What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-23 compared with 2025-03-27 · 195 added, 165 removed, 604 unchanged (37% of the section changed)

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Arbutus Biopharma Corporation (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Arbutus Biopharma Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of contingent consideration liability

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As of December 31, 2025, the contingent consideration liability was $8.4 million.

Auditing the valuation of the contingent consideration liability was complex and highly judgmental due to the significant estimation required in determining the fair value.

Auditing the valuation of the contingent consideration liability was complex and highly judgmental due to the higher degree of estimation required in determining the fair value.

In particular, the fair value estimate was sensitive to significant assumptions such as the probability of successfully commercializing a treatment for the hepatitis B virus, the timing of future payments, and the discount rate.

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Consolidated Balance Sheets

(Expressed in thousands of US Dollars, except share and per share amounts)

(Expressed in thousands of US Dollars, except share amounts)

December 31, 2025 December 31, 2024

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Total current assets 94,456 127,316

Property and equipment, net of accumulated depreciation 3,309 4,674

Investments in marketable securities, non-current — 6,284

Property and equipment, net of accumulated depreciation and impairment 32 3,309

Right of use asset — 1,048

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Interest income 4,068 6,585

Gain on sale of property and equipment 674 —

Interest expense ( 97 ) ( 137 )

Foreign exchange (loss) / gain ( 49 ) 25

Foreign exchange gain / (loss) 14 ( 49 )

Total other income 4,659 6,399

Loss before income taxes ( 69,920 ) ( 72,849 )

Income tax expense — —

Net loss $ ( 33,501 ) $ ( 69,920 )

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Consolidated Statement of Stockholders’ Equity

(Expressed in thousands of US Dollars, except share and per share amounts)

(Expressed in thousands of US Dollars, except share amounts)

Common Shares

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Stock-based compensation — — 8,986 — — 8,986

Issuance of common shares pursuant to the Open Market Sales Agreement 12,020,257 29,852 — — — 29,852

Issuance of common shares pursuant to the Open Market Sale Agreement 16,499,999 44,123 — — — 44,123

Issuance of common shares pursuant to exercise of ESPP 227,333 536 ( 140 ) — — 396

Issuance of common shares pursuant to exercise of stock options 2,958,264 14,355 ( 6,878 ) — — 7,477

Issuance of common shares upon settlement of RSUs 410,482 1,190 ( 1,190 ) — — —

Unrealized gain on available-for-sale securities — — — — 286 286

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Stock-based compensation — — 6,953 — — 6,953

Issuance of common shares pursuant to the Open Market Sales Agreement 16,499,999 44,123 — — — 44,123

Issuance of common shares pursuant to exercise of ESPP 60,493 252 ( 71 ) — — 181

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Consolidated Statements of Cash Flows

(Expressed in thousands of US Dollars, except share and per share amounts)

(Expressed in thousands of US Dollars)

Year ended December 31,

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Non-cash items:

Depreciation 1,380 1,404

Loss on impairment of lab equipment 167 —

Depreciation and amortization 363 1,380

Loss on impairment of leasehold improvements and lab equipment 2,811 167

Gain on sale of property and equipment ( 674 ) —

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Non-cash interest expense 95 127

Net accretion and amortization of investments in marketable securities ( 3,135 ) ( 2,196 )

Net accretion of investments in marketable securities ( 2,349 ) ( 3,135 )

Net change in operating items:

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Issuance of common shares pursuant to exercise of stock options 5,540 7,477

Issuance of common shares pursuant to exercise of ESPP 396 535

Issuance of common shares pursuant to ESPP 181 396

Net cash provided by financing activities 5,721 51,996

Effect of foreign exchange rate changes on cash and cash equivalents 14 ( 49 )

Increase / (decrease) in cash and cash equivalents $ 10,045 $ ( 4,491 )

(Decrease) / increase in cash and cash equivalents $ ( 18,322 ) $ 10,045

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

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Arbutus Biopharma Corporation (“Arbutus” or the “Company”) is a clinical-stage biopharmaceutical company focused on infectious disease.

The Company is currently developing imdusiran (AB-729), its proprietary, conjugated GalNAc, subcutaneously-delivered RNAi therapeutic, and AB-101, its proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).

Through its ownership stake in and its license to Genevant Sciences, Ltd (Genevant), the Company is also focused on maximizing opportunity for its in-house developed Lipid Nanoparticle (LNP) delivery technology.

The Company continues to protect and defend its intellectual property, which is the subject of its ongoing lawsuits against Moderna Therapeutics, Inc.

(Moderna) and against Pfizer Inc.

and BioNTech SE (collectively, Pfizer/BioNTech) for their use of the Company’s patented lipid nanoparticle (LNP) delivery technology in their COVID-19 mRNA-LNP vaccines.

With respect to the Moderna lawsuit in the United States, a trial date has been set for September 24, 2025.

On March 3, 2025, the Company announced that, along with Genevant, it filed five international lawsuits against Moderna in connection with their use of the Company’s LNP technology in their COVID-19 mRNA-LNP and RSV vaccines.

With respect to the Pfizer/BioNTech lawsuit, the claim construction hearing occurred in December 2024.

The court is expected to provide its ruling on the claim construction and issue a further scheduling order, including the date for trial, in 2025.

The Company is currently developing imdusiran (AB-729), its proprietary, GalNAc-conjugated, subcutaneously-delivered ribonucleic acid interference (RNAi) therapeutic, and AB-101, its proprietary oral PD-L1 inhibitor, for the treatment of chronic hepatitis B (cHBV).

The Company continues to protect and defend its intellectual property, which is the subject of its ongoing lawsuit against Pfizer Inc.

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

The court issued a claim construction ruling in September 2025, which construed the disputed claim terms in a manner the Company generally considers to be favorable.

The parties are awaiting further scheduling in the litigation.

On March 3, 2026, the Company, along with Genevant Sciences GmbH and its parent (collectively, Genevant), entered into a settlement agreement (the Moderna Settlement Agreement) to resolve all patent infringement litigation and patent revocation proceedings involving Moderna, Inc.

and its affiliates (collectively, Moderna) pending in the United States and internationally (the Moderna LNP Litigation).

Under the terms of the Moderna Settlement Agreement, Moderna will make an aggregate $950.0 million noncontingent lump sum payment (the Noncontingent Settlement Payment) to the Company and Genevant on or before July 8, 2026.

In addition, Moderna is obligated to pay the Company and Genevant an additional aggregate contingent lump sum payment of $1.3 billion (the Contingent Settlement Payment) upon a ruling that is favorable to the Company and Genevant in a limited appeal related to 28 U.S.C.

§1498 (§1498) that Moderna is allowed to file pursuant to the Moderna Settlement Agreement (the Moderna §1498 Appeal).

Under the Company’s license with Genevant, it is entitled to receive, after deduction of litigation costs, 20% of the Noncontingent Settlement Payment.

In addition, as of the date of this annual report, the Company owns approximately 16% of the outstanding common equity of Genevant.

The Company is currently evaluating a return of capital to its shareholders in the third quarter of calendar year 2026, following the receipt of its portion of the Noncontingent Settlement Payment.

At December 31, 2025, the Company had an aggregate of $ 91.5 million in cash, cash equivalents and investments in marketable securities.

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

The Company believes it has sufficient cash, cash equivalents and investments in marketable securities to fund its operations for at least the next 12 months.

The success of the Company is dependent on obtaining the necessary regulatory approvals to bring one or more of its product candidates to market and achieve profitable operations.

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

The success of the Company’s operations is dependent on obtaining the necessary regulatory approvals to bring one or more of its product candidates to market and achieve profitability from operations.

The Company’s development activities and the commercialization of its products are dependent on its ability to successfully complete these activities and to obtain adequate financing through a combination of financing activities and operations.

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

As of December 31, 2024, Arbutus owned approximately 16 % of the common equity of Genevant and the carrying value of Arbutus’ investment in Genevant was zero .

As of December 31, 2025, Arbutus owned approximately 16 % of the outstanding common equity of Genevant and the carrying value of Arbutus’ investment in Genevant was zero .

See Note 5 for more information.

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Substantially all of the Company’s premises, property and equipment are located in the United States.

See Note 7 for more information.

Revenue from collaborations and licenses

The Company generates revenue primarily through collaboration agreements and license agreements.

Such agreements may require the Company to deliver various rights and/or services, including intellectual property rights and licenses or development and manufacturing services.

Under such agreements, the Company is generally eligible to receive non-refundable upfront payments, funding for development and manufacturing services, milestone payments, and royalties.

The Company generates revenue through certain collaboration agreements and license agreements.

Such agreements may require the Company to deliver various rights and/or services, including intellectual property rights or licenses and research and development services.

Under such agreements, the Company is generally eligible to receive non-refundable upfront payments, funding for research and development services, milestone payments and royalties.

The Company’s collaboration agreements fall under the scope of Accounting Standards Codification (ASC) Topic 808, Collaborative Arrangements (ASC 808), when both parties are active participants in the arrangement and are exposed to significant risks and rewards.

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and (v) recognize revenue when or as a performance obligation is satisfied.

(i) the customer can benefit from the good or service either on its own or together with other resources that are readily available;

and (ii) the good or service is separately identifiable from other promises in the contract.

In contracts where the Company has more than one performance obligation to provide its customer with goods or services, each performance obligation is evaluated to determine whether it is distinct based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract.

The consideration under the contract is then allocated between the distinct performance obligations based on their respective relative stand-alone selling prices.

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Consideration associated with at-risk substantive performance milestones, including sales-based milestones, is recognized as revenue when it is probable that a significant reversal of the cumulative revenue recognized will not occur.

Sales-based royalties received in connection with licenses of intellectual property are subject to a specific exception in the revenue standards, whereby the consideration is not included in the transaction price and recognized in revenue until the customer’s subsequent sales or usages occur.

Sales-based royalties received in connection with licenses of intellectual property are subject to a

specific exception in the revenue standards, whereby the consideration is not included in the transaction price and recognized in revenue until the customer’s subsequent sales or usages occur.

The Company accounts for its lease under ASC 842, Leases , which generally requires the recognition of operating and financing lease liabilities with corresponding right-of-use assets on the balance sheet.

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Expense is recognized over the vesting period for all awards and commences at the grant date for time-based awards.

For awards where vesting may be accelerated if certain performance conditions are achieved, the Company will accelerate recognition of any unrecognized expense if and when it becomes probable that the performance conditions will be satisfied.

Forfeitures are recognized as they occur.

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Recent accounting pronouncements

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASC 2023-07), which requires disclosure of significant segment expenses and other segment items on an annual and interim basis under ASC 280.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

The amendments in this ASU should be applied on a retrospective basis to all periods presented.

The Company has implemented this guidance as of December 31, 2024.

See note 14 for further details.

In December 2023, the FASB issued ASU No.

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The ASU indicates that all entities will apply the guidance prospectively with an option for retroactive application to each period presented in the financial statements.

The Company has not determined the impact ASU 2023-09 may have on the Company’s financial statement disclosures.

The Company has implemented ASU 2023-09 for the year ended December 31, 2025 on a prospective basis.

See Note 15 for more information.

The Company has reviewed all other recently issued standards and has determined that such standards will not have a material impact on the Company’s financial statements or do not otherwise apply to the Company’s operations.

Fair value measurements

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The following table presents information about inputs used in measuring the fair value of the contingent consideration:

As of December 31, 2024

As of December 31, 2025 As of December 31, 2024

Timing of milestone payments 2035 - 2038 2032 - 2035

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Investments in marketable securities, current — 86,293 — 86,293

Investments in marketable securities, non-current — 6,284 — 6,284

Total $ 36,330 $ 86,293 $ — $ 122,623

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Cash equivalents

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

Money market funds $ 10,218 $ — $ — $ 10,218

Total $ 10,218 $ — $ — $ 10,218

Investments in marketable short-term securities

US corporate bonds 30,776 27 ( 6 ) 30,797

US treasury bills $ 37,411 $ 41 $ — $ 37,452

US government bonds 35,965 46 — 36,011

Total $ 73,376 $ 87 $ — $ 73,463

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Investments in marketable short-term securities

US government agency bonds $ 17,918 $ — $ ( 44 ) $ 17,874

US corporate bonds $ 30,776 $ 27 $ ( 6 ) $ 30,797

Yankee bonds 2,000 — $ ( 17 ) 1,983

US government bonds 9,001 — ( 26 ) 8,975

Total $ 99,964 $ 30 $ ( 276 ) $ 99,718

Investments in marketable long-term securities

US corporate bonds 6,273 18 ( 7 ) 6,284

US treasury bills 55,467 29 55,496

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

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

The contractual maturity of the $ 86.3 million of short-term marketable securities held by the Company as of December 31, 2024 is less than one year.

As of December 31, 2024, the Company did not hold any long-term marketable securities.

As of December 31, 2023, the Company’s $ 99.7 million of short-term marketable securities had contractual maturities of less than one year, while the Company’s $ 6.3 million of long-term marketable securities had maturities of more than one year, but less than five years.

At December 31, 2024 and December 31, 2023, the Company had 6 and 27 , respectively, available-for-sale investment debt securities in an unrealized loss position without an allowance for credit losses.

The contractual maturity of the $ 73.5 million and $ 86.3 million of short-term marketable securities held by the Company as of December 31, 2025 and December 31, 2024, respectively, was less than one year.

As of December 31, 2025 and December 31, 2024, the Company did not hold any long-term marketable securities.

At December 31, 2025, the Company had no available-for-sale investment debt securities in an unrealized loss position.

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

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

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

Accrued interest receivable on investments in marketable securities was $ 0.3 million and $ 0.6 million at December 31, 2024 and 2023, respectively, and is included in prepaid expenses and other current assets.

Accrued interest receivable on investments in marketable securities was $ 0.3 million at both December 31, 2025 and 2024 and is included in prepaid expenses and other current assets.

The Company had realized gains on investments of less than $ 0.1 million for both of the years ended December 31, 2025 and 2024 .

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

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

(Genevant), a company focused on nucleic acid- and gene editing-based therapeutics enabled by the Company’s LNP and ligand conjugate delivery technologies.

The Company licensed rights to its LNP and ligand conjugate delivery platforms to Genevant outside of HBV, except to the extent certain rights had already been licensed to other third parties (the Genevant License).

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

The Company licensed rights to its LNP and ligand conjugate delivery platforms to Genevant outside of hepatitis B (HBV), except to the extent certain rights had already been licensed to other third parties (the Genevant License).

The Company retained all rights to its LNP and conjugate delivery platforms for HBV.

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As of December 31, 2024 and 2023, the carrying value of the Company’s investment in Genevant was zero and the Company owned approximately 16 % of the common equity of Genevant.

The Company had one operating lease for its office and laboratory space as of December 31, 2024.

The Company’s corporate headquarters is located at 701 Veterans Circle, Warminster, Pennsylvania.

The lease expires on April 30, 2027, and the Company has the option of extending the lease for two additional five-year terms.

As of December 31, 2025 and 2024, the carrying value of the Company’s investment in Genevant was zero and the Company owned approximately 16 % of the outstanding common equity of Genevant.

In the first quarter of 2025, the Board decided to exit our corporate headquarters at 701 Veterans Circle, Warminster, Pennsylvania.

The lease for this property expires on April 30, 2027 and was the Company’s sole operating lease as of December 31, 2025.

The Company accounts for its lease under ASC 842, Leases .

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Operating lease right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term.

The lease does not provide an implicit rate so in determining the present

value of lease payments, the Company utilized its incremental borrowing rate for the lease, which was 9.0 %.

The lease does not provide an implicit rate so in determining the present value of lease payments, the Company utilized its incremental borrowing rate for the lease, which was 9.0 %.

The Company recognizes lease expense on a straight-line basis over the remaining lease term.

During the years ended December 31, 2024 and 2023, the Company incurred total operating lease expenses of $ 0.7 million and $ 0.6 million, respectively, which included lease expenses associated with fixed lease payments of $ 0.5 million in both years, and variable payments associated with common area maintenance and similar expenses of $ 0.2 million in both years.

During the years ended December 31, 2025 and 2024, the Company incurred total operating lease expenses of $ 0.3 million and $ 0.7 million, respectively, which included lease expenses associated with fixed lease payments of $ 0.2 million and $ 0.5 million, respectively, and variable payments associated with common area maintenance and similar expenses of $ 0.1 million and $ 0.2 million, respectively.

Weighted average remaining lease term and discount rate were as follows:

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Supplemental cash flow information related to the Company’s operating lease was as follows:

Twelve Months Ended December 31,

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities $ 634 $ 616

Future minimum lease payments under the Company’s operating lease as of December 31, 2024 are as follows:

Future minimum lease payments under the Company’s operating lease as of December 31, 2025 were as follows:

As of December 31, 2025

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Property and equipment

The Company’s property and equipment balances as of the years ended December 31, 2024 and 2023 are as follows:

During the year ended December 31, 2025 and related to its 2025 restructuring and planned exit from its corporate headquarters in Warminster, Pennsylvania (Note 16), the Company recorded impairment charges of $1.9 million and $0.9 million for leasehold improvements and laboratory equipment, respectively.

In connection with the exit from the building and disposal of equipment, the Company also wrote off the fully-depreciated or fully-impaired balances associated with these assets in 2025.

The Company’s property and equipment balances as of the years ended December 31, 2025 and 2024 were as follows:

Cost Accumulated depreciation Net book value

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$ 16,305 $ ( 12,996 ) $ 3,309

Depreciation expense for the years ended December 31, 2024 and 2023 was $ 1.4 million for both years.

Depreciation expense for the years ended December 31, 2025 and 2024 was $ 0.4 million and $ 1.4 million, respectively.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are comprised of the following:

Accounts payable and accrued liabilities were comprised of the following:

December 31, 2025 December 31, 2024

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Professional fee accruals 1,075 1,164

Restructuring liabilities 640 —

Total $ 5,459 $ 7,564

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

In taking these steps to streamline the organization, the Company implemented a 40 % reduction in its workforce, primarily affecting the discovery and general and administrative functions.

As a result, the Company recorded a one-time restructuring charge of $ 3.7 million in the third quarter of 2024, of which there was less than $ 0.1 million in medical benefit costs accrued as of December 31, 2024.

In March 2025, the Company implemented changes to focus its efforts on advancing the clinical development of imdusiran and AB-101 by ceasing all discovery efforts, implementing workforce reductions, and halting preparations for a potential IM-PROVE III clinical trial.

In addition, in 2025, the decision was made to exit the Company’s corporate headquarters in Warminster, Pennsylvania and to discontinue in-house scientific research.

The Company recognized $ 12.9 million of restructuring charges in 2025, of which there was $ 0.6 million in severance and medical benefit costs and lease expenses accrued as of December 31, 2025.

Sale of future royalties

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

From the inception of the royalty sale through 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.

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

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

In addition to the two royalty entitlements, the Company is entitled to receive payments upon the achievement of contractual milestones related to Alnylam’s use of the Company’s proprietary LNP technology for other products.

Contingencies and commitments

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In October 2014, Arbutus Inc., the Company’s wholly-owned subsidiary, acquired all of the outstanding shares of Enantigen pursuant to a stock purchase agreement.

The amount paid to Enantigen’s selling shareholders could be up to an additional $ 102.5 million in sales performance milestones in connection with the sale of the first commercialized product by Arbutus for the treatment of HBV, regardless of whether such product is based upon assets acquired under this agreement, and a low single-digit royalty on net sales of such first commercialized HBV product, up to a maximum royalty payment of $ 1.0 million that, if

paid, would be offset against Arbutus’ milestone payment obligations.

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

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Qilu Pharmaceuticals Co, Ltd.

In December 2021, the Company entered into a technology transfer and exclusive licensing agreement (the License Agreement) with Qilu, pursuant to which the Company granted Qilu an exclusive (except as to certain retained rights), sublicensable, royalty-bearing license, under certain intellectual property owned by the Company, to develop, manufacture and commercialize imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (Greater China and Taiwan).

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

(Qilu), pursuant to which the Company granted Qilu a sublicensable, royalty-bearing license, under certain intellectual property owned by the Company, which was non-exclusive as to development and manufacturing and exclusive with respect to commercialization of imdusiran, including pharmaceutical products that include imdusiran, for the treatment or prevention of hepatitis B in China, Hong Kong, Macau and Taiwan (Greater China and Taiwan).

In partial consideration for the rights granted by the Company, Qilu paid the Company a one-time upfront cash payment of $ 40.0 million on January 5, 2022 and agreed to pay the Company up to $ 245 million, net of withholding taxes, upon the achievement of certain technology transfer, development, regulatory and commercialization milestones (the Milestone Payments).

Qilu paid $ 4.4 million of withholding taxes to the Chinese taxing authority on the Company’s behalf, related to the upfront cash payment.

In addition, Qilu also agreed to pay the Company double digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan.

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

Qilu is responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan.

Qilu is required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.

A joint development committee has been established between the Company and Qilu to coordinate and review the development, manufacturing and commercialization plans.

Both parties also have entered into a supply agreement and related quality agreement pursuant to which the Company will manufacture or have manufactured and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until the Company has completed manufacturing technology transfer to Qilu and Qilu has received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.

In addition, Qilu agreed to pay the Company double-digit royalties into the low twenties percent based upon annual net sales of imdusiran in Greater China and Taiwan.

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

Qilu was responsible for all costs related to developing, obtaining regulatory approval for, and commercializing imdusiran for the treatment or prevention of hepatitis B in Greater China and Taiwan.

Qilu was required to use commercially reasonable efforts to develop, seek regulatory approval for, and commercialize at least one imdusiran product candidate in Greater China and Taiwan.

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

Both parties also entered into a supply agreement and related quality agreement pursuant to which the Company would manufacture and supply Qilu with all quantities of imdusiran necessary for Qilu to develop and commercialize in Greater China and Taiwan until the Company completed its manufacturing technology transfer to Qilu and Qilu received all approvals required for it or its designated contract manufacturing organization to manufacture imdusiran in Greater China and Taiwan.

Concurrent with the execution of the license agreement, the Company entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of the Company’s common shares at a purchase price of USD $ 4.19 per share, which was a 15 % premium on the thirty-day average closing price of the Company’s common shares as of the close of trading on December 10, 2021 (the Share Transaction).

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

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

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

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

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

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

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

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

(i) rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (the Qilu License);

and (ii) drug supply

obligations and manufacturing technology transfer (the Manufacturing Obligations).

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

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

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

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

transfer of the manufacturing know-how was complete.

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

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

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

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

Transaction Price Cumulative Collaboration Revenue Recognized Deferred License Revenue

(in thousands)

Combined performance obligation $ 50,445 $ 38,038 $ 12,407

Less contract asset $ ( 1,973 )

Total deferred license revenue $ 10,434

The Company recognized $ 1.4 million of revenue based on labor hours expended by the Company on its Manufacturing Obligations during the twelve months ended December 31, 2024, and $ 10.7 million during the twelve months ended December 31, 2023.

As of December 31, 2024, the balance of the deferred license revenue was $ 10.4 million, of which $ 7.6 million was classified as a current liability and $ 2.9 million was classified as a non-current liability.

The $ 4.4 million of withholding taxes paid by Qilu on behalf of the Company was recorded as income tax expense during the twelve months ended December 31, 2022.

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

The Company recognized less than $ 0.1 million of related amortization expense for the twelve months ended December 31, 2024.

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

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

Assembly Biosciences, Inc.

In August 2020, the Company entered into a clinical collaboration agreement with Assembly Biosciences, Inc.

(Assembly) to evaluate imdusiran in combination with Assembly’s first-generation HBV core inhibitor (capsid inhibitor) candidate vebicorvir (VBR) and standard-of-care NA therapy for the treatment of patients with HBV infection.

Assembly has completed enrollment in the clinical trial.

In July 2022, Assembly announced its plan to discontinue development of VBR.

Despite this, in consultation with Assembly, the Company continued dosing patients in this Phase 2a proof-of-concept clinical trial in order to fully and accurately assess the results.

Preliminary data from 65 patients indicated that adding VBR to imdusiran and NA therapy does not positively or negatively impact the reduction of HBsAg compared to imdusiran and NA therapy alone.

Accordingly, the Company and Assembly mutually agreed to discontinue the clinical trial following completion of the final, on-

treatment visit at week 48.

The Company and Assembly shared in the costs of the collaboration.

The Company did not incur any costs related to the collaboration in 2024, and incurred $ 1.3 million of costs related to the collaboration during 2023.

Such costs were reflected in research and development in the statements of operations and comprehensive loss.

Except to the extent necessary to carry out Assembly’s responsibilities with respect to the collaboration trial, the Company has not provided any license grant to Assembly for use of imdusiran.

Due to the conclusion of the strategic partnership with Qilu, the Company recognized the remainder of the $ 9.6 million of deferred revenue during the twelve months ended December 31, 2025.

The Company also recognized $ 0.8 million of revenue based on labor hours expended by the Company on its Manufacturing Obligations during the twelve months ended December 31, 2025.

The Company recognized $ 1.4 million of revenue during the twelve months ended December 31, 2024, related to labor hours expended.

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

The Company recognized the remainder of the amortization expense at the conclusion of the strategic partnership, recognizing a total of $ 0.2 million of amortization expense during the twelve months ended December 31, 2025.

The Company recognized amortization expense of less than $ 0.1 million for the twelve months ended December 31, 2024.

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

Barinthus Biotherapeutics plc

In July 2021, the Company entered into a clinical collaboration agreement with Barinthus Biotherapeutics plc (Barinthus) to evaluate imdusiran followed by Barinthus’ VTP-300, an HBV antigen specific immunotherapy, and ongoing nucleos(t)ide analogue therapy in patients with cHBV infection.

Subsequently, the clinical trial was amended to include an additional treatment arm with an approved PD-1 monoclonal antibody inhibitor, nivolumab (Opdivo ® ).

The Company is responsible for managing this Phase 2a proof-of-concept clinical trial, subject to oversight by a joint development committee comprised of representatives from the Company and Barinthus.

The Company and Barinthus retain full rights to their 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.

However, in January 2025, Barinthus announced a shift in its strategic business focus that included postponing further development of VTP-300 after the completion of their ongoing VTP-300 clinical trials.

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

The Company incurred $ 2.1 million and $ 1.8 million of costs related to the collaboration, net of Barinthus’s 50 % share, during the years ended December 31, 2024 and 2023, respectively, which are classified as research and development in the statements of operations and comprehensive loss.

In July 2021, the Company entered into a clinical collaboration agreement with Barinthus Biotherapeutics plc (Barinthus), formerly Vaccitech plc, pursuant to which the Company 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 immunotherapeutic, administered after imdusiran in patients with cHBV infection.

This clinical trial was amended to include a treatment arm with the addition of an approved PD-1 monoclonal antibody inhibitor, nivolumab (Opdivo).

The Company was responsible for managing this Phase 2a proof-of-concept clinical trial, subject to oversight by a joint development committee comprised of representatives from the Company and Barinthus.

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

The Company incurred $ 1.4 million and $ 2.1 million of costs related to the collaboration, net of Barinthus’s 50 % share, during the years ended December 31, 2025 and 2024, respectively, and reflected those costs in research and development in the statements of operations and comprehensive loss.

Royalty Entitlements

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and Acuitas Therapeutics, Inc.

In 2012, the Company entered into the LNP License Agreement with Alnylam that entitles Alnylam to develop and commercialize products with the Company’s LNP technology in exchange for milestone and royalty payments.

The Company has two royalty entitlements to Alnylam’s global net sales of ONPATTRO.

In 2012, the Company entered into a license agreement with Alnylam Pharmaceuticals, Inc.

(Alnylam) that entitles Alnylam to develop and commercialize products with the Company’s LNP technology.

Alnylam’s ONPATTRO, which represents the first approved application of the Company’s LNP technology, was launched by Alnylam in 2018.

In addition, the Company is entitled to receive payments upon the achievement of contractual milestones related to Alnylam’s use of the Company’s proprietary LNP technology for other products.

Alnylam launched ONPATTRO, the first approved application of the Company’s LNP technology, in 2018.

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

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See Note 9 for further details.

The Company also has 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 Therapeutics, Inc.

The Company is also 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 Therapeutics, Inc.

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

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Milestone payments that are not within the control of the Company or the licensee, such as those that require regulatory approvals, are not considered probable of being achieved until those approvals are received.

The Company did not receive any payments from Gritstone during the years ended December 31, 2024 or 2023.

The Company did not receive any payments from Gritstone or Seattle Project Corp.

during the years ended December 31, 2025 or 2024.

Revenues from the Company’s royalty entitlements are summarized in the following table:

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Qilu Pharmaceutical Co., Ltd.

Other milestone and royalty payments 500 —

Non-cash royalty revenue

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The Company did not utilize any of the December 2024 Prospectus Supplement pursuant to the Sale Agreement prior to the termination of the Sale Agreement.

During the years ended December 31, 2024 and 2023, the Company issued 16,499,999 and 12,020,257 common shares, respectively, under the Sale Agreement, resulting in net proceeds of approximately $ 44.1 million and $ 29.9 million, respectively.

During the year ended December 31, 2024, the Company issued 16,499,999 common shares under the Sale Agreement, resulting in net proceeds of approximately $ 44.1 million.

During the year ended 2025, the Company issued no common shares under the Sale Agreement.

Stock-based compensation

Awards outstanding and available for issuance

During the year ended December 31, 2024, the Company had stock options outstanding under the following plans (collectively, the Plans):

During the year ended December 31, 2025, the Company had stock options outstanding under the following plans (collectively, the Arbutus Plans):

the 2016 Omnibus Share and Incentive Plan (the 2016 Plan), the 2011 Omnibus Share Compensation Plan (the 2011 Plan);

the 2023 and 2019 inducement grants;

and the OnCore Option Plan.

and the 2023 inducement grant.

During the year ended December 31, 2025, the Company had restricted stock units outstanding under the 2016 Plan.

As of December 31, 2024, the aggregate number of shares authorized for awards under all Plans was 41,790,202 .

As of December 31, 2024, the Company had 15,451,687 options and 1,493,136 restricted stock units outstanding and 16,674,175 awards available for issuance under the Plans.

As of December 31, 2025, the aggregate number of shares authorized for awards under the Arbutus Plans was 40,493,870 .

As of December 31, 2025, the Company had 12,430,999 options and 1,529,959 restricted stock units outstanding and 16,881,800 awards available for issuance under the Arbutus Plans.

The Company issues new common shares of stock to settle options exercised.

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Options granted generally vest over four years for employees and for directors’ initial grants, and immediately for directors’ annual grants.

In June 2019, the Company provided an inducement grant of 1,112,000 options to its newly hired Chief Executive Officer.

These options were awarded in a separate plan as non-qualified awards and were governed by the substantially the same terms as the 2016 Plan.

As of December 31, 2024, there were no options outstanding under this separate plan, as all options under this plan were exercised during 2024.

In July 2023, the Company provided an inducement grant of 500,000 options in connection with the hiring of its General Counsel and Chief Compliance Officer, which is governed by substantially the same terms as the 2016 Plan.

Hereafter, information on options governed by the 2016 Plan, the 2011 Plan and the 2023 and 2019 inducement grants (the Arbutus Plans) is presented on a consolidated basis as the terms of the plans are similar.

In July 2023, the Company provided an inducement grant of 500,000 options in connection with the hiring of its then-General Counsel and Chief Compliance Officer, which is governed by substantially the same terms as the 2016 Plan.

Hereafter, information on options governed by the Arbutus Plans is presented on a consolidated basis as the terms of the plans are similar.

Stock options under the Arbutus Plans

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Balance as of December 31, 2025 12,430,999 $ 3.39

The intrinsic value of options exercised under the Arbutus Plans during 2024 and 2023 are $ 1.4 million and less than $ 0.1 million, respectively.

The intrinsic value of options exercised under the Arbutus Plans during 2025 and 2024 was $ 1.8 million and $ 1.4 million, respectively.

The weighted average grant-date fair value of stock options granted during the year ended December 31, 2025 and 2024 was $ 2.34 and $ 1.87 , respectively.

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Weighted-average term remaining 5.2 years

The assumptions used in the Black-Scholes option-pricing for grants made during the years ended December 31, 2024 and 2023 are as follows:

The assumptions used in the Black-Scholes option-pricing for grants made during the years ended December 31, 2025 and 2024 were as follows:

December 31, 2025 December 31, 2024

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The Company considers all available information when estimating the fair value of its stock option grants.

Stock options under the other plans

As of December 31, 2024, the Company had no liability option awards outstanding and no stock option awards outstanding under the OnCore Option Plan, as the last of these stock option awards expired or were fully exercised, respectively, during 2024.

Restricted Stock Units under the 2016 Plan

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Employee Stock Purchase Plan

In May 2020, the Company’s stockholders approved the 2020 Employee Stock Purchase Plan (the ESPP) which became effective on May 28, 2020.

In May 2020, the Company’s shareholders approved the 2020 Employee Stock Purchase Plan (the ESPP) which became effective on May 28, 2020.

A total of 1,500,000 common shares were reserved for issuance under the ESPP.

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As of December 31, 2025, there were 554,175 shares remaining for issuance under the ESPP.

For both of the years ended December 31, 2024 and 2023, the Company recognized $ 0.1 million of stock-based compensation expense related to the ESPP.

For both of the years ended December 31, 2025 and 2024, the Company recognized less than $ 0.1 million of stock-based compensation expense related to the ESPP.

The fair value of the right to acquire stock at a discounted price under the ESPP is calculated using the Black-Scholes valuation model and recorded as stock-based compensation.

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Stock-based compensation expense

Total stock-based compensation expense was comprised of the vesting of options and restricted stock units awarded to employees under the Arbutus and OnCore Plans calculated in accordance with the fair value method as described above and amortization of compensation cost related to the ESPP.

Total stock-based compensation expense was comprised of the vesting of options and restricted stock units awarded to employees under the Arbutus Plans calculated in accordance with the fair value method as described above and amortization of compensation cost related to the ESPP.

The Company recognizes forfeitures as they occur, and the effects of forfeitures are reflected in stock-based compensation expense.

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General and administrative 2,550 5,339

Restructuring $ 2,502 $ —

Total $ 6,953 $ 8,986

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For each of the years ended December 31, 2025 and 2024, the Company had zero performance-based stock compensation expense.

Modification associated with restructuring

During the year ended December 31, 2025, the Company recognized $ 2.5 million of expense related to the modification of stock options for employees who were terminated as a result of the restructuring (Note 16).

The modifications involved extension of the post-termination exercise period from 90 days to one year.

The expense was recorded as part of restructuring costs in the consolidated statements of operations and comprehensive income.

Segment Reporting

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AB-101-001 Phase 1a/1b clinical trial expense 6,220 10,196

Coronavirus early research expense — 9,036

Other early research and development programs expense 236 1,493

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Interest income 4,068 6,585

Gain on sale of property and equipment 674 —

Segment net loss $ ( 33,501 ) $ ( 69,920 )

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

The Company is subject to taxation and files income tax returns in Canadian federal and provincial, United States federal and several state jurisdictions.

Income tax expense varies from the amounts that would be computed by applying the combined Canadian federal and provincial income tax rate of 27 % (2023 - 27 %) to the loss before income taxes as shown in the following tables:

The Company is subject to taxation and files income tax returns in Canadian federal and provincial, and United States federal and several state jurisdictions.

As described in Note 2, the Company implemented ASU 2023-09 for the year ended December 31, 2025 on a prospective basis.

Income tax expense varies from the amounts that would be computed by applying the combined Canadian federal tax rate of 25% to the loss before income taxes as shown in the following tables.

The change in the rate from 27% in 2024 to 25% in 2025 is due to the adoption of the new standard, which requires the rate reconciliation to begin with the federal rate in the country of domicile.

In 2024, a combined rate of 27% was used (federal of 15% and provincial of 12%).

The domestic and foreign components of loss before income taxes were as follows:

Year ended December 31,

(in thousands)

Computed taxes (benefits) at Canadian federal and provincial tax rates $ ( 18,888 ) $ ( 19,668 )

Withholding taxes — —

Domestic $ 11,952 $ ( 1,671 )

Foreign $ ( 45,453 ) $ ( 68,249 )

Loss before income taxes $ ( 33,501 ) $ ( 69,920 )

There is no provision for federal, state or foreign income taxes.

A reconciliation of the Canadian federal statutory income tax rate to the effective tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09 is as follows:

Year Ended December 31, 2025

(in thousands, except percentages)

Computed taxes (benefits) at Canadian federal rates $ ( 8,374 ) 25 %

Domestic tax effects:

Change in valuation allowance ( 2,540 ) 8 %

Other ( 449 ) 1 %

Domestic provincial tax effects:

Tax abatement ( 1,195 ) 4 %

Provincial tax 1,435 ( 4 ) %

Change in valuation allowance ( 203 ) 1 %

Other ( 36 ) — %

Foreign tax effects:

United States

Foreign tax rate differential 1,818 ( 5 ) %

Non-taxable and non-deductible items:

stock options 879 ( 3 ) %

research and development credits ( 403 ) 1 %

Changes in valuation allowance 8,706 ( 26 ) %

Other adjustments:

Stock option adjustment 304 ( 1 ) %

Effective tax rate $ — — %

The reconciliation of the combined Canadian federal and provincial income tax rate to the effective income tax rate for the year ended December 31, 2024 is as follows:

Year Ended December 31, 2024

(in thousands)

Computed taxes (benefits) at Canadian federal and provincial tax rates $ ( 18,888 )

Permanent and other differences 515

Federal R&D credit ( 1,122 )

Foreign tax credit applied — —

Federal and Provincial ITCs applied — ( 179 )

Change in valuation allowance 11,748

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United States net operating loss carryforwards arising in 2019 and future periods have an indefinite carryforward period.

As of December 31, 2024, the Company had $ 260.0 million of net operating losses subject to an indefinite carryforward period which can be used to offset future taxable income in the United States.

As of December 31, 2025 and 2024, the Company had $ 329.9 million and $ 260.0 million of net operating losses subject to an indefinite carryforward period which can be used to offset future taxable income in the United States.

As a result of ownership changes occurring on October 1, 2014 and March 4, 2015, the Company’s ability to use these losses may be limited under Internal Revenue Code Section 382.

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The Company generated $ 12.0 million of pre-tax domestic income and $ 45.5 million in pre-tax foreign losses, respectively, for the year ended December 31, 2025.

The Company generated $ 14.8 million of pre-tax domestic income and $ 87.7 million in pre-tax foreign losses, respectively, for the year ended December 31, 2023.

The Company generated $ 1.7 million of pre-tax domestic losses and $ 68.2 million in pre-tax foreign losses, respectively, for the year ended December 31, 2024.

The Company used accumulated domestic net operating losses to offset the taxable income in both years.

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Amortization 191 256

Other 138 114

Total deferred tax assets $ 181,390 $ 175,426

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Net deferred tax assets (liabilities) $ — $ —

Restructuring

In both 2024 and 2025, the Company implemented changes to focus its efforts on advancing the clinical development of imdusiran and AB-101 by ceasing all discovery efforts, implementing workforce reductions, and halting preparations for a potential IM-PROVE III clinical trial.

In 2025, the decision was made to exit the Company’s corporate headquarters in Warminster, Pennsylvania and to discontinue in-house scientific research.

The restructuring has resulted in a total workforce after reductions of 19 employees.

Significant components of the Company’s restructuring charges are shown below:

Year ended December 31,

(in thousands)

Severance and continuing benefits $ 6,331 $ 2,857

Non-cash stock compensation modification expense 2,483 —

Non-cash impairment of leasehold improvements and laboratory equipment 2,811 167

Non-cash impairment of lease right-of-use asset 948 —

Accrual of lease-related operating expenses 364 —

Contract close-out costs — 696

Total restructuring charges $ 12,939 $ 3,720

Related Party Transaction

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

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

Manchester served as a member of the Board until February 24, 2025 and is considered a related person due to his service on the Board during the fiscal year ended December 31, 2025.

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

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

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

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

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

Subsequent Events

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

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

In connection with these actions, the Company expects to incur a one-time restructuring charge in the first quarter of 2025 of approximately $ 11 million to $ 13 million for cash severance and benefits and non-cash stock compensation expense and impairment charges.

On March 3, 2026, subsequent to the Company’s December 31, 2025 balance sheet date, the Company and Genevant entered into the Moderna Settlement Agreement to resolve the Moderna LNP Litigation.

As part of the Moderna Settlement Agreement, the Company and Genevant will receive an aggregate $ 950 million Noncontingent Settlement Payment in July 2026.

This portion of the settlement is noncreditable and nonrefundable.

In addition, the Company and Genevant are entitled to receive an additional Contingent Settlement Payment of up to an aggregate $ 1.3 billion upon the occurrence of certain events related to the Moderna §1498 Appeal, but which may be subject to repayment.

Under the Genevant License, the Company is entitled to receive, after reimbursement of both the Company’s and Genevant’s litigation costs, 20 % of the Noncontingent Settlement Payment.

As of December 31, 2025, the Company owns approximately 16 % of the outstanding common equity of Genevant.

As the settlement was executed after December 31, 2025, no amounts related to the settlement have been reflected in the accompanying consolidated financial statements.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data