Welcome everyone, and good day. I'm John McHutchison, CEO and President of Assembly Bio, and I'd like to welcome you all to our event today. I'm excited about these research webcasts we've been hosting for two important reasons. First, I'm thrilled that we are showcasing the outstanding work that Will Delaney and his talented team of scientists have been doing to catalyze novel programs to combat chronic hepatitis B infection and other viral diseases. Secondly, it's allowed us to invite scientific advisors and clinical experts and collaborators like Professor Edward Gane, who joins us today from New Zealand to give his expert opinion and view on the tremendous unmet need in diseases like hepatitis B and delta infection, and the opportunities for new approaches to make a marked difference for our patients.
Before we turn to the content of today's event, I'd like to quickly touch on a few housekeeping items. I'd like to remind you that we'll be making forward-looking statements. As always, please refer to our SEC filings for a full list of disclosures. Today's event will be available for replay on the Assembly Bio website shortly after the live webcast has concluded. The slide presentation will also be available there for download. Following the prepared remarks, we'll be hosting a Q&A session. You may submit your questions at any time during the event by entering the text into the Q&A box, which you will find below the video player.
If you experience any technical issues during the broadcast, please first refresh your browser and then if the issue persists, please message the technical support team using the chat box at the bottom right corner of your screen. As you all know, a central tenet in our mission at Assembly Bio is to discover and develop finite and curative therapies for the nearly 300 million individuals globally who are infected with hepatitis B virus. The depth of our scientific expertise in virology and the discovery of small molecules has made us a leader in that field. As I said during our last research event, Will and I, and many others on the Assembly Bio team, were involved in the efforts to turn hepatitis C into a curable disease, where it was imperative that we think broadly and creatively about how to suppress and eradicate the virus.
Professor Gane has also worked extensively in this area as well. We believe the strength of our science and skills positions us to bring long overdue innovation to hepatitis B therapeutics and to improve outcomes for individuals living with the chronic infection, including those co-infected with hepatitis delta virus. Interestingly, the program we are discussing today builds upon the strength of established science with insight and innovation unique to Assembly Bio's drug discovery capabilities. Interferon alpha has been used for over 30 years in the treatment of hepatitis B, and also hepatitis C in the past. In a small subset of patients, when given for a year, interferon alpha treatment combined with a NUC has achieved a functional cure of hepatitis B and loss of surface antigen. This is the highest rate of S loss observed in controlled trials to date.
The side effects of interferon therapy and its restricted use in only certain groups of patients have limited its availability, utility, and uptake by both patients and by providers. As Professor Gane shared during our last event, historically in treating patients with delta infection too, peg interferon also results in hepatitis delta RNA declines and improved clinical outcomes. Despite the potential to benefit some patients, interferon's uses in HBV therapy are greatly limited today, and this is primarily because of treatment limitations. The standard interferon having poor tolerability and many contraindications and requiring weekly injections for up to a year.
The side effects can be substantial, including flu-like symptoms following administration, muscle aches and pains, joint aches and pains, lack of appetite, impact on blood cell counts that frequently fall, and often potentially significant depression, mood changes, weight loss, dehydration, hair loss, a fogginess in thinking, and thyroid abnormalities, just to name some that I can recall. Professor Gane will cover this more in a minute, but you can see why interferon today is not widely prescribed by liver specialists for hepatitis B. When Will first joined me at Assembly, we strategized about what mechanisms we should be pursuing for hepatitis B that might complement our portfolio of potent core inhibitors. At our last event, we talked to you about the entry inhibitor we are now advancing for hepatitis B and hepatitis delta, which represents a complementary antiviral approach.
What about immune modulation as another complementary approach, particularly with a validated mechanism like interferons? By leveraging our expertise in orally administered small molecules and designing a compound to have exposure focused to the liver, we had the opportunity to advance a promising therapeutic approach with greater convenience and tolerability. As you'll see on the agenda, Will will present details on our oral small molecule liver-focused interferon alpha receptor agonist program a little later on in the webcast. We'll include what we're trying to achieve, where we are with our research activities and what we have seen to date, why we're excited and confident about the program, and what to look for from us as this body of work moves forward.
First, I'd like to introduce Professor Edward Gane, who joins us from New Zealand, where he is Professor of Medicine at the University of Auckland, a liver specialist and hepatologist, and Director at the New Zealand Liver Transplant Unit at the Auckland City Hospital. Professor Gane trained in hepatology at the King's College London GKT School of Medical Education, where he completed his postgraduate training and degree on the pathogenesis of hepatitis C-related liver injury. In 1998, he was appointed as Chief Physician for the first New Zealand Liver Transplant Unit at Auckland City Hospital, which provides a national transplant and liver cancer program. He helped set up the community-based National Hepatitis B Surveillance Program, which is the largest in the world, and also chairs the Ministry of Health committee responsible for hepatitis C elimination.
Professor Gane is a key leader and principal investigator for many international clinical trials, with particular interest in early-phase development of new direct-acting antiviral therapies against chronic hepatitis C, hepatitis B, NASH, and liver cancer. He has published extensively with over 400 high-impact papers in peer-reviewed journals, including The Lancet and The New England Journal of Medicine. In 2011, he was made a member of the Order of New Zealand for services to medicine, and he was the 2017 New Zealand Innovator of the Year for his work towards elimination of hepatitis C in New Zealand. In 2018, he was elected to the Royal Society of Medicine in Australia. Ed, thank you very much for being with us today, and I'll now turn the event over to you.
Thank you, John, for inviting me to participate in this event, and hello, everyone. My task is to discuss the role of interferon in the treatment of hepatitis B and how this agent could contribute to future functional cure. Why do we need new therapies for hepatitis B? We already have safe, effective long-term nucleotide analogs, or NUCs, which are recommended as first-line treatment by all of the current guidelines. There still remains an unmet need for hepatitis B therapy in many patient populations. First, NUCs are currently only recommended to those patients with so-called active chronic hepatitis B, and these make up less than a third of all patients living with hepatitis B infection. NUCs do reduce, but they do not remove the lifelong risk of liver cancer.
Lifelong treatment comes with a cost and also risks of non-compliance, in particular in young people. Also, there's a lifelong risk of cumulative toxicity, and this is especially in an aging population with risk factors for bone and kidney disease. Stopping NUCs, either due to non-compliance or by design, may be followed by rapid virologic relapse, and in some patients, this can lead to severe clinical relapse, which may be life-threatening, leading to acute liver failure. Therefore, there is a need to develop a finite duration therapy to achieve functional cure. Next, thanks. Chronic hepatitis B virus infection is associated with very high levels of viral replication and impaired host immune responses. Therapeutic approaches to achieve cure include inhibition of viral replication, lowering the very high viral antigen burden, and boosting the host's own innate and HB-specific immune responses. Next, thanks.
Advances in the understanding of the immunology and virology of hepatitis B over the last decade have identified many new targets for drug development. One therapy that is already approved that actually has all these three mechanisms of action is, of course, interferon alpha. Interferon alpha, firstly, it can boost the immune responses, and it does that by enhancing antigen presentation. It also activates effector cells, which can therefore secrete a variety of cytokines which inhibit viral replication. Interferon alpha also possesses direct antiviral properties. By binding to cellular interferon receptors with JAK2, it activates multiple signaling pathways within the infected hepatocyte, which goes on to activate ISGs, and these trigger a variety of cytokines, again, which degrade viral RNA and inhibit antigen production.
Finally, we now know that interferon alpha enhances the production of APOBEC3B, this is a cytidine deaminase, and multiple other enzymes which can silence cccDNA and also degrade established cccDNA and also genomic RNA, and this itself blocks viral replication. Next slide, thanks. You'll hear more about that from Will later. Let's look, what is the efficacy of interferon in the clinic? This is an old but very important meta-analysis from David Wong in Toronto, and it shows that even the older standard interferon, and this was dosed subcutaneously, 3x a week, even this very old form of interferon had significant antiviral efficacy in patients who were e-antigen positive, and you can see in terms of post-treatment, 24 weeks post-treatment, viral suppression, e-antigen loss, and even surface antigen loss in a small number of patients. Next, thanks.
The development of pegylated interferon allowed a more convenient once-weekly subcutaneous dosing, and this was associated with increased antiviral efficacy. As shown in this international randomized study, pegylated interferon achieved higher rates of e-antigen loss, DNA suppression, ALT normalization, and surface antigen loss when compared to the older standard interferon. Next. One particular benefit of interferon therapy in hepatitis B is that the efficacy continues to increase with longer follow-up post-treatment. In this study from the Netherlands, more than half of those patients who lost hep E antigen on treatment went on to lose surface antigen during the 10 years of follow-up. Next, thanks. Again, in this large Korean study, which included almost 500 patients with e-antigen-positive chronic hepatitis B, interferon treatment was associated with markedly reduced progression to cirrhosis and also the incidence of liver cancer during 20 years of post-treatment follow-up. Next, thanks.
We now have a treasure chest of different classes of novel therapies currently in clinical development, which can be combined in an effort to achieve finite duration of so-called functional cure. Given the multiple mechanisms of action, interferon would seem a very attractive therapy to include in these new combinations. In fact, there's already considerable data available on the efficacy of combining our two approved therapies, that is pegylated interferon plus nucleotide analogs. These are being combined in the clinic, and this is a large meta-analysis of 49 different studies where they looked at different designs of combining interferon to a nuke, either adding interferon on patients on long-term nuke, switching from long-term nukes to interferon, or starting both the nuke and the pegylated interferon at the same time.
What this meta-analysis shows that the most effective strategy was combining both agents from the very beginning, as this appeared to be the most effective in terms of surface antigen loss. Next, thanks. At last month's European Liver Meeting, the preliminary results from combining pegylated interferon with a translation inhibitor, in this case, the siRNA from Vir, these were presented. Again, the strategy of combining both agents from the beginning was the most effective in terms of surface antigen reduction. Following on from this, next, thanks. Every other siRNA and antisense oligonucleotide program is now also evaluating combining these translation inhibitors with pegylated interferon. What about the safety profile of interferon alpha? John has already introduced this. This slide actually nicely summarizes the time course of the most common side effects seen with interferons.
These start off with flu-like symptoms early on, and these are replaced later on by fatigue and mood changes which can lead to anxiety or depression. Next, thanks. This table depicts the frequency of common adverse events, serious adverse events, dose reductions, and discontinuations from the two large registration studies of Pegasys, that's the Roche pegylated interferon alpha, in patients with chronic hepatitis B. I should note that all of these were less frequent than the same, safety parameters reported in the registration studies of Pegasys in chronic hepatitis C. That has been seen in other analyses. Next, thanks.
Nonetheless, the side effect profile and also the systemic immunosuppressive effects of subcutaneous interferon means its use is contraindicated in many patient populations, including those with advanced liver disease or cardiac or lung disease, patients with autoimmune disease in particular, and also patients with psychiatric diseases, organ transplant recipients. Young children or the elderly do not tolerate this, and it's contraindicated in pregnancy and breastfeeding. These contraindications significantly limit the usefulness of pegylated interferon in our clinic. Okay, let's now switch to delta co-infection. John's also introduced this in the earlier presentation. It affects around 12 million people across the world. That's 5% of all hepatitis B-infected patients. If you look in particular countries and regions of the world, up to 60% of people living with hepatitis B have delta co-infection.
This is also the case in my backyard in the Western Pacific, where in our Kiribati patients in Solomons, Samoan patients, up to 40%, 50% of those with surface antigen also have delta co-infection. There's no proven benefit of long-term nucleotide analog therapy in these patients. We've already heard how delta co-infection accelerates the progression to cirrhosis and the complications of liver failure and liver cancer, as shown here in this study from Giovanni Fattovich. In my own experience in our transplant program, where we've transplanted a number of patients with delta co-infection, these patients are transplanted 5-10 years younger than patients we transplant for hepatitis B monoinfection. Next slide, thanks. The only finite treatment which has been shown to be effective in delta is interferon alpha.
In this old but very important NIH study, you can see a clear dose response in terms of HBV RNA suppression in the table on the left. This was associated with improved long-term outcomes. There appeared to be a dose response in terms of virologic suppression and long-term clinical benefits. Next slide, thank you. Now, as I've already described in drug development for HBV monoinfection, the new therapies which are being developed for delta co-infection are now also being combined with pegylated interferons. These figures demonstrate that the antiviral activity of pegylated interferon is synergistic with both the entry inhibitor bulevirtide, shown on the left, and also with the prenylation inhibitor lonafarnib, shown on the right. I think this synergistic antiviral effect in part reflects the specific roles of interferon in blocking the intrahepatic spread of delta virus.
Next slide, thanks. In summary, interferon has multiple different effects on HBV and the host immune system. Interferon, either alone or combined with nukes, has led to the highest rates of surface antigen loss and has improved clinical outcomes for patients with chronic hepatitis B. Interferon has synergistic antiviral activity when it's combined with novel therapies in development, either against HBV monoinfection or HBV delta co-infection. However, we've seen that the inconvenience, the poor tolerability, and the multiple contraindications have limited the use of subcutaneous interferon for the management of hepatitis B in our clinics. Therefore, an improved liver-targeting oral interferon with fewer systemic side effects could meaningfully contribute to functional cure in our patients with chronic hepatitis B. Thank you.
Thanks, Ed. That was fantastic. As always. Your review of the therapeutic approaches to finite and curative hep B therapies and the unmet needs are very relevant to the discussion today, of course. Your comments on the use of interferon for hepatitis B and some of the challenges that have limited its use provide a valuable context for why interferon hasn't played a greater role really, to date, at least in addressing these unmet needs trying to cure hepatitis B. With that as background, I'd like to hand it over to William Delaney now to provide an overview of Assembly Bio's small molecule liver-focused interferon alpha receptor agonist program that we've been talking about for a couple of years now, Will, I think. Thank you, Ed, and I'll hand it over to Will.
All right. Thanks a lot, John, and thank you, Ed. I'll start my presentation just by reinforcing some of the key points that Ed so clearly illustrated. Interferon alpha is an approved treatment for chronic hepatitis B and is used now in its pegylated forms, and it gives the highest rate of surface antigen loss or functional cure of any agents. However, despite the efficacy that it has, it has relatively limited use currently, and that's partially due to the fact that it's a weekly injectable, but mainly due to the significant side effects and tolerability issues that it has.
Therefore an oral activator of the interferon alpha pathway that was able to engage and take advantage of the efficacy that this pathway could give, but was focused on the liver and spare the rest of the body to improve tolerability would be a significant advance for patients, and that's the goal for our program. I want to start by first talking about our overarching goal for hepatitis B cure, and I think this is shared by many of our colleagues in the field across academia and industry. It's a two-component strategy that focuses first on inhibiting the virus, which could mean inhibiting viral replication, but also antigen production, and most importantly, cccDNA, which is the reservoir for viral infection. That's the first part of the strategy.
The second is to engage and augment the immune response, ideally ending up with a HBV-specific T cell response and B cell response. This could also take advantage of many of the innate immune cells that are available and that could ultimately lead to, better efficacy of the HBV specific T and B cells. Something that's unique about interferon alpha's mechanism of action is that it can actually engage both parts of these, both components of the cure strategy. It has many ways that it can interfere with HBV replication cycle, and we'll go through some of that in more detail. It's also the receptor is present in a broad complement of immune cells, including both the adaptive immune cells and the innate immune cells.
I want to talk a little bit more detail about interferon's mechanism of action. First, really the three main activities that we see. First, it can act within host cells and induce a cellular antiviral state. It does this by engaging its receptor, activating the JAK-STAT pathway, and this leads to the expression of many interferon-stimulated genes. I've listed some of those on the slide here on the left, things such as Mx, OAS, PKR, et cetera. It can protect cells that the virus would be replicating in. It also activates the innate immune system in many of cells, including some of those are shown here. For instance, macrophages, which in the liver are present as Kupffer cells and constitute a significant portion of the total cells in the liver.
It can activate macrophages and increase their regulatory functions. It can enhance the recruitment and activation of NK cells and also enhance the antigen presentation and migration of dendritic cells. Finally, it can act directly on those adaptive immune cells, namely T and B cells, resulting in the expansion of those cell types, enhancing the cytotoxic function of T cells and antibody production by B cells. I want to focus next on the first part, which is the antiviral state of the cell, and how this applies specifically to HBV. Replication cycle. If we start in the upper left-hand part of the slide, the virus attaches and enters the cell through the NTCP receptor. It uncoats.
It's able to deliver its DNA to the nucleus to form cccDNA, and that cccDNA is able to be transcribed, giving rise to viral mRNAs that enter the cytoplasm and can be translated into viral proteins. These proteins can be secreted, whether it's the antigens or they can form new viral particles, undergo reverse transcription and be secreted to complete the viral life cycle. Due to the efficacy of interferon, it's been studied at a cellular level for many years. If we go to the next slide, we can see a summary of some of this key literature.
Within the last 10 years, it's been shown that one of the mechanisms of interferon, and this comes from the lab of Massimo Levrero and also work by Jörg Petersen and Maura Dandri, showed that interferon is able to inhibit the transcriptional ability of cccDNA through epigenetic mechanisms. More recently, it was shown by Ulrike Protzer's group that activation of the interferon alpha pathway can lead to degradation of cccDNA. Several pieces of data coming from Francis V. Chisari's lab over the years have shown that interferon can also act on HBV RNA, accelerating their turnover, and can also destabilize viral capsids after they're formed. Collectively, we see multiple complementary and distinct mechanisms of action that can result in inhibition of HBV replication within cells. Importantly, we have two mechanisms working directly on cccDNA.
To frame the project that we have here at Assembly, I'll use this slide to illustrate that. Starting on the left-hand panel, you see interferon alpha is obviously a biologic. It's a 165 amino acid large molecule and is used predominantly as its pegylated form. That's dosed once a week, which leads to high circulating interferon levels, and this leads to tolerability issues which have limited its clinical use, also caused discontinuations in eligible patients and limit its overall duration in eligible patients. John and Ed have discussed many of the symptoms and side effects of interferon. They're also bulleted out on the bottom of the slide there.
Moving to the right-hand panel of the slide, the goal for our program is to have a small molecule that's able to bind and activate the interferon alpha receptor. This small molecule will have liver-focused PK exposure, and what that will allow us to do is to activate the antiviral pathways in infected hepatocytes, as I just discussed, also to engage both innate and adaptive immune cells that are present in the liver. Furthermore, the goal of this program is to avoid high systemic exposure which will spare the rest of the body from the effects of interferon alpha and the tolerability issues. Finally, this drug will be given orally, which also will increase convenience for patients.
To expand a little bit upon the liver-focused strategy for this program, this slide illustrates the goals of the program and the approach that we're taking. The compound, again, will be given orally, and it will be rapidly absorbed through the intestine into the portal vein. As soon as it enters the portal vein, high concentrations of compound will hit the liver, resulting in high liver exposure. They'll engage the interferon alpha receptor. An important part of this strategy is that the compound does not need to be circulating at high levels like a conventional antiviral that inhibits the virus, but it just needs to trigger the receptor and start a signal transduction cascade, and we'll talk more about that in a moment.
The driver here is that we'll have a long pharmacodynamic effect after engaging the receptor, and then the liver will do what it naturally does, which is eliminate drugs. This compound will be designed to have a high first pass effect, so very little of it will survive the liver, and will have a short half-life and ultimately having low systemic exposure. I also wanted to note that the liver is a complex organ and contains many different cell types. Of course, we think first of hepatocytes in the liver, and those constitute about 70% of the cells in the liver. There's also many other important cell types that could be relevant for the resolution of HBV infection. Those include liver sinusoidal endothelial cells, which constitute about 10%-15% of cells in the liver.
Kupffer cells, which I already mentioned, which can be present in about 10% of the cells of the liver, and then various other immune cell types, including T cells, B cells, and NK cells. Importantly, all of these cell types express the interferon alpha receptor, and they can all be engaged to collectively work against HBV, whether it's the direct antiviral state in the hepatocytes or the activities on the innate or adaptive immune cells. I'm going to switch now and share some of the data that we've generated from our internal small molecule program here. There are expectations that we would have for a compound that acts by this mechanism, and those are summarized here, and I'll walk through some data for each of these expectations.
First, we would expect the compound that activates the interferon alpha pathway to have broad antiviral activity and be active against a number of DNA and RNA viruses. We would expect it to have activity against HBV, as I've outlined on previous slides, against both replication and antigen production. We would also expect that this activity would be dependent on signaling through the receptor, through the JAK-STAT pathway, and through the production and transcription of interferon-stimulated genes. Starting with the broad antiviral activity, we used three RNA virus assays to first profile some of the compounds from this program. This includes hepatitis C virus, Zika virus, and EMCV or encephalomyocarditis virus. In the case of the HCV and the Zika assays, these are replicon cells that have a construct that replicates continuously within the cells.
This is a very simple assay where we add the drug for two days to these cells and then use a luciferase reporter to look for the amount of virus present at the end of the assay. In the case of EMCV, this is a whole virus assay where we infect lung cells with EMCV. We then add the compound and incubate the cells for two and a half days. Since this is a cytopathic virus, we look for cell viability as the marker for protection against the virus. In the next slide, we can summarize the results of these antiviral assays.
I'm showing results here for five. Starting over on the left panel, you can see for hepatitis C, it's quite sensitive to these molecules, and we see EC50 is ranging from about 100 nanomolar down to about 10 nanomolar for the various series of compounds, very consistent activity. Moving to the central panel, similar results for Zika virus, where you can see all five of the series are active with EC50s around 100 nanomolar or less. Then finally, in the whole virus assay for EMCV, again, similar results where we see compounds having activity somewhere around 100 nanomolar for all of the series of compounds. Moving on to talk about HBV, we used two assays to look at the antiviral activity against hepatitis B, an early and a late treatment assay.
I want to walk through the differences in these assays, because it's critical to understanding the activity of interferon. First, in the early treatment assay, we take primary human hepatocytes, we infect them with virus, and then a couple of hours later, we add the compound. This adds the compound before the formation of cccDNA. We then incubate the compounds or the cells and the compounds for 7 days. Then we're using surface antigen as a marker for the formation and transcriptional activity of cccDNA as the endpoint. Again, we're treating the cells before cccDNA formation in the early assay. In the late assay, we plate the cells, infect them. We give the cells 2 days after infection to form cccDNA, and then we add the compounds and incubate for a further 5 days.
Importantly, here, we're adding the compound after cccDNA formation. We're using the same surface antigen endpoint to look for the activity and transcription from cccDNA. Three different classes of molecules in both those early and late assays, nucleoside analogues, core inhibitors, and then the small molecule interferon agonist receptor, interferon alpha agonist receptor molecules. Starting on the left-hand panel, we're using entecavir as an example nuc. You can see that whether we give entecavir early or after two days, we see very little activity against cccDNA. Basically, it doesn't affect significantly the production of surface antigen. This agrees with the known mechanism of action of nucleoside analogues. It has no effect on preformed cccDNA. It's also not effective in being able to stop the formation of new cccDNA.
Moving to the central panel with the core inhibitors, here we're using our phase Ib compound ABI-H3733. We can see in the early treatment assay with ABI-H3733, we see potent activity against the formation of cccDNA. You can see surface antigen is inhibited with an EC50 around 100 nanomolar. However, when we treat late, two days after infection when cccDNA is already formed, we don't see a significant effect against surface antigen, as expected for this class of inhibitors. Finally, moving to the right-hand panel with the small molecule agonist, we can see that whether we give the molecule early before the formation of cccDNA or late after the formation of cccDNA, in both cases, we see a significant inhibition of surface antigen.
I think this slide very nicely illustrates the differences between the different mechanisms and the different classes of inhibitors and also the uniqueness of the interferon alpha mechanism of action as compared to the antivirals. Next, we also wanted to confirm that these molecules were acting as we expect by engaging the receptor, activating signal transduction and resulting in the transcription of interferon-stimulated genes. The first set of experiments we did to look at this is we did Western blot on cells to look for the evidence of phospho-STAT. After the receptor is bound by interferon or the small molecule agonist, you should get active dimerization, activa`tion of JAK-STAT pathway, phosphorylation of STAT, and then STAT1, STAT2. Heterodimer is what stimulates then the transcription of the responsive genes.
The endpoint we're looking for is that phosphorylated STAT1 as evidence that we're signaling through the receptor and causing dimerization and activation of the pathway. We looked at three conditions. DMSO control, using interferon, the biologic itself, and then also using the small molecule agonist, and we're using a series one molecule as the example here. Let me walk you through the Western blot on the right-hand panel. The first two columns show the DMSO treated, and whether we add a JAK inhibitor or not, we see no basal level of STAT1 phosphorylation, so there's no detectable signal there. Moving to the center two panels, using interferon alpha itself, we see that in the absence of the JAK inhibitor, we see a strong signal for phosphorylated STAT1.
However, this can be completely blocked by the addition of the JAK inhibitor, and you see the disappearance of that green band there in the middle, indicating phospho-STAT1. Moving on to the far right, last two columns we see with the small molecule agonist. Just like interferon, when we add the agonist, we see the appearance of phosphorylated STAT1, and that's able to be blocked, just like interferon by the addition of the JAK inhibitor. You can see the loading control on the bottom for the cell lysates with GAPDH. Overall, these indicate that its molecules are acting like interferon alpha through the JAK-STAT signaling. We next wanted to look at some of the genes that would be produced after activation of this receptor pathway.
To do this, we took primary human hepatocytes, and we treated them with interferon, or we treated them with a small molecule agonist and compared them to untreated cells and looked for the induction and changes in genes based on those treatments. This is done by a NanoString analysis of RNA, and we're looking at a panel of approximately 800 genes here. What I have plotted out is the fold induction of genes on the y-axis, fold induced by interferon alpha, and on the x-axis, the fold induced by a series one small molecule agonist. What you'll see is a very nice diagonal line with an R squared of 0.9, indicating there's a very tight correlation between the genes induced by the biologic interferon and by the small molecule agonist.
You can see the genes that are highly induced by interferon are also highly induced by the small molecule, and conversely, those that are have little induction or no induction by interferon show a similar pattern for the small molecule. I've highlighted a couple of the common household name interferon-stimulated genes on this panel, including OAS, MX1, IRA, et cetera. Moving on to our target profile for this interferon agonist program. In terms of activity, the compound needs to be active against both hepatitis B and hepatitis delta with levels comparable to interferon alpha or better. It has to induce ISGs comparable to interferon alpha, so induce the same type of immune gene response.
Then finally, we want to see that when we treat animals and preclinically that in vivo we get strong induction of interferon-stimulated genes in the liver versus the periphery. The PK profile that would support that type of activity would be, as I said before, an orally administered compound with rapid absorption, high liver exposure, but limited systemic exposure, and therefore having a short terminal half-life. Finally, critically, the safety profile for the molecule, it needs to be well-tolerated, which would be a significant advance compared to the side effects we've discussed for pegylated interferon. In terms of our progress on the project and our goals, the project's currently in lead optimization. We've got multiple chemically differentiated lead series, as I've discussed, and I've shown that these have broad antiviral activity as well as activity specifically against HBV.
We've confirmed that it's active through the canonical signal transduction pathway, and we're currently in the process of optimizing the PK. We know that we can modify the half-life based on the chemical structure, and we're actively profiling compounds in preclinical PK/PD studies. Our goal is to advance compounds into preclinical safety profiling in 2023 to enable selecting a development candidate as quickly as possible. Before I wrap up my portion of the presentation, I just wanted to highlight thinking forward to the clinical testing of a molecule from a program like this. The fact that we can detect the activity of interferon relatively shortly after it's administered, there are many studies that have been published that show this. I pulled out one example that looks at the early kinetics of pegylated interferon.
This is a study from Harry Janssen and Stefan Zeuzem's groups in 20 patients, where you can see that they give 4 doses of interferon over 28 days. Immediately after the first dose, there's a marked decline in HBV DNA. You can actually see due to the pharmacokinetics of pegylated interferon that that starts to wane and rebound a little bit before the next shot is administered. Progressively, as you continue to give shots over the 28-day period, there's a decline in HBV DNA, and in this study it's about half a log. We've also seen in other published studies that you can see movement in viral antigens, including e antigen and S antigen as well.
You know, it's very important that we would be able to get an early read on it and proof of concept for the compound, and we would be able to do that in a 28-day study. As Ed and John have discussed, the side effects and tolerability of interferon is apparent very early in clinical dosing, and we would also have viral biomarkers for the activity and proof of concept. I'll wrap up at this point and just summarize that interferon alpha is an approved drug for hepatitis B that has a demonstrated ability to achieve functional cure. Despite that, it's not used very often due to its you know, poor tolerability and contraindications.
Therefore, a small molecule that's able to engage the benefits of the interferon alpha pathway, so the efficacy while reducing the systemic exposure and improving the tolerability profile would overcome this major limitation. We've discovered novel potent agonists of the IFNAR alpha receptor and are aiming to advance compounds in the preclinical safety assessments next year. I'll wrap up at that point. Back over to you, John.
Thanks, Will. I love that gel with the STAT1 phosphorylation where it's the same, the small molecule's the same as the large molecule as well. Look, our oral liver-focused interferon alpha receptor agonist program has the potential to unlock the value that interferon has shown it can bring to the treatment setting while mitigating the considerable toxicity of systemic exposure and improving ease of use and potentially duration of use as well. It also introduces an immune mechanism into our strategy to combat hepatitis B and delta hepatitis alongside the antiviral approach of our hepatitis B delta entry inhibitor and our next generation, more potent core inhibitors.
From a company perspective, we have successfully assembled an incredibly strong research organization over the past two years that's enabled us to create significantly more potent core inhibitors targeting that second mechanism of the class to combat the formation of new cccDNA and to expand our discovery and development efforts, as you've heard today, beyond core inhibition as they are focused towards hepatitis B, delta and other viral diseases, which we plan to talk about in an upcoming additional webcast as well. Along with our strong research pipeline we are building, we're enthusiastic about advancing our next generation core inhibitors, 3733 and 4334, into the clinic. We're excited to have the talent and ability to be able to do all those things. Thank you, Will and your team as well.
It's a good time now to transition to a few Q&A. As a reminder to our participants, if you'd like to ask a question today, I know some of you have already, please enter it into the chat box below the video player and we'll get started. Ed Gane, Professor Gane, I should say, I'm too familiar, but perhaps we can start, Ed, with you because you've got an enormous clinic there, so hepatitis B clinic based out of Auckland. How many people or patients attend that hepatitis B clinic?
Thanks, John. New Zealand is part of Asia-Pacific or Polynesia, so we have about 2.5% of our population have hepatitis B and about 10% of our indigenous people or Māori. My clinic, we see people who need treatment, traditionally we've had been referred from our large surveillance program. We've talked about people who have high ALTs, high HBV DNA. We currently have around 2,500 people on the oral nuke therapy in my own clinics. Yep.
2,500 people.
2,500, yes. Yep. On long-term NUC therapy.
That's an extraordinary number of patients. I was incredibly surprised to hear that in some of those populations, 40%-45% of people have delta co-infection as well. Was it? I think you said that during your talk today. I didn't know that, actually.
Yes. Certainly, this is the case in the Western Pacific and Kiribati, Solomons, New Hebrides. Yeah. We have a lot of these people living in our major cities now.
Of all those patients, Ed, any on interferon or no?
Well, I was very involved in developments such as Graham Cooksley's study and George Lau's study with pegylated interferon, the registration studies. We used a bit of interferon back then. That's 20 years ago. I guess our long-term results weren't great. We are largely genotype B, C, and D. Virtually no genotype A here in the South Pacific. Nowadays, to answer your question, I use very little interferon. I think the only patients I've treated in the clinic with interferon over the last few years have been patients with delta co-infection because there's a lack of any other treatment for this population. I am using interferon in a number of the development programs as in the combinations.
As you pointed out, most of the development programs of novel agents are adding in cohorts combining pegylated interferon. Really, my use of interferon is limited to that.
I'm just trying to tease it out a little bit further. Is it, you know, from the patient perspective and the doctor or the provider perspective, do the patients not want the side effects as well? Is that part of it? Or is it because nukes were so much easier to use with a much more tolerable safety profile? What led to, you know, people just not using it over time?
Well, I guess we were very enthused early on about in particular treating the younger patient, the e antigen-positive patient with a high ALT. You know, the patients whom we felt were the best responders in terms of to a finite course of interferon.
Our results, long-term results have been very poor, and I think that reflects the HBV genotype in this part of the world and all of Asia Pacific, to be honest. You're right. The patients are really given 24 or 48 weeks of pegylated interferon. It has a significant impact on their quality of life, on their ability to work, on their relationships. It's there too in the hepatitis B population. This is just not. I showed you some data, but it's not just in hepatitis C patients. Hepatitis B patients do struggle with the systemic side effects of interferon. To go through 24 or 48 weeks and then not to achieve a durable response is disappointing.
Yeah.
For the patient and physician.
Yeah. For both alike. Probably the patient more than the physician, really, right?
Yeah.
Yeah.
We are really and you're right. The nukes are available here unrestricted. They are very well-tolerated. The only issue I have in the younger patients is adherence, but we do try and reinforce the need for that. Yep. NUCs are very well-tolerated.
Thanks, Ed. Will, you looked at this. We were looking at all the clinical trial stuff and the studies, and Ed's noted today that people are starting to use interferon in their new regimens for their new trials of cocktails for hepatitis B. What's your take on it all, Will, and what's going on there in terms of clinical trials and people using interferon for hep B cocktails?
Yeah. I think what we're seeing is hepatitis B is tough to cure. You know, the field is looking for a way forward and, you know, probably instincts coming out of the HCV days where people worked very hard to get interferon out of the regimens. The small molecules were able to do the job. We're not to go to the side effects that we've discussed with interferon, despite the fact that it was effective. As we've moved forward as a field for HBV, there's been, you know, I think a reawakening of what interferon brings to the table. You know, actually looking at ClinicalTrials.gov, there's over 20 clinical studies ongoing right now where people are looking at novel mechanisms of action in combination with interferons.
I think people are really trying to work with and leverage what interferon alpha brings to the table in their cure regimens.
If I may just add, John.
Yeah.
I think, you know, everyone's looking at the combination of various replication inhibitors with immunomodulators. Because the only immunomodulator currently available and approved is interferon, I think people initially looked at interferon as being, say, a stocking filler until they develop other effective immunomodulators. Now, the preliminary results are coming through. It looks as though interferon may certainly be a part of many development programs going forward.
Yeah. It's true, isn't it? Because, you know, many of the other immunomodulatory approaches, and you had a long list of them all on your slide, and Will and I worked on a lot of those, but they haven't panned out so well. I think there is a significant opportunity if we can dial back the side effects of interferon, maintain its efficacy and its mechanisms of action, and potentially even dose it for a longer period of time, we might be able to do something different. I think, you know, that's the goal of what we're trying to talk to you about, and that's what we'd like to be able to hopefully achieve and to get there and to try and prove at least in some early clinical trials.
Will, I just wanted to ask you another question as well, because I think one thing on everybody's minds, and there are the questions coming in here today is, you know, as I said before, you and I have been talking about this program now for a couple of years, working here together. You know, we're trying to start to show something that we believe is differentiated and on target here. You know, why hasn't anybody done this before? You know? Why are we doing it now? Why hasn't anybody done it before? I think it's an obvious question, really.
Yeah. Thanks, John. I personally have been interested in interferon most of my career, dating back to my postdoc days with Steven. It was very obvious to me when the first nucleosides were approved, and you know, we had experience with conventional interferon and then later with pegylated that, you know, the two mechanisms of action were very different. You know, we had the tolerability of nukes and the profound viral suppression, but interferon could do something that nucleosides didn't. What was that? Was it its antiviral properties? Was it the immunomodulatory properties, or was it the combination?
You know, this has been something that's been near and dear to my heart and scientifically incredibly interesting to me my whole career, and definitely something I wanted to try to harness and leverage with our program here. The question of why aren't others doing this or why is it taking us or the field longer to get here? I think, again, might be partially a hangover from hepatitis C, where, as I said, we worked really hard to remove interferon from the regimens and, you know, as an RNA virus with a limited lifespan that could be accomplished with sofosbuvir and other compounds. Hepatitis B is proving a tougher nut to crack, can you get the efficacy without all the tolerability issues, which is what we're trying to accomplish here.
Okay, very good. Ed, do you test everybody there in New Zealand for Delta? That was just a brief aside with the prevalence of Delta in your B hep population. You're on mute, sorry.
Yeah. Apologies. Yes.
Yeah.
We certainly test everyone who have emigrated from countries of high prevalence, of which there are large numbers living in New Zealand now from the Western Pacific. It's not found in our Asian population. We do test it though, in patients who are from other ethnicities, other countries, if they have persistent active liver disease with low HBV DNA.
Okay.
Certainly we do it routinely in patients from countries of known high prevalence.
Okay. Thanks, Ed. Will, we wouldn't limit the development if you're successful doing this and. You know, we wouldn't limit the development of this to hepatitis B. You know, Ed had slides on Delta and interferon today. Would that be part of the plan or?
Absolutely. I mean, interferon is actually used quite a bit against Delta virus, even though it's not an approved agent. The reasons are just as Ed illustrated, that it does impact the viral load and translate into improved outcomes for the patients. I think furthermore, the two Delta studies that Ed showed, one with bulevirtide and another with an experimental compound where there was a clear enhanced effect by adding interferon on top. Absolutely, this would be something we would be interested in looking at for Delta and potentially combining with our entry molecule for Delta.
Okay, that's good. Of course, you know, if we're successful, there's a couple of questions here. Would we use this in cocktails with next generation compounds, core inhibitors, et cetera? The answer to that would be yes. There is a path to approval for this alone, as a freestanding agent for hepatitis B and/or Delta and in, and/or in combination with NUCs for hepatitis B. That could be in the setting of a switch, an add-on or a combination up front as well. You know, we have lots of potential options there. As Will said today, it's important to realize that, you know, PD wise in 28 days and we should be able. If we're doing what interferon does, we should be able to see an effect on hepatitis B DNA within the first month of dosing.
There's a number of questions here about, you know, various different aspects of the development program. One I just want to touch on is, you know, the data isn't very good with functional cure and is it really just a matter of it being side effect related, et cetera, et cetera. I think Ed touched on this. The response rates and the cure rates or S loss rates are low with the year of interferon and a NUC, you know, 5%-9%. Right now, we're at 0%. That would be a start and an incremental improvement. There are a couple of meta-analyses we were just talking about before, mainly from Asia, but they show if you extend the duration of interferon beyond a year, you can increase S loss rates by about 10%.
We can send that paper around to some of you who would like to see it as well. I think there is an opportunity that, you know, again, gets back to what we were saying before about ability to take the drug for a prolonged period of time with its side effect profile. Sorry, Ed, you were going to say something?
John, just to add to that really, I think, a couple of questions about what about increasing the dose of pegylated interferon? Do you increase efficacy? Well, I think that was really well studied in Graham Cooksley's randomized study where they went up to from 90, 180 to 70. The higher you push the dose, the worse the tolerability. There is a balance, I think, between efficacy and tolerability with the systemic side effects of injectable interferon.
Yeah. Thank you, Ed. Appreciate that. I missed that, so that was good. Will, another question here about is there a scenario where we can design the drug to enhance the selectivity, potency, widen therapeutic window, dose higher, et cetera, along those lines again? What would you think about that sort of approach from a drug developer, discoverer perspective?
Yeah. I think that's really the crux of the program, that if you know, we have a compound that's well-absorbed, rapidly absorbs, and it gets delivered high concentrations and activates the liver and then is rapidly degraded and disappears. You know, the goal is to harness the efficacy without having the circulating interferon levels that the peg has activating cells throughout the body. So, I do expect that that's really the crux of the program that we will enhance the selectivity. Now, whether we can push much higher and get more out of the mechanism, I mean, I think that's something we'll be able to test when we get there with the program.
Then, like you were saying, John, I'm really encouraged by both the results in hepatitis C with interferon and in hepatitis B, where the prospect of dosing longer could push the cure rates higher. Obviously, if we had a molecule that was much better tolerated, we could, you know, there would be no reason to limit the dosing to 24 or 48 weeks, as long as we continue to increase the cure rates.
Well, as I always say to you, Will, no pressure, right?
You do say that a lot.
No pressure. There's a question about whether you discovered how you discovered the molecules through screening and, you know, where the molecules are binding, et cetera. You know, it might be a tough question.
Just say it's well known that, you know, there are various receptors that can be engaged with small molecules. We worked on a couple at Gilead together with TLR7 and TLR8. It's, you know, not every receptor is suitable, but this is one that is. You know, and then it becomes a medicinal chemistry campaign to build in the profile that you want in terms of potency, activity and the PK profile.
Very good. When would we have 28-day proof of concept data? As soon as possible, really, but no. I mean, there's a lot of work to do here, right, Will? You know, we'll go from lead to IND-enabling tox studies as quickly as we can, and we're pretty prompt and efficient at that.
Yeah.
Probably healthy volunteers, and then a short duration hepatitis B study, probably with Ed helping us, I would hope, in New Zealand to be able to do that, to see if we could show some antiviral effect, very early on. I think that's what we want to do. We want to be able to say, "Look, if you give a dose of subcutaneous interferon or you give our oral drug for a 4-week period of time, you're seeing equivalent reductions in HBV DNA. You're not seeing fevers, you're not seeing low neutrophil counts, et cetera, et cetera." If we could do something like that, this is very forward-looking, in 28 days, you'd know you had proof of concept, and you were very much on the right track, right, Will?
Yeah, absolutely. I think we'll have a great understanding of the molecules and their potential after a 28-day study.
Right. I may not have answered the question exactly about timing, but I think, you know, we'll do everything we possibly can to accelerate the program as quickly as we can. We have a number of series now that have the characteristics of what you've seen today as well. We have some diversity around the scaffold. One of the other questions, Will, probably I think we're running out of time now, but one of the other questions really is, you know, when you target something that's not a large molecule, but a small molecule, you sort of potentially increase the number of side effects that you can have, right? Because you've got a lot more compounds in cells, et cetera, in various different parts of the body. What's the trade-off there and how can you do that?
Yeah, I think, again, it all comes back to what exposure we're going to have around the body, and this is the rationale for having something that's liver-targeted, that it has a very short half-life in vivo. Normally, we're working towards the opposite for a typical antiviral because we want to maintain very high levels. But in this program, since we're going by a pharmacodynamic effect driven by engaging the receptor, you know, the high first pass of the liver should remove the compound from circulation effectively, very quickly and spare the rest of the body. So, you know, there are always, you know, differences that are possible when you're going from one treatment modality to another treatment modality, but that's something we can study carefully during the preclinical discovery phase and as we move a compound towards development.
Again, with the strategy of the liver-focused exposure of the compound, that should allow us to manage those effects.
Thank you both. With that, I think we'll wrap things up today. Ed, as always, we're incredibly grateful that you have been so generous with your time and your insights and your vast experience, and for helping all of us and for those listening to the event on what's most important for patients and also for the field. Thank you again.
Thank you, John. I think this is an incredibly exciting program. Given the multiple mechanisms of action of interferons, if we had an oral liver targeting form without systemic side effects, this would be a huge boost in our journey towards hepatitis B cure.
Well, thank you for saying that. Unscripted, everybody. That is, of course, though. As I've said before, we're thrilled to be advancing our research pipeline to complement our next generation, more potent core inhibitors. Will and I are excited about incorporating additional mechanisms into the portfolio and to expanding beyond hepatitis B and delta with some early programs targeting other viruses that we plan to introduce to you later this quarter also. We also hope to share more from our research programs at upcoming scientific meetings later in this year and going forward.
To recap our anticipated progress during the remainder of 2022, you can see that we have a phase 1b study, which is underway for ABI-H3733 next generation core inhibitor with greater potency against the formation of cccDNA and new virus production, and we expect to have interim data to report during the second half of the year for that program. We also plan to advance ABI-4334 into the clinic during the second half of this year. This is our most potent core inhibitor, designed with a profile that's potentially the best-in-class. Additionally, during 2023, we anticipate moving several research programs we've told you about into preclinical safety profiling to enable development candidate nomination and then IND-enabling studies as quickly as we possibly can.
Here at Assembly, we're embracing the science, our data-driven strategy and our approach, while leveraging our team's strengths and track record in virologic drug development as we advance and expand the portfolio. I look forward to updating you all further during the second half of the year, including at the final research event we plan to announce soon. This concludes today's webcast. Thank you all for joining us, and once again, thank you all for supporting Assembly Bio.