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Arbutus inks $116 mln funding deal with SoftBank-backed Roivant

Arbutus Biopharma Corp (Nasdaq: ABUS), a Vancouver-based developer of hepatitis B virus (HBV) therapeutic solutions, has agreed to sell US$116.4 million in convertible preferred shares to Roivant Sciences Ltd, a Swiss healthcare business. The proceeds will be used by the company to develop and advance its clinical and pre-clinical HBV drug pipeline. Arbutus will also partner with Roivant to accelerate pipeline development, grow its geographic footprint, and maximize the value of its non-HBV assets. Roivant is backed by several investors, including SoftBank Vision Fund. Earlier in 2017, SoftBank led a US$1.1 billion investment in the company.

PRESS RELEASE

Arbutus to Receive $116 Million Strategic Investment from Roivant Sciences

Cash to Provide Significant Support for Arbutus to Fund HBV R&D Pipeline

Roivant to Support Accelerating Development of Arbutus’ HBV Pipeline and Maximizing the Value of Arbutus’ LNP Assets

VANCOUVER, British Columbia and WARMINSTER, Pa., Oct. 02, 2017 (GLOBE NEWSWIRE) — Arbutus Biopharma Corporation (Nasdaq:ABUS), an industry-leading hepatitis B virus (HBV) therapeutic solutions company, today announced that it has signed a share purchase agreement with Roivant Sciences for the sale of convertible preferred shares (“Preferred Shares”) for gross proceeds of $116.4 million. Arbutus intends to use the proceeds to further develop and advance its clinical and preclinical HBV pipeline programs.

“We are pleased to receive this strategic investment from Roivant, Arbutus’ largest existing shareholder and a company known for its innovative approach to drug development,” said Dr. Mark J. Murray, President and CEO of Arbutus. “This financing meaningfully extends Arbutus’ operating runway to enable the generation of important clinical data for multiple pipeline programs. I look forward to leveraging Roivant’s infrastructure and capabilities to complement Arbutus and to accelerate our mission of developing a curative therapy for HBV.”

“I am pleased with the progress that Arbutus has made over the past two years, but I believe that the company’s most exciting days are ahead of it,” said Vivek Ramaswamy, Founder and CEO of Roivant and Chairman of Arbutus. “HBV is one of the most devastating diseases impacting patients globally, and a cure remains elusive. Roivant is proud to support Arbutus in taking on this bold mission through an expanded relationship. We look forward to providing strategic and operational support to Arbutus, while also maximizing the value of Arbutus’ other assets, including through potential additional investment where required.”

Following the close of this transaction, Roivant and Arbutus intend to explore working together to leverage Roivant’s infrastructure to accelerate more efficient development of Arbutus’ HBV drug pipeline. Arbutus also anticipates working with Roivant to expand its geographic footprint in HBV drug development and to maximize the value of Arbutus’ non-HBV assets, including Arbutus’ LNP and GalNAc platforms for the delivery of novel therapeutic modalities including RNA interference, mRNA, and gene editing technologies.

Roivant’s investment will take the form of preferred shares which will be convertible into common shares at a conversion price of $7.13 per share (a 15% premium to the closing stock price on September 29, 2017). The preferred shares plus an amount equal to 8.75% per annum compounded annually will be subject to mandatory conversion into common shares on the fourth anniversary of the closing date. Roivant has agreed to a four year lock-up period for this investment and its existing holdings in Arbutus. The initial investment of $50.0 million is expected to close shortly, and the remaining amount of $66.4 million is expected to close promptly upon satisfaction of customary closing conditions including regulatory and shareholder approvals, as applicable, under applicable Canadian securities law.

Please refer to the Company’s Form 8-K to be filed with the Securities and Exchange Commission for further details of the terms of the convertible preferred shares.

About Chronic Hepatitis B
Chronic Hepatitis B (cHBV) is a serious infection of the liver caused by the hepatitis B virus (HBV) and is considered a major global health problem. cHBV infection can cause chronic liver disease, which increases a patient’s risk of death from liver cirrhosis and liver cancer. Estimates from the Centers for Disease Control and Prevention (CDC) indicate that up to 350 million people globally may be chronically infected with HBV. According to the World Health Organization (WHO), more than 780,000 people die every year due to HBV. Most currently available therapies aim to suppress viral replication but do not lead to a cure in the overwhelming majority of patients.

Advisors
MTS Securities, LLC is serving financial advisor for the Special Committee of the Board of Directors of Arbutus. Arbutus’ Canadian legal advisor is Farris, Vaughan, Wills & Murphy LLP, with Dorsey & Whitney LLP as Arbutus’ US legal advisor. Roivant’s Canadian legal advisor is Lawson Lundell LLP, with White & Case LLP as Roivant’s US legal advisor.

About Arbutus Biopharma
Arbutus Biopharma Corporation is a biopharmaceutical company dedicated to discovering, developing and commercializing a cure for patients suffering from chronic HBV infection. Arbutus is headquartered in Vancouver, BC, and has facilities in Warminster, PA. For more information, please visit www.arbutusbio.com.

About Roivant Sciences
Roivant is dedicated to transformative innovation in healthcare. Roivant focuses on realizing the full potential of promising biomedical research by developing and commercializing novel therapies across diverse therapeutic areas. Roivant partners with innovative biopharmaceutical companies and academic institutions to ensure that important medicines are rapidly developed and delivered to patients.

Roivant advances its drug pipelines through wholly- or majority-owned subsidiary companies, including Axovant (neurology), Myovant (women’s health and endocrine diseases), Dermavant (dermatology), Enzyvant (rare diseases), and Urovant (urology). Roivant also pursues its mission by incubating and launching innovative healthcare companies operating outside of traditional biopharmaceutical development. Roivant’s long-range mission is to reduce the time and cost of developing and delivering new medicines for patients. For more information, please visit www.roivant.com.

Contact Information
Investors
Adam Cutler
Senior Vice President, Corporate Affairs
Phone: 604-419-3200
Email: acutler@arbutusbio.com
Tiffany Tolmie
Manager, Investor Relations
Phone: 604-419-3200
Email: ttolmie@arbutusbio.com
Media
David Schull
Russo Partners
Phone: 858-717-2310
Email: david.schull@russopartnersllc.com

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