Core Insights - Assembly Biosciences, Inc. (NASDAQ:ASMB) is highlighted as a top long-term biotechnology stock to consider for investment [1] - H.C. Wainwright has reaffirmed a Buy rating and a price target of $50 for Assembly Biosciences following promising interim data for ABI-5366, an oral treatment for recurrent genital herpes [2] Company Overview - Assembly Biosciences focuses on developing and commercializing small-molecule therapies for serious viral diseases, particularly chronic hepatitis B virus (HBV) and herpesviruses [2] Clinical Development - The interim data presented for ABI-5366 demonstrated strong antiviral activity, favorable tolerability, and a dosing profile that supports weekly or monthly administration [2] - These results are seen as a validation of Assembly's helicase-primase inhibitor platform, reducing the risk associated with advancing ABI-5366 into Phase 2 trials [2] - The company plans to initiate Phase 2 clinical studies by mid-2026, indicating ongoing progress in its antiviral pipeline [2]

Core Insights - The article highlights stocks reaching new 52-week highs, indicating market recognition of strong fundamentals and potential catalysts for growth [1][2]. Company Summaries Cogent Biosciences Inc. (COGT) - Cogent Biosciences plans to file its first New Drug Application for Bezuclastinib by the end of 2025, targeting non-advanced systemic mastocytosis [3]. - A phase III trial comparing Bezuclastinib with Sutent is ongoing, with results expected in the second half of 2025 [4]. - The stock reached a 52-week high of $16.99, up from $7.25 when last featured [5]. Assembly Biosciences Inc. (ASMB) - Assembly Biosciences is advancing four key development programs, with ABI-5366 expected to enter phase 2 studies in mid-2026 [6]. - Interim data for ABI-1179 is anticipated this fall, while ABI-6250 is in a phase 1a trial [7]. - The stock hit a 52-week high of $28, up from $14.53 when last featured [8]. Compass Therapeutics Inc. (CMPX) - Compass Therapeutics is conducting a phase 2/3 study of Tovecimig for advanced biliary tract cancer, with analyses of secondary endpoints expected in Q1 2026 [9][10]. - The stock reached a 52-week high of $4.39, up from $2.91 when last featured [11]. NewAmsterdam Pharma Company N.V. (NAMS) - NewAmsterdam Pharma is developing Obicetrapib as a cholesterol-lowering therapy, with positive data from the BROADWAY trial [12][13]. - The company has completed two additional phase III trials and submitted marketing applications to the EMA [16]. - The stock reached a 52-week high of $39.76, up from $21.56 when last featured [17]. Mineralys Therapeutics Inc. (MLYS) - Mineralys is developing Lorundrostat for uncontrolled hypertension, with a pivotal phase III trial achieving its primary endpoint [19]. - A phase II trial for overweight participants with OSA is ongoing, with topline results expected in 1H 2026 [20]. - The stock hit a 52-week high of $43.88, up from $10.34 when last featured [20]. Kymera Therapeutics Inc. (KYMR) - Kymera is set to report data from its phase I trial of KT-621 this quarter, with phase 2b studies planned for late 2025 and early 2026 [21][22]. - The stock reached a 52-week high of $60, up from $40 when last featured [22]. Insmed Inc. (INSM) - Insmed has two approved drugs and is conducting a phase 3 trial of Arikayce, with topline results expected in 1H 2026 [24][25]. - The stock hit a high of $166.54, up from $76.54 when last featured [26]. Adaptive Biotechnologies Corp. (ADPT) - Adaptive Biotechnologies expects MRD revenue between $190 million and $200 million for 2025, up from $145.5 million in 2024 [28][29]. - The stock reached a 52-week high of $15.94, up from $9.80 when last featured [29]. BridgeBio Pharma Inc. (BBIO) - BridgeBio has upcoming topline results from the FORTIFY and CALIBRATE studies expected in Fall 2025 [30]. - The stock reached a 3-year high of $56.24, up from $25.10 when last featured [31]. Tarsus Pharmaceuticals Inc. (TARS) - Tarsus reported strong sales for Xdemvy, with Q2 2025 sales of $102.7 million, compared to $40.8 million in Q2 2024 [32]. - The stock hit an all-time high of $70.15, up from $25.01 when last featured [34]. Palvella Therapeutics Inc. (PVLA) - Palvella's QTORIN is under development for various skin diseases, with a phase 2 trial expected to report data in mid-December 2025 [35][36]. - The stock reached a 52-week high of $76.76, up from $25 when last featured [36]. Merus N.V. (MRUS) - Merus agreed to be acquired by Genmab for $97 per share, with the deal expected to close in early Q1 2026 [37]. - The stock was at $39.71 when last featured [39]. Nephros Inc. (NEPH) - Nephros reported net revenue of $4.4 million for Q2 2025, marking its third consecutive quarter of profitability [40][41]. - The stock hit a 52-week high of $5.98, up from $2.93 when last featured [42].

Core Insights - Assembly Biosciences, Inc. is participating in two upcoming investor conferences to discuss its innovative therapeutics targeting serious viral diseases [1][2][3] Group 1: Upcoming Events - Anuj Gaggar, MD, PhD, the chief medical officer, will present a pre-recorded fireside chat at the H.C. Wainwright Liver Disease Virtual Conference on October 21, 2025, starting at 7 a.m. Eastern Time [2] - Jason Okazaki, CEO and president, along with Dr. Gaggar, will present during the Guggenheim 2nd Annual Healthcare Innovation Conference on November 12, 2025, at 11 a.m. Eastern Time [3] - Webcast registration for both events is available on Assembly Biosciences' website, with replays accessible after each event [3] Group 2: Company Overview - Assembly Biosciences is focused on developing small-molecule therapeutics aimed at serious viral diseases, particularly targeting herpesvirus, hepatitis B virus (HBV), and hepatitis delta virus (HDV) infections [4] - The company is led by a team experienced in virologic drug development, emphasizing its commitment to improving patient outcomes [4]

Core Insights - Assembly Biosciences, Inc. presented interim Phase 1b clinical data for its HSV helicase-primase inhibitor candidate ABI-5366 at the IUSTI Congress, highlighting its potential to improve treatment for recurrent genital herpes [1][2] Clinical Data Summary - The interim data showed significant antiviral activity, with a 94% reduction in HSV-2 shedding rate, a 98% decrease in high viral load shedding rate, and a 94% reduction in genital lesion rate in the 350 mg weekly dosing cohort compared to placebo [3][9] - ABI-5366 was well tolerated at both the 30 mg and 350 mg doses evaluated in the study [2][3] Future Development Plans - A monthly dosing regimen of ABI-5366 is currently under evaluation, and interim data from both ABI-5366 and ABI-1179 studies are expected to be shared later this fall [4][9] - The company plans to initiate Phase 2 clinical studies of ABI-5366 in mid-2026 [4] Collaboration and Licensing - Under a collaboration agreement with Gilead Sciences, Gilead has the option to obtain an exclusive license for further development and commercialization of the helicase-primase inhibitor program after reviewing the data package post-Phase 1b studies [6][7] Market Context - Recurrent genital herpes affects over four million people in the U.S. and several European countries, with current treatment options being limited and no new therapies approved in over two decades [8][10] - The current standard of care is nucleoside analogs, which are only partially effective in preventing recurrences and reducing transmission [10][11]

Core Insights - Four biotechnology stocks have surged into the top 10th percentile for momentum ranking, indicating strong technical strength and price action [1][2] Group 1: Momentum Ranking - Arrowhead Pharmaceuticals Inc. (ARWR), Assembly Biosciences Inc. (ASMB), Atara Biotherapeutics Inc. (ATRA), and Corcept Therapeutics Inc. (CORT) have shown significant momentum percentile increases, making them stand out in the competitive biotech sector [2][5] - Joining the top decile for momentum ranking means these stocks are outperforming 90% of all tracked stocks in terms of price appreciation and volatility-adjusted returns [5] Group 2: Individual Stock Performance - ARWR's momentum percentile increased from 89.87 to 93.79, with a week-on-week gain of 3.92 percentage points; the stock has risen by 66.92% year-to-date and 69.33% over the year [7] - ASMB moved from 87.58 to 93.13, posting a 5.55 percentage point increase; it is up 43.85% YTD and 62.95% over the year [7] - ATRA climbed from 88.24 to 92.76, translating to a weekly gain of 4.52 percentage points; the stock has declined 2.97% YTD but advanced 69.00% over the year [8] - CORT advanced from 88.05 to 90.50, achieving a week-on-week improvement of 2.45 percentage points; it has risen by 67.84% YTD and 81.22% over the year [8]

Core Insights - Assembly Biosciences (ASMB) shares increased by 9.8% to $24.46, following a significant trading volume, contrasting with a 16.4% decline over the past month [1][2] Company Overview - The recent stock price surge is linked to positive investor sentiment regarding Assembly Biosciences' innovative pipeline, which includes four candidates in early-stage studies targeting recurrent genital herpes, Hepatitis B, and Hepatitis D [2] Financial Expectations - The company is projected to report a quarterly loss of $0.50 per share, reflecting a year-over-year increase of 66.9%. Expected revenues are $10.2 million, marking a 49.1% rise from the same quarter last year [3] - The consensus EPS estimate for the upcoming quarter has remained stable over the last 30 days, indicating that stock price movements typically do not sustain without trends in earnings estimate revisions [4] Industry Context - Assembly Biosciences is categorized within the Zacks Medical - Generic Drugs industry, where Doctor Reddy's (RDY) also operates. RDY's stock closed 0.3% higher at $14.87, with a 2.8% return over the past month [4] - Doctor Reddy's has an unchanged consensus EPS estimate of $0.18 for its upcoming report, representing a 350% increase from the previous year [5]

Group 1 - Assembly Biosciences, Inc. (NASDAQ: ASMB) released results from its phase 1b study of ABI-5366, a long-acting helicase-primase inhibitor for treating recurrent genital herpes [2] - The study results are significant for the treatment of patients suffering from recurrent genital herpes, indicating potential advancements in the pharmaceutical sector [2] Group 2 - The Biotech Analysis Central service offers a comprehensive analysis of various pharmaceutical companies, including a library of over 600 articles and a model portfolio of small and mid-cap stocks [2]

Core Viewpoint - Assembly Biosciences, Inc. has announced a registered offering of common stock and warrants, aiming to raise capital for its innovative therapeutics targeting serious viral diseases [1][4]. Group 1: Offering Details - The offering consists of 5,591,840 shares of common stock and pre-funded warrants for 1,040,820 shares, with a combined price of $19.60 per share and accompanying warrants [1]. - Each pre-funded warrant has a nominal exercise price of $0.001 and is immediately exercisable, while Class A and Class B warrants have an exercise price of $21.60 and specific expiration conditions [1]. - The offering and a private placement with Gilead Sciences, Inc. are expected to close on August 11, 2025, contingent upon customary closing conditions [4]. Group 2: Investor Participation - The offering includes participation from both new and existing investors, such as Commodore Capital, Blackstone Multi-Asset Investing, and Farallon Capital Management [2]. - Gilead will purchase 2,295,920 shares in a private placement at the same price as the offering, which will not be registered under the Securities Act [3]. Group 3: Use of Proceeds - The net proceeds from the offering and private placement will be utilized for general corporate purposes [4]. Group 4: Company Overview - Assembly Biosciences is focused on developing small-molecule therapeutics aimed at serious viral diseases, including herpesvirus and hepatitis infections [7][8].

Core Insights - Assembly Biosciences, Inc. announced positive interim results from a Phase 1b study of ABI-5366, showing significant reductions in HSV-2 shedding and genital lesions in participants with recurrent genital herpes [1][4][21] Antiviral Activity - A 94% reduction in HSV-2 shedding rate was observed compared to placebo, exceeding the company's target of 80%-85% [2][12] - A 94% reduction in genital lesion rate was also noted, alongside a 98% reduction in high viral load shedding rate [2][12] Safety and Tolerability - ABI-5366 was well-tolerated at oral doses up to 350 mg weekly, with a favorable safety profile [3][13] - The proportion of participants reporting treatment-emergent adverse events was similar between ABI-5366 and placebo recipients [14] Clinical Development Plans - The company plans to move directly into Phase 2 clinical study preparation, expecting to initiate these studies in mid-2026 [4][3] - Ongoing cohorts are evaluating a monthly dosing regimen for ABI-5366 [4][18] Collaboration and Future Studies - Under a collaboration agreement with Gilead Sciences, Gilead has the option to opt in for exclusive licensing of the helicase-primase inhibitor program after reviewing data from the Phase 1b studies [5][6] - Interim data from another candidate, ABI-1179, is expected to be shared in the fall of this year [4]

Report Information [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Quarterly Report on Form 10-Q for Assembly Biosciences, Inc., filed for the quarterly period ended June 30, 2025 - **Filing Type**: Quarterly Report on Form 10-Q[1](index=1&type=chunk)[2](index=2&type=chunk) - **Period Ended**: June 30, 2025[2](index=2&type=chunk) Registrant Classification | Classification | Status | | :--------------- | :----- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☐ | - **Common Stock Outstanding** as of August 1, 2025: **7,672,261 shares**[4](index=4&type=chunk) PART I: FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of changes in stockholders' equity, and statements of cash flows, along with their accompanying notes, for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets provide a snapshot of the company's financial position, showing a decrease in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, primarily driven by reduced cash, cash equivalents, and marketable securities Condensed Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | | :-------------------------------- | :------------ | :---------------- | :-------------------- | | Cash and cash equivalents | $24,006 | $38,344 | $(14,338) | | Marketable securities | $50,974 | $73,735 | $(22,761) | | Total current assets | $77,467 | $115,503 | $(38,036) | | Total assets | $80,780 | $119,168 | $(38,388) | | Total current liabilities | $47,291 | $47,803 | $(512) | | Total liabilities | $62,680 | $85,809 | $(23,129) | | Total stockholders' equity | $18,100 | $33,359 | $(15,259) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a net loss for both the three and six months ended June 30, 2025, with collaboration revenue increasing year-over-year, while operating expenses remained relatively stable or slightly decreased for the three-month period Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Collaboration revenue from a related party | $9,626 | $8,533 | $19,045 | $14,318 | | Research and development expenses | $16,125 | $16,259 | $30,976 | $28,138 | | General and administrative expenses | $4,594 | $4,477 | $9,103 | $9,112 | | Loss from operations | $(11,093) | $(12,203) | $(21,034) | $(22,932) | | Net loss | $(10,198) | $(11,152) | $(19,016) | $(20,229) | | Net loss per share, basic and diluted | $(1.33) | $(1.98) | $(2.51) | $(3.64) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) The statements reflect changes in stockholders' equity, including the issuance of common stock under the ESPP and ATM equity offering program, stock-based compensation, and the impact of net losses, leading to a decrease in total stockholders' equity Key Changes in Stockholders' Equity (Six Months Ended June 30, 2025 vs. December 31, 2024) (in thousands) | Item | December 31, 2024 | June 30, 2025 | | :-------------------------------------- | :---------------- | :------------ | | Common Stock (Shares) | 7,457,240 | 7,672,249 | | Common Stock (Amount) | $7 | $8 | | Additional Paid-in Capital | $859,488 | $863,312 | | Accumulated Other Comprehensive Loss | $(211) | $(279) | | Accumulated Deficit | $(825,925) | $(844,941) | | Total Stockholders' Equity | $33,359 | $18,100 | - Issuance of common stock under ATM equity offering program: **161,645 shares**, net proceeds of **$1.9 million** (six months ended June 30, 2025)[17](index=17&type=chunk) - **Stock-based compensation expense**: **$1.546 million** for the six months ended June 30, 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a net decrease in cash and cash equivalents for the six months ended June 30, 2025, primarily due to significant cash used in operating activities, partially offset by cash provided by investing and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) (in thousands) | Activity | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Net cash used in operating activities | $(40,197) | $(35,466) | | Net cash provided by investing activities | $23,580 | $22,379 | | Net cash provided by financing activities | $2,279 | $12,454 | | Net decrease in cash and cash equivalents | $(14,338) | $(633) | | Cash and cash equivalents at end of period | $24,006 | $19,208 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential context and detailed information for the condensed consolidated financial statements, covering the company's business, accounting policies, related party transactions, fair value measurements, accrued expenses, equity activities, stock-based compensation, collaboration agreements, and segment reporting [Note 1 - Nature of Business](index=9&type=section&id=Note%201%20-%20Nature%20of%20Business) Assembly Biosciences, Inc. is a biotechnology company focused on developing innovative therapeutics for serious viral diseases. The company has incurred significant losses since inception and faces substantial doubt about its ability to continue as a going concern, relying on future funding and collaboration payments - **Company Pipeline**: Includes two helicase-primase inhibitors (HPIs) for recurrent genital herpes, an orally bioavailable hepatitis delta virus (HDV) entry inhibitor, a next-generation capsid assembly modulator (CAM) for hepatitis B virus (HBV), and a novel oral broad-spectrum non-nucleoside polymerase inhibitor (NNPI) for transplant-related herpesviruses[20](index=20&type=chunk) - **Liquidity and Going Concern**: As of June 30, 2025, cash, cash equivalents, and marketable securities totaled **$75.0 million**, which is not sufficient to fund operations beyond one year, leading to substantial doubt about the company's ability to continue as a going concern[22](index=22&type=chunk) - **Mitigation Plans**: Management plans to seek additional funding through public or private equity financings and potential payments from the Gilead Collaboration Agreement[23](index=23&type=chunk) [Note 2 - Summary of Significant Accounting Policies](index=10&type=section&id=Note%202%20-%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of presentation for the unaudited condensed consolidated financial statements, emphasizing compliance with U.S. GAAP for interim information and the use of estimates, particularly for revenue recognition and R&D accruals. It also addresses potential impacts from external conditions and the calculation of net loss per share - **Basis of Presentation**: Unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP for interim financial information and SEC rules[27](index=27&type=chunk) - **Use of Estimates**: Significant estimates include revenue recognition and research and development accruals for costs incurred but not yet invoiced[29](index=29&type=chunk) - **Net Loss per Share**: Basic and diluted net loss per share are the same due to antidilutive effects of potentially dilutive securities given the net loss[32](index=32&type=chunk) [Note 3 – Related Party](index=11&type=section&id=Note%203%20%E2%80%93%20Related%20Party) Gilead Sciences, Inc. is considered a related party due to its ownership of the company's common stock following the Gilead Equity Agreements. The company recognized collaboration revenue from Gilead under the collaboration agreement - **Gilead Sciences, Inc.** is a related party due to its ownership of the Company's common stock as of June 30, 2025[35](index=35&type=chunk) Collaboration Revenue from Gilead (in thousands) | Period | 2025 | 2024 | | :------------------------------- | :----- | :----- | | Three Months Ended June 30, | $9,626 | $8,533 | | Six Months Ended June 30, | $19,045 | $14,318 | - In July 2025, Gilead agreed to reimburse the Company up to **$1.5 million** for certain nonclinical study activities[37](index=37&type=chunk) [Note 4 – Fair Value Measurements and Investments in Marketable Securities](index=11&type=section&id=Note%204%20%E2%80%93%20Fair%20Value%20Measurements%20and%20Investments%20in%20Marketable%20Securities) The company values its financial instruments using a three-level hierarchy, with cash equivalents and marketable securities approximating fair value. Investments in marketable securities primarily consist of corporate debt securities, U.S. treasury securities, and commercial paper, showing a decrease in fair value from December 31, 2024, to June 30, 2025 - **Fair Value Hierarchy**: Uses Level 1 (quoted prices in active markets) and Level 2 (observable inputs) for valuing financial instruments[39](index=39&type=chunk)[44](index=44&type=chunk) Fair Value of Cash Equivalents and Marketable Securities (in thousands) | Item | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------------------- | :----------------------- | :--------------------------- | | Cash equivalents | $23,445 | $37,503 | | Short-term marketable securities | $50,974 | $73,735 | | Total assets measured at fair value | $74,419 | $111,238 | - Unrealized losses on marketable securities were not material and primarily due to interest rate fluctuations, with the company intending to hold them until maturity[41](index=41&type=chunk) [Note 5 – Other Accrued Expenses](index=14&type=section&id=Note%205%20%E2%80%93%20Other%20Accrued%20Expenses) Other accrued expenses primarily consist of accrued compensation and accrued professional fees, showing a significant decrease from December 31, 2024, to June 30, 2025 Other Accrued Expenses (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Accrued compensation | $3,043 | $6,478 | | Accrued professional fees and other | $364 | $384 | | Total accrued expenses | $3,407 | $6,862 | [Note 6 – Stockholders' Equity](index=14&type=section&id=Note%206%20%E2%80%93%20Stockholders'%20Equity) The company engaged in an at-the-market (ATM) equity offering program, selling 161,645 shares for $1.9 million net proceeds during the six months ended June 30, 2025. Warrants to purchase 814,000 shares of common stock remained outstanding with an exercise price of $17.00 per share - **ATM Offering**: Sold **161,645 shares** of common stock under the 2024 ATM program for net proceeds of **$1.9 million** during the six months ended June 30, 2025[47](index=47&type=chunk)[48](index=48&type=chunk) Outstanding Warrants to Purchase Common Stock | Issue Date | Expiration Date | Exercise Price per Share | June 30, 2025 | December 31, 2024 | | :--------- | :-------------- | :----------------------- | :------------ | :---------------- | | 6/16/2024 | 6/18/2029 | $17.00 | 634,500 | 634,500 | | 6/17/2024 | 6/18/2029 | $17.00 | 179,500 | 179,500 | | **Total** | | | **814,000** | **814,000** | - Warrants are equity classified and were not exercised during the three and six months ended June 30, 2025 and 2024[49](index=49&type=chunk)[50](index=50&type=chunk) [Note 7 – Stock-Based Compensation](index=16&type=section&id=Note%207%20%E2%80%93%20Stock-Based%20Compensation) Total stock-based compensation expense for the six months ended June 30, 2025, was $1.546 million. The company granted 225,000 performance stock units (PSUs) in June 2025, with no expense recognized yet as the clinical milestone for vesting is not probable Total Stock-Based Compensation Expense (in thousands) | Period | 2025 | 2024 | | :------------------------------- | :----- | :----- | | Three Months Ended June 30, | $834 | $833 | | Six Months Ended June 30, | $1,546 | $1,572 | - Granted **225,000 performance stock units (PSUs)** in June 2025 with a fair value of **$3.9 million**; no expense recognized as vesting is contingent on a clinical milestone not yet deemed probable[51](index=51&type=chunk) - **Unrecognized stock-based compensation**: **$7.5 million** as of June 30, 2025, to be recognized over a weighted average remaining amortization period of **1.6 years**[52](index=52&type=chunk) [Note 8 - Collaboration Agreement](index=17&type=section&id=Note%208%20-%20Collaboration%20Agreement) The Gilead Collaboration Agreement, amended in December 2024, involves Gilead licensing HPI and NNPI programs to the company and retaining opt-in rights for other pipeline programs. The company received a $10.0 million non-refundable payment for an accelerated development plan for ABI-6250, which is creditable towards future payments. The transaction price for remaining collaborative activities was $74.2 million as of June 30, 2025, recorded as deferred revenue - **Gilead Collaboration Agreement**: Gilead licensed HPI and NNPI programs to the Company and has opt-in rights for other pipeline programs, with opt-in fees ranging from **$45.0 million to $125.0 million** per program[53](index=53&type=chunk) - **ABI-6250 Development**: Received a **$10.0 million** non-refundable payment from Gilead to support an accelerated development plan for ABI-6250, creditable towards future collaboration payments[54](index=54&type=chunk) - **Milestones and Royalties**: Eligible for up to **$330.0 million** in potential regulatory and commercial milestones per program, plus high single-digit to high teens royalties, if Gilead exercises its opt-in rights[55](index=55&type=chunk) - **Deferred Revenue**: Transaction price for remaining collaborative activities was **$74.2 million** as of June 30, 2025, with **$40.9 million** short-term and **$13.0 million** long-term deferred revenue[61](index=61&type=chunk)[64](index=64&type=chunk) [Note 9 - Segment Reporting](index=19&type=section&id=Note%209%20-%20Segment%20Reporting) The company operates as a single operating segment focused on developing therapeutics for viral diseases. The chief operating decision maker (CODM) evaluates performance and allocates resources based on consolidated net loss - **Single Operating Segment**: The Company operates as one segment, focusing on innovative therapeutics for serious viral diseases[65](index=65&type=chunk) - **Performance Evaluation**: The CODM uses consolidated net loss to evaluate performance and make strategic decisions, not asset measures[65](index=65&type=chunk) Total Research and Development Expenses by Program (in thousands) | Program | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :---------------------- | :------------------------------- | :----------------------------- | | ABI-5366 | $3,048 | $4,728 | | ABI-1179 | $1,331 | $2,065 | | ABI-6250 | $1,458 | $3,903 | | ABI-4334 | $380 | $806 | | ABI-7423 | $898 | $1,650 | | Research and discovery | $1,873 | $3,649 | | Total external program expenses | $8,988 | $16,801 | | Employee and contractor-related expenses | $6,217 | $12,431 | | Facility and other expenses | $920 | $1,744 | | **Total research and development** | **$16,125** | **$30,976** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, detailing clinical program advancements, collaboration agreements, and an analysis of financial performance and liquidity, including the ongoing 'going concern' assessment [Overview](index=20&type=section&id=Overview) Assembly Biosciences is a biotechnology company focused on developing innovative therapeutics for serious viral diseases, with a pipeline including clinical-stage investigational therapies for recurrent genital herpes, HDV, and HBV, as well as a regulatory filing-enabling program for transplant-related herpesviruses - **Company Focus**: Developing innovative therapeutics targeting serious viral diseases[68](index=68&type=chunk) - **Key Pipeline Areas**: Helicase-primase inhibitors (HPIs) for recurrent genital herpes, an orally bioavailable hepatitis delta virus (HDV) entry inhibitor, a next-generation capsid assembly modulator (CAM) for hepatitis B virus (HBV), and a novel oral broad-spectrum non-nucleoside polymerase inhibitor (NNPI) for transplant-related herpesviruses[68](index=68&type=chunk) [Our Clinical Programs and Regulatory Filing-Enabling Program](index=20&type=section&id=Our%20Clinical%20Programs%20and%20Regulatory%20Filing-Enabling%20Program) Since early 2024, the company has initiated Phase 1a/b studies for two HPIs (ABI-5366 and ABI-1179) for recurrent genital herpes, a Phase 1a study for an HDV entry inhibitor (ABI-6250), and a Phase 1b study for an HBV CAM (ABI-4334). Additionally, ABI-7423, a broad-spectrum NNPI, is in regulatory filing-enabling preclinical studies - **Clinical Study Initiations** (since early 2024) include Phase 1a/b studies of ABI-5366 and ABI-1179 for recurrent genital herpes, a Phase 1a study of ABI-6250 for HDV, and a Phase 1b study of ABI-4334 for chronic HBV infection[69](index=69&type=chunk) - **Development Candidate**: ABI-7423, a broad-spectrum NNPI for transplant-associated herpesviruses, is in regulatory filing-enabling preclinical studies[70](index=70&type=chunk) [Recurrent Genital Herpes/HSV-1 and HSV-2](index=20&type=section&id=Recurrent%20Genital%20Herpes/HSV-1%20and%20HSV-2) Recurrent genital herpes, caused by HSV-1 or HSV-2, affects millions globally with limited effective long-term treatments. The company is developing novel, potent, long-acting helicase-primase inhibitors (HPIs), ABI-5366 and ABI-1179, which have shown favorable safety profiles and pharmacokinetic data supporting once-weekly or once-monthly oral dosing in Phase 1a studies, with Phase 1b studies ongoing - **Disease Burden**: Over **60 million people** live with HSV-2 infection, with frequent recurrences (**3-15 per year**) for many, and current nucleoside analog therapies are only partially effective[74](index=74&type=chunk)[75](index=75&type=chunk) - **ABI-5366 (HPI)**: Demonstrated low nanomolar potency against HSV-1 and HSV-2, favorable nonclinical safety, and a mean half-life of approximately **20 days** in Phase 1a, supporting once-weekly or once-monthly oral dosing. Interim Phase 1b data expected by fall 2025[76](index=76&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) - **ABI-1179 (HPI)**: Structurally-differentiated HPI with single-digit nanomolar potency, favorable nonclinical PK and safety profile, and a half-life of approximately **four days** in Phase 1a, supporting weekly dosing. Phase 1b study initiated in Q2 2025, with interim data expected by fall 2025[76](index=76&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [Our HBV and HDV Programs](index=23&type=section&id=Our%20HBV%20and%20HDV%20Programs) Chronic HBV infects 254 million people worldwide, leading to significant mortality and low cure rates with current therapies. HDV, a satellite virus of HBV, affects 12-72 million HBV-infected individuals, causing the most severe form of hepatitis with high progression to cirrhosis and limited approved treatments, particularly in the U.S - **HBV Prevalence**: **254 million people** worldwide chronically infected with HBV as of 2022, with **1.1 million deaths** in 2022[85](index=85&type=chunk) - **HDV Prevalence and Severity**: Affects **12-72 million** HBV-infected people, accounting for **18% of cirrhosis** and **20% of hepatocellular carcinoma** associated with HBV, and is considered the most severe form of hepatitis[87](index=87&type=chunk) - **Treatment Gaps**: Current HBV therapies (NrtIs) are lifelong with low cure rates; HDV has no approved treatments in the U.S. and limited options in Europe[86](index=86&type=chunk)[88](index=88&type=chunk) [HDV Entry Inhibitor](index=23&type=section&id=HDV%20Entry%20Inhibitor) ABI-6250 is a novel, orally bioavailable small molecule designed to inhibit HBV and HDV entry by targeting NTCP. Nonclinical studies showed low nanomolar potency and a favorable safety profile. Interim Phase 1a clinical data in healthy participants demonstrated a mean half-life of approximately four days, supporting once-daily oral dosing, with dose-dependent elevations of total serum bile acids (TBAs) indicating target engagement. Further studies are planned to explore factors associated with observed ALT elevations - **ABI-6250 Mechanism**: Novel, orally bioavailable small molecule inhibiting HBV and HDV entry by targeting NTCP, similar to the clinically-validated bulevirtide[89](index=89&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk) - **Nonclinical Profile**: Demonstrated low nanomolar potency against HBV/HDV genotypes, favorable selectivity for NTCP, good oral bioavailability, and a favorable nonclinical safety profile[92](index=92&type=chunk) - **Phase 1a Interim Data**: Mean half-life of approximately **four days**, supporting once-daily oral dosing. Dose-dependent elevations of total serum bile acids (TBAs) observed, indicating NTCP target engagement[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - **Safety Observations**: Generally well-tolerated with Grade 1 or 2 AEs. One Grade 2 ALT elevation observed at the highest single dose (**25 mg**), accompanied by off-target engagement of other liver transporters. Additional studies are planned to investigate these elevations[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Capsid Assembly Modulator](index=24&type=section&id=Capsid%20Assembly%20Modulator) ABI-4334 is a next-generation capsid assembly modulator (CAM) for chronic HBV infection, designed to disrupt viral replication and prevent cccDNA establishment. Nonclinical studies showed best-in-class potency and a favorable safety profile. Phase 1b clinical results demonstrated potent antiviral activity with mean HBV DNA declines of 2.9-3.2 log10 IU/mL over 28 days, supporting once-daily oral dosing and a favorable safety profile - **ABI-4334 Mechanism**: Next-generation CAM optimized to disrupt viral replication (MOA 1) and prevent cccDNA establishment and replenishment (MOA 2)[102](index=102&type=chunk) - **Nonclinical Profile**: Best-in-class profile with single-digit nanomolar potency against both MOA 1 and MOA 2, pan-genotypic activity, improved resistance profile, and favorable safety[103](index=103&type=chunk) - **Phase 1b Clinical Results**: Demonstrated a half-life supportive of once-daily oral dosing. Mean declines in HBV DNA of **2.9 log10 IU/mL (150 mg)** and **3.2 log10 IU/mL (400 mg)** over **28 days**. Well-tolerated with a favorable safety profile[104](index=104&type=chunk) [Transplant-Associated Herpesviruses](index=26&type=section&id=Transplant-Associated%20Herpesviruses) Transplant patients face a high risk of severe disease from reactivated herpesviruses (CMV, HSV-1, HSV-2, VZV, EBV) due to immunosuppression. Existing antivirals are partially efficacious, lack broad-spectrum activity, and carry side effect risks. The company nominated ABI-7423 as a development candidate for an oral, broad-spectrum non-nucleoside polymerase inhibitor (NNPI) to address these limitations - **High Risk in Transplant Patients**: Immunosuppressed transplant patients are at high risk of uncontrolled viral replication and severe disease from herpesviruses (CMV, HSV-1, HSV-2, VZV, EBV)[105](index=105&type=chunk) - **Limitations of Current Therapies**: Approved antivirals are partially efficacious, not broad-spectrum, and pose risks of side effects and drug-drug interactions[106](index=106&type=chunk) - **Development Candidate**: ABI-7423, a novel oral broad-spectrum NNPI, was nominated in December 2024 and is undergoing regulatory filing-enabling studies[107](index=107&type=chunk) [Research Programs](index=26&type=section&id=Research%20Programs) Beyond its current clinical and regulatory-enabling programs, the company's research team actively pursues proprietary research to discover and develop novel antivirals for serious viral diseases - **Ongoing Research**: The company's research team is actively engaged in proprietary research to discover and develop novel antivirals for serious viral diseases[108](index=108&type=chunk) [Collaboration and License Agreement](index=28&type=section&id=Collaboration%20and%20License%20Agreement) The company's collaboration with Gilead Sciences, Inc. involves Gilead licensing its HPI and NNPI programs to the company and retaining opt-in rights for other pipeline programs. The agreement includes potential opt-in fees ($45M-$125M per program), up to $330M in regulatory/commercial milestones, and high single-digit to high teens royalties. Gilead also made an upfront equity investment and purchased additional shares, and the agreement was amended to restructure timing and fees for ABI-6250's accelerated development - **Gilead Collaboration Agreement**: Gilead exclusively licensed its HPI and NNPI programs to the Company and holds opt-in rights for all other current and future pipeline programs[109](index=109&type=chunk) - **Financial Terms**: Opt-in fees range from **$45.0 million to $125.0 million** per program. The Company is eligible for up to **$330.0 million** in potential regulatory and commercial milestones and royalties from high single-digits to high teens[109](index=109&type=chunk)[110](index=110&type=chunk) - **Equity Agreements**: Gilead made an upfront equity investment of **$15.2 million** and purchased additional shares for **$20.1 million** in December 2024, maintaining approximately **29.9% ownership**[112](index=112&type=chunk) - **ABI-6250 Amendment**: The agreement was amended in December 2024 to restructure timing and fees for ABI-6250's accelerated development, including a **$10.0 million** non-refundable payment from Gilead[109](index=109&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) The company's results of operations show an increase in collaboration revenue for both the three and six months ended June 30, 2025, compared to the prior year. Research and development expenses saw a slight decrease for the three-month period but an increase for the six-month period, driven by pipeline advancements. General and administrative expenses remained consistent, while interest and other income decreased due to a smaller portfolio balance and lower interest rates [Comparison of the Three Months Ended June 30, 2025 and 2024](index=30&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) For the three months ended June 30, 2025, collaboration revenue increased by 13% to $9.6 million, while total research and development expenses slightly decreased by 1% to $16.1 million. General and administrative expenses remained consistent, and interest and other income decreased by 39% due to a smaller portfolio and lower interest rates Collaboration Revenue (Three Months Ended June 30) (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :------------------------------- | :----- | :----- | :------- | :------- | | Collaboration revenue from a related party | $9,626 | $8,533 | $1,093 | 13% | Research and Development Expenses (Three Months Ended June 30) (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :------------------------------- | :----- | :----- | :------- | :------- | | Total research and development expenses | $16,125 | $16,259 | $(134) | (1%) | Interest and Other Income, Net (Three Months Ended June 30) (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :------------------------------- | :----- | :----- | :------- | :------- | | Interest and other income, net | $895 | $1,457 | $(562) | (39%) | [Comparison of the Six Months Ended June 30, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) For the six months ended June 30, 2025, collaboration revenue increased by 33% to $19.0 million, driven by increased costs incurred under the Gilead Collaboration Agreement. Total research and development expenses rose by 10% to $31.0 million, primarily due to the advancement of the pipeline, particularly ABI-5366. Interest and other income decreased by 35% to $2.0 million Collaboration Revenue (Six Months Ended June 30) (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :------------------------------- | :----- | :----- | :------- | :------- | | Collaboration revenue from a related party | $19,045 | $14,318 | $4,727 | 33% | Research and Development Expenses (Six Months Ended June 30) (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :------------------------------- | :----- | :----- | :------- | :------- | | Total research and development expenses | $30,976 | $28,138 | $2,838 | 10% | | - Increase in ABI-5366 expenses | | | $2,592 | 121% | Interest and Other Income, Net (Six Months Ended June 30) (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :------------------------------- | :----- | :----- | :------- | :------- | | Interest and other income, net | $2,018 | $3,109 | $(1,091) | (35%) | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company has historically funded operations through equity financings and collaborations, incurring significant losses and accumulating a deficit of $844.9 million as of June 30, 2025. Existing cash, cash equivalents, and marketable securities of $75.0 million are not expected to fund operations beyond mid-2026, raising substantial doubt about its ability to continue as a going concern. Mitigation plans include seeking additional funding and relying on potential payments from the Gilead Collaboration Agreement [Sources of Liquidity](index=33&type=section&id=Sources%20of%20Liquidity) Since its incorporation in October 2005, the company has primarily funded its operations through $648.0 million in net proceeds from equity financings and $200.9 million from strategic collaborations - **Total funding since inception**: **$648.0 million** from equity financings and **$200.9 million** from strategic collaborations[126](index=126&type=chunk) [Cash Flows for the Six Months Ended June 30, 2025 and 2024](index=33&type=section&id=Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) The company experienced a net decrease in cash and cash equivalents of $14.3 million for the six months ended June 30, 2025, compared to a $0.6 million decrease in the prior year, driven by increased cash used in operating activities and lower financing proceeds Summary of Cash Flow Activities (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(40,197) | $(35,466) | | Net cash provided by investing activities | $23,580 | $22,379 | | Net cash provided by financing activities | $2,279 | $12,454 | | Net decrease in cash and cash equivalents | $(14,338) | $(633) | [Operating Activities](index=33&type=section&id=Operating%20Activities) Net cash used in operating activities increased to $40.2 million for the six months ended June 30, 2025, from $35.5 million in the prior year, primarily due to higher operating expenses from pipeline advancement and timing of vendor payments - **Net cash used in operating activities** increased by **$4.7 million** to **$40.2 million** for the six months ended June 30, 2025 (vs. **$35.5 million** in 2024)[128](index=128&type=chunk) - **Primary drivers**: Increases in operating expenses from clinical pipeline advancement and timing of vendor invoicing and payments[128](index=128&type=chunk) [Investing Activities](index=33&type=section&id=Investing%20Activities) Net cash provided by investing activities increased to $23.6 million for the six months ended June 30, 2025, from $22.4 million in the prior year, mainly due to higher proceeds from maturities of marketable securities used to fund increased operations - **Net cash provided by investing activities** increased by **$1.2 million** to **$23.6 million** for the six months ended June 30, 2025 (vs. **$22.4 million** in 2024)[129](index=129&type=chunk) - **Primary driver**: Higher proceeds from maturities of marketable securities, necessitated by increased overall expenses[129](index=129&type=chunk) [Financing Activities](index=33&type=section&id=Financing%20Activities) Net cash provided by financing activities decreased significantly to $2.3 million for the six months ended June 30, 2025, from $12.5 million in the prior year, primarily due to lower proceeds from at-the-market offerings compared to the registered direct offering and private placement in 2024 - **Net cash provided by financing activities** decreased by **$10.2 million** to **$2.3 million** for the six months ended June 30, 2025 (vs. **$12.5 million** in 2024)[130](index=130&type=chunk) - **Primary driver**: Lower proceeds from the sale of common stock under 'at-the-market' offerings in 2025 compared to a registered direct offering and private placement in 2024[130](index=130&type=chunk) [Funding Requirements and Going Concern](index=33&type=section&id=Funding%20Requirements%20and%20Going%20Concern) The company has an accumulated deficit of $844.9 million as of June 30, 2025, and expects continued substantial operating losses. Its existing cash and marketable securities of $75.0 million are projected to fund operations only into mid-2026, leading to substantial doubt about its ability to continue as a going concern. The company plans to seek additional funding through equity financings and potential payments from the Gilead Collaboration Agreement, but there is no assurance of availability on reasonable terms - **Accumulated Deficit**: **$844.9 million** as of June 30, 2025[131](index=131&type=chunk) - **Liquidity Horizon**: Existing cash, cash equivalents, and marketable securities (**$75.0 million**) are expected to fund operations only into the middle of 2026[132](index=132&type=chunk) - **Going Concern**: Substantial doubt exists about the company's ability to continue as a going concern beyond one year from the report's issuance date[133](index=133&type=chunk) - **Mitigation Strategy**: Seeking additional funding through public or private equity financings and potential payments from the Gilead Collaboration Agreement[134](index=134&type=chunk) [Critical Accounting Estimates](index=35&type=section&id=Critical%20Accounting%20Estimates) There have been no material changes to the company's critical accounting estimates from those previously disclosed in its 2024 Annual Report - No material changes to critical accounting estimates from the 2024 Annual Report[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company for the reported period - The company states that this item is not applicable[141](index=141&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and reported no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=36&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The company's management, including the principal executive officer and principal financial officer, evaluated the effectiveness of disclosure controls and procedures and concluded they were effective at the reasonable assurance level as of June 30, 2025 - **Disclosure controls and procedures** were evaluated and deemed effective at the reasonable assurance level as of June 30, 2025[142](index=142&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting - No material changes in internal control over financial reporting during the quarter ended June 30, 2025[143](index=143&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, though it may become involved in litigation in the ordinary course of business in the future - The company is not a party to any material legal proceedings[145](index=145&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially and adversely affect the company's business, financial condition, results of operations, or stock price. These risks are categorized into those related to the business itself, the regulatory and legal environment, intellectual property, and the company's common stock [Risks Related to Our Business](index=37&type=section&id=Risks%20Related%20to%20Our%20Business) Key business risks include substantial doubt about the company's ability to continue as a going concern, dependence on the future success of unapproved product candidates, the need for additional financing, and the critical reliance on the Gilead collaboration. Challenges in conducting expensive and time-consuming clinical studies, reliance on CROs, and manufacturing risks also pose significant threats - Substantial doubt about the ability to continue as a going concern due to recurring operating losses and negative cash flows[147](index=147&type=chunk)[148](index=148&type=chunk) - Dependence on future success of product candidates, with no approved products and uncertainty in obtaining regulatory approval or successful commercialization[149](index=149&type=chunk)[152](index=152&type=chunk) - Reliance on the Gilead collaboration is critical, but its success is uncertain, and termination could impact funding and development[155](index=155&type=chunk)[156](index=156&type=chunk) - Clinical studies are expensive, time-consuming, and may fail to demonstrate necessary safety and efficacy, leading to delays or abandonment of product candidates[157](index=157&type=chunk)[159](index=159&type=chunk)[162](index=162&type=chunk) - Reliance on CROs and third-party manufacturers increases risks related to control, performance, compliance, and supply chain disruptions[163](index=163&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk) [Risks Related to Our Regulatory and Legal Environment](index=46&type=section&id=Risks%20Related%20to%20Our%20Regulatory%20and%20Legal%20Environment) The company operates under extensive and costly government regulations, including those from the FDA and other health authorities, with unpredictable approval processes. Non-compliance with anti-kickback, false claims, and privacy laws (like EU GDPR and CCPA) could lead to significant penalties. Additionally, the company faces product liability claims and risks associated with hazardous materials - **Extensive Government Regulation**: Subject to rigorous domestic and foreign government regulation covering testing, manufacturing, clinical studies, labeling, and promotion, with non-compliance leading to severe penalties[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - **Unpredictable Regulatory Approval**: The FDA and foreign approval processes are lengthy, time-consuming, and inherently unpredictable, with no assurance of obtaining necessary approvals[194](index=194&type=chunk)[197](index=197&type=chunk) - **Healthcare Fraud and Abuse Laws**: Subject to federal and state anti-kickback, false claims, and physician payment transparency laws, as well as health information privacy laws (e.g., EU GDPR, CCPA), with potential for criminal sanctions and civil penalties for non-compliance[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - **Product Liability Claims**: Exposed to the risk of costly product liability claims inherent in drug development, with potential for liabilities exceeding total assets[204](index=204&type=chunk) - **Hazardous Materials Liability**: Risk of accidental injury or contamination from hazardous materials and chemicals used in R&D, potentially leading to liability and substantial compliance costs[205](index=205&type=chunk) [Risks Related to Our Intellectual Property](index=52&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success relies heavily on protecting its intellectual property (IP), including patents and trade secrets. There are significant risks that patent applications may not result in issued patents, or that granted patents may be challenged, narrowed, or circumvented. The high cost of global patent maintenance and potential infringement of third-party IP also pose substantial threats to product development and commercialization - **IP Protection is Crucial**: Success depends on obtaining and maintaining patent protection and preserving trade secrets for products, methods, and technologies[209](index=209&type=chunk) - **Patent Risks**: Patent prosecution is expensive and time-consuming, with no assurance of securing broad patent rights. Issued patents may be challenged, narrowed, invalidated, or circumvented by competitors[210](index=210&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) - **Trade Secret Risks**: Reliance on trade secret protection and confidentiality agreements, but unauthorized disclosure or independent development by competitors remains a risk[215](index=215&type=chunk)[216](index=216&type=chunk) - **Infringement by Others**: Litigation related to IP is expensive and may result in patents being deemed invalid or non-infringed, allowing competitors to use discoveries[217](index=217&type=chunk) - **Infringement of Others' IP**: Risk of infringing third-party patents, potentially leading to development delays, manufacturing halts, substantial costs, and monetary damages[218](index=218&type=chunk)[219](index=219&type=chunk) [Risks Related to Our Common Stock](index=56&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The price of the company's common stock has historically been, and is expected to remain, highly volatile due to various factors, including clinical study results and capital availability. Additionally, the company's amended and restated bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder actions, which could limit stockholders' ability to choose a favorable judicial forum - **Stock Price Volatility**: The price of common stock has fluctuated significantly and is expected to remain volatile due to factors like clinical study progress, regulatory approvals, and capital availability[223](index=223&type=chunk) - **Exclusive Forum Provision**: Amended bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain stockholder actions, potentially limiting stockholders' choice of judicial forum[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds for the period - No unregistered sales of equity securities or use of proceeds to report[226](index=226&type=chunk) [Item 3. Defaults Upon Senior Securities](index=57&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities for the period - No defaults upon senior securities to report[227](index=227&type=chunk) [Item 4. Mine Safety Disclosures](index=57&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company states that this item is not applicable[228](index=228&type=chunk) [Item 5. Other Information](index=57&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - No other information to report[229](index=229&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report, including amendments to stock incentive plans, certifications (e.g., Sarbanes-Oxley Act), and Inline XBRL documents - **Exhibits** include amendments to the 2018 Stock Incentive Plan and Employee Stock Purchase Plan, certifications under the Sarbanes-Oxley Act, and Inline XBRL documents[231](index=231&type=chunk) SIGNATURES [Officer Signatures](index=59&type=section&id=Officer%20Signatures) The report is signed by Jason A. Okazaki, Vice President, Finance (Principal Financial Officer and Principal Accounting Officer), and Jeanette M. Bjorkquist, Chief Executive Officer and President (Principal Executive Officer), on August 6, 2025 - Signed by **Jason A. Okazaki** (Vice President, Finance) and **Jeanette M. Bjorkquist** (CEO and President) on August 6, 2025[235](index=235&type=chunk)