What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-03-05 compared with 2023-03-02 · 121 added, 108 removed, 466 unchanged (33% of the section changed)

14 unchanged sentences

• develop and maintain successful strategic relationships;

• manage our spending and cash requirements as our expenses are expected to continue to increase due to research and pre-clinical work, clinical trials, regulatory approvals, commercialization and maintaining our intellectual property portfolio.

• manage our spending and cash requirements as our expenses are expected to continue to increase due to research and preclinical work, clinical trials, regulatory approvals, commercialization and maintaining our intellectual property portfolio.

If we are unsuccessful in accomplishing these objectives, we may not be able to develop our product candidates, raise capital, expand our business or continue our operations.

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 cHBV 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 infection to ultimately develop a functional curative combination regimen.

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

4 unchanged sentences

If we cannot develop compounds to achieve our goal of functionally curing HBV internally, we may be unable to acquire additional product candidates on terms acceptable to us, or at all.

Even if we are able to acquire or develop product candidates that address one of these mechanisms of action in pre-clinical studies, we may not succeed in demonstrating safety and efficacy of the product candidate in clinical trials.

If we are unable to identify suitable compounds for pre-clinical and clinical development, we will not succeed in realizing our goal of a functional curative combination regimen for HBV.

Even if we are able to acquire or develop product candidates that address one of these mechanisms of action in preclinical studies, we may not succeed in demonstrating safety and efficacy of the product candidate in clinical trials.

If we are unable to identify suitable compounds for preclinical and clinical development, we will not succeed in realizing our goal of a functional curative combination regimen for HBV.

We will require substantial additional capital to fund our operations.

2 unchanged sentences

Our principal sources of liquidity are cash, cash equivalents and investments in marketable securities, which were $132.3 million as of December 31, 2023.

We believe that our $ 184.3 million of cash, cash equivalents and investments in marketable securities as of December 31, 2022 will be sufficient to fund our operations into the fourth quarter of 2024.

We believe that our $ 132.3 million of cash, cash equivalents and investments in marketable securities as of December 31, 2023 will be sufficient to fund our operations into the first quarter of 2026.

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

2 unchanged sentences

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

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

(“Gritstone”);

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

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

28 unchanged sentences

We anticipate that our expenses will continue to be significant if and as we:

• continue our research and pre-clinical and clinical development of our product candidates;

• initiate additional pre-clinical, clinical or other studies or trials for our product candidates;

• continue our research and preclinical and clinical development of our product candidates;

• initiate additional preclinical, clinical or other studies or trials for our product candidates;

• continue or expand our licensing arrangements with our licensing partners;

9 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 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 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 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 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, 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 2022.

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.

2 unchanged sentences

Our ability to generate future revenues from product sales depends heavily on our success in:

• completing research and pre-clinical and clinical development of our product candidates;

• completing research and preclinical and clinical development of our product candidates;

• seeking and obtaining regulatory approvals for product candidates for which we complete clinical trials;

10 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.

12 unchanged sentences

• 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.

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.

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.

2 unchanged sentences

The clinical trial process may fail to demonstrate that our product candidates are both safe and effective for their intended uses.

Pre-clinical and clinical data and analyses are often able to be interpreted in different ways.

Preclinical and clinical data and analyses are often able to be interpreted in different ways.

Even if we view our results favorably, if a regulatory authority has a different view, we may still fail to obtain regulatory approval of our product candidates.

Any of these occurrences may harm our business, financial condition, results of operations, cash flows and prospects significantly.

Pre-clinical studies and preliminary and interim data from clinical trials of our product candidates are not necessarily predictive of the results or success of ongoing or later clinical trials of our product candidates.

If we cannot replicate the results from our pre-clinical studies and initial clinical trials of our product candidates in later clinical trials, we may be unable to successfully develop, obtain regulatory approval for and commercialize our product candidates.

Pre-clinical studies and any positive preliminary and interim data from our clinical trials of our product candidates may not necessarily be predictive of the results of ongoing or later clinical trials.

A number of companies in the pharmaceutical and biotechnology industries, including us and many other companies with greater resources and experience than we, have suffered significant setbacks in clinical trials, even after seeing promising results in prior pre-clinical studies and clinical trials.

Even if we are able to complete our planned clinical trials of our product candidates according to our current development timeline, initial positive results from pre-clinical studies and clinical trials of our product candidates may not be replicated in subsequent clinical trials.

Preclinical studies and preliminary and interim data from clinical trials of our product candidates are not necessarily predictive of the results or success of ongoing or later clinical trials of our product candidates.

If we cannot replicate the results from our preclinical studies and initial clinical trials of our product candidates in later clinical trials, we may be unable to successfully develop, obtain regulatory approval for and commercialize our product candidates.

Preclinical studies and any positive preliminary and interim data from our clinical trials of our product candidates may not necessarily be predictive of the results of ongoing or later clinical trials.

Even if we are able to complete our planned clinical trials of our product candidates according to our current development timeline, initial positive results from preclinical studies and clinical trials of our product candidates may not be replicated in subsequent clinical trials.

The design of our later stage clinical trials could differ in significant ways (e.g., inclusion and exclusion criteria, endpoints, statistical analysis plan) from our earlier stage clinical trials, which could cause the outcomes of the later stage trials to differ from those of our earlier stage clinical trials.

2 unchanged sentences

We are an early-stage company with limited resources and revenues.

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.

The product candidates we currently have under development will require significant development, preclinical 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.

2 unchanged sentences

If we make resource allocation decisions that later are shown to be inaccurate, our business and prospects could be harmed.

Several of our current pre-clinical studies and clinical trials are being conducted outside the United States, and the FDA may not accept data from trials conducted in locations outside the United States.

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, Taiwan, South Korea, Hong Kong, the United Kingdom, Australia and New Zealand, among other countries.

Several of our current preclinical studies and clinical trials are being conducted outside the United States, and the FDA may not accept data from trials conducted in locations outside the United States.

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

We are currently conducting clinical trials in the United States, Moldova, Thailand, Taiwan, South Korea, Hong Kong, the United Kingdom, 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.

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.

9 unchanged sentences

• establishment of the safety and efficacy of the product for each use sought;

• government review and approval of a submission containing, among other things, manufacturing, pre-clinical and clinical data;

• government review and approval of a submission containing, among other things, manufacturing, preclinical and clinical data;

• compliance with GMP regulations.

6 unchanged sentences

• failure to demonstrate that the product candidate’s benefits outweigh its risks;

• disagreement with our interpretation of pre-clinical or clinical data;

• disagreement with our interpretation of preclinical or clinical data;

• inadequacies in the manufacturing facilities or processes of third-party manufacturers.

The FDA or comparable regulatory authorities outside the United States may require us to conduct additional pre-clinical and clinical testing, which may delay or prevent approval of a product candidate and our commercialization plans, or cause us to abandon the development program.

The FDA or comparable regulatory authorities outside the United States may require us to conduct additional preclinical and clinical testing, which may delay or prevent approval of a product candidate and our commercialization plans, or cause us to abandon the development program.

Further, any approval we receive may be for fewer or more limited indications than we request, may not include labeling claims necessary for successful commercialization of the product candidate, or may be contingent upon our conducting costly post-marketing studies.

4 unchanged sentences

These types of clinical trial challenges could in turn, delay or prevent regulatory approval of our product candidate.

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.

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.

24 unchanged sentences

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

It may take considerable time and expense to resolve the clinical hold that has been placed on our IND application of AB-101 by the FDA, and no assurance can be given that the FDA will remove the clinical hold, in which case our business and financial prospects may be adversely affected.

On April 25, 2023, we announced that we were notified via verbal communication from the FDA that our AB-101 IND application has been placed on clinical hold, meaning we must suspend any ongoing clinical investigation, may not recruit new subjects to the study, and may not administer AB-101 to any subjects in the United States.

For purposes of clarity, the Phase 1 clinical trial had not been initiated and we had not dosed any patients with AB-101.

In May 2023, we received the clinical hold letter from the FDA, which raised questions about certain preclinical data and aspects of the clinical trial design.

In July 2023, Medsafe approved our CTA application for a Phase 1 clinical trial in New Zealand for AB-101;

however, there are no assurances that FDA will accept the results of such clinical trial and may require us to conduct an additional Phase 1 clinical trial or additional nonclinical studies.

If the FDA does not accept the results of our Phase 1 clinical trial in New Zealand for

AB-101 or requires us to conduct additional trials or studies, it may take a considerable period of time, the length of which is not certain at this time, and expense for us to fully address the FDA’s concerns.

Even if we are able to fully respond to the FDA’s current concerns, the FDA may subsequently make additional requests that we would need to fulfill prior to the lifting of the clinical hold.

It is possible that we will be unable to fully address the FDA’s concerns and, as a result, the clinical hold may never be lifted and we may never be able to initiate our AB-101 clinical program in the United States, which could have a material adverse effect on our business and financial prospects.

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

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

A portion of our clinical trial evaluating AB-836 and a cohort of Antios Therapeutics, Inc.’s (“Antios”) clinical trial evaluating a triple combination including AB-729 were being conducted in Ukraine at that time.

A portion of our clinical trial evaluating AB-836 and a cohort of Antios Therapeutics, Inc.’s (Antios) clinical trial evaluating a triple combination including imdusiran were being conducted in Ukraine at that time.

We had also planned to conduct a portion of the following clinical trials in Ukraine:

(i) our Phase 2a clinical trial evaluating AB-729 in combination with ongoing NA therapy and short courses of PEG-IFNα-2a in cHBV patients and (ii) our planned Phase 2a clinical trial to evaluate a triple combination of AB-729 with Vaccitech’s VTP-300 and an NA therapy.

(i) our Phase 2a clinical trial evaluating imdusiran in combination with ongoing NA therapy and short courses of PEG-IFNα-2a in cHBV infected patients and (ii) our planned Phase 2a clinical trial to evaluate a triple combination of imdusiran with Barinthus’s VTP-300 and an NA therapy.

As a result of such military invasion, we intend to utilize alternative clinical trial sites for our ongoing and planned clinical trials impacted by the military action in Ukraine.

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

For example, enrollment was completed in a cohort of patients in Antios’ ongoing Phase 2a proof-of-concept clinical trial evaluating a triple combination of AB-729, Antios’ proprietary Active Site Polymerase Inhibitor Nucleotide (ASPIN), ATI-2173, and Viread (tenofovir disoproxil fumarate), a nucleos(t)ide reverse transcriptase inhibitor.

However, the majority of patients in this cohort

were enrolled in Ukraine and, as a result, these patients have been lost to follow-up before completing the clinical trial.

For example, enrollment was completed in a cohort of patients in Antios’ ongoing Phase 2a proof-of-concept clinical trial evaluating a triple combination of imdusiran, Antios’ proprietary Active Site Polymerase Inhibitor Nucleotide (ASPIN), ATI-2173, and Viread (tenofovir disoproxil fumarate), a nucleos(t)ide reverse transcriptase inhibitor.

However, the majority of patients in this cohort were enrolled in Ukraine and, as a result, these patients have been lost to follow-up before completing the clinical trial.

Antios terminated this clinical trial and we have terminated our clinical collaboration agreement with Antios.

12 unchanged sentences

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.

For example, the Patient Protection and Affordable Care Act, as amended (the ACA), intended 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.

1 unchanged sentence

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, including those 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.

Additionally, individual states in the U.S.

have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including sometimes establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits and implementing marketing cost disclosure and transparency measures.

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.

2 unchanged sentences

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.

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

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 Roche, Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly, Enanta Pharmaceuticals, Aligos Therapeutics and Vaccitech.

These companies include, but are not limited to Roche, Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly, Enanta Pharmaceuticals, Aligos Therapeutics, Barinthus, Ascletis Pharma, Inc.

and Brii Biosciences Ltd..

Further, in addition to current investigational therapeutics in development, it is likely that additional drugs will become available in the future for the treatment of HBV.

In addition, given the severity of the global coronavirus 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.

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.

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 and coronavirus markets, with several early and late phase product candidates announced.

We anticipate significant competition in the HBV market, 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 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.

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 cHBV infection 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:

39 unchanged sentences

These legislative and regulatory changes may negatively impact the reimbursement for any future products, following approval.

We are subject to United States and Canadian healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, fines, disgorgement, exclusion from participation in government healthcare programs, curtailment or restricting of our operations and diminished profits and future earnings.

We are subject to United States and Canadian healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages and reputational harm.

fines, disgorgement, exclusion from participation in government healthcare programs, curtailment or restricting of our operations and diminished profits and future earnings.

Healthcare providers, physicians and others will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval.

7 unchanged sentences

Although we are not directly subject to HIPAA — other than with respect to providing certain employee benefits — we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA;

• numerous federal and state laws and regulations that address privacy and data security, including state data breach notifications laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act, or FTC Act, and the CCPA), govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways, thus complicating the compliance efforts.

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;

• numerous federal and state laws and regulations that address privacy and data security, including state data breach notifications laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, the CCPA), govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways, thus complicating the compliance efforts.

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;

• 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.

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

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

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 as of 2022), as well as ownership and investment interests held in the company by physicians and their immediate family members;

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, certain other practitioners, and teaching hospitals, 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;

3 unchanged sentences

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;

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;

state laws that restrict the ability of manufacturers to offer co-pay support to patients for certain prescription drugs;

5 unchanged sentences

The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

If we participate in the Medicaid Drug Rebate Program and other governmental pricing programs, failure to comply with obligations under these programs could result in additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Under the Medicaid Drug Rebate program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B.

Those rebates are based on pricing data reported by the manufacturer on a monthly and quarterly basis to CMS.

These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the U.S.

in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.

If we fail to pay the required rebate amount or report pricing data on a timely basis, we may be subject to civil monetary penalties and/or termination from the Medicaid Drug Rebate program.

Additionally, civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we fail to submit the required price data on a timely basis, or if we misclassify or misreport product information.

CMS could also decide to terminate any Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs, if commercialized.

The ACA made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation to implement the changes to the Medicaid Drug Rebate Program under the ACA.

CMS also issued a final regulation that modified prior Medicaid Drug Rebate Program regulations to permit reporting multiple best price figures with regard to value-based purchasing arrangements;

and provide definitions for “line extension,” “new formulation,” and related terms, with the practical effect of expanding the scope of drugs considered to be line extensions that are subject to an alternative rebate formula.

While the regulatory provisions that purported to affect the applicability of the best price and average manufacturer price exclusions of manufacturer-sponsored patient benefit programs, in the context of pharmacy benefit manager (PBM) “accumulator” programs were invalidated by a court, such programs (including copayment “maximizer” programs) may continue to negatively affect us in other ways.

Our failure to comply with these price reporting and rebate payment options, as well as PBM “accumulator” programs (including copayment “maximizer” programs), could negatively impact our financial results.

Federal law requires that a manufacturer also participate in the 340B Drug Pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.

The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to a specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as hospitals that serve a disproportionate share of low-income patients.

The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated

under the Medicaid Drug Rebate Program.

If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price for any of our commercialized products, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for HRSA to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs, once commercialized, would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.

Further, the IRA establishes a Medicare Part D inflation rebate scheme (the first rebate period is in fourth quarter 2022 through third quarter 2023) and a drug price negotiation program, with the first negotiated prices to take effect in 2026.

It also makes several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025).

Manufacturers may be subject to civil monetary penalties for certain violations of the negotiation and inflation rebate provisions and an excise tax during a noncompliance period under the negotiation program.

Drug manufacturers may also be subject to civil monetary penalties with respect to their compliance with the new Part D manufacturer drug discount program.

Pricing and rebate calculations are complex, vary across products and programs, and are often subject to interpretation by the manufacturer, governmental agencies, and courts.

A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit corrected data up to three years after those data originally were due.

Restatements and recalculations increase the costs for complying with the laws and policies governing the Medicaid Drug Rebate program and could result in an overage or underage in our rebate liability for past quarters.

They also may affect the 340B ceiling price and therefore liability under the 340B program.

Finally, in order to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by the Big Four Agencies and certain federal grantees, a manufacturer is required to participate in the FSS pricing program, established under Section 603 of the Veterans Health Care Act of 1992.

Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an FSS contract and charge a price to the Big Four Agencies that is no higher than the FCP, which is a price calculated pursuant to a statutory formula.

The FCP is derived from a calculated price point called the Non-FAMP, which the manufacturer calculates and reports to the VA on a quarterly and annual basis.

Pursuant to applicable law, knowing provision of false information in connection with a Non FAMP filing can subject a manufacturer to significant penalties for each item of false information.

The FSS contract also contains extensive disclosure and certification requirements.

If we overcharge the government in connection with the FSS contract or Tricare Retail Pharmacy Rebate Program, whether due to a misstated FCP or otherwise, we will be required to refund the difference to the government.

Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.

Unexpected refunds to the government, and any response to government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Under Section 703 of the National Defense Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries.

The rebates are calculated as the difference between the annual Non FAMP and FCP for the calendar year that the product was dispensed.

A manufacturer that overcharges the government in connection with the FSS contract or Tricare Retail Pharmacy Rebate Program, whether due to a misstated FCP or otherwise, is required to refund the difference to the government.

Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.

Failure to comply with the United States Foreign Corrupt Practices Act (FCPA), and potentially other global anti-corruption and anti-bribery laws such as the Canadian Corruption of Foreign Public Officials Act, could subject us to penalties and other adverse consequences.

23 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, 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

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

We may be unable to continue to establish such licensing agreements, and any licensing agreements we do establish may be unsuccessful, or we may not receive milestone payments or royalties as anticipated.

2 unchanged sentences

Failure of a licensing partner to continue funding any particular program could delay or halt the development or commercialization of any products arising out of such program.

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 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 and Vaccitech.

We are responsible for managing the clinical trial under the collaboration agreement with Vaccitech, while Assembly is responsible for managing the clinical trials under the collaboration we have with 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, the success of those collaborations also depend on whether Assembly 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.

For example, through the clinical collaboration agreement with Assembly that we entered into in August 2020, Assembly conducted a clinical trial evaluating AB-729 in combination with its first-generation HBV core inhibitor (capsid inhibitor) candidate VBR and standard-of-care NA therapy for the treatment of cHBV in HBeAg negative patients with cHBV to evaluate the safety, pharmacokinetics, and antiviral activity of the triple combination of AB-729, VBR, and an NA (n=32).

In July 2022, Assembly announced its plans to discontinue development of VBR.

Despite this, in consultation with Assembly, we continued this Phase 2a proof-of-concept clinical trial in order to fully and accurately assess the results.

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.

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 will depend on Qilu for the development and commercialization of imdusiran in China, Hong Kong, Macau and Taiwan.

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.

We will depend on Qilu to comply with all applicable laws relative to the development and commercialization of imdusiran 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 imdusiran 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.

1 unchanged sentence

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

In certain situations, Qilu has the ability to terminate the License Agreement and retain all rights to manufacture, develop and commercialize imdusiran 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, Qilu, Gritstone, Assembly 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.

Conflicts may arise with our collaboration or licensing partners, including Alnylam, Qilu, Assembly and Barinthus 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.

9 unchanged sentences

Switching or adding additional third-party service providers involves additional cost and requires management time and focus.

In addition, there is a natural transition period when a new third-party service provider begins work.

In addition, there is a natural transition period when a new third-party

service provider begins work.

As a result, delays may occur, which can materially impact our ability to meet our desired development timelines.

37 unchanged sentences

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

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.

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.

12 unchanged sentences

In order to protect our proprietary technology and processes, we rely in part on confidentiality agreements with our collaborators, employees, vendors, consultants, outside scientific collaborators and sponsored researchers, and other advisors.

These agreements offer only limited protection, and as such may not effectively prevent disclosure of confidential information and also may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.

These agreements offer only limited protection, and as such may not effectively

prevent disclosure of confidential information and also may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.

In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such party.

2 unchanged sentences

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

As of February 28, 2023, executive officers, directors, five percent or greater shareholders, and their respective affiliated entities beneficially owned, in the aggregate, approximately 26% of our outstanding common shares.

As of March 1, 2024, executive officers, directors, five percent or greater shareholders, and their respective affiliated entities beneficially owned, in the aggregate, approximately 41% of our outstanding common shares.

Entities associated with Roivant Sciences Ltd.

(“Roivant”) collectively held as a group approximately 25% of our outstanding common shares as of February 28, 2023.

(Roivant) collectively held as a group approximately 22% of our outstanding common shares as of March 1, 2024.

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.

This may prevent or discourage unsolicited acquisition proposals or offers for our common shares that you may feel are in your best interest.

The interests of Roivant may not always coincide with your interests or the interests of other

shareholders and they may act in a manner that advances their best interests and not necessarily those of other shareholders, including seeking a premium value for their common shares.

The interests of Roivant may not always coincide with your interests or the interests of other shareholders and they may act in a manner that advances their best interests and not necessarily those of other shareholders, including seeking a premium value for their common shares.

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

12 unchanged sentences

If we are deemed to be a “passive foreign investment company” for the current or any future taxable year, investors who are subject to United States federal taxation would likely suffer materially adverse United States federal income tax consequences.

We generally will be a “passive foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”) if (a) 75% or more of our gross income is “passive income” (generally, dividends, interest, rents, royalties, and gains from the disposition of assets producing passive income) in any taxable year, or (b) if at least 50% or more of the quarterly average value of our assets produce, or are held for the production of, passive income in any taxable year.

We generally will be a “passive foreign investment company” under the meaning of Section 1297 of the Code (a PFIC) if (a) 75% or more of our gross income is “passive income” (generally, dividends, interest, rents, royalties, and gains from the

disposition of assets producing passive income) in any taxable year, or (b) if at least 50% or more of the quarterly average value of our assets produce, or are held for the production of, passive income in any taxable year.

We have determined that we have not been a PFIC for the three taxable years ended December 31, 2023, however recent changes to Treasury regulations under the Code have made this determination more challenging for us, and we cannot provide any assurances that we will not become a PFIC in the future.

6 unchanged sentences

This legislation permits the Commissioner of Competition of Canada to review any acquisition of a significant interest in us.

This legislation grants the Commissioner jurisdiction to challenge such an acquisition before the Canadian Competition

Tribunal if the Commissioner believes that it would, or would be likely to, result in a substantial lessening or prevention of competition in any market in Canada.

This legislation grants the Commissioner jurisdiction to challenge such an acquisition before the Canadian Competition Tribunal if the Commissioner believes that it would, or would be likely to, result in a substantial lessening or prevention of competition in any market in Canada.

The Investment Canada Act subjects an acquisition of control of a Canadian-company by a non-Canadian to government review if the value of our assets, as calculated pursuant to the legislation, exceeds a threshold amount.

6 unchanged sentences

We rely heavily on our ability to attract and retain qualified managerial, scientific and technical staff.

The loss of the service of any of the members of our senior management, including William H.

Collier, our President and Chief Executive Officer, and Michael J.

The loss of the service of any of the members of our senior management, including Michael J.

McElhaugh, our interim President and Chief Executive Officer, and Michael J.

Sofia, our Chief Scientific Officer, may adversely affect our ability to develop our technology, add to our pipeline, advance our product candidates and manage our operations.

18 unchanged sentences

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.

For example, the loss of preclinical 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.

14 unchanged sentences

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

Unresolved Staff Comments

There are currently no unresolved staff comments.

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