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Item 1A. Risk Factors

2026-03-23 compared with 2025-03-27 · 112 added, 131 removed, 471 unchanged (34% of the section changed)

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Risks Related to Our Business, Our Financial Results and Need for Additional Capital

We are involved in multiple patent infringement lawsuits in multiple jurisdictions to protect and assert our intellectual property rights against large, well-capitalized companies, which requires that we continue to expend substantial resources, and we may not be successful in these proceedings.

We are currently involved in patent infringement lawsuits in multiple jurisdictions against Moderna and Pfizer/BioNTech, which are large, well-capitalized companies.

These lawsuits have been ongoing for years and have required substantial investments of resources.

We are involved in patent infringement lawsuits to protect and assert our intellectual property rights against large, well-capitalized companies and the United States, which requires that we continue to expend substantial resources, and we may not be successful in these proceedings.

We are currently involved in a patent infringement lawsuit in the United States against Pfizer/BioNTech and, if filed by Moderna, the Moderna §1498 Appeal, which are actions against large, well-capitalized companies.

We are also involved in a lawsuit against the United States in the United States Court of Federal Claims, seeking to recover compensation for Moderna’s infringement for vaccine doses that were sold to the United States Government under a particular contract and were deemed by the District Court to be doses that were provided directly to United States Government employees.

Some of these lawsuits have been ongoing for years and have required substantial investments of resources.

We anticipate that these proceedings will continue to require similar investments over an extended period of time.

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We believe that it is critical to our future success to continue to pursue these actions, and we intend to do so.

Each action will result in court rulings and decisions about significant issues, such as claim construction, patent validity, infringement, jurisdiction and other matters, almost all of which are subject to an appeal process that are typically lengthy and unpredictable in terms of outcome.

Each action will result in court rulings and decisions about significant issues, such as claim construction, patent validity, infringement, the affirmative defense under §1498, jurisdiction and other matters, almost all of which are subject to appeal processes that are typically lengthy and unpredictable in terms of outcome.

Moreover, the ruling or decision in one proceeding is not necessarily indicative of rulings or decisions that may be issued in another proceeding, even if the factual and legal matters are similar.

We expect that various courts will issue significant rulings in several of our proceedings within the next year, and the disclosure of those rulings may cause substantial volatility in our share price and could impact our business, financial condition and results of operations.

We expect that various courts will issue significant rulings within the next year, and the disclosure of those rulings may cause substantial volatility in our share price and could impact our business, financial condition and results of operations.

We face risks associated with the Contingent Settlement Payment under the Moderna Settlement Agreement.

In addition to the aggregate $950.0 million Noncontingent Settlement Payment due to us and Genevant, the Moderna Settlement Agreement provides for a Contingent Settlement Payment of up to an aggregate $1.3 billion to us and Genevant, which is payable in full only upon the occurrence of an Arbutus/Genevant §1498 Victory (as defined above).

If the appellate court determines that §1498 bars all or some of our and Genevant’s claims, we may receive no payment at all or only a prorated portion of the $1.3 billion Contingent Settlement Payment.

While Moderna is subject to financial covenants under the Moderna Settlement Agreement to protect the payment of the Contingent Settlement Payment, there can be no assurance that we and Genevant will receive this payment in a timely manner, or at all, due to factors beyond our control, including, among others, the satisfaction of contractual conditions, administrative or procedural delays, or disputes regarding the interpretation or enforcement of the Moderna Settlement Agreement.

Moreover, under certain circumstances specified in the Moderna Settlement Agreement, if an Arbutus/Genevant §1498 Victory is subsequently overturned in Moderna’s favor in a final, non‑appealable decision, we and Genevant would be required to return any Contingent Settlement Payment previously received, together with interest.

Any obligation to repay such amounts could require us to use a significant portion of our available cash.

Additionally, any Contingent Settlement Payment we do receive may be subject to financial covenants on us to protect the potential repayment of the Contingent Settlement Payment, which would restrict our ability to freely use those proceeds during that period.

The Moderna §1498 Appeal and any subsequent related appeals are subject to substantial uncertainty regarding their outcomes, including the timing thereof, and there can be no assurance that an Arbutus/Genevant §1498 Victory will be achieved.

For more information, see “Item 1 – Business – Other Collaborations, Royalty Entitlements and Intellectual Property Litigation” and “Item 3 – Legal Proceedings.”

Our expectation of receiving proceeds from the Moderna Settlement Agreement, including through the Genevant License and our equity ownership interest in Genevant, may not be realized.

Any delay in receiving such payments, failure to receive some or all of the proceeds under the Moderna Settlement Agreement, or an obligation to return any Contingent Settlement Payments

previously received could materially adversely affect our liquidity, financial condition, results of operations, and ability to execute our business strategy.

We are in the early stages of our development, and there is a limited amount of information about us upon which you can evaluate our product candidates.

We have not begun to market or generate revenues from the commercialization of any of our product candidates.

We have only a limited history upon which you can evaluate our business and prospects as our product candidates are still at an early stage of development and thus we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area.

We have only a limited history upon which you can evaluate our business and prospects as our product candidates are still in the clinical trial stage of development and thus we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area.

For example, to continue the development of our cHBV programs, we would need to successfully:

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If we are unsuccessful in accomplishing these objectives, we may not be able to develop our product candidates, raise capital, expand our business or continue our operations.

The approach we are taking to discover and develop novel product candidates is unproven and may never lead to marketable products.

We are concentrating and intend to continue to concentrate our internal development efforts primarily on the development of product candidates targeting cHBV infection to ultimately develop a functional curative combination regimen.

We are concentrating and intend to continue to concentrate our internal development efforts primarily on the development of product candidates targeting cHBV infection.

Our future success depends in part on the successful development of these product candidates.

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Any compounds that we develop may not effectively address HBV persistence.

Even if we are able to develop compounds that address one or more of the key factors in the HBV life cycle (e.g., HBV

replication, HBsAg expression and immune reactivation), targeting these key factors has not been proven to functionally cure HBV.

If we cannot develop compounds to achieve our goal of functionally curing HBV internally, we may be unable to acquire additional product candidates on terms acceptable to us, or at all.

Even if we are able to acquire or develop product candidates that address one of these mechanisms of action in preclinical studies, we may not succeed in demonstrating safety and efficacy of the product candidate in clinical trials.

If we are unable to identify suitable compounds for preclinical and clinical development, we will not succeed in realizing our goal of a functional curative combination regimen for HBV.

Even if we are able to develop compounds that address one or more of the key factors in the HBV life cycle (e.g., HBV replication, HBsAg expression and immune reactivation), targeting these key factors has not been proven to functionally cure HBV.

We may require substantial additional capital to fund our operations.

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Our principal sources of liquidity are cash, cash equivalents and investments in marketable securities, which were $91.5 million as of December 31, 2025.

Within the next several years and subject to the results of our review of our pipeline and development plans for our hepatitis B programs, substantial additional funds would be required to continue with the active development of our pipeline product candidates and technologies.

While we do expect payments pursuant to the Moderna Settlement Agreement, we may be restricted from freely using the Contingent Settlement Payment while subject to repayment, and we are evaluating a return of capital to shareholders and may not retain all or part of the Noncontingent Settlement Payment.

Within the next several years, substantial additional funds would be required to continue with the active development of our pipeline product candidates and technologies.

In particular, our funding needs may vary depending on a number of factors including:

• the results of the review of our pipeline and development plans for our hepatitis B programs;

• costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matters against Moderna and Pfizer/BioNTech;

• revenues earned from our licensing partners, including Alnylam, Qilu and Acuitas;

• costs associated with prosecuting and enforcing our patent claims and other intellectual property rights, including our ongoing patent infringement matter against Pfizer/BioNTech, the Moderna §1498 Appeal (if filed by Moderna), and our lawsuit against the United States;

• a potential return of capital to our shareholders in connection with proceeds from the Moderna Settlement Agreement;

• revenues earned from our licensing partners, including Alnylam and Acuitas;

• the extent to which we continue the development of our product candidates or form licensing arrangements to advance our product candidates;

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• seek a sale of the Company or cease operations.

We have incurred losses in nearly every year since our inception and we anticipate that we will not achieve profits for the foreseeable future.

We have incurred operating losses in nearly every year since our inception and we anticipate that we will not achieve operating profits for the foreseeable future.

To date, we have had no product revenues.

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We continue to incur significant expenses related to our ongoing operations, including development of our product candidates.

We do not expect to achieve profits until such time as product sales, milestone payments and royalty payments, if any, generate sufficient revenues to fund our continuing operations.

We cannot predict if we will ever achieve profitability and, if we do, we may not be able to remain consistently profitable or increase our profitability.

We do not expect to achieve operating profits until such time as product sales, milestone payments and royalty payments, if any, generate sufficient revenues to fund our continuing operations.

We cannot predict if we will ever achieve operating profitability and, if we do, we may not be able to remain consistently profitable from operations or increase our operating profitability.

We expect to continue to incur significant expenses and operating losses for the foreseeable future.

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• experience any delays or encounter issues with any of the above.

The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

We do not generate revenues from product sales and may never be profitable.

Our ability to generate revenue and achieve profitability depends on our ability, alone or with strategic partners, to successfully complete the development of, and obtain the regulatory approvals necessary for, the manufacture and commercialization of our product candidates.

The operating losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

We do not generate revenues from product sales and may never be profitable from operations.

Our ability to generate product revenue and achieve operating profitability depends on our ability, alone or with strategic partners, to successfully complete the development of, and obtain the regulatory approvals necessary for, the manufacture and commercialization of our product candidates.

We do not anticipate generating significant revenues from product sales for the foreseeable future, if ever.

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Our expenses could increase beyond expectations if we are required by the FDA or other regulatory authorities outside the United States to perform clinical trials or other studies in addition to those that we currently anticipate.

Even if we are able to generate revenues from the sale of any approved product candidates, we may not become profitable and may need to obtain additional funding to continue operations.

Even if we are able to generate revenues from the sale of any approved product candidates, we may not become profitable from operations and may need to obtain additional funding to continue operations.

Risks Related to Development, Clinical Testing, Regulatory Approval, Marketing, and Coverage and Reimbursement of our Product Candidates

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If we fail to produce positive results in our planned clinical trials of any of our product candidates, the development timeline and regulatory approval and commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects, would be materially adversely affected.

Because we have limited resources, we may decide to pursue a particular product candidate and fail to advance product candidates that later demonstrate a greater chance of clinical and commercial success.

We are an early-stage company with limited resources and revenues.

The product candidates we currently have under development will require significant development, preclinical and clinical testing and investment of significant funds before their commercialization.

Because we have limited operational resources, we may decide to pursue a particular product candidate and fail to advance product candidates that later demonstrate a greater chance of clinical and commercial success.

We are a development stage company with limited operational resources and revenues.

The product candidates we currently have under development will require significant clinical testing and investment of significant funds before their commercialization.

Because of this, we must make strategic decisions regarding resource allocations and which product candidates to pursue.

There can be no assurance that we will be able to develop all potentially promising product candidates that we may identify.

Based on preliminary results, we may choose to advance a particular product candidate that later fails to be successful, and simultaneously forgo or defer further investment in other product candidates that later are discovered to

demonstrate greater promise in terms of clinical and commercial success.

If we make resource allocation decisions that later are shown to be inaccurate, our business and prospects could be harmed.

Several of our current clinical trials are being conducted outside the United States, and the FDA may not accept data from trials conducted in locations outside the United States.

Several of our current clinical trials are being conducted outside the United States and we may conduct further clinical trials outside the United States in the future.

We are currently conducting clinical trials in the United States, Moldova, Taiwan, South Korea, Hong Kong, the United Kingdom, Romania, Singapore, Italy, Canada, Ukraine, Australia and New Zealand, among other countries.

To the extent we do not conduct these clinical trials under an IND, the FDA may not accept data from such trials.

Several of our clinical trials are currently or were conducted outside the United States, and the FDA may not accept data from trials conducted in locations outside the United States.

We are currently conducting a clinical trial at least partially outside the United States and we may conduct further clinical trials outside the United States in the future.

We are currently conducting our clinical trial in the United States, Moldova, Taiwan, South Korea, and Hong Kong.

To the extent we do not conduct our clinical trials under an IND, the FDA may not accept data from such trials.

Although the FDA may accept data from clinical trials conducted outside the United States that are not conducted under an IND, the FDA’s acceptance of these data is subject to certain conditions.

For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles.

The trial population must also adequately represent the United States population, and the data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful.

In general, the patient population for any clinical trials conducted outside of the United States must be representative of the population for whom we intend to label the product in the United States.

The data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful.

The FDA also must have the ability to validate the foreign data through an on-site inspection or other appropriate means in the event the FDA considers such on-site inspection to be necessary.

In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its ability to verify the data and its determination that the trials complied with all applicable United States laws and regulations.

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The FDA or comparable regulatory authorities outside the United States may require us to conduct additional preclinical and clinical testing, which may delay or prevent approval of a product candidate and our commercialization plans, or cause us to abandon the development program.

Further, any approval we receive may be for fewer or more limited indications than we request, may not include labeling claims necessary for successful commercialization of the product candidate, or may be

contingent upon our conducting costly post-marketing studies.

Any of these scenarios could materially harm the commercial prospects of a product candidate, and our operations will be adversely effected.

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In addition, government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies.

For example, the current presidential administration recently established the Department of Government Efficiency, which implemented a federal government hiring freeze and announced certain additional efforts to reduce federal government employee headcount and the size of the federal government.

It is unclear how these executive actions or other potential actions by the presidential administration or other parts of the federal government will impact the FDA or other regulatory authorities that oversee the product development portion of our business.

It is not entirely clear how actions by the presidential administration or other parts of the federal government have already impacted and will continue to impact the FDA or other regulatory authorities that oversee the product development portion of our business.

These budgetary pressures may reduce the FDA’s ability to perform its responsibilities.

If a significant reduction in the FDA’s workforce occurs, the FDA’s budget is significantly reduced or a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a material adverse effect on our business.

If a significant reduction in the FDA’s workforce continues, the FDA’s budget is significantly reduced or another prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the development or marketing of our products, if approved, which could have a material adverse effect on our business.

If a particular product candidate causes undesirable side effects, then we may be unable to receive regulatory approval of or commercialize such product candidate.

We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of any of our product candidates, including the occurrence of undesirable side effects.

Such side effects could lead to clinical trial challenges, such as difficulties in subject recruitment, retention, and adherence, potential product liability claims, and possible termination by health authorities.

Such side effects could lead to clinical trial challenges, such as difficulties in subject recruitment, retention, and adherence, potential product

liability claims, and possible termination by health authorities.

These types of clinical trial challenges could in turn, delay or prevent regulatory approval of our product candidate.

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however, there are no assurances that FDA will accept the results of such clinical trial and may require us to conduct an additional Phase 1 clinical trial or additional nonclinical studies.

If the FDA does not accept the results of our Phase 1 clinical trial in New Zealand for AB-101 or requires us to conduct additional trials or studies, it may take a considerable period of time, the length of which is not certain at this time, and expense for us to fully address the FDA’s concerns.

Even if we are able to fully respond to the FDA’s current concerns, the FDA may subsequently make additional requests that we would need to fulfill prior to the lifting of the clinical hold.

It is possible that we will be unable to fully address the FDA’s concerns and, as a result, the clinical hold may never be lifted and we may never be able to initiate our AB-101 clinical program in the United States, which could have a material adverse effect on our business and financial prospects.

Current and planned clinical trials may be impacted as a result of the military action by Russia in Ukraine.

In February 2022, Russia commenced a military invasion of Ukraine.

Our Phase 1 clinical trial for AB-101 (AB-101-001) has a clinical trial site in Ukraine.

The military action in Ukraine could disrupt our ongoing AB-101-001 clinical trial and could increase our costs and disrupt future planned clinical development activities.

Although the length and impact of Russia’s military action is highly unpredictable, actions by Russia, or potentially other countries, against Ukraine and surrounding areas may adversely affect our ability to adequately conduct our ongoing AB-101-001 clinical trials and maintain compliance with relevant protocols due to, among other reasons, the prioritization of hospital resources away from clinical trials, reallocation or evacuation of site staff and subjects, or as a result of government-imposed curfews, warfare, violence, or other governmental action or events that restrict movement.

These developments may also result in our inability to access our clinical trial site in Ukraine for monitoring or to obtain data from such site or subjects going forward.

We could also experience disruptions in our supply chain or limits to our ability to provide sufficient investigational materials in Ukraine.

Alternative sites to fully and timely compensate for our clinical trial activities in Ukraine may not be available and we may need to find other countries to conduct our AB-101-001 clinical trials.

If our AB-101-001 clinical trial is interrupted, our clinical development plans for AB-101 could be significantly delayed, which would increase our costs, slow down our AB-101 development and approval process and jeopardize our ability to commence product sales and generate revenues.

Even if our product candidates obtain regulatory approval, they will remain subject to ongoing regulatory requirements and oversight.

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In addition, we will be subject to continued compliance with GMP and GCP requirements for any clinical trials that we conduct post-approval.

If we or any of the third parties on which we rely fail to meet those requirements, the FDA or comparable regulatory authorities outside the United States could initiate enforcement actions.

Potential consequences include the issuance of fines, warning letters, untitled letters or holds on clinical trials, product seizure or detention or refusal to permit the import or export of our product candidates, permanent injunctions and consent decrees, or the imposition of civil or criminal penalties, any of which could significantly impair our ability to successfully commercialize a given product.

If we or any of the third parties on which we rely fail to meet those applicable requirements, the FDA or comparable regulatory authorities outside the United States could initiate enforcement actions.

Potential consequences include the issuance of fines, warning letters, untitled letters or holds on clinical trials, product seizure or detention or refusal to permit the import or export of our products, if approved, permanent injunctions and consent decrees, or the imposition of civil or criminal penalties, any of which could significantly impair our ability to successfully commercialize a given product.

If the FDA or a comparable regulatory authority outside the United States becomes aware of new safety information, it can impose additional restrictions on how the product is marketed or may seek to withdraw marketing approval altogether.

Further, the United States and state governments have shown significant interest in establishing cost containment measures to limit the growth of government-paid health care costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs.

For example, the Patient Protection and Affordable Care Act, as amended (the ACA), intended to reduce the cost of health care, and it has substantially changed the way health care is financed by both government and private insurers.

While we cannot predict with certainty what impact on federal and other reimbursement policies this legislation will have in general or on our business specifically, the ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price we may charge for, any products we develop that receives regulatory approval.

Legislative changes to and regulatory changes under the ACA remain possible, but the nature and extent of such potential additional changes are uncertain at this time.

Further, the Inflation Reduction Act (IRA), among other things, established Medicare Part B and Part D inflation rebate schemes under which, generally, manufacturers will owe rebates if the average sales price of certain Part B drugs, or the average manufacturer price of certain covered Part D drugs, increases faster than the pace of inflation, and a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, beginning in 2026.

We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, the IRA, and other healthcare reform measures, including those that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.

Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including sometimes establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits and implementing marketing cost disclosure and transparency measures.

For example, the Patient Protection and the ACA, intended to reduce the cost of health care, and it has substantially changed the way health care is financed by both government and private insurers.

The ACA sometimes results in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price we may charge for, any products we develop that receives regulatory approval.

Further legislative changes to and regulatory changes under the ACA remain possible, but the nature and extent of such potential additional changes are uncertain at this time.

Further, the IRA, among other things, established Medicare Part B and Part D inflation rebate schemes under which, generally, manufacturers owe rebates if the average sales price of certain Part B drugs, or the average manufacturer price of certain covered Part D drugs, increases faster than the pace of inflation, and a drug price negotiation program under which the prices for certain Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition are capped by reference to, among other things, a specified non-federal average manufacturer price, beginning in 2026.

Also, the OBBBA is projected to decrease federal health care spending by approximately $1 trillion by reducing Medicaid spending and enrollment and making changes to federal Medicare spending.

We expect that the ACA, its implementation, efforts to modify or invalidate the ACA, or portions thereof, the IRA, the OBBBA, and other healthcare reform measures, including those that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to successfully commercialize our product candidates, if approved.

Additionally, individual states in the United States have passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including sometimes regulating how manufacturers make the 340B Drug Pricing Program ceiling price available on the market and establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits and implementing marketing cost disclosure and transparency measures.

The marketability of any products for which we receive regulatory approval for commercial sale may suffer if the United States or other government and third-party payors fail to provide adequate coverage and reimbursement.

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As a significant unmet medical need exists for HBV, there are several large and small pharmaceutical companies focused on delivering therapeutics for treatment of HBV.

These companies include, but are not limited to Vir Biotechnology, GlaxoSmithKline, Gilead Sciences, Assembly, Aligos Therapeutics, Bluejay Therapeutics, Inc., AusperBio Therapeutics, Inc.

and Brii Biosciences Ltd.

These companies include, but are not limited to GSK plc, Gilead Sciences, Inc., Assembly Biosciences, Inc., Aligos Therapeutics, Inc., AusperBio Therapeutics, Inc., Brii Biosciences Limited, Mirum Pharmaceuticals, Inc., and Precision Biosciences, Inc.

Further, in addition to current investigational therapeutics in development, it is likely that additional drugs will become available in the future for the treatment of HBV.

Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and significantly greater experience in the discovery and development of product candidates, as well as in obtaining regulatory

approvals of those product candidates in the United States and other countries.

Many of our current and potential future competitors also have significantly more experience commercializing drugs that have been approved for marketing.

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Such competitors could also recruit our employees, which could negatively impact our level of expertise and the ability to execute on our business plan.

We are largely dependent on the future commercial success of our HBV product candidates.

Our ability to generate revenues and become profitable will depend in large part on the future commercial success of our HBV product candidates, if approved.

If any product that we commercialize in the future does not gain an adequate level of acceptance among physicians, patients and third parties, or our estimates of the number of people who have cHBV infection are lower than expected, we may not generate significant product revenues or become profitable.

Our ability to generate product revenues and become profitable from operations is largely dependent on the future commercial success of our HBV product candidates.

Our ability to generate product revenues and become profitable from operations will depend in large part on the future commercial success of our HBV product candidates, if approved.

Market acceptance by physicians, patients and third-party payors of the products we may commercialize will depend on a number of factors, some of which are beyond our control, including:

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For example, even if our products have been approved by the FDA or comparable foreign regulatory authorities, physicians and patients may not immediately be receptive to them and may be slow to adopt them.

If our products do not achieve an adequate level of acceptance among physicians, patients and third-party payors, we may not generate meaningful revenues and we may not become profitable.

If our products do not achieve an adequate level of acceptance among physicians, patients and third-party payors, we may not generate meaningful revenues and we may not become profitable from operations.

We may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability lawsuits.

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We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be.

Inadequate coverage and reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval.

Inadequate coverage and reimbursement may impact the demand for, or the price of, any

product for which we obtain marketing approval.

If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize any product candidates that we develop.

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These legislative and regulatory changes may negatively impact the reimbursement for any future products, following approval.

We are subject to United States and Canadian healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages and reputational harm.

fines, disgorgement, exclusion from participation in United States federal healthcare programs, curtailment or restricting of our operations and diminished profits and future earnings.

We are subject to United States and Canadian healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages and reputational harm, fines, disgorgement, exclusion from participation in United States federal healthcare programs, curtailment or restricting of our operations and diminished profits from operations and future earnings.

Healthcare providers, physicians and others will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval.

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We may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA.

Although we are not directly subject to HIPAA — other than with respect to providing certain employee benefits — we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA;

• numerous federal and state laws and regulations that address privacy and data security, including state data breach notifications laws, state health information and/or genetic privacy laws, artificial intelligence laws passed in the United States, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, and the Health Breach Notification Rule, the CCPA, as amended by the CPRA), govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways, thus complicating the compliance efforts.

Although we are not directly subject to HIPAA, other than with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA, and could potentially be subject to other civil and/or criminal penalties if we obtain, use, or disclose information in a manner not permitted by other privacy and data security and consumer protection laws;

• numerous federal and state laws and regulations that address privacy and data security, including state data breach notifications laws, state health information and/or genetic privacy laws, artificial intelligence laws passed in the United States, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, and the Health Breach Notification Rule, and the CCPA), govern the collection, use, disclosure and protection of health-related and other personal information, many of which differ from each other in significant ways, thus complicating the compliance

Compliance with these laws is difficult, constantly evolving, and time-consuming, and companies that do not comply with these laws may face government enforcement actions, civil and/or criminal penalties, or private action, as well as adverse publicity that could negatively affect our operating results and business;

• activities outside of the United States implicate local and national data protection standards, impose additional compliance requirements and generate additional risks of enforcement for non-compliance.

The European Union’s GDPR, including as implemented in the United Kingdom and other data protection, privacy and similar national, state/provincial and local laws, including the EU AI Act, may restrict the access, use, storage, disclosure or other processing

activities concerning patient health information abroad.

The GDPR and other data protection, privacy and similar national, state/provincial and local laws, including the EU AI Act, may restrict the access, use, storage, disclosure or other processing activities concerning patient health information abroad.

Compliance efforts will likely be an increasing and substantial cost in the future.

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It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of these laws or any other governmental laws and regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from United States federal healthcare programs, contractual damages, reputational harm, disgorgement, curtailment or restricting of our operations, any of which could substantially disrupt our operations and diminish our profits and future earnings.

If any of the physicians or other providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

The risk of our being found in violation of these laws is increased by the fact that many of them are subject to evolving interpretation and application by courts and enforcement and regulatory authorities.

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Those rebates are based on pricing data reported by the manufacturer on a monthly and quarterly basis to CMS.

These data include the

average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.

These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.

If we fail to pay the required rebate amount or report pricing data on a timely basis, we may be subject to civil monetary penalties and/or termination from the Medicaid Drug Rebate program.

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Federal law requires that a manufacturer also participate in the 340B Drug Pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.

The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to a specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as hospitals that serve a disproportionate share of low-income patients.

The 340B program requires participating manufacturers to agree to charge no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs to specified “covered entities,” including community health centers and other entities that receive certain federal grants, as well as hospitals that serve a disproportionate share of low-income patients.

The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program.

If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price for any of our commercialized products, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for HRSA to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs, once commercialized, would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.

Further, the IRA establishes a Medicare Part B and Part D inflation rebate scheme and a drug price negotiation program, with the first negotiated prices to take effect in 2026.

It also makes several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025).

If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price for any of our commercialized products, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for the Health Resources and Services Administration (HRSA) to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs, once commercialized, would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.

Further, the IRA established a Medicare Part B and Part D inflation rebate scheme and a drug price negotiation program, with the first negotiated prices taking effect in 2026.

It also made several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025).

Manufacturers may be subject to civil monetary penalties for certain violations of the negotiation and inflation rebate provisions and an excise tax during a noncompliance period under the negotiation program.

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Pricing and rebate calculations are complex, vary across products and programs, and are often subject to interpretation by the manufacturer, governmental agencies, and courts.

A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit corrected data up to three years after those data originally were due.

three years after those data originally were due.

Restatements and recalculations increase the costs for complying with the laws and policies governing the Medicaid Drug Rebate program and could result in an overage or underage in our rebate liability for past quarters.

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Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an FSS contract and charge a price to the Big Four Agencies that is no higher than the FCP, which is a price calculated pursuant to a statutory formula.

The FCP is derived from a calculated price point called the Non-FAMP, which the manufacturer calculates and reports to the VA on a quarterly and

annual basis.

The FCP is derived from a calculated price point called the Non-FAMP, which the manufacturer calculates and reports to the VA on a quarterly and annual basis.

Pursuant to applicable law, knowing provision of false information in connection with a Non-FAMP filing can subject a manufacturer to significant penalties for each item of false information.

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Alnylam received FDA approval in August 2018 and launched ONPATTRO immediately upon approval.

We are entitled to low to mid-single-digit royalty payments escalating based on sales performance and received our first royalty payment in the fourth quarter of 2018.

We are entitled to low to mid-single-digit royalty payments escalating based on sales performance and received our first royalty

payment in the fourth quarter of 2018.

In July 2019, we sold this royalty entitlement to OMERS, the defined benefit pension plan for municipal employees based in the Province of Ontario, Canada, effective as of January 1, 2019, for $20 million in gross proceeds before advisory fees.

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

From the inception of the royalty sale through December 31, 2024, an aggregate of $ 25.0 million of royalties have been collected by OMERS.

From the inception of the royalty sale through December 31, 2025, an aggregate of $ 26.5 million of royalties have been earned by OMERS.

The possibility and timing of any possible reversion of the royalty entitlement is affected by many factors including:

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• commencement of marketing in additional countries.

ONPATTRO sales have declined each of the last two years due primarily to sales from Alnylam’s next generation RNAi product AMVUTTRA cannibalizing sales of ONPATTRO.

ONPATTRO sales have declined each of the last three years due primarily to sales from Alnylam’s next generation RNAi product AMVUTTRA cannibalizing sales of ONPATTRO.

If Alnylam’s sales of ONPATTRO continue to decline, the royalty entitlement may never revert back to us.

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If these licensing agreements are unsuccessful, or anticipated milestone or royalty payments are not received, our business could be materially adversely affected.

We expect that we will depend in part on our licensing agreements with Alnylam and Qilu to provide revenue to partially fund our operations, especially in the near term.

We expect that we will depend in part on our licensing agreements with (or involving) Alnylam to provide revenue to partially fund our operations, especially in the near term.

Furthermore, our strategy is to enter into various additional arrangements with corporate and academic collaborators, licensors, licensees and others for the development, clinical testing, manufacturing, marketing and commercialization of our product candidates or other products based upon our technology.

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In addition, there can be no assurance that the licensing partners will not pursue alternative technologies or develop alternative products either on their own or in collaboration with others, including our competitors.

We depend on Qilu for the development and commercialization of imdusiran in China, Hong Kong, Macau and Taiwan.

In December 2021, we entered into the License Agreement with Qilu, pursuant to which we granted Qilu an exclusive (except as to certain retained rights), sublicensable, royalty-bearing license, under certain intellectual property owned by us, to develop, manufacture and commercialize imdusiran in Greater China and Taiwan.

The timing and amount of any milestone and royalty payments we may receive under the License Agreement will depend, in part, on the efforts of Qilu.

We depend on Qilu to comply with all applicable laws relative to the development and commercialization of imdusiran in Greater China and Taiwan.

Under the License Agreement, 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.

Any failure by Qilu to use such commercially reasonable efforts could have a material adverse impact on financial results and operations.

Additionally, if Qilu were to violate, or was alleged to have violated, any laws or regulations during the performance of its obligations to us, we could suffer financial and reputational harm or other negative outcomes.

Any termination, breach or expiration of the License Agreement could also have a material adverse impact on our business by reducing or eliminating the potential for us to receive milestone and royalty payments.

If that were to occur, we may be required to devote additional time, costs and attention to pursue the manufacture, development and commercialization of imdusiran in Greater China and Taiwan.

In certain situations, Qilu has the ability to terminate the License Agreement and retain all rights to manufacture, develop and commercialize imdusiran in Greater China and Taiwan with no obligation to make any additional milestone or royalty payments to us.

If conflicts arise between our collaboration or licensing partners and us, our collaboration or licensing partners may act in their best interest and not in our best interest, which could adversely affect our business.

Conflicts may arise with our collaboration or licensing partners, including Alnylam and Qilu, if they pursue alternative therapies for the diseases that we have targeted or develop or prioritize alternative products either on their own or in collaboration with others.

Competing products, either developed by our present collaboration or licensing partners or any future

partners or to which our present partners or any future partners have rights, may result in development delays or the withdrawal of their support for one or more of our product candidates.

Additionally, conflicts may arise if there is a dispute about the progress of, or other activities related to, the clinical development of a product candidate, the achievement and payment of a milestone amount, the payment of royalties or the ownership of intellectual property that is developed during the course of the collaborative arrangement.

Similarly, the parties to a licensing agreement may disagree as to which party owns newly developed products.

If an agreement is terminated as a result of a dispute and before we have realized the benefits of the collaboration or licensing arrangement, our reputation could be harmed, and we might not obtain revenues that we anticipated receiving.

If conflicts arise between our licensing partners and us, our licensing partners may act in their best interest and not in our best interest, which could adversely affect our business.

Conflicts may arise with our licensing partners, including Alnylam, if they pursue alternative therapies for the diseases that we have targeted or develop or prioritize alternative products either on their own or in collaboration with others.

Competing products, either developed by our present licensing partners or any future partners or to which our present partners or any future partners have rights, may result in development delays or the withdrawal of their support for one or more of our product candidates.

If an agreement is terminated as a result of a dispute and before we have realized the benefits of the licensing arrangement, our reputation could be harmed, and we might not obtain revenues that we anticipated receiving.

We rely on third parties to conduct our clinical trials, and if they fail to fulfill their obligations, perform services in a satisfactory manner, and/or comply with applicable legal or regulatory requirements, our development plans may be adversely affected.

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• drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and other government agencies to ensure compliance with cGMP and other government regulations and corresponding foreign standards.

do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures;

We do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures;

• if any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we may not own, or may have to share, the intellectual property rights to such improvements;

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There can be no assurance that our patents, if issued, will be held valid or enforceable by a court or that a competitor’s technology or product would be found to infringe such patents.

For example, in April 2023, following the institution of inter partes review of a patent in our LNP patent portfolio, such patent was found to be invalid.

For example, in April 2023, following the institution of inter partes review of a patent in our LNP patent portfolio, such patent was found to be invalid, and in January 2026, the EPO revoked our ’254 Patent.

For more information on past and ongoing intellectual property challenges and litigation, see “Item 3—Legal Proceedings.”

We have incurred, and may in the future continue to incur, substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights, and we may not be successful in one or more of these lawsuits or proceedings, any of which could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.

proceedings, any of which could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common shares to decline.

There has been significant litigation in the biotechnology industry over contractual obligations, patents and other proprietary rights, and we may become involved in various types of litigation that arise from time to time.

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Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations as a result of claims of patent infringement or violation of other intellectual property rights and the costs associated with litigation, which could have a material adverse effect on our business, financial condition, and operating results and could cause the market value of our common shares to decline.

Additionally, we continue to protect and defend our intellectual property rights, certain of which are the subject of ongoing lawsuits against Moderna and Pfizer/BioNTech for their use of our patented LNP technology in their COVID-19 mRNA-LNP vaccines.

Additionally, we continue to protect and defend our intellectual property rights, certain of which are the subject of an ongoing lawsuit against Pfizer/BioNTech, and if filed by Moderna, the Moderna §1498 Appeal, for their use of our patented LNP technology in their COVID-19 mRNA-LNP vaccines.

These lawsuits consume significant resources.

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General Risk Factors

Our success depends on our new management team and Board of Directors, which is conducting a review of our pipeline and development plans for our hepatitis B programs.

In the first quarter of 2025, we announced the appointment of five new members of 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 57% resulting in a total workforce after reductions of 19 employees.

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

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

Our new management team and Board may make further adjustments and reassess our short and long-term business portfolio and development strategies.

These potential changes could lead to shifts in our company’s strategic direction, which may impact our operations, financial condition, and overall business performance.

We could face liability from our controlled use of hazardous and radioactive materials in our development processes.

We use certain radioactive materials, biological materials and chemicals, including organic solvents, acids and gases stored under pressure, in our development activities.

Our use of radioactive materials is regulated by the United States Nuclear Regulatory Commission and Pennsylvania Department of Environmental Protection for the possession, transfer, import, export, use, storage, handling and disposal of radioactive materials.

Our use of biological materials and chemicals, including the use, manufacture, storage, handling and disposal of such materials and certain waste products is regulated by a number of federal, state and local laws and regulations.

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These threats may arise from persons inside our organization, authorized persons with access to systems inside our organization or those with whom we do business, or unauthorized individuals.

The risk of a cyberattack or other cybersecurity incidents has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Although to date the cybersecurity incidents we have experienced have not resulted in a material impact on us, such events impacting either our own systems, networks and technology, or those of our contractors, consultants, vendors, or other business partners could threaten the confidentiality, integrity and availability of our data or data upon which we rely, including regulated personal information, confidential information or intellectual property.

The risk of cyberattacks or other cybersecurity incidents has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

This could result in unauthorized access to, loss of, or modification of critical data, the loss of Company funds and/or the failure or interruption of critical operations.

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The cost and operational consequences of responding to cybersecurity incidents, including disruption, degradation, or manipulation of systems, networks or technology, or implementing remediation measures could be significant.

Threat actors may use AI tools to automate and enhance cybersecurity attacks against us.

We use software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems.

Moreover, local data protection laws may require us to notify such cybersecurity incidents with competent regulators and impacted individuals, resulting in an increase of costs and resources, and potential enforcement and civil claims.

Additionally, while we have implemented security measures that we believe are appropriate and continue to enhance cybersecurity protections, a regulator could deem our security measures not to be appropriate given the lack of prescriptive measures in certain data protection laws.

Increased regulation of data collection, use and retention practices,

including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business.

To the extent that any disruption or cybersecurity incident results or appears to result in such interruption or loss, we could incur material financial, legal, business or reputational harm, including regulatory fines, penalties, scrutiny, or intervention, or claims by third parties, including that we have breached privacy- or confidentiality-related obligations.

Increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business.

We rely on third party vendors and service providers to support various aspects of our business process.

However, these third parties may pose risks related to data security, compliance, and contractual obligations.

A breach or failure by a third party to adequately protect our data could have adverse consequences for our business and reputation.

claims by third parties, including that we have breached privacy- or confidentiality-related obligations.

A significant cybersecurity incident may also deter new clinical trial participants from participating in our trials.

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And, as cyberattacks increase in frequency and magnitude, we may be unable to obtain insurance in amounts and on terms we view as adequate for our operations.

We may acquire other assets or businesses, or form strategic alliances or collaborations or make investments in other companies or technologies that could harm our financial condition, results of operations or cash flows, dilute our shareholders’ ownership, incur debt or cause us to incur significant expense.

As part of our business strategy, we may pursue acquisitions of assets or businesses, or strategic alliances or collaborations, to expand our existing technologies and operations.

We may form strategic alliances or collaborations that could harm our financial condition, results of operations or cash flows, dilute our shareholders’ ownership, incur debt or cause us to incur significant expense.

As part of our business strategy, we may pursue strategic alliances or collaborations.

We may not identify or complete these transactions in a timely manner, on a cost-effective basis, or at all, and we may not realize the anticipated benefits of any such transaction, any of which could have a detrimental effect on our financial condition, results of operations or cash flows.

We may not be able to find suitable acquisition candidates, and if we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business and we may incur debt or assume unknown or contingent liabilities in connection therewith.

Integration of an acquired company or assets may also disrupt ongoing operations, require the hiring of additional personnel and the implementation of additional internal systems and infrastructure, especially the acquisition of commercial assets, and require management resources that would otherwise focus on developing our existing business.

We may not be able to find suitable collaboration partners or identify other investment opportunities, and we may experience losses related to any such investments.

To finance any acquisitions or collaborations, we may choose to issue debt or equity securities as consideration.

We may not be able to find suitable collaboration partners.

To finance collaborations, we may choose to issue debt or equity securities as consideration.

Any such issuance of shares would dilute the ownership of our shareholders.

If the price of our common shares is low or volatile, we may not be able to acquire other assets or businesses or fund a transaction using our equity securities as consideration.

Alternatively, it may be necessary for us to raise additional capital for acquisitions through public or private financings.

Alternatively, it may be necessary for us to raise additional capital through public or private financings.

Additional capital may not be available on terms that are favorable to us, or at all.

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

What changed 10-K

Item 1A. Risk Factors