What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-14 · 144 added, 98 removed, 354 unchanged (41% of the section changed)

4 unchanged sentences

Dollars, except share amounts)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current assets:

34 unchanged sentences

ARBUTUS BIOPHARMA CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Loss

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands of U.S.

Dollars, except share and per share amounts)

Three Months Ended March 31,

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

2025 2024 2025 2024

Collaborations and licenses $ 10,213 $ 1,155 $ 11,529 $ 2,094

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Change in fair value of contingent consideration 260 211 559 391

Restructuring 12,373 —

Restructuring costs 165 — 12,538 —

Total operating expenses 9,251 23,309 36,714 44,204

Loss from operations ( 25,699 ) ( 19,363 )

Gain (loss) from operations 1,488 ( 21,583 ) ( 24,211 ) ( 40,946 )

Interest income 1,042 1,829 2,239 3,374

2 unchanged sentences

Total other income 1,035 1,787 2,208 3,275

Net loss $ ( 24,526 ) $ ( 17,875 )

Loss per share

Basic and diluted $ ( 0.13 ) $ ( 0.10 )

Net income (loss) $ 2,523 $ ( 19,796 ) $ ( 22,003 ) $ ( 37,671 )

Net income (loss) per common share

Basic $ 0.01 $ ( 0.11 ) $ ( 0.12 ) $ ( 0.21 )

Diluted $ 0.01 $ ( 0.11 ) $ ( 0.12 ) $ ( 0.21 )

Weighted average number of common shares

Basic and diluted 190,707,085 175,625,552

Comprehensive loss

Unrealized gain on available-for-sale securities $ ( 31 ) $ 50

Comprehensive loss $ ( 24,557 ) $ ( 17,825 )

Basic 191,551,282 188,041,489 191,130,631 181,842,519

Diluted 192,399,733 188,041,489 191,130,631 181,842,519

Comprehensive income (loss)

Unrealized (loss) gain on available-for-sale securities $ ( 21 ) $ 63 $ ( 52 ) $ 113

Comprehensive income (loss) $ 2,502 $ ( 19,733 ) $ ( 22,055 ) $ ( 37,558 )

See accompanying notes to the condensed consolidated financial statements.

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Issuance of common shares upon vesting of RSUs 580,584 1,518 ( 1,518 ) — — —

Unrealized gain on available-for-sale securities — — — — ( 31 ) ( 31 )

Unrealized loss on available-for-sale securities — — — — ( 31 ) ( 31 )

Net loss — — — ( 24,526 ) — ( 24,526 )

Balance March 31, 2025 191,481,474 $ 1,416,332 $ 82,089 $ ( 1,371,098 ) $ ( 48,166 ) $ 79,157

Stock-based compensation expense — — 864 — — 864

Issuance of common shares pursuant to exercise of options 160,037 778 ( 325 ) — — 453

Unrealized loss on available-for-sale securities — — — — ( 21 ) ( 21 )

Net income — — — 2,523 — 2,523

Balance June 30, 2025 191,641,511 $ 1,417,110 $ 82,628 $ ( 1,368,575 ) $ ( 48,187 ) $ 82,976

See accompanying notes to the condensed consolidated financial statements.

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Balance March 31, 2024 180,192,227 $ 1,377,315 $ 80,220 $ ( 1,294,527 ) $ ( 48,371 ) $ 114,637

Stock-based compensation expense — — 3,180 — — 3,180

Issuance of common shares pursuant to the Open Market Sale Agreement 7,833,922 22,359 — — — 22,359

Issuance of common shares pursuant to exercise of options 712,895 3,660 ( 1,649 ) — — 2,011

Unrealized gain on available-for-sale securities — — — — 63 63

Net loss — — — ( 19,796 ) — ( 19,796 )

Balance June 30, 2024 188,739,044 $ 1,403,334 $ 81,751 $ ( 1,314,323 ) $ ( 48,308 ) $ 122,454

See accompanying notes to the condensed consolidated financial statements.

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(In thousands of U.S.

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES

17 unchanged sentences

Purchase of investments in marketable securities ( 63,214 ) ( 57,982 )

Proceeds from sale of property and equipment 9 —

Disposition of investments in marketable securities 90,165 79,601

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and BioNTech SE (collectively, Pfizer/BioNTech) for their use of the Company’s 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, the Company announced that, along with Genevant Sciences Ltd.

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

At March 31, 2025, the Company had an aggregate of $ 112.7 million in cash, cash equivalents and investments in marketable securities.

The Company had no outstanding debt as of March 31, 2025.

With respect to the Moderna lawsuit in the United States, the summary judgment phase of the case began in July 2025 and a trial date has been set for March 2026.

In March 2025, the Company, along with Genevant Sciences GmbH and/or its affiliates (collectively, Genevant), filed five international lawsuits against Moderna in connection with the use of the Company’s LNP technology in Moderna’s COVID-19 mRNA-LNP vaccines and, in the Unified Patent Court, also other Moderna products that use the same LNP technology, including Moderna’s respiratory syncytial virus (RSV) vaccines.

The first major hearings in the international lawsuits are expected in the first half of calendar year 2026.

With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred in December 2024, and fact discovery is ongoing.

The court has not provided guidance for the timing of its ruling in the claim construction hearing, which could potentially come in 2025.

At June 30, 2025, the Company had an aggregate of $ 98.1 million in cash, cash equivalents and investments in marketable securities.

The Company had no outstanding debt as of June 30, 2025.

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

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These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

These unaudited condensed consolidated financial statements include the accounts of Arbutus Biopharma Corporation and its one wholly-owned subsidiary, Arbutus Biopharma, Inc., and reflect, in the opinion of management, all adjustments and reclassifications necessary to fairly present the Company’s financial position as of March 31, 2025 and December 31, 2024, the Company’s results of operations for the three months ended March 31, 2025 and 2024, and the Company’s cash flows for the three months ended March 31, 2025 and 2024.

These unaudited condensed consolidated financial statements include the accounts of Arbutus Biopharma Corporation and its one wholly-owned subsidiary, Arbutus Biopharma, Inc., and reflect, in the opinion of management, all adjustments and reclassifications necessary to fairly present the Company’s financial position as of June 30, 2025 and December 31, 2024, the Company’s results of operations for the three and six months ended June 30, 2025 and 2024, and the Company’s cash flows for the six months ended June 30, 2025 and 2024.

Such adjustments are of a normal recurring nature.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results for the full year.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results for the full year.

These unaudited condensed consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2024, except as described below under the section entitled “Recent Accounting Pronouncements.”

All intercompany balances and transactions have been eliminated.

Net loss per share

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

Diluted net loss per share does not differ from basic net loss per share for the three months ended March 31, 2025 and 2024, since the effect of including potential common shares would be anti-dilutive.

For the three months ended March 31, 2025, potential common shares of 15.2 million pertaining to outstanding stock options and unvested restricted stock units were excluded from the calculation of net loss per share.

A total of approximately 22.6 million outstanding stock options and unvested restricted stock units were excluded from the calculation for the three months ended March 31, 2024.

Net income (loss) per share

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

Diluted net income (loss) per share is calculated using the treasury stock method and reflects the effect of all potentially dilutive securities (outstanding stock options and restricted stock units).

The number of weighted average shares used in the calculation of net income per share for the three months ended June 30, 2025 was as follows:

Three Months Ended June 30, 2025

Weighted average shares:

Basic shares 191,551,282

Potentially dilutive shares from equity-based compensation plans 848,451

Diluted shares 192,399,733

Diluted net loss per share does not differ from basic net loss per share for the six months ended June 30, 2025 or the three and six months ended June 30, 2024 since the effect of including potential common shares would be anti-dilutive as the Company was in a net loss position.

Total antidilutive securities that were excluded from the computation of diluted weighted-average shares outstanding were as follows:

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

2025 2024 2025 2024

Outstanding stock options and restricted stock units 14,348,427 21,539,688 16,086,902 20,446,983

Revenue from collaborations and licenses

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

The Company determined the fair value of the contingent consideration was $ 10.5 million as of March 31, 2025 and the increase of $ 0.3 million from December 31, 2024 has been recorded as a component of total operating expenses in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

The Company determined the fair value of the contingent consideration was $ 10.8 million as of June 30, 2025 and the increase of $ 0.6 million from December 31, 2024 has been recorded as a component of total operating expenses in the condensed consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2025.

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

There were no changes in the assumptions as of March 31, 2025 compared to December 31, 2024.

The Company assessed the sensitivity of the fair value measurement to changes in these unobservable inputs, and determined that changes within a reasonable range would not result in a materially different assessment of fair value.

There were no changes in the assumptions as of June 30, 2025 compared to December 31, 2024.

The Company assessed the sensitivity of the fair value measurement to changes in these

unobservable inputs, and determined that changes within a reasonable range would not result in a materially different assessment of fair value.

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques used to determine such fair value:

Level 1 Level 2 Level 3 Total

As of March 31, 2025 (in thousands)

As of June 30, 2025 (in thousands)

Cash and cash equivalents $ 37,412 $ — $ — $ 37,412

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(in thousands)

Three Months Ended March 31, 2025 $ 10,225 $ 299 $ 10,524

Three Months Ended March 31, 2024 $ 7,600 $ 180 $ 7,780

Six Months Ended June 30, 2025 $ 10,225 $ 559 $ 10,784

Six Months Ended June 30, 2024 $ 7,600 $ 391 $ 7,991

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

3 unchanged sentences

Gross Unrealized Loss (1)

As of March 31, 2025 (in thousands)

As of June 30, 2025 (in thousands)

Cash equivalents

Money market $ 23,890 $ — $ — $ 23,890

US treasury bills $ 2,487 $ — $ — $ 2,487

Money market funds $ 30,400 $ — $ — $ 30,400

Total $ 30,400 $ — $ — $ 30,400

2 unchanged sentences

US treasury bills 47,128 — ( 10 ) 47,118

US government bonds 2,250 — ( 1 ) 2,249

Total $ 60,678 $ 9 $ ( 11 ) $ 60,676

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

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

Amortized Cost Gross Unrealized Gain (1)

2 unchanged sentences

Cash equivalents

Money market fund $ 29,533 $ — $ — $ 29,533

Money market funds $ 29,533 $ — $ — $ 29,533

Total $ 29,533 $ — $ — $ 29,533

3 unchanged sentences

Total $ 86,243 $ 56 $ ( 6 ) $ 86,293

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

The contractual term to maturity of the $ 75.6 million of short-term marketable securities held by the Company as of March 31, 2025 is less than one year.

As of March 31, 2025, the Company held no long-term marketable securities with contractual maturities of more than one year, but less than five years.

As of December 31, 2024, the Company’s $ 86.3 million of short-term marketable securities had contractual maturities of less than one year, while the Company held no long-term marketable securities with maturities of more than one year, but less than five years.

At March 31, 2025 and December 31, 2024, the Company had 14 and 6 , respectively, available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses.

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

The contractual term to maturity of the $ 60.7 million of short-term marketable securities held by the Company as of June 30, 2025 is less than one year.

As of June 30, 2025, the Company held no long-term marketable securities.

At June 30, 2025 and December 31, 2024, the Company had 20 and 6 , respectively, available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses.

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

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

Accrued interest receivable on investments in marketable securities of $ 0.2 million at both March 31, 2025 and December 31, 2024 is included in prepaid expenses and other current assets.

The Company had zero realized gain for the three months ended March 31, 2025 and less than $ 0.1 million realized gains for the three months ended March 31, 2024, respectively.

Accrued interest receivable on investments in marketable securities of $ 0.1 million and $ 0.3 million at June 30, 2025 and December 31, 2024, respectively, is included in prepaid expenses and other current assets.

The Company had zero realized gains for the three and six months ended June 30, 2025 and less than $ 0.1 million realized gains for both the three and six months ended June 30, 2024.

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

1 unchanged sentence

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

(Roivant), its largest shareholder, to launch Genevant, a company focused on a broad range of ribonucleic acid (RNA)-based therapeutics enabled by the Company’s LNP and ligand conjugate delivery technologies.

(Roivant), its largest shareholder, to launch Genevant Sciences Ltd., a company focused on a broad range of ribonucleic acid (RNA)-based therapeutics enabled by the Company’s LNP and ligand conjugate delivery technologies.

The Company licensed rights to its 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).

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Accordingly, an estimate of the fair value of the securities is based on the original cost less previously recognized equity method losses, less impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or a similar Genevant securities.

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

As of June 30, 2025, the carrying value of the Company’s investment in Genevant was zero and the Company owned approximately 16 % of the common equity of Genevant.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are comprised of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands)

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Total accounts payable and accrued liabilities $ 4,508 $ 7,564

In March 2025, the Company’s Board of Directors (the Board) took action to reduce the Company’s workforce by 57 %, resulting in a total workforce after reductions of 19 employees.

In March 2025, the Company’s Board of Directors (the Board) took action to reduce the Company’s workforce by 57 %.

The Board also decided to exit the Company’s corporate headquarters in Warminster, Pennsylvania and to discontinue in-house scientific research.

As a result, the Company recorded a one-time restructuring charge of $ 12.4 million in the first quarter of 2025, of which there was $ 5.6 million in severance and benefit costs and $ 0.4 million of lease-related operation expenses accrued as of March 31, 2025.

As a result, the Company recorded a one-time restructuring charge of $ 12.4 million in the first quarter of 2025, of which there was $ 0.4 million in severance and benefit costs and $ 0.3 million of lease-related operation expenses accrued as of June 30, 2025.

Sale of future royalties

1 unchanged sentence

ONPATTRO utilizes the Company’s LNP technology, which was licensed to Alnylam pursuant to the Cross-License Agreement, dated November 12, 2012, by and between the Company and Alnylam (the LNP License Agreement).

Under the terms of the LNP License Agreement, the Company is entitled to tiered royalty payments on global net sales of ONPATTRO ranging from 1.00 % to 2.33 % after offsets, with the highest tier applicable to annual net sales above $ 500 million.

terms of the LNP License Agreement, the Company is entitled to tiered royalty payments on global net sales of ONPATTRO ranging from 1.00 % to 2.33 % after offsets, with the highest tier applicable to annual net sales above $ 500 million.

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

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

As of March 31, 2025, the Company estimated an effective annual interest rate of approximately 2.2 %.

As of June 30, 2025, the Company estimated an effective annual interest rate of approximately 2.5 %.

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

2 unchanged sentences

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

From the inception of the royalty sale through March 31, 2025, the Company has recorded an aggregate of $ 25.3 million of non-cash royalty revenue for royalties earned by OMERS.

From the inception of the royalty sale through June 30, 2025, the Company has recorded an aggregate of $ 25.9 million of non-cash royalty revenue for royalties earned by OMERS.

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

During the three months ended March 31, 2025, the Company recognized non-cash royalty revenue of $ 0.4 million and related non-cash interest expense of less than $ 0.1 million.

During the three months ended March 31, 2024, the Company recognized non-cash royalty revenue of $ 0.6 million and related non-cash interest expense of less than $ 0.1 million.

The table below shows the activity related to the net liability for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

During the six months ended June 30, 2025, the Company recognized non-cash royalty revenue of $ 1.0 million and related non-cash interest expense of less than $ 0.1 million.

During the six months ended June 30, 2024, the Company recognized non-cash royalty revenue of $ 1.2 million and related non-cash interest expense of less than $ 0.1 million.

The table below shows the activity related to the net liability for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

(in thousands)

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Stock Purchase Agreement with Enantigen

In October 2014, Arbutus Inc., the Company’s wholly-owned subsidiary, acquired all of the outstanding shares of Enantigen Therapeutics, Inc.

In October 2014, Arbutus Biopharma, Inc., the Company’s wholly-owned subsidiary, acquired all of the outstanding shares of Enantigen Therapeutics, Inc.

(Enantigen) pursuant to a stock purchase agreement.

1 unchanged sentence

Certain other development milestones related to the acquisition were tied to programs which are no longer under development by the Company, and therefore the contingency related to those development milestones is zero .

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

The fair value of the contingent consideration was $ 10.5 million as of March 31, 2025.

The fair value of the contingent consideration was $ 10.8 million as of June 30, 2025.

Collaborations, contracts and licensing agreements

1 unchanged sentence

Qilu Pharmaceutical Co., Ltd.

In December 2021, the Company entered into a technology transfer and licensing agreement (the License Agreement) with Qilu Pharmaceutical Co., Ltd.

(Qilu), pursuant to which the Company granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by the Company, 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 (Greater China and Taiwan).

In December 2021, the Company entered into a technology transfer and licensing agreement (the Qilu License Agreement) with Qilu Pharmaceutical Co., Ltd.

(Qilu), pursuant to which the Company granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by the Company, which was 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 (Greater China and Taiwan).

In partial consideration for the rights granted by the Company, Qilu paid the Company a one-time upfront cash payment of $ 40.0 million, net of withholding taxes, on January 5, 2022, and agreed to pay the Company up to $ 245.0 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones.

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In addition, Qilu agreed to pay the Company 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 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 the Company 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 the Company 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 the Company has 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, the Company 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 the Company’s 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).

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

Qilu was 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 was 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 was established between the Company and Qilu to coordinate and review the development, manufacturing and commercialization plans.

Both parties also entered into a supply agreement and related quality agreement pursuant to which the Company would manufacture and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until the Company completed its manufacturing technology transfer to Qilu and Qilu 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 Qilu License Agreement, the Company 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 the Company’s 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).

The Company 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 License Agreement falls under the scope of ASC 808 as both parties are active participants in the arrangement and are exposed to significant risks and rewards.

While this arrangement is in the scope of ASC 808, the Company analogizes to ASC 606 for some aspects of this arrangement, including for the delivery of a good or service (i.e., a unit of account).

In June 2025, the Company and Qilu mutually agreed to conclude the strategic partnership and terminated the Qilu License Agreement and related agreements, and the Company now once again holds global rights for imdusiran.

As no obligations remain under the Qilu License Agreement, the Company recognized all previously deferred revenue of $9.6 million in the second quarter of 2025.

For the period of time the Qilu License Agreement was effective, it fell under the scope of ASC 808 as both parties were active participants in the arrangement and were exposed to significant risks and rewards.

While this arrangement was in the scope of ASC 808, the Company analogized to ASC 606 for some aspects of this arrangement, including for the delivery of a good or service (i.e., a unit of account).

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

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

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

As such, the Company will combine these commitments into one performance obligation to which the transaction price will be allocated to and will recognize this transaction price associated with the bundled performance obligation over time using an inputs method based on labor hours expended by the Company on its Manufacturing Obligations.

The Company determined the initial transaction price of the combined performance obligation to be $ 50.4 million, which includes the $ 40.0 million upfront fee, $ 4.4 million of withholding taxes paid by Qilu on behalf of the Company, the premium paid for the Share Transaction of $ 4.1 million.

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

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

As such, the Company combined these commitments into one performance obligation to which the transaction price was allocated and recognized this transaction price associated with the

bundled performance obligation over time using an inputs method based on labor hours expended by the Company on its Manufacturing Obligations.

The Company determined the initial transaction price of the combined performance obligation to be $ 50.4 million, which included the $ 40.0 million upfront fee, $ 4.4 million of withholding taxes paid by Qilu on behalf of the Company, and the premium paid for the Share Transaction of $ 4.1 million.

The Company determined the milestone payments to be variable consideration subject to constraint at inception.

At the end of each subsequent reporting period, the Company will reevaluate the probability of achievement of the future development, regulatory, and sales milestones subject to constraint and, if necessary, will adjust its estimate of the overall transaction price.

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

At the end of each subsequent reporting period, the Company reevaluated the probability of achievement of the future development, regulatory, and sales milestones subject to constraint and, if necessary, adjusted its estimate of the overall transaction price.

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

The following table outlines the transaction price and the changes to the related liability balance:

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Total deferred license revenue $ —

The Company recognized $ 0.8 million and $ 0.2 million of revenue based on labor hours expended by the Company on its Manufacturing Obligations during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the balance of the deferred license revenue was $ 11.6 million, which, in accordance with ASC 210-20, was partially offset by the contract asset associated with the manufacturing cost reimbursement of $ 2.0 million, resulting in a net deferred license revenue liability of $ 9.6 million.

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

The Company recognized amortization expense of less than $ 0.1 million for both the three months ended March 31, 2025 and 2024, respectively.

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

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

Due to the conclusion of the strategic partnership with Qilu, the Company recognized the remainder of the $ 9.6 million of deferred revenue during the three months ended June 30, 2025.

The Company also recognized $ 0.5 million of revenue based on labor hours expended by the Company on its Manufacturing Obligations during the six months ended June 30, 2025.

The Company recognized $ 0.5 million and $ 0.8 million during the three and six months ended June 30, 2024, respectively, related to labor hours expended.

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

During the three months ended June 30, 2025, the Company recognized the $0.1 million remaining amortization expense, for a total amortization expense for the six months ended June 30, 2025 of $0.2 million.

The Company recognized amortization expense of less than $ 0.1 million for both the three and six months ended June 30, 2024.

Until the conclusion of the strategic partnership with Qilu, the Company reevaluated the transaction price and the total estimated labor hours expected to be incurred to satisfy the performance obligations and adjusted the deferred revenue at the end of each reporting period, which resulted in changes to the amount of collaboration revenue recognized and deferred revenue.

Barinthus Biotherapeutics plc

3 unchanged sentences

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

The Company incurred $ 0.4 million and $ 0.5 million of expenses, net of Barinthus’s 50% share, during the three months ended March 31, 2025 and 2024, respectively, and reflected those costs in research and development in the condensed consolidated statements of operations and comprehensive loss.

The Company incurred $ 0.3 million and $0.6 million of expenses, net of Barinthus’s 50% share, during the three and six months ended June 30, 2025, respectively, and $ 0.5 million and $1.0 million during the three and six months ended June 30, 2024, respectively, and reflected those costs in research and development in the condensed consolidated statements of operations and comprehensive income (loss).

Royalty Entitlements

9 unchanged sentences

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

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

From the inception of the royalty sale through June 30, 2025, an aggregate of $ 25.9 million of royalties have been earned by OMERS.

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

1 unchanged sentence

Revenues are summarized in the following table:

Three Months Ended March 31,

(in thousands)

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

2025 2024 2025 2024

(in thousands) (in thousands)

Revenue from collaborations and licenses

Acuitas Therapeutics, Inc.

$ 591 $ 642 $ 1,095 $ 1,337

Qilu Pharmaceutical Co., Ltd.

9,622 513 10,434 757

Non-cash royalty revenue

Alnylam Pharmaceuticals, Inc.

526 571 974 1,164

Total revenue $ 10,739 $ 1,726 $ 12,503 $ 3,258

4 unchanged sentences

Effective March 26, 2025, the Company terminated its Open Market Sale Agreement with Jefferies LLC (Jefferies) dated December 20, 2018, as amended (the Sale Agreement), under which the Company could offer and sell common shares, from time to time.

Prior to the termination of the Sale Agreement, the Company did not issue any common shares pursuant to the Sale Agreement during the three months ended March 31, 2025.

During the three months ended March 31, 2024, the Company issued 8,666,077 common shares pursuant to the Sale Agreement, resulting in net proceeds of $ 21.8 million.

Prior to the termination of the Sale Agreement, the Company did not issue any common shares pursuant to the Sale Agreement during the six months ended June 30, 2025.

During the three and six months ended June 30, 2024, the Company issued 7,833,922 and 16,499,999 common shares pursuant to the Sale Agreement, respectively, resulting in net proceeds of $ 22.4 million and $ 44.1 million, respectively.

Stock-based compensation

The table below summarizes information about the Company’s stock-based compensation for the three months ended March 31, 2025 and 2024 and the expense recognized in the condensed consolidated statements of operations:

Three Months Ended March 31,

The table below summarizes information about the Company’s stock-based compensation for the three and six months ended June 30, 2025 and 2024 and the expense recognized in the condensed consolidated statements of operations:

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

2025 2024 2025 2024

(in thousands, except share and per share data)

13 unchanged sentences

The accounting policies of the single segment are the same as those described in the summary of significant accounting policies.

The chief operating decision maker assesses performance for the single segment and decides how to allocate resources based on net loss that also is reported on the condensed and consolidated statements of operations and comprehensive loss as consolidated net loss.

The chief operating decision maker uses net loss to monitor budget versus actual results and to evaluate the overall cash burn of the business.

Three months ended March 31,

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

2025 2024 2025 2024

(in thousands)

Revenue $ 10,739 $ 1,726 $ 12,503 $ 3,258

6 unchanged sentences

Other segment expense (1)

267 253 590 490

Interest income 1,042 1,829 2,239 3,374

Segment net loss $ ( 24,526 ) $ ( 17,875 )

Segment net income (loss) $ 2,523 $ ( 19,796 ) $ ( 22,003 ) $ ( 37,671 )

Adjustments and reconciling items — — — —

Consolidated net loss $ (24,526) $ (17,875)

Consolidated net income (loss) $ 2,523 $ (19,796) $ (22,003) $ (37,671)

(1) Other segment expense includes the change in the fair value of contingent consideration, non-cash interest expenses and foreign currency exchange gains and losses.

Restructuring

In March 2025, the Board took action to reduce the Company’s workforce by 57 %, resulting in a total workforce after reductions of 19 employees.

In March 2025, the Board took action to reduce the Company’s workforce by 57 %.

The Board also decided to exit the Company’s corporate headquarters in Warminster, Pennsylvania and to discontinue in-house scientific research.

In connection with these actions, the Company incurred a one-time restructuring charge in the first quarter of 2025 of $ 12.4 million, which includes approximately $ 6.0 million of cash severance and continued benefits paid, $ 2.3 million of non-cash expense related to the modification of equity awards, non-cash impairment charges for leasehold improvements and laboratory equipment of $ 1.9 million and $ 0.9 million, respectively, $ 0.9 million related to impairment of the right-of-use asset associated with the lease of the Company’s corporate headquarters and a $ 0.4 million accrual of lease-related operating expenses.

As of March 31, 2025, there was $ 5.6 million of accrued restructuring costs for severance payments and a $ 0.4 million accrual of lease-related operating expenses included in accounts payable and accrued liabilities.

In connection with these actions, the Company incurred a one-time restructuring charge in the first quarter of 2025 of $ 12.4 million and $ 0.2 million in the second quarter of 2025, which includes approximately $ 6.1 million of cash severance and continued benefits paid, $ 2.3 million of non-cash expense related to the modification of equity awards, non-cash impairment charges for leasehold improvements and laboratory equipment of $ 1.9 million and $ 0.9 million, respectively, $ 0.9 million related to impairment of the right-of-use asset associated with the lease of the Company’s corporate headquarters and a $ 0.4 million accrual of lease-related operating expenses.

As of June 30, 2025, there was $ 0.4 million of accrued restructuring costs for severance payments and a $ 0.3 million accrual of lease-related operating expenses included in accounts payable and accrued liabilities.

Related Party Transaction

On August 5, 2025, the Company entered into an agreement with Keith Manchester, M.D.

for consulting services regarding the Company’s development strategy and its hepatitis B programs.

Manchester served as a member of the Board until February 24, 2025 and is considered a related person due to his service on the Board during the current fiscal year.

In connection with this agreement, the Company granted an option to purchase 400,000 common shares to Dr.

Manchester, with 5/48ths vesting immediately and the remainder vesting monthly.

Vesting of all unvested shares may be accelerated if certain performance conditions are achieved, at the discretion of the Board.

The grant date fair value of the award was calculated using the Black-Scholes option valuation model, and expense will be recognized over the expected service period.

The Company will accelerate recognition of any unrecognized expense if and when it becomes probable that the performance conditions will be satisfied.

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

What changed 10-Q

Item 1. Financial Statements