Arbutus Biopharma plans to repurchase up to $230 million of its common shares through a modified Dutch auction, funded by cash from its March settlement with Moderna.
Arbutus Biopharma plans to repurchase up to $230 million of its common shares through a modified Dutch auction tender offer, the company announced Friday. The offer price range is $5.00 to $5.75 per share. The company expects to fund the repurchase with cash on hand, including proceeds from its March 2026 settlement with Moderna.
In a modified Dutch auction, shareholders can tender shares at any price within the range. The company will determine the lowest price that allows it to buy the target amount. All shares tendered at or below that price will be purchased at that single price. The offer is expected to start on or about August 24 and expire on September 29, unless extended.
“Our March 2026 settlement with Moderna, and the July 2026 initial payment under that settlement, were critical milestones in establishing for the world what most of the scientific community already knew: Arbutus’ lipid nanoparticle technology inventions opened the doors to an entirely new world of therapeutic treatments using nucleic acids,” said Lindsay Androski, President and CEO of Arbutus. “Today, we are thrilled to announce our intention to return the financial proceeds from this win to the shareholders who have stood by our side during this long process. We, alongside our exclusive licensee Genevant, will continue to vigorously enforce our rights against infringers, including Pfizer and BioNTech.”
The offer has not yet commenced. It is subject to obtaining exemptive relief from securities laws in Canada and the United States regarding a proportionate tender feature and certain extension requirements. Arbutus has applied for that relief. There is no assurance the offer will commence on the terms described or at all.
If the offer proceeds, shareholders who tender at prices within the range will receive the clearing price. The buyback would reduce the share count and boost earnings per share, but only if fully subscribed. The ongoing patent litigation against Pfizer and BioNTech remains a risk factor that could affect the company's cash position or stock.
The deal is structured as a modified Dutch auction, a mechanism that lets the company set a price range and shareholders decide where to tender. Arbutus will set a single clearing price at the lowest level that allows it to buy the full $230 million. Shareholders who tender at or below that price get the clearing price. Those who tender above it get their shares back. The structure gives the company flexibility to buy shares at a discount if the stock trades below $5.00, while shareholders get the chance to exit at a premium if the clearing price lands above the market.
Arbutus shares closed at $4.87 on Thursday, below the offer's $5.00 floor. That means the tender offer, if it proceeds, would represent a 2.7% premium at the minimum and an 18% premium at the maximum. But the offer is contingent on receiving exemptive relief from Canadian and U.S. securities regulators. The company said it has applied for relief on a proportionate tender feature and certain extension requirements. The proportionate tender feature lets shareholders who tender a portion of their holdings get that portion bought at the clearing price, which is standard in Canadian issuer bids.
The $230 million buyback represents about 30% of Arbutus's market capitalization at the current stock price. The company had $310 million in cash and equivalents as of June 30, according to its most recent quarterly filing. The buyback would consume most of that cash, leaving limited room for other uses like litigation costs or R&D spending.
The Moderna settlement provided the cash for this buyback. Arbutus and its exclusive licensee Genevant sued Moderna in 2022 over the use of lipid nanoparticle technology in mRNA vaccines. The companies settled in March 2026. The financial terms were not disclosed, but Arbutus said it received an initial payment in July. The $230 million buyback suggests the total settlement was meaningfully larger than that amount, though the company has not confirmed the total.
Arbutus still has pending patent litigation against Pfizer and BioNTech over the same LNP technology. Androski said the company will "continue to vigorously enforce our rights against infringers, including Pfizer and BioNTech." The outcome of that litigation could bring additional cash, or it could require more spending on legal fees. The buyback reduces the cash available to fund that litigation, which could be a risk if the Pfizer case drags on.
The dealer-manager for the offer is J.P. Morgan Securities LLC. Georgeson LLC and TSX Trust Company will serve as the Information Agent and Depositary, respectively. Arbutus shareholders are urged to read the tender offer documents when filed with the SEC and Canadian regulators.
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