Arbutus scuttles lead HBV capsid inhibitor program

Arbutus scrapped plans to start a combination trial next year due to the emergence of a safety signal in two healthy volunteers in a Phase I study of AB-506, an oral capsid inhibitor expected to be part of a regimen to treat HBV.

Arbutus Biopharma Corp. (NASDAQ:ABUS) said late Thursday it has discontinued development of AB-506 after seeing two cases of acute hepatitis. The company is mining its follow-on capsid inhibitors for use in combinations, and hopes to identify a candidate by December for IND-enabling studies.

The changes drove down Arbutus' shares by $0.41 (29%) to $1.02, with its market cap dipping below $60 million.

Arbutus believes the key to curing chronic HBV infection is to combine therapies targeting multiple aspects of HBV biology, particularly viral replication, HBsAg expression and host immune response. It had planned 2H20 starts for clinical trials of AB-506 in combination with AB-729 and an approved nucleoside analog. AB-729 is an RNAi therapy that blocks HBV replication, and nucleoside analogs are part of standard of care therapy.

Other products in Arbutus' preclinical pipeline include AB-452, which is an HBV RNA destabilizer; inhibitors of covalently closed circular DNA, which is the nuclear viral reservoir; and PD-L1 inhibitors.

At least two Arbutus executives, CBO Michael McElhaugh and CSO Michael Sofia, were part of the management team at Pharmasset Inc. Gilead Sciences Inc. (NASDAQ:GILD) bought Pharmasset in 2011 for $11 billion, obtaining Sovaldi sofosbuvir when that compound was in Phase III testing. Sovaldi became a critical piece of Gilead's massively profitable HCV franchise.

McElhaugh was Pharmasset's director of business development and market analytics. Sofia was its SVP of chemistry.

Targets: HBsAg - Hepatitis B surface antigen; PD-L1 (B7-H1; CD274) - Programmed cell death 1 ligand 1

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