Assembly Biosciences, Inc. (Nasdaq: ASMB), a clinical-stage biotechnology company developing innovative therapeutics targeting hepatitis B virus (HBV), today reported financial results and recent highlights for the fourth quarter and year ended December 31, 2020.

“Our strategy for 2021 and beyond is to focus entirely on developing finite and curative therapies that have the potential to free patients with chronic HBV infection from a lifetime of therapy. We are well positioned to do this by advancing our more potent next generation core inhibitors, which include three novel compounds in the clinic and a fourth candidate in pre-IND development, exploring multiple triple combination studies of vebicorvir with complementary mechanisms of action, and expanding our internal research efforts to discover and develop candidates against novel targets,” said John McHutchison, AO, MD, Chief Executive Officer and President of Assembly Bio.

Fourth Quarter 2020 and Recent Highlights

  • Strategy and resources fully focused on pursuing finite and curative therapies for chronic HBV:• As announced separately today, Assembly Bio will forgo initiation of Phase 3 registrational studies of vebicorvir (VBR) as a chronic suppressive therapy to concentrate research and development efforts on identifying a finite and curative therapy.• By directing all resources to support its finite and curative strategy, the company expects to advance these initiatives more quickly, while simultaneously extending its cash runway into 2023.• Assembly Bio is hosting a webcast and conference call today at 5:00 p.m. ET. The live audio webcast may be accessed through the “Events & Presentations” page in the “Investors” section of Assembly Bio’s website at https://investor.assemblybio.com/events-presentations.
  • Initiated a Phase 2 triple combination study evaluating the addition of peg-IFNα to the VBR+ nucleos(t)ide analog reverse transcriptase inhibitor (NrtI) antiviral backbone in patients with chronic HBV infection.
  • Entered into collaboration with Door Pharmaceuticals to discover and develop a novel class of HBV cccDNA disruptors that target different phases of the HBV replication cycle distinct from and complementary to those targeted by Assembly Bio’s existing pipeline compounds.
  • Presented four posters at the American Association for the Study of Liver Diseases (AASLD) Annual Meeting in November 2020, including data from the company’s HBV core inhibitor research and development programs, as well as a collaborative translational study using Assembly Bio’s sensitive HBV nucleic acid assays.
  • Reported data in early November 2020 from Study 211 on the dual combination of VBR+Nrtl to assess off-treatment response in patients with chronic HBV infection, which did not achieve a meaningful rate of sustained virologic response (SVR).
  • Substantially completed wind-down of Assembly Bio’s Microbiome program.
  • Appointed Nicole S. White, PhD, as Senior Vice President of Pharmaceutical Development and Manufacturing.
  • Appointed Gina Consylman, Senior Vice President, Chief Financial Officer of Ironwood Pharmaceuticals, Inc. to Board of Directors.

2021 Key Objectives and Anticipated Progress

  • Initiate Phase 2 triple combination study with Arbutus Biopharma Corporation evaluating VBR, RNAi therapeutic AB-729, and NrtI therapy in virologically-suppressed patients in H1 2021.
  • Nominate a best-in-class fourth core inhibitor candidate in H1 2021.
  • Anticipate interim data from Phase 2 study with ABI-H2158 in H2 2021.
  • Expect to progress two additional internal programs evaluating differentiated and undisclosed targets.

Fourth Quarter 2020 and Year End Financial Results

  • Cash, cash equivalents and marketable securities were $216.4 million as of December 31, 2020, compared to $237.9 million as of September 30, 2020, and $274.0 million as of the year ended December 31, 2019. This result includes the $5.5 million of net proceeds from the issuance of common shares under Assembly Bio’s at-the-market (ATM) program. Subsequently, net proceeds from Assembly Bio’s ATM program during January and February 2021 to-date were $25.5 million. The company’s cash position is projected to fund operations into 2023.
  • Revenues from collaborative research were $1.0 million for the three months ended December 31, 2020, compared to $4.8 million for the same period in 2019, and $79.1 million for the year ended December 31, 2020, compared to $16.0 million in 2019. The year-over-year increase was primarily due to the $31.0 million recognized under the collaboration agreement with BeiGene, Ltd. (BeiGene) and the remaining deferred revenue balance of $37.0 million incurred under the collaboration agreement with Abbvie Inc. (Allergan Pharmaceuticals International Limited prior to Abbvie’s acquisition of Allergan).
  • Research and development expenses were $33.5 million for the three months ended December 31, 2020, compared to $22.6 million for the same period in 2019, and $106.8 million for the year ended December 31, 2020, compared to $85.8 million in 2019. The increase was primarily due to an increase of $14.4 million in research and development expenses related to the HBV program and one-time expenses of $5.7 million related to the microbiome program wind down. Research and development expenses include non-cash stock-based compensation expenses of $11.4 million for both of the years ended December 31, 2020 and 2019.
  • General and administrative expenses were $7.2 million for the three months ended December 31, 2020 compared to $10.8 million for the same period in 2019, and $37.1 million for the year ended December 31, 2020 compared to $32.9 million in 2019. The increase was primarily due to an increase of $2.7 million of expenses related to entering into the collaboration agreement with BeiGene. General and administrative expenses include non-cash stock-based compensation expenses of $10.5 million for year ended December 31, 2020 and $9.2 million for the same period in 2019.
  • Net loss attributable to common stockholders was $39.4 million, or $1.10 per basic and diluted share, for the three months ended December 31, 2020, compared to $27.1 million, or $1.06 per basic and diluted share, for the same period in 2019. For the year ended December 31, 2020, net loss was $62.2 million, or $1.75 per basic and diluted share, compared to $97.6 million, or $3.72 per basic and diluted share, for the year ended December 31, 2019.

About Assembly BiosciencesAssembly Bio is a clinical-stage biotechnology company committed to bringing finite and curative therapies to the 270 million people living with hepatitis B virus (HBV) worldwide. A pioneer in the development of a new class of potent, oral core inhibitor drug candidates, Assembly Bio’s approach aims to break the complex viral replication cycle of HBV to free patients from a lifetime of therapy. Assembly Bio’s strategy toward cure includes a leading portfolio of more potent, next-generation core inhibitors, proof-of-concept combination studies and a research program focused on the discovery of novel HBV targets. For more information, visit assemblybio.com.

Forward-Looking Statements The information in this press release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to materially differ. These risks and uncertainties include:  Assembly Bio’s ability to initiate and complete clinical studies involving its HBV therapeutic product candidates, including studies contemplated by Assembly Bio’s clinical collaboration agreements, in the currently anticipated timeframes; safety and efficacy data from clinical studies may not warrant further development of Assembly Bio’s product candidates; clinical and nonclinical data presented at conferences may not differentiate Assembly Bio’s product candidates from other companies’ candidates; continued development and commercialization of Assembly Bio’s HBV product candidates, if successful, in the China territory will be dependent on, and subject to, Assembly Bio’s collaboration agreement governing its activity in the China territory; Assembly Bio’s ability to maintain financial resources necessary to continue its clinical studies and fund business operations; any impact that the COVID-19 pandemic may have on Assembly Bio’s business and operations, including initiation and continuation of its clinical studies or timing of discussions with regulatory authorities; and other risks identified from time to time in Assembly Bio’s reports filed with the U.S. Securities and Exchange Commission (the SEC). You are urged to consider statements that include the words may, will, would, could, should, might, believes, hopes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal or the negative of those words or other comparable words to be uncertain and forward-looking. Assembly Bio intends such forward-looking statements to be covered by the safe harbor provisions contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. More information about Assembly Bio’s risks and uncertainties are more fully detailed under the heading “Risk Factors” in Assembly Bio’s filings with the SEC, including its most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Except as required by law, Assembly Bio assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

ContactsInvestor and Corporate:Lauren GlaserSenior Vice President, Investor Relations and Corporate Affairs(415) 521-3828lglaser@assemblybio.com

Media:Sam Brown Inc. Audra Friis (917) 519-9577 ASMBMedia@sambrown.com

ASSEMBLY BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except for share amounts and par value)
         
    December 31,   December 31,
      2020       2019  
         
ASSETS        
Current assets        
Cash and cash equivalents   $ 59,444     $ 46,732  
Marketable securities     156,969       227,311  
Accounts receivable from collaboration     1,230       3,374  
Prepaid expenses and other current assets     6,850       5,363  
Total current assets     224,493       282,780  
         
Property and equipment, net     1,600       1,830  
Operating lease right-of-use (ROU) assets     9,131       11,975  
Other assets     6,392       1,684  
Indefinite-lived intangible asset     29,000       29,000  
Goodwill     12,638       12,638  
Total assets   $ 283,254     $ 339,907  
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities        
Accounts payable   $ 4,598     $ 1,731  
Accrued clinical expenses     4,444       4,826  
Other accrued expenses     11,987       8,286  
Deferred revenue - short-term           6,411  
Operating lease liabilities - short-term     3,404       3,186  
Total current liabilities     24,433       24,440  
         
Deferred tax liabilities     2,531       2,531  
Deferred revenue - long-term     8,987       30,637  
Operating lease liabilities - long-term     6,725       9,082  
Total liabilities     42,676       66,690  
         
Commitments and contingencies        
         
Stockholders' equity        
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding            
Common stock, $0.001 par value; 100,000,000 shares authorized as of December 31, 2020 and 2019; 34,026,680 and 32,558,307 shares issued and outstanding as of December 31, 2020 and 2019, respectively     34       32  
Additional paid-in capital     742,387       712,807  
Accumulated other comprehensive loss     (270 )     (201 )
Accumulated deficit     (501,573 )     (439,421 )
Total stockholders' equity     240,578       273,217  
Total liabilities and stockholders' equity   $ 283,254     $ 339,907  
         
ASSEMBLY BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands except for share and per share amounts)
     
             
    Year Ended December 31,
      2020       2019       2018  
Collaboration revenue   $ 79,105     $ 15,963     $ 14,804  
             
Operating expenses:            
Research and development     106,823       85,757       72,741  
General and administrative     37,058       32,919       34,798  
Total operating expenses     143,881       118,676       107,539  
Loss from operations     (64,776 )     (102,713 )     (92,735 )
             
Other income            
Interest and other income, net     2,624       4,305       3,083  
Total other income     2,624       4,305       3,083  
Loss before income taxes     (62,152 )     (98,408 )     (89,652 )
             
Income tax benefit           774       (1,099 )
Net loss   $ (62,152 )   $ (97,634 )   $ (90,751 )
             
Other comprehensive (loss) income            
Unrealized (loss) gain on marketable securities, net of tax     (69 )     146       45  
Comprehensive loss   $ (62,221 )   $ (97,488 )   $ (90,706 )
             
Net loss per share, basic and diluted   $ (1.75 )   $ (3.72 )   $ (3.98 )
Weighted average common shares outstanding, basic and diluted     35,427,120       26,258,790       22,801,644