In an August 5, 2022, research note, H.C. Wainwright & Co. LLC Analysts Ed Arce and Thomas Yip commented that Arbutus Biopharma Corp.'s (ABUS:NASDAQ) AB-729 has demonstrated impressive virologic control six months after dosing.
The analysts stated that at the EASL International Liver Congress 2022, Arbutus Biopharma released data showing that "AB-729 continues to demonstrate strong HBsAg reductions that are comparable in both HBeAg+ and HBeAg- patients across multiple dosing cohorts."
Furthermore, the analysts remarked that it is notable that data gathered so far from Cohort K in the Phase 1b study "suggests that baseline HBeAg status has no negative impact on HBsAg response to AB-729 treatment."
The data collected indicates that 26 of 34 patients reported HBsAg below the 100 IU/mL threshold at some point during the study and that 50% (16 of 32) of participants who completed treatment still had HBsAg levels below 100 IU/mL 24 weeks following their last dose of AB-729. H.C. Wainwright claimed that these AB-729 post-treatment responses are encouraging.
H.C. Wainwright advised that it is affirming its Buy rating on Arbutus Biopharma Corp. but is "moderating" its price target to $7.50 from its previous target of $8.50.
The analysts said that even though some patients experienced HBV DNA and ALT elevations, these symptoms later subsided without any required intervention.
The report noted that in four of six patients who took part in the trial, up to 60 weeks following treatment, "AB-729 continues to restore HBV-specific T-cell immune response and reduction in exhausted CD-8+ T-cells."
At present, the company is conducting three separate ongoing combination studies of AB-729.
Arbutus is expected to release initial data readouts from two AB-729 combination studies in HBV patients during H2/22, which H.C. Wainwright says represents an important milestone.
The studies include a Phase 2a study to evaluate AB-729 in combination with ongoing NA therapy and short courses of PEG-IFNα-2a, and a Phase 2a study of AB-729 with Assembly Biosciences Inc (ASMB:NASDAQ) core inhibitor vebicorvir and an NA.
A third Phase 2a study is also underway for AB-729 in conjunction with Vaccitech plc (VACC:NASDAQ)'s T-cell stimulating immunotherapeutic VTP-300, plus standard-of-care (NA).
Arbutus has another prospective drug in its pipeline called AB-836, which has led to strong HBV DNA reductions.
During a three-part Phase 1a/1, b ascending dose study, on Day 28, AB-836-001 treatment produced potent inhibition of HBV replication across all dosage levels.
The analysts reported that in the study, AB-836 was found to be safe and well-tolerated, apart from several cases of ALT elevations that were observed in the 100 mg and 200 mg cohorts.
As a result, Arbutus with undertaking a new longer-term Phase 1a study in healthy volunteers to investigate the causes and implications of the ALT flares observed in the 200 mg cohort.
H.C. Wainwright noted that the company is on pace to complete IND-enabling studies in H2/22 for its oral PDL1 inhibitor, AB-101, which was shown in preclinical studies to lead to encouraging levels of T-cell activation and additionally activate HBV-specific T-cells in-vitro in.
In H2/22, the firm is also expected to complete IND-enabling studies for its oral RNA destabilizer known as AB-161.
The analysts indicated that Arbutus Biopharma reported financial results for Q2/22.
During the quarter, the company brought in $14.2M (million) in revenue from collaborations and licenses, including $11.0M recognized under its license agreement with Qilu Pharmaceuticals.
The firm advised that for Q2/22, it posted a net loss of $14.2M, or ($0.10) per basic and diluted share.
H.C. Wainwright wrote that as of June 30, 2022, the company held total cash of $200.6M on its balance sheet, which will be sufficient to fund the company's operations and programs into Q2/24.
H.C. Wainwright commented in its update that it has modified its valuation model for Arbutus due to "the potential safety concern of AB-836, specifically the ALT elevations that were reported in the completed Phase 1a/1b study of AB-836 in HBV patients."
The research firm said it believes that more positive safety data of AB-836 from a new longer treatment duration Phase 1 study in healthy volunteers together with a Phase 2a proof-of-concept study in the future for HBV patients would alleviate safety concerns.
Arbutus Biopharma Corp. is a virology-focused biotechnology company based in Warminster, Pa.
The firm is presently conducting pre-clinical studies and active clinical trials in the areas of Hepatitis B virus (HBV) and pan-coronavirus.
H.C. Wainwright advised that it is affirming its Buy rating on Arbutus Biopharma Corp. but is "moderating" its price target to $7.50 from its previous target of $8.50.
The firm indicated that it arrived at that price for ABUS shares using a risk-adjusted net present value (rNPV) model. H.C. Wainwright said its model assigns a value of $4.48 per share for AB-729 in HBsAg in patients with chronic HBV infection, $1.56 per share for AB-836 in suppression of HBV DNA in HBV patients, $0.42 per share for the firm's other pipeline assets, and $1.04 per share for estimated royalties from potential 3% royalty settlement related to Moderna Inc.'s (MRNA:NASDAQ) {not rated by H.C.W.} COVID-19 vaccine net sales.
Arbutus Biopharma Corp. shares trade under the symbol "ABUS" on the Nasdaq Stock Exchange and last closed for trading at $2.53 on Monday, August 15, 2022.
The company has approximately149.95 million shares outstanding and a market cap of about $379.38 million.
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Disclosures for H.C.Wainwright & Co., Arbutus Biopharma Corp., August 5, 2022
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer.
I, Ed Arce and Thomas Yip, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Arbutus Biopharma Corporation, Assembly Biosciences, Inc. and Vaccitech plc (including, without limitation, any option, right, warrant, future, long or short position).
As of July 31, 2022 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Arbutus Biopharma Corporation, Assembly Biosciences, Inc. and Vaccitech plc. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Arbutus Biopharma Corporation and Assembly Biosciences, Inc. for noninvestment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Arbutus Biopharma Corporation, Assembly Biosciences, Inc. and Vaccitech plc for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Arbutus Biopharma Corporation, Assembly Biosciences, Inc. and Vaccitech plc as of the date of this research report.
