Arbutus said it was undertaking the restructuring in order to better align its hepatitis B business in Warminster, Penn.
Shares of Arbutus Biopharma Corporation are down about 5 percent this morning after the company announced it was initiating an organizational restructuring that includes the termination of 31 percent of its global workforce and the shutdown of its British Columbia site.
Arbutus said it was undertaking the restructuring in order to better align its hepatitis B business in Warminster, Penn. The company said the organizational changes are expected to result in increased efficiency, a more flexible variable cost structure and additional preservation of the company’s cash reserves.
Mark Murray, Arbutus’ president and chief executive officer, said the company has a broad pipeline of HBV assets as well as a strong balance sheet. He said the company is committed to leading the field to develop a cure for HBV and the reorganization is part of that effort. There are an estimated 400 million cases of HBV in the world. It is the most common serious liver infection globally. The company has multiple HBV therapies in development, two of which are in clinical trials.
In September 2017, the company announced topline results from a Phase II trial of RNAi agent, ARB-1467 in the treatment of HBV. Data shows 12 patients in the fourth cohort saw reductions in serum HBsAg levels, greater than cohorts 1 to 3. That prompted a significant investment into Arbutus from its board of directors, biotech investor Vivek Ramaswamy. In October, Ramaswamy and his company, Roivant Sciences in Arbutus to $116.4 million.
Additionally, Arbutus has AB-423, a first-generation capsid inhibitor that completed Phase I testing.
“We have chosen to consolidate our business around Warminster, PA, the center of our HBV discovery activities, thereby maximizing our focus on our mission to cure chronic HBV. As a result, some very talented and committed people will leave our organization and we thank them for their efforts,” Murray said in a statement.
Job cuts will not impact the company’s Lipid Nanoparticle (LNP) technology group. In September, Arbutus announced its LNP platform licensed by Cambridge, Mass.-based Alnylam Pharmaceuticals met endpoints in a Phase III study of that company’s RNAi therapeutic patisiran for the treatment of patients with hereditary ATTR amyloidosis with polyneuropathy. In November 2017, Alnylam initiated submission of a rolling New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for patisiran based on the Phase III study. A PDUFA date is set for Aug. 11.
In addition to Alnylam, the Arbutus LNP team also established a collaboration with Gritstone Oncology to deliver RNA-based neoantigen immunotherapy products.
The job cuts and closure of the Burnaby, B.C. site are expected to cost Arbutus about $5 million in restructuring costs that are related to one-time employee termination benefits, employee relocation costs, and site closure costs. Arbutus said the $5 million will primarily be paid in cash during the second quarter of 2018.
