Dive Brief:
- Assembly Biosciences is reorganizing and giving up on its lead drug after studies suggested the experimental medicine failed to significantly benefit hepatitis B patients when administered as part of a triple combination therapy.
- The California biotechnology company based its decision on interim results from two Phase 2 studies of the drug, called vebicorvir or VBR. Assembly said late Wednesday it will end one of the trials immediately but continue another that’s being conducted with Arbutus Biopharma.
- Assembly said it will now prioritize two next-generation treatments for hepatitis B that could be more effective. To extend its cash runway into the first half of 2024, the company will also lay off 30% of its staff and restructure. Assembly said its chief financial officer and chief medical officer are leaving as well.
Dive Insight:
While the study failures are a significant setback for Assembly, they’re not a major surprise for a company whose market value has hovered around $100 million, Jefferies analyst Dennis Ding wrote in a note to clients. “The Street didn’t expect the trials to work anyway,” he wrote.
Indeed, the company’s plans to shift priorities and reorganize gave a boost to the stock. Shares of Assembly rose as much as 9%, to about $2.40, in early trading Thursday.
Like many biotechs, Assembly has seen its fortunes wane in recent years amid research disappointments and dwindling support among public investors for the inherently risky industry. Back in March 2018, the company’s shares traded above $64 for a time.
In its latest statement, Assembly emphasized the potential for its next-generation compounds, known as ABI-H3733 and ABI-4334, as the company pursues a functional cure for hepatitis B. The newer drugs are “significantly more potent” than VBR, Assembly CEO and President John McHutchison said, citing preclinical study results.
The company is vying to enter a significant and increasingly competitive market. About 296 million people around the world are chronically infected with hepatitis B, the primary cause of liver cancer. Though vaccines are available to fight the blood-borne virus that causes hepatitis B, it’s still a significant public health issue that has sparked research on dozens of experimental therapies, according to the Hepatitis B Foundation. Companies such as Vir Biotechnology, Arrowhead Pharmaceuticals and Roche are developing drug prospects.
Assembly said its layoffs will affect about 70 full-time employees. Chief Medical Officer Luisa Stamm will leave the company at the end of July and Chief Financial Officer Michael Samar will depart Aug. 12. Chief Operating Officer Jason Okazaki will take on additional responsibilities overseeing all general, administrative and finance functions and on Aug. 1 will also assume the title of president, currently held by McHutchison.