Arbutus Update
Big news for ABUS shareholders
January 23, 2025
Operation Warp Speed (OWS) was a public-private partnership to accelerate Covid-19 vaccines in 2020-2021. Moderna (MRNA) received ~$2.5 billion in emergency grants. Pfizer (PFE) didn’t directly participate but benefited from expedited approvals. Both companies were pressed to act faster than they had in the past. They were told to “move fast and break things” as Mark Zuckerberg would say.
One of the things that they broke was intellectual property rules. Arbutus (ABUS) through their investment in Genevant owned key parts of the IP that both MRNA and PFE used for their vaxes. ABUS is owed royalties that could add up to several percent of the vax revenues. ABUS has great odds against MRNA and more opaque odds against PFE in court this year. I expect two wins. I own ABUS; you might want to too.
February 25, 2025
Arbutus (ABUS) replaced its CEO and board. The new CEO is fantastic – an upgrade in who she is and what her hiring represents.
First, Arbutus shareholders (including this one) have actively encouraged the company to cut costs. The new board and management will do so.
Secondly, they should sell or partner their hepatitis B programs. Now that can happen.
Thirdly, it is time to focus singularly on approaching litigation against Moderna (MRNA) and Pfizer (PFE). The new CEO is intimately engaged in this as the special counsel at Genevant with responsibilities including LNP litigation.
Last and least, the board will be cheaper and smaller. Five is the correct number of board members and optimal for high quality and speedy decisions. So this is very positive for ABUS shareholders.
What next? The timing was necessary. Moderna (MRNA) knows that they have a massive liability and are likely to lose the upcoming suit. Their best option was to simply buy ABUS, but that wasn’t strategically optimal for Roivant (ROIV).
Instead, Roivant stepped in to take control, making common cause with ABUS shareholders. Now all of the strategic moves can be made with consolidated control and focus. Insiders are newly aligned with owners. The market is under reacting to this development. Shares are up about a quarter but should be up about a buck.
TL; DR
I own ABUS shares. You might want to too. If you don’t, buy some. If you do, consider adding beneath $5 per share.