In This Article:
Believes Now Is the Logical Time for Arbutus to Pursue a License and Collaboration Agreement With a Strategic Partner and Explore All Options for HBV Portfolio
Urges Arbutus to Commit to No Dilutive Equity Issuances or ATM Use for Another Year
Whitefort Formally Requests Meeting With the Board to Ensure Alignment of Views on Path Forward
NEW YORK, December 03, 2024--(BUSINESS WIRE)--Whitefort Capital Management, LP (together with its affiliates, "Whitefort Capital," "us" or "we"), which is a long-term investor and the third largest shareholder of Arbutus Biopharma Corp. (NASDAQ: ABUS) ("Arbutus" or the "Company") with an ownership interest of approximately 6.8% of the Company’s outstanding shares, today published a letter to the Company’s Board of Directors (the "Board") outlining its views on the actions Arbutus must take in order to preserve and maximize shareholder value.
The full text of the letter is below:
Arbutus Biopharma Corporation
701 Veterans Circle
Warminster, PA 18974
Attn: Board of Directors
Re: Company’s Direction Following Announcement of a Functional Cure for Hepatitis B (HBV)
Dear Members of the Board,
Whitefort Capital Management, LP (together with its affiliates, "Whitefort Capital" or "we") is a significant shareholder of Arbutus Biopharma Corporation ("Arbutus" or the "Company") with ownership of approximately 6.8% of the Company’s outstanding shares. In our public letter to fellow shareholders dated May 17, 2024, and reiterated in our private letter to the Company’s Board of Directors (the "Board") dated July 16, 2024, we expressed our view that, provided the data from the Company’s IM-PROVE I Phase 2a clinical trial remained confirmatory, the Company would be well positioned to pursue a license and collaboration agreement with a strategic partner and should explore all strategic options for its HBV portfolio at that time. Following the confirmatory results presented by the Company at AASLD – The Liver Meeting® on November 18, 2024 (pre-announced to the market on November 15), which reported that in Cohort A1 of the IM-PROVE I trial, 50% of patients who had baseline HBsAg levels less than 1000 IU/mL and 25% of patients overall achieved functional cure, we believe that time has now come.
It is noteworthy that the Company’s share price did not react positively to the announcement of the trial results on November 15, 2024, and was down over 5% in the following days. We previously expressed our view that Phase 2b and Phase 3 trials for a combination therapy enrolling many additional patients will be large, expensive and complicated such that to maximize the probability of success of its HBV program, the Company should partner with a larger biopharmaceutical company with an existing hepatitis franchise that has the clinical expertise, commercial infrastructure and capital necessary to commercialize a complex combination therapy. We believe that the market’s negative, or at best muted, reaction to the positive data from the IM-PROVE I trial reflects investors’ concerns over a possible self-funding of the Phase 2b trial, resulting in further shareholder dilution. While the Company may have sufficient cash to fund substantially all of Phase 2b, with cash balances affording it runway to the end of 2026, we reiterate our view that the Board must avoid further diluting shareholders and should clearly communicate to the market that it will not pursue further dilution by self-funding a Phase 2b trial.