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Item 1A. Risk Factors

2025-03-27 compared with 2024-03-05 · 159 added, 144 removed, 443 unchanged (41% of the section changed)

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Risks Related to Our Business, Our Financial Results and Need for Additional Capital

We are involved in multiple patent infringement lawsuits in multiple jurisdictions to protect and assert our intellectual property rights against large, well-capitalized companies, which requires that we continue to expend substantial resources, and we may not be successful in these proceedings.

We are currently involved in patent infringement lawsuits in multiple jurisdictions against Moderna and Pfizer/BioNTech, which are large, well-capitalized companies.

These lawsuits have been ongoing for years and have required substantial investments of resources.

We anticipate that these proceedings will continue to require similar investments over an extended period of time.

Each of the proceedings is subject to substantial uncertainty regarding their outcomes, which is highly dependent upon specific factual matters and legal interpretations.

We believe that it is critical to our future success to continue to pursue these actions, and we intend to do so.

Each action will result in court rulings and decisions about significant issues, such as claim construction, patent validity, infringement, jurisdiction and other matters, almost all of which are subject to an appeal process that are typically lengthy and unpredictable in terms of outcome.

Moreover, the ruling or decision in one proceeding is not necessarily indicative of rulings or decisions that may be issued in another proceeding, even if the factual and legal matters are similar.

We expect that various courts will issue significant rulings in several of our proceedings within the next year, and the disclosure of those rulings may cause substantial volatility in our share price and could impact our business, financial condition and results of operations.

We are in the early stages of our development, and there is a limited amount of information about us upon which you can evaluate our product candidates.

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We have only a limited history upon which you can evaluate our business and prospects as our product candidates are still at an early stage of development and thus we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area.

For example, to execute our business plan, we will need to successfully:

• execute research and development activities using technologies involved in the development of our product candidates;

For example, to continue the development of our cHBV programs, we would need to successfully:

• execute development activities using technologies involved in the development of our product candidates;

• build, maintain and protect a strong intellectual property portfolio;

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• 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 preclinical work, clinical trials, regulatory approvals, commercialization and maintaining our intellectual property portfolio.

• manage our spending and cash requirements to support our clinical trials, regulatory approvals, commercialization and the maintaining of 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 infection to ultimately develop a functional curative combination regimen.

We are concentrating and intend to continue to concentrate our internal development efforts primarily on the 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.

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Any compounds that we develop may not effectively address HBV persistence.

Even if we are able to develop compounds that address one or more of the key factors in the HBV life cycle (e.g., HBV replication, HBsAg expression and immune reactivation), targeting these key factors has not been proven to functionally cure HBV.

Even if we are able to develop compounds that address one or more of the key factors in the HBV life cycle (e.g., HBV

replication, HBsAg expression and immune reactivation), targeting these key factors has not been proven to functionally cure HBV.

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.

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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.

We may require substantial additional capital to fund our operations.

Additional funds may be dilutive to shareholders or impose operational restrictions.

Further, if additional capital is not available, we may need to delay, limit or eliminate our research, development and commercialization programs and modify our business strategy.

Further, if additional capital is not available, we may need to delay, limit or eliminate our development and commercialization programs and modify our business strategy.

Our principal sources of liquidity are cash, cash equivalents and investments in marketable securities, which were $122.6 million as of December 31, 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

currently expected because of such circumstances.

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

Within the next several years and subject to the results of our review of our pipeline and development plans for our hepatitis B programs, substantial additional funds would be required to continue with the active development of our pipeline product candidates and technologies.

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

• the results of the review of our pipeline and development plans for our hepatitis B programs;

• costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matters against Moderna and Pfizer/BioNTech;

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

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• competing products, product candidates and technological and market developments.

• prosecuting and enforcing our patent claims and other intellectual property rights.

We will seek to obtain funding to maintain and advance our business from a variety of sources including equity financings, debt financings, licensing agreements, partnerships, government grants and contracts and other strategic transactions and funding opportunities.

We may seek to obtain funding to maintain and advance our business from a variety of sources including equity financings, debt financings, licensing agreements, partnerships, government grants and contracts and other strategic transactions and funding opportunities.

There can be no assurance that we will be able to complete any such transaction on acceptable terms or otherwise.

If we are able to raise additional capital through the issuance of equity securities, the percentage ownership of our current shareholders will be reduced.

If we raise additional capital through the issuance of equity securities, the percentage ownership of our current shareholders will be reduced.

In addition, we may issue equity as part of the consideration to our licensors, to compensate consultants or to settle outstanding payables, all of which could cause our shareholders to experience additional dilution in net book value per share.

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If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will need to curtail and reduce our operations and costs, and modify our business strategy which may require us to, among other things:

• significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates or one or more of our research and development initiatives;

• seek collaborators for one or more of our product candidates or one or more of our research and development initiatives at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;

• sell or license on unfavorable terms our rights to one or more of our technologies, product candidates or research and development initiatives that we otherwise would seek to develop or commercialize ourselves;

• cease operations.

• significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates;

• seek collaborators for one or more of our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;

• sell or license on unfavorable terms our rights to one or more of our technologies or product candidates that we otherwise would seek to develop or commercialize ourselves;

• seek a sale of the Company or cease operations.

We have incurred losses in nearly every year since our inception and we anticipate that we will not achieve profits for the foreseeable future.

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

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

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

We do not expect to achieve profits until such time as product sales, milestone payments and royalty payments, if any, generate sufficient revenues to fund our continuing operations.

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

• 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 the clinical development of our products candidates;

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

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

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• establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain regulatory approval;

• seek to identify and validate additional product candidates;

• acquire or in-license other product candidates and technologies;

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• attract and retain skilled personnel;

• create additional infrastructure to support our research, product development and planned future commercialization efforts;

• create additional infrastructure to support our product development and planned future commercialization efforts;

• experience any delays or encounter issues with any of the above.

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

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

• completing clinical development of our product candidates;

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

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The outcomes of clinical trials are uncertain, and delays in the completion of or the termination of any clinical trial of our product candidates could harm our business, financial condition and prospects.

Our research and development programs are at an early stage of development.

Our development programs are at an early stage of development.

We must demonstrate our product candidates’ safety and efficacy in humans through extensive clinical testing, which is expensive and time-consuming and requires specialized knowledge and expertise.

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The commencement and completion of clinical trials may be delayed or precluded by a number of factors, including:

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

• the results of the review of our pipeline and development plans for our hepatitis B programs;

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

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

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

Based on preliminary results, we may choose to advance a particular product candidate that later fails to be successful, and simultaneously forgo or defer further investment in other product candidates that later are discovered to demonstrate greater promise in terms of clinical and commercial success.

demonstrate greater promise in terms of clinical and commercial success.

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

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.

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

We are currently conducting clinical trials in the United States, Moldova, Taiwan, South Korea, Hong Kong, the United Kingdom, Romania, Singapore, Italy, Canada, Ukraine, 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.

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• disagreement with the design or implementation of our clinical trials;

• failure to demonstrate that our product candidate is safe and effective for the proposed indication;

• failure to demonstrate that our product candidates are safe and effective for the proposed indication;

• failure of clinical trial results to meet the level of statistical significance required for approval;

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

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

• disagreement with our interpretation of preclinical or clinical data;

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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.

contingent upon our conducting costly post-marketing studies.

Any of these scenarios could materially harm the commercial prospects of a product candidate, and our operations will be adversely effected.

Disruptions at the FDA, including due to a reduction in the FDA’s workforce and/or inadequate funding for the FDA, could prevent the FDA from performing normal functions on which our business relies, which could negatively impact our business.

The ability of the FDA to review and approve new products or review other regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate government budget and funding levels, a reduction in the FDA’s workforce and its ability to hire and retain key personnel.

Disruptions at the FDA and other agencies may also increase the time to meet with and receive agency feedback , review and/or approve our submissions, conduct inspections, issue regulatory guidance, or take other actions that facilitate the development, approval and marketing of regulated products, which would adversely affect our business.

In addition, government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies.

For example, the current presidential administration recently established the Department of Government Efficiency, which implemented a federal government hiring freeze and announced certain additional efforts to reduce federal government employee headcount and the size of the federal government.

It is unclear how these executive actions or other potential actions by the presidential administration or other parts of the federal government will impact the FDA or other regulatory authorities that oversee the product development portion of our business.

These budgetary pressures may reduce the FDA’s ability to perform its responsibilities.

If a significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly reduced or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a material adverse effect on our business.

If a particular product candidate causes undesirable side effects, then we may be unable to receive regulatory approval of or commercialize such product candidate.

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

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

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

• severity of the disease under investigation;

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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.

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

For purposes of clarity, the Phase 1 clinical trial in the United States 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.

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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.

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.

Current and planned clinical trials may be impacted 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 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 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 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.

Although the length and impact of Russia’s military action is highly unpredictable, actions by Russia, or potentially other countries, against Ukraine and surrounding areas may adversely affect our ability to adequately conduct or complete certain clinical trials and maintain compliance with relevant protocols due to, among other reasons, the prioritization of hospital resources away from clinical trials, reallocation or evacuation of site staff and subjects, or as a result of government-imposed curfews, warfare, violence, or other governmental action or events that restrict movement.

These developments may also result in our inability to access sites for monitoring or to obtain data from affected sites or patients going forward.

We could also experience disruptions in our supply chain or limits to our ability to provide sufficient investigational materials in Ukraine and surrounding regions.

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

If these clinical trials are further interrupted, our clinical development plans for these product candidates could be significantly delayed, which would increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues.

Our Phase 1 clinical trial for AB-101 (AB-101-001) has a clinical trial site in Ukraine.

The military action in Ukraine could disrupt our ongoing AB-101-001 clinical trial and could increase our costs and disrupt future planned clinical development activities.

Although the length and impact of Russia’s military action is highly unpredictable, actions by Russia, or potentially other countries, against Ukraine and surrounding areas may adversely affect our ability to adequately conduct our ongoing AB-101-001 clinical trials and maintain compliance with relevant protocols due to, among other reasons, the prioritization of hospital resources away from clinical trials, reallocation or evacuation of site staff and subjects, or as a result of government-imposed curfews, warfare, violence, or other governmental action or events that restrict movement.

These developments may also result in our inability to access our clinical trial site in Ukraine for monitoring or to obtain data from such site or subjects going forward.

We could also experience disruptions in our supply chain or limits to our ability to provide sufficient investigational materials in Ukraine.

Alternative sites to fully and timely compensate for our clinical trial activities in Ukraine may not be available and we may need to find other countries to conduct our AB-101-001 clinical trials.

If our AB-101-001 clinical trial is interrupted, our clinical development plans for AB-101 could be significantly delayed, which would increase our costs, slow down our AB-101 development and approval process and jeopardize our ability to commence product sales and generate revenues.

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

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

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

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

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

Further, the U.S.

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

Further, the United States 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, 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.

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

We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, or its implementation, and other healthcare reform measures, 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.

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

Further, the Inflation Reduction Act (IRA), among other things, established Medicare Part B and Part D inflation rebate schemes under which, generally, manufacturers will owe rebates if the average sales price of certain Part B drugs, or the average manufacturer price of certain covered Part D drugs, increases faster than the pace of inflation, and a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, beginning in 2026.

We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, the IRA, 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 United States 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 United States or other government and third-party payors fail to provide adequate coverage and reimbursement.

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

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

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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, Barinthus, Ascletis Pharma, Inc.

These companies include, but are not limited to Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly, Aligos Therapeutics, Bluejay Therapeutics, Inc., AusperBio Therapeutics, 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.

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.

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

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

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

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

Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries.

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• reimbursement coverage;

• patent position.

• patent position and regulatory exclusivities.

Our competitors may develop or commercialize products with significant advantages over any products we develop based on any of the factors listed above, or on other factors.

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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.

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

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.

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• distribution and use restrictions imposed by the FDA or other regulatory authorities outside the United States or that are part of a REMS or voluntary risk management plan.

For example, even if our products have been approved by the FDA, physicians and patients may not immediately be receptive to them and may be slow to adopt them.

For example, even if our products have been approved by the FDA or comparable foreign regulatory authorities, physicians and patients may not immediately be receptive to them and may be slow to adopt them.

If our products do not achieve an adequate level of acceptance among physicians, patients and third-party payors, we may not generate meaningful revenues and we may not become profitable.

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Coverage and adequate reimbursement may not be available for our product candidates, which could make it difficult for us to sell our products profitably.

Market acceptance and sales of any products that we develop will depend in part on the extent to which reimbursement for these products and related treatments will be available from third party payors, including government health administration authorities and private health insurers.

Market acceptance and sales of any products that we develop and receive approval for will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities and private health insurers.

Third-party payors decide which drugs they will pay for and establish reimbursement levels.

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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.

fines, disgorgement, exclusion from participation in United States federal 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.

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

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

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

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

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

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

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

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

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

• HIPAA and its implementing regulations also impose obligations on certain covered entity health care providers, health plans and health care clearinghouses as well as their business associates (e.g., persons or entities that create, receive, maintain, or transmit protected health information in connection with providing a specified service or performing a function on behalf of a covered entity).

We may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA.

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 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.

• 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, artificial intelligence laws passed in the United States, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, and the Health Breach Notification Rule, the CCPA, as amended by the CPRA), 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, storage, disclosure or other processing activities concerning patient health information abroad.

• activities outside of the United States 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, including as implemented in the United Kingdom and other data protection, privacy and similar national, state/provincial and local laws, including the EU AI Act, 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, certain other practitioners, and teaching hospitals, as well as ownership and investment interests held in the company by physicians and their immediate family members;

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

• the United States federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, 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;

• the IRA, which, among other things, requires the U.S.

Secretary of Health and Human Services to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026, penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation, and makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability under the program which could negatively affect our business and financial condition;

• the IRA, which, among other things, requires the United States Secretary of Health and Human Services to negotiate, with respect to Medicare units and subject to a specified cap, the price of a set number of certain high Medicare spend drugs and biologicals per year starting in 2026, penalizes manufacturers of certain Medicare Parts B and D drugs for price increases above inflation, and makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability under the program which could negatively affect our business and financial condition;

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

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

state laws and laws outside the United States that require

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;

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It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, contractual damages, reputational harm, disgorgement, curtailment or restricting of our operations, any of which could substantially disrupt our operations and diminish our profits and future earnings.

If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from United States federal healthcare programs, contractual damages, reputational harm, disgorgement, curtailment or restricting of our operations, any of which could substantially disrupt our operations and diminish our profits and future earnings.

If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

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.

The risk of our being found in violation of these laws is increased by the fact that many of them are subject to evolving interpretation and application by courts and enforcement and regulatory authorities.

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.

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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.

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 United States 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.

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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.

Our failure to comply with these price reporting and rebate payment obligations 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.

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.

Further, the IRA establishes a Medicare Part B and Part D inflation rebate scheme 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).

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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.

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.

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The possibility and timing of any possible reversion of the royalty entitlement is affected by many factors including:

• Alnylam’s and its distributors’ and sublicensees’ ability to effectively market and sell ONPATTRO in each country where sold;

• Alnylam’s and its distributors’ and sublicensees’ ability and actions to effectively market and sell ONPATTRO in each country where sold;

• the manner of sale, whether directly by Alnylam or by sublicensees or distributors, and the terms of sublicensing and distribution agreements;

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• regulatory approvals, appropriate labeling, and desirable pricing, insurance coverage and reimbursement;

• competition;

• competition, including from Alnylam’s next generation RNAi product AMVUTTRA ® (vutrisiran);

• commencement of marketing in additional countries.

If Alnylam’s commercialization of ONPATTRO does not continue to be successful, the royalty entitlement may never revert back to us.

ONPATTRO sales have declined each of the last two years due primarily to sales from Alnylam’s next generation RNAi product AMVUTTRA cannibalizing sales of ONPATTRO.

If Alnylam’s sales of ONPATTRO continue to decline, the royalty entitlement may never revert back to us.

We expect to depend in part on our licensing agreements for a significant portion of our revenues for the foreseeable future and to develop, conduct clinical trials with, obtain regulatory approvals for, and manufacture, market and sell some of our product candidates.

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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.

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

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

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.

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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 will depend on Qilu for the development and commercialization of imdusiran 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 imdusiran 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 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 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.

We depend on Qilu to comply with all applicable laws relative to the development and commercialization of imdusiran in Greater China and Taiwan.

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

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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 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 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 Greater China and Taiwan.

In certain situations, Qilu has the ability to terminate the License Agreement and retain all rights to manufacture, develop and commercialize imdusiran in Greater China and Taiwan 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, 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.

Conflicts may arise with our collaboration or licensing partners, including Alnylam and Qilu, if they pursue alternative therapies for the diseases that we have targeted or develop or prioritize 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.

Additionally, conflicts may arise if there is a dispute about the progress of, or other activities related to, the clinical development of a product candidate, the achievement and payment of a milestone amount, the payment of royalties or the ownership of intellectual property that is developed during the course of the collaborative arrangement.

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

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

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

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

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.

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We have entered into contracts with third-party manufacturers to manufacture, supply, store and distribute supplies of our product candidates for our clinical trials.

If any of our product candidates receive FDA approval, we expect to rely on third-party contractors to manufacture our products.

If any of our product candidates receive approval, we expect to rely on third-party contractors to manufacture our products.

We have no current plans to build internal manufacturing capacity for any product candidate, and we have no long-term supply arrangements.

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• we may be unable to contract with third-party manufacturers on acceptable terms, or at all, because the number of potential manufacturers is limited.

Potential manufacturers of any product candidate that is approved will be subject to FDA compliance inspections and any new manufacturer would have to be qualified to produce our products;

Potential manufacturers of any product candidate that is approved will be subject to regulatory compliance inspections and any new manufacturer would have to be qualified to produce our products;

• our third-party manufacturers might be unable to formulate and manufacture our product candidates and products in the volume and of the quality required to meet our clinical and commercial needs, if any;

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• drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and other government agencies to ensure compliance with cGMP and other government regulations and corresponding foreign standards.

We do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures;

do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures;

• if any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we may not own, or may have to share, the intellectual property rights to such improvements;

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

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

RNAi and PD-L1 inhibitors have generated many different patent applications from organizations and individuals seeking to obtain patents in the field.

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

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

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

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

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

Our patents and patent applications may be challenged and may be found to be invalid, which could adversely affect our business.

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

Certain of our patents and patent applications have been challenged and found to be invalid, and additional challenges may occur in the future, which could adversely affect our business.

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

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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 were or any licensor was the first creator of inventions covered by pending patent applications or that we were 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.

There can be no assurance that our patents, if issued, will be held valid or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights which could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.

For example, in April 2023, following the institution of inter partes review of a patent in our LNP patent portfolio, such patent was found to be invalid.

For more information on past and ongoing intellectual property challenges and litigation, see “Item 3—Legal Proceedings.”

We have incurred, and may in the future continue to incur, substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, and we may not be successful in one or more of these lawsuits or proceedings, any of which could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.

There has been significant litigation in the biotechnology industry over contractual obligations, patents and other proprietary rights, and we may become involved in various types of litigation that arise from time to time.

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Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations as a result of claims of patent infringement or violation of other intellectual property rights and the costs associated with litigation, which could have a material adverse effect on our business, financial condition, and operating results and could cause the market value of our common shares to decline.

Additionally, we continue to protect and defend our intellectual property rights, certain of which are the subject of ongoing lawsuits against Moderna and Pfizer/BioNTech for their use of our patented LNP technology in their COVID-19 mRNA-LNP vaccines.

These lawsuits consume significant resources.

Should we not be successful in one or more of these lawsuits, it could have a material adverse effect on our business, financial condition, and operating results and could cause the market value of our common shares to decline.

For more information on past and ongoing intellectual property challenges and litigation, see “Item 3—Legal Proceedings.”

Confidentiality agreements with employees and others, including collaborators, may not adequately prevent disclosure of trade secrets and other proprietary information .

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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.

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• delay, defer or prevent a change in control;

• entrench our management and/or the board of directors;

• entrench our management and/or our Board;

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

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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.

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, 2024, 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.

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Our articles and certain Canadian laws could delay or deter a change of control.

Our preferred shares are available for issuance from time to time at the discretion of our board of directors, without shareholder approval.

Our preferred shares are available for issuance from time to time at the discretion of our Board, without shareholder approval.

Our articles allow our Board, without shareholder approval, to determine the special rights to be attached to our preferred shares, and such rights may be superior to those of our common shares.

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General Risk Factors

If we are unable to attract and retain qualified key management, scientific staff, consultants and advisors, our ability to implement our business plan may be adversely affected.

We depend upon our senior executive officers as well as key scientific, management and other personnel.

The competition for qualified personnel in the biotechnology field is intense.

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 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.

We do not carry key person life insurance on any of our employees.

We rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy.

Our consultants and advisors may be employed by other entities and may have commitments under consulting or advisory contracts with those entities that may limit their availability to us.

If we are unable to continue to attract and retain highly qualified personnel, our ability to develop and commercialize our product candidates will be limited.

We could face liability from our controlled use of hazardous and radioactive materials in our research and development processes.

We use certain radioactive materials, biological materials and chemicals, including organic solvents, acids and gases stored under pressure, in our research and development activities.

Our success depends on our new management team and Board of Directors, which is conducting a review of our pipeline and development plans for our hepatitis B programs.

In the first quarter of 2025, we announced the appointment of five new members of our Board to replace all of the former directors, as well as the appointment of a new President, Chief Executive Officer and Chairperson of our Board and a new Chief Financial Officer.

Additionally, our Board took action to reduce our workforce by 57% resulting in a total workforce after reductions of 19 employees.

Our Board also decided to exit our corporate headquarters in Warminster, PA and to discontinue in-house scientific research.

Our new Board and management team are reviewing our pipeline and development plans for our hepatitis B programs.

Our new management team and Board may make further adjustments and reassess our short and long-term business portfolio and development strategies.

These potential changes could lead to shifts in our company’s strategic direction, which may impact our operations, financial condition, and overall business performance.

We could face liability from our controlled use of hazardous and radioactive materials in our development processes.

We use certain radioactive materials, biological materials and chemicals, including organic solvents, acids and gases stored under pressure, in our development activities.

Our use of radioactive materials is regulated by the United States Nuclear Regulatory Commission and Pennsylvania Department of Environmental Protection for the possession, transfer, import, export, use, storage, handling and disposal of radioactive materials.

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We are not specifically insured with respect to this liability.

Our business, reputation, and operations could suffer in the event of information technology system failures, such as a cybersecurity breach.

Our business, reputation, and operations could suffer in the event of information technology system failures, such as a cybersecurity incident.

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

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

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

Despite the implementation of security measures, our systems, networks and technology and those of our contractors and consultants are vulnerable to damage or interruption from events including computer viruses, cyberattacks (including ransomware, malware attacks, unauthorized access attempts, and denial of service and other unintentional intrusions or malicious cyberattacks), social engineering (including phishing) or other fraudulent schemes, and other cybersecurity incidents, as well as natural disasters, terrorism, war, telecommunication and electrical failures.

These threats may arise from persons inside our organization, authorized persons with access to systems inside our organization or those with whom we do business, or unauthorized individuals.

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

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

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

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

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

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.

Additionally, while we have implemented security measures that we believe are appropriate and continue to enhance cybersecurity protections, a regulator could deem our

security measures not to be appropriate given the lack of prescriptive measures in certain data protection laws.

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

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

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’ systems, networks and technologies.

The cost and operational consequences of responding to cybersecurity incidents, including disruption, degradation, or manipulation of systems, networks or technology, or implementing remediation measures could be significant.

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

Increased regulation of data collection, use and retention practices,

including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business.

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

A significant cybersecurity incident may also deter new clinical trial participants from participating in our trials.

Furthermore, if our systems, networks, and technology, or those of third parties on which we rely, suffer severe damage, disruption or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results and the development of our product candidates could be delayed.

Moreover, our insurance may not provide any or adequate coverage of any such losses.

And, as cyberattacks increase in frequency and magnitude, we may be unable to obtain insurance in amounts and on terms we view as adequate for our operations.

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

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What changed 10-K

Item 1A. Risk Factors