What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-11-05 compared with 2020-08-07 · 106 added, 75 removed, 308 unchanged (37% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis by our management of our financial position and results of operations in conjunction with our audited consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2019 and our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2020.

Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and are presented in U.S.

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• obtaining adequate financing through a combination of financing activities and operations;

• using the results from our HBV studies to adaptively design additional clinical trials to test the efficacy of the combination therapy and the duration of the result in patients;

• the expected timing of and amount for payments related to the Enantigen Therapeutics, Inc.’s transaction and its programs;

• using the results from our HBV studies to adaptively design additional clinical trials to test the efficacy of combination therapy and the duration of the result in patients;

• the expected timing of and amount for payments related to the Enantigen Therapeutics, Inc.

• the potential of our drug candidates to improve upon the standard of care and contribute to a curative combination treatment regimen;

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• expanding our HBV drug candidate pipeline through internal development, acquisitions and in-licenses;

• our expectation for AB-729 for preliminary results from a single-dose 90 mg cohort and multi-dose 60 mg cohorts in our Phase 1a/1b trial to be available in the second half of 2020;

• our expectation for AB-729 for preliminary results from a 90 mg single-dose cohort in HBV DNA positive subjects to be available in the second half of 2020;

• our expectation for AB-729 for preliminary results from the multi-dose 60 mg cohorts with a dosing interval of every four weeks and follow-up data on the 60 mg and 90 mg single-dose cohorts to be presented at an upcoming scientific meeting later this year;

• our expectation for AB-729 for preliminary results from the 60 mg multi-dose cohorts with a dosing interval of every eight weeks and the 90 mg single-dose cohort in HBV DNA positive subjects to be available in the fourth quarter of 2020;

• our expectation that AB-729 could be combined with our lead capsid inhibitor candidate, AB-836, and approved NAs, in our first combination therapy for HBV patients;

• our expectations regarding the dose interval for the planned AB-729 90 mg multi-dose cohorts;

• the potential for an oral HBsAg-reducing agent and potential all-oral combination therapy;

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• the potential for AB-836 to be once-daily dosing;

• our expectation to initiate the Phase 2 clinical trial under our clinical collaboration agreement with Assembly BioSciences, Inc.

(“Assembly”) in the first half of 2021;

• our expectation to enroll approximately 60 subjects in the Phase 2 clinical trial with Assembly;

• our expectation to pursue development of a next generation oral HBV RNA-destabilizer;

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We are advancing multiple drug product candidates that may be combined into a potentially curative regimen for chronic HBV infection.

Arbutus has also initiated a drug discovery and development effort for treating coronaviruses, including COVID-19.

We have also initiated a drug discovery and development effort for treating coronaviruses, including COVID-19.

Hepatitis B is a potentially life-threatening liver infection caused by HBV.

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Our HBV product pipeline consists of the following programs:

We believe that AB-729, our subcutaneously administered RNAi product candidate, may be combinable with AB-836, our lead capsid inhibitor product candidate, and other currently-marketed or investigational therapies, in our first combination therapy for chronic HBV patients.

In parallel, we are in lead optimization with several oral compounds for our PD-L1 program and our next-generation HBV RNA destabilizer program.

In addition, we announced in August 2020, that we entered into a clinical collaboration agreement with Assembly BioSciences, Inc.

(“Assembly”) to evaluate AB-729 in combination with Assembly’s lead HBV core inhibitor (capsid inhibitor) candidate vebicorvir (VBR) and standard-of-care nucleos(t)ide reverse transcriptase inhibitor (“NrtI”) therapy for the treatment of patients with chronic HBV infection.

This collaboration will include a randomized, multi-center, open-label Phase 2 clinical trial that will explore the safety, pharmacokinetics, and antiviral activity of the triple combination of AB-729, VBR and an NrtI compared to the double combinations of VBR with an NrtI and AB-729 with an NrtI.

This trial is expected to initiate in the first half of 2021 and enroll approximately 60 virologically-suppressed subjects with chronic HBV infection.

We continue to explore expansion of our HBV pipeline through internal discovery and development activities and through potential strategic alliances.

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• In Part 1, three cohorts of healthy subjects were randomized 4:2 to receive single doses (60 mg, 180 mg or 360 mg) of AB-729 or placebo.

• In Part 2, non-cirrhotic, HBeAg positive or negative, chronic hepatitis B subjects (n=6) currently taking nucleos(t)ide antiviral therapy with HBV DNA below the limit of quantitation received single doses (60 mg, 90 mg or 180 mg) of AB-729.

All subjects continued their nucleos(t)ide antiviral therapy throughout the trial.

Part 2 will also include dosing of AB-729 in HBV DNA positive chronic hepatitis B subjects.

• In Part 3, chronic hepatitis B subjects, HBV DNA negative first and HBV DNA positive later, will receive multiple doses of AB-729 for up to six months at four and eight week dosing intervals.

• In Part 3, chronic hepatitis B subjects, HBV DNA negative first and HBV DNA positive later, will receive multiple doses of AB-729 for up to six months at four, eight or twelve week dosing intervals.

In March 2020, we announced positive preliminary results in the three cohorts of healthy subjects, all of whom received a single subcutaneous injection of AB-729 with no serious adverse events (“SAEs”) observed and most adverse events (“AEs”) were mild and considered unrelated to AB-729.

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In March 2020, we also announced positive preliminary results in two cohorts (60 mg and 180 mg dose groups) of chronic hepatitis B subjects and, in May 2020, we announced additional Week 12 follow-up data on the 60 mg cohort.

Week 12 data for the 90 mg single-dose cohort were reported in September 2020.

All chronic hepatitis B subjects were on nucleos(t)ide antiviral therapy and received a single subcutaneous injection of AB-729.

Mean HBsAg changes from baseline:

60 mg Single-Dose Cohort (N=6)

180 mg Single-Dose Cohort (N=4)

Day 29 mean log10 IU/mL

(Standard Error of the Mean)

60 mg Single-Dose

(N=6) 90 mg Single-Dose

(N=6) 180 mg Single-Dose

Week 12 (day 84) mean log10 IU/mL (Standard Error of the Mean) -0.99 (0.24) -1.23 (0.18) -0.98 (0.22)

The Week 12 mean log10 (SE) HBsAg decline for the 60 mg single-dose cohort was equivalent to the 180 mg single-dose cohort.

AB-729 dosed at either 60 mg or 180 mg in chronic hepatitis B subjects was generally safe and well tolerated and there were no SAEs.

All single-dose cohorts achieved meaningful week 12 mean log10 (SE) HBsAg declines and the 60 mg and 90 mg single doses demonstrated favorable safety and tolerability profiles with no SAEs.

Most AEs were mild (13/15) and considered unrelated (12/15) to AB-729.

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Notably, this subject experienced an unrelated gastroenteritis and self-medicated.

We are dosing two 60 mg multi-dose cohorts of subjects with chronic HBV infection with dosing intervals of every four and eight weeks, respectively.

We are also dosing subjects in a 90 mg single-dose cohort and we have initiated an additional AB-729 90 mg single-dose cohort in HBV positive subjects.

Results from all of these cohorts are expected in the second half of 2020.

Additionally, we intend to initiate two 90 mg multi-dose cohorts in the second half of 2020.

As we await data from the 90 mg single-dose cohorts, we anticipate that the dose interval for the planned 90 mg multi-dose cohorts will be every eight and twelve weeks, respectively.

We are currently dosing two 60 mg multi-dose cohorts of subjects with chronic HBV infection with dosing intervals of every four and eight weeks, respectively.

Results from the 60 mg multi-dose cohort with a dosing interval of every four weeks and additional follow-up data on the 60 mg and 90 mg single-dose cohorts are expected to be disclosed as part of an oral presentation at the upcoming American Association for the Study of Liver Disease Conference (“AASLD”) in November.

Separately, results from the 60 mg multi-dose cohort with a dosing interval of every eight weeks and a 90 mg single-dose cohort in HBV DNA positive subjects are expected in the fourth quarter of 2020.

Additionally, the Company is dosing two 90 mg multi-dose cohorts of subjects with chronic HBV infection with dosing intervals of every eight and twelve weeks, respectively.

While we have been able to progress with our clinical and pre-clinical activities to date, it is not possible to predict if the COVID-19 pandemic will negatively impact our plans and timelines, including enrolling and monitoring subjects in the trial.

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Our oral capsid inhibitor discovery effort generated promising next-generation compounds, which led to the nomination of AB-836 in January 2020.

AB-836 has the potential for increased potency and an enhanced resistance profile compared to our previous capsid inhibitor product candidates, including AB-506.

AB-836 is a novel chemical series differentiated from AB-506 and other competitor compounds in the capsid inhibitor space.

AB-836 is a novel chemical series differentiated from competitor compounds with the potential for increased efficacy and an enhanced resistance profile.

AB-836 leverages a novel binding site within the core protein dimer-dimer interface, has shown to be active against NA resistant variants and has the potential to address certain known capsid resistant variants.

AB-836 is anticipated to be combinable with other mechanisms of action and is also anticipated to be dosed once daily.

We anticipate completing IND/CTA-enabling studies for AB-836 by the end of 2020.

We anticipate completing CTA/IND-enabling studies for AB-836 by the end of 2020.

Immune Reawakening

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Sofia, who was awarded the Lasker-DeBakey Award for his discovery of sofosbuvir, brings extensive antiviral drug discovery experience to this new program.

We have also recently joined forces with the COVID R&D consortium to further support and expedite efforts to address the SARS-CoV-2 pandemic and any future coronavirus outbreaks.

At this time, our COVID-19 research program will focus on the discovery and development of new molecular entities that address specific viral targets including the nsp12 viral polymerase and the viral protease.

We have also recently joined the COVID R&D consortium to further support and expedite efforts to address the SARS-CoV-2 pandemic and any future coronavirus outbreaks.

These targets are essential viral proteins which we have experience in targeting.

We are actively screening multiple new oral molecular entities.

The establishment of the COVID-19 effort does not materially impact our cash guidance for 2020 of $54 million to $58 million.

Royalty Entitlements

Royalty Entitlements and Collaborations

Alnylam Pharmaceuticals, Inc.

and Acuitas Therapeutics, Inc.

The Company has two royalty entitlements to Alnylam’s global net sales of ONPATTRO®.

In 2012, we entered into a license agreement with Alnylam Pharmaceuticals, Inc.

(“Alnylam”) that entitles Alnylam to develop and commercialize products with our lipid nanoparticle delivery (“LNP”) technology.

The Company has two royalty entitlements to Alnylam Pharmaceuticals, Inc.’s (“Alnylam”) global net sales of ONPATTRO® (“ONPATTRO”).

In 2012, we entered into a license agreement with Alnylam that entitles Alnylam to develop and commercialize products with our lipid nanoparticle (“LNP”) delivery technology.

Alnylam’s ONPATTRO, which represents the first approved application of our LNP technology, was approved by the United States Food and Drug Administration (“FDA”) and the European Medicines Agency (“EMA”) during the third quarter of 2018 and was launched by Alnylam immediately upon approval in the United States.

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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.

We also have rights to a second royalty interest on global net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas.

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.

This royalty entitlement from Acuitas has been retained by us and was not part of the royalty entitlement sale to OMERS.

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In April 2018, we entered into an agreement with Roivant Sciences Ltd.

(“Roivant”), our largest shareholder, to launch Genevant, a company focused on the discovery, development, and commercialization of a broad range of RNA-based therapeutics enabled by Arbutus’ lipid nanoparticle (“LNP”) and ligand conjugate delivery technologies.

(“Roivant”), our largest shareholder, to launch Genevant Sciences Ltd.

(“Genevant”), a company focused on the discovery, development, and commercialization of a broad range of RNA-based therapeutics enabled by Arbutus’ LNP and ligand conjugate delivery technologies.

We licensed exclusive rights to our LNP and ligand conjugate delivery platforms to Genevant for RNA-based applications outside of HBV, except to the extent certain rights had already been licensed to other third parties.

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If Genevant sub-licenses the intellectual property licensed by us to Genevant, we would receive upon the commercialization of a product developed by such sub-licensee the lesser of (i) twenty percent of the revenue received by Genevant for such sublicensing and (ii) tiered low single-digit royalties on product sales by the sublicensee.

As of June 30, 2020, the carrying value of our investment in Genevant was zero and we owned approximately 40% of the common equity of Genevant.

On July 23, 2020, the United States Patent and Trademark Office before the Patent Trial and Appeal Board (“PTAB”) announced their decision in Moderna Therapeutics, Inc.'s challenge of the validity of U.S.

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The ‘069 Patent was included in this license agreement between Genevant and Arbutus.

We are gratified by the recent decision of the PTAB, upholding the validity of one of the patents protecting our LNP technology that we have licensed to Genevant.

This decision reinforces our continuing belief in the potential of this technology.

On July 31, 2020, Roivant recapitalized Genevant through an equity investment and conversion of previously issued convertible debt securities held by Roivant.

We participated in the recapitalization of Genevant with an equity investment of $2.5 million.

Following the recapitalization, we own approximately 16% of the common equity of Genevant.

In connection with the recapitalization, the three parties entered into an Amended and Restated Shareholders Agreement that provides Roivant with substantial control of Genevant.

We have a non-voting observer seat on Genevant’s Board of Directors.

As of September 30, 2020, 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.

Collaboration with Assembly BioSciences, Inc.

In August 2020, the Company and Assembly entered into a clinical collaboration agreement to evaluate AB-729 in combination with Assembly’s lead HBV core inhibitor (capsid inhibitor) candidate VBR and standard-of-care Nrtl therapy for the treatment of patients with chronic HBV infection.

The companies will share in the costs of the collaboration and the associated clinical trial is projected to initiate in the first half of 2021.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS AND ESTIMATES

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The following summarizes the results of our operations for the periods shown:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

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Other income (loss) (3,538) (4,134) (5,198) (10,859)

Loss before income taxes (18,755) (95,159) (46,703) (141,725)

Income tax benefit — 12,656 — 12,656

Net loss (18,755) (82,503) (46,703) (129,069)

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Revenues are summarized in the following tables:

Three Months Ended June 30,

Three Months Ended September 30,

2020 % of Total 2019 % of Total

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$ 774 51 % $ 516 17 %

Gritstone Oncology, Inc.

— — % 1,722 56 %

Other milestone and royalty payments 54 4 % 362 12 %

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Total revenue $ 1,523 100 % $ 3,061 100 %

Six Months Ended June 30,

Nine Months Ended September 30,

2020 % of Total 2019 % of Total

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$ 2,288 51 % $ 1,161 26 %

Gritstone Oncology, Inc.

— — % 1,789 41 %

Other milestone and royalty payments 199 4 % 464 11 %

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Revenue contracts are addressed in detail in the Overview section of Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Form 10-K.

Revenue increased $0.9 million and $1.7 million for the three and six months ended June 30, 2020, respectively, as compared to the same periods in 2019, due primarily to an increase in royalties from the growth of Alnylam’s sales of ONPATTRO.

Revenue decreased $1.5 million for the three months ended September 30, 2020, compared to the same period in 2019, due primarily to a $1.5 million development milestone earned in 2019 under our license agreement with Gritstone Oncology, Inc.

(“Gritstone”).

Revenue increased $0.1 million for the nine months ended September 30, 2020, compared to the same period in 2019, due primarily to a $2.2 million increase in royalties from the growth of Alnylam’s sales of ONPATTRO, partially offset by a $1.8 million decrease in milestone and royalty revenue from Gritstone.

Operating expenses

Operating expenses are summarized in the following tables:

Three Months Ended June 30,

Three Months Ended September 30,

2020 % of Total 2019 % of Total

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Site consolidation — — % 182 — %

Impairment of intangible assets — — 43,836 47 %

Impairment of goodwill — — 22,471 24 %

Arbitration — — 6,486 7 %

Total operating expenses $ 16,740 100 % $ 94,086 100 %

Six Months Ended June 30,

Nine Months Ended September 30,

2020 % of Total 2019 % of Total

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Site consolidation 64 — % 33 — %

Impairment of intangible assets $ — — % $ 43,836 32 %

Impairment of goodwill $ — — % $ 22,471 17 %

Arbitration $ — — % $ 6,486 5 %

Total operating expenses $ 46,033 100 % $ 135,259 100 %

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Research and development expenses consist primarily of clinical and pre-clinical trial expenses, personnel expenses, consulting and third party expenses, consumables and materials, as well as a portion of stock-based compensation and general overhead costs.

Research and development expenses decreased $2.3 million and $6.6 million for the three and six months ended June 30, 2020, respectively, as compared to the same periods in 2019.

Research and development expenses decreased $5.7 million and $12.2 million for the three and nine months ended September 30, 2020, respectively, as compared to the same periods in 2019.

The decrease was due primarily to the October 2019 decision to discontinue development of AB-506, our prior generation capsid inhibitor product candidate, as well as higher spend on AB-729 during 2019 for preclinical studies and drug product supply in preparation for the Phase 1a/1b clinical trial which commenced in the second quarter of 2019.

These decreases for the three and six months ended June 30, 2020 were partially offset by higher spend related to AB-836, our next generation capsid inhibitor.

These decreases for the three and nine months ended September 30, 2020 were partially offset by higher spend related to AB-836, our next generation capsid inhibitor.

A significant portion of our research and development expenses are not tracked by project as they benefit multiple projects or our technology platform and because our most-advanced programs are not yet in late-stage clinical development.

General and administrative

General and administrative expenses decreased $4.6 million and $5.5 million for the three and six months ended June 30, 2020, as compared to the same periods in 2019, due primarily to our former President and Chief Executive Officer's departure from the company in June 2019 and a decrease in legal fees primarily associated with the arbitration case with the University of British Columbia that was settled in September 2019.

General and administrative expenses increased $0.8 million for the three months ended September 30, 2020, as compared to the same period in 2019 due primarily to increased compensation-related expenses and an increase in insurance premiums.

General and administrative expenses decreased $4.7 million for the nine months ended September 30, 2020 due primarily to our former President and Chief Executive Officer's departure from the company in June 2019 and a decrease in legal fees primarily associated with the arbitration case with the University of British Columbia that was settled in September 2019.

In accordance with the terms of his legacy employment agreement, our former President and Chief Executive Officer received $2.3 million of cash severance, which was paid in July 2019, and we recognized $1.1 million of non-cash stock-based compensation expense for accelerated vesting of his stock options.

Partially offsetting the decreases in general and administrative expenses were increased stock-based compensation expense and an increase in insurance premiums.

Change in fair value of contingent consideration

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Site consolidation

As of June 30, 2020, we have recognized all of the expense related to our site consolidation.

As of September 30, 2020, we have recognized all of the expense related to our site consolidation.

Other income (loss)

Other income (loss) is summarized in the following table:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

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Interest income

The decreases in interest income for the three and six months ended June 30, 2020, compared to the same periods in 2019 were due primarily to lower average cash and investment balances and a general decline in market interest rates.

The decreases in interest income for the three and nine months ended September 30, 2020, compared to the same periods in 2019 were due primarily to a general decline in market interest rates.

Interest expense

Interest expense for the three and six months ended June 30, 2020 consisted primarily of non-cash amortization of the liability related to the sale of future royalties, which occurred in July 2019.

Interest expense for the three and nine months ended September 30, 2020 consisted primarily of non-cash amortization of the liability related to the sale of future royalties, which occurred in July 2019.

Foreign exchange gains (losses)

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dollars, will continue to decrease as a result of the site consolidation.

Gain on investment and equity investment losses

In the second quarter of 2018, together with Roivant Science Ltd.

(“Roivant”), we launched Genevant Sciences Ltd.

(“Genevant”), a company focused on the discovery, development, and commercialization of a broad range of RNA-based therapeutics enabled by our LNP Delivery Technologies.

We account for our 40% ownership interest in Genevant using the equity method of accounting.

Genevant has issued convertible debt securities to other investors.

If those securities are converted to common shares, the Company’s ownership interest in Genevant may be significantly diluted.

As of June 30, 2020, the carrying value of our investment in Genevant was zero and we did not record equity losses during the three and six months ended June 30, 2020.

For the three and six months ended June 30, 2019, we recorded $3.3 million and $8.0 million of equity investment losses, reflecting our proportionate share of Genevant’s net results on a one-quarter lag basis.

Equity investment losses

In the second quarter of 2018, together with Roivant, we launched Genevant, a company focused on the discovery, development, and commercialization of a broad range of RNA-based therapeutics enabled by our LNP delivery technologies.

On July 31, 2020, Roivant recapitalized Genevant through an equity investment and conversion of previously issued convertible debt securities held by Roivant.

We participated in the recapitalization of Genevant with an equity investment of $2.5 million.

Following the recapitalization, we own approximately 16% of the common equity of Genevant.

In connection with the

recapitalization, the three parties entered into an Amended and Restated Shareholders Agreement that provides Roivant with substantial control of Genevant.

We have a non-voting observer seat on Genevant’s Board of Directors.

We determined that this $2.5 million additional investment in Genevant was funding prior losses and recorded the amount as an equity investment loss on the Condensed Consolidated Statements of Operations and Comprehensive Loss during the third quarter of 2020.

For the three and nine months ended September 30, 2019, we recorded $3.5 million and $11.5 million of equity investment losses, respectively.

The equity investment losses for 2019 reflected our proportionate share of Genevant’s net results on a one-quarter lag basis.

Due to our loss of significant influence with respect to Genevant as a result of the recapitalization, we discontinued the use of equity method accounting for our interest in Genevant.

Following the recapitalization, we account for our interest in Genevant as equity securities without readily determinable fair values.

Accordingly, an estimate of the fair value of the securities is based on the original cost less previously recognized equity method losses, less impairments, plus or minus changes resulting from future observable price changes in orderly transactions for identical or a similar Genevant securities.

As of September 30, 2020, the carrying value of our investment in Genevant was zero and we owned approximately 16% of the common equity of Genevant.

Our entitlement to receive future royalties or sublicensing revenue from Genevant was not impacted by the recapitalization.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes our cash flow activities for the periods indicated:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Since our incorporation, we have financed our operations through the sales of equity, debt, revenues from research and development collaborations and licenses with corporate partners, royalty monetization, interest income on funds available for investment, and government contracts, grants and tax credits.

For the six months ended June 30, 2020, $24.3 million of cash was used in operating activities compared to $34.2 million of cash used in the six months ended June 30, 2019.

The decrease in net cash used in operating activities was related primarily to lower research and development expenses from our decision in October 2019 to discontinue development of AB-506 as well as higher spend on AB-729 during 2019 for preclinical studies and drug product supply in preparation for the Phase 1a/1b clinical trial which commenced in the second quarter of 2019.

For the six months ended June 30, 2020, net cash provided by investing activities was $21.0 million as we purchased additional investments in marketable securities of $25.9 million, while $46.9 million of short-term investments matured.

For the six months ended June 30, 2019, net cash provided by investing activities was $71.0 million as certain short-term investments matured.

For the six months ended June 30, 2020, net cash provided by financing activities was $17.4 million due primarily to proceeds from sales of common shares under our open market sale agreement, as amended, with Jefferies LLC (“Jefferies”).

For the six months ended June 30, 2019, net cash provided by financing activities was $5.0 million due primarily to proceeds from sales of common stock under such sales agreement.

For the nine months ended September 30, 2020, $36.4 million of cash was used in operating activities compared to $57.7 million of cash used in the nine months ended September 30, 2019.

For the nine months ended September 30, 2020, net cash provided by investing activities was $35.1 million as we purchased additional investments in marketable securities of $28.9 million, while $66.5 million of short-term investments matured.

For the nine months ended September 30, 2019, net cash provided by investing activities was $87.2 million as certain short-term investments matured.

For the nine months ended September 30, 2020, net cash provided by financing activities was $66.5 million due primarily to proceeds from sales of common shares under our open market sale agreement, as amended, with Jefferies LLC (“Jefferies”).

For the nine months ended September 30, 2019, net cash provided by financing activities was $23.6 million due primarily to proceeds from the sale of a portion of our future royalties from sales of ONPATTRO and proceeds from sales of common shares under our open market sale agreement.

Sources of Liquidity

As of June 30, 2020, we had cash, cash equivalents and investments of $84.0 million.

We had no outstanding debt at June 30, 2020.

As of September 30, 2020, we had cash, cash equivalents and investments of $118.3 million.

We had no outstanding debt at September 30, 2020.

In December 2018, we entered into an Open Market Sale Agreement with Jefferies (the “Sale Agreement”), under which we could issue and sell common shares, from time to time, for an aggregate sales price of up to $50.0 million.

In December 2019, we entered into an amendment to the Sale Agreement with Jefferies (the “Amended Sale Agreement”) in connection with the filing of a new shelf registration statement on Form S-3 (File No.

333-235674), filed with the SEC on December 23, 2019 (the “New Shelf Registration Statement”).

The Amended Sale Agreement revised the original Sale Agreement to reflect that we may sell our common shares, from time to time, for an aggregate sales price of up to $50.0 million, under the New Shelf Registration Statement.

For the six months ended June 30, 2020, we issued 6,438,265 common shares pursuant to the Sale Agreement and the Amended Sale Agreement, resulting in net proceeds of approximately $17.4 million.

During July 2020, we fully utilized the remaining availability under the Amended Sale Agreement resulting in an additional $36.5 million of net proceeds from the issuance of 9,548,780 common shares.

In December 2019, we entered into an amendment to the Sale Agreement with Jefferies (the “2019 Amendment”) in connection with the filing of a shelf registration statement on Form S-3 (File No.

333-235674), filed with the SEC on December 23, 2019 (the “Shelf Registration Statement”).

The 2019 Amendment revised the original Sale Agreement to reflect that we may sell our common shares, from time to time, for an aggregate sales price of up to $50.0 million, under the Shelf Registration Statement.

During July 2020, we fully utilized the remaining availability under the Sale Agreement, as amended by the 2019 Amendment.

In August 2020, we entered into a new amendment to the Sale Agreement (the “2020 Amendment”) with Jefferies.

Pursuant to the 2020 Amendment, we can issue and sell common shares, from time to time, for an aggregate sales price of up to an additional $75.0 million under the Sale Agreement.

For the three and nine months ended September 30, 2020, we issued 13,258,096 and 19,696,361 common shares, respectively, under the Sale Agreement, as amended, resulting in net proceeds of approximately $48.8 million and $66.1 million, respectively.

As of September 30, 2020, there is approximately $62.3 million available under the Sale Agreement, as amended.

In August 2020, we filed a new $200 million shelf registration statement on Form S-3 (File No.

333-248467), which was declared effective by the SEC on October 22, 2020 (the “New Shelf Registration Statement”).

We have not yet sold any securities under the New Shelf Registration Statement.

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 immediately upon approval in the US.

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Cash requirements

At June 30, 2020, we held an aggregate of $84.0 million in cash, cash equivalents and investments.

We believe that our cash, cash equivalents and investments as of June 30, 2020 plus the additional $36.5 million of proceeds received under our Amended Sale Agreement during July 2020 are sufficient to fund our operations into mid-2022.

At September 30, 2020, we held an aggregate of $118.3 million in cash, cash equivalents and investments.

We believe that our cash, cash equivalents and investments as of September 30, 2020 is sufficient to fund our operations into mid-2022.

In the future, substantial additional funds will be required to continue with the active development of our pipeline products and technologies.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis