Monday, October 7, 2019

Open Letter to Arbutus Biopharma Board and Management

HBV RNAi or Nothing

It is now 4 years that Wunderkind Vivek Ramaswamy handed you a bag of worthless small molecules for half of what was then one of the premier nucleic acid therapeutics companies with a strategically valuable position in RNAi Therapeutics and bright prospects in mRNA Therapeutics and genome editing.

To this day, I wonder what he put into your drinks that you would agree to such a deal.

Today, your actions have destroyed almost all of that value as close to a dozen clinical candidates, one after the other, have failed in development revealing shocking deficiencies in evaluating preclinical safety.  Meanwhile, shareholders have lost almost everything as the share price has been decimated from around $15 to less than a dollar as I type.

But instead of dwelling on the past, I want to look to the future and make it very clear to you that with your in-house capsid inhibitor having been abandoned last week, you have no choice, but to now try and extract as much value as possible from your HBV RNAi candidate ABUS-729 with the goal of selling the company. $5 per share (~$400M) for a compound backed by phase I clinical data showing it to be safe, potent, and fairly long-lasting in knocking down its targets would seem reasonable given the interest in the space for RNAi assets and achievable before 2021.

Waiting for in-house candidates to mature enough to combine them with 729 would leave you too far behind the competition and cause you to waste your other main current asset: the $100M in cash balance (don't even think of in-licensing yet another poorly validated small molecule!).  $100M meanwhile would allow you to comfortably develop 729 to clinical validation.  This, of course, also means that you need to cut your functions to what is strictly necessary to achieve that goal, including eliminating all of pre-clinical research.

Further cash could be raised by monetizing your stake in Genevant.

The time to act decisively is now. 

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By Dirk Haussecker. All rights reserved.

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