Chardan: Assembly Biosciences Hep B Antiviral Data 'Positive,' But Undifferentiated From Competitor Johnson & Johnson

Assembly Biosciences Inc ASMB made a poster presentation of interim results from two early-stage studies for its ABI-H073, a hepatitis B virus core protein allosteric modulator, at the EASL International Liver Congress 2018 in Paris.

The Analyst

Chardan analyst Gbola Amusa downgraded Assembly Biosciences from Buy to Neutral and increased the price target from $35 to $50. 

The Thesis

The Phase 1a/1b results showed that ABI-H0731 was generally well-tolerated when administered once daily, with no serious adverse events reported, Amusa said in a Friday note. (See the analyst's track record here.) 

Based on the results, the company plans to initiate two Phase 2a studies, testing 300 mg of the pipeline candidate in combination with standard of care nucleos(t)ide analogs in mid-2018, Amusa said. Top-line results from both studies are due in early 2019, the analyst said. 

While terming the Phase 1a/1b results as "positive," Amusa said he sees less scope for performance in 2018. With Johnson & Johnson JNJ also producing similar Phase 1b efficacy data at EASL 2018, the analyst said there isn't much product differentiation that could have better positioned Assembly Biosciences against a highly capitalized competitor.

Chardan projects higher upside risk from big-cap partnering for Assembly Biosciences in 2019. 

The competitive landscape had intensified since Chardan's May 30, 2017 initiation of coverage, Amusa said: "J&J and Assembly are in close competition on timing and are less differentiated than expected." 

Delays in the progress of the company's microbiome program tempered Chardan's position, the analyst said. 

The Price Action

Assembly Biosciences shares have nearly doubled over the past year, although they are up merely 3 percent year-to-date.

The stock was down 8.24 percent at $44.57 at the time of publication Friday. 

Related Links:

8 Biotech Stocks With Clinical Trial Outcomes In April

On World Autism Awareness Day, A Look At Biotech Firms With Potential Treatments In The Pipeline