Q3 2022 Arbutus Biopharma Corp Earnings Call

Okay.

Good day, and thank you for standing by and welcome to our beauty by Farmer Corporation, 2022 third quarter financial results and corporate update conference call.

At this time all participants are in a listen only mode.

The speaker's presentation there'll be a question and answer session to ask a question. During this session you'll need to press star one one on your telephone. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Lisa Copper Alley, Vice President of Investor Relations you may begin.

Thanks, Justin Good morning, everyone and thank you for joining our beautiful third quarter 2022 financial results and corporate update call.

<unk> me today from the our beauty <unk> executive team are Bill Collier, President and Chief Executive Officer.

David Hastings, Chief Financial Officer, Dr. Stan P T O Chief Development Officer, and Dr. Mike Sofia, Chief Scientific Officer Bill.

Bill will begin with a corporate update followed by Dave who will provide a review of the company's third quarter 2022 financial results.

After opening remarks, we will open the call for Q&A.

Don and Mike will be available to address clinical development and research related questions.

Before we begin I'd like to remind you that some of the statements made during the call. Today are forward looking statements, which are subject to a number of risks and uncertainties that may cause our actual results to differ materially including those described in our most recent annual report on Form 10-K quarterly Rip.

Port on Form 10-Q to be filed later today and from time to time and other documents filed with the SEC.

With that I'll turn the call over to Bill Collier Bill.

And thank you everyone for joining us today, we really do appreciate your continued interest.

In support of Arbutus Biopharma.

Now this morning, we issued our third quarter 2022 financial results and corporate update press release, which highlights the significant progress we've made in advancing our preclinical and clinical programs in support of our mission to develop a functional cure for hepatitis b virus and to treat COVID-19.

<unk> and future Corona Corona virus outbreaks.

Late last week, we issued a press release on hosted a webcast focusing on the encouraging off treatment data with our lead clinical asset a b seven to nine.

This data was also presented as a poster at the <unk>.

I I S. L D Medical Congress on Monday.

This morning, I'd like to review a few key highlights a V. I S. L D data and provide some updates on our programs.

They relate to our milestones planned for the remainder of this year.

So first of all we believe that a b 729 is one of the most advanced RNA therapeutics in development and continue to believe that 17 nine can be a cornerstone therapeutic in the treatment regimen for HBV.

729 is capable of suppressing HBV DNA, reducing surface antigen and immunologically controlling HBV hitching all three of the components that we consider critical to achieving a functional cure.

I I S. L. D. We revealed additional data for seven to nine that supports this claim by showing the following.

First nine out of nine patients with chronic HBV that were treated with seven to nine plus a nuc for one year and we're eligible to stop all therapy.

We're able to control HBV biomarkers, while off all therapy.

The surface antigen remained well below pre study levels and the HBV DNA remained suppressed.

Second none of these nine patients had clinical relapse, none met the protocol defined criteria to restart nuc therapy.

And third there was some level of reawakening of Hps HBV specific immunity.

This was not only shown by maintaining surface antigen below baseline levels without therapy.

But also through control of bursts of viral replication without restarting treatment.

So we're extremely impressed by this data and for the first time the medical field has seen the ability of an RNA therapeutic control to control HBV disease Biomarkers while off treatment.

While the criteria for a functional cure, which consists of undetectable HBV DNA and surface antigen for six months. After therapy has not yet been met we do believe that this data suggests that we can ultimately get that.

Now we also presented data from a preclinical study that assess the ability of monotherapy and combination treatment with a b one O. One our small molecule oral PD L. One inhibitor.

And in HBV targeting RNA agent to reinvigorate HPV HPV specific T cell activity and an HBV mouse model.

We were pleased that this confirms liver engagement and HBV immune enhancement of a b one O. One and further supports our development strategy of potentially using 101 in combination with seven to nine in our pursuit of a functional cure in HBV.

I'd now like to switch to the key milestones, we anticipate for the remainder of this year and provide an update on our progress towards achievement.

Now, we anticipate reporting preliminary data from our phase two clinical trial evaluating seven to nine in combination with interferon and <unk>.

Chronic HBV patients.

In this trial patients received a b 17 nine for 24 weeks and are then randomized to receive either seven to nine plus a nuc plus interferon.

Or nuc, plus interferon for 12 to 24 weeks.

The goal of this trial is to determine the additive if any benefit that interferon provides in addition to a be seven to nine.

Other HBV preclinical assets, a b one O one oral PDL, one inhibitor compound and AB 161, our oral RNA destabilizer.

Both in IND, enabling studies, which are on track to complete this year.

And also in our Corona virus program by year end, we expect to nominate a clinical candidate that inhibits the Sars Covid two NSP five main protease inhibitor or <unk> program.

So the rest of the year, we'll be quite busy for us as we continue to progress our HBV and coronavirus assets.

And I look forward to providing updates as we achieve these milestones.

I'll now turn the call over to Dave Hastings for a brief financial update.

Thanks Bill.

Good morning, everybody as I've mentioned in the past are.

Our key financial metrics, our cash and financial runway.

Our cash cash equivalents and investments were approximately $190 2 million as of September 30th 2022, as compared to approximately $191 million as of December 31 2021.

Now during the nine months ended September 30 of 2022, the company received a four.

$40 million upfront payment from <unk> pharmaceutical company.

Weighted to a technology transfer and license agreement for AB seven to nine in greater China.

$15 million of gross proceeds from <unk> equity investment in the company.

Approximately 9.2 million of net proceeds from issuance of common shares under our viewers is aftermarket offering program.

These cash inflows were partially offset by approximately $62 4 million of cash used in operations.

The company expects.

Cash burn of between 90 to 95 million in 2022.

Not including the 55 million of proceeds received from Chile.

And we believe our cash runway will be sufficient to fund operations into the second quarter of 2024.

Yeah.

Additionally, we were pleased to see that owners, who we sold our primary royalty addressing on Petro two.

<unk> earned $16 5 million in cumulative royalties now as a reminder, once commerce collect 30 million on Petro royalties that entitlement will revert back to us.

After that reversion, our royalty rate for our Petro annual net sales greater than $500 million will be slightly higher than 3%.

So in closing we are well positioned financially to advance our mission to develop a functional cure for HBV and a treatment for COVID-19.

Actual future coronavirus outbreaks.

With that I'll turn the call back to bill. Thanks.

Thanks, very much Dave So Justin operator can we open up the lines now for the Q&A session. Thank you.

As a reminder to ask a question you'll need to press star one one on your telephone.

Please stand by while we compile the Q&A roster and once again that is star one one to ask the question.

And one moment for our first question.

And our first question comes from Dennis <unk> from Jefferies. Your line is now open.

Hi, good morning, Thanks for taking my questions two from me.

First on Hep B.

Can you just comment on the phase two study that's reading out in the fourth quarter with Peg interferon.

What do you expect to show for that study and how much incrementally better do you hope, adding 7000 to nine will be and then secondly on the patent litigation you know what are the next steps here what are the key dates.

Can provide in terms of a piece next update I'm just looking for more.

More factual.

Information Guide you guys can provide thank you.

Thank you Dennis this is bill so on your first question around the interferon study.

I think I'd make a couple of comments here.

L D.

There are some interesting data from fear with the study with interferon and some.

What I would say mixed data from from J&J.

So there's that context out there, but as far as our own study is concerned.

We're eagerly awaiting now Orange study results.

That study is close to being fully enrolled and as we've indicated we expect to have some initial results by the end of the year.

So between now and the end of December we will be back to you with with some of those initial readings.

On your second question.

Around the litigation I mean, obviously, we were really pleased to see the district court denied Madonna's partial motion to dismiss.

And we're now moving forward with our patent infringement lawsuit.

But to be honest I can't comment on specific dates or activities.

We will let the legal process following.

Its path.

Okay.

Operator, we can move to the next question.

And thank you.

And one moment for our next question.

And our next question comes from Roy Buchanan from of JMP. Your line is now open.

Alright, alright, thanks for taking the questions I actually had a couple of non hepatitis b ones that.

Now, it's still early days, but as far as Covid treatment.

Inscape did do you expect that market to eventually require combination treatments due to resistance or other reasons and then anything you can tell us about your intro candidates like if they're peptide mimetic covalent warheads any any details you can provide thanks.

Sure.

This is Mike Sofia so.

Yeah.

Yeah.

Clearly in the lab, you can see resistance against.

Some of these.

Pro candidates that have been sort of progress forward.

You know that we've seen either on the market or in the literature. So you know as one would expect with a protease inhibitor that is.

Significant possibility so combination therapy as we've always said, we believe is going to be an important.

Piece of Armamentarium, that's going to help address that but also.

As we've always said.

This is sort of the single agent protease inhibitors really have had no impact on pre and post exposure prophylaxis or or Symptomology, which we hope that now really potent combination agent will do that and you know within NSP 12.

Polymerase inhibitor, which you typically have high barrier to resistance now that I've covered resistant SaaS back, but also provide that Adam.

It goes to not only intrinsic potency, but hopefully.

Clinical efficacy.

Okay, great and any details on the M program try yeah, no, we havent really disclosed anything yet.

On our compound.

We haven't really said what the profile that we're looking for a pan coronavirus.

Intrinsic potency at least competitive or better than whats out there currently with oral dosing minus ritonavir.

Need for retirement are boosting as.

<unk> requires so so I think that's what we've described.

We clearly have more.

Multiple pronged approach going on our internal program our collaboration with <unk>.

It gives us a number of different options here for for what we ultimately can can deliver to the clinic.

Okay great.

Expert the collaboration program started with library, screenwriter DNA encoded library.

That is correct yes.

Okay, great. Thank you.

And thank you.

And if you have a question that is star one one again if you have a question that is star one one and one moment our next question.

And our next question comes from K Nicky.

From Chardan. Your line is now open.

Yes. Thanks.

As you look to advance.

101, and $1 six one into the clinic next year.

At least from where you're standing now what might those initial clinical study designs look like for each.

Okay.

Yeah. Okay. Thank you very much this is bill.

We haven't described.

That yet publicly when we've talked about the year end deadline in getting these IND, enabling studies completed and they are moving into the clinic.

What we anticipate doing early January is coming out with.

2023 guidance.

And clearly that will include what the.

The plans look like for 101, 161, as well as the as well as the other assets that we're moving forward with.

But right now we're focused on working hard to get all those R&D, enabling studies complete.

Okay.

Okay, and just just back to the combination study with interferon.

You know when you talk about kind of.

Reporting initial results I guess, maybe beyond safety, what type of efficacy might you plan to report.

Yeah. Good question.

Thank you for your interest.

I think the any other thing I can say at this stage is that obviously the way that study was designed there was a lead in period with seven to nine.

Before we then stratified into adding.

Interferon.

So.

One of the things we've been looking at is is how the initial lead in period has performed as.

As well as some of the initial data on interferon but.

That is a.

Still in the Hopper, we're still.

Assessing the the results that we see and we'll we'll get that to you before the end of December .

Okay. Thank you.

And thank you.

Okay.

And I am showing no further questions I would now like to turn the call back over to management for closing remarks.

Alright, Thank you very much and thank you for your questions. Thanks for joining us this morning.

Obviously, we appreciate your interest in hepatitis B and Corona virus and we all look forward to sharing these additional updates on our assets as we move forward through the remainder of November and December this year. Thanks, very much for joining us this morning.

This concludes today's conference call. Thank you for participating you may now disconnect.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

[music].

Yeah.