Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Dec. 31, 2015	Feb. 29, 2016	Jun. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Arbutus Biopharma Corp
Document Type	10-K
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		54,625,703
Entity Public Float			$ 644,038,348
Amendment Flag	false
Entity Central Index Key	0001447028
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 166,779	$ 72,187
Short-term investments	14,525	39,974
Accounts receivable	1,008	1,903
Accrued revenue	128	538
Investment tax credits receivable	246	86
Prepaid expenses and other assets	1,196	1,730
Total current assets	183,882	116,418
Property and equipment	12,912	12,959
Less accumulated depreciation	(9,729)	(11,199)
Property and equipment, net of accumulated depreciation	3,183	1,760
Long-term investments	10,070	0
Intangible assets	352,642	0
Goodwill	162,514	0
Total assets	712,291	118,178
Current liabilities:
Accounts payable and accrued liabilities	8,827	9,328
Deferred revenue	868	5,779
Warrants	883	5,099
Total current liabilities	10,578	20,206
Deferred revenue, net of current portion	213	9,937
Contingent consideration	7,497	0
Deferred tax liability	146,324	0
Total liabilities	164,612	30,143
Stockholders’ equity:
Common shares, authorized - unlimited number with no par value, Issued and outstanding: 54,570,691 (December 31, 2014 - 22,438,169)	834,240	290,004
Additional paid-in capital	30,206	26,208
Deficit	(266,985)	(205,864)
Accumulated other comprehensive loss	(49,782)	(22,313)
Total stockholders' equity	547,679	88,035
Total liabilities and stockholders' equity	$ 712,291	$ 118,178

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common shares, par value (in USD per share)	$ 0	$ 0
Common shares, shares issued	54,570,691	22,438,169
Common shares, shares outstanding	54,570,691	22,438,169

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue
Collaborations and contracts	$ 13,309	$ 11,738	$ 10,425
Licensing fees, milestone and royalty payments	11,564	3,215	5,040
Total revenue	24,873	14,953	15,465
Expenses
Research, development, collaborations and contracts	51,505	38,713	21,458
General and administrative	26,438	8,683	5,546
Depreciation of property and equipment	589	529	613
Acquisition costs	9,656	462	0
Impairment of intangible assets	39,007	0	0
Total expenses	127,195	48,387	27,617
Loss from operations	(102,322)	(33,434)	(12,152)
Other income (losses)
Interest income	674	853	540
Foreign exchange gains	21,771	4,127	1,079
Decrease (increase) in fair value of warrant liability	3,341	(10,383)	(3,530)
Increase in fair value of contingent consideration	(770)	0	0
Total other income (losses)	25,016	(5,403)	(1,911)
Loss before income taxes	(77,306)	(38,837)	(14,063)
Deferred income tax recovery	16,185	0	0
Net loss	$ (61,121)	$ (38,837)	$ (14,063)
Loss per common share
Basic loss per common share (in USD per share)	$ (1.34)	$ (1.80)	$ (0.92)
Diluted loss per common share (in USD per share)	$ (1.34)	$ (1.80)	$ (0.92)
Weighted average number of common shares
Basic weighted average number of common shares (in shares)	45,462,324	21,603,136	15,302,680
Diluted weighted average number of common shares (in shares)	45,462,324	21,603,136	15,302,680
Other Comprehensive loss
Cumulative translation adjustment	$ (27,469)	$ (6,489)	$ (3,135)
Comprehensive loss	$ (88,590)	$ (45,326)	$ (17,198)

Consolidated Statement of Stockholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Additional paid-in capital	Deficit	Accumulated other comprehensive loss
Balance (in shares) at Dec. 31, 2012		14,305,356
Balance at Dec. 31, 2012	$ 40,919	$ 181,786	$ 24,786	$ (152,964)	$ (12,689)
Stock-based compensation	903		903
Issuance of common shares pursuant to exercise of options (in shares)		125,596
Issuance of common shares pursuant to exercise of options	389	$ 735	(346)
Issuance of common shares pursuant to exercise of warrants (in shares)		305,448
Issuance of common shares pursuant to exercise of warrants	2,143	$ 2,143
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs (in shares)		4,312,500
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs	32,038	$ 32,038
Currency translation adjustment	(3,135)				(3,135)
Net loss	(14,063)			(14,063)
Balance (in shares) at Dec. 31, 2013		19,048,900
Balance at Dec. 31, 2013	59,194	$ 216,702	25,343	(167,027)	(15,824)
Stock-based compensation	3,283		3,283
Issuance of common shares pursuant to exercise of options (in shares)		648,506
Issuance of common shares pursuant to exercise of options	2,616	$ 5,034	(2,418)
Issuance of common shares pursuant to exercise of warrants (in shares)		615,763
Issuance of common shares pursuant to exercise of warrants	11,791	$ 11,791
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs (in shares)		2,125,000
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs	56,477	$ 56,477
Currency translation adjustment	(6,489)				(6,489)
Net loss	(38,837)			(38,837)
Balance (in shares) at Dec. 31, 2014		22,438,169
Balance at Dec. 31, 2014	88,035	$ 290,004	26,208	(205,864)	(22,313)
Stock-based compensation	22,093	$ 16,687	5,406
Issuance of common shares pursuant to exercise of options (in shares)		640,457
Issuance of common shares pursuant to exercise of options	1,651	$ 4,186	(2,535)
Issuance of common shares pursuant to exercise of warrants (in shares)		18,750
Issuance of common shares pursuant to exercise of warrants	371	$ 371
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs (in shares)		7,500,000
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs	142,177	$ 142,177
Increase of equity instruments in conjunction with the acquisition of Arbutus Inc. (in shares)		23,973,315
Increase of equity instruments in conjunction with the acquisition of Arbutus Inc.	381,942	$ 380,815	1,127
Currency translation adjustment	(27,469)				(27,469)
Net loss	(61,121)			(61,121)
Balance (in shares) at Dec. 31, 2015		54,570,691
Balance at Dec. 31, 2015	$ 547,679	$ 834,240	$ 30,206	$ (266,985)	$ (49,782)

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
OPERATING ACTIVITIES
Net loss for the period	$ (61,121,000)	$ (38,837,000)	$ (14,063,000)
Items not involving cash:
Deferred income taxes	(16,185,000)	0	0
Depreciation of property and equipment	589,000	529,000	613,000
Gain on sale of property and equipment	0	(80,000)	0
Unrealized foreign exchange (gains) losses	(21,966,000)	(4,218,000)	(18,000)
Change in fair value of warrant liability	(3,341,000)	10,383,000	3,530,000
Change in fair value of contingent consideration	770,000	0	0
Impairment of intangible assets	39,007,000	0	0
Net change in non-cash operating items:
Accounts receivable	628,000	(1,887,000)	889,000
Accrued revenue	349,000	(360,000)	2,008,000
Deferred expenses	0	167,000	231,000
Investment tax credits receivable	(188,000)	(52,000)	(31,000)
Prepaid expenses and other assets	159,000	(773,000)	(776,000)
Accounts payable and accrued liabilities	(2,489,000)	6,253,000	130,000
Deferred revenue	(13,090,000)	13,171,000	(153,000)
Net cash used in operating activities	(54,785,000)	(12,421,000)	(6,737,000)
INVESTING ACTIVITIES
Disposition (acquisition) of investments	9,645,000	(41,982,000)	0
Cash acquired through acquisition	324,000	0	0
Proceeds from sale of property and equipment	0	80,000	0
Acquisition of property and equipment	(2,287,000)	(1,056,000)	(725,000)
Net cash provided by (used in) investing activities	7,682,000	(42,958,000)	(725,000)
FINANCING ACTIVITIES
Proceeds from issuance of common shares, net of issuance costs	142,177,000	56,477,000	32,038,000
Issuance of common shares pursuant to exercise of options	1,651,000	2,616,000	389,000
Issuance of common shares pursuant to exercise of warrants	42,000	1,583,000	289,000
Net cash provided by financing activities	143,870,000	60,676,000	32,716,000
Effect of foreign currency rate changes on cash and cash equivalents	(2,175,000)	(1,827,000)	(3,561,000)
Increase in cash and cash equivalents	94,592,000	3,470,000	21,693,000
Cash and cash equivalents, beginning of period	72,187,000	68,717,000	47,024,000
Cash and cash equivalents, end of period	166,779,000	72,187,000	68,717,000
Supplemental cash flow information
Fair value of warrants exercised on a cashless basis	0	(116,000)	1,404,000
Investment tax credits received	24,000	0	10,000
Acquisition of Arbutus Inc. net of cash acquired	381,618,000	0	0
Research, development, collaborations
Items not involving cash:
Stock-based compensation	7,869,000	2,343,000	622,000
General and administrative expenses
Items not involving cash:
Stock-based compensation	$ 14,224,000	$ 940,000	$ 281,000

Nature of Business and Future Operations	12 Months Ended
Nature of Business and Future Operations	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of business and future operations	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 the 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 four wholly-owned subsidiaries: Protiva Biotherapeutics Inc. (Protiva), Protiva Biotherapeutics (USA) Inc. (Protiva USA), and Protiva Agricultural Development Company Inc. (“PADCo”). In March 2016, Monsanto exercised its option to acquire 100% of the outstanding shares in PADCo - refer to note 13 subsequent events. 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 continue to fund these programs in the future.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Significant accounting policies

Basis of presentation

Arbutus Biopharma Corporation (formerly Tekmira Pharmaceuticals Corporation) was incorporated on October 6, 2005 as an inactive wholly owned subsidiary of Inex Pharmaceuticals Corporation (Inex). Pursuant to a “Plan of Arrangement” effective April 30, 2007, the business and substantially all of the assets and liabilities of Inex were transferred to the Company. The consolidated financial statements for all periods presented herein include the consolidated operations of Inex until April 30, 2007 and the operations of the Company thereafter.

The Company has four wholly-owned subsidiaries as at December 31, 2015: Arbutus Biopharma, Inc. (formerly OnCore Biopharma, Inc.) Protiva Biotherapeutics Inc. (Protiva), Protiva Biotherapeutics (USA) Inc. (Protiva USA), and Protiva Agricultural Development Company Inc. (“PADCo”). Protiva and Protiva USA were acquired on May 30, 2008. PADCo was incorporated on January 9, 2014. Arbutus Inc. was acquired by way of a Merger Agreement on March 4, 2015, which included Arbutus Inc.'s wholly-owned subsidiary, Enantigen Therapeutics, Inc. (Enantigen) - see note 3. Enantigen was merged with Arbutus Inc. on September 30, 2015.

These consolidated financial statements include the accounts of the Company and three of its wholly-owned subsidiaries, Arbutus Inc., Protiva and Protiva USA. 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 the Company 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). In March 2016, Monsanto exercised its option to acquire PADCo - refer to note 13 subsequent events.

Use of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses, contingent assets and contingent liabilities as at the end or during the reporting period. Actual results could significantly differ from those estimates. Significant areas requiring the use of management estimates relate to purchase price allocation, valuation of intangible assets and goodwill, recognition of revenue, stock-based compensation, valuation of warrant liability and financial instrument, and the amounts recorded as accrued liabilities, contingent consideration, and income tax recovery.

Cash and cash equivalents

Cash and cash equivalents are all highly liquid instruments with an original maturity of three months or less when purchased. Cash equivalents are recorded at cost plus accrued interest. The carrying value of these cash equivalents approximates their fair value.

Short-term and long-term investments

The Company acquired guaranteed investment certificates and a term deposit during the year, which are classified as short-term and long-term investments on the balance sheet respectively. Short-term investments have original maturities exceeding three months, and have remaining maturities less than one year. Long-term investments have remaining maturities exceeding twelve months. Short-term and long-term investments accrue interest daily based on a fixed interest rate for the term. The carrying value of these investments are recorded at cost plus accrued interest, which approximates their fair value. All investments are governed by the Board approved Investment Policy for the Company.

Fair value of financial instruments

We measure certain financial instruments and other items at fair value.

To determine the fair value, we use 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.

Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

The Company’s financial instruments consist of cash and cash equivalents, short-term and long-term investments, accounts receivable, accounts payable and accrued liabilities, warrants and financial instruments. Long-term investments approximate fair value due to the interest rates being at prevailing market rates.

The carrying values of cash and cash equivalents, short-term investments, accounts receivable and accounts payable and accrued liabilities approximate their fair values due to the immediate or short-term maturity of these financial instruments.

As quoted prices for the warrants are not readily available, the Company has used a Black-Scholes pricing model, as described in note 6, to estimate fair value. These are level 3 inputs as defined above.

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. The fair value was determined at the date of recognition, and at each reporting date. The initial fair value of the financial instrument was nil, and there has been no change to its fair value as at December 31, 2015. The assumptions used in the discounted cash flow model are level 3 inputs as defined above.

To determine the fair value of the contingent consideration, the Company uses 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, as in note 9. The fair value was determine at the date of recognition to be $6,727,000. The Company determined the fair value of the contingent consideration has increased by $770,000 to $7,497,000 and the increase in fair value has been recorded in other losses in the statement of operations and comprehensive loss for the year-ended December 31, 2015. The assumptions used in the discounted cash flow model are level 3 inputs as defined above.

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



	Level 1		Level 2	Level 3		December 31, 2015
Assets
Cash and cash equivalents	$	166,779	—	—		$	166,779
Guaranteed investment certificate	14,525		—	—		14,525
Term deposit	10,070		—	—		10,070
Total	$	191,374	—	—		$	191,374
Liabilities
Warrants	—		—	$	883	$	883
Contingent consideration	—		—	7,497		7,497
Financial instrument	—		—	—		—
Total	—		—	$	8,380	$	8,380



	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:



	Liability at beginning of the period		Warrants issued in the period		Fair value of warrants exercised in the period			Increase (decrease) in fair value of warrants			Foreign exchange loss			Liability at end of the period
Year ended December 31, 2013	$	4,015	$	—	$	(1,854	)	$	3,530		$	(312	)	$	5,379
Year ended December 31, 2014	$	5,379	—		$	(10,208	)	$	10,383		$	(455	)	$	5,099
Year ended December 31, 2015	$	5,099	—		$	(334	)	$	(3,341	)	$	(541	)	$	883

The following table presents the changes in fair value of the Company’s contingent consideration:



	Liability at beginning of the period ⁽¹⁾		Increase in fair value of contingent consideration		Liability at end of the period
Year ended December 31, 2015	$	6,727	$	770	$	7,497

(1) As at acquisition date of March 4, 2015 - see note 3 below.

Inventory

Inventory includes materials assigned for the manufacture of products for collaborative partners and manufacturing costs for products awaiting acceptance by collaborative partners. Inventory is carried at the lower of cost and net realizable value and measured using first-in-first-out method. The cost of inventories includes all costs of purchase, costs of manufacturing and other costs incurred in bringing the inventories to their present location and condition.

Materials purchased for the Company’s own research and development products are not recorded as inventory but are expensed as incurred.

Property and equipment

Property and equipment is recorded at cost less impairment losses, accumulated depreciation, related government grants and investment tax credits. The Company records depreciation using the straight-line method over the estimated useful lives of the capital assets as follows:



	Useful life (years)
Laboratory equipment		5
Computer and office equipment	2	—	5
Furniture and fixtures		5

Leasehold improvements are depreciated over their estimated useful lives but in no case longer than the lease term, except where lease renewal is reasonably assured.

If there is a major event indicating that the carrying value of property and equipment may be impaired then management will perform an impairment test and if the carrying value exceeds the recoverable value, based on undiscounted future cash flows, then such assets are written down to their fair values.

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 carrying value exceeds the recoverable value, based on discounted future cash flows, 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 reporting unit, the second step measures the amount of the impairment loss. If the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized equal to that excess.

The Company reviews the recoverable amount of intangible assets on an annual basis, and the annual evaluation for goodwill is performed as of December 31 each year. In addition, the Company evaluates for events or changes in the business that could indicate impairment and earlier testing. Such indicators include, but are not limited to, on an ongoing basis: (a) industry and market considerations such as increased competitive environment or adverse change in legal factors including an adverse assessment by regulators; (b) an accumulation of costs significantly in excess of the amount originally expected for the development of the asset; (c) current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of the asset; and (d) if applicable, a sustained decrease in share price.

Revenue recognition

The Company earns revenue from research and development collaboration and contract services, licensing fees, milestone and royalty payments. Revenues associated with multiple element arrangements are attributed to the various elements based on their relative fair values or are recognized as a single unit of accounting when relative fair values are not determinable. Non-refundable payments received under collaborative research and development agreements are recorded as revenue as services are performed and related expenditures are incurred. Non-refundable upfront license fees from collaborative licensing and development arrangements are recognized as the Company fulfills its obligations related to the various elements within the agreements, in accordance with the contractual arrangements with third parties and the term over which the underlying benefit is being conferred. The Company evaluates new arrangements for any substantive milestones by considering: whether substantive uncertainty exists upon execution of the arrangement; if the event can only be achieved based in whole or in part on the Company’s performance, or occurrence of a specific outcome resulting from the Company’s performance; any future performance required, and payment is reasonable relative to all deliverables; and, the payment terms in the arrangement. Payments received upon the achievement of substantive milestones are recognized as revenue in their entirety. Payments received upon the occurrence of milestones that are non-substantive are deferred and recognized as revenue over the estimated period of performance applicable to the associated collaborative agreement.

Revenue earned under research and development manufacturing collaborations where the Company bears some or all of the risk of a product manufacturing failure is recognized when the purchaser accepts the product and there are no remaining rights of return.

Revenue earned under research and development collaborations where the Company does not bear any risk of product manufacturing failure is recognized in the period the work is performed. For contracts where the manufacturing amount is specified, revenue is recognized as product is manufactured in proportion to the total amount specified under the contract.

Revenue and expenses under the contract with the United States Government Department of Defense (“DoD”) are being recorded using the percentage-of-completion method. Contract progress is based on costs incurred to date. Expenses under the contract are recorded in the Company’s consolidated statement of operations and comprehensive income (loss) as they are incurred. Government contract revenues related to expenses incurred under the contract are recorded in the same period as those expenses. Expenses accrued under the contract but not yet invoiced are recorded in the Company’s balance sheet as accrued liabilities and accrued revenues. Equipment purchased under the contract is recorded on the Company’s balance sheet as deferred expense and deferred revenue and amortized, on a straight-line basis, over the life of the contract.

Cash or other compensation received in advance of meeting the revenue recognition criteria is recorded on the balance sheet as deferred revenue. Revenue meeting recognition criteria but not yet received or receivable is recorded on the balance sheet as accrued revenue.

Leases and lease inducements

Leases entered into are classified as either capital or operating leases. Leases which substantially transfer all benefits and risks of ownership of property to the Company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded together with its related long-term obligation to reflect the purchase and financing.

All other leases are accounted for as operating leases wherein rental payments are expensed as incurred.

Lease inducements represent leasehold improvement allowances and reduced or free rent periods and are amortized on a straight-line basis over the term of the lease and are recorded as a reduction of rent expense.

Research and development costs

Research and development costs, including acquired in-process research and development expenses for which there is no alternative future use, are charged as an expense in the period in which they are incurred.

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 for the years ended December 31, 2015, 2014 and 2013, since the effect of the Company’s stock options and warrants is anti-dilutive.

The following table sets out the computation of basic and diluted net income (loss) per common share:



	For the year ended December 31
	2015			2014			2013
Numerator:
Net loss	$	(61,121	)	$	(38,837	)	$	(14,063	)
Denominator:
Weighted average number of common shares	45,462,324			21,603,136			15,302,680
Basic income (loss) per common share	$	(1.34	)	$	(1.80	)	$	(0.92	)
Diluted income (loss) per common share	$	(1.34	)	$	(1.80	)	$	(0.92	)

For the year ended December 31, 2015, potential common shares of 2,899,331 were excluded from the calculation of income per common share because their inclusion would be anti-dilutive (December 31, 2014 – 2,221,233; December 31, 2013 – 3,064,767).

Government grants and refundable investment tax credits

Government grants and tax credits provided for current expenses is included in the determination of income or loss for the year, as a reduction of the expenses to which it relates. Government grants and tax credits towards the acquisition of property and equipment is deducted from the cost of the related property and equipment.

Foreign currency translation and change in reporting currency

The functional currency of the Company and two of its integrated subsidiaries (Protiva and Protiva USA), is the Canadian dollar, and the functional currency of Arbutus Inc. is the U.S. dollar. Foreign currency monetary assets and liabilities are translated into the functional currency 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 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. As the translation differences from the Company’s functional currency of Canadian dollars to the Company’s reporting currency of US dollars are unrealized gains and losses, the differences are recorded in other comprehensive income (loss), and do not impact the calculation of Income or Loss per Share.

On January 1, 2016, the Company changed its functional currency from the Canadian dollar to the U.S. dollar based on management's analysis of the changes in the primary economic environment in which the Company operates. The change in functional currency is accounted for prospectively from January 1, 2016 and financial statements prior to and including the year-ended December 31, 2015 have not been restated for the change in functional currency.

Deferred income taxes

Income taxes are accounted for using the asset and liability method of accounting. Deferred income taxes are recognized for the future income tax consequences attributable to differences between the carrying values of assets and liabilities and their respective income tax bases and for loss carry-forwards. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax laws or rates is included in earnings in the period that includes the enactment date. When realization of deferred income tax assets does not meet the more-likely-than-not criterion for recognition, a valuation allowance is provided.

Stock-based compensation

The Company grants stock options to employees and directors pursuant to a share incentive plan described in note 6. Compensation expense is recorded for issued stock options using the fair value method with a corresponding increase in additional paid-in capital. Any consideration received on the exercise of stock options is credited to share capital.

The fair value of stock options is measured at the grant date and amortized on a straight-line basis over the vesting period.

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., Arbutus 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. Replacement awards are excluded in the calculation of basic net income (loss) per share until the repurchase rights have expired.

Warrants

The Company accounts for the warrants under the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the registered warrants require the issuance of registered securities upon exercise and do not sufficiently preclude an implied right to net cash settlement. The Company classifies warrants in its consolidated balance sheet as a liability which is revalued at each balance sheet date subsequent to the initial issuance. The Company uses the Black-Scholes pricing model to value the warrants. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment. A small change in the estimates used may cause a relatively large change in the estimated valuation. The estimated volatility of the Company’s common stock at the date of issuance, and at each subsequent reporting period, is based on historic fluctuations in the Company’s stock price. The risk-free interest rate is based on the Government of Canada rate for bonds with a maturity similar to the expected remaining life of the warrants at the valuation date. The expected life of the warrants is based on the historical pattern of exercises of warrants.

Segment information

The Company operates in a single reporting segment. Substantially all of the Company’s revenues to date were earned from customers or collaborators based in the United States. Substantially all of the Company’s premises, property and equipment are located in Canada and the United States.

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, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Recognition and Measurement of Financial Assets and Financial Liabilities. The update supersedes Topic 840, Leases and requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. Topic 842 retains a distinction between finance leases and operating leases, with cash payments from operating leases classified within operating activities in the statement of cash flows. The amendments in this update are effective for fiscal years beginning after December 15, 2018 for public business entities, which for the Company means January 1, 2019. The Company does not plan to early adopt this update. The extent of the impact of this adoption has not yet been determined.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The update eliminates the requirement to retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding adjustment to goodwill during the measurement period when new information is obtained about the facts and circumstances that existed as of the acquisition date, that if known, would have affected the measurement of the amounts initially recognized or would have resulted in the recognition of additional assets or liabilities. The amendments in this update are effective for fiscal years beginning after December 15, 2015, which for the Company means January 1, 2016, and should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update. Early application is permitted for financial statements that have not been issued. The Company has adopted this update and applied it to the acquisition of Arbutus Inc.

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 August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date to defer the effective date of Update 2014-09 for all entities by one year. The new guidance would be effective for fiscal years beginning after December 15, 2017, 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 of the impact of this adoption has not yet been determined.

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

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

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

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

(a) Purchase Price Allocation

On January 11, 2015, the Company entered into a Merger Agreement to acquire 100% of the outstanding shares of Arbutus Inc. (formerly OnCore Biopharma, Inc.) and its wholly-owned subsidiary, Enantigen (see note 9). 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 closed 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, with Arbutus (formerly Tekmira) identified as 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 fair value; common shares as consideration are issued at the market price as at the acquisition date. The excess of the purchase price over the preliminary fair value assigned to the net assets acquired has been recorded as goodwill. Acquisition costs were expensed as incurred. The Company recorded $9,656,000 of acquisition costs for the year ended December 31, 2015 (2014 - $462,000).

The Company issued consideration with a total fair value of $381,942,000 on acquisition. Of this consideration, 23,973,315 common shares were issued, 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 provisions. 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 and is not included in the total acquisition consideration. In July 2015, in conjunction with amendments to 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 $1,900,000 per quarter, effective in Q3 2015. The Company recorded $16,687,000 in stock-based compensation expense related to services performed during the period of expiration of repurchase provision rights from the acquisition date through to December 31, 2015.

As at the acquisition date, 3,625,412 shares were issued and outstanding which were and continue to remain subject to a repurchase provision. Subsequent to the acquisition date and the July 2015 amendment to the repurchase provision rights, the rights expire at a rate of 302,120 on November 30, 2015 and February 29, 2016 and at a rate of 503,552 shares every three months thereafter commencing May 31, 2016.

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 at the date of acquisition has been determined to be $3,287,000, using the Black-Scholes pricing model with an assumed risk-free interest rate of 0.97%, volatility of 78%, a zero dividend yield and an expected life of 8 years, which are consistent with the assumption inputs used by the Company to determine the fair value of its 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 $463,000 compensation expense related to the vesting of Arbutus Inc. stock options from the acquisition date through to December 31, 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 fair values of assets acquired and liabilities assumed. The Company has refined the preliminary allocation of the purchase price for intangible assets, goodwill, contingent consideration and deferred tax liability from what was disclosed in prior periods. The following table summarizes the Company’s finalized purchase price allocation as at December 31, 2015:



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	391,649
Goodwill	162,514
Accounts payable and accrued liabilities	(3,580		)
Other non-current liabilities (note 9)	(6,727		)
Deferred income tax liability	(162,509		)
Total purchase price allocation	$	381,942

The fair value of intangible assets is estimated to be $391,649,000. The fair value of each IPR&D asset is estimated 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 13.7%. 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	$	39,007
IPR&D – Immune Modulators	183,103
IPR&D – Antigen Inhibitors	36,437
IPR&D – cccDNA Sterilizers	133,102
Total IPR&D	$	391,649

All IPR&D acquired is currently classified as indefinite-lived and is not currently being amortized. IPR&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 fair values above, an amount of $162,514,000 has been allocated to goodwill, which represents the excess of the purchase price over the fair values 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 value of goodwill has been assigned to the entire Company, since management has determined that the Company has only one reporting unit. The goodwill is not deductible for tax purposes, and is not amortized, but will be evaluated for impairment on an annual basis or more often if the Company identifies impairment indicators that would require earlier testing.

Reconciliation of preliminary to final purchase price allocation

During the year ended December 31, 2015, the Company finalized the purchase price allocation and made revisions to certain preliminary estimated fair values of assets acquired and liabilities assumed. The following table presents a summary of revisions and adjustments made to the preliminary estimates as previously disclosed to the finalized purchase price allocation:



	Preliminary Amounts Recognized as of Acquisition Date ⁽¹⁾			Measurement Period Adjustments⁽²⁾			Amounts Recognized as of Acquisition Date (as adjusted)
Purchase Price	$	381,942		$	—		$	381,942

Identifiable assets acquired and liabilities assumed:
Cash	$	324		$	—		$	324
Prepaid expenses and other assets	127			(11		)	116
Accounts receivable	8			—			8
Property and equipment	147			—			147
Acquired intangible assets	389,652			1,997			391,649
Goodwill	155,865			6,649			162,514
Accounts payable and accrued liabilities	(3,580		)	—			(3,580		)
Other non-current liabilities (note 8)	(4,736		)	(1,991		)	(6,727		)
Deferred income tax liability	(155,865		)	(6,644		)	(162,509		)
Total purchase price allocation	$	381,942		$	—		$	381,942


1.	The preliminary purchase price as of the acquisition date of March 4, 2015 as previously disclosed in the notes to consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2015.


2.	The measurement period is from the acquisition date of March 4, 2015 to the date the Company finalized the purchase price allocation on December 31, 2015.

The measurement period adjustment for intangible assets acquired was made as the Company revised certain royalty rates on future sales of various intangible assets acquired. This resulted in an increase in deferred income tax liability associated with the intangible assets. In addition, the Company revised its preliminary tax rate based on management's revised analysis of a combined federal and state tax rate in the jurisdiction in which the Company expects the deferred tax liability to be settled or realized.

The measurement period adjustment for other non-current liabilities relate to the contingent consideration payable to former Enantigen shareholders upon the achievement of certain regulatory, development and sales milestones, as described in note 9. The adjustment relates to management's revision to the probabilities used in a probability weighted assessment of the likelihood of milestones being met and timing of such payments.

Based on the above measurement period adjustments, the increase to goodwill of $6,649,000 results in a final goodwill allocation of $162,514,000. As described in note 2 and further below, the Company conducts its annual goodwill impairment test on December 31st.

Pro forma information

The amount of net loss of Arbutus Inc. included in the consolidated statements of operations from the acquisition date, through the period ended December 31, 2015 was $13,658,000. Arbutus Inc. did not earn any revenues from the acquisition date through the year-ended December 31, 2015.

The following table presents the unaudited pro forma results for the year ended December 31, 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, impairment charge on acquired intangible assets (as described in note 3b below), but does not include amortization charges for acquired intangible assets as these assets have not yet been put in use.



	Year ended
	December 31,
	2015			2014
Pro forma information
Gross Revenue	$	24,873		$	14,953
Loss from operations	(109,387		)	(51,088		)
Net loss	(67,416		)	(56,491		)
Basic and diluted loss per share	$	(1.38	)	$	(1.24	)

(b) Impairment evaluations for intangible assets and goodwill

The Company evaluates the recoverable amount of intangible assets on an annual basis and performs an annual evaluation of goodwill as of December 31 each year, unless there is an event or change in the business that could indicate impairment and earlier testing.

Impairment of intangible assets

On October 28, 2015, the Company announced that the development of the cyclophilin drug candidate, OCB-030 has been discontinued. The decision was based on extensive preclinical evaluations performed by the Company of OCB-030 and other competitive cyclophilin inhibitors following the acquisition of Arbutus Inc., which concluded that cyclophilins do not play a meaningful role in HBV biology. Although the final conclusion was made subsequent to the period end, it reflected management’s best estimate as at September 30, 2015, and as such, the Company recorded an estimated impairment charge of $37,990,000 and a corresponding income tax benefit of $15,196,000 related to the decrease in deferred tax liability for the discontinuance of OCB-030 in the consolidated statement of operations and comprehensive loss.

As noted above, the Company finalized its purchase price allocation during the fourth quarter of 2015 by making certain revisions to estimates which included adjustments to the fair value of individual intangible assets acquired. The fair value of cyclophilin inhibitors has been adjusted to be $39,007,000 as compared to management's best estimate of $37,990,000 previously written off in the third quarter. The incremental adjustment to fair value of $1,017,000 as well as the corresponding incremental adjustment to income tax benefit of $989,000 are cumulatively reflected in the Company's consolidated statement of operations and comprehensive loss for the year-ended December 31, 2015. For all other IPR&D, fair values of the intangible assets were calculated to be above the respective carrying values; therefore, no impairment was recorded. The following table summarizes the carrying values, net of impairment of the intangible assets as at December 31, 2015:



IPR&D – Cyclophilins	$	—
IPR&D – Immune Modulators	183,103
IPR&D – Antigen Inhibitors	36,437
IPR&D – cccDNA Sterilizers	133,102
Total IPR&D	$	352,642

Annual impairment evaluation of goodwill

On December 31, the Company conducted its annual impairment evaluation of goodwill. Goodwill was recorded as a result of the acquisition of Arbutus Inc. as described in note 3(a), and has a carrying value of $162,514,000. As part of the evaluation of the recoverability of goodwill, the Company has identified only one reporting unit to which the total carrying amount of goodwill has been assigned. The income approach is used to estimate the fair value of the reporting unit, which requires estimating future cash flows and risk-adjusted discount rates. Changes in these estimates and assumptions could materially affect the determination of fair value of the reporting unit and may result in impairment charges in future periods.

As at December 31, 2015, the fair value of the reporting unit exceeded the carrying value of the reporting unit, and as such the second step of the impairment test, which measures the amount of impairment charge, was not required. In addition to the income approach, the Company considered the market capitalization of approximately $242,844,000 as at December 31, 2015. Although the Company’s carrying value of $547,679,000 exceeded the market capitalization, the Company reconciled the income approach determination of fair value with the market capitalization by considering macroeconomic factors, and as such, the Company does not believe that market capitalization appropriately reflected the value of the Company for the purpose of testing goodwill impairment. No impairment charge on goodwill was recorded for the year ended December 31, 2015.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Collaborations, Contracts and Licensing Agreements

12 Months Ended

Dec. 31, 2015

Deferred Revenue Disclosure [Abstract]

Collaborations, contracts and licensing agreements

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



	Year ended December 31
	2015		2014		2013
Collaborations and contracts
DoD (a)	$	6,764	$	8,407	$	9,806
Monsanto (b)	4,725		1,080		—
BMS (d)	—		1,741		526
Dicerna (e)	1,820		510		—
Other RNAi collaborators (g)	—		—		93
Total research and development collaborations and contracts	13,309		11,738		10,425
Licensing fees, milestone and royalty payments
Monsanto licensing fees and milestone payments (b)	10,256		2,744		—
Alnylam and Acuitas licensing fees and milestone payments (c)	15		150		5,000
Dicerna licensing fee (e)	1,053		131		—
Spectrum royalty payments (f)	240		190		40
Total licensing fees, milestone and royalty payments	11,564		3,215		5,040
Total revenue	$	24,873	$	14,953	$	15,465

The following table sets forth deferred collaborations and contracts revenue:



	December 31, 2015		December 31, 2014
DoD (a)	$	15	$	313
Monsanto current portion (b)	—		4,245
Dicerna current portion (e)	853		1,221
Deferred revenue, current portion	868		5,779
Monsanto long-term portion (b)	—		8,666
Dicerna long-term portion (e)	213		1,271
Total deferred revenue	$	1,081	$	15,716

(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 was 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 was 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.

The DoD had 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 have provided the Company with up to $140,000,000 in funding for the entire program. In December 2014, the DoD exercised an option valued at $7,000,000 to manufacture TKM-Ebola-Guinea, developed by the Company targeting the Ebola-Guinea strain responsible for the current outbreak in West Africa.

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 labor and overhead rates for the year ahead. At the end of the year the actual labor and overhead rates are calculated and revenue is adjusted accordingly. The Company’s actual labor 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. For the years ended December 31, 2014 and 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 October 1, 2015, the Company received formal notification from the DoD that, due to the unclear development path for TKM-Ebola and TKM-Ebola-Guinea, the Ebola-Guinea Manufacturing and the Ebola-Guinea IND submission statements of work had been terminated, subject to the completion of certain post-termination obligations. The TKM-Ebola portion of the contract was completed in November 2015. The Company is currently conducting contract close out procedures with the DoD.

(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 is $86,200,000 following the successful completion of milestones.

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 December 31, 2015, the Company had received $19,300,000 from Monsanto. The 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.

Following the completion of the Phase A extension period in October 2015, no further research activities were conducted under the arrangement, as Monsanto did not elect to proceed to Phase B of the research plan. As such, the Company revised its estimate of the option period, over which payments received from Monsanto is recognized as revenue, to be from inception to December 31, 2015 as the Company believes it no longer has any further obligations to provide future research activities to Monsanto. This resulted in the full release of Monsanto deferred revenue and a recognition of $14,981,000 in Monsanto revenue for the year-ended December 31, 2015.

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 the Company 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 December 31, 2015. There was no equity income or loss with respect to PADCo recorded for the periods ended December 31, 2014 and December 31, 2015. In March 2016, Monsanto exercised its option to acquire 100% of the outstanding shares of PADCo and will pay the Company an exercise fee of $1,000,000 - refer to note 13 for the subsequent event.

Milestone receipts and payments

In November 2013, Alnylam initiated a Phase III trial with ALN-TTR02, also known as patisiran, and the associated $5,000,000 development milestone was paid to the Company in December 2013. In addition, the Company earned a $150,000 milestone in March 2014 from Acuitas (formerly AlCana Technologies, Inc.) subsequent to Acuitas receiving a milestone payment from Alnylam with respect to Alnylam initiating a Phase III trial for ALN-TTR02.

In November 2013, the Company initiated Phase I/II clinical trial for TKM-PLK1, resulting in a milestone payment of $375,000 to Alnylam.

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 believed that under its licensing agreement with Alnylam, the technology transfer to Ascletis triggered a $5,000,000 milestone obligation from Alnylam to the Company. However, Alnylam demanded a declaration that the Company had not yet met its milestone obligations. The Company disputed Alnylam’s position. To remedy this dispute, the Company and Alnylam commenced arbitration proceedings as provided for under the agreement. The hearing date for this arbitration took place in May 2015, and in March 2016, the arbitration proceeding with Alnylam has concluded resulting in no milestone payment to the Company. The Company has not recorded any revenue in respect of this milestone for the year-ended December 31, 2015.

(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 can 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 is required to provide a pre-determined number of LNP batches over the four-year agreement. BMS has 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 is being recognized as the Company produces the related LNP batches.

Revenue earned for the year-ended December 31, 2014 relates to batches shipped to BMS 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 development, manufacture, and commercialization of products directed to 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 the manufacturing and services provided, as well as further payments with the achievement of development and regulatory milestones of $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 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 as at December 31, 2015.

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. The Company has deferred the recognition of revenue on all cash deposit payments received for manufacturing work orders until acceptance of inventory. Revenue from service work orders is recognized as the services are performed.

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. In the year ended December 31, 2012, the Company received a milestone of $1,000,000 based on the FDA’s approval of Marqibo and will receive royalty payments based on Marqibo’s commercial sales. 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 did 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. In the year ended December 31, 2015, the Company recorded $240,000 in Marqibo royalty revenue (2014 - $190,000, 2013 -$40,000). In the year ended December 31, 2015, the Company accrued $6,000 in royalties due to TPC in respect of the Marqibo royalty earned by the Company (see note 9).

(g) Other RNAi collaborators

The Company had active research agreements with a number of other RNAi collaborators.

Property and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property and equipment



December 31, 2015	Cost		Accumulated depreciation			Net book value
Lab equipment	$	5,910	$	(3,748	)	$	2,162
Leasehold improvements	4,681		(4,189		)	492
Computer hardware and software	2,014		(1,487		)	527
Furniture and fixtures	307		(305		)	2
	$	12,912	$	(9,729	)	$	3,183



December 31, 2014	Cost		Accumulated depreciation			Net book value
Lab equipment	$	5,021	$	(4,451	)	$	570
Leasehold improvements	5,281		(4,796		)	485
Computer hardware and software	2,293		(1,588		)	705
Furniture and fixtures	364		(364		)	—
	$	12,959	$	(11,199	)	$	1,760

As at December 31, 2015, all of the Company’s property and equipment are currently in use and no impairment has been recorded.

Share Capital

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Note [Abstract]

Share capital

(a) Financing

On October 22, 2013, the Company completed an underwritten public offering of 3,750,000 common shares, at a price of $8.00 per share, representing gross proceeds of $30,000,000. On November 1, 2013, the offering’s underwriter completed the exercise of its over-allotment option to purchase a further 562,500 shares at $8.00 bringing the aggregate financing gross proceeds to $34,500,000. The cost of the financing, including commissions and professional fees, was $2,462,000, resulting in net proceeds of $32,038,000.

On March 26, 2014, the Company completed an underwritten public offering of 2,125,000 common shares, at a price of $28.50 per share, representing gross proceeds of $60,562,000. The Company also granted the underwriters a 30-day option to purchase an additional 318,750 shares for an additional $9,084,000 to cover any over-allotments. The underwriters did not exercise the option. The cost of financing, including commissions and professional fees, was $4,085,000, resulting in net proceeds of $56,477,000.

On March 25, 2015, the Company announced that it had completed an underwritten public offering of 7,500,000 common shares, at a price of $20.25 per share, representing gross proceeds of $151,875,000. The Company also granted the underwriters a 30-day option to purchase an additional 1,125,000 shares for an additional $22,781,000 to cover any over-allotments. The underwriters did not exercise the option. The cost of financing, including commissions and professional fees, was $9,700,000, resulting in net proceeds of $142,177,000.

(b) Authorized share capital

The Company’s authorized share capital consists of an unlimited number of common and preferred shares without par value.

During the year ended December 31, 2015, there were 18,750 warrants exercised for $42,000 in cash (December 31, 2014 – 610,478 warrants for $1,583,000) and no warrants were exercised using the cashless exercise provision (December 31, 2014 – 6,000 warrants for 5,285 common shares).

The following table summarizes the Company’s warrant activity for the years ended December 31, 2015 and 2014:



	Common shares purchasable upon exercise of warrants		Weighted average exercise price (C$)		Weighted average exercise price (US$)		Range of exercise prices (C$)				Range of exercise prices (US$)				Weighted average remaining contractual life (years)	Aggregate intrinsic value (C$)		Aggregate intrinsic value (US$)
Balance, December 31, 2013	1,014,728		$	2.90	$	2.72	$2.60	—	$	3.35	$2.44	—	$	3.15	2.7	$	5,635	$	5,298
Exercised	(616,478	)	3.09		2.80		2.60	—	3.35		2.35	—	3.03
Balance, December 31, 2014	398,250		2.95		2.67		2.60	—	3.35		2.35	—	3.03		1.8	5,902		5,343
Exercised	(18,750	)	2.88		2.25		2.60	—	3.35		2.03	—	2.62
Balance, December 31, 2015	379,500		$	2.95	$	2.13	$2.60	—	$	3.35	$2.03	—	$	2.62	0.8	$	1,217	$	879

The aggregate intrinsic value in the table above is calculated based on the difference between the exercise price of the warrants and the quoted price of the Company’s common stock as of the reporting date.

All of the Company’s warrants were exercisable as of December 31, 2015.

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



	As at December 31
	2015			2014
Dividend yield	—		%	—		%
Expected volatility	49.07		%	85.22		%
Risk-free interest rate	0.48		%	1.00		%
Expected average term (years)	0.6 years			0.5 years
Fair value of warrants outstanding	$	2.33		$	12.80
Aggregate fair value of warrants outstanding	$	883		$	5,099
Number of warrants outstanding	379,500			398,250

The value of the Company’s warrants are particularly sensitive to changes in the Company’s share price and the estimated share price volatility.

(d) Stock-based compensation

The Company has six share-based compensation plans; the “2007 Plan”, the “2011 Plan”, two “Designated Plans” (together, the “Arbutus Plans”), the “Protiva Option Plan”, and the "OnCore Option Plan" (see note 3 above).

On June 22, 2011, the shareholders of the Company approved an omnibus stock-based compensation plan (the “2011 Plan”). The Company’s pre-existing 2007 Plan was limited to the granting of stock options as equity incentive awards whereas the 2011 Plan also allows for the issuance of tandem stock appreciation rights, restricted stock units and deferred stock units (collectively, and including options, referred to as “Awards”). The 2011 Plan replaces the 2007 Plan. The 2007 Plan will continue to govern the options granted thereunder. No further options will be granted under the Company’s 2007 Plan.

Under the Company’s 2007 Plan the Board of Directors granted options to employees, directors and consultants of the Company. The exercise price of the options was determined by the Company’s Board of Directors but was always at least equal to the closing market price of the common shares on the day preceding the date of grant and the term of options granted did not exceed 10 years. The options granted generally vested over three years for employees and immediately for directors.

Under the Company’s 2011 Plan the Board of Directors may grant options, and other types of Awards, to employees, directors and consultants of the Company. The exercise price of the options is determined by the Company’s Board of Directors but will be at least equal to the closing market price of the common shares on the day preceding the date of grant and the term may not exceed 10 years. Options granted generally vest over three years for employees and immediately for directors.

Additionally, the Company granted a total of 200,000 options in 2013 to two executive officers in conjunction with their new appointments as executive officers. These options were granted in accordance with the policies of the Toronto Stock Exchange and pursuant to newly designated share compensation plans (the “Designated Plans”). The Designated Plans are governed by substantially the same terms as the 2011 Plan. Hereafter, information on options governed by the 2007 Plan, the 2011 Plan, and the Designated Plans is presented on a consolidated basis as the terms of the four plans are similar. Information on the Protiva Option Plan and the OnCore Option Plan is presented separately.

At the Company’s annual general and special meeting of shareholders on May 8, 2014 and July 9, 2015, the shareholders of the Company approved respectively, a 800,000 and a 3,500,000 increase in the number of stock-based compensation awards that the Company is permitted to issue.

Stock option activity for the Arbutus Plans



	Number of optioned common shares		Weighted average exercise price (C$)		Weighted average exercise price (US$)		Aggregate intrinsic value (C$)		Aggregate intrinsic value (US$)
Balance, December 31, 2012	1,648,846		$	4.54	$	4.54	$	2,300	$	2,301
Options granted	270,250		7.52		7.30
Options exercised	(124,246	)	3.22		3.13		551		535
Options forfeited, canceled or expired	(64,085	)	21.87		21.23
Balance, December 31, 2013	1,730,765		4.45		4.32		7,030		6,826
Options granted	431,125		13.63		12.34
Options exercised	(622,752	)	4.62		4.18		7,650		6,926
Options forfeited, canceled or expired	(9,000	)	8.20		7.42
Balance, December 31, 2014	1,530,138		6.95		6.29		16,573		15,004
Options granted	1,309,625		N/A		16.57
Options exercised	(398,293	)	5.03		3.93		6,887		5,386
Options forfeited, canceled or expired	(151,207	)	19.29		15.09
Balance, December 31, 2015	2,290,263		$	15.53	$	11.22	$	1,376	$	994

Options under the Arbutus Plans expire at various dates from March 28, 2016 to December 2, 2025.

The following table summarizes information pertaining to stock options outstanding at December 31, 2015 under the Arbutus Plans

Consolidated Statement of Stockholders Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Stockholders' Equity [Abstract]
Issuance of common shares in conjunction with the private (public in 2015) offering, net of issuance costs of	$ 9,700	$ 4,085	$ 2,462