Gilead Bets on New Herpes Drug Class in Assembly Bio Licensing Deal
The virology giant will pay $35 million upfront for two candidates with potential for once-weekly oral dosing, aiming to disrupt a market that hasn't seen innovation in decades.
Gilead Sciences Inc. (GILD) is expanding its vast virology empire, exercising an option to license two experimental genital herpes treatments from Assembly Biosciences (ASMB) in a deal potentially worth over $365 million. The move signals a strategic bet on a new class of drugs aimed at a common virus that has not seen a new treatment approach in more than 25 years.
The deal was triggered by promising early-stage clinical data for the drug candidates, which demonstrated strong antiviral activity and, crucially, the potential for a once-weekly oral dose. This would represent a significant improvement over the current standard of care, which often requires daily medication. Gilead will make an upfront payment of $35 million to Assembly Bio and take full control of developing and commercializing the assets.
Despite the strategic expansion, investor reaction for Gilead was muted. Shares of the $154 billion biopharmaceutical company were down slightly by 0.44% in recent trading to $123.74. The modest move reflects the early stage of the assets and the relatively small size of the initial investment for a company of Gilead's scale. In contrast, shares of the smaller Assembly Biosciences jumped over 3% to $36.35, as the deal provides significant non-dilutive funding and powerful validation of its drug discovery platform.
A New Approach to a Persistent Virus
The licensed programs, ABI-1179 and ABI-5366, belong to a novel class of antivirals known as helicase-primase inhibitors. They work by targeting an enzyme complex that is essential for the herpes simplex virus (HSV) to replicate. This mechanism is distinct from the nucleoside analogs like valacyclovir that have long dominated the market.
"Our research partnership with Assembly Bio has been highly fruitful, and we are excited to continue the clinical development of our herpes simplex virus candidates," said Jared Baeten, Senior Vice President and Virology Therapeutic Area Head at Gilead Sciences, in a statement released on Business Wire. "Collaborations and partnerships are key in the pursuit of life-changing innovations."
The decision to license follows positive interim results from a Phase 1b trial that showed the candidates could significantly reduce virus-positive lesions and were well-tolerated. The prospect of a weekly pill could dramatically improve patient adherence and quality of life, addressing a key unmet need in a global herpes treatment market valued at over $2.5 billion annually.
Strategic Rationale and Financials
For Gilead, a company built on its dominance in treating HIV and Hepatitis C, the move marks a tactical expansion within its core competency of virology. While it has active programs in other areas like Hepatitis B, this venture into HSV taps a large, persistent market where its development and commercialization expertise could be decisive.
Under the terms of the agreement, Assembly Bio will receive the $35 million upfront payment and is eligible for up to $330 million in future payments tied to regulatory and commercial milestones. In an interesting twist, Assembly Bio retains an option to co-develop and co-commercialize the drugs in the United States. Should it choose to exercise this option, it would share 40% of all costs and profits in the U.S. market, forgoing the milestone payments and future royalties.
"With Gilead’s proven track record in developing and commercializing antiviral medicines, exercising this option is an important step forward as they take control of ABI-5366 and ABI-1179," commented Jason Okazaki, CEO and President of Assembly Bio. The deal provides Assembly Bio with immediate capital while retaining significant upside in the lucrative U.S. market.
The Road Ahead
With the license now in hand, Gilead will assume all future development, regulatory, and commercialization activities and costs for the herpes programs. The next critical steps will be designing and initiating larger Phase 2 and Phase 3 clinical trials to confirm the safety and efficacy of the once-weekly dosing regimen in a broader patient population.
Success is far from guaranteed, as many promising early-stage drugs fail in later, more rigorous testing. However, the combination of a novel mechanism of action, a validated market need, and Gilead's formidable clinical development engine positions these candidates as ones to watch in the coming years. If successful, Gilead could add another major franchise to its virology portfolio and finally offer a more convenient alternative for the millions of people affected by recurrent genital herpes.