What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-27 compared with 2024-03-05 · 108 added, 82 removed, 168 unchanged (53% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Arbutus Biopharma Corporation (“Arbutus”, the “Company”, “we”, “us”, and “our”) is a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to identify and develop novel therapeutics with distinct mechanisms of action, which can potentially be combined to provide a functional cure for patients with chronic hepatitis B virus (cHBV) infection.

We believe the key to success in developing a functional cure involves suppressing hepatitis B virus deoxyribonucleic acid (HBV DNA), reducing hepatitis B surface antigen (HBsAg) and boosting HBV-specific immune responses.

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

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

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

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

Arbutus Biopharma Corporation (“Arbutus”, the “Company”, “we”, “us”, and “our”) is a clinical-stage biopharmaceutical company focused on infectious disease.

We are currently developing imdusiran (AB-729), our proprietary, conjugated GalNAc, subcutaneously-delivered RNAi therapeutic, and AB-101, our proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).

Through our ownership stake in and our license to Genevant Sciences, Ltd (Genevant), we are also focused on maximizing opportunity for our in-house developed Lipid Nanoparticle (LNP) delivery technology.

We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuits against Moderna Therapeutics, Inc.

(Moderna) and against Pfizer Inc.

and BioNTech SE (collectively, Pfizer/BioNTech) for their use of our patented LNP delivery technology in their COVID-19 mRNA-LNP vaccines.

With respect to the Moderna lawsuit in the United States, a trial date has been set for September 24, 2025.

On March 3, 2025, we announced that, along with Genevant, we have filed five international lawsuits against Moderna in connection with their use of our LNP technology in their COVID-19 mRNA-LNP and RSV vaccines.

With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred in December 2024.

The court is expected to provide its ruling on the claim construction and issue a further scheduling order, including the date for trial, in 2025.

During 2024, we streamlined the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101, and therefore ceased all discovery efforts, discontinued our IM-PROVE III clinical trial and reduced our workforce by 40%.

In the first quarter of 2025, we announced the appointment of five new members of our Board of Directors (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 an additional 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.

In connection with these actions, we expect to incur a one-time restructuring charge in the first quarter of 2025 of approximately $11 million to $13 million.

With these organizational changes and our ongoing cost management efforts, we expect to significantly reduce our net cash burn in 2025 when compared to 2024.

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

To assist with this review, we are currently retaining experts in virology, hepatitis B, and in the clinical development and approval of antiviral treatments.

We expect to provide a further update once our review is complete.

Our strategy is focused on maximizing opportunities for our cHBV development programs and our in-house developed LNP delivery technology.

LNP delivery technology

On February 28, 2022 and April 4, 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.

It is well established in the scientific literature that the most significant technological hurdle to developing and deploying medicines using mRNA is engineering a safe and effective way to deliver the mRNA to human cells.

Scientists at Arbutus and Genevant have spent years developing and refining LNP delivery technology, which has been licensed for various applications to many different third parties.

Our and Genevant’s LNP technology relies on microscopic particles built from four carefully selected types of fat-like molecules to shelter and protect RNA molecules.

With this technology, the RNA can travel through the human body to a target cell and through the target cell’s membrane before releasing the RNA.

Without this crucial delivery technology, the RNA would quickly degrade in the body and be ineffective.

We remain committed to taking all legal actions necessary to defend and protect our intellectual property.

With respect to the Moderna lawsuit, the claim construction hearing occurred on February 8, 2024.

On April 3, 2024, the court provided its claim construction ruling in which it construed the disputed claim terms and agreed with our position on most of the disputed claim terms.

A trial date for the Moderna lawsuit in the United States has been set for September 24, 2025.

With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred in December 2024.

The court is expected to provide its ruling on the claim construction and issue a further scheduling order, including the date for trial, in 2025.

cHBV programs

Our current HBV strategy is to develop a functional cure for patients with cHBV infection with imdusiran as a potential cornerstone in a combination therapy.

We believe that a combination of compounds that can suppress hepatitis B virus deoxyribonucleic acid (HBV DNA) replication and hepatitis B surface antigen (HBsAg) expression as well as boost patients’ HBV-specific immune response could address the most important elements to achieving a functional cure.

Functional cure is defined as sustained HBsAg loss and HBV DNA less than the lower limit of quantification 24 weeks off treatment, with or without anti-hepatitis B surface antibodies (anti-HBs).

By providing a functional cure for patients with cHBV, we aim to prevent complications of disease progression, to decrease HBV burden by minimizing patient stigma and address the need for finite and more efficacious HBV treatments that further improve long-term outcomes and reduce associated healthcare costs.

Our product pipeline consists of the following programs:

Our strategy is to position imdusiran as a potential cornerstone therapeutic in combination with AB-101 or other agents with potentially complementary mechanisms of action.

When our AB-101-001 clinical trial is completed, assuming success, we intend to initiate a Phase 2 clinical trial combining imdusiran, AB-101 and NA therapy in patients with cHBV infection.

We are also conducting two Phase 2a clinical trials combining imdusiran with other agents.

Imdusiran is our proprietary subcutaneously-delivered RNAi therapeutic product candidate that suppresses all HBV antigens, including HBsAg expression, which is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to HBV.

Over 250 patients with cHBV infection have been dosed with imdusiran in our Phase 1 and Phase 2a clinical trials.

Clinical data generated thus far has shown imdusiran to be generally safe and well-tolerated, while also providing meaningful reductions in HBsAg and HBV DNA.

AB-101 is our oral PD-L1 inhibitor that has the potential to reawaken patients’ HBV-specific immune response by inhibiting PD-L1.

Preclinical data in an HBV mouse model that was presented at the 2022 AASLD Liver Meeting showed that combination treatment with AB-101 and an HBV-targeting GalNAc-siRNA agent resulted in activation and increased frequency of HBV-specific T-cells and greater anti-HBsAg antibody production.

Data from our IM-PROVE I Phase 2a clinical trial showed that six doses of imdusiran and 24 weeks of pegylated interferon alfa-2α (IFN), a standard-of-care immunomodulator, added to ongoing nucleoside analogue (NA) therapy led to a functional cure rate of 50% (3/6) in HBeAg-negative patients with baseline HBsAg levels less than 1000 IU/mL, and an overall functional cure rate of 25% (3/12).

Those patients that achieved a functional cure also seroconverted with high anti-HB levels.

These data from the IM-PROVE I trial suggest that the combination of imdusiran, 24 weeks of IFN and ongoing NA therapy was generally safe and well-tolerated.

We are reviewing our pipeline and development plans for our hepatitis B programs.

AB-101 is our proprietary oral PD-L1 inhibitor that has the potential to reawaken patients’ HBV-specific immune response by inhibiting PD-L1.

AB-101 is currently in a Phase 1a/1b clinical trial (AB-101-001) evaluating the safety, tolerability, pharmacokinetics, and pharmacodynamics of single- and multiple-ascending oral doses in healthy subjects and patients with cHBV infection.

Parts 1 and 2 of this clinical trial enrolled sequential cohorts of healthy subjects receiving single and multiple doses, respectively, of AB-101 at increasing dose levels.

The data showed that AB-101 was generally well-tolerated with evidence of dose-dependent receptor occupancy.

We have moved into Part 3 of this clinical trial which evaluates repeat doses of AB-101 for 28 days in patients with cHBV.

Next steps for AB-101 will be determined after we complete our review of our pipeline and development plans for our hepatitis B programs.

Collaborations and Royalty Entitlements

Qilu Pharmaceutical Co., Ltd.

In December 2021, we entered into a technology transfer and license agreement (the License Agreement) with Qilu, pursuant to which we granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by us, which is non-exclusive as to development and manufacturing and exclusive with respect to commercialization of imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (the Territory).

In partial consideration for the rights granted by us, Qilu paid us a one-time upfront cash payment of $40 million on January 5, 2022 and agreed to pay us milestone payments totaling up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones.

Qilu also agreed to pay us double digit royalties into the low twenties percent based upon annual net sales of imdusiran in the Territory.

In partial consideration for the rights granted by us, Qilu paid us a one-time upfront cash payment of $40 million on January 5, 2022 and agreed to pay us up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones.

Qilu also agreed to pay us double-digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan.

The royalties are payable on a product-by-product and region-by-region basis, subject to certain limitations.

Qilu is responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in the Territory.

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.

Qilu is responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan.

Qilu is required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.

A joint development committee has been established between us and Qilu to coordinate and review the development, manufacturing and commercialization plans.

Both parties also have entered into a supply agreement and related quality agreement pursuant to which we will manufacture or have manufactured and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in the Territory until we have completed manufacturing technology transfer to Qilu and Qilu has received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in the Territory.

Concurrent with the execution of the License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares, without par value (the Common Shares), at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of the Common Shares as of the close of trading on December 10, 2021 (the Share Transaction).

Both parties also have entered into a supply agreement and related quality agreement pursuant to which we will manufacture or have manufactured and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until we have completed manufacturing technology transfer to Qilu and Qilu has received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.

Concurrent with the execution of the License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common shares as of the close of trading on December 10, 2021 (the Share Transaction).

We received $15.0 million of gross proceeds from the Share Transaction on January 6, 2022.

The Common Shares sold to the Investor in the Share Transaction represented approximately 2.5% of the Common Shares outstanding immediately prior to the execution of the Share Purchase Agreement.

The common shares sold to the Investor in the Share Transaction represented approximately 2.5% of our common shares outstanding immediately prior to the execution of the Share Purchase Agreement.

Alnylam Pharmaceuticals, Inc.

9 unchanged sentences

(Genevant), a company we launched with Roivant Sciences, Ltd.

and to which we licensed rights to our lipid nanoparticle (LNP) and ligand conjugate delivery platforms for RNA-based applications outside of HBV, except to the extent certain rights had already been licensed to other third parties (the Genevant License).

and to which we licensed rights to our lipid nanoparticle (LNP) and ligand conjugate delivery platforms outside of HBV, except to the extent certain rights had already been licensed to other third parties (the Genevant License).

We retained all rights to our LNP and conjugate delivery platforms for HBV.

Under the Genevant License, as amended, if a third party sublicensee of intellectual property licensed by Genevant from us commercializes a sublicensed product, we become entitled to receive a specified percentage of certain revenue that may be received by Genevant for such sublicense, including royalties, commercial milestones and other sales-related revenue, or, if

less, tiered low single-digit royalties on net sales of the sublicensed product.

Under the Genevant License, as amended, if a third-party sublicensee of intellectual property licensed by Genevant from us commercializes a

sublicensed product, we become entitled to receive a specified percentage of certain revenue that may be received by Genevant for such sublicense, including royalties, commercial milestones and other sales-related revenue, or, if less, tiered low single-digit royalties on net sales of the sublicensed product.

The specified percentage is 20% in the case of a mere sublicense (i.e., naked sublicense) by Genevant without additional contribution and 14% in the case of a bona fide collaboration with Genevant.

21 unchanged sentences

We generate revenue primarily through collaboration agreements and license agreements.

Such agreements may require us to deliver various rights and/or services, including intellectual property rights or licenses and research, development and manufacturing services.

Under such agreements, we are generally eligible to receive non-refundable upfront payments, funding for research, development and manufacturing services, milestone payments, and royalties.

Such agreements may require us to deliver various rights and/or services, including intellectual property rights or licenses and development and manufacturing services.

Under such agreements, we are generally eligible to receive non-refundable upfront payments, funding for development and manufacturing services, milestone payments, and royalties.

Our collaboration agreements fall under the scope of ASC Topic 808, Collaborative Arrangements , (ASC 808) when both parties are active participants in the arrangement and are exposed to significant risks and rewards.

For certain arrangements under the scope of ASC 808, we analogize to ASC 606 for some aspects, including for the delivery of a good or service (i.e., a unit of account).

For certain arrangements

under the scope of ASC 808, we analogize to ASC 606 for some aspects, including for the delivery of a good or service (i.e., a unit of account).

ASC 606, Revenue From Contracts with Customers (ASC 606) requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers under a five-step model:

35 unchanged sentences

1,357 22 % 10,666 59 %

Other milestone and royalty payments — — % 35 — %

Non-cash royalty revenue

3 unchanged sentences

Total revenue decreased $12.0 million for the year ended December 31, 2024 compared to 2023, due primarily to:

i) a $15.3 million decrease in license revenue recognized related to our progress towards the satisfaction of our performance obligations with respect to our technology transfer and licensing agreement with Qilu;

and ii) a $5.5 million decrease in license royalty revenue from Alnylam and Acuitas due to lower sales of Alnylam’s ONPATTRO in 2023 compared to 2022.

i) a $9.3 million decrease in revenue recognition of the upfront license fee we received from Qilu in 2022 as less effort was required from us in 2024 compared to 2023 to support Qilu’s progress towards achieving their own imdusiran manufacturing capability;

and ii) a $2.7 million decrease in license royalty revenue from Alnylam and Acuitas due to lower sales of Alnylam’s ONPATTRO in 2024 compared to 2023 primarily due to Alnylam’s next generation RNAi product AMVUTTRA (vutrisiran) cannibalizing sales of ONPATTRO .

We anticipate that the license royalty revenue from Alnylam and Acuitas will continue to decrease due to such cannibalization of sales of ONPATTRO.

The royalty interest for ONPATTRO from Alnylam was sold to OMERS, effective as of January 1, 2019, for $20 million in gross proceeds before advisory fees.

1 unchanged sentence

OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if they fail to collect any such future royalties.

During the term of this agreement, we recognize non-cash royalty revenue related to the sales of ONPATTRO.

During the term of this agreement, we recognize non-cash royalty revenue related

to the sales of ONPATTRO.

From the inception of the royalty sale through December 31, 2024, we have recorded an aggregate of $25.0 million of non-cash royalty revenue for royalties earned by OMERS.

The royalty interest for ONPATTRO from

Acuitas was not part of the royalty sale to OMERS and we have retained the rights to receive those royalties.

The royalty interest for ONPATTRO from Acuitas was not part of the royalty sale to OMERS and we have retained the rights to receive those royalties.

Revenue contracts are described in more detail in “Item 1.

6 unchanged sentences

Change in fair value of contingent consideration 2,625 3 % 69 — %

Restructuring costs 3,720 5 % — — %

Total operating expenses $ 82,490 100 % $ 96,244 100 %

Research and development

Research and development expenses consist primarily of personnel expenses, fees paid to clinical research organizations and contract manufacturers, consumables and materials, consulting, and other third party expenses to support our clinical and preclinical activities, as well as a portion of stock-based compensation and general overhead costs.

Research and development expenses decreased $10.7 million in 2023 compared to 2022 due primarily to a decrease in manufacturing expenses associated with supplying drug for our clinical trials and a decrease in clinical expenses due to the discontinuation of our AB-836 program in 2022.

These decreases were partially offset by an increase in clinical expenses for our AB-101 Phase 1a/1b clinical trial.

Research and development expenses consist primarily of personnel expenses, fees paid to clinical research organizations and contract manufacturers, consumables and materials, consulting, and other third-party expenses to support our clinical development activities, as well as a portion of stock-based compensation and general overhead costs.

Research and development expenses decreased $19.7 million in 2024 compared to 2023 due primarily to:

i) a decrease in clinical expenses related to the discontinuation of our coronavirus and AB-161 programs during the fourth quarter of 2023;

ii) a decrease in research activities and preclinical study costs for AB-101 which is now in a Phase 1a/1b clinical trial;

and iii) cost savings from our decision in August 2024 to streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101, which included ceasing all discovery efforts, discontinuing our IM-PROVE III clinical trial and reducing our workforce by 40%.

A significant portion of our research and development expenses are not tracked by project, as they benefit multiple projects or our overall technology platform.

General and administrative

General and administrative expenses increased $4.6 million in 2023 compared to 2022, due primarily to increased legal fees, non-cash stock-based compensation expense and employee compensation costs.

General and administrative expenses decreased $0.4 million in 2024 compared to 2023, due primarily to decreases in employee compensation-related expenses, partially offset by an increase in litigation-related legal fees.

Change in fair value of contingent consideration

2 unchanged sentences

In general, increases in the fair value of the contingent consideration are related to the progress of our programs as they get closer to triggering these contingent payments.

In 2023 and 2022, the fair value of our contingent consideration liability increased $0.1 million and $2.2 million, respectively, related to fair value adjustments for the passage of time, the progression of our programs through clinical trials and our assessment of the probability, timing and extent of future product sales.

The change in the fair value of our Contingent Consideration is driven by fair value adjustments for the passage of time, the discount rate, the progression of our programs through clinical trials and our assessment of the probability, timing and extent of future product sales, resulting in an increase of $2.6 million and $0.1 million, in 2024 and 2023, respectively.

The increase in the fair value of the contingent consideration in 2024 was due primarily

to an increase in our assessment of the probability of success of future product sales based on the positive clinical data we reported in November 2024 from our IM-PROVE I clinical trial with imdusiran, IFN and NA therapy.

Restructuring

Effective August 1, 2024, we ceased all discovery efforts and discontinued our IM-PROVE III clinical trial to streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101.

In taking these steps, we implemented a 40% reduction in our workforce, primarily affecting the discovery and general and administrative functions.

As a result, we incurred a one-time restructuring charge in the third quarter of 2024 of approximately $3.7 million, which includes approximately $2.9 million of cash severance and continued benefits payments, a non-cash impairment charge for laboratory equipment of approximately $0.2 million and approximately $0.6 million of cash payments to vendors for close-out activities in connection with the cessation of discovery efforts and the discontinuation of our IM-PROVE III clinical trial.

Other income (losses)

10 unchanged sentences

Interest expense decreased $0.3 million in 2024 compared to 2023 due primarily to a decrease in the non-cash amortization of the discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019.

Income tax expense

Income tax expense for the years ended December 31, 2023 and 2022 is summarized in the following table:

Year ended December 31,

(in thousands, except percentages)

Income tax expense $ — — % $ 4,444 100 %

We recognized income tax expense of $4.4 million during 2022 for withholding taxes paid to the Chinese taxing authority by Qilu on our behalf in connection with the upfront license fee Qilu paid us.

There was no corresponding income tax expense during 2023.

LIQUIDITY AND CAPITAL RESOURCES

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

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

As of December 31, 2024, we had total cash, cash equivalents and investments in marketable securities of $122.6 million, of which $36.3 million was cash and cash equivalents and $86.3 million was investments in marketable securities.

2 unchanged sentences

Sale Agreement

We have an Open Market Sale Agreement SM with Jefferies dated December 20, 2018, as amended by Amendment No.

Effective March 26, 2025, we terminated our Open Market Sale Agreement SM with Jefferies dated December 20, 2018, as amended by Amendment No.

1, dated December 20, 2019, Amendment No.

2, dated August 7, 2020 and Amendment No.

3, dated March 4, 2021 (as amended, the Sale Agreement), under which we may offer and sell common shares, from time to time.

On December 23, 2019, we filed a shelf registration statement on Form S-3 with the SEC (File No.

333-235674) and accompanying base prospectus, declared effective by the SEC on January 10, 2020 (the January 2020 Registration Statement), for the offer and sale of up to $150 million of our securities.

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

333-248467) and accompanying base prospectus, declared effective by the SEC on October 22, 2020 (the October 2020 Registration Statement), for the offer and sale of up to $200 million of our securities.

On March 4, 2021, we filed a prospectus supplement with the SEC in connection with the offering of up to an additional $75.0 million of our common shares pursuant to the Sale Agreement under the October 2020 Registration Statement, which we fully utilized during 2021.

On October 8, 2021, we filed a prospectus supplement with the SEC for the offer and sale of up to an additional $75.0 million of our common shares pursuant to the Sale Agreement under the October 2020 Registration Statement.

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

333-248467) and accompanying base prospectus, declared effective by the SEC on November 18, 2021 (the November 2021 Registration Statement), for the offer and sale of up to $250 million of our securities.

On March 3, 2022, we filed a prospectus supplement with the SEC (the March 2022 Prospectus Supplement) for the offer and sale of up to an additional $100.0 million of our common shares pursuant to the Sale Agreement under:

(i) the January 2020 Registration Statement;

(ii) the October 2020 Registration Statement;

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

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

3, dated March 4, 2021 (as amended, the Sale Agreement), under which we could offer and sell common shares, from time to time.

Previously, on November 6, 2024, we had filed:

i) a shelf registration statement on Form S-3 with the SEC (File No.

333-283038) with an accompanying base prospectus, declared effective by the SEC on December 5, 2024 (the December 2024 Registration Statement), for the offer and sale of up to $300.0 million of our securities;

and ii) a prospectus supplement with the SEC in connection with the offering of up to $100.0 million of our common shares pursuant to the Sale Agreement under the December 2024 Registration Statement (the December 2024 Prospectus Supplement).

We did not utilize any of the December 2024 prospectus supplement pursuant to the Sale Agreement prior to the termination of the Sale Agreement.

During the years ended December 31, 2024 and 2023, we issued 16,499,999 and 12,020,257 common shares, respectively, under the Sale Agreement resulting in net proceeds of approximately $44.1 million and $29.9 million, respectively.

As of December 31, 2023, we had an aggregate of $70.9 million remaining available under the March 2022 Prospectus Supplement.

Royalty Entitlements

7 unchanged sentences

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

In December 2021, we entered into a technology transfer and exclusive licensing agreement with Qilu pursuant to which we granted Qilu an exclusive (with certain exceptions), sublicensable, royalty-bearing license, under certain intellectual property owned by us, to develop, manufacture and commercialize imdusiran for the treatment or prevention of cHBV infection in the Territory.

In partial consideration for the rights granted by us, Qilu paid us a one-time upfront cash payment of $40 million and made an equity investment of $15.0 million, both received in January 2022, and agreed to pay us milestone payments totaling up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones.

Qilu also agreed to pay us double digit royalties into the low twenties percent based upon annual net sales of imdusiran in the Territory.

In partial consideration for the rights granted by us, Qilu paid us a one-time upfront cash payment of $40 million and made an equity investment of $15.0 million, both received in January 2022, and agreed to pay us up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and

commercialization milestones.

Qilu also agreed to pay us double digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan.

Cash requirements

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 based on our expectation of a net cash burn between $63.0 million and $67.0 million in 2024.

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

With the organizational changes announced during the first quarter of 2025, and our ongoing cost management efforts, we expect to significantly reduce our net cash burn in 2025 when compared to 2024.

In the future and subject to the completion 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 products 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;

• revenue earned from our legacy collaborative partnerships and licensing agreements, including potential royalty payments from Alnylam’s ONPATTRO;

8 unchanged sentences

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

• costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including

litigation and arbitration arising in the course of our business activities.

We intend to seek funding to maintain and advance our business from a variety of sources including public or private equity or debt financing, potential monetization transactions, collaborative or licensing arrangements with pharmaceutical companies and government grants and contracts.

There can be no assurance that funding will be available at all or on acceptable terms to permit further development of our research and development programs.

If adequate funding is not available, we may be required to delay, reduce or eliminate one or more of our research or development programs or reduce expenses associated with our non-core activities.

We may seek funding to maintain and advance our business from a variety of sources including public or private equity or debt financing, potential monetization transactions, collaborative or licensing arrangements with pharmaceutical companies and government grants and contracts.

If we seek additional funding, there can be no assurance that funding will be available at all or on acceptable terms to maintain and advance our business.

If we decide to seek funding and such adequate funding is not available, we may be required to delay, reduce or eliminate one or more of our development programs or reduce expenses associated with our non-core activities.

We may need to obtain funds through arrangements with collaborators or others that may require us to relinquish most or all of our rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise seek if we were better funded.

8 unchanged sentences

Net cash used in operating activities $ (64,850) $ (85,936)

Net cash provided by/(used in) investing activities 50,773 (74,942)

Issuance of common shares pursuant to Share Purchase Agreement — 10,973

Net cash provided by investing activities 22,948 50,773

Issuance of common shares pursuant to the Open Market Sale Agreement 44,123 29,852

2 unchanged sentences

Effect of foreign exchange rate changes on cash and cash equivalents (49) 25

Decrease in cash and cash equivalents $ (4,491) $ (78,506)

Increase / (decrease) in cash and cash equivalents $ 10,045 $ (4,491)

Cash and cash equivalents, beginning of period 26,285 30,776

Cash and cash equivalents, end of period $ 36,330 $ 26,285

Net cash used in operating activities in 2023 increased $50.6 million compared to 2022 due primarily to the upfront cash payment of $40.0 million received from Qilu in January 2022 in connection with the License Agreement and a $4.0 million premium paid by Qilu as part of their $15.0 million equity investment.

These cash inflows were offset by $79.4 million of cash used in operations in 2022.

Cash used in operations in 2023 was $85.9 million and there were no material transactional cash inflows in 2023.

Net cash provided by investing activities in 2023 was $50.8 million compared to net cash used in investing activities of $74.9 million in 2022, due primarily to the timing of acquisitions and maturities of investments in marketable securities.

Net cash provided by financing activities in 2023 decreased $1.2 million compared to 2022.

Cash provided by financing activities in 2023 consisted primarily of $29.9 million of proceeds from sales of common shares under the Sale Agreement.

Cash provided by financing activities in 2022 consisted primarily of $20.3 million of proceeds from sales of common shares under the Sale Agreement and $11.0 million for the fair value of shares purchased by Qilu as part of their $15.0 million equity investment, of which the remaining $4.0 million was a premium paid by Qilu on the equity investment and was allocated to deferred revenue.

Net cash used in operating activities in 2024 decreased $21.1 million compared to 2023 due primarily to a decrease in research and development expenses related to our HBV pipeline prioritization and the timing of payments to vendors.

Net cash provided by investing activities in 2024 decreased $27.8 million compared to 2023, due primarily to the timing of acquisitions and maturities of investments in marketable securities.

Net cash provided by financing activities in 2024 increased $21.3 million compared to 2023 due primarily to a $14.2 million increase in proceeds from sales of common shares under the Sale Agreement and an increase in proceeds from employee stock option exercises.

RECENT ACCOUNTING PRONOUNCEMENTS

4 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis