Hi, good morning, good afternoon. My name is Dennis Ding. Jefferies Biotech analyst here. Welcome to the Jefferies London Healthcare Conference. I have the pleasure of having Arbutus Biopharma here, CEO Mike McElhaugh, and CFO Dave Hastings. So welcome, guys.
Thank you.
Thank you.
So you guys have been trying to tackle hepatitis B for quite some time. And you know, you guys finally had some really promising data that came around at AASLD last week. Can you just kind of remind us what you guys showed? And just talk a little bit about the clinically meaningfulness of the data that you showed.
Sure. So you're referencing the functional cure data that we presented at AASLD last week at the liver conference. We're very excited about that data. And that data was specific to our IM-PROVE I study, where we looked at imdusiran, our siRNA targeting all hepatitis B transcripts, in combination with a short course of pegylated interferon. And what we saw with that data, Dennis, is that overall, we got a 25% functional cure. And in patients with hepatitis B surface antigen, less than 1,000 at baseline, that number went up pretty substantially to 50%, which is a really nice number. It's actually the best functional cure data that's been presented in the field to date. And functional cure is an important endpoint. It's hepatitis B DNA undetectable, surface antigen loss, meaning less than the lower limit of quantification, with or without antibody generation off of all therapy.
These patients are off of all therapy, including their background nucleoside.
Maybe take a step back and just talk about how difficult it has been to reach this stage, not necessarily for you guys specifically, but just the broader industry in general.
Yeah. So hepatitis B functional cure has been a long time coming. There are some standard of care therapies that are available now. Pegylated interferon for 48 weeks, which isn't very well tolerated, leads to functional cure in about 5% of patients. And nucleoside analogs, which are lifelong therapy, leads to functional cure in about 3% of patients. So it has been a long time coming. But there is a huge global unmet need for hepatitis B functional cures. And I'm happy that we're finally there.
Right. So low single digit percentage, low to mid in terms of standard of care. You guys showed 25% in the pooled population, which is already multifold better, and then when you kind of look at patients with low baseline S, you're at 50%. Now, appreciating this is in relatively small numbers, but talk a little bit about your confidence around that data holding up with a larger trial.
Yep. So you're right. It is a phase II-A trial, so a proof of concept initially, which we've achieved. We're very confident in the durability of that data and the probability that it'll be replicated in a larger phase II-B study. That'll be the next phase of development, phase II-B, looking to replicate that most likely versus a control. There's still some ongoing discussions there about how best we'll proceed. But we're very confident in the data. And we think it'll continue to hold as we move forward.
OK, and maybe help frame the hepatitis B opportunity for investors. Because when people think about Hep B, they think, oh, Hep C. Hep C was huge market, billions and billions of dollars of revenue. And they had, what, 70%, 80%, and eventually 95%, 90-ish% cure. You guys are at 25%-50%. And I think that kind of speaks to the difficulty of the virus itself and some of the biology there. But maybe help frame the opportunity, perhaps relative to Hep C.
So you're absolutely correct. hepatitis B and hepatitis C, two completely different viruses, one RNA and one DNA. But the numbers that you're referencing, I think importantly, you're remembering the back end of the hepatitis C days. So hepatitis C drug development was actually a very long process as well. And in the early days of hepatitis C drug development, the standard of care was pegylated interferon and ribavirin. And the cure rates that you got were somewhere in the 40%-ish range. So not much different than what we're talking about now in the hepatitis B space. And then, yes, of course, as things continued to progress and small molecules became available for hepatitis C, those cure rates did improve dramatically, ultimately to the 90% with 12 or 8 week durations that you referenced earlier. I think we're heading down a similar path for hepatitis B.
Yes, it's a more complicated virus. And it's taking us a little bit more time to figure that out. But I can see a similar sort of pathway playing out in hepatitis B as well. We're now in the sort of 25% overall, 50% if you look at a specific subset of patients, not unlike what happened in hepatitis C with, for example, telaprevir, where it was response-guided therapy. If you responded a certain way, you got continued therapy. That's kind of what we're thinking about here with the surface antigen, less than 1,000, really targeting that to maximize functional cure. But I can see that iterating as we continue to move forward here. Our goal is to get imdusiran into patients' hands and physicians' hands as quickly as possible. And that's probably the pathway to do it.
OK. And maybe comment a little bit about the sentiment around hepatitis B over the last few years. This isn't usually the type of area where everybody is super excited about, including both investors and pharma. So maybe comment on what do you think the field needs to really kickstart the interest?
Yeah. It's a good question. And you're right. Over the past couple of years, hepatitis C, excuse me, hepatitis B hasn't had the panache that some other disease areas have. I think what it's going to take is functional cure rates to meaningful numbers, which we have now. And getting those functional cure rates to the numbers that we've been able to deal with imdusiran plus interferon, I think, will help to drive interest in the space. And as far as pharma interests, build it and they will come. I mean, I think that's happened pretty commonly in the past. And as we continue to deliver data that is supportive of functional cures in hepatitis B, I think there are plenty of players out there who may become interested in the space.
Right. So I guess it just needs more data, more time. Kind of really tough to ascribe a big amount of value to just phase II data given the small n. So you mentioned phase II-B. That's kind of the next step. So how are you thinking about that?
Yeah. It's a good question. So as you mentioned, the data that we just presented is very fresh. We just presented it at AASLD conference last week in San Diego. We are in the midst of having lots of discussions internally about what a phase II-B design might look like. We obviously have to have discussions with regulators as well to make sure that we have the appropriate path defined. But our goal really is to maximize functional cure. So I can envision us really targeting that patient segment of surface antigen, less than 1,000 at baseline. That's not something that just we're doing, but our competitors are doing as well. It seems like an appropriate place to start and gives us more confidence moving forward with the program.
OK. So the focus will be probably in the low baseline patients, right?
That's reasonable to think as of now, yes.
Right. And that's where you have 50% functional cure.
Correct.
So have you thought about the size of the phase II-B, the different arms, what that would look like, if it would look very similar to the phase II or not?
Yeah. All good questions and all answers that will come with a little bit more time to digest the data and move forward. I think it's reasonable to think that we'll replicate the best performing arm from the phase II-A in some way and then build from there. We're thinking about a controlled trial as well, something that'll be a little bit more robust than a proof of concept phase II-A study. But stay tuned. We'll continue to update you and the street as appropriate.
OK. When do you think you guys will provide that update? Is it more like early 2025?
Yeah. That's probably about the appropriate time. Early 2025 is probably a good time to think about it.
I think some of the investor feedback over the last few years has just been around, I think, concern or uncertainty around the amount of capital that it would need to run a phase II-B. Dave, maybe remind us the cash position, the runway, and just kind of your initial thoughts on what a phase II-B would cost.
Yeah. So as Mike mentioned, it's a little early to address directly what we think the phase II-B costs are going to be. What we've said and what we're confident about is that with the current capital on hand, we can fund substantially all of that phase II-B. And when the final details are worked out around study design and protocol development and regulatory feedback, we'll provide more specific guidance when it comes to that. The company has $131 million of cash as of the end of Q3 of this year. That's two years of cash runway into Q4 of 2026.
Can you remind me, in Hep B, some of the competitor data and maybe if there's anything interesting that you want to call out from AASLD last week?
Sure. So I don't know that I want to get into specifics of competitor data in this setting. But you're right. There was some data presented from the competitors at AASLD. I think one thing I will say is that I would highly recommend sort of an apples to apples comparison when you start thinking about the competitive data sets. Because I think we stack up extremely well. In fact, I think we look like one of the probably best functional cure rate out there, certainly. Not everyone's to that point yet, obviously. But one of the things that I think is important coming out of AASLD is there's historically been a desire to sort of lump siRNAs together in the hepatitis B space. And I think that there is now sufficient data to suggest that that's maybe not the case.
We really should be looking at what may differentiate imdusiran relative to our competitors. We think we have the best siRNA. Yeah.
Maybe talk a little bit about that. Why is yours so differentiated versus the rest? Is it like frequency? Is it a target?
It's a great question. So one thing I can say definitively is we have a lower dose and a less frequent dosing duration that yields results that are impressive. So there's a couple of things that could potentially contribute to that. And I'm not going to assign specifics to any one particular area. But if you think about how the siRNAs in hepatitis B are designed, obviously there's a targeting sequence. And those sequences are different depending on what product you're using. The modifications that can be made to those sequences are different. And the GalNAc display, which of course traffics the product to the asialoglycoprotein receptor in hepatocytes, is also different. Some of them have a three-prong display. Some are tetravalent. So there are certainly differences there that I would consider.
Okay. Understood. So you also have other programs in the pipeline or other trials that you're running concurrently with imdusiran. So talk about specifically the VTP-300 program, some of the recent data that's come out of that.
Yep. So we also, in addition to the IM-PROVE I data, combination with interferon that we presented at AASLD, we also had a data set looking at the combination of imdusiran and VTP-300 plus low dose nivolumab. That's a study called IM-PROVE II . That's a little bit further behind. That's being done in conjunction with our partners at Barinthus Biotherapeutics. In that particular data set, we looked at the arm that uses imdusiran, VTP-300, and low dose nivolumab. We presented 48-week data, which is the end of the sort of active treatment. And what we found in that particular study and in that particular arm was that the combination of imdusiran, VTP-300, and low dose nivolumab performed best. And we were actually able to get 23% of patients to surface antigen loss at week 48 in that study, which is an impressive number in and of itself.
So we'll continue to follow that as it moves forward. And of course, we have our own small molecule PD-L1 program in the checkpoint space that we're excited about as well called AB-101.
OK. So for the low dose nivo data that you were talking about, how does S loss at the end of treatment translate to functional cure? I mean, you mentioned 23%. Is that kind of the peak functional cure that you would get going into the off treatment? And that would only degrade over time? Or is there something else?
You know, that's a really good question, Dennis. I don't know that we have the answer to that yet. Remember, we're talking about a therapeutic vaccine and low dose nivolumab here. It is possible that there's some type of delayed effect that could manifest in the data that we see as we move forward. However, we are assessing at week 48 to stop nucleoside. Patients will stop their nucleoside. We will follow them up for functional cure. I suspect that the number will be at maximum 23%. But we don't know that we won't know the answer to that until we get to the follow-up.
OK. And can you remind us the rationale behind using nivo?
Sure. So nivo was chosen based on some data in the field generally, but also was used in the ongoing Barinthus Biotherapeutics VTP-300 trial, and what they saw was that when they dosed low dose nivolumab with the boost component of the vaccine, they actually got patients lower in surface antigen, so given that, we decided to add it as an arm to the ongoing imdusiran trial. There is evidence that the checkpoint axis is involved in hepatitis B activity and what causes hepatitis B to become a chronic disease, so if we can break that tolerance and reinvigorate the host immune response, it may lead to functional cures, which we're hopeful for.
Right. Right. Because functional cure is all about being off treatment, and part of that is to, like you said, reawaken the immune system. Because I think when hepatitis B infection goes kind of out of control, the immune system is super depressed. It's not able to properly inhibit the virus.
That's exactly right. What happens is the immune system is completely exhausted. It sees so much hepatitis B surface antigen and other hepatitis B antigens, it just says enough and shuts off. So we have put a strategy in place back from day one at Arbutus to reduce hepatitis B surface antigen, suppress HBV DNA, and boost the immune system. We are actively engaged in that strategy. That's why we put those two phase II-A programs to work, looking at different immune boosters.
When do you think we'll have functional cure data from that low dose nivo trial?
It's a good question. Stay tuned. We just presented end of treatment at week 48. So you can kind of do the math based on that. But we'll certainly provide an update as that data is available.
OK, and so do you think you've seen enough from the VTP-300 trial to kind of make a definitive conclusion on what combo regimen to move forward with in phase II-B? Or do you feel like you kind of have to wait and see a little bit more of the data?
I think at this point, we're pretty confident that the interferon-containing regimen is probably the most appropriate pathway, given the fact that we've seen functional cure rates as high as 50% in that low surface antigen population. That's what we're sort of planning towards. Obviously, if something pops up in that additional IM-PROVE II study that makes us change course a little bit, we will evaluate as appropriate. But for now, our intention is to take forward an interferon-containing regimen.
Will you also do a low baseline HBsAg analysis for the VTP-300 data?
Yes, we will. Yeah.
OK. But you still feel kind of good that the combo that you will be moving forward will be the right one regardless?
We will. Yeah.
Great. And then talk about the oral PD-L1. And then you've already shown some of the nivo data. Is that de-risk the oral?
Yeah. So the idea behind including an oral PD-L1 program was really because historically, at least in hepatitis B, the antibodies were challenging for lots of different reasons. But mainly because of the immune-related adverse events that are seen when an antibody is dosed. Obviously, the antibodies were developed for oncology applications. And the risk-benefit profile in oncology is much different than it is in hepatitis B. So the goal in developing the small molecule program was really to be able to better focus those immune-related adverse events. So as patients, if there's any issues, obviously you can turn it off much quicker than you can an antibody because of the PK/PD relationship that exists with small molecules. It's also liver-targeted. So it's not getting exposure to the periphery and causing issues where you don't want it to cause.
So that was sort of the rationale behind the small molecule program relative to an antibody. This program is progressing well. We're currently in phase I-A/I- B. We're in patients currently, in hepatitis B patients. We presented some single-dose phase I-A data in healthy subjects. We've also presented some multiple ascending dose data in healthy subjects. And we'll present some patient data here probably in the first half of 2025. But it is acting like we would expect it would act. We are seeing receptor occupancy and target engagement. So that's a good thing.
Remind us of the target engagement data for the single and multi-dose data.
Sure. So receptor occupancy, we saw somewhere north of 50% when we dosed single dose up to 25 mg. And in multi-dose, we're seeing north of 70%. So right where we would expect it to be or want it to be, at least from an antibody perspective, which we think could apply to the small molecules as well.
Was there a dose response?
Yes. Actually, there is a dose response as you move through. Now, we'll see how that translates into patients as well. Obviously, we're in our first cohort of patients currently. But yes, we do see a dose response even in healthy subjects.
We're going to get some phase I-B hepatitis B patients in the first half of 2025.
That's correct.
Can you remind us what exactly you guys will disclose?
We haven't said specifically what we'll disclose yet. As you know from the protocol, it's a 28-day dosing period in HBV patients. We'll see what that data look like and how much we can actually present to you.
OK. So probably things like HBV DNA, S antigen, like that sort of stuff?
Potentially.
Do you expect a meaningful impact from just an oral PD-L1? Or do you think that needs to be added to another regimen?
Yeah. It's a good question. So we've never developed the small molecule. We don't anticipate it being a standalone program. Obviously, we expect it to be put in combination with imdusiran, ideally. But from an efficacy perspective, I'm not sure. I don't know exactly what we're going to see. Obviously, we're going to have to wait until the data is available. But we'll certainly have something like receptor occupancy and target engagement to be able to think about as it applies to hepatitis B patients.
Okay. I would feel like the focus should be mainly on safety because this would be added to others. If there's any kind of weird toxicities, like liver enzyme elevations and things like that, then that could be a problem if you add it to imdusiran and others. Perhaps to not really focus too much on efficacy, at least in my view.
I think that's the right way to think about it.
Right. OK. Got it. And then lastly, because this is a Jefferies conference, I do have to ask about the LNP litigation against Moderna and Pfizer. I mean, you guys got a very favorable claim construction against Moderna earlier this year. I thought that looked great. So talk about the next steps there with the Moderna litigation. What are the events that we should be paying attention to?
Sure. You want to handle that?
Yeah, sure.
So the trial date for Moderna is going to be September 24th, 2025. Of course, that's subject to the court's availability. So I always put a little bit of a warning around that. But right now, that is the trial date. So we're looking forward to that. And for Pfizer, that is also beginning to move forward. The Markman hearing is scheduled for December 18th of this year. And then the court will be able to set the docket in terms of timing after that takes place. So both trials are now well into it.
Right, and maybe if I could take a step back and talk about why we should care about this. Because I don't think everybody may appreciate it. You guys have developed some LNP delivery technology, and Moderna and Pfizer, through their COVID-19 vaccines, may have used some of that technology. And those vaccines have done billions and billions and billions of dollars, I think somewhere between $50 billion-$100 billion of revenue. And you guys are suing, claiming infringement. And the idea is that the idea is to not take those vaccines off the market, but rather for you guys to be paid a royalty or some fair share of some of the profits that they have gained over the last five years.
Yeah. That's a great summary. And it's a good segue into the economics for Arbutus. Now, this is a joint effort. So it's Arbutus and Genevant, which is a subsidiary of Roivant, of which we also own 16%. So we have an interest in Genevant. In terms of the profit cut from any lawsuit, it's 80% to Genevant, 20% to Arbutus, plus our 16% ownership of Genevant, obviously, would be quite important at that point if we are victorious in the suit.
Yeah. So I think net net, you guys roughly get like 1/3 of the economics. If we assume $50 billion-$100 billion in COVID-19 revenue from both parties, slap on a 10% royalty, and you get 1/3 , I could easily imagine how that could be very meaningful.
Yeah. You're getting me very excited there, Dennis. We can't comment on what Dennis is saying, obviously. But he can have his opinions. We're very careful about what we say about the lawsuit for obvious reasons. But yeah, thank you, Dennis.
All right. Got it. Well, look, I'm really excited about the Hep B data. I'm really excited about all the updates coming from the litigation over the next 12 months. And yeah, I'm just really excited about the year forward.
As are we. So thank you. I appreciate it.
Perfect. Thank you so much.
Thank you very much.