What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-03-03 compared with 2021-03-04 · 131 added, 110 removed, 433 unchanged (36% of the section changed)

17 unchanged sentences

The approach we are taking to discover and develop novel product candidates is unproven and may never lead to marketable products.

We are concentrating and intend to continue to concentrate our internal research and development efforts primarily on the discovery and development of product candidates targeting chronic HBV in order to ultimately develop a functional curative combination regimen, as well as on therapies to treat coronaviruses, including COVID-19.

We are concentrating and intend to continue to concentrate our internal research and development efforts primarily on the discovery and development of product candidates targeting cHBV in order to ultimately develop a functional curative combination regimen, as well as on therapies to treat coronaviruses, including COVID-19.

Our future success depends in part on the successful development of these product candidates.

10 unchanged sentences

Our principal sources of liquidity are cash, cash equivalents and marketable securities, which were $191.0 million as of December 31, 2021.

From January 1, 2021 through March 4, 2021, we received an additional $24.3 million of net proceeds from the issuance of common shares under the ATM program.

We believe that our cash resources will be sufficient to fund our operations through the third quarter of 2022.

However, changing circumstances may cause us to consume capital faster than we

currently anticipate, and we may need to spend more money than currently expected because of such circumstances.

In January 2022, we received a $40 million upfront payment and $15 million of proceeds resulting from the sale of common shares to Qilu as part of the technology transfer and exclusive licensing agreement to develop and commercialize AB-729 in China.

We believe that our $191.0 million of cash and investments in marketable securities as of

December 31, 2021 plus the $55 million of proceeds received in January 2022 from our partnership with Qilu will be sufficient to fund our operations into the second quarter of 2024.

However, changing circumstances may cause us to consume capital faster than we currently anticipate, and we may need to spend more money than currently expected because of such circumstances.

Within the next several years, substantial additional funds will be required to continue with the active development of our pipeline product candidates and technologies.

In particular, our funding needs may vary depending on a number of factors including:

• revenues earned from our licensing partners, including Alnylam and Gritstone;

• revenues earned from our licensing partners, including Alnylam, Acuitas, Gritstone Oncology, Inc.

(“Gritstone”) and Qilu;

• the extent to which we continue the development of our product candidates or form licensing arrangements to advance our product candidates;

22 unchanged sentences

From inception to December 31, 2021, we have an accumulated net deficit of approximately $1.1 billion.

Investment in drug development is highly speculative because it entails

substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable.

Investment in drug development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or become commercially viable.

We continue to incur significant research, development and other expenses related to our ongoing operations, including development of our product candidates.

16 unchanged sentences

The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

The COVID-19 coronavirus could adversely impact our business, including our clinical development plans.

In December 2019, a novel strain of coronavirus, SARS-CoV-2 (the “COVID-19 coronavirus”), was reported to have surfaced in Wuhan, China.

Since then, the COVID-19 coronavirus has spread to multiple countries, including the United States, and has caused significant disruptions around the world.

We may continue to experience disruptions as a result of the COVID-19 coronavirus pandemic that could severely impact our business, including:

The COVID-19 pandemic could adversely impact our business, including our clinical development plans.

We continue to monitor the effects of COVID-19, which has caused significant disruptions around the world.

We may continue to experience disruptions as a result of the COVID-19 pandemic that could severely impact our business, including:

• interruption of key manufacturing, research and clinical development activities due to limitations on work and travel imposed or recommended by federal or state governments, employers and others;

• delays or difficulties in clinical trial site operations, including difficulties in recruiting clinical site investigators and clinical site staff and difficulties in enrolling subjects or treating subjects in active trials;

• the diversion of healthcare resources away from the conduct of clinical trial matters to focus on COVID-19 coronavirus pandemic concerns, including the administration of COVID-19 coronavirus vaccines, which could negatively affect the attention of physicians serving as our clinical trial investigators, the hospitals serving as our clinical trial sites and the hospital staff supporting the conduct of our clinical trials;

• limitations on travel and quarantine requirements that interrupt key clinical trial activities, such as clinical trial site initiations, our ability and the ability of our CROs to access and monitor clinical trial sites, and new clinical trial site policies resulting from the COVID-19 coronavirus pandemic that determine essential and non-essential functions and staff, which may impact the ability of site staff to conduct assessments or result in delays to the conduct of the assessments as part of our clinical trial protocols, or impact the ability to enter assessment results into clinical trial databases in a timely manner, or limit the ability of a subject to participate in a clinical trial or delay access to product candidate dosing or assessments;

• the diversion of healthcare resources away from the conduct of clinical trial matters to focus on COVID-19 pandemic concerns, including the administration of COVID-19 vaccines, which could negatively affect the attention of physicians serving as our clinical trial investigators, the hospitals serving as our clinical trial sites and the hospital staff supporting the conduct of our clinical trials;

• limitations on travel and quarantine requirements that interrupt key clinical trial activities, such as clinical trial site initiations, our ability and the ability of our clinical research organizations (“CROs”) to access and monitor clinical trial sites, and new clinical trial site policies resulting from the COVID-19 pandemic that determine essential and non-essential functions and staff, which may impact the ability of site staff to conduct assessments or result in delays to the conduct of the assessments as part of our clinical trial protocols, or impact the ability to enter assessment results into clinical trial databases in a timely manner, or limit the ability of a subject to participate in a clinical trial or delay access to product candidate dosing or assessments;

• interruption of key business activities due to illness and/or quarantine of key individuals and delays associated with recruiting, hiring and training new temporary or permanent replacements for such key individuals, both internally and at our third party service providers;

• delays in research and clinical trial sites receiving the supplies and materials needed to conduct preclinical studies and clinical trials, due to work stoppages, travel and shipping interruptions or restrictions or other reasons;

• potential clinical trial subjects may be unable or unwilling to participate further (or may have to limit participation) in our clinical trials due to risks related to the COVID-19 coronavirus pandemic;

• potential clinical trial subjects may be unable or unwilling to participate further (or may have to limit participation) in our clinical trials due to risks related to the COVID-19 pandemic;

• difficulties in raising additional capital needed to pursue the development of our programs due to the slowing of our economy and near term and/or long term negative effects of the pandemic on the financial, banking and capital markets;

• changes in local regulations as part of a response to the COVID-19 coronavirus outbreak that may require us to change the ways in which research, including clinical development, is conducted, which may result in unexpected costs;

• changes in local regulations as part of a response to the COVID-19 outbreak that may require us to change the ways in which research, including clinical development, is conducted, which may result in unexpected costs;

• delays in necessary interactions with regulators and other important agencies and contractors due to limitations in employee resources, travel restrictions or forced furlough of government employees.

If a subject participating in one of our clinical trials contracts COVID-19 coronavirus, this could negatively impact the data readouts from these trials;

for example, the subject may be unable to participate further (or may have to limit participation) in our clinical trial, the subject may show a different clinical trial assessment than if the subject had not contracted the COVID-19 coronavirus, or the subject could experience an adverse event that could be attributed to our product candidate.

The global outbreak of the COVID-19 coronavirus continues to rapidly evolve.

The extent to which the COVID-19 coronavirus may further impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the virus.

If a subject participating in one of our clinical trials contracts COVID-19, this could negatively impact the data readouts from these trials;

for example, the subject may be unable to participate further (or may have to limit participation) in our clinical trial, the subject may show a different clinical trial assessment than if the subject had not contracted the COVID-19, or the subject could experience an AE that could be attributed to our product candidate.

The global outbreak of COVID-19 continues to evolve, including with the emergence of new COVID-19 variants in 2021.

The extent to which the COVID-19 pandemic may further impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the virus.

We do not generate revenues from product sales and may never be profitable.

15 unchanged sentences

Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate.

Our expenses could increase beyond expectations if we are required by the FDA or other regulatory authorities outside the United States to perform clinical trials or other studies in addition to those that we currently anticipate.

Our expenses could increase beyond expectations if we are required by the FDA or other regulatory authorities outside the United States to perform clinical trials or

other studies in addition to those that we currently anticipate.

Even if we are able to generate revenues from the sale of any approved product candidates, we may not become profitable and may need to obtain additional funding to continue operations.

10 unchanged sentences

• delay or failure in reaching agreement with the FDA or other regulatory authority outside the United States on the design of a given trial, or in obtaining authorization to commence a trial;

• delay or failure in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites;

• delay or failure in obtaining approval of an institutional review board (“IRB”) or ethics committees before a clinical trial can be initiated at a given site;

• any shelter-in-place orders from local, state or federal governments or clinical trial site policies resulting from the COVID-19 coronavirus pandemic that determine essential and non-essential functions and staff, which may impact the ability of the staff to conduct assessments or result in delays to the conduct of the assessments as part of our clinical trial protocols, or impact the ability to enter assessment results into clinical trial databases in a timely manner;

• delay or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;

• delay or failure in obtaining approval of an IRB or ethics committees before a clinical trial can be initiated at a given site;

• any shelter-in-place orders from local, state or federal governments or clinical trial site policies resulting from the COVID-19 pandemic that determine essential and non-essential functions and staff, which may impact the ability of the staff to conduct assessments or result in delays to the conduct of the assessments as part of our clinical trial protocols, or impact the ability to enter assessment results into clinical trial databases in a timely manner;

• withdrawal of clinical trial sites from our clinical trials, including as a result of changing standards of care or the ineligibility of a site to participate;

14 unchanged sentences

• changes in governmental regulations or administrative action.

We, the FDA, other regulatory authorities outside the United States, or an IRB may suspend a clinical trial at any time for various reasons, including if it appears that the clinical trial is exposing participants to unacceptable health risks or if the FDA or one or more other regulatory authorities outside the United States find deficiencies in our IND or similar application outside the United States or the conduct of the trial.

If we experience delays in the completion of, or the termination of, any clinical trial

of any of our product candidates, the commercial prospects of such product candidate will be harmed, and our ability to generate product revenues from such product candidate will be delayed or rendered impossible.

or one or more other regulatory authorities outside the United States find deficiencies in our IND or similar application outside the United States or the conduct of the trial.

If we experience delays in the completion of, or the termination of, any clinical trial of any of our product candidates, the commercial prospects of such product candidate will be harmed, and our ability to generate product revenues from such product candidate will be delayed or rendered impossible.

In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process, and jeopardize our ability to commence product sales and generate revenues.

14 unchanged sentences

The product candidates we currently have under development will require significant development, pre-clinical and clinical testing and investment of significant funds before their commercialization.

Because of this, we must make strategic decisions regarding resource allocations and which product candidates to pursue, such as our decisions to no longer pursue the development of AB-452 and AB-506.

Because of this, we must make strategic decisions regarding resource allocations and which product candidates to pursue.

There can be no assurance that we will be able to develop all potentially promising product candidates that we may identify.

3 unchanged sentences

Several of our current pre-clinical studies and clinical trials are being conducted outside the United States and we may conduct further pre-clinical studies and clinical trials outside the United States in the future.

We are currently conducting clinical trials in Moldova, Thailand, South Korea, Hong Kong, Australia and New Zealand.

We are currently conducting clinical trials in Moldova, Thailand, Taiwan, South Korea, Hong Kong, Australia and New Zealand, among other countries.

To the extent we do not conduct these clinical trials under an IND, the FDA may not accept data from such trials.

Although the FDA may accept data from clinical trials conducted outside the United States that are not conducted under an IND, the FDA’s acceptance of these data is subject to certain conditions.

For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles.

The trial population must also adequately represent the United States population, and the

data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful.

For example, the clinical trial must be well designed and conducted and performed by

qualified investigators in accordance with ethical principles.

The trial population must also adequately represent the United States population, and the data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful.

In general, the patient population for any clinical trials conducted outside of the United States must be representative of the population for whom we intend to label the product in the United States.

27 unchanged sentences

Side effects may also lead regulatory authorities to require stronger product warnings on the product label, costly post-marketing studies, and/or a Risk Evaluation and Mitigation Strategy (“REMS”), among other possible requirements.

If the product candidate has already been approved, such approval may be withdrawn.

If the product candidate has already been approved, such approval may be

Any delay in, denial, or withdrawal of marketing approval for one of our product candidates will adversely affect our business, including our results of operations and financial position.

Even if one or more of our product candidates receives marketing approval, undesirable side effects may limit such product’s commercial viability.

Patients may not wish to use our

product, physicians may not prescribe our product, and our reputation may suffer.

Patients may not wish to use our product, physicians may not prescribe our product, and our reputation may suffer.

Any of these events may significantly harm our business and financial prospects.

We may find it difficult to enroll subjects in our clinical trials, which could delay or prevent clinical trials of our product candidates.

Identifying and qualifying subjects to participate in clinical trials of our product candidates is critical to our success.

The timing of our clinical trials depends in part on the speed at which we can recruit subjects to participate in testing our product candidates.

We may not be able to identify, recruit and enroll a sufficient number of subjects, or those with required or desired characteristics to achieve diversity in a clinical trial, or complete our clinical trials in a timely manner.

We may find it difficult to enroll patients in our clinical trials, which could delay or prevent clinical trials of our product candidates.

Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success.

The timing of our clinical trials depends in part on the speed at which we can recruit patients to participate in testing our product candidates.

We may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics to achieve diversity in a clinical trial, or complete our clinical trials in a timely manner.

Subject enrollment is affected by a variety factors including, among others:

4 unchanged sentences

• perceived risks and benefits of the product candidate under study;

• willingness or availability of subjects to participate in the clinical trials (including due to the COVID-19 coronavirus pandemic);

• proximity and availability of clinical trial sites for prospective subjects;

• willingness or availability of patients to participate in the clinical trials;

• proximity and availability of clinical trial sites for prospective patients;

• ability to recruit clinical trial investigators with the appropriate competencies and experience;

3 unchanged sentences

• patient referral practices of physicians;

• risk that subjects enrolled in clinical trials will drop out of the trials before completion;

• ability to monitor subjects adequately during and after treatment.

If patients are unwilling to participate in our clinical trials, the timeline for recruiting subjects, conducting clinical trials and obtaining regulatory approval of potential products may be delayed.

• risk that patients enrolled in clinical trials will drop out of the trials before completion;

• ability to monitor patients adequately during and after treatment.

If patients are unwilling to participate in our clinical trials, the timeline for recruiting patients, conducting clinical trials and obtaining regulatory approval of potential products may be delayed.

These delays could result in increased costs, delays in advancing or testing our product candidates or termination of the clinical trials altogether.

Even if our product candidates obtain regulatory approval, they may be negatively impacted by future development or regulatory difficulties.

Several of our and our collaboration partner’s clinical trials have been impacted and could be delayed or suspended as a result of the military action by Russia in Ukraine.

A portion of our clinical trials evaluating AB-836 and AB-729 are being conducted in Ukraine.

In addition, our collaboration partner, Antios, is conducting a Phase 2a proof-of-concept clinical trial that includes a cohort evaluating a triple combination of AB-729, ATI-2173 and Viread primarily in Ukraine.

We had also planned to conduct a portion of our planned Phase 2a clinical trial to evaluate a triple combination of AB-729 with Vaccitech’s VTP-300 and a NA in Ukraine.

In February 2022, Russia commenced a military invasion of Ukraine.

Russia’s invasion and the ensuing response by Ukraine has disrupted our and our collaboration partner’s current clinical trials in such jurisdictions and could increase our costs and disrupt future planned clinical development activities.

For example, we believe we and our collaboration partner may not be able to complete any additional dosing and/or follow-up visits of patients in Ukraine who are participating in these clinical trials.

We may also be unable to ship additional clinical drug and other supplies necessary to complete the clinical trials in Ukraine.

Although the route, length and impact of Russia’s military action is highly unpredictable, clinical trial sites in Ukraine, could also suspend or terminate trials, and patients could be forced to evacuate or voluntarily choose to relocate far from clinical trial sites, making them unavailable for initial or further participation in these clinical trials.

Alternative sites to fully and timely compensate for our clinical trial activities in Ukraine may not be available and we may need to find other countries to conduct these clinical trials.

If these clinical trials are further interrupted, our clinical development plans for these product

candidates could be significantly delayed, which would increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues.

Even if our product candidates obtain regulatory approval, they will remain subject to ongoing regulatory requirements and oversight.

Approved drug products are subject to ongoing regulatory requirements and oversight, including requirements related to manufacturing, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, import, export, advertising, promotion, recordkeeping and reporting.

In addition, we will be subject to continued compliance with GMP and GCP requirements for any clinical trials that we conduct post-approval.

If we or any of the third parties on which we rely fail to meet those requirements, the FDA or comparable regulatory authorities outside the United States could initiate enforcement action.

If we or any of the third parties on which we rely fail to meet those requirements, the FDA or comparable regulatory authorities outside the United States could initiate enforcement actions.

Other potential consequences include the issuance of fines, warning letters, untitled letters or holds on clinical trials, product seizure or detention or refusal to permit the import or export of our product candidates, permanent injunctions and consent decrees, or the imposition of civil or criminal penalties, any of which could significantly impair our ability to successfully commercialize a given product.

If the FDA or a comparable regulatory authority outside the United States becomes aware of new safety information, it can impose additional restrictions on how the product is marketed or may seek to withdraw marketing approval altogether.

We face significant competition from other biotechnology and pharmaceutical companies targeting HBV.

Further, the U.S.

and state governments have shown significant interest in establishing cost containment measures to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs.

For example, in March 2010, the Patient Protection and Affordable Care Act, as amended (the “ACA”), became law in the United States.

A primary goal of the ACA is to reduce the cost of health care, and it has substantially changed the way health care is financed by both government and private insurers.

While we cannot predict with certainty what impact on federal and other reimbursement policies this legislation will have in general or on our business specifically, the ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price we may charge for, any products we develop that receives regulatory approval.

Legislative changes to and regulatory changes under the ACA remain possible, but the nature and extent of such potential additional changes are uncertain at this time.

We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, or its implementation, and other healthcare reform measures that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.

The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement.

In addition, cost containment measures in the United States has been an area or increasing emphasis, and we expect they will continue to increase the pressure on pharmaceutical pricing.

Coverage policies and third-party reimbursement rates may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be adopted in the future.

We face significant competition from other biotechnology and pharmaceutical companies targeting HBV and coronaviruses, including COVID-19.

As a significant unmet medical need exists for HBV, there are several large and small pharmaceutical companies focused on delivering therapeutics for treatment of HBV.

These companies include, but are not limited to, Johnson & Johnson, Roche, Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly Biosciences, Dicerna Pharmaceuticals, Replicor, Enanta

Pharmaceuticals and Aligos Therapeutics.

These companies include, but are not limited to Johnson & Johnson, Roche, Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly, Enanta Pharmaceuticals, Aligos Therapeutics, Antios and Vaccitech.

Further, it is likely that additional drugs will become available in the future for the treatment of HBV.

Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory approvals of those product candidates in the United States and other countries.

In addition, given the severity of the global COVID-19 pandemic, several companies are developing or commercializing therapeutics for the treatment of coronaviruses.

These companies include, but are not limited to, Pfizer, Merck, Gilead, Vir Biotechnology, Shionogi, PardesBio, Enanta Pharmaceuticals, Aligos Therapeutics and Cocrystal Pharma.

approvals of those product candidates in the United States and other countries.

Many of our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing.

We anticipate significant competition in the HBV market with several early phase product candidates announced.

We anticipate significant competition in the HBV and coronavirus markets, with several early and late phase product candidates announced.

We will also face competition for other product candidates that we expect to develop in the future.

12 unchanged sentences

Such competitors could also recruit our employees, which could negatively impact our level of expertise and the ability to execute on our business plan.

We are largely dependent on the future commercial success of our HBV product candidates.

Our ability to generate revenues and become profitable will depend in large part on the future commercial success of our HBV product candidates, if they are approved for marketing.

If any product that we commercialize in the future does not gain an adequate level of acceptance among physicians, patients and third parties, or our estimates of the number of people who have chronic HBV are lower than we expected, we may not generate significant product revenues or become profitable.

We are largely dependent on the future commercial success of our HBV and coronavirus product candidates.

Our ability to generate revenues and become profitable will depend in large part on the future commercial success of our HBV and coronavirus product candidates, if they are approved for marketing.

If any product that we commercialize in the future does not gain an adequate level of acceptance among physicians, patients and third parties, or our estimates of the number of people who have cHBV or are infected with coronaviruses are lower than expected, we may not generate significant product revenues or become profitable.

Market acceptance by physicians, patients and third party payors of the products we may commercialize will depend on a number of factors, some of which are beyond our control, including:

42 unchanged sentences

Our future arrangements with healthcare providers, patients and third party payors will expose us to broadly applicable United States and Canadian fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and collaborative partners through which we market, sell and distribute any products for which we obtain marketing approval.

Restrictions under applicable federal and state healthcare laws and regulations include the following:

Restrictions under applicable federal and state healthcare laws and regulations are described in further detail in the section entitled Government Regulation – Post-Approval Regulation and include the following:

• the federal Anti-Kickback Law prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease or order, any good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

• the federal civil False Claims Act imposes civil penalties, sometimes pursued through whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented claims for payment of government funds that are false or fraudulent or making a false statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government;

• HIPAA imposes criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, or knowingly and willfully making false statements relating to healthcare matters;

• HIPAA imposes criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false fictitious or fraudulent statement or entry, in connection with the delivery of or payment for healthcare benefits, items or services;

• HIPAA and its implementing regulations also impose obligations on certain covered entity health care providers, health plans and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.

3 unchanged sentences

Compliance with these laws is difficult, constantly evolving, and time-consuming, and companies that do not comply with these laws may face government enforcement actions, civil and/or criminal penalties, or private action, as well as adverse publicity that could negatively affect our operating results and business;

• the federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value to physicians and teaching hospitals (and certain other practitioners beginning in 2022), as well as ownership and investment interests held in the company by physicians and their immediate family members;

• activities outside of the U.S.

implicate local and national data protection standards, impose additional compliance requirements and generate additional risks of enforcement for non-compliance.

The European Union’s GDPR and other data protection, privacy and similar national, state/provincial and local laws may restrict the access, use and disclosure of patient health information abroad.

Compliance efforts will likely be an increasing and substantial cost in the future;

Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value to physicians and teaching hospitals (and certain other practitioners beginning in 2022), as well as ownership and investment interests held in the company by physicians and their immediate family members;

• price reporting requirements under the Medicaid Drug Rebate Program and the 340B Program and with respect to average sales price reporting under the Medicare Part B program, and rebate or discount liability under the Medicaid Drug Rebate Program, the 340B Program, and Medicare Part D, with respect to which we could be subject to civil monetary penalties for a failure to comply with our reporting or rebate or discount obligations, or termination from the Medicaid Drug Rebate Program or 340B program, which, in turn, could jeopardize the availability of federal funds for our products under Medicaid and Medicare Part B;

• analogous state laws and laws and regulations outside the United States, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;

state laws and laws outside the United

States that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to certain healthcare providers;

state laws and laws outside the United States that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to certain healthcare providers;

state laws and laws outside the United States that require drug manufacturers to report information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

14 unchanged sentences

Risks Related to Our Dependence on Third Parties

We depend on our license agreement with Alnylam for the commercialization of ONPATTRO.

We depend on our license agreement with Alnylam for the commercialization of ONPATTRO™ (Patisiran).

In 2012, we entered into a license agreement with Alnylam that entitles Alnylam to develop and commercialize products with our LNP technology.

13 unchanged sentences

If these licensing agreements are unsuccessful, or anticipated milestone or royalty payments are not received, our business could be materially adversely affected.

We expect that we will depend in part on our licensing agreements with Alnylam and Gritstone to provide revenue to partially fund our operations, especially in the near term.

We expect that we will depend in part on our licensing agreements with Alnylam, Qilu and Gritstone to provide revenue to partially fund our operations, especially in the near term.

Furthermore, our strategy is to enter into various additional arrangements with corporate and academic collaborators, licensors, licensees and others for the research, development, clinical testing, manufacturing, marketing and commercialization of our product candidates or other products based upon our technology.

4 unchanged sentences

In addition, there can be no assurance that the licensing partners will not pursue alternative technologies or develop alternative products either on their own or in collaboration with others, including our competitors.

We are dependent on Assembly pursuant to our clinical collaboration agreement and, therefore, are subject to the efforts of Assembly and our ability to successfully collaborate with Assembly.

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

Under the terms of the agreement, this trial will be a randomized, multi-center, open-label Phase 2 clinical trial that will evaluate the safety, pharmacokinetics, and antiviral activity of the triple combination of AB-729, VBR, and an NA compared to the double combinations of VBR with an NA and AB-729 with an NA.

This trial has initiated screening and is anticipated to enroll approximately 60 virologically-suppressed patients with HBeAg negative chronic HBV infection.

Patients will be dosed for 48 weeks with AB-729 60 mg subcutaneously every 8 weeks and VBR 300 mg orally once daily, with a 48-week follow-up period.

Assembly will be responsible for managing the clinical trial.

Under the terms of the collaboration, we and Assembly may also add additional cohorts in the future to evaluate other patient populations and/or combinations.

The success of our collaboration with Assembly depends upon the efforts of Assembly, to the extent it is responsible for performance of collaboration activities.

Assembly may not be successful in performance of such activities.

Assembly may change its strategic focus or pursue alternative technologies.

In addition, if we have a dispute or enter into litigation with Assembly in the future, it could delay development programs, distract management from other business activities, and generate substantial expense.

Except to the extent necessary to carry out Assembly’s responsibilities with respect to the collaboration trial, we have not provided any license grant to Assembly for use of our AB-729 compound.

We are dependent on our collaboration and licensing partners and, therefore, are subject to the efforts of these parties and our ability to successfully collaborate with them.

We have entered into a number of clinical collaboration agreements, including with Assembly, Vaccitech and Antios.

We are responsible for managing the clinical trial under the collaboration agreement with Vaccitech, while Assembly and Antios are responsible for managing the clinical trials under the collaborations we have with each of them.

The success of our collaborations depend on not only our efforts, but also on the efforts of our counterparties.

Because we are not responsible for managing the clinical trials with Assembly and Antios, the success of those collaborations also depend on whether Assembly or Antios is successful in performance of its activities, to the extent it is responsible for performance of collaboration activities.

Additionally, these counterparties could change their strategic focus or pursue alternative technologies, which could materially and adversely affect our business.

Similarly, we are dependent on X-Chem and Proteros pursuant to our discovery and research agreement to work toward the development of pan-coronavirus agents to treat COVID-19 and potential future coronavirus outbreaks.

In addition, if we have a dispute or enter into litigation with any of these parties in the future, it could delay development programs, distract management from other business activities, and generate substantial expense.

We will depend on Qilu for the development and commercialization of AB-729 in China, Hong Kong, Macau and Taiwan.

In December 2021, we entered into the License Agreement with Qilu, pursuant to which we granted Qilu an exclusive (except as to certain retained rights), sublicensable, royalty-bearing license, under certain intellectual property owned by us, to develop, manufacture and commercialize AB-729 in the Territory.

The timing and amount of any milestone and royalty payments we may receive under the License Agreement will depend, in part, on the efforts of Qilu.

We will depend on Qilu to comply with all applicable laws relative to the development and commercialization of AB-729 in the Territory.

Under the License Agreement, Qilu is required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one AB-729 product candidate in the Territory.

Any failure by Qilu to use such commercially reasonable efforts could have a material adverse impact on financial results and operations.

Additionally, if Qilu were to violate, or was alleged to have violated, any laws or regulations during the performance of its obligations to us, we could suffer financial and reputational harm or other negative outcomes.

Any termination, breach or expiration of the License Agreement could also have a material adverse impact on our business by reducing or eliminating the potential for us to receive milestone and royalty payments.

If that were to occur, we may be required to devote additional time, costs and attention to pursue the manufacture, development and commercialization of AB-729 in the Territory.

In certain situations, Qilu has the ability to terminate the License Agreement and retain all rights to manufacture, develop and commercialize AB-729 in the Territory with no obligation to make any additional milestone or royalty payments to us.

If conflicts arise between our collaboration or licensing partners and us, our collaboration or licensing partners may act in their best interest and not in our best interest, which could adversely affect our business.

Conflicts may arise with our collaboration or licensing partners, including Alnylam, Gritstone and Assembly, if they pursue alternative therapies for the diseases that we have targeted or develop alternative products either on their own or in collaboration with others.

Conflicts may arise with our collaboration or licensing partners, including Alnylam, Qilu, Gritstone, Assembly, Antios and Vaccitech if they pursue alternative therapies for the diseases that we have targeted or develop alternative products either on their own or in collaboration with others.

Competing products, either developed by our present collaboration or licensing partners or any future partners or to which our present partners or any future partners have rights, may result in development delays or the withdrawal of their support for one or more of our product candidates.

6 unchanged sentences

Although we depend heavily on these parties and have contractual agreements governing their activities, we do not control them and therefore, we cannot be assured that these third parties will adequately perform all of their contractual obligations to us.

If our third-party service providers cannot adequately fulfill their obligations to us on a timely and satisfactory basis or if the quality or accuracy of our clinical trial data is compromised due to failure to adhere to our protocols or regulatory requirements, or if such third parties otherwise fail to meet deadlines or follow legal or regulatory requirements, our development plans may be delayed or terminated.

such third parties otherwise fail to meet deadlines or follow legal or regulatory requirements, our development plans may be delayed or terminated.

If any of our relationships with these third-parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms or at all.

20 unchanged sentences

Other companies or organizations may assert patent rights that prevent us from developing or commercializing our products.

RNA interference, capsid inhibitors and RNA destabilizer, as well as our other novel HBV assets, are relatively new scientific fields that have generated many different patent applications from organizations and individuals seeking to obtain patents in the field.

RNAi, capsid inhibitors and RNA destabilizer, as well as our other novel HBV assets, have generated many different patent applications from organizations and individuals seeking to obtain patents in the field.

These applications claim many different methods, compositions and processes relating to the discovery, development and commercialization of these therapeutic products.

Because the field is so new, very few of these patent applications have been fully processed by government patent offices around the world, and there is a great deal of uncertainty about which patents will be issued, when, to whom, and with what claims.

It is likely that there could be litigation and other proceedings, such as inter parte review and opposition proceedings in various patent offices, relating to patent rights in RNAi, capsid inhibitors, RNA destabilizer and other small molecule compounds targeted at HBV.

It is likely that there could be litigation and other proceedings, such as inter partes review and opposition proceedings in various patent offices, relating to patent rights in RNAi, capsid inhibitors, RNA destabilizer and other small molecule compounds targeted at HBV.

We are aware of patents and patent applications owned by third parties that may in the future be alleged by such third parties to cover the use of one or more of our products.

We may need to acquire or obtain a license from such third parties to any such issued patents to market or sell any such products, which may not be available on commercially acceptable terms or at all.

We may need to acquire or obtain a license from

such third parties to any such issued patents to market or sell any such products, which may not be available on commercially acceptable terms or at all.

If such third parties obtain valid and enforceable patents and successfully prove infringement of an approved Arbutus product, and we are not able to acquire such issued patents or negotiate a license on acceptable terms, and if such approved Arbutus product is determined to infringe any such issued patents, then we may be forced to pay royalties, damages and costs, or we may be prevented from commercializing such approved Arbutus product altogether, which could have a material adverse impact on our business.

1 unchanged sentence

Certain United States, Canadian and international patents and patent applications we own involve complex legal and factual questions for which important legal principles are largely unresolved.

For example, no consistent policy has emerged for the breadth of biotechnology patent claims that are granted by the United States Patent and Trademark Office or enforced by the United States federal courts.

For example, no consistent policy has emerged for the breadth of biotechnology patent claims that are granted by the USPTO or enforced by the United States federal courts.

In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued.

9 unchanged sentences

In addition, we could incur substantial costs in filing suits against others to have such patents declared invalid.

applications or that we or such licensor was the first to file patent applications for such inventions.

As publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain we or any licensor was the first creator of inventions covered by pending patent applications or that we or such licensor was the first to file patent applications for such inventions.

Any future proceedings could result in substantial costs, even if the eventual outcomes are favorable.

16 unchanged sentences

Risks Related to the Ownership of our Common Shares

The concentration of common share ownership with insiders, as well as director nomination rights held by the largest shareholder, will likely limit the ability of the other shareholders to influence corporate matters.

The concentration of common share ownership will likely limit the ability of the other shareholders to influence corporate matters.

As of March 3, 2022, executive officers, directors, five percent or greater shareholders, and their respective affiliated entities beneficially owned, in the aggregate, approximately 28% of our outstanding common shares.

1 unchanged sentence

(“Roivant”) collectively held as a group approximately 26% of our outstanding common shares as of March 3, 2022.

In addition, in October 2017, we issued 500,000 Series A participating convertible preferred shares (“Preferred Shares”) to Roivant for gross proceeds of $50.0 million.

We issued a second tranche of 664,000 Preferred Shares to Roivant in January 2018 for gross proceeds of $66.4 million.

The Preferred Shares are non-voting and are convertible into common shares at a conversion price of $7.13 per share (which represents a 15% premium to the closing price of $6.20 per share on October 16, 2017).

The Preferred Shares are currently not convertible into common shares.

The purchase price for the Preferred Shares plus an amount equal to 8.75% per annum, compounded annually, will be subject to mandatory conversion into approximately 23 million common shares on October 18, 2021 (subject to limited exceptions in the event of certain fundamental corporate transactions relating to our capital structure or assets, which would permit earlier conversion at

Roivant’s option).

Assuming the Preferred Shares were converted as of March 1, 2021, Roivant would have held approximately 39 million common shares, or, 32%, of our outstanding common shares.

Roivant has agreed to a four year lock-up period and standstill period whereby, pursuant to the standstill, Roivant will not acquire greater than 49.99% of our common shares or securities convertible into common shares.

Both the lockup and standstill periods expire on October 18, 2021.

Following the expiration of the standstill period, Roivant will no longer be contractually prohibited from acquiring control of our company.

As a result, Roivant can significantly influence the outcome of matters requiring shareholder approval, including the election of directors, amendments of our organizational documents, or approval of any merger, sale of assets or other major corporate transaction.

2 unchanged sentences

These actions might affect the prevailing market price for our common shares.

In addition, Roivant and certain of our other principal shareholders that have held their shares for several years may be more interested in selling our company to an acquiror than other investors, or they may want us to pursue strategies that deviate from the interests of other shareholders.

In addition, Roivant and certain of our other principal shareholders that have held their shares for several years may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other shareholders.

Such concentration of ownership control may also:

2 unchanged sentences

• impede a merger, consolidation, takeover or other business combination involving us that other shareholders may desire.

In addition, for so long as Roivant has beneficial ownership or exercises control or direction over not less than:

(i) 30% of the issued and outstanding common shares (including common shares issuable upon the conversion of the Preferred Shares), Roivant has the right to nominate three individuals for election to our board of directors, one of whom must be “independent” within the meaning of applicable law and the rules and regulations of The Nasdaq Stock Market LLC, not including the rules related to the independence of audit committee members;

(ii) 20% of the issued and outstanding common shares (including common shares issuable upon the conversion of the Preferred Shares), Roivant has the right to nominate two individuals for election to our board of directors;

and (iii) 10% of the issued and outstanding common shares (including common shares issuable upon the conversion of the Preferred Shares), Roivant has the right to nominate one individual for election to our board of directors.

For so long as Roivant has the right to nominate one or more directors to our board of directors, the total number of directors will not, without the prior written consent of Roivant, be permitted to exceed eight directors, the majority of whom must be “independent.” While the directors appointed by Roivant are obligated to act in accordance with their fiduciary duty to the Company, they may have equity or other interests in Roivant and, accordingly, their personal interests may be aligned with Roivant’s interests, which may not always coincide with our corporate interests or the interests of our other shareholders.

The directors are required to disclose any potential material conflicts of interest.

The current Roivant nominated directors are Frank Torti, M.D., our Chairman of the Board, Eric Venker, M.D., Pharm.D.

and Keith Manchester, M.D.

We are incorporated in Canada, with our assets located both in Canada and the United States, with the result that it may be difficult for investors to enforce judgments obtained against us or some of our officers.

40 unchanged sentences

We are increasingly dependent on sophisticated software applications and computing infrastructure to conduct critical operations.

Disruption, degradation, or manipulation of these applications and systems through intentional or accidental means could materially adversely impact key business processes.

Despite the implementation of security measures, including controls over unauthorized access, our internal computer systems and those of our contractors and consultants are vulnerable to damage from computer viruses, cybersecurity breaches and other forms of unauthorized access, as well as natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks or cyber-intrusions over the Internet, loss of funds or information from phishing or other fraudulent schemes, attachments to emails, persons inside our organization, or persons with access to systems inside our organization or those with whom we do business.

The risk of a security breach or disruption, particularly through cyberattacks or cyber-intrusions, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Such events could result in exposure of confidential information, the modification of critical data, the loss of Company funds and/or the failure or interruption of critical operations.

We depend on both our own systems, networks, and technology as well as the systems, networks and technology of our contractors, consultants, vendors and other business partners.

Disruption, degradation, or manipulation of systems, networks or technology through intentional or accidental means could materially adversely impact key business processes.

Despite the implementation of security measures, our systems, networks and technology and those of our contractors and consultants are vulnerable to damage from computer viruses (including ransomware), cybersecurity breaches and other forms of unauthorized access, as well as natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks, phishing or other fraudulent schemes, persons inside our organization, or persons with access to systems inside our organization or those with whom we do business.

The risk of a cyberattack or other cybersecurity incidents has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Although to date the cybersecurity incidents we have experienced have not resulted in any material losses, such events impacting either our own systems, networks and technology, or those of our contractors, consultants, vendors, or other business partners could threaten the confidentiality, integrity and availability of regulated personal information, confidential information or intellectual property.

This could result in the modification of critical data, the loss of Company funds and/or the failure or interruption of critical operations.

For example, the loss of pre-clinical trial data or data from completed or ongoing clinical trials for our product candidates could result in delays in our regulatory filings and development efforts and significantly increase our costs.

There can be no assurance that our efforts to protect data and systems will prevent service interruption or the loss of critical or sensitive information from our or third party providers’ databases or systems.

To the extent that any disruption or security breach results in such interruption or loss, we could incur material financial, legal, business or reputational harm, the development of our product candidates could be delayed, and our insurance may not provide any or adequate coverage of any such losses.

Additionally, while we have implemented security measures that we believe are appropriate and continue to enhance cybersecurity protections, a regulator could deem our security measures not to be appropriate given the lack of prescriptive measures in certain data protection laws.

To the extent that any disruption or cybersecurity incident results or appears to result in such interruption or loss, we could incur material financial, legal, business or reputational harm, including regulatory fines, penalties or intervention, or claims by third parties that we have breached privacy- or confidentiality-related obligations.

Furthermore, the development of our product candidates could be delayed, and our insurance may not provide any or adequate coverage of any such losses.

We may acquire other assets or businesses, or form strategic alliances or collaborations or make investments in other companies or technologies that could harm our financial condition, results of operations or cash flows, dilute our shareholders’ ownership, incur debt or cause us to incur significant expense.

2 unchanged sentences

We may not be able to find suitable acquisition candidates, and if we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business and we may incur debt or assume unknown or contingent liabilities in connection therewith.

Integration of an acquired company or assets may also disrupt ongoing operations, require the hiring of additional personnel and the implementation of additional internal systems and infrastructure, especially the acquisition of commercial assets, and require management resources that would otherwise focus on developing our existing business.

resources that would otherwise focus on developing our existing business.

We may not be able to find suitable collaboration partners or identify other investment opportunities, and we may experience losses related to any such investments.

2 unchanged sentences

If the price of our common shares is low or volatile, we may not be able to acquire other assets or businesses or fund a transaction using our equity securities as consideration.

Alternatively,

it may be necessary for us to raise additional capital for acquisitions through public or private financings.

Alternatively, it may be necessary for us to raise additional capital for acquisitions through public or private financings.

Additional capital may not be available on terms that are favorable to us, or at all.

2 unchanged sentences

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-K

Item 1A. Risk Factors