------------------ | | July through December 2019 | $433 | | 2020 | $657 | | 2021 | $677 | | 2022 | $581 | | 2023 | $598 | | Thereafter | $2,038 | | Total Lease Payments | $4,984 | | Less: interest | $(1,345) | | Present value of lease payments | $3,639 | [9. Stockholders' equity and stock-based compensation](index=18&type=section&id=9.%20Stockholders'%20equity%20and%20stock-based%20compensation) This note details changes in stockholders' equity, including common share issuances and preferred share characteristics - Under an **Open Market Sale Agreement**, the company issued **593,689** common shares for **$2.5 million** **gross proceeds** in Q2 2019, and **1,208,090** common shares for **$5.2 million** **gross proceeds** in H1 2019[57](index=57&type=chunk) - The company has **1,164,000 Series A participating convertible preferred shares** outstanding, convertible into approximately **23 million** common shares by October 2021, which would give **Roivant** approximately **49%** ownership[59](index=59&type=chunk) - An **8.75%** per annum compounding coupon on preferred shares is accrued as an **increase** to preferred share capital and deficit[60](index=60&type=chunk) [10. Collaborations, contracts and licensing agreements](index=20&type=section&id=10.%20Collaborations,%20contracts%20and%20licensing%20agreements) This note outlines the company's revenue sources from royalties and services, and key licensing agreements - **Revenue** for the three and six months ended June 30, 2019, primarily consisted of **royalties** from **Alnylam's ONPATTRO™** and **Spectrum's Marqibo®**, and services to **Gritstone Oncology**[64](index=64&type=chunk) - In July 2019, the company sold a portion of its **ONPATTRO™ royalty entitlement** to **OMERS** for **$20 million** **gross proceeds**, with the entitlement reverting after **OMERS** receives **$30 million**[63](index=63&type=chunk)[77](index=77&type=chunk) - The company retains a separate, lower **royalty interest** on **ONPATTRO™** from a settlement agreement with **Acuitas Therapeutics**[78](index=78&type=chunk) [11. Contingencies and commitments](index=20&type=section&id=11.%20Contingencies%20and%20commitments) This note describes ongoing legal proceedings, contingent consideration, and other contractual commitments - The company is involved in an arbitration with the **University of British Columbia (UBC)** regarding alleged unpaid **royalties**, with **UBC** seeking **$10.9 million** plus interest[66](index=66&type=chunk) - The fair value of **contingent consideration** related to the **Enantigen acquisition** was **$3.4 million** as of June 30, 2019, with potential future payments up to **$21.0 million** for development/regulatory milestones and **$102.5 million** for sales performance milestones[70](index=70&type=chunk) - Under a new two-year master services agreement with **Blumberg**, the company will fund specific research activities, retaining exclusive rights to generated intellectual property[72](index=72&type=chunk) [12. Related Party Transactions](index=21&type=section&id=12.%20Related%20Party%20Transactions) This note details transactions with related parties, primarily Genevant Sciences, for services and sublease arrangements - The company purchased **$33 thousand** in **research and development services** from **Genevant** for the six months ended June 30, 2019[73](index=73&type=chunk) - **Genevant** purchased **$0.2 million** in administrative and transitional services from the company for the six months ended June 30, 2019[74](index=74&type=chunk) - Sublease income from **Genevant** for the Burnaby facility was **$0.1 million** for the six months ended June 30, 2019; the sublease expired on July 31, 2019[74](index=74&type=chunk) [13. Subsequent Events](index=22&type=section&id=13.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including a royalty interest sale - On July 2, 2019, the company sold a portion of its **royalty interest** on future global net sales of **ONPATTRO™** to **OMERS** for **$20 million** in **gross proceeds**[76](index=76&type=chunk)[77](index=77&type=chunk) - **OMERS** will retain this entitlement until it has received **$30 million** in **royalties**, after which **100%** of the **royalty interest** will revert to the company[77](index=77&type=chunk) - The company retains a separate, lower **royalty interest** on **ONPATTRO™** from **Acuitas Therapeutics**, which was not part of the sale to **OMERS**[78](index=78&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's analysis of the company's financial condition, results of operations, strategy, product pipeline, and liquidity [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=22&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This note advises readers that the report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements regarding strategy, future operations, clinical trials, regulatory approvals, financing, and product development[80](index=80&type=chunk) - These statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially[82](index=82&type=chunk) - The company disclaims any obligation to update forward-looking statements, advising readers to consult further SEC disclosures[83](index=83&type=chunk) [OVERVIEW](index=24&type=section&id=OVERVIEW) This section provides an overview of Arbutus Biopharma's mission to cure chronic HBV and its diverse product pipeline - **Arbutus Biopharma Corporation** is dedicated to discovering, developing, and commercializing a cure for chronic **hepatitis B infection (HBV)**, a global unmet medical need affecting approximately **257 million** people[85](index=85&type=chunk) - The company is developing a diverse product pipeline of drug candidates with complementary mechanisms of action to achieve higher cure rates with finite treatment durations[86](index=86&type=chunk) - Additional assets, including **royalty entitlement** on **ONPATTRO™** and a **40% equity interest** in **Genevant**, are expected to provide significant non-dilutive capital[87](index=87&type=chunk) [Strategy](index=24&type=section&id=Strategy) This section outlines the company's strategic objectives for developing HBV therapeutics, including clinical progression and combination therapies - The company's objective is to develop a cure for chronic **HBV** by developing proprietary therapeutic agents targeting **HBV viral lifecycle** elements and the host immune system[88](index=88&type=chunk) - Key focus areas include progressing clinical and **pre-clinical** candidates through **Phase 1** and **Phase 2** trials, identifying effective combination regimens for **Phase 3**, obtaining regulatory approval, and commercialization[89](index=89&type=chunk) - Results from current **Phase 1a/1b clinical trials** and **pre-clinical** studies will inform the adaptive design of future combination therapy trials[90](index=90&type=chunk) [HBV Product Pipeline](index=25&type=section&id=HBV%20Product%20Pipeline) The company's **HBV product pipeline** includes multiple drug candidates like **AB-506**, **AB-729**, and **AB-452**, targeting viral lifecycle steps for combination therapies [Agents for Combination Therapy](index=25&type=section&id=Agents%20for%20Combination%20Therapy) This section discusses the rationale for combination therapies in HBV treatment and the company's approach - Current **HBV** treatments (**Peg-IFNα** and **NAs**) have low cure rates (**<5%**), highlighting the need for combination therapies[93](index=93&type=chunk) - The company believes its **RNAi agent**, **AB-729**, could be combined with its **capsid inhibitor**, **AB-506**, and approved **NAs** for a first combination therapy[95](index=95&type=chunk) - Combination clinical trials with **AB-506**, **AB-729**, and an approved **NA** are anticipated to begin in the second half of 2020[95](index=95&type=chunk) [HBV Suppression (Capsid Inhibitors: AB-506 & AB-423)](index=25&type=section&id=HBV%20Suppression%20(Capsid%20Inhibitors%3A%20AB-506%20%26%20AB-423)) This section details the development and preliminary clinical results of **capsid inhibitors** **AB-506** and **AB-423** for **HBV suppression** - **AB-506**, an orally administered **capsid inhibitor**, is in a **Phase 1a/1b clinical trial**, showing improved potency and pharmacokinetics over first-generation **AB-423** in **pre-clinical** studies[99](index=99&type=chunk)[100](index=100&type=chunk) - Preliminary **Phase 1a/1b** results for **AB-506** monotherapy indicated potent **HBV DNA** and **RNA decreases** (**2.0-2.8 log** and **2.4 log**, respectively) at Day 28 in **CHB** subjects[101](index=101&type=chunk)[102](index=102&type=chunk) - Four **CHB** subjects experienced **Grade 4 ALT flares**, with one showing notable declines in **HBsAg** and **HBeAg**, suggesting an immune-mediated response[102](index=102&type=chunk) [HBsAg Reduction (RNAi Agents: AB-729)](index=27&type=section&id=HBsAg%20Reduction%20(RNAi%20Agents%3A%20AB-729)) This section describes **AB-729**, a second-generation **RNAi therapeutic** designed to reduce **HBsAg expression** - **AB-729** is a second-generation **GalNAc RNAi therapeutic** designed to reduce **HBsAg expression**, inhibit viral replication, and suppress all viral antigens, with anticipated monthly subcutaneous dosing[107](index=107&type=chunk) - **Pre-clinical** data showed robust **HBsAg knockdown** and more durable in vivo activity compared to earlier-generation **siRNA agents**[108](index=108&type=chunk) - The healthy subject portion of a **Phase 1a/1b clinical trial** for **AB-729** was initiated in July 2019, with preliminary safety and efficacy data expected in Q1 2020[109](index=109&type=chunk) [HBV RNA Destabilizer (AB-452)](index=27&type=section&id=HBV%20RNA%20Destabilizer%20(AB-452)) This section discusses **AB-452**, an **HBV RNA destabilizer**, its **pre-clinical** findings, and safety study status - **AB-452**, an orally administered **HBV RNA destabilizer**, has shown novel activity in **pre-clinical** studies by destabilizing **HBV RNA**, leading to **RNA degradation** and **HBsAg reduction**[111](index=111&type=chunk) - Nonclinical safety findings in October 2018 led to pausing clinical entry for **AB-452**; a repeat **90-day preclinical safety study** in two species is underway, with a go/no-go decision expected in early 2020[113](index=113&type=chunk)[115](index=115&type=chunk) - The company is also advancing back-up compounds with distinct chemical scaffolds into lead optimization[115](index=115&type=chunk) [Research Programs](index=28&type=section&id=Research%20Programs) This section outlines ongoing discovery efforts focused on **checkpoint inhibition** and **cccDNA** targeting for novel **HBV** therapies - Ongoing discovery efforts focus on **checkpoint inhibition** and **cccDNA** targeting to identify novel, orally administered small molecule drug candidates[116](index=116&type=chunk) - These programs aim to complement the existing pipeline and form an effective combination therapy for **HBV** treatment[116](index=116&type=chunk) [Strategic Alliances and Licensing Agreements](index=28&type=section&id=Strategic%20Alliances%20and%20Licensing%20Agreements) The company leverages strategic alliances and licensing agreements, including **ONPATTRO™ royalties** and an **equity stake** in **Genevant Sciences**, to **fund its HBV pipeline** [ONPATTRO® (Patisiran/ALN-TTR02)](index=28&type=section&id=ONPATTRO%C2%AE%20(Patisiran%2FALN-TTR02)) This section details the company's **royalty entitlement** from **Alnylam's ONPATTRO™** and its partial sale to **OMERS** - The company is entitled to tiered low to mid single-digit **royalty payments** on global net sales of **Alnylam's ONPATTRO™**, which utilizes its **LNP technology**[117](index=117&type=chunk)[119](index=119&type=chunk) - In July 2019, a portion of this **royalty interest** was sold to **OMERS** for **$20 million** **gross proceeds**, with the entitlement reverting to the company after **OMERS** receives **$30 million**[118](index=118&type=chunk)[119](index=119&type=chunk) - A second, lower **royalty interest** on **ONPATTRO™** from **Acuitas Therapeutics** was retained by the company[120](index=120&type=chunk) [Genevant Sciences](index=28&type=section&id=Genevant%20Sciences) This section describes **Genevant Sciences**, a joint venture with **Roivant** focused on **RNA-based therapeutics** outside **HBV** - **Genevant**, launched in April 2018 with **Roivant Sciences**, focuses on **RNA-based therapeutics** using the company's **LNP** and ligand conjugate delivery technologies for non-HBV applications[121](index=121&type=chunk) - **Roivant** contributed **$37.5 million** in seed capital to **Genevant**, and the company retains all rights to its Delivery Platforms for **HBV**[122](index=122&type=chunk) - As of June 30, 2019, the company held an approximate **40% equity interest** in **Genevant**[122](index=122&type=chunk) [CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS AND ESTIMATES](index=29&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGEMENTS%20AND%20ESTIMATES) This section highlights the critical accounting policies and significant judgments used in financial statement preparation - The preparation of financial statements requires estimates and assumptions affecting reported amounts of assets, liabilities, revenues, and expenses[124](index=124&type=chunk) - No significant changes in critical accounting policies and estimates were reported from the Annual Report on Form 10-K for the year ended December 31, 2018[124](index=124&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=29&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section discusses the impact of recently issued accounting standards on the company's financial reporting - The company believes that recently issued accounting standards not yet effective will not have a material impact on its financial position or results of operations upon adoption[125](index=125&type=chunk) - Further details on recent accounting pronouncements are provided in Note 2 to the condensed consolidated financial statements[126](index=126&type=chunk) [RESULTS OF OPERATIONS](index=29&type=section&id=RESULTS%20OF%20OPERATIONS) The company experienced **decreased revenue**, lower **R&D** and **site consolidation costs**, **increased G&A expenses** due to executive departure, and reported a **net loss** [Revenue](index=29&type=section&id=Revenue) This section analyzes the company's **revenue** performance for the reported periods, highlighting key drivers | Metric (in thousands) | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $653 | $1,244 | $1,332 | $2,680 | - **Revenue** **decreased** by **$0.6 million** and **$1.3 million** for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018[128](index=128&type=chunk) - Current period **revenue** primarily consisted of **royalties** from **Alnylam's ONPATTRO™** and **Spectrum's Marqibo®**, and services to **Gritstone**, while prior year **revenue** included an upfront license fee from **Gritstone**[128](index=128&type=chunk) [Expenses](index=30&type=section&id=Expenses) This section provides a detailed breakdown of the company's operating expenses, including **R&D** and **G&A** | Expense Category (in thousands) | Three months ended June 30, 2019 | % of Total (2019) | Three months ended June 30, 2018 | % of Total (2018) | | :------------------------------ | :------------------------------- | :---------------- | :------------------------------- | :---------------- | | Research and development | $12,740 | 60% | $16,356 | 70% |\ | General and administrative | $8,189 | 39% | $3,775 | 16% |\ | Depreciation and amortization | $505 | 2% | $578 | 2% |\ | Site consolidation | $(266) | (1)% | $2,581 | 11% |\ | Total operating expenses | $21,168 | | $23,290 | | | Expense Category (in thousands) | Six months ended June 30, 2019 | % of Total (2019) | Six months ended June 30, 2018 | % of Total (2018) | | :------------------------------ | :----------------------------- | :---------------- | :----------------------------- | :---------------- | | Research and development | $27,452 | 67% | $30,305 | 70% |\ | General and administrative | $12,601 | 31% | $7,444 | 17% |\ | Depreciation and amortization | $1,014 | 2% | $1,180 | 3% |\ | Site consolidation | $(149) | —% | $4,202 | 10% |\ | Total operating expenses | $40,918 | | $43,131 | | [Research and development](index=30&type=section&id=Research%20and%20development) This section details the changes in **research and development expenses**, attributing them to specific program activities - **Research and development expenses** **decreased** by **$3.6 million** and **$2.9 million** for the three and six months ended June 30, 2019, respectively, compared to 2018[134](index=134&type=chunk) - The **decrease** was primarily due to higher costs in 2018 for **AB-452** manufacturing and **AB-1467 Phase 2 clinical trials**, partially offset by **increased** spending in 2019 for **AB-506 Phase 1a/1b** and **AB-729 pre-clinical** studies[134](index=134&type=chunk) - Current **R&D expenses** included enrollment for **AB-506 Phase 1a/1b**, **IND/CTA** enabling studies for **AB-729**, and in vitro/in vivo studies for **AB-452**[134](index=134&type=chunk) [General and administrative](index=30&type=section&id=General%20and%20administrative) This section explains the **increase** in **general and administrative expenses**, primarily due to executive severance - **General and administrative expenses** **increased** by **$4.4 million** and **$5.2 million** for the three and six months ended June 30, 2019, respectively, compared to 2018[136](index=136&type=chunk) - The **increase** was primarily due to the former President and CEO's departure in June 2019, resulting in **$2.3 million** **cash severance** and **$2.2 million** non-cash **stock-based compensation expense** for accelerated vesting[136](index=136&type=chunk) [Site consolidation](index=31&type=section&id=Site%20consolidation) This section reports on the progress and expenses related to the company's **site consolidation** efforts - **Site consolidation expenses** were substantially completed by June 30, 2018, with total expected expenses of approximately **$4.9 million**, of which **$4.7 million** incurred by June 30, 2019[139](index=139&type=chunk) - For the six months ended June 30, 2019, **site consolidation expenses** were a credit of **$0.1 million**, compared to an expense of **$4.2 million** in the prior year[132](index=132&type=chunk) [Other income (loss)](index=31&type=section&id=Other%20income%20(loss)) This section details other non-operating income and losses, including interest, foreign exchange, and equity investment impacts | Metric (in thousands) | Three months ended June 30, 2019 | Three months ended June 30, 2018 | Six months ended June 30, 2019 | Six months ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $606 | $805 | $1,206 | $1,563 | | Foreign exchange gain (loss) | $60 | $(359) | $68 | $(885) | | Gain on investment | — | $24,884 | — | $24,884 | | Equity investment losses | $(3,334) | — | $(7,985) | — | | Decrease (increase) in fair value of contingent consideration | $(130) | $(193) | $(255) | $655 | | Total other income (loss) | $(2,800) | $25,137 | $(6,980) | $26,113 | [LIQUIDITY AND CAPITAL RESOURCES](index=32&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's liquidity is supported by cash, investments, equity sales, and royalty monetization, with current resources funding operations into H2 2020, but additional funding is required [Sources of Liquidity](index=32&type=section&id=Sources%20of%20Liquidity) This section identifies the primary sources of the company's liquidity, including cash, investments, and equity sales - As of June 30, 2019, the company had **$78.9 million** in **cash and cash equivalents** and **$16.4 million** in **short-term investments**, totaling **$95.3 million**[149](index=149&type=chunk) - In H1 2019, the company issued **1,208,090** common shares under an **Open Market Sale Agreement**, generating **$5.2 million** in **gross proceeds**[150](index=150&type=chunk) - The sale of a portion of **ONPATTRO™ royalty interest** to **OMERS** in July 2019 for **$20 million** **gross proceeds** is expected to provide significant non-dilutive capital[151](index=151&type=chunk) [Cash requirements](index=33&type=section&id=Cash%20requirements) This section outlines the company's anticipated cash needs and the factors influencing future funding requirements - The company believes its cash, **cash equivalents**, and **short-term investments** as of June 30, 2019, combined with the **$20 million** from the **OMERS royalty sale**, will **fund operations** into the second half of 2020[153](index=153&type=chunk) - Substantial **additional funds** will be required for continued development of pipeline products and technologies[153](index=153&type=chunk) - Future **funding needs** depend on factors such as business development, **revenue** from partnerships, product candidate development, acquisition decisions, clinical trial delays, and intellectual property costs[154](index=154&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=34&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section confirms the absence of material off-balance sheet arrangements impacting the company's financial position - The company does not have any off-balance sheet arrangements that are material to its financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources[157](index=157&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=34&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) There have been no material changes in the company's quantitative and qualitative disclosures about market risk since its Annual Report on Form 10-K for the year ended December 31, 2018 - No material changes in market risk disclosures from the Annual Report on Form 10-K for the year ended December 31, 2018[158](index=158&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal control [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details the evaluation and conclusion regarding the effectiveness of the company's disclosure controls - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2019[159](index=159&type=chunk) [Changes in Internal Control over Financial Reporting](index=34&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the three months ended June 30, 2019[160](index=160&type=chunk) PART II. OTHER INFORMATION This section contains additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Information regarding legal matters is incorporated by reference from Note 11, 'Contingencies and Commitments,' to the condensed consolidated financial statements - Legal proceedings information is detailed in Note 11, 'Contingencies and Commitments,' of the financial statements[162](index=162&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes in the company's risk factors from those disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 - No material changes in risk factors from the Annual Report on Form 10-K for the year ended December 31, 2018[163](index=163&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=35&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities and use of proceeds[163](index=163&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=35&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities during the period - No defaults upon senior securities[163](index=163&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=35&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[163](index=163&type=chunk) [ITEM 5. OTHER INFORMATION](index=35&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company reported no other information for the period - No other information to report[163](index=163&type=chunk) [ITEM 6. EXHIBITS](index=36&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including articles of incorporation, governance agreements, and certifications - **Exhibit 3.1**: Notice of Articles and Articles of **Arbutus Biopharma Corporation**, as amended[164](index=164&type=chunk) - **Exhibit 10.6**: Purchase and Sale Agreement, dated July 2, 2019, by and between **Arbutus Biopharma Corporation** and **OCM IP Healthcare Portfolio LP**[170](index=170&type=chunk) - **Exhibit 31.1** and **31.2**: Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934[170](index=170&type=chunk)

Arbutus Biopharma Corporation (NASDAQ:ABUS) Q1 2019 Results Earnings Conference Call May 6, 2019 4:30 PM ET Company Participants Pam Murphy - IR Mark Murray - CEO Mike Sofia - Chief Scientific Officer Gaston Picchio - Chief Development Officer Dave Hastings - CFO Conference Call Participants Keay Nakae - Chardan Mayank Mamtani - B Riley FBR Operator Good day, ladies and gentlemen, and welcome to the Arbutus Biopharma Corporation 2019 First Quarter Financial Results and Corporate Update Conference Call. [Ope ...

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Arbutus Biopharma reported a **$23.3 million** net loss for Q1 2019, with total assets decreasing to **$209.2 million** and cash increasing to **$84.0 million** [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$209.2 million** as of March 31, 2019, driven by reduced short-term investments, with equity at **$181.2 million** Condensed Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $83,969 | $36,942 | | Short-term investments | $26,621 | $87,675 | | Total current assets | $112,486 | $129,229 | | Total assets | $209,216 | $227,905 | | **Liabilities & Equity** | | | | Total current liabilities | $8,823 | $11,239 | | Total liabilities | $28,007 | $27,671 | | Total stockholders' equity | $181,209 | $200,234 | | Total liabilities and stockholders' equity | $209,216 | $227,905 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue decreased to **$0.7 million** in Q1 2019, resulting in a **$23.3 million** net loss, primarily due to an equity investment loss Statement of Operations Summary (in thousands of U.S. dollars, except per share data) | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Revenue | $679 | $1,436 | | Research, development, collaborations and contracts | $14,712 | $13,949 | | General and administrative | $4,412 | $3,669 | | Site consolidation | $117 | $1,621 | | Total expenses | $19,750 | $19,841 | | Loss from operations | $(19,071) | $(18,405) | | Equity investment (loss) | $(4,651) | — | | Net loss | $(23,251) | $(17,429) | | Net loss attributable to common shares | $(25,966) | $(19,765) | | Basic and diluted net loss per share | $(0.47) | $(0.36) | [Condensed Consolidated Statements of Cash Flow](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Net cash used in operations was **$16.6 million**, with investing activities providing **$61.0 million**, increasing cash to **$84.0 million** Cash Flow Summary (in thousands of U.S. dollars) | Cash Flow Activity | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(16,580) | $(19,967) | | Net cash provided by (used in) investing activities | $61,033 | $(75,666) | | Net cash provided by financing activities | $2,536 | $54,367 | | **Increase (Decrease) in cash and cash equivalents** | **$47,027** | **$(41,831)** | | Cash and cash equivalents, end of period | $83,969 | $12,461 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's HBV cure focus, ASC 842 adoption, a **$4.7 million** equity loss from Genevant, and ongoing UBC arbitration - The company is a biopharmaceutical business focused on discovering, developing, and commercializing a cure for chronic hepatitis B (HBV) Its pipeline includes AB-506 (oral capsid inhibitor), AB-729 (RNAi therapeutic), and AB-452 (oral RNA destabilizer)[16](index=16&type=chunk) - The company adopted the new lease accounting standard, ASC 842, on January 1, 2019, resulting in the recognition of right-of-use assets of approximately **$3.2 million** and lease liabilities of **$4.1 million**[31](index=31&type=chunk) - The company holds a **40%** equity interest in Genevant and recorded an equity investment loss of **$4.7 million** for its proportionate share of Genevant's net loss for the three months ended March 31, 2019[41](index=41&type=chunk) - The company is in an ongoing arbitration with the University of British Columbia (UBC), which is seeking **$10.9 million** in alleged unpaid royalties The company has not recorded an estimate of possible loss due to uncertainty[64](index=64&type=chunk)[65](index=65&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the HBV cure strategy, pipeline candidates, **$0.7 million** revenue, **$23.3 million** net loss, and **$110.6 million** liquidity [Overview](index=24&type=section&id=OVERVIEW) Arbutus focuses on developing a curative combination regimen for chronic HBV, with key pipeline candidates AB-506, AB-729, and AB-452 - The company's primary objective is to develop a cure for chronic HBV by developing a pipeline of proprietary therapeutic agents targeting HBV replication, HBsAg expression, and immune reactivation[86](index=86&type=chunk)[89](index=89&type=chunk) - Key clinical programs include AB-506 (capsid inhibitor), AB-729 (GalNAc RNAi), and AB-452 (HBV RNA destabilizer)[93](index=93&type=chunk)[97](index=97&type=chunk)[103](index=103&type=chunk)[108](index=108&type=chunk) - The company anticipates initiating combination clinical trials with AB-506 and AB-729, along with an approved NA, in **2020**[96](index=96&type=chunk) - A regulatory authority requested the completion of ongoing toxicology studies for AB-729 before commencing its Phase 1a/1b clinical trial, causing a delay to the planned Q2 **2019** start[105](index=105&type=chunk) [Results of Operations](index=28&type=section&id=RESULTS%20OF%20OPERATIONS) Q1 2019 revenue decreased to **$0.7 million**, R&D expenses increased, and a **$4.7 million** equity investment loss resulted in a total other loss Comparison of Operating Results (in thousands of U.S. dollars) | Line Item | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Total revenue | $679 | $1,436 | | Research and development | $14,712 | $13,949 | | General and administrative | $4,412 | $3,669 | | Site consolidation | $117 | $1,621 | | Loss from operations | $(19,071) | $(18,405) | | Total other income (loss) | $(4,180) | $976 | - The decrease in revenue was due to **2018** including revenue from a license agreement with Gritstone, while **2019** revenue primarily consists of royalties from Alnylam's Onpattro™[121](index=121&type=chunk) - The shift to a significant 'Other loss' was driven by a **$4.7 million** equity investment loss from the company's **40%** ownership in Genevant, accounted for on a one-quarter lag basis[132](index=132&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of March 31, 2019, liquidity totaled **$110.6 million**, sufficient to fund operations into **2020**, with **$16.6 million** used in operations - The company held **$84.0 million** in cash and cash equivalents and **$26.6 million** in short-term investments, for a total of **$110.6 million** as of March 31, 2019[139](index=139&type=chunk) - Management believes current cash resources are sufficient to fund operations into **2020**[144](index=144&type=chunk) - In Q1 **2019**, the company issued **614,401** common shares under its Open Market Sale Agreement, generating gross proceeds of approximately **$2.7 million**[140](index=140&type=chunk) - Net cash used in operating activities decreased to **$16.6 million** in Q1 **2019** from **$20.0 million** in Q1 **2018**[136](index=136&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes in market risk disclosures have occurred since the **2018** Annual Report on Form 10-K - There have been no material changes in market risk disclosures since the **2018** Form 10-K[147](index=147&type=chunk) [Controls and Procedures](index=32&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Disclosure controls and procedures were effective as of March 31, 2019, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, **2019**, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[148](index=148&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the three months ended March 31, **2019**[149](index=149&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=34&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal matters, detailed in Note 11, include an ongoing arbitration with UBC regarding **$10.9 million** in alleged unpaid royalties - Information regarding legal matters is detailed in Note 11, which discusses the ongoing arbitration with the University of British Columbia[151](index=151&type=chunk)[64](index=64&type=chunk) [Risk Factors](index=34&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors have occurred since the company's **2018** Annual Report on Form 10-K - No material changes in risk factors have occurred since the company's **2018** Annual Report on Form 10-K[152](index=152&type=chunk) [Exhibits](index=34&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes standard exhibits such as officer certifications under Sarbanes-Oxley Sections **302** and **906**, and XBRL financial data[155](index=155&type=chunk)

Arbutus Biopharma Corp. (NASDAQ:ABUS) Q4 2018 Results Conference Call March 7, 2019 4:30 PM ET Company Participants Pam Murphy - Investor Relations Mark Murray - CEO Mike Sofia - Chief Scientific Officer Gaston Picchio - Chief Development Officer Dave Hastings - Chief Financial Officer Conference Call Participants Katherine Xu - William Blair Keay Nakae - Chardan Mayank Mamtani - B Riley Operator Good day, ladies and gentlemen. And welcome to Arbutus Biopharma Fourth quarter and 2018 Year-End Conference Cal ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number: 001-34949 | --- | --- | |----------------------------------------------------------------------------|--------------------------------------------- ...