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Item 2. Management’s Discussion and Analysis

2025-05-14 compared with 2024-11-06 · 225 added, 295 removed, 217 unchanged (71% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis by our management of our financial position and results of operations in conjunction with our audited consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2023 and our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2024.

You should read the following discussion and analysis by our management of our financial position and results of operations in conjunction with our audited consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2024 and our unaudited condensed consolidated financial statements for the three months ended March 31, 2025.

Our consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and are presented in U.S.

REFERENCES TO ARBUTUS BIOPHARMA CORPORATION

Throughout this Quarterly Report on Form 10-Q (Form 10-Q), the “Company,” “Arbutus,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Arbutus Biopharma Corporation and its consolidated subsidiary, and “our Board of Directors” refers to the board of directors of Arbutus Biopharma Corporation.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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Forward-looking statements in this Form 10-Q, including the documents incorporated by reference, include statements about, among other things:

• our strategy, future operations, preclinical studies, clinical trials, prospects and the plans of management;

• our strategy, future operations, preclinical studies, clinical trials, and prospects;

• our beliefs, plans and expectations regarding our patent infringement lawsuits against Moderna and Pfizer/BioNTech;

• the potential for our product candidates to achieve their desired or anticipated outcomes;

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• the development and commercialization of a curative combination regimen for chronic hepatitis B infection, a disease of the liver caused by the hepatitis B virus;

• our aim to prevent complications of disease progression, to decrease hepatitis B virus burden by minimizing patient stigma and to address the need for finite and more efficacious hepatitis B virus treatments that further improve long-term outcomes and reduce associated healthcare costs;

• the potential of our product candidates to improve upon the standard of care and contribute to a functional curative combination treatment regimen;

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• obtaining adequate financing through a combination of financing activities and operations;

• the expected returns and benefits from strategic alliances, licensing agreements, and research collaborations with third parties, and the timing thereof;

• the expected returns and benefits from strategic alliances, licensing agreements, and development collaborations with third parties, and the timing thereof;

• our expectations regarding our technology licensed to third parties, and the timing thereof;

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• our expectations regarding the timing of announcing data from our ongoing clinical trials;

• our expectations regarding current patent disputes and litigation;

• our expectation of a net cash burn between $63 million and $67 million in 2024;

• our belief that we have sufficient cash resources to fund our operations into the fourth quarter of 2026,

• our expectations regarding our net cash burn;

• our expectation for how long we can fund our operations with our existing cash resources,

as well as other statements relating to our future operations, financial performance or financial condition, prospects or other future events.

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Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

Arbutus Biopharma Corporation (“Arbutus”, the “Company”, “we”, “us”, and “our”) is a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to 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, GalNAc-conjugated, subcutaneously-delivered ribonucleic acid interference (RNAi) therapeutic, and AB-101, our proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).

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

(Moderna) and Pfizer Inc.

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

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

(Moderna) and against Pfizer Inc.

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

With respect to the Moderna lawsuit in the United States, a trial date has been set for September 29, 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 Pfizer/BioNTech lawsuit claim construction and issue a further scheduling order, including the date for trial, in 2025.

On March 3, 2025, we announced that, along with Genevant Sciences Ltd.

(Genevant), we have filed five international lawsuits against Moderna in connection with the use of our LNP technology in Moderna’s COVID-19 mRNA-LNP vaccines and, in the Unified Patent Court, also Moderna’s respiratory syncytial virus (RSV) vaccines.

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, Pennsylvania and to discontinue in-house scientific research.

In connection with these actions, we incurred a one-time restructuring charge in the first quarter of 2025 of $12.4 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 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 ribonucleic acid (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 in the United States, 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.

On August 5, 2024, we and Genevant Sciences Ltd.

(Genevant), along with Moderna, filed a Stipulation to Extend Time (the Stipulation) with the court that requested an amended case schedule to accommodate certain outstanding discovery from Moderna and third parties.

The court approved the amended case schedule and the start of the trial was moved from April 21, 2025 to September 24, 2025, subject to the court’s availability.

The lawsuit against Pfizer/BioNTech is ongoing and a date for a claim construction hearing has been scheduled for December 18, 2024.

Our strategy is to advance our therapeutic product candidates with complementary mechanisms of action into late-stage clinical trials with the goal of developing a functional cure for people with cHBV infection.

We believe that a combination of compounds that can suppress HBV DNA replication and 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 (<LLOQ) 24 weeks off treatment, with or without anti-HBsAg antibodies.

We are developing imdusiran as a cornerstone in a combination therapy that also includes antivirals and immunologics.

We believe that a combination therapy delivered over a finite treatment period that results in a significant increase in the functional cure rate (i.e., a cure rate of at least 20%) would be a meaningful advancement for patients with cHBV infection.

A trial date for the Moderna lawsuit in the United States has been set for September 29, 2025.

With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred on December 18, 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.

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

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 (<LLOQ) after 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 to address the need for finite and more efficacious HBV treatments that further improve long-term outcomes and reduce associated healthcare costs.

Our HBV product pipeline includes the following:

• Imdusiran is our proprietary, conjugated GalNAc, 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 ongoing 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.

• Imdusiran is our proprietary, GalNAc-conjugated, subcutaneously-delivered RNAi therapeutic product candidate that suppresses all HBV antigens, including HBsAg, 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 provides meaningful reductions in HBsAg and HBV DNA and leads to functional cure in some patients, while being generally safe and well-tolerated.

To date, eight patients have reached functional cure, off all treatment, in combination therapy that includes imdusiran, including two patients who did not receive any pegylated interferon alfa-2a (IFN) as part of the combination therapy.

• 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 (PK), and pharmacodynamics (PD) 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 dosing of AB-101 in patients with cHBV, and we expect to report preliminary data in the first half of 2025.

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.

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

The intent of these trials is to initially lower HBsAg levels with imdusiran and then administer a complementary agent, in this case an immune modulator or a therapeutic vaccine, to further lower HBsAg levels and promote

anti-HBV immunity.

We believe that if we can lower HBsAg and promote immunity, we may achieve sustained HBsAg loss and HBV DNA <LLOQ, potentially leading to a functional cure.

Our imdusiran development program includes the following Phase 2a clinical trials:

• Imdusiran in combination with Peg-IFNα-2a and ongoing standard-of-care NA therapy in patients with cHBV infection (IM-PROVE I).

Preliminary data reported from this IM-PROVE I trial suggest that the addition of a short course of Peg-IFNα-2a to imdusiran treatment was generally safe, well-tolerated and, in some patients, resulted in HBsAg loss at end-of-treatment and sustained HBsAg loss 24 weeks after completing imdusiran and Peg-IFNα-2a treatment.

We intend to present additional follow-up data as a late-breaker poster presentation at the upcoming AASLD - The Liver Meeting in November 2024.

• Imdusiran in combination with VTP-300, Barinthus Biotherapeutics plc’s (Barinthus and formerly Vaccitech plc), HBV antigen specific immunotherapy, and ongoing standard-of-care NA therapy in patients with cHBV infection (IM-PROVE II).

Preliminary data reported from this IM-PROVE II clinical trial showed that dosing with imdusiran and then VTP-300 achieved statistical significance in lowering HBsAg levels after the end of the treatment period.

We are also dosing patients in an additional cohort of this clinical trial that, in addition to imdusiran and VTP-300, includes up to two low doses of nivolumab (Opdivo®), an approved PD-1 monoclonal antibody inhibitor.

We intend to present preliminary end-of-treatment data from this additional cohort as a poster presentation at the upcoming AASLD - The Liver Meeting in November 2024.

On July 29, 2024, our Board of Directors approved a plan, effective August 1, 2024, to streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101, and therefore ceased all discovery efforts and discontinued our IM-PROVE III clinical trial.

In taking these steps to streamline the organization, 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 $3.6 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 $0.5 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.

With these organizational changes and our ongoing cost management efforts, we expect our current cash, cash equivalents and investments in marketable securities will be sufficient to fund our operations into the fourth quarter of 2026.

The data from healthy subjects in Parts 1 and 2 and cHBV patients to date in Part 3 of this clinical trial have showed that AB-101 was generally well-tolerated with evidence of high receptor occupancy.

To help position imdusiran as a potential cornerstone in a combination therapy, we fully enrolled two Phase 2a clinical trials that combined imdusiran with other agents.

The intent of these trials was to initially lower HBsAg levels with imdusiran and then administer a complementary agent, an immune modulator or a therapeutic vaccine, to further lower HBsAg levels and promote anti-HBV immunity.

We believe that if we can lower HBsAg and promote immunity, we may achieve sustained HBsAg loss and HBV DNA <LLOQ, potentially leading to a functional cure in many patients with cHBV.

To date, we have reported a total of eight patients with cHBV who have been functionally cured following treatment with imdusiran and ongoing NA therapy in combination with either IFN or with low dose nivolumab plus an immunotherapeutic.

Two of the patients who reached functional cure did not receive any IFN as part of the combination therapy.

Seven of the eight patients who achieved functional cure had HBsAg less than 1000 IU/mL at baseline.

According to the literature, patients with HBsAg levels <1000 IU/mL represent a significant portion of the cHBV population.

Our imdusiran development program includes the following two Phase 2a clinical trials:

• Imdusiran in combination with Peg-IFNα-2a (IFN), a standard-of-care immunomodulator, and ongoing standard-of-care nucleoside analogue (NA) therapy in patients with cHBV infection (IM-PROVE I).

At the American Association for the Study of Liver Diseases (AASLD) – The Liver Meeting ® in November 2024, we presented new data from our IM-PROVE I Phase 2a clinical trial showing that six doses of imdusiran and 24 weeks of IFN added to ongoing 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).

Additionally, three cHBV patients from other cohorts in the IM-PROVE I clinical trial achieved functional cure.

Those patients who achieved a functional cure also seroconverted.

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

• Imdusiran in combination with VTP-300, Barinthus Biotherapeutics plc’s (Barinthus) HBV immunotherapy, ongoing NA therapy in patients with cHBV infection, including a cohort with the addition of low dose nivolumab (Opdivo ® ) (IM-PROVE II).

At the European Association for the Study of the Liver (EASL) Congress in May 2025, we presented data from this clinical trial showing that 25% (2/8) of the patients with low dose nivolumab added to the treatment regimen and with baseline HBsAg levels less than 1000 IU/mL reached functional cure.

These data from the IM-PROVE II trial suggest that the combination of imdusiran, VTP-300, NA therapy and low dose nivolumab was generally safe and well-tolerated.

Our Product Candidates

Our pipeline consists of two product candidates that are designed to suppress HBV DNA, reduce HBsAg and/or boost HBV-specific immune responses, as follows:

We continue to explore expansion opportunities for our pipeline through development activities and potential strategic alliances.

We continue to explore expansion opportunities for our pipeline through potential strategic alliances.

RNAi therapeutic (imdusiran, AB-729)

RNAi therapeutics represent a significant advancement in drug development.

RNAi therapeutics utilize a natural pathway within cells to silence genes by eliminating the disease-causing proteins that they code for.

We are developing an RNAi therapeutic that is designed to reduce HBsAg expression and other HBV antigens in people with cHBV infection.

RNAi therapeutics utilize a natural pathway within cells to effectively silence genes by eliminating the disease-causing proteins that they code for.

We are developing an RNAi therapeutic, imdusiran (AB-729), that is designed to reduce HBsAg and other HBV antigen expression in people with cHBV infection.

Reducing HBsAg is widely believed to be a key prerequisite to enable a patient’s immune system to reawaken and respond against the virus.

Imdusiran (AB-729) is a subcutaneously-delivered single-trigger RNAi therapeutic targeted to hepatocytes using our proprietary covalently conjugated GalNAc delivery technology.

Imdusiran reduces all HBV antigens and inhibits viral replication.

Data from our Phase 1a/1b clinical trial evaluating single and multiple doses of imdusiran in healthy subjects and patients with cHBV (AB-729-001) showed that repeat dosing of 60mg and 90mg of imdusiran at different dosing intervals was well-tolerated and resulted in robust and comparable HBsAg declines and supported our view that 60mg every 8 weeks was an appropriate dose to move forward in our Phase 2a clinical trials.

IM-PROVE I Phase 2a proof-of-concept clinical trial evaluating imdusiran in combination with Peg-IFNα-2a

We have completed enrollment in a randomized, open label, multicenter Phase 2a proof-of-concept clinical trial investigating the safety and antiviral activity of imdusiran in combination with a short course of Peg-IFNα-2a and ongoing NA therapy in 43 stably NA-suppressed, HBeAg negative, non-cirrhotic patients with cHBV infection.

The primary objective of this trial is to initially lower HBsAg levels with imdusiran and then administer Peg-IFNα-2a as an immunomodulator to promote anti-HBV immune reawakening.

Imdusiran (AB-729) has the following advantages over other RNAi therapeutics in development for cHBV infection:

– Targeted to hepatocytes using our proprietary covalently conjugated GalNAc delivery technology which provides highly efficient liver-targeted uptake and enables subcutaneous dosing.

– Unique nucleotide sequence that is single trigger and targets all HBV transcripts including HBx from cccDNA and integrated DNA.

– Specific chemical modifications that reduce off-target effects while maintaining potency and providing durable liver exposure.

– Delivered at a lower dose and less frequently.

– Immune activation properties with HBV-specific T-cell immune restoration and a decrease in exhausted T-cells in key responder patients.

– In combination with IFN and NA therapy, has provided the highest functional cure rates in cHBV patients to date with a 50% (3/6) functional cure rate in patients with HBsAg<1000 IU/mL at baseline.

– Achieved a 25% (2/8) functional cure rate in patients with HBsAg<1000 IU/mL at baseline in an IFN-free treatment regimen consisting of imdusiran, VTP-300, ongoing NA therapy and low dose nivolumab.

IM-PROVE I Phase 2a proof-of-concept clinical trial evaluating imdusiran in combination with IFN

We have completed enrollment in IM-PROVE I, a randomized, open label, multicenter Phase 2a proof-of-concept clinical trial investigating the safety and antiviral activity of imdusiran in combination with a short course of IFN and ongoing NA therapy in 43 stably NA-suppressed, HBeAg negative, non-cirrhotic patients with cHBV infection.

The primary objective of this trial was to initially lower HBsAg levels with imdusiran and then administer IFN as an immunomodulator to promote anti-HBV

immune reawakening.

We believe that if we can lower HBsAg and promote immune reawakening, we may achieve sustained HBsAg loss and HBV DNA <LLOQ, potentially leading to a functional cure.

After 24-weeks of dosing with imdusiran (60mg every 8 weeks, 4 doses), patients were randomized into one of four arms to receive a short course of Peg-IFNα-2a plus ongoing NA therapy for either 12 or 24 weeks, with or without an additional two doses of imdusiran.

After completion of the assigned Peg-IFNα-2a treatment period, all patients remained on NA therapy for the initial 24-week follow-up period, and then discontinued NA treatment, provided they met protocol-defined stopping criteria.

After 24-weeks of dosing with imdusiran (60mg every 8 weeks, 4 doses) plus ongoing NA therapy, patients were randomized into one of four cohorts to receive a short course of IFN plus ongoing NA therapy for either 12 or 24 weeks, with or without up to two additional doses of imdusiran.

After completion of the assigned IFN treatment period, all patients remained on NA therapy for the initial 24-week follow-up period, and then discontinued NA treatment, provided they met protocol-defined stopping criteria.

Patients who stopped NA therapy entered an intensive follow-up period for 48 weeks.

At the European Association for the Study of the Liver (EASL) Congress in June 2024, we presented data from this clinical trial that suggests that the addition of Peg-IFNα-2a to imdusiran treatment was generally safe, well-tolerated and, in some patients, resulted in HBsAg loss at end-of-treatment and sustained HBsAg loss 24 weeks after completing imdusiran and Peg-IFNα-2a treatment.

Select key data from this Phase 2a clinical trial that was presented at EASL 2024 include:

• 33% of patients in Cohort A1 who received 48 weeks of imdusiran (60mg every 8 weeks, 6 doses) combined with 24 weeks of Peg-IFNα-2a and their ongoing NA therapy achieved HBsAg loss at the end-of-treatment (EOT) that was maintained in 100% of these patients 24 weeks after completing imdusiran and Peg-IFNα-2a treatment.

• HBsAg loss was achieved and maintained in 67% of patients with HBsAg less than 1,000 IU/mL at baseline in Cohort A1.

• A total of six patients who received 24 weeks of Peg-IFNα-2a (n=4 Cohort A1;

n=2 Cohort A2) seroconverted with HBsAg loss.

At the time the data was reported, all six of these patients had stopped NA therapy, with two of those patients reaching 12 weeks off all therapy with sustained undetectable HBV DNA levels and HBsAg loss.

The remaining four patients were at various timepoints less than 12 weeks off therapy with undetectable HBV DNA levels and HBsAg loss.

These data from the IM-PROVE I trial suggest that the combination of imdusiran and 24 weeks of Peg-IFNα-2a was generally safe and well-tolerated.

There were no serious adverse events related to imdusiran or Peg-IFNα-2a, and no adverse events leading to discontinuation.

The most common imdusiran-related treatment emergent adverse events (TEAEs) were transient ALT elevations and injection site bruising.

The Peg-IFNα-2a-related TEAEs were consistent with the known safety profile of Peg-IFNα-2a.

We intend to present additional follow-up data as a late-breaker poster presentation at the upcoming AASLD - The Liver Meeting in November 2024.

Select key data from 12 patients in Cohort A1 of this Phase 2a clinical trial who received 6 doses of imdusiran, 24 weeks of IFN and ongoing NA therapy, as presented at the AASLD – The Liver Meeting ® in November 2024, include:

• 50% (3/6) of patients with baseline HBsAg <1000 IU/mL achieved a functional cure.

• Overall, 25% (3/12) of patients achieved a functional cure.

• Those patients that achieved a functional cure also seroconverted with anti-HBs levels increasing as patients lost HBsAg.

At the EASL Congress in May 2025, we presented a poster characterizing the demographics and virological markers of the six cHBV patients across dosing cohorts in the IM-PROVE I Phase 2a clinical trial who achieved functional cure.

The data showed that HBsAg at baseline was the only apparent marker in common associated with functional cure.

In a second poster, we reported that patients who achieved functional cure in the 24-week IFN treatment cohorts experienced HBsAg loss that was associated with transient HBV RNA elevations that were preceded by or coincided with increases in immunological markers.

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

There were no serious adverse events related to imdusiran, IFN or NA therapy, and no adverse events leading to discontinuation.

The most common imdusiran-related treatment emergent adverse events (TEAEs) were transient alanine aminotransferase elevations and injection site bruising.

The IFN-related TEAEs were consistent with the known safety profile of IFN.

IM-PROVE II Phase 2a proof-of-concept clinical trial evaluating imdusiran in combination with Barinthus’ VTP-300

Through a clinical collaboration agreement with Barinthus that we entered into in July 2021, we have completed enrollment in IM-PROVE II, a Phase 2a proof-of-concept clinical trial evaluating the safety, antiviral activity and immunogenicity of Barinthus’ VTP-300, an HBV antigen specific immunotherapy, administered after imdusiran in patients with cHBV infection.

Through a clinical collaboration agreement with Barinthus that we entered into in July 2021, we have completed enrollment in IM-PROVE II, a Phase 2a proof-of-concept clinical trial evaluating the safety, antiviral activity and immunogenicity of a combination treatment with Barinthus’ VTP-300, an HBV immunotherapy, administered after imdusiran in patients with cHBV infection.

The initial trial design enrolled 40 NA-suppressed, HBeAg negative or positive, non-cirrhotic cHBV infected patients.

The primary objective of this trial was to initially lower HBsAg levels with imdusiran and then administer VTP-300 as an immunomodulator to promote anti-HBV immune reawakening.

We believe that if we can lower HBsAg and promote immune reawakening, we may achieve sustained HBsAg loss and HBV DNA <LLOQ, potentially leading to a functional cure.

All patients received imdusiran (60mg every 8 weeks, 4 doses) plus NA therapy for 24 weeks.

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Patients continued only on NA therapy and were randomized to receive VTP-300 or placebo at week 26 and week 30.

At week 48, all patients were evaluated for eligibility to discontinue NA therapy and are followed for an additional 24 to 48 weeks.

Preliminary data were presented at the EASL Congress in June 2024 from 38 of 40 patients in the IM-PROVE II clinical trial that were on stable NA therapy throughout the treatment period, received imdusiran (60mg every 8 weeks, 4 doses) over 24 weeks and were then randomized to receive either VTP-300 (treatment arm) or placebo at Weeks 26 and 30.

The data showed that at 24-weeks post-treatment with imdusiran and VTP-300, statistical significance (p<0.05) was achieved in HBsAg levels between the treatment arm (n=5) and placebo (n=6).

In addition, more patients maintained HBsAg thresholds of <100 IU/mL and <10 IU/mL when administered VTP-300 versus placebo.

Treatment with imdusiran and VTP-300 was generally safe and well-tolerated.

There were no serious adverse events, Grade 3 or 4 adverse events or discontinuations due to adverse events.

Additionally, we amended the IM-PROVE II clinical trial protocol to include another cohort that received imdusiran, VTP-300 and low dose nivolumab (Opdivo ® ), an approved PD-1 inhibitor.

At week 48, all patients were evaluated for eligibility to discontinue NA therapy and are being followed for an additional 24 to 48 weeks.

Subsequently, we amended the IM-PROVE II clinical trial protocol to include another cohort that received imdusiran, VTP-300, NA therapy and low dose nivolumab (Opdivo ® ), an approved PD-1 inhibitor in oncology.

In this additional cohort, patients received imdusiran (60mg every 8 weeks, 4 doses) plus NA therapy for 24 weeks, followed by administration of VTP-300 plus up to two low doses of nivolumab while remaining on NA therapy.

At week 48, all patients will be evaluated for eligibility to discontinue NA therapy, and will be followed for an additional 24 to 48 weeks.

We intend to present preliminary end-of-treatment data from this additional cohort as a poster presentation at the upcoming AASLD - The Liver Meeting in November 2024.

At week 48, all patients were evaluated for eligibility to discontinue NA therapy, and are being followed for an additional 24 to 48 weeks.

The cohort that included low dose nivolumab was the best performing cohort in the IM-PROVE II clinical trial.

At the AASLD – The Liver Meeting ® in November 2024, we presented data from this clinical trial showing that the addition of low dose nivolumab increased rates of HBsAg loss in cHBV patients and that 23% (3/13) of patients who received the treatment regimen with low dose nivolumab achieved HBsAg loss by week 48.

At the EASL Congress in May 2025, we presented data showing that 25% (2/8) of patients with low dose nivolumab added to the treatment regimen and with baseline HBsAg<1000 IU/mL reached functional cure.

Treatment with imdusiran, VTP-300, NA therapy and low dose nivolumab in this clinical trial was generally safe and well-tolerated.

There were no serious adverse events, Grade 3 or 4 adverse events, immune-related adverse events, or discontinuations due to adverse events.

The IM-PROVE II clinical trial is being managed by us, subject to oversight by a joint development committee comprised of representatives from both companies.

We and Barinthus retain full rights to our respective product candidates and will split all costs associated with the clinical trial.

Pursuant to the agreement, the parties may undertake a larger Phase 2b clinical trial depending on the results of the initial Phase 2a clinical trial.

IM-PROVE III Phase 2a proof-of-concept clinical trial to evaluate imdusiran in combination with durvalumab

We have terminated our Phase 2a clinical trial evaluating the safety, tolerability and antiviral activity of imdusiran and NA therapy in combination with intermittent low doses of durvalumab, an approved anti-PD-L1 monoclonal antibody, in patients with cHBV infection (IM-PROVE III) prior to dosing any participants.

This decision was based on a prioritization of resources and the projected availability of clinical data from this trial.

We and Barinthus retain full rights to our respective product candidates and are splitting all costs associated with the clinical trial.

Pursuant to the agreement, the parties could have undertaken a larger Phase 2b clinical trial depending on the results of the initial Phase 2a clinical trial.

However, in January 2025, Barinthus announced a shift in its

strategic business focus that included postponing further development of VTP-300 after its ongoing VTP-300 clinical trials have concluded.

The parties do not intend to undertake a larger Phase 2b with this combination treatment regimen.

Oral PD-L1 Inhibitor (AB-101)

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Highly functional HBV-specific T-cells within our immune system are believed to be required for long-term HBV viral resolution.

However, HBV-specific T-cells become functionally defective, and greatly reduced in their frequency during cHBV infection.

One approach to boost HBV-specific T-cells is to prevent PD-L1 proteins from binding to PD-1 and thus inhibiting the HBV-specific immune function of T-cells.

Immune checkpoints such as PD-1/PD-L1 play an important role in the induction and maintenance of immune tolerance and in T-cell activation.

AB-101 is our proprietary oral small-molecule PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade while minimizing the systemic safety issues typically seen with checkpoint inhibitor antibody therapies.

AB-101 is differentiated from monoclonal antibody checkpoint inhibitors such as durvalumab (anti-PD-L1) and nivolumab (anti-PD-1) because it is liver centric, has a much shorter duration of effect which may provide dosing and safety advantages, and has a novel mechanism of action as it binds to PD-L1 on the surface of cells causing dimerization and internalization of the PD-L1 protein followed by degradation within hours.

Preclinical data indicates that AB-101 mediates activation and reinvigoration of HBV-specific T-cells from cHBV infected patients.

In June 2022, we presented a poster at the 2022 EASL ILC highlighting data from a study that was designed to assess

the preclinical activity of AB-101 and the compound’s ability to reinvigorate patient HBV-specific T-cells.

Studies were conducted using a transgenic MC38 tumor mouse model and peripheral blood mononuclear cells (PBMCs) from cHBV infected patients.

The data presented showed that once daily oral administration of AB-101 resulted in profound tumor reduction that was associated with T-cell activation.

In addition, AB-101 activates and reinvigorates HBV-specific T-cells in vitro.

Additionally, preclinical data in an HBV mouse model were presented at the 2022 AASLD Liver Meeting showing that monotherapy with AB-101 reduced PD-L1 in liver immune cells, confirming liver target engagement of the compound.

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.

This favorable preclinical profile supports further development of AB-101 as a therapeutic modality for cHBV infection treatment.

We believe AB-101, when used in combination with imdusiran or other approved and investigational agents, could potentially lead to a functional cure in HBV chronically infected patients.

In April 2023, we received verbal communication from the FDA that the AB-101 IND application had been placed on clinical hold.

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

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

We thus decided to pursue other regulatory pathways outside of the US while evaluating our path forward with the FDA.

In July 2023, the New Zealand Medicine Safety Authority (Medsafe) approved our clinical trial application (CTA) for a Phase 1 clinical trial in New Zealand for AB-101, and we believe the protocol approved by Medsafe adequately addresses the clinical trial design and safety monitoring issues raised by the FDA.

We included the clinical hold letter from the FDA as part of our CTA application with Medsafe.

Subsequent to its approval in New Zealand, our CTA for this Phase 1 clinical trial with AB-101 was approved in several additional countries outside of the U.S.

However, HBV-specific T-cells become functionally defective, and greatly reduced in number during cHBV infection.

One approach to boost HBV-specific T-cells is to prevent PD-L1 proteins from binding to PD-1, which would otherwise lead to inhibition of the HBV-specific immune function of T-cells.

AB-101 is our proprietary oral small-molecule PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade while minimizing the systemic safety issues often seen with checkpoint inhibitor antibody therapies.

AB-101 is differentiated from monoclonal antibody checkpoint inhibitors such as durvalumab (anti-PD-L1) and nivolumab (anti-PD-1) because it is liver centric, has a much shorter duration of effect in preclinical models (which may provide dosing and safety advantages), and has a novel mechanism of action as it binds to PD-L1 on the surface of cells causing dimerization, internalization and degradation of the PD-L1 protein.

Phase 1a/1b clinical trial to evaluate safety, tolerability and PK/PD of AB-101 (AB-101-001)

We are currently dosing study subject in our Phase 1a/1b clinical trial for AB-101 (AB-101-001).

The AB-101-001 clinical trial is designed to investigate the safety, tolerability and PK/PD of single and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV infection.

AB-101-001 is a Phase 1a/1b clinical trial designed to investigate the safety, tolerability and PK/PD of single and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV infection.

The trial consists of three parts starting with single ascending doses in healthy subjects, followed by multiple ascending doses in healthy subjects and culminating with multiple doses in patients with cHBV infection.

Safety and PK/PD assessments are performed prior to dose escalation in all parts of the clinical trial.

Part 1 of this clinical trial enrolled four sequential cohorts of eight healthy subjects each (6 active:

Part 1 of this clinical trial enrolled five sequential cohorts of eight healthy subjects each (6 active:

2 placebo) receiving a single dose of AB-101 at increasing dose levels.

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

In the 25mg cohort, all five evaluable subjects showed evidence of receptor occupancy between 50-100%.

Part 2 of this clinical trial has enrolled to date two sequential cohorts of ten healthy subjects each receiving 10 mg or 25 mg of AB-101 (8 active:

In Part 1, all five evaluable subjects in the 40mg cohort showed evidence of 100% receptor occupancy.

Part 2 of this clinical trial enrolled three sequential cohorts of ten healthy subjects that each received 10, 25 or 40 mg of AB-101 (8 active:

2 placebo) daily for seven days.

AB-101 was generally well-tolerated after repeat dosing with evidence of dose-dependent receptor occupancy.

In the 25mg cohort, all subjects showed evidence of receptor occupancy, with seven of the eight subjects demonstrating receptor occupancy greater than 70% during the seven-day dosing period.

We have moved into Part 3 of this clinical trial which evaluates repeat dosing of AB-101 for 28 days in patients with cHBV and we expect to report preliminary data in the first half of 2025.

In Part 2, all subjects in the 40mg cohort showed evidence of high receptor occupancy between 74-100%, with six of the eight subjects demonstrating 100% receptor occupancy during the seven-day dosing period.

Across Parts 1 and 2, eleven of the thirteen evaluable healthy subjects that received either single or multiple doses of 40mg of AB-101 achieved 100% receptor occupancy.

The data from Part 1 and Part 2 showed that AB-101 was well-tolerated with evidence of high 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.

At the EASL Congress in May 2025, we presented data showing that a single dose of 10 mg of AB-101 for 28 days in cHBV patients was well tolerated with PD-L1 receptor occupancy similar to that seen in healthy subjects at this dose.

Treatment with AB-101 in Part 3 of this clinical trial was generally safe and well-tolerated.

There were no serious adverse events or early discontinuations due to AB-101 and no evidence of liver dysfunction to date.

Part 3 of this clinical trial is ongoing.

Other Collaborations, Royalty Entitlements and Intellectual Property Litigation

Collaboration with 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.

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).

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OMERS will retain this entitlement until it has received $30 million in royalties, at which point 100% of this royalty entitlement on future global net sales of ONPATTRO will revert to us.

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.

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 it fails to collect any such future royalties.

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

From the inception of the royalty sale through September 30, 2024, an aggregate of $24.4 million of royalties have been earned by OMERS.

From the inception of the royalty sale through March 31, 2025, an aggregate of $25.3 million of royalties have been earned by OMERS.

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

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In April 2018, we entered into an agreement with Roivant Sciences Ltd.

(Roivant), our largest shareholder, to launch Genevant, a company focused on a broad range of RNA-based therapeutics enabled by our LNP and ligand conjugate delivery technologies.

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

(Roivant), our largest shareholder, to launch Genevant, a company focused on nucleic acid- and gene editing-based therapeutics enabled by our LNP and ligand conjugate delivery technologies.

We licensed rights to our LNP and ligand conjugate delivery platforms to Genevant 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.

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Genevant or, if less, tiered low single-digit royalties on net sales of the infringing product (inclusive of the proceeds from litigation or settlement, which would be treated as net sales).

Notwithstanding the preceding, in March 2025, we and Genevant agreed that we would be entitled to any award of damages in (or any proceeds of settlement of) certain pending patent litigation against Moderna and certain affiliates that specifically accuses Moderna of infringement related to Moderna’s vaccine for RSV known as mRESVIA ™ , and that, in the event there is no such specific allocation to mRESVIA ™ in such award or settlement, the parties will discuss an appropriate allocation in good faith.

In July 2020, Roivant recapitalized Genevant through an equity investment and conversion of previously issued convertible debt securities held by Roivant.

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In connection with the recapitalization, the three parties entered into an Amended and Restated Shareholders Agreement that provides Roivant with substantial control of Genevant.

We have a non-voting observer seat on Genevant’s Board of Directors.

As of September 30, 2024, we owned approximately 16% of the common equity of Genevant and the carrying value of our investment in Genevant was zero.

We have the right to have a non-voting observer attend meetings of Genevant’s Board of Directors.

As of March 31, 2025, we owned approximately 16% of the common equity of Genevant and the carrying value of our investment in Genevant was zero.

Our entitlement to receive future royalties or sublicensing revenue from Genevant was not impacted by the recapitalization.

Moderna Inter Partes Review Petition

On February 21, 2018, Moderna Therapeutics, Inc.

(Moderna) filed a petition requesting the United States Patent and Trademark Office to institute an Inter Partes Review of Arbutus United States Patent 9,404,127 (the ’127 Patent).

In its petition, Moderna sought to invalidate all claims of the patent based on Moderna’s allegation that the claims are anticipated and/or obvious.

We filed a response to Moderna’s petition on June 14, 2018.

On September 12, 2018, the Patent Trial and Appeal Board (the PTAB) rendered its decision to institute Inter Partes Review of the ‘127 Patent.

The ‘127 Patent represents only a fraction of our extensive LNP patent portfolio.

With respect to the ‘127 Patent, the PTAB held all claims as invalid on September 10, 2019, by reason of anticipatory prior art.

However, this decision was vacated and sent back (remanded) to the PTAB for a rehearing, pending the U.S.

Supreme Court’s (Supreme Court) decision whether to grant certiorari in a different case, United States v.

Athrex), the holding of which could impact the findings in the ‘127 Patent matter.

The Supreme Court granted certiorari in US v.

Athrex on October 13, 2020 (i.e., agreed to review the decision appealed from a lower court).

Until the Supreme Court rendered its opinion in US v.

Athrex, the ‘127 Patent hearing remained in abeyance, with no decision reached as to the validity of its claims.

The Supreme Court decided on the US v.

Athrex case on June 21, 2021, following which the Federal Circuit reinstated the appeal sua sponte, requiring the parties to brief how the case should proceed in light of the Supreme Court’s opinion or for the Appellant to waive the challenge.

We elected to waive the challenge and proceed with the appeal at the Federal Circuit.

The opening brief was filed on October 25, 2021.

Moderna’s responsive brief was filed on February 24, 2022 and our reply brief was filed on April 26, 2022.

An oral hearing for this matter was held on November 4, 2022.

On April 11, 2023, the Federal Circuit rendered its opinion, affirming the PTAB’s finding that all claims of the ‘127 Patent are invalid by reason of anticipation.

Moderna and Merck European Opposition

On April 5, 2018, Moderna and Merck, Sharp & Dohme Corporation (Merck) filed Notices of Opposition to Arbutus’ European patent EP 2279254 (the ’254 Patent) with the European Patent Office (EPO), requesting that the ‘254 Patent be revoked in its entirety for all contracting states.

We filed a response to Moderna and Merck’s oppositions on September 3, 2018.

A hearing was conducted before the Opposition Division of the EPO on October 10, 2019.

At the conclusion of the hearing, the EPO upheld an auxiliary request adopting the amendment, as put forth by us, of certain claims of the ‘254 Patent.

In February 2020 Moderna and Merck filed Notices of Appeal challenging the EPO’s grant of the auxiliary request.

Merck filed its notice of appeal on February 24, 2020 and Moderna on February 27, 2020.

Both Merck and Moderna perfected their appeals by filing Grounds of Appeal on April 30, 2020.

We filed our responses to the appeals on September 18, 2020.

On March 22, 2022, Moderna filed further written submissions to which we and Genevant responded in August 2022.

On April 18, 2023, we and Genevant withdrew our auxiliary request, however, the original (main) request remains in the action.

We and Moderna informed the Board of Appeals that we would not object to a remittance of the matter without a hearing to the Opposition Division of the EPO.

The hearing in this matter before the Board of Appeals was subsequently cancelled and resubmitted to the Opposition Division (i.e., lower board) of the EPO.

On October 31, 2023, the Opposition Division issued a summons for oral proceedings and provided its preliminary and non-binding opinion on the subject matter to be discussed at the hearing.

On November 3, 2023, we responded to the summons and on January 15, 2024, Moderna and Merck filed their reply to the written opinion of the Opposition Division, as well as to our written submission of November 3, 2023.

We responded to Moderna and Merck’s reply on April 5, 2024.

Oral proceedings were held on June 6, 2024, and the Opposition Division upheld the ‘254 Patent but declined our and Genevant’s request to broaden certain claims in the ‘254 Patent.

Both parties have given notice of their intent to appeal the Opposition Division’s decision, and the deadline for filing for their respective grounds for appeal is November 25, 2024.

While we are the patent holder, the ‘127 Patent, the ‘254 Patent, the other patents in our LNP portfolio have been licensed to Genevant and are included in the rights licensed by us to Genevant under the Genevant License.

Patent Infringement Litigation vs.

United States:

On February 28, 2022, we and Genevant filed a lawsuit in the U.S.

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Government.” On November 2, 2022, the court issued an Order denying Moderna’s motion.

On November 30, 2022, Moderna filed its Answer to the Complaint and Counterclaims.

We and Genevant filed our Answer to Moderna’s Counterclaims on December 21, 2022.

On February 14, 2023, the U.S.

Department of Justice filed a Statement of Interest in the action.

On February 16, 2023, the court held an Initial Pretrial Conference after which it issued an Order, dated February 16, 2023, ordering that within 14 days of the issuance of the Order, the parties and the U.S.

Government were to submit letters regarding the impact of the Governments’ Statement of Interest on the scheduling of the matter.

On February 16, 2023, the court held an Initial Pretrial Conference after which it issued an Order directing the parties and the U.S.

Government to submit letters regarding the impact of the Government’s Statement of Interest.

On March 10, 2023, the court reaffirmed its denial of Moderna’s motion to dismiss.

On March 16, 2023, the court held a Rule 16 scheduling conference, and on March 21, 2023, the court issued a scheduling order in the matter without setting a trial date.

On June 9, 2023, the court granted the parties’ request to extend the time for claim construction briefing.

The claim construction hearing was held on February 8, 2024.

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Regarding the Encapsulation of mRNA (’651) Patent, the court held that “wherein at least 70% / at least 80% / about 90% of the mRNA in the formulation is fully encapsulated in the lipid vesicles” means “wherein at least 70% / at least 80% / about 90% of the mRNA is fully, as distinct from partially, contained inside the lipid vesicles”.

On August 5, 2024, we and Genevant, along with Moderna, filed the Stipulation with the court that requested an amended case schedule to accommodate certain outstanding discovery from Moderna and third parties.

The court approved the amended case schedule and the start of the trial was moved from April 21, 2025 to September 24, 2025, subject to the court’s availability.

Trial is currently scheduled for September 29, 2025.

Expert discovery has concluded and the case is entering the summary judgement stage.

International:

On March 3, 2025, we and Genevant filed five international lawsuits against Moderna seeking to enforce patents protecting our patented lipid nanoparticle technology.

These five lawsuits target alleged infringing activities by Moderna in 30 countries, including Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland, and Turkey.

We and Genevant are seeking monetary relief and injunctions against Moderna’s COVID-19 vaccine and, in the Unified Patent Court, additional Moderna products, which Moderna has represented use the same lipid nanoparticle technology as the COVID-19 vaccine, including its RSV vaccine.

Where permitted to do so at this stage, we and Genevant submitted evidence from testing of commercial Moderna product samples sourced from the U.S.

and European Union indicating the samples contain lipid nanoparticles falling under the protective scope of the claims of our lipid composition patents.

The five international lawsuits are as follows:

Federal Court of Canada File No.

T-704-25, seeking a permanent injunction and damages or, if Genevant so elects, an accounting of Moderna’s profits, attributable to infringement of Canadian Patent No.

Tokyo District Court Case No.

2025 (Wa) 70079, seeking a permanent injunction and reasonable royalty for infringement of Japanese Patent No.

• Switzerland:

a case seeking a permanent injunction and monetary relief, which upon later choice of Genevant and Arbutus can include surrender of profits, damages or a reasonable royalty, for infringement of EP 2 279 254.

• Unified Patent Court:

Case 10280/2025, seeking permanent and provisional injunctions, as well as monetary damages, which can include recovery of Moderna’s unfair profits, from infringement of EP 2 279 254.

• Unified Patent Court:

Case 10280/2025, seeking permanent and provisional injunctions, as well as monetary damages, which can include recovery of Moderna’s unfair profits, from infringement of EP 4 241 767.

The five complaints have been or are being served on Moderna pursuant to the service of process rules of the respective courts.

In the Unified Patent Court, Moderna’s Statement of Defense is due on July 8, 2025.

Patent Infringement Litigation vs.

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However, we seek fair compensation for Pfizer’s and BioNTech’s use of our patented technology that was developed with great effort and at great expense, without which their COVID-19 mRNA-LNP vaccines would not have been successful.

On July 10, 2023, Pfizer and BioNTech filed their answer to the complaint, affirmative defenses and counterclaims.

We and Genevant filed our answer to these counterclaims on August 14, 2023.

A scheduling conference was held on August 28, 2023 and the court issued a Letter Order on September 7, 2023 setting certain court dates.

Subsequently, the claim construction hearing was scheduled for December 18, 2024.

Scheduling of subsequent case dates, including the date for trial, will be set at a later time that is yet to be determined.

Document and written discovery in the action is ongoing.

Acuitas Declaratory Judgment Lawsuit

On March 18, 2022, Acuitas filed a lawsuit against us and Genevant in the U.S.

District Court for the Southern District of New York, asking the court to enter declaratory judgment that Arbutus patent Nos.

8,058,069, 8,492,359, 8,822,668, 9,006,417, 9,364,435, 9,404,127, 9,504,651, 9,518,272, and 11,141,378 do not infringe Pfizer and BioNTech’s COVID-19 vaccine, COMIRNATY, which uses an mRNA lipid provided, under license, by Acuitas.

Acuitas also seeks a declaration that each of the listed patents is invalid.

On June 24, 2022, we and Genevant sought a pre-motion conference concerning our anticipated motion to dismiss all of Acuitas’ claims due to lack of subject matter jurisdiction.

The request for a pre-motion conference was

granted, but the case was subsequently re-assigned to a new judge who entered an order directing:

(i) Acuitas to inform the court whether it intended to file an amended complaint;

(ii) that Acuitas must file any amended complaint by a certain date;

and (iii) that if Acuitas did not file an amended complaint, we and Genevant must file our motion to dismiss by a certain date.

Acuitas filed its amended complaint on September 6, 2022.

On October 4, 2022, we and Genevant filed our motion to dismiss the Acuitas action for lack of subject matter jurisdiction based on the lack of a case or controversy.

Acuitas filed its opposition to the motion to dismiss on November 1, 2022, and we and Genevant filed our reply brief on November 16, 2022 at which point the motion was fully briefed.

A status conference for the action was set for August 9, 2023, however on August 4, 2023, Acuitas voluntarily dismissed its complaint in the Southern District of New York and refiled a virtually identical complaint in the District Court of New Jersey (D.

N.J.) where the Pfizer/BioNTech matter is currently pending, except that the 9,404,127 patent is not at issue in the New Jersey action, and Acuitas also added two additional patents to its New Jersey declaratory judgment action (U.S.

11,298,320 and 11,318,098) that were not at issue in its New York action.

On September 15, 2023, we and Genevant filed a letter with the court seeking a premotion conference for a motion to dismiss and subsequently filed our and Genevant’s motion to dismiss on October 13, 2023.

Acuitas filed its opposition on November 1, 2023 and we and Genevant filed our reply on November 16, 2023.

Acuitas filed a request to commence discovery on November 18, 2023, to which we and Genevant responded on November 20, 2023.

On May 20, 2024, the court granted our and Genevant’s motion to dismiss, so we believe this matter is now concluded.

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.

Fact discovery in the action is ongoing.

Moderna and Merck European Oppositions

On April 5, 2018, Moderna and Merck, Sharp & Dohme Corporation (Merck) filed Notices of Opposition to Arbutus’ European patent EP 2279254 (the ’254 Patent) with the European Patent Office (EPO), requesting that the ’254 Patent be revoked in its entirety for all contracting states.

We filed a response to Moderna and Merck’s oppositions on September 3, 2018.

A hearing was conducted before the Opposition Division of the EPO on October 10, 2019.

At the conclusion of the hearing, the EPO upheld an auxiliary request adopting the amendment, as put forth by us, of certain claims of the ’254 Patent.