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 | --- | --- | |----------------------------------------------------------------------------|--------------------------------------------- ...