Q2 2021 Arbutus Biopharma Corp Earnings Call

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Good day and thank you for standing by welcome to the <unk> Biopharma Corporation 2021 second quarter financial results and corporate update conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the session you'll need to press star 1 on your telephone.

Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Ms. Pam Murphy. Please go ahead.

Good morning, everyone.

On the call from they are beautiful executive team are Bill Collier, President and Chief Executive Officer, Dave Hastings, Chief Financial Officer, Dr. Gass on P. C O Chief Development Officer, and Dr. Mike Sofia, Chief Scientific Officer.

Bill will begin with a review of the second quarter and first half of accomplishments of clinical development and remaining 2021 corporate objective.

Good day, Dave Hastings, who will provide a review of the company's second quarter financial results.

We will then open up the call for Q&A, and Mike and Tom will be available to address the research and clinical development related questions.

Before we begin we'd like to remind you that some of the statements made during the call today are forward looking statements, including statements regarding expectations or be the proprietary HBV pipeline in HBV and Pan Corona virus discovery programs, including potential clinical results and timelines for AB 720.

9 a be a true tick.

And future compounds, our expected cash runway and the potential for our drug candidate to improve upon the standard of care and contribute to a curative combination regimen for H D D.

These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially <unk>.

Including those described in the most recent annual report on 10-K quarterly report on form 10-Q, and other specific reports filed with the SEC from time to time.

Bill.

Thank you Pam and good morning, everybody. Thank you for joining US today, we appreciate your interest in Arbutus Biopharma.

I'm very pleased to report on a significant progress so far this year and to outline our objectives for the rest of 2021.

We continue to drive towards our goal of W. Twos, which is to focus primarily on developing a portfolio of products with different mechanisms of action that when used in combination result in a functional cure for patients living with chronic HBV.

During the first half of this year, we established a strong foundation towards achieving that goal by accomplishing the following.

We continue to report compelling data on AB 7 to 9 with full abstracts of easel, including a late breaker oral presentation that showed substantial declines in hepatitis b surface antigen and subjects with chronic HBV.

Importantly.

17 on continues to have a favorable safety and Tolerability profile and all 4 of these abstracts were selected for best of Easel Conference.

Notably in addition to reporting significant drops in the surface on to Jim we saw that in 3 out of 5 evaluable subjects.

On increased HBV specific immune response, providing support for combination therapy, including immuno modular tree agents.

This compelling 7 to 9 data derived from up to 1 year of dosing supports all of you that 60 milligrams every 8 weeks is an appropriate dose in our phase Iia clinical trials.

And I will discuss these trials in just a moment.

Looking forward, we expect to provide additional data in the second half of 2021, including initial data from a 90 milligram every 12 week cohort in HBV DNA negative subjects.

On the initial data on a 90 milligram every 8 week cohort in HBV DNA positive subjects.

As we've discussed in the past, we believe that 79 has the potential to be a cornerstone of therapeutic and future HBV combination regimens.

Therefore, our strategy has been to enter several clinical collaborations to evaluate <unk> in combination with other agents with potential complementary mechanisms of action.

And so I am pleased to report significant progress towards this goal with our previously announced collaborations with the Assembly Biosciences, Ngl's Therapeutics and vaccines Tech and also the authorization from the FDA to proceed with our R&D application for 7 to 9 and the clinical trial.

In combination with the nucleoside analog and short courses of Peg interferon.

Now the Ngl's collaboration will evaluate of triple combination of 7 to 9 the <unk> proprietary active site polymerase inhibitor nukes of aside which is called the ATI to $1.73, and <unk> for the treatment of subjects with chronic HBV.

The <unk> collaboration will evaluate the triple combination of 7 to 9 with <unk> proprietary immuno therapeutic V. T. P 300, and standard of care nucleoside analogue therapy for the treatment of subjects with chronic HBV.

The clinical trials evaluating 17 on with interferon and Andreas is ATI to $1.73 are expected to initiate in the second half of 2021.

We expect to file the Cta for the clinical trial with <unk> of ETP 300 in the second half of 2021 unexpected to initiate the clinical trial in early 2022.

In addition to the substantial progress that we've made with AB 7 to 9 I'm also gratified with the initiation of the phase <unk> clinical trial with <unk> hundred 6 on next generation oral capsid inhibitor.

This is an important program as it will allow us to potentially have our own proprietary combination therapy to treat patients with chronic HBV.

The recent easily conference of <unk> presented preclinical <unk> hundred 6 day to suggesting the potential for increased efficacy and then enhance resistance profile relative to previous generation capsid inhibitors.

Initial data from healthy volunteers and HBV subjects is expected in the second half of this year.

We continue to make progress in all of our discovery programs. We're focused on generating lead nomination candidates for oral PDL, 1 inhibitor and RNA destabilizer programs.

In addition on internal research program to identify new small molecule antiviral medicines to treat COVID-19 on future Corona of Corona virus outbreaks continues to progress.

And so with that summary, I'll now turn the call over to Dave Hastings for a brief financial update.

Okay.

Thanks, Bill and good morning, everybody.

As I've mentioned in the past, our key financial metric of cash and financial runway.

Our cash cash equivalents and investments was $121.3 million as of June 30 of 2021.

As compared to $123.3 million as of December 31st 2020.

Our cash used from operations for the first half of 2021 was $31.9 million.

Which was offset by $37 million of net proceeds from it.

Issuance of common shares under our <unk> ATM program.

For all of 2021, we expect our cash use to range from $70 million to $75 million.

Therefore, we expect our current cash runway is sufficient to fund operations through the third quarter of 2022.

So with that Bill I'll turn the call back to you.

Thanks, very much Dave So operator, let's now open up the lines for Q&A. Please.

Ladies and gentlemen at this time, if you would like to ask a question. Please press star followed by the number 1 on your telephone keypad again at the Star 1 well pause for just a moment.

Your first question comes from the line of Ed Arce with H C. Wainwright.

Hi, Good morning, everyone. This is Thomas Yip asking the couple of questions for Ed.

The first about the.

The new Phase Iia study with the 7 to 9.

Specifically regarding the voting choice.

In the press release, you indicated that you are already selected 60 milligram every day.

The dose to go forward.

Just wondering.

Well the study on the.

1 of those or is there a possible thing.

1 of our doses with the of 90 milligram dose.

Data.

Our expected in the second half of this year.

Yes. Good question. Thank you very much good morning guest on would you like to take that 1.

Sure good morning.

For now the decision has been made to include a single dose, but since we are in the early stages of.

The preparation of the file and our 90 milligram data will come on later this year there is always the opportunity to reconsider that decision.

Doses, but right now we're going on with Windows.

Yeah.

Okay sounds good.

And then.

The ups force.

The 6.4 also of the phase 1 the.

The study that's ongoing.

You mentioned the data from both happy volunteers.

HBV patients.

Whoa Whoa.

It will be included.

In the second half of this year.

Just wondering would there be a single day of the readout and what should we expect.

From the spread of the safety data.

Yeah.

Yep guessed on that too.

Sure.

So we expect obviously.

Safety data the liability.

The as well as some.

HBV DNA.

Data coming from the current <unk> cohorts.

We may be able to also the lever some HV RNA data as well.

Sorry, let me just add 1 thing we will as usual the measure S antigen.

<unk>.

Weather.

As you know.

Potentially.

Much more effective but targeting the second mechanism. So we will be measuring that as well and see what happens in the upfront.

Right. So so perhaps.

Some are comparable to <unk> 79 per week.

They didn't releases.

Yes.

Okay.

Right right right, Okay, and then 1 final question from Us.

Just wondering you.

You mentioned the progress for 17 I combination studies.

Wonder.

You reported.

The report enrolment of progress for the something in the combo study with the assembly.

<unk>.

And if not what what should we expect from the study.

Thanks.

Guest on it yet.

So I mean is that limit per mature yet the study is recruiting.

And pending the.

Progress in terms of enrolling the study.

We will make announcements regarding what data can we share before.

At the end of the year.

The study is enrolling as planned as we speak.

Okay.

Okay.

Sure.

Back on Europe.

By the end of the year.

Again, I think he is going to the dependent on how successful the enrollment process.

Forward.

There is.

Challenges around the world right now in terms of Colby. So so far so growth the study's enrolling the studies that are opening.

It's very difficult to predict these days the pay.

As of the enrollment.

The way around the world.

Yes, so just on that we haven't guided to having results by the end of the year and the assembly collaboration.

What we have said in conjunction with our partners at Assembly of the study has initiated an agent recruiting.

Okay understood.

The completely understandable given what's going on the around the world.

Thanks, so much for taking the questions and we look forward to the multiple of data releases in the second half of this year.

Thank you very much.

Your next question comes from the line of Brian Corny with Baird.

Hey, this is Luke on for Brian.

So regarding the peg interferon Alpha combo study beyond safety of could you maybe talk about what you are hoping to see regarding Biomarkers I know, it's still kind of early here, but.

Also when do you think we could see initial data.

Well on on that study.

Ed.

We will initiate in the second half of this year as to the study design and I'll, let <unk> answer that.

Yes, thanks for the question so basically.

As you know we presented data at <unk>.

Showing debt.

There is reawakening of HBV specific immunity after.

<unk> 20 weeks of dosing with the 7 to 9 so within the need to provide a great opportunity to add on on.

Other agents such as the.

The minimum of 130 agents such as the interferon.

So we expect basically to see.

At the time of the addition of interferon, we expect to see probably faster and deeper declining the S antigen.

We also plan to measure T cell responses and we obviously potentially expect to see the T cell responses in the presence of interferon are stronger.

And kind of potentially brother.

Then obviously, we have other biomarker bye.

Biomarkers such as the HCV RNA, but that will depend on whether the initial baseline HCV RNA level.

<unk> as you know in old patients total.

So really.

It's going to be around that and hopefully we may see also.

The increase in anti F antibodies.

It's another possibility in the presence of the interferon.

We haven't seen.

So far in India ongoing studies.

Great. Thanks.

Thank you Luke.

Your next question comes from the line of Roy Buchanan with JMP Securities.

Hi, great. Thanks for taking the question. The first 1 on 1 asked about the Oxitec appear.

The approach and just what made that approach still appealing for the use of the therapeutic vaccine.

For example of why not use that approved potent vaccine like high flow therapy or something that's of PAH.

Off of the option.

Yes, thanks for the question.

We've always had a strategy the combination of drugs is likely to be the.

At the site the.

Thank you.

Is that essentially the slide that we've had on our corporate debt.

Foundation on justification to do the study with boxing day.

So.

Platform, we believe provide the much stronger uhm.

HIV specific immune response, the existing prophylactic HIV vaccine.

So I mean, I think you you should.

Discussing with them directly.

Based on.

Based on what we learn.

We believe that.

The therapeutic vaccine with the.

Ah the no platform as well as MBA provide the much better opportunity at enhancing hvv's specific responses compared to for free.

The that take the HOV by the things that may be in the market.

Okay, Great and I had a question on the antioxidants.

Uhm, the ATI 21.73.

How does that so it's the nucleoside, how does that differ uhm and targeting versus the background of new style can can help the here in the case and with the Golden replace the background nuke with the more total of milk of what's the the goal of the combination.

Good question, it's it.

It set up in the study is.

With a nucleus on maybe Mike Sofia do you want the chime in on the on that.

Sure.

So I mean, if you look at club meeting nuclear of talk nuclear sorry, no. It should very interesting.

Profile and in vivo studies.

Even in some of the earlier historic clinical trials. What you saw was longer duration of effect wrote compared to a typical nuclear side of whether it can off of there in Tucker beer.

It also has a slightly different mechanism of action, although with those target the polymerase at those points of the darker side, it's not what they call chain terminators, so doesn't function as a as the tenofovir on in Tucker period of dogs that differentiate in some way so so back from.

Combination of interesting observations.

Made it an interesting experiment to do to combine it with.

An agent like 729, which reduces us antigen.

Can do them brand something like the antaeus molecule with another nuclear side and see very deep suppression of bar repetition.

That is more sustained over time, then with a single nuclear side. So.

Not the sort of the rationale for an interest level and bringing in the end tears molecule into the into the mix.

Okay, Great. That's helpful. Thanks again in the last couple of questions on the interfere on.

Program you know they are presented from preliminary results for that combo with the army that's and that's the on if anything that you've learned from from that program that can be applied the 729 anything that you're doing differently. The 729 that might differentiate it from the other candidates or or maybe you don't need the the.

The friendship and then what are you what are you guys expect to be the baseline uhm functional cure rate for the interfere on plus the new car and if you have the number of for interfere on and look on the slide back on <unk> not clear of interfere on number of the combo or just the mere Karen itself. Thanks.

Asked on Joanna take that 1 true.

[laughter].

So let me start from the last question. So the expectation in terms of function with Europe I don't think we are.

In a position to provide a number of what's our expectation of function on a cure.

So we just let the date of speaks for itself.

When it comes to what did we learn well the the approach.

The Bill took actually was was.

This is the part of the study of the they showed data.

On on each of it was adding interfere on at the beginning.

So from the get go they would.

At the or RNA I've lots of interference.

So that resulted believe if I remember correctly. It was 12 and an increase in the in the decay of his antigen.

So we have a little bit of a different approach again in line with the the finance that we have.

As a result of the neurologist studies that what percentage of the E mail.

We believe it is better to first.

Drop as antigen.

And allow of that in your response to come back and then add the interference. So I believe again I mean I'm, taking my work for the I believe that based on the data I believe I I've seen that there will be testing that as well they will be having interfere on the later.

But we are on the exploring other than the interference later so after the.

As you May see in you can see the design of the southern clinical trials of cough right now.

We're going to be interfering at the 24 weeks of of.

7 to 9 treatment, so where we believe that it's engine over the would have gone down by probably somewhere around on 1 day and the 2 inbox on the average across the entire population.

So.

What we expect of as I said before it the bathroom and procurement obviously the on the double continues to the K.

We may see some sort of conversion.

We may see also because we're from the measure of that uhm better HED.

The specific newly awakened and compared to the subjects I did not receive interfere.

Okay, great. Thank you.

Your next question comes from the line of key a net key with short ends.

K and the guy from charting <unk>.

Just just back on that same topic was the time of the interfere on in your study.

Or is there a threshold drop in S antigen before you'll advance of patient to the interferon or is it just simply the 24 week during the time <unk>.

There is no with the rest of all we're very confident that.

Bye week 24.

All the subjects of achieved at least of log in from.

On the vast majority of more than a log on the half.

Of SMG on job.

In response to the the question there's no.

Minimum threshold that they need to me, but.

We're very confident of everyone has been to the next.

That's the 1 multi K on that sandwich.

Okay, and then how long is the course of interferon.

Yes, Great question, we're testing to 2 courses 24 weeks as well as 12 weeks.

Okay.

Okay, I should add remind everyone the.

The details are in control of the bold bright.

Okay.

Alright, great that's all I have.

Okay.

There are no additional questions at this time I'd like to turn it back over to the management I'm.

I'm sorry, there is a question there is from caliche should care with Jeffrey.

The 18th.

Hey, How's it going thanks for putting me in here just a couple of questions on my end I guess on a high level are there any competitor datasets over the coming quarters that you'll specifically be looking at 4 read through or transform the design or to provide you with any information for your own.

The clinical studies.

Hey, Good question I mean, we've just had obviously the easel conference.

And as always we had a.

Peeled Forum interesting data from the.

Actually any source.

And then you think about the second half of the year.

The typical event is Asl D, which is in November.

I didn't know that I would single out any particular dataset I am just racking my brain guest on on Mike can you think of anything that.

Other than obviously staying like you guys breast of what all of the major companies are doing in the areas. So.

Desktop the attic got it.

I think the.

1.

On.

So so it's interesting because we are the.

So we pretty much showed 1 year of dosing with the 87 to 9.

We were expecting to see 1 year of dosing coming from Jonathan that the.

Percentage of from there reached studies, so I would say it would be interesting to see if that day that gets percentage at.

Some of the major of this year as well as in.

In that study the they also have the triple combination so that would be all for interest and proceed.

Right.

Great Great. Thank you that's great color on there and I guess, the lastly, I guess in respect to your earlier states programs is there any additional color you can provide around when you might be able to enter the clinic with those so you're you're destabilize the as 1 of the PTO on.

Yeah, Mike on technology.

Yes.

So so we're very close.

No we're kind of in the.

In the latter stages of of.

Of our candidates selection process.

There will be able to update.

And when we expect to be in the clinic.

Perfect. Thank you.

There are no additional questions at this time.

Right well. Thank you very much everyone for joining us. This morning. We appreciate your interest on your questions actually so we look forward to of productive remainder of 2021, and we continue to be confident with further data from the 729 phase 1 a 1 of the trial.

Our progression of 7292 additional phase 2 a proof of concept of studies.

On data from 836 clinical trial as well as continued progress and on HPV discovery programs.

That will be building on a strong foundation to achieve of functional care for people with chronic HBV and of course, we're also looking forward to leveraging on antiviral discovery and research efforts and progressing a pen coronavirus discovery program. So with that being said. Thank you again for your time and the operator that concludes.

The call this morning.

Ladies and gentlemen, this does conclude today's conference call you may now disconnect.