Q4 2023 Arbutus Biopharma Corp Earnings Call

Okay.

Operator: Good day, and thank you for standing by. Welcome to the Arbutus Biopharma Fourth Quarter and Year End 2023 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by welcome to the Army. This.

Speaker Change: Biopharma fourth quarter and year end 2020 through your financial results and corporate update conference call at.

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

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone and then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lisa Caperelli, VP of Investor Relations. Please go ahead. Thank you, Stephen.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session you will need to press star one on your telephone and then here on automated message revising your hands raised.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your first speaker today, Lisa temporarily V.

Lisa: V P of Investor Relations. Please go ahead.

Lisa M. Caperelli: Good morning everyone, and thank you for joining Arbutus's fourth quarter and year-end 2023 financial results and corporate update call. Joining me today from the Arbutus executive team are Mike McElhaugh, interim president and chief executive officer, Dr. Karen Sims, chief medical officer, David Hastings, chief financial officer, and Dr. Mike Sofia, chief scientific officer. Mike McElhaugh will begin with a corporate update, followed by Karen, who will review our ongoing clinical programs. Dave will then provide a review of the company's fourth quarter and year-end 2023 financial results.

Thank you Steven good morning, everyone and thank you for joining our Bureau says fourth quarter and year end 2023 financial results and corporate update call.

Lisa: Joining me today from the argued his executive team are Mike Michael Hall, interim President and Chief Executive Officer Dr.

Speaker Change: Dr. Karen Simms, Chief Medical Officer.

Speaker Change: David Hastings, Chief Financial Officer, and Dr. Mike Sofia, Chief Scientific Officer.

Speaker Change: Mike Michael Hall will begin with a corporate update followed by Karen who will review our ongoing clinical programs.

David C. Hastings: Dave will then provide a review of the company's fourth quarter and.

David C. Hastings: And year end 2023 financial results after our prepared remarks, we will open the call for Q&A.

Lisa M. Caperelli: 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 annual report on Form 10-K and from time to time in our other documents filed with the SEC. With that, I'll now turn the call over to Mike McElhaugh.

Speaker Change: 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.

Speaker Change: Including those described in our annual report on Form 10-K, and from time to time in our other documents filed with the SEC.

Speaker Change: With that I'll now turn the call over to Mike Michael Hall, Mike.

Michael J. McElhaugh: Thank you, Lisa. Good morning, everyone, and thank you for joining us. In 2023, we made several important strategic choices to best position Arbutus for long-term success. In addition to streamlining our focus and resources on HPV, which extended our cash runway into the first quarter of January 2026, we also announced my appointment as interim president and CEO. As a co-founder of Arbutus, I am honored to have this opportunity to lead my colleagues in our mission to develop a functional cure for the millions of people chronically infected with hepatitis B virus. I'm excited for my new role and plan to leverage my extensive scientific, strategic, transactional, and commercial experience with antiviral and infectious disease companies to continue to move Arbutus forward. In 2024, our focus is to position Arbutus for continued success and create value for all our stakeholders.

Speaker Change: Thank you Lisa.

Speaker Change: Everyone and thank you for joining us today and.

Speaker Change: In 2023, we made several important strategic choices to best position our view this for long term success.

Speaker Change: In addition to streamlining our focus and resources on HBV, which extended our cash runway into the first quarter of January 2026.

Also announced my appointment as interim President and CEO.

Speaker Change: As a cofounder of <unk> I am honored to have this opportunity to lead my colleagues and our mission to develop a functional cure for the millions of people chronically infected with hepatitis B virus.

Speaker Change: I'm excited for my new role and plan to leverage my extensive scientific strategic transactional and commercial experience with anti viral in infectious disease companies to continue to move <unk> forward.

Speaker Change: In 2024, our focus is to position <unk> for continued success and create value for all our stakeholders.

Michael J. McElhaugh: We remain committed to advancing the development of our proprietary clinical assets in HPV, including Abduceram, our RNAi therapeutic, and AB101, our oral PD-L1 check. There remains a need for finite and more efficacious HPV treatments that further improve long-term outcomes and increase functional cure rates, as fewer than 5% of patients currently achieve functional cure with currently approved nukes or interferon. Our goal is to develop a treatment for chronic hepatitis B virus patients that results in at least a 20 percent functional cure rate to address this large unmet medical need. HPV is a complex virus that will most likely require a combination of compounds that inhibit viral replication.

Speaker Change: We remain committed to advancing the development of proprietary clinical assets in HBV, including inducer, an RNA therapeutic in 80 101, our oral PDL one checkpoint inhibitor.

Speaker Change: Gains and need for finite and more efficacious HBV treatment that further improve long term outcomes and increased functional cure rates as fewer than 5% of patients currently achieve functional cure with currently approved nukes or interferon.

Speaker Change: Our goal is to develop a treatment for chronic hepatitis b virus patients that results in at least a 20% functional cure rate to address this large unmet medical need.

Speaker Change: HBV is a complex virus that will most likely require a combination of compounds that inhibit viral replication.

Michael J. McElhaugh: Lower the viral antigen burden and boost the immune system. We are executing on our three-pronged approach to functionally cure HPV with a combination therapy that includes Imbuceran, Ezocorin, and A combination that includes Imbuceran, AB101, and Anuke is our ultimate goal. That said, our current strategy is evaluating Induciran in combination with other agents in multiple Phase IIa clinical trials with the goal of gaining valuable insights on efficacy, safety, and optimal dosing to help inform the design of a Phase IIb clinical trial with Induciran as the cornerstone therapy. Throughout 2024, we anticipate reporting data from our two ongoing Phase 2a clinical trials with Imbuciran, including the potential to see patients with undetectable surfaces. Achieving undetectable surface antigen levels in either of our current Phase 2a clinical trials would certainly be an important validation of Imbuciran's role in potentially achieving a functional cure for hepatitis B.

Speaker Change: Lower the viral antigen burden and boost the immune response.

We are excited we are executing on our three pronged approach to functionally cure HBV with a combination therapy that includes inducer and as a cornerstone.

Speaker Change: A combination that includes <unk> <unk> hundred one and a nuc is our ultimate goal.

Speaker Change: That said our current strategy is evaluating <unk> in combination with other agents in multiple phase Iia clinical trials with the goal of gaining valuable insights on efficacy safety and optimal dosing to help inform the design of a phase two b clinical trial with <unk> as the cornerstone therapy.

Speaker Change: Throughout 2024, we anticipate reporting data from our two ongoing phase Iia clinical trials with <unk>, including the potential to see patients with undetectable surface antigen.

Speaker Change: Cheating undetectable surface antigen levels in either of our current phase Iia clinical trials will certainly be an important validation of <unk> role in potentially achieving a functional cure for hepatitis b patients.

Michael J. McElhaugh: This year, we also anticipate data from our Healthy Subjects portion of our Phase 1a, 1b clinical trial with AB101, our immune- We expect to report preliminary safety and, importantly, preliminary receptor occupancy and target engagement data in this population. With the potential of AB101 to boost the host immune response, our goal is to move AB101 through the clinic as quickly as possible to prepare it for a possible combination with induced I'd like to say a few brief words about our ongoing intellectual property litigation efforts before closing out this section of the call. All of our scientists take great pride in the intellectual property they develop, which takes great effort, time, resources, and expense.

Speaker Change: This year, we also anticipate data from our healthy subject portion of our phase <unk> clinical trial with <unk> hundred one our immune modulator.

Speaker Change: We expect to report preliminary safety and importantly, preliminary receptor occupancy and target engagement data in this population.

Speaker Change: With the potential of 80 101 to boost the host immune response, our goal is to move 80 101 through the clinic as quickly as possible to prepare it for a possible combination with <unk>.

Speaker Change: I'd like to say a few brief words about our ongoing intellectual property litigation efforts before closing out this section of the call.

Speaker Change: All of our scientists take great pride in the intellectual property, they develop which takes great effort time resources and expense.

Michael J. McElhaugh: It is for these reasons that we continue to protect and defend our intellectual property, including our LNP delivery technology, which is the subject of ongoing lawsuits against Moderna and Pfizer-Bionta. An important step in the litigation against Moderna took place on February 8th of this year. This was the date of the Markman hearing, also known as a claim construction hearing, where the court heard each party's interpretation of the construction of claims in the disputed patent.

Speaker Change: It is for these reasons that we continue to protect and defend our intellectual property, including our LNP delivery technology, which is a subject of ongoing lawsuits against Madonna and Pfizer beyond Tech.

Speaker Change: An important step in the litigation.

Speaker Change: For Medina took place on February eight of this year. This was the date of the Markman hearing also known as a claim construction hearing where the court heard each party's interpretation of the construction of claims and a disputed patents.

Michael J. McElhaugh: We anticipate the judge will issue his order from the hearing within 60 days of February. The next steps will include expert testimony and deposition. In addition, the court has set April 21st, 2025 as the trial date for this. That date is subject to course availability. With respect to the Pfizer-BioNTech lawsuit, the only update I can provide is that the lawsuit is ongoing, but it is behind the Moderna lawsuit as it was filed later. A date for the claim construction hearing in that case has not yet been set.

Speaker Change: We anticipate the judge to issue his order from the hearing within 60 days of February.

Speaker Change: The next steps will include expert testimony and depositions.

Speaker Change: In addition, the court has set April 21, 2025 as the trial date for this case that date is subject to the court's availability.

Speaker Change: With respect to the Pfizer beyond Tech lawsuit the only update I can provide is that the lawsuit is ongoing but is behind them and turn a lawsuit as it was filed later.

Speaker Change: A date for the claim construction hearing for that case has not yet been set.

Michael J. McElhaugh: When able, we will provide updates on both the Pfizer and Moderna lawsuits, but please keep in mind that given the legal sensitivities, we're limited in what we can say. I'll now turn the call over to Karen Sims to provide an update on the continued progress we are making across our Thanks, Mike. And good morning, everyone.

Speaker Change: When April we will provide updates on both the Pfizer and maternal lawsuits, but please keep in mind that given the legal sensitivities. We're limited in what we can say.

Speaker Change: I'll now turn the call over to Karen seems to provide an update on the continued progress we are making across our pipeline Karen.

Karen Sims: Thanks, Mike and good morning, everyone. We are currently conducting three clinical trials with our hepatitis B assets two phase Iia clinical trials of <unk> and one <unk> clinical trial of <unk> hundred one and we expect to report data from all three of these trials throughout this year.

Karen Sims: We are currently conducting three clinical trials with our hepatitis B assets, two phase 2A clinical trials with induced ORANs and one phase 1A, 1B clinical trial with AB101, and we expect to report data from all three of these trials throughout this year. We also plan to initiate a third phase 2A clinical trial with induced saran and dervalumab and approved anti-PD-L1 monoclonal antibodies in the first half of this year. We will share more details on that trial upon initiating it. As Mike stated, the purpose of these multiple phase to combination clinical trials is to glean information on the safety and efficacy of induced oran as a cornerstone therapy and to identify a combination treatment regimen that reduces viral burden and boosts the host immune response to advance into a later stage clinical trial.

Karen: We also plan to initiate a third phase III clinical trial with induced saran undervalued Nab and <unk> anti PD, one monoclonal antibody in the first half of this year, we will share more details on that trial initiation.

Karen: As Mike stated the purpose of these multiple phase <unk> combination clinical trial are to glean information on safety and efficacy Easter and as a cornerstone therapy and to identify a combination treatment regimen that reduces viral burden.

Karen: The host immune response to advance into later stage clinical trial.

Karen Sims: AB-729-201 is our Phase IIa clinical trial evaluating imducerin in combination with ongoing mucotherapy and interferon in patients with chronic hepatitis B. Last June at Eazl, we reported preliminary data that continues to reinforce our confidence in induced neurons' ability to effectively lower surface antigen. At that time, we reported data on a small number of patients that had received induced neurons plus at least 12 weeks of interferon and showed that interferon may contribute to additional declines in surface antigen.

Karen: 79 <unk> one.

Karen: <unk> clinical trial evaluating <unk> in combination with ongoing therapy and interferon in patients with chronic hepatitis b.

Karen: <unk> is all we reported preliminary data that continues to reinforce our confidence in <unk> ability to effectively lower surface antigen at that time, we recorded data on a small number of patients that had received <unk> plus at least 12 weeks of interferon and showed the interferon may contribute to additional decline in surface antigen.

Karen Sims: In the first half of this year, we plan to announce end-of-interferon treatment data for all 43 study patients, which will include safety and changes in surface antigen from baseline. When we report these data, we could potentially have some subjects that achieve undetectable surface antigen. As a reminder, undetectable surface antigen is a key component of functional cure. AB729202 is a Phase 2a clinical trial that we are conducting in collaboration with Brincis Biotherapeutics, formerly known as Vaxitech. Through this clinical trial, we are testing whether the combination of induced neurons, new therapy, and HPV antigen-specific immunotherapeutic VTP300 can lower surface antigen and stimulate the host's immune system to fully suppress the virus. Late last year at ASLD, we reported preliminary data that included all patients that received induced NIRN treatment and several patients who had received DTP-300 or placebo. In these early data, we reported that surface antigen levels were reduced and sustained with the combination treatment of induced NIRAN and VTP300.

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Karen: In the first half of this year, we plan to announce.

Karen: We are on treatment data for all 43000 patients, which will include safety and changes in surface antigen from baseline.

Karen: When we report these data we could potentially have some subjects that achieved undetectable surface antigen as a reminder, on the tactical surface antigen is a key component of functional cure.

Karen: <unk> is a phase <unk> clinical trial, we are conducting in collaboration with <unk> Biotherapeutics, formerly known as Mac's attack through this clinical trial, we are testing whether the combination of an Easter in nuc therapy and Brent. This is HPV antigen specific immunotherapy that ETP 300 <unk>.

Karen: Lower surface antigen and stimulate the host immune system to fully suppress the virus.

Karen: Late last year S. L. D. We reported preliminary data that included all patients that received in Houston and treatment and several patients to oversee and BCP 300 or placebo.

Karen: And these early data we reported that surface antigen levels were reduced and sustained with the combination treatment of <unk> and ETP 300.

Karen Sims: In the first half of this year, we expect to report end-of-treatment data, which would include safety and change in surface antigen from baseline for all 40 patients that received induced NIRAN, BTP300, or placebo and new therapy. We are continuing to dose patients in the amendment to the AB729202 trial that explores the addition of a low dose of the anti-PD-1 monoclonal antibody nivolumab to the combination treatment regimen. We believe nivolumab may further boost the host immune response. Preliminary data from this portion of the trial is expected in the second half of this year.

Karen: In the first half of this year, we expect to report and the treatment data, which will include safety and change in surface antigen from baseline for all 40 patients that received an Easter an ETP 300, or placebo and nuc therapy.

We are continuing to dose patients and the amendment to the <unk> 79 tier two trial that explores the addition of a low dose of the anti PD, one monoclonal antibody in Nevada.

Karen: Combination treatment regimen.

Karen: We believe <unk> may further boost the host immune response.

Karen: Data from this portion of the trial is expected in the second half of this year as noted for the 87 to 91 trial. When they also have the potential with the <unk>.

Karen Sims: As noted for the AB729-201 trial, we may also have the potential to see undetectable surface antigen in some patients, which is a prerequisite to achieving functional cure. While our Phase IIa clinical trials are evaluating induced uranin in combination with immune modulators, we intend to develop a proprietary combination therapy with induced uranin and AB101, our oral PD-L1 checkpoint inhibitor. We believe that the immune checkpoint pathway plays an important role in HBV-specific immune tolerance and in T cell activation.

Karen: First of all circumstances and in some patients which is a prerequisite to achieving functional cure.

Karen: While our phase Iia clinical trials are evaluating <unk> in combination with immune modulators, we intend to develop a proprietary combination therapy with <unk> and <unk> hundred one our oral PDL one checkpoint inhibitor.

Karen: We believe that the immune checkpoint pathway plays an important role in HBV specific immune tolerance and in T cell activation.

Karen Sims: Our third ongoing clinical trial is our Phase 1A, 1B clinical trial, AB-101-001. This double-blind, randomized placebo-controlled trial is designed to investigate the safety, tolerability, pharmacokinetics, and pharmacodynamics of AB101. This trial consists of three parts, starting with single and multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic hepatitis B. We are now moving AB101 into the second part of this trial, which involves evaluating multiple ascending doses of AB101 in healthy subjects. In the first half of this year, we anticipate reporting preliminary data from the healthy subject portion of this trial, which will include safety data in addition to preliminary target engagement and receptor occupancy data. As we continue to advance the clinical development of induced seranin AB101, we believe both compounds are well positioned to deliver on our goal of developing a functional cure for hepatitis C and driving value for our company.

Karen: Our third ongoing clinical trial is our phase <unk> clinical trial 8100 1001.

Karen: This double blind randomized placebo controlled trial is designed to investigate the safety Tolerability pharmacokinetics and pharmacodynamics of AED 101.

Karen: This trial consists of three parts, starting with single and multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic hepatitis b.

Karen: We are now moving 80 101 into the second part of this trial, which includes evaluating multiple ascending doses of 81 to one in healthy subjects.

Karen: In the first half of this year, we anticipate reporting preliminary data from the healthy subject portion of this trial, which will include safety data. In addition to preliminary target engagement and receptor occupancy data.

Karen: As we continue to advance the clinical development of <unk> 80, 101, we believe both compounds are well positioned to deliver on our goal of developing a functional cure for hepatitis b and driving value for our company.

Karen Sims: With that, I'll turn the call over to Dave Hastings for a brief financial update. Dave? Thanks, Karen, and good morning, everybody. We ended 2023 with approximately $132 million of cash, cash equivalents, and investments, compared to approximately $184 million as of December 31, 2022. During the year ended December 31st, 2023, we received 29.9 million in net proceeds from the issuance of common shares under our at the market offering program. These cash inflows were offset by $85.9 million of cash used in operations.

Karen: With that I'll turn the call over to Dave Hastings for a brief financial update.

David C. Hastings: Thanks, Karen and good morning, everybody.

David C. Hastings: We ended 2023 with approximately $132 million of cash cash equivalents and investments.

David C. Hastings: Compared to approximately $184 million as of December 31, 2022.

David C. Hastings: During the year ended December 31 2023.

David C. Hastings: We received $29 9 million of net proceeds from the issuance of common shares under our at the market offering program.

David C. Hastings: These cash inflows were offset by $85 9 million of cash used in operations.

David C. Hastings: We anticipate a significant reduction in our cash burn in 2024 from Point23 as we focus our pipeline and research efforts on HPV. Therefore, we expect our 2024 net cash burn to range between $63 to $67 million, excluding any proceeds received from our at-the-market offering. Importantly, we believe our cash runway is sufficient to 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 HPV assets to provide a functional cure for chronic HPV. With that, I'll turn the call back to Mike. Thanks, Steve.

David C. Hastings: We anticipate a significant reduction to our cash burn in 2024 from 2023, as we focus our pipeline and research efforts on HBV.

David C. Hastings: Therefore, we expect our 2024 net cash burn to range between 63% to $67 million, excluding any proceeds received from our aftermarket offering program.

David C. Hastings: Importantly, we believe our cash runway is sufficient to fund our operations into the first quarter of 2026.

David C. Hastings: 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.

David C. Hastings: With that I'll turn the call back to Mike Mike.

Michael J. McElhaugh: As I mentioned earlier, we have a data-rich year with end-of-treatment data expected from our two Phase IIa clinical trials with MDU-SIRAN and preliminary data from our Phase Ia-Ib clinical trial with AV104. We also anticipate initiating a third Phase 2a clinical trial with Imbuciran and Dervalum. Operator, we're now ready to open the call for Q&A. All right, thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again.

Michael J. Sofia: Thanks, Dave.

Michael J. Sofia: As I mentioned earlier, we have a data rich year with end of treatment data expected from our two phase Iia clinical trials with reducer, Anne and preliminary data from our phase <unk> clinical trial with <unk> hundred one we.

Michael J. Sofia: We also anticipate initiating its third phase Iia clinical trial with <unk> and your value Matt.

Speaker Change: Operator, we're now ready to open the call for Q&A.

Speaker Change: Alright. 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 on your telephone and wait for your name to be announced.

Speaker Change: To withdraw your question. Please press star one again please.

Operator: Please stand by while we compile the Q&A roster. The first question comes from the line of Dennis Ding of Jefferies. Your line is now open. Hi, good morning. If I can ask a question about patent litigation. Can you just pray for us?

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Okay.

Speaker Change: First question comes from the line of Dennis <unk> Jefferies. Your line is now open.

Dennis Jefferies: Hi, Good morning, if I can ask a question around the patent litigation.

Dennis Jefferies: Can you just help frame for us.

Yuchen Ding: What to expect at the upcoming claims instruction order and what is perhaps a good outcome, and do you need the judge to rule in favor of you for all three, or could just one disputed claim be good enough? Thank you. Good morning, guys. Dave, do you want to handle that question? Yes, sure. I mean, look, as you know, we're a little bit, we have to be very careful about what we say publicly about this case. We look forward to the judge's ruling. I really don't think we want to comment. I was sort of on the play-by-play of that until it actually happened.

Dennis Jefferies: What do you expect that the upcoming claim construction order.

Dennis Jefferies: And what is perhaps a good outcome in view.

Dennis Jefferies: The judge to rule in favor of your for all three here I just wanted.

Dennis Jefferies: One disputed claim be eager enough. Thank you.

Speaker Change: Hey, Good morning, guys, Steve do you want to handle that question.

Steve: Yes, sure I mean look at it as you know.

Steve: We're a little bit.

Steve: Very careful about what we say publicly about this case.

Steve: We look forward to the judge's ruling.

Steve: Okay can you want to comment.

Steve: Sort of on the play by play of that until it actually happens.

David C. Hastings: We appreciate everyone's interest. We take this, obviously, very seriously. We were pleased with the actual hearing itself. We look forward to Justice Goldberg's ruling, which we expect, as you know, within 60 days of February. And maybe, as a follow-up to that, like as you look for 6 to 12 months, is there an opportunity for a summary judgment or anything that could happen potentially in your favor before actually going to trial?

We appreciate everyone's interest we take obviously very seriously.

Steve: But we were.

Steve: We were pleased with.

Steve: The actual hearing itself and we look forward to charters Kohlberg's ruling, which we expect as you know within 60 days of February.

Steve: And maybe as a follow up to that like as you look.

Steve: For the 12 months.

Speaker Change: Is there an opportunity for a summary judgment or or anything.

Speaker Change: It happened, particularly in your favor.

Speaker Change: Before actually going to trial. Thank you.

David C. Hastings: Thank you. Yeah, I believe the schedule is that there will be that opportunity at some point. I believe we're expecting that in the late summer. You know, all these timelines are subject to change, obviously.

Speaker Change: Yes, I believe that.

Speaker Change: Schedule is that there will be there.

Speaker Change: Opportunity at some point.

We're expecting that in the late summer.

Speaker Change: All of these timelines are subject to change obviously.

David C. Hastings: I think that's the best estimate for the company at this point in time. Thank you.

Speaker Change: The best estimate of the company at this point in time.

Speaker Change: Thank you.

Speaker Change: Thanks Dennis.

Operator: All right, thank you. One moment for our next question. The next question comes from the line of Brian Skorney of Baird. Your line is now open. Hey, good morning.

Speaker Change: Alright. Thank you one moment for our next question.

Speaker Change: Okay.

Speaker Change: The next question comes from the line of Brian Scorning of Baird. Your line is now open.

Brian Peter Skorney: Thank you for taking my question. I just wanted to get a little bit more of a handle on the PD-1 L1 antibody study designs and rationales. I guess first, how do you think about PD-1 versus PD-L1 targeting? It's been a while, but I think some of the initial Medirex literature showed that maybe pre-clinically PD-L1 was the more desirable of a target for infectious disease.

Brian Scorning: Hey, good morning. Thank you for taking my question just wanted to get a little bit more of a handle on the PD. One antibody study designs and rationale I guess I guess first how do you think about PD one versus PD L. One targeting it's been a while but I think some of the initial metrics literature showed that maybe pre clinically PDL one was the more desirable.

Brian Scorning: For infectious disease.

Brian Scorning: <unk> on that differential and then how did you kind of go about thinking about selecting nebo for 202 and durable for starting to operate yes. Thanks.

Michael J. McElhaugh: And then how do you kind of go about thinking about selecting NEVO for 202 and DERVA for study 203? Yeah. Thanks. Good morning, Brian.

Michael J. Sofia: Thanks for the questions. So, a couple of questions there. So, maybe what I'll do is I'll turn it over to Mike Sofia to answer the PD-1 versus PD-L1 question, and then we can go to Karen for some considerations on design, if that works. So, do you want to handle the PD-1 versus PD-L1 question? Sure. Sure. Hi, Brian.

Speaker Change: Good morning, Brian Thanks for the questions. So a couple of questions there so.

Speaker Change: Maybe what I'll do is I'll turn it over to Mike Sofia to answer that PD, one versus PDL one question and then.

Speaker Change: And then we can go to Karen for the for some considerations on design that works. So Mike do you want to handle the PD one PDL one question door sure Hi, Brian.

Michael J. Sofia: So we do know that PD-L1 is certainly up-regulated on hepatocytes in chronic hepatitis B patients, right? The decision for PD-1 versus PD-L1 really comes from a strategy standpoint in the sense that, you know, we were able to identify small molecule agents that target and block PD-L1, essentially. And obviously, as we have reported in the literature, that this is a novel mechanism of action by which it internalizes the PD-L1, causes degradation, etc., and you can then reconstitute PD-L1 on the surface of hepatocytes completely by just washing out the drugs. So that all fits within our strategy for small molecule liver-centric agents that circumvents, you know, the concerns with, let's say, general systemic activation of the immune system. So it was, A, partly a decision around the fact that PD-L1 is highly upregulated in hepatocytes.

Michael J. Sofia: So we do know that the PDL one is certainly up regulated on.

Michael J. Sofia: Our private sites.

Michael J. Sofia: In chronic hepatitis b patients right.

The decision for PD, one versus PDL one.

Michael J. Sofia: Really come from a strategy standpoint in the sense that.

Michael J. Sofia: We were able to identify small molecule agents that target.

Michael J. Sofia: Block PDL, one essentially and obviously as we reported in the literature.

Michael J. Sofia: This is a novel mechanism of action by which it internalizes. The PDL one cause the degradation et cetera, you can memory constitute PDL one on the surface of hepatocytes completely by just washing out drugs. So.

Michael J. Sofia: Is that all fit within our strategy for small molecule liver centric agents that circumvents.

The concerns with let's say general systemic activation of the.

Michael J. Sofia: The immune system. So it was a partly the decision around the fact that PD lone is highly up regulated in a pilot sites.

Michael J. Sofia: Therefore, we can, you know, target the hepatocytes with a PD-L1 agent and the ability to design and develop a small molecule that fits within our overall concept of how to address this as a liver disease. Yeah, thanks, Mike. And I can jump in about the questions regarding Nevo versus Dervalumab in our clinical trials. So for the 202 trial, that's the trial we're doing in collaboration with Berenthes Biotherapeutics and their VTP300 asset. So, as you probably know, they have already performed some studies using VTP300 in combination with low-dose nivolumab in their HPV002 and ongoing HPV003 studies. And in those studies, they suggested that there is potentiation of response in subjects that receive VTP300 plus a dose of low-dose nivolumab given at the time of the MVA boost.

Michael J. Sofia: Therefore, we can target the hepatocytes with a PD, one agent and the ability to design and develop a small molecule that fits within our overall concept of how to address this from all of them are liver disease standpoint.

Michael J. Sofia: Okay.

Speaker Change: Yes, Thanks, Mike and I can jump in about the questions regarding the Nemo versus directly involved in our clinical trials. So for the tier two trial. That's the trial, we're doing in collaboration with Brent This biotherapeutics and Theyre BGP 300 asset. So as you probably know they have performed.

Speaker Change: Since studies already using ETP 300 in combination with low dose normal amount in there hdds <unk> Q and ongoing HBV is zero three studies and in those studies. They have suggested that there's potentiation.

Speaker Change: In subjects that receive <unk> 300, plus dose of low dose <unk> given at the time of the endgame.

Michael J. Sofia: So, for that reason, we incorporated that strategy into the 202 study as an amendment based on their prior and ongoing experience with using nivolumab in this context. For the 203 study, we did decide to utilize the anti-PD-L1 antibody, jiravalumab, basically for the reasons Mike just suggested and to be able to inform our upcoming combination study with AB101 and induced DURAM in terms of starting to explore the optimal timing and administration of a PD-L1 inhibitor in the context of induced DURAM therapy.

Speaker Change: So for that reason, we incorporated that strategy into the tier two study amendment based on their prior and ongoing experience. When do you think of all of that in this context for the <unk> study.

Speaker Change: <unk> decided to utilize the anti PDL, one antibody <unk> basically for the reasons, Mike just suggested and to be able to inform our upcoming combination study with <unk> 101, an inducer and in terms of starting to explore the optimal timing and administration of that.

Speaker Change: <unk> inhibitor in the context of engine ramp therapy. So that's kind of the rationale for the difference between the two studies and certainly as the tier three study moves forward, we will be able to share more details about the study design.

Karen Sims: So that's kind of the rationale for the difference between the two studies. And certainly, as the 203 study moves forward, we'll be able to share more details about the study design. Great, thanks, that's really helpful.

Speaker Change: Great. Thanks, that's really helpful.

Speaker Change: Great. Thanks, Brian.

Brian Peter Skorney: All right, one moment for our next question. The next question comes from the line of Roy Buchanan of Citizens JMP. Your line is now open.

Speaker Change: Alright, one moment for our next question.

Speaker Change: Next question comes from the line of Roy Buchanan of citizens JMP. Your line is now open.

Douglas Royal Buchanan: Hey, thanks for taking the question. A couple of questions. I guess for 101, just when do you think you might be in a position to re-engage the FDA on 101? And, I guess more broadly, what are your plans following phase 1A, 1B? Can you just elaborate on those a little? Sure. Karen, do you want to handle that one?

Douglas Royal Buchanan: Hey, Thanks for taking the question.

Douglas Royal Buchanan: Couple of I guess for 101, just when do you think you might be in a position.

Douglas Royal Buchanan: Positioned to Reengage with the FDA on one.

Douglas Royal Buchanan: 101, and I guess more broadly what are your.

Douglas Royal Buchanan: Plans following the phase <unk> elaborate on those a little bit.

Speaker Change: Sure Karen do you want to handle that one.

Karen Sims: Sure, absolutely. As we've said throughout this process, we certainly do intend to reengage the FDA for this program. And really, the criteria for that are when we feel that we have sufficient data to return to them with a robust package to be able to move forward in the U.S. So, you know, that line of communication is certainly always open. And, you know, we're looking forward to the AB101 trial continuing to proceed as it is and accumulating that data to be able to share back with the FDA. And, you know, this development strategy is something we've done before.

Karen: Sure absolutely so as we said throughout this process, we certainly do intend to re engage the FDA for this program and really the criteria for that is when we feel that that we have sufficient data to return to them with a robust package to be able to move forward in the U S. So that that way to communicate.

Karen: <unk> is certainly always open and we're looking forward.

Karen: 101 trial continuing to proceed as it is Nicky emulating that data to be able to you ought to share back with the FDA and this development strategy is something we've done before we frequently taken assets.

Karen Sims: We've, you know, frequently taken assets initially outside of the United States for a phase one study and then brought them back to FDA to initiate phase two trials along with other global jurisdictions as we need to increase study populations and study size. And then in regards to, you know, how the study is progressing and outputs, as we've said, we have just progressed the study into multiple dosing in healthy subjects. We do intend to share preliminary data from healthy subjects in the first half of this year. The study is designed as an umbrella study, so a seamless transition into chronic hepatitis B patients once we have sufficient data to move forward into that population.

Karen: Initially outside of the United States for a phase one study and then brought them back to the FDA to initiate phase two trials along with other global jurisdictions as we need to increase study populations in study size.

Karen: And then in regards to how the study is progressing and outlets as we said just now we have progressed.

Karen: Study into multiple dosing in healthy subjects, we do intend to share preliminary data from healthy subjects in the first half of this year. The study is designed as an umbrella studies, though a seamless transition into chronic hepatitis b patients. Once we have sufficient data to move forward into that population and in a certainly we'll be sharing updates.

Karen Sims: And, you know, certainly we'll be sharing updates as they become available with the study in an ongoing fashion. Okay, great. And then, if I could ask one about VPP 300, what do you need to see from the results this half to kind of move that approach forward and potentially, I guess, make it a cornerstone, but you mentioned combos with induced saran and 101. Yeah, what do you need to see to add VTP-300 or another vaccine to that approach? Or do you really need to see the NEVO data? Yeah, it's a good question, Roy.

Karen: As they become available with the study in an ongoing fashion.

Speaker Change: Okay, Great and then if I could ask one about the ATP 301, what do you need to see from the results. This half to move that approach forward.

Speaker Change: And potentially I guess make it a cornerstone, but you mentioned combos with induced Brandon and 101.

Speaker Change: Yes, what do you need to see to add BTT.

Speaker Change: The vaccine to that approach.

Speaker Change: Good to see it in the budget.

Speaker Change: Okay.

Speaker Change: Yes, good question Roy.

Michael J. McElhaugh: So, you know, Honestly, I think we just need to see what the data look like, and, you know, we'll continue to evaluate as it comes forward. As you rightfully mentioned, we added the NEVO arm to that study as well. I think we probably want to see that NEVO data before moving that combo forward, unless, of course, we see something spectacular out of it. VTP 300 plus inducer and arm, and I have no insight into that currently. I just, you know, it'll depend on what the data look like. Obviously, with VTP 300 not being a proprietary asset.

Douglas Royal Buchanan: Honestly I think we just need to see what the data look like and.

Speaker Change: We will continue to evaluate as it comes forward as you as you as you rightfully mentioned, we added the knievel arm to that study as well I think we would probably want to see that Nemo data before moving that combo forward unless of course, we see something spectacular out of the.

Speaker Change: The <unk> 300, plus an inducer and harm and I have.

Speaker Change: Into that currently.

Speaker Change: It will depend on what the data look like.

Speaker Change: Obviously.

Speaker Change: With <unk> 300, not being a proprietary asset.

Michael J. McElhaugh: Thinking about InducerM plus 101 and moving that forward as quickly as we can. That's always been sort of the goal.

Speaker Change: We are considering things.

Speaker Change: Thinking about.

Speaker Change: Inducer, and plus 101, and moving that forward as quickly as we can and that's always been sort of the goal.

Michael J. McElhaugh: But, you know, the data will guide you. I think that is probably the best way to think about it, with thanks. Sure. One moment for our next question. The next question comes from the line of Ed Arce of HC Wainwright. Your line is now open. Hi, good morning, everyone.

Speaker Change: But the data will the data will guide us I think.

Speaker Change: Probably the best way to think about it.

Speaker Change: Yes. Thanks.

Speaker Change: Sure.

Speaker Change: One moment for our next question.

Next question comes from the line of Ed Arce H C. Wainwright. Your line is now open.

Antonio Eduardo Arce: This is Thomas Yip asking a couple of questions for Ed. Thank you for the kind words. First, the first question for the new QL3 phase 2A study with the variable map. Can you discuss the design in broad strokes, how big the study would be, and any specific elements that we can expect in the study that can be learned from the ongoing QL2 study? Karen, do you want to handle that one, please?

Antonio Eduardo Arce: Hi, Good morning, everyone business Thomas Yip asking.

Antonio Eduardo Arce: Couple of questions for Ed. Thank you, let's go to questions.

Antonio Eduardo Arce: First question for the new.

Antonio Eduardo Arce: Jewel III phase III study with the roadmap.

Antonio Eduardo Arce: Can you discuss the design in broad strokes.

Antonio Eduardo Arce: Okay.

Ed: So there would be any specific.

Ed: Other than that.

Ed: You can expect in the study that is loaded from the ongoing <unk> study.

Ed: Karen do you want to handle that one please.

Karen Sims: Yeah, sure. So, you know, again, we typically don't dive into the details of our study designs until we're able to announce the first subject, first dose in the study. So, I can't elaborate much beyond what we've already said. But again, the goal of the study is to try to help inform upcoming studies with induced serine in combination with AB101.

Karen: Yeah sure. So again, we typically don't dive into the details of our study designs and so we're able to announce the first subject dosed in the study so I can't elaborate much beyond what we've already said.

Karen: Again the goal of the study is to try to help inform upcoming studies with <unk> in combination with 81 to one so looking at different options in terms of the timing of adding our PD one inhibitor to <unk> therapy is really that the high level goal in terms of the size of the study. It is a typical <unk> size.

Karen Sims: So, looking at different options in terms of the timing of adding a PD-L1 inhibitor to induced serine therapy is really the high-level goal. In terms of the size of the study, it is a typical two-way crossover study. This is, again, an exploratory study to try to basically learn about, again, that optimal timing and optimal duration of that combination approach. So, the study is listed on clinicaltrials.gov, and you're certainly welcome to peruse that for any additional details there.

Karen: <unk>. This is again, an exploratory study to try there.

Karen: <unk> learned a balance again that optimal timing optimal duration of that combination approach. So the study is listed on clinical trials that government Youre certainly welcome to peruse that for any additional detail there, but again, we will share more specific details about the trial once we have subjects enrolled.

Karen Sims: But again, we will share more specific details about the trial once we have subjects enrolled. Got it, understood. And then, same thing, similar along that line, just thinking ahead of the combination study with inducer and then with 101. Will the first study be a similar proof of concept study, phase 2a, that we've seen with other combinations as well? Yeah, I can jump into that one as well. Typically, it is.

Speaker Change: Got it understood and then.

Karen: Yes.

Karen: Same thing similar along that line.

Karen: Just thinking ahead of the combination study with <unk> and then what.

Karen: 101.

Karen: The first study would be a similar proof of concept study basically way that we've seen with other combinations as well.

Speaker Change: Yes, I can jump into that one as well typically it is I mean, and the rationale really for starting with the phase III study is certainly for 81 to one we will still be increasing the safety database for that molecule will be still learning additional information about PK and pharmacodynamics.

Karen Sims: I mean, the rationale really for starting with a Phase IIa study is, you know, certainly for AB101, we will still be increasing the safety database for that molecule. We'll still be learning additional information about PK and pharmacodynamics in a larger population of subjects. So, moving to a Phase IIa study is fairly routine with an early development asset just to make sure we're, you know, fully understanding the different aspects of the molecule before taking it into a larger Phase IIb type study. And that really is just all about de-risking the compounds and making sure that, you know, we're completely comfortable taking them into these larger studies, which, you know, as you know, are very, you know, technically difficult, and very expensive.

Speaker Change: A larger population of subjects, so moving to a phase Iia study is it's fairly routine with an early development asset just to make sure. We're fully understanding the different aspects of the molecule before taking it into a larger phase two b type study and that really is just all about derisking the compound and making sure that we are.

Speaker Change: We're completely comfortable taking it into these larger studies.

Speaker Change: In our Berry.

Berry: Yes, technically difficult very expensive, though is that most likely at all.

Karen Sims: So, it'll most likely start with a smaller IIa study. But again, you know, as Mike mentioned throughout the call, we need to see the data and see how the data guides us. You know, more to come on that as the AB101 program moves through Phase I. Got it, understood. And then one final question from us, just try to... Narrow down the timing of the first half readouts, most notably the TIL-1 end-of-period data readout and then also the AB-101 heavy on-tier data. Are these separate events or should we expect kind of like a big splash at ESOL? Yeah, good question, Thomas. That's kind of a tough question to answer.

Berry: Start with a smaller Iia study, but again as Mike mentioned throughout the call we need to see the data and see how the data guide us.

Berry: More to come on that is as the 81 to one program list or phase one.

Berry: Yes.

Speaker Change: Got it understood and then.

Speaker Change: One final question from US just further.

Speaker Change: Narrow down the timing of the first half.

Speaker Change: Readouts, most notably the tier one and a prudent data readout and then also the.

Speaker Change: Maybe 101 heavy volunteer data.

Speaker Change: Are these separate events or should we expect kind of a.

Speaker Change: Make a big splash diesel.

Speaker Change: Yes, good question Thomas.

Speaker Change: It's kind of a tough question to answer I think.

Michael J. McElhaugh: I think and the reason I say that is because, of course, we'd love to present our data at EASL. We always, we always love to present our data at EASL, but, of course, we have no idea whether any abstracts that we may or may not submit will be accepted. So it's hard to guide specifically to a particular conference.

Wing Cheung Yip: And the reason I say that is because of course, we'd love to present, our data at igo, we always we always love to present, our data at diesel but of course, we have no idea whether any abstracts that we may or may not submit will be accepted so it's hard to.

Wing Cheung Yip: It's hard to guide specifically to a to a particular conference, but I think that.

Michael J. McElhaugh: But I think that you're kind of thinking about the timing correctly, that that's probably around the time when, either through a conference or through some other mechanism, the data will likely be. Got it. Thank you again, everyone, for the questions, and we're looking forward to the data readout in the next few months. Thank you, Thomas. Thank you. One moment for our next question, which comes from the line of Keay Nakae of Chardin.

Wing Cheung Yip: I think youre kind of thinking about the timing correctly.

Wing Cheung Yip: That's probably around the time when either through a conference or through some other mechanism.

Wing Cheung Yip: The data will likely be available.

Speaker Change: Got it.

Speaker Change: Thank you again have to work with final questions and we're looking forward to the data readout.

Speaker Change: Great. Thank you Thomas.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Okay.

Speaker Change: Next question comes from the line of Kian <unk> of <unk>.

Keay Thomas Nakae: Your line is now open. No questions have been answered. Okay, I'm showing no further questions at this time. I would now like to turn it back to management for closing remarks. Great, thank you. And thanks, everyone, for joining us this morning. We certainly appreciate your continued interest in and support of Arbutus. And we look forward to providing updates as we progress the development of our HPV clinical stage.

Kian: Sure Dan Your line is now open.

Kian: My question has been answered.

Kian: Thanks Scott.

Kian: Okay.

Kian: <unk> no further questions at this time I would now like to turn it back to management for closing remarks, great.

Speaker Change: Great. Thank you.

Speaker Change: And thanks, everyone for joining us. This morning, we certainly appreciate your continued interest in and support of our <unk> and we look forward to providing updates as we progress the development of our HBV clinical stage assets.

Michael J. McElhaugh: Operator, that concludes our call. All right, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. named Artemis of the People. I am the owner of the money.

Speaker Change: Operator that concludes our call.

Speaker Change: Alright. Thank you for your participation in today's conference. This does conclude the program and you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.