Participants

Lisa Capparelli; Investor Relations; Arbutus Biopharma Corp

Michael McElhaugh; Interim President, Chief Executive Officer, Director; Arbutus Biopharma Corp

David Hastings; Chief Financial Officer; Arbutus Biopharma Corp

Presentation

Operator

Good day. And thank you for standing by Welcome to the Arbutus BioPharma 2024 3rd quarter, financial results and corporate update.
(Operator Instructions) I would now like to hand the conference over to your first speaker today, Lisa Capparelli, Vice President of Investor Relations. Please go ahead.

Lisa Capparelli

Thank you, Antoine. Good morning, everyone and thank you for joining arbutus' third quarter, 2024 financial results and corporate update call. Joining me today from the Arbutus executive team are Michael McElhaugh, interim President and Chief Executive Officer David Hastings, Chief Financial Officer, Dr Karen Sims, Chief Medical Officer and Michael Sofia, Chief Scientific Officer, Michael McElhaugh will provide a corporate update including an update on our, on our ongoing clinical programs in HBV. Dave will then provide a review of the company's third quarter, 2024 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 annual report on form 10-K, our quarterly report on form 10-Q which will be filed today and from time to time in our other documents filed with the SEC with that, I'll turn the call over to Michael McElhaugh . Mike.

Michael McElhaugh

Thank you Lisa and good morning everyone. I appreciate you joining us today. A few weeks ago, we issued a press release announcing that multiple abstracts highlighting inducer and data were accepted for presentation at the liver meeting 2024 which is the annual meeting held by the American Association for the study of liver diseases.
Included in the acceptance are two late breaker poster presentations with inducer and data from our ongoing phase two. A clinical trials improve one and improve two.
Since that meeting kicks off next Friday, November 15th and the data are under embargo. We're not able to provide any updates to those trials at this time.
I will however review at a high level, the data that we presented from those clinical trials earlier this year at the EASL conference before doing so. I want to take a minute to discuss why we are focused on a functional cure for patients with chronic hepatitis B.
Chronic HPV remains a significant global health challenge affecting more than 250 million people worldwide. Despite the availability of preventive vaccines and current treatment options.
This underscores our mission to address the urgent need to bring innovative combination treatments with a finite duration such as those that could include our RNI therapeutic inducer to patients as quickly as possible. Currently, the primary treatments for chronic HPV include nucleus analogs that suppress HPV DNA and immune modulators like interferon. These agents result in a very low functional cure rate. Therefore, combining new and innovative therapies to reduce surface antigen suppress HPV DNA and boost the immune system with current standard of care is needed to provide a more optimal functional cure rate for patients with HPV.
If a functional cure rate were available for patients with chronic HPV, it could potentially significantly reduce the patient's risk of liver cirrhosis and hepatocellular carcinoma, decrease patients stigma and eliminate lifelong treatment and burdensome health care costs.
As we focus on developing a functional cure for chronic HPV, we believe it is first important to lower viral markers such as hepatitis B surface antigen. Our phase two studies are designed to use inducer to reduce surface antigen as low as possible. Before administering an immune modulator, we are combining our RNA therapeutic inducer with two different immune modulators. In two phase two, a clinical trials, our improved one trial which includes short courses of interferon and our improved two trial which includes a combination of a therapeutic vaccine and an anti PD one monoclonal antibody at the Easel Congress in June. We reported data from our improved one clinical trial showing that the combination of inducer and plus interferon was generally safe and well tolerated.
The cohort that performed the best was cohort A one where HPV patients received six doses of inducer and 24 weeks of interferon. In addition to ongoing nu therapy in cohort, a 1 33% of the patients achieved surface antigen loss at the end of inducer and interferon treatment that was sustained at 24 weeks. Post end of treatment, we also looked at a subset of patients who had surface antigen less than 1,000 international units per mill at baseline in cohort, a 1 67% of the patients who had surface antigen less than 1,000 international units per mill at baseline maintained surface antigen loss 24 weeks after completion of inducer and interfere on treatment. This is one of the highest reported rates of surface antigen loss achieved by patients with baseline surface antigen less than 1,000 international units per mill.
This is a relevant population to assess because published studies have shown that patients with surface antigen loss have better long term outcomes. As we think about a phase two B clinical trial and based on these data stratifying the patient population to include those with low surface antigen may best position us for success while still capturing a significant portion of chronic HPV patients.
At the time, we reported the data, these four patients in cohort A one with sustained surface antigen loss had discontinued their nucleotide therapy. We've been following these patients to assess them for functional cure as a reminder, functional cure is defined as sustained hepatitis B surface antigen loss and HPV DNA. Less than the lower levels of quantification. 24 weeks off treatment with or without Hepatitis B surface antibodies.
We continue to receive positive feedback on these data from key opinion leaders in the HPV field and we are excited to provide additional follow up data from this trial at a SLD next week in June at ESY, we also reported end of treatment data from our improved two clinical trial that is evaluating the safety and immunogenicity of a 24 week lead in with inducer followed by barry biotherapeutics, immunotherapeutic VTP 300 or placebo while continuing new therapy in this trial inducer and lowered surface antigen to levels less than 100 international use per mil prior to dosing with VTP 300 or placebo in 95% of the patients after receiving VTP 300 through 24 weeks. Post end of treatment, more patients maintain surface antigen thresholds of less than 100 or less than 10 international needs per mil versus placebo for patients who reach this time point. A statistically significant difference was achieved in mean surface antigen levels between the treatment arm and placebo recall that we have expanded this improved two clinical trial to evaluate the addition of a low dose of the anti PD one monoclonal antibody neume to the inducer and VTB 300 combination treatment regimen which we believe may further boost the host immune response. We are on track to report preliminary data from this portion of the trial. Next week. At ad the totality of these data support our plans to advance inducer into a phase two B clinical trial as a cornerstone in a potential HPV functional cure treatment regimen.
Now, I'd like to move on to ab 101 oral small molecule PD L one checkpoint inhibitor. We believe that the immune checkpoint pathway plays an important role in HPV, specific immune tolerance. And in T cell activation and the addition of a checkpoint inhibitor in combination with inducer could potentially further enhance HPV, specific immune responses.
We remain excited about the potential of A B 101 in treating HPV A B 101 is liver centric. And in preclinical studies had typical small molecule pharmacokinetics likely providing a much shorter duration of effect than long acting antibodies. A B 101 was designed with the goal of minimizing systemic exposure and reducing the chance of immune related adverse events that are often seen with checkpoint antibodies.
Ab 101 is currently in a phase one A one B clinical trial that consists of three parts starting with single and multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic HBV. Last quarter, we reported data from the part one single ascending dose portion of the trial showing that ab 101 was generally well tolerated with evidence of dose dependent receptor occupancy.
In the 25 mg single dose cohort, all five evaluable subjects showed evidence of PD L one receptor occupancy between 5100% indicating that ab 101 is interacting with its intended target.
Today, we reported data from phase two of this trial where part excuse me, part two of this trial where we have so far enrolled two sequential cohorts of 10 healthy subjects. Each cohort received 10 or 25 mg of ab 101 or placebo daily for seven days. Multiple ascending doses of ab 101 were generally well tolerated with evidence of dose dependent receptor occupancy.
In the 25 mg cohort, all subjects showed evidence of receptor occupancy with seven of the eight subjects demonstrating receptor occupancy greater than 70% during the seven day dosing period with a favorable safety profile to date and evidence of receptor occupancy. We have now moved into part three, the global portion of this clinical trial which evaluates 28 days of repeat dosing in a 101 in patients with chronic HPV.
We expect to report preliminary data from HPV patients dosed with ab 101 in the first half of next year.
Finally, I have two brief updates on the litigation progress with Moderna and Pfizer Biontech around our LNP intellectual property in the Moderna case. The trial date is now scheduled for September 24th 2025 which is of course subject to the court's availability in the Pfizer Biontech lawsuit. The date for the claim construction hearing also known as the Markman hearing has been set for December 18th 2024.
I'll now turn the call over to Dave Hastings for a brief financial update. Dave.

David Hastings

Thanks Mike and good morning everybody.
We ended the third quarter of 2024 with approximately$131 million of cash, cash equivalents and investments and marketable securities compared to approximately $132 million. As of December 31st 2023.
During the first half of 2024 we received approximately $44 million of net proceeds from the issuance of common shares under our at the market offering program.
These cash inflows were offset by$ 54.5 million of cash used in operations.
We did not issue any common shares under our ATM program in the third quarter of 2024 and we still expect our 2024 cash burn to range from $63million to $67 million.
Importantly, our cash runway is sufficient to fund our operations into the fourth quarter of 2026.
In closing, we have a strong financial position to advance our mission of developing our HPV assets to provide a functional cure for people with chronic HPV. And with that, I'll turn the call back to Mike.

Michael McElhaugh

Thanks Dave. We look forward to providing an update next week as we intend to report additional data from our improved one clinical trial and preliminary end of treatment data from the volume of arm of the improved two trial at a sld with these planned data announcements and today's reporting of the multiple ascending dose data from healthy subjects in the A B 101 trial, we will have achieved all of our second half milestones operator. We're now ready to open the call for Q&A.

Question and Answer Session

Operator

Thank you at this time. We will conduct a question and answer session as a reminder to ask a question. You need to press star 11 on your telephone and wait for your name to be announced to withdraw your question. Please press star 11 again. Please stand by while I compile the Q&A roster.
Your first question comes from Dennis Ding from Jefferies. Please go ahead.

Good morning. This is Anthea on for dentists. Thanks for taking our questions. We had a question on functional cure data that's upcoming. I know that you've mentioned the 20% bar but also appreciating that the update will include patients from cohort A two without inducer.
So do you have any thoughts on what functional cure would look like in this arm? Would you be looking for a 20% incremental benefit on top? When you add inducer? Just imagining if this cohort has 10 15% functional cure, how we should interpret that data is adding him to gets to 20%. Thank you.

Michael McElhaugh

Good morning Atea. This is, this is Mike. So let me, let me try to try to understand where you're headed with this question. So, first of all, we have not presented any functional cure data related to inducer. And to date, we've only presented end of treatment and post nucleus site consolidation. The 20% functional curate that you've mentioned is sort of a stick in the mud for us. Sort of a baseline of what we think is a meaningful functional curate. As you know, the current therapies don't do very well, less than 10% somewhere around 5% and less for nucleus size.
So we, as a company have sort of set a goal for, for our programs that if we can hit a functional cure of 20% as a goal as an aspirational goal that that would be meaningful and and beneficial to patients going forward. So, you know, whether we're talking about cohort A one or a two, or B one or B two. You know, we should, we should see sort of how that, how that continues at a sld next week. And Karen, do you want, if you want to add anything to that, please?

And I would like to clarify how the study is designed just to avoid any misinterpretation. So all of the subjects in the improved one study received at least four doses of induced around so 60 mg every eight weeks for a period of 24 weeks. And then they were randomized to the different interferon containing cohort. The two group did in fact receive four doses of induced before they were randomized to receive the 24 weeks of interferon.
The difference between the A one and the A two cohort is the A one cohort continued to receive induced during the interferon treatment period. Whereas the A two cohort just received the initial four doses and then received interferon only. So I just want to clarify that point in case there's a misunderstanding about the trial design.

Okay. Got it. And so the bar would be 20% in either cohort.

Because they're both interference or induced grant and interferon containers.

Yes, got it. Thank you.

Operator

Thank you one moment for our next question.
Our next question comes from Roy Buchanan from J MP Securities . Please go ahead.

Hey, great. Thanks for taking the questions. I guess to follow up on that, that last question that how, what should we consider as a denominator? So if we just take cohort a one, for example, is the denominator for functional cure going to be 12 patients or are you thinking about the four patients who achieved and loss and then kind of along the same lines. How are you thinking about the inducer and lead in for subsequent studies? You can get Pati a lot of patients below 1,000 with induce itself. So you may be thinking to screen after inducer and lead in or at the very beginning. Thanks.

Yeah. So getting back to your first question about the the denominator. So, you know, each cohort, as you noted, had a denominator of around 12 or 13 subjects for the 24 week cohort. So certainly we'd be looking, you know, at functional care across the entire population of that cohort. And we've already presented some an and loss data as Mike said, at end of treatment, four weeks, post end of treatment after the new consolidation period, looking at that denominator of 12 where we get 33%. If we then look at the population a little differently and look at subjects who entered the study with baseline surface antigen less than 1,000, we see that percentage of surface antigen loss go up to 67% and this is consistent with what a lot of sponsors have seen across clinical trials recently in the Hepatitis B area that subjects with lower surface antigen tend to respond better to these therapies.
But I think in either situation, you know, if, if our surface antigen loss data transfers to functional cure data, we're above that 20% bar regardless of whether we look at the entire cohort or whether we look at the subjects with surface antigen less than 1,000. So, you know, I think we'll be looking, you know, as the data merges and looking forward to updated a slg about how the the functional cure data will appear, looking at both of those denominators. In regards to your second question about the inducer and lead in period. So, you know, obviously, we're continuing to look at all different possibilities of study designs moving forward. I think what has been a little differentiating about this particular trial with improved one, for example, is we're using this lead in period to drive surface antigen as low as possible.
And when we do that and then come with the im you know, modulator after lowering surface antigen, we're seeing these very high rates of surface antigen loss. So I think, you know that so far has that been I think a good study design for us in terms of our goals of lowering surface antigen and then boosting the host immune response with an immunomodulator. So certainly, as I mentioned, as we go forward, we're looking at all different types of, study design options. And you know, we'll see where the data lead us with these face to a studies.

Okay, great. That's helpful. Thank you and a couple on a 101.
The, so the results in the first half of next year is that likely just going to be cohort A and is that so 12 subjects from that? And then do you have any plans to present the the part one or, or two results? Thanks.

Michael McElhaugh

Yeah. So Roy, we're still, l working through that. We will, we can't, I can't give you any additional detail on what specifically that, what specific data set will be presented in the first half, but there will be HPV patient data in the first half with regards to the, the M ad portion of the data. We will, we'll figure out the right forum to get that out. But of course, you know, we're, pretty, open with the data that we, that we have and we like to get that in the hands of a, you know, in the hands of the likes of you. know, as quickly as we typically can. So stay tuned.

All good. Thank you.

Operator

Thank you one moment for our next question.
Our next question comes from Keay, Nakae from Chardan Capital Markets. Please go ahead.

Yes, thank you. So I'm wondering if you can give us any further clarity on how you're thinking about timing for face to B.

Michael McElhaugh

Yeah, so, good morning Kay. Good to hear from you. I, I, at this point, I can't really give you any additional timing related to the phase two B. Other than to say that we're working through it as diligently as we can. We are, you know, we're looking at the data that we have on hand and what's going to be coming up. And obviously, we need to, we need to have internal discussions, talk to regulators and figure out what the right, the right path is for inducer and to get it to market as quickly as we can. So, you know, all I can say at this point is we're being diligent and we will continue to do so. And we'll get there just as quickly as we can.

Okay. Thanks.

Operator

Thank you one moment for our next question.
Our next question comes from Brian Skorney from Baird. Please go ahead.

Hey, good morning everyone. Thanks for taking the question. I actually I went on ad 101 going into part three of the study. Just wondering if, if you had any insight into prior looks at PD one or PDL 11 date in HBV. Is there any HPV specific biomarker that would be expected to move here? Not sure if you're enrolling just a mix of the antigen positives or negatives, but just trying to level set expectations on, on what a 28 8 day result could show in HPV patients with the anti PD L one. Thanks.

Michael McElhaugh

Sure, good morning, Brian. Thanks for the call. Maybe I'll ask Karen or Mike to handle, to handle that one.

Yeah, I can start. I mean, you know, as you probably know from following, you know, our company over the years, we tend to be very biomarker heavy. So we always like to explore you know, biomarkers to the extent we can in any of our trials including phase one trial. So we are doing a robust biomarker collection to you know, look as we've already reported receptor occupancy and other markers. So that continues into the, the part three of the study, the hepatitis B portion of the study.
You know, I will remind everyone that it is just a 28 day treatment period and 81 on one is not a direct acting antiviral, right? It's an immune modulator. So we're not, we don't have clear expectations yet on what we might see in terms of actual effects on Hepatitis B on the anti hepatitis B immune response in these subjects with a 28 day treatment period. So we'll have to, you know, see that data as it evolves and as we dose escalate through that portion of the trial, but had any other, you know, I mean, I know obviously fair, fair made it clear what the expectations.
So.

The goal, the goal with 101, obviously, Brian is to get it in combination with inducer as quickly as we can. Our strategy has always been to lower surface first, then add an immune booster. So, you know, unfortunately, our, I guess it's just the reality of drug development. You have to take it as monotherapy first and see how it performs and then we can get it into combo as quick as we can. So.

Great.
Thanks.
Thank you.

Operator

One moment for our next question.
Our next question comes from Ed Arce from HC Wainwright. Please go ahead.

Hi, good morning, everyone. This is Thomas asking a couple of questions for Ed. Thank you for taking our questions. So, so first question first to clarify the A S LP lead breaking presentation with the improved to study. So, are we expecting data only from the expansion cohort or can we expect the updated data from the main study as well?

Hi, Thomas. Yes. So the, the presentation will be focused on group C of the improved two studies. So that was the cohort with the addition of low dose evol ofab. We did present the update on the, the A&D groups back at easel in the June.

Got it. Okay. Yeah, that, makes sense and, and then perhaps moving, moving a little bit on the legal side. Just, wonder what, can we expect after declaring construction hearing, following the lawsuit, you know, and, your lawsuit against Pfizer.

Michael McElhaugh

Thomas, I just want to make sure I caught that question correctly. It was the question is what can we expect after the, the claim construction, the Markman hearing for Pfizer. Is that correct?

Yes. Both, the, you know, what, what kind of, results can we expect from that hearing? And, and also what's, what's the next step in the process?

Michael McElhaugh

Sure. So as you know, as is always the case, I can say very little about the litigation. So as far as what to expect, we'll, we can, we can, you know, wait until the, until the hearing happens and we'll, we'll learn at the same time, you do sort of what, what we can expect coming out of that. The process as far as, as far as, you know, feedback is concerned is, is sort of similar to what we saw in the past. It's going to take some time after that hearing before we get some kind of report.
What we are, what we are looking forward to is sort of a court schedule, right? Which after the, after the results of the Markman hearing, get made available, we will also have a court schedule available to us which will give us a little more insight into when we may move forward with the trial and when, you know, when the trial date may come and when all the goodies that happened in between there, could take place. So, you know, stay tuned. We're, not that far away from December 18th now and then it'll be likely a couple of months before we have the, the outcome of that meeting in writing. But, we're, we're anxiously awaiting the results just like you.

Understood. Perhaps one more question from us. This was regarding cash runway about 24 months from now. So, I wonder if that includes any expected receipts from the ATM program?

Michael McElhaugh

I'm I'm sorry, you tailed off the end there.

Does it include any expected proceeds from the ATM program?

Michael McElhaugh

Oh, no, no, no. It does not. It assumes no financing. Sorry about that.
Yeah.

Okay. Thank you.

Michael McElhaugh

Thank you.
Okay, got it. Yeah, so straight talk. So thank you. Bye bye.

Operator

Thank you.
I'm showing no further questions. I will now turn it back over to management for close remarks.

Michael McElhaugh

Thank you everyone for joining us this morning. We remain committed to transforming the HPV treatment landscape and providing hope to millions of patients worldwide. As always, we appreciate your continued support and confidence in our vision. We look forward to providing updates next week at a sld on the clinical development of inducer and operator that concludes our call.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.