Gilead Sciences wants first dibs on all Assembly Biosciences’ programs. Rather than buy the viral disease biotech outright, Gilead is paying $100 million upfront for opt-in rights on all Assembly Bio’s current and future programs.
Assembly Bio has suffered a series of clinical setbacks in recent years, downgrading its goal from curing to controlling hepatitis B before dropping drug candidates altogether in response to safety signals and lackluster efficacy. With its cash falling below $60 million and its share price struggling to hit $1, the biotech had powered down parts of its pipeline to preserve cash.
Gilead is powering Assembly Bio back up. The Big Biotech is paying $84.8 million upfront and making a $15.2 million equity investment in return for a 19.9% stake in Assembly Bio. Gilead has also agreed to buy up to a further 29.9% of the biotech's stock.
“It gives us the ability to actually build a fully-fledged life sciences organization,” Assembly Bio CEO Jason Okazaki told Fierce Biotech in an interview.
“I actually don't think it really has any impact on our strategic ability to source things going forward,” Okazaki added. “It gives us the independence we actually need, because we are basically running all programs until the opt-in points.”
In return for its outlay, Gilead has secured a chance to obtain exclusive rights to all Assembly Bio’s current and future programs. The opt-ins are set for the end of phase 1 or, if an extension is activated, the end of phase 2 and are worth at least $45 million per program. Beyond that, Assembly Bio is in line to receive up to $330 million in regulatory and commercial milestones per program.
The deal ties Assembly Bio to Gilead for 12 years. Over that time, if Gilead wants an Assembly Bio asset, it can buy it under pre-agreed terms. Yet, with Assembly Bio having its own commercial opt-in options, Okazaki sees the deal as a way for his company to “stay independent.”
“The reality of most of these collaborations is … they're not going to opt in … to everything,” Okazaki told Fierce Biotech. “Sure, they will have an opt-in on future research discoveries. But the big thing on the back end is we can opt in to the profit/cost share. On the new compounds, we also have a co-promoter option.”
Assembly Bio will advance its own candidates alongside two programs contributed by Gilead. Okazaki is aiming to have four molecules in the clinic by the end of next year. One of the molecules, ABI-4334, is a core inhibitor that Assembly Bio paused work on in April to save money. “We would certainly plan on reinitiating that to get it to the [phase] 1b point, which would be an opt-in point,” Okazaki said.
A push to get the hepatitis B candidate ABI-4334 into the clinic will advance alongside work to ready a pair of herpes simplex virus (HSV) therapies for human testing. Gilead is contributing a helicase-primase inhibitor, adding to Assembly Bio’s own candidate against the target and positioning it to take two HSV programs into the clinic. Assembly Bio’s hepatitis delta virus drug rounds out the list of near-clinic assets.
The deal has echoes of Gilead’s ill-fated decision to pay $3.95 billion upfront for exclusive access to all current and future Galapagos compounds. Gilead saw the deal as a way to bolt an external innovation engine on to its own operation, doubling its research capacity. Galapagos framed the pact as a way to secure its independence and emerge as a midsized biopharma company. The situation soured quickly.