Chronic HBV Treatment - Approximately 250 million people are affected by chronic HBV, with current treatment options limited to lifelong suppressive therapy, indicating a significant unmet medical need for a finite curative regimen[5] - The combination therapy strategy aims to develop a finite, curative treatment for chronic HBV by utilizing antivirals and immunomodulators[6] - Phase 2a clinical trial data for imdusiran shows a 50% functional cure rate in patients with baseline HBsAg <1000 IU/mL when combined with a short course of interferon[25] - The Phase 2a trial (IM-PROVE I) demonstrated that 25% of all patients achieved a functional cure, with no serious adverse events related to imdusiran or interferon[25] - Imdusiran demonstrated a 50% functional cure rate in patients with HBsAg <1000 IU/mL when combined with a short course of IFN[28] - Imdusiran resulted in HBsAg declines of approximately 1.5-2.0 log10 across various dosing regimens[28] - Data from Phase 2a trials suggest that imdusiran combined with interferon is generally safe and well-tolerated[49] Clinical Trials - The company is initiating a placebo-controlled Phase 2b clinical trial with 170 HBeAg-negative cHBV patients in the first half of 2025[24] - The company plans to initiate a Phase 2b clinical trial for imdusiran combined with IFN in 2025[47] - The ongoing IM-PROVE II trial is evaluating imdusiran in combination with Barinthus Bio's immunotherapeutic, VTP-300, and low dose nivolumab[26] - The company expects to present preliminary data from Cohort 3A of the AB-101 trial in the first half of 2025[47] - Preliminary data from the AB-101 Phase 1a/1b trial indicates that all evaluable subjects in the 25mg cohort showed receptor occupancy between 50-100%[42] Financial Position - The company has a strong financial position with a cash runway through Q1 2028, fully funding the Phase 2b clinical trial[5] - As of December 31, 2024, the company reported a cash balance of $123M, with a projected cash runway through Q1 2028[49] - The anticipated costs to complete the Phase 2b clinical trial are estimated to be between $30 million and $40 million[24] - The company anticipates a cash burn of $47-50M in 2025 as it advances its clinical trials and litigation efforts[49] Legal Matters - The company is seeking damages from patent litigation against Moderna and Pfizer/BioNTech related to COVID-19 vaccine sales[5] - The ongoing litigation with Pfizer and Moderna could result in royalties of 20% to Arbutus from related damages[44] - The strategic collaboration with Qilu Pharmaceutical includes a $40M upfront payment and potential commercialization payments up to $245M[30] Future Presentations - The company plans to present additional data at AASLD 2024, subject to regulatory approval[23]

Core Insights - Arbutus Biopharma Corporation is undergoing significant changes in leadership and operational strategy to enhance the development of its pipeline, particularly focusing on imdusiran for chronic hepatitis B virus (cHBV) treatment [2][3][24] - The company reported a substantial decrease in total revenue for 2024, amounting to $6.2 million, down from $18.1 million in 2023, primarily due to reduced collaboration efforts and license royalties [11][12] - A workforce reduction of 57% has been implemented, resulting in a streamlined team aimed at improving financial and operational efficiency [2][10][3] Financial Results - As of December 31, 2024, the company had cash, cash equivalents, and investments totaling $122.6 million, a decrease from $132.3 million in 2023 [8][18] - The net loss for the year ended December 31, 2024, was $69.9 million, or a loss of $0.38 per share, compared to a net loss of $72.8 million, or a loss of $0.44 per share, in 2023 [14][17] - Operating expenses decreased to $82.5 million in 2024 from $96.2 million in 2023, driven by reduced research and development costs [12][16] Clinical Development - Imdusiran (AB-729) has shown promising results in clinical trials, achieving a functional cure rate of 50% in specific patient groups during a Phase 2a trial [3][21] - The company is evaluating plans for a Phase 2b clinical trial of imdusiran, with a focus on accelerating the development timeline [3][4] - AB-101, an oral PD-L1 inhibitor, is currently in a Phase 1a/1b clinical trial, with data indicating it is well-tolerated and shows potential for treating cHBV [9][22] Legal and Corporate Updates - The company is actively involved in litigation to protect its intellectual property, including lawsuits against Moderna and Pfizer/BioNTech for patent infringement related to its lipid nanoparticle technology [3][4][6] - Tuan Nguyen has been appointed as the new Chief Financial Officer, bringing extensive experience in biopharma finance [2][10][24] - The company has terminated its at-the-market (ATM) offering program as part of its strategy to reduce cash burn and refocus operations [10][12]

Core Viewpoint - Genevant Sciences and Arbutus Biopharma have filed five international lawsuits against Moderna, seeking to enforce patents related to their lipid nanoparticle (LNP) technology, alleging infringement in 30 countries [1][2]. Group 1: Legal Actions - The lawsuits aim to obtain monetary relief and injunctions against Moderna's Spikevax and other products that allegedly utilize the same LNP technology [2]. - The enforcement actions cover multiple jurisdictions, including Austria, Belgium, France, Germany, Italy, Spain, and Turkey, among others [3]. - In addition to international lawsuits, there is an ongoing case in the U.S. District Court for the District of Delaware, with a jury trial scheduled for September 2025 [4]. Group 2: Technology Background - The LNP technology developed by Arbutus and Genevant is crucial for the effective delivery of mRNA to human cells, addressing significant technological challenges in mRNA medicine development [5]. - This technology involves microscopic particles made from four types of fat-like molecules, which protect mRNA and facilitate its delivery to target cells [5]. - Genevant has over 20 years of experience in LNP delivery technology, which has been licensed for various applications, including vaccines and gene editing [6]. Group 3: Company Profiles - Genevant Sciences is recognized for its robust LNP patent portfolio and has pioneered LNP delivery for over two decades, enabling a wide range of RNA-based applications [6]. - Arbutus Biopharma focuses on infectious diseases and is developing treatments for chronic hepatitis B, while also leveraging its partnership with Genevant to maximize the potential of LNP technology [8].

Core Viewpoint - Arbutus Biopharma Corporation has announced significant changes in its leadership, including the appointment of Lindsay Androski as the new CEO, aimed at enhancing the company's focus on its pipeline and LNP delivery technology [1][3]. Leadership Changes - Lindsay Androski has been appointed as the new CEO, replacing Michael J. McElhaugh, effective immediately [1]. - Four new directors have joined the board: Robert Alan Beardsley, Joseph Bishop, Matthew Gline, and Anuj Hasija, while all existing board members have stepped down [3]. - The board has been reduced to five members, with potential plans to expand in the future to include expertise in clinical development [3]. Strategic Focus - The company will temporarily pause participation in investor meetings and conferences to review development plans and strategic options for its hepatitis B programs [4]. - The leadership changes are expected to enable a renewed focus on advancing the company's pipeline and maximizing contributions to LNP delivery technology through Genevant [3]. Company Overview - Arbutus Biopharma Corporation is a clinical-stage biopharmaceutical company focused on infectious diseases, currently developing imdusiran (AB-729) for chronic hepatitis B [5]. - The company aims to leverage its ownership stake and license agreement with Genevant to enhance its LNP delivery technology [5].

Core Viewpoint - Arbutus Biopharma Corporation is advancing its mission to develop a functional cure for chronic hepatitis B virus (cHBV) infection, with plans to initiate a Phase 2b clinical trial in the first half of 2025 after demonstrating promising results in earlier trials [1][2]. Company Objectives and Clinical Trials - The company aims to initiate a Phase 2b clinical trial combining imdusiran, interferon, and nucleos(t)ide analogue therapy in the first half of 2025, following a meaningful functional cure rate observed in the IM-PROVE I Phase 2a clinical trial [2][5]. - In the IM-PROVE I trial, a functional cure rate of 50% was achieved in HBeAg-negative patients with baseline HBsAg levels less than 1000 IU/mL, and an overall functional cure rate of 25% [5][8]. - The company is also evaluating the addition of low-dose nivolumab in the IM-PROVE II Phase 2a trial, where 23% of patients achieved HBsAg loss by week 48 [5]. Financial Update - As of December 31, 2024, the company reported cash, cash equivalents, and investments totaling approximately $123 million [12]. - The expected net cash burn for 2025 is projected to be between $47 million and $50 million, a reduction from approximately $65 million in 2024 [12]. - The company believes its financial resources are sufficient to fund operations through the first quarter of 2028, including the Phase 2b clinical trial for imdusiran [12]. Intellectual Property and Litigation - Arbutus is actively defending its intellectual property in ongoing lawsuits against Moderna and Pfizer/BioNTech regarding its patented LNP technology [5][12]. - The claim construction hearing for the lawsuit against Pfizer/BioNTech took place on December 18, 2024, with a ruling expected in the first half of 2025 [12]. Product Pipeline - Imdusiran is an RNAi therapeutic designed to reduce HBV viral proteins and antigens, showing meaningful functional cure rates when combined with pegylated interferon and nucleos(t)ide analogue therapy [8][13]. - AB-101, an oral PD-L1 inhibitor, is currently in a Phase 1a/1b clinical trial, with data from the 10 mg cohort expected in the first half of 2025 [9][12]. Industry Context - Chronic hepatitis B virus infection affects over 250 million people globally and is a leading cause of liver cancer, representing a significant unmet medical need [10]. - Approximately 1.1 million people die annually from complications related to chronic HBV infection, despite the availability of effective vaccines and treatments [10].

Group 1 - Arbutus Biopharma reported positive data from its phase 2a IM-PROVE I trial, utilizing its drug Imdusiran (AB-729) in combination with short courses of pegylated interferon alfa-2a to treat Hepatitis B patients [2] - The combination regimen showed promising results, indicating potential for further development in Hepatitis B treatment [2] Group 2 - The Biotech Analysis Central service offers in-depth analysis of various pharmaceutical companies, including a library of over 600 biotech investing articles and a model portfolio of small and mid-cap stocks [2] - The service is available for $49 per month, with a discounted yearly plan at $399, providing investors with resources to make informed decisions [1]

WARMINSTER, Pa., Nov. 26, 2024 (GLOBE NEWSWIRE) -- Arbutus Biopharma Corporation (Nasdaq: ABUS), (“Arbutus” or the “Company”), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop a functional cure for people with chronic hepatitis B virus (cHBV) infection, today announced that the Company will participate in the virtual H.C Wainwright @ Home fireside chat series taking place on Tuesday, December 3, 2024 at 11:00 am ET. To access the live webcast of the fireside ...

50% of patients who had baseline HBsAg levels less than 1000 IU/mL achieved functional cure in Cohort A1 of the IM-PROVE I Phase 2a clinical trial Overall, in Cohort A1, 25% of patients achieved functional cure Data to be presented in late-breaker poster session at AASLD – The Liver Meeting® on Monday, November 18, 2024 WARMINSTER, Pa., Nov. 15, 2024 (GLOBE NEWSWIRE) -- Arbutus Biopharma Corporation (Nasdaq: ABUS) (“Arbutus” or the “Company”), a clinical-stage biopharmaceutical company leveraging its exten ...

Core Insights - Arbutus Biopharma Corporation is focused on developing a functional cure for chronic hepatitis B virus (cHBV) infection through its extensive virology expertise [1][2] - The company will present at the Jefferies London Healthcare Conference on November 21, 2024, and will host one-on-one meetings [1] - Arbutus has a pipeline that includes an RNAi therapeutic, imdusiran (AB-729), and an oral PD-L1 inhibitor, AB-101, both of which are in clinical trials [2] Company Overview - Arbutus Biopharma Corporation is a clinical-stage biopharmaceutical company specializing in novel therapeutics with distinct mechanisms of action aimed at providing a functional cure for cHBV [2] - The company's strategy involves suppressing HBV DNA, reducing surface antigen, and boosting HBV-specific immune responses [2] - Imdusiran has shown significant clinical data in reducing surface antigen and reawakening HBV-specific immune response, currently in two Phase 2a combination clinical trials [2] - AB-101 is being evaluated in a Phase 1a/1b clinical trial [2]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial information for Arbutus Biopharma Corporation [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets provide a snapshot of the company's assets, liabilities, and equity at specific reporting dates | Metric | Sep 30, 2024 ($ thousands) | Dec 31, 2023 ($ thousands) | | :-------------------------- | :------------------------- | :------------------------- | | Total Assets | 140,441 | 144,401 | | Total Liabilities | 33,551 | 38,383 | | Total Stockholders' Equity | 106,890 | 106,018 | - **Total assets decreased by $3.96 million** from December 31, 2023, to September 30, 2024, primarily due to a decrease in marketable securities[4](index=4&type=chunk) - **Total liabilities decreased by $4.83 million**, mainly driven by a reduction in accounts payable and accrued liabilities and deferred license revenue[4](index=4&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) These statements detail the company's revenues, expenses, and net loss over specific interim periods | Metric (in thousands) | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenue | $1,339 | $4,658 | $4,597 | $15,996 | | Total Operating Expenses | $22,779 | $26,216 | $66,983 | $73,352 | | Loss from Operations | $(21,440) | $(21,558) | $(62,386) | $(57,356) | | Net Loss | $(19,717) | $(20,104) | $(57,388) | $(53,537) | | Basic and Diluted Loss per Share | $(0.10) | $(0.12) | $(0.31) | $(0.32) | - **Total revenue decreased significantly by $3.3 million (70.8%)** for the three months ended September 30, 2024, and by **$11.4 million (71.3%)** for the nine months ended September 30, 2024, compared to the same periods in 2023[5](index=5&type=chunk)[161](index=161&type=chunk) - **Net loss for the three months ended September 30, 2024, was $(19.7) million**, a slight improvement from **$(20.1) million** in the prior year, while the nine-month net loss increased to **$(57.4) million** from **$(53.5) million**[5](index=5&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement tracks changes in the company's equity, including share capital and accumulated deficit | Metric (in thousands) | Balance Dec 31, 2023 | Balance Sep 30, 2024 | | :------------------------------ | :------------------- | :------------------- | | Number of Shares Outstanding | 169,867,414 | 189,438,135 | | Share Capital | $1,349,821 | $1,407,595 | | Additional Paid-In Capital | $81,270 | $81,425 | | Deficit | $(1,276,652) | $(1,334,040) | | Total Stockholders' Equity | $106,018 | $106,890 | - The number of common shares outstanding increased by approximately **19.57 million** from December 31, 2023, to September 30, 2024, primarily due to issuances under the Open Market Sale Agreement and stock option exercises[7](index=7&type=chunk) - **Total stockholders' equity increased by $0.87 million**, despite a growing accumulated deficit, driven by new share issuances[7](index=7&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(54,535) | $(68,644) | | Net cash provided by investing activities | $9,537 | $28,548 | | Net cash provided by financing activities | $50,575 | $26,840 | | Increase/(decrease) in cash and cash equivalents | $5,561 | $(13,245) | | Cash and cash equivalents, end of period | $31,846 | $17,531 | - **Net cash used in operating activities decreased by $14.1 million** for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to reduced R&D expenses and timing of vendor payments[10](index=10&type=chunk)[177](index=177&type=chunk) - **Net cash provided by financing activities significantly increased to $50.6 million** in 2024 from **$26.8 million** in 2023, driven by higher proceeds from common share issuances[10](index=10&type=chunk)[179](index=179&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential details and explanations for the figures presented in the financial statements [1. Nature of business and future operations](index=8&type=section&id=1.%20Nature%20of%20business%20and%20future%20operations) This note describes the company's core business, strategic focus, and financial outlook - Arbutus Biopharma Corporation is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for chronic hepatitis B virus (cHBV) infection, with key pipeline assets including imdusiran (RNAi therapeutic) and AB-101 (oral PD-L1 inhibitor)[11](index=11&type=chunk) - The company is actively engaged in intellectual property litigation against Moderna and Pfizer/BioNTech regarding the use of its patented lipid nanoparticle (LNP) technology in COVID-19 vaccines, with the Moderna trial moved to September 24, 2025[12](index=12&type=chunk) - As of September 30, 2024, the company had **$130.8 million in cash, cash equivalents, and marketable securities**, with no outstanding debt, and believes it has sufficient cash to fund operations for at least the next 12 months[13](index=13&type=chunk) [2. Significant accounting policies](index=9&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 US GAAP for interim statements and include Arbutus Biopharma Corporation and its wholly-owned subsidiary[16](index=16&type=chunk) - Net loss per share is calculated based on weighted average common shares outstanding, with potential common shares excluded due to their anti-dilutive effect[17](index=17&type=chunk) - Revenue from collaborations and licenses is recognized using a five-step model under ASC 606, with consideration allocated to distinct performance obligations and recognized as control is transferred[18](index=18&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) [3. Fair value measurements](index=10&type=section&id=3.%20Fair%20value%20measurements) This note details the valuation techniques and inputs used for financial instruments measured at fair value - The company measures certain financial instruments at fair value using a three-level hierarchy, prioritizing observable inputs[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Contingent consideration is measured at fair value using a probability-weighted assessment and discounted cash flow model (Level 3 inputs), with its fair value increasing to **$8.3 million** as of September 30, 2024, from **$7.6 million** at December 31, 2023[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) | Fair Value Item (in thousands) | Level 1 (Sep 30, 2024) | Level 2 (Sep 30, 2024) | Level 3 (Sep 30, 2024) | Total (Sep 30, 2024) | | :----------------------------- | :--------------------- | :--------------------- | :--------------------- | :------------------- | | Cash and cash equivalents | $31,846 | — | — | $31,846 | | Marketable securities, current | — | $95,948 | — | $95,948 | | Marketable securities, non-current | — | $2,964 | — | $2,964 | | Contingent consideration | — | — | $8,335 | $8,335 | [4. Investments in marketable securities](index=12&type=section&id=4.%20Investments%20in%20marketable%20securities) This note provides a breakdown of the company's marketable securities portfolio and their fair values | Investment Type (in thousands) | Amortized Cost (Sep 30, 2024) | Fair Value (Sep 30, 2024) | Amortized Cost (Dec 31, 2023) | Fair Value (Dec 31, 2023) | | :----------------------------- | :---------------------------- | :------------------------ | :---------------------------- | :------------------------ | | Money market | $25,948 | $25,948 | $18,029 | $18,029 | | US corporate bonds | $46,409 | $46,455 | $77,318 | $77,170 | | US treasury bills | $52,408 | $52,457 | — | — | | US government agency bonds | — | — | $17,918 | $17,874 | | Yankee bonds | — | — | $2,000 | $1,983 | | US government bonds | — | — | $9,001 | $8,975 | - As of September 30, 2024, the company held **$95.9 million** in short-term marketable securities (maturing in less than one year) and **$3.0 million** in long-term marketable securities (maturing in 1-5 years)[41](index=41&type=chunk) - Unrealized losses on debt securities are not recognized into income as they are primarily due to market conditions/interest rates, and the company does not intend to sell prior to anticipated recovery[43](index=43&type=chunk) [5. Investment in Genevant](index=13&type=section&id=5.%20Investment%20in%20Genevant) This note describes the company's licensing agreement and equity investment in Genevant Sciences Ltd - Arbutus licensed its LNP and ligand conjugate delivery platforms to Genevant Sciences Ltd for RNA-based applications outside of HBV, retaining all rights for HBV[45](index=45&type=chunk) - The company is entitled to a specified percentage (14-20%) of certain revenue Genevant receives from sublicenses or litigation proceeds related to the licensed intellectual property[46](index=46&type=chunk)[47](index=47&type=chunk) - As of September 30, 2024, the carrying value of the company's approximately 16% common equity investment in Genevant was zero[48](index=48&type=chunk) [6. Accounts payable and accrued liabilities](index=14&type=section&id=6.%20Accounts%20payable%20and%20accrued%20liabilities) This note provides a detailed breakdown of the company's short-term financial obligations | Category (in thousands) | Sep 30, 2024 | Dec 31, 2023 | | :------------------------------ | :----------- | :----------- | | Trade accounts payable | $2,315 | $3,223 | | Research and development accruals | $1,367 | $2,884 | | Professional fee accruals | $709 | $815 | | Payroll accruals | $2,588 | $3,349 | | Restructuring liabilities | $565 | — | | Total | $7,544 | $10,271 | - **Total accounts payable and accrued liabilities decreased by $2.73 million** from December 31, 2023, to September 30, 2024, primarily due to reductions in R&D accruals and payroll accruals[50](index=50&type=chunk) - **Restructuring liabilities of $0.57 million** were recorded as of September 30, 2024, following the workforce reduction and cessation of discovery efforts[50](index=50&type=chunk) [7. Sale of future royalties](index=14&type=section&id=7.%20Sale%20of%20future%20royalties) This note explains the accounting treatment for the sale of a portion of future ONPATTRO royalty interests - In 2019, Arbutus sold a portion of its ONPATTRO royalty interest to OMERS for **$20 million**, with OMERS retaining entitlement until **$30 million** in royalties are received, after which rights revert to Arbutus[51](index=51&type=chunk) - The transaction is accounted for as a liability, with a discount amortized as interest expense, and an estimated effective annual interest rate of approximately 2.0% as of September 30, 2024[52](index=52&type=chunk) | Metric (in thousands) | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------------------------------------- | :-------------------------- | :-------------------------- | | Net liability related to sale of future royalties - beginning balance | $6,953 | $10,365 | | Non-cash royalty revenue | $(1,736) | $(2,667) | | Non-cash interest expense | $98 | $412 | | Net liability related to sale of future royalties - ending balance | $5,315 | $8,110 | [8. Contingencies and commitments](index=15&type=section&id=8.%20Contingencies%20and%20commitments) This note discloses potential future obligations and legal claims that could impact the company's finances - The company has a contingent consideration liability related to the 2014 acquisition of Enantigen Therapeutics, Inc., which could involve up to **$102.5 million** in sales performance milestones for the first commercialized HBV product[57](index=57&type=chunk) - The fair value of this contingent consideration was **$8.3 million** as of September 30, 2024, and changes in fair value are recorded in the statements of operations[58](index=58&type=chunk) [9. Collaborations, contracts and licensing agreements](index=15&type=section&id=9.%20Collaborations,%20contracts%20and%20licensing%20agreements) This note details the company's key strategic alliances, licensing deals, and their financial implications - The collaboration with Qilu Pharmaceutical Co., Ltd. involves a license for imdusiran in China, Hong Kong, Macau, and Taiwan, with an upfront payment of **$40 million** and potential milestone payments up to **$245 million**, plus double-digit royalties[60](index=60&type=chunk)[61](index=61&type=chunk) - Revenue recognized from the Qilu collaboration for the nine months ended September 30, 2024, was **$0.9 million**, a significant decrease from **$10.3 million** in the same period of 2023, reflecting progress on manufacturing obligations[67](index=67&type=chunk) - The clinical collaboration with Barinthus Biotherapeutics plc for the IM-PROVE II trial evaluates imdusiran with VTP-300 and nivolumab, with both companies splitting costs[72](index=72&type=chunk) | Revenue Source (in thousands) | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :---------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Acuitas Therapeutics, Inc. | $644 | $714 | $1,981 | $2,980 | | Qilu Pharmaceutical Co., Ltd. | $123 | $3,221 | $880 | $10,349 | | Non-cash royalty revenue (Alnylam) | $572 | $723 | $1,736 | $2,667 | | Total Revenue | $1,339 | $4,658 | $4,597 | $15,996 | [10. Shareholders' equity](index=18&type=section&id=10.%20Shareholders'%20equity) This note provides information on the company's capital structure, share issuances, and stock-based compensation - The company's authorized share capital includes an unlimited number of common and preferred shares, and 1,164,000 Series A preferred shares[78](index=78&type=chunk) - Under the Open Market Sale Agreement with Jefferies, the company issued 16,499,999 common shares for net proceeds of approximately **$44.1 million** during the nine months ended September 30, 2024, compared to 9,848,090 shares for **$26.0 million** in the same period of 2023[84](index=84&type=chunk) - As of September 30, 2024, approximately **$25.4 million** of common shares remained available for issuance under the March 2022 Prospectus Supplement[85](index=85&type=chunk) | Stock Compensation Expense (in thousands) | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $847 | $1,002 | $3,007 | $2,854 | | General and administrative | $1,313 | $1,481 | $4,347 | $4,724 | | Total stock compensation expense | $2,160 | $2,483 | $7,354 | $7,578 | [11. Restructuring](index=19&type=section&id=11.%20Restructuring) This note outlines the details and financial impact of the company's recent operational restructuring plan - On July 29, 2024, the Board of Directors approved a restructuring plan, effective August 1, 2024, to focus on imdusiran and AB-101 clinical development, ceasing all discovery efforts and discontinuing the IM-PROVE III clinical trial[87](index=87&type=chunk) - The restructuring involved a **40% workforce reduction**, primarily in discovery and G&A functions, resulting in a one-time charge of **$3.6 million** in Q3 2024[87](index=87&type=chunk) - The **$3.6 million** charge included **$2.9 million** in cash severance, **$0.2 million** non-cash impairment for lab equipment, and **$0.5 million** cash for close-out activities[87](index=87&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition, operational results, strategic focus, and the impact of recent restructuring [OVERVIEW](index=22&type=section&id=OVERVIEW) This section introduces the company's core business, therapeutic focus, and ongoing intellectual property litigation - Arbutus is a clinical-stage biopharmaceutical company focused on developing therapeutics for chronic hepatitis B virus (cHBV) infection, with key product candidates imdusiran (RNAi therapeutic) and AB-101 (oral PD-L1 inhibitor)[98](index=98&type=chunk) - The company is involved in patent infringement lawsuits against Moderna and Pfizer/BioNTech concerning its patented LNP technology used in COVID-19 vaccines, with the Moderna trial rescheduled to September 24, 2025[99](index=99&type=chunk) [Strategy](index=22&type=section&id=Strategy) This section outlines the company's strategic goals for advancing cHBV therapeutics and recent operational streamlining efforts - Arbutus's strategy is to advance therapeutic product candidates with complementary mechanisms of action into late-stage clinical trials to achieve a functional cure for cHBV infection[100](index=100&type=chunk) - A functional cure is defined as sustained HBsAg loss and HBV DNA <LLOQ 24 weeks off treatment, with or without anti-HBsAg antibodies, aiming for a cure rate of at least 20%[101](index=101&type=chunk) - The company implemented a **40% workforce reduction** and ceased discovery efforts, discontinuing the IM-PROVE III clinical trial, to streamline operations and focus on imdusiran and AB-101 development[108](index=108&type=chunk) [Our Product Candidates](index=23&type=section&id=Our%20Product%20Candidates) This section describes the company's key therapeutic candidates and their clinical development status [RNAi therapeutic (imdusiran, AB-729)](index=24&type=section&id=RNAi%20therapeutic%20(imdusiran,%20AB-729)) This section details the development and clinical trial results for imdusiran, an RNAi therapeutic for cHBV - Imdusiran (AB-729) is a subcutaneously-delivered RNAi therapeutic designed to reduce all HBV antigens, including HBsAg, and inhibit viral replication, with 60mg every 8 weeks identified as an appropriate dose for Phase 2a trials[112](index=112&type=chunk)[113](index=113&type=chunk) - IM-PROVE I trial data showed that **33% of patients** in Cohort A1 (48 weeks imdusiran + 24 weeks Peg-IFNα-2a) achieved HBsAg loss at EOT, maintained at 24 weeks post-treatment, with **67% HBsAg loss** in patients with baseline HBsAg <1,000 IU/mL[115](index=115&type=chunk) - IM-PROVE II trial preliminary data showed statistical significance (p<0.05) in lowering HBsAg levels with imdusiran and VTP-300 compared to placebo, and an additional cohort is evaluating the combination with low-dose nivolumab[118](index=118&type=chunk)[119](index=119&type=chunk) - The IM-PROVE III clinical trial, evaluating imdusiran with durvalumab, was terminated prior to dosing due to resource prioritization[120](index=120&type=chunk) [Oral PD-L1 Inhibitor (AB-101)](index=25&type=section&id=Oral%20PD-L1%20Inhibitor%20(AB-101)) This section describes the development and clinical progress of AB-101, an oral PD-L1 inhibitor for cHBV - AB-101 is a proprietary oral small-molecule PD-L1 inhibitor designed to reawaken HBV-specific immune responses, differentiated by its liver-centric action, shorter duration of effect, and novel mechanism of binding to PD-L1[122](index=122&type=chunk) - Preclinical data indicate AB-101 activates and reinvigorates HBV-specific T-cells and, in combination with an HBV-targeting siRNA, increased anti-HBsAg antibody production[123](index=123&type=chunk)[124](index=124&type=chunk) - The AB-101 IND application was placed on clinical hold by the FDA in April 2023, leading the company to pursue regulatory pathways outside the US, with a Phase 1 clinical trial approved in New Zealand and other countries[125](index=125&type=chunk) - The Phase 1a/1b clinical trial for AB-101 is currently in Part 3, evaluating repeat dosing in cHBV patients, with preliminary data expected in the first half of 2025, following dose-dependent receptor occupancy observed in healthy subjects[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) [Other Collaborations, Royalty Entitlements and Intellectual Property Litigation](index=26&type=section&id=Other%20Collaborations,%20Royalty%20Entitlements%20and%20Intellectual%20Property%20Litigation) This section covers the company's partnerships, royalty agreements, and ongoing intellectual property disputes [Collaboration with Qilu Pharmaceutical Co., Ltd. (Qilu)](index=26&type=section&id=Collaboration%20with%20Qilu%20Pharmaceutical%20Co.,%20Ltd.%20(Qilu)) This section details the licensing agreement with Qilu for imdusiran in specific Asian territories - Arbutus granted Qilu a license for imdusiran in China, Hong Kong, Macau, and Taiwan, receiving a **$40 million** upfront payment and potential milestones up to **$245 million**, plus double-digit royalties[130](index=130&type=chunk)[131](index=131&type=chunk) - Qilu is responsible for all development, regulatory, and commercialization costs for imdusiran in the Territory[132](index=132&type=chunk) [Alnylam Pharmaceuticals, Inc. (Alnylam) and Acuitas Therapeutics, Inc. (Acuitas)](index=27&type=section&id=Alnylam%20Pharmaceuticals,%20Inc.%20(Alnylam)%20and%20Acuitas%20Therapeutics,%20Inc.%20(Acuitas)) This section describes the company's royalty entitlements from Alnylam's ONPATTRO sales via Acuitas - Arbutus has two royalty entitlements on Alnylam's global net sales of ONPATTRO, an RNAi therapeutic utilizing Arbutus's LNP technology[134](index=134&type=chunk) - A portion of the primary royalty interest was sold to OMERS for **$20 million**, with OMERS retaining rights until **$30 million** in royalties are received; **$24.4 million** has been earned by OMERS through September 30, 2024[135](index=135&type=chunk) - A second, lower royalty interest from Acuitas on ONPATTRO sales has been retained by Arbutus[136](index=136&type=chunk) [Genevant Sciences, Ltd.](index=27&type=section&id=Genevant%20Sciences,%20Ltd.) This section outlines the licensing agreement with Genevant and the company's equity investment - Arbutus licensed its LNP and ligand conjugate delivery platforms to Genevant for RNA-based applications outside of HBV, retaining all HBV rights[137](index=137&type=chunk) - Arbutus is entitled to **14-20%** of certain revenue Genevant receives from sublicenses or infringement actions related to the licensed IP[138](index=138&type=chunk)[139](index=139&type=chunk) - As of September 30, 2024, Arbutus owned approximately **16%** of Genevant's common equity, with a carrying value of zero, but its entitlement to future royalties/sublicensing revenue remains unaffected[142](index=142&type=chunk) [Moderna Inter Partes Review Petition](index=28&type=section&id=Moderna%20Inter%20Partes%20Review%20Petition) This section provides an update on Moderna's petition to invalidate one of Arbutus's U.S. patents - Moderna filed an Inter Partes Review petition in 2018 to invalidate Arbutus's U.S. Patent 9,404,127 ('127 Patent)[143](index=143&type=chunk) - The PTAB initially held all claims invalid, but after appeals and a Supreme Court decision, the Federal Circuit affirmed the PTAB's finding of invalidity due to anticipation on April 11, 2023[144](index=144&type=chunk) [Moderna and Merck European Opposition](index=28&type=section&id=Moderna%20and%20Merck%20European%20Opposition) This section details the opposition proceedings against Arbutus's European patent by Moderna and Merck - Moderna and Merck filed oppositions to Arbutus's European patent EP 2279254 ('254 Patent) in 2018[145](index=145&type=chunk) - Oral proceedings on June 6, 2024, resulted in the Opposition Division upholding the '254 Patent but declining to broaden certain claims; both parties intend to appeal[145](index=145&type=chunk)[205](index=205&type=chunk) [Patent Infringement Litigation vs. Moderna](index=29&type=section&id=Patent%20Infringement%20Litigation%20vs.%20Moderna) This section provides an update on the patent infringement lawsuit against Moderna regarding its COVID-19 vaccine - Arbutus and Genevant sued Moderna in February 2022 for infringement of multiple U.S. patents related to LNP technology in Moderna's COVID-19 vaccine, MRNA-1273, seeking damages[148](index=148&type=chunk) - The court denied Moderna's motion to dismiss and issued a claim construction ruling on April 3, 2024, largely agreeing with Arbutus's positions on disputed claim terms[148](index=148&type=chunk) - The trial start date was moved from April 21, 2025, to September 24, 2025, to accommodate outstanding discovery[148](index=148&type=chunk) [Patent Infringement Litigation vs. Pfizer and BioNTech](index=29&type=section&id=Patent%20Infringement%20Litigation%20vs.%20Pfizer%20and%20BioNTech) This section details the patent infringement lawsuit against Pfizer and BioNTech concerning their COVID-19 vaccine - Arbutus and Genevant filed a lawsuit against Pfizer and BioNTech in April 2023 for infringement of U.S. patents related to LNP technology in their COVID-19 mRNA-LNP vaccines, seeking damages[149](index=149&type=chunk) - A claim construction hearing is scheduled for December 18, 2024, with subsequent case dates, including trial, to be determined later[149](index=149&type=chunk) [Acuitas Declaratory Judgment Lawsuit](index=29&type=section&id=Acuitas%20Declaratory%20Judgment%20Lawsuit) This section describes the concluded declaratory judgment lawsuit initiated by Acuitas against Arbutus's patents - Acuitas filed a lawsuit in March 2022 seeking declaratory judgment that Arbutus's patents do not infringe Pfizer and BioNTech's COMIRNATY vaccine and that the patents are invalid[150](index=150&type=chunk) - Acuitas voluntarily dismissed its complaint in New York in August 2023 and refiled a similar complaint in New Jersey, adding two patents[152](index=152&type=chunk) - The court granted Arbutus and Genevant's motion to dismiss on May 20, 2024, concluding this matter[152](index=152&type=chunk) [CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS AND ESTIMATES](index=31&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20SIGNIFICANT%20JUDGEMENTS%20AND%20ESTIMATES) This section discusses the key accounting policies and estimates that require significant management judgment - The preparation of financial statements requires estimates and assumptions affecting reported amounts of assets, liabilities, revenues, and expenses[154](index=154&type=chunk) - No significant changes in critical accounting policies and estimates were identified from the Annual Report on Form 10-K for the year ended December 31, 2023[155](index=155&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=31&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section outlines the potential impact of recently issued accounting standards on the company's financial statements - The company is evaluating the impact of ASU No 2023-07 (Segment Reporting) and ASU No 2023-09 (Income Taxes) on its financial statement disclosures, effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively[25](index=25&type=chunk)[26](index=26&type=chunk) - Other recently issued standards are not expected to have a material impact on the company's financial statements[27](index=27&type=chunk) [RESULTS OF OPERATIONS](index=31&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including revenue and operating expenses, for the reporting periods [Revenue](index=32&type=section&id=Revenue) This section details the sources and changes in the company's total revenue for the reporting periods | Revenue Source (in thousands) | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :---------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Royalties from ONPATTRO sales | $644 | $714 | $1,981 | $2,980 | | Qilu Pharmaceutical Co., Ltd. | $123 | $3,221 | $880 | $10,349 | | Non-cash royalty revenue | $572 | $723 | $1,736 | $2,667 | | Total Revenue | $1,339 | $4,658 | $4,597 | $15,996 | - **Total revenue decreased by $3.3 million (70.8%)** for the three months and **$11.4 million (71.3%)** for the nine months ended September 30, 2024, compared to 2023[161](index=161&type=chunk) - The decrease was primarily due to reduced license revenue from the Qilu agreement and lower royalty revenue from Alnylam and Acuitas due to decreased ONPATTRO sales[161](index=161&type=chunk) [Operating expenses](index=33&type=section&id=Operating%20expenses) This section provides an overview of the company's total operating expenses and their period-over-period changes | Operating Expense (in thousands) | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $14,273 | $20,169 | $45,227 | $56,136 | | General and administrative | $4,537 | $5,842 | $17,396 | $17,374 | | Change in fair value of contingent consideration | $344 | $205 | $735 | $(158) | | Restructuring | $3,625 | — | $3,625 | — | | Total Operating Expenses | $22,779 | $26,216 | $66,983 | $73,352 | - **Total operating expenses decreased by $3.4 million (13.1%)** for the three months and **$6.4 million (8.7%)** for the nine months ended September 30, 2024, compared to 2023[163](index=163&type=chunk)[164](index=164&type=chunk) [Research and development](index=33&type=section&id=Research%20and%20development) This section analyzes the trends and drivers of the company's research and development expenditures - **Research and development expenses decreased by $5.9 million (29.2%)** for the three months and **$10.9 million (19.4%)** for the nine months ended September 30, 2024, compared to 2023[166](index=166&type=chunk) - The decrease was primarily due to the discontinuation of coronavirus and AB-161 programs and related headcount reductions in September 2023, and the cessation of all discovery efforts in August 2024[166](index=166&type=chunk) [General and administrative](index=33&type=section&id=General%20and%20administrative) This section examines the changes in general and administrative expenses, including compensation and legal fees - **General and administrative expenses decreased by $1.3 million (22.4%)** for the three months ended September 30, 2024, due to reduced employee compensation from headcount reductions[168](index=168&type=chunk) - For the nine months, G&A expenses remained similar, with higher litigation-related legal fees offset by lower employee compensation and insurance premiums[168](index=168&type=chunk) [Change in fair value of contingent consideration](index=34&type=section&id=Change%20in%20fair%20value%20of%20contingent%20consideration) This section explains the adjustments made to the fair value of contingent consideration liabilities - The fair value of contingent consideration increased by **$0.7 million** for the nine months ended September 30, 2024, reflecting the progression of imdusiran through Phase 2a clinical trials[33](index=33&type=chunk)[170](index=170&type=chunk) [Restructuring](index=34&type=section&id=Restructuring) This section details the one-time charges incurred due to the company's recent restructuring plan - A one-time restructuring charge of **$3.6 million** was incurred in Q3 2024 due to the cessation of discovery efforts, discontinuation of the IM-PROVE III trial, and a **40% workforce reduction**[171](index=171&type=chunk) [Other income (loss)](index=34&type=section&id=Other%20income%20(loss)) This section reports on non-operating income and expenses, including interest income and foreign exchange gains/losses | Other Income (in thousands) | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Interest income | $1,747 | $1,494 | $5,121 | $4,223 | | Interest expense | $(29) | $(46) | $(107) | $(415) | | Foreign exchange gain/(loss) | $5 | $6 | $(16) | $11 | | Total Other Income | $1,723 | $1,454 | $4,998 | $3,819 | - **Total other income increased by $0.27 million** for the three months and **$1.18 million** for the nine months ended September 30, 2024, compared to 2023[172](index=172&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=35&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section assesses the company's ability to meet its short-term and long-term financial obligations [Sources of Liquidity](index=35&type=section&id=Sources%20of%20Liquidity) This section identifies the primary means by which the company generates and maintains its cash reserves - As of September 30, 2024, Arbutus had **$130.8 million** in cash, cash equivalents, and investments in marketable securities, with no outstanding debt[180](index=180&type=chunk) - The company issued 16,499,999 common shares under its Open Market Sale Agreement for net proceeds of approximately **$44.1 million** during the nine months ended September 30, 2024[186](index=186&type=chunk) - Arbutus retains a second royalty interest on ONPATTRO sales from Acuitas and has potential future milestone and royalty payments from its collaboration with Qilu Pharmaceutical[187](index=187&type=chunk)[188](index=188&type=chunk) [Cash requirements](index=37&type=section&id=Cash%20requirements) This section outlines the company's projected cash burn and future funding needs - The company believes its current cash resources of **$130.8 million** are sufficient to fund operations into the fourth quarter of 2026[189](index=189&type=chunk) - Arbutus expects a net cash burn between **$63 million and $67 million** in 2024[189](index=189&type=chunk) - Future funding needs will depend on factors such as revenue from collaborations, milestone payments, development progress of pipeline products, and intellectual property litigation costs[189](index=189&type=chunk) [OFF-BALANCE SHEET ARRANGEMENTS](index=37&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) This section confirms the absence of any 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, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources[192](index=192&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section notes that as a smaller reporting company, Arbutus is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, Arbutus Biopharma Corporation is not required to provide quantitative and qualitative disclosures about market risk[192](index=192&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=37&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of disclosure controls and procedures and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section describes management's assessment of the effectiveness of the company's disclosure controls - Management, including the principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures as of September 30, 2024[194](index=194&type=chunk) - Based on the evaluation, the disclosure controls and procedures were concluded to be effective at the reasonable assurance level[194](index=194&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&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 - There have been no material changes in internal control over financial reporting during the three months ended September 30, 2024[195](index=195&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings and risk factors [ITEM 1. LEGAL PROCEEDINGS](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section updates on ongoing patent infringement lawsuits against Pfizer/BioNTech and Moderna, and other intellectual property disputes [Patent Infringement Litigation vs. Pfizer and BioNTech](index=39&type=section&id=Patent%20Infringement%20Litigation%20vs.%20Pfizer%20and%20BioNTech) This section details the patent infringement lawsuit against Pfizer and BioNTech regarding their COVID-19 mRNA-LNP vaccines - Arbutus and Genevant sued Pfizer and BioNTech in April 2023 for infringement of multiple U.S. patents related to LNP technology in their COVID-19 mRNA-LNP vaccines, seeking damages[197](index=197&type=chunk) - A claim construction hearing is scheduled for December 18, 2024, with other case dates to be determined later[197](index=197&type=chunk) [Patent Infringement Litigation vs. Moderna](index=39&type=section&id=Patent%20Infringement%20Litigation%20vs.%20Moderna) This section provides an update on the patent infringement lawsuit against Moderna concerning its COVID-19 vaccine - Arbutus and Genevant filed a lawsuit against Moderna in February 2022 for infringement of U.S. patents related to LNP technology in Moderna's COVID-19 vaccine, MRNA-1273, seeking damages[198](index=198&type=chunk) - The court denied Moderna's motion to dismiss and issued a claim construction ruling on April 3, 2024, largely favoring Arbutus's positions[198](index=198&type=chunk) - The trial start date was moved from April 21, 2025, to September 24, 2025, to allow for additional discovery[198](index=198&type=chunk) [Acuitas Declaratory Judgment Lawsuit](index=39&type=section&id=Acuitas%20Declaratory%20Judgment%20Lawsuit) This section describes the concluded declaratory judgment lawsuit initiated by Acuitas against Arbutus's patents - Acuitas filed a lawsuit in March 2022 seeking declaratory judgment that Arbutus's patents do not infringe Pfizer and BioNTech's COMIRNATY vaccine and that the patents are invalid[199](index=199&type=chunk) - Acuitas voluntarily dismissed its New York complaint in August 2023 and refiled a similar action in New Jersey, adding two patents[200](index=200&type=chunk) - The court granted Arbutus and Genevant's motion to dismiss on May 20, 2024, concluding this matter[200](index=200&type=chunk) [Moderna Inter Partes Review Petition](index=40&type=section&id=Moderna%20Inter%20Partes%20Review%20Petition) This section provides an update on Moderna's petition to invalidate one of Arbutus's U.S. patents - Moderna's 2018 petition to invalidate Arbutus's U.S. Patent 9,404,127 ('127 Patent) was affirmed by the Federal Circuit on April 11, 2023, finding all claims invalid due to anticipation[201](index=201&type=chunk)[202](index=202&type=chunk) [Moderna and Merck European Opposition](index=40&type=section&id=Moderna%20and%20Merck%20European%20Opposition) This section details the opposition proceedings against Arbutus's European patent by Moderna and Merck - Moderna and Merck's opposition to Arbutus's European patent EP 2279254 ('254 Patent) resulted in the Opposition Division upholding the patent on June 6, 2024, but declining to broaden claims; both parties plan to appeal[203](index=203&type=chunk)[205](index=205&type=chunk) [Other Matters](index=41&type=section&id=Other%20Matters) This section addresses other legal matters in the ordinary course of business and their expected impact - The company is involved in various legal matters in the ordinary course of business and does not believe they will have a material adverse effect on its consolidated results of operations, cash flows, or financial condition[206](index=206&type=chunk) [ITEM 1A. RISK FACTORS](index=41&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section confirms no material changes to the risk factors previously disclosed in the company's latest Annual Report on Form 10-K - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended December 31, 2023[207](index=207&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=41&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section reports no unregistered sales of equity securities or use of proceeds for the current reporting period - No unregistered sales of equity securities or use of proceeds to report[207](index=207&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=41&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section confirms no defaults upon senior securities for the current reporting period - No defaults upon senior securities to report[207](index=207&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section clarifies that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the company[207](index=207&type=chunk) [ITEM 5. OTHER INFORMATION](index=41&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section provides information on other matters, including a Rule 10b5-1 trading arrangement adopted by the Chief Scientific Officer's Trust [Trading Plans](index=41&type=section&id=Trading%20Plans) This section details a Rule 10b5-1 trading arrangement adopted by the Trust of the Chief Scientific Officer - On September 18, 2024, the Irrevocable Deed of Trust of Michael J Sofia (Chief Scientific Officer) adopted a Rule 10b5-1 trading arrangement[207](index=207&type=chunk) - This plan provides for the sale of up to 96,456 shares of common stock held by the Trust and will terminate on April 15, 2025, or earlier upon completion of sales[207](index=207&type=chunk) [ITEM 6. EXHIBITS](index=42&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including company articles, employment agreements, certifications, and financial statements - Exhibits include company articles, an amendment to the Executive Employment Agreement for Michael J Sofia, certifications from principal executive and financial officers, and XBRL formatted financial statements[209](index=209&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) This section contains the signatures of authorized officers, certifying the filing of the report on November 6, 2024 - The report was duly signed on November 6, 2024, by Michael J McElhaugh, Interim President and Chief Executive Officer, and David C Hastings, Chief Financial Officer[211](index=211&type=chunk)[212](index=212&type=chunk)