Arbutus Biopharma Corporation

Good day and thank you for standing by. Welcome to the RBDS Biopharma fourth quarter and year end 2023 financial results and corporate update conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone and then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lisa Caporelli, VP of Investor Relations. Please go ahead.

Thank you, Stephen. Good morning, everyone, and thank you for joining Arbutus' fourth quarter and year-end 2023 Financial Results and Corporate Update call. Joining me today from the Arbutus executive team are Mike McAhaugh, Interim President and Chief Executive Officer, Dr. Karen Sims, Chief Medical Officer, David Hastings, Chief Financial Officer, and Dr. Mike Sophia, Chief Scientific Officer. Mike McElhall 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 fourth quarter and year-end 2023 financial results. After our prepared remarks, we will open the call for Q&A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements, which are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our annual report on Form 10-K and from time to time in our other documents filed with the SEC. With that, I'll now turn the call over to Mike McElhall. Mike?

Thank you, Lisa. Good morning, everyone, and thank you for joining us today. In 2023, we made several important strategic choices to best position Arbutus for long-term success. In addition to streamlining our focus and resources on HPV, which extended our cash runway into the first quarter of January, 2026, we also announced my appointment as interim president and CEO. As a co-founder of Arbutus, I am honored to have this opportunity to lead my colleagues in our mission to develop a functional cure for the millions of people chronically infected with hepatitis B virus. I'm excited for my new role and plan to leverage my extensive scientific, strategic, transactional, and commercial experience with antiviral and infectious disease companies to continue to move Arbutus forward. In 2024, Our focus is to position Arbutus for continued success and create value for all our stakeholders. We remain committed to advancing the development of our proprietary clinical assets in HPV, including Induceram, our RNAi therapeutic, and AB101, our oral PD-L1 checkpoint inhibitor. There remains a need for finite and more efficacious HPV treatments that further improve long-term outcomes and increase functional cure rates. as fewer than 5% of patients currently achieve functional cure with currently approved nukes or interferon. Our goal is to develop a treatment for chronic hepatitis B virus patients that results in at least a 20% functional cure rate to address this large unmet medical need. HPV is a complex virus that will most likely require a combination of compounds that inhibit viral replication, lower the viral antigen burden, and boost the immune response. We are executing on our three-pronged approach to functionally cure HPV with a combination therapy that includes imduceran as a cornerstone. A combination that includes imduceran, AB101, and a nuke is our ultimate goal. That said, our current strategy is evaluating imduceran in combination with other agents in multiple Phase IIa clinical trials with the goal of gaining valuable insights on efficacy, safety, and optimal dosing to help inform the design of a Phase IIb clinical trial with imduceran as the cornerstone therapy. Throughout 2024, we anticipate reporting data from our two ongoing Phase IIa clinical trials with imduceran, including the potential to see patients with undetectable surface antigen. Achieving undetectable surface antigen levels in either of our current Phase IIa clinical trials would certainly be an important validation of imduceran's role and potentially achieving a functional cure for hepatitis B patients. This year, we also anticipate data from our healthy subject portion of our Phase 1A-1B clinical trial with AB101, our immune modulator. We expect to report preliminary safety and, importantly, preliminary receptor occupancy and target engagement data in this population. With the potential of AB101 to boost the host immune response, Our goal is to move AB 101 through the clinic as quickly as possible to prepare it for a possible combination with Inducerant. I'd like to say a few brief words about our ongoing intellectual property litigation efforts before closing out this section of the call. All of our scientists take great pride in the intellectual property they develop, which takes great effort, time, resources, and expense. It is for these reasons that we continue to protect and defend our intellectual property including our LNP delivery technology, which is the subject of ongoing lawsuits against Moderna and Pfizer-BioNTech. An important step in the litigation for Moderna took place on February 8th of this year. This was the date of the Markman hearing, also known as a claim construction hearing, where the court heard each party's interpretation of the construction of claims in the disputed patents. We anticipate the judge to issue his order from the hearing within 60 days of February 8th. The next steps will include expert testimony and depositions. In addition, the Court has set April 21, 2025 as the trial date for this case. That date is subject to the Court's availability. With respect to the Pfizer-BioNTech lawsuit, the only update I can provide is that the lawsuit is ongoing, but is behind the Moderna lawsuit as it was filed later. A date for the claim construction hearing for that case has not yet been set. When able, we will provide updates on both the Pfizer and Moderna lawsuits, but please keep in mind that given the legal sensitivities, we're limited in what we can say. I'll now turn the call over to Karen Sims to provide an update on the continued progress we are making across our pipeline. Karen?

Thanks, Mike, and good morning, everyone. We are currently conducting three clinical trials with our hepatitis B assets, two phase 2A clinical trials with induced RANs and one phase 1A, 1B clinical trial with AB101. And we expect to report data from all three of these trials throughout this year. We also plan to initiate a third phase to a clinical trial with Induceran and Dervalumab, an approved anti-PD-L1 monoclonal antibodies in the first half of this year. We will share more details on that trial upon initiation. As Mike stated, the purpose of these multiple phase to a combination clinical trials are to glean information on the safety and efficacy of Induceran as a cornerstone therapy. and to identify a combination treatment regimen that reduces viral burden and boosts the host immune response to advance into a later stage clinical trial. AB729201 is our phase 2A clinical trial, evaluating Induceran in combination with ongoing muke therapy and interferon in patients with chronic hepatitis B. Last June at EASL, we reported preliminary data that continues to reinforce our confidence in Induceran's ability to effectively lower surface antigens. At that time, we reported data on a small number of patients that had received induceran plus at least 12 weeks of interferon and showed that interferon may contribute to additional declines in surface antigen. In the first half of this year, we plan to announce ends of interferon treatment data for all 43 study patients, which will include safety and changes in surface antigen from baselines. When we report these data, we could potentially have some subjects that achieved undetectable surface antigen. As a reminder, undetectable surface antigen is a key component of functional cure. AB729202 is a Phase IIa clinical trial that we are conducting in collaboration with Brincis Biotherapeutics, formerly known as Vaxotec. Through this clinical trial, we are testing whether the combination of Induceran, NucTherapy, and parenthesis HPV antigen-specific immunotherapeutic VTP300 can lower surface antigen and stimulate the host immune system to fully suppress the virus. Late last year at ASLD, we reported preliminary data that included all patients that received induced NIRAN treatment and several patients who had received VTP300 or placebo. In these early data, we reported that surface antigen levels were reduced and sustained with a combination treatment of Induceran and VTP300. In the first half of this year, we expect to report end-of-treatment data, which would include safety and change in surface antigen from baseline for all 40 patients that received Induceran, VTP300 or placebo, and nuke therapy. We are continuing to dose patients in the amendment to the AB729202 trial that explores the addition of a low dose of the anti-PD1 monoclonal antibody nivolumab to the combination treatment regimen. We believe nivolumab may further boost the host immune response. Preliminary data from this portion of the trial is expected in the second half of this year. As noted for the AB729201 trial, we may also have the potential to see undetectable surface antigen in some patients. which is a prerequisite to achieving functional cure. While our Phase IIa clinical trials are evaluating Induceran in combination with immune modulators, we intend to develop a proprietary combination therapy with Induceran and AB101, our oral PD-L1 checkpoint inhibitor. We believe that the immune checkpoint pathway plays an important role in HPV-specific immune tolerance and in T-cell activation. Our third ongoing clinical trial is our Phase 1A-1B clinical trial, AB 101-001. This double-blind randomized placebo-controlled trial is designed to investigate the safety, tolerability, pharmacokinetics, and pharmacodynamics of AB 101. This trial consists of three parts, starting with single and multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic hepatitis B. We are now moving AB101 into the second part of this trial, which includes evaluating multiple ascending doses of AB101 in healthy subjects. In the first half of this year, we anticipate reporting preliminary data from the healthy subject portion of this trial, which will include safety data in addition to preliminary target engagement and receptor occupancy data. As we continue to advance the clinical development of Imbuciran and AB101, We believe both compounds are well-positioned to deliver on our goal of developing a functional cure for hepatitis B and driving value for our company. With that, I'll turn the call over to Dave Hastings for a brief financial update. Dave?

Thanks, Karen, and good morning, everybody. We ended 2023 with approximately $132 million of cash, cash equivalents, and investments, compared to approximately $184 million as of December 31, 2022. During the year ended December 31st, 2023, we received 29.9 million of net proceeds from the issuance of common shares under our at-the-market offering program. These cash inflows were offset by 85.9 million of cash used in operations. We anticipate a significant reduction to our cash burn in 2024. from 2023 as we focus our pipeline and research efforts on HPV. Therefore, we expect our 2024 net cash burn to range between 63 to 67 million, excluding any proceeds received from our at-the-market offering program. Importantly, we believe our cash runway is sufficient to fund our operations into the first quarter of 2026. In closing, we have a strong financial position to advance our mission, and we remain committed to developing our HPV assets to provide a functional cure for chronic HPV. With that, I'll turn the call back to Mike. Mike?

Thanks, Dave. As I mentioned earlier, we have a data-rich year with end-of-treatment data expected from our two Phase 2A clinical trials with Mduceran and preliminary data from our Phase 1A1B clinical trial with AV101. We also anticipate initiating a third Phase 2A clinical trial with Induceran and Dervalumab. Operator, we're now ready to open the call for Q&A.

All right, thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. First question comes from the line of Dennis Ding, Jefferies. Your line is now open.

Hi, good morning. If I can ask a question around the patent litigation, can you just help frame for us what to expect at the upcoming claim construction order and what is perhaps a good outcome? And do you need the judge to roll in favor of you for all three or could just one disputed claim be good enough? Thank you. Good morning, Dennis.

Dave, do you want to handle that question?

Yeah, sure. I mean, as you know, we're a little bit, we have to be very careful about what we say publicly about this case. We look forward to the judge's ruling. I really don't think we want to comment sort of on the play-by-play of that until it actually happens. We appreciate everyone's interest. We take this, obviously, very seriously. We were We were pleased with the actual hearing itself, and we look forward to Justice Goldberg's ruling, which we expect, as you know, within 60 days of February 8th.

And maybe as a follow-up to that, like as you look forward six to 12 months, is there an opportunity for a summary judgment or anything that could happen potentially in your favor before actually going to trial? Thank you.

Yeah, I believe that the schedule is that there will be that opportunity at some point.

I believe we're expecting that in the late summer. You know, all these timelines are subject to change, obviously. I think that's the best estimate of the company at this point in time.

Thank you.

Thanks, Dennis. All right, thank you. One moment for our next question. Next question comes from the line of Brian Scorney of Baird. Your line is now open.

Hey, good morning. Thank you for taking my question. I just wanted to get a little bit more of a handle on the PD-1, L-1 antibodies study designs and rationale. I guess first, how do you think about PD-1 versus PD-L1 targeting? It's been a while, but I think some of the initial meta-reqs literature showed that maybe preclinically PD-L1 was the more desirable of the target for infectious disease. Any thoughts on that, Brian? And then how did you kind of go about thinking about selecting NEVO for 202 and DERVA for study 203? Yeah. Thanks.

Good morning, Brian. Thanks for the questions. So a couple of questions there. So maybe what I'll do is I'll turn it over to Mike Sophia to answer the PD-1 versus PD-L1 question, and then And then we can go to Karen for some considerations on design, if that works. So, Mike, do you want to handle the PD-1, PD-L1 question?

Sure. Sure. Hi, Brian. So, we do know that PD-L1 is certainly upregulated on hepatocytes in chronic hepatitis B patients, right? The decision for PD-1 versus PD-L1 really come from a strategy standpoint in the sense that, you know, we were able to identify small molecule agents that target, you know, that block PD-L1 essentially. And obviously as we reported in the literature that, you know, this is a novel mechanism of action by which it internalizes the PD-L1, causes degradation, et cetera, and you can then reconstitute PD-L1 on the surface of hepatocytes completely by just washing out drugs. That all fit within our strategy for small molecule, liver-centric agents that circumvents, you know, the concerns with, let's say, general systemic activation of the immune system. So, it was a partly the decision around the fact that, you know, PD-L1 is highly upregulated in hepatocytes. Therefore, we can, you know, target the hepatocytes with a PD-L1 agent. and the ability to design and develop a small molecule that fits within our overall concept of how to address this from a liver disease standpoint.

Yeah, thanks, Mike.

And I can jump in about the questions regarding the NEVO versus Dervalumab in our clinical trials. So for the 202 trial, that's the trial we're doing in collaboration with Brinthus Biotherapeutics and their VTP300 assets. So as you probably know, they have performed some studies already using VTP300 in combination with low-dose nivolumab in their HPV002 and ongoing HPV003 studies. And in those studies, they have suggested that there is potentiation of response in subjects that receive VTP300 plus a dose of low-dose nivolumab given at the time of the MVA boost. So for that reason, we incorporated that strategy into the 202 study as an amendment based on their prior and ongoing experience with using nivolumab in this context. For the 203 study, we did decide to utilize the anti-PD-L1 antibody, drivalumab, basically for the reasons Mike just suggested and to be able to inform our upcoming combination study with AB101 and Induceram in terms of starting to explore the optimal timing and administration of a PD-L1 inhibitor in the context of induced dram therapy. So that's kind of the rationale for the difference between the two studies, and certainly as the 203 study moves forward, we'll be able to share more details about the study design.

Great. Thanks. That's really helpful.

Great. Thanks, Brian. All right. One moment for our next question. Next question. comes from the line of Roy Buchanan of Citizens JMP. Your line is now open.

Hey, thanks for taking the questions. A couple, I guess for 101, when do you think you might be in a position to reengage the FDA on 101? And I guess more broadly, what are your plans following the phase 1A, 1B? Can you just elaborate on those a little bit?

Sure. Karen, do you want to handle that one?

Sure, absolutely. So, you know, as we said, you know, throughout this process, you know, we certainly do intend to reengage the FDA for this program. And really the criteria for that is for when we feel that we have sufficient data to return to them with a robust package to be able to move forward in the U.S. So, you know, that line of communication is certainly always open. And, you know, we're looking forward to the AB101 trial continuing to proceed, you know, as it is and accumulating that data to be able to share back with the FDA. And this development strategy is something we've done before. We've frequently taken assets initially outside of the United States for a phase one study and then brought them back to FDA to initiate phase two trials along with other global jurisdictions as we need to increase study populations and study size. And then in regards to how the study is progressing in outputs, as we said, just now we have progressed the study into multiple dosing in healthy subjects. We do intend to share preliminary data from healthy subjects in the first half of this year. The study is designed as an umbrella study, so a seamless transition into chronic hepatitis B patients once we have sufficient data to move forward into that population. And, you know, certainly we'll be sharing updates, you know, as they become available with a study in an ongoing fashion.

Okay, great. And then if I could ask one about VTP300. What do you need to see from the results this has to kind of move that approach forward and potentially, I guess, make it a cornerstone, but you mentioned combos with inducer N and 101. Yeah, what do you need to see to add VTP-300 or another vaccine to that approach, or do you really need to see the NEVO data? Thanks.

Yeah, good question, Roy. So, you know, honestly, I think we just need to see what the data look like, and, you know, we'll continue to evaluate as it comes forward. As you rightfully mentioned, we added the NEVO arm to that study as well. I think we'd probably want to see that NEVO data before moving that combo forward, unless, of course, we see something spectacular out of the VTP300 plus Indusiran arm, and I have no insight into that currently. I just, you know, it'll depend on what the data look like. Obviously, with VTP300 not being a proprietary asset, we're considering thinking about inducer and plus 101 and moving that forward as quickly as we can. That's always been sort of the goal. But, you know, the data will guide us, I think, is probably the best way to think about it. Okay, thanks.

Sure. One moment for our next question. Next question comes from the line of Ed Arce of HC Wainwright. Your line is now open.

Hi, good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for the kind of questions. First question for the new 203 phase 2a study with the value map. Can you discuss the design in broad strokes? You know, how big would the study be and any specific elements that we can expect in the study that is learning from the ongoing 202 study?

Karen, do you want to handle that one, please?

Yeah, sure. So, again, we typically don't dive into the details of our study designs until we're able to announce the first subject, first dose in the study. So, I can't elaborate much beyond what we've already said. Again, the goal of the study is to try to help inform upcoming studies with imducerin in combination with AB101. looking at, you know, different options in terms of the timing of adding a PD-L1 inhibitor to induced Duran therapy is really the high-level goal. In terms of the size of the study, it is a typical 2A size study. This is, again, an exploratory study to try to basically learn about, again, that optimal timing, optimal duration of that combination approach. So, You know, the study is listed on clinicaltrials.gov, and you're certainly welcome to peruse that for any additional details there. But again, you know, we will share, you know, more specific details about the trial, you know, once we have subject enrolled.

Got it. Understood. And then, similar along that line, just thinking ahead of the combination study with Inducerin and then with 101, Will the first study be a similar proof of concept study phase two way that we've seen with other combinations as well?

Yeah, I can jump into that one as well. Typically it is.

I mean, you know, the rationale really for starting with a Phase IIa study is, you know, certainly for AB101, you know, we will still be increasing the safety database for that molecule. We'll be, you know, still learning additional information about PK and pharmacodynamics in a larger population of subjects. moving to a phase 2a study is fairly routine with an early development asset just to make sure we're you know fully understanding the different aspects of the molecule before taking it into a larger phase 2b type study and that really is just all about de-risking the compound and making sure that you know we're completely comfortable taking it into these larger studies which you know as you know are very um you know technically difficult very expensive so it's uh most likely it'll it'll start with a smaller two-way study. But again, as Mike mentioned throughout the call, we need to see the data and see how the data guides us. More to come on that as the AB101 program moves through phase one.

Got it. Understood. And then one final question from us. narrow down the timing of the first half readouts, most notably the TIL-1 end of treatment data readout, and then also the AB101 heavy on TIL data. Are these separate events, or should we expect kind of like a big splash at EZO?

Yeah, good question, Thomas. That's kind of a tough question to answer. And the reason I say that is because, of course, we'd love to present our data at EASL. We always love to present our data at EASL. But, of course, we have no idea whether any abstracts that we may or may not submit will be accepted. So it's hard to guide specifically to a particular conference. But I think you're kind of thinking about the timing correctly, that that's probably around the time when either through a conference or through some other mechanism, the data will likely be available.

Got it. Thank you again, everyone, for the questions. And we're looking forward to the data readout in the next few months.

Great.

Thank you, Thomas.

Thank you. One moment for our next question. Next question comes from the line of Kianaki of Chardin. Your line is now open. Your question has been answered. Thanks.

Thanks, Kay.

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

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

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

Bye. Thank you.

Good day and thank you for standing by.

Welcome to the Arbitus Biopharma fourth quarter and year-end 2023 financial results and corporate update conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone and then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lisa Caporelli, VP of Investor Relations. Please go ahead.

Thank you, Stephen. Good morning, everyone, and thank you for joining Arbutus' fourth quarter and year-end 2023 Financial Results and Corporate Update call. Joining me today from the Arbutus executive team are Mike McAhaugh, Interim President and Chief Executive Officer, Dr. Karen Sims, Chief Medical Officer, David Hastings, Chief Financial Officer, and Dr. Mike Sophia, Chief Scientific Officer. Mike McElhall 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 fourth quarter and year-end 2023 financial results. After our prepared remarks, we will open the call for Q&A. Before we begin, I'd like to remind you that some of the statements made during the call today are forward-looking statements, which are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our annual report on Form 10-K and from time to time in our other documents filed with the SEC. With that, I'll now turn the call over to Mike McElhall. Mike?

Thank you, Lisa. Good morning, everyone, and thank you for joining us today. In 2023, we made several important strategic choices to best position Arbutus for long-term success. In addition to streamlining our focus and resources on HPV, which extended our cash runway into the first quarter of January 2026, we also announced my appointment as interim president and CEO. As a co-founder of Arbutus, I am honored to have this opportunity to lead my colleagues in our mission to develop a functional cure for the millions of people chronically infected with hepatitis B virus. I'm excited for my new role and plan to leverage my extensive scientific, strategic, transactional, and commercial experience with antiviral and infectious disease companies to continue to move Arbutus forward. In 2024, Our focus is to position Arbutus for continued success and create value for all our stakeholders. We remain committed to advancing the development of our proprietary clinical assets in HPV, including Induceram, our RNAi therapeutic, and AB101, our oral PD-L1 checkpoint inhibitor. There remains a need for finite and more efficacious HPV treatments that further improve long-term outcomes and increase functional cure rates. as fewer than 5% of patients currently achieve functional cure with currently approved nukes or interferon. Our goal is to develop a treatment for chronic hepatitis B virus patients that results in at least a 20% functional cure rate to address this large unmet medical need. HPV is a complex virus that will most likely require a combination of compounds that inhibit viral replication, lower the viral antigen burden, and boost the immune response. We are executing on our three-pronged approach to functionally cure HPV with a combination therapy that includes imduceran as a cornerstone. A combination that includes imduceran, AB101, and a nuke is our ultimate goal. That said, our current strategy is evaluating imduceran in combination with other agents in multiple Phase IIa clinical trials with the goal of gaining valuable insights on efficacy, safety, and optimal dosing to help inform the design of a Phase IIb clinical trial with Induceran as the cornerstone therapy. Throughout 2024, we anticipate reporting data from our two ongoing Phase IIa clinical trials with Induceran, including the potential to see patients with undetectable surface antigen. Achieving undetectable surface antigen levels in either of our current Phase IIa clinical trials would certainly be an important validation of Induceran's role and potentially achieving a functional cure for hepatitis B patients. This year, we also anticipate data from our healthy subject portion of our Phase 1A-1B clinical trial with AB101, our immune modulator. We expect to report preliminary safety and, importantly, preliminary receptor occupancy and target engagement data in this population. With the potential of AB101 to boost the host immune response, Our goal is to move AB 101 through the clinic as quickly as possible to prepare it for a possible combination with Inducerant. I'd like to say a few brief words about our ongoing intellectual property litigation efforts before closing out this section of the call. All of our scientists take great pride in the intellectual property they develop, which takes great effort, time, resources, and expense. It is for these reasons that we continue to protect and defend our intellectual property including our LNP delivery technology, which is the subject of ongoing lawsuits against Moderna and Pfizer-BioNTech. An important step in the litigation for Moderna took place on February 8th of this year. This was the date of the Markman hearing, also known as a claim construction hearing, where the court heard each party's interpretation of the construction of claims in the disputed patents. We anticipate the judge to issue his order from the hearing within 60 days of February 8th. The next steps will include expert testimony and depositions. In addition, the Court has set April 21, 2025 as the trial date for this case. That date is subject to the Court's availability. With respect to the Pfizer-BioNTech lawsuit, the only update I can provide is that the lawsuit is ongoing, but it is behind the Moderna lawsuit as it was filed later. A date for the claim construction hearing for that case has not yet been set. When able, we will provide updates on both the Pfizer and Moderna lawsuits, but please keep in mind that given the legal sensitivities, we're limited in what we can say. I'll now turn the call over to Karen Sims to provide an update on the continued progress we are making across our pipeline. Karen?

Thanks, Mike, and good morning, everyone. We are currently conducting three clinical trials with our hepatitis B assets, two phase 2A clinical trials with induced RAN and one phase 1A, 1B clinical trial with AB101. and we expect to report data from all three of these trials throughout this year. We also plan to initiate a third Phase IIA clinical trial with imduciran and dervalumab, an approved anti-PD-L1 monoclonal antibody, in the first half of this year. We will share more details on that trial upon initiation. As Mike stated, the purpose of these multiple Phase IIA combination clinical trials are to glean information on the safety and efficacy of imduciran as a cornerstone therapy. and to identify a combination treatment regimen that reduces viral burden and boosts the host immune response to advance into a later stage clinical trial. AB729201 is our Phase IIa clinical trial evaluating Induceran in combination with ongoing muke therapy and interferon in patients with chronic hepatitis B. Last June at EASL, we reported preliminary data that continues to reinforce our confidence in Induceran's ability to effectively lower surface antigen. At that time, we reported data on a small number of patients that had received induceran plus at least 12 weeks of interferon and showed that interferon may contribute to additional declines in surface antigen. In the first half of this year, we plan to announce end of interferon treatment data for all 43 study patients, which will include safety and changes in surface antigen from baselines. When we report these data, we could potentially have some subjects that achieved undetectable surface antigen. As a reminder, undetectable surface antigen is a key component of functional cure. AB729202 is a Phase IIa clinical trial that we are conducting in collaboration with Brincis Biotherapeutics, formerly known as Baxotec. Through this clinical trial, we are testing whether the combination of Induceran, NucTherapy, and parenthesis HPV antigen-specific immunotherapeutic VTP300 can lower surface antigen and stimulate the host immune system to fully suppress the virus. Late last year at ASLD, we reported preliminary data that included all patients that received induced NIRAN treatment and several patients who had received VTP300 or placebo. In these early data, we reported that surface antigen levels were reduced and sustained with a combination treatment of Induceran and VTP300. In the first half of this year, we expect to report end-of-treatment data, which would include safety and change in surface antigen from baseline for all 40 patients that received Induceran, VTP300 or placebo, and nuketherapy. We are continuing to dose patients in the amendment to the AB729202 trial that explores the addition of a low dose of the anti-PD1 monoclonal antibody nivolumab to the combination treatment regimen. We believe nivolumab may further boost the host immune response. Preliminary data from this portion of the trial is expected in the second half of this year. As noted for the AB729201 trial, we may also have the potential to see undetectable surface antigen in some patients. which is a prerequisite to achieving functional cure. While our Phase IIa clinical trials are evaluating Induceran in combination with immune modulators, we intend to develop a proprietary combination therapy with Induceran and AB101, our oral PD-L1 checkpoint inhibitor. We believe that the immune checkpoint pathway plays an important role in HPV-specific immune tolerance and in T-cell activation. Our third ongoing clinical trial is our Phase 1A-1B clinical trial, AB 101-001. This double-blind randomized placebo-controlled trial is designed to investigate the safety, tolerability, pharmacokinetics, and pharmacodynamics of AB 101. This trial consists of three parts, starting with single and multiple ascending doses in healthy subjects and culminating with multiple doses in patients with chronic hepatitis B. We are now moving AB101 into the second part of this trial, which includes evaluating multiple ascending doses of AB101 in healthy subjects. In the first half of this year, we anticipate reporting preliminary data from the healthy subject portion of this trial, which will include safety data in addition to preliminary target engagement and receptor occupancy data. As we continue to advance the clinical development of imbusiniran and AB101, We believe both compounds are well-positioned to deliver on our goal of developing a functional cure for hepatitis B and driving value for our company. With that, I'll turn the call over to Dave Hastings for a brief financial update.

Dave? Thanks, Karen, and good morning, everybody. We ended 2023 with approximately $132 million of cash, cash equivalents, and investments, compared to approximately $184 million as of December 31, 2022. During the year ended December 31st, 2023, we received 29.9 million of net proceeds from the issuance of common shares under our at-the-market offering program. These cash inflows were offset by 85.9 million of cash used in operations. We anticipate a significant reduction to our cash burn in 2024. from 2023 as we focus our pipeline and research efforts on HPV. Therefore, we expect our 2024 net cash burn to range between 63 to 67 million, excluding any proceeds received from our at-the-market offering program. Importantly, we believe our cash runway is sufficient to fund our operations into the first quarter of 2026. In closing, we have a strong financial position to advance our mission, and we remain committed to developing our HPV assets to provide a functional cure for chronic HPV. With that, I'll turn the call back to Mike. Mike?

Thanks, Dave. As I mentioned earlier, we have a data-rich year with end-of-treatment data expected from our two Phase 2A clinical trials with Mduceran and preliminary data from our Phase 1A1B clinical trial with AV101. We also anticipate initiating a third Phase 2A clinical trial with Indusiran and Dervalumab. Operator, we're now ready to open the call for Q&A.

All right. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. First question comes from the line of Dennis Ding of Jefferies. Your line is now open.

Hi, good morning. If I can ask a question around the patent litigation, can you just help frame for us what to expect at the upcoming claims instruction order and what is perhaps a good outcome? And do you need the judge to roll in favor of you for all three or could just one disputed claim be good enough? Thank you. Good morning, guys.

Dave, do you want to handle that question?

Yeah, sure. I mean, as you know, we're a little bit, we have to be very careful about what we say publicly about this case. We look forward to the judge's ruling. I really don't think we want to comment sort of on the play-by-play of that until it actually happens. We appreciate everyone's interest. We take this, obviously, very seriously. We were We were pleased with the actual hearing itself, and we look forward to Justice Goldberg's ruling, which we expect, as you know, within 60 days of February 8th.

And maybe as a follow-up to that, like as you look forward six to 12 months, is there an opportunity for a summary judgment or anything that could happen potentially in your favor before actually going to trial? Thank you.

Yeah, I believe that the schedule is that there will be that opportunity at some point.

I believe we're expecting that in the late summer. You know, all these timelines are subject to change, obviously. I think that's the best estimate of the company at this point in time.

Thank you.

Thanks, Dennis. All right, thank you. One moment for our next question. Next question comes from the line of Brian Scorney of Baird. Your line is now open.

Hey, good morning. Thank you for taking my question. I just wanted to get a little bit more of a handle on the PD-1, L-1 antibodies study designs and rationale. I guess first, how do you think about PD-1 versus PD-L1 targeting? It's been a while, but I think some of the initial meta-reqs literature showed that maybe preclinically PD-L1 was the more desirable of the target for infectious disease. Any thoughts on that, Brian? And then how did you kind of go about thinking about selecting NEVO for 202 and DERVA for study 203? Yeah. Thanks.

Good morning, Brian. Thanks for the questions. So a couple of questions there. So maybe what I'll do is I'll turn it over to Mike Sophia to answer the PD-1 versus PD-L1 question, and then And then we can go to Karen for some considerations on design, if that works. So Mike, do you want to handle the PD-1, PD-L1 question?

Sure. Sure. Hi, Brian. So we do know that PD-L1 is certainly upregulated on hepatocytes in chronic hepatitis B patients, right? The decision for PD-1 versus PD-L1 really come from a strategy standpoint in the sense that, you know, we were able to identify small molecule agents that target, you know, that block PD-L1, essentially. And obviously, as we reported in the literature, that, you know, this is a novel mechanism of action by which it internalizes the PD-L1, causes degradation, et cetera, and you can then reconstitute PD-L1 on the surface of hepatocytes completely by just washing out drugs. So, That all fit within our strategy for small molecule liver-centric agents that circumvents, you know, the concerns with, let's say, general systemic activation of the immune system. So it was a partly the decision around the fact that, you know, PD-L1 is highly upregulated in hepatocytes. Therefore, we can, you know, target the hepatocytes with a PD-L1 agent. and the ability to design and develop a small molecule that fits within our overall concept of how to address this from a liver disease standpoint.

Yeah, thanks, Mike.

And I can jump in about the questions regarding the NEVO versus Dervalumab in our clinical trials. So for the 202 trial, that's the trial we're doing in collaboration with Brinthus Biotherapeutics and their VCP300 assets. So as you probably know, they have performed some studies already using VTP300 in combination with low-dose nivolumab in their HPV002 and ongoing HPV003 studies. And in those studies, they have suggested that there is potentiation of response in subjects that receive VTP300 plus a dose of low-dose nivolumab given at the time of the MVA boost. So for that reason, we incorporated that strategy into the 202 study as an amendment based on their prior and ongoing experience with using nivolumab in this context. For the 203 study, we did decide to utilize the anti-PD-L1 antibody, drivalumab, basically for the reasons Mike just suggested and to be able to inform our upcoming combination study with AB101 and Induceram in terms of starting to explore the optimal timing and administration of a PD-L1 inhibitor in the context of induced dram therapy. So that's kind of the rationale for the difference between the two studies, and certainly as the 203 study moves forward, we'll be able to share more details about the study design.

Great. Thanks. That's really helpful.

Great. Thanks, Brian. All right. One moment for our next question. Next question. comes from the line of Roy Buchanan of Citizens JMP. Your line is now open.

Hey, thanks for taking the question. A couple, I guess for 101, just when do you think you might be in a position to reengage the FDA on 101? And I guess more broadly, what are your plans following the phase 1A, 1B? Can you just elaborate on those a little bit?

Sure. Karen, do you want to handle that one?

Sure, absolutely. So, you know, as we said, you know, throughout this process, you know, we certainly do intend to reengage the FDA for this program. And really the criteria for that is for when we feel that we have sufficient data to return to them with a robust package to be able to move forward in the U.S. So, you know, that line of communication is certainly always open. And, you know, we're looking forward to the AB101 trial continuing to proceed, you know, as it is and accumulating that data to be able to share back with the FDA and And this development strategy is something we've done before. We've frequently taken assets initially outside of the United States for a phase one study and then brought them back to FDA to initiate phase two trials along with other global jurisdictions as we need to increase study populations and study size. And then in regards to how the study is progressing in outputs, as we said, just now we have progressed the study into multiple dosing in healthy subjects. We do intend to share preliminary data from healthy subjects in the first half of this year. The study is designed as an umbrella study, so a seamless transition into chronic hepatitis B patients once we have sufficient data to move forward into that population. And, you know, certainly we'll be sharing updates, you know, as they become available with a study in an ongoing fashion.

Okay, great. And then if I could ask one about VTP300. What do you need to see from the results this has to kind of move that approach forward and potentially, I guess, make it a cornerstone, but you mentioned combos with induced saran and 101. Yeah, what do you need to see to add VTP-300 or another vaccine to that approach, or do you really need to see the NEVO data? Thanks.

Yeah, good question, Roy. So, you know, honestly, I think we just need to see what the data look like, and, you know, we'll continue to evaluate as it comes forward. As you rightfully mentioned, we added the NEVO arm to that study as well. I think we'd probably want to see that NEVO data before moving that combo forward, unless, of course, we see something spectacular out of the VTP300 plus Indusiran arm, and I have no insight into that currently. I just, you know, it'll depend on what the data look like. Obviously, with VTP300 not being a proprietary asset, we're considering thinking about inducer and plus 101 and moving that forward as quickly as we can. That's always been sort of the goal. But, you know, the data will guide us, I think, is probably the best way to think about it. Okay, thanks.

Sure. One moment for our next question. Next question comes from the line of Ed Arce of HC Wainwright. Your line is now open.

Hi, good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for the kind of questions. First question for the new 203 phase 2a study with the value map. Can you discuss the design in broad strokes? You know, how big would the study be and any specific elements that we can expect in the study that is learning from the ongoing 202 study?

Karen, do you want to handle that one, please?

Yeah, sure.

So again, we typically don't dive into the details of our study designs until we're able to announce the first subject, first dose in the study. So I can't elaborate much beyond what we've already said. Again, the goal of the study is to try to help inform upcoming studies with imducerin in combination with AB101. looking at, you know, different options in terms of the timing of adding a PD-L1 inhibitor to induced Duran therapy is really the high-level goal. In terms of the size of the study, it is a typical 2A size study. This is, again, an exploratory study to try to basically learn about, again, that optimal timing, optimal duration of that combination approach. So, you know, the study is listed on clinicaltrials.gov, and you're certainly welcome to peruse that for any additional details there. But again, you know, we will share, you know, more specific details about the trial, you know, once we have subjects enrolled.

Got it. Understood. And then, similar along that line, just thinking ahead of the combination study with Inducerin and then with 101, Will the first study be a similar proof of concept study phase two way that we've seen with other combinations as well?

Yeah, I can jump into that one as well. Typically it is.

I mean, you know, the rationale really for starting with a Phase IIa study is, you know, certainly for AB101, you know, we will still be increasing the safety database for that molecule. We'll be, you know, still learning additional information about PK and pharmacodynamics in a larger population of subjects. Moving to a phase 2A study is fairly routine with an early development asset just to make sure we're fully understanding the different aspects of the molecule before taking it into a larger phase 2B type study. And that really is just all about de-risking the compound and making sure that we're completely comfortable taking it into these larger studies, which, as you know, are very technically difficult, very expensive. So it's most likely it'll start with a smaller two-way study. But again, as Mike mentioned throughout the call, we need to see the data and see how the data guides us. More to come on that as the AB101 program moves through phase one.

Got it. Understood. And then one final question from us. narrow down the timing of the first half readouts, most notably the TIL-1 end-of-period data readout and then also the AB101 heavy-arm tier data. Are these separate events, or should we expect kind of like a big splash at ESO?

Yeah, good question, Thomas. That's kind of a tough question to answer. And the reason I say that is because, of course, we'd love to present our data at EASL. We always love to present our data at EASL. But, of course, we have no idea whether any abstracts that we may or may not submit will be accepted. So it's hard to guide specifically to a particular conference. But I think you're kind of thinking about the timing correctly, that that's probably around the time when either through a conference or through some other mechanism, the data will likely be available.

Got it. Thank you again, everyone, for taking the questions, and we're looking forward to the data readout in the next few months.

Great. Thank you, Thomas.

Thank you. One moment for our next question. Next question comes from the line of Kianaki of Chardin. Your line is now open. Your question has been answered. Thanks.

Thanks, Gabe.

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

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

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