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Arbutus (ABUS) to Focus on Hepatitis B Candidates, Stock Up

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Arbutus Biopharma (ABUS - Free Report) announced that it will be focusing its resources on developing hepatitis B virus (HBV) therapies, while discontinuing development of its oral RNA destabilizer, AB-161 and coronavirus combination therapy program. This strategic shift is expected to extend the company's cash runway through the third quarter of 2025. Shares of the company were up 4.8% on Sep 11, following the news.

ABUS is currently developing two candidates to address chronic HBV - imdusiran (AB-729) and AB-101. Imdusiran is an RNA interference (RNAi) designed to target and reduce HBV viral proteins and antigens. The candidate is being currently evaluated in multiple early-to-mid stage combination studies for treatment of chronic HBV infection.

The company recently initiated a phase Ia/Ib study on AB-101, an oral PD-L1 inhibitor. Data from preclinical studies on the candidate have indicated its ability to reactivate exhausted HBV-specific T-cells in chronic HBV patients,potentially restoring the immune response against the virus. Arbutus anticipates to report initial data from the early-stage study in the first half of 2024.

Arbutus’ shares have fallen 5.6% year to date compared with the industry’s 12.8% decline.

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Additionally, the company is discontinuing the development of all coronavirus and oral RNA destabilizer programs. It is ending the development of its oral RNA destabilizer,AB-161, due to a pre-clinical toxicology finding, which is unrelated to peripheral neuropathy. AB-161 was being evaluated in an early-stage study for patients with HBV infection. We note that therewere no reported safety issues in healthy subjects who received doses of AB-161 during the early-stage study.

ABUS is also discontinuing the discovery and development of new molecular therapies for treating coronavirus. This program includes AB-343, a coronavirus drug candidate that inhibits the SARS-CoV-2 Mpro and targets treatment of COVID-19 and potential coronavirus outbreaks. This decision was driven by an unfavorable pharmacokinetic profile observed during the investigational new drug-enabling studies for AB-343.

Discontinuation of the studies will provide the company with the financial stability needed to pursue its core HBV-focused programs. As of Jun 30, 2023, the company had cash, cash equivalents and investments in marketable securities of $163.5 million compared with $178.5 million as of Mar 31, 2023.

Hepatitis B is a significant global health concern affecting millions worldwide and leading to severe complications, including cirrhosis and liver cancer. Despite the availability of vaccines and treatment options, chronic HBV infection remains a pressing unmet medical need, resulting in approximately 820,000 deaths annually.

Zacks Rank & Stocks to Consider

Arbutus currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same industry are Anika Therapeutics (ANIK - Free Report) , Annovis Bio (ANVS - Free Report) and Corcept Therapeutics (CORT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 90 days, the Zacks Consensus Estimate forAnika Therapeutics has narrowed from a loss of $1.41 per share to a loss of $1.32 for 2023. The bottom-line estimate has narrowed from a loss of 79 cents to a loss of 64 cents for 2024 during the same time frame. Shares of the company have lost 41.5% year to date.

ANIK’s earnings beat estimates in one of the trailing four quarters and missed the mark in the remaining three, delivering an average negative surprise of 32.12%.

In the past 90 days, the Zacks Consensus Estimate for Annovis Bio has narrowed from a loss of $4.89 per share to a loss of $4.38 for 2023. The bottom-line estimate has narrowed from a loss of $3.18 to a loss of $2.77 for 2024 during the same time frame. Shares of the company have lost 14.8% year to date.

ANVS’ earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 13.40%.

In the past 90 days, the Zacks Consensus Estimate for Corcept’s earnings has gone up from 62 cents per share to 78 cents for 2023. The bottom-line estimate has also improved from 61 cents to 83 cents for 2024 during the same time frame. Shares of the company have rallied 62.7% year to date.

CORT’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 6.99%.

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