Company: ABUS
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001447028-25-000115
Chunk: 31

Company: Arbutus Biopharma Corp
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 of such royalty interest on future global net sales of ONPATTRO will revert to the Company. OMERS has assumed the risk of collecting up to $30 million of future royalty payments from Alnylam and the Company is not obligated to reimburse OMERS if it fails to collect any such future royalties.  The $30 million in royalties to be paid to OMERS is accounted for as a liability, with the difference between the liability and the gross proceeds received accounted for as a discount. The discount, as well as $1.5 million of transaction costs, will be amortized as interest expense based on the projected balance of the liability as of the beginning of each period. As of June 30, 2025, the Company estimated an effective annual interest rate of approximately 2.5%.  Over the course of the Agreement, the actual interest rate will be affected by the amount and timing of royalty revenue recognized and changes in the timing of forecasted royalty revenue. On a quarterly basis, the Company will reassess the expected timing of the royalty revenue, recalculate the amortization and effective interest rate and adjust the accounting prospectively as needed. The Company recognizes non-cash royalty revenue related to the sales of ONPATTRO during the term of the Agreement. As royalties are remitted to OMERS from Alnylam, the balance of the recognized liability is effectively repaid over the life of the Agreement. From the inception of the royalty sale through June 30, 2025, the Company has recorded an aggregate of $25.9 million of non-cash royalty revenue for royalties earned by OMERS. There are a number of factors that could materially affect the amount and timing of royalty payments from Alnylam, none of which are within the Company’s control. During the six months ended June 30, 2025, the Company recognized non-cash royalty revenue of $1.0 million and related non-cash interest expense of less than $0.1 million. During the six months ended June 30, 2024, the Company recognized non-cash royalty revenue of $1.2 million and related non-cash interest expense of  less than $0.1 million.   The table below shows the activity related to the net liability for the six months ended June 30, 2025 and 2024:Six Months Ended June 30,20252024(in thousands)Net liability related to sale of future royalties - beginning balance$4,829 $6,953