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What changed in Arbutus Biopharma Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Arbutus Biopharma Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+472 added−474 removedSource: 10-K (2026-03-23) vs 10-K (2025-03-27)

Top changes in Arbutus Biopharma Corp's 2025 10-K

472 paragraphs added · 474 removed · 322 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

150 edited+80 added−72 removed161 unchanged
Biggest changeImdusiran (AB-729) has the following advantages over other RNAi therapeutics in development for cHBV infection: – Targeted to hepatocytes using our proprietary covalently conjugated GalNAc delivery technology which provides highly efficient liver-targeted uptake and enables subcutaneous dosing. – Unique nucleotide sequence that is single trigger and targets all HBV transcripts including HBx from cccDNA and integrated DNA. – Specific chemical modifications that reduce off-target effects while maintaining potency and providing durable liver exposure. – Delivered at a low dose and less frequently. – Immune activation properties with HBV-specific T-cell immune restoration and a decrease in exhausted T-cells in key responder patients. – In combination with interferon and NA therapy, has provided the highest functional cure rates in cHBV patients to date with a 50% (3/6) functional cure rate in patients with HBsAg IM-PROVE I Phase 2a proof-of-concept clinical trial evaluating imdusiran in combination with IFN We have completed enrollment in IM-PROVE I, a randomized, open label, multicenter Phase 2a proof-of-concept clinical trial investigating the safety and antiviral activity of imdusiran in combination with a short course of IFN and ongoing NA therapy in 43 stably NA-suppressed, HBeAg negative, non-cirrhotic patients with cHBV infection.
Biggest changeImdusiran has the following advantages over other RNAi therapeutics in development for cHBV infection: – Targeted to hepatocytes using our proprietary covalently conjugated GalNAc delivery technology which provides highly efficient liver-targeted uptake and enables subcutaneous dosing. – Unique nucleotide sequence that is single trigger and targets all HBV transcripts including HBx from cccDNA and integrated HBV DNA. – Specific chemical modifications and unique asymmetric RNA structure that reduces off-target effects while maintaining/enhancing potency and providing durable liver exposure and in vivo therapeutic effect. – Delivered at a low dose and infrequently (4, 8 or 12 week intervals). – Immune activation properties with HBV-specific T-cell immune restoration and a decrease in exhausted T-cells in responder patients.
Concurrent with the execution of the License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common shares as of the close of trading on December 10, 2021 (the Share Transaction).
Concurrent with the execution of the Qilu License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at 15 a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common shares as of the close of trading on December 10, 2021 (the Share Transaction).
In the first quarter of 2025, our Board took action to reduce our workforce by 57% resulting in a total workforce after reductions of 19 employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages. We believe that relations with our employees are good.
In the first quarter of 2025, our Board took action to reduce our workforce by 57%, resulting in a total workforce after reductions of 19 employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement, nor have we experienced any work stoppages. We believe that 19 relations with our employees are good.
The GDPR provides different transfer mechanisms we can use to lawfully transfer personal data from the EU to countries outside the EU. An example is relying on adequacy decisions of the European Commission, such as the EU-U.S. Data Privacy Framework which was adopted by the European Commission in July 2023.
The EU GDPR provides different transfer mechanisms we can use to lawfully transfer personal data from the EU to countries outside the EU. An example is relying on adequacy decisions of the European Commission, such as the EU-U.S. Data Privacy Framework which was adopted by the European Commission in July 2023.
These laws and regulations, as well as any associated claims, inquiries, or investigations or any other government actions may lead to unfavorable outcomes including increased compliance costs, delays or impediments in the development of 28 new products, negative publicity, increased operating costs, diversion of management time and attention, and remedies that harm our business, including fines or demands or orders that we modify or cease existing business practices.
These laws and regulations, as well as any associated claims, inquiries, or investigations or any other government actions may lead to unfavorable outcomes including increased compliance costs, delays or impediments in the development of new products, negative publicity, increased operating costs, diversion of management time and attention, and remedies that harm our business, including fines or demands or orders that we modify or cease existing business practices.
These laws may differ from each other in significant ways, thus complicating compliance efforts. Federal regulators, state attorneys general, and plaintiffs’ attorneys have been and will likely continue to be active in this space. Activities outside of the United States implicate local and national data protection standards, impose additional compliance requirements and generate additional risks of enforcement for non-compliance.
These laws may differ from each other in significant ways, thus complicating compliance efforts. Federal regulators, state attorneys general, and plaintiffs’ attorneys have been and will likely continue to be active in this space. Activities outside of the United States implicate local and national data protection standards, impose additional compliance requirements and generate 28 additional risks of enforcement for non-compliance.
FDORA gives the agency significant flexibility in setting forth such conditions, which may include enrollment targets, study protocol and milestones—including the target date of study completion. The FDA may also require, as appropriate, that certain 22 post-approval studies be underway prior to Accelerated Approval or within a specified time from the date of approval.
FDORA gives the agency significant flexibility in setting forth such conditions, which may include enrollment targets, study protocol and milestones—including the target date of study completion. The FDA may also require, as appropriate, that certain post-approval studies be underway prior to Accelerated Approval or within a specified time from the date of approval.
Compliance efforts will likely be an increasing and substantial cost in the future. 27 Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us (including the imposition of significant penalties), private litigation and/or adverse publicity that could negatively affect our business.
Compliance efforts will likely be an increasing and substantial cost in the future. Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us (including the imposition of significant penalties), private litigation and/or adverse publicity that could negatively affect our business.
Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products, which in turn would affect the price we can receive for those products. Any reduction in reimbursement from 31 Medicare and other government programs may result in a similar reduction in payment from commercial payers.
Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products, which in turn would affect the price we can receive for those products. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payment from commercial payers.
Corporate Information 32 We, under the name Tekmira Pharmaceuticals Corporation (Tekmira), were incorporated pursuant to the British Columbia Business Corporations Act (BCBCA), on October 6, 2005, and commenced active business on April 30, 2007, when Tekmira and its parent company, Inex Pharmaceuticals Corporation (Inex), were reorganized under a statutory plan of arrangement (the Plan of Arrangement), completed under the provisions of the BCBCA.
Corporate Information We, under the name Tekmira Pharmaceuticals Corporation (Tekmira), were incorporated pursuant to the British Columbia Business Corporations Act (BCBCA), on October 6, 2005, and commenced active business on April 30, 2007, when Tekmira and its parent company, Inex Pharmaceuticals Corporation (Inex), were reorganized under a statutory plan of arrangement (the Plan of Arrangement), completed under the provisions of the BCBCA.
Pharmaceutical and other healthcare companies also are subject to other federal false claim laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs. • The fraud provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which impose criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors, and prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing 26 or document knowing the same to contain any materially false fictitious or fraudulent statement or entry, in connection with the delivery of or payment for healthcare benefits, items or services. • Analogous state and local laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that restrict the ability of manufacturers to offer co-pay support to patients for certain prescription drugs; and state and foreign laws that require drug manufacturers to report information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws and local ordinances that require identification or licensing of sales representatives. • The United States federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services (CMS) information related to direct or indirect payments and other transfers of value to physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives, and teaching hospitals, as well as ownership and investment interests held in the company by physicians and their immediate family members. • The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties or international organizations with the intent to obtain or retain business or seek a business advantage.
Pharmaceutical and other healthcare companies also are subject to other federal false claim laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs. 27 • The fraud provisions of the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (collectively, HIPAA), which impose criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors, and prohibit knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false fictitious or fraudulent statement or entry, in connection with the delivery of or payment for healthcare benefits, items or services. • Analogous state and local laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that restrict the ability of manufacturers to offer co-pay support to patients for certain prescription drugs; and state and foreign laws that require drug manufacturers to report information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws and local ordinances that require identification or licensing of sales representatives. • The United States federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services (CMS) information related to direct or indirect payments and other transfers of value to physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives, and teaching hospitals, as well as ownership and investment interests held in the company by physicians and their immediate family members. • The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties or international organizations with the intent to obtain or retain business or seek a business advantage.
As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenues we are able to generate from the sale of the product in that particular country.
As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenues we are able to generate from the sale of 30 the product in that particular country.
Government healthcare programs and other third-party payors are increasingly challenging the prices charged for medical products and services and examining 29 the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy, and have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
Government healthcare programs and other third-party payors are increasingly challenging the prices charged for medical products and services and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy, and have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
Any reduction in reimbursement from Medicare, Medicaid or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.
Any reduction in reimbursement from Medicare, Medicaid or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain operating profitability or commercialize our products.
Further, the IRA, among other things, established a Medicare Part B and Part D inflation rebate scheme, under which, generally, manufacturers will owe rebates if the average sales price of certain Part B drugs or annual average manufacturer price of certain covered Part D drugs increases faster than the pace of inflation.
Further, the IRA, among other things, established a Medicare Part B and Part D inflation rebate scheme, under which, generally, manufacturers owe rebates if the average sales price of certain Part B drugs or annual average manufacturer price of certain covered Part D drugs increases faster than the pace of inflation.
Our in-house clinical development and manufacturing teams implement our development strategies and oversee the activities of our outside vendors. Employee Oversight, Training and Development We are invested in the professional development of our employees. In order to promote long-term retention and to maximize the potential of our employees, we provide individualized performance management programs.
Our clinical development and manufacturing teams implement our development strategies and oversee the activities of our outside vendors. Employee Oversight, Training and Development We are invested in the professional development of our employees. In order to promote long-term retention and to maximize the potential of our employees, we provide individualized performance management programs.
Before testing any product candidate in humans in the United States, a company must develop preclinical data, generally including laboratory evaluation of the product candidate’s chemistry and formulation, as well as toxicological and pharmacological studies in animal species to assess safety and quality.
Before testing any product candidate in humans in the United States, a company must develop preclinical data, generally including laboratory evaluation of the product candidate’s chemistry and formulation, as well as toxicological and pharmacological studies, potentially in animal species, to assess safety and quality.
The sponsor of a clinical trial, the investigators and IRBs each must comply with requirements and restrictions that govern, among other things, obtaining informed consent from each study subject, complying with the protocol and investigational plan, adequately monitoring the clinical trial, and timely reporting adverse effects.
The sponsor of a clinical trial, the investigators and IRBs each must comply with requirements and restrictions that govern, among other things, obtaining informed consent from each study subject, complying 22 with the protocol and investigational plan, adequately monitoring the clinical trial, and timely reporting adverse effects.
It is impossible to predict whether other changes to legislation, regulation, or guidance will be enacted, or what the impact of such changes, if any, may be. However, an important and foreseeable example of new legislation is the forthcoming European Union pharmaceutical legislation revision.
It is 26 impossible to predict whether other changes to legislation, regulation, or guidance will be enacted, or what the impact of such changes, if any, may be. However, an important and foreseeable example of new legislation is the forthcoming European Union pharmaceutical legislation revision.
A “Paragraph I” certification is the 23 sponsor’s statement that patent information has not been filed for the RLD. A “Paragraph II” certification is the sponsor’s statement that the RLD’s patents have expired. A “Paragraph III” certification is the sponsor’s statement that it will wait for the patent to expire before obtaining approval for its product.
A “Paragraph I” certification is the sponsor’s statement that patent information has not been filed for the RLD. A “Paragraph II” certification is the sponsor’s statement that the RLD’s patents have expired. A “Paragraph III” certification is the sponsor’s statement that it will wait for the patent to expire before obtaining approval for its product.
The USPTO, in consultation with the FDA, reviews and approves the application for patent term restoration. In the European Union, new medicinal products are granted a protection period of eight years of data exclusivity and an additional two years of market exclusivity.
The USPTO, in consultation with the FDA, reviews and approves the application for patent term restoration. 25 In the European Union, new medicinal products are granted a protection period of eight years of data exclusivity and an additional two years of market exclusivity.
Federal law requires that any company that participates in the Medicaid Drug Rebate Program also participate in the Public Health Service’s 340B drug pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
Federal law requires that any company that participates in the Medicaid Drug Rebate Program also participate in the Public Health Service’s 340B drug pricing program in order for federal funds to be available for the manufacturer’s drugs under 31 Medicaid and Medicare Part B.
(Qilu) In December 2021, we entered into a technology transfer and license agreement (the License Agreement) with Qilu, pursuant to which we granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by us, which is non-exclusive as to development and manufacturing and exclusive with respect to commercialization of imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (Greater China and Taiwan).
(Qilu) In December 2021, we entered into a technology transfer and license agreement (the Qilu License Agreement) with Qilu, pursuant to which we granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by us, which was non-exclusive as to development and manufacturing and exclusive with respect to commercialization of imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (Greater China and Taiwan).
Further, our failure to prevail in any such proceedings could limit the patent protection available to our therapeutic HBV programs, coronavirus programs or RNAi platform, including our product candidates.
Further, our failure to prevail in any such proceedings could limit the patent protection available to our therapeutic HBV programs, or RNAi platform, including our product candidates.
Our Code of Business Conduct (the Code of Conduct) prohibits discrimination and harassment of any kind, including discrimination or harassment based on age, race, national origin, color, religion, gender identity or expression, pregnancy status, sexual orientation, genetic information and disability. In addition to our anti-harassment and human rights policies, we also require mandatory annual training in unconscious bias and anti-harassment.
Our Code of Business Conduct (the Code of Conduct) prohibits discrimination and harassment of any kind, including discrimination or harassment based on age, race, national origin, color, religion, gender identity or expression, pregnancy status, sexual orientation, genetic information and disability. In addition to our anti-harassment and human rights policies, we also require mandatory annual anti-harassment training.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. The Affordable Care Act, as amended (the Affordable Care Act), has substantially changed the way healthcare is financed by both governmental and private insurers, and has significantly impacted the pharmaceutical industry.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain operating profitability, or commercialize our products. The Affordable Care Act, as amended (the ACA), has substantially changed the way healthcare is financed by both governmental and private insurers, and has significantly impacted the pharmaceutical industry.
Qilu is responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan. Qilu is required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.
Qilu was responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan. Qilu was required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.
With regard to the transfer of personal data, the GDPR generally restricts the ability of companies to transfer personal data from the European Economic Area to the United States and other countries, which may adversely affect our ability to transfer personal data or otherwise may cause us to incur significant costs for implementing lawful transfer mechanisms, conducting data transfer impact assessments, and implementing additional measures where necessary to ensure that personal data transferred are adequately protected in a manner essentially equivalent to the EU.
With regard to the transfer of personal data, the EU GDPR generally restricts the ability of companies to transfer personal data from the European Economic Area to the United States and other countries without a valid transfer mechanism, which may adversely affect our ability to transfer personal data or otherwise may cause us to incur significant costs for implementing lawful transfer mechanisms, conducting data transfer impact assessments, and implementing additional measures where necessary to ensure that personal data transferred are adequately protected in a manner essentially equivalent to the EU.
While these treatments reduce viral load, less than 10% of patients are functionally cured after a finite treatment duration. With such low cure rates, most patients with cHBV infection are required to take NA therapy daily for the rest of their lives.
While these treatments reduce viral load, fewer than 10% of patients are functionally cured after a finite treatment duration. With such low cure rates, most patients with cHBV infection are required to take NA therapy daily for the rest of their lives.
Also effective July 31, 2015, the corporate name of our wholly owned subsidiary, OnCore Biopharma, Inc. changed to Arbutus Biopharma, Inc. (Arbutus Inc.). We had two wholly owned subsidiaries: Arbutus Inc. and Protiva Biotherapeutics Inc. (Protiva). Effective January 1, 2018, Protiva was amalgamated with Arbutus and we had one wholly-owned subsidiary as of December 31, 2024: Arbutus Biopharma, Inc.
Also effective July 31, 2015, the corporate name of our wholly owned subsidiary, OnCore Biopharma, Inc. changed to Arbutus Biopharma, Inc. (Arbutus Inc.). We had two wholly owned subsidiaries: Arbutus Inc. and Protiva Biotherapeutics Inc. (Protiva). Effective January 1, 2018, Protiva was amalgamated with Arbutus Inc. and we had one wholly-owned subsidiary as of December 31, 2025: Arbutus Inc.
Item 1. Business Overview Arbutus Biopharma Corporation (“Arbutus”, the “Company”, “we”, “us”, and “our”) is a clinical-stage biopharmaceutical company focused on infectious disease. We are currently developing imdusiran (AB-729), our proprietary, conjugated GalNAc, subcutaneously-delivered RNAi therapeutic, and AB-101, our proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).
Item 1. Business Overview Arbutus Biopharma Corporation (“Arbutus”, the “Company”, “we”, “us”, and “our”) is a clinical-stage biopharmaceutical company focused on infectious disease. We are currently developing imdusiran (AB-729), our proprietary, GalNAc-conjugated, subcutaneously-delivered ribonucleic acid interference (RNAi) therapeutic, and AB-101, our proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).
That deadline can be extended under certain circumstances, including by the FDA’s requests for additional information.
That deadline can be extended under certain circumstances, including by the FDA’s requests 23 for additional information.
For example, the Tax Cuts and Jobs Act eliminated the tax-based shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, commonly referred to as the individual mandate. Additional legislative changes, regulatory changes, and judicial challenges related to the Affordable Care Act remain possible.
For example, the Tax Cuts and Jobs Act eliminated the tax-based shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, commonly referred to as the individual mandate. Additional legislative changes, regulatory changes, and judicial challenges related to the ACA remain possible.
In addition, other legislative changes have been proposed since the Affordable Care Act was enacted. For example, the Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals for spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction, which triggered the legislation’s automatic reductions.
In addition, other legislative changes have been proposed since the ACA was enacted. For example, the Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals for spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction, which triggered the legislation’s automatic reductions.
Failure to pay a discount under this new program will be subject to a civil monetary penalty. In addition, the IRA established a Medicare Part D inflation rebate scheme, under which, generally speaking, manufacturers will owe additional rebates if the average manufacturer price of a Part D drug increases faster than the pace of inflation.
Failure to pay a discount under this new program is subject to a civil monetary penalty. In addition, the IRA established a Medicare Part D inflation rebate scheme, under which, generally speaking, manufacturers owe additional rebates if the average manufacturer price of a Part D drug increases faster than the pace of inflation.
At the American Association for the Study of Liver Diseases (AASLD) – The Liver Meeting ® in November 2024, we presented new data from our IM-PROVE I Phase 2a clinical trial showing that six doses of imdusiran and 24 weeks of IFN added to ongoing NA therapy led to a functional cure rate of 50% (3/6) in HBeAg-negative patients with baseline HBsAg levels less than 1000 IU/mL, and an overall functional cure rate of 25% (3/12).
At the American Association for the Study of Liver Diseases (AASLD) – The Liver Meeting ® in November 2024, we presented data from our IM-PROVE I Phase 2a clinical trial showing that six doses of imdusiran and 24 weeks of IFN added to ongoing NA therapy led to a functional cure rate of 50% (3/6) in hepatitis B e antigen (HBeAg) negative patients with baseline HBsAg levels less than 1000 IU/mL, and an overall functional cure rate of 25% (3/12).
Qilu also agreed to pay us double-digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan. The royalties are payable on a product-by-product and region-by-region basis, subject to certain limitations.
Qilu also agreed to pay us double-digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan. The royalties were to be payable on a product-by-product and region-by-region basis, subject to certain limitations.
We believe that our ability to compete depends, in part, upon our ability to develop products, successfully complete the clinical trials and regulatory approval processes, and effectively market any approved products.
We believe that our ability to compete depends, in part, upon our ability to successfully complete clinical trials and regulatory approval processes, and effectively market any approved products.
At week 48, all patients were evaluated for eligibility to discontinue NA therapy, and are being followed for an additional 24 to 48 weeks. The cohort that included low dose nivolumab was the best performing cohort in the IM-PROVE II clinical trial.
At week 48, all patients were evaluated for eligibility to discontinue NA therapy, and were followed for an additional 24 to 48 weeks. 13 The cohort that included low dose nivolumab was the best performing cohort in the IM-PROVE II clinical trial.
Moderna and Merck European Opposition On April 5, 2018, Moderna and Merck, Sharp & Dohme Corporation (Merck) filed Notices of Opposition to Arbutus’ European patent EP 2279254 (the ’254 Patent) with the European Patent Office (EPO), requesting that the ‘254 Patent be revoked in its entirety for all contracting states.
Moderna and Merck European Oppositions On April 5, 2018, Moderna and Merck, Sharp & Dohme Corporation (Merck) filed Notices of Opposition to our European patent EP 2279254 (the ’254 Patent) with the European Patent Office (EPO), requesting that the ’254 Patent be revoked in its entirety for all contracting states.
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. 33
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. 34
The intent of these trials was to initially lower HBsAg levels with imdusiran and then administer a complementary agent, in this case an immune modulator or a therapeutic vaccine, to further lower HBsAg levels and promote anti-HBV immunity.
The intent of these trials was to initially lower HBsAg levels with imdusiran and then administer a complementary agent, an immune modulator or a therapeutic vaccine, to further lower HBsAg levels and promote anti-HBV immunity.
It is possible that the Affordable Care Act, as currently enacted or as it may be amended in the future, and other healthcare reform measures, including those that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.
It is possible that the ACA, as currently enacted or as it may be amended in the future, and other healthcare reform measures, including those that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.
Moderna United States: On February 28, 2022, we and Genevant filed a lawsuit in the U.S. District Court for the District of Delaware against Moderna, Inc. and a Moderna affiliate (collectively, Moderna) seeking damages for infringement of U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19.
Moderna On February 28, 2022, we and Genevant filed a lawsuit in the United States District Court for the District of Delaware against Moderna seeking damages for infringement of United States Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19.
In the United States our patents might be challenged by inter partes review or opposition proceedings. In Europe, upon grant, a period of nine months is allowed for notification of opposition to such granted patents. If our patents are subjected to inter partes review or opposition proceedings, we would incur significant costs to defend them.
In the United States our patents might be challenged in post-grant review proceedings, such as inter partes review. In Europe, upon grant, a period of nine months is allowed for notification of opposition to such granted patents. If our patents are subjected to post-grant review, such as opposition proceedings, we would incur significant costs to defend them.
AB-101 is differentiated from monoclonal antibody checkpoint inhibitors such as durvalumab (anti-PD-L1) and nivolumab (anti-PD-1) because it is liver centric, has a much shorter duration of effect, which may provide dosing and safety advantages, and has a novel mechanism of action as it binds to PD-L1 on the surface of cells causing dimerization and internalization of the PD-L1 protein followed by degradation within hours. 12 Phase 1a/1b clinical trial to evaluate safety, tolerability and PK/PD of AB-101 (AB-101-001) AB-101-001 is a Phase 1a/1b clinical trial designed to investigate the safety, tolerability and PK/PD of single and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV infection.
AB-101 is differentiated from monoclonal antibody checkpoint inhibitors such as durvalumab (anti-PD-L1) and nivolumab (anti-PD-1) because it is liver centric, has a much shorter duration of effect in preclinical models (which may provide dosing and safety advantages), and has a novel mechanism of action as it binds to PD-L1 on the surface of cells causing dimerization, internalization and degradation of the PD-L1 protein. 14 Phase 1a/1b clinical trial to evaluate safety, tolerability and PK/PD of AB-101 (AB-101-001) AB-101-001 is a Phase 1a/1b clinical trial designed to investigate the safety, tolerability and PK/PD of single and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV infection.
The Affordable Care Act was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms.
The ACA was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms.
We expect that the Affordable Care Act, IRA, as well as other healthcare reform measures that have been adopted and may be adopted in the future, may result in more rigorous coverage criteria and new payment methodologies, and in additional downward pressure on coverage and payment and the price that we receive for any approved product, and could seriously harm our future revenues.
We expect that the ACA, IRA, OBBBA, as well as other healthcare reform measures that have been adopted and may be adopted in the future, may result in more rigorous coverage criteria and new payment methodologies, and in additional downward pressure on coverage and payment and the price that we receive for any approved product, and could seriously harm our future revenues.
The IRA also creates a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologicals without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price starting in 2026.
The IRA also created a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologicals without generic or biosimilar competition are capped by reference to, among other things, a specified non-federal average manufacturer price starting in 2026.
It is unclear how efforts to modify or invalidate the Affordable Care Act or its implementing regulations, or portions thereof, will affect our business. Any such changes could decrease the number of individuals with health coverage.
It is unclear how efforts to modify or invalidate the ACA or its implementing regulations, or portions thereof, will affect our business. Any such changes could decrease the number of individuals with health coverage.
Both parties also have entered into a supply agreement and related quality agreement pursuant to which we will manufacture or have manufactured and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until we have completed manufacturing technology transfer to Qilu and Qilu has received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.
Both parties also entered into a supply agreement and related quality agreement pursuant to which we would manufacture and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until we had completed manufacturing technology transfer to Qilu and Qilu had received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.
Functional cure is defined as sustained HBsAg loss and HBV DNA less than the lower limit of quantification ( Our HBV product pipeline includes the following: • Imdusiran is our proprietary, conjugated GalNAc, subcutaneously-delivered RNAi therapeutic product candidate that suppresses all HBV antigens, including HBsAg expression, which is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to HBV.
Functional cure is defined as sustained HBsAg seroclearance and HBV DNA less than the lower limit of quantification ( Our HBV product pipeline includes the following: • Imdusiran (AB-729) is our proprietary, GalNAc-conjugated, subcutaneously-delivered RNAi therapeutic product candidate that suppresses all HBV antigens, including HBsAg, which is thought to be a key prerequisite to enable potentiation of a patient’s immune system to respond to HBV.
OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if they fail to collect any such future royalties.
OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if it fails to collect any such future royalties.
Numerous federal and state laws, including state security breach notification laws, state health information privacy laws, state genetic privacy laws, and federal and state consumer protection and privacy laws, (including, for example, Section 5 of the Federal Trade Commission Act (FTC Act) and the Health Breach Notification Rule, and the California Consumer Privacy Act (CCPA), as amended by the California Privacy Rights Act (CPRA)) govern the collection, use and disclosure of personal information.
Numerous federal and state laws, including state security breach notification laws, state health information privacy laws, state genetic privacy laws, and federal and state consumer protection and privacy laws, (including, for example, Section 5 of the Federal Trade Commission Act (FTC Act) and the Health Breach Notification Rule, and the California Consumer Privacy Act (CCPA)) govern the collection, use and disclosure of personal information.
Success in early-stage clinical trials does not assure success in later-stage clinical trials. Moreover, data from clinical trials are not always conclusive and may be subject to alternative interpretations that could delay, limit or prevent approval. When a clinical trial is carried out in the European Union, the Clinical Trials Regulation (CTR) provides the regulatory framework.
Moreover, data from clinical trials are not always conclusive and may be subject to alternative interpretations that could delay, limit or prevent approval. When a clinical trial is carried out in the European Union, the Clinical Trials Regulation (CTR) provides the regulatory framework.
IM-PROVE II Phase 2a proof-of-concept clinical trial evaluating imdusiran in combination with Barinthus’ VTP-300 Through a clinical collaboration agreement with Barinthus that we entered into in July 2021, we have completed enrollment in IM-PROVE II, a Phase 2a proof-of-concept clinical trial evaluating the safety, antiviral activity and immunogenicity of Barinthus’ VTP-300, an HBV antigen specific immunotherapy, administered after imdusiran in patients with cHBV infection.
IM-PROVE II Phase 2a proof-of-concept clinical trial evaluating imdusiran in combination with Barinthus’ VTP-300 Through a clinical collaboration agreement with Barinthus that we entered into in July 2021, we completed IM-PROVE II, a Phase 2a proof-of-concept clinical trial evaluating the safety, antiviral activity and immunogenicity of a combination treatment with Barinthus’ VTP-300, an HBV immunotherapeutic, administered after imdusiran in patients with cHBV infection.
In Phase 2 trials, the product candidate is administered to a relatively small sample of the intended patient population to develop initial data regarding efficacy in the targeted disease, determine the optimal dose range, and generate additional information regarding the product candidate’s safety.
In Phase 2 trials, the product candidate is administered to a relatively small sample of the intended patient population to develop initial data regarding efficacy in the targeted disease, determine the optimal dose range, and generate additional information regarding the product candidate’s safety. Additional animal toxicology studies may precede this phase.
We believe that if we can lower HBsAg and promote immune reawakening, we may achieve sustained HBsAg loss and HBV DNA Select key data from patients in Cohort A1 of this Phase 2a clinical trial who received 6 doses of imdusiran, 24 weeks of IFN and ongoing NA therapy, as presented at the AASLD – The Liver Meeting ® in November 2024, include: • 50% (3/6) of patients with baseline HBsAg • Overall, 25% (3/12) of patients achieved a functional cure. • Those patients that achieved a functional cure also seroconverted with anti-HBs levels increasing as patients lost HBsAg.
Our belief in this trial was that if we can lower HBsAg, other viral proteins and HBV DNA levels and promote immune responses, we may achieve sustained HBsAg seroclearance and HBV DNA Select key data from 12 patients in Cohort A1 of this Phase 2a clinical trial who received 6 doses of imdusiran, 24 weeks of IFN and ongoing NA therapy, as presented at the AASLD – The Liver Meeting in November 2024, include: • 50% (3/6) of patients with baseline HBsAg • Overall, 25% (3/12) of patients achieved functional cure. • Those patients who achieved functional cure also seroconverted with anti-HBs levels increasing as patients lost HBsAg.
A joint development committee has been established between us and Qilu to coordinate and review the development, manufacturing and commercialization plans.
A joint development committee was established between us and Qilu to coordinate and review the development, manufacturing and commercialization plans.
Certain provisions of the Affordable Care Act have been subject to judicial challenges as well as efforts to modify them or to alter their interpretation and implementation.
Certain provisions of the ACA have been subject to judicial challenges as well as efforts to modify them or to alter their interpretation and implementation.
Strategy Our strategy is focused on maximizing opportunities for our cHBV development programs and our in-house developed LNP delivery technology. LNP delivery technology On February 28, 2022 and April 4, 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.
Strategy Our strategy is focused on maximizing opportunities for our cHBV development programs and, through our exclusive license with Genevant, our in-house developed LNP technology. 8 LNP technology In February 2022 and April 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.
We received $15.0 million of gross proceeds from the Share Transaction on January 6, 2022. The common shares sold to the Investor in the Share Transaction represented approximately 2.5% of our common shares outstanding immediately prior to the execution of the Share Purchase Agreement. 13 Alnylam Pharmaceuticals, Inc. (Alnylam) and Acuitas Therapeutics, Inc.
We received $15.0 million of gross proceeds from the Share Transaction on January 6, 2022. The common shares sold to the Investor in the Share Transaction represented approximately 2.5% of our common shares outstanding immediately prior to the execution of the Share Purchase Agreement.
If this royalty entitlement reverts to us, it has the potential to provide an active royalty stream or to be otherwise monetized again in full or in part. From the inception of the royalty sale through December 31, 2024, an aggregate of $25.0 million of royalties have been collected by OMERS.
If this royalty entitlement reverts to us, it has the potential to provide an active royalty stream or to be otherwise monetized again in full or in part. From the inception of the royalty sale through December 31, 2025, an aggregate of $26.5 million of royalties have been earned by OMERS.
In October 2014, Arbutus Inc., our wholly-owned subsidiary, acquired all of the outstanding shares of Enantigen Therapeutics, Inc. (Enantigen) pursuant to a stock purchase agreement.
Potential Additional Payments Related to the Acquisition of Enantigen Therapeutics, Inc. In October 2014, Arbutus Inc., our wholly-owned subsidiary, acquired all of the outstanding shares of Enantigen Therapeutics, Inc. (Enantigen) pursuant to a stock purchase agreement.
In order to use the EU Standard Contractual Clauses mechanism, the exporter and the importer must ensure that the importer may guarantee a level of personal data protection in the importing country’s level of protection must be adequate that is essentially equivalent to that of the European Economic Area.
In order to use the EU Standard Contractual Clauses mechanism, the data exporter and the data importer must ensure that the data importer guarantees a level of personal data protection in the importing country that is essentially equivalent to that of the European Economic Area.
In California, the CCPA establishes certain requirements for data use and sharing transparency and provides California residents certain rights concerning the use, disclosure, and retention of their personal information. The CCPA and its implementing regulations have already been amended multiple times since their enactment.
In California, the CCPA establishes certain requirements for processing personal data, including obligations related to transparency and the collection, use, retention, and disclosure of personal data, and provides California residents certain rights concerning the use, correction, disclosure, and retention of their personal information. The CCPA and its implementing regulations have already been amended multiple times since their enactment.
Although we are not directly subject to HIPAA other than potentially with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we, or our affiliates or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.
Although we are not directly subject to HIPAA other than potentially with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we, or our affiliates or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA, and we could potentially be subject to other civil and/or criminal penalties if we obtain, use, or disclose information in a manner not permitted by other privacy and data security and consumer protection laws.
In addition to mandating training on our Code of Conduct on an annual basis, we also provide annual training on insider trading, anti-bribery and anti-corruption, among other topics. In addition, we require our suppliers’ agreements to comply with anti-bribery and anti-fraud provisions, and to comply with all applicable laws.
In addition to mandating training on our Code of Conduct on an annual basis, we also provide annual training on insider trading, cyber security and data privacy. In addition, we require our suppliers’ agreements to comply with anti-bribery and anti-fraud provisions, and to comply with all applicable laws.
We have a non-voting observer seat on Genevant’s Board of Directors. As of December 31, 2024, we owned approximately 16% of the common equity of Genevant and the carrying value of our investment in Genevant was zero. Our entitlement to receive future royalties or sublicensing revenue from Genevant was not impacted by the recapitalization. 14 Patent Infringement Litigation vs.
We have the right to have a non-voting observer attend meetings of Genevant’s Board of Directors. As of December 31, 2025, we owned approximately 16% of the common equity of Genevant and the carrying value of our investment in Genevant was zero. Our entitlement to receive future royalties or sublicensing revenue from Genevant was not impacted by the recapitalization.
At the AASLD – The Liver Meeting ® in November 2024, we presented data from this clinical trial showing that the addition of low dose nivolumab increased rates of HBsAg loss in cHBV patients and 23% (3/13) of patients that received imdusiran, VTP-300, NA therapy and low dose nivolumab achieved HBsAg loss by week 48.
At the AASLD – The Liver Meeting in November 2024, we presented data from this clinical trial showing that the addition of low dose nivolumab increased rates of HBsAg seroclearance in cHBV patients and that 23% (3/13) of patients who received the treatment regimen with low dose nivolumab achieved HBsAg seroclearance by week 48.
Part 1 of this clinical trial enrolled four sequential cohorts of eight healthy subjects each (6 active: 2 placebo) receiving a single dose of AB-101 at increasing dose levels. The data showed that AB-101 was well-tolerated with evidence of dose-dependent receptor occupancy. In the 25mg cohort, all five evaluable subjects showed evidence of receptor occupancy between 50-100%.
Part 1 of this clinical trial enrolled five sequential cohorts of eight healthy subjects each (6 active: 2 placebo) receiving a single dose of AB-101 at increasing dose levels. In Part 1, all five evaluable subjects in the 40mg cohort showed evidence of 100% receptor occupancy.
The European Union’s General Data Protection Regulation, including as implemented in the United Kingdom, (collectively, GDPR) and other data protection, privacy and similar national, state/provincial and local laws may restrict the access, use, storage, disclosure and other processing activities concerning patient health information abroad.
The European Union’s General Data Protection Regulation (EU GDPR), the United Kingdom’s General Data Protection Regulation (UK GDPR and together with EU GDPR, GDPR) and other data protection, privacy and similar national, state/provincial and local laws may restrict the access, use, storage, disclosure and other processing activities concerning patient health information abroad.
These data from the IM-PROVE I trial suggest that the combination of imdusiran, 24 weeks of IFN and NA therapy was generally safe and well-tolerated. • Imdusiran in combination with VTP-300, Barinthus Biotherapeutics plc’s (Barinthus) HBV antigen specific immunotherapy, ongoing NA therapy and including a cohort with the addition of low dose nivolumab (Opdivo ® ) in 9 patients with cHBV infection (IM-PROVE II).
These data from the IM-PROVE I trial suggest that the combination of imdusiran, 24 weeks of IFN and NA therapy was generally safe and well-tolerated with beneficial clinical outcomes, and that imdusiran may enhance responsiveness to IFN in HBV genotypes that are poor responders to IFN. • Imdusiran in combination with VTP-300, Barinthus Biotherapeutics plc’s (Barinthus) HBV immunotherapeutic, and ongoing NA therapy in patients with cHBV infection, including a cohort with the addition of low dose nivolumab (Opdivo ® ) (IM-PROVE II).
Competitive singular or combination products may render one or more of our product candidates obsolete or non-competitive before we can recover the expenses of developing and commercializing any of our product candidates.
Our competitors’ products may be safer, more effective, or more effectively marketed and sold than any product we may commercialize. Competitive singular or combination products may render one or more of our product candidates obsolete or non-competitive before we can recover the expenses of developing and commercializing any of our product candidates.
We offer every employee a total compensation package consisting of base salary, cash target bonus targeting the 50th to 75th percentile of market based on company size and industry, a comprehensive benefit package, including medical, dental and vision health care coverage, a 401(k) plan with an employer match, tax-advantaged savings accounts and equity compensation for every employee, which includes stock options and restricted stock units.
We offer non-executive officer employees a total compensation package consisting of base salary, cash target bonus, a comprehensive benefit package, including medical, dental and vision health care coverage, a 401(k) plan with an employer match, tax-advantaged savings accounts and equity compensation for every employee, which includes stock options and restricted stock units.
Further, we need to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary product candidates or processes, and secure sufficient capital resources for the substantial time period between the discovery of lead compounds and their commercial sales, if any.
Further, we need to attract and retain qualified personnel, obtain patent protection or otherwise develop proprietary processes, and secure sufficient capital resources for the substantial time period between the completion of clinical trials and regulatory approval processes and subsequent commercial sales, if any.
The IRA further makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and replacement of the coverage gap discount program with a new manufacturer discount program beginning in 2025.
The IRA further makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and replacement of the coverage gap discount program with a new manufacturer discount program beginning in 2025. Additionally, on July 4, 2025, the “One Big Beautiful Bill Act” (the OBBBA) was signed into law.
We may be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy, data protection and cybersecurity laws, to protect against security breaches and hackers, to notify breaches with competent authorities, and to alleviate problems caused by such breaches.
We may be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy, data protection and cybersecurity laws, to protect against cybersecurity incidents, to notify competent authorities and impacted individuals in the event of a cybersecurity incident, and to alleviate 29 problems caused by such cybersecurity incidents.
Manufacturing We currently rely on third-party manufacturers to supply drug substance and drug products, including imdusiran and AB-101, for our ongoing and anticipated clinical trials and non-clinical studies. We currently have no plans to establish any large-scale internal manufacturing facilities for our product candidates.
Manufacturing We currently rely on third-party manufacturers to supply drug substance and drug products, including imdusiran and AB-101, for our ongoing and anticipated clinical trials and non-clinical studies.
We believe that a combination of compounds that can suppress hepatitis B virus deoxyribonucleic acid (HBV DNA) replication and HBsAg expression as well as boost patients’ HBV-specific immune response could address the most important elements to achieving a functional cure.
Development to date has emphasized a combination of compounds that can suppress hepatitis B virus deoxyribonucleic acid (HBV DNA) replication, hepatitis B virus RNA (HBV RNA) transcription, and hepatitis B surface antigen (HBsAg) and other viral protein expression, as well as boost patients’ HBV-specific immune response, which together could address the most important elements to achieving a functional cure.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn particular, our funding needs may vary depending on a number of factors including: • the results of the review of our pipeline and development plans for our hepatitis B programs; • costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matters against Moderna and Pfizer/BioNTech; • revenues earned from our licensing partners, including Alnylam, Qilu and Acuitas; • the extent to which we continue the development of our product candidates or form licensing arrangements to advance our product candidates; • our decisions to in-license or acquire additional products, additional product candidates or technology for development; • our ability to attract and retain development or commercialization partners, and their effectiveness in carrying out the development and ultimate commercialization of one or more of our product candidates; • whether batches of product candidates that we manufacture fail to meet specifications resulting in clinical trial delays and investigational and remanufacturing costs; • the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and product candidates; and • competing products, product candidates and technological and market developments.
Biggest changeIn particular, our funding needs may vary depending on a number of factors including: • costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matter against Pfizer/BioNTech, the Moderna §1498 Appeal (if filed by Moderna), and our lawsuit against the United States; • a potential return of capital to our shareholders in connection with proceeds from the Moderna Settlement Agreement; • revenues earned from our licensing partners, including Alnylam and Acuitas; • the extent to which we continue the development of our product candidates or form licensing arrangements to advance our product candidates; • our decisions to in-license or acquire additional products, additional product candidates or technology for development; • our ability to attract and retain development or commercialization partners, and their effectiveness in carrying out the development and ultimate commercialization of one or more of our product candidates; 36 • whether batches of product candidates that we manufacture fail to meet specifications resulting in clinical trial delays and investigational and remanufacturing costs; • the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and product candidates; and • competing products, product candidates and technological and market developments.
Even if we are able to generate revenues from the sale of any approved product candidates, we may not become profitable and may need to obtain additional funding to continue operations.
Even if we are able to generate revenues from the sale of any approved product candidates, we may not become profitable from operations and may need to obtain additional funding to continue operations.
If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from United States federal healthcare programs, contractual damages, reputational harm, disgorgement, curtailment or restricting of our operations, any of which could substantially disrupt our operations and diminish our profits and future earnings.
If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from United States federal healthcare programs, contractual damages, reputational harm, disgorgement, curtailment or restricting of our operations, any of which could substantially disrupt our operations and diminish our profits from operations and future earnings.
The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to a specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as hospitals that serve a disproportionate share of low-income patients.
The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as hospitals that serve a disproportionate share of low-income patients.
Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
The commencement and completion of clinical trials may be delayed or precluded by a number of factors, including: • the results of the review of our pipeline and development plans for our hepatitis B programs; • delay or failure in reaching agreement with the FDA or other regulatory authorities outside the United States on the design of a given trial, or in obtaining authorization to commence a trial; • delay or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites; • delay or failure in obtaining approval of an IRB or ethics committees before a clinical trial can be initiated at a given site; • withdrawal of clinical trial sites from our clinical trials, including as a result of changing standards of care or the ineligibility of a site to participate; • delay or failure in recruiting and enrolling subjects in our clinical trials; • delay or failure in having subjects complete a clinical trial or return for post-treatment follow up; • clinical sites or investigators deviating from trial protocol, failing to conduct the trial in accordance with applicable regulatory requirements, or dropping out of a trial; • inability to identify and maintain a sufficient number of trial sites; • failure of CROs to meet their contractual obligations or deadlines; • the need to modify a trial protocol; • unforeseen safety issues; • emergence of dosing issues; • lack of effectiveness data during clinical trials; • changes in the standard of care of the indication being studied; 37 • reliance on third-party suppliers for the clinical trial supply of product candidates and failure by our third-party suppliers to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • inability to monitor subjects adequately during or after treatment; • limitations on our or our CROs’ ability to access and verify clinical trial data captured at clinical trial sites through monitoring and source document verification; • lack of sufficient funding to finance the clinical trials; and • changes in governmental regulations or administrative action.
The commencement and completion of clinical trials may be delayed or precluded by a number of factors, including: • the results of the review of our pipeline and development plans for our hepatitis B programs; • delay or failure in reaching agreement with the FDA or other regulatory authorities outside the United States on the design of a given trial, or in obtaining authorization to commence a trial; • delay or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites; • delay or failure in obtaining approval of an IRB or ethics committees before a clinical trial can be initiated at a given site; • withdrawal of clinical trial sites from our clinical trials, including as a result of changing standards of care or the ineligibility of a site to participate; • delay or failure in recruiting and enrolling subjects in our clinical trials; • delay or failure in having subjects complete a clinical trial or return for post-treatment follow up; • clinical sites or investigators deviating from trial protocol, failing to conduct the trial in accordance with applicable regulatory requirements, or dropping out of a trial; • inability to identify and maintain a sufficient number of trial sites; • failure of CROs to meet their contractual obligations or deadlines; • the need to modify a trial protocol; • unforeseen safety issues; • emergence of dosing issues; • lack of effectiveness data during clinical trials; • changes in the standard of care of the indication being studied; • reliance on third-party suppliers for the clinical trial supply of product candidates and failure by our third-party suppliers to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • inability to monitor subjects adequately during or after treatment; • limitations on our or our CROs’ ability to access and verify clinical trial data captured at clinical trial sites through monitoring and source document verification; • lack of sufficient funding to finance the clinical trials; and • changes in governmental regulations or administrative action.
Our ability to generate future revenues from product sales depends heavily on our success in: • completing clinical development of our product candidates; • seeking and obtaining regulatory approvals for product candidates for which we complete clinical trials; • developing a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates; • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support clinical development and the market demand for our product candidates for which we obtain regulatory approval; • launching and commercializing product candidates for which we obtain regulatory approval, either by collaborating with partners or, if launched independently, by establishing a sales force, marketing, sales operations and distribution infrastructure; 36 • obtaining market acceptance of our product candidates for which we obtain regulatory approval as viable treatment options; • addressing any competing technological and market developments; • implementing additional internal systems and infrastructure, as needed; • identifying and validating new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Our ability to generate future revenues from product sales depends heavily on our success in: • completing clinical development of our product candidates; • seeking and obtaining regulatory approvals for product candidates for which we complete clinical trials; • developing a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates; • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate (in amount and quality) products and services to support clinical development and the market demand for our product candidates for which we obtain regulatory approval; • launching and commercializing product candidates for which we obtain regulatory approval, either by collaborating with partners or, if launched independently, by establishing a sales force, marketing, sales operations and distribution infrastructure; • obtaining market acceptance of our product candidates for which we obtain regulatory approval as viable treatment options; • addressing any competing technological and market developments; • implementing additional internal systems and infrastructure, as needed; • identifying and validating new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Market acceptance by physicians, patients and third-party payors of the products we may commercialize will depend on a number of factors, some of which are beyond our control, including: • their efficacy, safety and other potential advantages in relation to alternative treatments; • their relative convenience and ease of administration in relation to alternative treatments; • the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; • the prevalence and severity of adverse events; • their cost of treatment in relation to alternative treatments, including generic products; • the extent and strength of our third-party manufacturer and supplier support; • the extent and strength of marketing and distribution support; • the limitations or warnings contained in a product’s approved labeling; and • distribution and use restrictions imposed by the FDA or other regulatory authorities outside the United States or that are part of a REMS or voluntary risk management plan.
Market acceptance by physicians, patients and third-party payors of the products we may commercialize will depend on a number of factors, some of which are beyond our control, including: • their efficacy, safety and other potential advantages in relation to alternative treatments; • their relative convenience and ease of administration in relation to alternative treatments; • the availability of adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; • the prevalence and severity of adverse events; • their cost of treatment in relation to alternative treatments, including generic products; • the extent and strength of our third-party manufacturer and supplier support; 44 • the extent and strength of marketing and distribution support; • the limitations or warnings contained in a product’s approved labeling; and • distribution and use restrictions imposed by the FDA or other regulatory authorities outside the United States or that are part of a REMS or voluntary risk management plan.
Subject enrollment is affected by a variety of factors including, among others: • severity of the disease under investigation; • design of the trial protocol; • prevalence of the disease/size of the patient population; • eligibility criteria for the clinical trial in question; 40 • perceived risks and benefits of the product candidate under study; • willingness or availability of patients to participate in the clinical trials; • proximity and availability of clinical trial sites for prospective patients; • ability to recruit clinical trial investigators with the appropriate competencies and experience; • availability of competing therapies and clinical trials; • efforts to facilitate timely enrollment in clinical trials; • ability to obtain and maintain subject consents; • patient referral practices of physicians; • risk that patients enrolled in clinical trials will drop out of the trials before completion; and • ability to monitor patients adequately during and after treatment.
Subject enrollment is affected by a variety of factors including, among others: • severity of the disease under investigation; • design of the trial protocol; • prevalence of the disease/size of the patient population; • eligibility criteria for the clinical trial in question; • perceived risks and benefits of the product candidate under study; • willingness or availability of patients to participate in the clinical trials; • proximity and availability of clinical trial sites for prospective patients; • ability to recruit clinical trial investigators with the appropriate competencies and experience; • availability of competing therapies and clinical trials; • efforts to facilitate timely enrollment in clinical trials; • ability to obtain and maintain subject consents; • patient referral practices of physicians; • risk that patients enrolled in clinical trials will drop out of the trials before completion; and • ability to monitor patients adequately during and after treatment.
We anticipate that our expenses will continue to be significant if and as we: • continue the clinical development of our products candidates; • initiate additional clinical trials or other studies or trials for our product candidates; • continue or expand our licensing arrangements with our licensing partners; • change or add additional manufacturers or suppliers; • seek regulatory approvals for our product candidates that successfully complete clinical trials; • establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain regulatory approval; • acquire or in-license other product candidates and technologies; • maintain, protect and expand our intellectual property portfolio; • attract and retain skilled personnel; • create additional infrastructure to support our product development and planned future commercialization efforts; and • experience any delays or encounter issues with any of the above.
We anticipate that our expenses will continue to be significant if and as we: • continue the clinical development of our products candidates; • initiate additional clinical trials or other studies or trials for our product candidates; 37 • continue or expand our licensing arrangements with our licensing partners; • change or add additional manufacturers or suppliers; • seek regulatory approvals for our product candidates that successfully complete clinical trials; • establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain regulatory approval; • acquire or in-license other product candidates and technologies; • maintain, protect and expand our intellectual property portfolio; • attract and retain skilled personnel; • create additional infrastructure to support our product development and planned future commercialization efforts; and • experience any delays or encounter issues with any of the above.
If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will need to curtail and reduce our operations and costs, and modify our business strategy which may require us to, among other things: 35 • significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates; • seek collaborators for one or more of our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; • sell or license on unfavorable terms our rights to one or more of our technologies or product candidates that we otherwise would seek to develop or commercialize ourselves; or • seek a sale of the Company or cease operations.
If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will need to curtail and reduce our operations and costs, and modify our business strategy which may require us to, among other things: • significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates; • seek collaborators for one or more of our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available; • sell or license on unfavorable terms our rights to one or more of our technologies or product candidates that we otherwise would seek to develop or commercialize ourselves; or • seek a sale of the Company or cease operations.
The possibility and timing of any possible reversion of the royalty entitlement is affected by many factors including: • Alnylam’s and its distributors’ and sublicensees’ ability and actions to effectively market and sell ONPATTRO in each country where sold; • the manner of sale, whether directly by Alnylam or by sublicensees or distributors, and the terms of sublicensing and distribution agreements; 48 • the amount and timing of sales of Alnylam in each country; • regulatory approvals, appropriate labeling, and desirable pricing, insurance coverage and reimbursement; • competition, including from Alnylam’s next generation RNAi product AMVUTTRA ® (vutrisiran); and • commencement of marketing in additional countries.
The possibility and timing of any possible reversion of the royalty entitlement is affected by many factors including: • Alnylam’s and its distributors’ and sublicensees’ ability and actions to effectively market and sell ONPATTRO in each country where sold; • the manner of sale, whether directly by Alnylam or by sublicensees or distributors, and the terms of sublicensing and distribution agreements; • the amount and timing of sales of Alnylam in each country; • regulatory approvals, appropriate labeling, and desirable pricing, insurance coverage and reimbursement; • competition, including from Alnylam’s next generation RNAi product AMVUTTRA ® (vutrisiran); and • commencement of marketing in additional countries.
For more information on past and ongoing intellectual property challenges and litigation, see “Item 3—Legal Proceedings.” We have incurred, and may in the future continue to incur, substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, and we may not be successful in one or more of these lawsuits or proceedings, any of which could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.
For more information on past and ongoing intellectual property challenges and litigation, see “Item 3—Legal Proceedings.” We have incurred, and may in the future continue to incur, substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, and we may not be successful in one or more of these lawsuits or 52 proceedings, any of which could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.
These data include the 46 average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.
These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.
If the FDA does not accept the results of our Phase 1 clinical trial in New Zealand for AB-101 or requires us to conduct additional trials or studies, it may take a considerable period of time, the length of which is not certain at this time, and expense for us to fully address the FDA’s concerns.
If the FDA does not accept the results of our Phase 1 clinical trial in New Zealand for AB-101 or requires us to conduct additional trials or studies, it may take a considerable period of time, the length of which is not certain at this time, and expense for us to fully address the FDA’s 42 concerns.
We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, the IRA, and other healthcare reform measures, including those that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.
We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, the IRA, the OBBBA, and other healthcare reform measures, including those that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.
Our ability to generate revenue and achieve profitability depends on our ability, alone or with strategic partners, to successfully complete the development of, and obtain the regulatory approvals necessary for, the manufacture and commercialization of our product candidates. We do not anticipate generating significant revenues from product sales for the foreseeable future, if ever.
Our ability to generate product revenue and achieve operating profitability depends on our ability, alone or with strategic partners, to successfully complete the development of, and obtain the regulatory approvals necessary for, the manufacture and commercialization of our product candidates. We do not anticipate generating significant revenues from product sales for the foreseeable future, if ever.
The FCP is derived from a calculated price point called the Non-FAMP, which the manufacturer calculates and reports to the VA on a quarterly and 47 annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non FAMP filing can subject a manufacturer to significant penalties for each item of false information.
The FCP is derived from a calculated price point called the Non-FAMP, which the manufacturer calculates and reports to the VA on a quarterly and annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non-FAMP filing can subject a manufacturer to significant penalties for each item of false information.
To the extent that any disruption or cybersecurity incident results or appears to result in such interruption or loss, we could incur material financial, legal, business or reputational harm, including regulatory fines, penalties, scrutiny, or intervention, or claims by third parties, including that we have breached privacy- or confidentiality-related obligations.
To the extent that any disruption or cybersecurity incident results or appears to result in such interruption or loss, we could incur material financial, legal, business or reputational harm, including regulatory fines, penalties, scrutiny, or intervention, or 56 claims by third parties, including that we have breached privacy- or confidentiality-related obligations.
Based on preliminary results, we may choose to advance a particular product candidate that later fails to be successful, and simultaneously forgo or defer further investment in other product candidates that later are discovered to 38 demonstrate greater promise in terms of clinical and commercial success.
Based on preliminary results, we may choose to advance a particular product candidate that later fails to be successful, and simultaneously forgo or defer further investment in other product candidates that later are discovered to demonstrate greater promise in terms of clinical and commercial success.
Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be adopted in the future. We face significant competition from other biotechnology and pharmaceutical companies targeting HBV.
Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be adopted in the future. 43 We face significant competition from other biotechnology and pharmaceutical companies targeting HBV.
If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.
If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare 47 programs.
Such side effects could lead to clinical trial challenges, such as difficulties in subject recruitment, retention, and adherence, potential product liability claims, and possible termination by health authorities. These types of clinical trial challenges could in turn, delay or prevent regulatory approval of our product candidate.
Such side effects could lead to clinical trial challenges, such as difficulties in subject recruitment, retention, and adherence, potential product 41 liability claims, and possible termination by health authorities. These types of clinical trial challenges could in turn, delay or prevent regulatory approval of our product candidate.
Increased regulation of data collection, use and retention practices, 55 including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business.
Increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business.
We continue to incur significant expenses related to our ongoing operations, including development of our product candidates. We do not expect to achieve profits until such time as product sales, milestone payments and royalty payments, if any, generate sufficient revenues to fund our continuing operations.
We continue to incur significant expenses related to our ongoing operations, including development of our product candidates. We do not expect to achieve operating profits until such time as product sales, milestone payments and royalty payments, if any, generate sufficient revenues to fund our continuing operations.
Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory 42 approvals of those product candidates in the United States and other countries.
Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the United States and other countries.
A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit corrected data up to three years after those data originally were due.
A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit corrected data up to 48 three years after those data originally were due.
We cannot guarantee how long it will take regulatory agencies to review our applications for product candidates, and we may fail to obtain the necessary regulatory approvals to market our product candidates. Before we can commercialize our product candidates in the United States, we must obtain approval from the FDA.
We cannot guarantee how long it will take regulatory agencies to review our applications for product candidates, and we may fail to obtain the necessary regulatory approvals to market our product candidates. 40 Before we can commercialize our product candidates in the United States, we must obtain approval from the FDA.
To the extent we do not conduct these clinical trials under an IND, the FDA may not accept data from such trials. Although the FDA may accept data from clinical trials conducted outside the United States that are not conducted under an IND, the FDA’s acceptance of these data is subject to certain conditions.
To the extent we do not conduct our clinical trials under an IND, the FDA may not accept data from such trials. Although the FDA may accept data from clinical trials conducted outside the United States that are not conducted under an IND, the FDA’s acceptance of these data is subject to certain conditions.
The outcomes of clinical trials are uncertain, and delays in the completion of or the termination of any clinical trial of our product candidates could harm our business, financial condition and prospects. Our development programs are at an early stage of development.
The outcomes of clinical trials are uncertain, and delays in the completion of or the termination of any clinical trial of our product candidates could harm our business, financial condition and prospects. 38 Our development programs are at an early stage of development.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be. Inadequate coverage and reimbursement may impact the demand for, or the price of, any 45 product for which we obtain marketing approval.
We have incurred losses in nearly every year since our inception and we anticipate that we will not achieve profits for the foreseeable future. To date, we have had no product revenues.
We have incurred operating losses in nearly every year since our inception and we anticipate that we will not achieve operating profits for the foreseeable future. To date, we have had no product revenues.
We are entitled to low to mid-single-digit royalty payments escalating based on sales performance and received our first royalty payment in the fourth quarter of 2018.
We are entitled to low to mid-single-digit royalty payments escalating based on sales performance and received our first royalty 49 payment in the fourth quarter of 2018.
Although to date the cybersecurity incidents we have experienced have not resulted in a material impact on us, such events impacting either our own systems, networks and technology, or those of our contractors, consultants, vendors, or other business partners could threaten the confidentiality, integrity and availability of our data or data upon which we rely, including regulated personal information, confidential information or intellectual property.
Although to date the cybersecurity incidents we have experienced have not resulted in a material impact on us, such events impacting either our own systems, networks and technology, or those of our contractors, consultants, vendors, or other business partners could threaten the confidentiality, integrity and availability of our data or data upon which we rely, including regulated personal information, trade secrets, confidential information or intellectual property.
If a significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly reduced or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a material adverse effect on our business.
If a significant reduction in the FDA’s workforce continues, the FDA’s budget is significantly reduced or another prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a material adverse effect on our business.
If any product that we commercialize in the future does not gain an adequate level of acceptance among physicians, patients and third parties, or our estimates of the number of people who have cHBV infection are lower than expected, we may not generate significant product revenues or become profitable.
If any product that we commercialize in the future does not gain an adequate level of acceptance among physicians, patients and third parties, or our estimates of the number of people who have cHBV infection are lower than expected, we may not generate significant product revenues or become profitable from operations.
We have determined that we have not been a PFIC for the three taxable years ended December 31, 2024, however recent changes to Treasury regulations under the Code have made this determination more challenging for us, and we cannot provide any assurances that we will not become a PFIC in the future.
We have determined that we have not been a PFIC for the three taxable years ended December 31, 2025, however recent changes to Treasury regulations under the Code have made this determination more challenging for us, and we cannot provide any assurances that we will not become a PFIC in the future.
With the exception of the years ended December 31, 2006 and December 31, 2012, we have incurred losses each fiscal year since inception through the year ended December 31, 2024 and have not received any revenues other than from research and development collaborations, royalties, license fees and milestone payments.
With the exception of the years ended December 31, 2006 and December 31, 2012, we have incurred losses each fiscal year since inception through the year ended December 31, 2025 and have not received any revenues other than from research and development collaborations, royalties, license fees and milestone payments.
The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. We do not generate revenues from product sales and may never be profitable.
The operating losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. We do not generate revenues from product sales and may never be profitable from operations.
We cannot predict if we will ever achieve profitability and, if we do, we may not be able to remain consistently profitable or increase our profitability. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
We cannot predict if we will ever achieve operating profitability and, if we do, we may not be able to remain consistently profitable from operations or increase our operating profitability. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
Conflicts may arise with our collaboration or licensing partners, including Alnylam and Qilu, if they pursue alternative therapies for the diseases that we have targeted or develop or prioritize alternative products either on their own or in collaboration with others.
Conflicts may arise with our licensing partners, including Alnylam, if they pursue alternative therapies for the diseases that we have targeted or develop or prioritize alternative products either on their own or in collaboration with others.
Competing products, either developed by our present collaboration or licensing partners or any future 49 partners or to which our present partners or any future partners have rights, may result in development delays or the withdrawal of their support for one or more of our product candidates.
Competing products, either developed by our present licensing partners or any future partners or to which our present partners or any future partners have rights, may result in development delays or the withdrawal of their support for one or more of our product candidates.
If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price for any of our commercialized products, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for HRSA to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs, once commercialized, would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.
If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price for any of our commercialized products, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for the Health Resources and Services Administration (HRSA) to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs, once commercialized, would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.
ONPATTRO sales have declined each of the last two years due primarily to sales from Alnylam’s next generation RNAi product AMVUTTRA cannibalizing sales of ONPATTRO. If Alnylam’s sales of ONPATTRO continue to decline, the royalty entitlement may never revert back to us.
ONPATTRO sales have declined each of the last three years due primarily to sales from Alnylam’s next generation RNAi product AMVUTTRA cannibalizing sales of ONPATTRO. If Alnylam’s sales of ONPATTRO continue to decline, the royalty entitlement may never revert back to us.
Our articles and certain Canadian laws could delay or deter a change of control. 53 Our preferred shares are available for issuance from time to time at the discretion of our Board, without shareholder approval.
Our articles and certain Canadian laws could delay or deter a change of control. 54 Our preferred shares are available for issuance from time to time at the discretion of our Board, without shareholder approval.
These threats may arise from persons inside our organization, authorized persons with access to systems inside our organization or those with whom we do business, or unauthorized individuals. The risk of a cyberattack or other cybersecurity incidents has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
These threats may arise from persons inside our organization, authorized persons with access to systems inside our organization or those with whom we do business, or unauthorized individuals. The risk of cyberattacks or other cybersecurity incidents has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
If these licensing agreements are unsuccessful, or anticipated milestone or royalty payments are not received, our business could be materially adversely affected. We expect that we will depend in part on our licensing agreements with Alnylam and Qilu to provide revenue to partially fund our operations, especially in the near term.
If these licensing agreements are unsuccessful, or anticipated milestone or royalty payments are not received, our business could be materially adversely affected. We expect that we will depend in part on our licensing agreements with (or involving) Alnylam to provide revenue to partially fund our operations, especially in the near term.
Although we are not directly subject to HIPAA — other than with respect to providing certain employee benefits — we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA; • numerous federal and state laws and regulations that address privacy and data security, including state data breach notifications laws, state health information and/or genetic privacy laws, artificial intelligence laws passed in the United States, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, and the Health Breach Notification Rule, the CCPA, as amended by the CPRA), govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways, thus complicating the compliance efforts.
Although we are not directly subject to HIPAA, other than with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA, and could potentially be subject to other civil and/or criminal penalties if we obtain, use, or disclose information in a manner not permitted by other privacy and data security and consumer protection laws; • numerous federal and state laws and regulations that address privacy and data security, including state data breach notifications laws, state health information and/or genetic privacy laws, artificial intelligence laws passed in the United States, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, and the Health Breach Notification Rule, and the CCPA), govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways, thus complicating the compliance 46 efforts.
If our products do not achieve an adequate level of acceptance among physicians, patients and third-party payors, we may not generate meaningful revenues and we may not become profitable. 43 We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits.
If our products do not achieve an adequate level of acceptance among physicians, patients and third-party payors, we may not generate meaningful revenues and we may not become profitable from operations. We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits.
It also makes several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025).
It also made several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025).
We have only a limited history upon which you can evaluate our business and prospects as our product candidates are still at an early stage of development and thus we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area.
We have only a limited history upon which you can evaluate our business and prospects as our product candidates are still in the clinical trial stage of development and thus we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area.
Additional capital may not be available on terms that are favorable to us, or at all. 56 Item 1B. Unresolved Staff Comments There are currently no unresolved staff comments.
Additional capital may not be available on terms that are favorable to us, or at all. 57 Item 1B. Unresolved Staff Comments There are currently no unresolved staff comments.
Further, the Inflation Reduction Act (IRA), among other things, established Medicare Part B and Part D inflation rebate schemes under which, generally, manufacturers will owe rebates if the average sales price of certain Part B drugs, or the average manufacturer price of certain covered Part D drugs, increases faster than the pace of inflation, and a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, beginning in 2026.
Further, the IRA, among other things, established Medicare Part B and Part D inflation rebate schemes under which, generally, manufacturers owe rebates if the average sales price of certain Part B drugs, or the average manufacturer price of certain covered Part D drugs, increases faster than the pace of inflation, and a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition are capped by reference to, among other things, a specified non-federal average manufacturer price, beginning in 2026.
Should we not be successful in one or more of these lawsuits, it could have a material adverse effect on our business, financial condition, and operating results and could cause the market value of our common shares to decline.
These lawsuits consume significant resources. Should we not be successful in one or more of these lawsuits, it could have a material adverse effect on our business, financial condition, and operating results and could cause the market value of our common shares to decline.
For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The trial population must also adequately represent the United States population, and the data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful.
For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful.
From inception to December 31, 2024, we have an accumulated net deficit of approximately $1.3 billion. Investment in drug development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable.
From inception to December 31, 2025, we have an accumulated net deficit of approximately $1.4 billion. Investment in drug development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable.
Potential consequences include the issuance of fines, warning letters, untitled letters or holds on clinical trials, product seizure or detention or refusal to permit the import or export of our product candidates, permanent injunctions and consent decrees, or the imposition of civil or criminal penalties, any of which could significantly impair our ability to successfully commercialize a given product.
Potential consequences include the issuance of fines, warning letters, untitled letters or holds on clinical trials, product seizure or detention or refusal to permit the import or export of our products, if approved, permanent injunctions and consent decrees, or the imposition of civil or criminal penalties, any of which could significantly impair our ability to successfully commercialize a given product.
If conflicts arise between our collaboration or licensing partners and us, our collaboration or licensing partners may act in their best interest and not in our best interest, which could adversely affect our business.
If conflicts arise between our licensing partners and us, our licensing partners may act in their best interest and not in our best interest, which could adversely affect our business.
Additionally, conflicts may arise if there is a dispute about the progress of, or other activities related to, the clinical development of a product candidate, the achievement and payment of a milestone amount, the payment of royalties or the ownership of intellectual property that is developed during the course of the collaborative arrangement.
Additionally, conflicts may arise if there is a dispute about the progress of, or other activities related to, the clinical development of a product candidate, the achievement and payment of a milestone amount, the payment of royalties or the ownership of intellectual property that is developed during the course of a licensing agreement.
Risks Related to Our Business, Our Financial Results and Need for Additional Capital We are involved in multiple patent infringement lawsuits in multiple jurisdictions to protect and assert our intellectual property rights against large, well-capitalized companies, which requires that we continue to expend substantial resources, and we may not be successful in these proceedings.
Risks Related to Our Business, Our Financial Results and Need for Additional Capital We are involved in patent infringement lawsuits to protect and assert our intellectual property rights against large, well-capitalized companies and the United States, which requires that we continue to expend substantial resources, and we may not be successful in these proceedings.
Because we have limited resources, we may decide to pursue a particular product candidate and fail to advance product candidates that later demonstrate a greater chance of clinical and commercial success. We are an early-stage company with limited resources and revenues.
Because we have limited operational resources, we may decide to pursue a particular product candidate and fail to advance product candidates that later demonstrate a greater chance of clinical and commercial success. We are a development stage company with limited operational resources and revenues.
If we make resource allocation decisions that later are shown to be inaccurate, our business and prospects could be harmed. Several of our current clinical trials are being conducted outside the United States, and the FDA may not accept data from trials conducted in locations outside the United States.
If we make resource allocation decisions that later are shown to be inaccurate, our business and prospects could be harmed. Several of our clinical trials are currently or were conducted outside the United States, and the FDA may not accept data from trials conducted in locations outside the United States.
Risks Related to the Ownership of our Common Shares The concentration of common share ownership will likely limit the ability of the other shareholders to influence corporate matters. As of March 25, 2025, executive officers, directors, five percent or greater shareholders, and their respective affiliated entities beneficially owned, in the aggregate, approximately 44% of our outstanding common shares.
Risks Related to the Ownership of our Common Shares The concentration of common share ownership will likely limit the ability of the other shareholders to influence corporate matters. As of March 18, 2026, executive officers, directors, five percent or greater shareholders, and their respective affiliated entities beneficially owned, in the aggregate, approximately 38% of our outstanding common shares.
For example, the Patient Protection and Affordable Care Act, as amended (the ACA), intended to reduce the cost of health care, and it has substantially changed the way health care is financed by both government and private insurers.
For example, the Patient Protection and the ACA, intended to reduce the cost of health care, and it has substantially changed the way health care is financed by both government and private insurers.
(Roivant) collectively held as a group approximately 20% of our outstanding common shares as of March 25, 2025. 52 As a result, Roivant can significantly influence the outcome of matters requiring shareholder approval, including the election of directors, amendments of our organizational documents, or approval of any merger, sale of assets or other major corporate transaction.
(Roivant) collectively held as a group approximately 20% of our outstanding common shares as of March 18, 2026. 53 As a result, Roivant can significantly influence the outcome of matters requiring shareholder approval, including the election of directors, amendments of our organizational documents, or approval of any merger, sale of assets or other major corporate transaction.
The European Union’s GDPR, including as implemented in the United Kingdom and other data protection, privacy and similar national, state/provincial and local laws, including the EU AI Act, may restrict the access, use, storage, disclosure or other processing 45 activities concerning patient health information abroad. Compliance efforts will likely be an increasing and substantial cost in the future.
The GDPR and other data protection, privacy and similar national, state/provincial and local laws, including the EU AI Act, may restrict the access, use, storage, disclosure or other processing activities concerning patient health information abroad. Compliance efforts will likely be an increasing and substantial cost in the future.
We may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the anticipated benefits of any such transaction, any of which could have a detrimental effect on our financial condition, results of operations or cash flows.
We may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the anticipated benefits of any such transaction, any of which could have a detrimental effect on our financial condition, results of operations or cash flows. We may not be able to find suitable collaboration partners.
We are largely dependent on the future commercial success of our HBV product candidates. Our ability to generate revenues and become profitable will depend in large part on the future commercial success of our HBV product candidates, if approved.
Our ability to generate product revenues and become profitable from operations is largely dependent on the future commercial success of our HBV product candidates. Our ability to generate product revenues and become profitable from operations will depend in large part on the future commercial success of our HBV product candidates, if approved.
OMERS will retain this royalty entitlement until it has received $30 million in royalties, at which point 100% of this royalty entitlement on future global net sales of ONPATTRO will revert to us. From the inception of the royalty sale through December 31, 2024, an aggregate of $25.0 million of royalties have been collected by OMERS.
OMERS will retain this royalty entitlement until it has received $30 million in royalties, at which point 100% of this royalty entitlement on future global net sales of ONPATTRO will revert to us. From the inception of the royalty sale through December 31, 2025, an aggregate of $26.5 million of royalties have been earned by OMERS.
Further, the IRA establishes a Medicare Part B and Part D inflation rebate scheme and a drug price negotiation program, with the first negotiated prices to take effect in 2026.
Further, the IRA established a Medicare Part B and Part D inflation rebate scheme and a drug price negotiation program, with the first negotiated prices taking effect in 2026.
Each action will result in court rulings and decisions about significant issues, such as claim construction, patent validity, infringement, jurisdiction and other matters, almost all of which are subject to an appeal process that are typically lengthy and unpredictable in terms of outcome.
Each action will result in court rulings and decisions about significant issues, such as claim construction, patent validity, infringement, the affirmative defense under §1498, jurisdiction and other matters, almost all of which are subject to appeal processes that are typically lengthy and unpredictable in terms of outcome.
Even if we are able to develop compounds that address one or more of the key factors in the HBV life cycle (e.g., HBV 34 replication, HBsAg expression and immune reactivation), targeting these key factors has not been proven to functionally cure HBV.
Even if we are able to develop compounds that address one or more of the key factors in the HBV life cycle (e.g., HBV replication, HBsAg expression and immune reactivation), targeting these key factors has not been proven to functionally cure HBV. We may require substantial additional capital to fund our operations.
Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including sometimes establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits and implementing marketing cost disclosure and transparency measures.
Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including sometimes regulating how manufacturers make the 340B Drug Pricing Program ceiling price available on the market and establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits and implementing marketing cost disclosure and transparency measures.
As a significant unmet medical need exists for HBV, there are several large and small pharmaceutical companies focused on delivering therapeutics for treatment of HBV. These companies include, but are not limited to Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly, Aligos Therapeutics, Bluejay Therapeutics, Inc., AusperBio Therapeutics, Inc. and Brii Biosciences Ltd.
As a significant unmet medical need exists for HBV, there are several large and small pharmaceutical companies focused on delivering therapeutics for treatment of HBV. These companies include, but are not limited to GSK plc, Gilead Sciences, Inc., Assembly Biosciences, Inc., Aligos Therapeutics, Inc., AusperBio Therapeutics, Inc., Brii Biosciences Limited, Mirum Pharmaceuticals, Inc., and Precision Biosciences, Inc.
Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some jurisdictions outside the United States that could affect our ability to sell any future products profitably.
Additionally, there have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some jurisdictions outside the United States that could affect our ability to sell any future products profitably. These legislative and regulatory changes may negatively impact the reimbursement for any future products, following approval.
It is unclear how these executive actions or other potential actions by the presidential administration or other parts of the federal government will impact the FDA or other regulatory authorities that oversee the product development portion of our business. These budgetary pressures may reduce the FDA’s ability to perform its responsibilities.
It is not entirely clear how actions by the presidential administration or other parts of the federal government have already impacted and will continue to impact the FDA or other regulatory authorities that oversee the product development portion of our business. These budgetary pressures may reduce the FDA’s ability to perform its responsibilities.
Our approach to the treatment of HBV is unproven, and we do not know whether we will be able to develop any products of commercial value. There is no known functional cure for HBV. Any compounds that we develop may not effectively address HBV persistence.
Our future success depends in part on the successful development of these product candidates. Our approach to the treatment of HBV is unproven, and we do not know whether we will be able to develop any products of commercial value. There is no known functional cure for HBV. Any compounds that we develop may not effectively address HBV persistence.
Further, if additional capital is not available, we may need to delay, limit or eliminate our development and commercialization programs and modify our business strategy. Our principal sources of liquidity are cash, cash equivalents and investments in marketable securities, which were $122.6 million as of December 31, 2024.
Additional funds may be dilutive to shareholders or impose operational restrictions. Further, if additional capital is not available, we may need to delay, limit or eliminate our development and commercialization programs and modify our business strategy. Our principal sources of liquidity are cash, cash equivalents and investments in marketable securities, which were $91.5 million as of December 31, 2025.
We 50 do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures; • if any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we may not own, or may have to share, the intellectual property rights to such improvements; and • a third-party manufacturer may gain knowledge from working with us that could be used to supply one of our competitors with a product that competes with ours.
We do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures; • if any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we may not own, or may have to share, the intellectual property rights to such improvements; and • a third-party manufacturer may gain knowledge from working with us that could be used to supply one of our competitors with a product that competes with ours. 51 Each of these risks could delay or have other adverse impacts on our clinical trials and the approval and commercialization of our product candidates, potentially resulting in higher costs, reduced revenues or both.
Within the next several years and subject to the results of our review of our pipeline and development plans for our hepatitis B programs, substantial additional funds would be required to continue with the active development of our pipeline product candidates and technologies.
Within the next several years, substantial additional funds would be required to continue with the active development of our pipeline product candidates and technologies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHe provides regular briefings (quarterly at a minimum) to our Computer Security Incident Response Team consisting of the Chief Financial Officer and General Counsel/Chief Compliance Officer on cybersecurity matters, including threats, events, and program enhancements. 57 Board Oversight While our Board of Directors has overall responsibility for risk oversight, our Audit Committee oversees cybersecurity risk matters.
Biggest changeHe provides regular briefings (quarterly at a minimum) to our Computer Security Incident Response Team consisting of the Chief Financial Officer and General Counsel/Chief Compliance Officer on cybersecurity matters, including threats, events, and program enhancements. 58 Board Oversight While our Board of Directors has overall responsibility for risk oversight, our Audit Committee oversees cybersecurity risk matters.
As of December 31, 2024, we have not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected our business strategy, results of operations or financial condition or are reasonably likely to have such a material effect.
As of December 31, 2025, we have not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected our business strategy, results of operations or financial condition or are reasonably likely to have such a material effect.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Since November 1, 2016, we have had a lease agreement for our headquarters at 701 Veterans Circle, Warminster, Pennsylvania. The building has approximately 35,000 square feet of laboratory facilities and office space. The lease expires on April 30, 2027. We also have the option of extending the lease for two further five-year terms.
Biggest changeItem 2. Properties In the first quarter of 2025, our Board decided to exit our corporate headquarters at 701 Veterans Circle, Warminster, Pennsylvania. We have had a lease agreement for this headquarters since November 1, 2016, and the lease expires on April 30, 2027. The building has approximately 35,000 square feet of laboratory facilities and office space.
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In the first quarter of 2025, our Board decided to exit our corporate headquarters in Warminster, PA.
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Currently, all employees work remotely and are not using our headquarters.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeModerna and Merck European Opposition On April 5, 2018, Moderna and Merck, Sharp & Dohme Corporation (Merck) filed Notices of Opposition to Arbutus’ European patent EP 2279254 (the ’254 Patent) with the European Patent Office (EPO), requesting that the ‘254 Patent be revoked in its entirety for all contracting states.
Biggest changeThe complaint also includes a protective request to recover compensation from the United States for any other vaccine doses where, as a result of the Moderna §1498 Appeal, §1498 is deemed to bar our and Genevant’s claims for direct infringement and indirect infringement against Moderna. 60 Moderna and Merck European Oppositions On April 5, 2018, Moderna and Merck filed Notices of Opposition to the ’254 Patent with the EPO, requesting that the ’254 Patent be revoked in its entirety for all contracting states.
The lawsuit does not seek an injunction or otherwise seek to impede the sale, manufacture or distribution of any COVID-19 mRNA-LNP vaccines. 59 However, we seek fair compensation for Pfizer’s and BioNTech’s use of our patented technology that was developed with great effort and at great expense, without which their COVID-19 mRNA-LNP vaccines would not have been successful.
The patents relate to nucleic acid-lipid particles and their composition, manufacture, delivery and methods of use. In the lawsuit, we seek fair compensation for Pfizer’s and BioNTech’s use of our patented technology that was developed with great effort and at great expense, without which their COVID-19 mRNA-LNP vaccines would not have been successful.
Oral proceedings were held on June 6, 2024, and the Opposition Division upheld the ‘254 Patent but declined our and Genevant’s request to broaden certain claims in the ‘254 Patent.
From 2018 until 2024, various hearings were held by different divisions of the EPO regarding requests submitted by all parties. Oral proceedings were held in June 2024, and the Opposition Division of the EPO upheld the ’254 Patent but declined our and Genevant’s request to broaden certain claims in the ’254 Patent.
District Court for the District of New Jersey against Pfizer Inc. (Pfizer) and BioNTech SE (BioNTech) seeking damages for infringement of U.S. Patent Nos. 9,504,651; 8,492,359; 11,141,378; 11,298,320; and 11,318,098 in the manufacture and sale of any COVID-19 mRNA-LNP vaccines. The patents relate to nucleic acid-lipid particles and their composition, manufacture, delivery and methods of use.
Item 3. Legal Proceedings Patent Infringement Litigation vs. Pfizer and BioNTech On April 4, 2023, we and Genevant filed a lawsuit in the United States District Court for the District of New Jersey against Pfizer/BioNTech seeking damages for infringement of United States Patent Nos. 9,504,651; 8,492,359; 11,141,378; 11,298,320; and 11,318,098 in the manufacture and sale of any COVID-19 mRNA-LNP vaccines.
International: On March 3, 2025, we and Genevant filed five international lawsuits against Moderna seeking to enforce patents protecting our patented lipid nanoparticle technology.
On March 3, 2025, we and Genevant filed five international lawsuits against Moderna seeking to enforce patents protecting our patented LNP technology. Together, these lawsuits comprise the Moderna LNP Litigation. On March 3, 2026, we, Genevant, and, solely for specified purposes, Genevant Sciences Ltd., and Moderna entered into the Moderna Settlement Agreement to resolve the Moderna LNP Litigation.
Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19. The patents relate to nucleic acid-lipid particles and lipid vesicles, as well as compositions and methods for their use. The lawsuit does not seek an injunction or otherwise seek to impede the sale, manufacture or distribution of MRNA-1273.
Moderna 59 On February 28, 2022, we and Genevant filed a lawsuit in the United States District Court for the District of Delaware against Moderna seeking damages for infringement of United States Patent Nos. 8,058,069, 8,492,359, 8,822,668, 9,364,435, 9,504,651, and 11,141,378 in the manufacture and sale of MRNA-1273, Moderna’s vaccine for COVID-19.
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Item 3. Legal Proceedings Patent Infringement Litigation vs. Moderna United States: On February 28, 2022, we and Genevant filed a lawsuit in the U.S. District Court for the District of Delaware against Moderna, Inc. and a Moderna affiliate (collectively, Moderna) seeking damages for infringement of U.S.
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The claim construction hearing occurred in December 2024, and in September 2025, the court issued a claim construction ruling, which construed the disputed claim terms in a manner we generally consider to be favorable. The parties are awaiting further scheduling in the litigation. Patent Infringement Litigation vs.
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However, we seek fair compensation for Moderna’s use of our patented technology that was developed with great effort and at great expense, without which Moderna’s COVID-19 vaccine would not have been successful. On May 6, 2022, Moderna filed a partial motion to dismiss the claims “relating to Moderna’s sale and provision of COVID-19 vaccine doses to the U.S.
Added
Pursuant to the Moderna Settlement Agreement, all parties filed stipulated judgments and stipulations of dismissal for the respective courts or tribunals to enter judgment, dismiss with prejudice or withdraw (as the case may be) all claims in the Moderna LNP Litigation, except that Moderna may file the Moderna §1498 Appeal.
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Government.” On November 2, 2022, the court issued an Order denying Moderna’s motion. On February 14, 2023, the U.S. Department of Justice filed a Statement of Interest in the action.
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The Moderna §1498 Appeal is an appeal of the consent judgment entered in the District Court solely with respect to whether §1498 bars our and Genevant’s claims for direct infringement and indirect infringement against Moderna for vaccine doses that were sold to the United States Government under a particular contract and characterized by the District Court as “vaccines that did not go directly to United States Government employees.” Under the terms of the Moderna Settlement Agreement, Moderna will make an aggregate $950.0 million Noncontingent Settlement Payment to us and Genevant on or before July 8, 2026.
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On February 16, 2023, the court held an Initial 58 Pretrial Conference after which it issued an Order, dated February 16, 2023, ordering that within 14 days of the issuance of the Order, the parties and the U.S. Government were to submit letters regarding the impact of the Government’s Statement of Interest on the scheduling of the matter.
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In addition, as described in more detail in, and subject to the terms of, the Moderna Settlement Agreement, Moderna will make an additional Contingent Settlement Payment of an aggregate $1.3 billion to us and Genevant (i) if the Court of Appeals for the Federal Circuit (whether by the initial panel, upon panel rehearing or en banc ) affirms, or if there is a final non-appealable judgment that affirms, the rejection of Moderna’s affirmative defense pursuant to §1498 by the District Court in its entirety or otherwise holds that §1498 does not bar our and Genevant’s claim against Moderna as to either or both of direct infringement and indirect infringement with respect to all of the doses subject to the Moderna §1498 Appeal, or (ii) upon a failure to timely file, or voluntary dismissal of, the Moderna §1498 Appeal (any of the foregoing (clause (i) or (ii) above), an Arbutus/Genevant §1498 Victory).
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On March 10, 2023, the court reaffirmed its denial of Moderna’s motion to dismiss. On March 16, 2023, the court held a Rule 16 scheduling conference, and on March 21, 2023, the court issued a scheduling order in the matter without setting a trial date. The claim construction hearing was held on February 8, 2024.
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If an appellate ruling were to hold that §1498 bars our and Genevant’s infringement claims as to some, but not all, of the doses subject to the Moderna §1498 Appeal, the Moderna Settlement Agreement provides that Moderna will pay us and Genevant a prorated amount of the Contingent Settlement Payment, calculated based on the number of doses for which §1498 bars our and Genevant’s infringement claims as clearly articulated by the Federal Circuit or, if not clearly articulated by the Federal Circuit, as mutually agreed by the parties or determined in an accelerated binding arbitration process.
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On April 3, 2024, the court issued its opinion regarding the claims construction.
Added
Under certain circumstances, as described in more detail in, and subject to the terms of, the Moderna Settlement Agreement, if the Arbutus/Genevant §1498 Victory is subsequently overturned in Moderna’s favor in a final nonappealable decision, we and Genevant are required to return any Contingent Settlement Payment to Moderna, plus interest.
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The court agreed with both of our positions regarding the Composition of Total Lipid (‘069) Patent that: (i) the claimed molar percentage (mol. %) ranges can be met by any particle and is not limited to “finished” particles that are not subjected to further process steps; and (ii) that the claimed mol. % ranges include standard variation based on the number of significant figures recited in the claim.
Added
If, following an Arbutus/Genevant §1498 Victory, either (i) Moderna does not timely appeal such Arbutus/Genevant §1498 Victory or (ii) such Arbutus/Genevant §1498 Victory is subsequently affirmed in a final nonappealable decision, Moderna will have no further right to a potential repayment of the Contingent Settlement Payment.
Removed
The court also agreed with our position regarding the Cationic Lipid with Protonatable Tertiary Amine (‘378) Patent that there is no limitation as to the mol. % of the claimed cationic lipid.
Added
The Moderna Settlement Agreement includes mutual financial covenants to protect the payment or repayment of the Contingent Settlement Payment, as described above. The Moderna Settlement Agreement also contains customary mutual releases in favor of each of us/Genevant and Moderna in respect of the Moderna LNP Litigation.
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Regarding the Encapsulation of mRNA (‘651) Patent, the court held that “wherein at least 70% / at least 80% / about 90% of the mRNA in the formulation is fully encapsulated in the lipid vesicles” means “wherein at least 70% / at least 80% / about 90% of the mRNA is fully, as distinct from partially, contained inside the lipid vesicles”.
Added
In addition, the Moderna Settlement Agreement includes a fully paid-up, royalty free, irrevocable, non-exclusive, worldwide license and covenant not to sue granted to Moderna under any patents and patent applications owned or licensable by us or Genevant or our respective direct and indirect wholly owned subsidiaries that exist, or that claim priority to patents or patent applications that exist, as of the effective date of the Moderna Settlement Agreement, to make, sell and generally otherwise exploit Moderna’s SPIKEVAX™, mNEXSPIKE™ and mRESVIA™ vaccines and any other mRNA vaccines that include a lipid SM-102-based LNP formulation against an infectious disease and meet certain conditions, as well as a covenant not to sue with respect to certain other of our and Genevant’s patents and Moderna products.
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On August 5, 2024, we and Genevant, along with Moderna, filed the Stipulation with the court that requested an amended case schedule to accommodate certain outstanding discovery from Moderna and third parties. The court approved the amended case schedule and the start of the trial was moved from April 21, 2025 to September 24, 2025.
Added
On March 19, 2026, we and Genevant filed a complaint against the United States in the United States Court of Federal Claims, seeking to recover compensation for Moderna’s infringement for vaccine doses that were sold to the United States Government under a particular contract and were deemed by the District Court to be doses that were provided directly to United States Government employees.
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These five lawsuits target alleged infringing activities by Moderna in 30 countries, including Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland, and Turkey.
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Both parties appealed the Opposition Division’s decision, and on January 15, 2026, in a verbal decision, the Board of Appeal of the EPO revoked the ’254 Patent. A written decision is expected in the next few months.
Removed
We and Genevant are seeking monetary relief and injunctions against Moderna’s COVID-19 vaccine and, where applicable, additional Moderna products, which Moderna has represented use the same lipid nanoparticle technology as the COVID-19 vaccine, including its RSV vaccine, which recently received regulatory approval in the U.S. and European Union.
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We disagree with the outcome, and upon receipt of the written decision, we plan to file a petition for review by the Enlarged Board of Appeal of the EPO. The revocation was based on an EPO standard of “added matter” that does not apply in the United States.
Removed
Where permitted to do so at this stage, we and Genevant submitted evidence from testing of commercial Moderna product samples sourced from the U.S. and European Union indicating the samples contain lipid nanoparticles falling under the protective scope of the claims of our lipid composition patents.
Added
In March 2026, pursuant to the Moderna Settlement Agreement, Moderna withdrew from this revocation proceeding. We do not expect the EPO revocation decision to have an impact on the potential outcome, or timing, of our patent infringement litigation pending against Pfizer/BioNTech in the United States.
Removed
The five international lawsuits are as follows: • Canada: Federal Court of Canada File No.
Added
On April 29, 2025, Moderna filed a revocation action on the ’767 patent with the EPO, requesting that the patent be revoked in its entirety for all contracting states. In July 2025, Merck, Arrowhouse GmbH and Keltie LLP filed three additional revocation actions against the ’767 patent.
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T-704-25, seeking a permanent injunction and damages or, if Genevant so elects, an accounting of Moderna’s profits, attributable to infringement of Canadian Patent No. 2,721,333. • Japan: Tokyo District Court Case No. 2025 (Wa) 70079, seeking a permanent injunction and reasonable royalty for infringement of Japanese Patent No. 5,475,753. • Switzerland: a case seeking a permanent injunction and monetary relief, which upon later choice of Genevant and Arbutus can include surrender of profits, damages or a reasonable royalty, for infringement of EP 2 279 254. • Unified Patent Court (UPC): Case 10280/2025, seeking permanent and provisional injunctions, as well as monetary damages, which can include recovery of Moderna’s unfair profits, from infringement of EP 2 279 254. • UPC: Case 10280/2025, seeking permanent and provisional injunctions, as well as monetary damages, which can include recovery of Moderna’s unfair profits, from infringement of EP 4 241 767.
Added
Initial briefing has been completed and we are currently awaiting an initial hearing date. In March 2026, pursuant to the Moderna Settlement Agreement, Moderna withdrew from this revocation proceeding. While we are the patent owner, the ’254 Patent, the ’767 Patent, and the other patents in our LNP portfolio have been licensed to Genevant under the Genevant License.
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The five complaints are being served on Moderna pursuant to the service of process rules of the respective courts. To date, Moderna has not responded to any of the five international lawsuits. Patent Infringement Litigation vs. Pfizer and BioNTech On April 4, 2023, we and Genevant filed a lawsuit in the U.S.
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On July 10, 2023, Pfizer and BioNTech filed their answer to the complaint, affirmative defenses and counterclaims. We and Genevant filed our answer to these counterclaims on August 14, 2023. A scheduling conference was held on August 28, 2023 and the court issued a Letter Order on September 7, 2023 setting certain court dates.
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The claim construction hearing occurred in December 2024. The court is expected to provide its ruling on the claim construction and issue a further scheduling order, including the date for trial, in 2025. Fact discovery in the action is ongoing. Moderna Inter Partes Review Petition On February 21, 2018, Moderna Therapeutics, Inc.
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(Moderna) filed a petition requesting the United States Patent and Trademark Office to institute an Inter Partes Review of Arbutus United States Patent 9,404,127 (the ’127 Patent). In its petition, Moderna sought to invalidate all claims of the patent based on Moderna’s allegation that the claims are anticipated and/or obvious.
Removed
We filed a response to Moderna’s petition on June 14, 2018. On September 12, 2018, the Patent Trial and Appeal Board (the PTAB) rendered its decision to institute Inter Partes Review of the ‘127 Patent. The ‘127 Patent represents only a fraction of our extensive LNP patent portfolio.
Removed
With respect to the ‘127 Patent, the PTAB held all claims as invalid on September 10, 2019, by reason of anticipatory prior art. However, this decision was vacated and sent back (remanded) to the PTAB for a rehearing, pending the U.S. Supreme Court’s (Supreme Court) decision whether to grant certiorari in a different case, United States v. Athrex, Inc.
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(US v. Athrex), the holding of which could impact the findings in the ‘127 Patent matter. The Supreme Court granted certiorari in US v. Athrex on October 13, 2020 (i.e., agreed to review the decision appealed from a lower court). Until the Supreme Court rendered its opinion in US v.
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Athrex, the ‘127 Patent hearing remained in abeyance, with no decision reached as to the validity of its claims. The Supreme Court decided on the US v.
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Athrex case on June 21, 2021, following which the Federal Circuit reinstated the appeal sua sponte, requiring the parties to brief how the case should proceed in light of the Supreme Court’s opinion or for the Appellant to waive the challenge. We elected to waive the challenge and proceed with the appeal at the Federal Circuit.
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The opening brief was filed on October 25, 2021. Moderna’s responsive brief was filed on February 24, 2022 and our reply brief was filed on April 26, 2022. An oral hearing for this matter was held on November 4, 2022.
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On April 11, 2023, the Federal Circuit rendered its opinion, affirming the PTAB’s finding that all claims of the ‘127 Patent are invalid by reason of anticipation.
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We filed a response to Moderna and Merck’s oppositions on September 3, 2018. A hearing was conducted before the Opposition Division of the EPO on October 10, 2019. At the conclusion of the hearing, the EPO upheld an auxiliary request adopting the amendment, as put forth by us, of certain claims of the ‘254 Patent.
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In February 2020 Moderna and Merck filed Notices of Appeal challenging the EPO’s grant of the auxiliary request. Merck filed its notice of appeal on February 24, 2020 and Moderna on February 27, 2020. Both Merck and Moderna perfected their appeals by filing Grounds of Appeal on April 30, 2020.
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We filed our responses to the appeals on September 18, 2020. On March 22, 2022, Moderna filed further written submissions to which we and Genevant responded in August 2022. On April 18, 2023, we and Genevant withdrew our auxiliary request, however, the original (main) request remains in the action.
Removed
We and Moderna informed the Board of Appeals that we would not object to a remittance of the matter without a hearing to the Opposition Division of the EPO. The hearing in this matter before the Board of Appeals was subsequently cancelled and resubmitted to the Opposition Division (i.e., lower board) of the EPO.
Removed
On October 31, 2023, the Opposition Division issued a summons for oral proceedings and provided its preliminary and non-binding opinion on the subject matter to be discussed at the hearing.
Removed
On November 3, 2023, we responded to the summons and on January 15, 2024, Moderna and Merck filed their reply to the written opinion of the Opposition Division, as well as to our written submission of November 3, 2023. We responded to Moderna and Merck’s reply on April 5, 2024.
Removed
Both parties appealed the Opposition Division’s decision and on March 21, 2025, the Board of Appeals scheduled oral proceedings for January 15 and 16, 2026. 60 While we are the patent holder, the ‘127 Patent, the ‘254 Patent, the other patents in our LNP portfolio have been licensed to Genevant and are included in the rights licensed by us to Genevant under the Genevant License.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common shares trade on the Nasdaq Global Select Market under the symbol “ABUS”. As of March 25, 2025, there were 102 registered holders of common shares and 191,480,188 common shares issued and outstanding.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common shares trade on the Nasdaq Global Select Market under the symbol “ABUS”. As of March 18, 2026, there were 101 registered holders of common shares and 195,478,068 common shares issued and outstanding.
Recent Sales of Unregistered Securities Other than as previously disclosed on our Current Reports on Form 8-K or Quarterly Reports on Form 10-Q, we did not issue any unregistered equity securities during the twelve months ended December 31, 2024.
Recent Sales of Unregistered Securities Other than as previously disclosed on our Current Reports on Form 8-K or Quarterly Reports on Form 10-Q, we did not issue any unregistered equity securities during the twelve months ended December 31, 2025.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2024. Item 6. Reserved 62
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2025. Item 6. Reserved 62

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther income (losses) Other income (losses) for the years ended December 31, 2024 and 2023 are summarized in the following table: Year ended December 31, 2024 2023 (in thousands, except percentages) Interest income $ 6,585 103 % $ 5,688 108 % Interest expense (137) (2) % (459) (9) % Foreign exchange (loss) / gain (49) (1) % 25 — % Total other income $ 6,399 100 % $ 5,254 100 % Interest income Interest income increased $0.9 million in 2024 compared to 2023 due primarily to a general increase in market interest rates related to our investments in marketable securities.
Biggest changeIn connection with these actions, during the years ended December 31, 2025 and 2024, we recognized the following: Year ended December 31, 2025 2024 (in thousands) Severance and continuing benefits $ 6,331 $ 2,857 Non-cash stock compensation modification expense 2,483 — Non-cash impairment of leasehold improvements and laboratory equipment 2,811 167 Non-cash impairment of lease right-of-use asset 948 — Accrual of lease-related operating expenses 364 — Contract close-out costs — 696 Total restructuring charges $ 12,939 $ 3,720 Other income (losses) Other income (losses) for the years ended December 31, 2025 and 2024 are summarized in the following table: Year ended December 31, 2025 2024 (in thousands, except percentages) Interest income $ 4,068 88 % $ 6,585 103 % Gain on sale of property and equipment 674 14 % — — % Interest expense (97) (2) % (137) (2) % Foreign exchange gain / (loss) 14 — % (49) (1) % Total other income $ 4,659 100 % $ 6,399 100 % Interest income Interest income decreased $2.5 million in 2025 compared to 2024 due primarily to lower balances in our cash and investments in marketable securities. 72 Gain on sale of property and equipment In 2025, the gain on sale of property and equipment related to the sale of laboratory equipment associated with the exit of our corporate headquarters and discontinuance of in-house scientific research.
Concurrent with the execution of the License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common shares as of the close of trading on December 10, 2021 (the Share Transaction).
Concurrent with the execution of the Qilu License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common shares as of the close of trading on December 10, 2021 (the Share Transaction).
Sources of Liquidity Sale Agreement Effective March 26, 2025, we terminated our Open Market Sale Agreement SM with Jefferies dated December 20, 2018, as amended by Amendment No. 1, dated December 20, 2019, Amendment No. 2, dated August 7, 2020 and Amendment No. 3, dated March 4, 2021 (as amended, the Sale Agreement), under which we could offer and sell common shares, from time to time.
Sources of Liquidity Open Market Sale Agreement Effective March 26, 2025, we terminated our Open Market Sale Agreement SM with Jefferies dated December 20, 2018, as amended by Amendment No. 1, dated December 20, 2019, Amendment No. 2, dated August 7, 2020 and Amendment No. 3, dated March 4, 2021 (as amended, the Sale Agreement), under which we could offer and sell common shares, from time to time.
Under the Genevant License, as amended, if a third-party sublicensee of intellectual property licensed by Genevant from us commercializes a 65 sublicensed product, we become entitled to receive a specified percentage of certain revenue that may be received by Genevant for such sublicense, including royalties, commercial milestones and other sales-related revenue, or, if less, tiered low single-digit royalties on net sales of the sublicensed product.
Under the Genevant License, as amended, if a third-party sublicensee of intellectual property licensed by Genevant from us commercializes a sublicensed product, we become entitled to receive a specified percentage of certain revenue that may be received by Genevant for such sublicense, including royalties, commercial milestones and other sales-related revenue, or, if less, tiered low single-digit royalties on net sales of the sublicensed product.
In contracts where we have more than one performance obligation to provide its customer with goods or services, each performance obligation is evaluated to determine whether it is distinct based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract.
In contracts where we have more than one performance obligation to provide our customer with goods or services, each performance obligation is evaluated to determine whether it is distinct based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract.
In December 2021, we entered into a technology transfer and exclusive licensing agreement with Qilu pursuant to which we granted Qilu an exclusive (with certain exceptions), sublicensable, royalty-bearing license, under certain intellectual property owned by us, to develop, manufacture and commercialize imdusiran for the treatment or prevention of cHBV infection in Greater China and Taiwan.
In December 2021, we entered into a technology transfer and exclusive license agreement with Qilu pursuant to which we granted Qilu an exclusive (with certain exceptions), sublicensable, royalty-bearing license, under certain intellectual property owned by us, to develop, manufacture and commercialize imdusiran for the treatment or prevention of cHBV infection in Greater China and Taiwan.
The estimated stand-alone selling price of each deliverable reflects our best estimate of what the selling price would be if the deliverable was regularly sold on a stand-alone basis and is determined by reference to market rates for the good or service when sold to others or by using an adjusted market assessment approach if the selling price on a stand-alone basis is not available.
The estimated stand-alone selling 68 price of each deliverable reflects our best estimate of what the selling price would be if the deliverable was regularly sold on a stand-alone basis and is determined by reference to market rates for the good or service when sold to others or by using an adjusted market assessment approach if the selling price on a stand-alone basis is not available.
We may need to obtain funds through arrangements with collaborators or others that may require us to relinquish most or all of our rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise seek if we were better funded.
We may need to obtain funds 75 through arrangements with collaborators or others that may require us to relinquish most or all of our rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise seek if we were better funded.
(Qilu) In December 2021, we entered into a technology transfer and license agreement (the License Agreement) with Qilu, pursuant to which we granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by us, which is non-exclusive as to development and manufacturing and exclusive with respect to commercialization of imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (Greater China and Taiwan).
(Qilu) In December 2021, we entered into a technology transfer and license agreement (the Qilu License Agreement) with Qilu, pursuant to which we granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by us, which was non-exclusive as to development and manufacturing and exclusive with respect to commercialization of imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (Greater China and Taiwan).
For certain arrangements 66 under the scope of ASC 808, we analogize to ASC 606 for some aspects, including for the delivery of a good or service (i.e., a unit of account).
For certain arrangements under the scope of ASC 808, we analogize to ASC 606 for some aspects, including for the delivery of a good or service (i.e., a unit of account).
In partial consideration for the rights granted by us, Qilu paid us a one-time upfront cash payment of $40 million and made an equity investment of $15.0 million, both received in January 2022, and agreed to pay us up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and 71 commercialization milestones.
In partial consideration for the rights granted by us, Qilu paid us a one-time upfront cash payment of 74 $40 million and made an equity investment of $15.0 million, both received in January 2022, and agreed to pay us up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones.
OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if they fail to collect any such future royalties. During the term of this agreement, we recognize non-cash royalty revenue related 68 to the sales of ONPATTRO.
OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if 70 they fail to collect any such future royalties. During the term of this agreement, we recognize non-cash royalty revenue related to the sales of ONPATTRO.
The increase in the fair value of the contingent consideration in 2024 was due primarily 69 to an increase in our assessment of the probability of success of future product sales based on the positive clinical data we reported in November 2024 from our IM-PROVE I clinical trial with imdusiran, IFN and NA therapy.
The increase in the fair value of the contingent consideration in 2024 was due primarily to an increase in our assessment of the probability of success of future product sales 71 based on the positive clinical data we reported in November 2024 from our IM-PROVE I clinical trial with imdusiran, IFN and NA therapy.
Qilu is responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan. Qilu is required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.
Qilu was responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan. Qilu was required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.
Qilu also agreed to pay us double-digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan. The royalties are payable on a product-by-product and region-by-region basis, subject to certain limitations.
Qilu also agreed to pay us double-digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan. The royalties were to be payable on a product-by-product and region-by-region basis, subject to certain limitations.
Alnylam Pharmaceuticals, Inc. and Acuitas Therapeutics, Inc We have a royalty entitlement on ONPATTRO ® (Patisiran) (ONPATTRO), a drug developed by Alnylam Pharmaceuticals, Inc. (Alnylam) under a license agreement with us that incorporates our lipid nanoparticle delivery (LNP) technology.
We have a royalty entitlement on ONPATTRO (Patisiran) (ONPATTRO), a drug developed by Alnylam Pharmaceuticals, Inc. under a license agreement with us that incorporates our lipid nanoparticle delivery (LNP) technology.
Interest expense Interest expense decreased $0.3 million in 2024 compared to 2023 due primarily to a decrease in the non-cash amortization of the discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019. 70 LIQUIDITY AND CAPITAL RESOURCES Since our incorporation, we have financed our operations through the sales of equity, debt, revenues from development collaborations and licenses with corporate partners, a royalty monetization, interest income on funds available for investment, and government contracts, grants and tax credits.
Interest expense Interest expense decreased less than $0.1 million in 2025 compared to 2024 due primarily to a decrease in the non-cash amortization of the discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019. 73 LIQUIDITY AND CAPITAL RESOURCES Since our incorporation, we have financed our operations through sales of equity, debt, revenues from development collaborations and licenses with corporate partners, a royalty monetization, interest income on funds available for investment, and government contracts, grants and tax credits.
Both parties also have entered into a supply agreement and related quality agreement pursuant to which we will manufacture or have manufactured and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until we have completed manufacturing technology transfer to Qilu and Qilu has received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.
Both parties also entered into a supply agreement and related quality agreement pursuant to which we would manufacture and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until we had completed manufacturing technology transfer to Qilu and Qilu had received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.
Refer to “Item 1. Business.” and Note 11 of the Consolidated Financial Statements for a discussion of our clinical collaborations and other royalty entitlements. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The accounting for our contingent consideration is a significant accounting policy that we believe is critical in fully understanding and evaluating our financial results.
Business.” and Note 11 of the Consolidated Financial Statements for a discussion of our clinical collaborations and other royalty entitlements. 67 CRITICAL ACCOUNTING POLICIES AND ESTIMATES The accounting for our contingent consideration is a significant accounting policy that we believe is critical in fully understanding and evaluating our financial results.
From the inception of the royalty sale through December 31, 2024, we have recorded an aggregate of $25.0 million of non-cash royalty revenue for royalties earned by OMERS. If this royalty entitlement reverts to us, it has the potential to provide an active royalty stream or to be otherwise monetized again in full or in part.
From the inception of the royalty sale through December 31, 2025, we have recorded an aggregate of $26.5 million of non-cash royalty revenue for royalties earned by OMERS. If this royalty entitlement reverts to us, it has the potential to provide an active royalty stream or to be otherwise monetized again in full or in part.
The change in the fair value of our Contingent Consideration is driven by fair value adjustments for the passage of time, the discount rate, the progression of our programs through clinical trials and our assessment of the probability, timing and extent of future product sales, resulting in an increase of $2.6 million and $0.1 million, in 2024 and 2023, respectively.
The change in the fair value of our contingent consideration is driven by fair value adjustments for the passage of time, the discount rate, the progression of our programs through clinical trials and our assessment of the probability, timing and extent of future product sales, resulting in a decrease of $1.8 million and an increase of $2.6 million in 2025 and 2024, respectively.
From the inception of the royalty sale through December 31, 2024, we have recorded an aggregate of $25.0 million of non-cash royalty revenue for royalties earned by OMERS. The royalty interest for ONPATTRO from Acuitas was not part of the royalty sale to OMERS and we have retained the rights to receive those royalties.
From the inception of the royalty sale through December 31, 2025, we have recorded an aggregate of $26.5 million of non-cash royalty revenue for royalties earned by OMERS. The royalty interest for ONPATTRO from Acuitas was not part of the royalty sale to OMERS and we have retained the rights to receive those royalties.
A joint development committee has been established between us and Qilu to coordinate and review the development, manufacturing and commercialization plans.
A joint development committee was established between us and Qilu to coordinate and review the development, manufacturing and commercialization plans.
We also have rights to a second, lower royalty interest on global net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas Therapeutics, Inc. (Acuitas). The royalty entitlement from Acuitas has been retained by us and was not part of the royalty entitlement sale to OMERS. Genevant Sciences, Ltd.
We also are receiving a second, lower royalty interest on global net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas Therapeutics, Inc. The royalty entitlement from Acuitas has been retained by us and was not part of the royalty entitlement sale to OMERS.
In particular, our funding needs may vary depending on a number of factors including: • the results of the review of our pipeline and development plans for our hepatitis B programs; • costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matters against Moderna and Pfizer/BioNTech; • revenue earned from our legacy collaborative partnerships and licensing agreements, including potential royalty payments from Alnylam’s ONPATTRO; • revenue earned from ongoing collaborative partnerships, including milestone and royalty payments; • the potential requirement to make milestone payments related to our legacy agreements; • the extent to which we continue the development of our product candidates, add new product candidates to our pipeline, or form collaborative relationships or licensing arrangements to advance our product candidates; • delays in the development of our product candidates due to preclinical and clinical findings; • our decisions to in-license or acquire additional products, product candidates or technology for development; • our ability to attract and retain development or commercialization partners, and their effectiveness in carrying out the development and ultimate commercialization of one or more of our product candidates; • whether batches of product candidates that we manufacture fail to meet specifications resulting in clinical trial delays and investigational and remanufacturing costs; • the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and product candidates; and • competing products, product candidates and technological and market developments.
In particular, our funding needs may vary depending on a number of factors including: • costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matter against Pfizer/BioNTech, the Moderna §1498 Appeal (if filed by Moderna), and our lawsuit against the United States; • a potential return of capital to our shareholders in connection with proceeds from the Moderna Settlement Agreement; • revenue earned from our legacy collaborative partnerships and licensing agreements, including potential royalty payments from Alnylam’s ONPATTRO; • revenue earned from ongoing collaborative partnerships, including milestone and royalty payments; • the potential requirement to make milestone payments related to our legacy agreements; • the extent to which we continue the development of our product candidates, add new product candidates to our pipeline, or form collaborative relationships or licensing arrangements to advance our product candidates; • delays in the development of our product candidates due to preclinical and clinical findings; • our decisions to in-license or acquire additional products, product candidates or technology for development; • our ability to attract and retain development or commercialization partners, and their effectiveness in carrying out the development and ultimate commercialization of one or more of our product candidates; • whether batches of product candidates that we manufacture fail to meet specifications resulting in clinical trial delays and investigational and remanufacturing costs; • the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and product candidates; and • competing products, product candidates and technological and market developments.
Royalty Entitlements Additionally, we have a royalty entitlement on ONPATTRO, a drug developed by Alnylam that incorporates our LNP technology and was approved by the FDA and the EMA during the third quarter of 2018 and was launched by Alnylam immediately upon approval in the United States.
Royalty Entitlements We have a royalty entitlement on ONPATTRO, a drug developed by Alnylam that incorporates our LNP technology and was approved by the United States Food and Drug Administration and the European Medicines Agency during the third quarter of 2018 and was launched by Alnylam immediately upon approval in the United States.
Net cash provided by investing activities in 2024 decreased $27.8 million compared to 2023, due primarily to the timing of acquisitions and maturities of investments in marketable securities.
Net cash provided by investing activities in 2025 decreased $7.4 million compared to 2024, due primarily to the timing of acquisitions and maturities of investments in marketable securities.
We did not utilize any of the December 2024 prospectus supplement pursuant to the Sale Agreement prior to the termination of the Sale Agreement. During the years ended December 31, 2024 and 2023, we issued 16,499,999 and 12,020,257 common shares, respectively, under the Sale Agreement resulting in net proceeds of approximately $44.1 million and $29.9 million, respectively.
We did not utilize any of the December 2024 Prospectus Supplement pursuant to the Sale Agreement prior to the termination of the Sale Agreement. During the year ended December 31, 2024, we issued 16,499,999 common shares under the Sale Agreement resulting in net proceeds of approximately $44.1 million.
A significant portion of our research and development expenses are not tracked by project, as they benefit multiple projects or our overall technology platform. General and administrative General and administrative expenses decreased $0.4 million in 2024 compared to 2023, due primarily to decreases in employee compensation-related expenses, partially offset by an increase in litigation-related legal fees.
A significant portion of our research and development expenses are not tracked by project, as they benefit multiple projects or our overall technology platform. General and administrative General and administrative expenses decreased $6.2 million in 2025 compared to 2024, due primarily to a decrease in employee compensation-related expenses and a decrease in litigation-related legal fees.
OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and Arbutus is not obligated to reimburse OMERS if they fail to collect any such future royalties.
OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if it fails to collect any such future royalties.
Business.” Operating expenses Operating expenses for the years ended December 31, 2024 and 2023 are summarized in the following table: Year ended December 31, 2024 2023 (in thousands, except percentages) Research and development $ 54,037 66 % $ 73,700 77 % General and administrative 22,108 27 % 22,475 23 % Change in fair value of contingent consideration 2,625 3 % 69 — % Restructuring costs 3,720 5 % — — % Total operating expenses $ 82,490 100 % $ 96,244 100 % Research and development Research and development expenses consist primarily of personnel expenses, fees paid to clinical research organizations and contract manufacturers, consumables and materials, consulting, and other third-party expenses to support our clinical development activities, as well as a portion of stock-based compensation and general overhead costs.
Business.” Operating expenses Operating expenses for the years ended December 31, 2025 and 2024 are summarized in the following table: Year ended December 31, 2025 2024 (in thousands, except percentages) Research and development $ 25,241 49 % $ 54,037 65 % General and administrative 15,893 30 % 22,108 27 % Change in fair value of contingent consideration (1,830) (4) % 2,625 3 % Restructuring costs 12,939 25 % 3,720 5 % Total operating expenses $ 52,243 100 % $ 82,490 100 % Research and development Research and development expenses consist primarily of personnel expenses, fees paid to clinical research organizations and contract manufacturers, consumables and materials, consulting, and other third-party expenses to support our clinical development activities, as well as a portion of stock-based compensation and general overhead costs.
We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuits against Moderna Therapeutics, Inc. (Moderna) and against Pfizer Inc. and BioNTech SE (collectively, Pfizer/BioNTech) for their use of our patented LNP delivery technology in their COVID-19 mRNA-LNP vaccines.
We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuit against Pfizer Inc. and BioNTech SE (collectively, Pfizer/BioNTech) for their use of our patented lipid nanoparticle (LNP) technology in their COVID-19 messenger ribonucleic acid interference (mRNA)-LNP vaccines.
We believe that a combination of compounds that can suppress hepatitis B virus deoxyribonucleic acid (HBV DNA) replication and hepatitis B surface antigen (HBsAg) expression as well as boost patients’ HBV-specific immune response could address the most important elements to achieving a functional cure.
Development to date has emphasized a combination of compounds that can suppress hepatitis B virus deoxyribonucleic acid (HBV DNA) replication, hepatitis B virus RNA (HBV RNA) transcription, and hepatitis B surface antigen (HBsAg) and other viral protein expression, as well as boost patients’ HBV-specific immune response, which together could address the most important elements to achieving a functional cure.
In the future and subject to the completion of our review of our pipeline and development plans for our hepatitis B programs, substantial additional funds would be required to continue with the active development of our pipeline products and technologies.
In the future, substantial additional funds would be required to continue with the active development of our pipeline products and technologies.
Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling price of identified performance obligations, and estimating the progress towards satisfaction of performance obligations. 67 RESULTS OF OPERATIONS The following summarizes our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023: Year Ended December 31, 2024 2023 (in thousands) Revenue $ 6,171 $ 18,141 Operating expenses 82,490 96,244 Loss from operations (76,319) (78,103) Other income 6,399 5,254 Loss before income taxes (69,920) (72,849) Income tax expense — — Net loss $ (69,920) $ (72,849) For the fiscal year ended December 31, 2024, our net loss attributable to common shares was $69.9 million, or a loss of $0.38 per basic and diluted common share, as compared to a net loss of $72.8 million, or a loss of $0.44 per basic and diluted common share, for the year ended December 31, 2023.
Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling price of identified performance obligations, and estimating the progress towards satisfaction of performance obligations. 69 RESULTS OF OPERATIONS The following summarizes our results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024: Year Ended December 31, 2025 2024 (in thousands) Revenue $ 14,083 $ 6,171 Operating expenses 52,243 82,490 Loss from operations (38,160) (76,319) Other income 4,659 6,399 Net loss $ (33,501) $ (69,920) For the fiscal year ended December 31, 2025, our net loss attributable to common shares was $33.5 million, or a loss of $0.17 per basic and diluted common share, as compared to a net loss of $69.9 million, or a loss of $0.38 per basic and diluted common share, for the year ended December 31, 2024.
Our strategy is focused on maximizing opportunities for our cHBV development programs and our in-house developed LNP delivery technology. LNP delivery technology On February 28, 2022 and April 4, 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.
LNP technology 63 In February 2022 and April 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.
Revenue Revenue for the years ended December 31, 2024 and 2023 is summarized in the following table: Year ended December 31, 2024 2023 (in thousands, except percentages) Revenue from collaborations and licenses Royalties from sales of Onpattro $ 2,562 41 % $ 3,608 20 % Qilu Pharmaceutical Co., Ltd. 1,357 22 % 10,666 59 % Non-cash royalty revenue Royalties from sales of Onpattro 2,252 36 % 3,867 21 % Total revenue $ 6,171 100 % $ 18,141 100 % Revenue consists mainly of license revenue and royalties received from other companies for sales of products that utilize our licensed technologies.
Revenue Revenue for the years ended December 31, 2025 and 2024 is summarized in the following table: Year ended December 31, 2025 2024 (in thousands, except percentages) Revenue from collaborations and licenses Royalties from sales of ONPATTRO $ 1,667 12 % $ 2,562 42 % Qilu Pharmaceutical Co., Ltd. 10,434 73 % 1,357 22 % Other milestone and royalty payments 500 4 % — — % Non-cash royalty revenue Royalties from sales of ONPATTRO 1,482 11 % 2,252 36 % Total revenue $ 14,083 100 % $ 6,171 100 % Revenue consists mainly of license revenue and royalties received from other companies for sales of products that utilize our licensed technologies.
With this technology, the RNA can travel through the human body to a target cell and through the target cell’s membrane before releasing the RNA. Without this crucial delivery technology, the RNA would quickly degrade in the body and be ineffective.
This technology enables the mRNA to travel through the human body to a target cell and through the target cell’s membrane, where it releases the mRNA. Without this crucial technology, the mRNA would quickly degrade in the body and be ineffective.
(Genevant), a company we launched with Roivant Sciences, Ltd. and to which we licensed rights to our lipid nanoparticle (LNP) and ligand conjugate delivery platforms outside of HBV, except to the extent certain rights had already been licensed to other third parties (the Genevant License). We retained all rights to our LNP and conjugate delivery platforms for HBV.
In connection with the launch of Genevant, we entered into the Genevant License where we licensed rights to our LNP and ligand conjugate delivery platforms to Genevant outside of HBV, except to the extent certain rights had already been licensed to other third parties. We retained all rights to our LNP and conjugate delivery platforms for HBV.
AB-101 is our proprietary oral PD-L1 inhibitor that has the potential to reawaken patients’ HBV-specific immune response by inhibiting PD-L1. AB-101 is currently in a Phase 1a/1b clinical trial (AB-101-001) evaluating the safety, tolerability, pharmacokinetics, and pharmacodynamics of single- and multiple-ascending oral doses in healthy subjects and patients with cHBV infection.
AB-101 is currently in a Phase 1a/1b clinical trial (AB-101-001) evaluating the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses in healthy subjects and patients with cHBV infection.
As of December 31, 2024, we had total cash, cash equivalents and investments in marketable securities of $122.6 million, of which $36.3 million was cash and cash equivalents and $86.3 million was investments in marketable securities. We had no outstanding debt as of December 31, 2024.
As of December 31, 2025, we had total cash, cash equivalents and investments in marketable securities of $91.5 million, of which $18.0 million was cash and cash equivalents and $73.5 million was investments in marketable securities. We had no outstanding debt as of December 31, 2025.
During 2024, we streamlined the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101, and therefore ceased all discovery efforts, discontinued our IM-PROVE III clinical trial and reduced our workforce by 40%.
For more information, see “Item 1 – Business – Other Collaborations, Royalty Entitlements and Intellectual Property Litigation” and “Item 3 – Legal Proceedings.” During 2024, we streamlined the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101, and therefore ceased all discovery efforts, halted preparations for a potential IM-PROVE III clinical trial and reduced our workforce by 40%.
It is well established in the scientific literature that the most significant technological hurdle to developing and deploying medicines using mRNA is engineering a safe and effective way to deliver the mRNA to human cells.
It is well established in the scientific literature that the most significant technological hurdle to developing and deploying medicines using mRNA is engineering a safe and effective way to deliver the mRNA to human cells. Scientists at Arbutus and Genevant have spent years developing and refining LNP technology, which has been licensed for various applications to many different third parties.
Our product pipeline consists of the following programs: Over 250 patients with cHBV infection have been dosed with imdusiran in our Phase 1 and Phase 2a clinical trials.
Functional cure is defined as sustained HBsAg seroclearance and HBV DNA less than the lower limit of quantification ( Our product pipeline consists of the following programs: 64 Over 200 patients with cHBV infection have been dosed with imdusiran in Phase 1 and Phase 2a clinical trials.
We are currently developing imdusiran (AB-729), our proprietary, conjugated GalNAc, subcutaneously-delivered RNAi therapeutic, and AB-101, our proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV). Through our ownership stake in and our license to Genevant Sciences, Ltd (Genevant), we are also focused on maximizing opportunity for our in-house developed Lipid Nanoparticle (LNP) delivery technology.
We are currently developing imdusiran (AB-729), our proprietary, GalNAc-conjugated, subcutaneously-delivered ribonucleic acid interference (RNAi) therapeutic, and AB-101, our proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).
Insufficient financing may also mean failing to prosecute our patents or relinquishing rights to some of our technologies that we would otherwise develop or commercialize. 72 Cash Flows The following table summarizes our cash flow activities for the periods indicated: Year ended December 31, 2024 2023 (in thousands) Net loss $ (69,920) $ (72,849) Non-cash items 7,899 5,146 Change in deferred license revenue (1,357) (10,664) Net change in operating items (1,472) (7,569) Net cash used in operating activities $ (64,850) $ (85,936) Net cash provided by investing activities 22,948 50,773 Issuance of common shares pursuant to the Open Market Sale Agreement 44,123 29,852 Other financing activities 7,873 795 Net cash provided by financing activities $ 51,996 $ 30,647 Effect of foreign exchange rate changes on cash and cash equivalents (49) 25 Increase / (decrease) in cash and cash equivalents $ 10,045 $ (4,491) Cash and cash equivalents, beginning of period 26,285 30,776 Cash and cash equivalents, end of period $ 36,330 $ 26,285 Net cash used in operating activities in 2024 decreased $21.1 million compared to 2023 due primarily to a decrease in research and development expenses related to our HBV pipeline prioritization and the timing of payments to vendors.
Cash Flows The following table summarizes our cash flow activities for the periods indicated: Year ended December 31, 2025 2024 (in thousands) Net loss $ (33,501) $ (69,920) Non-cash items 3,887 7,899 Change in deferred license revenue (10,434) (1,357) Net change in operating items 411 (1,472) Net cash used in operating activities $ (39,637) $ (64,850) Net cash provided by investing activities 15,580 22,948 Issuance of common shares pursuant to the Open Market Sale Agreement — 44,123 Other financing activities 5,721 7,873 Net cash provided by financing activities $ 5,721 $ 51,996 Effect of foreign exchange rate changes on cash and cash equivalents 14 (49) (Decrease) / increase in cash and cash equivalents $ (18,322) $ 10,045 Cash and cash equivalents, beginning of period 36,330 26,285 Cash and cash equivalents, end of period $ 18,008 $ 36,330 Net cash used in operating activities in 2025 decreased $25.2 million compared to 2024 due primarily to our decisions to cease all discovery efforts, halt preparations for a potential IM-PROVE III clinical trial, and decrease our workforce to further streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101.
Additionally, our Board took action to reduce our workforce by an additional 57% resulting in a total workforce after reductions of 19 employees. Our Board also decided to exit our corporate headquarters in Warminster, PA and to discontinue in-house scientific research.
Additionally, our Board took action to reduce our workforce by an additional 57%. Our Board also decided to exit our corporate headquarters in Warminster, Pennsylvania and to discontinue in-house scientific research. In connection with these actions, we incurred one-time restructuring charges during 2025 of $12.9 million.
Net cash provided by financing activities in 2024 increased $21.3 million compared to 2023 due primarily to a $14.2 million increase in proceeds from sales of common shares under the Sale Agreement and an increase in proceeds from employee stock option exercises.
Net cash provided by financing activities in 2025 decreased $46.3 million compared to 2024, due primarily to the $44.1 million in proceeds from sales of common shares pursuant to the Sale Agreement in 2024 that were not recurring in 2025.
Qilu also agreed to pay us double digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan. Cash requirements With the organizational changes announced during the first quarter of 2025, and our ongoing cost management efforts, we expect to significantly reduce our net cash burn in 2025 when compared to 2024.
Qilu also agreed to pay us double digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan. In June 2025, we and Qilu mutually agreed to conclude our strategic partnership, and we now once again hold global rights for imdusiran.
Research and development expenses decreased $19.7 million in 2024 compared to 2023 due primarily to: i) a decrease in clinical expenses related to the discontinuation of our coronavirus and AB-161 programs during the fourth quarter of 2023; ii) a decrease in research activities and preclinical study costs for AB-101 which is now in a Phase 1a/1b clinical trial; and iii) cost savings from our decision in August 2024 to streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101, which included ceasing all discovery efforts, discontinuing our IM-PROVE III clinical trial and reducing our workforce by 40%.
Research and development expenses decreased $28.8 million in 2025 compared to 2024 due primarily to our decision to cease all discovery efforts, halt preparations for a potential IM-PROVE III clinical trial, implement reductions in our workforce to streamline the organization, and to focus our efforts on advancing the clinical development of imdusiran and AB-101.
Parts 1 and 2 of this clinical trial enrolled sequential cohorts of healthy subjects receiving single and multiple doses, respectively, of AB-101 at increasing dose levels. The data showed that AB-101 was generally well-tolerated with evidence of dose-dependent receptor occupancy.
The data from healthy subjects in Parts 1 and 2 and cHBV patients in Part 3 of this clinical trial have shown that AB-101 was generally well-tolerated with evidence of high receptor occupancy. 65 Collaborations and Royalty Entitlements Collaboration with Qilu Pharmaceutical Co., Ltd.
Scientists at Arbutus and Genevant have spent years developing and refining LNP delivery technology, which has been licensed for various applications to many different third parties. Our and Genevant’s LNP technology relies on microscopic particles built from four carefully selected types of fat-like molecules to shelter and protect RNA molecules.
Our and Genevant’s LNP technology relies on microscopic particles built from four carefully selected types of fat-like molecules to shelter and protect nucleic acid molecules, including ribonucleic acid (RNA) molecules like the messenger RNA (mRNA) utilized in COVID-19 mRNA-LNP vaccines.
Restructuring Effective August 1, 2024, we ceased all discovery efforts and discontinued our IM-PROVE III clinical trial to streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101. In taking these steps, we implemented a 40% reduction in our workforce, primarily affecting the discovery and general and administrative functions.
Refer to Note 10 to our consolidated financial statements for a discussion of the assumptions related to this contingency. Restructuring In both 2024 and 2025, we implemented changes to focus our efforts on advancing the clinical development of imdusiran and AB-101 by ceasing all discovery efforts, implementing workforce reductions, and halting preparations for a potential IM-PROVE III clinical trial.
In connection with these actions, we expect to incur a one-time restructuring charge in the first quarter of 2025 of approximately $11 million to $13 million. With these organizational changes and our ongoing cost management efforts, we expect to significantly reduce our net cash burn in 2025 when compared to 2024.
With these organizational changes and our ongoing cost management efforts, we significantly reduced our net cash burn in 2025 when compared to 2024. In June 2025, we launched a new Scientific Advisory Board (SAB) consisting of globally-recognized leaders in the treatment of cHBV with extensive experience in late-stage clinical trials.
Total revenue decreased $12.0 million for the year ended December 31, 2024 compared to 2023, due primarily to: i) a $9.3 million decrease in revenue recognition of the upfront license fee we received from Qilu in 2022 as less effort was required from us in 2024 compared to 2023 to support Qilu’s progress towards achieving their own imdusiran manufacturing capability; and ii) a $2.7 million decrease in license royalty revenue from Alnylam and Acuitas due to lower sales of Alnylam’s ONPATTRO in 2024 compared to 2023 primarily due to Alnylam’s next generation RNAi product AMVUTTRA (vutrisiran) cannibalizing sales of ONPATTRO .
This increase was partially offset by a $1.7 million decrease in license royalty revenue from Alnylam and Acuitas related to lower sales of Alnylam’s ONPATTRO in 2025 compared to 2024 primarily due to Alnylam’s next generation RNAi product AMVUTTRA (vutrisiran) cannibalizing sales of ONPATTRO.
The court is expected to provide its ruling on the claim construction and issue a further scheduling order, including the date for trial, in 2025. cHBV programs Our current HBV strategy is to develop a functional cure for patients with cHBV infection with imdusiran as a potential cornerstone in a combination therapy.
We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuit against Pfizer/BioNTech for their use of our patented LNP technology in their COVID-19 mRNA-LNP vaccines. cHBV programs Our hepatitis B (HBV) strategy has been to develop a functional cure for patients with cHBV infection with imdusiran as a potential cornerstone in a combination therapy.
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With respect to the Moderna lawsuit in the United States, a trial date has been set for September 24, 2025. On March 3, 2025, we announced that, along with Genevant, we have filed five international lawsuits against Moderna in connection with their use of our LNP technology in their COVID-19 mRNA-LNP and RSV vaccines.
Added
The court issued a claim construction ruling in September 2025, which construed the disputed claim terms in a manner we generally consider to be favorable. The parties are awaiting further scheduling in the litigation.
Removed
With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred in December 2024. The court is expected to provide its ruling on the claim construction and issue a further scheduling order, including the date for trial, in 2025.
Added
On March 3, 2026, we, along with Genevant Sciences GmbH and its parent (collectively, Genevant), entered into a settlement agreement (the Moderna Settlement Agreement) to resolve all patent infringement litigation and patent revocation proceedings involving Moderna, Inc. and its affiliates (collectively, Moderna) pending in the United States and internationally (the Moderna LNP Litigation).
Removed
Our new Board and management team are reviewing our pipeline and development plans for our hepatitis B programs. To assist with this review, we are currently retaining experts in virology, hepatitis B, and in the clinical development and approval of antiviral treatments. We expect to provide a further update once our review is complete.
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Under the terms of the Moderna Settlement Agreement, Moderna will make an aggregate $950.0 million noncontingent lump sum payment (the Noncontingent Settlement Payment) to us and Genevant on or before July 8, 2026.
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We remain committed to taking all legal actions necessary to defend and protect our intellectual property. 63 With respect to the Moderna lawsuit, the claim construction hearing occurred on February 8, 2024.
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In addition, Moderna is obligated to pay us and Genevant an additional aggregate contingent lump sum payment of $1.3 billion (the Contingent Settlement Payment) upon a ruling that is favorable to us and Genevant in a limited appeal related to 28 U.S.C. §1498 (§1498) that Moderna is allowed to file pursuant to the Moderna Settlement Agreement (the Moderna §1498 Appeal).
Removed
On April 3, 2024, the court provided its claim construction ruling in which it construed the disputed claim terms and agreed with our position on most of the disputed claim terms. A trial date for the Moderna lawsuit in the United States has been set for September 24, 2025.
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Under our license with Genevant, we are entitled to receive, after deduction of litigation costs, 20% of the Noncontingent Settlement Payment. In addition, as of the date of this annual report, we own approximately 16% of the outstanding common equity of Genevant.
Removed
On March 3, 2025, we announced that, along with Genevant, we have filed five international lawsuits against Moderna in connection with their use of our LNP technology in their COVID-19 mRNA-LNP and RSV vaccines. With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred in December 2024.
Added
We are currently evaluating a return of capital to our shareholders in the third quarter of calendar year 2026, following the receipt of our portion of the Noncontingent Settlement Payment.
Removed
Functional cure is defined as sustained HBsAg loss and HBV DNA less than the lower limit of quantification 24 weeks off treatment, with or without anti-hepatitis B surface antibodies (anti-HBs).
Added
SAB members are advising us on the strategic evaluation of our cHBV pipeline. In August 2025, we announced changes to our Board. Effective August 4, 2025, Anuj Hasija resigned from our Board due to his transition to a full-time executive role at another company that precludes his participation on our Board and other boards of directors. Dr.
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By providing a functional cure for patients with cHBV, we aim to prevent complications of disease progression, to decrease HBV burden by minimizing patient stigma and address the need for finite and more efficacious HBV treatments that further improve long-term outcomes and reduce associated healthcare costs.
Added
Roger Sawhney was appointed to the vacant seat on our Board, effective August 4, 2025. Dr. Sawhney was also appointed as a member of our Board’s Audit Committee and Corporate Governance and Nominating Committee. Our strategy is focused on maximizing opportunities for our cHBV development programs and, through our exclusive license with Genevant, our in-house developed LNP delivery technology.
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Data from our IM-PROVE I Phase 2a clinical trial showed that six doses of imdusiran and 24 weeks of pegylated interferon alfa-2α (IFN), a standard-of-care immunomodulator, added to ongoing nucleoside analogue (NA) therapy led to a functional cure rate of 50% (3/6) in HBeAg-negative patients with baseline HBsAg levels less than 1000 IU/mL, and an overall functional cure rate of 25% (3/12).
Added
Clinical data generated thus far has shown imdusiran provides meaningful reductions in HBsAg and other viral proteins, HBV DNA and HBV RNA, and leads to functional cure in some patients, while being generally safe and well-tolerated. Benefits were observed in patients across all evaluated HBV genotypes (A to E).
Removed
Those patients that achieved a functional cure also seroconverted with high anti-HB levels. These data from the IM-PROVE I trial suggest that the combination of imdusiran, 24 weeks of IFN and ongoing NA therapy was generally safe and well-tolerated. We are reviewing our pipeline and development plans for our hepatitis B programs.
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In the Phase 1 and Phase 2a clinical trials, eight patients achieved functional cure, off all treatment, in combination therapy that includes imdusiran, including two patients who did not receive any pegylated interferon alfa-2a (IFN) as part of the combination therapy.
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We have moved into Part 3 of this clinical trial which evaluates repeat doses of AB-101 for 28 days in patients with cHBV. Next steps for AB-101 will be determined after we complete our review of our pipeline and development plans for our hepatitis B programs. 64 Collaborations and Royalty Entitlements Qilu Pharmaceutical Co., Ltd.
Added
An additional 41 patients across our Phase 2a clinical trials were able to remain off nucleos(t)ide analogue (NA) therapy for at least 48 weeks after discontinuing NA therapy during their Phase 2a clinical trials.
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As of December 31, 2024, we owned approximately 16% of the common equity of Genevant Sciences Ltd.
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A total of 47% (49/105) of all Phase 2a patients achieved functional cure or remained off NA therapy after discontinuing NA therapy during their Phase 2a clinical trials.

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