Assembly Biosciences, Inc. (ASMB) Earnings Call Transcript & Summary

Good evening, and welcome to the Assembly Bio conference call. [Operator Instructions] Please be advised that today's conference is being recorded and will be available for replay on the Assembly Bio website. I will now turn the call over to Jason Okazaki, President and CEO of Assembly Bio. Jason, you may begin.

Thanks, Carmen, and thank you all for taking the time to join us this afternoon. I'm joined by Dr. Anuj Gaggar, our Chief Medical Officer on this call. Before we get started, I would just like to quickly remind everyone we will be making forward-looking statements, so please refer to our SEC filings for a full list of disclosures. Today, we're excited to be able to share what we believe are truly impressive results from our Phase Ib clinical studies of our long-acting helicase-primase inhibitor candidates, ABI-1179 and ABI-5366 in participants with recurrent genital herpes. This is an important moment for the company and individuals living with this disease as both candidates met or exceeded all key objectives of the study. With this data, we believe we now have a path to a potentially best-in-class therapy across key parameters, including dosing interval and improved efficacy versus approved agents. In a moment, we will dig into the data, but first, I want to provide a brief overview of the results we are presenting today, which are provided in Slide 3 of the accompanying deck. As a quick reminder, in August, you might recall that we announced positive proof-of-concept interim data on ABI-5366 in its Phase Ib clinical study treating participants with recurrent genital herpes. With participants dosed once weekly over 29 days in cohort B2 of ABI-5366, we saw an astounding 94% reduction of HSV-2 shedding versus placebo and a 97% reduction in virologically confirmed lesions. Today, we announced interim efficacy data from two weekly dosing cohorts of ABI-1179, our second long-acting helicase-primase inhibitor candidate in participants with recurrent genital herpes. Results from cohort B1 of the study shows similarly impressive reductions in HSV shedding of 98% and virologically confirmed lesions of 92% versus placebo. We also released today two additional updates from the ABI-5366 Phase Ib study. First, we've now updated the interim safety data from the study to include both interim blinded safety data from the third cohort B3, looking at proof-of-concept monthly dosing for 5366 and also unblinded safety data from the first two weekly dose cohorts of the Phase Ib trial that were released in August in blinded form. Second, we released interim efficacy data from the monthly dosing cohort B3. This cohort also showed potent antiviral activity but suggests that we may have additional work to do to maintain the same high level of suppression seen in the weekly dosing cohort. I'm excited to now turn it over to Anuj to walk you through each of these important interim data results.

Thank you, Jason. I will first turn to 1179, and Slide 4 outlines the design of the study. This is a double-blind, placebo-controlled study evaluating the safety and antiviral activity of ABI-1179 following weekly dose administration over 29 days and participants seropositive for HSV-2 with recurrent genital herpes. An evaluation period for collection of anogenital swabs, quantification of HSV levels and reporting of genital herpes lesions extends from day 8 through day 35 inclusive. Within each cohort, 20 participants are assigned to ABI-1179 and 5 to placebo. The 3 treatment regimens, which have been initiated to date are 10 milligrams, 20 milligrams and 50 milligrams weekly. The results released today cover cohorts B1 receiving 50 milligrams weekly oral and B2 receiving 20 milligrams weekly oral and include complete HSV shedding data and safety data through day 57 for the two cohorts. As the 10-milligram cohort is ongoing, no data are reported here. Additionally, as follow-up is ongoing for cohorts B1 and B2, the safety data are reported collectively for 1179 and placebo recipients within each cohort in order to maintain blinding until the study database is locked. Turning to Slide 5. Overall, baseline demographics and disease characteristics were well balanced between the two cohorts. The enrolled population was predominantly white and aged 40 years. A higher proportion of female participants was enrolled in the 50-milligram cohort. Of specific note is the enrollment of a population with active disease having on average 5 to 6 genital lesions in the prior 12 months or prior to initiation of suppressive therapy. Approximately 75% to 80% of enrolled participants were receiving suppressive therapy with nucleoside analogs at screening. Now looking at Slide 6. Overall, 1179 was well tolerated on the two treatment cohorts. 71% to 92% of participants reported a treatment-emergent adverse event, the majority being Grade 1 or 2. A single grade 3 treatment-emergent adverse event of migraine was reported by a participant with a medical history of migraine in the 50-milligram placebo cohort. 32% to 38% of participants experienced a treatment-emergent laboratory abnormality, all being Grade 1 or 2. No adverse events led to treatment discontinuations and no serious adverse events were reported. Now moving over to efficacy. In the Phase Ib study, as with the 5366 study, we looked at both viral shedding and genital lesion recurrence rates. We're looking to achieve an 80% to 85% reduction in HSV-2 shedding versus placebo as our key efficacy measure for the study. We also wanted to see directionality for the clinical endpoint of genital lesion recurrence rate. Slide 7 shows HSV-2 shedding rates over the evaluation period of 16.9%, 1.4% and 0.4% for placebo, 20 milligrams and 50-milligram cohorts, respectively. For both ABI-1179 dose levels, the differences from placebo and HSV-2 shedding rates were statistically significant. The shedding rate for the 50-milligram dose represents a 98% reduction compared to placebo. Turning to Slide 8. High-viral-load shedding that is shedding of greater than 10 to the fourth copies per mil is considered a surrogate marker for increased HSV-2 transmission. At the end of the evaluation period, high-viral-load shedding rates of 11.8%, 0.5% and less than 0.1% were reported for the placebo, 20-milligram and 50-milligram cohorts, respectively. Near complete elimination of high-viral-load shedding for the 50-milligram dose represents a greater than 99% reduction compared to placebo. Given this greater than 99% reduction, we are not able to calculate a reliable p-value, but this reduction level is consistent with the significant effect and the reduction in high-viral-load shedding for the 20-milligram cohort was statistically significant. Slide 9 shows a summary of the virologically confirmed lesion rate, which includes any lesion that had any positive HSV-2 swab taken during the duration of the lesion. At the end of the evaluation period, virologically confirmed genital lesion rates of 8.4%, less than 0.1% and 0.7% were reported for the placebo, 20-milligram and 50-milligram groups, respectively. Notably, similar to the results seen for the 50-milligram cohort for high-viral-load shedding, a p-value could not be reliably calculated for the 20-milligram dose level given the greater than 99% reduction in virologically confirmed lesion rate compared to placebo. However, the difference is consistent with a highly significant effect. The virologically confirmed lesion rate for the 50-milligram dose level represents a 91% reduction compared to placebo. For the 50-milligram dose level, the difference from placebo in virologically confirmed lesion rate was statistically significant. Slide 10 summarizes that overall, ABI-1179 met or exceeded the goals Assembly established for the Phase Ib study. ABI-1179 has been well tolerated with no safety signals identified in humans or animal studies to date. The antiviral and clinical activity profile exceeded the established goals with the 50-milligram weekly regimen demonstrating 98% greater than 99% and 91% reductions compared to placebo for HSV-2 viral shedding, high-viral-load shedding and virologically confirmed genital lesions. With these results, we are pleased to now have 2 highly promising helicase-primase inhibitor candidates that have exceeded our Phase Ib efficacy targets in cohorts evaluating weekly oral dosing in participants seropositive for HSV-2 with recurrent genital herpes. Now let's turn to ABI-5366, beginning on Slide 11. The Phase Ib study is similar in design to that previously described for ABI-1179, evaluating the safety and antiviral activity of ABI-5366 following weekly administration over 29 days and a simulated monthly dose regimen in participants seropositive for HSV-2 with recurrent genital herpes. With the longer plasma half-life of ABI-5366, the follow-up period is extended through day 98. Three treatment regimens have been evaluated, which are cohorts B1, 150-milligram loading dose with a 30-milligram weekly dose; B2, a 350-milligram weekly dose and B3 with five 350-milligram loading doses given during the first week of the study and then no further dosing over the 29-day evaluation period to simulate a monthly dose regimen. We previously released interim data for the weekly dosing cohorts, B1 and B2 in August, which included 98% shedding data and all lesion data through the evaluation period. Here, we are now also including cohorts B3 evaluating a monthly dosing regimen. And this new -- and this data set now includes complete HSV-2 shedding and lesion data for all cohorts complete and unblinded safety data for cohorts B1 and B2 and blinded safety data up to at least day 43 for Cohort B3. Slide 12 shows that overall, baseline demographics and disease characteristics were well balanced across cohorts. The enrolled population was predominantly white and aged 44 years. A higher proportion of female participants were enrolled in a monthly cohort. Similar to ABI-1179 study, the 5366 study enrolled a population with active disease having 5 to 6 genital lesions in the prior 12 months or prior to initiation of suppressive therapy. Approximately 60% of enrolled participants were receiving suppressive therapy with nucleoside analogs at baseline. Turning to safety on Slide 13. Overall, ABI-5366 was well tolerated. 90% to 100% of participants reported a treatment-emergent adverse event and all were grade 1 or 2. Approximately 54% to 90% of participants experienced a treatment-emergent laboratory abnormality, most being Grade 1 or 2. Three grade 3 treatment-emergent laboratory abnormalities were reported all in cohorts B1 and B2 that are now unblinded: decreased neutrophils in a placebo patient, exercise associated increased creatinine kinase in a 30-milligram recipient and worsening of cholesterol elevation in a subject with a grade 2 elevation at baseline and a 350-milligram recipient. No adverse events led to treatment discontinuation or serious adverse events have been reported. Now turning to efficacy on Slide 14. At the end of the evaluation period, HSV-2 shedding rates were 14.9%, 14.5%, 0.9% and 3.5% in the placebo 30 milligram weekly, 350-milligram weekly and monthly regimens, respectively. For the 350-milligram weekly and monthly regimens, the differences from placebo and HSV-2 shedding rates were statistically significant. The shedding rates for the 350-milligram weekly dose level was reduced by 94% compared to placebo, which is unchanged from the interim data release in August for this cohort. For the monthly dose cohort, we saw a significantly -- statistically significant 76% reduction in HSV-2 viral shedding rate compared to placebo over the evaluation period, which is our key marker of efficacy for this 29-day Phase Ib study. This reduction reflects encouraging potent antiviral activity and recall, our target for the study was an 80% to 85% reduction in shedding and we saw almost 90% of those shedding events occurring in just the last 2 weeks of the cohort. We plan to continue to optimize exposure of ABI-5366 to further evaluate its potential for monthly oral dosing, given the level of antiviral activity seen for weekly oral dosing of ABI-5366. Slide 15 presents that over the evaluation period, high-viral-load shedding rate of 11.8%, 9.4%, 0.2% and 2.2% were reported for the placebo 30 milligram weekly, 350-milligram weekly and monthly regimens, respectively. With the 350-milligram weekly regimen at the high-viral-load shedding rate of 0.2% represents a 98% reduction compared to placebo. Turning to Slide 16. Over the evaluation period, virologically confirmed genital lesion rates of 16.2%, 11.5%, 0.5% and 2% were reported for placebo 30-milligram, 350-milligram and monthly regimens, respectively. For the 350-milligram weekly and monthly regimens, the differences from placebo and overall lesion rates were statistically significant. The virologically confirmed lesion rates of 350-milligram weekly dose regimen represents a 97% reduction compared to placebo. Slide 17 summarizes that overall 5366 met or exceeded the goals Assembly established prior to the conduct of the Phase Ib study. 5366 has been well tolerated with no safety signals identified in human or animal studies, including chronic toxicology studies. The antiviral and clinical activity profile exceeded the established goals with a 350-milligram weekly regimen demonstrating at 94%, 98% and 97% reduction compared to placebo in HSV-2 shedding, high-viral-load shedding and virologically confirmed genital lesions. Slide 18 provides a visual representation comparing the impressive efficacy of ABI-1179 and ABI-5366 weekly regimen in these Phase Ib studies to historical placebo-controlled Phase Ib studies. As you can see, it's a great demonstration of the improvement in shedding reduction rates for both ABI-5366 and ABI-1179 as well as a decreased pill burden. Not only do weekly regimens in both of these highly promising compounds exceed our Phase Ib targets for reductions in HSV-2 shedding, but we believe these results are very encouraging for our eventual goals for the program to develop a therapeutic that can improve on the standard of care and offer increased efficacy and better convenience for people living with recurrent genital herpes.

Thank you, Anuj. Based on these very encouraging Phase Ib results, we believe that ABI-5366 and 1179 both have the potential to change the treatment paradigm for individuals with recurrent genital herpes. On Slide 19, I will quickly touch on next steps for these programs and upcoming milestones across our broad pipeline. As previously guided, we expect to initiate a Phase II clinical study of ABI-5366 in mid-2026, and have also begun Phase II enabling activities for ABI-1179 given the strength of the data presented today. As a reminder, our partner, Gilead Sciences, has the right to opt into an exclusive license for this HSV program, with the first option time point continuing through the completion of their review of the Phase Ib data sets for ABI-5366 and 1179. We are also continuing chronic toxicology studies on ABI-6250 and continuing preparation for its Phase II clinical study in chronic hepatitis delta, which we anticipate initiating by end of 2026. With the financing we closed in August, we have a strong financial foundation to execute on these programs over the next several years. We expect our cash runway to fund the company into late 2027 not including potential future payments under the collaboration with Gilead or from potential warrant exercises, either of which would further extend our cash run rate beyond 2028. Our cash position supports key activities, including the advancement of both our HSV and HDV programs into Phase II, while continuing our efforts to discover and develop new programs. We look forward to keeping everyone updated on our progress next year. Thanks again for your time today and happy holidays to everyone. We'll now move into the Q&A session where Bill Delaney, our Chief Scientific Officer, and Katie Kitrinos, our SVP of Preclinical R&D will also be joining us. Carmen, I'll turn it over to you.

[Operator Instructions] Our first question comes from the line of Salim Syed with Mizuho.

Congrats on the data. Just a couple from us on maybe 5366. Just the language in the release here around pursuing optimization, could you just clarify exactly what that looks like and when we could see the data from those optimization efforts? And then also, if you don't end up having the monthly, does that change the opportunity set here for you guys for 5366?

Thanks, Salim. Good to catch up today. So why don't I start and Anuj and Bill, feel free to chime in. So second question first. The TPP for these programs has always been once weekly better efficacy and then standard of care. So our programs have always been on that profile. So the monthly, while we think about as an upside is probably going to be the next generation regardless. So even when we started this endeavor, we always plan for weekly first monthly second. So it actually doesn't alter the opportunity at all in our eyes. As far as optimizing, I'll start, it's really -- right now, we're looking at formulation if there's any way to make some formulation tweaks to increase exposure levels, how deep we'll have to go on that or what kind of alterations, I think it's too early to tell. But it's fair to say that we keep doing that in parallel with advancing the weekly regimen and it would be like a long-term life cycle management as we think about monthly. And in the past, we've discussed even potentially quarterly subcu regimen. So I think there's a lot of potential franchise expansion down the road, but the weekly is the great first stuff for us. Anuj, Bill, anything to add?

Yes. I'd just echo what you're saying, Jason. And now that we've completed that cohort B3, we have a better idea of the drug levels we'll need to maintain a trough through the monthly dosing. So obviously, we're working with the University of Washington and Josh Schiffer to continue to refine the model, pharmacodynamic model. And with the results we have now and some additional formulation work, as Jason indicated, that we'll pursue next year, we'll continue to work towards that. But the first order of business is to pursue the weekly.

Our next question is from Evan Wang with Guggenheim Securities.

This is Evan Wang on for Vamil Divan at Guggenheim. Super encouraging data across both 5366 and 1179. Just two from us. I guess, first, I wanted to get a sense of next steps product advancement to Phase II for 5366, over 75 patients now from 5366 and 50 from 1179, do you feel like you have sufficient exposure in clinical data and the modeling kind of dynamics required determine the dose -- go-forward dose for Phase II with the three cohorts worth of data from each? And then second question is really stellar results from 1179. To us, it looks like there's flexibility to explore the dose relationship. It looks like you're doing that with a 10 mg just given the strong shedding in lesion reductions. I'm just curious with 2 strong programs now in 5366 and 1179 in both on the weekly right now. Can you talk about how you're thinking about the opportunity for clinical development for both programs, will it be similar? Or could there be an opportunity for kind of unique development?

Why don't I start the second program and then I'll kick it over to Anuj. So as far as the weekly, I think -- we had always talked about the baseline being -- moving 5 through 6 forward into Phase II. I think with this data, it does create an interesting dilemma for us, a very positive one to have do you take both forward in the 5 to 6x. And like you said, Evan, is there different kind of addressable patient populations or something you can do with that. So I think it's too early to say that, but you can assume that we are analyzing all efforts as far as Phase II programs are both of those molecules. And of course, with the partner we have, those discussions are ongoing with them as well. Anuj, I'll turn it over to you.

Yes. And thanks, Evan. This is Anuj. So I think the question of how we are looking at the data that we've collected so far for both programs for choosing doses and moving forward into Phase II, yes, it's a great point, and we think we are there with both compounds with the three cohorts of data. As you know, we're doing some PK/PD modeling with the University of Washington, Fred Hutchinson Cancer Research Center with Josh Schiffer, and that really helps us take these data and zero in on dose that we can move to Phase II. So we're pretty confident with the data we have in hand and again, finishing the cohort B3 for 1179 that we'll have the data we need to be able to choose those doses. And so we're really pushing forward to Phase II as fast as we can.

Got it. And maybe 1 follow-up. I guess, would it be kind of interchangeable as you're thinking about mid-2026 start between 5366 and 1179. Are there kind of considerations to be thinking about in terms of, I guess, choosing one or the other?

Yes. I think one of the major parts of our Phase II program is to do longer-term dosing. And so in order to do the longer-term dosing, we do need to complete all the chronic toxicology requirements, which have been completed for ABI-5366 and they are planned to be completed later on for ABI-1179. So I think the timing is going to be dictated more by the requirements to do the study we'd like to do with 5366 happening first.

Our next question comes from the line of Dennis Ding with Jefferies.

This is Georgia on for Dennis. Congratulations on the data. I had a question on 1179 and that it nearly eliminated shedding, but the lesion reduction was less compared to like 5366. I'm just wondering if you can help me understand the relationship between the lesion reduction and the shedding reductions and whether this reflects differences in like tissue penetration, immune-mediated lesion formation or something else?

Yes. So really, it's a good point. I think in general, we always knew that lesions are a bit more of a stochastic process in when they occur compared to shedding, which is why it was not the powered end point for the study. We know they track very well, but they're not necessarily always a one-to-one relationship. These are also patient reported lesions. And so it's not always the case that what gets listed as a lesion is truly a lesion or the duration of the lesion is all virologically -- is due to the virus. Now we do look at virologically confirmed lesions, and that's an important way of trying to get at what our lesions do to HSV-2 and which ones are not. That being said, those lesions are also, the resolution of them have to do with the immune response and other things that are not just the virus itself. So I think when we started off with this program, we really just wanted to see the shedding primarily directionality on lesions, and we know they are related to one another. And I think in a longer-term study, the correlation will get even tighter. So right now, it's just a short duration study.

Our next question comes from Patrick Trucchio with H.C. Wainwright.

Congrats on the data. Several follow-up questions from us. The first one is, is there a specific criteria that would drive the decision to advance either ABI-1179 or ABI-5366. Secondly, do you view the near elimination of high-viral-load shedding as a surrogate for transmission reduction? How could that be incorporated into a Phase II? Or is that part of regulatory discussions? And then lastly, I was just wondering if the collaboration structure, if you can remind us if it differs economically or strategically, depending on whether 1179 or 5366 is advanced?

Thanks, Patrick. Why don't I start with the last one. So collaborative structure, the opt-in, there is no economic difference between the 2 assets that are treated identically as our programs. And then for the first question, thought process on 5366 versus 1179, I think the base case that I've said is we'll go forward 5366 as a weekly regimen, and that's scheduled to initiate by mid-2026. So that's ahead and like Anuj alluded to, we still have to do chronic tox on 1179. So we couldn't just pick one and start them both in mid-2026. That being said, certainly, we are speeding up things on 1179 to give the potential to bring that asset as well to 117, sorry, to bring that to Phase II as well. So I think the scenario you could have is 5366 initiates mid-2026 and then depending on what the final cohorts in 1179 turn out, we may be trying to accelerate that to also bring out the Phase II, which would be a new thing that we hadn't previously contemplated. And of course, to your last question, all this is subject to the overarching collaboration, right, and there's an opt-in structure. So certainly, that makes the decision process a little bit more complicated, but again, a good problem to have, I think, in our book. Anuj, do you want to take the second one?

Yes. It's a great question on how we look at the high viral load -- reduction high-viral-load shedding. So yes, this is correlated with reduced transmission. This will, in the end, require discussions with the regulators as to how we use this virological end point to inform the risk of transmission. And I think we have pretty good standing because of what the work that valacyclovir has done before, which has shown the reduction in transmission with treatment. And our goal in the Phase II program is to benchmark 5366 and 1179 versus valacyclovir. So we can really understand the impact on the virus in relation to high-viral-load shedding and shedding in general. And I think we would assume that if we were to do better than valacyclovir, on both of those metrics that it should result in a reduction in transmission as well. And like you said, that will require a discussion with the agencies at that point.

As I see no further questions in the queue, I will conclude the Q&A session and conference for today. Thank you all for participating. You may now disconnect.