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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________to___________.

 

Commission file number: 001-35005

 

ASSEMBLY BIOSCIENCES, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

20-8729264

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

 

 

331 Oyster Point Blvd., Fourth Floor

 

South San Francisco, California

94080

(Address of principal executive offices)

(zip code)

 

(833) 509-4583

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001

ASMB

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes         No       

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes            No       

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

 

Accelerated Filer

Non-accelerated Filer

 

Smaller Reporting Company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes       No   

 

As of August 4, 2022, there were 48,436,880 shares of the registrant’s common stock outstanding.

 

 


 

Index

 

 

 

Page

Number

 

 

 

PART I:

FINANCIAL INFORMATION

2

 

 

 

Item 1.

Financial Statements

2

 

 

 

 

Condensed Consolidated Balance Sheets at June 30, 2022 (unaudited) and December 31, 2021

2

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited)

6

 

 

 

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

7

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

26

 

 

 

Item 4.

Controls and Procedures

26

 

 

 

PART II:

OTHER INFORMATION

27

 

 

 

Item 1.

Legal Proceedings

27

 

 

 

Item 1A.

Risk Factors

27

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

 

 

 

Item 3.

Defaults Upon Senior Securities

41

 

 

 

Item 4.

Mine Safety Disclosures

41

 

 

 

Item 5.

Other Information

41

 

 

 

Item 6.

Exhibits

42

 

 

SIGNATURES

43

 

 

 


 

References to Assembly Biosciences, Inc.

Throughout this Quarterly Report on Form 10-Q, the “Company,” “Assembly,” “we,” “us,” and “our,” except where the context requires otherwise, refer to Assembly Biosciences, Inc. and its consolidated subsidiaries, and “our board of directors” or “the Board” refers to the board of directors of Assembly Biosciences, Inc.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” that are subject to certain risks and uncertainties, including, without limitation, those set forth in Part I, Item 1A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchanges Commission (SEC) on March 11, 2022 (2021 Annual Report) and Part II, Item 1A of this Quarterly Report on Form 10-Q under the heading “Risk Factors,” that could cause actual results to materially differ. Such risks and uncertainties include, among other things:

 

our ability to successfully execute our strategic plan announced on July 20, 2022 to (1) discontinue further development of our first-generation core inhibitor, vebicorvir; (2) advance our next generation core inhibitors, ABI-H3733 and ABI-4334, in clinical studies; (3) prioritize additional research activities, including a small molecule hepatitis B virus/hepatitis delta virus entry inhibitor, small molecule interferon-α receptor agonist and two additional undisclosed viral targets; and (4) reduce the size of our organization to align with the foregoing;

 

our ability to initiate and complete clinical trials involving our therapeutic product candidates, including studies contemplated by our clinical collaboration agreements, in the currently anticipated timeframes;

 

safety and efficacy data from clinical studies may not warrant further development of our product candidates;

 

clinical and nonclinical data presented at conferences may not differentiate our product candidates from other companies’ candidates;

 

results of nonclinical studies may not be representative of disease behavior in a clinical setting and may not be predictive of the outcomes of clinical studies;

 

our ability to maintain financial resources necessary to continue our clinical studies and fund business operations;

 

continued development and commercialization of our hepatitis B virus (HBV) product candidates, if successful, in the China territory will be dependent on, and subject to, our collaboration agreement governing our HBV-related activity in the China territory; and

 

any impact that the COVID-19 pandemic may have on our business and operations, including initiation, enrollment and continuation of our clinical studies or timing of discussions with regulatory authorities.

You are urged to consider statements that include the words may, will, would, could, should, might, believes, hopes, estimates, projects, potential, expects, plans, anticipates, intends, continues, forecast, designed, goal or the negative of those words or other comparable words to be uncertain and forward-looking. In particular, forward-looking statements include, but are not limited to, statements regarding the timing of commencement of future clinical studies involving our therapeutic product candidates; our ability to successfully complete, and receive favorable results in, clinical trials for our product candidates; and the expected impact of the COVID-19 pandemic on our business and operations. We intend such forward-looking statements to be covered by the safe harbor provisions contained in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Except as required by law, we assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

1


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands except for share amounts and par value)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

43,063

 

 

$

45,627

 

Marketable securities - short-term

 

 

73,626

 

 

 

101,000

 

Accounts receivable from collaborations

 

 

523

 

 

 

336

 

Prepaid expenses and other current assets

 

 

7,082

 

 

 

7,241

 

Total current assets

 

 

124,294

 

 

 

154,204

 

 

 

 

 

 

 

 

 

 

Marketable securities - long-term

 

 

11,908

 

 

 

27,972

 

Property and equipment, net

 

 

899

 

 

 

1,139

 

Operating lease right-of-use (ROU) assets

 

 

4,711

 

 

 

6,042

 

Other assets

 

 

1,635

 

 

 

1,703

 

Total assets

 

$

143,447

 

 

$

191,060

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,454

 

 

$

2,659

 

Accrued research and development expenses

 

 

4,446

 

 

 

3,400

 

Other accrued expenses

 

 

4,750

 

 

 

6,863

 

Operating lease liabilities - short-term

 

 

3,311

 

 

 

3,151

 

Total current liabilities

 

 

14,961

 

 

 

16,073

 

 

 

 

 

 

 

 

 

 

Deferred revenue

 

 

2,733

 

 

 

2,733

 

Operating lease liabilities - long-term

 

 

1,773

 

 

 

3,325

 

Total liabilities

 

 

19,467

 

 

 

22,131

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding

 

 

 

 

 

 

Common stock, $0.001 par value; 150,000,000 and 100,000,000 shares authorized as of June 30, 2022 and December 31, 2021, respectively; 48,362,736 and 48,120,437 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

803,910

 

 

 

800,728

 

Accumulated other comprehensive loss

 

 

(998

)

 

 

(419

)

Accumulated deficit

 

 

(678,980

)

 

 

(631,428

)

Total stockholders' equity

 

 

123,980

 

 

 

168,929

 

Total liabilities and stockholders' equity

 

$

143,447

 

 

$

191,060

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

2


ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands except for share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

17,792

 

 

$

16,749

 

 

$

34,997

 

 

$

35,303

 

General and administrative

 

 

6,781

 

 

 

6,917

 

 

 

12,738

 

 

 

15,621

 

Total operating expenses

 

 

24,573

 

 

 

23,666

 

 

 

47,735

 

 

 

50,924

 

Loss from operations

 

 

(24,573

)

 

 

(23,666

)

 

 

(47,735

)

 

 

(50,924

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

112

 

 

 

71

 

 

 

183

 

 

 

129

 

Total other income

 

 

112

 

 

 

71

 

 

 

183

 

 

 

129

 

Net loss

 

$

(24,461

)

 

$

(23,595

)

 

$

(47,552

)

 

$

(50,795

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable securities

 

 

(90

)

 

 

(2

)

 

 

(579

)

 

 

(3

)

Comprehensive loss

 

$

(24,551

)

 

$

(23,597

)

 

$

(48,131

)

 

$

(50,798

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.51

)

 

$

(0.55

)

 

$

(0.99

)

 

$

(1.23

)

Weighted average common shares outstanding, basic and diluted

 

 

48,293,495

 

 

 

42,876,268

 

 

 

48,208,735

 

 

 

41,286,831

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

 

3


 

ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands except for share amounts)

(Unaudited)

 

 

 

For the Three Month Period

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity

 

Balance as of March 31, 2022

 

 

48,132,937

 

 

$

48

 

 

$

802,170

 

 

$

(908

)

 

$

(654,519

)

 

$

146,791

 

Issuance of common stock under Employee Stock Purchase Plan (ESPP)

 

 

134,888

 

 

 

 

 

 

177

 

 

 

 

 

 

 

 

 

177

 

Issuance of common stock for settlement of restricted stock units (RSUs)

 

 

94,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(90

)

 

 

 

 

 

(90

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,563

 

 

 

 

 

 

 

 

 

1,563

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,461

)

 

 

(24,461

)

Balance as of June 30, 2022

 

 

48,362,736

 

 

$

48

 

 

$

803,910

 

 

$

(998

)

 

$

(678,980

)

 

$

123,980

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity

 

Balance as of March 31, 2021

 

 

40,104,684

 

 

$

40

 

 

$

776,248

 

 

$

(271

)

 

$

(528,773

)

 

$

247,244

 

Issuance of common stock under at-the-market (ATM) equity offering program, net of issuance costs

 

 

1,458,043

 

 

 

2

 

 

 

6,013

 

 

 

 

 

 

 

 

 

6,015

 

Issuance of common stock under ESPP

 

 

42,803

 

 

 

 

 

 

144

 

 

 

 

 

 

 

 

 

144

 

Issuance of common stock for settlement of RSUs

 

 

64,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon cashless exercise of pre-funded warrants

 

 

2,108,621

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,988

 

 

 

 

 

 

 

 

 

1,988

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(23,595

)

 

 

(23,595

)

Balance as of June 30, 2021

 

 

43,779,059

 

 

$

44

 

 

$

784,391

 

 

$

(273

)

 

$

(552,368

)

 

$

231,794

 

 

4


 

 

 

 

For the Six Month Period

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity

 

Balance as of December 31, 2021

 

 

48,120,437

 

 

$

48

 

 

$

800,728

 

 

$

(419

)

 

$

(631,428

)

 

$

168,929

 

Issuance of common stock under ESPP

 

 

134,888

 

 

 

 

 

 

177

 

 

 

 

 

 

 

 

 

177

 

Issuance of common stock for settlement of RSUs

 

 

107,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(579

)

 

 

 

 

 

(579

)

Stock-based compensation

 

 

 

 

 

 

 

 

3,005

 

 

 

 

 

 

 

 

 

3,005

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47,552

)

 

 

(47,552

)

Balance as of June 30, 2022

 

 

48,362,736

 

 

$

48

 

 

$

803,910

 

 

$

(998

)

 

$

(678,980

)

 

$

123,980

 

 

 

 

Common Stock

 

 

Additional

 

 

Accumulated

Other

 

 

 

 

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Comprehensive

Loss

 

 

Accumulated

Deficit

 

 

Stockholders'

Equity

 

Balance as of December 31, 2020

 

 

34,026,680

 

 

$

34

 

 

$

742,387

 

 

$

(270

)

 

$

(501,573

)

 

$

240,578

 

Issuance of common stock under ATM equity offering program, net of issuance costs

 

 

7,449,901

 

 

 

8

 

 

 

40,144

 

 

 

 

 

 

 

 

 

40,152

 

Issuance of common stock under ESPP

 

 

42,803

 

 

 

 

 

 

144

 

 

 

 

 

 

 

 

 

144

 

Issuance of common stock for settlement of RSUs

 

 

151,054

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon cashless exercise of pre-funded warrants

 

 

2,108,621

 

 

 

2

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

Unrealized loss on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

 

 

 

(3

)

Stock-based compensation

 

 

 

 

 

 

 

 

1,718

 

 

 

 

 

 

 

 

 

1,718

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(50,795

)

 

 

(50,795

)

Balance as of June 30, 2021

 

 

43,779,059

 

 

$

44

 

 

$

784,391

 

 

$

(273

)

 

$

(552,368

)

 

$

231,794

 

 

See Accompanying Notes to Condensed Consolidated Financial Statements

5


ASSEMBLY BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(47,552

)

 

$

(50,795

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

240

 

 

 

227

 

Stock-based compensation

 

 

3,024

 

 

 

1,700

 

Net amortization of investments in marketable debt securities

 

 

214

 

 

 

249

 

Non-cash rent expense

 

 

1,784

 

 

 

2,037

 

Loss on disposal of property and equipment

 

 

 

 

 

1,625

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable from collaboration

 

 

(187

)

 

 

933

 

Prepaid expenses and other current assets

 

 

159

 

 

 

666

 

Other assets

 

 

68

 

 

 

299

 

Accounts payable

 

 

(205

)

 

 

(1,732

)

Accrued research and development expenses

 

 

1,046

 

 

 

(768

)

Other accrued expenses

 

 

(2,132

)

 

 

(7,649

)

Operating lease liabilities

 

 

(1,846

)

 

 

(1,944

)

Net cash used in operating activities

 

 

(45,387

)

 

 

(55,152

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of marketable securities

 

 

(15,854

)

 

 

(84,800

)

Proceeds from maturities of marketable securities

 

 

46,500

 

 

 

98,950

 

Proceeds from sale of marketable securities

 

 

12,000

 

 

 

3,000

 

Purchases of property and equipment