Hi, good morning, everybody. My name is Dennis Ding, Biotech Analyst here at Jefferies, and welcome to the 2023 Jefferies London Healthcare Conference. I'm very pleased to have Arbutus Biopharma here today, and we have Bill Collier, President and CEO. So I think you have some slides that you want to take us through, and then we can kind of transition to a couple of questions.
Yep. Thank you very much, Dennis. Good morning, everybody, and thank you all very much for your interest in the company. I'm gonna flick through a couple of slides, and then time for Q&A. First of all, our forward-looking statements, you can find these on our website at www.arbutusbio.com. We are a company that has an exclusive focus on hepatitis B, so our aim is to develop a number of different medicines with different modes of action that when combined together, can form a finite treatment that results in a functional cure of at least 20%. And we've selected that number because it's a significant step up from the around 5% functional cure rates that you get with current lifelong therapies.
The trouble with the current therapies is, A, lifelong, and B, the functional cure is somewhat erratic in terms of when it may occur. So we're looking for finite treatment, following which there is a functional cure. Here are six reasons to be interested in the company. The first is that hepatitis B is a very large, unmet medical need. So if you think back to hepatitis C, it, it's estimated that hep B is probably twice the prevalence. So that's a, a good reason to be interested, both for the patients and for the potential financial benefits. We have a team with immense virology expertise. Our Chief Scientific Officer, Mike Sofia, was the inventor of sofosbuvir, the hepatitis C cure, and Mike and his team have now turned their virology expertise to hepatitis B. Our portfolio is entirely internally developed assets with different modes of action.
We'll get into the portfolio as we go through these slides, but we have an RNAi therapeutic and a PD-L1 inhibitor. Our lead asset, 729, currently now called imdusiran, that's the generic name, is in phase II-A, and I'll show you some of the latest data that we have from our phase II-A studies, the latest of which was actually presented this last weekend at the AASLD meeting in Boston. A strong financial position, cash runway currently of two years out to the beginning of 2026, and I will mention it here for full disclosure, but we're also the owners of a suite of LNP patents, which we have licensed out to Genevant. We co-own Genevant with another company, Roivant.
And the reason I mention that is because if Genevant develops products from that technology or if they license out the technology to another company, then there's a royalty income stream that reverts back to Arbutus. Also linked in here is the fact that we have filed two legal suits, one against Moderna, the second one against Pfizer-BioNTech, where we allege that their COVID-19 vaccines infringe on our LNP patents. I really can't say too much more about ongoing litigation, but I feel for full disclosure and full transparency, that's something that we should mention right up front. So here's the pipeline. Like I said, we have these two assets, 729 in phase II-A, and 101, which is the PD-L1 inhibitor, which is currently in phase I-A. So just one slide really on our whole approach to hepatitis B.
We believe that scientifically, and I think this is held up with a lot of discussions we have with KOLs and scientists in the area, what we're trying to do to reach functional cure is three things: so stop the virus from replicating, so the measurement there is decreased HBV DNA, and you can use there nucleosides. We've also shown that 729 on its own can decrease HBV DNA. Second thing we need to do is reduce surface antigen. So when the virus is replicating, it spins off large amounts of surface antigen, which really act as a way of diminishing the immune system. So we want to be able to reduce surface antigen, and that's the role of the RNAi agent, imdusiran 729.
And then thirdly, we want to find ways to boost the immune system, such that when the viral parameters are held in check, the immune system is working to hold those levels down, and you can do that with a range of products that we've mentioned here. We have also shown, by the way, that 729 imdusiran does actually, in some patients where we've been able to measure it, reawaken the HBV-specific immune system. So our lead asset, actually is active on all three of these pillars, and that's why we believe that it's a really strong candidate to be a cornerstone agent in the combination of agents that we bring forward for functional cure. So let's have a look at some of the data. So, lots of charts and graphs on this slide.
This is the summary output of our phase I study. So for those who like pictures, look at the picture. For those who like data tables, look at the data table. It's kind of the same, same information. But what we were doing here was in different cohorts, looking at different doses of 729, either given every four weeks, every eight weeks, or every 12 weeks, and we're looking at the impact on surface antigen. And to cut a long story short, across all the cohorts, we get at least a 1.8 log reduction in surface antigen, and that is sustained even after we stop treatment. So you can see on the graph there's a treatment period and then a follow-up period. When treatment stopped, the S antigen levels do not rebound back up to the historical level.
There's also no big difference between the dosage cohorts, which means that our agent potentially, instead of being dosed monthly like the other RNAi agents, could actually be dosed every eight weeks or every 12 weeks, which would be a significant patient advantage. Also from this phase I study, the drug was well tolerated with no remarkable findings. So, based on that, we moved forward to look at some of these patients who went through the treatment period with 729. The 729 treatment stopped. They then continued just on the nucleoside. They met the criteria for actually stopping the nucleoside as well.
So in this phase I study, there are actually nine patients who stopped all treatment, and so we're checking to see here whether the HBV DNA and surface antigen levels go back up to historical levels. So of the nine patients, two, there was some recommencement of treatment, but seven of the nine here, you can see that both HBV DNA, surface antigen, and ALTs, which frankly a measure of drug safety, remained extremely low. So we continue to track these patients. So just to be clear, they're not yet functionally cured. If anything, they're partially cured. But again, I think it shows the sustained impact of 729 .
This is the chart that shows that in the phase I study, 729 increased HBV-specific T cell activation and decreased exhausted T cells, so it was having an impact on the HBV-specific immune system. So in phase II-A, which is where we're at now, we have two studies to review. This is the first one, where there's a lead-in period of imdusiran and a nucleoside for 24 weeks. That's to suppress the HBV DNA and surface antigen, and then patients are randomized to receive either 24 or 12 weeks of interferon. Then at the end of that, there's a follow-up phase where we stop treatment to see if we've got a functional cure. Now, earlier this year at EASL, we shared some data that was from the middle phase.
So it's not the end of the clinical study, it's interim data, and that's shown on this slide here. Again, same thing, data on the left and in the charts is the same. But what we saw in the first 24 weeks was a reduction in surface antigen, entirely consistent with what we've seen in other studies and from the phase I studies. A good degree, 93% of patients got to S antigen levels below 100 international units. We quite often use that as a benchmark. It's not undetectable, but it is a low enough benchmark where some physicians would think about stopping therapy. And four patients reached S antigen levels which were below the limit of quantification. So this data was released back in June.
The study continues, obviously, and we would expect some further follow-up data as we move into 2024. Second study is this one here, which we're doing in combination with Barinthus, formerly known as Vaccitech. And here, similar structure, 24-week lead-in phase of imdusiran and the nucleoside, and then patients randomized to receive the vaccine, therapeutic vaccine or placebo, and then we stop treatment and follow up. So I'll get into the data from that top section in a moment. But we also this year started the additional cohort that's shown in the middle of the slide here, where as well as the therapeutic vaccine, patients are also given some low dose of nivo. So that's another attempt to kind of rekindle, reawaken the immune system. So we have no data from that additional cohort yet, but it has started with dosing patients.
So going back to that top section, last week, at AASLD, actually at the weekend, we produced this data. Again, it's from this middle phase, so it's interim data. But we felt this was quite interesting. So once again, you see S antigen levels decrease in that lead-in phase in a way that's entirely consistent with the other phase II and phase I studies, so that's reassuring. Safety is also very reassuring. And what we are beginning to see here is a difference between the active group in blue that received imdusiran and VTP-300, and the placebo group in red, which just received the imdusiran. So what it appears to show is that the addition of VTP-300 sustains the S antigen loss.
I will point out, though, at the bottom of that graph, you can see how many patients are at each stage of this study. And, you know, clearly, you can see the ends up here, but we have more patients to flow through this study. So I guess what I'm pointing out is this is interim data, and again, as we go forward into 2024, we expect to be sharing more information from this study. But I think this was well received at AASLD, and that is literally hot off the press from our presentation last weekend.
We've also shown in this VTP-300 clinical collaboration with Barinthus that when you measure the immune response in the patients that have taken imdusiran and received VTP-300, you can show signs of immune restoration, which is what we'd want to see. Now, moving on to AB-101, which is the oral PD-L1 inhibitor. On the left-hand side, you can just see here a summary of the rationale for why we're looking into this particular area. So in HBV, immune tolerance is a critical driver of HBV infection. PD-L1 expression is upregulated during HBV infection, and you can find PD-1 upregulated on HBV specific T and B cells.
So our approach here is to try and find a small molecule, so not an injectable antibody, but a small molecule that allows controlled checkpoint blockade, oral dosing, and potentially is more specific to HBV with less of the systemic side effects that you see with antibodies. So, we've completed obviously all the preclinical and IND, and we are now in a phase I-A study, on the left-hand side here, and we anticipate some results, early results, from this study in the first half of next year. So just by way of our key milestones for this year, you can see check marks against all of them, so we're happy that we've delivered on the data reports.
This year, cash balance of $145 million as I mentioned, which is out to the first quarter of 2026. What we typically do at the beginning of January, just before JP Morgan, is another press release with our expectations and guidance for 2024. But I think you can get a sense that, you know, it's going to be a year where we have upcoming data releases from the two phase II-A studies and the phase I study with 101. So I will pause there, Dennis. That's the quick summary, and we have some time now for the Q&A.
Perfect. Thanks so much. That's a really great overview. Maybe we, you know, if we can just take a step back and talk about hepatitis B more broadly as a space, maybe, you know, talk about, you know, your discussions with investors and if you can gauge the level of interest, you know, in the space given, you know, it has been challenging. There have been some disappointments in the past.
Right.
You know, just talk about what investors may need to see to get a little bit more enthused around the space.
Right. So good question. I see it as two sides of the same coin, in a way. It's a large market, unmet medical need, and so far, despite lots of companies trying, in lots of different ways, we haven't yet cracked the code for finding a functional cure. But everyone we speak to firmly agrees with the three pillars on what we're trying to do: decreasing HBV DNA, suppressing surface antigen, and also finding a way to reawaken the immune system.
So it's our belief that either the small biopharma players or there's a small handful of big pharmas that are still active in hepatitis B as well will eventually crack that code, and then I think whatever the functional cure rate is on those initial studies, I mean, our goal is 20%, as I mentioned, but I think frankly, if someone finds 15% functional cure, then I think the field will then quickly kind of iterate up, which is what we saw with hepatitis C and in other areas as well. So although it has been hard going, and I think some investors are frustrated, I think the prize is still there, still a large market, and no one has quite yet figured out the code. So I think when we do, it's gonna be great.
Right. And maybe, you know, a positive data point was the recent deal that GSK did for, with J&J/Arrowhead for the siRNA. So talk about, you know, your thoughts on that deal. Is that sort of validating, for you guys in terms of the siRNA approach and what may be needed to kinda get to functional cure?
Well, a couple of things. I think it validates the combination approach that we are advocating. So GSK have combined their ASO, or well, we'll combine it with the RNAi from Arrowhead. I think it validates the role of RNAis in reducing surface antigen. As to how and why they did the deal, you have to ask GSK, but I, I would point out, you know, between the RNAis, I think there are some differences. So as I've tried to highlight this morning, we have shown in our data that 729 is active in not just reducing surface antigen, it also reduces HBV DNA, can also show reawakening of the immune system, so active on all three pillars. So we have shown that data.
We've also shown that we can dose 729 potentially at every eight weeks or every 12 weeks. All the other RNAis are monthly. So I think competitively, we're still in a good position.
If we kind of go through your pipeline vision a little bit, you know, as you go into 2024, you mentioned there were you know, there was gonna be some, some additional data. What sort of data do you need to see to have the confidence to move into a larger phase II-B or a phase III trial where you are kind of evaluating functional cure?
Well, I think we need to see more and sustained data of the type that is emerging. So if you can show that combinations have either the same or further reductions in surface antigen, and if you get more patients below limit of quantification, then you're getting to the point where it makes logical sense to actually stop treatment and then measure whether or not these viral parameters rebound. The definition of functional cure is essentially undetectable HBV DNA, undetectable surface antigen for at least six months post cessation of treatment, with or without antibodies. And so I think we will get there. But we have to let these two-year studies run a little bit longer, and then I think we'll be able to pick, you know, the right combination.
So, I mean, logically, it's going to include a nuke to really knock down HBV DNA. It will include imdusiran 729 to knock down the surface antigen, and then there'll be an agent, third agent to boost the immune system. Could be interferon, could be the VTP-300, could ultimately be AB-101, which would be, you know, ideal for us. It would be an internal combination. But I think we've shown that we're nimble and agile and willing to work with other partners to get 729 into the right pairing for a potential functional cure combo.
So when you think about the peg interferon study, the phase II-A, you guys had some promising interim data this year. What should we expect for next year?
Yeah, so like I said, the study results that we reported at EASL were from that interim stage, so not all the patients had flowed through the study. As we go into 2024, we'll get a much, you know, significant number of patients completing all the arms of the study. I think for us, it makes sense to not do too many data cuts and reports along the way. Maybe better to kind of let the patients flow through and then look at the end study results and then report out. Likewise, on the VTP-300 study. But I think next year we will see, you know, data that we have will be really interesting.
So on the oral PD-L1. It's in phase I. You're going to have some data first half 2024. This will be in healthy volunteers?
It will be the single ascending dose data in healthy volunteers.
Okay.
Which is interesting because as well as just checking for safety, we can also check in healthy volunteers, target engagement. We'll be able to report out on that and then move after that into chronic HBV patients.
Is there, you know, with regards to the oral PD-L1, is there anything specific with the molecule that makes it more promising in hepatitis B? Because, you know, when you think about, you know, PD, you know, having oral PD-L1 seems pretty interesting, especially for pharma, you know, if they could reposition that for oncology. But is there anything specific with your molecule that only keeps it within the hepatitis B?
Well, our team have designed it specifically for HBV, but you're quite correct. You know, potentially there are other applications in oncology. We're a hep B virology house, so that's where we focus. But, you know, if there's, if there's interest and, and partnership, to explore other opportunities, then we're certainly open for that discussion, too.
You know, you mentioned that there, you know, there are three pillars to curing hepatitis B, and obviously, there are a number of mechanisms out there. You yourself have, you know, three of them in-house, or, you know, at least two of them in-house. But what other promising mechanism do you see out there that could pair well, with, you know, the cocktail or the regimen that you guys have?
Well, I mean, I think what you see in the design and selection of our phase II-A studies is what we think will likely be optimal. So either combinations with interferon or with a therapeutic vaccine, or with, you know, a PD-L1 inhibitor. But we have shown over the years that we can be very nimble and agile. We had some other phase II-A studies with capsid inhibitors. Those studies didn't work out, but I think if there are other agents elsewhere that we consider may well be beneficial in the combo, then we will test that out. But our sense was, given what we knew at the time, that interferon and VTP-300 and ultimately AB-101 would be the likely best targets.
Got it. And maybe last question for me is just around the balance sheet.
Okay.
Can you remind us how much cash and runway and what could be the catalyst path over the next couple of years between now and the runway?
Right. So we have here at the end of Q3, $145 million.
$145 million
Which takes us out to the beginning of 2026. Dave, anything you want to add from an additional point of view?