What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-12 compared with 2026-05-13 · 110 added, 65 removed, 384 unchanged (31% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis by our management of our financial position and results of operations in conjunction with our audited consolidated financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2025 and our unaudited condensed consolidated financial statements for the three months ended March 31, 2026.

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

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• our strategy, future operations, preclinical studies, clinical trials, and prospects;

• our beliefs, plans and expectations regarding our patent infringement lawsuit against Pfizer/BioNTech, and the expected timing thereof;

• our beliefs, plans and expectations regarding our patent infringement lawsuits against Pfizer/BioNTech, and the expected timing thereof;

• our beliefs, plans and expectations regarding Moderna’s limited appeal following the settlement of our patent infringement litigation, the noncontingent lump sum payment and the contingent lump sum payment included in our settlement with Moderna, and the expected timing thereof;

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• our beliefs, plans and expectations regarding our patent infringement lawsuit against the United States, and the expected timing thereof;

• our expectations regarding the receipt, timing and amount of any dividend from Genevant;

• the potential for our product candidates to achieve their desired or anticipated outcomes;

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

• the expected cost, timing and results of our clinical and regulatory development plans and clinical trials, including interactions with regulatory authorities, the incorporation of regulatory feedback into our development programs and clinical collaborations with third parties;

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

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as well as other statements relating to our future operations, financial performance or financial condition, prospects or other future events.

Forward-looking statements appear primarily in the sections of this Form 10-Q entitled “Part I, Item 1-Financial Statements (Unaudited),” and “Part I, Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements appear primarily in the sections of this Form 10-Q entitled “Part I, Item 1-Financial

Statements (Unaudited),” and “Part I, Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based upon current expectations and assumptions and are subject to a number of known and unknown risks, uncertainties and other factors that could cause actual results to differ materially and adversely from those expressed or implied by such statements.

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

We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuit against Pfizer Inc.

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

We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuits against Pfizer Inc., BioNTech SE, and certain of their affiliates (collectively, Pfizer/BioNTech) for their use of our patented lipid nanoparticle (LNP) technology in their COVID-19 messenger ribonucleic acid interference (mRNA)-LNP vaccines and any other products that would infringe the asserted patents.

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

The parties are awaiting further scheduling in the litigation.

In July 2026, we, along with our exclusive licensee Genevant Sciences GmbH, filed three international lawsuits seeking to enforce patents protecting our LNP technology against Pfizer/BioNTech.

On March 3, 2026, we, along with Genevant Sciences GmbH and, solely for specified purposes, its parent company Genevant Sciences Ltd.

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(together, Moderna) to resolve all patent infringement litigation and patent revocation proceedings involving Moderna and its affiliates 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 us and Genevant on or before July 8, 2026.

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

We received $178.4 million on July 8, 2026 as our share of the Noncontingent Settlement Payment, which included reimbursement of our litigation costs.

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

§1498 (§1498) that Moderna filed, as allowed under the Moderna Settlement Agreement (the Moderna §1498 Appeal).

Under our license with Genevant, we are entitled to receive, after deduction of litigation costs, 20% of the Noncontingent Settlement Payment.

We currently expect to receive an estimated $178.7 million of the Noncontingent Settlement Payment, which includes reimbursement of our litigation costs.

In addition, as of March 31, 2026, we owned approximately 16% of the outstanding common equity of Genevant.

We are currently evaluating a return of capital to our shareholders in the third quarter of calendar year 2026, following the receipt of our portion of the Noncontingent Settlement Payment.

The Company owned approximately 16% of the outstanding common equity of Genevant as of June 30, 2026, and the Company anticipates the payment of a material dividend from Genevant in the third quarter of calendar year 2026.

We are currently evaluating a return of capital to our shareholders in the third quarter of calendar year 2026.

In April 2026, the U.S.

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The FDA’s Fast Track program is designed to facilitate the development and expedite the review of investigational therapies to treat serious conditions with unmet medical need.

In May 2026, we reached alignment with the FDA on the design and safety parameters of a proposed Phase 2b clinical trial evaluating imdusiran for the treatment of cHBV.

We intend to incorporate the FDA’s feedback into a final Phase 2b protocol.

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

LNP technology

In February 2022 and April 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.

In February 2022 and April 2023, we filed patent infringement lawsuits in the United States against Moderna and Pfizer/BioNTech, respectively, and in March 2025 and July 2026, we filed international patent infringement lawsuits against Moderna and Pfizer/BioNTech, respectively, seeking compensation for their unlicensed use of our patented technologies in their COVID-19 mRNA-LNP vaccines.

It is well established in the scientific literature that the most significant technological hurdle to developing and deploying medicines using mRNA is engineering a safe and effective way to deliver the mRNA to human cells.

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

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

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

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

We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuit against Pfizer/BioNTech for their use of our patented LNP technology in their COVID-19 mRNA-LNP vaccines.

We continue to protect and defend our intellectual property, which is the subject of our ongoing lawsuits against Pfizer/BioNTech for their use of our patented LNP technology in their COVID-19 mRNA-LNP vaccines and any other products that would infringe the asserted patents.

cHBV programs

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

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

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

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

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• AB-101 is our proprietary oral PD-L1 inhibitor that has the potential to activate patients’ HBV-specific immune response by inhibiting PD-L1.

AB-101 is currently in a Phase 1a/1b clinical trial (AB-101-001) evaluating the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses in healthy subjects and patients with cHBV infection.

The data from healthy subjects in Parts 1 and 2 and cHBV patients in Part 3 of this clinical trial have shown that AB-101 was generally well-tolerated with evidence of high receptor occupancy.

AB-101 has completed a Phase 1a/1b clinical trial (AB-101-001) evaluating the safety, tolerability, pharmacokinetics (PK), and pharmacodynamics (PD) of single- and multiple-ascending oral doses in healthy subjects and patients with cHBV infection.

The data from healthy subjects in Parts 1 and 2 and cHBV patients in Part 3 of this clinical trial have shown that AB-101 was generally well-tolerated with evidence of high receptor occupancy in seven cHBV patients and HBsAg decline in two cHBV patients at the 30mg dose.

To help position imdusiran as a potential cornerstone in a combination therapy, we fully enrolled two Phase 2a clinical trials that combined imdusiran with other agents.

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If relevant criteria are met, investigational therapies that receive Fast Track designation may also qualify for Accelerated Approval or Priority Review of a Biologics License Application or New Drug Application.

In May 2026, we reached alignment with the FDA on the design and safety parameters of a proposed Phase 2b clinical trial evaluating imdusiran for the treatment of cHBV.

We intend to incorporate the FDA’s feedback into a final Phase 2b protocol.

RNAi therapeutic (imdusiran, AB-729)

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

Reducing HBsAg in addition to other viral proteins and HBV DNA are widely believed to be key prerequisites to potentiate an effective patient’s immune response against the virus.

Reducing HBsAg in addition to other viral proteins and HBV DNA are widely believed to be key prerequisites to potentiate a patient’s effective immune response against the virus.

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

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

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

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

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

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

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

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

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

After week 24, treatment with imdusiran was stopped.

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

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

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

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AB-101 is our proprietary oral small-molecule PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade while minimizing the systemic safety issues often seen with checkpoint inhibitor antibody therapies.

AB-101 is differentiated from monoclonal antibody checkpoint inhibitors such as durvalumab (anti-PD-L1) and nivolumab (anti-PD-1)

because it is liver centric, has a much shorter duration of effect in preclinical models (which may provide dosing and safety advantages), and has a novel mechanism of action as it binds to PD-L1 on the surface of cells causing dimerization, internalization and degradation of the PD-L1 protein.

AB-101 is differentiated from monoclonal antibody checkpoint inhibitors such as durvalumab (anti-PD-L1) and nivolumab (anti-PD-1) because it is liver centric, has a much shorter duration of effect in preclinical models (which may provide dosing and safety advantages), and has a novel mechanism of action as it binds to PD-L1 on the surface of cells causing dimerization, internalization and degradation of the PD-L1 protein.

Phase 1a/1b clinical trial to evaluate safety, tolerability and PK/PD of AB-101 (AB-101-001)

AB-101-001 is a Phase 1a/1b clinical trial designed to investigate the safety, tolerability and PK/PD of single and multiple-ascending oral doses of AB-101 for up to 28 days in healthy subjects and patients with cHBV infection.

The trial consists of three parts starting with single ascending doses in healthy subjects, followed by multiple ascending doses in healthy subjects and culminating with multiple doses in patients with cHBV infection.

Safety and PK/PD assessments are performed prior to dose escalation in all parts of the clinical trial.

The trial consisted of three parts starting with single ascending doses in healthy subjects, followed by multiple ascending doses in healthy subjects and culminating with multiple doses in patients with cHBV infection.

Safety and PK/PD assessments were performed prior to dose escalation in all parts of the clinical trial.

Part 1 of this clinical trial enrolled five sequential cohorts of eight healthy subjects each (6 active:

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

Two patients experienced HBsAg declines of 86.4% and 98.8%, respectively.

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

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

Concurrent with the execution of the Qilu License Agreement, we entered into a Share Purchase Agreement (the Share Purchase Agreement) with Anchor Life Limited, a company established pursuant to the applicable laws and regulations of Hong Kong and an affiliate of Qilu (the Investor), pursuant to which the Investor purchased 3,579,952 of our common shares at a purchase price of USD $4.19 per share, which was a 15% premium on the thirty-day average closing price of our common

shares as of the close of trading on December 10, 2021 (the Share Transaction).

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

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

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

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

Alnylam Pharmaceuticals, Inc.

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

From the inception of the royalty sale through March 31, 2026, an aggregate of $26.7 million of royalties have been earned by OMERS.

From the inception of the royalty sale through June 30, 2026, an aggregate of $26.9 million of royalties have been earned by OMERS.

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

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

Additionally, if Genevant receives proceeds from an action for infringement by any third parties of our intellectual property licensed to Genevant, we would be entitled to receive, after deduction of litigation costs, 20% of the proceeds received by Genevant or, if less, tiered low single-digit royalties on net sales of the infringing product (inclusive of the proceeds from litigation or settlement, which would be treated as net sales).

Genevant or, if less, tiered low single-digit royalties on net sales of the infringing product (inclusive of the proceeds from litigation or settlement, which would be treated as net sales).

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

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

As of March 31, 2026, we owned approximately 16% of the outstanding common equity of Genevant and the carrying value of our investment in Genevant was zero.

As of June 30, 2026, we owned approximately 16% of the outstanding common equity of Genevant and the carrying value of our investment in Genevant was zero.

Our entitlement to receive future royalties or sublicensing revenue from Genevant was not impacted by the recapitalization.

Under the terms of the Moderna Settlement Agreement, Moderna will make an aggregate $950.0 million Noncontingent Settlement Payment to us and Genevant on or before July 8, 2026.

Under the terms of the Moderna Settlement Agreement, Moderna made an aggregate $950.0 million Noncontingent Settlement Payment to us and Genevant on July 8, 2026.

We received $178.4 million on July 8, 2026 as our share of the Noncontingent Settlement Payment, which included reimbursement of our litigation costs.

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

Under the Genevant License, we are entitled to receive, after deduction of litigation costs, 20% of the Noncontingent Settlement Payment, exclusive of our ownership of approximately 16% of the outstanding common equity of Genevant.

We currently expect to receive an estimated $178.7 million of the Noncontingent Settlement Payment, which includes reimbursement of our litigation costs.

The Company anticipates the payment of a material dividend from Genevant in the third quarter of calendar year 2026.

In March 2025, we and Genevant entered into an agreement (the RSV Agreement) that provided that we would be entitled to any award of damages in, or proceeds from the settlement of, our patent litigation against Moderna that was specifically allocated to infringing acts related to Moderna’s vaccine for respiratory syncytial virus (mRESVIA) and, in the event there was no such specific allocation to mRESVIA, we and Genevant would discuss an appropriate allocation in good faith.

The Moderna Settlement Agreement did not specifically allocate any settlement proceeds to infringing acts related to mRESVIA.

On July 15, 2026, we and Genevant entered into an agreement to terminate the RSV Agreement (the RSV Termination Agreement).

Pursuant to the RSV Termination Agreement, we received a termination fee of $1.0 million from Genevant on July 21, 2026, and all rights or obligations under the RSV Agreement were terminated.

Patent Infringement Litigation vs.

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The parties are awaiting further scheduling in the litigation.

In July 2026, we, along with Genevant, filed three international lawsuits seeking to enforce patents protecting our LNP technology against Pfizer/BioNTech and certain of their affiliates.

We and Genevant are seeking monetary relief, as well as injunctions against Pfizer/BioNTech’s COVID-19 mRNA-LNP vaccines and any other products that would infringe the asserted patents.

The three international lawsuits are as follows:

Federal Court of Canada File No.

T-3200-26, seeking a permanent injunction and damages or, if Arbutus and Genevant elect, an accounting of Pfizer/BioNTech’s profits, attributable to infringement of Canadian Patent No.

• Unified Patent Court (UPC):

Case UPC-CFI-0002562/2026, seeking permanent injunctions, as well as monetary damages, which can include recovery of Pfizer/BioNTech’s unfair profits from infringement of EP 4 241 767

Case UPC-CFI-0002566/2026, seeking permanent injunctions, as well as monetary damages, which can include recovery of Pfizer/BioNTech’s unfair profits from infringement of EP 4 495 237

The UPC actions seek relief for infringing activities by Pfizer/BioNTech and certain of their affiliates in Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia, Spain, and Sweden.

Patent Infringement Litigation vs.

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The Moderna §1498 Appeal is an appeal of the consent judgment entered in the District Court solely with respect to whether §1498 bars our and Genevant’s claims for direct infringement and indirect infringement against Moderna for vaccine doses that were sold to the United States Government under a particular contract and characterized by the District Court as “vaccines that did not go directly to United States Government employees.”

Under the terms of the Moderna Settlement Agreement, Moderna will make an aggregate $950.0 million Noncontingent Settlement Payment to us and Genevant on or before July 8, 2026.

Under the terms of the Moderna Settlement Agreement, Moderna made an aggregate $950.0 million Noncontingent Settlement Payment to us and Genevant on July 8, 2026.

We received $178.4 million on July 8, 2026 as our share of the Noncontingent Settlement Payment, which included reimbursement of our litigation costs.

In addition, as described in more detail in, and subject to the terms of, the Moderna Settlement Agreement, Moderna will make an additional Contingent Settlement Payment of an aggregate $1.3 billion to us and Genevant (i) if the Court of Appeals for the Federal Circuit (whether by the initial panel, upon panel rehearing or en banc ) affirms, or if there is a final non-appealable judgment that affirms, the rejection of Moderna’s affirmative defense pursuant to §1498 by the District Court in its entirety or otherwise holds that §1498 does not bar our and Genevant’s claim against Moderna as to either or both of direct infringement and indirect infringement with respect to all of the doses subject to the Moderna §1498 Appeal, or (ii) upon a voluntary dismissal of the Moderna §1498 Appeal (any of the foregoing (clause (i) or (ii) above), an Arbutus/Genevant §1498 Victory).

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On May 6, 2026, Merck withdrew from this revocation proceeding.

We do not expect the EPO revocation decision to have an impact on the potential outcome, or timing, of our patent infringement litigation pending against Pfizer/BioNTech in the United States.

We do not expect the EPO revocation decision to have an impact on the potential outcome, or timing, of our patent infringement litigation pending against Pfizer/BioNTech.

On April 29, 2025, Moderna filed a revocation action on our European patent EP 4241767 (the ’767 patent) with the EPO, requesting that the patent be revoked in its entirety for all contracting states.

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(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 us

for the treatment of HBV, regardless of whether such product is based upon assets acquired under this stock purchase 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 our performance milestone payment obligations.

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 us for the treatment of HBV, regardless of whether such product is based upon assets acquired under this stock purchase 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 our performance milestone payment obligations.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

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

Three Months Ended March 31,

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

2026 2025 2026 2025

(in thousands)

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Operating expenses 6,978 9,251 17,196 36,714

Income (loss) from operations 168,908 (25,699)

(Loss) income from operations (5,964) 1,488 162,944 (24,211)

Other income 821 1,035 1,608 2,208

Net income (loss) $ 169,695 $ (24,526)

Net (loss) income $ (5,143) $ 2,523 $ 164,552 $ (22,003)

Revenues are summarized in the following tables:

Three Months Ended March 31,

Three Months Ended June 30,

2026 % of Total 2025 % of Total

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Total revenue $ 1,014 100 % $ 10,739 100 %

Total revenue increased $177.4 million for the three months ended March 31, 2026 compared to the same period in 2025, due primarily to estimated license revenue from Genevant expected in 2026 related to our portion of the Noncontingent Settlement Payment.

Six Months Ended June 30,

2026 % of Total 2025 % of Total

(in thousands, except percentages)

Revenue from collaborations and licenses

Acuitas Therapeutics, Inc.

$ 406 — % $ 1,095 9 %

Qilu Pharmaceutical Co., Ltd.

— — % 10,434 83 %

License revenue from Genevant 179,373 100 % — — %

Non-cash royalty revenue

Alnylam Pharmaceuticals, Inc.

361 — % 974 8 %

Total revenue $ 180,140 100 % $ 12,503 100 %

Total revenue decreased $9.7 million for the three months ended June 30, 2026 compared to the same period in 2025, due primarily to recognizing all $9.6 million of previously deferred revenue upon the conclusion of our strategic partnership with Qilu in 2025.

Total revenue increased $167.6 million for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to recognizing revenue of $178.4 million for our share of the Noncontingent Settlement Payment in 2026, partially offset by recognizing all $9.6 million of previously deferred revenue upon the conclusion of our strategic partnership with Qilu in 2025.

Operating expenses

Operating expenses are summarized in the following tables:

Three Months Ended March 31,

Three Months Ended June 30,

2026 % of Total 2025 % of Total

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Total operating expenses $ 6,978 100 % $ 9,251 100 %

Six Months Ended June 30,

2026 % of Total 2025 % of Total

(in thousands, except percentages)

Research and development $ 7,018 41 % $ 14,457 39 %

General and administrative 9,756 57 % 9,160 25 %

Change in fair value of contingent consideration 422 2 % 559 2 %

Restructuring costs — — % 12,538 34 %

Total operating expenses $ 17,196 100 % $ 36,714 100 %

Research and development

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

Research and development expenses decreased $4.8 million for the three months ended March 31, 2026, compared to the same period in 2025.

The decrease was due primarily to cost savings from our decisions to reduce our workforce and discontinue in-house scientific research, as well as lower clinical trial costs as studies neared completion.

Research and development expenses decreased $2.6 million and $7.4 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025.

The decreases were due primarily to cost savings from our decisions to reduce our workforce and discontinue in-house scientific research, as well as lower clinical trial costs as studies neared completion.

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

General and administrative

General and administrative expenses increased $0.1 million for the three months ended March 31, 2026 as compared to the same period in 2025, due primarily to an increase in litigation-related legal fees driven by the settlement with Moderna, partially offset by cost-cutting efforts by the Company, which drove reductions in employee compensation-related expenses.

General and administrative expenses increased $0.5 million for each of the three and six months ended June 30, 2026 as compared to the same periods in 2025, due primarily to an increase in litigation-related legal fees driven by the settlement with Moderna, partially offset by cost-cutting efforts by the Company, which drove reductions in employee compensation-related expenses.

Change in fair value of contingent consideration

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

In connection with these actions, we incurred a one-time restructuring charge in the first quarter of 2025 of $12.4 million, which includes approximately $6.0 million of cash severance and continued benefits paid, $2.4 million of non-cash expense related to the modification of equity awards, non-cash impairment charges for leasehold improvements and laboratory equipment of $1.9 million and $0.9 million, respectively, $0.9 million related to impairment of the right-of-use asset associated with the lease of our corporate headquarters and a $0.4 million accrual of lease-related operating expenses.

As of March 31, 2026, there was less than $0.1 million of accrued restructuring costs for medical benefits and a $0.2 million accrual of lease-related operating expenses included in accounts payable and accrued liabilities.

In connection with these actions, we incurred a one-time restructuring charge in the first half of 2025 of $12.5 million, which includes approximately $6.1 million of cash severance and continued benefits paid, $2.4 million of non-cash expense related to the modification of equity awards, non-cash impairment charges for leasehold improvements and laboratory equipment of $1.9 million and $0.9 million, respectively, $0.9 million related to impairment of the right-of-use asset associated with the lease of our corporate headquarters and a $0.4 million accrual of lease-related operating expenses.

As of June 30, 2026, there was an aggregate of $0.2 million of accrued restructuring costs for medical benefits and lease-related operating expenses included in accounts payable and accrued liabilities.

Other income (loss)

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

Three Months Ended March 31,

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

2026 2025 2026 2025

(in thousands)

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Interest income

The decrease in interest income for the three months ended March 31, 2026 compared to the same period in 2025 was due primarily to less interest earned on our cash and investment balances due to a lower average balance and a general decrease in market interest rates.

The decrease in interest income for the three and six months ended June 30, 2026 compared to the same periods in 2025 was due primarily to less interest earned on our cash and investment balances due to a lower average balance and a general decrease in market interest rates.

Interest expense

Interest expense for the three months ended March 31, 2026 and 2025 consisted primarily of non-cash amortization of discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019.

Interest expense for the three and six months ended June 30, 2026 and 2025 consisted primarily of non-cash amortization of discount and issuance costs related to the sale of a portion of our ONPATTRO royalty interest to OMERS in July 2019.

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

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

1 unchanged sentence

Non-cash items 2,422 5,834

License receivable from Genevant (178,741) —

Change in deferred license revenue — (10,434)

Receivable from Genevant license (179,373) —

Net change in other operating items (1,729) (2,537)

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

For the three months ended March 31, 2026, $8.1 million of cash was used in operating activities compared to $13.4 million used in operating activities for the three months ended March 31, 2025, a decrease of $5.3 million.

For the six months ended June 30, 2026, $14.1 million of cash was used in operating activities compared to $29.1 million used in operating activities for the six months ended June 30, 2025, a decrease of $15.0 million.

The decrease was due primarily to our decisions to decrease our workforce and further streamline the organization to focus our efforts on advancing the clinical development of imdusiran and AB-101.

For the three months ended March 31, 2026, net cash provided by investing activities was $2.2 million, resulting primarily from maturities of investments in marketable securities of $16.0 million, partially offset by additional investments in marketable securities of $13.8 million.

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

For the three months ended March 31, 2026, net cash provided by financing activities was $11.6 million, which was primarily related to $11.5 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

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

For the six months ended June 30, 2026, net cash provided by investing activities was $0.5 million, resulting primarily from maturities of investments in marketable securities of $38.0 million, partially offset by additional investments in marketable securities of $37.5 million.

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

For the six months ended June 30, 2026, net cash provided by financing activities was $14.8 million, which was primarily related to $14.7 million in proceeds from the issuance of common shares pursuant to the exercise of stock options.

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

Sources of Liquidity

As of March 31, 2026, we had cash, cash equivalents and investments in marketable securities of $95.2 million.

We had no outstanding debt as of March 31, 2026.

As of June 30, 2026, we had cash, cash equivalents and investments in marketable securities of $92.6 million.

We had no outstanding debt as of June 30, 2026.

Noncontingent Settlement Payment

On July 8, 2026, we received $178.4 million as our share of the Noncontingent Settlement Payment, which included reimbursement of our litigation costs.

Royalty Entitlements

We have a royalty entitlement on ONPATTRO, a drug developed by Alnylam that incorporates our LNP technology and was approved by the FDA and the EMA during the third quarter of 2018 and was launched by Alnylam immediately upon approval in the United States.

In July 2019, we sold a portion of this royalty interest to OMERS, effective as of January 1, 2019, for $20 million in gross proceeds before advisory fees.

In July 2019, we sold a portion of this royalty interest to OMERS, effective as of January 1, 2019, for $20

million in gross proceeds before advisory fees.

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

OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and we are not obligated to reimburse OMERS if it fails to collect any such future royalties.

From the inception of the royalty sale through March 31, 2026, we have recorded an aggregate of $26.7 million of non-cash royalty revenue for royalties earned by OMERS.

From the inception of the royalty sale through June 30, 2026, we have recorded an aggregate of $26.9 million of non-cash royalty revenue for royalties earned by OMERS.

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

In addition to

the royalty from the Alnylam LNP license agreement, we are also receiving a second, lower royalty interest on global net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas.

In addition to the royalty from the Alnylam LNP license agreement, we are also receiving a second, lower royalty interest on global net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis