Arbutus Biopharma Corporation (ABUS): Business Model Canvas [11-2024 Updated]

Arbutus Biopharma Corporation (ABUS) is at the forefront of revolutionizing treatments for chronic hepatitis B virus (cHBV) infection with its innovative business model. By leveraging key partnerships, a robust pipeline of HBV therapeutics, and a strong focus on research and development, Arbutus is poised to make significant strides in the biopharmaceutical landscape. Discover how their unique value propositions and strategic activities are shaping the future of virology and benefiting patients worldwide.

Arbutus Biopharma Corporation (ABUS) - Business Model: Key Partnerships

Collaborations with Qilu Pharmaceutical for imdusiran development

In December 2021, Arbutus Biopharma entered into a technology transfer and licensing agreement with Qilu Pharmaceutical Co., Ltd., granting Qilu a sublicensable, royalty-bearing license for the development, manufacturing, and commercialization of imdusiran in China, Hong Kong, Macau, and Taiwan. Qilu paid an upfront cash payment of $40 million on January 5, 2022, and agreed to milestone payments totaling up to $245 million based on the achievement of specific technology transfer, development, regulatory, and commercialization milestones. Additionally, Qilu will pay double-digit royalties in the low twenties percent on annual net sales of imdusiran in the specified territories.

Licensing agreements for technology transfer and royalties

Arbutus retains rights to royalties from its licensing agreements. Specifically, under the LNP License Agreement with Alnylam Pharmaceuticals, Arbutus is entitled to tiered royalty payments on the global net sales of ONPATTRO, ranging from 1.00% to 2.33% after offsets. As of September 30, 2024, a total of $24.4 million of royalties have been recognized from this agreement. Furthermore, Arbutus has a royalty interest ranging from 0.75% to 1.125% on global net sales of ONPATTRO from a settlement agreement with Acuitas Therapeutics.

Partnerships with clinical research organizations for trials

Arbutus collaborates with clinical research organizations to conduct trials for its products. Notably, the company has a clinical collaboration agreement with Barinthus Biotherapeutics plc for the evaluation of imdusiran in combination with VTP-300, an HBV antigen-specific immunotherapy. This partnership involves a Phase 2a proof-of-concept clinical trial, with both parties sharing costs. During the three months ended September 30, 2024, Arbutus incurred expenses of $0.5 million related to this trial.

Partnership	Details	Financial Terms
Qilu Pharmaceutical	Development and commercialization of imdusiran in specified territories	Upfront payment: $40 million; Milestone payments: up to $245 million; Royalties: low twenties percent
Alnylam Pharmaceuticals	License for LNP technology used in ONPATTRO	Royalties: 1.00% - 2.33% on global net sales; Total royalties recognized: $24.4 million
Acuitas Therapeutics	Royalty interest on ONPATTRO sales	Royalties: 0.75% - 1.125%
Barinthus Biotherapeutics	Clinical trial collaboration for imdusiran	Costs shared; Q3 2024 expenses incurred: $0.5 million

Arbutus Biopharma Corporation (ABUS) - Business Model: Key Activities

Development of HBV therapeutics, focusing on imdusiran and AB-101

Arbutus Biopharma is actively developing therapeutics for hepatitis B virus (HBV) infection. The company’s lead candidate, imdusiran (AB-729), is an RNA interference therapeutic designed to reduce HBV surface antigen and stimulate HBV-specific immune responses. As of September 30, 2024, imdusiran is undergoing two Phase 2a combination clinical trials. The second product, AB-101, an oral PD-L1 inhibitor, is currently in a Phase 1a/1b clinical trial.

Conducting clinical trials (Phase 1 and 2)

Arbutus has made significant investments in clinical trials. For the nine months ended September 30, 2024, the company reported research and development expenses of $45.2 million, which accounted for 68% of total operating expenses. This marked a decrease from $56.1 million in the same period of 2023, reflecting a strategic focus on key candidates.

Clinical Trial Phase	Product Candidate	Status	Expected Completion Date
Phase 2a	Imdusiran (AB-729)	Ongoing	2025
Phase 1a/1b	AB-101	Ongoing	2024

Research and development to enhance product pipeline

In addition to ongoing clinical trials, Arbutus is focused on expanding its product pipeline. The company is prioritizing its HBV pipeline, which has resulted in a strategic reduction of R&D expenses, particularly after discontinuing non-core projects like the coronavirus and AB-161 programs. The company's total operating expenses for the nine months ended September 30, 2024, were $67.0 million, down from $73.4 million in 2023.

As of September 30, 2024, Arbutus had cash, cash equivalents, and investments in marketable securities totaling $130.8 million, which is expected to fund operations into the fourth quarter of 2026. The company anticipates a net cash burn of between $63 million and $67 million for 2024.

Arbutus Biopharma Corporation (ABUS) - Business Model: Key Resources

Proprietary RNAi therapeutic technology (imdusiran)

Arbutus Biopharma Corporation leverages its proprietary RNA interference (RNAi) therapeutic technology, specifically imdusiran, which is designed for the treatment and prevention of chronic hepatitis B virus (cHBV). This technology is central to the company’s product pipeline, which aims to provide innovative solutions for patients suffering from viral infections. The development of imdusiran is supported by clinical collaborations, including a partnership with Barinthus Biotherapeutics plc, to evaluate its efficacy in combination with other therapies.

Experienced team in virology and drug development

Arbutus boasts a team with extensive experience in virology and drug development. This includes professionals who have previously worked in leading pharmaceutical companies and have a strong track record in advancing therapeutic candidates through clinical trials. The team’s expertise is critical in navigating the complexities of drug development, regulatory approvals, and market entry.

Financial resources, including $130.8 million in cash and equivalents

As of September 30, 2024, Arbutus reported cash, cash equivalents, and investments in marketable securities totaling $130.8 million. This financial position is crucial for supporting ongoing research and development efforts, as well as operational expenses. The company has no outstanding debt, which further strengthens its financial stability.

Financial Metric	Value (as of September 30, 2024)
Cash and Cash Equivalents	$130.8 million
Outstanding Debt	$0
Net Loss (nine months ended September 30, 2024)	($57.4 million)
Total Revenue (nine months ended September 30, 2024)	$4.6 million
Operating Expenses (nine months ended September 30, 2024)	$67.0 million

Arbutus Biopharma Corporation (ABUS) - Business Model: Value Propositions

Innovative combination therapies aimed at curing chronic HBV

Arbutus Biopharma focuses on developing innovative combination therapies to address chronic hepatitis B virus (HBV) infections. The company's lead product candidates include imdusiran (AB-729), an RNA interference therapeutic, and AB-101, an oral PD-L1 inhibitor. These therapies are designed to work synergistically to enhance the efficacy of treatment regimens aimed at achieving a functional cure for HBV.

Potential for high efficacy with lower side effects

The combination of imdusiran and AB-101 has shown promising results in clinical trials, with data indicating a reduction in hepatitis B surface antigen (HBsAg) levels and reawakening of HBV-specific immune responses. In two Phase 2a clinical trials, imdusiran demonstrated a significant impact on HBsAg reduction, while concurrently maintaining a favorable safety profile compared to existing treatments. The focus on reducing side effects positions Arbutus favorably in the competitive landscape of HBV therapies, where patient adherence is often affected by adverse effects.

Strong intellectual property portfolio in virology

Arbutus Biopharma maintains a robust intellectual property portfolio, particularly in the field of virology. This includes patents related to their proprietary lipid nanoparticle (LNP) technology, which is critical for the delivery of their RNAi therapeutics. The company is actively engaged in legal actions against industry leaders such as Moderna and Pfizer/BioNTech, asserting infringement of its patents. As of September 30, 2024, the fair value of contingent consideration related to its intellectual property was estimated at $8.3 million.

Financial Metric	Q3 2024	Q3 2023
Total Revenue	$1.339 million	$4.658 million
Net Loss	$(19.717) million	$(20.104) million
Research and Development Expenses	$14.273 million	$20.169 million
Cash and Cash Equivalents	$31.846 million	$26.285 million
Common Shares Outstanding	189,438,135	167,695,247

As of September 30, 2024, Arbutus Biopharma had $130.8 million in cash, cash equivalents, and investments in marketable securities, providing a solid financial base to support ongoing clinical development and operational activities. The company's strategic focus on leveraging its intellectual property and innovative therapies positions it uniquely within the biopharmaceutical landscape, aiming for significant advancements in the treatment of chronic HBV.

Arbutus Biopharma Corporation (ABUS) - Business Model: Customer Relationships

Engagement with healthcare professionals for clinical trial participation

Arbutus Biopharma actively engages healthcare professionals to participate in clinical trials, which is a crucial aspect of their product development strategy. As of September 30, 2024, the company managed a Phase 2a proof-of-concept clinical trial for imdusiran (AB-729), involving collaboration with Barinthus Biotherapeutics plc. This trial includes an additional treatment arm with nivolumab (Opdivo®), approved as a PD-1 monoclonal antibody inhibitor.

During the three months ended September 30, 2024, the company incurred $0.5 million in expenses related to this clinical trial, net of Barinthus's 50% share. For the nine months ended September 30, 2024, expenses totaled $1.7 million.

Collaboration with pharmaceutical companies for product development

Arbutus has established significant collaborations, particularly with Qilu Pharmaceutical Co., Ltd., under a licensing agreement. This agreement includes a one-time upfront payment of $40 million and potential milestone payments totaling up to $245 million, contingent upon achieving specific development and regulatory milestones. Additionally, Qilu is obligated to pay double-digit royalties based on annual net sales of imdusiran in the territory.

The following table summarizes the financial aspects of the collaboration agreements:

Collaboration Partner	Upfront Payment	Milestone Payments	Royalty Percentage
Qilu Pharmaceutical	$40 million	Up to $245 million	Low twenties percent
Alnylam Pharmaceuticals (ONPATTRO)	Royalty Sale: $20 million	Future royalties up to $30 million	0.75% to 1.125%

Direct communication with investors and stakeholders for transparency

Arbutus maintains direct communication with investors and stakeholders to ensure transparency regarding its operations and financial health. As of September 30, 2024, the company reported a net loss of $57.4 million, with total revenues from collaborations and licenses amounting to $2.9 million for the nine months ended September 30, 2024.

The company has issued 16,499,999 common shares during the nine months ended September 30, 2024, raising approximately $44.1 million. This reflects their strategy to keep investors informed and engaged through regular updates and financial disclosures.

Arbutus Biopharma Corporation (ABUS) - Business Model: Channels

Direct sales and partnerships for product distribution

Arbutus Biopharma utilizes various direct sales strategies and partnerships to distribute its products. As of September 30, 2024, the company had cash, cash equivalents, and investments in marketable securities totaling $130.8 million. The company has entered into significant collaborations, including a technology transfer and exclusive licensing agreement with Qilu Pharmaceutical Co., Ltd. This agreement included an upfront payment of $40 million and potential milestone payments totaling up to $245 million. The company also receives double-digit royalties based on annual net sales of its product candidates.

Clinical trial sites for patient engagement and data collection

Arbutus engages with clinical trial sites to enhance patient engagement and facilitate data collection for its pipeline products. The company is advancing its lead candidate, imdusiran, which is currently in two Phase 2a combination clinical trials. As of September 30, 2024, Arbutus reported a net loss of $57.4 million for the nine months ended September 30, compared to a net loss of $53.5 million for the same period in the previous year. This reflects a focus on clinical development, which is essential for gathering data to support regulatory submissions and future commercialization efforts.

Investor relations through financial reports and presentations

Investor relations are a critical aspect of Arbutus's communication strategy. The company provides financial reports and presentations to keep investors informed about its performance and future outlook. For the nine months ended September 30, 2024, Arbutus reported net cash provided by financing activities of $50.6 million, primarily from the issuance of common shares under the Open Market Sale Agreement. The company had issued approximately 16.5 million common shares during this period, resulting in net proceeds of around $44.1 million. This funding is crucial for the ongoing development of its therapeutic pipeline and maintaining operational liquidity.

Category	Details
Cash and Cash Equivalents	$130.8 million (as of September 30, 2024)
Upfront Payment from Qilu	$40 million
Potential Milestone Payments from Qilu	Up to $245 million
Net Loss (9 months ended September 30, 2024)	$57.4 million
Net Cash Provided by Financing Activities	$50.6 million
Common Shares Issued (9 months ended September 30, 2024)	16.5 million
Net Proceeds from Common Shares Issued	$44.1 million

Arbutus Biopharma Corporation (ABUS) - Business Model: Customer Segments

Patients suffering from chronic hepatitis B virus (cHBV) infection

Arbutus Biopharma Corporation primarily targets patients suffering from chronic hepatitis B virus (cHBV) infection. The global prevalence of cHBV is significant, with approximately 257 million people living with the infection as of 2023. This chronic condition can lead to serious health issues, including cirrhosis and liver cancer, making the need for effective treatments critical.

Arbutus is developing innovative therapies aimed at providing a functional cure for cHBV. Their lead product candidate, imdusiran (AB-729), is currently undergoing clinical trials. Imdusiran has shown promising results in reducing hepatitis B surface antigen (HBsAg) levels, which is essential for managing the disease.

Healthcare providers specializing in infectious diseases

Healthcare providers are a key customer segment for Arbutus, particularly those specializing in infectious diseases and liver health. These providers are critical in diagnosing, treating, and managing patients with cHBV.

According to the American Association for the Study of Liver Diseases (AASLD), an estimated 1.5 million new cases of hepatitis B occur annually in the United States alone. This statistic emphasizes the demand for effective treatment options that healthcare providers can offer to their patients. Arbutus aims to engage these providers through educational initiatives and partnerships to enhance awareness of their therapies.

Pharmaceutical companies seeking innovative therapies

Another significant customer segment includes pharmaceutical companies that are interested in innovative therapies for cHBV. Arbutus collaborates with these companies to develop and commercialize new treatments. The biopharmaceutical market for hepatitis B is projected to grow significantly, with the global market expected to reach $4.3 billion by 2027, driven by increased demand for novel treatment options.

Arbutus has entered into various collaboration agreements, including a notable partnership with Qilu Pharmaceutical Co., Ltd. This collaboration focuses on the development and commercialization of novel therapeutics, thereby expanding Arbutus’s reach and resources in the competitive biopharmaceutical landscape.

Customer Segment	Target Group	Market Size (2023)	Growth Rate (2024-2027)	Key Product Candidates
Patients with cHBV	Chronic hepatitis B patients	257 million globally	2.5% annually	Imdusiran (AB-729)
Healthcare Providers	Infectious disease specialists	1.5 million new cases/year (US)	5% annually	Imdusiran (AB-729)
Pharmaceutical Companies	Biopharmaceutical partners	$4.3 billion (expected by 2027)	7% annually	AB-101

Arbutus Biopharma's focus on these customer segments allows for tailored marketing strategies and product development, ensuring that their therapies effectively meet the needs of both patients and healthcare providers while facilitating collaborations with pharmaceutical companies eager to enhance their therapeutic offerings in the hepatitis B market.

Arbutus Biopharma Corporation (ABUS) - Business Model: Cost Structure

Significant R&D Expenditures

In 2024, Arbutus Biopharma Corporation incurred approximately $45.2 million in research and development (R&D) expenditures. This represents a significant portion of the company's operating expenses, reflecting its commitment to advancing therapeutic solutions for chronic hepatitis B virus (cHBV) infection. The decrease in R&D spending compared to previous periods can be attributed to the prioritization of the HBV pipeline and the cessation of other programs, such as the coronavirus and AB-161 initiatives.

General and Administrative Costs

The company's general and administrative costs for 2024 were around $17.4 million. These expenses include salaries, benefits for administrative staff, and various operational costs necessary to maintain the company’s business functions. Notably, these costs remained relatively stable compared to the previous year, with fluctuations mainly driven by legal expenses associated with ongoing litigation.

Legal and Patent-Related Expenses

Arbutus Biopharma is currently engaged in litigation concerning its intellectual property rights, particularly against Moderna and Pfizer/BioNTech regarding the use of its patented lipid nanoparticle technology in COVID-19 vaccines. Legal expenses related to these cases contribute to the cost structure and are included within the general and administrative costs. While specific figures for legal expenses are not disclosed, they are expected to impact the overall financial performance as the company seeks to protect its innovations.

Cost Category	2024 Amount (in millions)	Notes
Research and Development	$45.2	Focus on HBV pipeline; reduced spending from prior years
General and Administrative	$17.4	Includes employee compensation and operational costs
Legal and Patent-Related Expenses	Not Specified	Ongoing litigation expenses affecting overall costs

Arbutus Biopharma Corporation (ABUS) - Business Model: Revenue Streams

Milestone payments from collaboration agreements

Arbutus Biopharma generates revenue through milestone payments received from collaboration agreements. For example, in its agreement with Qilu Pharmaceutical Co., the company is entitled to milestone payments totaling up to $245 million, contingent upon achieving specific technology transfer, development, regulatory, and commercialization milestones.

Royalties from licensed products, including ONPATTRO

The company receives royalties from the sales of ONPATTRO, a drug developed by Alnylam Pharmaceuticals that utilizes Arbutus's LNP technology. As of September 30, 2024, the royalty revenue from ONPATTRO amounted to $1.981 million for the nine months ended September 30, 2024, which represented 43% of total revenue. Additionally, non-cash royalty revenue related to ONPATTRO for the same period was $1.736 million, accounting for 38% of total revenue.

Period	Royalties from ONPATTRO (in thousands)	Percentage of Total Revenue
Three Months Ended September 30, 2024	$644	48%
Three Months Ended September 30, 2023	$714	15%
Nine Months Ended September 30, 2024	$1,981	43%
Nine Months Ended September 30, 2023	$2,980	19%

Upfront payments and ongoing funding from partnerships

Arbutus received an upfront cash payment of $40 million as part of the licensing agreement with Qilu, along with an equity investment of $15 million. This agreement also includes provisions for ongoing funding through milestone payments and royalties based on annual net sales of imdusiran, which are expected to be in the double-digit royalties into the low twenties percent.

In addition, the company has utilized its Open Market Sale Agreement, generating approximately $44.1 million from issuing 16,499,999 common shares in the nine months ended September 30, 2024. This mechanism provides a continuous revenue stream that supports operational funding.

Updated on 16 Nov 2024

Resources:

1. Arbutus Biopharma Corporation (ABUS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Arbutus Biopharma Corporation (ABUS)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Arbutus Biopharma Corporation (ABUS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.