Company: ABUS
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001447028-25-000115
Chunk: 34

Company: Arbutus Biopharma Corp
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 price of the common shares as of the close of trading on December 10, 2021 (the Share Transaction). The Company received $15.0 million of gross proceeds from the Share Transaction on January 6, 2022. The common shares sold to the Investor in the Share Transaction represented approximately 2.5% of the common shares outstanding immediately prior to the execution of the Share Purchase Agreement. In June 2025, the Company and Qilu mutually agreed to conclude the strategic partnership and terminated the Qilu License Agreement and related agreements, and the Company now once again holds global rights for imdusiran. As no obligations remain under the Qilu License Agreement, the Company recognized all previously deferred revenue of $9.6 million in the second quarter of 2025.For the period of time the Qilu License Agreement was effective, it fell under the scope of ASC 808 as both parties were active participants in the arrangement and were exposed to significant risks and rewards. While this arrangement was in the scope of ASC 808, the Company analogized to ASC 606 for some aspects of this arrangement, including for the delivery of a good or service (i.e., a unit of account). In accordance with the guidance, the Company identified the following commitments under the arrangement: (i) rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (as defined in the Qilu License Agreement) (the Qilu License) and (ii) drug supply obligations and manufacturing technology transfer (the Manufacturing Obligations). The Company determined that these two commitments were not distinct performance obligations for purposes of recognizing revenue as the manufacturing process is highly specialized and Qilu would not be able to benefit from the Qilu License Agreement without the Company’s involvement in the manufacturing activities until the transfer of the manufacturing know-how was complete. As such, the Company combined these commitments into one performance obligation to which the transaction price was allocated and recognized this transaction price associated with the 

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bundled performance obligation over time using an inputs method based on labor hours expended by the Company on its Manufacturing Obligations.The Company determined the initial transaction price of the combined performance obligation to be $50.4 million, which included the $40.0 million upfront fee, $4.4 million of withholding taxes paid by Qilu on behalf of the Company, and the premium paid for the Share Transaction of $4.1 million. The Company determined the milestone payments