Q3 2023 Arbutus Biopharma Corporation Earnings Call
Good day and thank you for standing by welcome to the R. Beauty's third quarter corporate and financial update conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one.
One on your telephone you will then hear an automated message advising your hand is race to withdraw your.
Your question. Please press Star one one again, please be advised that today's conference is being recorded.
I would now like to hand, the conference over to Lisa kept Bradley. Please go ahead.
Thank you Briana good morning, everyone and thank you for joining our beauty third quarter 2023 financial results and corporate update call.
Joining me today for me are beautiful executive team are Bill Collier, President and Chief Executive Officer, David <unk>, Chief Financial Officer.
Michael Michael Hall, Chief Operating Officer, Dr. Mike Sofia, Chief Scientific Officer, and Dr. Karen said Chief Medical Officer.
Bill will begin with a corporate update followed by Dave Hastings, who will provide a review of the company's third quarter 2023 financial results.
After our prepared remarks, we will open the call for Q&A.
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 10-K, our quarterly report on form.
10-Q, which will be filed later today and from time to time in our other documents filed with the SEC.
With that I'll turn the call over to Bill Collier Bill.
Good morning, everyone and thank you very much for joining us today as you likely saw in addition to reporting our third quarter results earlier this morning.
We also announced I will be retiring at the end of the year.
I'll speak more about that shortly but first let's discuss our results.
At Arbutus, we remain committed to our goal of developing a functional cure for patients with chronic hepatitis b virus by advancing the development of our clinical assets that can be combined to create a curative treatment regimen.
Over the last few months, we've optimized our pipeline, including the discontinuation of our coronavirus research programs and our oral RNA.
RNA Destabilizer.
This allows us to sharpen our focus and resources on our most promising clinical programs and do Saran and AB 101, both of which are expected to have data Readouts next year.
As a result of this pipeline prioritization. We are also announcing today the difficult decision to streamline our organization by reducing our workforce by 24%.
We want to underscore how grateful we are to all of our employees, especially those departing the organization for their dedication and passion and developing novel therapeutics for viral diseases at Arbutus.
And while these changes primarily impact our research research function. We have maintained a group of research scientists as we remain committed to continuing discovery research and chronic HBV.
Now, we know that changes that impact how people are not easy and we're committed to providing those employees with support as they transition to their next rolls.
At the same time, we're confident that arbutus remains positively positioned for the future.
Now I'd like to provide some updates on the continued progress that we're making across our pipeline.
With more than 219 million people worldwide chronically infected with HBV.
And with current lifelong treatment options, resulting in less than a 5% cure rate.
There remains a large unmet medical need for a functional cure for chronic HBV.
We believe we are well suited to address this need with our teams extensive expertise in virology.
And within <unk> and with <unk>, which is one of the most advanced RNA therapeutics in development.
Based on data generated to date inducer and has shown to impact all three components needed for a functional cure for patients with chronic HBV.
Those are reducing HBV DNA suppressing surface antigen and reawakening the HBV specific immune response.
Our strategy to develop a functional cure for HBV involves exploring inducer and in combination with other investigational and approved products.
That can further stimulate the immune system to induce functional cure in chronic HBV patients.
<unk> is our lead asset and later this week at a prestigious liver focused medical conference <unk> the liver meeting.
We will be presenting a late breaking poster with preliminary data from our phase Iia clinical trial that we're conducting with <unk> biotherapeutics, formerly known as Vacs attack.
Through this clinical trial, we're testing whether the combination of them do Saran nuc therapy, and parenthesis HPV antigen specific immunotherapy BTB 300 can lower surface antigen and stimulate the host immune system to fully suppress the virus.
As I've mentioned previously this is an early look at data and not all patients have received the full <unk> 300 or placebo dosing regimen.
In addition to safety data from an efficacy standpoint.
Hoping to see a reduction in surface antigen within 24 weeks of India sorry.
We're hoping to see a reduction in surface antigen with 24 weeks of <unk> treatment that is similar to what we've seen in our other clinical trials to date.
And further impact on Hbsag and HBV specific immune activation with the addition of <unk> 300.
We look forward to reporting these data at <unk>.
Now you may recall that we've expanded this trial to explore the addition of a low dose of the anti PD, one monoclonal antibody inhibitor Napoleon map to.
To the combination treatment regimen.
We believe me, though may further boost the host immune response.
The data that we're reporting at <unk> will not include any data from this expanded arm.
As we're in the early stages of this trial.
We will have more to report on this portion of the clinical trial next year.
We also have a second phase Iia clinical trial that is evaluating <unk> in combination with ongoing ongoing nuc therapy and interferon in patients with chronic HBV.
Earlier this year, we reported preliminary data that continues to reinforce our confidence in <unk> ability to effectively lower surface antigen.
We're continuing to follow these patients and expect to provide updates from this clinical trial in 2024.
Our second HBV asset is a b 101 oral PDL one inhibitor that is currently in a phase <unk> clinical trial.
Immune checkpoints have been shown to play an important role in HBV specific immune tolerance and in T cell activation.
This double blind randomized placebo controlled clinical trial is designed to investigate the safety Tolerability pharmacokinetics and pharmacodynamics of <unk> hundred one.
The trial will be conducted in three parts, starting with single and multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic HBV.
In September we announced that we dosed the first patient in the single ascending dose group of the trial and expect initial data from that group in the first half of 2024.
Finally, let me spend a moment talking about my decision to retire as CEO at the end of this year.
As many of you know I've had the privilege to lead abusers since June 2019.
Since then we've accomplished so much.
This was a particularly challenging decision for me to make personally.
One that is completely unrelated to recent activities at all pieces.
I remain confident in <unk> and <unk> hundred one.
And the ability of this team to develop these compounds to possibly provide a functional cure for patients with chronic HBV.
My four year plus tenure at Arbutus is one of the most remote rewarding positions I've had in my career.
The opportunity to lead a group of talented and passionate researchers clinicians and professionals with a drive to serve the HBV patient community has been a true privilege.
We've achieved many successes and key milestones and as I look to my future retirement, I am confident in the future of Arbutus.
Yeah, Mike macro who will succeed me as interim CEO effective January the first.
As many of you know Mike is a co founder of our beaches and served as our Chief operating officer.
He has more than 20 years of scientific strategic transactional and commercial experience spanning various operating roles with Bristol Myers Squibb, Pharmasset, Merck and very pharma.
The board and I have the utmost confidence in <unk> ability to be successful in leading up users and to continue to create value for our shareholders.
Mike has worked very closely with me over the last four plus years and I am confident that it will be a smooth transition.
And I will also continue to be a resource for Mike as he becomes acclimated to his new role.
In closing I am confident in Mike's leadership as he leads abusers into its next chapter.
<unk> and <unk> are well positioned to deliver on our goal of developing a functional cure for HBV.
And driving value for our company as we are all HBV assets.
With that I'll hand, the call over to Dave Hastings for a brief financial update.
Thanks, Bill and good morning, everybody.
We ended the third quarter of 2023 with approximately $145 million of cash cash equivalents of investments.
Compared to approximately $184 million as of December 31, 2022.
During the nine months ended September 32000 22023.
We received approximately $26 million of net proceeds from the issuance of common shares under our views is aftermarket offering program.
These cash inflows were offset by approximately $69 million of cash used in operations.
As Bill mentioned.
And today, we announced that we reduced our workforce by 24%.
Importantly, we have maintained a discovery research capability in HBV and continue to believe we have the people necessary to advance our clinical stage HBV pipeline.
With this reduction in workforce, we will incur a one time restructuring charge of approximately $1 1 million that will be recorded in the fourth quarter of 2023.
We expect our 2023 net cash burn to range between $90 million to $95 million, excluding any proceeds received from our aftermarket offering program.
And importantly, we believe our cash runway will be sufficient to now fund our operations into the first quarter of 2026.
In closing, we have a strong financial position to advance our mission and we remain committed to developing our HBV assets to provide a functional cure for chronic HBV.
With that I will now turn the call back to Bill.
Thanks, Dave.
As I mentioned earlier, we're looking forward to reporting preliminary data from the AB 790, 202 Phase Iia study.
Binding and do so in nuc therapy, and the <unk> 300.
<unk> the liver meeting in the coming weeks.
Immediately following that medical Congress will be attending the Jefferies Healthcare conference in London.
Please reach out to Lisa if you want to schedule time to meet with the team to review that data.
In closing I wish the best to our departing employees and again, thank them for their dedication and many contributions to the company as we continue to pursue our goal of developing a functional cure for patients with chronic HBV.
Operator, we're now ready to open the call for any Q&A.
Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.
To withdraw please press star one again, please standby, while we compile the Q&A roster.
Our first question comes from Roy Buchanan for JMP. Your line is now open.
Alright, great. So congrats to bill for the retirement Justice.
I think theyre getting exciting over there and congrats to Mike for that.
Promotion I guess, maybe if you let's start with AP 101, just the results in the first half of next year.
Are you going to have sounds like maybe not but the complete.
As a result.
And maybe just give us some patient number details as you can and then.
Are you going to share the data regularly with the FDA and youre going to wait to complete the whole phase one and then just remind us what other activities preclinical studies are underway with 101.
Okay right.
Thank you. Thank you for your well wishes.
I'll turn it over to current environment, maybe the best thing we could do to answer your questions just to describe the structure of the 101 phase one study I think I misspoke earlier on when I said it was a double blind randomized study so perhaps.
Perhaps you could clarify that.
And I know it's.
So great question, absolutely. So Ashley I believe are correct and as Ed.
Right.
It is a what we're calling <unk> trial and there are.
Portions of the trial.
E Eastern portions of the trial, where we begin.
Okay.
Okay.
So the way these trials Ryan Chavez amine data from each part of the trials.
Part of it right.
Now as Bill said, we're in the cycle.
Just a question on the trial.
We expect to have data next year.
On the cadence of the trial.
Victory are subject to timely manner.
We should have some safety data.
Hey, David on preliminary Pharmacodynamic data in the first half of the year.
A portion of the trial in healthy subjects beyond that.
We began allocating trial.
Trial recruitment and we will disclose data once we have a meaningful data package Cuba acquired.
Okay, Great and then maybe what other activities are you doing some preclinical studies or anything that's underway with this one.
One.
Mark do you want to take that one.
Well.
The standard the standard non clinical safety studies continue to move forward with 101.
I think we've established a pretty solid package of data preclinical data that supports a mechanism, which is novel would support efficacy in animal models.
So and.
Obviously a peak.
Youll PK profile, which was deliver targeted for this for this agent.
But really right now the only activities.
All of the non clinical toxicology assessments that are required to support further progression of the drop.
Okay great.
More detailed question yes.
And <unk> studies, how frequently check for its share of converting conversion of S antigen.
And then on that really crystal ball or our speculative question you guys ever considered hepatitis Delta Sameer.
Some of your competitors.
Using the same agents for hepatitis B and potentially hepatitis Delta have you considered that indication I guess what are your thoughts around that thanks.
So Kevin do you want to take the first part and then Mike the second absolutely. So we are checking frequently in all of our clinical trials for surface antigen loss and zero conversion the timing really depends on how each clinic visits were setup for Suntrust.
Typically whenever there's a clinic visit for subjects, we can collect those parameters just for monitoring so it can vary anywhere.
Three months.
Depending on where the subject is in the clinical trial, whether that as my follow up so we can flex those parameters and pretty much everybody.
Yes, I'd say ballpark every every month.
More frequent.
Okay.
Yes.
On adult us question.
Yes look we've looked at a lot of targets.
And Delta was clearly one of them.
Initially with potentially one could use 87% volume as an SRO RNA knockdown antigen low or no thats required for delta two to exist.
Recent clinical data certainly has.
No.
The generated data that's not supportive of that there seems to be some liver safety issues associated with.
Potentially the accumulation of.
Delta related.
Antigens.
And Michelle and therefore somebody else significant IOP elevation. So.
Our assessment is that.
Sorry, RNA developed for hepatitis B is probably not an option for delta.
So.
Also.
As Bill had mentioned that focus our efforts with our.
Reduced head count on hepatitis B, we felt stoping thats a significant challenge to us.
That needs to be overcome and we believe in our strategy, So thats where were focusing our efforts.
Got it thank you.
Thank you Eric.
Thank you and one moment for our next question.
Our next question comes from Dennis Devine of Jefferies. Your line is now open.
Hi, Good morning. This is anthea on for Dennis two questions from us.
What are your thoughts on GSK and licensing the J&J S RNA and what does that mean for the Hep B space was our beta is also in discussions with GSK and then second could you comment on the <unk> litigation and what we should expect heading into D. Julian construction brief in December Thank you.
Are you.
Yes, so let.
Let me take the second part first and then maybe Mike Matt can talk about.
Our business development efforts.
So on the litigation front.
As I think we put in the press release that there is no new news to announce.
We continue to remain passionate about defending our patents in the middle or in the case. There is a claim construction meeting scheduled for February seven right.
So that's the next kind of.
Data point in the <unk> trial and the size of case, there is not yet a date set for claims construction.
I think thats about all we can say at this stage. So Mike do you want to take the Trulia has gained US a development question, yes. So I think the way we look at the GSK news is that any any consolidation in the field any licenses that happened in the hepatitis B space are good for the field generally.
And of course, we want to see.
Success in hepatitis B space with people getting to functional cure that's opportunity for everybody. So as you know, it's a very very large market.
And can certainly support multiple competitors with regards to conversations with any particular company. We can't comment on that obviously, but I think it's fair to say that we.
We stay.
Closely in touch with everyone in the field and and we continue those conversations whenever whenever appropriate.
Great. Thank you so much.
Thank you and one moment for our next question.
Our next question comes from Brian <unk> of Baird. Your line is now open.
Hey, guys. This is Charlie on for Brian Thanks for taking our question so.
One is.
You mentioned that with the reduction in force the cash runway is extended through 2026 and I was just hoping you could contextualize this for us with.
Your kind of ideal clinical development timeline and possibly.
Other scenarios just to kind of get a better <unk>.
On what this cash runway means for you and your development efforts as well as could you do.
Based on your research just a little bit of comparing and contrasting following up on the recent question about.
The GSK deal with the asset that they just in license compared to induce ramp. Thanks.
Yes, okay. So.
I mean I think we're.
Pleased that we've now extended the runway into 2026.
It allows us good clear two years' worth of funding.
And as we.
Continue to progress the phase Iia studies will get further readouts for the data Readouts and then that will inform the next phase of the phase <unk> or phase III.
It's also going to allow us to continue to progress <unk> one through its phase one activity. So.
All of that I think is quite encouraging.
On the GSK question.
A couple of comments I think one it it's another recognition of the fact the combination therapy.
Is the way to go in hepatitis B.
As far as comparing induced <unk> with the assets that they've licensed and I think there are a couple of key differences as I mentioned in my comments earlier on some two nine has shown activity on all three of the components. We believe are necessary for functional cure reduce.
<unk> HBV DNA, reducing surface antigen.
And reawakening the immune system.
And <unk>.
<unk> is the only on AI.
Generated data sharing dosage.
Intervals of either monthly or every eight weeks every 12 weeks. So we have built in some dosage flexibility moving forward and then Mike you might want to just comment upon the.
A single trigger aspect in any of the preclinical differences yes.
Yes, so pre clinically if you look at <unk> right. It's a single trigger agent, which can knock on all viral transcripts with one <unk>, including integrated transport spectrum costs.
Integrated.
<unk> got a couple for Bob.
The host of Juno.
One of the challenges with the J&J.
Asset is that it requires two <unk>.
To be able to accomplish what we were able to accomplish with one.
So I think Theres, a big difference in when you look at cost of goods and feasibility of commercialization of those of those two different assets, where a lower dose.
They are as well.
So so there is a.
Differentiated profile for <unk> versus J&J IRR.
Great. Thank you that's very helpful.
Okay.
Thank you and one moment for our next question.
Our next question comes from Thomas Yip of H C. Wainwright. Your line is now open.
Hi, good afternoon, everyone.
Good morning, sorry about that.
Thanks for taking my question.
Asking questions for Ed.
First of all just wanted to say bill.
Nigel.
Looking at year and best of luck.
Alright, I appreciate that there is.
Yes.
Kind of a current spot price.
But our first.
The first question.
From the extended cohort for bacteria to study the one word for a low dose.
We will not.
Perhaps can you provide more.
Specific.
Client timeframe for this preliminary readout.
Should we expect something in the first half of the year.
And then also how many.
So treatment data can we expect from this from the memory datasets.
Alright, Thomas Thank you very much for your well wishes I appreciate that.
Yes. So this additional arm that we've included in the 202 study that includes knee, though obviously, we announced that.
Good time after we started the original study design. So it is running on a on a later time track.
As we've announced we have started dosing in that in that arm.
So that is underway.
Not yet disclosed when we're likely to get.
Data from that specific.
I mean I would I.
I would point to the fact that most years, we normally do a press release with our kind of expectations early in January.
And that might be another.
Ask your question.
Sure.
Got it.
Okay.
Pertaining to this preliminary readout.
Can you discuss what.
Would be <unk>.
<unk>.
No.
Corn study will consider to be successful.
Okay.
Yes, Karen.
No absolutely.
As we've discussed our goals, our intense electric <unk> and hepatitis B.
Certainly there will be interim.
<unk> III.
Taken before we get subjects.
Sure. So for this particular dataset, you'll be looking at surface antigen decline.
Based on the engine.
This is the 24 weeks.
Prior to randomization either.
300 immunotherapy.
So, yes, certainly looking for brands contributions, allowing surface antigens lead in period, and then certainly any impact that VEB 300 has insurance.
Maintaining that surface antigen decline in increasing that surface antigen decline.
And certainly anything related to additional NGL modulus rate impacts in addition to what we have done previously.
So I think those are what we'll be looking for.
And the data readout, that's coming up ahead of me Unfortunately still under embargo, so I can't share.
Thank you.
At <unk>.
Yes.
As the conference call.
Okay.
Perhaps one more question from us for it maybe 101.
Okay can you talk about how.
Foreign law.
For each of the three parts in.
Yes.
The full data for the third quarter in HBV patients data possible any possibility.
To those 101 and compensate combination with.
So we have seen in the expansion cohort.
Yes, so I think what we said so far on that study as it will have some initial data in the first half of next year.
I think Karen also mentioned earlier on.
It's still somewhat dependent upon recruitment rates into each of those arms.
Youre right that all.
Aim would be to combine seventy-nine and 101.
The nuclear side, but.
But we have not yet provided any timelines for that.
Okay.
Thank you again for taking my questions and looking forward.
Sure.
<unk> paper Division.
Thank.
Thank you Thomas.
Thank you and this concludes the question answer session I would now like to turn it back to management for closing remarks.
Okay, well look thank you very much everyone for joining us. This morning. We appreciate your continued interest in and support of our Bluetooth and your questions.
Much look forward to providing you updates as we progress the development of our HBV clinical stage assets over coming months. So operator that concludes our call for this morning.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
[music].
Okay.
Okay.
[music].
Okay.
[music].