What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-03 · 94 added, 74 removed, 436 unchanged (28% of the section changed)

4 unchanged sentences

Dollars, except share and per share amounts)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets:

39 unchanged sentences

Dollars, except share and per share amounts)

Three Months Ended June 30, Six Months Ended June 30, 2023

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

2023 2022 2023 2022

43 unchanged sentences

Balance June 30, 2023 166,922,739 $ 1,344,195 $ 77,202 $ ( 1,237,236 ) $ ( 49,468 ) $ 134,693

Stock-based compensation expense — — 2,483 — — 2,483

Issuance of common shares pursuant to the Open Market Sale Agreement 633,922 1,396 — — — 1,396

Issuance of common shares pursuant to ESPP 138,586 424 ( 139 ) — — 285

Unrealized gain on available-for-sale securities — — — — 584 584

Net loss — — — ( 20,104 ) — ( 20,104 )

Balance September 30, 2023 167,695,247 $ 1,346,015 $ 79,546 $ ( 1,257,340 ) $ ( 48,884 ) $ 119,337

See accompanying notes to the condensed consolidated financial statements.

21 unchanged sentences

Balance June 30, 2022 148,794,262 $ 1,298,409 $ 69,134 $ ( 1,164,304 ) $ ( 50,097 ) $ 153,142

Stock-based compensation expense — — 1,715 — — 1,715

Certain fair value adjustments to liability stock option awards — — 2 — — 2

Issuance of common shares pursuant to the Open Market Sale Agreement 3,832,717 8,973 — — — 8,973

Issuance of common shares pursuant to ESPP 84,723 272 ( 113 ) — — 159

Unrealized loss on available-for-sale securities — — — — ( 907 ) ( 907 )

Net loss — — — ( 17,567 ) — ( 17,567 )

Balance September 30, 2022 152,711,702 $ 1,307,654 $ 70,738 $ ( 1,181,871 ) $ ( 51,004 ) $ 145,517

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

(In thousands of U.S.

Six Months Ended June 30,

Nine Months Ended September 30,

OPERATING ACTIVITIES

14 unchanged sentences

Other liabilities ( 289 ) ( 281 )

Net cash (used in) provided by operating activities ( 46,860 ) 326

Net cash used in operating activities ( 68,644 ) ( 18,366 )

INVESTING ACTIVITIES

21 unchanged sentences

Description of the Business

Arbutus Biopharma Corporation (“Arbutus” or the “Company”) is a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases.

The Company’s current focus areas include hepatitis B virus (“HBV”), SARS-CoV-2 and other coronaviruses.

To address HBV, the Company is developing an RNA interference (“RNAi”) therapeutic, imdusiran (AB-729), an oral PD-L1 inhibitor, AB-101, and an oral RNA destabilizer, AB-161, to potentially identify a combination regimen with the aim of providing a functional cure for patients with chronic HBV infection (“cHBV”) by suppressing viral replication, reducing surface antigen and reawakening the immune system.

The Company believes its lead compound, imdusiran, is the only RNAi therapeutic with evidence of immune re-awakening.

Imdusiran is currently being evaluated in multiple phase 2 clinical trials.

In addition, a Phase 1 clinical trial with AB-161 was recently initiated.

The Company also has an ongoing drug discovery and development program directed to identifying novel, orally active agents for treating coronaviruses, including SARS-CoV-2, where the Company has nominated a compound and has begun IND-enabling preclinical studies.

In addition, the Company is also exploring oncology applications for its internal PD-L1 portfolio.

At June 30, 2023, the Company had an aggregate of $ 163.5 million in cash, cash equivalents and investments in marketable securities.

The Company had no outstanding debt as of June 30, 2023.

Arbutus Biopharma Corporation (“Arbutus” or the “Company”) is a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop a functional cure for patients with chronic hepatitis B virus (“cHBV”).

The Company believes the key to success in developing a functional cure involves suppressing HBV DNA, reducing surface antigen and boosting HBV-specific immune response.

The Company’s pipeline of internally developed, proprietary compounds includes an RNAi therapeutic, imdusiran (AB-729), and an oral PD-L1 inhibitor, AB-101.

Imdusiran has generated meaningful clinical data demonstrating an impact on both surface antigen reduction and reawakening of the HBV-specific immune response.

Imdusiran is currently in two Phase 2a combination clinical trials.

AB-101 is currently being evaluated in a Phase 1a/1b clinical trial.

Additionally, the Company has identified compounds in its internal PD-L1 portfolio that could be used in oncology indications.

At September 30, 2023, the Company had an aggregate of $ 144.7 million in cash, cash equivalents and investments in marketable securities.

The Company had no outstanding debt as of September 30, 2023.

The Company believes it has sufficient cash resources to fund its operations for at least the next 12 months.

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These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

These unaudited condensed consolidated financial statements include the accounts of Arbutus Biopharma Corporation and its one wholly-owned subsidiary, Arbutus Biopharma, Inc., and reflect, in the opinion of management, all adjustments and reclassifications necessary to fairly present the Company’s financial position as of June 30, 2023 and December 31, 2022, the Company’s results of operations for the three and six months ended June 30, 2023 and 2022, and the Company’s cash flows for the six months ended June 30, 2023 and 2022.

These unaudited condensed consolidated financial statements include the accounts of Arbutus Biopharma Corporation and its one wholly-owned subsidiary, Arbutus Biopharma, Inc., and reflect, in the opinion of management, all adjustments and reclassifications necessary to fairly present the Company’s financial position as of September 30, 2023 and December 31, 2022, the Company’s results of operations for the three and nine months ended September 30, 2023 and 2022, and the Company’s cash flows for the nine months ended September 30, 2023 and 2022.

Such adjustments are of a normal recurring nature.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results for the full year.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the full year.

These unaudited condensed consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2022, except as described below under Recent Accounting Pronouncements.

3 unchanged sentences

Net loss per share is calculated based on the weighted average number of common shares outstanding.

Diluted net loss per share does not differ from basic net loss per share for the three and six months ended June 30, 2023 and 2022, since the effect of including potential common shares would be anti-dilutive.

For the six months ended June 30, 2023, potential common shares of 20.2 million pertaining to outstanding stock options and unvested restricted stock units were excluded from the calculation of net loss per share.

A total of approximately 15.9 million outstanding stock options were excluded from the calculation for the six months ended June 30, 2022.

Diluted net loss per share does not differ from basic net loss per share for the three and nine months ended September 30, 2023 and 2022, since the effect of including potential common shares would be anti-dilutive.

For the nine months ended September 30, 2023, potential common shares of 21.0 million pertaining to outstanding stock options and unvested restricted stock units were excluded from the calculation of net loss per share.

A total of approximately 15.9 million outstanding stock options were excluded from the calculation for the nine months ended September 30, 2022.

Revenue from collaborations and licenses

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To determine the fair value of the contingent consideration (Note 8), the Company uses a probability weighted assessment of the likelihood the milestones would be met and the estimated timing of such payments, and then the potential contingent payments are discounted to their present value using a probability adjusted discount rate that reflects the early stage nature of the development program, the time to complete the program development, and overall biotech indices.

The Company determined the fair value of the contingent consideration was $ 7.2 million as of June 30, 2023 and the decrease of $ 0.4 million from December 31, 2022 has been recorded as a component of total operating expenses in the statements of operations and comprehensive loss for the six months ended June 30, 2023.

The Company determined the fair value of the contingent consideration was $ 7.4 million as of September 30, 2023 and the decrease of $ 0.2 million from December 31, 2022 has been recorded as a component of total operating expenses in the statements of operations and comprehensive loss for the nine months ended September 30, 2023.

The assumptions used in the discounted cash flow model are level 3 inputs as defined above.

2 unchanged sentences

Level 1 Level 2 Level 3 Total

As of June 30, 2023 (in thousands)

As of September 30, 2023 (in thousands)

Cash and cash equivalents $ 17,531 $ — $ — $ 17,531

15 unchanged sentences

(in thousands)

Six Months Ended June 30, 2023 $ 7,531 $ ( 363 ) $ 7,168

Six Months Ended June 30, 2022 $ 5,298 $ 409 $ 5,707

Nine Months Ended September 30, 2023 $ 7,531 $ ( 158 ) $ 7,373

Nine Months Ended September 30, 2022 $ 5,298 $ 624 $ 5,922

See Note 4 for additional information regarding the fair value of the Company’s investments in marketable securities.

3 unchanged sentences

Gross Unrealized Loss (1)

As of June 30, 2023 (in thousands)

As of September 30, 2023 (in thousands)

Cash equivalents

5 unchanged sentences

US treasury bills 10,940 — ( 2 ) 10,938

Yankee bonds 2,000 — ( 32 ) 1,968

US government bonds 14,985 — ( 141 ) 14,844

2 unchanged sentences

US corporate bonds 10,522 — ( 29 ) 10,496

Yankee bonds 1,999 — ( 37 ) 1,962

Total $ 10,522 $ 3 $ ( 29 ) $ 10,496

18 unchanged sentences

(1) Gross unrealized gain (loss) is pre-tax and is reported in accumulated other comprehensive loss.

The contractual term to maturity of the $ 125.3 million of short-term marketable securities held by the Company as of June 30, 2023 is less than one year.

As of June 30, 2023, the Company held $ 11.1 million of long-term marketable securities with contractual maturities of more than one year, but less than five years.

The contractual term to maturity of the $ 116.6 million of short-term marketable securities held by the Company as of September 30, 2023 is less than one year.

As of September 30, 2023, the Company held $ 10.5 million of long-term marketable securities with contractual maturities of more than one year, but less than five years.

As of December 31, 2022, the Company’s $ 116.1 million of short-term marketable securities had contractual maturities of less than one year, while the Company’s $ 37.4 million of long-term marketable securities had maturities of more than one year, but less than five years.

At June 30, 2023 and December 31, 2022, respectively, the Company had 45 and 53 available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses.

At September 30, 2023 and December 31, 2022, the Company had 40 and 53 , respectively, available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses.

Unrealized losses on the Company’s investments in debt securities have not been recognized into income as the issuers’ bonds are of high credit quality and the decline in fair value is largely due to market conditions and/or changes in interest rates.

2 unchanged sentences

The fair value is expected to recover as the bonds approach maturity.

Accrued interest receivable on investments in marketable securities of $ 0.6 million at both June 30, 2023 and December 31, 2022 is included in Prepaid expenses and other current assets.

The Company had realized gains of less than $ 0.1 million for the three and six months ended June 30, 2023 and no unrealized gains in 2022.

Accrued interest receivable on investments in marketable securities of $ 0.6 million at both September 30, 2023 and December 31, 2022 is included in prepaid expenses and other current assets.

The Company had realized gains of less than $ 0.1 million for both the three and nine months ended September 30, 2023 and 2022.

See Note 3 for additional information regarding the fair value of the Company’s investments in marketable securities.

9 unchanged sentences

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 observable price changes in orderly transactions for identical or a similar Genevant securities.

As of June 30, 2023, the carrying value of the Company’s investment in Genevant was zero and the Company owned approximately 16 % of the common equity of Genevant.

As of September 30, 2023, the carrying value of the Company’s investment in Genevant was zero and the Company owned approximately 16 % of the common equity of Genevant.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are comprised of the following:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(in thousands)

14 unchanged sentences

The discount, as well as $ 1.5 million of transaction costs, will be amortized as interest expense based on the projected balance of the liability as of the beginning of each period.

As of June 30, 2023, the Company estimated an effective annual interest rate of approximately 7.2 %.

As of September 30, 2023, the Company estimated an effective annual interest rate of approximately 2.3 %.

Over the course of the Agreement, the actual interest rate will be affected by the amount and timing of royalty revenue recognized and changes in the timing of forecasted royalty revenue.

2 unchanged sentences

As royalties are remitted to OMERS from Alnylam, the balance of the recognized liability is effectively repaid over the life of the Agreement.

From the inception of the royalty sale through June 30, 2023, the Company has recorded an aggregate of $ 20.8 million of non-cash royalty revenue for royalties earned by OMERS.

From the inception of the royalty sale through September 30, 2023, the Company has recorded an aggregate of $ 21.5 million of non-cash royalty revenue for royalties earned by OMERS.

There are a number of factors that could materially affect the amount and timing of royalty payments from Alnylam, none of which are within the Company’s control.

During the six months ended June 30, 2023, the Company recognized non-cash royalty revenue of $ 1.9 million and related non-cash interest expense of $ 0.4 million.

During the six months ended June 30, 2022, the Company recognized non-cash royalty revenue of $ 3.0 million and related non-cash interest expense of $ 1.0 million.

The table below shows the activity related to the net liability for the six months ended June 30, 2023 and 2022:

Six Months Ended June 30,

During the nine months ended September 30, 2023, the Company recognized non-cash royalty revenue of $ 2.7 million and related non-cash interest expense of $ 0.4 million.

During the nine months ended September 30, 2022, the Company recognized non-cash royalty revenue of $ 5.4 million and related non-cash interest expense of $ 1.4 million.

The table below shows the activity related to the net liability for the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

(in thousands)

12 unchanged sentences

The contingent consideration is a financial liability and is measured at its fair value at each reporting period, with any changes in fair value from the previous reporting period recorded in the statements of operations and comprehensive loss (see Note 3).

The fair value of the contingent consideration was $ 7.2 million as of June 30, 2023.

The fair value of the contingent consideration was $ 7.4 million as of September 30, 2023.

Collaborations, contracts and licensing agreements

17 unchanged sentences

In accordance with the guidance, the Company identified the following commitments under the arrangement:

(i) rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (the “Qilu License”) and (ii) drug supply obligations and manufacturing technology transfer (the “Manufacturing Obligations”).

(i) rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (as defined in the License Agreement) (the “Qilu License”) and (ii) drug supply obligations and manufacturing technology transfer (the “Manufacturing Obligations”).

The Company determined that these two commitments are not distinct performance obligations for purposes of recognizing revenue as the manufacturing process is highly specialized and Qilu would not be able to benefit from the Qilu License without the Company’s involvement in the manufacturing activities until the transfer of the manufacturing know-how is complete.

4 unchanged sentences

Any such adjustments will be recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

The following table outlines the transaction price and the changes to the related asset and liability balances during the six months ended June 30, 2023:

Six Months Ended June 30, 2023

The following table outlines the transaction price and the changes to the related asset and liability balances during the nine months ended September 30, 2023:

Nine Months Ended September 30, 2023

Transaction Price Cumulative Collaboration Revenue Recognized Deferred License Revenue

5 unchanged sentences

Non-current deferred license revenue $ —

The Company recognized $ 3.0 million and $ 7.1 million of revenue based on labor hours expended by the Company on its Manufacturing Obligations during the three and six months ended June 30, 2023, respectively, and $ 11.0 million and $ 20.7 million during the three and six months ended June 30, 2022, respectively.

As of June 30, 2023, the balance of the deferred license revenue was $ 16.1 million, which, in accordance with ASC 210-20, was partially offset by the contract asset associated with the manufacturing cost reimbursement of $ 0.8 million, resulting in a net deferred license revenue liability of $ 15.3 million.

The Company recognized $ 3.2 million and $ 10.3 million of revenue based on labor hours expended by the Company on its Manufacturing Obligations during the three and nine months ended September 30, 2023, respectively, and $ 2.4 million and $ 23.0 million during the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, the balance of the deferred license revenue was $ 12.9 million, which, in accordance with ASC 210-20, was partially offset by the contract asset associated with the manufacturing cost reimbursement of $ 0.8 million, resulting in a net deferred license revenue liability of $ 12.1 million.

The $ 4.4 million of withholding taxes paid by Qilu on behalf of the Company was recorded as income tax expense during the twelve months ended December 31, 2022.

The Company incurred $ 0.6 million of incremental costs in obtaining the Qilu License, which the Company capitalized in other current assets and other assets and amortizes as a component of general and administrative expense commensurate with the recognition of the combined performance obligation.

The Company recognized amortization expense of less than $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2023, respectively, and $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2022, respectively.

The Company recognized amortization expense of less than $ 0.1 million and $ 0.1 million for the three and nine months ended September 30, 2023, respectively, and less than $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2022, respectively.

The Company reevaluates the transaction price and the total estimated labor hours expected to be incurred to satisfy the performance obligations and adjusts the deferred revenue at the end of each reporting period.

Such changes will result in a change to the amount of collaboration revenue recognized and deferred revenue.

Vaccitech plc

In July 2021, the Company entered into a clinical collaboration agreement with Vaccitech plc (“Vaccitech”) to evaluate

imdusiran followed by Vaccitech’s VTP-300, a proprietary T-cell stimulating HBV antigen-specific immunotherapeutic, in nucleos(t)ide reverse transcriptase inhibitor (“NrtI”)-suppressed patients with cHBV.

The Company is responsible for managing this Phase 2a proof-of-concept clinical trial, subject to oversight by a joint development committee comprised of representatives from the Company and Vaccitech.

The Company and Vaccitech retain full rights to their respective product candidates and will split all costs associated with the clinical trial.

The Company incurred $ 0.3 million and $ 0.8 million of expenses, net of reimbursements from Vaccitech, related to the collaboration during the three and six months ended June 30, 2023, respectively, and reflected those costs in research and development in the statements of operations and comprehensive loss.

Barinthus Biotherapeutics plc

In July 2021, the Company entered into a clinical collaboration agreement with Barinthus Biotherapeutics plc (“Barinthus”),

formerly Vaccitech plc, to evaluate imdusiran followed by Barinthus’ VTP-300, an HBV antigen specific immunotherapy, and ongoing nucleos(t)ide analogue therapy in patients with cHBV.

Recently, the clinical trial was amended and is now dosing patients in an additional treatment arm that includes an approved PD-1 monoclonal antibody inhibitor, nivolumab (Opdivo ® ).

The Company and Barinthus retain full rights to their respective product candidates and will split all costs associated with the clinical trial.

The Company incurred $ 0.7 million and $ 1.6 million of expenses, net of reimbursements from Barinthus, related to the collaboration during the three and nine months ended September 30, 2023, respectively, and reflected those costs in research and development in the statements of operations and comprehensive loss.

The Company incurred $ 0.3 million and $ 0.7 million of such costs for the same respective periods in 2022.

3 unchanged sentences

After completing enrollment in the Phase 2a proof-of-concept clinical trial, in July 2022, Assembly announced its plan to discontinue development of VBR.

In consultation with Assembly, the Company continued dosing patients in this clinical trial in order to fully and accurately assess the results.

Based on preliminary data reported in late 2022, both parties have mutually agreed to discontinue the clinical trial following completion of the final, on-treatment visit at week 48.

The Company and Assembly are sharing in the costs of the collaboration.

The Company incurred $ 0.6 million and $ 1.3 million of expenses related to the collaboration during the three and six months ended June 30, 2023, respectively, and $ 0.8 million and $ 1.4 million during the three and six months ended June 30, 2022, respectively.

In consultation with Assembly, the Company continued dosing patients in this clinical trial until completion of the final, on-treatment visit at week 48, at which point both parties mutually agreed to discontinue the clinical trial.

The Company and Assembly shared in the costs of the collaboration.

The Company incurred $ 0.1 million and $ 1.4 million of expenses related to the collaboration during the three and nine months ended September 30, 2023, respectively, and $ 0.6 million and $ 2.1 million during the three and nine months ended September 30, 2022, respectively.

Those costs are reflected in research and development in the statements of operations and comprehensive loss.

3 unchanged sentences

(“X-Chem”) and Proteros biostructures GmbH (“Proteros”) to focus on the discovery of novel inhibitors targeting the SARS-CoV-2 nsp5 main protease (“Mpro”).

The agreement is designed to accelerate the development of pan-coronavirus agents to treat COVID-19 and potential future coronavirus outbreaks.

The agreement was designed to accelerate the development of pan-coronavirus agents to treat COVID-19 and potential future coronavirus outbreaks.

This collaboration brought together the Company’s expertise in the discovery and development of antiviral agents with X-Chem’s industry leading DNA-encoded library (DEL) technology and Proteros’ protein sciences, biophysics and structural biology capabilities and provides important synergies to potentially identify safe and effective therapies against coronaviruses including SARS-CoV-2.

The collaboration allows for the rapid screening of one of the largest small molecule libraries against Mpro (an essential protein required for the virus to replicate itself) and the use of state-of-the-art structure guided methods to rapidly optimize Mpro inhibitors to progress to clinical candidates.

Through this collaboration, the Company has identified and obtained a worldwide exclusive license to several molecules that inhibit Mpro, a validated target for the treatment of COVID-19 and potential future coronavirus outbreaks.

In the fourth quarter of 2022, the Company nominated AB-343 as its lead candidate that inhibits Mpro and the Company is also continuing lead optimization activities for an nsp12 viral polymerase candidate.

The agreement provides for payments by the Company to X-Chem and Proteros upon satisfaction of certain development, regulatory and commercial milestones, as well as royalties on sales.

The agreement with X-Chem and Proteros was amended, effective March 31, 2022, primarily to extend the term of the collaboration and update the funding and fee structure.

The Company incurred $ 0.5 million and $ 1.1 million of expenses related to the collaboration during the three and six months ended June 30, 2023, respectively, and less than $ 0.1 million and $ 0.3 million during the three and six months ended June 30, 2022, respectively.

The collaboration allowed for the rapid screening of one of the largest small molecule libraries against Mpro (an essential protein required for the virus to replicate itself) and the use of state-of-the-art structure guided methods to rapidly optimize Mpro inhibitors to progress to clinical candidates.

Through this collaboration, the Company identified and obtained a worldwide exclusive license to several molecules that inhibit Mpro, a validated target for the treatment of COVID-19 and potential future coronavirus outbreaks.

In the fourth quarter of 2022, the Company nominated AB-343 as its lead candidate that inhibits Mpro.

The agreement, as amended, provided for payments by the Company to X-Chem and Proteros upon satisfaction of certain development, regulatory and commercial milestones, as well as royalties on sales.

The Company incurred less than $ 0.1 million and $ 1.0 million of expenses related to the collaboration during the three and nine months ended September 30, 2023, respectively, and $ 0.6 million and $ 0.9 million during the three and nine months ended September 30, 2022, respectively.

Those costs are reflected in research and development in the statements of operations and comprehensive loss.

During the third quarter of 2023, the Company discontinued its efforts to identify and develop a coronavirus combination therapy due to an unfavorable pharmacokinetic (PK) profile noted in the IND-enabling studies for AB-343.

The Company also terminated this discovery research and license agreement with X-Chem and Proteros.

Royalty Entitlements

9 unchanged sentences

If this royalty entitlement reverts to the Company, it has the potential to provide an active royalty stream or to be otherwise monetized again in full or in part.

From the inception of the royalty sale through June 30, 2023, an aggregate of $ 20.8 million of royalties have been earned by OMERS.

From the inception of the royalty sale through September 30, 2023, an aggregate of $ 21.5 million of royalties have been earned by OMERS.

The Company also is receiving a second royalty interest of 0.75 % to 1.125 % on global net sales of ONPATTRO, with 0.75 % applying to sales greater than $ 500 million, originating from a settlement agreement and subsequent license agreement with Acuitas.

1 unchanged sentence

Revenues are 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,

2023 2022 2023 2022

24 unchanged sentences

The August 2020 Prospectus Supplement was fully utilized during 2020.

The January 2020 Registration Statement expired in January 2023.

On August 28, 2020, the Company filed a shelf registration statement on Form S-3 with the SEC (File No.

333-248467) and accompanying base prospectus, which was declared effective by the SEC on October 22, 2020 (the “October 2020 Registration Statement”), for the offer and sale of up to $ 200.0 million of the Company’s securities.

On March 4, 2021, the Company filed a prospectus supplement with the SEC (the “March 2021 Prospectus Supplement”) for an offering of up to an additional $ 75.0 million of its common shares pursuant to the Sale Agreement under the October 2020 Registration Statement.

The March 2021

Prospectus Supplement was fully utilized during 2021.

On March 4, 2021, the Company filed a

prospectus supplement with the SEC (the “March 2021 Prospectus Supplement”) for an offering of up to an additional $ 75.0 million of its common shares pursuant to the Sale Agreement under the October 2020 Registration Statement.

The March 2021 Prospectus Supplement was fully utilized during 2021.

On October 8, 2021, the Company filed a prospectus supplement with the SEC (the “October 2021 Prospectus Supplement”) for an offering of up to an additional $ 75.0 million of its common shares pursuant to the Sale Agreement under the October 2020 Registration Statement.

The October 2020 Registration Statement expired in October 2023 with $ 29.3 million that was not utilized under the October 2021 Prospectus Supplement.

On November 4, 2021, the Company filed a shelf registration statement on Form S-3 with the SEC (File No.

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(ii) the October 2020 Registration Statement;

and (iii) the November 2021 Registration Statement.

During the three and six months ended June 30, 2023, the Company issued 1,790,546 and 9,214,168 common shares pursuant to the Sale Agreement, respectively, resulting in net proceeds of approximately $ 4.7 million and $ 24.6 million, respectively.

During the three and six months ended June 30, 2022, the Company issued 69,048 common shares pursuant to the Sale Agreement, resulting in net proceeds of $ 0.3 million.

As of June 30, 2023, there was approximately $ 105.8 million of common shares remaining available in aggregate under the October 2021 Prospectus Supplement and the March 2022 Prospectus Supplement.

and (iii) the November 2021 Registration Statement, of which only the November 2021 Registration Statement remains active.

During the three and nine months ended September 30, 2023, the Company issued 633,922 and 9,848,090 common shares pursuant to the Sale Agreement, respectively, resulting in net proceeds of approximately $ 1.4 million and $ 26.0 million, respectively.

During the three and nine months ended September 30, 2022, the Company issued 3,832,717 common shares pursuant to the Sale Agreement, resulting in net proceeds of $ 9.0 million.

As of September 30, 2023, there was approximately $ 104.3 million of common shares remaining available in aggregate under the October 2021 Prospectus Supplement and March 2022 Prospectus Supplement.

In October 2023, the October 2020 Registration Statement expired with $ 29.3 million that was not utilized under the October 2021 Prospectus Supplement, leaving $ 75.0 million remaining available under the March 2022 Prospectus Supplement pursuant to the November 2021 Registration Statement.

Stock-based compensation

The table below summarizes information about the Company’s stock-based compensation for the three and six months ended June 30, 2023 and 2022 and the expense recognized in the condensed consolidated statements of operations:

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

The table below summarizes information about the Company’s stock-based compensation for the three and nine months ended September 30, 2023 and 2022 and the expense recognized in the condensed consolidated statements of operations:

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

2023 2022 2023 2022

10 unchanged sentences

Total stock compensation expense $ 2,483 $ 1,714 $ 7,578 $ 5,515

The RSUs vest in three equal annual installments beginning one year from the grant date.

The RSUs vest over three years in equal annual installments beginning one year from the grant date.

Subsequent events

On November 6, 2023, the Company reduced its workforce by 24 % primarily affecting its research function.

As a result, the Company will incur a one-time restructuring charge of approximately $ 1.1 million that will be recorded in the fourth quarter of 2023.

The Company has maintained a group of research scientists as it remains committed to continuing discovery research in HBV.

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 1. Financial Statements