Assembly Bio stock gains after exercising Gilead profit option

Assembly Biosciences Inc (NASDAQ:ASMB) saw its shares climb 4.9% in after-hours trading on Tuesday after the company disclosed it had exercised an option to take on a 40% share of U.S. development expenses and profits for its herpes simplex virus helicase-primase (HSV HPI) program, which is being developed under a collaboration with Gilead Sciences, Inc.

The move follows Assembly Bio's review of Gilead's full development plan and budget for the program, covering both GS-1179 and GS-5366. Per the collaboration terms, Gilead remains solely responsible for the continued clinical development and commercialization of the HSV HPI program.

Assembly Bio is still entitled to receive up to $280 million in regulatory and commercial milestones, along with tiered royalties on net sales outside the U.S. ranging from the high single digits to low teens. Its participation in the U.S. profit share is subject to opt-out and conversion rights held by either party, which could lead to a shift to as much as $330 million in regulatory and commercial milestones and tiered royalties on net sales spanning the high single digits to low teens.

According to the development plan, GS-1179 is slated to move into a Phase 2 clinical trial in participants with recurrent genital herpes by the end of 2026, and could also be assessed as part of a combination approach with HIV pre-exposure prophylaxis.

Assembly Bio is set to receive a $75 million option continuation payment from Gilead in Q4 2026, marking the third anniversary of the collaboration agreement. The company maintains its expectation that existing cash, cash equivalents, and marketable securities will be sufficient to fund operations through 2029.

GS-1179, previously known as ABI-1179, is an investigational helicase-primase inhibitor intended for HSV infections. Gilead chose the compound for further development based on Phase 1b data and its potential to enable once-weekly oral administration.

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