Clinical Development - The biopharmaceutical company is advancing clinical candidates targeting chronic hepatitis B virus (HBV) and hepatitis delta virus (HDV), with a focus on improving patient outcomes and developing curative therapies[217]. - The company has paused the development of its first-generation core inhibitor, VBR, due to insufficient efficacy data and is now prioritizing next-generation core inhibitors, ABI-H3733 and ABI-4334[218][236]. - In the Phase 1b trial of ABI-H3733, six of eight patients in the 50 mg cohort achieved HBV DNA levels below the lower limit of quantification (<LLOQ) within 21 days, with a mean decline of approximately 3.1 logs[233]. - ABI-H4334 has demonstrated a best-in-class preclinical profile with single-digit nanomolar potency against both the production of new virus and the formation of cccDNA[239]. - The company initiated a Phase 1a clinical study of ABI-H4334 in October 2022, with interim data showing mild to moderate treatment-emergent adverse events and no significant ECG abnormalities reported[240]. - The company aims to develop oral small molecule entry inhibitors for HDV, which currently relies on off-label treatments that require complex administration[222]. - The strategic focus includes advancing research activities on HBV/HDV entry inhibitors and long-acting HSV-2 helicase inhibitors targeting high-recurrence genital herpes[218]. - The company announced a research program for a novel oral small molecule entry inhibitor targeting HBV and HDV, aiming to nominate a product candidate for development in 2023[242]. - The investigational IFNAR agonist program aims to selectively activate the IFN-α pathway in the liver, improving tolerability compared to existing subcutaneous therapies[243]. - The company has identified an opportunity to develop an oral pan-herpes NNPI for transplant-associated herpesvirus infections, simplifying treatment for patients[250]. - The company’s herpesvirus programs target high-recurrence genital herpes and transplant-associated herpesviruses, addressing significant unmet medical needs[246]. Financial Performance - As of December 31, 2022, the company reported an accumulated deficit of $724.5 million, with expectations of continued losses as product candidates are developed[252]. - The company has had no revenue from product sales since inception and has funded operations primarily through debt and equity financings[251]. - Collaboration revenue for the year ended December 31, 2022 was $0, a decrease of 100% compared to $6.3 million in 2021, which was recognized upon discontinuing development of product 2158[273]. - Research and development expenses increased to $70.0 million in 2022 from $68.5 million in 2021, reflecting a $1.5 million increase driven by higher employee and contractor-related expenses[276]. - General and administrative expenses decreased by 16% to $24.1 million in 2022 from $28.8 million in 2021, primarily due to reductions in professional fees and stock-based compensation[278]. - The impairment of goodwill and indefinite-lived intangible assets was $0 in 2022, compared to $41.6 million in 2021, reflecting a significant reduction in impairment charges[279]. - Interest and other income increased by 238% to $1.0 million in 2022 from $0.3 million in 2021, mainly due to higher interest income from marketable securities[280]. - The company raised an aggregate of $605.0 million in net proceeds from public offerings and private placements from inception to December 31, 2022[284]. - Future operating expenses are expected to decrease due to cost savings from a strategic reorganization plan implemented in July 2022, but substantial additional funding will still be required[285]. - The company has no FDA-approved products and has generated operating losses since its incorporation in October 2005, relying on additional financings to achieve business objectives[289]. Operational Changes - The company implemented a strategic restructuring plan in July 2022, resulting in a workforce reduction of 30 employees, leaving approximately 70 employees[218]. - Contractual obligations include operating lease obligations totaling $3.5 million as of December 31, 2022, with $3.4 million being short-term[286]. - Net cash used in operating activities was $84.5 million for the year ended December 31, 2022, primarily due to a net loss of $93.1 million[294]. - Net cash provided by investing activities for the year ended December 31, 2022 was $90.6 million, mainly from proceeds of $89.2 million from sales and maturities of marketable securities[296]. - Net cash provided by financing activities for the year ended December 31, 2022 was $0.6 million, resulting from the sale of 300,827 shares of common stock[297]. - The company reported a net cash used in operating activities of $93.4 million for the year ended December 31, 2021, due to a net loss of $129.9 million[294]. - The company had a net cash provided by investing activities of $26.5 million for the year ended December 31, 2021[296]. - The company expects to finance cash needs through equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements[290]. - If additional funds are not raised, the company may need to delay or terminate product development efforts[291]. - The company does not have any committed external source of funds, which may lead to dilution of stockholder ownership if additional capital is raised[290]. Asset Impairment - The company recognized a goodwill impairment charge of $12.6 million in 2021 due to a decline in market capitalization and unfavorable clinical trial results[263]. - The indefinite-lived intangible asset related to in-process research and development was fully impaired, reflecting the challenges in advancing certain projects[266]. - As of December 31, 2022, the company had an accumulated deficit of $724.5 million primarily due to research and development and general administrative expenses[272]. Internal Controls - The company’s internal control over financial reporting was deemed effective as of December 31, 2022[300].

Financial Performance - Total assets decreased to $248.973 million as of September 30, 2021, down from $283.254 million at December 31, 2020, representing a decline of approximately 12.1%[18] - Collaboration revenue for the three months ended September 30, 2021, was $6.254 million, a significant decrease of 81.9% compared to $34.611 million for the same period in 2020[20] - Total operating expenses for the three months ended September 30, 2021, were $25.129 million, down 34.9% from $38.630 million in the same period of 2020[20] - The net loss for the three months ended September 30, 2021, was $18.803 million, compared to a net loss of $3.349 million for the same period in 2020, indicating a substantial increase in losses[20] - The company reported a comprehensive loss of $18.818 million for the three months ended September 30, 2021, compared to a comprehensive loss of $3.611 million for the same period in 2020[20] - The net loss for the nine months ended September 30, 2021, was $69,598, compared to a net loss of $3,349 for the same period in 2020[29][27] - The company has not generated any revenue from product sales to date and has incurred losses since inception[34] - The company expects to continue incurring substantial losses for the next several years as it advances its product development efforts[34] - As of September 30, 2021, the company had an accumulated deficit of $571.2 million, with expectations of continued losses as product candidates are developed[149] Cash and Liquidity - Cash and cash equivalents increased to $70.760 million as of September 30, 2021, from $59.444 million at the beginning of the period, reflecting a net increase of $11.316 million[23] - The company experienced a net cash used in operating activities of $74.034 million for the nine months ended September 30, 2021, compared to $37.688 million for the same period in 2020, indicating a significant increase in cash outflows[23] - The company has sufficient funds to meet its operating requirements for at least the next twelve months[34] - The company expects existing cash, cash equivalents, and marketable securities to fund operating expenses for at least the next twelve months[178] - The company has raised an aggregate of $602.0 million in net proceeds through equity financings and $90.0 million through strategic collaborations as of September 30, 2021[170] Research and Development - Research and development expenses for the nine months ended September 30, 2021, totaled $53.777 million, a decrease of 26.7% from $73.314 million for the same period in 2020[20] - The company is focused on developing oral therapeutic candidates for the treatment of chronic hepatitis B virus (HBV) infection[32] - The company has discovered several novel core inhibitors targeting HBV replication[33] - The Phase 2 studies for Vebicorvir (VBR) showed greater viral suppression of HBV DNA and pgRNA when combined with NrtI therapy compared to NrtI alone[135] - The company plans to initiate a Phase 1b study for ABI-H3733 in patients with chronic HBV infection in 2022, following favorable safety and pharmacokinetics results from Phase 1a[140] - The company is conducting multi-drug combination studies to explore the efficacy of combining core inhibitors with NrtIs and other compounds[142] - The company wound down its Microbiome program in January 2021 to focus on developing therapies for chronic HBV infection[133] Collaboration and Revenue - The Company recognized $6.3 million as collaboration revenue for the ABI-H2158 License during the three months ended September 30, 2021[110] - The Company received an upfront cash payment of $40.0 million from BeiGene for the delivery of exclusive licenses to develop and commercialize certain product candidates[103] - The Company is eligible to receive up to approximately $500.0 million in cash milestone payments from BeiGene, including up to $113.8 million for development and regulatory milestones[103] - Collaboration revenue for Q3 2021 was $6.25 million, a decrease of 82% from $34.61 million in Q3 2020, primarily due to the discontinuation of development for ABI-H2158[155] - Collaboration revenue for the nine months ended September 30, 2021 was $6.3 million, a significant decline of 92% compared to $78.1 million for the same period in 2020[162] Operating Expenses - Total liabilities decreased to $24.328 million as of September 30, 2021, down from $42.676 million at December 31, 2020, representing a decline of approximately 43%[18] - General and administrative expenses for Q3 2021 were $6.66 million, a decrease of 43% from $11.69 million in Q3 2020, mainly due to reduced salaries and consulting fees[159] - General and administrative expenses for the nine months ended September 30, 2021 were $22.3 million, a decrease of 25% from $29.9 million in the same period in 2020[168] - The Company’s total lease cost for the three months ended September 30, 2021, was $1.208 million, compared to $1.674 million for the same period in 2020[127] Market and Regulatory Environment - The impact of the COVID-19 pandemic on the company's financial performance remains uncertain[44] - The COVID-19 pandemic has adversely affected clinical studies, potentially delaying patient enrollment and compliance[192] - The company may face significant delays in clinical studies due to various factors, including regulatory agreements and patient recruitment challenges[203] - The results of nonclinical studies may not predict clinical outcomes, leading to potential failures in demonstrating safety and efficacy[200] Stock and Equity - The weighted average common shares outstanding for the three months ended September 30, 2021, were 45,569,276, an increase from 35,506,042 shares for the same period in 2020[20] - The company issued 10,399,548 common shares under the at-the-market (ATM) equity offering program, net of issuance costs, raising $50,207[29] - The weighted-average grant-date fair value of options granted was $3.08 for the nine months ended September 30, 2021, compared to $11.01 for the same period in 2020[82] - As of September 30, 2021, the total number of nonvested RSUs increased to 1,138,188, with a weighted average fair value per RSU grant price of $17.03[86] Future Outlook - The company is not currently profitable and anticipates continued substantial operating and capital expenditures to advance product candidates[198] - Future capital requirements will depend on various factors, including ongoing drug discovery and clinical studies, as well as the ability to establish collaborations on favorable terms[178] - The company may need additional financing to complete product development and fund future activities[199]

Financial Performance - Collaboration revenue for the three months ended June 30, 2021, was $0, compared to $39.4 million for the same period in 2020, representing a decrease of 100%[22] - The net loss for the six months ended June 30, 2021, was $50.8 million, compared to a net loss of $19.4 million for the same period in 2020, indicating an increase in losses of approximately 161%[24] - The company reported a loss per share of $0.55 for the six months ended June 30, 2021, compared to a loss per share of $0.55 for the same period in 2020[25] - For the three months ended June 30, 2021, the company reported a net loss of $23.6 million, compared to a net income of $7.3 million for the same period in 2020, resulting in a basic net loss per share of $(0.55) compared to $0.21 in 2020[54] - The company reported a net loss of $50.795 million for the six months ended June 30, 2021[33] Operating Expenses - Total operating expenses for the three months ended June 30, 2021, were $23.7 million, down from $32.8 million in the same period of 2020, a reduction of approximately 28%[23] - Research and development expenses for the six months ended June 30, 2021, were $35.3 million, down from $46.4 million in the same period of 2020, a decrease of approximately 24%[23] - General and administrative expenses for the six months ended June 30, 2021, were $15.6 million, down from $18.2 million in the same period of 2020, a decrease of approximately 14%[23] - Stock-based compensation expense for the three months ended June 30, 2021, was $1.986 million, a decrease from $7.134 million in the same period of 2020, representing a reduction of approximately 72.1%[102] - General and administrative expenses decreased to $15.6 million for the six months ended June 30, 2021, down from $18.2 million in the same period of 2020, with a notable reduction in stock-based compensation expenses[172] Cash and Assets - Cash and cash equivalents at the end of the period on June 30, 2021, were $59.5 million, slightly up from $59.4 million at the beginning of the period[27] - Total assets decreased to $262.1 million as of June 30, 2021, from $283.3 million as of December 31, 2020, a decline of approximately 7.5%[19] - The company had total cash equivalents and investments of $191.6 million as of June 30, 2021, which includes $52.1 million in cash equivalents and $139.6 million in short-term investments[63] - Total cash equivalents as of June 30, 2021, amounted to $52.081 million, an increase from $47.553 million as of December 31, 2020, representing a growth of 5.4%[68] - Total short-term investments as of June 30, 2021, were $139.560 million, down from $156.969 million as of December 31, 2020, indicating a decrease of 11.1%[68] Liabilities and Equity - Total liabilities decreased to $30.3 million as of June 30, 2021, from $42.7 million as of December 31, 2020, a reduction of approximately 29%[19] - As of June 30, 2021, total stockholders' equity was $231.794 million, with an accumulated deficit of $552.368 million[30] - The company has not generated any revenue from product sales to date and has incurred losses since inception[38] - The company expects to continue incurring substantial losses for the next several years as it advances its product development efforts[38] Funding and Capital - The company has sufficient funds to meet its operating requirements for at least the next twelve months[38] - The company has raised an aggregate of $592.0 million in net proceeds through equity financings and $90.0 million through strategic collaborations as of June 30, 2021[173] - The company expects to need substantial additional funding to continue operations and may be forced to delay or reduce research and development programs if unable to raise capital[181] - The company does not have any committed external source of funds and may face dilution of stockholder ownership if additional capital is raised through equity offerings[185] Research and Development - The company is focused on developing oral therapeutic candidates for the treatment of chronic hepatitis B virus (HBV) infection[36] - The company has discovered several novel core inhibitors targeting HBV, aiming for finite and curative therapies[37] - The HBV Cure program expenses increased by 15% to $36.3 million for the first half of 2021, compared to $31.6 million in the same period of 2020[168] - The company is conducting multi-drug combination studies to enhance the efficacy of its core inhibitors, with two ongoing triple combination studies initiated in Q1 2021[149] - The Company expects interim data from the Phase 2 clinical study of ABI-H2158 in the second half of 2021, focusing on safety and viral biomarkers[145] Collaboration Agreements - The Company received an upfront cash payment of $40.0 million from BeiGene for the delivery of exclusive licenses to develop and commercialize certain product candidates[110] - The Company is eligible to receive up to approximately $500.0 million in cash milestone payments from BeiGene, including up to $113.8 million for development and regulatory milestones and up to $385.0 million in net sales milestones[110] - The Company entered into a Collaboration Agreement with Door Pharmaceuticals, involving an upfront payment of $1.8 million and potential success-based milestones up to $35 million[128] - The Company wound down its Microbiome program in January 2021, terminating the License and Collaboration Agreement with Therabiome[127] Market and Operational Risks - The impact of the COVID-19 pandemic on the company's financial performance remains uncertain, with potential adverse effects on operations and strategy[48] - The COVID-19 pandemic may adversely affect the company's research and development activities, including delays in clinical studies[198] - Factors that may delay the commencement and completion of clinical studies include regulatory agreement delays, patient recruitment issues, and manufacturing challenges[209] - Nonclinical and clinical studies required for product candidates are expensive and time-consuming, with potential failures in demonstrating safety and efficacy necessary for product approval[206]

1 Corporate Presentation FEBRUARY 2021 ©2020 ASSEMBLY BIOSCIENCES, INC. Cautionary Note Regarding Forward-Looking Statements The information in this presentation contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to materially differ. These risks and uncertainties include: Assembly Bio's ability to initiate and complete clinical studies involving its HBV therapeutic product candidates, including studies contemplated by Assembly Bio's clini ...