Hello, everyone, and thank you for joining the H.C. Wainwright's 28th Annual Global Investment Conference. I'm Luis Santos, Senior Associate in Patrick Trucchio's team in healthcare. It is my pleasure today to introduce Assembly Biosciences. We have with us Chief Manufacturing Officer, Nicole White, Jeanette Bjorkquist, and SVP of Preclinical R&D, Katie Kitrinos. Assembly is a clinical-stage company working on small molecule anti-viral therapeutics for viral and liver diseases, including recurring genital herpes, HDV, HBV, cholestatic liver diseases. Thank you for joining us today. It's a pleasure to have you.
For those that are less familiar, briefly, where is Assembly today and what are your lead programs?
Yeah. We advanced four different programs through phase I last year, and our lead candidate for the HSV program was licensed by Gilead by the end of last year. They're taking it into phase II for recurrent genital herpes by the end of this year. We have 6250, we were originally developing for hepatitis delta virus. That's going to plan to start a phase II study by the end of this year. We also recently announced that we're expanding into cholestatic liver diseases, and we'll be taking a phase II study for PBC and PSC next year.
Other than that, we also have 7272, which is a pan-herpes program for transplant patients, which we hope to be. It's right now in IND-enabling studies, and we hope to get it into the clinic next year. We have a very strong research engine that's working on the next wave of pipeline.
Excellent. This Gilead collaboration, can you walk us through how it is set up and which programs are involved, and your most recent decision also announced last week?
Yeah. We entered back a few years ago, and it's a long-term collaboration where they have the right to license any of our programs that we discover. They did license the HSV program, and we opted in to share 40% of the costs and profits in the U.S. Traditionally, we still get milestones and royalties, and we'll still have those ex-U.S. We thought that that 40% milestone royalty in the U.S. was meaningful to opt into.
One of your lead programs, ABI-6250 in delta, hepatitis delta is the most severe form of viral hepatitis. Why is that?
I can take this one. Hepatitis delta is a co-infection with HBV, and typically for HBV, you would be on NUC therapy. While NUCs are good at basically suppressing replication of the hepatitis B virus, it does not fully typically eliminate the surface antigen, which is what delta relies on for propagation. Even if you're able to suppress the hepatitis B virus, you still have propagation of the hepatitis delta virus. In general, hepatitis delta leads to a more significant liver-related death over time.
So, bulevirtide received accelerated approval in the U.S. this year. This is the first therapy ever approved in HDV. How does that change the market landscape for you in terms of testing, diagnosis, and treatment?
That's a great question. We're really excited to see the bulevirtide approval in the U.S. It's been approved in other regions for longer, and it's had a really meaningful benefit for those patients that have been infected with hepatitis delta. What we've seen as more treatments emerge is that typically testing has improved. We've seen this most recently with the Roche high-throughput assay for hepatitis D, as well as Labcorp has also launched a new testing option. Our hope is with these new testing options that are available, it leads to not only earlier diagnosis of hepatitis delta, so earlier intervention, but also better long-term treatment options.
Right now we're estimating, I think what's out there is about only 10% of those with hepatitis D in the U.S. have been diagnosed. We expect with better treatments, better testing, that this patient number will increase over time.
Excellent. Bulevirtide hits the same inhibitor that you're targeting with 6250. Can you tell us about the differentiation points?
Sure. Yeah, bulevirtide is also an NTCP inhibitor, which is great because it validates the target. As I mentioned, we've already seen some meaningful benefit in patients out there. The big difference is that bulevirtide is a large molecule that must be injected daily, and 6250 is a small molecule with potentially ability to dose once daily oral. This really provides a nice convenience benefit for patients, perhaps better adherence. The other thing is that Gilead's published some modeling where you don't see full target engagement over the 24-hour period, so the receptor occupancy is not 100%, where we feel with 6250 in a small molecule, we may have ability to achieve more target coverage over the 24-hour period, which could provide a meaningful benefit to patients.
Perhaps better safety profile. Is that something we could say at this point?
I think at this stage it's a little bit early in development. We've only been through a phase I-A study, but I think the long-term goal would be if you can have more target occupancy, perhaps you could have more efficacy.
Can you tell us how the phase I-A informs the design of the phase II that you're planning to?
Focusing on the multiple dose cohorts from the phase I-A, we saw serum bile acid elevations that met or exceeded what's been seen with bulevirtide. We certainly know for bulevirtide with the approved dose that they see multiple log reductions in HDV RNA, as well as ALT normalization with a good safety profile. As Nicole just mentioned, we had a good safety profile over 10 days of dosing, and we saw no AEs of pruritus. Going into phase II, we've selected two doses to evaluate. One dose at a predicted NTCP receptor occupancy that is consistent with what's been seen with bulevirtide, and then one that's at a predicted receptor occupancy level that's greater than what has been seen with bulevirtide.
You mentioned HDV RNA and ALT normalization. Can you tell us how important that is for the phase II key efficacy endpoints, and also what will you consider a successful release there?
Yeah, I think for our phase II study, the primary focus is identifying which dose we want to take forward into longer term clinical trials. That said, we have a great roadmap with bulevirtide, and we know that over 16 weeks of treatment, which is our primary endpoint for phase II, that they saw meaningful declines in HDV RNA. We also know with longer term dosing, they achieved ALT normalization and continued to maintain a good safety profile. We expect to see the same for 6250.
Going back to that ALT normalization, it can move, it can change for reasons unrelated to the infection. What are your expectations here for the endpoint versus the composite?
Sure. Yeah. I think it's our view that the composite endpoint is really going to be most meaningful in terms of long-term patient outcomes, for the HDV patient population.
The treatment has so far been indefinite. Bulevirtide now has a boxed warning about exacerbations, discontinuations. This is probably going back to the safety profile. Finite treatment is probably going to enter the conversation. Is this something that you're contemplating, and what is the stopping rule here?
Yeah. First of all, I think it's important to acknowledge that this is a patient population that had no medications available to them a couple of years ago. The fact that we're even talking about finite treatment now is really a testament to how far the field has come in the last few years. That said, we're focused on treatment for 6250, but Nicole mentioned that we have been doing some PK modeling with 6250, and what we've seen is that 6250 is likely to remain bound to the NTCP receptor for 24 hours. I think it's an open question whether a potential longer-term receptor occupancy can result in greater reductions in HDV RNA, and we'll certainly be following the patients in phase II to see if there is the potential for finite treatment as we think about longer-term trials.
Great. You also mentioned expansion of your pipeline to cholestatic liver disease, and you've expanded into PBC, PSC. What is the biological rationale here?
Yeah. For cholestatic liver diseases like PBC, PSC, we're talking about damage to the bile ducts, which results in increased levels of bile acids in the liver, which then results in progressive liver damage. We think that we see multiple intervention points where NTCP inhibition, PPAR agonists, IBAT inhibitors, and all of those have the potential to block bile acids from getting into the liver. NTCP blocks uptake from the serum, PPAR agonists prevents de novo production of bile acids, and then the IBAT inhibitors prevent reabsorption of the bile acids from the gut into the serum. We don't know entirely what the relative contribution of all of those are.
But where we think NTCP inhibition has a lot of potential is that it's preventing that uptake from the serum into the liver. We know that the majority of bile acids in the body are recycled. Relative to PPAR agonists that are blocking that de novo production, we think there's the potential that NTCP inhibition may result in greater reductions in intrahepatic bile acids. But that will be something that we'll be monitoring for in the phase II study.
In the phase II study, which is a basket study.
Correct.
It's a basket design study.
Yes.
You have sentinel dosing ahead of the second-line PBC, third-line PBC, and first-line PSC cohorts. Can you tell us how you chose the structure and why you chose the structure?
Yeah. We selected a basket study for operational efficiency. This allows us to open one study at one site and enroll both patients as opposed to running two studies in parallel at the same site. It also streamlines the communications that we have with the regulatory agencies as we're doing this proof of concept in cholestatic liver disease, and we discuss how to take this forward. Your question about sentinel dosing, that's being done for patient safety. What's been seen with the PPAR agonists, which are approved for PBC, is that the dose that's used in that patient population is lower than what's been used in other patient populations.
That may be related to the fragility of the liver and the cholestatic liver disease population. Out of an abundance of precaution for the patient's safety, we're doing sentinel dosing to ensure that we're getting the dose correct.
How should we think about commercial positioning in those two populations?
It is a different commercial market. For PBC, it is more established. There are already approved therapies out there in the past few years, and we really see it being able to be different areas of success. It could be a second line on standalone or a second line combination, as Katie mentioned, IBAT, or IBAT and FXR and PPARs could really be complementary to our NTCP inhibition. Or it could be third line. Depending on where that stands, we estimate the market being between $1 billion and $2 billion. For PSC, there are no approved therapies out there. It really would be setting a new market out there. We and others believe that market is about $1 billion.
Great. That is helpful. Moving on to herpes and the opt-in decision with Gilead. GS, now GS-1179, not ABI-1179, is heading into a phase II in RGH later this year with other Gilead. They are moving that forward. What can you tell us about that program? Can you tell us anything about that program already? Again, what do you think drove that selection?
They did not give us very many details. It is really a high-level plan. We cannot share much. We believe that they selected 1179 because it is a higher potency and has a more standard formulation, so could play well for fixed-dose combination therapies they might be thinking, because they have announced that they plan to explore combining it with HIV PrEP and also lower cost of goods sold.
The development plan for 1179 also contemplates. You just mentioned the combination with HIV PrEP. Again, how do you think this could move from a suppressive into a prevention setting?
Yeah. They are the experts in PrEP, so I think that they are well equipped to be able to assess that. We do think that chronic suppressive therapy is a different patient population than the PrEP market. It really, that whole PrEP market is just upside.
This opt-in decision, your opt-in decision for the cost sharing—
Yeah, we just made that.
Congratulations on that. Can you just guide us a little bit more about the future milestones and royalties and how the potential in the preventive care versus the potential in the suppressive care could influence that?
Yes. So in addition to having 40% cost and profit share in the U.S., we are still eligible to receive up to $280 million in global milestones, commercial and regulatory milestones, as well as royalties in the high single digits to low teens. The HIV PrEP market is just seen as pure upside. The way that the cost share of that will work, if in any combination approaches, is that our 40% is kind of a, if you can imagine A over A plus B formula is typically done with these agreements. So if 1179 is contributing, let us say 50% of the value to the combination product, then we would share 40% of that 50%.
Of the 50%.
We would have 20% cost and 20% profits.
Got it. Great. That's helpful. Regarding your pipeline capital competitive positioning, you also have ABI-4334. That's in HBV. In the partnering process, could you tell us how the partnering discussions are going?
Yeah. We only were able to just start those partnering discussions at Q1 when Gilead's option to license the program expired.
Right.
They're still early on. We've also been focused on transitioning the HSV program to Gilead this time, as well as getting our phase II studies for 6250 up and running and that expansion to CLD. It hasn't been the priority at this point, so it's still early on, and we hope to find a partner who will really be committed to advancing the program.
For 7272, the other program?
That is still in IND regulatory enabling studies. We hope to get it into the clinic next year.
Great. Regarding your capital, you end the second quarter with $320 million and runway into 2029. That is including the extension payments expected later this year and the milestones that you mentioned. What will that cover? What are the next catalysts that investors should focus on in the next year?
I first will clarify that. We do get the $75 million extension payment on the third, fifth, and seventh anniversaries. Right now that runway is only assuming that first one due by end of this year, because at this point it is imminent to receive. That really gets us through phase II development for 6250, both for HDV and PBC and PSC, as well as when Gilead should be complete with the phase II study for 1179, as well as continuing the rest of our pipeline, assuming success in nominating new candidates.
Absolutely. Well, I don't know if there are any questions from the audience. Otherwise, I just wanted to thank you for this great overview, and thank you everybody for attending.
Thank you.