On August 1, 2024 Labcorp (NYSE: LH), a global leader of innovative and comprehensive laboratory services, reported results for the second quarter ended June 30, 2024 and updated full-year guidance (Press release, LabCorp, AUG 1, 2024, View Source [SID1234645264]).

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"Labcorp delivered strong revenue and EPS growth in the second quarter and has significant momentum as we enter the second half of the year," said Adam Schechter, chairman and CEO of Labcorp. "We expanded our leadership in key therapeutic areas, including oncology, women’s health and neurology, and strengthened our position with customers through acquisitions and innovative digital and data solutions. We will continue driving long-term value by expanding our laboratory and testing solutions, forging new partnerships with health systems, and leveraging science and technology to improve health and improve lives around the world."

Labcorp continued to progress against its growth initiatives:

Received approval for the acquisition of select assets from Invitae, a leading medical genetics company. Through this acquisition, the company will utilize genetic insights to develop new treatments and deliver personalized care in oncology and select rare diseases. The transaction is expected to close in early August.
Subsequent to quarter end, entered into a comprehensive strategic collaboration with Naples Comprehensive Healthcare (NCH) in Southwest Florida to manage the daily operations of NCH’s inpatient lab operations. Separately, Labcorp will begin to serve as the primary lab for NCH’s physician network later this summer.
The company continues to make strides in science, technology, and innovation:

Received FDA approval as a Humanitarian Use Device for its companion diagnostic (CDx) to determine patient eligibility for treatment with BEQVEZ (fidanacogene elaparvovec-dzkt), Pfizer’s recently FDA-approved hemophilia B gene therapy.
Introduced first trimester preeclampsia screening test to determine the risk of developing preeclampsia before 34 weeks of pregnancy. It is the only test of its kind available in the United States and is relevant for all pregnant individuals. With the addition of this test, Labcorp is the only lab that can detect preeclampsia risk across all trimesters.
Launched new strategic service offerings within its precision oncology portfolio to strengthen the company’s leadership as a premier, single-source partner for biopharmaceutical companies. This includes the expanded availability of Labcorp Tissue Complete to Geneva and Shanghai and the addition of OmniSeq INSIGHT circulating tumor DNA into the portfolio of genomic profiling services.
Introduced Labcorp Global Trial Connect, a suite of central laboratory solutions aimed at increasing the speed of clinical trials.
Expanded Labcorp OnDemand with several new tests, including a standard drug, complete drug, comprehensive testosterone, HIV and complete Heart Health.
On July 25, 2024, the company announced a quarterly cash dividend of $0.72 per share of common stock, payable on September 13, 2024, to stockholders of record at the close of business on August 29, 2024. In addition, the Board of Directors approved an increase in share repurchase authorization by $1.0 billion to a total of $1.4 billion.

Consolidated Results

Second Quarter Results

Revenue for the quarter was $3.22 billion, an increase of 6.2% from $3.03 billion in the second quarter of 2023. The increase was due to organic revenue of 3.8%, acquisitions, net of divestitures, of 2.5%, partially offset by foreign currency translation of (0.1%). The 3.8% increase in organic revenue was driven by a 4.5% increase in the company’s organic Base Business, partially offset by a (0.7%) decrease in COVID-19 PCR testing (COVID-19 Testing). Compared to the Base Business last year, Base Business revenue grew 6.9%. Base Business includes Labcorp’s operations except for COVID-19 Testing.

Operating income for the quarter was $294.8 million, or 9.2% of revenue, compared to $266.3 million, or 8.8%, in the second quarter of 2023. The company recorded amortization, restructuring charges, and special items, which together totaled $185.1 million in the quarter, compared to $182.0 million during the same period in 2023. Adjusted operating income (excluding amortization, restructuring charges, and special items) for the quarter was $479.9 million, or 14.9% of revenue, compared to $448.3 million, or 14.8%, in the second quarter of 2023. The increase in operating income and margin was driven by demand and LaunchPad savings, partially offset by personnel costs.

Net earnings from continuing operations for the quarter were $205.6 million compared to $155.2 million in the second quarter of 2023. Diluted EPS from continuing operations were $2.43 in the quarter compared to $1.74 during the same period in 2023. Adjusted EPS (excluding amortization, restructuring charges, and special items) were $3.94 in the quarter compared to $3.42 in the second quarter of 2023.

Operating cash flow from continuing operations for the quarter was $561.1 million compared to $161.5 million in the second quarter of 2023. The increase in operating cash flow was due to cash earnings and working capital. Capital expenditures totaled $128.2 million compared to $103.3 million a year ago. As a result, free cash flow from continuing operations (operating cash flow from continuing operations less capital expenditures) was $432.9 million compared to $58.2 million in the second quarter of 2023.

At the end of the quarter, the company’s cash balance was $265.1 million and total debt was $5.07 billion. During the quarter, the company invested $33.9 million in acquisitions, paid out $60.4 million in dividends, and used $100.0 million for share repurchases.

Year-To-Date Results

Revenue was $6.40 billion, an increase of 5.4% from $6.07 billion in the first six months of 2023. The increase was due to organic revenue of 3.0%, acquisitions, net of divestitures, of 2.1%, and foreign currency translation of 0.2%. The 3.0% increase in organic revenue was driven by a 4.3% increase in the company’s organic Base Business, partially offset by a (1.3)% decrease in COVID-19 Testing. Compared to the Base Business last year, Base Business revenue grew 6.8%.

Operating income was $616.1 million, or 9.6% of revenue, compared to $596.1 million, or 9.8%, in the first six months of 2023. The company recorded amortization, restructuring charges, special items, and impairments, which together totaled $316.6 million in the first six months of 2024 compared to $300.0 million during the same period in 2023. Adjusted operating income (excluding amortization, restructuring charges, special items, and impairments) was $932.7 million, or 14.6% of revenue, compared to $896.1 million, or 14.8%, in the first six months of 2023. The increase in adjusted operating income was driven by organic demand and LaunchPad savings, partially offset by personnel costs.

Net earnings from continuing operations were $433.9 million compared to $363.6 million in the first six months of 2023. Diluted EPS were $5.13 in the first six months of 2024 compared to $4.08 during the same period in 2023. Adjusted EPS (excluding amortization, restructuring charges, special items, and impairments) were $7.62 in the first six months of 2023 compared to $6.88 during the same period in 2023.

Operating cash flow from continuing operations was $531.3 million compared to $347.2 million in the first six months of 2023. The increase in operating cash flow was primarily due to higher cash earnings. Capital expenditures totaled $262.0 million compared to $181.5 million during the same period in 2023. As a result, free cash flow (operating cash flow less capital expenditures) from continuing operations was $269.3 million compared to $165.7 million in the first six months of 2023.

Second Quarter Segment Results

The company’s two segments include Diagnostics Laboratories and Biopharma Laboratory Services (comprised of Central Laboratories and Early Development Research Laboratories). The following segment results exclude amortization, restructuring charges, special items, and unallocated corporate expenses.

Diagnostics Laboratories

Revenue for the quarter was $2.52 billion, an increase of 7.9% from $2.34 billion in the second quarter of 2023. The increase was due to organic growth of 4.7% and acquisitions, net of divestitures, of 3.2%, partially offset by foreign currency translation of (0.1%). The 4.7% increase in organic revenue was due to a 5.6% increase in the Base Business, partially offset by a (0.9%) decrease in COVID-19 Testing. Total Base Business growth compared to the Base Business in the prior year was 8.9%.

Total volume (measured by requisitions) increased by 5.7% as organic volume increased by 2.9%, while acquisitions, net of divestitures increased 2.8%. Organic volume was up due to a 3.4% increase in the Base Business, partially offset by a (0.5%) decrease in COVID-19 Testing. Price/mix increased by 2.1% due to organic Base Business growth of 2.2% and acquisitions of 0.4%, partially offset by COVID-19 Testing of (0.4%). Base Business volume increased 6.3% compared to the Base Business last year. Price/mix was up 2.5% in the Base Business compared to the Base Business last year.

Adjusted operating income for the quarter was $441.5 million, or 17.5% of revenue, compared to $409.7 million, or 17.5%, in the second quarter of 2023. The increase in adjusted operating income was driven by organic demand, acquisitions, and Launchpad savings, partially offset by higher personnel costs.

Biopharma Laboratory Services

Revenue for the quarter was $707.0 million, an increase of 1.1% from $699.0 million in the second quarter of 2023. The increase was due to organic growth of 1.2%, partially offset by foreign currency translation of (0.1%).

Adjusted operating income for the quarter was $107.4 million, or 15.2% of revenue, compared to $104.6 million, or 15.0%, in the second quarter of 2023. Adjusted operating income and margin increased due to organic growth and LaunchPad savings, partially offset by higher personnel costs.

Net orders and net book-to-bill during the trailing twelve months were $2.82 billion and 1.00, respectively. Backlog at the end of the quarter was $7.92 billion, a decrease of (0.6)% compared to last year. The company expects approximately $2.50 billion of its backlog to convert into revenue in the next twelve months. The company expects net orders, net book-to-bill, and backlog to increase in the second half of the year.

Outlook for 2024

Labcorp is updating 2024 full year guidance to reflect its second quarter performance, the acquisition of Invitae, and full year outlook. The following guidance assumes foreign exchange rates effective as of June 30, 2024, for the remainder of the year. Enterprise level guidance includes the estimated impact from currently anticipated capital allocation, including acquisitions, share repurchases and dividends.

(Dollars in billions, except per share data)

Previous

Updated

Invitae Impact

Results

2024 Guidance

2024 Guidance

In Guidance

2023

Low

High

Low

High

at Midpoint

Revenue

Labcorp Enterprise (1)(2)

$12.2

4.8 %

6.4 %

6.4 %

7.5 %

1.0 %

Diagnostics Laboratories

$9.4

4.8 %

6.0 %

6.9 %

7.9 %

1.3 %

Biopharma Laboratory Services (3)

$2.8

3.7 %

5.7 %

3.7 %

5.0 %

Adjusted EPS

$13.56

$14.45

$15.35

$14.30

$14.90

($0.40)

Free Cash Flow from Cont. Ops(4)

$0.89

$1.00

$1.15

$0.85

$1.00

($0.15)

(1) 2024 Guidance includes an impact from foreign currency translation of 0.1%.

(2) Enterprise level revenue is presented net of intersegment transaction eliminations.

(3) 2024 Guidance includes an impact from foreign currency translation of 0.4%.

(4) 2023 Free Cash Flow from continuing operations excluding spin-related items.

Use of Adjusted Measures

The company has provided in this press release and accompanying tables "adjusted" financial information that has not been prepared in accordance with GAAP, including adjusted net income, adjusted EPS (or adjusted net income per share), adjusted operating income, adjusted operating margin, free cash flow, and certain segment information. The company believes these adjusted measures are useful to investors as a supplement to, but not as a substitute for, GAAP measures, in evaluating the company’s operational performance. The company further believes that the use of these non-GAAP financial measures provides an additional tool for investors in evaluating operating results and trends, and growth and shareholder returns, as well as in comparing the company’s financial results with the financial results of other companies. However, the company notes that these adjusted measures may be different from and not directly comparable to the measures presented by other companies. Reconciliations of these non-GAAP measures to the most comparable GAAP measures and an identification of the components that comprise "special items" used for certain adjusted financial information are included in the tables accompanying this press release.

The company today is providing an investor relations presentation with additional information on its business and operations, which is available in the investor relations section of the company’s website at www.Labcorp.com. Analysts and investors are directed to the website to review this supplemental information.

A conference call discussing Labcorp’s quarterly results will be held today at 9:00 a.m. ET and is available by registering at this link, which will provide a dial-in number and unique PIN to access the call. It is recommended that participants join 10 minutes prior to the start of the call, although participants may register and join at any time during the call. A live webcast of Labcorp’s quarterly conference call on August 1, 2024, will be available at the Labcorp Investor Relations website beginning at 9:00 a.m. ET. This webcast will be archived and accessible through July 18, 2025.

On August 1, 2024 Oncolytics Biotech Inc. (NASDAQ: ONCY) (TSX: ONC), a leading clinical-stage company specializing in immunotherapy for oncology, reported recent operational highlights and financial results for the second quarter ended June 30, 2024 (Press release, Oncolytics Biotech, AUG 1, 2024, View Source [SID1234645282]). All dollar amounts are expressed in Canadian currency unless otherwise noted.

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"In the second quarter, we continued to build regulatory and clinical momentum for our differentiated and potentially leading immunotherapeutic agent, pelareorep, which is poised to advance to registration-enabling studies for the treatment of breast and pancreatic cancers," said Wayne Pisano, Chair of Oncolytics’ Board of Directors and Interim CEO. "Notably, we are pleased to have aligned with the FDA on key elements for the path forward in HR+/HER2- metastatic breast cancer (mBC). Based on guidance from regulators and compelling data from two randomized breast cancer studies, we are confident in pelareorep’s potential to demonstrate a clinically meaningful benefit in a future registration-enabling study, and we remain on track to report overall survival results from the BRACELET-1 trial in the second half of 2024."

Mr. Pisano continued, "In parallel, we initiated dosing in the mFOLFIRINOX cohort of the GOBLET study, an exciting opportunity to evaluate the combination of pelareorep with another first-line pancreatic cancer chemotherapy regimen that could result in a second registration program in this indication. The study builds on positive data demonstrating that the combination of pelareorep, atezolizumab, gemcitabine, and nab-paclitaxel in pancreatic cancer patients more than doubled tumor response rates compared to earlier trials of chemotherapy treatment alone. That combination received Fast Track Designation from the FDA and, through our collaboration with the Global Coalition for Adaptive Research (GCAR), will be evaluated in an adaptive registration-enabling trial. Taken together, we are encouraged by the robust clinical and translational data supporting pelareorep’s unique mechanism of action, and we look forward to providing updates on our progress."

Second Quarter Highlights

Received productive feedback from the Type C meeting with the FDA, supportive of the planned potential registration-enabling study for pelareorep in HR+/HER2- mBC. The FDA supports progression-free survival as the primary endpoint of the study and overall survival as a secondary endpoint. The patient population is expected to include those who have failed hormonal therapy and have received no more than one line of antibody-drug conjugate (ADC) therapy (link to the PR). The control arm is expected to be paclitaxel monotherapy, and the test arm is expected to be pelareorep combined with paclitaxel. Notably, the combination of pelareorep and paclitaxel has already shown a meaningful patient benefit compared to paclitaxel in two previous randomized studies (BRACELET-1 and IND-213).

First patient dosed in the new GOBLET study pancreatic cancer cohort supported by PanCAN. The fifth cohort of the GOBLET study has been initiated and will evaluate pelareorep plus modified FOLFIRINOX (mFOLFIRINOX) with or without atezolizumab in newly diagnosed pancreatic ductal adenocarcinoma (PDAC) patients (link to the PR). The Pancreatic Cancer Action Network (PanCAN) awarded Oncolytics the Therapeutic Accelerator Award and US$5 million to evaluate this treatment regimen, which includes mFOLFIRINOX, a commonly used chemotherapy for PDAC patients. Having already reported compelling data for pelareorep in combination with another chemotherapy regimen (gemcitabine + nab-paclitaxel) and atezolizumab in pancreatic cancer in cohort 1 of the GOBLET study, similar data with this treatment regimen could result in another registrational opportunity for pelareorep in this challenging indication.

Announced preliminary collaboration with GCAR for adaptive registrational pancreatic cancer study. The preliminary collaboration has enabled planning activities to begin for the evaluation of pelareorep in the treatment of first-line metastatic PDAC as part of GCAR’s anticipated master protocol for metastatic pancreatic cancer (link to the PR). An anticipated outcome of the study is to produce registration-enabling data. The treatment regimen expected to be evaluated is pelareorep, gemcitabine, nab-paclitaxel, and atezolizumab, which has already more than doubled the objective response rate compared to historical trials (link to the PR, link to the poster) and received Fast Track Designation from the FDA. This innovative adaptive Phase 2/3 design allows for multiple investigational therapies to be evaluated and could accelerate the registrational study timeline and provide substantial cost savings compared to traditional trial designs. This collaboration and the new cohort of the GOBLET study are part of the Company’s strategy to improve treatment options and outcomes for patients with pancreatic cancer.

Two presentations at the Annual Meeting of the American Society for Clinical Oncology (ASCO) (Free ASCO Whitepaper). A poster presented at ASCO (Free ASCO Whitepaper) included a trial-in-progress update for cohort 5 of the GOBLET study evaluating the combination of pelareorep and mFOLFIRINOX with and without atezolizumab in newly diagnosed PDAC patients. There will be a three-patient safety run-in for each treatment arm followed by enrollment of 15 total patients per arm if the safety criteria are met. One or both arms could expand enrollment by 17 patients per arm to stage 2 if certain efficacy criteria are met (link to the poster). The study cohort is being conducted in collaboration with AIO-Studien-gGmbH (AIO), a medical oncology working group within the German Cancer Society, as part of GOBLET, a Phase 1/2 multiple indication study evaluating pelareorep-based combinations in gastrointestinal cancers. An abstract presented at the meeting detailed pelareorep’s unique ability to induce the expansion of tumor-infiltrating lymphocytes (TILs) via intravenous administration across multiple cancers, including breast, pancreatic, and colorectal (link to the abstract). The abstract also discussed the correlation between TIL expansion and tumor response while noting pelareorep’s ability to expand TILs, highlighting its immunotherapeutic mechanism of action and potential as a backbone immunotherapy for multiple indications (link to the PR).

Announced Wayne Pisano, Chair of Oncolytics’ Board of Directors, will serve as Interim CEO during Dr. Matt Coffey’s medical leave of absence. Chair of the Oncolytics Board since 2013, Mr. Pisano has more than 30 years of experience as a pharmaceutical industry executive, including as a CEO on multiple occasions. In 2010, he was recognized as Pharma Executive of the Year by the World Vaccine Congress.

Financial Highlights

As of June 30, 2024, the Company reported $24.9 million in cash and cash equivalents, with a projected cash runway through key milestones and into 2025.
The net loss for the second quarter of 2024 was $7.3 million, compared to a net loss of $7.4 million for the second quarter of 2023. The basic and diluted loss per share was $0.10 in the second quarter of 2024, compared to a basic and diluted loss per share of $0.12 in the second quarter of 2023.
Research and development expenses for the second quarter of 2024 were $4.6 million, compared to $3.7 million for the second quarter of 2023. The increase was primarily due to higher clinical trial expenses, including BRACELET-1 data analysis and the GCAR collaboration, and higher share-based compensation expense. The increase was partly offset by lower production run and process and analytical development activities.
General and administrative expenses for the second quarter of 2024 were $3.4 million, consistent with $3.5 million for the second quarter of 2023.
Net cash used in operating activities for the six months ended June 30, 2024 was $14.3 million, compared to $16.3 million for the six months ended June 30, 2023. The decrease reflects non-cash working capital changes, partly offset by higher net operating activities in 2024.
Recent and Anticipated Milestones

H2 2024: Overall survival results from the randomized BRACELET-1 trial in HR+/HER2- mBC
H2 2024: Guidance on the registration path for HR+/HER2- mBC
H2 2024: Finalize master protocol for the adaptive registration-enabling trial for pelareorep, gemcitabine, nab-paclitaxel, and atezolizumab in first-line PDAC with GCAR
H1 2025: GOBLET mFOLFIRINOX cohort safety run-in update
Webcast and Conference Call

Management will host a conference call for analysts and investors at 4:30 p.m. ET today, August 1, 2024. To access the call, please dial (800) 836-8184 (North America) or (646) 357-8785 (International), and if needed, provide Conference ID: 34386. To join the conference call without operator assistance, please click here. A live webcast of the call will also be available by clicking here or on the Investor Relations page of Oncolytics’ website, available by clicking here, and will be archived for three months. A dial-in replay will be available for one week and can be accessed by dialing (888) 660-6345 (North America) or (289) 819-1450 (International) and using replay code: 34386#.

On August 1, 2024 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, reported second quarter 2024 financial results and provides a corporate update (Press release, Arbutus Biopharma, AUG 1, 2024, View Source [SID1234645246]).

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"At the EASL Congress we reported impressive imdusiran data. I’m particularly excited that in the IM-PROVE I clinical trial we saw undetectable HBsAg in 67% of those patients with baseline HBsAg less than 1000 IU/mL who were treated with 48 weeks of imdusiran and 24 weeks of IFN," said Michael J. McElhaugh, Interim President and Chief Executive Officer of Arbutus Biopharma. "In addition, these patients stopped all therapy and in early follow-up have maintained undetectable HBsAg and HBV DNA, a precursor to a functional cure. With these encouraging data, we continue to be optimistic about imdusiran as a potential cornerstone therapeutic in a treatment regimen to functionally cure cHBV."

Mr. McElhaugh continued, "We intend to focus our existing resources on conducting a Phase 2b clinical trial with imdusiran, assuming continued positive data. This has the potential to create a true inflection point for both Arbutus and HBV patients. To ensure we have the resources to conduct such a program, we have made the difficult decision to discontinue our HBV research efforts and reduce our headcount leading to a projected cash runway into the fourth quarter of 2026. I want to express my sincere gratitude to those impacted by the workforce reduction for their invaluable contributions to our mission and their dedication to helping HBV patients."

Clinical Development Update

Imdusiran (AB-729, RNAi Therapeutic)

At the EASL Congress in June, end-of-treatment data was presented from IM-PROVE I (AB-729-201), a Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of the combination of imdusiran, nucleos(t)ide analogue (NA) therapy and pegylated interferon alfa-2a (IFN) in patients with cHBV. The data showed that 33.3% (n=4/12) of patients in Cohort A1 receiving 48 weeks of imdusiran combined with a short course of IFN (24-weeks) and NA therapy, achieved undetectable HBsAg at the end-of-treatment that was maintained in 100% of these patients 24 weeks after completing imdusiran and IFN treatment. Undetectable HBsAg was achieved in 67% of those patients with HBsAg less than 1000 IU/mL at baseline. A total of six patients who received 24 weeks of IFN (n=4 Cohort A1; n=2 Cohort A2) seroconverted, with HBsAg loss accompanied by high titers of anti-HBsAg antibodies. All six of these patients have stopped NA therapy, with two of those patients reaching 12 weeks off all therapy with sustained undetectable levels of HBsAg and HBV DNA. The combination of imdusiran and IFN in this clinical trial was generally safe and well-tolerated.
Also at the EASL Congress in June, end-of treatment data was presented from the IM-PROVE II (AB-729-202) Phase 2a clinical trial evaluating the safety and immunogenicity of imdusiran, NA therapy and Barinthus Bio’s VTP-300, an HBV antigen-specific immunotherapy. The data showed that at 24-weeks post-end of treatment with imdusiran and VTP-300, statistical significance (p<0.05) was achieved in HBsAg levels between the treatment arm (n=5) and placebo (n=6). In addition, more patients maintained HBsAg thresholds of <100 IU/mL and <10 IU/mL when administered VTP-300 vs. placebo at 24-weeks post end-of-treatment. The combination of imdusiran and VTP-300 in this clinical trial was generally safe and well-tolerated.
IM-PROVE II includes an additional cohort of patients who will receive imdusiran plus NA therapy for 24 weeks followed by VTP-300 plus up to two low doses of nivolumab, an approved anti-PD-1 monoclonal antibody. Arbutus is on-track to report preliminary end-of-treatment data from this additional cohort in the second half of 2024.
Arbutus has terminated its Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of imdusiran and NA therapy in combination with intermittent low doses of durvalumab, an approved anti-PD-L1 monoclonal antibody (IM-PROVE III, AB-729-203) prior to dosing any participants. This decision was based on a prioritization of resources and the projected availability of clinical data from this trial.
AB-101 (Oral PD-L1 Inhibitor)

AB-101-001 is a Phase 1a/1b double-blind, randomized, placebo-controlled clinical trial designed to investigate the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV. Part 1 of the clinical trial has enrolled four sequential cohorts of eight healthy subjects each (6 active:2 placebo) to date, each receiving a single dose of AB-101 at increasing dose levels up to 25 mg or placebo. Data from Part 1 of this trial showed that AB-101 was generally well-tolerated with evidence of dose-dependent receptor occupancy. In the 25 mg cohort, all five evaluable subjects showed evidence of receptor occupancy between 50-100%. Arbutus has moved into Part 2 of this clinical trial which evaluates multiple-ascending doses of AB-101 in healthy subjects and expects to report preliminary data in the second half of this year.
Corporate Updates

The Company has made the decision to streamline the organization to focus its efforts on advancing the clinical development of imdusiran and AB-101, and is therefore ceasing all discovery efforts and discontinuing its IM-PROVE III clinical trial. In taking these steps to streamline the organization, Arbutus is implementing a reduction in its workforce of 40%, primarily affecting the discovery and general and administrative functions. As a result, Arbutus will incur a one-time restructuring charge of approximately $3.0 – $4.0 million that will be recorded in the third quarter of 2024. With these organizational changes and its ongoing cost management efforts, the Company now expects its current cash, cash equivalents and investments in marketable securities will be sufficient to fund operations into the fourth quarter of 2026.
LNP Litigation Update

Next steps in the lawsuit against Moderna include expert reports and expert depositions. A trial date has been set for April 21, 2025, and is subject to change.
The lawsuit against Pfizer/BioNTech is ongoing and a date for a claim construction hearing has not been set. 
Arbutus continues to protect and defend its intellectual property, which is the subject of the on-going lawsuits against Moderna and Pfizer/BioNTech. The Company is seeking fair compensation for Moderna’s and Pfizer/BioNTech’s use of its patented LNP technology that was developed with great effort and at a great expense, without which Moderna’s and Pfizer/BioNTech’s COVID-19 vaccines would not have been successful.

Financial Results

Cash, Cash Equivalents and Investments

As of June 30, 2024, the Company had cash, cash equivalents and investments in marketable securities of $148.5 million compared to $132.3 million as of December 31, 2023. During the six months ended June 30, 2024, the Company used $33.8 million in operating activities, which was offset by $44.1 million of net proceeds from the issuance of common shares under its "at-the-market" offering program (ATM Program). The Company expects its 2024 cash burn to range from $63 million to $67 million. With the organizational changes announced today, the Company believes its cash, cash equivalents and investments in marketable securities will be sufficient to fund its operations into the fourth quarter of 2026.

Revenue

Total revenue was $1.7 million for the three months ended June 30, 2024 compared to $4.7 million for the same period in 2023. The decrease of $3.0 million was due primarily to: i) a decrease in license revenue recognized under our licensing agreement with Qilu Pharmaceutical; and ii) a decrease in license royalty revenue from Alnylam due to lower sales of ONPATTRO in 2024 compared to 2023.

Operating Expenses

Research and development expenses were $15.6 million for the three months ended June 30, 2024 compared to $17.7 million for the same period in 2023. The decrease of $2.1 million was due primarily to the discontinuation of the Company’s coronavirus and AB-161 programs in September 2023 as part of its efforts to focus on its lead HBV product candidates, partially offset by an increase in clinical expenses for the Company’s AB-101 Phase 1a/1b clinical trial and its multiple imdusiran Phase 2a clinical trials. General and administrative expenses were $7.5 million for the three months ended June 30, 2024 compared to $6.0 million for the same period in 2023. The increase of $1.5 million was due primarily to higher litigation costs, partially offset by a decrease in compensation-related expenses.

Net Loss

For the three months ended June 30, 2024, the Company’s net loss was $19.8 million, or a loss of $0.11 per basic and diluted common share, as compared to a net loss of $17.1 million, or a loss of $0.10 per basic and diluted common share, for the three months ended June 30, 2023.

Outstanding Shares

As of June 30, 2024, the Company had approximately 188.7 million common shares issued and outstanding. In addition, the Company had approximately 20.5 million stock options and unvested restricted stock units outstanding as of June 30, 2024. Roivant Sciences Ltd. owned approximately 21% of our outstanding common shares as of June 30, 2024.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share and per share data)

Three Months Ended March 31, Six Months Ended June 30,
2024 2023 2024 2023
Revenue
Collaborations and licenses $ 1,155 $ 3,885 $ 2,094 $ 9,394
Non-cash royalty revenue 571 766 1,164 1,944
Total revenue 1,726 4,651 3,258 11,338
Operating expenses
Research and development 15,551 17,692 30,954 35,967
General and administrative 7,547 5,980 12,859 11,532
Change in fair value of contingent consideration 211 (636 ) 391 (363 )
Total operating expenses 23,309 23,036 44,204 47,136
Loss from operations (21,583 ) (18,385 ) (40,946 ) (35,798 )
Other income
Interest income 1,829 1,461 3,374 2,729
Interest expense (34 ) (171 ) (78 ) (369 )
Foreign exchange gain (8 ) 1 (21 ) 5
Total other income 1,787 1,291 3,275 2,365
Net loss $ (19,796 ) $ (17,094 ) $ (37,671 ) $ (33,433 )
Loss per share
Basic and diluted $ (0.11 ) $ (0.10 ) $ (0.21 ) $ (0.20 )
Weighted average number of common shares
Basic and diluted 188,041,489 166,063,284 181,842,519 163,855,661

Comprehensive loss
Unrealized gain on available-for-sale securities 63 166 113 1,020
Comprehensive loss $ (19,733 ) $ (16,928 ) $ (37,558 ) $ (32,413 )

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

June 30, 2024 December 31, 2023
Cash, cash equivalents and marketable securities, current $ 141,986 $ 126,003
Accounts receivable and other current assets 6,234 6,024
Total current assets 148,220 132,027
Property and equipment, net of accumulated depreciation 4,059 4,674
Investments in marketable securities, non-current 6,527 6,284
Right of use asset 1,237 1,416
Total assets $ 160,043 $ 144,401
Accounts payable and accrued liabilities $ 11,108 $ 10,271
Deferred license revenue, current 11,034 11,791
Lease liability, current 453 425
Total current liabilities 22,595 22,487
Liability related to sale of future royalties 5,859 6,953
Contingent consideration 7,991 7,600
Lease liability, non-current 1,144 1,343
Total stockholders’ equity 122,454 106,018
Total liabilities and stockholders’ equity $ 160,043 $ 144,401

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Six Months Ended June 30,
2024
2023
Net loss $ (37,671 ) $ (33,433 )
Non-cash items 3,973 2,911
Change in deferred license revenue (757 ) (7,128 )
Other changes in working capital 656 (9,210 )
Net cash used in operating activities (33,799 ) (46,860 )
Net cash provided by investing activities 21,523 18,119
Issuance of common shares pursuant to the Open Market Sale Agreement 44,124 24,604
Cash provided by other financing activities 4,676 555
Net cash provided by financing activities 48,800 25,159
Effect of foreign exchange rate changes on cash and cash equivalents (21 ) 3
Increase/(decrease) in cash and cash equivalents 36,503 (3,579 )
Cash and cash equivalents, beginning of period 26,285 30,776
Cash and cash equivalents, end of period 62,788 27,197
Investments in marketable securities 85,725 136,344
Cash, cash equivalents and marketable securities, end of period $ 148,513 $ 163,541

Conference Call and Webcast Today

Arbutus will hold a conference call and webcast today, Thursday, August 1, 2024, at 8:45 AM Eastern Time to provide a corporate update. To dial-in for the conference call by phone, please register using the following link: Registration Link. A live webcast of the conference call can be accessed through the Investors section of Arbutus’ website at www.arbutusbio.com.

An archived webcast will be available on the Arbutus website after the event.

About Imdusiran (AB-729)

Imdusiran 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. Imdusiran targets hepatocytes using Arbutus’ novel covalently conjugated N-Acetylgalactosamine (GalNAc) delivery technology enabling subcutaneous delivery. Clinical data generated thus far has shown single and multiple doses of imdusiran to be generally safe and well-tolerated, while also providing meaningful reductions in hepatitis B surface antigen and hepatitis B DNA. Imdusiran is currently in multiple Phase 2a clinical trials.  

About AB-101

AB-101 is our oral PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade while minimizing the systemic safety issues typically seen with checkpoint antibody therapies. Immune checkpoints such as PD-1/PD-L1 play an important role in the induction and maintenance of immune tolerance and in T-cell activation. Preclinical data generated thus far indicates that AB-101 mediates re-activation of exhausted HBV-specific T-cells from cHBV patients. We believe AB-101, when used in combination with other approved and investigational agents, could potentially lead to a functional cure in patients chronically infected with HBV. AB-101 is currently being evaluated in a Phase 1a/1b clinical trial.

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 2.4 million people in the United States suffer from chronic HBV infection. Approximately 820,000 people die every year from complications related to chronic HBV infection despite the availability of effective vaccines and current treatment options.

On August 1, 2024 Moleculin Biotech, Inc., (Nasdaq: MBRX) ("Moleculin" or the "Company"), a clinical stage pharmaceutical company with a broad portfolio of drug candidates targeting hard-to-treat tumors and viruses, reported the positive discussion in and outcome of its End of Phase 1B/2 (EOP1B/2) meeting with the US Food and Drug Administration (FDA) supporting the advancement of Annamycin in combination with Cytarabine (also known as "Ara-C" and for which the combination of Annamycin and Ara-C is referred to as "AnnAraC") to a Phase 3 pivotal trial for the treatment of AML patients who are refractory to or relapsed after induction therapy (R/R AML) (Press release, Moleculin, AUG 1, 2024, View Source [SID1234645265]). This Phase 3 "MIRACLE" trial (derived from Moleculin R/R AML AnnAraC Clinical Evaluation) will be a global trial, including sites in the US.

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"We thank the FDA’s Divisions of Hematologic Malignancies I and Cardiology and Nephrology, as well as related divisions, for a very constructive EOP1B/2 meeting and for their valuable feedback. Armed with this, we are now able to finalize plans for a pivotal approval pathway in AML," commented Walter Klemp, Chairman and Chief Executive Officer of Moleculin. "Importantly, consistent with the FDA’s recommendations, the adaptive Phase 3 trial will rely solely on CR (complete remission) at day 30 as the primary endpoint versus placebo, a standard we are confident Annamycin will meet and that provides an opportunity for accelerated approval."

Mr. Klemp continued: "We now also have additional confidence that our planned pivotal trial should be able to generate data supportive of a true value inflection point for shareholders in a timely manner. We plan to utilize a double-blind, placebo-controlled design, where the control arm is high dose cytarabine (HiDAC) plus placebo. There is considerable historical data on the use of HiDAC. You can see in this graphic that, compared to this historical data, AnnAraC has already demonstrated more than double the CR rate. The MIRACLE trial will initially focus on 2nd line treatment for R/R AML subjects and then follow-up with treatment for 3rd line R/R AML."

"This approach should also allow us to use this trial for approval in Europe. Based on our discussions with the FDA, we intend to amend our current investigational new drug application or IND to allow dosing above the lifetime maximum allowable dose (LTMAD) for currently prescribed anthracyclines in this trial in the US."

The Company obtained valuable input from the FDA and having resolved a number of key issues, believes that it has significantly de-risked the pathway to approval. The MIRACLE study, subject to appropriate future filings with and potential additional feedback from the FDA and their foreign equivalents, is expected to initially utilize an adaptive design whereby the first 75 patients will be randomized to receive HiDAC combined with either placebo, 190 mg/m2 of Annamycin, or 230 mg/m2 of Annamycin. At that point, the trial will be unblinded to select the Optimum Dose for Annamycin. For the second half of the trial, approximately 120 additional patients will be randomized to receive either HiDAC plus placebo or HiDAC plus the Optimum Dose of Annamycin. The selection of the Optimum Dose will be based not only on the absence of dose limiting toxicities but also on the overall balance of safety, pharmacokinetics and efficacy, consistent with the FDA’s new Project Optimus initiative.

Mr. Klemp concluded: "The FDA also wants to see the durability of response (DoR) and overall survival (OS) as secondary endpoints, as well as data for patients beyond 2nd line, which is why our plan includes a follow-on MIRACLE2 trial in 3rd line patients starting once the optimum dose is established in the MIRACLE trial. From a Company perspective, we believe this approach is the best of all worlds. We are not only making the leap into being a Phase 3 company, but our planned approval is also based on a primary endpoint comparing to a control that we are optimistic we can beat with the ability to report unblinded progress after just 75 patients. We are truly excited to launch the MIRACLE trial."

Moleculin Planned Significant Milestones

The Company has established plans for the following milestones:

2H 2024 – Begin contracting with MIRACLE trial sites
Q1 2025 – First subject treated in MIRACLE trial
Mid 2026 – Interim data (n=75) unblinded and Optimum Dose set for MIRACLE trial
2026 – Begin enrollment of 3rd line subjects in MIRACLE2
2027 – Enrollment ends in 2nd line subjects
2028 – Final Data for 2nd line subjects in MIRACLE
2H 2028 – Begin submission of a new drug application (NDA) the treatment of R/R AML for accelerated approval on primary endpoint of CR from MIRACLE
Annamycin currently has Fast Track Status and Orphan Drug Designation from the US Food and Drug Administration for the treatment of relapsed or refractory acute myeloid leukemia, in addition to Orphan Drug Designation for the treatment of soft tissue sarcoma. Furthermore, Annamycin has Orphan Drug Designation for the treatment of relapsed or refractory acute myeloid leukemia from the European Medicines Agency (EMA). For more information about the ongoing MB-106 Phase 1B/2 trial, visit clinicaltrialsregister.eu and reference EudraCT 2020-005493-10 or clinicaltrials.gov and reference NCT05319587.

On August 1, 2024 Innate Pharma SA (Euronext Paris: IPH; Nasdaq: IPHA) ("Innate" or the "Company") reported members of its executive team are scheduled to participate in the upcoming conference, detailed below (Press release, Innate Pharma, AUG 1, 2024, View Source [SID1234645283]). Participants will include Yannis Morel, EVP, Chief Operating Officer and Arvind Sood, EVP, President of US Operations.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

BTIG Virtual Biotechnology Conference
Dates: August 5 – 6 2024 | Virtual