10-Q
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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, 2023

 

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, 2023, there were 52,614,194 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, 2023 (unaudited) and December 31, 2022

2

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (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

14

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

24

 

 

 

Item 4.

Controls and Procedures

24

 

 

 

PART II:

OTHER INFORMATION

25

 

 

 

Item 1.

Legal Proceedings

25

 

 

 

Item 1A.

Risk Factors

25

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38

 

 

 

Item 3.

Defaults Upon Senior Securities

38

 

 

 

Item 4.

Mine Safety Disclosures

38

 

 

 

Item 5.

Other Information

38

 

 

 

Item 6.

Exhibits

39

 

 

SIGNATURES

40

 

 


 

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 “board of directors” 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 22, 2023 (2022 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 maintain financial resources necessary to continue our research activities, clinical studies and other business operations;
our ability to initiate and complete clinical studies involving our therapeutic product candidates, including studies contemplated by collaboration agreements, in the anticipated timeframes;
safety and efficacy data from clinical or nonclinical 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; and
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.

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; and our ability to successfully complete, and receive favorable results in, clinical trials for our product candidates. 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,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,623

 

 

$

52,418

 

Marketable securities

 

 

38,208

 

 

 

39,192

 

Accounts receivable from collaboration

 

 

342

 

 

 

944

 

Prepaid expenses and other current assets

 

 

3,908

 

 

 

4,413

 

Total current assets

 

 

64,081

 

 

 

96,967

 

 

 

 

 

 

 

Property and equipment, net

 

 

541

 

 

 

743

 

Operating lease right-of-use (ROU) assets

 

 

1,623

 

 

 

3,195

 

Other assets

 

 

332

 

 

 

889

 

Total assets

 

$

66,577

 

 

$

101,794

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

904

 

 

$

2,493

 

Accrued research and development expenses

 

 

2,037

 

 

 

3,122

 

Other accrued expenses

 

 

4,188

 

 

 

7,317

 

Operating lease liabilities - short-term

 

 

1,702

 

 

 

3,364

 

Total current liabilities

 

 

8,831

 

 

 

16,296

 

 

 

 

 

 

 

Deferred revenue

 

 

2,733

 

 

 

2,733

 

Operating lease liabilities - long-term

 

 

64

 

 

 

101

 

Total liabilities

 

 

11,628

 

 

 

19,130

 

 

 

 

 

 

 

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 shares authorized as of June 30, 2023 and December 31, 2022; 52,450,731 and 48,894,973 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

52

 

 

 

49

 

Additional paid-in capital

 

 

815,588

 

 

 

807,938

 

Accumulated other comprehensive loss

 

 

(325

)

 

 

(803

)

Accumulated deficit

 

 

(760,366

)

 

 

(724,520

)

Total stockholders' equity

 

 

54,949

 

 

 

82,664

 

Total liabilities and stockholders' equity

 

$

66,577

 

 

$

101,794

 

 

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,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

12,523

 

 

$

17,792

 

 

$

27,070

 

 

$

34,997

 

General and administrative

 

 

4,965

 

 

 

6,781

 

 

 

9,977

 

 

 

12,738

 

Total operating expenses

 

 

17,488

 

 

 

24,573

 

 

 

37,047

 

 

 

47,735

 

Loss from operations

 

 

(17,488

)

 

 

(24,573

)

 

 

(37,047

)

 

 

(47,735

)

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

 

592

 

 

 

112

 

 

 

1,201

 

 

 

183

 

Total other income

 

 

592

 

 

 

112

 

 

 

1,201

 

 

 

183

 

Net loss

 

$

(16,896

)

 

$

(24,461

)

 

$

(35,846

)

 

$

(47,552

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable securities

 

 

188

 

 

 

(90

)

 

 

478

 

 

 

(579

)

Comprehensive loss

 

$

(16,708

)

 

$

(24,551

)

 

$

(35,368

)

 

$

(48,131

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.32

)

 

$

(0.51

)

 

$

(0.69

)

 

$

(0.99

)

Weighted average common shares outstanding, basic and diluted

 

 

52,260,088

 

 

 

48,293,495

 

 

 

51,638,928

 

 

 

48,208,735

 

 

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, 2023

 

 

52,015,268

 

 

$

52

 

 

$

814,264

 

 

$

(513

)

 

$

(743,470

)

 

$

70,333

 

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

 

 

83,599

 

 

 

 

 

 

54

 

 

 

 

 

 

 

 

 

54

 

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

 

 

90,407

 

 

 

 

 

 

80

 

 

 

 

 

 

 

 

 

80

 

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

 

 

261,457

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

188

 

 

 

 

 

 

188

 

Stock-based compensation

 

 

 

 

 

 

 

 

1,190

 

 

 

 

 

 

 

 

 

1,190

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,896

)

 

 

(16,896

)

Balance as of June 30, 2023

 

 

52,450,731

 

 

$

52

 

 

$

815,588

 

 

$

(325

)

 

$

(760,366

)

 

$

54,949

 

 

 

 

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 ESPP

 

 

134,888

 

 

 

 

 

 

177

 

 

 

 

 

 

 

 

 

177

 

Issuance of common stock for settlement of 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

 

 

 

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, 2022

 

 

48,894,973

 

 

$

49

 

 

$

807,938

 

 

$

(803

)

 

$

(724,520

)

 

$

82,664

 

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

 

 

3,134,045

 

 

 

3

 

 

 

4,543

 

 

 

 

 

 

 

 

 

4,546

 

Issuance of common stock under ESPP

 

 

90,407

 

 

 

 

 

 

80

 

 

 

 

 

 

 

 

 

80

 

Issuance of common stock for settlement of RSUs

 

 

331,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

478

 

 

 

 

 

 

478

 

Stock-based compensation

 

 

 

 

 

 

 

 

3,027

 

 

 

 

 

 

 

 

 

3,027

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(35,846

)

 

 

(35,846

)

Balance as of June 30, 2023

 

 

52,450,731

 

 

$

52

 

 

$

815,588

 

 

$

(325

)

 

$

(760,366

)

 

$

54,949

 

 

 

 

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

 

 

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,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(35,846

)

 

$

(47,552

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

250

 

 

 

240

 

Stock-based compensation

 

 

3,025

 

 

 

3,024

 

Net (accretion) amortization of investments in marketable debt securities

 

 

(221

)

 

 

214

 

Non-cash rent expense

 

 

1,709

 

 

 

1,784

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable from collaboration

 

 

602

 

 

 

(187

)

Prepaid expenses and other current assets

 

 

505

 

 

 

159

 

Other assets

 

 

557

 

 

 

68

 

Accounts payable

 

 

(1,589

)

 

 

(205

)

Accrued research and development expenses

 

 

(1,085

)

 

 

1,046

 

Other accrued expenses

 

 

(3,127

)

 

 

(2,132

)

Operating lease liabilities

 

 

(1,836

)

 

 

(1,846

)

Net cash used in operating activities

 

 

(37,056

)

 

 

(45,387

)

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Proceeds from maturities of marketable securities

 

 

24,645

 

 

 

46,500

 

Purchases of property and equipment