Assembly Biosciences, Inc. Stock

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.

Thanks, Rob.

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.

Yes. So basically, Assembly Biosciences is a small biotech company. It's located in South San Francisco. Our focuses today are primarily HSV-2 recurrent genital herpes as well as hepatitis delta. And then most recently, we announced an expansion into PBC, PSC, so cholestatic liver diseases. So we have historically been 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 is very fortuitous based on our expertise in the past.

So our focus is for molecules-wise, our lead molecules for HSV-2, we have 2 compounds, 5366 and 1179 that are both helicase-primase inhibitors focused on high recurrent genital herpes. The TPP for both those molecules is a once-weekly oral, and we're targeting superior efficacy of the Valtrex. And we can talk more about the data we announced last year, but that was incredibly positive, led to 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 HSV-2 program is the first opt-in in the exercise. And then, this year coming up in May, we'll have a decision as to whether or not we decide -- or sorry, midyear, so we are past May, we'll have a decision as to whether to opt into our 40-60 cost-profit share. So we're awaiting the clinical development plan and excited to see what Gilead is going to do with the molecule, which molecule they'll choose or both molecules potentially going forward. So that's the HSV-2 program.

And then, delta-6250 is really -- what we're looking at is our pipeline, the pill, right? So it's focused on hep 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 enrolling, initiating end of this year and early next year. So a lot of data points coming ahead in 2027 and 2028. So I'd like we're really set up as far as a small molecule antiviral releases company.

That's great. Maybe pulling on that a little bit, a number of data readouts over the past year. Before looking forward, what do you see as the most important validation points in -- across the pipeline?

Yes, absolutely. Last year was a very data-heavy year. So we had 4 Phase I clinical trials. We had an HBV compound in Ib that we decided to partner because our focus on HBV is cure, but it's a great molecule. It's a CAM that show great antiviral activity. So we're starting the partnering process for that and hopefully placing that with an organization that could combine with a sort of assets for immunomodulator, really advanced in the cure field.

Hep delta-6250 with Phase I study that -- 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 hepatocyte. So in the Phase Ia, we saw bile acid elevation of serum. So it was doing exactly what we wanted to do. So that's very encouraging as we move on to Phase II for that.

And the last but not least, the HSV-2, we had 2 molecules, so 5266 and 1179, both had phenomenal proof-of-concept data in patients with recurrent genital herpes. So statistically, basically for viral shedding, we had 95-plus percent reduction in viral shedding, which is really what you're looking for in the Ib.

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 had opted in early.

In fact, they opted in before the Phase Ibs were actually complete. So I think, obviously, they were happy -- as happy with 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 Valtrex. But based on that Ib, given our expertise in virology, nothing is certainly guaranteed, but we tend to track more the Ib 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?

Yes. So maybe I'll start on kind of the genetic molecule. It's actually a very nice molecule, also helicase-primase inhibitor. It's only in studies for a very small niche population, acyclovir-resistant immunocompromised population. But the same target, it's far less potent in a molecule, so it's dosed once daily, but they set up a very nice breadcrumb path for us to follow, right? So in their Ib, similar to our design, right, they showed an 80% roughly reduction in viral shedding. As I mentioned earlier, we were high 90% reduction, which is obviously favorable.

That same molecule went on the Phase II head-to-head against Valtrex, which is standard of care, and they showed superiority. So our logical next step or Gilead's next step presumably would be a Phase II head-to-head against Valtrex, which showed that that's absolute proof of concept against standard of care, but hopefully, we would track along the lines of the competitor molecule and then set us up well for the Phase III, which would really just be an expansion of the safety database, more so than kind of proof of concept. But I think the Phase II data when we were planning it internally would have been roughly 200 subject studies, you would get a good [indiscernible] head-to-head efficacy with Valtrex. And maybe can you talk a little about -- Valtrex is a good molecule, but it certainly leaves a lot of unmet medical need in the population.

Yes. So I think just kind of stepping back and thinking about the patient population, it's a pretty underserved population overall. 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. What Phase III studies with Valtrex is recurrence-free over the course of the year. And furthermore, there's only less than a 50% reduction in transmission from infected individuals to their partners, which is obviously a big concern for individuals living with this disease.

So I think on the backs of the initial helicase-primase inhibitor that Jason talked about, which has shown superiority versus Valtrex, but we know both 5366 and 1179 have improved potency relative to that. 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 that Gilead opt-in and opting in before they needed to. I guess, how do you see that as changing the trajectory of HSV? Is it accelerating it? Is it kind of broadening the opportunity, and I guess, kind of implications to the overall company as well?

Yes. I think it's probably a great example of the collaboration working exactly as it should work, right? So you think about these kind of collaborations holistically, and certainly, a company like Gilead, proven track record on development, commercialization. But obviously, the bar for them revenue-wise is probably pretty high, right? So HSV-2 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 in development timelines, really building out the commercial profile and the presence to kind of maximize this market, which something we couldn't do realistically, right? It's a small company. It would be very hard to scale up, particularly for HSV-2, right?

I think there are disease areas of virology and liver disease, we're working on that, would be small in niche markets, so you could have a very small specialty sales force and potentially do your own. But this one, no question, like it's a win-win for Gilead to take us over. And of course, they are very advanced, quick development organization. So that's why we're very looking -- much looking forward to the development plan. So [Technical Difficulty] the cost structure, the timing [Technical Difficulty] launch planning.

And I think going back to that market, right, this is an enormous market. So from how it affects the company, 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, there's -- 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, that's just one of it, not the leading research center -- treatment center for HSV-2.

And looking at Valtrex scripts, particularly for 90-day scripts and more ICD-10 codes, medical records, as much public information we gathered 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 the potency as far as kind of prevention of recurrences. So we can increase that bar significantly, as we've all experienced across virology and other diseases, the better the drug, the bigger 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 HSV-2 and recurrent genital herpes. And that's not to mention, these molecules are all active against HSV-1 as well. So they theoretically should work against orofacial herpes. So there's a lot of expansion potential there that, again, having a company like Gilead take us over, I think, opens a lot of those opportunities. And for us, it's just analyzing do we want to share those costs going forward or just participate just through our milestones and royalties.

Great. You mentioned a little bit about this, but can you help investors understand some of the more specifically key catalysts, key milestones, key decisions at your point on the forwarding program?

Yes. So for HSV-2, the next clear catalyst, if you will, is really our decision on opting into the 40-60 U.S. cost-profit share split. So nothing really earth shattering there. I think we'll look at the development plan. Obviously, the extended development plan. We'll certainly run an NPV analysis to figure out how that lies versus a pure milestone royalty formulation. But of course, it's a trade-off, right? You're going to incur significant costs for Phase II, Phase III commercial ramp-up that you would expect that given the market that we just discussed, that it will 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 focus going forward. We would expect them -- even for us, we would have data against Valtrex head-to-head in probably second half of next year. So hopefully, they're on that same time line, if not faster, again, because they can speed things up potentially over a small company. So that's the first thing for HSV-2. And then coming off the heels of our recent announcements, for 6250, again, now that has this kind of pipeline of pill potential. The next thing we want to make sure is we get the Phase II for delta, initiated by end of this year, and we would expect data in hep B, at least interim data by end of 2027.

And then for PBC, PSC, which are, again, high unmet 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 it was kind of reload and re-execute. And I think with the addition of the PBC, PSC expansion, that's going to 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, not including we've got a lot of programs under discovery so -- 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 is because of the Gilead collaboration, like it's incentivized the collaboration in the long term for us to discover and develop things. And also, Gilead is not going to opt into everything, nobody is going to do that, right? So it will give us the potential down the road to also have niche indications in niche disease states, where we could build an end-to-end organization. So a lot of excitement for the next few years ahead.

You mentioned 6250 just a minute ago. Maybe taking a step back, can you give overview of the program? What gives you confidence in the program and potential for differentiation versus other approaches?

Yes. So we initiated this program kind of on the backs of bulevirtide, 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 used to enter into hepatocytes. And bulevirtide has been used for over 4 years now, great safety and efficacy, has shown multiple log reductions in viral RNA as well as ALT normalization.

The downside of bulevirtide is that it's a daily subcu 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 bulevirtide 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 Ia data at EASL a couple of weeks ago, and we showed excellent PK 3- to 4-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 bulevirtide.

And finally, we had a 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 II. And as Jason said, we're looking to initiate those studies by the end of this year.

On the cholestatic expansion that you mentioned and you announced recently, I guess maybe taking a step back, rationale for moving into both PBC and PSC, both biologically, commercially, and why you think 6250 could be differentiated there?

Yes. I guess to take a step back, as we talked about, the primary focus of this program was hep delta, but the mechanism over the past year, 1.5 years, we've been talking to KOLs, both from a mechanism side and the clinical development side, is to the intriguing aspect of a hepatoprotective molecule, right, and its effect in cholestatic liver diseases. So I would say that work has been ongoing and really culminated 3 weeks ago -- 2 weeks ago, when we announced the program. And that was the reason we got to that point is we had a full clinical development plan.

We talked to the KOLs and gotten resoundingly positive feedback that, yes, this is definitely something that, that should work and would be additive, if not supplant existing 6 second-line therapies for PBC, certainly. And then, beyond that, obviously, commercial potential. And then finally, we had a pre-IND meeting with FDA, which was -- 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 triangulating across that, and that's what -- why we think the molecule is really going to be very productive for cholestatic liver disease in general.

Of course, we have to show that in the data, but I think it gives us the optionality to do that, and we will talk more about it later for commercial market. But as we're thinking about the clinical plan, right, we've laid it out very nicely to kind of lay out the potential, right? So you've got an arm in the second line as a stand-alone. You 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 IBAT, 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, do you want to talk about the biology on the bulevirtide?

Yes. So as I mentioned before, we have really nice low nanomolar potency against NTCP. And I think 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 agonist and IBAT inhibitors. 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. 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 we're very excited about this because, for one, 6250 directly prevents bile acids from getting from the serum into the hepatocytes. 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, we have a really nice safety profile with 6250 through 10 days of dosing. We've got great safety margins from our chronic toxicology studies. Some of it, we know for IBAT inhibitors, they do have some limitations in terms of their dosing due to GI tolerability issues. So I think those are the reasons we're really excited about bringing 6250 forward for cholestatic liver disease.

Makes sense. One investor question or potential investor question could be bile acid versus kind of risk of pruritus. How do you think about that?

Absolutely. It's an important question. So in our Phase Ia study, we did not see any AEs of pruritus. It's not anything that we've seen in our chronic toxicology studies. And if you look over the 4-plus years of dosing with bulevirtide, 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 intrahepatic 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 intrahepatic 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. Very interesting in IL-31. Maybe a little premature, but Jason, how are you thinking about positioning in PBC and PSC, combination, stand-alone, line of therapy, et cetera?

Yes. I think it could be all of the above, right? So obviously, the market is really second line, right? So everyone goes through UDCA first. So the question, and that we're going to answer on the clinical side, is we do have an arm that is a stand-alone, basically of 6250 against UDCA. So we'll see basically how it's comparing second-line therapy to other molecules, so PPARs, et cetera.

And then third line would be on top of a PPAR so we've already taken PPAR, so the seladelpar or whatever it is, it will be on top of it. So that will actually show if we're right to that it could have additive in addition to stand-alone. 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 stand-alone. You could also win as additive therapy on top of PPARs. And of course, given our partner, Gilead has a PPAR. They're an expert at fixed-dose combinations. This is a very small dose molecule, right? It's going to be 1 milligram or less dosing.

So I think we have that potential, like Katie said, biologically, you should be -- you shouldn't have that additive property because of where the bile acids 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 scenario, the best case scenario would be your stand-alone second line, which approaches more of a $2 billion market. On the worst case, going for a worst case, your third line on top of PPAR, which is probably closer to $1 billion market. And then the in between is if you're on top of the PPAR and that really becomes the second-line therapy. So I think that's where we're excited that in a relatively small clinical study, Phase II 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 Gilead'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 catalysts over the next couple of years? Execution this year, but over the next couple of years, how should investors be thinking about Assembly?

Yes. I think it's pretty broad-based, right? So obviously, like I noted earlier, starting, call it, mid-2027, second half '27, it's going to be back on to true catalyst proof-of-concept data, right? So that's going to be hep delta data that we really looking at ALT reduction, really looking at the results against bulevirtide, right? So bulevirtide just got approved in the U.S. The WACC is $280,000 an ounce. So small patient population, but a 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, siRNA or bulevirtide is a peptide, right? So I think that alone, once we get that data will give us a good kind of wind in ourselves going forward. We're certainly going to be later to market, right? But I think that small molecule oral give us a big advantage if we can show that proof of concept in relation to bulevirtide data as far as matching, if not matching or exceeding the levels that they hit in their Phase I -- or sorry, their clinical data and their actually 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 probably treat all diseases. So that's for delta, right? And the first step on that is that proof-of-concept data for the Phase II that we expect interim data, call it, end of 2027.

And then, if you go back to HSV-2, 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 Valtrex, that will help kind of set up the commercial profile, obviously, where you could stand, and then obviously, where you stand from launch potential. And the interesting thing will be, are there other kind of indications Gilead is going to look at early on, given the size of the company, what they can do with, what 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 in the Ib trials last year, I think that Phase II undoubtedly is going to be what people are concerned about as far as actually head-to-head against Valtrex.

And then last but not least, first half of 2028 is the PBC, PSC. So PBC, very clear markers for kind of proof of concept, the alka phos reduction and how we're comparing and really kind of getting to alka phos normalization is where the field is going. We had a lot of discussions with EASL and all the other companies working on this have a similar approach of alka phos normalization. So PBC, I think the endpoint is pretty clear, and we should be able to show that or -- show that it is working or not working, certainly on that marker in particular, in the Phase II. We'll certainly check all the other markers, pruritus, [indiscernible], et cetera.

And that's going to be important for PSC, right, because there is no alka phos reduction endpoint for approval of PSC, and we've had lots of pre-IND discussion with FDA. And I think it still remains as of right now an outcomes model. But with a number of companies working on PSC, I think our hope and expectation is that would evolve in the next couple of years to maybe have some other kind of biomarkers or kind of surrogate markers that can make a clear pathway to PSC. And the interesting thing, too, is we're one of the few companies working on disease-modifying therapy for PSC, like this mechanism could have a disease-modifying rather than just treating kind of symptoms of pruritus, which obviously is very important for the ultimate goal of the disease modifying. So that's going to be the big data point for first half of 2028.

The good thing is with the financing we did in August of 2025, and when we just did a few weeks ago, at least the HSV-2 programs, are funded to get to that Phase II proof of concept against Valtrex head-to-head, and then, the PBC, PSC or likewise financed so we get to that mid -- past that mid-2028 point to get that proof-of-concept data. So I know the catalyst setup is pretty enormous for the next 2 years, not to mention, we'll still announce some new programs, and hopefully, some interesting areas that -- to follow over the next 2 years as well.

Wonderful. Well, very exciting next little bit for you guys. Appreciate you joining us today.

Thank you so much, Rob.

Great. Thank you.

Here at the bank. And with me on the stage is Assembly Biosciences and Anuj Gaggar, Chief Medical Officer. Thank you so much for joining us.

Thanks for having us.

Excellent. Well, maybe to start broadly for those less familiar with the Assembly story. Can you give us a quick overview of your work in virology?

Yes. Thanks. First of all, we're very excited to be here and share our story with everyone. Assembly is a company that's a clinical stage company that is really focused on patients who are still suffering from serious viral illnesses. We're a full R&D company, research and development, and we have a broad partnership with Gilead Sciences, who, as you know, is a leader in antiviral discovery and development. Over the past 2.5 years, we have brought 4 new molecules into the clinic and have generated really positive data on each of those molecules. Most recently, we've had 2 of those molecules, our HSV programs, optioned by Gilead Sciences on the strength of the Phase Ib data. And we're excited for the next year where we'll move our other programs into value inflection points as well.

Great. Maybe just to take a step back, how would you frame the unmet need in hepatitis B, hep D, HSV? Is this still a space that supports meaningful innovation despite the availability of both vaccines and antivirals?

Yes. In a word, absolutely. I think what we do at Assembly is we look for the places where there are still unmet needs for patients. And taking some of the diseases that we work on one at a time. For HSV, there is no vaccine. There's neither a prophylactic vaccine nor a therapeutic vaccine right now despite significant effort. Most recently, GSK and Moderna both had trials that did not meet their endpoints in patients with HSV-2 infection. And in the world of antivirals for HSV, we know that while there are treatments, still, there's a lot of efficacy that's remained to be gotten for patients. More than 2/3 of patients fail on chronic suppressive therapy for HSV-2. So we know that despite having significant effort from a lot of folks on vaccines and with the antivirals, we have room to go.

Hepatitis B and hepatitis D, we look at that similarly where there's a great prophylactic vaccine. But for those patients who already have infection of which there's, globally, millions of patients, there are no effective therapies for curing hepatitis B or for really treating hepatitis D outside of bulevirtide, which is approved in the EU. So we look at those areas, too, and we see a lot of opportunity for patients to have better outcomes with better antivirals. So that's how we focus, how we approach diseases, and these are 2 where we think there's a lot to be added by what we're doing.

We got it. Let's pivot to the herpes simplex program. A recurring theme here is that current therapies may suppress outbreaks, but often fail to meaningfully improve quality of life for many patients. Beyond simply reducing the outbreaks, how does Assembly define a clinically meaningful outcome? And which endpoints best capture that?

Yes. For patients that are suffering from HSV-2 infection and recurrent genital herpes, there's really 3 areas that they look at for improvement for their outcome. So first are the lesions themselves. These are what really are psychologically impactful for patients. They're, of course, very painful, and many patients are having multiple lesions a year many times, even sometimes once a month. Currently, we know that the standard of care treatment, valacyclovir, has an impact on that part of their disease. But by their label also, 2/3 of patients at least have recurrences even while taking this medicine. So we know on lesions, there is room to go to make that better for patients. And what we think is going to improve that are medicines that have higher potency, easier to take, a little more convenient, and we think that's where our drugs fit really well.

A second area that's very important for patients also is just the convenience. So we know right now because of the poor PK and lower potency of valacyclovir, patients have to take that drug every day to maintain their efficacy. By missing days, you risk of recurrence coming. And so for patients, that's very impactful on their lives, whether they're traveling, weekends away, they got to bring their medicines, get reminded of that every day. And what we've seen from the HIV world is that one way to improve adherence and, therefore, efficacy is to get treatments that are longer acting. So we see an impact there if we were to make those treatments more convenient.

And I think one final component that is very important to patients is transmission. So a lot of these patients are sexually actually active. They have partners that don't have HSV. And so they're very concerned if they are going to transmit it to their partners or to others. And here, we know that what really leads to transmission is high levels of virus and many days with viral shedding. And so treatments that can impact that can impact that for patients as well. So we look at the molecules, 1179 and 5366 that we had developed and Gilead has now in-licensed as highly potent weekly dose medicines that are tolerated well. And we think that's something that can address all 3 aspects for patients.

Let's get into that a little bit further. Gilead licensed the helicase primase inhibitor program relatively early. And I guess, from your perspective, what aspects of the data or mechanism clearly signal the potential for differentiation?

Yes. Both Gilead and Assembly were working on this target prior to our collaboration. So I think we both independently identified this target as one that could make a meaningful impact for patients. And it has to do with the fact that it's -- there's no kind of host equivalent. You can make very potent molecules against it.

And from our experience in antivirals, the more potent you can make a molecule, the more efficacy you can get out of it. So I think we started from a place where we shared the value of that target. And then it was just the data and the strength of the data from our Phase Ib programs. We exceeded our expectations even on multiple aspects, both on lesion reduction, shedding reduction, and high viral load shedding reduction. And I think on the strength of those data, that's probably what led -- I mean we can't speak for Gilead, but we think the strength of those data early really led to them making that option decision before we even completed the trials.

Got it. And then again, from a broader perspective, HSV therapeutics have historically received far less investment attention than areas like HIV and HBV. Why do you think that's been the case? And do you believe the commercial opportunity here has been structurally underappreciated?

Yes. We believe it is underappreciated. I think what has happened over the past 20-some years is there was a heavy focus on HIV therapeutics. And that dominated, I think, a lot of the attention in the antiviral world. And then there was a wave of hepatitis B, then hepatitis C, and then COVID. And I think what these things did is sort of drew attention, both industry attention, investor attention into clear areas of need that were demonstrated.

Also, there had been a treatment valacyclovir, which was about 30 years ago now, and there was just assumption that things were going well. I think now what we are seeing when we talk with patients, we realized that there is an opportunity to improve upon what actually is a substandard drug. We would never accept it in those other areas. And this is the time now for we can see to address all those. So I think that we're kind of hitting a time where there's more awareness, slightly less stigma now. And there was a lot of stigma on these diseases before. And I think we've done a good job of erasing stigma for HIV, hepatitis C, hepatitis B, and I think now is the right time for HSV, now.

Excellent. Well, let's move to your hepatitis D program. While NTCP blockade has been clinically validated at this point, what do you view as the key translational risk when applying that biology to a small molecule oral approach like 6250?

Yes. So one benefit we have in hepatitis delta space is the knowledge from the bulevirtide program from Gilead. So that program, which is a peptide that targets NTCP has now been approved in the EU, and we expect soon, approval in the U.S. from them. And it has multiple years of data demonstrating safety, efficacy in a broad range of patient populations. So our molecule targets the same molecule or same protein, NTCP. One of the nice things about our program is that when you target NTCP, you have a pharmacodynamic readout, which is an elevation in serum bile acid, something that's seen with bulevirtide. And in our Phase Ia study, we're able to demonstrate not only our safety and PK, but we could look at levels of bile acids in the serum. And we saw a dose-dependent increase in bile acids that also was equal to and even greater than what was seen with bulevirtide. So for us, that's a very derisking Phase Ia study that lets us go straight to a Phase II program, which is what we're planning for the end of this year.

I think for us, the remaining uncertainties or unknowns is just to equate all that with the antiviral efficacy. We have in vitro data in which we've tested multiple genotypes of hepatitis B and delta, so we know it works in vitro. We know we're hitting the target in vivo. And now just putting that together in the Phase II is the last kind of thing that we have to target.

Great. When you look at the clinical program, what specific signals from the Phase I add to your confidence that an oral NTCP inhibitor can translate the efficacy that you've seen from this peptide into the practice?

Yes. I mean I think we -- what we always wanted is a daily oral medicine that we know patients could take and have sufficient pressure on the virus every day. And that's something very important in antiviral development. And so the PK was really important from this Phase Ia study, which showed that we can dose every day and achieve levels of the drug that we think will lead to efficacy. And as I mentioned, that pharmacodynamic measure of bile acid elevation tells us we're not just getting serum levels, but we're getting levels on target in the liver itself. The fact that it has matched what we expected from the pre-clinical experiments, I think, is really good data for us to give us confidence. And now it's just a matter of, yes, generating the clinical data in delta patients.

Got it. And just in terms of sort of, I guess, planning for catalysts, when should -- we can sort of expect these readouts to come?

So we've accelerated our chronic tox on that program because we want to do a longer-term dosing in patients with hepatitis delta. So the plan is to start those studies by the end of this year. And then we're expecting to have our data readouts by the end of '27 for this program to be able to look at and say what dose level would we like to go forward with in Phase III. Of course, that will be subject to discussions with regulators, but we're trying to design this Phase II to allow us to go to Phase III right afterwards.

At a high level, what do you think or believe 6250 ultimately needs to demonstrate in terms of efficacy and safety relative to -- what is likely to be the standard of care here? I mean, can you just win on convenience? Or do you need to be better in class?

Yes. So there's great competition in this space right now, not only Gilead's bulevirtide, but Mirum has an antibody that they acquired from Bluejay, and Vir has an antibody siRNA combination as well. When we look at all of these modalities, we think they all bucket into the same idea, which is preventing new hepatocytes from being infected. So they all are functional entry inhibitors. You can either do that at the level of the receptor as bulevirtide and our molecule 6250 do or you can do it at the level of the virus by removing the virus, which is what the antibodies are doing. So we think that in the end, they shall have -- should have at least similar efficacy when it comes to ALT normalization, which we think is the most important part of the outcomes for patients.

In that setting, I think we think we can actually get maybe more efficacy because we can maintain our levels more consistently over time and may actually improve efficacy. But from a convenience perspective, we think there's a lot of value and convenience here. So all of the other modalities are injectables, either daily injectable in the case of bulevirtide, potentially weekly or monthly injectable with Mirum, and monthly injectables with multiple agents with Vir. And in a setting where patients are already taking a pill every day for their hepatitis B, the simplest thing from the patient is to take a pill for hepatitis delta as well. So we think, in this setting with similar efficacy, the convenience will have a major impact.

Maybe just to take a step back and look kind of overall broadly at your portfolio. What do you view as the biggest remaining uncertainties? Is it durability, efficacy, safety, commercial adoption?

One of the nice things about antivirals is that what you see in early-stage studies tends to track with later-stage studies. So we really work hard to design our early studies, so that they address as many questions as we can to derisk them for later studies. So for HSV-2, the Phase Ib studies that were performed really derisk it from efficacy and safety for future studies. Of course, the longer you dose patients, the more patients you dose, you have more confidence on safety. So I think that's one thing we always are looking for. Same thing for our delta program. The next study is meant to derisk it on the antiviral component, which we think should track really well for Phase III as well. So I think our uncertainties are not so much around that. They're really around the edges.

So for HSV-2, are there other markets we're not considering or Gilead may have to consider that might expand the use of these molecules? So we've looked at recurrent genital herpes, but there's areas where you can think about subcutaneous injections every 3 months or monthly orals or oral herpes or other places where we can make an impact for patients. So I think there's some areas where I think some work needs to get done about what's the best way to impact patients. And then I think from a company side, we're just awaiting some development plan from Gilead on the HSV-2 programs. So what that lets us do as a company is opt in to a 40% profit-cost share, which gets us a little more value for the work that we put in already for the program.

Yes, makes sense. I guess in terms of next steps and looking beyond your current portfolio, what other viruses do you think might be very interesting targets?

So we have a program, which we haven't talked about today, ABI-7272, which is focused on transplant-related herpes viruses. The transplant space is one with more transplants happening and more immunosuppressed patients out there. These viruses are having kind of a lot of impact on those patients' outcomes. So how we address those is something that we're very interested in. So CMV being one that we think is very exciting and 7272 is a fantastic molecule that we think can be useful for that.

And then beyond that, we're looking at what other or the implications on those patients for their outcomes and how can we address it. So we have a very active research group. We didn't stop research just because we were doing our development work. And so we're hoping to maybe announce even another candidate later on this year, but we're hard at work at finding out the next frontier.

Dr. Gaggar, sounds fascinating. Looking forward to the next steps. Thank you so much for joining us.

Thank you so much.

Good evening, and welcome to the Assembly Bio conference call. [Operator Instructions] Please be advised that today's conference is being recorded and will be available for replay on the Assembly Bio website.

I will now turn the call over to Jason Okazaki, President and CEO of Assembly Bio. Jason, you may begin.

Thanks, Carmen, and thank you all for taking the time to join us this afternoon. I'm joined by Dr. Anuj Gaggar, our Chief Medical Officer on this call. Before we get started, I would just like to quickly remind everyone we will be making forward-looking statements, so please refer to our SEC filings for a full list of disclosures.

Today, we're excited to be able to share what we believe are truly impressive results from our Phase Ib clinical studies of our long-acting helicase-primase inhibitor candidates, ABI-1179 and ABI-5366 in participants with recurrent genital herpes. This is an important moment for the company and individuals living with this disease as both candidates met or exceeded all key objectives of the study. With this data, we believe we now have a path to a potentially best-in-class therapy across key parameters, including dosing interval and improved efficacy versus approved agents.

In a moment, we will dig into the data, but first, I want to provide a brief overview of the results we are presenting today, which are provided in Slide 3 of the accompanying deck. As a quick reminder, in August, you might recall that we announced positive proof-of-concept interim data on ABI-5366 in its Phase Ib clinical study treating participants with recurrent genital herpes. With participants dosed once weekly over 29 days in cohort B2 of ABI-5366, we saw an astounding 94% reduction of HSV-2 shedding versus placebo and a 97% reduction in virologically confirmed lesions. Today, we announced interim efficacy data from two weekly dosing cohorts of ABI-1179, our second long-acting helicase-primase inhibitor candidate in participants with recurrent genital herpes. Results from cohort B1 of the study shows similarly impressive reductions in HSV shedding of 98% and virologically confirmed lesions of 92% versus placebo.

We also released today two additional updates from the ABI-5366 Phase Ib study. First, we've now updated the interim safety data from the study to include both interim blinded safety data from the third cohort B3, looking at proof-of-concept monthly dosing for 5366 and also unblinded safety data from the first two weekly dose cohorts of the Phase Ib trial that were released in August in blinded form. Second, we released interim efficacy data from the monthly dosing cohort B3. This cohort also showed potent antiviral activity but suggests that we may have additional work to do to maintain the same high level of suppression seen in the weekly dosing cohort.

I'm excited to now turn it over to Anuj to walk you through each of these important interim data results.

Thank you, Jason. I will first turn to 1179, and Slide 4 outlines the design of the study. This is a double-blind, placebo-controlled study evaluating the safety and antiviral activity of ABI-1179 following weekly dose administration over 29 days and participants seropositive for HSV-2 with recurrent genital herpes. An evaluation period for collection of anogenital swabs, quantification of HSV levels and reporting of genital herpes lesions extends from day 8 through day 35 inclusive.

Within each cohort, 20 participants are assigned to ABI-1179 and 5 to placebo. The 3 treatment regimens, which have been initiated to date are 10 milligrams, 20 milligrams and 50 milligrams weekly. The results released today cover cohorts B1 receiving 50 milligrams weekly oral and B2 receiving 20 milligrams weekly oral and include complete HSV shedding data and safety data through day 57 for the two cohorts. As the 10-milligram cohort is ongoing, no data are reported here. Additionally, as follow-up is ongoing for cohorts B1 and B2, the safety data are reported collectively for 1179 and placebo recipients within each cohort in order to maintain blinding until the study database is locked.

Turning to Slide 5. Overall, baseline demographics and disease characteristics were well balanced between the two cohorts. The enrolled population was predominantly white and aged 40 years. A higher proportion of female participants was enrolled in the 50-milligram cohort. Of specific note is the enrollment of a population with active disease having on average 5 to 6 genital lesions in the prior 12 months or prior to initiation of suppressive therapy. Approximately 75% to 80% of enrolled participants were receiving suppressive therapy with nucleoside analogs at screening.

Now looking at Slide 6. Overall, 1179 was well tolerated on the two treatment cohorts. 71% to 92% of participants reported a treatment-emergent adverse event, the majority being Grade 1 or 2. A single grade 3 treatment-emergent adverse event of migraine was reported by a participant with a medical history of migraine in the 50-milligram placebo cohort. 32% to 38% of participants experienced a treatment-emergent laboratory abnormality, all being Grade 1 or 2. No adverse events led to treatment discontinuations and no serious adverse events were reported.

Now moving over to efficacy. In the Phase Ib study, as with the 5366 study, we looked at both viral shedding and genital lesion recurrence rates. We're looking to achieve an 80% to 85% reduction in HSV-2 shedding versus placebo as our key efficacy measure for the study. We also wanted to see directionality for the clinical endpoint of genital lesion recurrence rate. Slide 7 shows HSV-2 shedding rates over the evaluation period of 16.9%, 1.4% and 0.4% for placebo, 20 milligrams and 50-milligram cohorts, respectively. For both ABI-1179 dose levels, the differences from placebo and HSV-2 shedding rates were statistically significant. The shedding rate for the 50-milligram dose represents a 98% reduction compared to placebo.

Turning to Slide 8. High-viral-load shedding that is shedding of greater than 10 to the fourth copies per mil is considered a surrogate marker for increased HSV-2 transmission. At the end of the evaluation period, high-viral-load shedding rates of 11.8%, 0.5% and less than 0.1% were reported for the placebo, 20-milligram and 50-milligram cohorts, respectively. Near complete elimination of high-viral-load shedding for the 50-milligram dose represents a greater than 99% reduction compared to placebo. Given this greater than 99% reduction, we are not able to calculate a reliable p-value, but this reduction level is consistent with the significant effect and the reduction in high-viral-load shedding for the 20-milligram cohort was statistically significant.

Slide 9 shows a summary of the virologically confirmed lesion rate, which includes any lesion that had any positive HSV-2 swab taken during the duration of the lesion. At the end of the evaluation period, virologically confirmed genital lesion rates of 8.4%, less than 0.1% and 0.7% were reported for the placebo, 20-milligram and 50-milligram groups, respectively. Notably, similar to the results seen for the 50-milligram cohort for high-viral-load shedding, a p-value could not be reliably calculated for the 20-milligram dose level given the greater than 99% reduction in virologically confirmed lesion rate compared to placebo. However, the difference is consistent with a highly significant effect. The virologically confirmed lesion rate for the 50-milligram dose level represents a 91% reduction compared to placebo. For the 50-milligram dose level, the difference from placebo in virologically confirmed lesion rate was statistically significant.

Slide 10 summarizes that overall, ABI-1179 met or exceeded the goals Assembly established for the Phase Ib study. ABI-1179 has been well tolerated with no safety signals identified in humans or animal studies to date. The antiviral and clinical activity profile exceeded the established goals with the 50-milligram weekly regimen demonstrating 98% greater than 99% and 91% reductions compared to placebo for HSV-2 viral shedding, high-viral-load shedding and virologically confirmed genital lesions. With these results, we are pleased to now have 2 highly promising helicase-primase inhibitor candidates that have exceeded our Phase Ib efficacy targets in cohorts evaluating weekly oral dosing in participants seropositive for HSV-2 with recurrent genital herpes.

Now let's turn to ABI-5366, beginning on Slide 11. The Phase Ib study is similar in design to that previously described for ABI-1179, evaluating the safety and antiviral activity of ABI-5366 following weekly administration over 29 days and a simulated monthly dose regimen in participants seropositive for HSV-2 with recurrent genital herpes. With the longer plasma half-life of ABI-5366, the follow-up period is extended through day 98. Three treatment regimens have been evaluated, which are cohorts B1, 150-milligram loading dose with a 30-milligram weekly dose; B2, a 350-milligram weekly dose and B3 with five 350-milligram loading doses given during the first week of the study and then no further dosing over the 29-day evaluation period to simulate a monthly dose regimen.

We previously released interim data for the weekly dosing cohorts, B1 and B2 in August, which included 98% shedding data and all lesion data through the evaluation period. Here, we are now also including cohorts B3 evaluating a monthly dosing regimen. And this new -- and this data set now includes complete HSV-2 shedding and lesion data for all cohorts complete and unblinded safety data for cohorts B1 and B2 and blinded safety data up to at least day 43 for Cohort B3.

Slide 12 shows that overall, baseline demographics and disease characteristics were well balanced across cohorts. The enrolled population was predominantly white and aged 44 years. A higher proportion of female participants were enrolled in a monthly cohort. Similar to ABI-1179 study, the 5366 study enrolled a population with active disease having 5 to 6 genital lesions in the prior 12 months or prior to initiation of suppressive therapy. Approximately 60% of enrolled participants were receiving suppressive therapy with nucleoside analogs at baseline.

Turning to safety on Slide 13. Overall, ABI-5366 was well tolerated. 90% to 100% of participants reported a treatment-emergent adverse event and all were grade 1 or 2. Approximately 54% to 90% of participants experienced a treatment-emergent laboratory abnormality, most being Grade 1 or 2. Three grade 3 treatment-emergent laboratory abnormalities were reported all in cohorts B1 and B2 that are now unblinded: decreased neutrophils in a placebo patient, exercise associated increased creatinine kinase in a 30-milligram recipient and worsening of cholesterol elevation in a subject with a grade 2 elevation at baseline and a 350-milligram recipient. No adverse events led to treatment discontinuation or serious adverse events have been reported.

Now turning to efficacy on Slide 14. At the end of the evaluation period, HSV-2 shedding rates were 14.9%, 14.5%, 0.9% and 3.5% in the placebo 30 milligram weekly, 350-milligram weekly and monthly regimens, respectively. For the 350-milligram weekly and monthly regimens, the differences from placebo and HSV-2 shedding rates were statistically significant. The shedding rates for the 350-milligram weekly dose level was reduced by 94% compared to placebo, which is unchanged from the interim data release in August for this cohort.

For the monthly dose cohort, we saw a significantly -- statistically significant 76% reduction in HSV-2 viral shedding rate compared to placebo over the evaluation period, which is our key marker of efficacy for this 29-day Phase Ib study. This reduction reflects encouraging potent antiviral activity and recall, our target for the study was an 80% to 85% reduction in shedding and we saw almost 90% of those shedding events occurring in just the last 2 weeks of the cohort. We plan to continue to optimize exposure of ABI-5366 to further evaluate its potential for monthly oral dosing, given the level of antiviral activity seen for weekly oral dosing of ABI-5366.

Slide 15 presents that over the evaluation period, high-viral-load shedding rate of 11.8%, 9.4%, 0.2% and 2.2% were reported for the placebo 30 milligram weekly, 350-milligram weekly and monthly regimens, respectively. With the 350-milligram weekly regimen at the high-viral-load shedding rate of 0.2% represents a 98% reduction compared to placebo.

Turning to Slide 16. Over the evaluation period, virologically confirmed genital lesion rates of 16.2%, 11.5%, 0.5% and 2% were reported for placebo 30-milligram, 350-milligram and monthly regimens, respectively. For the 350-milligram weekly and monthly regimens, the differences from placebo and overall lesion rates were statistically significant. The virologically confirmed lesion rates of 350-milligram weekly dose regimen represents a 97% reduction compared to placebo.

Slide 17 summarizes that overall 5366 met or exceeded the goals Assembly established prior to the conduct of the Phase Ib study. 5366 has been well tolerated with no safety signals identified in human or animal studies, including chronic toxicology studies. The antiviral and clinical activity profile exceeded the established goals with a 350-milligram weekly regimen demonstrating at 94%, 98% and 97% reduction compared to placebo in HSV-2 shedding, high-viral-load shedding and virologically confirmed genital lesions.

Slide 18 provides a visual representation comparing the impressive efficacy of ABI-1179 and ABI-5366 weekly regimen in these Phase Ib studies to historical placebo-controlled Phase Ib studies. As you can see, it's a great demonstration of the improvement in shedding reduction rates for both ABI-5366 and ABI-1179 as well as a decreased pill burden. Not only do weekly regimens in both of these highly promising compounds exceed our Phase Ib targets for reductions in HSV-2 shedding, but we believe these results are very encouraging for our eventual goals for the program to develop a therapeutic that can improve on the standard of care and offer increased efficacy and better convenience for people living with recurrent genital herpes.

Thank you, Anuj. Based on these very encouraging Phase Ib results, we believe that ABI-5366 and 1179 both have the potential to change the treatment paradigm for individuals with recurrent genital herpes. On Slide 19, I will quickly touch on next steps for these programs and upcoming milestones across our broad pipeline.

As previously guided, we expect to initiate a Phase II clinical study of ABI-5366 in mid-2026, and have also begun Phase II enabling activities for ABI-1179 given the strength of the data presented today. As a reminder, our partner, Gilead Sciences, has the right to opt into an exclusive license for this HSV program, with the first option time point continuing through the completion of their review of the Phase Ib data sets for ABI-5366 and 1179. We are also continuing chronic toxicology studies on ABI-6250 and continuing preparation for its Phase II clinical study in chronic hepatitis delta, which we anticipate initiating by end of 2026.

With the financing we closed in August, we have a strong financial foundation to execute on these programs over the next several years. We expect our cash runway to fund the company into late 2027 not including potential future payments under the collaboration with Gilead or from potential warrant exercises, either of which would further extend our cash run rate beyond 2028. Our cash position supports key activities, including the advancement of both our HSV and HDV programs into Phase II, while continuing our efforts to discover and develop new programs. We look forward to keeping everyone updated on our progress next year.

Thanks again for your time today and happy holidays to everyone. We'll now move into the Q&A session where Bill Delaney, our Chief Scientific Officer, and Katie Kitrinos, our SVP of Preclinical R&D will also be joining us.

Carmen, I'll turn it over to you.

[Operator Instructions] Our first question comes from the line of Salim Syed with Mizuho.

Congrats on the data. Just a couple from us on maybe 5366. Just the language in the release here around pursuing optimization, could you just clarify exactly what that looks like and when we could see the data from those optimization efforts? And then also, if you don't end up having the monthly, does that change the opportunity set here for you guys for 5366?

Thanks, Salim. Good to catch up today. So why don't I start and Anuj and Bill, feel free to chime in. So second question first. The TPP for these programs has always been once weekly better efficacy and then standard of care. So our programs have always been on that profile. So the monthly, while we think about as an upside is probably going to be the next generation regardless. So even when we started this endeavor, we always plan for weekly first monthly second. So it actually doesn't alter the opportunity at all in our eyes. As far as optimizing, I'll start, it's really -- right now, we're looking at formulation if there's any way to make some formulation tweaks to increase exposure levels, how deep we'll have to go on that or what kind of alterations, I think it's too early to tell. But it's fair to say that we keep doing that in parallel with advancing the weekly regimen and it would be like a long-term life cycle management as we think about monthly. And in the past, we've discussed even potentially quarterly subcu regimen.

So I think there's a lot of potential franchise expansion down the road, but the weekly is the great first stuff for us. Anuj, Bill, anything to add?

Yes. I'd just echo what you're saying, Jason. And now that we've completed that cohort B3, we have a better idea of the drug levels we'll need to maintain a trough through the monthly dosing. So obviously, we're working with the University of Washington and Josh Schiffer to continue to refine the model, pharmacodynamic model. And with the results we have now and some additional formulation work, as Jason indicated, that we'll pursue next year, we'll continue to work towards that. But the first order of business is to pursue the weekly.

Our next question is from Evan Wang with Guggenheim Securities.

This is Evan Wang on for Vamil Divan at Guggenheim. Super encouraging data across both 5366 and 1179. Just two from us. I guess, first, I wanted to get a sense of next steps product advancement to Phase II for 5366, over 75 patients now from 5366 and 50 from 1179, do you feel like you have sufficient exposure in clinical data and the modeling kind of dynamics required determine the dose -- go-forward dose for Phase II with the three cohorts worth of data from each? And then second question is really stellar results from 1179. To us, it looks like there's flexibility to explore the dose relationship. It looks like you're doing that with a 10 mg just given the strong shedding in lesion reductions. I'm just curious with 2 strong programs now in 5366 and 1179 in both on the weekly right now. Can you talk about how you're thinking about the opportunity for clinical development for both programs, will it be similar? Or could there be an opportunity for kind of unique development?

Why don't I start the second program and then I'll kick it over to Anuj. So as far as the weekly, I think -- we had always talked about the baseline being -- moving 5 through 6 forward into Phase II. I think with this data, it does create an interesting dilemma for us, a very positive one to have do you take both forward in the 5 to 6x. And like you said, Evan, is there different kind of addressable patient populations or something you can do with that. So I think it's too early to say that, but you can assume that we are analyzing all efforts as far as Phase II programs are both of those molecules. And of course, with the partner we have, those discussions are ongoing with them as well. Anuj, I'll turn it over to you.

Yes. And thanks, Evan. This is Anuj. So I think the question of how we are looking at the data that we've collected so far for both programs for choosing doses and moving forward into Phase II, yes, it's a great point, and we think we are there with both compounds with the three cohorts of data. As you know, we're doing some PK/PD modeling with the University of Washington, Fred Hutchinson Cancer Research Center with Josh Schiffer, and that really helps us take these data and zero in on dose that we can move to Phase II. So we're pretty confident with the data we have in hand and again, finishing the cohort B3 for 1179 that we'll have the data we need to be able to choose those doses. And so we're really pushing forward to Phase II as fast as we can.

Got it. And maybe 1 follow-up. I guess, would it be kind of interchangeable as you're thinking about mid-2026 start between 5366 and 1179. Are there kind of considerations to be thinking about in terms of, I guess, choosing one or the other?

Yes. I think one of the major parts of our Phase II program is to do longer-term dosing. And so in order to do the longer-term dosing, we do need to complete all the chronic toxicology requirements, which have been completed for ABI-5366 and they are planned to be completed later on for ABI-1179. So I think the timing is going to be dictated more by the requirements to do the study we'd like to do with 5366 happening first.

Our next question comes from the line of Dennis Ding with Jefferies.

This is Georgia on for Dennis. Congratulations on the data. I had a question on 1179 and that it nearly eliminated shedding, but the lesion reduction was less compared to like 5366. I'm just wondering if you can help me understand the relationship between the lesion reduction and the shedding reductions and whether this reflects differences in like tissue penetration, immune-mediated lesion formation or something else?

Yes. So really, it's a good point. I think in general, we always knew that lesions are a bit more of a stochastic process in when they occur compared to shedding, which is why it was not the powered end point for the study. We know they track very well, but they're not necessarily always a one-to-one relationship. These are also patient reported lesions. And so it's not always the case that what gets listed as a lesion is truly a lesion or the duration of the lesion is all virologically -- is due to the virus. Now we do look at virologically confirmed lesions, and that's an important way of trying to get at what our lesions do to HSV-2 and which ones are not. That being said, those lesions are also, the resolution of them have to do with the immune response and other things that are not just the virus itself.

So I think when we started off with this program, we really just wanted to see the shedding primarily directionality on lesions, and we know they are related to one another. And I think in a longer-term study, the correlation will get even tighter. So right now, it's just a short duration study.

Our next question comes from Patrick Trucchio with H.C. Wainwright.

Congrats on the data. Several follow-up questions from us. The first one is, is there a specific criteria that would drive the decision to advance either ABI-1179 or ABI-5366. Secondly, do you view the near elimination of high-viral-load shedding as a surrogate for transmission reduction? How could that be incorporated into a Phase II? Or is that part of regulatory discussions? And then lastly, I was just wondering if the collaboration structure, if you can remind us if it differs economically or strategically, depending on whether 1179 or 5366 is advanced?

Thanks, Patrick. Why don't I start with the last one. So collaborative structure, the opt-in, there is no economic difference between the 2 assets that are treated identically as our programs. And then for the first question, thought process on 5366 versus 1179, I think the base case that I've said is we'll go forward 5366 as a weekly regimen, and that's scheduled to initiate by mid-2026. So that's ahead and like Anuj alluded to, we still have to do chronic tox on 1179. So we couldn't just pick one and start them both in mid-2026. That being said, certainly, we are speeding up things on 1179 to give the potential to bring that asset as well to 117, sorry, to bring that to Phase II as well.

So I think the scenario you could have is 5366 initiates mid-2026 and then depending on what the final cohorts in 1179 turn out, we may be trying to accelerate that to also bring out the Phase II, which would be a new thing that we hadn't previously contemplated.

And of course, to your last question, all this is subject to the overarching collaboration, right, and there's an opt-in structure. So certainly, that makes the decision process a little bit more complicated, but again, a good problem to have, I think, in our book. Anuj, do you want to take the second one?

Yes. It's a great question on how we look at the high viral load -- reduction high-viral-load shedding. So yes, this is correlated with reduced transmission. This will, in the end, require discussions with the regulators as to how we use this virological end point to inform the risk of transmission. And I think we have pretty good standing because of what the work that valacyclovir has done before, which has shown the reduction in transmission with treatment. And our goal in the Phase II program is to benchmark 5366 and 1179 versus valacyclovir. So we can really understand the impact on the virus in relation to high-viral-load shedding and shedding in general. And I think we would assume that if we were to do better than valacyclovir, on both of those metrics that it should result in a reduction in transmission as well. And like you said, that will require a discussion with the agencies at that point.

As I see no further questions in the queue, I will conclude the Q&A session and conference for today. Thank you all for participating. You may now disconnect.