Could Arbutus Biopharma’s Patent Harm Moderna?

Arbutus Biopharma and Moderna’s Patent Challenge

Arbutus Biopharma (ABUS) is a publicly-traded biopharmaceutical company dedicated to discovering and developing a cure for patients suffering from chronic hepatitis B infection.

The stock has been in the Aggressive Table of the Prohost Portfolio for a while and has recently rallied, doubling and tripling; it continues to soar. Why? Because Moderna (MRNA) has lost in its attempt to invalidate its United States patent owned by Arbutus. An administrative court run by the U.S. Patent and Trademark office rejected Moderna’s arguments that the Arbutus patent 069 should be revoked as this small firm might have described obvious concepts. The patent in question relates to lipid nanoparticle (LNP) technology that enables the human body to create its own therapeutic proteins.

The LNP technology could be crucial to the development of Moderna’s vaccines which put pressure on this firm to pay for a license to Arbutus’ patent portfolio. Some analysts believe that the ruling might have been disappointing for Moderna but many do not believe it will have an immediate financial impact on the company.

Yesterday’s story of the court’s negative reaction to Moderna in favor of Arbutus incited us to write an update about Arbutus; one of the firms that we believe have solid scientific fundamentals leading us to believe that they have a good chance of rebounding after experiencing crazy selloffs due to a failure in one of their trials.    

About Arbutus Biopharma

Arbutus Biopharma’s goal is developing hepatitis B virus (HBV) treatments with higher cure rates and with finite durations. To the firm, a functional cure is where HBV DNA replication and hepatitis B surface antigen (“HBsAg”) expression are reduced to undetectable levels and sustained six months after a finite duration of therapy.

The cause of hepatitis B liver infection is a hepatitis b virus which causes a chronic infection that could be life-threatening from the infection’s complications, including liver cirrhosis and liver cancer. The World Health Organization (WHO) estimates that over 250 million people worldwide suffer from chronic HBV infection. In the United States it is estimated that around 2 million people suffer from chronic HBV infection.

Arbutus’ HBV Product Pipeline:   

  • RNA interference (“RNAi”) therapeutics,
  • Oral capsid inhibitors,
  • Oral PDL1 inhibitors and  
  • Oral HBV RNA destabilizers.

Arbutus believes that a combination of these product candidates could lead to a curative treatment regimen with a finite duration for patients with chronic HBV infection.

Chronic HBV Infection

Chronic HBV infection is still an unmet medical need. Approximately 900,000 people die every year from complications related to chronic HBV infection despite the availability of effective vaccines and current treatment options. The current treatments include nucleos(t)ide analogs (“NA”) and pegylated interferon regimens (“Peg-IFN”) which, it is said, help to cure less than 5% of patients. With such low cure rates most patients with chronic HBV infection are required to take NA therapy daily for the rest of their lives.

Arbutus’ Recent Trial Results

The latest from the firm about its trial results came on May 18, 2020 when Arbutus reported positive follow-up data from a Phase 1a/1b clinical trial (AB-729-001) in chronic HBV subjects on nucleos(t)ide therapy who received a single subcutaneous injection of 60 mg of AB-729, a proprietary GalNAc delivered RNAi compound. 

William Collier, President and Chief Executive Officer of Arbutus, stated, “These new data further demonstrate the robust activity of AB-729. At week 12, the 60 mg single-dose achieved equivalent reductions in HBsAg as the 180 mg single-dose. We are currently dosing chronic HBV subjects in a multi-dose cohort with 60 mg of AB-729. These data keep us on track for achieving our goal of delivering a combination therapy that includes HBsAg reduction in chronic hepatitis B subjects.”

Dr. Gaston Picchio, Chief Development Officer of Arbutus, stated, “Importantly, throughout the 12 week period, not only does AB-729 demonstrate robust HBsAg reduction, it does so while remaining generally safe and well-tolerated with no abnormal transaminase values in any of the six subjects. We are impressed by both the magnitude and continuous reduction in HBsAg achieved with a single 60 mg dose. We believe that these features could provide a competitive advantage with a low dose and reduced frequency of injections. To this end, we are currently dosing chronic HBV subjects in a multi-dose cohort with 60 mg at 4-week intervals and also intend to evaluate 60 mg at 8 week intervals, which will begin as soon as possible.  As we previously announced we are also exploring an additional 90 mg single-dose cohort. We expect data from both the 60 mg multi-dose cohorts in the second half of the year.  We also expect week 12 90 mg single-dose data in the second half of 2020.”

AB-729-001 is an ongoing first-in-human clinical trial consisting of three parts:

  • Part 1, three cohorts of healthy subjects were randomized 4:2 to receive single-doses (60 mg, 180 mg, or 360 mg) of AB-729 or placebo. 
  • Part 2, non-cirrhotic, HBeAg positive or negative, chronic HBV subjects on a background of nucleos(t)ide therapy with HBV DNA below the limit of quantitation received single-doses (60 mg or 180 mg) of AB-729. An additional cohort in Part 2 is designed to include 90 mg single-dose of AB-729 in HBV DNA positive chronic HBV subjects. 
  • Part 3, chronic HBV subjects, HBV DNA negative first and HBV DNA positive later, will receive multi-doses of AB-729 for up to six months. 

Prohost Observations

As stated above, the market is large, offering an opportunity for a curative HBV regimen. It is estimated that 27 million (10.5%) of a total of over 250 million people worldwide with chronic HBV infection are diagnosed with the infection and approximately 4.5 million (1.8%) are on treatment.

It makes sense that a safe and curative regimen with a finite duration would substantially occupy a considerable segment of the large market.  

Do we guarantee that Arbutus’ products represent a curative regimen with a finite duration?

When it comes to clinical trial results we can be optimistic but we do not guarantee the results except in some presented products and technologies such as gene editing, etc.

We are optimistic.

Regarding the near-term; however, we cannot ignore the impact of the COVID-19 pandemic on clinical trial delays. Arbutus itself has tackled this subject, stating that the pandemic has resulted in and will likely continue to result in significant disruptions to businesses. The measures taken by companies include the closing of businesses and requiring people to stay in their homes; the latter raises uncertainty with regard to the ability of volunteers to travel to hospitals to participate in clinical trials.

Additional measures that had, and will likely continue to have, a major impact on clinical development, at least in the near-term, include shortages and delays in the supply chain, and prohibitions in certain countries on enrolling subjects in new clinical trials. 

Arbutus said, “While we have been able to progress with our clinical and pre-clinical activities to date, it is not possible to predict if the COVID-19 pandemic will negatively impact our plans and timelines in the future.”

Regarding Moderna’s negative court decision, we do not believe that it will hinder the firm’s ability to develop its vaccines and will not negatively influence its revenues when the vaccine will be approved and used.   

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