Arbutus Biopharma Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 1, 2024

There are 9 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Arbitis Biopharma 2024 2nd Quarter Financial Results and Corporate Update. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to your first speaker today, Lisa Capparelli, Vice President of Investor Relations. Please go ahead.

Speaker 1

Thank you, Jill. Good morning, everyone, and thank you for joining Arbutus' 2nd quarter 2024 financial results and corporate update call. Joining me today from the Arbutus executive team are Mike McElholl, Interim President and Chief Executive Officer Doctor. Karen Sims, Chief Medical Officer Dave Hastings, Chief Financial Officer and Doctor. Mike Sofia, Chief Scientific Officer.

Speaker 1

Mike McElholl will begin with a corporate update, followed by Karen, who will review our ongoing clinical programs. Dave will then provide a review of the company's Q2 2024 financial results. After our prepared remarks, we will open the call for Q and A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward looking statements, which are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our annual report on Form 10 ks, our quarterly report on Form 10 Q, which we filed today and from time to time in other documents filed with the SEC. With that, I'll turn the call over to Mike McElholl.

Speaker 1

Mike?

Speaker 2

Good morning, everyone, and thank you for joining us today. In the Q2 of 2024, we made significant advancements in our pursuit of developing a functional cure for patients with hepatitis D and driving value for our company and shareholders. Most importantly, we presented positive data from 2 Phase 2a clinical trials combining our RNAi therapeutic, imduceran, with different immunomodulators. Both of these data sets support the continued development of imduceran as a cornerstone in an HBV functional cure treatment regimen. Of note, the IMPROVE-one clinical trial demonstrated undetectable hepatitis B surface antigen in 33% of patients from Cohort A1 who were treated with 48 weeks of imduceran and 24 weeks of interferon.

Speaker 2

More importantly, 67 percent of those patients with baseline surface antigen less than 1,000 international units per mL had undetectable hepatitis B surface antigen. In addition, 6 patients, 4 from Cohort A1 and 2 from Cohort A2, who achieved undetectable surface antigen after receiving indusiran plus 24 weeks of interferon, stopped all therapy and maintained undetectable surface antigen and HBV DNA in early follow-up, a precursor to a functional cure. To put this in context, if these 6 patients continue to maintain undetectable levels of HBV DNA and surface antigen for 24 weeks while off all therapy, they would be considered functionally cured. We look forward to following the trajectory of these patients and potentially achieving our goal of reaching a functional cure rate that is equal to or greater than 20%, a goal that aligns with a number of KOLs in the HBV field. We are now prioritizing advancing indusiran into Phase 2b clinical development and preparations are ongoing.

Speaker 2

In addition to the follow-up data from the patients from IMPROVE-one that are trending towards a functional cure, we expect to report preliminary data from the nivolumab arm of the IMPROVE-two trial evaluating imduciran plus VTP-three hundred in the second half of this year. As a reminder, IMPROVE-two includes an additional cohort of patients who received imduceran plus nucleoside analog therapy for 24 weeks, followed by VTP-three hundred plus up to 2 low doses of nivolumab and approved anti PD-one monoclonal antibody. Because we are now focused on advancing imiduceran into Phase 2b clinical development and ensuring we have the resources to do so, we have made the difficult decision to further streamline the company by eliminating our HBV discovery efforts. These actions will result in a reduction in workforce of 40%, affecting our discovery research and G and A functions. We know changes that impact our people are not easy and we are committed to providing our departing employees with support as they transition to their next roles.

Speaker 2

At the same time, we are confident that Arbutus remains well positioned for the future. I want to emphasize how grateful we are to all our employees, especially those departing for their dedication and passion in developing novel therapeutics that may lead to a functional cure in hepatitis B. In addition to eliminating our research discovery efforts, we have also decided prior to dosing any patients to discontinue our recently initiated IMPROVE-three trial, also known as AB729203, which was a Phase 2a trial evaluating the addition of durvalumab to imduciran. Our decision to discontinue the IMPROVE III clinical trial is not related to any concerns regarding imduciran or our belief that the addition of controlled checkpoint inhibition may be a key component of a functional cure regimen. The decision was based solely on prioritization of resources for the advancement of midusiran into a Phase 2b clinical trial and the projected availability of IMPROVE-three clinical data given the advancement of AV-one hundred and one through Phase 1 clinical development.

Speaker 2

I want to emphasize that our decision to discontinue this clinical trial has no impact on our oral small molecule PD L1 checkpoint inhibitor, AB101, that is differentiated from checkpoint antibodies and is currently in a Phase 1a1b clinical trial. Recall, AB101 is liver centric and in preclinical studies had typical small molecule pharmacokinetics and therefore likely a much shorter duration of effect than long acting antibodies. These features were designed with the goal of minimizing systemic exposures and reducing the chance of immune related adverse events that are often seen with checkpoint antibodies. It is for these reasons that we continue to remain excited about the potential of AB101 in hepatitis B and are continuing to evaluate multiple ascending doses of AB101 in healthy subjects in our Phase 1a1b clinical trial. Importantly, the actions today have allowed us to extend our projected cash runway into the Q4 of 2026.

Speaker 2

Before I turn the call over to Karen, I would like to provide a brief update on the litigation with Moderna and Pfizer BioNTech around our LNP intellectual property. In the Moderna case, next steps include expert reports and expert depositions. The court has set April 21, 2025 is a trial date for this case, which is of course subject to change. The Pfizer BioNTech lawsuit is ongoing with no updates at this time. With that, I'll now turn the call over to Karen to review the data we presented at EASL.

Speaker 2

Karen?

Speaker 3

Thanks, Mike, and good morning, everyone. The end of treatment data we reported at the EASL converse in June was from our ongoing Phase IIa combination clinical trials evaluating indusiran with 2 immunomodulatory approaches and supports advancing the development of indusiran as the cornerstone therapeutic of an HBV functional cure regimen that reduces surface antigen, depresses HBV DNA and boosts the immune system. The first trial in PRU-one evaluated the safety, tolerability and antiviral activity of a 24 week lead in of imduceran 60 milligrams given every 8 weeks, followed by 12 or 24 weeks of weekly interferon with or without additional doses of imduceran in nuke suppressed chronic hepatitis B patients. At the end of interferon treatment, patients remained on their nuke therapy for an additional 24 weeks. And at that point, if protocol criteria were met, they could stop their NUC therapy and remain off all therapy for 48 weeks of follow-up.

Speaker 3

While we presented the full end of treatment preliminary data set for all four patient cohorts at EASL, I will focus on the 2 cohorts of patients in the trial that received 24 weeks of interferon, as more patients in these cohorts reached and maintained undetectable surface antigen levels than in the 12 week interferon cohort. 12 patients received 24 weeks of imbusiran dosing followed by 24 weeks of weekly interferon with continued imbusiran dosing every 8 weeks. And 4 of those 12 patients or 33 percent had undetectable surface antigen at the end of treatment. All 4 patients maintained undetectable surface antigen after stopping interferon treatment and continuing just their Nuke therapy for 24 weeks. These same four patients discontinued their Nuc therapy and are in follow-up, and if they continue to maintain undetectable surface antigen and HBV DNA levels for another 24 weeks, they will be considered functionally cured.

Speaker 3

Of note, there are also 2 patients that received 24 weeks of imduceran followed by 24 weeks of interferon with no additional doses of imduceran that also reached and maintained undetectable surface antigen and have discontinued NUC therapy. So in total, there are 6 patients from the 24 week interferon cohort that achieved sustained surface antigen loss, have seroconverted with high surface antibody levels and are now being followed off all therapies to assess for a functional cure. The 33% response rate seen with 24 weeks of interferon is one of the highest response rates seen in the field, including some studies testing interferon treatment durations of 48 weeks. In addition, unlike other RNAi candidates in development that have been evaluated in combination with interferon, induceram was administered less frequently and at a lower dose. The key opinion leaders in the HBV field have found these data to be impressive.

Speaker 3

There has been prior skepticism around the use of interferon in HBV functional cure regimen, especially since 48 weeks of interferon treatment is not always well tolerated. This clinical trial evaluated 24 weeks of interferon treatment, which is one of the shortest courses leading to sustained surface antigen loss in patients with HBV to date. Additionally, in this clinical trial, interferon was generally safe and well tolerated, giving us and others in the field the belief that this may be a viable treatment regimen to advance into a Phase 2b clinical trial. Our second trial, IMPROVE-two, is evaluating the safety and immunogenicity of a 24 week leading with indusiran, followed by Varinsys Biotherapeutics immunotherapeutic DTP-three hundred, while continuing Nuc therapy. At the end of treatment week 48, if patients met protocol criteria, they could stop their Nuc therapy and continue to be followed for 48 weeks off all treatment.

Speaker 3

During the 24 week inducerin read in period, we saw a 1.8 log decline in surface antigen from baseline on average. This decline in surface antigen, seen with inducerin treatment alone, is in line with data we have seen to date from our other clinical trials. In addition, 95% of patients had surface antigen levels less than 100 IUs per ml at the time of dosing with VTP-three 100 or placebo. And after VTP-three hundred administration, more patients maintained surface antigen thresholds of less than 100 or less than 10 IUs per mL versus placebo through 24 weeks post end of treatment. Statistical significance was achieved in mean surface antigen levels between the treatment arm of 5 patients and placebo with 6 patients, reaching the 24 week post end of treatment time point.

Speaker 3

The data from this trial supports our thesis that by first lowering surface antigen with indusiran, we increased the patient's ability to respond to additional treatment. Recall that we've expanded the IMPROVE-two clinical trial to evaluate the addition of a low dose of the anti PD-one monoclonal antibody nivolumab to the indusiran and BTP-three hundred combination treatment regimen. We believe nivolumab may further boost the host immune response. We are on track to report preliminary data from this portion of the trial later this year. Now let's briefly review the Phase IaIb clinical trial with AB101.

Speaker 3

As Mike mentioned, AB101, our liver centric oral small molecule PDL-one checkpoint inhibitor, is differentiated from checkpoint inhibitor antibodies and is developed for potential use in combination with indusiran as a potential treatment regimen to functionally cure chronic hepatitis B. The Phase 1a1b clinical trial consists of 3 parts, starting with single and then multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic hepatitis B. Last quarter, we reported data from Part 1 showing that AB101 is generally well tolerated with evidence of dose dependent receptor occupancy. In the 25 milligram cohort, all five evaluable subjects showed evidence of PD L1 receptor occupancy between 50% 100%, indicating that AB101 is interacting with its intended target. We are now in Part 2 of this trial, where cohorts of healthy subjects are receiving multiple ascending doses of AB101.

Speaker 3

We anticipate announcing preliminary data from Part 2 later this year. Our goal is to move as quickly as possible into Part 3, which will enroll patients with chronic hepatitis B. We believe that the immune checkpoint pathway plays an important role in HBV specific immune tolerance and in T cell activation, and the addition of a checkpoint inhibitor in combination with imbusiran could potentially further enhance HBV specific immune responses. With that, I'll turn the call over to Dave Hastings for a brief financial update. Dave?

Speaker 4

Thanks, Karen, and good morning, everybody. We ended the Q2 of 2024 with approximately $148,500,000 of cash, cash equivalents and investments in marketable securities, compared to approximately $132,000,000 as of December 31, 2023. During the first half of twenty twenty four, we received $44,100,000 of net proceeds from the issuance of common shares under Arbutus' at the market offering program. These cash inflows were offset by $33,800,000 of cash used in operations. As we announced today, we are reducing our workforce by 40%.

Speaker 4

Importantly, we continue to believe we have the financial and human resources 2024. We still expect our 2024 cash burn to range from $63,000,000 to $67,000,000 Importantly, with the actions that we announced today, we extended our cash runway into the Q4 of 2026 and significantly strengthened our ability to fund an anticipated indusiran Phase 2b clinical trial. In closing, we have a strong financial position to advance our mission of developing our HBV assets to provide a functional cure for chronic HBV. With that, I'll turn the call back to Mike.

Speaker 2

Thanks, Steve. With the reporting of end of treatment data from IMPROVE-one and IMPROVE-two, we have now achieved all of our first half of twenty twenty four key milestones. All second half milestones are on track, including reporting preliminary end of treatment data from the nivolumab arm of the IMPROVE-two trial and reporting preliminary multiple ascending dose data from healthy subjects in the AB101001 trial. In closing, I wish the best to our departing employees and again thank them for their dedication and contributions to the company as we continue to pursue our goal of developing a functional cure for patients with chronic hepatitis B. Operator, we're now ready to open the call for Q and A.

Operator

Thank you. At this time, we will conduct a question and answer session. The first call comes from Dennis Jing with Jefferies. Go ahead. Your line is open.

Speaker 5

Good morning. Thanks for taking the questions. I just had one on the Phase 2b that you guys were mentioning. Can you just talk a little bit about what this trial would look like in terms of size and design and approximately how much it would cost to run? And as a follow-up, I'm just curious, would this include AV-one hundred and one as part of the regimen?

Speaker 5

Or I guess, maybe it would just include interferon and BTP-three hundred pending some more data in the second half of this year. Maybe just comment on that as well, please. Thank you.

Speaker 2

Sure. Good morning, Dennis. Karen, would you like to handle that question?

Speaker 3

Sure. That's fine. Hi, Dennis. So there's really not much I can share at this point in terms of the Phase 2b study design. Obviously, we're in the planning stages of that study, so it would be premature to describe any specific study design features or the timing of the study.

Speaker 3

So that will need to be the subject of a future discussion. In terms of including compounds in that trial, I think we're evaluating all the options we have at our disposal right now. As you know, we shared very exciting data at EASL with our interferon combination in IMPROVE-one with VPP-three hundred. We're awaiting that additional nivolumab data from the IMPROVE-two additional cohort coming later this year. So at this point, I think all options are open and on the table and we're evaluating all those as we speak.

Speaker 5

Okay. Thank you.

Operator

Thank you. Stand by for our next question. Next question comes from Ed Arce with H. C. Wainwright.

Operator

Please go ahead. Your line is open.

Speaker 6

Good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. So first question for the IMPROVE-two expansion cohort data and expecting second half of this year. Is the data announcement expected to be in conjunction with any major medical conference in the second half this year?

Speaker 2

Good morning, Thomas. Thanks for the question. I will tell you what we tell you every time we talk about the release of data. We hope that that's the case. But of course, we can't commit to that because we don't know we won't know the disposition of abstracts yet.

Speaker 2

So we hope that's the case. We anticipate that, that will be the case, but course we can't confirm that till we get closer to the end of the year.

Speaker 6

Understood. And then perhaps as an add on question to that, are there any plans to report new interim data from IMPROVE-one and IMPROVE-two studies before year end?

Speaker 2

Yes. I think the answer to that question, Thomas, is yes, timing TBD.

Speaker 6

Got it. And then perhaps one question from us on the operation streamline plans. Are there any other impacts on your clinical programs other than the planned IMPROVE-three study? And then also if you can discuss any preclinical programs that are affected by this streamlining? Yes.

Speaker 6

No,

Speaker 4

look, we don't anticipate any other impact on the clinical programs. In fact, the focus really is to focus on the later stage inducement studies. And that's the intent and using the existing resources we have to fund the Phase 2b study, which we believe we can substantially fund with the current cash on hand. Obviously, we can't give exact guidance as to that until the study design is complete. But with the streamlining today that positions the company well to advance imbusiran quickly.

Speaker 6

Got it. Thank you again for taking the questions.

Speaker 2

Of course. Thanks, Thomas.

Operator

Stand by for our next question. The next question comes from Roy Buchanan with Citizens. Go ahead. Your line is open.

Speaker 7

Hey, thanks for taking the questions. Just a couple of quick ones. I guess just to make sure I'm clear, just and I'm sure you're going to need to talk to the FDA, but it sounds like the next and possibly only trial that you're going to start is going to be this Phase 2b, is that correct?

Speaker 2

Yes. Roy, I don't know how to answer that. I mean, what we said today was we're planning to move imducerin into later stage clinical development, which is likely a Phase 2b study. We have lots of thinking to do. We are in the process of doing that and we'll come back when we have some more details.

Speaker 7

Okay. And still some data to see, okay.

Speaker 2

Still some data to see, that's correct.

Speaker 7

That's correct. Yes. Okay. And then just one, just I guess you're thinking and I think you mentioned it in the prepared remarks about focusing on patients with baseline HBS less than 1,000 other companies are looking there? Just how are you potentially thinking about that today?

Speaker 7

Thanks.

Speaker 2

Yes, that's a good question, Roy. I mean, yes, you're right. You did hear that comment in the prepared remarks. One of the things that we found very intriguing about the data that we generated in IMPROVE-one is that if you looked at the response rate in patients with surface antigen less than 1,000 at baseline, the number increased dramatically from 33% to 67%. Now, of course, we're going to have to see how that continues to hold as we move forward here.

Speaker 2

But remember, we're talking about 350,000,000 patients globally with hepatitis B. So even if you start to cut that down into some patient populations and you think about how you could potentially segment that market, we're still talking about substantial numbers of patients. We're working on specifically what that looks like. But there are there is a very large base number of patients to work from. So yes, we're excited about that.

Speaker 7

Okay. Thank you.

Operator

One moment. Thank you. Question. The next question comes from Key with Chardan. Go ahead.

Operator

Your line is open.

Speaker 8

Yes, thanks. Yes, just again, not to beat a dead horse here, but just trying to understand the path forward for the next clinical trial. It sounds like you're trying to position your resources to be able to at least start this on your own if needed. But can you just firm up when you think you might start it? I know can't give us any details on design, but you're going to have more data in the second half of this year.

Speaker 8

So is this a first half twenty five study or later?

Speaker 2

Yes. Kay, good question. Good to have you on the line. Thanks for the question. I can't give you any more specifics about design or timing at this point.

Speaker 2

All I can say is that we'll get it started just as quickly as we possibly can. There are still some discussions to be had. We are, as you mentioned, we're still waiting for some data, which is obviously going to help drive that decision. But the goal here is to start this as quickly as we can. And yes, we do have the legs to kick this off on our own.

Speaker 2

And as Dave said, to fund substantially all of it at this point with the cash we have on hand. So we're diligently working to get this kicked off quickly and stay tuned for more information.

Speaker 8

Okay, thanks.

Speaker 6

Thank you.

Operator

I'm showing no further questions at this time. I would now like to turn it back to the company for closing remarks.

Speaker 2

Thank you everyone for joining us this morning. We appreciate your continued interest in and support of Arbutus. And of course, we look forward to providing updates as we progress development of our HBV assets. Operator, that concludes our call.

Operator

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

Powered by Quartr
Earnings Conference Call
Arbutus Biopharma Q2 2024
00:00 / 00:00