Assembly Biosciences, Inc. — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. The filing was signed March 22, 2023. Assembly Bio is a clinical-stage biopharmaceutical company with no approved products or product-sale revenue; its programs focus on HBV, HDV and herpesviruses.
Financial and operating performance
| Metric | FY2022 | FY2021 |
|---|---|---|
| Collaboration revenue | $0 | $6.3 million |
| Research and development expense | $70.0 million | $68.5 million |
| General and administrative expense | $24.1 million | $28.8 million |
| Operating loss | $94.1 million | $132.7 million |
| Net loss | $93.1 million | $129.9 million |
| Net loss per share, basic and diluted | $1.92 | $3.00 |
| Net cash used in operating activities | $84.5 million | $93.4 million |
- At December 31, 2022, cash and cash equivalents were $52.4 million and short-term marketable securities were $39.2 million; there were no long-term marketable securities. Combined cash and marketable securities were approximately $91.6 million, versus $174.6 million a year earlier.
- Total assets were $101.8 million; total liabilities were $19.1 million and stockholders’ equity was $82.7 million. The filing does not report financial debt. Operating lease liabilities totaled $3.5 million, mostly short-term.
- Accumulated deficit was $724.5 million. No product gross margin is applicable because the company had no product sales.
Material changes versus FY2021
- Net loss narrowed by $36.8 million, largely because FY2021 included $41.6 million of noncash impairment charges for goodwill and in-process research and development. FY2022 had no such impairment.
- FY2021 included $6.3 million of collaboration revenue from recognition of deferred BeiGene revenue after discontinuation of ABI-H2158; FY2022 collaboration revenue was zero.
- R&D expense rose 2%, reflecting higher research, ABI-H3733 and ABI-4334 activity and employee costs, partly offset by lower spending on discontinued programs. G&A expense fell 16%.
- Operating cash use decreased by $8.9 million. Investing activities provided $90.6 million, primarily from net sales and maturities of marketable securities; financing provided $0.6 million, compared with $53.1 million in FY2021, when the company raised $52.8 million through its at-the-market (ATM) offering.
Business developments, outlook and risks
- In July 2022, the company discontinued vebicorvir (VBR) after combination-study results did not support continuing development and reduced its workforce by approximately 30 employees. It reported 68 employees at year-end; its Chief Medical Officer and Chief Financial Officer stepped down.
- ABI-H3733 showed substantial short-term HBV DNA reductions in small Phase 1b cohorts. However, a 26-week nonclinical toxicology study identified a time-dependent toxicity in one species. In March 2023, the company paused 3733; further assessment and likely additional chronic toxicology work would add time and cost before longer-term dosing.
- ABI-4334 was prioritized as the next-generation HBV core inhibitor. Phase 1a interim data through mid-March 2023 indicated a half-life supportive of once-daily dosing and mild-to-moderate reported adverse events. Further multiple-dose safety and pharmacokinetic data were expected in April 2023. These are early-stage findings, not evidence of clinical benefit.
- The company nominated ABI-5366, a long-acting HSV-2 helicase inhibitor, for IND-enabling studies in February 2023. It also aims to nominate an HBV/HDV entry-inhibitor candidate in 2023; its oral liver-focused IFNAR agonist and pan-herpes research programs remain earlier stage.
- Management expected existing cash, cash equivalents and marketable securities to fund operating and capital needs for at least 12 months from the financial statements’ issuance. It also stated that substantial additional funding will be needed; financing may not be available on acceptable terms. A further 3.05 million shares sold through the ATM after year-end generated $4.5 million net proceeds.
- BeiGene’s HBV collaboration retains potential milestone and royalty payments, but payments depend on development and commercial milestones; the maximum stated milestone opportunity for 3733 was reduced to $285 million after VBR and ABI-H2158 were discontinued. The 3733 program pause adds uncertainty to that opportunity.
- The company reported no material legal proceedings. It cited clinical, regulatory, funding, manufacturing and CRO reliance risks, as well as market volatility and inflation. Following Silicon Valley Bank’s March 2023 closure, management said it did not expect a material impact: cash equivalents and marketable securities were held with a separate custodian bank, and depositors were granted access to SVB funds.
Important facts for investors to verify
- Current cash runway and burn rate, including the effect of the post-year-end ATM proceeds and planned R&D spending.
- Follow-up toxicology findings for ABI-H3733 and whether the pause becomes a discontinuation or requires additional studies.
- Complete ABI-4334 Phase 1a safety and pharmacokinetic results and the timing, design and funding of subsequent patient studies.
- Whether early viral-load reductions translate into durable clinical benefit, given the small cohorts and short treatment periods reported for ABI-H3733.
- Progress and funding needs for ABI-5366 and the HBV/HDV and other research programs, alongside the company’s ability to raise capital without material dilution.
- BeiGene collaboration status and the milestones, cost-sharing obligations and termination provisions applicable to ABI-H3733.