What happened

Shares of Arbutus Biopharma (NASDAQ:ABUS) are down 15% at 2:14 p.m. EDT, following the release of the biotech's first-quarter results, although there didn't appear to be anything in the press release to justify the sell-off.

So what

Arbutus is still a clinical-stage biotech, so revenue is minimal and comes from collaborations and licenses. The company also has some noncash royalty revenue that it books each quarter. On the bottom line, the biotech posted a net loss of $17.1 million, which is to be expected with no products on the market.

The more important issue is how much cash Arbutus is burning relative to what it has in the bank. Fortunately, with the help of a capital raise in July, the company was able to extend its cash runway into mid-2022, compared with prior guidance of mid-2021.

Various pills on spread-out hundred-dollar bills

Image source: Getty Images.

Today's decline likely has to do with what wasn't in the press release. There was no major update on any of its pipeline candidates -- especially its antiviral program developing drugs to treat COVID-19, which is still in preclinical development but could advance rapidly given the pandemic.

Now what

While short-term investors hit the sell button, long-term investors should view the pullback as a buying opportunity with the caveat that Arbutus is your typical risky-but-cheap biotech. The company's most advanced drug, AB-729, is in phase 1 clinical trials to treat hepatitis B virus infections.

The company also has patents that it's licensed out to partners, which could add to its revenue stream in the future. And last month, Moderna unsuccessfully tried to get one of Arbutus' patents invalidated, potentially setting up a royalty stream on Moderna's coronavirus vaccine.

Finally, Arbutus owns 16% of privately held Genevant, a joint venture started with Roivant Sciences, which could benefit Arbutus if Genevant starts generating revenue or if the company were to go public, allowing Arbutus to easily sell its stake and generate additional capital.