Arbutus's Q2 revenue fell 91% to $1.0M against a one-off-inflated year-ago quarter, but its $178.4M share of the Moderna patent settlement arrived July 8, with $1.3B more riding on an appeal.
Revenue
$1.0M
-90.6% YoY
Net income
-$5.1M
Diluted EPS
$-0.03
This period vs a year ago
Same period last year
This period
Revenue▼-90.6%
≈$11M
$1.0M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
A quiet quarter sitting on top of a $178 million windfall
Arbutus Biopharma's second quarter of 2026 looks weak on paper: revenue fell 91% to $1.0 million and the company swung from a $2.5 million profit to a $5.1 million loss. Neither number tells you much. The year-ago quarter was inflated by a one-time $9.6 million accounting release when a partnership with China's Qilu Pharmaceutical ended, and the real story of 2026 happened a quarter earlier and landed in cash just after this one closed: Arbutus's $178.4 million share of Moderna's $950 million settlement of the COVID-19 vaccine patent fight, received on July 8, 2026.
Arbutus is a small drug developer. It is working on imdusiran, an injected drug for chronic hepatitis B, and it owns patents on lipid nanoparticles (LNPs) — tiny fat bubbles that carry fragile mRNA into human cells, the delivery system inside mRNA vaccines. It earns almost nothing from selling products; its money comes from licensing and, now, from enforcing those patents.
At a glance
$1.0 million of Q2 revenue (down from $10.7 million). The drop is almost entirely the missing one-time Qilu item from last year; recurring royalty income is small and shrinking.
$92.6 million of cash and investments at June 30, plus $178.4 million received on July 8. Before the July payment, June's cash alone would cover roughly three years of spending at the first-half pace; with it, the company says it is evaluating returning capital to shareholders this quarter.
$1.3 billion more is still in play. Moderna owes Arbutus and its licensee Genevant a further $1.3 billion in total if an appeals court rules their way on one narrow legal question. The filing does not say how that sum would be split.
The numbers
Figures in US$ millions except per-share amounts. Source: Q2 2026 Form 10-Q.
Metric
Q2 2026
Q2 2025
YoY Change
Total revenue
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1.0
10.7
-90.6%
– Collaborations and licenses (Acuitas, Qilu)
0.2
10.2
-98.0%
– License revenue from Genevant
0.6
0.0
n/m
– Non-cash royalty revenue (ONPATTRO)
0.2
0.5
-65.8%
Research & development expense
2.9
5.5
-47.3%
General & administrative expense
3.9
3.3
+16.2%
Operating income (loss)
-6.0
1.5
n/m
Net income (loss)
-5.1
2.5
n/m
Diluted EPS
-$0.03
$0.01
n/m
Cash, equivalents & investments (period-end)
92.6
—
—
n/m = not meaningful (a swing between profit and loss has no sensible percentage). Operating margin — the share of revenue left after running the business — isn't shown: on $1.0 million of revenue and $7.0 million of expenses it works out to about -588%, a figure that describes the tiny revenue base more than the business.
For the first half of the year the picture is very different, because the Moderna settlement was booked as revenue, almost all of it in the first quarter:
First half (six months)
H1 2026
H1 2025
Total revenue
180.1
12.5
License revenue from Genevant (Moderna settlement share)
179.4
0.0
Total operating expenses
17.2
36.7
Net income (loss)
164.6
-22.0
Diluted EPS
$0.84
-$0.12
Cash used in operations
14.1
29.1
Takeaway: Arbutus is now a cash-rich company with a very cheap day-to-day operation — quarterly operating costs were $7.0 million — so what drives its value from here is not quarterly revenue but three external events: how much of the Moderna and Genevant money is handed back to shareholders, the appeal that decides the extra $1.3 billion, and the still-unscheduled Pfizer/BioNTech case.
What moved and why
Revenue. Management attributes the $9.7 million quarterly decline "primarily to recognizing all $9.6 million of previously deferred revenue upon the conclusion of our strategic partnership with Qilu in 2025." That was money Qilu had paid upfront years earlier; when the deal ended in June 2025 the unused portion was recognized all at once. Strip it out and last year's Q2 revenue was about $1.1 million, so the true comparison is $1.0 million versus roughly $1.1 million.
Underneath that, the legacy royalty streams are fading. Payments from Acuitas (a second royalty on Alnylam's ONPATTRO, a drug that uses Arbutus's LNP technology) fell to $0.2 million from $0.6 million. The "non-cash royalty revenue" line — ONPATTRO royalties that go to OMERS, an investor Arbutus sold part of that royalty to in 2019 for $20 million — fell to $0.2 million from $0.5 million. OMERS keeps those royalties until it has received $30 million; $26.9 million has been counted so far, after which the stream reverts to Arbutus.
Costs. R&D fell 47% to $2.9 million, which management attributes to "cost savings from our decisions to reduce our workforce and discontinue in-house scientific research, as well as lower clinical trial costs as studies neared completion." That follows the March 2025 restructuring that cut 57% of staff and closed the company's Pennsylvania headquarters and labs. G&A rose $0.5 million, "due primarily to an increase in litigation-related legal fees driven by the settlement with Moderna."
The notable point: Arbutus now spends more on administration and lawyers ($3.9 million) than on drug development ($2.9 million). For a company whose main pipeline asset has just received regulatory encouragement (below), that balance is worth watching.
The Moderna settlement, in plain terms
On March 3, 2026, Arbutus and Genevant (a company Arbutus co-founded with Roivant in 2018, which holds the exclusive license to Arbutus's LNP patents outside hepatitis B) settled all patent litigation with Moderna worldwide:
$950 million paid by Moderna on July 8, 2026 to Arbutus and Genevant together. Arbutus's share was $178.4 million, which "included reimbursement of the Company's litigation costs." Arbutus recorded it as revenue (almost all in the first quarter) and as a receivable at June 30 (the $179.4 million "Receivable from Genevant license" on the balance sheet).
A further $1.3 billion in total if Arbutus and Genevant win Moderna's appeal on "§1498" — a US law that says patent holders must sue the US government, not the contractor, for products made for the government. Moderna argued that COVID-19 vaccine doses it supplied to the US government fall under that rule. If the appeals court agrees for only some of the doses, the payment is prorated; if an Arbutus win is later overturned, the money must be returned with interest. The filing does not state Arbutus's share of the $1.3 billion. For reference only, its share of the $950 million was about 19%.
A Genevant dividend. Arbutus owns about 16% of Genevant, which received the rest of the $950 million, and "anticipates the payment of a material dividend from Genevant in the third quarter of calendar year 2026." No amount is given. Arbutus carries its Genevant stake at zero on the balance sheet, so none of this value shows up in the June 30 figures.
Moderna gets a paid-up licence to the patents, so there is no ongoing royalty from Moderna after this.
Arbutus has also sued the United States in the Court of Federal Claims (March 2026) to collect for the doses the lower court ruled were supplied directly to US government employees — the portion the §1498 rule already covers.
What the headline numbers hide
The first-half profit is a single cash payment, not a new business. Of $180.1 million in H1 revenue, $179.4 million came from the Genevant/Moderna line. Excluding it, first-half revenue was $0.8 million.
Cash conversion looks terrible, but only because of timing. H1 net income was $164.6 million while operating cash flow was minus $14.1 million — the settlement was booked as income but not paid until July 8, after the period ended. The two July payments ($178.4 million from the settlement and a $1.0 million fee Genevant paid on July 21 to end a side agreement over Moderna's RSV vaccine) together match the $179.4 million receivable. Expect Q3 operating cash flow to swing sharply positive.
No tax on the windfall. The company reported no income tax expense because it "utilized available net operating loss carryforwards" — past losses used to offset the taxable gain. With an accumulated deficit still at $1.2 billion, that shield is large.
Year-ago comparisons are distorted in both directions. Q2 2025 had the one-time $9.6 million Qilu revenue; H1 2025 also carried a $12.5 million one-off restructuring charge. H1 operating costs fell from $36.7 million to $17.2 million, but about $12.5 million of that drop is the absence of that charge rather than new savings.
Share count is creeping up, not down. Shares outstanding rose from 192.5 million to 197.6 million (+2.7%) in six months, mainly from $14.7 million of stock-option exercises (the filing doesn't break down who exercised). There are no buybacks.
Balance sheet is otherwise clean: no debt, $15.3 million of total liabilities, of which $8.8 million is a non-cash estimate of milestone payments owed to the former owners of Enantigen if a hepatitis B drug is ever sold.
Pipeline: the drug still matters
In April 2026 the FDA granted Fast Track designation to imdusiran for chronic hepatitis B — a status for drugs addressing serious unmet needs that allows more frequent FDA contact and a rolling application. In May 2026 Arbutus "reached alignment with the FDA on the design and safety parameters of a proposed Phase 2b clinical trial" and intends to finalize the protocol.
The goal is a "functional cure": the virus's surface protein disappears from the blood and viral DNA stays undetectable 24 weeks after stopping treatment — something today's lifelong pills rarely achieve. In the earlier IM-PROVE I Phase 2a trial, imdusiran plus 24 weeks of interferon (an approved immune-boosting drug) produced functional cure in 25% of patients overall (3 of 12) and 50% (3 of 6) in a subgroup with lower starting surface-protein levels. Those are small numbers; a Phase 2b trial is where they either hold up or don't. Arbutus also regained full global rights to imdusiran when the Qilu partnership ended in 2025, and says it is exploring "strategic alliances" to fund development.
Did last time's read hold up?
This is our first published analysis of Arbutus, so there is no earlier outlook to check against.
What to watch next
Q3 2026 (10-Q due around mid-November 2026): the $178.4 million receipt should lift cash and investments to roughly $270 million (our arithmetic: $92.6 million at June 30 plus the two July payments, before about $7 million of quarterly running costs). Also watch for the size of the Genevant dividend management expects this quarter.
Return of capital: management "is currently evaluating a return of capital to our shareholders in the third quarter of calendar year 2026." The form (special dividend or buyback) and size are not yet disclosed. How much it keeps for the Phase 2b trial versus hands back is the key capital-allocation decision.
The §1498 appeal: the outcome decides whether a further $1.3 billion (shared with Genevant) is paid. There is no date in the filing.
Pfizer/BioNTech: the US case in New Jersey had a claim construction ruling (the court's interpretation of what the patent words mean) in September 2025 that Arbutus considers favorable, but the parties "are awaiting further scheduling." In July 2026 Arbutus and Genevant added three suits outside the US — one in Canada and two at Europe's Unified Patent Court covering 20 countries — seeking damages and injunctions. These take years; the Moderna case took four years from filing to settlement.
Our view: with operating costs now around $7 million a quarter and roughly $270 million of cash expected after July, Arbutus has years of runway even with no further legal wins. The quarterly income statement will stay near zero revenue until the next legal payout, so the numbers to track are cash per share after any capital return, and whether the Phase 2b trial actually starts.