What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-14 · 134 added, 112 removed, 330 unchanged (43% 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, 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.

38 unchanged sentences

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.

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, we, along with Genevant Sciences GmbH and/or its affiliates (collectively, Genevant), 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 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.

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.

Additionally, our Board took action to reduce our workforce by an additional 57%.

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

1 unchanged sentence

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.

In June 2025, we launched a new Scientific Advisory Board (SAB) consisting of globally-recognized leaders in the treatment of cHBV with extensive experience in late-stage clinical trials.

SAB members will advise us on the strategic evaluation of our cHBV pipeline.

In August 2025, we announced changes to our Board.

Effective August 4, 2025, Anuj Hasija resigned from our Board due to his transition to a full-time executive role that precludes his participation on our Board and other boards of directors.

Roger Sawhney was appointed to the vacant seat on our Board, effective August 4, 2025.

Sawhney was also appointed as a member of our Board’s Audit Committee and Corporate Governance and Nominating Committee.

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.

In February 2022 and April 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.

4 unchanged sentences

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.

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.

With respect to the Moderna lawsuit in the United States, the court provided its claim construction ruling in April 2024 in which it construed the disputed claim terms and agreed with our position on most of the disputed claim terms.

The summary judgment phase of the case began in July 2025 and a trial date has been set for March 2026.

In March 2025, we, along with Genevant, 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 other Moderna products that use the same LNP technology, including Moderna’s 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.

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.

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).

1 unchanged sentence

Our HBV product pipeline includes the following:

• 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.

• Imdusiran (AB-729) 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.

To date, eight patients have achieved 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.

4 unchanged sentences

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.

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

Two of the patients who achieved 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.

1 unchanged sentence

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).

• Imdusiran in combination with IFN, a standard-of-care immunomodulator, and ongoing standard-of-care 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 hepatitis B e antigen (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.

2 unchanged sentences

• 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.

1 unchanged sentence

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 potential strategic alliances.

We continue to explore pipeline opportunities in the form of potential strategic alliances.

RNAi therapeutic (imdusiran, AB-729)

1 unchanged sentence

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.

We are developing an RNAi therapeutic, imdusiran, 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) has the following advantages over other RNAi therapeutics in development for cHBV infection:

Imdusiran 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.

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

– Specific chemical modifications and unique asymmetric RNA structure that reduces off-target effects while maintaining/enhancing potency and providing durable liver exposure and in vivo efficacy.

– 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.

– In combination with IFN and NA therapy, has achieved 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.

1 unchanged sentence

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.

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.

21 unchanged sentences

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.

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

1 unchanged sentence

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.

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 achieved functional cure.

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

3 unchanged sentences

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.

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.

25 unchanged sentences

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 (Greater China and Taiwan).

In December 2021, we entered into a technology transfer and license agreement (the Qilu License Agreement) with Qilu, pursuant to which we granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by us, 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 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 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 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).

The royalties were to be 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 us 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 we would manufacture and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until we had completed manufacturing technology transfer to Qilu and Qilu had 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, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common shares as of the close of trading on December 10, 2021 (the Share Transaction).

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

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

In June 2025, we and Qilu mutually agreed to conclude our strategic partnership and terminate the Qilu License Agreement and related agreements, and we now once again hold global rights for imdusiran.

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

Alnylam Pharmaceuticals, Inc.

(Alnylam) and Acuitas Therapeutics, Inc.

We have two royalty entitlements to Alnylam’s global net sales of ONPATTRO.

We have two royalty entitlements to global net sales of ONPATTRO ® (Patisiran) (ONPATTRO), an RNA interference therapeutic currently being sold by Alnylam.

In 2012, we entered into a license agreement with Alnylam that entitles Alnylam to develop and commercialize products with our LNP delivery technology.

5 unchanged sentences

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 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.

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.

2 unchanged sentences

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

(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.

(Roivant), our largest shareholder, to launch Genevant Sciences Ltd., 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).

2 unchanged sentences

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

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).

Additionally, if Genevant receives proceeds from an action for infringement by any third parties of our intellectual property licensed to Genevant, we would be entitled to receive, after deduction of litigation costs, 20% of the proceeds received by 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.

3 unchanged sentences

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.

As of June 30, 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.

6 unchanged sentences

The patents relate to nucleic acid-lipid particles and lipid vesicles, as well as compositions and methods for their use.

The lawsuit does not seek an injunction or otherwise seek to impede the sale, manufacture or distribution of MRNA-1273.

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

On May 6, 2022, Moderna filed a partial motion to dismiss the claims “relating to Moderna’s sale and provision of COVID-19 vaccine doses to the U.S.

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

On February 14, 2023, the U.S.

In the lawsuit, we seek fair compensation for Moderna’s use of our patented technology that was developed with great effort and at great expense, without which Moderna’s COVID-19 vaccine would not have been successful.

In May 2022, Moderna filed a partial motion to dismiss the claims “relating to Moderna’s sale and provision of COVID-19 vaccine doses to the U.S.

Government” and argued that U.S.

taxpayers, not Moderna, are financially liable for any infringement by Moderna of our patents.

In November 2022, the court issued an Order denying Moderna’s motion.

In February 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 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.

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

On April 3, 2024, the court issued its opinion regarding the claims construction.

Subsequently in February 2023, the court held a hearing and directed the parties and the U.S.

Government to submit letters regarding the impact of the Government’s Statement of Interest on Moderna’s motion to dismiss.

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

The claim construction hearing was held in February 2024, and in April 2024, the court issued its opinion regarding the claims construction.

The court agreed with both of our positions regarding the Composition of Total Lipid (’069) Patent that:

6 unchanged sentences

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”.

Trial is currently scheduled for September 29, 2025.

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

Fact discovery has been completed, and expert discovery is concluding.

The summary judgment phase of the case began in July 2025 and a jury trial is scheduled to be held in March 2026.

Additionally, in July 2025, the case was reassigned to a different judge in the same court.

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.

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

We and Genevant are seeking monetary relief and injunctions against the continued manufacture and sale of 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.

12 unchanged sentences

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.

Moderna and/or its affiliates have responded to the lawsuits in Japan, Switzerland and the Unified Patent Court, and the first major hearings are expected to occur in the first half of calendar year 2026.

Patent Infringement Litigation vs.

5 unchanged sentences

The patents relate to nucleic acid-lipid particles and their composition, manufacture, delivery and methods of use.

The lawsuit does not seek an injunction or otherwise seek to impede the sale, manufacture or distribution of any COVID-19 mRNA-LNP vaccines.

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.

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.

In the lawsuit, 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.

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.

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.

We filed a response to Moderna and Merck’s oppositions in September 2018 and a hearing was conducted before the Opposition Division of the EPO in October 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 filed our responses to the appeals in September 2020.

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

In April 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 appealed the Opposition Division’s decision and on March 21, 2025, the Board of Appeals scheduled oral proceedings for January 15 and 16, 2026.

In October 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.

In November 2023, we responded to the summons and in January 2024, Moderna and Merck filed their reply to the written opinion of the Opposition Division, as well as to our written submission from November 2023.

We responded to Moderna and Merck’s reply in April 2024.

Oral proceedings were held in June 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 appealed the Opposition Division’s decision and in March 2025, the Board of Appeals scheduled oral proceedings for January 2026.

On April 29, 2025, Moderna filed a revocation action on EPO patent EP 4 241 767 (the ’767 patent) with the EPO, requesting that the patent be revoked in its entirety for all contracting states.

Moderna’s deadline to provide facts, arguments, and evidence in support of invalidity is July 23, 2025.

Moderna submitted its opposition brief in July 2025 and we are currently preparing our response.

While we are the patent owner, the ’254 Patent, the ’767 Patent, and the other patents in our LNP portfolio have been licensed to Genevant under the Genevant License.

12 unchanged sentences

The following summarizes the results of our operations for the periods shown:

Three Months Ended March 31,

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

2025 2024 2025 2024

(in thousands)

1 unchanged sentence

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)

Other income 1,035 1,787 2,208 3,275

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

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

Revenues are summarized in the following tables:

Three Months Ended March 31,

Three Months Ended June 30,

2025 % of Total 2024 % of Total

7 unchanged sentences

Total revenue $ 10,739 100 % $ 1,726 100 %

Total revenue increased $0.2 million for the three months ended March 31, 2025 compared to the same period in 2024, due primarily to an increase in license revenue recognized related to our progress towards the satisfaction of our performance obligations with respect to the technology transfer and licensing agreement with Qilu, partially offset by a decrease in license royalty revenue from Alnylam and Acuitas due to lower sales of ONPATTRO in the 2025 period compared to the 2024 period.

Six Months Ended June 30,

2025 % of Total 2024 % of Total

(in thousands, except percentages)

Revenue from collaborations and licenses

Royalties from sales of ONPATTRO $ 1,095 9 % $ 1,337 41 %

Qilu Pharmaceutical Co., Ltd.

10,434 83 % 757 23 %

Non-cash royalty revenue

Royalties from sales of ONPATTRO 974 8 % 1,164 36 %

Total revenue $ 12,503 100 % $ 3,258 100 %

Total revenue increased $9.0 million and $9.2 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, due primarily to recognizing all $9.6 million of previously deferred revenue upon the conclusion of our strategic partnership with Qilu in June 2025, partially offset by a decrease in license royalty revenue from Alnylam and Acuitas due to lower sales of ONPATTRO in the 2025 periods compared to the 2024 periods.

Operating expenses

Operating expenses are summarized in the following tables:

Three Months Ended March 31,

Three Months Ended June 30,

2025 % of Total 2024 % of Total

3 unchanged sentences

Change in fair value of contingent consideration 260 3 % 211 1 %

Restructuring 12,373 45 % — — %

Restructuring costs 165 2 % — — %

Total operating expenses $ 9,251 100 % $ 23,309 100 %

Six Months Ended June 30,

2025 % of Total 2024 % of Total

(in thousands, except percentages)

Research and development $ 14,457 39 % $ 30,954 70 %

General and administrative 9,160 25 % 12,859 29 %

Change in fair value of contingent consideration 559 2 % 391 1 %

Restructuring costs 12,538 34 % — — %

Total operating expenses $ 36,714 100 % $ 44,204 100 %

Research and development

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

Research and development expenses decreased $6.4 million for the three months ended March 31, 2025, compared to the same period in 2024.

Research and development expenses decreased $10.1 million and $16.5 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024.

The decrease was due primarily to our decision in the third quarter of 2024 to cease all discovery efforts, discontinue our IM-PROVE III clinical trial and implement a 40% reduction in our workforce to streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101.

In connection with our cessation of all discovery efforts in August 2024 and an additional 57% reduction in our workforce in the first quarter of 2025, we expect our research expenses to continue to be reduced in future periods.

A significant portion of our research and development expenses are not tracked by project as they benefit multiple projects or our technology platform and because our most-advanced programs are not yet in late-stage clinical development.

General and administrative

General and administrative expenses increased $0.5 million for the three months ended March 31, 2025, as compared to the same period in 2024, due primarily to an increase in litigation-related legal fees, partially offset by a decrease in employee compensation-related expenses.

General and administrative expenses decreased $4.2 million and $3.7 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in 2024, due primarily to a decrease in employee compensation-related expenses and a decrease in litigation-related legal fees.

Change in fair value of contingent consideration

4 unchanged sentences

Restructuring

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

In March 2025, our Board took action to reduce our workforce by 57%.

The 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, 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 our 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.

During the three months ended June 30, 2025, we recorded an additional $0.2 million of restructuring costs related to severance and benefits.

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.

Other income (loss)

The components of our other income (loss) are summarized in the following table:

Three Months Ended March 31,

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

2025 2024 2025 2024

(in thousands)

4 unchanged sentences

Interest income

The decrease in interest income for the three months ended March 31, 2025 compared to the same period in 2024 was due primarily to less interest earned on our cash and investment balances due to a lower average balance and a general decrease in market interest rates.

The decrease in interest income for the three and six months ended June 30, 2025 compared to the same periods in 2024 was due primarily to less interest earned on our cash and investment balances due to a lower average balance and a general decrease in market interest rates.

Interest expense

Interest expense for the three months ended March 31, 2025 and 2024 consisted primarily of non-cash amortization of discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019.

Interest expense for the three and six months ended June 30, 2025 and 2024 consisted primarily of non-cash amortization of discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019.

The decrease is related to the declining balance of the unamortized discount and issuance costs.

1 unchanged sentence

The following table summarizes our cash flow activities for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

2 unchanged sentences

Change in deferred license revenue (10,434) (757)

Net change in operating items 6,081 (2,615)

Net change in other operating items (2,537) 656

Net cash used in operating activities (29,140) (33,799)

8 unchanged sentences

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

For the three months ended March 31, 2025, $13.4 million of cash was used in operating activities compared to $19.3 million used in operating activities for the three months ended March 31, 2024, a decrease of $5.9 million.

The decrease was due primarily to our decisions in the third quarter of 2024 to cease all discovery efforts, discontinue our IM-PROVE III clinical trial, and decrease our workforce by 40% to further streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101.

For the three months ended March 31, 2025, net cash provided by investing activities was $11.3 million, resulting primarily from maturities of investments in marketable securities of $46.1 million, partially offset by additional investments in marketable securities of $34.7 million.

For the three months ended March 31, 2024, net cash provided by investing activities was $11.7 million, which resulted primarily from maturities of investments in marketable securities of $37.2 million, partially offset by additional investments in marketable securities of $25.4 million.

For the three months ended March 31, 2025, net cash provided by financing activities was $2.8 million, which was primarily related to $2.7 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

For the three months ended March 31, 2024, net cash provided by financing activities was $24.4 million, which included $21.8 million in proceeds from sales of common shares pursuant to the Sale Agreement (as defined below) and $2.5 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

For the six months ended June 30, 2025, $29.1 million of cash was used in operating activities compared to $33.8 million used in operating activities for the six months ended June 30, 2024, a decrease of $4.7 million.

The decrease was due primarily to our decisions to cease all discovery efforts, discontinue our IM-PROVE III clinical trial, and decrease our workforce to further streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101.

For the six months ended June 30, 2025, net cash provided by investing activities was $27.0 million, resulting primarily from maturities of investments in marketable securities of $90.2 million, partially offset by additional investments in marketable securities of $63.2 million.

For the six months ended June 30, 2024, net cash provided by investing activities was $21.5 million, which resulted primarily from maturities of investments in marketable securities of $79.6 million, partially offset by additional investments in marketable securities of $58.0 million.

For the six months ended June 30, 2025, net cash provided by financing activities was $3.2 million, which was primarily related to $3.1 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

For the six months ended June 30, 2024, net cash provided by financing activities was $48.8 million, which included $44.1 million in proceeds from sales of common shares pursuant to the Sale Agreement (as defined below) and $4.5 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

Sources of Liquidity

As of March 31, 2025, we had cash, cash equivalents and investments in marketable securities of $112.7 million.

We had no outstanding debt as of March 31, 2025.

As of June 30, 2025, we had cash, cash equivalents and investments in marketable securities of $98.1 million.

We had no outstanding debt as of June 30, 2025.

Open Market Sale Agreement

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

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

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

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

For the six months ended June 30, 2024, we issued 16,499,999 common shares pursuant to the Sale Agreement, resulting in net proceeds of approximately $44.1 million.

Royalty Entitlements

3 unchanged sentences

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.

From the inception of the royalty sale through March 31, 2025, we have 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, we have recorded an aggregate of $25.9 million of non-cash royalty revenue for royalties earned by OMERS.

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.

4 unchanged sentences

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.

In June 2025, we and Qilu mutually agreed to conclude our strategic partnership, and we now once again hold global rights for imdusiran.

Cash requirements

11 unchanged sentences

• whether batches of product candidates that we manufacture fail to meet specifications resulting in clinical trial delays and investigational and remanufacturing costs;

• the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and product candidates;

• the decisions, and the timing of decisions, made by health regulatory agencies regarding our technology and product

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

9 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis