Arbutus Biopharma Corp (ABUS) stock intrinsic value fair value estimate & owner earnings analysis

Arbutus Biopharma is a clinical-stage drug developer (chronic hepatitis B candidate imdusiran) that also owns lipid nanoparticle (LNP) delivery patents, licensed through Genevant, used in mRNA COVID vaccines. It has never earned an operating profit: owner earnings (operating cash flow less working-capital swings, stock compensation and maintenance capex) were negative every year we could measure, roughly -$0.79 per share in 2020, -$0.45 in 2022 and -$0.16 in 2025 as the company cut its workforce by about 40% in 2024 and a further 57% in 2025 and closed its Pennsylvania headquarters. Because the operating business only consumes cash, we do not value it on an earnings multiple. Value comes from named, contracted items only. The key item is the Moderna settlement signed March 2026: Moderna owes a $950 million lump sum by July 8, 2026, and Arbutus is entitled to 20% after litigation costs (the costs are not disclosed in the filing). We take that as secured, and treat the 10-K's cash position (about $91 million in cash and investments at end of 2025) as a starting point that we could not update for the 2026 quarters. Each case then charges the continuing cash burn of roughly $22-25 million a year, since imdusiran development and patent litigation are real costs. Bear (about $0.20 per share): costs consume a larger share, so Arbutus nets roughly $120 million; the company keeps burning cash for around eight years without a commercial product. Base (about $0.60): net proceeds of about $150 million plus remaining cash, less about five years of burn. Bull (about $1.75): full $190 million of gross entitlement, plus Arbutus's 20% share (about $260 million before costs) of a further $1.3 billion Moderna owes only if a limited appeal on the 28 U.S.C. 1498 government-contractor defence goes Arbutus's way. That payment is contractual but the outcome is not in hand and may be subject to repayment, so it appears only in the bull case. Left out entirely: any outcome in the Pfizer/BioNTech patent lawsuit (no trial result or settlement yet), any value for imdusiran (no approval path yet), and the roughly 16% stake in Genevant (no disclosed value). Management is evaluating returning capital to shareholders in the third quarter of 2026; we do not assume an amount. Note that the 2025 improvement in cash flow was partly flattered by non-cash recognition of deferred license revenue. What would make this wrong: costs deducted from the settlement being much lower, a successful Pfizer outcome, or clinical success would raise value materially; a much larger cost deduction or delayed payment would lower it. The filings do not allow the exact net proceeds to be reconciled, and this valuation should be revisited once the payment is reported.