What happened
Shares of Assembly Biosciences (ASMB +0.72%), a clinical-stage biopharmaceutical company, were on the move after the company priced an upcoming share offering. Investors encouraged by the offering price drove the stock 29.2% higher as of 1:33 p.m. EST on Thursday.
So what
After losing $70.6 million during the first nine months of 2019, Assembly Biosciences finished September with just $157 million in cash and securities. Its experimental treatments for the hepatitis B virus (HBV) have performed well in mid-stage testing, but it's going to be a long time before we see any pivotal data that could support a new drug application.
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To make ends meet, Assembly will offer 5.2 million shares at $16.50 each, plus the rights to purchase another 2.4 million at the same price in the form of pre-funded warrants. The stock rose today because investors were expecting a price more in line with the stock's average price over the past 50 trading sessions, which was just $14 per share.
Now what
Hepatitis B is a sneaky virus that isn't easy to get rid of. Available antiviral treatments can beat it down until it's undetectable on cell surfaces. Sadly, around three-quarters of these patients have enough remaining inside cells to reignite the infection after treatment ends.
In the U.S., HBV isn't nearly as common as it is in other places around the globe, but there are more than enough addressable patients to generate blockbuster sales for at least one of Assembly's core inhibitors. Unfortunately for Assembly, it isn't the only company targeting HBV core proteins.
Assembly's lead candidates are small-molecule drugs that inhibit HBV core protein from doing its job. Arrowhead Pharmaceuticals (ARWR +0.15%) is developing an injectable RNA interference drug, JNJ-3989, in partnership with Johnson & Johnson (JNJ 0.85%) that halts the production of HBV core protein.
Investors should know that Johnson & Johnson and Arrowhead are slightly ahead of Assembly on the development timeline and have produced outstanding results. Assembly stock could take a tumble if JNJ-3989 continues to impress.
