Arbutus Biopharma Corporation

Good morning. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Arbutus Biopharma 2022 Second Quarter Financial Results and Corporate Update. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star and the number one on your telephone keypad. Thank you. Ms. Lisa Caporelli, Vice President of Investor Relations, you may begin your conference.

Thank you, Abby. Good morning, everyone, and thank you for joining our second quarter 2022 financial results and corporate update call. Joining me today from the Arbutus Executive Team are Bill Collier, President and Chief Executive Officer, David Hastings, Chief Financial Officer, Dr. Ghassan Pikio, Chief Development Officer, and Dr. Mike Sofia, Chief Scientific Officer. Bill will begin with a corporate update, followed by Dave Hastings, who will provide a review of the company's second quarter 2022 financial results. After opening remarks, we will open the call up for Q&A. Gaston Piccio and Mike Sophia will be available to address clinical and development-related questions. 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 most recent annual report on 10-K, quarterly report on Form 10-Q to be filed later today, and from time to time in our other documents filed with the SEC. With that, I'll turn the call over to Bill Collier. Bill?

Thank you, Lisa, and good morning, everyone. Thank you for joining us today. We appreciate your continued interest and support for Arbutus Biopharma. Now, with the first half of this year behind us, we've made significant progress in advancing our preclinical and clinical programs in support of our mission to develop a functional cure for hepatitis B virus and to treat COVID-19 and future coronavirus outbreaks. Furthermore, we're on track to deliver on multiple key milestones across these programs in the remainder of this year. And equally important in this volatile capital markets environment, we're well positioned financially to fund our current programs and provide runway into the second quarter of 2024. Now, Dave will discuss the financial aspects during the financial position summary shortly. Now, we are making excellent progress with our two key HPV preclinical programs. That's AB101, our oral PD-L1 inhibitor, and AB161, our oral RNA destabilizer. Now, rather than elaborate on these programs here, I'll refer you to today's press release for those updates and use the time on this call to briefly highlight the rather impressive data on our lead HPV clinical assets AB729, that's our RNAi therapeutic. This data was reported last month at the Easel International Liver Congress. Now, as you know, patients with chronic HPV infection receive nuke therapy as standard of care. And while that therapy is generally safe and effective at reducing viral load, less than 5% of patients are functionally cured and usually only after many, many years of therapy. In our clinical trial, AB729001, we wanted to see how treatment with various doses and dosing schedules of our RNAi therapeutic, in addition to nuke therapy, was handled by patients with chronic HPV who had different baseline characteristics. If patients met certain predefined criteria and consented, we discontinued first their treatment with AB729 and later their lifelong standard of care nuke therapy to see if their undetectable HPV DNA status was maintained and if their S antigen reduction was sustained, which could be a sign of virologic control and potential subsequent functional cure. Now, three major findings were disclosed from this clinical trial at the EASL conference. First of all, we saw a robust reduction in surface antigen between 1.8 to 2.1 log reduction. And that was with 48 weeks of treatment. And the reduction occurred regardless of dose, dosing schedule, or baseline characteristics. Second, in addition to the meaningful and consistent surface antigen decline, we saw an increase in HPV-specific T cells and a decrease in exhausted T cells in patients treated with 729. And third, and what we believe to be of significant importance, When we stopped treatment with AB729 and stopped nuke therapy in the first five eligible patients that consented, their surface antigen and their HBV DNA responses were sustained at low levels while they were off treatment for at least eight to 24 weeks. Now, in addition, none of these patients showed evidence of virologic nor clinical relapse, and so they did not need to restart their nuke therapy. We believe this data is most impressive as it shows that we were able to take patients off of their lifelong treatment of standard of care nuke therapies and still maintain reduced surface antigen and reduced HPV DNA, a potential early indicator of functional cure. We are continuing to follow these patients as well as other patients that have consented to stop all therapy. And we anticipate reporting more data in the second half of this year. Now, 729 is one of the most advanced RNAi therapeutics for HPV. And based on the availability of public data, it's differentiated from other RNAis based on its more convenient dosing schedule and immune activation capacity. We're also encouraged by the safety that we see in this and other ongoing trials. And it's for these reasons that we continue to view AB729 as a cornerstone agent in a potential curative combination treatment for chronic HPV, either with our own proprietary compounds or with those in development by other companies or with therapies that are already approved for the treatment of HPV. Now, also at Eazl, we, along with many of our peer companies, reported data on the use of capsid inhibitors alone or in combination in the HPV treatment regimen. And while much of this data is early and inconclusive, our strategy is as follows. First of all, based on data from our ongoing phase 1A, 1B trial, some of which was presented at Eazl, we're planning to conduct a longer duration phase one study in healthy volunteers with our oral capsid inhibitor AB836. As you will recall, we reported that AB836 showed robust antiviral activity with greater than 3.5 log reduction in HBV DNA. Along with this impressive efficacy, however, we saw an increase in ALTs in some patients on the last day of treatment. And so the goal of the longer duration healthy volunteer study is to further characterize the safety of 836 by determining whether the ALT flares we saw were beneficial or not before resuming dosing in HPV patients. A second part of our strategy is that we are continuing, in collaboration with Assembly, the Phase 2A proof-of-concept clinical trial, evaluating the triple combination of 729 and Assembly's core inhibitor, VEBICORVIR, and NUC therapy, even though Assembly has announced its plans to discontinue the development of VEBICORVIR. At Arbutus, we believe it's important to continue the conduct of this trial in order to fully and accurately assess the results. By continuing this Phase II triple combination combination trial and also evaluating AB836 in healthy volunteers in our Phase I study, we believe we will obtain data that will inform our use of capsids in a go-forward combination strategy in the development of chronic HPV treatments, as well as help to address open questions in the field. Now, finally, we were gratified to see positive top-line results announced by Alnylin for the Phase III study of Onpatro in patients with ATTR amyloidosis with cardiomyopathy. As you may recall, we're entitled to tiered royalty payments on global net sales of Onpatro, ranging from 1% to 2.33% after offsets. with the highest tier applicable to annual net sales above $500 million. Now, this royalty interest was sold to OMERS effective as of January the 1st, 2019 for $20 million in gross proceeds before advisory fees. And OMERS will retain this entitlement until they have received $30 million in royalties at which point 100% of the royalty interest on future global net sales of En Patro, which could include additional sales for the expanded indication if it's approved, will revert back to Arbutus. Now, to date, OMAS has received approximately $14 million. In addition, we retained a second lower royalty interest ranging from 0.75% to 1.125% on global net sales among Patro, with the 0.75% applying to sales greater than $500 million. And that royalty stream was not part of the OMAS transactions. So as I wrap up my opening remarks this morning, I'd like to remind you of the key milestones we anticipate in the second half of this year. There are four. First, AB729 follow-up data, which could include long-term on and off treatment data from our Phase 1A, 1B clinical trial. Second, initial data from both the Phase 2A combination trial of 729 interferon and nuke therapy, and the triple combination trial with assemblies vebicorvir. Third, we expect to complete the IND enabling studies for both AB101, our oral PD-L1 inhibitor, and AB161, our oral RNA destabilizer. And fourthly, we expect to advance into IND enabling studies a clinical candidate that inhibits the SARS-CoV-2 NSP5 main protease. I'll now turn the call over to Dave Hastings for a brief financial update. Over to you, Dave.