On August 5, 2021 Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage biopharmaceutical company primarily focused on discovering, developing and commercializing a cure for people with chronic hepatitis B virus (HBV) infection, as well as therapies to treat coronaviruses (including COVID-19), reported its second quarter 2021 financial results and provides a corporate update (Press release, Arbutus Biopharma, AUG 5, 2021, View Source [SID1234585792]).
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William Collier, President and Chief Executive Officer of Arbutus, stated, "We had a productive second quarter, particularly in advancing our efforts to position AB-729 as a potential cornerstone therapy in future HBV combination regimens. Our recently announced proof-of-concept clinical collaborations with Vaccitech plc and Antios Therapeutics, Inc. to evaluate AB-729 with other agents reflects this objective as does our planned Phase 2a clinical trial to evaluate AB-729 in combination with Peg-IFNα-2a."
Mr. Collier added, "Looking ahead, we expect a productive second half of 2021 including: additional data from the ongoing Phase 1a/1b clinical trial with AB-729, specifically 90 mg multi-dose data (dosing interval every 12 weeks) in HBV DNA negative subjects and 90 mg multi-dose data (dosing interval every 8 weeks) in HBV DNA positive subjects, initiation of two Phase 2a proof-of-concept clinical trials for AB-729, and initial Phase 1a/1b data from our proprietary oral capsid inhibitor, AB-836."
Pipeline Update
AB-729
Arbutus is currently conducting a single- and multi-dose Phase 1a/1b clinical trial to determine the safety, tolerability, pharmacokinetics, and pharmacodynamics of AB-729 in healthy subjects and in subjects with chronic HBV infection. The Company presented three posters and a late breaker oral presentation at the 2021 EASL conference highlighting the most recent data from this clinical trial. AB-729 continues to demonstrate robust mean HBsAg reduction across all doses and dosing intervals with a favorable safety and tolerability profile, followed by a sustained plateau phase:
The efficacy and safety data for AB-729 derived from up to one year of dosing support our view that 60 mg every 8 weeks is an appropriate dose to move forward in the upcoming Phase 2a clinical trials.
Additionally, based on 3/5 evaluable subjects, long term dosing with AB-729 demonstrated increased HBV-specific immune responses, providing support for combination therapy including immunomodulatory agents.
Arbutus expects to provide additional data from ongoing cohorts of the Phase 1a/1b clinical trial in the second half of 2021, including initial data for a 90 mg every 12 weeks cohort in HBV DNA negative subjects and initial data in a 90 mg every 8 weeks cohort in HBV DNA positive subjects.
In July 2021, Arbutus received authorization from the U.S. Food and Drug Administration to proceed with its Investigational New Drug (IND) application for AB-729 in a Phase 2 proof-of-concept clinical trial to evaluate AB-729 in combination with ongoing NA therapy and short courses of Peg-IFNα-2a in subjects with chronic HBV infection. This clinical trial is expected to initiate in the second half of 2021.
To further support AB-729 as a potential cornerstone therapeutic in future HBV combination regimens, Arbutus has entered into several clinical collaborations to evaluate AB-729 in combination with other agents:
Through a collaboration with Assembly Biosciences, Inc. ("Assembly"), subjects are being enrolled in a Phase 2 proof-of-concept clinical trial with a triple combination of AB-729, Assembly’s lead HBV core inhibitor (capsid inhibitor) product candidate, vebicorvir ("VBR"), and nucleos(t)ide analog ("NA") therapy for the treatment of people with chronic HBV.
In July 2021, we entered into a clinical collaboration with Vaccitech plc ("Vaccitech") to evaluate a triple combination of AB-729 with Vaccitech’s proprietary immunotherapeutic, VTP-300, and standard-of-care NA therapy for the treatment of subjects with chronic HBV infection. We expect to file a Clinical Trial Application (CTA) in the second half of 2021 and initiate the clinical trial in early 2022.
In June 2021, we entered into a clinical collaboration with Antios Therapeutics, Inc. ("Antios") to evaluate a triple combination of AB-729, Antios’ proprietary active site polymerase inhibitor nucleotide (ASPIN), ATI-2173, and Viread (tenofovir disoproxil fumarate), for the treatment of subjects with chronic HBV infection. This clinical trial is expected to initiate in the second half 2021.
AB-836: Oral Capsid Inhibitor
In January 2020, Arbutus selected AB-836, from a novel chemical series, as its next-generation oral capsid inhibitor. At EASL, Arbutus presented pre-clinical data suggesting the potential for increased efficacy and an enhanced resistance profile relative to previous generation capsid inhibitors. Arbutus completed CTA/IND-enabling studies in the fourth quarter of 2020 and initiated a Phase 1a/1b clinical trial for AB-836 in the first quarter of 2021. Initial data from healthy volunteers and HBV subjects from this clinical trial is expected in second half of 2021.
HBV Discovery Programs
Arbutus’ drug discovery efforts are focused on follow-on compounds for its current HBV pipeline. Arbutus expects to continue to advance its research in its oral PD-L1 inhibitor and RNA-destabilizer programs.
Research Efforts to Combat COVID-19 and Future Coronavirus Outbreaks
Based on its extensive antiviral drug discovery experience, Arbutus has established an internal research program to identify new small molecule antiviral medicines to treat COVID-19 and future coronavirus outbreaks. This effort, led by Dr. Michael Sofia, Arbutus’ Chief Scientific Officer, is focused on the discovery and development of new molecular entities that address specific viral targets including the nsp12 viral polymerase and the nsp5 viral protease. These targets are essential viral proteins which Arbutus has experience in targeting. Arbutus recently entered into a discovery research and license agreement with X-Chem, Inc. and Proteros biostructures GmbH focused on the discovery of novel inhibitors targeting the SARS-CoV-2 nsp5 main protease (Mpro). The agreement is designed to accelerate the development of pan-coronavirus agents to treat COVID-19 and potential future coronavirus outbreaks.
Financial Results
Cash, Cash Equivalents and Investments
Arbutus had cash, cash equivalents and investments totaling $121.3 million as of June 30, 2021, as compared to $123.3 million as of December 31, 2020. During the six months ended June 30, 2021, Arbutus used $31.9 million in operating activities, which was offset by $30.7 million of net proceeds from the issuance of common shares under Arbutus’s "at-the-market" offering program. The Company believes its cash, cash equivalents and investments of $121.3 million as of June 30, 2021 are sufficient to fund the Company’s operations through the third quarter of 2022.
Net Loss
Net loss attributable to common shares for the three months ended June 30, 2021 was $22.7 million ($0.23 basic and diluted loss per common share) as compared to $17.1 million ($0.25 basic and diluted loss per common share) for the three months ended June 30, 2020. Net loss attributable to common shares for the three months ended June 30, 2021 and 2020 included non-cash expense for the accrual of coupon on the Company’s convertible preferred shares of $3.3 million and $3.0 million, respectively.
Operating Expenses
Research and development expenses were $15.4 million for the three months ended June 30, 2021 compared to $10.5 million in the same period in 2020. The increase in research and development expenses for the three months ended June 30, 2021 versus the same period in 2020 was due primarily to higher expenses for the Company’s clinical development and discovery programs, including activities under our collaboration with Assembly and internal research efforts to treat COVID-19 and future coronavirus outbreaks, both of which initiated in mid-2020. General and administrative expenses were $4.4 million for the three months ended June 30, 2021 compared to $3.6 million for the same period in 2020. This increase was due primarily to increases in non-cash stock-based compensation expense and professional fees.
Outstanding Shares
The Company had approximately 97.7 million common shares issued and outstanding as of June 30, 2021. In addition, the Company had approximately 13.3 million stock options outstanding and 1.164 million convertible preferred shares outstanding, which (including the annual 8.75% coupon) will be mandatorily convertible into approximately 23 million common shares on October 18, 2021.
COVID-19 Impact
In December 2019 an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus continues to spread globally, has been declared a pandemic by the World Health Organization and has spread to nearly every country in the world. The impact of this pandemic has been, and will likely continue to be, extensive in many aspects of society. The pandemic has resulted in and will likely continue to result in significant disruptions to businesses. A number of countries and other jurisdictions around the world have implemented extreme measures to try and slow the spread of the virus. These measures include the closing of businesses and requiring people to stay in their homes, the latter of which raises uncertainty regarding the ability to travel to hospitals in order to participate in clinical trials. Additional measures that have had, and will likely continue to have, a major impact on clinical development, at least in the near-term, include shortages and delays in the supply chain, and prohibitions in certain countries on enrolling subjects in new clinical trials. While we have been able to progress with our clinical and pre-clinical activities to date, it is not possible to predict if the COVID-19 pandemic will materially impact our plans and timelines in the future.
Conference Call and Webcast Today
Arbutus will hold a conference call and webcast today, Thursday, August 5, 2021 at 8:45 AM Eastern Time to provide a corporate update. You can access a live webcast of the call, which will include presentation slides, through the Investors section of Arbutus’ website at www.arbutusbio.com or directly at Live Webcast. Alternatively, you can dial (866) 393-1607 or (914) 495-8556 and reference conference ID 2719108.
An archived webcast will be available on the Arbutus website after the event. Alternatively, you may access a replay of the conference call by calling (855) 859-2056 or (404) 537-3406, and reference conference ID 2719108.
About AB-729
AB-729 is an RNA interference (RNAi) therapeutic targeted to hepatocytes using Arbutus’ novel covalently conjugated N-acetylgalactosamine (GalNAc) delivery technology that enables subcutaneous delivery. AB-729 inhibits viral replication and reduces all HBV antigens, including hepatitis B surface antigen in preclinical models. Reducing hepatitis B surface antigen is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to the virus. Based upon clinical data generated thus far in an ongoing single- and multi-dose Phase 1a/1b clinical trial, AB-729 has demonstrated positive safety and tolerability data and meaningful reductions in hepatitis B surface antigen.
About AB-836
AB-836 is an oral HBV capsid inhibitor. HBV core protein assembles into a capsid structure, which is required for viral replication. The current standard-of-care therapy for HBV, primarily nucleos(t)ide analogues that work by inhibiting the viral polymerase, significantly reduce virus replication, but not completely. Capsid inhibitors inhibit replication by preventing the assembly of functional viral capsids. They also have been shown to inhibit the uncoating step of the viral life cycle thus reducing the formation of new covalently closed circular DNA (cccDNA), the genetic reservoir which the virus uses to replicate itself.
About HBV
Hepatitis B is a potentially life-threatening liver infection caused by 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.