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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-06 · 142 added, 120 removed, 344 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 and six months ended June 30, 2025.

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

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• the expected cost, timing and results of our clinical development plans and clinical trials, including our clinical collaborations with third parties;

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

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

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

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

• the potential of our product candidates to improve upon the standard of care to treat hepatitis B infection and provide clinical benefits to hepatitis B patients;

• obtaining necessary regulatory approvals;

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(Moderna) and against Pfizer Inc.

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

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

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

With respect to the Moderna lawsuit in the United States, fact discovery, expert discovery and summary judgment briefing have been completed, 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%.

Public oral hearings for the two cases in the Unified Patent Court are scheduled for May 2026, and the trial in the Canadian case is set to begin in September 2027.

With respect to the Pfizer/BioNTech lawsuit, the court issued a claim construction ruling in September 2025, which construed the disputed claim terms in a manner we generally consider to be favorable.

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, halted preparations for a potential 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.

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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.

SAB members are advising 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.

Effective August 4, 2025, Anuj Hasija resigned from our Board due to his transition to a full-time executive role at another company 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

Our strategy is focused on maximizing opportunities for our cHBV development programs and, through our exclusive license with Genevant, our in-house developed LNP technology.

LNP technology

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.

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

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

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

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

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

Our and Genevant’s LNP technology relies on microscopic particles built from four carefully selected types of fat-like molecules to shelter and protect nucleic acid molecules, including ribonucleic acid (RNA) molecules like the messenger RNA (mRNA) utilized in COVID-19 mRNA-LNP vaccines.

This technology enables the mRNA to travel through the human body to a target cell and through the target cell’s membrane, where it releases the mRNA.

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

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

With respect to the Moderna lawsuit in the United States, the 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.

Fact discovery, expert discovery and summary judgment briefing have been completed, 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.

Public oral hearings for the two cases in the Unified Patent Court are scheduled for May 2026, and the trial in the Canadian case is set to begin in September 2027.

cHBV programs

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

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

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

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

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

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

Functional cure is defined as sustained HBsAg seroclearance 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).

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

Our current ongoing evaluation of our HBV strategy also includes analysis of imdusiran’s potential to suppress HBV DNA and HBV RNA replication and HBsAg expression, without any immunotherapeutics.

Our HBV product pipeline includes the following:

• 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 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.

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

Clinical data generated thus far has shown imdusiran provides meaningful reductions in HBsAg, HBV DNA and HBV RNA, and leads to functional cure in some patients, while being generally safe and well-tolerated.

Benefits were observed in patients across all evaluated HBV genotypes (A to E).

To date, eight patients 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.

An additional 40 patients across our Phase 2a clinical trials were able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran (46% (48/105) of all Phase 2a patients achieved functional cure or remained off NA therapy after discontinuing NA therapy following treatment with imdusiran).

Of the 18 patients who consented to long-term follow-up, which includes all functionally cured patients and 10 patients who discontinued and remained off NA therapy for 48 weeks, 94% continue to remain off NA therapy for between 58 and 109 weeks.

One functionally cured patient seroreverted but remains virally suppressed and off NA 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.

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

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

To date, we have reported a total of eight patients with cHBV who have been functionally cured following treatment with imdusiran and ongoing 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.

Our belief in these trials was that if we can lower HBsAg and promote immunity, we may achieve sustained HBsAg seroclearance and HBV DNA <LLOQ, potentially leading to a functional cure in many patients with cHBV.

Currently, patients with cHBV have limited treatment options - either NA therapy, which requires lifelong treatment, or a finite duration of IFN, which is poorly tolerated and has serious complications and side effects.

We believe patients can see significant benefits even without functional cure if they are well enough to be able to discontinue NA therapy and maintain viral suppression.

To date, a total of eight patients with cHBV achieved functional cure following treatment with imdusiran and NA therapy in combination with either IFN or with low dose nivolumab plus an immunotherapeutic, with seven of the eight patients continuing to sustain functional cure for periods ranging between 58 to 109 weeks.

Seven of the eight total patients who achieved functional cure at the 60mg dose of imdusiran had HBsAg less than 1000 IU/mL at baseline.

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

In addition to the patients who achieved functional cure, 40 more patients were able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran.

In total, 46% (48/105) of all Phase 2a patients either achieved functional cure or remained off NA therapy after discontinuing NA therapy following treatment with imdusiran.

Of the 10 patients who were able to discontinue and remain off NA therapy for at least 48 weeks that are being followed in our rollover study, nine have continued to remain off NA therapy for periods ranging between 83 to 108 weeks.

All eight patients who achieved functional cure are participating in a rollover study and have maintained HBV DNA <LLOQ for between 58 to 109 weeks.

These results suggest that imdusiran has lasting durability in helping patients maintain viral suppression.

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

• 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.

Those patients who achieved a functional cure also seroconverted.

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

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

Furthermore, an additional 10 patients who did not achieve functional cure were able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran.

At the AASLD – The Liver Meeting in November 2025, we presented new analysis from our IM-PROVE I Phase 2a clinical trial showing beneficial clinical outcomes were observed across all evaluated HBV genotypes (A to E).

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

• Imdusiran in combination with VTP-300, Barinthus Biotherapeutics plc’s (Barinthus) HBV immunotherapeutic, and 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 achieved 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.

Furthermore, an additional 30 patients (including some HBeAg positive patients) who did not achieve functional cure were able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran.

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 with beneficial clinical outcomes.

Our Product Candidates

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

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

Our pipeline consists of two product candidates that are designed to suppress HBV DNA and HBV RNA, reduce HBsAg and other viral antigens and/or boost HBV-specific immune responses, to allow cHBV patients to become and remain treatment-free, as follows:

We continue to explore pipeline opportunities in the form of potential strategic alliances, in order to accelerate the development of these programs.

RNAi therapeutic (imdusiran, AB-729)

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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, 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.

We are developing an RNAi therapeutic, imdusiran, that is designed to reduce HBV DNA, HBV RNA, HBsAg and other HBV antigen expression in people with cHBV infection.

Reducing HBsAg and HBV DNA are widely believed to be key prerequisites to enable a patient’s immune system to reawaken and respond against the virus.

Imdusiran has the following advantages over other RNAi therapeutics in development for cHBV infection:

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– 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 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.

– Delivered at a lower dose and less frequently (4, 8 or 12 week intervals).

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

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

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

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

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

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

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

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

We have completed 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.

Our primary intent for this trial was to initially lower HBsAg, HBV DNA and HBV RNA levels with imdusiran and then administer IFN as an immunomodulator to promote

anti-HBV immune reawakening.

Our belief in this trial was that if we can lower HBsAg and HBV DNA levels and promote immune reawakening, we may achieve sustained HBsAg seroclearance and HBV DNA <LLOQ, potentially leading to a functional cure.

After patients received 24-weeks of dosing with imdusiran (60mg every 8 weeks, 4 doses) plus ongoing NA therapy, patients were randomized into one of four cohorts to receive a short course of IFN plus ongoing NA therapy for either 12 or 24 weeks, with or without up to two additional doses of imdusiran across an additional 16 week period.

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

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

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

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

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

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

Additionally, a total of 10 patients in IM-PROVE I who did not achieve functional cure were still able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran.

Across all cohorts and all baseline HBsAg levels, 37% (16/43) of patients either achieved functional cure or remained off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran at 60mg.

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

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

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

The most common imdusiran-related treatment emergent adverse events (TEAEs) were injection site bruising and transient alanine aminotransferase elevations, which occurred in association with decreasing HBsAg levels and/or markers of immune activation, and which returned to baseline values in all instances.

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

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

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

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

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

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

Our primary intent for this trial was to initially lower HBsAg, HBV DNA and HBV RNA levels with imdusiran and then administer VTP-300 as an immunomodulator to promote anti-HBV immune reawakening.

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

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

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

At week 48, all patients were evaluated for eligibility to discontinue NA therapy and were 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, 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.

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 were followed for an additional 24 to 48 weeks.

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

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

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

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 seroclearance in cHBV patients and that 23% (3/13) of patients who received the treatment regimen with low dose nivolumab achieved HBsAg seroclearance 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 achieved functional cure.

Additionally, a total of 30 patients in IM-PROVE II who did not achieve functional cure were still able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran at 60mg.

A total of 52% (32/62) of patients either achieved functional cure or remained off NA therapy for at least 48 weeks after discontinuing NA therapy following treatment with imdusiran at 60mg, across all cohorts and all baseline HBsAg levels, and both HBeAg negative and positive patients.

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

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

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

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

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

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

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

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

At the AASLD - The Liver Meeting in November 2025, we presented cumulative data across all of our imdusiran clinical trials demonstrating that imdusiran was safe and well-tolerated, and that beneficial clinical outcomes in our Phase 2a clinical studies were potentially linked to immune reawakening in patients.

Imdusiran Treatment Without Immunotherapeutic

In our single and multiple ascending dose Phase 1b clinical trial for imdusiran, we enrolled HBeAg negative and positive patients, as well as HBV DNA positive patients not on NA therapy.

Across all arms, 71% (44/62) of patients achieved HBsAg levels below 100 IU/mL, including 5% (3/62) of patients achieving HBsAg seroclearance.

Additionally, 56% (5/9) of patients who elected to discontinue NA therapy remained off NA therapy for at least three years after discontinuation.

Furthermore, all patients in all imdusiran clinical studies showed significant early decreases in HBsAg levels, often observed after the first or second dose of imdusiran.

In Group B of IM-PROVE II, after just 24 weeks of imdusiran dosing at just 60mg with only background NA therapy and no other combination agent, 30% (6/20) of patients were able to remain off NA therapy for at least 48 weeks after discontinuing NA therapy, including one patient who achieved HBsAg seroclearance.

Based on the effect imdusiran alone appears to have on reducing HBsAg levels and suppressing HBV DNA and HBV RNA replication, we are also evaluating imdusiran as a treatment without any immunotherapeutic.

Oral PD-L1 Inhibitor (AB-101)

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

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

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

Part 3 of this clinical trial is ongoing.

At the AASLD - The Liver Meeting in November 2025, we presented a Poster of Distinction highlighting maximal PD-L1 receptor occupancy between 68-100% at the 30mg daily dose.

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

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

Other Collaborations, Royalty Entitlements and Intellectual Property Litigation

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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.

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

Alnylam’s ONPATTRO, which represents the first approved application of our LNP technology, was approved by the FDA and the European Medicines Agency (EMA) during the third quarter of 2018 and was launched by Alnylam immediately upon approval in the United States.

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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 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.

From the inception of the royalty sale through September 30, 2025, an aggregate of $26.3 million of royalties have been earned by OMERS.

We also are receiving 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.

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

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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.

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 is specifically allocated to Moderna’s vaccine for RSV known as mRESVIA ™ , and that, in the event there is no such specific allocation to mRESVIA in such award or settlement, the parties will discuss an appropriate allocation in good faith.

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

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

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.

As of September 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.

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In February 2023, the U.S.

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

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.

Department of Justice filed a Statement of Interest in the action, and 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 claim construction order.

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

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

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.

Fact discovery, expert discovery and summary judgment briefing have been completed, and a jury trial is scheduled for March 2026.

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

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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.

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

The five international lawsuits are as follows:

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

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

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.

Where permitted to do so in the initial pleadings, we and Genevant submitted evidence from testing of commercial Moderna product samples sourced from the U.S.

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

In October 2025, where permitted to do so, we submitted additional testing evidence from the U.S.

case that indicates samples produced by Moderna in the U.S.

proceedings also contain lipid nanoparticles falling under the protective scope of the claims of our lipid composition patents.

Public oral hearings for the Unified Patent Court cases are scheduled for May 2026, and the trial in the Canadian case is set to begin in September 2027.

Patent Infringement Litigation vs.

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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.

The claim construction hearing occurred in December 2024, and in September 2025, the court issued a claim construction ruling, which construed the disputed claim terms in a manner we generally consider to be favorable.

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.

On April 5, 2018, Moderna and Merck, Sharp & Dohme Corporation (Merck) filed Notices of Opposition to our 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 in September 2018 and a hearing was conducted before the Opposition Division of the EPO in October 2019.

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

In July 2025, Merck, Arrowhouse GmbH and Keltie LLP filed three additional revocation actions against the ‘767 patent.

All opponents have submitted their opposition briefs 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.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGEMENTS AND ESTIMATES

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

This management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles.

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Operating expenses 9,188 22,779 45,902 66,983

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

Loss from operations (8,659) (21,440) (32,870) (62,386)

Other income 917 1,723 3,125 4,998

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

Net loss $ (7,742) $ (19,717) $ (29,745) $ (57,388)

Revenues are summarized in the following tables:

Three Months Ended June 30,

Three Months Ended September 30,

2025 % of Total 2024 % of Total

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Total revenue $ 529 100 % $ 1,339 100 %

Six Months Ended June 30,

Nine Months Ended September 30,

2025 % of Total 2024 % of Total

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Total revenue $ 13,032 100 % $ 4,597 100 %

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.

Total revenue decreased $0.8 million for the three months ended September 30, 2025 compared to the same period in 2024, due primarily to 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.

Total revenue increased $8.4 million for the nine months ended September 30, 2025, compared to the same period in 2024, due primarily to recognizing the remaining $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 period compared to the 2024 period.

Operating expenses

Operating expenses are summarized in the following tables:

Three Months Ended June 30,

Three Months Ended September 30,

2025 % of Total 2024 % of Total

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Total operating expenses $ 9,188 100 % $ 22,779 100 %

Six Months Ended June 30,

Nine Months Ended September 30,

2025 % of Total 2024 % of Total

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

Research and development expenses decreased $10.1 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.

Research and development expenses decreased $8.5 million and $25.0 million for the three and nine months ended September 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, halt preparations for a potential 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.

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 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.

General and administrative expenses decreased $1.5 million and $5.2 million for the three and nine months ended September 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

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in October 2014.

In general, as time passes and assuming no changes to the assumptions related to the contingency, the fair value of the contingent consideration increases as the progress of our programs get closer to triggering contingent payments based on certain sales milestones of our first commercial product for cHBV.

In general, as time passes and assuming no changes to the assumptions related to the contingency, the fair value of the contingent consideration increases as the progress of our programs gets closer to triggering contingent payments based on certain sales milestones of our first commercial product for cHBV.

As imdusiran continues to progress through clinical trials, we will adjust our assumptions regarding probability of success commensurate with the progression of the program, which will increase the fair value of the liability.

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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, $2.4 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.

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.

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

As of September 30, 2025, there was $0.5 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Interest expense (23) (29) (79) (107)

Foreign exchange gain (loss) 21 (8) 25 (21)

Foreign exchange (loss) gain (12) 5 13 (16)

Total other income $ 917 $ 1,723 $ 3,125 $ 4,998

Interest income

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.

The decrease in interest income for the three and nine months ended September 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 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.

Interest expense for the three and nine months ended September 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.

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

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Effect of foreign exchange rate changes on cash and cash equivalents 13 (16)

Increase in cash and cash equivalents 1,082 36,503

(Decrease) / Increase in cash and cash equivalents (13,922) 5,561

Cash and cash equivalents, beginning of period 36,330 26,285

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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 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.

For the nine months ended September 30, 2025, $35.0 million of cash was used in operating activities compared to $54.5 million used in operating activities for the nine months ended September 30, 2024, a decrease of $19.6 million.

The decrease was due primarily to our decisions to cease all discovery efforts, halt preparations for a potential 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 nine months ended September 30, 2025, net cash provided by investing activities was $16.9 million, resulting primarily from maturities of investments in marketable securities of $131.4 million, partially offset by additional investments in marketable securities of $114.5 million.

For the nine months ended September 30, 2024, net cash provided by investing activities was $9.5 million, which resulted primarily from maturities of investments in marketable securities of $108.0 million, partially offset by additional investments in marketable securities of $98.3 million.

For the nine months ended September 30, 2025, net cash provided by financing activities was $4.1 million, which was primarily related to $3.9 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

For the nine months ended September 30, 2024, net cash provided by financing activities was $50.6 million, which included $44.1 million in proceeds from sales of common shares pursuant to the Sale Agreement (as defined below) and $6.1 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

Sources of Liquidity

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.

As of September 30, 2025, we had cash, cash equivalents and investments in marketable securities of $93.7 million.

We had no outstanding debt as of September 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 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.

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

For the nine months ended September 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

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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 June 30, 2025, we have recorded an aggregate of $25.9 million of non-cash royalty revenue for royalties earned by OMERS.

From the inception of the royalty sale through September 30, 2025, we have recorded an aggregate of $26.3 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.

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

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

In December 2021, we entered into a technology transfer and exclusive license agreement with Qilu pursuant to which we granted Qilu an exclusive (with certain exceptions), sublicensable, royalty-bearing license, under certain intellectual property owned by us, to develop, manufacture and commercialize imdusiran for the treatment or prevention of cHBV infection in 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 and made an equity investment of $15.0 million, both received in January 2022, and agreed to pay us up to $245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones.

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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