On December 13, 2021 Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage biopharmaceutical company dedicated to developing a cure for people with chronic hepatitis B virus (HBV) infection, and Qilu Pharmaceutical, one of the leading pharmaceutical companies in China, reported that the companies have entered into an exclusive licensing agreement and strategic partnership for the development and commercialization of AB-729 for the treatment or prevention of hepatitis B in mainland China, Hong Kong, Macau and Taiwan (Press release, Arbutus Biopharma, DEC 13, 2021, View Source [SID1234596909]).

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AB-729 is Arbutus’s lead RNA interference (RNAi) therapeutic that is currently in multiple Phase 2a proof-of-concept clinical trials designed to evaluate it in combination with other approved or investigational agents.

William Collier, President and Chief Executive Officer of Arbutus Biopharma, commented, "Qilu is an ideal partner for our AB-729 RNAi therapeutic given their extensive development, regulatory and commercialization capabilities in China. We are now positioned to bring AB-729 to the largest HBV patient population in need of a cure and to tap into one of the largest and most promising healthcare markets worldwide. We are committed to working with Qilu in this partnership which further validates the potential of AB-729 to address the unmet medical need in HBV."

Qilu Pharmaceutical Chief Executive Officer, Ms. Yan Li commented, "The HBV patient population is significant in China. Based on clinical data achieved to-date, we believe in the potential of AB-729 to be a safe and effective treatment option in treating HBV. We look forward to collaborating with Arbutus to maximize the potential clinical value that AB-729 can bring to and benefit the millions of underserved HBV patients in China."

Under the terms of the agreement, Arbutus will receive a $40 million upfront payment and will be entitled to additional payments of up to $245 million upon reaching certain development, regulatory and sales milestones. The above amounts are net of withholding taxes. Qilu will be responsible for funding all development and commercialization activities for mainland China, Hong Kong, Macau and Taiwan. Arbutus is also entitled to receive double-digit tiered royalties up to the low twenties percent on annual net sales. In addition, Qilu will make a $15 million equity investment in Arbutus common shares at a price of $4.19 per share, a 15% premium of Arbutus’ previous 30-day average closing stock price calculated from December 10, 2021.

The common shares to be sold in the private placement have been offered only to certain institutional and/or accredited investors in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The common shares have not been registered under the Securities Act or any state or other securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state securities laws. The Securities and Exchange Commission has not passed upon the merits of or given its approval to the common shares, the terms of the private placement or the accuracy or completeness of any private placement materials. The common shares sold in the private placement are subject to legal restrictions on transfer.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification or otherwise under the securities laws of any such state or jurisdiction.

About AB-729

AB-729 is an RNA interference (RNAi) therapeutic specifically designed to reduce all HBV viral proteins and antigens, including hepatitis B surface antigen, which is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to the virus. AB-729 targets hepatocytes using Arbutus’ novel covalently conjugated N-acetylgalactosamine (GalNAc) delivery technology that enables subcutaneous delivery. Clinical data generated thus far has shown single- and multi-doses of AB-729 to be generally safe and well-tolerated while providing meaningful reductions in hepatitis B surface antigen and hepatitis B DNA.

About HBV

Hepatitis B is a potentially life-threatening liver infection caused by the hepatitis B virus (HBV). HBV can cause chronic infection which leads to a higher risk of death from cirrhosis and liver cancer. Chronic HBV infection represents a significant unmet medical need. The World Health Organization estimates that over 250 million people worldwide suffer from chronic HBV infection, while other estimates indicate that approximately 2 million people in the United States suffer from chronic HBV infection. Approximately 900,000 people die every year from complications related to chronic HBV infection despite the availability of effective vaccines and current treatment options.