Leerink starts Assembly Biosciences at OP; PT $45

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Leerink Partners launched coverage of Assembly Biosciences (NASDAQ:ASMB) with an “outperform” rating and $45 price target. The stock closed at $24.67 on Nov. 16.

“Our valuation and rating are based on our probability-adjusted value for the cash flows we expect from lead asset ABI-H0731, an oral core protein allosteric modifier (CpAM) in Phase 2 development for chronic hepatitis B virus (HBV),” writes analyst Geoffrey Porges.

Mr. Porges is forecasting that ABI-H0731 is launched in 2022, with risk-adjusted revenue reaching $650-million. “This forecast is based on the proposition that CpAMs successfully clear the viral replication source (cccDNA) for hepatitis B in the liver, and provide a virologic cure, which is not accomplished with current standard-of-care oral nucleos(t)ide reverse transcriptase inhibitors (nucs),” he added.

Assembly is currently enrolling patients in two Phase 2 trials for ABI-H0731 with treatment-naïve and treatment-experienced HBV patients. Both will test the combination of ABI-H0731 and a nuc against a nuc alone on various endpoints to demonstrate superiority of the combination on viral biomarker reduction.

Mr. Porges said interim data for the two studies is expected to be released at the European Association for the Study of the Liver meeting in April 2019, which “provides a clear first-half catalyst that could increase the consensus probability-of-success for the program and drug class.”

Stephen Kilmer