2022 Annual Report
I am incredibly proud
of our exceptional
team, their steadfast
commitment and the
novel antiviral pipeline we
have advanced to further
our ultimate goal of
improving patients’ lives.
To our
stockholders:
2022 was a year of important progress for
Assembly Bio. We took significant steps forward
in pursuit of our ambitious mission to change
the path of chronic viral diseases and improve
the lives of patients around the world.
The past year was also not without its challenges.
Operating in a difficult biotech environment, we
made tough, but necessary, decisions to focus and
prioritize our clinical development and research
efforts through an organizational restructuring.
Amid a period of volatility and change, Assembly
Bio responded with agility, resilience and purpose,
relying on our unwavering dedication to the
science that informs our strategic decision-making
and guides our execution.
Improving lives through
innovative viral therapeutics
As a scientific leader in viral therapeutics,
Assembly Bio is committed to delivering life-
changing therapies for people struggling
with chronic hepatitis B virus (HBV), hepatitis
delta virus (HDV) and herpesvirus infections.
In 2022, we accelerated our discovery research
programs and advanced our clinical pipeline
of next-generation HBV core inhibitors. As a
result, we enter 2023 well-positioned to reach
our upcoming milestones and deliver value for
patients and stockholders.
Advancing research programs
with the greatest promise
Leveraging our team’s proven expertise in
virologic drug development, we made tangible
progress in 2022 to expand our discovery pipeline
through the introduction of four new research
programs, all with clinically validated drug
targets. This includes the introduction of two
novel small molecule approaches with potential
activity against both HBV and HDV. Beyond viral
hepatitis, we are also excited about our two new
programs targeting herpesviruses, including
our first development candidate outside of HBV,
ABI-5366 (5366), a long-acting helicase inhibitor
aimed at addressing the significant unmet need
in high-recurrence genital herpes caused by
herpes simplex virus type 2 (HSV-2). We expect
to advance 5366 into the clinic in the first half of
2024 and to nominate a second development
candidate from an additional new program later
this year.
Progressing HBV clinical development
In 2022, we also made progress in our HBV core
inhibitor clinical pipeline. Our drug development
efforts for HBV are taking place against the
backdrop of a disease in urgent need of a
cure. There are an estimated 296 million cases
of chronic HBV globally, contributing to an
estimated 820,000 deaths each year.
Mindful of this critical patient need, we have
made a series of data-driven decisions around
our core inhibitor pipeline candidates that we
believe will help advance the field closer to finite
and curative therapies.
In the first half of 2022, we completed enrollment
in two triple combination studies for our first-
generation investigational core inhibitor,
vebicorvir (VBR). While interim data from these
studies showed that VBR continues to be a strong
antiviral with a favorable safety profile, they also
showed that VBR is not likely to achieve finite
therapy or cure. Based on this evidence, we
decided in mid-2022 to discontinue development
of VBR to prioritize our discovery research pipeline
and next-generation core inhibitors.
ABI-H3733 (3733) and ABI-4334 (4334) are
Assembly Bio’s highly potent next-generation
core inhibitors designed specifically for greater
potency than VBR against the formation of
cccDNA, the second mechanism of action of
core inhibitors. Last year, we initiated a Phase
1b trial for 3733 and a Phase 1a study for 4334,
announcing initial data from both studies in
December. Subsequently, based on clinical
and nonclinical data through mid-March 2023,
including results from the ongoing Phase
1 studies of both candidates and a chronic
toxicology observation for 3733, we decided to
pause 3733 and prioritize 4334 given its greater
potency and encouraging clinical profile. Looking
ahead, we plan to report clinical data from the
final 200 mg multiple-dose Phase 1a cohort for
4334 by the end of April.
Fulfilling our commitment
to operational excellence
With our refocused research and development
efforts centered on our most promising
compounds, we strongly believe in our ability
to build on our progress to-date and position
Assembly Bio for long-term growth. As efficient
stewards of our financial resources, we have
a cash runway that is projected to fund our
operations into mid-2024.
Undoubtedly, 2022 was a year of progress and
change for Assembly Bio — and for me as well.
Following the retirement of John G. McHutchison,
A.O., M.D., as chief executive officer at the end
of the year, I am honored to now lead our team
forward as CEO and join our Board of Directors.
I am incredibly proud of our exceptional team,
their steadfast commitment and the novel
antiviral pipeline we have advanced to further our
ultimate goal of improving patients’ lives. I believe
our future holds much promise for the important
work we do.
I look forward to reporting our continued
pipeline progress to patients, the scientific
and medical community and our dedicated
stockholders. On behalf of all of us at Assembly
Bio, thank you for your continued support.
Sincerely,
Jason A. Okazaki
Chief Executive Officer and President
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from __________ to __________
Commission File Number: 001-35005
ASSEMBLY BIOSCIENCES, INC.
(Exact name of registrant specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
20-8729264
(I.R.S. Employer
Identification No.)
331 Oyster Point Blvd., Fourth Floor
South San Francisco, California 94080
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (833) 509-4583
Securities Registered Pursuant to Section 12(b) of the Exchange Act:
Trading Symbol(s)
ASMB
Securities Registered Pursuant to Section 12(g) of the Act: None
Title of Each Class
Common Stock, $0.001 Par Value
Name of Exchange on which Registered
The Nasdaq Global Select Market
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.45 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer
Accelerated filer
☐
☐
Non-accelerated filer
☒
Smaller reporting company
Emerging growth company
☒
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that
prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting stock held by non-affiliates of the registrant, as of June 30, 2022, was $100.5 million. Such aggregate
market value was computed by reference to the closing price of the common stock as reported on the Nasdaq Global Select Market on June 30,
2022. For purposes of making this calculation only, the registrant has defined affiliates as including only (1) directors, (2) executive officers and
(3) certain stockholders, if any, that hold greater than 10% of the voting stock of the registrant, in each case, as of June 30, 2022. Shares of common
stock held by other persons, including certain other holders of more than 10% of the registrant’s outstanding common stock, if any, have not been
excluded from the above calculation in that such persons are not deemed to be affiliates. The determination of affiliate status is not necessarily a
conclusive determination for other purposes.
As of March 20, 2023, there were 51,946,918 shares of the registrant’s common stock, $0.001 par value per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates information by reference to portions of the definitive proxy statement for the Company’s
Annual Meeting of Stockholders to be held in 2023, to be filed within 120 days of the registrant’s fiscal year ended December 31, 2022.
[This page intentionally left blank]
ASSEMBLY BIOSCIENCES, INC.
TABLE OF CONTENTS
Business
PART I
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operation
Item 6.
Item 7.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Item 8.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.
Item 12.
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
Exhibits, Financial Statement Schedules
Form 10-K Summary
Item 13.
Item 14.
Item 15.
Item 16.
Financial Statements
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F-1
i
References to Assembly Biosciences, Inc.
Throughout this Annual Report on Form 10-K, the “Company,” “Assembly Bio,” “Assembly,” “we,” “us,” and “our,”
except where the context requires otherwise, refer to Assembly Biosciences, Inc. and its consolidated subsidiaries,
and “our board of directors” or “the Board” refers to the board of directors of Assembly Biosciences, Inc.
Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” that are subject to certain risks and
uncertainties, including, without limitation, those set forth in Part I, Item 1A under the heading “Risk Factors,” that
could cause actual results to materially differ. Such risks and uncertainties include, among other things:
•
•
•
•
•
•
our ability to maintain financial resources necessary to continue our research activities, clinical studies and
other business operations;
our ability to initiate and complete clinical studies involving our therapeutic product candidates, including
studies contemplated by clinical collaboration agreements, in the anticipated timeframes;
safety and efficacy data from clinical or nonclinical studies may not warrant further development of our
product candidates;
clinical and nonclinical data presented at conferences may not differentiate our product candidates from other
companies’ candidates;
results of nonclinical studies may not be representative of disease behavior in a clinical setting and may not
be predictive of the outcomes of clinical studies; and
continued development and commercialization of ABI-H3733, if successful, in the China territory will be
dependent on, and subject to, our collaboration agreement governing our HBV-related activity in the China
territory.
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. In particular, forward-looking
statements include, but are not limited to, statements regarding the timing of commencement of future clinical studies
involving our therapeutic product candidates; and our ability to successfully complete, and receive favorable results
in, clinical trials for our product candidates. We intend such forward-looking statements to be covered by the safe
harbor provisions contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section
21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Except as required by law, we assume
no obligation to update publicly any forward-looking statements, whether as a result of new information, future events
or otherwise.
ii
PART I
Item 1. Business
Overview
We are a biopharmaceutical company advancing clinical candidates with the potential to improve the lives of millions
of people living with chronic hepatitis B virus (HBV) infection around the world, an early-stage development program
targeting high-recurrence genital herpes associated with herpes simplex virus type 2 (HSV-2) infection and research
programs focused on the discovery of novel antivirals to treat devastating viral diseases, including hepatitis delta virus
(HDV) and transplant-related herpesviruses.
In July 2022, we implemented a strategic restructuring plan to: (1) discontinue development of our first-generation
core inhibitor (CI), vebicorvir (VBR), based on review of interim on-treatment efficacy data from then ongoing triple
combination studies that did not support continuation; (2) advance our next-generation CIs, ABI-H3733 (3733) and
ABI-4334 (4334), in clinical studies; and (3) prioritize research activities, including our: HBV/HDV entry inhibitor;
orally bioavailable, liver-focused interferon-α (IFN-α) receptor (IFNAR) agonist; long-acting HSV-2 helicase
inhibitor targeting high-recurrence genital herpes; and programs targeting pan-herpes non-nucleoside polymerase
inhibitors (NNPIs) for transplant-associated infections. The strategic plan included a reduction of our workforce by
30 employees, resulting in a total of approximately 70 remaining employees. In connection with the plan, our Chief
Medical Officer and Chief Financial Officer stepped down from their roles.
Our Strategic Approaches
Our current business strategy is focused on three parallel paths:
•
•
•
Highly Potent Next-Generation HBV Core Inhibitors – Advancing our novel next-generation CIs in
clinical studies, with 4334 (currently prioritized) and 3733 (currently paused) in ongoing Phase 1a and
Phase 1b studies, respectively.
Novel Small Molecule Approaches for HBV and HDV – Advancing research programs targeting (1)
an orally bioavailable HBV/HDV entry inhibitor and (2) an orally bioavailable, liver-focused IFNAR
agonist.
Novel Antivirals Targeting Herpesviruses – Advancing (1) ABI-5366 (5366), a long-acting HSV-2
helicase inhibitor targeting high-recurrence genital herpes to clinical trials, and (2) a research program for
pan-herpes NNPIs to treat transplant-associated infections.
HBV Strategy
Inspired by the hundreds of millions of people worldwide living with chronic HBV infection, the goal of our HBV
program is to discover and develop finite and curative therapies for these patients. While we have learned that
combination therapy with our first-generation CI product candidate, VBR, plus the standard of care, nucleos(t)ide
analog reverse transcriptase inhibitor (NrtI), did not result in a finite and curative treatment, we have designed and
developed our next-generation CIs for significantly increased potency and ability to engage an additional mechanism
of action, targeting the viral reservoir, that VBR could not. We believe that a regimen of our next-generation CIs in
combination with NrtI therapy will be the antiviral backbone of future finite and curative therapies. To reach a finite
and curative therapy, it may also be necessary to include additional mechanisms of action, whether discovered and
developed internally or externally through collaborations, licenses, partnerships and other types of business
arrangements.
1
Development Pipeline Strategy
To complement our CI programs seeking finite and curative chronic HBV therapies, we have leveraged the depth and
breadth of our virology expertise to expand our pipeline with a focus on novel mechanisms acting on clinically
validated targets in therapeutic areas of high unmet medical need. Since beginning this portfolio expansion in late
2021, we have announced several new programs, both in- and outside of HBV: our HDV/HBV entry inhibitor
program, our IFNAR agonist program, our pan-herpes NNPI programs for transplant-associated infections and the
long-acting HSV-2 helicase inhibitor for high-recurrence genital herpes. We recently nominated 5366 as a
development candidate for our HSV-2 program and look forward to future candidate nominations from our discovery
virology pipeline.
We believe that these new programs are compelling complements to our CIs, as each program focuses on a clinically
validated target in a virologic disease where innovation is critical to improving patients’ lives. In addition, because
certain of our new programs are focused on treatments for chronic diseases, rather than curative therapies, the path to
proof-of-concept and registrational studies may be significantly shorter than that for our finite and curative HBV
therapeutics.
Our HBV and HDV Programs
The World Health Organization (WHO) estimates that 296 million people worldwide are chronically infected with
HBV as of 2019, and 1.5 million new infections occur each year. HBV is a leading global cause of chronic liver
disease and liver transplants, and the WHO estimates that 820,000 people died in 2019 from HBV, mostly due to
cirrhosis and hepatocellular carcinoma. Of the 296 million people living with chronic HBV infection as of 2019, only
approximately 30 million were aware of their infection, and only approximately 6.6 million of those diagnosed
received treatment. HBV is a highly prevalent disease that infects more than three times the number of people infected
with hepatitis C virus and HIV infections combined, according to the WHO, and has a higher morbidity and mortality
rate.
The current standard of care for chronic HBV infection, NrtIs, are taken life-long and reduce, but do not eliminate,
the virus and result in very low cure rates, leaving an enormous unmet need. No new mechanisms of action (MOA)
have been approved for chronic HBV infection in over 25 years. The focus of our HBV program is to improve
outcomes and increase the number of patients diagnosed and treated through the development of finite and curative
therapies.
We are also progressing two programs with potential application against HDV. HDV is a “satellite virus,” because it
can only infect people (1) who are already infected with HBV or (2) at the same time as a person is infected with
HBV. HDV impacts a subset of approximately 12 million HBV patients. These patients, which only comprise an
estimated 4.5% of hepatitis B surface antigen (HBsAg) positive patients, experience a substantially increased disease
burden, as they account for 18% of cirrhosis and 20% of hepatocellular carcinoma associated with HBV. In parallel
with our efforts to develop finite therapies and functional cures for HBV, we are also advancing programs targeting
HDV given the immediate disease burden facing these patients.
The current standard of care treatment for HDV is off-label pegylated IFN-α injected weekly or, in some regions, a
large, complex molecule that requires daily injections. We believe a safe and effective oral small molecule entry
inhibitor would be a significant innovation for patients living with HDV.
Core Inhibitors
HBV is a DNA virus that infects hepatocytes and establishes a reservoir of covalently closed circular DNA (cccDNA),
a unique viral DNA moiety that resides in the cell nucleus of HBV-infected hepatocytes and is associated with viral
persistence and chronic infection. No currently approved oral therapies target cccDNA activity directly, which makes
molecules that can modulate cccDNA generation or disrupt its function highly sought in the HBV field. As a result,
we have worked to discover and develop compounds targeting the core protein, a viral protein involved in numerous
aspects of the HBV replication cycle, including the generation of HBV cccDNA. Through our research efforts, we
have discovered several chemically distinct series of small molecule CIs that directly target and allosterically inhibit
core protein functions. As a result, we believe that our pipeline offers the potential for both first-in-class and best-in-
class compounds that target critical steps involved in cccDNA generation and the HBV viral replication cycle.
2
A benchmark for therapeutic agents aiming to decrease cccDNA levels is the use of several key viral antigens as
surrogate biomarkers of active cccDNA. The same biomarkers can be used in both primary human hepatocyte cells
and patients. On this basis, our CIs have shown preclinical proof of principle. In a variety of cell culture models, CIs
have demonstrated the ability to reduce production of viral HBV DNA levels as well as the surrogate markers for
cccDNA establishment: HBV e antigen (HBeAg), HBV core-related antigen (HBcrAg) and viral pre-genomic RNA
(pgRNA).
Our research and development organizations are advancing next-generation CIs through clinical development. These
candidates, which exhibit multiple MOAs, have been optimized to potently disrupt both viral replication (MOA #1)
and, importantly, prevent the establishment and replenishment of new cccDNA (MOA #2). cccDNA is the viral
reservoir that drives HBV’s life-long persistence in patients. First-generation CIs have not demonstrated adequate
potency to sufficiently block its formation. Further, the current standard of care, NrtIs, can only inhibit production of
new virus—and do so incompletely.
We leveraged our prior experience with our first-generation CI, VBR, which did not have sufficient potency against
MOA #2, in the development of our next-generation CIs. VBR was evaluated in a Phase 2 program with treatment for
up to 1.5 years across patient populations and exhibited a favorable safety profile. VBR was observed to be potent
against MOA #1 but not MOA #2, and, while it demonstrated greater viral suppression in combination with standard-
of-care NrtIs than NrtIs alone, it did not achieve functional cure or finite treatment in our clinical studies. As a result,
we discontinued development of VBR. Our two next-generation CIs, 3733 and 4334, were developed to optimize
activity against both MOAs and show significantly enhanced potency against both mechanisms preclinically.
3733
3733 was internally discovered and developed. The chemical scaffold of 3733 is novel and distinct from 4334 and
both of our discontinued first-generation CI product candidates, VBR and ABI-H2158 (2158).
In preclinical studies, 3733 has demonstrated pan-genotypic activity and an improved resistance profile, as well as
significantly increased potency against both MOAs and target coverage as compared to both VBR and 2158. In 2020,
we initiated and completed a Phase 1a clinical study of 3733 to evaluate safety, tolerability and pharmacokinetics (PK)
following single ascending dose and multiple ascending dose administration in healthy subjects in New Zealand. Data
indicated that 3733 was generally well-tolerated and had favorable PK. Results detailing 3733’s safety and PK from
this study were presented in a poster presentation at the American Association for the Study of Liver Diseases
(AASLD) The Liver Meeting® in November 2021 (AASLD 2021). In 2021, following the completion of the Phase
1a trial, our chemistry, manufacturing and controls (CMC) organization developed a new tablet formulation to support
Phase 1b for 3733. At the European Association for the Study of the Liver's (EASL) International Liver CongressTM
in June 2022 (EASL 2022), we presented 3733’s improved PK profile resulting from the new formulation activities
mentioned above.
In addition, at EASL's International Liver CongressTM in June 2021 (EASL 2021), we presented observations on
3733’s enhanced potency and target coverage for both antiviral activity and inhibition of cccDNA generation as
compared to VBR and 2158.
In June 2022, we initiated a randomized, multi-center, double-blind and placebo-controlled Phase 1b trial of 3733
evaluating the safety, PK and antiviral activity of 3733 in adults with cHBV infection, including changes in HBV
DNA and other viral parameters associated with 3733 treatment in adults with chronic HBV infection who are
treatment naïve or off treatment. Patients were randomized 8:2 between the new tablet formulation of 3733 and
placebo for a period of 28 days.
In December 2022, we released interim data from the Phase 1b trial, which consisted primarily of HBeAg negative
patients. The dose selected for the first cohort was 50 mg. Given the potent antiviral activity observed at 50 mg, a 25
mg dose was selected for the second cohort to further explore the dose response curve of 3733. A dose of 100 mg was
selected for the third cohort.
As of mid-December 2022, dosing in the 3733 Phase 1b trial had been completed for all ten patients in the 50 mg first
cohort. Nine of ten patients enrolled were HBeAg negative, so efficacy data was provided for these patients. Interim
3
efficacy results from this cohort as of mid-December included HBV DNA, HBV RNA and antigen measurements for
all patients for the full 28-day dosing period.
In the 50 mg cohort, six of eight patients receiving 3733 achieved HBV DNA less than the lower limit of quantification
(