WARMINSTER, PA — Arbutus Biopharma Corporation (Nasdaq: ABUS) announced its second quarter 2024 financial results and provided an update on its corporate strategy.
Key Highlights from the Quarter:
- Revenue: $1.7 million, down from $4.7 million in the same period last year.
- Operating Expenses: Research and development expenses decreased to $15.6 million, while general and administrative expenses rose to $7.5 million.
- Net Loss: $19.8 million, or $0.11 per share, compared to a net loss of $17.1 million, or $0.10 per share, in Q2 2023.
- Cash Position: $148.5 million in cash, cash equivalents, and investments, sufficient to fund operations into Q4 2026.
Clinical Development Highlights:
Imdusiran (AB-729, RNAi Therapeutic):
At the EASL Congress in June, end-of-treatment data from the IM-PROVE I Phase 2a clinical trial showed 33.3% of patients achieved undetectable HBsAg, which was maintained 24 weeks post-treatment. This percentage rose to 67% among patients with baseline HBsAg less than 1000 IU/mL. The combination of imdusiran and pegylated interferon alfa-2a (IFN) was generally safe and well-tolerated.
The IM-PROVE II trial combined imdusiran with VTP-300, showing significant reductions in HBsAg levels compared to placebo. Preliminary data from an additional cohort receiving imdusiran, VTP-300, and low doses of nivolumab are expected in the second half of 2024.
AB-101 (Oral PD-L1 Inhibitor):
The Phase 1a/1b trial showed AB-101 was well-tolerated with evidence of dose-dependent receptor occupancy. Arbutus has commenced Part 2 of the trial, focusing on multiple-ascending doses.
Strategic Shifts and Workforce Reduction:
Arbutus will focus on advancing imdusiran and AB-101. Consequently, the company will cease HBV research efforts and reduce its workforce by 40%, mostly affecting discovery and administrative functions. This restructuring aims to extend the company’s cash runway to Q4 2026 and incur a one-time charge of $3.0 – $4.0 million in Q3 2024.
CEO’s Remarks:
“At the EASL Congress, we reported impressive imdusiran data. I’m particularly excited that in the IM-PROVE I clinical trial we saw undetectable HBsAg in 67% of those patients with baseline HBsAg less than 1000 IU/mL who were treated with 48 weeks of imdusiran and 24 weeks of IFN,” said Michael J. McElhaugh, Interim President and CEO. He added, “We intend to focus our existing resources on conducting a Phase 2b clinical trial with imdusiran, assuming continued positive data.”
Business Analysis:
Revenue Decline and Cost Management:
Arbutus saw a significant drop in revenue, primarily due to decreased license revenue from Qilu Pharmaceutical and lower ONPATTRO royalties from Alnylam. However, the company managed to cut research and development expenses by discontinuing less promising programs.
Restructuring for Future Growth:
The strategic focus on imdusiran and AB-101, along with reducing the workforce, aims to optimize resources and extend the cash runway. This restructuring is expected to position Arbutus for a potential inflection point in both its clinical development and financial trajectory, making the company more attractive to investors.
Litigation Updates:
Arbutus continues to pursue lawsuits against Moderna and Pfizer/BioNTech to seek compensation for the use of its patented LNP technology. These legal actions could potentially bring significant financial gains if successful.
Balancing Challenges with Growth Potential
Arbutus Biopharma’s Q2 2024 results reflect both the challenges and opportunities the company faces. While revenue has declined, the strategic focus on promising therapies like imdusiran and AB-101, coupled with cost management and ongoing legal pursuits, provides a pathway for potential future growth and value creation for shareholders.
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