Nature of Operations [Text Block]

Nature of business and future operations

Arbutus Biopharma Corporation (the “Company” or “Arbutus”) is a Canadian biopharmaceutical business dedicated to discovering, developing, and commercializing a cure for patients suffering from chronic hepatitis B infection (“HBV”), a disease of the liver caused by hepatitis B virus (“HBV”). The Company is also developing a pipeline focused on advancing novel RNA interference therapeutics (RNAi) leveraging the Company’s expertise in Lipid Nanoparticle (“LNP”) technology.

Effective July 31, 2015, the corporate name changed from Tekmira Pharmaceuticals Corporation (“Tekmira”) to Arbutus Biopharma Corporation. Also effective July 31, 2015, the corporate name of the wholly-owned subsidiary, OnCore Biopharma, Inc. (“OnCore”) changed to Arbutus Biopharma Inc. (“Arbutus Inc.”). Including Arbutus Inc., the Company has five wholly-owned subsidiaries: Protiva Biotherapeutics Inc. (“Protiva”), Protiva Biotherapeutics (USA) Inc. (“Protiva USA”), Protiva Agricultural Development Company Inc. (“PADCo”), and Enantigen Therapeutics, Inc. (“Enantigen”).

The success of the Company is dependent on obtaining the necessary regulatory approvals to bring its products to market and achieve profitable operations. The continuation of the research and development activities and the commercialization of its products are dependent on the Company’s ability to successfully complete these activities and to obtain adequate financing through a combination of financing activities and operations. It is not possible to predict either the outcome of future research and development programs or the Company’s ability to fund these programs in the future.

Note 2 - Significant Accounting Policies

6 Months Ended

Jun. 30, 2015

Significant Accounting Policies [Text Block]

Significant accounting policies

Basis of presentation

These unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America (“U.S. GAAP”) for interim financial statements and accordingly, do not include all disclosures required for annual financial statements. These statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2014 and included in the Company’s 2014 annual report on Form 10-K. The unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments and reclassifications necessary to present fairly the financial position, results of operations and cash flows at June 30, 2015 and for all periods presented. The results of operations for the three and six months ended June 30, 2015 and June 30, 2014 are not necessarily indicative of the results for the full year. These condensed consolidated financial statements follow the same significant accounting policies as those described in the notes to the audited consolidated financial statements of the Company for the year ended December 31, 2014, except as described below.

Principles of Consolidation

These condensed consolidated financial statements include the accounts of the Company and four of its wholly-owned subsidiaries, Arbutus Inc., Protiva, Protiva USA, and Enantigen. All intercompany transactions and balances have been eliminated on consolidation.

The Company records its investment in PADCo using the equity method. The Company has determined that PADCo is a variable interest entity (“VIE”) of which it is not the primary beneficiary. The Company is not the primary beneficiary as it does not have the power to make decisions that most significantly affect the economic performance of the VIE nor does not have the right to receive benefits or the obligation to absorb losses that in either case could potentially be significant to the VIE. PADCo is described further in note 4(b).

Replacement awards

Replacement awards are share-based payment awards exchanged for awards held by employees of Arbutus Inc. As part of the Company’s acquisition of Arbutus Inc. (formerly OnCore), Arbutus (formerly Tekmira) shares were exchanged for Arbutus Inc.’s shares subject to repurchase rights held by Arbutus Inc.’s employees – see note 3.

As at the date of acquisition of Arbutus Inc., the Company determined the total fair value of replacement awards and attributed a portion of the replacement awards to pre-combination service as part of the total acquisition consideration, and a portion to post-combination service, which is recognized as compensation expense over the expiry period of repurchase provision rights subsequent to the acquisition date.

The replacement awards consist of common shares that were issued at acquisition. Accordingly, as stock compensation expense related to these awards is recognized, share capital is increased by a corresponding amount.

Goodwill and intangible assets

The costs incurred in establishing and maintaining patents for intellectual property developed internally are expensed in the period incurred.

Intangible assets consist of in-process research and development arising from the Company’s acquisition of Arbutus Inc. – see note 3. In-process research and development (IPR&D) intangible assets are classified as indefinite-lived and are not amortized. IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, which are the respective patent terms. Amortization begins when intangible assets with finite lives are put into use. If there is a major event indicating that the carrying value of intangible assets may be impaired, then management will perform an impairment test and if the recoverable value, based on undiscounted future cash flows, exceeds the carrying value, then such assets are written down to their fair values.

Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of Arbutus Inc. – see note 3. Goodwill has an indefinite accounting life and is therefore not amortized. Instead, goodwill is subject to a two-step impairment test on an annual basis, unless the Company identifies impairment indicators that would require earlier testing. The first step compares the fair value of the reporting unit to its carrying amount, which includes the goodwill. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired, and the second step of the impairment test is unnecessary. If the carrying amount exceeds the implied fair value of the goodwill, the second step measures the amount of the impairment loss. If the carrying amount exceeds the fair value of the goodwill, an impairment loss is recognized equal to that excess.

Income or loss per share

Income or loss per share is calculated based on the weighted average number of common shares outstanding. Diluted loss per share does not differ from basic loss per share since the effect of the Company’s stock options and warrants is anti-dilutive. Diluted income per share is calculated using the treasury stock method which uses the weighted average number of common shares outstanding during the period and also includes the dilutive effect of potentially issuable common shares from outstanding, in-the-money stock options and warrants. During the six months ended June 30, 2015, potential common shares of 2,774,398 (June 30, 2014 – 2,558,925) were excluded from the calculation of income per common share because their inclusion would be anti-dilutive.

Fair value of financial instruments

The Company measures certain financial instruments and other items at fair value.

To determine the fair value, the Company uses the fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use to value an asset or liability and are developed based on market data obtained from independent sources. Unobservable inputs are inputs based on assumptions about the factors market participants would use to value an asset or liability. The three levels of inputs that may be used to measure fair value are as follows:

•

Level 1 inputs are quoted market prices for identical instruments available in active markets.

•

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly. If the asset or liability has a contractual term, the input must be observable for substantially the full term. An example includes quoted market prices for similar assets or liabilities in active markets.

•

Level 3 inputs are unobservable inputs for the asset or liability and will reflect management’s assumptions about market assumptions that would be used to price the asset or liability.

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis, in thousands, and indicates the fair value hierarchy of the valuation techniques used to determine such fair value:

	Level 1		Level 2		Level 3		June 30, 2015
Assets
Cash and cash equivalents	$	207,205		-		-	$	207,205
Term deposit		10,012		-		-		10,012
Total	$	217,217					$	217,217

Liabilities
Warrants		-		-	$	3,606	$	3,606
Contingent consideration		-		-	$	5,136	$	5,136
Financial instrument		-		-		-		-
Total		-		-	$	8,742	$	8,742

		Level 1	Level 2		Level 3		December 31, 2014
Assets
Cash and cash equivalents	$	72,187	-		-	$	72,187
Guaranteed investment certificates		39,974	-		-		39,974
Total	$	112,161	-		-	$	112,161

Liabilities
Warrants		-	-	$	5,099	$	5,099
Financial instrument		-	-		-		-
Total		-	-	$	5,099	$	5,099

The Company acquired a term deposit in May 2015 with an original maturity of 24-months and it has been classified as a long-term investment on the balance sheet. For the period ended June 30, 2015, the fair value of the term deposit is $10,012,000 which includes the principal and accrued interest earned as at the balance sheet date.

The Company used a discounted cash flow model to determine the fair value of the financial instrument, related to Monsanto’s call option to acquire the equity or all of the assets of PADCo, as described in note 4(b). The fair value was determined at the date of recognition, and at each reporting date. The initial fair value of the financial liability was nil, and there has been no change to its fair value as at June 30, 2015.

Contingent consideration is a liability assumed by the Company from its acquisition of Arbutus Inc. – see notes 3 and 8. The Company used a discounted cash flow model to determine the fair value of the contingent consideration as at the acquisition date, and at each subsequent reporting date. The Company’s preliminary estimate of the contingent consideration was $4,736,000 for the reporting date of March 31, 2015. As at June 30, 2015, the Company has reassessed the preliminary initial fair value of the contingent consideration to be $5,136,000.

The following table presents the changes in fair value of the Company’s warrants, in thousands:

	Liability at beginning of the period		Opening liability of warrants issued in the period		Fair value of warrants exercised in the period			Increase (decrease) in fair value of warrants			Foreign exchange (gain) loss			Liability at end of the period
Six months ended June 30, 2014	$	5,379		-	$	(6,607	)	$	7,803		$	15		$	6,590
Six months ended June 30, 2015	$	5,099		-	$	(341	)	$	(801	)	$	(351	)	$	3,606

The change in fair value of warrant liability for the six months ended June 30, 2015 is recorded in the statement of operations and comprehensive loss.

The weighted average Black-Scholes option-pricing assumptions and the resultant fair values, in thousands, for warrants outstanding at June 30, 2015 and at December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014

Dividend yield		0.00	%		0.00	%
Expected volatility		69.32	%		85.22	%
Risk-free interest rate		0.59	%		1.00	%
Expected average term (years)		0.4			0.5
Fair value of warrants outstanding	$	9.50		$	12.80
Aggregate fair value of warrants outstanding	$	3,606		$	5,099
Number of warrants outstanding		379,500			398,250

Foreign currency translation and reporting currency

Functional currency

The functional currency of the Company and its integrated subsidiaries (Protiva and Protiva USA) is the Canadian dollar. Foreign currency monetary assets and liabilities are translated into Canadian dollars at the rate of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are translated at historical exchange rates. The previous month’s average rate of exchange is used to translate revenue and expense transactions. Exchange gains and losses are included in income or loss for the period.

The local currency of Arbutus Inc. (including its subsidiary, Enantigen) is the United States dollars which has been determined to be its functional currency, as it is the currency of the primary economic environment in which Arbutus Inc. operates and expends cash. Foreign currency monetary assets and liabilities are translated into United States dollars at the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated at historical exchange rates. The previous month’s average rate of exchange is used to translate revenue and expense transactions. Exchange gains and losses are included in income or loss for the period.

Reporting currency

The Company is using United States dollars as its reporting currency. All assets and liabilities are translated using the exchange rate at the balance sheet date. Revenues, expenses and other income (losses) are translated using the average rate for the period, except for large transactions, for which the exchange rate on the date of the transaction is used. Equity accounts are translated using the historical rate. The translation differences from the Company’s functional currency to the Company’s reporting currency of U.S. dollars are unrealized gains and losses; therefore, the differences are recorded in other comprehensive income (loss), and do not impact the calculation of Income or Loss per Share.

Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606). The standard is intended to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS by creating a new Topic 606, Revenue from Contracts with Customers. This guidance supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition – Construction-Type and Production-Type Contracts. The core principle of the accounting standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those good or services. The amendments should be applied by either (1) retrospectively to each prior reporting period presented; or (2) retrospectively with the cumulative effect of initially applying this ASU recognized at the date of initial application. In April 2015, the FASB voted to propose a deferral of the effective date of the ASU by one year. The new guidance would be effective for fiscal years beginning after December 15, 2017 instead of December 15, 2016, which for the Company means January 1, 2018. Entities are permitted to adopt in accordance with the original effective date if they choose. The Company has not yet determined the extent of the impact of adoption.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The update is intended to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Under amendments to GAAP, the assessment period is within one year after the date that the financial statements are issued (or available to be issued). The amendments are effective for the annual period ending after December 15, 2016, which for the Company means January 1, 2017, and for annual periods and interim periods thereafter. Early application is permitted. The Company does not plan to early adopt this update. The extent on the impact of this adoption has not yet been determined.

Note 3 - Merger with Arbutus Biopharma Inc. (Formerly OnCore BioPharma, Inc.)

6 Months Ended

Jun. 30, 2015

Business Combination Disclosure [Text Block]

Merger with Arbutus Biopharma Inc. (formerly OnCore BioPharma, Inc.)

On January 11, 2015, the Company entered into a Merger Agreement to acquire 100% of the outstanding shares of Arbutus Inc. and its wholly-owned subsidiary, Enantigen (see note 8). Arbutus Inc. was a privately owned U.S. company focused on discovery, development and commercialization of an all-oral cure regimen for patients with HBV. The merger was approved by the Company’s shareholders on March 3, 2015 and consummated on March 4, 2015. Arbutus Inc.’s results of operations and fair value of assets acquired and liabilities assumed are included in the Company’s consolidated financial statements from the date of acquisition.

The transaction has been accounted for using the acquisition method based on ASC 805, Business Combinations, on the basis that Arbutus (formerly Tekmira) is the acquirer, based on managements’ analysis and evaluation of the form of the acquisition, the relative contribution and rights of the predecessor groups post-closing, and the relative number of shares issued by the Company on acquisition of Arbutus Inc.. Under the acquisition method, the consideration transferred is measured at the market price as at the acquisition date. The excess of the purchase price over the preliminary value assigned to the net assets acquired has been recorded as goodwill. Acquisition costs are expensed as incurred. The company recorded $9,656,000 of acquisition costs for the six-months ended June 30, 2015.

The Company issued a total of 23,973,315 common shares with a total value of $381,942,000 as consideration, which is comprised of 20,347,906 common shares issued without subjects and 3,625,412 common shares issued to Arbutus Inc.’s founding executives and subject to repurchase provision. The fair value of the common shares issued without subjects has been determined to be the Company’s NASDAQ closing price of $18.26 on the date prior to the acquisition’s consummation, March 4, 2015. The total fair value of the common shares issued subject to repurchase provision has been determined to be $66,196,000, using the Black-Scholes pricing model with assumed risk-free interest rate of 0.74%, volatility of 81%, a zero dividend yield and an expected life of 4 years. Of the total fair value, $9,262,000 has been attributed as pre-combination service and included as part of the total acquisition consideration. The post-combination attribution of $56,934,000 will be recognized as compensation expense over the period of expiry of repurchase provision rights through to August 2018. The Company has included $5,324,000 compensation expense related to the expiration of repurchase provision rights from the acquisition date through to June 30, 2015. In July 2015, in conjunction with amendments to the the employment contracts of Arbutus Inc.’s founding executives, the Company amended the repurchase provision rights period of expiry from August 2018 to August 2017. This amendment results in an acceleration of compensation expense recognized in each subsequent period by approximately $1,893,000 per quarter, effective Q3 2015.

As at June 30, 2015, 3,625,412 shares were issued and outstanding which are subject to repurchase provision. Subsequent to the acquisition date, the repurchase rights expire at a rate of 453,177 shares every 3 months commencing on November 30, 2015.

The Company has further reserved 184,332 shares for the future exercise of Arbutus Inc. stock options. The total fair value of Arbutus Inc. stock options has been determined to be $3,287,000, using the Black-Scholes pricing model with the same assumption inputs used by the Company to determine the fair value of Arbutus options. Of the total fair value, $1,127,000 has been attributed as pre-combination service and included as part of the total acquisition consideration. The post-combination attribution of $2,160,000 will be recognized as compensation expense over the vesting period of the stock options through to December 2018. The Company has included $190,000 compensation expense related to the vesting of Arbutus Inc. stock options from the acquisition date through to June 30, 2015.

The aggregate fair value of consideration transferred to acquire Arbutus Inc.’s outstanding shares has been determined to be $381,942,000, and has been attributed to preliminary fair values of assets acquired and liabilities assumed as summarized in the following table, in thousands:

Consideration paid:
Common shares issued without subjects	$	371,553
Common shares issued subject to repurchase provision		9,262
Common shares issuable for Arbutus Inc. stock options		1,127
	$	381,942

Identifiable assets acquired and liabilities assumed:
Cash	$	324
Prepaid expenses and other assets		116
Accounts receivable		8
Property and equipment		147
Acquired intangible assets		390,017
Goodwill		156,053
Accounts payable and accrued liabilities		(3,580	)
Other noncurrent liabilities (note 8)		(5,136	)
Deferred income tax liability		(156,017	)
Total purchase price allocation	$	381,942

The preliminary fair value of intangible assets is estimated to be $390,017,000 using the income approach. The income approach uses valuation techniques to discount future economic benefits attributed to the subject intangible asset to a present value. Present value is based on current market expectations about those future amounts and includes management’s estimates of risk-adjusted future incremental earnings that may be achieved upon regulatory approval, promotion, and distribution associated with the rights and includes estimated cash flows of approximately 20 years and a discount rate of approximately 13.8%. The identifiable intangible assets acquired consist of in-process research and development (IPR&D) HBV assets, as summarized in the table below:

	$
IPR&D – Cyclophilins		35,124
IPR&D – Immune Modulator		189,182
IPR&D – Antigen Inhibitors		35,520
IPR&D – cccDNA		130,191
Total IPR&D	$	390,017

All IPR&D acquired are currently classified as indefinite-lived and so is not currently being amortized. IRP&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts, and will be amortized from that time over an estimated useful life based on respective patent terms. The fair value of each IPR&D asset will continue to be evaluated on a quarterly basis for indicators of impairment.

Based on the preliminary fair values above, an amount of $156,053,000 has been allocated to goodwill, which represents the excess of the purchase price over the final value assigned to the net assets acquired. Goodwill is attributable to synergies expected to arise after the Company’s acquisition of Arbutus Inc. The full amount of the goodwill has been assigned to Arbutus, which is the reporting unit management has determined the goodwill to be associated with. The goodwill is not deductible for tax purposes, and is not amortized, but will be evaluated for impairment on an annual basis.

The amount of net loss of Arbutus Inc. included in the consolidated statements of operations from the acquisition date, through the period ended June 30, 2015 was $4,072,000. Arbutus Inc. did not earn any revenues from the acquisition date through the period ended June 30, 2015.

The following table presents the unaudited pro forma results for the three and six months ended June 30, 2015 and 2014. The pro forma financial information combines the results of operations of Arbutus, Arbutus Inc., Protiva, Protiva USA, and Enantigen as though the businesses had been combined as of the beginning of fiscal 2014. The pro forma financial information is presented for informational purposes only, and is not indicative of the results of operations that would have been achieved if the merger had taken place at the beginning of fiscal 2014. The pro forma financial information presented includes acquisition costs, amortization charges for acquired tangible assets, but does not include amortization charges for acquired intangible assets as these assets have not yet been put in use.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Pro forma information
Gross Revenue	$	3,440		$	1,811		$	8,122		$	6,241
Loss from operations		(14,420	)		(13,844	)		(39,491	)		(24,278	)
Net loss		(14,886	)		(10,479	)		(33,940	)		(32,962	)
Basic and diluted loss per share		(0.27	)		(0.23	)		(0.67	)		(0.73	)

Note 4 - Collaborations, Contracts and Licensing Agreements

6 Months Ended

Jun. 30, 2015

Collaborative Arrangement Disclosure [Text Block]

Collaborations, contracts and licensing agreements

The following tables set forth revenue recognized under collaborations, contracts and licensing agreements, in thousands:

	Three months ended June 30				Six months ended June 30
	2015		2014		2015		2014
Collaborations and contracts
DoD (a)	$	1,862	$	861	$	4,907	$	4,101
Monsanto (b)		269		283		517		526
BMS (d)		-		-		-		206
Dicerna (e)		179		-		406		-
Total research and development collaborations and contracts		2,310		1,144		5,830		4,833

Licensing fees, milestone and royalty payments
Monsanto licensing fees and milestone payments (b)		805		626		1,647		1,171
Acuitas milestone payments (c)		-		-		-		150
Dicerna licensing fee (e)		263		-		526		-
Spectrum royalty payments (f)		62		41		119		87
Total licensing fees, milestone and royalty payments		1,130		667		2,292		1,408
Total revenue	$	3,440	$	1,811	$	8,122	$	6,241

The following table sets forth deferred collaborations and contracts revenue:

	June 30, 2015		December 31, 2014

DoD (a)	$	563	$	313
Monsanto current portion (b)		3,746		4,245
Dicerna current portion (e)		1,296		1,221
Deferred revenue, current portion		5,605		5,785
Monsanto long-term portion (b)		7,336		8,666
Dicerna long-term portion (e)		709		1,271
Total deferred revenue	$	13,650	$	15,722

(a) Contract with United States Government’s Department of Defense (“DoD”) to develop TKM-Ebola

On July 14, 2010, the Company signed a contract with the DoD to advance TKM-Ebola, an RNAi therapeutic utilizing the Company’s lipid nanoparticle technology to treat Ebola virus infection.

In the initial phase of the contract, funded as part of the Transformational Medical Technologies program, the Company was eligible to receive up to $34,700,000. This initial funding is for the development of TKM-Ebola including completion of preclinical development, filing an Investigational New Drug application with the United States Food and Drug Administration (“FDA”) and completing a Phase 1 human safety clinical trial. On May 8, 2013, the Company announced that the contract had been modified to support development plans that integrate recent advancements in lipid nanoparticle (“LNP”) formulation and manufacturing technologies. The contract modification increased the stage one targeted funding by an additional $6,970,000. On April 22, 2014, the Company and the DoD signed a contract modification to further increase the stage one targeted funding by $2,100,000 to $43,819,000. The additional funding is to compensate the Company for unrecovered overheads related to the temporary stop-work period that occurred in 2012 and to provide additional overhead funding should it be required. In May 2015, the Company and the DoD signed a contract modification to further increase stage one funding by up to $1,000,000.

The DoD has the option of extending the contract beyond the initial funding period to support the advancement of TKM-Ebola through to the completion of clinical development and FDA approval. Based on the contract’s budget this would provide the Company with up to $140,000,000 in funding for the entire program. In October 2014, the Company and the DoD exercised an option to add $7,000,000 for the manufacture of TKM-Ebola-Guinea (the “Ebola-Guinea Amendment”), developed by the Company, targeting the Ebola-Guinea strain responsible for the current outbreak in West Africa.

In March 2015, the Company and the DoD signed a contract modification to provide up to $2,250,000 to fund the Company for TKM-Ebola-Guinea IND submission expenses.

Under the contract, the Company is reimbursed for costs incurred, including an allocation of overhead costs, and is paid an incentive fee. At the beginning of the fiscal year the Company estimates its labour and overhead rates for the year ahead. At the end of the year the actual labour and overhead rates are calculated and revenue is adjusted accordingly. The Company’s actual labour and overhead rates will differ from its estimated rates based on actual costs incurred and the proportion of the Company’s efforts on contracts and internal products versus indirect activities. Within minimum and maximum collars, the amount of incentive fee the Company can earn under the contract varies based on costs incurred versus budgeted costs. During the contractual period, incentive fee revenue and total costs are impacted by management’s estimate and judgments which are continuously reviewed and adjusted as necessary using the cumulative catch-up method. At June 30, 2015, the Company believes it can reliably estimate the final contract costs so has recognized the portion of expected incentive fee which has been earned to date.

On July 20, 2015, the Company announced given the unclear development path for TKM-Ebola, development activities will be suspended and a joint re-evaluation of the development contract with the DoD is underway.

(b)

Option and Services Agreements with Monsanto Company (“Monsanto”)

On January 13, 2014, the Company and Monsanto signed an Option Agreement and a Services Agreement (together, the “Agreements”). Under the Agreements, Monsanto has an option to obtain a license to use the Company’s proprietary delivery technology and related intellectual property for use in agriculture. Over the option period, which is expected to be approximately four years, the Company will provide lipid formulations for Monsanto’s research and development activities, and Monsanto will make certain payments to the Company to maintain its option rights. The maximum potential value of the transaction, following the successful completion of milestones, is $86,200,000.

In May 2015, the arrangement was amended to extend the option period by approximately five months, with payments up to $2,000,000 for the extension period. From inception of the contract to June 30, 2015, the Company had received $18,550,000 from MonsantoThe amounts received relate to research services and use of the Company’s technology over the option period, and are recognized as revenue on a straight-line basis over the extended option period.

Under the Agreements, the Company has established a wholly-owned subsidiary, PADCo. The Company has determined that PADCo is a variable interest entity (“VIE”); however, Monsanto is the primary beneficiary of the arrangement. PADCo was established to perform research and development activities, which have been funded by Monsanto in return for a call option to acquire the equity or all of the assets of PADCo. At any time during the option period, Monsanto may choose to exercise its option, in which case Monsanto would pay the Company an option exercise fee and would receive a worldwide, exclusive right to use the Company’s proprietary delivery technology in the field of agriculture. Monsanto may elect to terminate this option at their discretion. The Company retains all rights to therapeutics uses of all current intellectual property and intellectual property developed under the Agreements. The Company’s initial investment is not significant, and has no implied or unfunded commitments and the maximum exposure to loss is limited to the amount of investment in the entity. The Company has included its investment in PADco in Other Assets. There were no significant assets or liabilities for PADCo as at June 30, 2015. There was no equity income or loss with respect to PADCo recorded for the six months ended June 30, 2015.

(c) License and collaboration with Alnylam Pharmaceuticals, Inc. (“Alnylam”) and Acuitas Therapeutics Inc. (“Acuitas”, formerly AlCana Technologies Inc.)

Milestone receipts and payments

In the six months ended June 30, 2014, the Company earned a $150,000 milestone from Acuitas, subsequent to Acuitas receiving a milestone payment from Alnylam with respect to Alnylam initiating a Phase III trial for ALN-TTR02.

Arbitration with Alnylam and Ascletis Pharmaceuticals (Hangzhou) Co. Ltd. (“Ascletis”)

On June 21, 2013, the Company transferred manufacturing process technology to Ascletis to enable them to produce ALN-VSP, a product candidate licensed to them by Alnylam. The Company believes that under the new licensing agreement with Alnylam, the technology transfer to Ascletis triggers a $5,000,000 milestone obligation from Alnylam to the Company. However, Alnylam has demanded a declaration that the Company has not yet met its milestone obligations. The Company disputes Alnylam’s position. To remedy this dispute, the Company and Alnylam have commenced arbitration proceedings as provided for under the agreement. The hearing date for this arbitration took place in May 2015, and a decision of the arbitrator is pending. The Company has not recorded any revenue in respect of this milestone.

(d) Bristol-Myers Squibb (“BMS”) collaboration

On May 10, 2010 the Company announced the expansion of its research collaboration with BMS. Under the new agreement, BMS uses small interfering RNA (“siRNA”) molecules formulated by the Company in LNP technology to silence target genes of interest. BMS is conducting the preclinical work to validate the function of certain genes and share the data with the Company. The Company could use the preclinical data to develop RNAi therapeutic drugs against the therapeutic targets of interest. The Company received $3,000,000 from BMS concurrent with the signing of the agreement and recorded the amount as deferred revenue. The Company was required to provide a pre-determined number of LNP batches over the four-year agreement. BMS had a first right to negotiate a licensing agreement on certain RNAi products developed by the Company that evolve from BMS validated gene targets.

Revenue from the May 10, 2010 agreement with BMS was being recognized as the Company produces the related LNP batches.

The revenue earned for the six months ended June 30, 2014 was related to BMS batches shipped during the period. In August 2014, the agreement expired and both companies’ obligations under the agreement ended.

(e) License and Development and Supply Agreement with Dicerna Pharmaceuticals, Inc. (“Dicerna”)

On November 16, 2014, the Company signed a License Agreement and a Development and Supply Agreement (together, the “Agreements”) with Dicerna to develop, manufacture, and commercialize products directed to the treatment of Primary Hyperoxaluria 1 (“PH1”). In consideration for the rights granted under the Agreements, Dicerna paid the Company an upfront cash payment of $2,500,000. The Company is also entitled to receive payments from Dicerna on manufacturing and services provided, as well as further payments with the achievement of development and regulatory milestones of up to $22,000,000, in aggregate, and potential commercial royalties. Further, under the Agreements, a joint development committee has been established to provide guidance and direction on the progression of the collaboration.

The Company determined the deliverables under the Agreements included the rights granted, participation in the joint development committee, materials manufactured and other services provided, as directed under the joint development committee. The Company has determined that manufacturing services and other services provided have standalone value, as a separate statement of work is executed and invoiced for each manufacturing or service work order. The relative fair values are determined as a batch price or fee is estimated upon the execution of each work order, with actual expenditures charged at comparable market rates with embedded margins on each work order. Manufacturing work orders are invoiced at the time of execution of the work order, at the initiation of manufacture, and at the release of materials. Revenue from service work orders is recognized as the services are performed. The license and participation in the joint development committee have been determined by the Company to not have standalone value due to the uniqueness of the subject matter under the Agreements. Therefore, these deliverables are treated as one unit of accounting and recognized as revenue over the performance period, which the Company has estimated to be approximately 28 months.

The Company believes the development and regulatory milestones are substantive, due to the existence of substantive uncertainty upon the execution of the arrangement, and that the achievement of the development and regulatory events are based, in part, on the Company’s performance and the occurrence of a specific outcome resulting from performance. The Company has not received any milestone payments to date.

(f) Agreements with Spectrum Pharmaceuticals, Inc. (“Spectrum”)

On May 6, 2006, the Company signed a number of agreements with Talon Therapeutics, Inc. (“Talon”, formerly Hana Biosciences, Inc.) including the grant of worldwide licenses (the “Talon License Agreement”) for three of the Company’s chemotherapy products, Marqibo®, Alocrest

(Optisomal Vinorelbine) and Brakiva

(Optisomal Topotecan).

On August 9, 2012, the Company announced that Talon had received accelerated approval for Marqibo from the FDA for the treatment of adult patients with Philadelphia chromosome negative acute lymphoblastic leukemia in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. Marqibo is a liposomal formulation of the chemotherapy drug vincristine. There are no further milestones related to Marqibo but the Company is eligible to receive total milestone payments of up to $18,000,000 on Alocrest and Brakiva.

Talon was acquired by Spectrum in July 2013. The acquisition does not affect the terms of the license between Talon and the Company.

On September 3, 2013, Spectrum announced that they had shipped the first commercial orders of Marqibo. For the three and six months ended June 30, 2015, the Company recorded $62,000 and $119,000 in Marqibo royalty revenue (three and six months ended June 30, 2014 - $41,000 and $87,000 respectively). For the six months ended June 30, 2015, the Company accrued 2.5% in royalties due to TPC in respect of the Marqibo royalty earned by the Company – see note 8, contingencies and commitments.

Note 7 - Concentrations of Credit Risk

6 Months Ended

Jun. 30, 2015

Concentration Risk Disclosure [Text Block]

Concentrations of credit risk

Credit risk is defined by the Company as an unexpected loss in cash and earnings if a collaborative partner is unable to pay its obligations in due time. The Company’s main source of credit risk is related to its accounts receivable balance which principally represents temporary financing provided to collaborative partners in the normal course of operations.

The Company does not currently maintain a provision for bad debts as the majority of accounts receivable are from collaborative partners or government agencies and are considered low risk.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at June 30, 2015 was the accounts receivable balance of $6,332,000 (December 31, 2014 - $1,903,000).

All accounts receivable balances were current as at June 30, 2015 and at December 31, 2014.

Note 8 - Contingencies and Commitments

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Text Block]

Contingencies and commitments

Product development partnership with the Canadian Government

The Company entered into a Technology Partnerships Canada ("TPC") agreement with the Canadian Federal Government on November 12, 1999. Under this agreement, TPC agreed to fund 27% of the costs incurred by the Company, prior to March 31, 2004, in the development of certain oligonucleotide product candidates up to a maximum contribution from TPC of $7,179,000

(C$9,323,000). As at June 30, 2015, a cumulative contribution of $2,965,000

(C$3,702,000) has been received and the Company does not expect any further funding under this agreement. In return for the funding provided by TPC, the Company agreed to pay royalties on the share of future licensing and product revenue, if any, that is received by the Company on certain non-siRNA oligonucleotide product candidates covered by the funding under the agreement. These royalties are payable until a certain cumulative payment amount is achieved or until a pre-specified date. In addition, until a cumulative amount equal to the funding actually received under the agreement has been paid to TPC, the Company agreed to pay 2.5% royalties on any royalties the Company receives for Marqibo. For the three and six months ended June 30, 2015, the Company earned royalties on Marqibo sales in the amount of $62,000 and $119,000

respectively

(three and six months ended June 30, 2014 – $41,000 and $87,000 respectively) (see note 4(f)), resulting in $3,000 being recorded by the Company as royalty payable to TPC (June 30, 2014 - $2,000). The cumulative amount paid or accrued up to June 30, 2015 was $9,000, resulting in the contingent amount due to TPC being $2,956,000 (C$3,692,000).

License agreement with Marina Biotech, Inc. (“Marina”)

On November 29, 2012 the Company announced a worldwide, non-exclusive license to a novel RNAi payload technology called Unlocked Nucleobase Analog (“UNA”) from Marina for the development of RNAi therapeutics.

UNA technology can be used in the development of RNAi therapeutics, which treats disease by silencing specific disease causing genes. UNAs can be incorporated into RNAi drugs and have the potential to improve them by increasing their stability and reducing off-target effects.

Under the license agreement the Company paid Marina an upfront fee of $300,000 during the year ended December 31, 2012. A further license payment of $200,000 was paid in 2013 and the Company will make milestone payments of up to $3,250,000 and royalties on each product developed by the Company that uses Marina’s UNA technology. The payments to Marina are expensed to research, development, collaborations and contracts expense.

Effective August 9, 2013, Marina’s UNA technology was acquired by Arcturus Therapeutics, Inc. (“Arcturus”) and the UNA license agreement between the Company and Marina was assigned to Arcturus. The terms of the license are otherwise unchanged. On December 22, 2014, the Company received clearance from Health Canada to conduct a Phase I Clinical Study with TKM-HBV, which utilizes Arcturus’ UNA technology. This triggered the accrual of $250,000 as at December 31, 2014 related to the milestone payable to Arcturus upon the dosing of first subject in a Phase I clinical trial of TKM-HBV, which occurred and was paid by the Company in January 2015.

Arbitration with the University of British Columbia (“UBC”)

Certain early work on lipid nanoparticle delivery systems and related inventions was undertaken at UBC. These inventions are licensed to the Company by UBC under a license agreement, initially entered in 1998 as amended in 2001, 2006 and 2007. The Company has granted sublicenses under the UBC license to Alnylam as well as to Spectrum. Alnylam has in turn sublicensed back to the Company under the licensed UBC patents for discovery, development and commercialization of RNAi products. In 2009, the Company entered into a supplemental agreement with UBC, Alnylam and Acuitas, in relation to a separate research collaboration to be conducted among UBC, Alnylam and Acuitas to which the Company has license rights. The settlement agreement signed in late 2012 to resolve the litigation among the Company, Alnylam, and Acuitas, provided for the effective termination of all obligations under such supplemental agreement as between and among all litigants.

On November 10, 2014, UBC filed a notice of arbitration against the Company and on January 16, 2015, filed a Statement of Claim, which alleges entitlement to $3,500,000 in allegedly unpaid royalties based on publicly available information, and an unspecified amount based on non-public information. UBC also seeks interest and costs, including legal fees. The Company is currently disputing UBC’s allegations, and no dates have been scheduled for this arbitration. The Company has not recorded an estimate of the possible loss associated with this arbitration, due to the uncertainties related to both the likelihood and amount of any possible loss or range of loss. Costs related to the arbitration have been recorded by the Company as incurred.

Contingent consideration from Arbutus Inc. acquisition of Enantigen and License Agreements between Enantigen and Blumberg and Drexel

In October 2014, Arbutus Inc. acquired all of the outstanding shares of Enantigen pursuant to a stock purchase agreement. Through this transaction, Arbutus Inc. acquired a HBV surface antigen secretion inhibitor program and a capsid assembly inhibitor program, each of which are now assets of Arbutus, following the Company’s merger with Arbutus Inc. – see note 3.

Under the stock purchase agreement, Arbutus Inc. agreed to pay up to a total of $21,000,000 to Enantigen’s selling stockholders upon the achievement of certain triggering events related to Enantigen’s two programs in pre-clinical development related to HBV therapies. The first triggering event is the enrollment of first patient in Phase 1b clinical trial in HBV patients, which the Company does not expect to occur in the next twelve-month period.

The regulatory milestone payments have an estimated fair value of approximately $5,136,000 and have been treated as contingent consideration payable in the preliminary purchase price allocation (note 3), based on information available at the date of acquisition, using a probability weighted assessment of the likelihood the milestones would be met and the estimated timing of such payments, and then the potential contingent payments were discounted to their present value using a probability adjusted discount rate that reflects the early stage nature of the development program, time to complete the program development, and overall biotech indices.

The Company is currently undertaking valuation assessments of assets acquired and liabilities assumed from Arbutus Inc., which includes a valuation assessment of the contingent consideration.

Drexel and Blumberg:

In February 2014, Arbutus Inc. entered into a license agreement with Blumberg and Drexel that granted an exclusive, worldwide, sub-licensable license to three different compound series: cccDNA inhibitors, capsid assembly inhibitors and HCC inhibitors.

In partial consideration for this license, Arbutus Inc. paid a license initiation fee of $150,000 and issued warrants to Blumberg and Drexel. Under this license agreement, Arbutus Inc. also agreed to pay up to $3,500,000 in development and regulatory milestones per licensed compound series, up to $92,500,000 in sales performance milestones per licensed product, and royalties in the mid-single digits based upon the proportionate net sales of licensed products in any commercialized combination. The Company is obligated to pay Blumberg and Drexel a double digit percentage of all amounts received from the sub-licensees, subject to customary exclusions.

In November 2014, Arbutus Inc. entered into an additional license agreement with Blumberg and Drexel pursuant to which it received an exclusive, worldwide, sub-licensable license under specified patents and know-how controlled by Blumberg and Drexel covering epigenetic modifiers of cccDNA and STING agonists. In consideration for these exclusive licenses, Arbutus Inc. made an upfront payment of $50,000. Under this agreement, the Company will be required to pay up to $1,000,000 for each licensed product upon the achievement of a specified regulatory milestone and a low single digit royalty, based upon the proportionate net sales of compounds covered by this intellectual property in any commercialized combination. The Company is also obligated to pay Blumberg and Drexel a double digit percentage of all amounts received from its sub-licensees, subject to exclusions.

Research Collaboration and Funding Agreement with Blumberg

In October 2014, Arbutus Inc. entered into a research collaboration and funding agreement with Blumberg under which the Company will provide $1,000,000 per year of research funding for three years, renewable at the Company’s option for an additional three years, for Blumberg to conduct research projects in HBV and liver cancer pursuant to a research plan to be agreed upon by the parties. Blumberg has exclusivity obligations to Arbutus with respect to HBV research funded under the agreement. In addition, the Company has the right to match any third party offer to fund HBV research that falls outside the scope of the research being funded under the agreement. Blumberg has granted the Company the right to obtain an exclusive, royalty bearing, worldwide license to any intellectual property generated by any funded research project. If the Company elects to exercise its right to obtain such a license, the Company will have a specified period of time to negotiate and enter into a mutually agreeable license agreement with Blumberg. This license agreement will include the following pre negotiated upfront, milestone and royalty payments: an upfront payment in the amount of $100,000; up to $8,100,000 upon the achievement of specified development and regulatory milestones; up to $92,500,000 upon the achievement of specified commercialization milestones; and royalties at a low single to mid-single digit rates based upon the proportionate net sales of licensed products from any commercialized combination.

NeuroVive Pharmaceutical AB (“NeuroVive”)

In September 2014, Arbutus Inc. entered into a license agreement with NeuroVive that granted them an exclusive, worldwide, sub-licensable license to develop, manufacture and commercialize, for the treatment of HBV, oral dosage form sanglifehrin based cyclophilin inhibitors (including OCB-030). Under this license agreement, the Company has been granted a non-exclusive, royalty free right and license and right of reference to NeuroVive’s relevant regulatory approvals and filings for the sole purpose of developing, manufacturing and commercializing licensed products for the treatment of HBV. Under this license agreement, the Company has (1) an option to expand its exclusive license to include treatment of viral diseases other than HBV and (2) an option, exercisable upon specified conditions, to expand its exclusive license to include development, manufacture and commercialization of non-oral variations of licensed products for treatment of viral diseases other than HBV. NeuroVive retains all rights with respect to development, manufacture and commercialization of licensed products and non-oral variations of licensed products for all indications (other than HBV) for which the Company has not exercised its option.

In partial consideration for this license, Arbutus Inc. paid NeuroVive a license fee of $1,000,000. The Company is also obligated to pay up to $47,000,000 in clinical development and regulatory milestones per indication and up to $102,500,000 in sales performance milestones per licensed product and indication. If the Company is acquired by a third party in a transaction that meets certain criteria, then the Company or its acquiror will be obligated to pay all remaining development, regulatory and sales milestone payments, regardless of whether the applicable milestone events have been achieved, for each licensed product that entered clinical development before such acquisition. As describe in note 3, the acquisition of Arbutus Inc. by the Company was completed by way of a Merger Agreement, which does not trigger any of the aforementioned milestone payments. The Company has agreed to pay NeuroVive tiered royalties in the mid-single to low-double digit range based upon the proportionate gross sales of patented licensed products from any commercialized combination. If the Company terminates this license agreement in its entirety for convenience prior to the first commercial sale of any licensed product, the Company will be obligated to pay NeuroVive a termination fee of $2,000,000.

Cytos Biotechnology Ltd (“Cytos”)

On December 30, 2014, Arbutus Inc. entered into an exclusive, worldwide, sub-licensable (subject to certain restrictions with respect to licensed viral infections other than hepatitis) license to six different series of compounds. The licensed compounds are Qbeta-derived virus-like particles that encapsulate TLR9, TLR7 or RIG-I agonists and may or may not be conjugated with antigens from the hepatitis virus or other licensed viruses. The Company has an option to expand this license to include additional viral infections other than influenza and Cytos will retain all rights for influenza, all non-viral infections, and all viral infections (other than hepatitis) for which it has not exercised its option.

In partial consideration for this license, the Company is obligated to pay Cytos up to a total of $67,000,000 for each of the six licensed compound series upon the achievement of specified development and regulatory milestones; for hepatitis and each additional licensed viral infection, up to a total of $110,000,000 upon the achievement of specified sales performance milestones; and tiered royalty payments in the high-single to low-double digits, based upon the proportionate net sales of licensed products in any commercialized combination.

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of presentation

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

Business Combinations Policy [Policy Text Block]

Replacement awards

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and intangible assets

The costs incurred in establishing and maintaining patents for intellectual property developed internally are expensed in the period incurred.

Earnings Per Share, Policy [Policy Text Block]

Income or loss per share

Fair Value Measurement, Policy [Policy Text Block]

Fair value of financial instruments

The Company measures certain financial instruments and other items at fair value.

•

Level 1 inputs are quoted market prices for identical instruments available in active markets.

•

Level 3 inputs are unobservable inputs for the asset or liability and will reflect management’s assumptions about market assumptions that would be used to price the asset or liability.

	Level 1		Level 2		Level 3		June 30, 2015
Assets
Cash and cash equivalents	$	207,205		-		-	$	207,205
Term deposit		10,012		-		-		10,012
Total	$	217,217					$	217,217

Liabilities
Warrants		-		-	$	3,606	$	3,606
Contingent consideration		-		-	$	5,136	$	5,136
Financial instrument		-		-		-		-
Total		-		-	$	8,742	$	8,742

		Level 1	Level 2		Level 3		December 31, 2014
Assets
Cash and cash equivalents	$	72,187	-		-	$	72,187
Guaranteed investment certificates		39,974	-		-		39,974
Total	$	112,161	-		-	$	112,161

Liabilities
Warrants		-	-	$	5,099	$	5,099
Financial instrument		-	-		-		-
Total		-	-	$	5,099	$	5,099

The following table presents the changes in fair value of the Company’s warrants, in thousands:

	Liability at beginning of the period		Opening liability of warrants issued in the period		Fair value of warrants exercised in the period			Increase (decrease) in fair value of warrants			Foreign exchange (gain) loss			Liability at end of the period
Six months ended June 30, 2014	$	5,379		-	$	(6,607	)	$	7,803		$	15		$	6,590
Six months ended June 30, 2015	$	5,099		-	$	(341	)	$	(801	)	$	(351	)	$	3,606

The change in fair value of warrant liability for the six months ended June 30, 2015 is recorded in the statement of operations and comprehensive loss.

The weighted average Black-Scholes option-pricing assumptions and the resultant fair values, in thousands, for warrants outstanding at June 30, 2015 and at December 31, 2014 are as follows:

	June 30, 2015			December 31, 2014

Dividend yield		0.00	%		0.00	%
Expected volatility		69.32	%		85.22	%
Risk-free interest rate		0.59	%		1.00	%
Expected average term (years)		0.4			0.5
Fair value of warrants outstanding	$	9.50		$	12.80
Aggregate fair value of warrants outstanding	$	3,606		$	5,099
Number of warrants outstanding		379,500			398,250

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign currency translation and reporting currency

Functional currency

Reporting currency

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

Note 2 - Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Level 1		Level 2		Level 3		June 30, 2015
Assets
Cash and cash equivalents	$	207,205		-		-	$	207,205
Term deposit		10,012		-		-		10,012
Total	$	217,217					$	217,217

Liabilities
Warrants		-		-	$	3,606	$	3,606
Contingent consideration		-		-	$	5,136	$	5,136
Financial instrument		-		-		-		-
Total		-		-	$	8,742	$	8,742

		Level 1	Level 2		Level 3		December 31, 2014
Assets
Cash and cash equivalents	$	72,187	-		-	$	72,187
Guaranteed investment certificates		39,974	-		-		39,974
Total	$	112,161	-		-	$	112,161

Liabilities
Warrants		-	-	$	5,099	$	5,099
Financial instrument		-	-		-		-
Total		-	-	$	5,099	$	5,099

Changes in Fair Value of Warrants [Table Text Block]

	Liability at beginning of the period		Opening liability of warrants issued in the period		Fair value of warrants exercised in the period			Increase (decrease) in fair value of warrants			Foreign exchange (gain) loss			Liability at end of the period
Six months ended June 30, 2014	$	5,379		-	$	(6,607	)	$	7,803		$	15		$	6,590
Six months ended June 30, 2015	$	5,099		-	$	(341	)	$	(801	)	$	(351	)	$	3,606

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	June 30, 2015			December 31, 2014

Dividend yield		0.00	%		0.00	%
Expected volatility		69.32	%		85.22	%
Risk-free interest rate		0.59	%		1.00	%
Expected average term (years)		0.4			0.5
Fair value of warrants outstanding	$	9.50		$	12.80
Aggregate fair value of warrants outstanding	$	3,606		$	5,099
Number of warrants outstanding		379,500			398,250

Note 3 - Merger with Arbutus Biopharma Inc. (Formerly OnCore BioPharma, Inc.) (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Consideration paid:
Common shares issued without subjects	$	371,553
Common shares issued subject to repurchase provision		9,262
Common shares issuable for Arbutus Inc. stock options		1,127
	$	381,942

Identifiable assets acquired and liabilities assumed:
Cash	$	324
Prepaid expenses and other assets		116
Accounts receivable		8
Property and equipment		147
Acquired intangible assets		390,017
Goodwill		156,053
Accounts payable and accrued liabilities		(3,580	)
Other noncurrent liabilities (note 8)		(5,136	)
Deferred income tax liability		(156,017	)
Total purchase price allocation	$	381,942

Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

	$
IPR&D – Cyclophilins		35,124
IPR&D – Immune Modulator		189,182
IPR&D – Antigen Inhibitors		35,520
IPR&D – cccDNA		130,191
Total IPR&D	$	390,017

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Pro forma information
Gross Revenue	$	3,440		$	1,811		$	8,122		$	6,241
Loss from operations		(14,420	)		(13,844	)		(39,491	)		(24,278	)
Net loss		(14,886	)		(10,479	)		(33,940	)		(32,962	)
Basic and diluted loss per share		(0.27	)		(0.23	)		(0.67	)		(0.73	)

Note 4 - Collaborations, Contracts and Licensing Agreements (Tables)

6 Months Ended

Jun. 30, 2015

Notes Tables

Schedule of Collaborative Arrangements and Non-collaborative Arrangement Transactions [Table Text Block]

	Three months ended June 30				Six months ended June 30
	2015		2014		2015		2014
Collaborations and contracts
DoD (a)	$	1,862	$	861	$	4,907	$	4,101
Monsanto (b)		269		283		517		526
BMS (d)		-		-		-		206
Dicerna (e)		179		-		406		-
Total research and development collaborations and contracts		2,310		1,144		5,830		4,833

Licensing fees, milestone and royalty payments
Monsanto licensing fees and milestone payments (b)		805		626		1,647		1,171
Acuitas milestone payments (c)		-		-		-		150
Dicerna licensing fee (e)		263		-		526		-
Spectrum royalty payments (f)		62		41		119		87
Total licensing fees, milestone and royalty payments		1,130		667		2,292		1,408
Total revenue	$	3,440	$	1,811	$	8,122	$	6,241

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

	June 30, 2015		December 31, 2014

DoD (a)	$	563	$	313
Monsanto current portion (b)		3,746		4,245
Dicerna current portion (e)		1,296		1,221
Deferred revenue, current portion		5,605		5,785
Monsanto long-term portion (b)		7,336		8,666
Dicerna long-term portion (e)		709		1,271
Total deferred revenue	$	13,650	$	15,722

Note 2 - Significant Accounting Policies (Details Textual) (USD $)	6 Months Ended				1 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015	Dec. 31, 2014	May 31, 2015 Term Deposit [Member]
Wholly Owned Subsidiaries Included in Financial Statements	4
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,774,398	2,558,925
Maturity of Investments					2 years
Long-term Investments	$ 10,012,000				$ 10,012,000
Business Combination, Contingent Consideration, Liability	$ 5,136,000		$ 4,736,000

Note 2 - Assets and Liabilities Measured at Fair Value (Details) (USD $)	Jun. 30, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 207,205,000	$ 72,187,000
Long-term Investments	10,012,000
Total	217,217,000	112,161,000
Guaranteed investment certificates		39,974,000
Liabilities
Warrants	3,606,000	5,099,000
Business Combination, Contingent Consideration, Liability	5,136,000
Total	8,742,000	5,099,000
Fair Value, Inputs, Level 1 [Member]
Assets
Cash and cash equivalents	207,205,000	72,187,000
Long-term Investments	10,012,000
Total	217,217,000	112,161,000
Guaranteed investment certificates		39,974,000
Fair Value, Inputs, Level 2 [Member]
Assets
Guaranteed investment certificates
Fair Value, Inputs, Level 3 [Member]
Liabilities
Warrants	3,606,000	5,099,000
Business Combination, Contingent Consideration, Liability	5,136,000
Total	$ 8,742,000	$ 5,099,000

Note 2 - Changes in Fair Value of the Company's Warrants (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Liability at beginning of the period	$ 5,099	$ 5,379
Fair value of warrants exercised in the period	(341)	(6,607)
Increase in fair value of warrants	(801)	7,803
Foreign exchange loss	(351)	15
Liability at end of the period	$ 3,606	$ 6,590

Note 2 - Black-Scholes Option-pricing Assumptions (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Fair Value Assumptions, Expected Volatility Rate	69.32%	85.22%
Fair Value Assumptions, Risk Free Interest Rate	0.59%	1.00%
Fair Value Assumptions, Expected Term	146 days	182 days
Fair value of warrants outstanding (in dollars per share)	$ 9.50	$ 12.80
Aggregate fair value of warrants outstanding	$ 3,606	$ 5,099
Number of warrants outstanding (in shares)	379,500	398,250

Note 3 - Merger with Arbutus Biopharma Inc. (Formerly OnCore BioPharma, Inc.) (Details Textual) (USD $)	0 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended		3 Months Ended	0 Months Ended		0 Months Ended			6 Months Ended	4 Months Ended	0 Months Ended		4 Months Ended	6 Months Ended
	Mar. 03, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Jun. 30, 2015 Arbutus Inc. [Member] Subject to Repurchase [Member]	Sep. 30, 2015 Arbutus Inc. [Member] Scenario, Forecast [Member]	Mar. 03, 2015 Arbutus Inc. [Member] Common Shares Issued Without Subjects [Member]	Mar. 03, 2015 Arbutus Inc. [Member] Common Shares Issued Without Subjects [Member]	Mar. 03, 2015 Arbutus Inc. [Member] Common Shares Issued Subject to Repurchase Provision [Member]	Mar. 03, 2015 Arbutus Inc. [Member] Common Shares Issued Subject to Repurchase Provision [Member]	Mar. 03, 2015 Arbutus Inc. [Member] Common Stock [Member]	Jun. 30, 2015 Arbutus Inc. [Member] Related to the Expiration of Repurchase Provision Rights [Member]	Jun. 30, 2015 Arbutus Inc. [Member] Arbutus Stock Options [Member]	Mar. 03, 2015 Arbutus Inc. [Member] Finite-Lived Intangible Assets [Member]	Mar. 03, 2015 Arbutus Inc. [Member]	Jun. 30, 2015 Arbutus Inc. [Member]	Jun. 30, 2015 Arbutus Inc. [Member]	Mar. 03, 2015 Arbutus Inc. [Member]	Jan. 11, 2015 Arbutus Inc. [Member]
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual																		$ 0
Common Stock, Shares, Issued		54,303,402		54,303,402		22,438,169	3,625,412
Business Acquisition, Percentage of Voting Interests Acquired																					100.00%
Business Combination, Acquisition Related Costs		361,000		9,656,000															9,656,000
Stock Issued During Period, Shares, Acquisitions																	23,973,315
Stock Issued During Period, Value, Acquisitions				381,942,000													381,942,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares									20,347,906		3,625,412
Business Acquisition, Share Price										$ 18.26
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned										371,553,000		66,196,000			3,287,000
Fair Value Assumptions, Risk Free Interest Rate				0.59%		1.00%					0.74%
Fair Value Assumptions, Expected Volatility Rate				69.32%		85.22%					81.00%
Fair Value Assumptions, Expected Dividend Rate				0.00%		0.00%					0.00%
Fair Value Assumptions, Expected Term				146 days		182 days					4 years					20 years
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned, Attributed as Pre Combination Service and Included as Part of Total Purchase Price												9,262,000			1,127,000
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned, Attributed as Post Combination Compensation Expense													56,934,000		2,160,000
Allocated Share-based Compensation Expense														5,324,000
Business Combination, Acceleration of Share-based Compensation Expense Per Quarter								1,893,000
Common Stock, Shares, Outstanding		54,303,402		54,303,402		22,438,169	3,625,412
Stock Repurchase Rights, Expiration Rate, Shares																			453,177
Common Stock, Capital Shares Reserved for Future Issuance															184,332
Business Acquisition, Compensation Expense Related to Vesting of Shares															190,000
Business Combination, Consideration Transferred	381,942,000																381,942,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles																				390,017,000
Fair Value Inputs, Discount Rate																13.80%
Goodwill		156,053,000		156,053,000																156,053,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual																		$ 4,072,000

Note 3 - Business Acquistion Assets and Liabilities Transferred (Details) (USD $)	0 Months Ended
	Mar. 03, 2015
Consideration paid:
	$ 381,942,000
Identifiable assets acquired and liabilities assumed:
	381,942,000
Common Shares Issued Without Subjects [Member] \| Arbutus Inc. [Member]
Consideration paid:
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned	371,553,000
Common Shares Issued Subject to Repurchase Provision [Member] \| Arbutus Inc. [Member]
Consideration paid:
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned	66,196,000
Common shares issued subject to repurchase provision	9,262,000
Shares Issuable for Arbutus Stock Options [Member] \| Arbutus Inc. [Member]
Consideration paid:
Common shares issued subject to repurchase provision	1,127,000
Arbutus Inc. [Member]
Consideration paid:
	381,942,000
Identifiable assets acquired and liabilities assumed:
	$ 381,942,000

Note 3 - Pro Forma Financial Information (Details) (Arbutus Inc. [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Arbutus Inc. [Member]
Pro forma information
Gross Revenue	$ 3,440	$ 1,811	$ 8,122	$ 6,241
Loss from operations	(14,420)	(13,844)	(39,491)	(24,278)
Net loss	$ (14,886)	$ (10,479)	$ (33,940)	$ (32,962)
Basic and diluted loss per share (in dollars per share)	$ (0.27)	$ (0.23)	$ (0.67)	$ (0.73)

Note 4 - Collaborations, Contracts and Licensing Agreements (Details Textual) (USD $)

3 Months Ended

6 Months Ended

0 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

1 Months Ended

0 Months Ended

1 Months Ended

3 Months Ended

6 Months Ended

16 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

Dec. 31, 2014

Jun. 30, 2015

PADCo [Member]

May 10, 2010

BMS [Member]

May 10, 2010

BMS [Member]

Nov. 16, 2014

Dicerna [Member]

Jun. 30, 2015

Dicerna [Member]

Jun. 30, 2014

Dicerna [Member]

Jun. 30, 2015

Dicerna [Member]

Jun. 30, 2014

Dicerna [Member]

Dec. 31, 2014

Dicerna [Member]

May 08, 2013

DoD [Member]

Increase to Support Development Plans [Member]

Apr. 22, 2014

DoD [Member]

Increased Funding for Stage One [Member]

May 31, 2015

DoD [Member]

Contract Modification to Fund The Company For TKM-Ebola-Guinea IND Submission Expenses [Member]

Mar. 31, 2015

DoD [Member]

Oct. 31, 2014

DoD [Member]

Apr. 22, 2014

DoD [Member]

Jul. 14, 2010

DoD [Member]

Jan. 13, 2014

Monsanto [Member]

May 31, 2015

Monsanto [Member]

Jun. 30, 2015

Monsanto [Member]

Jun. 30, 2014

Monsanto [Member]

Jun. 30, 2015

Monsanto [Member]

Jun. 30, 2014

Monsanto [Member]

May 31, 2015

Monsanto [Member]

Aug. 09, 2012

Talon Therapeutics [Member]

Jul. 14, 2010

Maximum [Member]

Contract Extension [Member]

Jun. 21, 2013

Alnylam License Agreement [Member]

Positive Outcome of Litigation [Member]

Jun. 30, 2014

Alnylam License Agreement [Member]

Jun. 30, 2015

Marqibo [Member]

Jun. 30, 2014

Marqibo [Member]

Jun. 30, 2015

Marqibo [Member]

Jun. 30, 2014

Marqibo [Member]

Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets

$ 0

Variable Interest Entity, Nonconsolidated, Carrying Amount, Liabilities

Variable Interest Entity, Measure of Activity, Income or Loss before Tax

Collaborative Arrangement, Term

4 years

Revenue Recognition, Performance Period

2 years 120 days

Potential Contract Funding Amount

6,970,000

2,100,000

2,250,000

43,819,000

34,700,000

18,000,000

140,000,000

Potential Contract Funding Amount Increase

1,000,000

Optional Exercised Contractual Option, Amount

7,000,000

Approximate Option Period

4 years

Maximum Potential Transaction Value

86,200,000

Extended Option Period

150 days

Maximum Potential Transaction Value for Extension Period

2,000,000

Near Term Contract Payments

18,550,000

Gain Contingency, Unrecorded Amount

1,130,000

667,000

2,292,000

1,408,000

263,000

^[1]

526,000

^[1]

805,000

^[2]

626,000

^[2]

1,647,000

^[2]

1,171,000

^[2]

150,000

5,000,000

Deferred Revenue

13,650,000

15,722,000

3,000,000

2,500,000

Milestone Payments

22,000,000

Royalty Revenue

$ 62,000

$ 41,000

$ 119,000

$ 87,000

Accrued Contract Revenue, Percentage

2.50%

[1]

License and Development and Supply Agreement with Dicerna Pharmaceuticals, Inc. ("Dicerna") On November 16, 2014, the Company signed a License Agreement and a Development and Supply Agreement (together, the "Agreements") with Dicerna to develop, manufacture, and commercialize products directed to the treatment of Primary Hyperoxaluria 1 ("PH1"). In consideration for the rights granted under the Agreements, Dicerna paid the Company an upfront cash payment of $2,500,000. The Company is also entitled to receive payments from Dicerna on manufacturing and services provided, as well as further payments with the achievement of development and regulatory milestones of up to $22,000,000, in aggregate, and potential commercial royalties. Further, under the Agreements, a joint development committee has been established to provide guidance and direction on the progression of the collaboration. The Company determined the deliverables under the Agreements included the rights granted, participation in the joint development committee, materials manufactured and other services provided, as directed under the joint development committee. The Company has determined that manufacturing services and other services provided have standalone value, as a separate statement of work is executed and invoiced for each manufacturing or service work order. The relative fair values are determined as a batch price or fee is estimated upon the execution of each work order, with actual expenditures charged at comparable market rates with embedded margins on each work order. Manufacturing work orders are invoiced at the time of execution of the work order, at the initiation of manufacture, and at the release of materials. Revenue from service work orders is recognized as the services are performed. The license and participation in the joint development committee have been determined by the Company to not have standalone value due to the uniqueness of the subject matter under the Agreements. Therefore, these deliverables are treated as one unit of accounting and recognized as revenue over the performance period, which the Company has estimated to be approximately 28 months. The Company believes the development and regulatory milestones are substantive, due to the existence of substantive uncertainty upon the execution of the arrangement, and that the achievement of the development and regulatory events are based, in part, on the Company's performance and the occurrence of a specific outcome resulting from performance. The Company has not received any milestone payments to date.

[2]

Option and Services Agreements with Monsanto Company ("Monsanto") On January 13, 2014, the Company and Monsanto signed an Option Agreement and a Services Agreement (together, the "Agreements"). Under the Agreements, Monsanto has an option to obtain a license to use the Company's proprietary delivery technology and related intellectual property for use in agriculture. Over the option period, which is expected to be approximately four years, the Company will provide lipid formulations for Monsanto's research and development activities, and Monsanto will make certain payments to the Company to maintain its option rights. The maximum potential value of the transaction, following the successful completion of milestones, is $86,200,000. In May 2015, the arrangement was amended to extend the option period by approximately five months, with payments up to $2,000,000 for the extension period. From inception of the contract to June 30, 2015, the Company had received $18,550,000 from MonsantoThe amounts received relate to research services and use of the Company's technology over the option period, and are recognized as revenue on a straight-line basis over the extended option period. Under the Agreements, the Company has established a wholly-owned subsidiary, PADCo. The Company has determined that PADCo is a variable interest entity ("VIE"); however, Monsanto is the primary beneficiary of the arrangement. PADCo was established to perform research and development activities, which have been funded by Monsanto in return for a call option to acquire the equity or all of the assets of PADCo. At any time during the option period, Monsanto may choose to exercise its option, in which case Monsanto would pay the Company an option exercise fee and would receive a worldwide, exclusive right to use the Company's proprietary delivery technology in the field of agriculture. Monsanto may elect to terminate this option at their discretion. The Company retains all rights to therapeutics uses of all current intellectual property and intellectual property developed under the Agreements. The Company's initial investment is not significant, and has no implied or unfunded commitments and the maximum exposure to loss is limited to the amount of investment in the entity. The Company has included its investment in PADco in Other Assets. There were no significant assets or liabilities for PADCo as at June 30, 2015. There was no equity income or loss with respect to PADCo recorded for the six months ended June 30, 2015.

Note 4 - Revenue Recognized Under Collaborations, Contracts and Licensing Agreements (Details) (USD $)

3 Months Ended

6 Months Ended

Jun. 30, 2015

Jun. 30, 2014

Jun. 30, 2015

Jun. 30, 2014

$ 2,310,000

$ 1,144,000

$ 5,830,000

$ 4,833,000

1,130,000

667,000

2,292,000

1,408,000

Total revenue

3,440,000

1,811,000

8,122,000

6,241,000

DoD [Member]

1,862,000

^[1]

861,000

^[1]

4,907,000

^[1]

4,101,000

^[1]

Monsanto [Member]

269,000

^[2]

283,000

^[2]

517,000

^[2]

526,000

^[2]

805,000

^[2]

626,000

^[2]

1,647,000

^[2]

1,171,000

^[2]

BMS [Member]

^[3]

206,000

^[3]

Dicerna [Member]

179,000

^[4]

406,000

^[4]

263,000

^[4]

526,000

^[4]

Acuitas [Member]

^[5]

150,000

^[5]

Spectrum [Member]

$ 62,000

^[6]

$ 41,000

^[6]

$ 119,000

^[6]

$ 87,000

^[6]

[1]	Contract with United States Government's Department of Defense ("DoD") to develop TKM-Ebola On July 14, 2010, the Company signed a contract with the DoD to advance TKM-Ebola, an RNAi therapeutic utilizing the Company's lipid nanoparticle technology to treat Ebola virus infection. In the initial phase of the contract, funded as part of the Transformational Medical Technologies program, the Company was eligible to receive up to $34,700,000. This initial funding is for the development of TKM-Ebola including completion of preclinical development, filing an Investigational New Drug application with the United States Food and Drug Administration ("FDA") and completing a Phase 1 human safety clinical trial. On May 8, 2013, the Company announced that the contract had been modified to support development plans that integrate recent advancements in lipid nanoparticle ("LNP") formulation and manufacturing technologies. The contract modification increased the stage one targeted funding by an additional $6,970,000. On April 22, 2014, the Company and the DoD signed a contract modification to further increase the stage one targeted funding by $2,100,000 to $43,819,000. The additional funding is to compensate the Company for unrecovered overheads related to the temporary stop-work period that occurred in 2012 and to provide additional overhead funding should it be required. In May 2015, the Company and the DoD signed a contract modification to further increase stage one funding by up to $1,000,000. The DoD has the option of extending the contract beyond the initial funding period to support the advancement of TKM-Ebola through to the completion of clinical development and FDA approval. Based on the contract's budget this would provide the Company with up to $140,000,000 in funding for the entire program. In October 2014, the Company and the DoD exercised an option to add $7,000,000 for the manufacture of TKMEbola-Guinea (the "Ebola-Guinea Amendment"), developed by the Company, targeting the Ebola-Guinea strain responsible for the current outbreak in West Africa. In March 2015, the Company and the DoD signed a contract modification to provide up to $2,250,000 to fund the Company for TKM-Ebola-Guinea IND submission expenses. Under the contract, the Company is reimbursed for costs incurred, including an allocation of overhead costs, and is paid an incentive fee. At the beginning of the fiscal year the Company estimates its labour and overhead rates for the year ahead. At the end of the year the actual labour and overhead rates are calculated and revenue is adjusted accordingly. The Company's actual labour and overhead rates will differ from its estimated rates based on actual costs incurred and the proportion of the Company's efforts on contracts and internal products versus indirect activities. Within minimum and maximum collars, the amount of incentive fee the Company can earn under the contract varies based on costs incurred versus budgeted costs. During the contractual period, incentive fee revenue and total costs are impacted by management's estimate and judgments which are continuously reviewed and adjusted as necessary using the cumulative catch-up method. At June 30, 2015, the Company believes it can reliably estimate the final contract costs so has recognized the portion of expected incentive fee which has been earned to date. On July 20, 2015, the Company announced given the unclear development path for TKM-Ebola, development activities will be suspended and a joint re-evaluation of the development contract with the DoD is underway.
[2]	Option and Services Agreements with Monsanto Company ("Monsanto") On January 13, 2014, the Company and Monsanto signed an Option Agreement and a Services Agreement (together, the "Agreements"). Under the Agreements, Monsanto has an option to obtain a license to use the Company's proprietary delivery technology and related intellectual property for use in agriculture. Over the option period, which is expected to be approximately four years, the Company will provide lipid formulations for Monsanto's research and development activities, and Monsanto will make certain payments to the Company to maintain its option rights. The maximum potential value of the transaction, following the successful completion of milestones, is $86,200,000. In May 2015, the arrangement was amended to extend the option period by approximately five months, with payments up to $2,000,000 for the extension period. From inception of the contract to June 30, 2015, the Company had received $18,550,000 from MonsantoThe amounts received relate to research services and use of the Company's technology over the option period, and are recognized as revenue on a straight-line basis over the extended option period. Under the Agreements, the Company has established a wholly-owned subsidiary, PADCo. The Company has determined that PADCo is a variable interest entity ("VIE"); however, Monsanto is the primary beneficiary of the arrangement. PADCo was established to perform research and development activities, which have been funded by Monsanto in return for a call option to acquire the equity or all of the assets of PADCo. At any time during the option period, Monsanto may choose to exercise its option, in which case Monsanto would pay the Company an option exercise fee and would receive a worldwide, exclusive right to use the Company's proprietary delivery technology in the field of agriculture. Monsanto may elect to terminate this option at their discretion. The Company retains all rights to therapeutics uses of all current intellectual property and intellectual property developed under the Agreements. The Company's initial investment is not significant, and has no implied or unfunded commitments and the maximum exposure to loss is limited to the amount of investment in the entity. The Company has included its investment in PADco in Other Assets. There were no significant assets or liabilities for PADCo as at June 30, 2015. There was no equity income or loss with respect to PADCo recorded for the six months ended June 30, 2015.
[3]	Bristol-Myers Squibb ("BMS") collaboration On May 10, 2010 the Company announced the expansion of its research collaboration with BMS. Under the new agreement, BMS uses small interfering RNA ("siRNA") molecules formulated by the Company in LNP technology to silence target genes of interest. BMS is conducting the preclinical work to validate the function of certain genes and share the data with the Company. The Company could use the preclinical data to develop RNAi therapeutic drugs against the therapeutic targets of interest. The Company received $3,000,000 from BMS concurrent with the signing of the agreement and recorded the amount as deferred revenue. The Company was required to provide a pre-determined number of LNP batches over the four-year agreement. BMS had a first right to negotiate a licensing agreement on certain RNAi products developed by the Company that evolve from BMS validated gene targets. Revenue from the May 10, 2010 agreement with BMS was being recognized as the Company produces the related LNP batches. The revenue earned for the six months ended June 30, 2014 was related to BMS batches shipped during the period. In August 2014, the agreement expired and both companies' obligations under the agreement ended.
[4]	License and Development and Supply Agreement with Dicerna Pharmaceuticals, Inc. ("Dicerna") On November 16, 2014, the Company signed a License Agreement and a Development and Supply Agreement (together, the "Agreements") with Dicerna to develop, manufacture, and commercialize products directed to the treatment of Primary Hyperoxaluria 1 ("PH1"). In consideration for the rights granted under the Agreements, Dicerna paid the Company an upfront cash payment of $2,500,000. The Company is also entitled to receive payments from Dicerna on manufacturing and services provided, as well as further payments with the achievement of development and regulatory milestones of up to $22,000,000, in aggregate, and potential commercial royalties. Further, under the Agreements, a joint development committee has been established to provide guidance and direction on the progression of the collaboration. The Company determined the deliverables under the Agreements included the rights granted, participation in the joint development committee, materials manufactured and other services provided, as directed under the joint development committee. The Company has determined that manufacturing services and other services provided have standalone value, as a separate statement of work is executed and invoiced for each manufacturing or service work order. The relative fair values are determined as a batch price or fee is estimated upon the execution of each work order, with actual expenditures charged at comparable market rates with embedded margins on each work order. Manufacturing work orders are invoiced at the time of execution of the work order, at the initiation of manufacture, and at the release of materials. Revenue from service work orders is recognized as the services are performed. The license and participation in the joint development committee have been determined by the Company to not have standalone value due to the uniqueness of the subject matter under the Agreements. Therefore, these deliverables are treated as one unit of accounting and recognized as revenue over the performance period, which the Company has estimated to be approximately 28 months. The Company believes the development and regulatory milestones are substantive, due to the existence of substantive uncertainty upon the execution of the arrangement, and that the achievement of the development and regulatory events are based, in part, on the Company's performance and the occurrence of a specific outcome resulting from performance. The Company has not received any milestone payments to date.
[5]	License and collaboration with Alnylam Pharmaceuticals, Inc. ("Alnylam") and Acuitas Therapeutics Inc. ("Acuitas", formerly AlCana Technologies Inc.) Milestone receipts and payments In the six months ended June 30, 2014, the Company earned a $150,000 milestone from Acuitas, subsequent to Acuitas receiving a milestone payment from Alnylam with respect to Alnylam initiating a Phase III trial for ALN-TTR02. Arbitration with Alnylam and Ascletis Pharmaceuticals (Hangzhou) Co. Ltd. ("Ascletis") On June 21, 2013, the Company transferred manufacturing process technology to Ascletis to enable them to produce ALN-VSP, a product candidate licensed to them by Alnylam. The Company believes that under the new licensing agreement with Alnylam, the technology transfer to Ascletis triggers a $5,000,000 milestone obligation from Alnylam to the Company. However, Alnylam has demanded a declaration that the Company has not yet met its milestone obligations. The Company disputes Alnylam's position. To remedy this dispute, the Company and Alnylam have commenced arbitration proceedings as provided for under the agreement. The hearing date for this arbitration took place in May 2015, and a decision of the arbitrator is pending. The Company has not recorded any revenue in respect of this milestone.
[6]	Agreements with Spectrum Pharmaceuticals, Inc. ("Spectrum") On May 6, 2006, the Company signed a number of agreements with Talon Therapeutics, Inc. ("Talon", formerly Hana Biosciences, Inc.) including the grant of worldwide licenses (the "Talon License Agreement") for three of the Company's chemotherapy products, Marqibo, AlocrestTM (Optisomal Vinorelbine) and BrakivaTM (Optisomal Topotecan). On August 9, 2012, the Company announced that Talon had received accelerated approval for Marqibo from the FDA for the treatment of adult patients with Philadelphia chromosome negative acute lymphoblastic leukemia in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. Marqibo is a liposomal formulation of the chemotherapy drug vincristine. There are no further milestones related to Marqibo but the Company is eligible to receive total milestone payments of up to $18,000,000 on Alocrest and Brakiva. Talon was acquired by Spectrum in July 2013. The acquisition does not affect the terms of the license between Talon and the Company. On September 3, 2013, Spectrum announced that they had shipped the first commercial orders of Marqibo. For the three and six months ended June 30, 2015, the Company recorded $62,000 and $119,000 in Marqibo royalty revenue (three and six months ended June 30, 2014 - $41,000 and $87,000 respectively). For the six months ended June 30, 2015, the Company accrued 2.5% in royalties due to TPC in respect of the Marqibo royalty earned by the Company - see note 8, contingencies and commitments.

Note 4 - Deferred Collaborations and Contracts Revenue (Details) (USD $)

Jun. 30, 2015

Dec. 31, 2014

Deferred revenue, noncurrent

$ 5,605,000

$ 5,779,000

8,045,000

9,937,000

Deferred Revenue

13,650,000

15,722,000

DoD [Member]

563,000

^[1]

313,000

^[1]

Monsanto [Member]

Deferred revenue, noncurrent

3,746,000

^[2]

4,245,000

^[2]

7,336,000

^[2]

8,666,000

^[2]

Dicerna [Member]