Welcome to the Assembly Fireside Chat here at the 47th Annual Goldman Sachs Healthcare Conference. Very pleased to be joined by Jason and Katie from the company. First, welcome.
Thank you.
Maybe for those less familiar with Assembly's company, maybe Jason, if you could give a brief overview of Assembly and what you think differentiates the company today.
Yeah, so basically Assembly Bioscience is a small biotech company located in South San Francisco. Our focuses today are primarily HSV-2, recurrent general herpes, as well as hepatitis delta. And then most recently we announced an expansion into PBC, PSC, so cholestatic liver diseases. So historically then virology focused expanding into liver disease. A lot of this came from antiviral organizations, Gilead in particular, so a lot of work on liver disease programs. so our expansion into liver diseases were very fortuitous based on our expertise in the past. So our focuses for molecules-wise, our lead molecules for HSV2, we have two compounds, 5366 and 1179, and they're both Hedocase Primus inhibitors focused on high recurrent general herpes. The TPP for both those molecules is a once-weekly oral, and we're targeting superior efficacy to Valtrex, and we can talk more about the data we announced last year, but that was incredibly positive, led to a Gilead opt-in on the program. We do have a partnership, a long-term partnership with Gilead Sciences, and under that collaboration, they have opt-in rights to our program. The HSV2 program was the first opt-in to exercise, and then this year, coming up in May, we'll have a decision as to whether or not we decide, or not May, sorry, mid-year, it's already past May, we'll have a decision as to whether to opt-in to our 40, 60 cost profit share, so we're awaiting the clinical development plan and I'm excited to see what Gilead's going to do with the molecule, which molecule they'll choose, or both molecules potentially going forward. So that's the HSV2 program. And then Delta 6250 is really what we're looking at as our pipeline, the pill, right? So it's focused on Delta originally. It has potential mechanistic impacts on PBC, PSC, which we're very excited about. So those will be the studies we're focused on and initiating end of this year and early next year. So a lot of data points coming ahead in 2027 and 2028, so I like what we're really set up as far as a small molecule at the bottom of the business company.
Maybe pulling on that a little bit, number of data readouts over the past year. Before looking forward, what do you see as the most important validation points across the pipeline?
Yeah, absolutely. Last year was a very data-heavy year, so we had four phase one clinical trials. We had an HPV compound in 1B that we decided to partner because our focus on HPV is cure, but it's a great molecule. It's a CAM that shows great antiviral activity. So we're starting the partnering process for that and hopefully placing that with an organization that can combine it with a third asset for immunomodulator, really advanced the cure field. Hep Delta 6250 with phase one study that, you know, obviously it's a safety study, but we were able to get clear signs of target engagement there. So there, and we'll talk more about this, it's a small molecule oral NTCP inhibitor. So the idea is to prevent bile acids from entering the path site. So in the phase 1A, we saw we file acid elevation of the serum, so it was doing exactly what we wanted to do, so that's very encouraging as we move on to phase 2 for that. And then last but not least, HSV2, we had two molecules, so 5366 and 1179, both have phenomenal proof-of-concept data in patients with recurrent tunnel herpes. So statistically, you know, basically for viral shedding, we had 95-plus percent reduction of viral shedding, which is really what you're looking for in the 1B. We also were not powered for this. We just had 90-plus percent lesion reduction, which will be eventually the approval endpoint. And then we also incredibly importantly showed 98-plus reduction in high viral load shedding, and that's what we think is a surrogate for transmission. So based on the back of that data, Gilead opted in early. In fact, they opted in before the Phase I fees were actually complete. So I think, obviously, they were as happy of that data as we were. So I think that's a true proof of concept on those compounds. and the next step will really be head-to-head against Valetrax, but based on that 1B, given our expertise in virology, nothing is certainly guaranteed, but we tend to track more to the 1B data to Phase II, Phase III, so we're looking forward to those.
Maybe continuing there along similar lines, you mentioned a little bit about the Phase IB data. Can you help contextualize what you saw there versus current standard of care?
Yeah, so we can all start on kind of, there's another molecule, it's actually a very nice molecule, also a helicase primus inhibitor. It's only in studies for a very small niche population, acylacovir-resistant, immunocompromised population. But the same target, it's far less potent in a molecule, it's only a dose once daily. But they set up a very nice breadcrumb path for us to follow, right? So in their 1B, similar to our design, right, they showed an 80% roughly reduction in viral shedding. And as I mentioned earlier, we were, you know, high 90% reduction, which is, you know, obviously favorable. That same molecule went on a phase two head-to-head against Valetrax, which is standard of care, and they showed superiority. So our logical next step, or GILAD's next step, presumably, would be a phase two head-to-head against Valetrax, where we show that absolute proof of concept against standard of care. But, you know, hopefully, you know, it would track, you know, along the lines of the competitor molecule and then set us up well for the phase three, which would really just be an expansion of the safety database, more so than kind of proof of concept, because I think the phase two data, when we were planning it internally, would it be in roughly 200 subject studies, so you would get a good form with your head-to-head efficacy in Valtrex. And maybe, Kate, you talked a little bit about, you know, Valtrex is a good molecule, but it certainly leaves a lot of unmet medical need in the population.
Yeah, so, you know, I think just kind of stepping back and thinking about the patient population, it's a pretty underserved population overall. You know, there have not been any new advancements for recurrent genital herpes in over 30 years, and as Jason said, Valtrex is the standard of care. You know, what we do from phase three studies with Valtrex is recurrence-free over the course of a year, and furthermore, you know, there's only less than a 50 percent reduction in transmission from infected individuals to their partners, which is, you know, obviously a big concern for individuals living with this disease. So, you know, I think on the backs of the initial heel case primus inhibitor that Jason talked about, which, you know, has shown superiority versus Valtrex, but we know both 5366 and 1179 have improved potency relative to that. You know, we really feel that both these molecules have the opportunity to make a significant advance for patients both in terms of efficacy but also in terms of convenience because we're looking at once weekly minimum for both drugs and then 5366 also having the potential for monthly oral dosing as well.
Great. Jason, you mentioned it earlier, the Gilead opt-in and opting in before they needed to. How do you see that as changing the trajectory of HSV? Is Is it accelerating it? Is it kind of broadening the opportunity and, I guess, kind of implications to an overall company as well?
Yeah, I think it's probably a great example of a collaboration working exactly as it should work, right? So you think about these kind of collaborations holistically and certainly a company like Dale have proven track record on development, commercialization, but obviously the bar for them revenue-wise is probably pretty high. So HSV2 is a big market, and I think in a collaboration like this, You would expect your partner, in our case, Gilead, to really take the ball and really run with, like you said, acceleration and development timelines, really building out the commercial profile and the presence to maximize this market, which, you know, something we couldn't do real estate, Gilead, right? As a small company, it would be very hard to scale up, particularly for HSV2, right? I think there are disease areas of virology and liver disease we're working on that, you know, would be smaller in each market, so you could have a very small specialty sales force and potentially doing your own. But this one, no question, like, it's a win-win for Gilead to take this over. And, of course, they are very advanced, quick development organizations. So that's why we're very much looking forward to the development plan. So we have the cost structure, the timing, planning. And I think, you know, going back to that market, right, this is an enormous market. So from how it affects the company, you know, we have either milestone royalties, right, or we have this 40, 60 commercial opt-in for profit share, cost share. So we'll have to carefully analyze that. But the market as we see it, you know, just from an epidemiology standpoint, there's 2 million patients in the U.S. alone. And even from a bottoms-up study, we did a study with the University of Washington as one of, if not the leading research center, treatment center for HSV-2. And, you know, looking at Valtrex scripts, particularly for 90-day scripts and more, ICT-10 codes, medical records, as much public advice we gather, basically, you're looking at about 1.3 million patients on the low end in the U.S., of which about 800,000 are on chronic suppressive therapy. So just going in, you've got a very established market. And, of course, like we said, Valtrex has deficiencies as well as kind of, you know, prevention of recurrences. So if we can increase that bar significantly, as we've all experienced across spirols and other diseases, the better the drug, the bigger the patient population, more people actually take therapy that may not be pursuing therapy right now because it's inadequate. So all in all, I think the opt-in is a great indication of the high potential for HSV2 and recurrent general herpes. And that's not even to mention, you know, these molecules are all active against HSV1 as well, so they theoretically should work in sort of facial herpes. So there's a lot of expansion potential there that, again, having a company like Gilead take this over, I think, opens a lot of those opportunities. And then for us, it's just analyzing, do we want to share those costs going forward or just participate just up through our milestones and royalties.
You mentioned a little bit about this, but can you help investors understand some of the more specifically key catalysts, key milestones, key decisions on your point?
Yeah, so for HSV2, the next clear catalyst, if you will, is really our decision on opting into the 40-60 U.S. cost-prop share split. So, you know, nothing really earth-shattering there. I think we'll look at the development plan, obviously the extended development plan. We'll certainly run an MPV analysis to figure out how that lies versus a pure milestone royalty formulation. But, of course, you know, it's a tradeoff, right? You're going to incur significant costs for phase two, phase three commercial ramp-up. that you would expect that, given the market that we just discussed, that it would be worth it on the back end. So that's the big next catalyst. And, of course, coming out of the development plan, most importantly is which molecule, if not both, is going forward. You know, we would expect them, you know, if it were us, we would have data against Daltrex head-to-head probably second half of next year. So hopefully they're on that same timeline, if not faster, again, because they can speed things up potentially over a small company. So that's the first thing for HSV2. And then coming off the heels of our recent announcements, you know, for 6-250, again, now that it has this kind of pipeline of pill potential, the next thing we want to make sure is we get the Phase 2 for Delta, you know, initiated by end of this year, and we would expect data in HEPD, at least interim data, by end of 2027. And then for PBC, PSC, which are, again, high medical needs and also large commercial markets, we're going to try and initiate those studies by first quarter 2027 with data expected in first half 2028. So as we talked about, last year 2025 was a very large kind of data-rich year, whereas this year is kind of reload and re-execute. And I think with the addition of the PBC, PSC expansion, and that's kind of really set us up well for a very significant catalyst flow from mid-27 to, call it mid-2028, across all these programs. And that's, frankly, and I have included, we've got a lot of programs under Discovery that we expect to nominate. So one thing I think, going back to differentiation, unlike a lot of companies, we still have a very strong research pipeline, right? And part of that's because of the GILI collaboration. It's incentivized the collaboration in the long term for us to discover and develop things, And also, you know, Gilead's not going to opt into everything. Nobody's going to do that, right? So it'll give us the potential down the road to also have niche indications or niche disease states where we could build an end-to-end organization. So a lot of excitement for the next years ahead.
You mentioned 6250 just a minute ago. Maybe taking a step back, can you give an overview of the program? What gives you confidence in the program and potential for differentiation versus other approaches?
Yeah, so we initiated this program kind of on the backs of bulivertide, which is a large peptide inhibitor of NTCP. NTCP is a receptor on the surface of hepatocytes. Its primary mechanism is bile acid transport, but it also is the receptor that hepatitis delta and hepatitis B use to enter into hepatocytes. And bulivertide has been used for over four years now. great safety and efficacy has shown multiple log reductions in viral RNA, as well as ALT normalization. The downside of bulovertide is that it's a daily sub-Q injectable, and it also requires cold chain storage. So we were looking to identify small molecule inhibitors of NTCP that either met or exceeded the efficacy of bulovertide while improving on the convenience. so from the program we identified 6250 it has low nanomolar potency at inhibiting hepatitis delta from entering cells it also has low nanomolar potency on inhibiting bile acid transport which will be important when we talk about cholestatic liver disease we just presented our phase 1a data at easel a couple weeks ago and we showed excellent pk three to four day half-life which absolutely supports being a daily oral. In addition, we had a pharmacodynamic marker. Jason alluded to this a little bit ago, and we're able to show elevations in serum bile acids, and those elevations met or exceeded that which has been seen with the approved doses of Bolivartide. And finally, we had good safety over 10 days of dosing, no AEs of pruritus. And I will also mention that we've completed our chronic tox studies, and those have given us excellent safety margins with the doses we're looking to take forward into Phase 2. And as Jason said, we're looking to initiate those studies by the end of this year. Yep.
On the cholestatic expansion that you mentioned and you announced recently, I guess maybe take a step back, rationale for moving into both PBC and PSC, both biologically, commercially, and why you think 62.50 could be differentiated there.
Yeah, I guess so to take a step back, you know, as we talked about, the primary focus for this program was hep delta, but the mechanism over the past year, year and a half, we've been talking to KLLs, both from a mechanism side and a clinical development side as to, you know, the intriguing aspect of a hepato-protective molecule, right, and its effect in cholestatical diseases. So I would say that work has been ongoing and really culminated three weeks ago, two weeks ago when we announced the program. And the reason we got to that point is we had a full clinical development plan. And we had talked about KLLs and gotten resoundingly positive feedback that, yes, this is definitely something that should work and would be additive, if not supplant, just in second-line therapies for PPC, certainly. And then beyond that, you know, obviously commercial potential. And then finally, we had a pre-IND meeting with FDA, which ended up just being a very nice check-the-box kind of conversation. So off the back of that, we made the announcement going into EASL, was able to raise to actually fund this program into the proof-of-concept data. So we've kind of been triangling across that, and that's why we think the molecule is really going to be very productive for call cycle liberties as a general. Of course, we have to show that in the data, but I think it gives us the optionality to do that, and we've talked more about it later for commercial order. But as we're thinking about the clinical plan, we've laid it out very nicely to kind of lay out the potential. So you've got an arm. The second line is a standalone. You'll have a third-line arm on top of PPARs. And then, of course, you can win on either of those, or if it's additive, which we think it very much could be on top of PPARs, that could supplant second-line therapy as well. So I think from a patient need and a commercial standpoint, because it's a different mechanism, right, it's not another IBAD, it's not another PPAR, I think that gives us a very unique positioning and also gives us the ability to potentially have a much more significant effect on disease. And maybe Katie, you want to talk about the biology and what we saw?
So, you know, as I mentioned before, you know, we have really nice lone animal potency against NTCP, and I think, you know, there's kind of multiple intervention points when you think about bile acid flow throughout the body, and Jason mentioned some of the other targets, PPAR agonists, IVAD inhibitors, you know, I think all of those are potentially complementary interventions. We know that at the crux of cholestatic liver disease, it's about the accumulation of bile acids in the hepatocytes, which are driving the progression of disease, you know, how much each of these intervention points contribute to that accumulation and what mechanisms or combination of mechanisms are going to result in the best patient outcomes, I think is unclear right now. So for NTCP inhibition, I think, you know, we're very excited about this because, for one, 6250 directly prevents bile acids from getting from the serum into the hepatocyte. In addition, we know that the majority of bile acids, anywhere from 75% to 90%, are recycled throughout the body as opposed to the de novo production of bile acids on a daily basis. So with that, I think 6250 has the potential, we'll have to prove this in the studies to have greater reductions in alkaline phosphatase normalization relative to a PPAR agonist, which is preventing the de novo production. I think additionally, you know, we have a really nice safety profile with 60-250 through 10 days of dosing. We've got great safety margins from our chronic toxicology studies. Some of the, you know, we know for IVAT inhibitors, they do have some limitations in terms of their dosing due to GI tolerability issues. So I think think those are the reasons we're really excited about bringing 60-250 forward for cholestatic liver disease.
Makes sense. One investor question, potential investor question, could be bile acid versus kind of risk of puritis. Sure. How do you think about that?
Absolutely. It's an important question. So, you know, in our phase 1A study, we did not see any AEs of puritis. It's not anything that we've seen in our chronic toxicology studies. And if you look over the four-plus years of dosing with bulimbertide, only a minority of patients have had very mild pruritus, and none of that has resulted in discontinuations. I think taking a step back and thinking about the mechanism of pruritus, as I mentioned, it's the interhepatic bile acids that are really driving progression of disease and contributing to that itch that's observed in these patients. And what's been demonstrated recently is that levels of IL-31, which is a cytokine associated with itch, really seem to be very strongly correlated with pruritus. And so what happens is as those bile acids accumulate in the hepatocyte, it triggers the FXR pathway, which is essentially trying to shut down de novo production of bile acids. And in doing that, that triggers elevations in IL-31. So what you see with something like a PPAR agonist where it reduces interhepatic bile acids it also reduces levels of IL-31 and they say improvements in itch score. So for 6250 where we expect it to prevent bile acids from getting into the hepatocyte we also anticipate that it will reduce levels of IL-31 and so we expect to see if not no change greater improvements in itch for those patients.
Very interesting That's very interesting, IL-31. Maybe a little premature, but, Jason, how are you thinking about positioning in PBC and PSC, combination, standalone, line of therapy, et cetera?
Yeah, I think it could be all of the above, right? So, obviously, the market is really second line, right, because everyone goes through UDCA first. So the question that we're going to answer on the clinical side is we do have an arm that is a standalone, basically of 60 to 50 against UDCA. So we'll see, you know, basically how it's comparing a second-line therapy to other molecules, so PPARs, et cetera. And then third line would be on top of a PPAR, so people already take in PPARs, well, that's celadelpar, or whatever it is that would be on top of it. So that will actually show, you know, if we're right, too, that it could have additive in addition to standalone. So the way we look at it is it's got a unique optionality, and, like, there's multiple ways to win, right? So you could win as a standalone. You could also win as additive therapy on top of PPARs. And, of course, given our partner, Gilead, has a PPAR, you know, So they're an expert at fixed-dose combinations. This is a very small-dose molecule, right? This is going to be one milligram or less dosing. So I think if we have that potential, like Katie said, biologically, you know, you should have that additive property because of where the biolasts are entering from. So we like the way that the clinical design is set up, and it's going to answer that question exactly. So in our scenarios, the best-case scenario would be, you know, your standalone second line, which, you know, approaches more of a $2 billion market. On the worst case, going for worst case, you're a third line on top of PPAR, which is probably closer to a billion-dollar market. And then the in-between is if you're on top of the PPAR, and that really becomes a second-line therapy. So I think that's where we're excited that in a very relatively small clinical study, a phase two study, we should be able to get the answer to all those questions and have a very clear kind of outcome as to where we think we could stand going out of that. And, of course, that will inform Gillian's opt-in decision on that program as well.
Makes sense.
Maybe finally, taking a step back, how should investors think about the overall growth trajectory of the company? Key catalyst over the next couple of years, execution this year, but over the next couple of years, how should investors be thinking about assembly?
Yeah, I think it's pretty broad-based, right? So obviously, like I noted earlier, starting until mid-2027, second half of 2027, it's going to be back onto true catalyst proof-of-concept data, right? So that's going to be hep delta data that we're really looking at ALT reduction, really looking at the results against Bolivir T, right? So Bolivir T just got approved in the U.S. The WAC is $20,000 an ounce. So small patient population but very large price kind of orphan indication. We're the only small molecule oral compound in the space, right? So there's a lot of competitors out there, but they're all antibodies, SRNA or Bolivir T is a peptide, right? So I think that alone, once we get that data, will give us a good kind of, you know, win in our sales going forward. We're certainly going to be later to market, right? But I think that small molecule will give us a big advantage if we can show that proof of concept in relation to Bolivar Tate as far as matching or exceeding the levels that they hit in their phase one, or sorry, their clinical data and their actual treatment data, right? So that will set us up, again, for combinations potentially, right? So a small molecule oral, you figure everyone on Delta is basically on TAF or TDF as well for hep B. So we could have a small molecule oral that could try to treat all diseases. So that's for Delta, right? And the first step on that is that proof of concept data for the phase two that we expect interim data called the end of 2027. And then if you go back to HSV2, again, pending the clinical development plan from Gilead, you're going to have true head-to-head data against Valtrex, right? So I think depending on, hopefully, the extent you're exceeding Valetrax, that will help kind of set up the commercial profile, obviously, where you could stand, and then obviously where you stand for launch potential. And the interesting thing will be, you know, are there other kind of indications that Gill is going to look at early on, given the size of the company, what they can do with the kind of speed and volume. So I think that's going to be a really interesting thing. Even though we have proof of concept, certainly the 1B trials last year, I think that phase two undoubtedly is going to be what people are concerned about as far as actually head-to-head against Maltrex. And then last but not least, you know, first half of 2028 is the PBC-PSC. So PBC, you know, very clear markers for kind of proof of concept, the Alka-Foss reduction and how we're comparing, and really kind of getting to Alka-Foss normalization is where the field is going. We had a lot of discussions at Easel and all the other companies working on this to have a similar approach of, you know, Alka-Foss normalization. So PBC, I think the end point is pretty clear, and we should be able to show that, or show that, you know, it's working or not working. I mean, certainly on that marker in particular in the Phase II, we'll certainly check all the other markers, pruritus, ALT, et cetera. And that's going to be important for PSC, right, because there is no, you know, alka-foss reduction endpoint for approval of PSC, and we've had an officer pre-ND discussion with FDA, and I think it still remains as of right now an outcomes model, but with the number of companies working on PSC, I think our hope and expectations that would evolve in the next couple of years to maybe, you know, have some other kind of biomarkers and kind of surrogate markers that can make a clear pathway to PSC. And, you know, the interesting thing, too, is we're one of the few companies working on disease-modifying theory for PSC. Like, this mechanism could have a disease-modifying rather than just treating kind of symptoms of paritis, which obviously is very important and the ultimate goal would be disease-modifying. So that's going to be, you know, the big data point for first half of 2028. You know, the good thing is with the financing we did in August of 2025 and what we just did a few weeks ago, At least the HSV2 programs are funded to get to that Phase II proof of concept against Valitrex head-to-head, and then the PBC, PSC are likewise financed so we get past that mid-2028 point to get that proof of concept data. So I know the catalyst setup is pretty enormous for the next two years, not to mention we'll still announce some new programs and hopefully some interesting areas to follow the next two years as well.
Wonderful. Well, very exciting next little bit for you guys. Appreciate you joining us. Thank you so much, Rob. Thank you.