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What changed in ASSEMBLY BIOSCIENCES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ASSEMBLY BIOSCIENCES, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+430 added−300 removedSource: 10-K (2026-03-19) vs 10-K (2024-12-31)

Top changes in ASSEMBLY BIOSCIENCES, INC.'s 2025 10-K

430 paragraphs added · 300 removed · 236 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

110 edited+76 added−19 removed156 unchanged
Biggest changeWe announced interim results from the Phase 1a portion of the 5366 study in September 2024, interim results from the Phase 1b study of 4334 in December 2024 and interim results from the Phase 1a portion of the 1179 study in February 2025. 1 In addition, during December 2024, we identified a development candidate, 7423, in our broad-spectrum NNPI program targeting transplant-associated herpesviruses.
Biggest changeFor additional information regarding the Gilead Collaboration, see “Collaboration and License Agreements—Gilead Sciences, Inc.” Our Clinical Programs and Regulatory Filing-Enabling Program 2025 was a pivotal year for us, as we reported positive data readouts for 5366, 1179, 4334 and 6250 as follows: • February 2025: o 1179 – Positive Phase 1a interim results in the Phase 1a/b study • June 2025: o 4334 – Positive Phase 1b topline results 5 • August 2025: o 5366 – Positive Phase 1b interim results from the weekly dosing cohorts in the Phase 1a/b study o 6250 – Positive Phase 1a interim results • December 2025: o 1179 – Positive Phase 1b interim results in the Phase 1a/b study o 5366 – Positive Phase 1b interim results from the monthly dosing cohorts in the Phase 1a/b study In addition, during December 2024, we identified a development candidate, ABI-7423 (7423), in our broad-spectrum NNPI program targeting transplant-associated herpesviruses. 7423 is a prodrug of the parent molecule 7272, and in October 2025, we transitioned our development from 7423 to 7272. 7272 is currently in regulatory filing enabling studies.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; • the federal false statements statute prohibits making a false statement to an agent or agency of the federal government in connection with certain federal matters; • the federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.
HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions; 22 • the federal false statements statute prohibits making a false statement to an agent or agency of the federal government in connection with certain federal matters; • the federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.
The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and patients, prescribers, purchasers, and formulary managers on the other; • federal civil and criminal false claims laws, including the federal False Claims Act, which can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws that prohibit individuals or entities for, among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent; making a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and patients, prescribers, purchasers, and formulary managers on the other; • federal civil and criminal false claims laws, including the federal False Claims Act, which can be enforced by private citizens through civil qui tam actions, and civil monetary penalty laws that prohibit individuals or entities from, among other things: knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent; making a false statement or record material to a false or fraudulent claim or obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay money to the federal government.
Human clinical studies are typically conducted in three sequential phases, which may overlap or be combined: • Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. • Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.
Human clinical studies are typically conducted in three sequential phases, which may overlap or be combined: • Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. • Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to 15 determine dosage tolerance and optimal dosage.
Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant or sponsor to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending applications, withdrawal of an approval, license revocation, imposition of a clinical hold, issuance of warning letters and untitled letters, product recalls, product seizures, total or 7 partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits or civil or criminal penalties.
Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant or sponsor to a variety of administrative or judicial sanctions, such as the FDA’s imposition of a clinical hold, refusal to approve pending applications, withdrawal of an approval, license revocation, imposition of a clinical hold, issuance of warning letters and untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits or civil or criminal penalties.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies in compliance with the FDA’s GLP regulations and applicable requirements for the humane use of laboratory animals or other applicable requirements; • submission to the FDA of an investigational new drug application (IND) which must become effective before human clinical studies may begin; • approval by an independent institutional review board (IRB) or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical studies in accordance with good clinical practices (GCP), and any additional requirements for the protection of human research participants and their health information, to establish the safety and efficacy of the proposed drug for each indication; • submission to the FDA of a new drug application (NDA); • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices (cGMP) requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the NDA to assure compliance with GCP requirements and integrity of the clinical data; • FDA review and approval of the NDA; and • compliance with any post-approval requirements, including a risk evaluation and mitigation strategy (REMS), where applicable, and post-approval studies required by the FDA as a condition of approval.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of nonclinical laboratory tests and animal studies in compliance with the FDA’s GLP regulations and applicable requirements for the humane use of laboratory animals or other applicable requirements; • submission to the FDA of an IND application, which must become effective before human clinical studies may begin; • approval by an independent institutional review board (IRB) or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical studies in accordance with good clinical practices (GCP), and any additional requirements for the protection of human research participants and their health information, to establish the safety and efficacy of the proposed drug for each indication; • submission to the FDA of a new drug application (NDA); 14 • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices (cGMP) requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; • satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the NDA to assure compliance with GCP requirements and integrity of the clinical data; • FDA review and approval of the NDA; and • compliance with any post-approval requirements, including a risk evaluation and mitigation strategy (REMS), where applicable, and post-approval studies required by the FDA as a condition of approval.
During the 12-year collaboration term (subject to payment of certain extension fees) and for a specified period thereafter, Gilead may exercise its opt-in rights, on a program-by-program basis, at one of two timepoints—completion of a certain Phase 1 study or completion of a certain Phase 2 study for the first product within the program—upon payment of an opt-in fee ranging from $45.0 million to $125.0 million per program depending on the type of program and when the option is exercised.
During the 12-year collaboration term (subject to payment of certain extension fees) and for a specified period thereafter, Gilead may exercise its opt-in rights, on a program-by-program basis, at one of two timepoints—completion of a certain Phase 1 study or, upon payment of a deferral fee and completion of a certain Phase 2 study for the first product within the program—upon payment of an opt-in fee ranging from $45.0 million to $125.0 million per program depending on the type of program and when the option is exercised.
In addition to these provisions, the ACA established a number of bodies whose work may have a future impact on the market for certain pharmaceutical products, including the Patient-Centered Outcomes Research Institute, established to oversee, identify priorities in, and conduct comparative clinical effectiveness research, and the Center for Medicare and Medicaid Innovation within the Centers for Medicare and Medicaid Services, established to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
In addition to these provisions, the ACA established a number of bodies whose work may have a future impact on the market for certain pharmaceutical products, including the Patient-Centered Outcomes Research Institute, established to oversee, identify priorities in, and conduct comparative clinical effectiveness research, and the Center for Medicare and Medicaid 20 Innovation within the Centers for Medicare and Medicaid Services, established to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; or 12 • consent decrees, injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters or clinical holds on post-approval studies; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; or • consent decrees, injunctions or the imposition of civil or criminal penalties.
If a product that has orphan designation subsequently receives the first FDA approval for a particular 11 active ingredient for the disease or condition for which it has such designation, the product is entitled to Orphan Drug exclusivity, which means that the FDA may not approve other applications to market the same product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.
If a product that has orphan designation subsequently receives the first FDA approval for a particular active ingredient for the disease or condition for which it has such designation, the product is entitled to Orphan Drug exclusivity, which means that the FDA may not approve other applications to market the same product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.
In addition, the PDMA sets forth civil and criminal penalties for violations. Foreign Regulation In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical studies, marketing authorization, commercial sales and distribution of our products.
In addition, the PDMA sets forth civil and criminal penalties for violations. Foreign Regulation In order to market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical 19 studies, marketing authorization, commercial sales and distribution of our products.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures. These measures could reduce the ultimate demand for our products, if approved, or put pressure on our product pricing.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, 21 restrictions on certain product access and marketing cost disclosure and transparency measures. These measures could reduce the ultimate demand for our products, if approved, or put pressure on our product pricing.
An IND sponsor must submit the results of the nonclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND. Some long-term nonclinical testing, such as animal tests of reproductive AEs and carcinogenicity, may continue after the IND is submitted.
An IND sponsor must submit the results of the nonclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND application. Some long-term nonclinical testing, such as animal tests of reproductive AEs and carcinogenicity, may continue after the IND is submitted.
The FDA must determine if the product candidate qualifies for fast track designation within 60 calendar days after receipt of the sponsor’s request. 10 In addition to other benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a Fast Track product’s NDA before the application is complete.
The FDA must determine if the product candidate qualifies for fast track designation within 60 calendar days after receipt of the sponsor’s request. In addition to other benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a Fast Track product’s NDA before the application is complete.
As a result, 4 we have worked to discover and develop compounds targeting the core protein, a viral protein involved in numerous aspects of the HBV replication cycle, including the generation of HBV cccDNA. A benchmark for therapeutic agents aiming to decrease cccDNA levels is the use of several key viral antigens as surrogate biomarkers of active cccDNA.
As a result, we have worked to discover and develop compounds targeting the core protein, a viral protein involved in numerous aspects of the HBV replication cycle, including the generation of HBV cccDNA. A benchmark for therapeutic agents aiming to decrease cccDNA levels is the use of several key viral antigens as surrogate biomarkers of active cccDNA.
However, various industry stakeholders, including certain pharmaceutical companies and industry trade organizations have 14 initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional. The impact of these judicial challenges and future government reform measures on us and the pharmaceutical industry as a whole is unclear.
However, various industry stakeholders, including certain pharmaceutical companies and industry trade organizations have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional. The impact of these judicial challenges and future government reform measures on us and the pharmaceutical industry as a whole is unclear.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the current Trump administration may reverse or otherwise change measures implemented by the prior administration, both the Trump administration and Congress have indicated that they will continue to take action to control drug costs.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the current administration may reverse or otherwise change measures implemented by the prior administration, both the current administration and Congress have indicated that they will continue to take action to control drug costs.
The Gilead Equity Agreements also include a three-year standstill provision and a two-year lockup provision, each with customary exceptions, and 6 provide Gilead with certain other stock purchase rights and registration rights, as well as the right to designate two directors (or, alternatively, board observers at Gilead’s election) to our board of directors.
The Gilead Equity Agreements also include a three-year standstill provision and a two-year lockup provision, each with customary exceptions, and provide Gilead with certain other stock purchase rights and registration rights, as well as the right to designate two directors (or, alternatively, board observers at Gilead’s election) to our board of directors.
EU member states may approve a specific price for a drug product or may instead adopt a 13 system of direct or indirect controls on the profitability of us placing the drug product on the market. Other member states allow companies to fix their own prices for drug products but monitor and control company profits.
EU member states may approve a specific price for a drug product or may instead adopt a system of direct or indirect controls on the profitability of us placing the drug product on the market. Other member states allow companies to fix their own prices for drug products but monitor and control company profits.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which will remain in effect through 2032, unless Congress takes additional action.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions to certain Medicare payments to providers of up to 2% per fiscal year, which will remain in effect through 2032, unless Congress takes additional action.
As a next-generation CAM, 4334 was optimized to potently disrupt viral replication (MOA #1) and prevent the establishment and replenishment of new cccDNA (MOA #2). In contrast, while active against MOA #1, first-generation CAMs have not demonstrated adequate potency to sufficiently block cccDNA formation (MOA #2).
As a next-generation CAM, 4334 was optimized to potently disrupt viral replication (MOA #1) and prevent the establishment and replenishment of new cccDNA (MOA #2). In contrast, while active against MOA #1, first-generation CAMs have not demonstrated adequate potency to sufficiently block MOA #2.
Further, the current standard of care, NrtIs, impacts the viral life cycle after establishment of cccDNA and can only inhibit production of new viral particles, and it does so incompletely. The chemical scaffold of 4334 is novel and distinct from all our prior CAM candidates.
Further, the current standard 10 of care, NrtIs, impacts the viral life cycle after establishment of cccDNA and can only inhibit production of new viral particles, and it does so incompletely. The chemical scaffold of 4334 is novel and distinct from all our prior CAM candidates.
In addition, an IRB at each institution participating in the clinical study must review and approve the plan for any clinical study before it 8 commences at that institution, and the IRB must conduct continuing review. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects.
In addition, an IRB at each institution participating in the clinical study must review and approve the plan for any clinical study before it commences at that institution, and the IRB must conduct continuing review. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects.
This right was exercised in December 2024, at a purchase price of $21.37 per share, which represents a 35% premium to the 30-trading day volume weighted average price immediately prior to the date of purchase.
This right was exercised in December 2024, at a purchase price of $21.37 per share, which represents a 35% premium to the 12 30-trading day volume weighted average price immediately prior to the date of purchase.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required 16 specifications.
In addition, the government may assert that a claim including items and services resulting from 15 a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.
A product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical studies to confirm the effect on the clinical endpoint.
A product 17 candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical studies to confirm the effect on the clinical endpoint.
The 17 EU has developed a standalone law to govern the offering and use of AI systems in the EU (AI Act), which entered into force on August 1, 2024.
The EU has developed a standalone law to govern the offering and use of AI systems in the EU (AI Act), which entered into force on August 1, 2024.
In addition, people with recurrent genital herpes often experience associated psychosocial impacts, including anxiety, concerns about transmission, depression and social stigma. Immunocompromised patients may experience more severe and prolonged symptoms due to increased recurrence rates. HPIs are antiviral agents in development for the treatment of recurrent genital herpes, with a clinically-validated mechanism of action.
In addition, people with recurrent genital herpes often experience associated psychosocial impacts, including anxiety, concerns about transmission, depression and social stigma. Immunocompromised individuals may experience more severe and prolonged symptoms due to increased recurrence rates. HPIs are antiviral agents in development for the treatment of recurrent genital herpes, with a clinically-validated mechanism of action.
Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical studies to assess new safety risks or imposition of distribution or other restrictions under a REM program.
Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical studies to assess new safety risks or imposition of distribution or other restrictions under a REMS program.
Human Capital Management As of December 31, 2024, we had 73 total employees and contracts with a number of temporary contractors, consultants and CROs. The majority of our employees work out of our facility in South San Francisco, California. We also have a small number of remote employees spread across the United States and one remote employee in the UK.
Human Capital Management As of December 31, 2025, we had 73 total employees and contracts with a number of temporary contractors, consultants and CROs. The majority of our employees work out of our facility in South San Francisco, California. We also have a small number of remote employees spread across the United States and one remote employee in the UK.
The information contained on our website is not a part of, and should not be construed as being incorporated by reference, into this report. The reports filed with the SEC by us and by our officers, directors and significant stockholders are available for review on the SEC’s website at www.sec.gov. 19
The information contained on our website is not a part of, and should not be construed as being incorporated by reference, into this report. The reports filed with the SEC by us and by our officers, directors and significant stockholders are available for review on the SEC’s website at www.sec.gov. 27
Genital herpes recurrence can cause painful genital lesions that can lead to increased transmission and debilitate patients, and symptoms may become more serious with additional episodes. Additional complications include increased risk of HIV infection, as 30% of HIV infections acquired through sexual transmission are attributable to HSV-2 infection.
Genital herpes recurrence can cause painful genital lesions that can lead to increased transmission and debilitate individuals, and symptoms may become more serious with additional episodes. Additional complications include increased risk of HIV infection, as 30% of HIV infections acquired through sexual transmission are attributable to HSV-2 infection.
Most people with initial symptomatic genital herpes who are infected with HSV-2 have frequent recurrences, generally between three and 15 per year, including over four million people in the United States and France, Germany, Italy and Spain (collectively, the EU4) and the United Kingdom (UK).
Most people with initial symptomatic genital herpes who are infected with HSV-2 have frequent recurrences, generally between three and 15 per year, impacting over four million people in the United States and France, Germany, Italy and Spain (collectively, the EU4) and the United Kingdom (UK).
During the term, Gilead will continue to support the collaboration through extension fees of $75.0 million in each of the third, fifth and seventh years of the collaboration. The Gilead Collaboration Agreement is subject to termination by either party for the other party’s uncured, material breach or insolvency.
During the term, Gilead will continue to support the collaboration through extension fees of $75.0 million in each of the third, fifth and seventh anniversaries of the collaboration. The Gilead Collaboration Agreement is subject to termination by either party for the other party’s uncured, material breach or insolvency.
The inhibition of HBV and HDV infection by molecules that bind NTCP has been demonstrated in vitro, in animal models and clinically. Notably, bulevirtide, a peptide blocker of NTCP, is the only approved therapy for HDV (approved in Europe). 6250 uses the same clinically-validated MOA as bulevirtide.
The inhibition of HBV and HDV infection by molecules that bind NTCP has been demonstrated in vitro, in animal models and clinically. Notably, bulevirtide, a peptide blocker of NTCP, is the only approved therapy for HDV. 6250 has the same clinically-validated MOA as bulevirtide.
These uncontrolled viral infections increase the risk of severe disease and serious complications, including organ rejection, graft loss and death, and impacted approximately 95,000 people receiving transplants in 2021 in the United States and Europe.
These uncontrolled herpesvirus infections increase the risk of severe disease and serious complications, including organ rejection, graft loss and death, and impacted approximately 95,000 people receiving transplants in 2021 in the United States and Europe.
For example, the European Union (EU) provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
For example, the EU provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
Priority review Under FDA policies, a product candidate may be eligible for priority review, a review generally completed within a six-month time frame from the date a complete application is filed.
Priority review Under FDA policies, a product candidate may be eligible for priority review, which means the review is generally completed within a six-month time frame from the date a complete application is filed.
As of 2022, of the 254 million people living with chronic HBV infection, only approximately 33 million, or 13%, were aware of their infection, and only approximately 7 million, or 3%, of those diagnosed received treatment.
Of the 254 million people living with chronic HBV infection, only approximately 33 million, or 13%, were aware of their infection, and only approximately 7 million, or 3%, of those diagnosed received treatment.
The EU GDPR may increase our responsibility and liability in relation to personal data that we process where such processing is subject to the EU GDPR, and we may be required to put in place additional mechanisms to ensure compliance with the EU GDPR, including as implemented by individual countries.
The EU GDPR may increase our responsibility and liability in relation to personal data that we process where such processing is subject to the EU GDPR, and we may be required to implement additional mechanisms to ensure compliance with the EU GDPR, including as implemented by individual countries.
The CCPA will require covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information.
The CCPA requires covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information.
A manufacturer of an investigational drug for a serious disease or condition is required to make available, such as by posting on its website, its policy regarding evaluating and responding to requests for individual patient access to such investigational drug.
A manufacturer of an investigational drug for a serious disease or condition is required to make available, such as by posting on its website, its policy regarding evaluating and responding to requests for individual patient access to such investigational drug for use outside a clinical trial.
Our pipeline includes multiple clinical-stage investigational therapies, including: (1) two helicase-primase inhibitors (HPI) targeting recurrent genital herpes; (2) an orally bioavailable hepatitis delta virus (HDV) entry inhibitor; and (3) a highly potent next-generation capsid assembly modulator (CAM) designed to disrupt the replication cycle of hepatitis B virus (HBV) at several key points.
Our pipeline includes multiple clinical-stage investigational therapies, including: (1) two long-acting helicase-primase inhibitors (HPIs) for the treatment of recurrent genital herpes; (2) an orally bioavailable hepatitis delta virus (HDV) entry inhibitor; and (3) a highly potent next-generation capsid assembly modulator (CAM) designed to disrupt the replication cycle of hepatitis B virus (HBV) at several key points.
HDV may be significantly underdiagnosed, because there were no HDV-targeted therapies approved until very recently, and the first therapy approved is only approved in Europe. HDV is known to accelerate disease progression and increase the incidence of liver cirrhosis and liver cancer, which results in higher morbidity and mortality rates than HBV alone.
HDV may be significantly underdiagnosed, because there were no HDV-targeted therapies approved until very recently, and the first therapy approved is only approved in the European Union (EU), Australia and Canada. HDV is known to accelerate disease progression and increase the incidence of liver cirrhosis and liver cancer, which results in higher morbidity and mortality rates than HBV alone.
For example, during his first administration, President Trump issued directives designed to delay the implementation of certain ACA provisions or otherwise circumvent requirements for health insurance mandated by the ACA, and Congress has considered legislation that would repeal, or repeal and replace all or part of the ACA.
For example, the administration has issued directives designed to delay the implementation of certain ACA provisions or otherwise circumvent requirements for health insurance mandated by the ACA, and Congress has considered legislation that would repeal, or repeal and replace all or part of the ACA.
These provisions began taking effect progressively starting in 2023, and, in January 2025, CMS announced the 15 drugs selected for the second cycle of Medicare drug price negotiations. Beginning in 2025, the IRA also eliminates the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and imposing on new manufacturer discount program.
These provisions began taking effect progressively starting in 2023, and, in January 2026, CMS announced the 15 drugs selected for the third cycle of Medicare drug price negotiations. Beginning in 2025, the IRA also eliminated the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and imposing a new manufacturer discount program.
The current standard of care treatment for HDV is off-label pegylated interferon-α (IFN-α) injected weekly or, in Europe, a large, complex peptide inhibitor that requires daily injections, bulevirtide. There are no approved HDV treatments in the United States, and the large, complex peptide blocker is the only approved HDV treatment in the Europe.
The current standard of care treatment for HDV is off-label pegylated interferon-α (IFN-α) injected weekly or, in the EU, Australia and Canada, a large, complex peptide inhibitor that requires daily injections, bulevirtide. There are no approved HDV treatments in the United States.
In addition to 5366, we are also advancing 1179, a structurally-differentiated HPI with single digit nanomolar potency against HSV-1 and HSV-2 and a nonclinical PK and safety profile to date that is supportive of a potential long-acting treatment by once-weekly oral administration.
In addition to 5366, we have also begun the clinical development of 1179, a structurally-differentiated HPI with single digit nanomolar potency against HSV-1 and HSV-2 and a nonclinical PK and safety profile to date that is supportive of a potential long-acting treatment by once-weekly oral administration.
In certain circumstances, we offer compensation above these levels, based on a candidate’s experience, criticality, amount of responsibility and either individual or Company-wide performance. We routinely review our employees’ base salaries to ensure they remain market competitive. Both annual 18 performance-based cash bonuses and long-term equity compensation increase as a percentage of total compensation based on employees’ levels of responsibility.
In certain circumstances, we offer compensation above these levels, based on a candidate’s experience, criticality, amount of responsibility and either individual or Company-wide performance. We routinely review our employees’ base salaries to ensure they remain market competitive. Both annual 26 performance-based cash bonus targets and long-term equity compensation increase based on employees’ levels of responsibility.
We also own published PCT patent applications, which have entered the national phase, relating to processes for preparing 4334 and crystalline forms of 4334. Any patents issuing therefrom are expected to expire in 2042. Finally, we own a provisional patent application relating to compositions of matter and methods of using broad-spectrum NNPIs to treat various herpes viruses.
We also own published and nationalized PCT patent applications relating to processes for preparing 4334 and crystalline forms of 4334. Any patents issuing therefrom are expected to expire in 2042. Finally, we own a published PCT patent application relating to compositions of matter and methods of using broad-spectrum NNPIs to treat various herpes viruses.
We initiated a Phase 1a clinical study of 6250 during the fourth quarter of 2024, and we expect interim safety, PK and biomarker data from single-ascending and multiple-ascending doses cohorts in healthy participants in the third quarter of 2025.
A Phase 1a clinical study of 6250 was initiated in the fourth quarter of 2024, and in August 2025, we announced interim PK, biomarker and safety data from single-ascending and multiple-ascending doses cohorts in healthy participants.
Additionally, the California Privacy Rights Act (CPRA), which went into effect on January 1, 2023, imposes additional obligations on companies covered by the legislation and expands consumers’ rights with respect to certain sensitive personal information, among other things.
Additionally, the California Privacy Rights Act (CPRA), which went into effect on January 1, 2023, significantly expanded the CCPA, imposing additional obligations on companies covered by the legislation and expanding consumers’ rights with respect to certain sensitive personal information, among other things.
HDV affects a subset of approximately 12 to 72 million HBV infected people. These individuals infected with HDV, which comprise an estimated 4.5% of hepatitis B surface antigen (HBsAg) positive individuals, experience a substantially increased disease burden, as they account for 18% of cirrhosis and 20% of hepatocellular carcinoma associated with HBV.
These individuals infected with HDV, which comprise an estimated 4.5% of hepatitis B surface antigen (HBsAg) positive individuals, experience a substantially increased disease burden, as they account for 18% of cirrhosis and 20% of hepatocellular carcinoma associated with HBV.
A sponsor of a new drug subject to the above pediatric testing requirements also is required to submit to the FDA a pediatric study plan generally 60 days after an end-of-Phase 2 meeting with the agency. Generally, the pediatric data requirements do not apply to products with orphan drug designation.
A sponsor of a new drug subject to the above pediatric testing requirements also is required to submit to the FDA a pediatric study plan generally 60 days after an end-of-Phase 2 meeting with the agency.
In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA has agreed to specified performance goals in the review of NDAs.
The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA has agreed to specified performance goals in the review of NDAs.
We own a published PCT patent application which has entered the national phase, relating to compositions of matter and methods of using compound 4334 and derivatives/analogs thereof to treat HBV. Any patents issuing therefrom are expected to expire in 2041.
Any patents issuing therefrom are expected to expire in 2045. We own a published nationalized PCT patent application relating to compositions of matter and methods of using compound 4334 and derivatives/analogs thereof to treat HBV. Any patents issuing therefrom are expected to expire in 2041.
Prior to Gilead’s potential exercise of its opt-in, we are primarily responsible for all discovery, research and development on both our programs and the two Gilead-contributed programs. Following Gilead’s opt-in, Gilead will control the further discovery, research, development, and commercialization on any optioned programs.
Prior to Gilead’s potential exercise of its opt-in, we are primarily responsible for all discovery, research and development on both our programs and the two Gilead-contributed programs.
Other regulatory requirements Any drug manufactured or distributed by us pursuant to FDA approvals will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.
Generally, the pediatric data requirements do not apply to products with orphan drug designation. 18 Other regulatory requirements Any drug manufactured or distributed by us pursuant to FDA approvals will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.
There are changes in the regulatory landscape relating to new and emerging technologies such as artificial intelligence (AI), which we use in a limited capacity solely to assist our employees in selecting chemical compounds to evaluate.
There are changes in the regulatory landscape relating to new and emerging technologies such as artificial intelligence (AI), which we use in a limited capacities, including to assist our employees in selecting chemical compounds to evaluate, as well as office-related tasks.
California enacted the California Consumer Privacy Act (CCPA), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
At the state level, California enacted the California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020. The CCPA creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
We anticipate releasing data from the 400 mg cohort in the first half of 2025. Transplant-Associated Herpesviruses In a transplant setting, when patients are experiencing immunosuppression, they are at high risk of uncontrolled viral replication and severe disease brought on by one or more herpesviruses, including cytomegalovirus (CMV), HSV-1, HSV-2, varicella zoster virus (VZV) and Epstein-Barr virus (EBV).
Transplant-Associated Herpesviruses In a transplant setting, when patients are experiencing immunosuppression, they are at high risk of uncontrolled viral replication and severe disease brought on by one or more herpesviruses, including cytomegalovirus (CMV), HSV-1, HSV-2, varicella zoster virus (VZV) and Epstein-Barr virus (EBV).
We also have rights to unpublished PCT patent applications related to crystalline forms and pharmaceutical formulations of 1179. Any patents issuing therefrom are expected to expire in 2044 and 2045, respectively. We own a published PCT patent application relating to compositions of matter and methods of using compound 6250 and derivatives/analogs thereof to treat HDV and HBV.
We own a published and nationalized PCT patent application relating to compositions of matter and methods of using compound 6250 and derivatives/analogs thereof to treat HDV and HBV. Any patents issuing therefrom are expected to expire in 2044. We also own a published PCT patent application relating to crystalline forms of 6250.
Additionally, we may face competition from currently available HBV treatments. Some of the competitive development programs from these companies may be based on scientific approaches that are similar to our approach, and others may be based on entirely different approaches.
Some of the competitive development programs from these companies may be based on scientific approaches that are similar to our approach, and others may be based on entirely different approaches.
Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. In January 2025, the U.S. Supreme Court granted certiorari to review a lower court's decision that the ACA's requirement that group health plans and health insurance issuers cover certain preventative services without cost-sharing is unconstitutional.
Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. More recently, in June 2025, the U.S. Supreme Court upheld the constitutionality of the ACA's requirement that group health plans and health insurance issuers cover certain preventative services without cost-sharing is unconstitutional.
The EU GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers.
The EU GDPR includes operational requirements for companies that receive or process personal data of EU residents. The EU GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and notable obligations on services providers.
We submitted the CTA for a Phase 1a/b study of 1179 in September 2024, which was approved in October 2024. We dosed our first participant in the Phase 1a portion of this study during the fourth quarter of 2024. In February 2025, we announced positive interim data for the Phase 1a portion of the 1179 study.
We submitted the CTA for the study in September 2024, which was approved in October 2024. We dosed our first participant in the Phase 1a portion of this study during the fourth quarter of 2024.
To reach that goal, we discovered and are developing a novel, potent, long-acting HPI for recurrent genital herpes, 5366, which demonstrated low nanomolar potency in vitro against both HSV-1 and HSV-2 clinical isolates and a favorable nonclinical safety profile in the U.S.
To reach that goal, we discovered and began the clinical development of a novel, potent, long-acting HPI for recurrent genital herpes, 5366, which demonstrated low nanomolar potency in vitro against both HSV-1 and HSV-2 clinical isolates and a favorable nonclinical safety profile in the U.S. Food and Drug Administration's (FDA) Good Laboratory Practice (GLP) toxicology studies.
Our pipeline also includes a novel, oral broad-spectrum non-nucleoside polymerase inhibitor (NNPI) targeting transplant-related herpesviruses, which is currently undergoing studies to enable a regulatory filing, and we have additional research programs against multiple antiviral targets.
Our pipeline also includes a novel, oral broad-spectrum non-nucleoside polymerase inhibitor (NNPI) for the treatment of transplant-related herpesviruses, which is currently undergoing studies to enable a regulatory filing, and we have additional research programs against multiple antiviral targets. In December 2025, pursuant to our collaboration (Gilead Collaboration) with Gilead Sciences, Inc.
Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee, currently $4.0 million, and the sponsor of an approved NDA is also subject to an annual program fee currently set at $0.42 million through September 30, 2024.
Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee, currently $4.682 million, and the sponsor of an approved NDA is also subject to an annual program fee currently set at $0.44 million through September 30, 2026. These fees are typically adjusted on October 1 each year.
The EU GDPR applies to any 16 company established in the EU as well as to those outside the EU if they collect and use personal data in connection with the offering goods or services to individuals in the EU or the monitoring of their behavior.
The EU GDPR applies to any company established in the EU as well as to those outside the EU if they process personal data in connection with the offering of goods or services to EU residents or the monitoring of their behavior within the EU, wherever such processing occurs.
These fees are typically adjusted on October 1 each year. 9 The FDA conducts a preliminary review of all NDAs within the first 60 days after submission before accepting them for filing to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing.
The FDA conducts a preliminary review of all NDAs within the first 60 days after submission before accepting them for filing to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information.
There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties. In addition, regulators globally are also imposing greater monetary fines for privacy violations.
There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties.
Across the Part A (Phase 1a) cohorts evaluated, 5366 had a mean half-life of approximately 20 days when dosed orally, supporting once-weekly oral dosing, the target profile for 5366, as well as showing the potential for once-monthly oral dosing. We plan to explore both once-weekly and once-monthly oral dosing regimens in the Part B (Phase 1b) portion of the study.
Across the Part A (Phase 1a) cohorts evaluated, 5366 had a mean half-life of approximately 20 days when dosed orally, supporting once-weekly oral dosing, the target profile for 5366, as well as showing the potential for once-monthly oral dosing. In the Phase 1a cohorts, 5366 was well-tolerated with a favorable safety profile, with exposures of up to 99 days.
As a result of these limitations, we identified an opportunity to develop an oral, broad-spectrum NNPI for transplant-associated herpesvirus infections, which could greatly advance treatment.
As a result of these limitations, we identified an opportunity to develop an oral, broad-spectrum NNPI for transplant-associated herpesvirus infections, which could greatly advance treatment. In December 2024, we nominated 7423, a prodrug, as our development candidate to undergo regulatory filing-enabling studies.
During the first quarter of 2024, we filed a Clinical Trial Application (CTA) to support initiation of a Phase 1a/b clinical study for 5366, which was approved in April 2024, and we dosed our first participant in the Phase 1a portion of this study during the second quarter of 2024. 2 In September 2024, we announced positive interim data for the Phase 1a portion of the 5366 study.
For additional information regarding the option exercise, see “Collaboration and License Agreements—Gilead Sciences, Inc.—Option Exercise.” During the first quarter of 2024, we filed a Clinical Trial Application (CTA) to support initiation of a Phase 1a/b clinical study for 5366, which was approved in April 2024, and we dosed our first participant in the Phase 1a portion of this study during the second quarter of 2024.
A Phase 1a study demonstrated that 4334 was well-tolerated when administered orally as single or multiple doses. In addition, the PK data support 4334 as a once daily oral therapy and predicts best-in-class activity against both MOA #1 and MOA #2. During the second quarter of 2024, we dosed our first participant in a Phase 1b clinical study of 4334.
A Phase 1a study demonstrated that 4334 was well-tolerated when administered orally as single or multiple doses. During the second quarter of 2024, we dosed our first participant in a Phase 1b clinical study of 4334.
The $10.0 million payment received in connection with the First Amendment to the Gilead Collaboration Agreement is creditable towards future collaboration-related payments payable by Gilead.
The $10.0 million payment received in connection with the First Amendment to the Gilead Collaboration Agreement is creditable towards future collaboration-related payments payable by Gilead. This credit was applied toward Gilead’s opt-in fee paid for the HPI program in December 2025.
We are actively assessing the scope of application, impact, and risk of these developments in the EU and the UK on our business and will continue to assess this moving forward. The proposed European Health Data Space (EHDS) Regulation introduces stricter requirements for the collection, processing, and sharing of electronic health data across the EU.
We are actively assessing the scope of application, impact, and risk of these developments in the EU and the UK on our business and will continue to assess this moving forward.
Orphan drug designation must be requested before submitting an NDA. After the FDA grants orphan drug designation, the identity of the product and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not shorten the duration of the regulatory review and approval process.
Orphan drug designation must be requested before submitting an NDA for the application to be eligible to receive orphan drug exclusivity upon approval. After the FDA grants orphan drug designation, the identity of the product and its potential orphan indication are disclosed publicly by the FDA.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include: • business interruptions resulting from geopolitical actions such as the war between Russia and Ukraine, the conflicts in the Middle East, the rising tensions between China and Taiwan, as well as tariffs, other wars, acts of terrorism, natural disasters or outbreaks of disease; • different regulatory requirements for drug approvals or increased scrutiny on CROs located in foreign countries, including China; • different standards of care in various countries that could complicate the evaluation of our product candidates; • different U.S. and foreign drug import and export rules; • different reimbursement systems and different competitive drugs indicated to treat the indication for which our product candidates are being developed; • reduced protection for intellectual property rights in certain countries; • Changes in economic policies by the U.S. or foreign governments, which may result in new or unexpected changes in tariffs, trade barriers or regulatory requirements; • compliance with the United States Foreign Corrupt Practices Act (the FCPA) and other anti-corruption and anti-bribery laws; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; and • foreign currency fluctuations and compliance with foreign currency exchange rules, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country.
Biggest changeThese risks include: • business interruptions resulting from geopolitical actions such as the war between Russia and Ukraine, the conflicts in the Middle East, including the recent hostilities involving Iran, and in Venezuela, tensions between China and Taiwan, as well as trade tension and/or the imposition and enforceability of tariffs (including tariffs that have been or may be in the future imposed by the United States and other countries and uncertainties regarding the ability to obtain refunds for previously paid tariffs that have subsequently been invalidated), other wars, acts of terrorism, natural disasters or outbreaks of disease; • increased scrutiny or prohibitions on CROs located in foreign countries, including China; • different regulatory requirements for drug approvals; • different standards of care in various countries that could complicate the evaluation of our product candidates; • different U.S. and foreign drug import and export rules; • different reimbursement systems and different competitive drugs indicated to treat the indication for which our product candidates are being developed; • reduced protection for intellectual property rights in certain countries; • changes in trade, economic or other policies by the U.S. or foreign governments, which may result in new or unexpected changes in tariffs, trade wars, barriers or restrictions, or regulatory requirements; • compliance with the United States Foreign Corrupt Practices Act (the FCPA) and other anti-corruption and anti-bribery laws; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; and • foreign currency fluctuations and compliance with foreign currency exchange rules, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country.
Data supporting our clinical development programs are derived from nonclinical data that support our early stage clinical programs, which will determine whether pivotal studies are appropriate. These pivotal studies are necessary to support regulatory approval, and it may be years before these larger, pivotal studies are completed, if ever.
Data supporting our clinical development programs are derived from nonclinical data that support our early stage clinical programs, which will determine whether larger, pivotal studies are appropriate. These pivotal studies are necessary to support regulatory approval, and it may be years before these studies are completed, if ever.
Adverse events in our nonclinical or clinical studies or those of our competitors or of academic researchers utilizing the same MOA as our product candidates, even if not ultimately attributable to our product candidates, and any resulting publicity could result in increased governmental regulation, larger, more complex, or an increased number of clinical trial requirements, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for our product candidates that are approved, if any, and a decrease in demand for any such products.
Adverse events (AEs) in our nonclinical or clinical studies or those of our competitors or of academic researchers utilizing the same MOA as our product candidates, even if not ultimately attributable to our product candidates, and any resulting publicity could result in increased governmental regulation, larger, more complex, or an increased number of clinical trial requirements, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for our product candidates that are approved, if any, and a decrease in demand for any such products.
We and our collaborators may be subject, directly or indirectly, to applicable U.S. federal and state anti-kickback, false claims laws, physician payment transparency laws, fraud and abuse laws or similar healthcare and security laws and regulations, and health information privacy and security laws, which could expose us or them to criminal sanctions, civil penalties, exclusion or suspension from federal and state healthcare programs, contractual damages, reputational harm and diminished profits and future earnings.
We and our collaborators may be subject, directly or indirectly, to applicable U.S. federal and state anti-kickback, false claims laws, physician payment transparency laws, other fraud and abuse laws or similar healthcare and security laws and regulations, and health information privacy and security laws, which could expose us or them to criminal sanctions, civil penalties, exclusion or suspension from federal and state healthcare programs, contractual damages, reputational harm and diminished profits and future earnings.
The patent process also is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our products by obtaining and defending patents. Composition-of-matter patents relating to the active pharmaceutical ingredient are generally considered to be the strongest form of intellectual property protection for pharmaceutical products.
The patent process also is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our products by obtaining and defending patents. 40 Composition-of-matter patents relating to the active pharmaceutical ingredient are generally considered to be the strongest form of intellectual property protection for pharmaceutical products.
We may also be subject to similar limitations at the state level. Risks Related to Our Regulatory and Legal Environment We are and will be subject to extensive and costly government regulation, and the failure to comply with these regulations may have a material adverse effect on our operations and business.
We may also be subject to similar limitations at the state level. 35 Risks Related to Our Regulatory and Legal Environment We are and will be subject to extensive and costly government regulation, and the failure to comply with these regulations may have a material adverse effect on our operations and business.
Our executive officers are critical to our success, and unanticipated loss of any of these key employees could have a material adverse impact on our business, financial condition and results of operations. 24 Our collaboration partners might delay, prevent or undermine the success of our product candidates.
Our executive officers are critical to our success, and unanticipated loss of any of these key employees could have a material adverse impact on our business, financial condition and results of operations. Our collaboration partners might delay, prevent or undermine the success of our product candidates.
Our product candidates are subject to extensive and rigorous domestic government regulation, including regulation by the FDA, the Centers for Medicare and Medicaid Services, other divisions of the U.S. Department of Health and Human Services, the U.S. Department of Justice, state and local governments, and their respective foreign equivalents.
Our product candidates are subject to extensive and rigorous domestic government regulation, including regulation by the FDA, the Centers for Medicare and Medicaid Services, other divisions of the U.S. Department of Health and Human Services (HHS), the U.S. Department of Justice, state and local governments, and their respective foreign equivalents.
Conducting nonclinical and clinical studies is a lengthy, time consuming and expensive process. The length of time varies substantially according to the type, complexity, novelty, and intended use of the product candidate, and often can be several years or more.
Conducting nonclinical and clinical studies is a lengthy, time consuming and expensive process. The length of time 29 varies substantially according to the type, complexity, novelty, and intended use of the product candidate, and often can be several years or more.
Failure to achieve such successful collaborations would limit our options for support of the development and commercialization of our programs and for financing and would likely have a material adverse impact on our business, results of operations, financial condition and share price.
Failure to achieve such successful collaborations would limit our 33 options for support of the development and commercialization of our programs and for financing and would likely have a material adverse impact on our business, results of operations, financial condition and share price.
Formulation patents protect the formulation of a product and do not prevent a competitor from making and marketing a product that has an identical active pharmaceutical ingredient to 30 our product if the product is formulated differently than the patented formulation.
Formulation patents protect the formulation of a product and do not prevent a competitor from making and marketing a product that has an identical active pharmaceutical ingredient to our product if the product is formulated differently than the patented formulation.
We might be exposed to liability claims associated with the use of hazardous materials and chemicals. Our research, development and manufacturing activities and/or those of our third-party contractors might involve the controlled use of hazardous materials and chemicals.
We might be exposed to liability claims associated with the use of hazardous materials and chemicals. 39 Our research, development and manufacturing activities and/or those of our third-party contractors might involve the controlled use of hazardous materials and chemicals.
The trading price of our common stock may continue to be volatile and subject to wide price fluctuations in response to various factors, many of which are beyond our control, such as the progress, results and timing of our clinical and nonclinical studies and other studies involving our product candidates, the success or failure of our product candidates, the receipt or loss of required regulatory approvals for our product candidates, the availability of capital or the other risks discussed in this “Risk Factors” section.
The trading price of our common stock has in the past and may continue to be volatile and subject to wide price fluctuations in response to various factors, many of which are beyond our control, such as the progress, results and timing of our clinical and nonclinical studies and other studies involving our product candidates, the success or failure of our product candidates, the receipt or loss of required regulatory approvals for our product candidates, the availability of capital or the other risks discussed in this “Risk Factors” section.
The following examples are illustrative: • Others may be able to make compounds that are the same as, or similar to, our current or future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed. • We or any of our licensors or strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed. • We or any of our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions. • Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights. • The prosecution of our pending patent applications may not result in granted patents. • Granted patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, because of legal challenges by our competitors. • Patent protection on our product candidates may expire before we are able to develop and commercialize the product, or before we are able to recover our investment in the product. • Our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for such activities, as well as in countries in which we do not have patent rights and may then use the information learned from such activities to develop competitive products for sale in markets where we intend to market our product candidates. 32 Risks Related to Our Common Stock The price of our common stock might fluctuate significantly, and you could lose all or part of your investment.
The following examples are illustrative: • Others may be able to make compounds that are the same as, or similar to, our current or future product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed. • We or any of our licensors or strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or have exclusively licensed. • We or any of our licensors or strategic partners might not have been the first to file patent applications covering certain of our inventions. • Others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights. • The prosecution of our pending patent applications may not result in granted patents. • Granted patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, because of legal challenges by our competitors. • Patent protection on our product candidates may expire before we are able to develop and commercialize the product, or before we are able to recover our investment in the product. • Our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for such activities, as well as in countries in which we do not have patent rights and may then use the information learned from such activities to develop competitive products for sale in markets where we intend to market our product candidates. 42 Risks Related to Our Common Stock The price of our common stock has in the past and may continue to fluctuate significantly, and you could lose all or part of your investment.
If we are unable to develop and commercialize any product candidates and generate sufficient revenue or raise capital, we could be forced to reduce staff, delay, scale back or discontinue product development and clinical studies, sacrifice attractive business opportunities, cease operations entirely and sell, or otherwise transfer, all or substantially all of our remaining assets, which would likely have a material adverse impact on our business, results of operations, financial condition and share price.
If we are unable to develop and commercialize any product candidates and generate sufficient revenue or raise capital, we could be forced to reduce staff, delay, scale back or discontinue product development and clinical studies, forego business opportunities, cease operations entirely and sell, or otherwise transfer, all or substantially all of our remaining assets, which would likely have a material adverse impact on our business, results of operations, financial condition and share price.
We are exposed to the following risks with respect to the manufacture of our product candidates: • We will need to identify manufacturers for commercial supply on acceptable terms, which we may be unable to do because the number of potential manufacturers is limited, and the FDA must evaluate and approve any new or replacement contractor. • Any third-party manufacturers with whom we contract might be unable to formulate and manufacture our product candidates in the volume and quality required to meet our nonclinical, clinical and, if approved, commercial needs in a timely manner. • Any third-party manufacturers with whom we contract might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our products. • One or more of any third-party manufacturers with whom we contract could be foreign, which increases the risk of shipping delays and adds the risk of import restrictions. • We do not have complete control over, and cannot ensure, any third-party manufacturers’ compliance with cGMP and other government regulations and corresponding foreign requirements, including periodic FDA and state regulatory inspections. • We may be required to obtain intellectual property rights from third parties to manufacture our product candidates, and if any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we may not own, or may have to share, the intellectual property rights to the innovation. • We may be required to share our trade secrets and know-how with third parties, increasing risk of misappropriation or disclosure of our intellectual property by or to third parties. • When contracting with third-party manufacturers, we might compete with other companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give other clients higher priority than we are given.
We are exposed to the following risks with respect to the manufacture of our product candidates: • We will need to identify manufacturers for commercial supply on acceptable terms, which we may be unable to do because the number of potential manufacturers is limited, and the FDA must evaluate and approve any new or replacement contractor. • Any third-party manufacturers with whom we contract might be unable to formulate and manufacture our product candidates in the volume and quality required to meet our nonclinical, clinical and, if approved, commercial needs in a timely manner. • Any third-party manufacturers with whom we contract might be unable to manufacture or obtain from other third parties the active pharmaceutical ingredient needed to manufacture the finished dosage form of our product candidates. • Any third-party manufacturers with whom we contract might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our products. • One or more of any third-party manufacturers with whom we contract could be foreign, which increases the risk of shipping delays and adds the risk of import restrictions. • We do not have complete control over, and cannot ensure, any third-party manufacturers’ compliance with cGMP and other government regulations and corresponding foreign requirements, including periodic FDA and state regulatory inspections. 32 • We may be required to obtain intellectual property rights from third parties to manufacture our product candidates, and if any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we may not own, or may have to share, the intellectual property rights to the innovation. • We may be required to share our trade secrets and know-how with third parties, increasing risk of misappropriation or disclosure of our intellectual property by or to third parties. • When contracting with third-party manufacturers, we might compete with other companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give other clients higher priority than we are given.
In addition, even if we demonstrate clinical proof of concept of a candidate, Gilead may choose not to exercise its option. • Gilead has the right to designate (and has designated) two directors for appointment to our board of directors pursuant to the terms of the investor rights agreement and owns approximately 29.9% of our outstanding common stock.
In addition, even if we demonstrate clinical proof of concept of a candidate, Gilead may choose not to exercise its option. • Gilead has the right to designate (and has designated) two directors for appointment to our board of directors pursuant to the terms of the investor rights agreement and owns approximately 28% of our outstanding common stock.
The results of nonclinical studies may not be representative of disease behavior in a clinical setting and may not be predictive of the outcomes of our clinical studies. In addition, the results of early clinical studies of product candidates may not be predictive of the results of later-stage clinical studies.
The results of nonclinical studies may not be representative of the product candidates' behavior in a clinical setting and may not be predictive of the outcomes of our clinical studies. In addition, the results of early clinical studies of product candidates may not be predictive of the results of later-stage clinical studies.
For example, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, including, in the case of clinical studies, good clinical practices, even if the study is conducted by a CRO.
For example, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, including, in the case of clinical studies, CGPs, even if the study is conducted by a CRO.
Top-line, preliminary or interim data may not accurately reflect the final results of a particular study. We may publicly disclose top-line, preliminary or interim data based on analysis of then-available efficacy, tolerability, PK and safety data, and the results and related findings and conclusions are subject to change following a more comprehensive data review related to the particular study.
We may publicly disclose top-line, preliminary or interim data based on analysis of then-available efficacy, tolerability, PK and safety data, and the results and related findings and conclusions are subject to change following a more comprehensive data review related to the particular study.
If we do not receive the funding we expect under these agreements, development of our investigational products could be delayed and we may need additional resources to develop our investigational products. • We will be heavily dependent on Gilead for further development and commercialization of the investigational products from the programs that it opts into. • We may not be successful in this collaboration due to various other factors, including our ability to demonstrate proof of concept in one or more clinical studies so that Gilead will exercise its option to these programs.
If we do not receive the funding we expect under these agreements, development of our investigational products could be delayed and we may need additional resources to develop our investigational products. • We will be heavily dependent on Gilead for further development and commercialization of the investigational products from the programs that it opts into, including our HPI program, and transition of these programs to Gilead could delay these programs' clinical and approval timelines. • We may not be successful in this collaboration due to various other factors, including our ability to demonstrate proof of concept in one or more clinical studies so that Gilead will exercise its option to these programs.
We have not submitted a new drug application (NDA) to the FDA or comparable applications to other regulatory authorities and do not expect to be in a position to do so in the near future. All our product candidates are in clinical development or in varying stages of nonclinical development.
We have not submitted an NDA to the FDA or comparable applications to other regulatory authorities and do not expect to be in a position to do so in the near future. All our product candidates are in clinical development or in varying stages of nonclinical development.
Furthermore, reductions in workforce at the FDA may lead to delays in inspecting facilities and, in turn, delayed FDA approvals for manufacturing changes. This could result in higher costs or deprive us of potential product revenues and materially harm our business, financial condition and results of operations.
Furthermore, workforce reductions at the FDA, and any future reductions of staffing or other resources at the FDA, may lead to delays in inspecting facilities and, in turn, delayed FDA approvals for manufacturing changes. This could result in higher costs or deprive us of potential product revenues and materially harm our business, financial condition and results of operations.
If a prolonged government shutdown or a widespread freeze on federal funding occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, the National Institutes of Health to conduct research or provide grants, or other agencies that support the FDA to slow their work.
A prolonged government shutdown or a widespread freeze on federal funding could also significantly impact the ability of the FDA to timely review and process our regulatory submissions and the National Institutes of Health to conduct research or provide grants, or cause other agencies that support the FDA to slow their work.
Item 1A. R isk Factors You should carefully consider the following risk factors, together with all other information in this report, including our consolidated financial statements and notes thereto, and in our other filings with the SEC.
Item 1A. Risk Fact ors You should carefully consider the following risk factors, together with all other information in this report, including our consolidated financial statements and notes thereto, and in our other filings with the SEC.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, authorization and payment of user fees, the ability to hire and retain key personnel, as well as other statutory, regulatory and policy changes.
The ability of the FDA to review and approve new products has been in the past and may in the future be affected by a variety of factors, including government budget and funding levels, authorization and payment of user fees, the ability to hire and retain key personnel, as well as other statutory, regulatory and policy changes.
In addition, failure or delays can occur at any time during the nonclinical and clinical study process, resulting in additional operating expenses or harm to our business. 21 The commencement and rate of completion of clinical studies might be delayed by many factors, including, for example: • delays in reaching agreement with regulatory authorities on study design; • delays in reaching agreement on acceptable terms with prospective contract research organizations (CROs) and clinical study sites; • failure to demonstrate efficacy or the emergence of unforeseen safety issues; • insufficient quantities of qualified materials made using current good manufacturing practice (cGMP) for use in clinical studies due to manufacturing challenges, delays or interruptions in the supply chain; • slower than expected rates of participant recruitment or failure to recruit a sufficient number of eligible participants, which may be due to a number of reasons, including the size of the participant population, the proximity of participants to clinical sites, the eligibility criteria for the study, the design of the clinical study, and other potential drug candidates being studied; • fewer available study sites due to changes in government funding of clinical research; • delays in participants completing participation in a study or return for post-treatment follow-up for any reason, including, product side effects or disease progression; • modification of clinical study protocols; • delays, suspension, or termination of clinical studies by the institutional review board or ethics committee responsible for overseeing the study at a particular study site; and • government or other regulatory agency delays or clinical holds requiring suspension or termination of our clinical studies due to safety, tolerability or other issues related to our product candidates.
The commencement and rate of completion of clinical studies might be delayed by many factors, including, for example: • delays in reaching agreement with regulatory authorities on study design; • delays in reaching agreement on acceptable terms with prospective contract research organizations (CROs) and clinical study sites; • failure to demonstrate efficacy or the emergence of unforeseen safety issues; • insufficient quantities of qualified materials made using cGMP for use in clinical studies due to manufacturing challenges, delays or interruptions in the supply chain; • slower than expected rates of participant recruitment or failure to recruit a sufficient number of eligible participants, which may be due to a number of reasons, including the size of the participant population, the proximity of participants to clinical sites, the eligibility criteria for the study, the design of the clinical study, and other potential drug candidates being studied; • fewer available study sites and academic lab facilities due to changes in government funding of clinical research; • delays in participants completing participation in a study or return for post-treatment follow-up for any reason, including, product side effects or disease progression; • modification of clinical study protocols; • problems with the integrity of data collected in the study; • delays, suspension, or termination of clinical studies by the institutional review board or ethics committee responsible for overseeing the study at a particular study site; and • government or other regulatory agency delays or clinical holds requiring suspension or termination of our clinical studies due to safety, tolerability or other issues related to our product candidates.
If the top-line, preliminary or interim data that we report differ from final results, or if others, including regulatory authorities, disagree with, or do not accept, the data or conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed or delayed, which could harm our business, financial condition, operating results or prospects. 23 We rely on third parties to formulate and manufacture our product candidates and products that we study in combination with our product candidates.
If the top-line, preliminary or interim data that we report differ from final results, or if others, including regulatory authorities, disagree with, or do not accept, the data or conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed or delayed, which could harm our business, financial condition, operating results or prospects.
In October 2023, we entered into the Gilead Collaboration Agreement with Gilead, whereby Gilead exclusively licensed to us its HPI program and NNPI program, while retaining opt-in rights to these programs, and has an option 20 to take an exclusive license, on a program-by-program basis, to all of our other current and future pipeline programs during the collaboration term.
If this collaboration is unsuccessful, our business could be adversely affected. 28 In October 2023, we entered into the Gilead Collaboration Agreement with Gilead, whereby Gilead exclusively licensed to us its HPI program and NNPI program, while retaining opt-in rights to these programs, and has an option to take an exclusive license, on a program-by-program basis, to all of our other current and future pipeline programs during the collaboration term.
If we, our collaborators, our contractors or our contract manufacturers fail to comply with applicable regulatory requirements at any stage during the regulatory process, such noncompliance could result in delays in the approval of applications or supplements to approved applications, refusal by a regulatory authority (including the FDA) to review pending marketing authorization applications or supplements to approved applications, untitled letters or warning letters, fines, import and export restrictions, product recalls or seizures, injunctions, total or partial suspension of production, civil penalties, withdrawals of previously approved marketing authorizations, recommendations by the FDA or other regulatory authorities against governmental contracts, and/or criminal prosecutions. 27 The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we or our collaborators are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
If we, our collaborators, our contractors or our contract manufacturers fail to comply with applicable regulatory requirements at any stage during the regulatory process, such noncompliance could result in delays in the approval of applications or supplements to approved applications, refusal by a regulatory authority (including the FDA) to review pending marketing authorization applications or supplements to approved applications, untitled letters or warning letters, fines, import and export restrictions, product recalls or seizures, injunctions, total or partial suspension of production, civil penalties, withdrawals of previously approved marketing authorizations, recommendations by the FDA or other regulatory authorities against governmental contracts, and/or criminal prosecutions.
If these CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, including good clinical practices, or for other reasons, our research, nonclinical or clinical studies may be extended, delayed or terminated and we may not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates, any of which could materially harm our business, prospects, financial condition and results of operations. 22 Furthermore, we are exposed to a number of risks related to our CROs, vendors, suppliers and other service providers that are located outside of the United States, many of which may be beyond our control.
If these CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to 30 be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements, including GCPs, or for other reasons, our research, nonclinical or clinical studies may be extended, delayed or terminated and we may not be able to obtain, or may be delayed in obtaining, regulatory approvals for our product candidates, any of which could materially harm our business, prospects, financial condition and results of operations.
We have experienced ownership changes in the past, and future equity issuances may result in additional ownership change. Accordingly, some of our net operating losses or credits could expire unutilized, and our ability to utilize our net operating losses or credits to offset U.S. federal taxable income could be limited, which would result in increased future tax liability to us.
Accordingly, some of our net operating losses or credits could expire unutilized, and our ability to utilize our net operating losses or credits to offset U.S. federal taxable income could be limited, which would result in increased future tax liability to us.
We cannot guarantee that the manufacture, use or marketing of any product candidates that we develop will not infringe third-party patents. 31 If a patent infringement suit were brought against us, we may be forced to stop or delay developing, manufacturing, or selling potential products that are claimed to infringe a third party’s intellectual property, unless that third party grants us rights to use its intellectual property.
If a patent infringement suit were brought against us, we may be forced to stop or delay developing, manufacturing, or selling potential products that are claimed to infringe a third party’s intellectual property, unless that third party grants us rights to use its intellectual property.
Negative data from clinical studies using a competitor’s product candidates with the same or similar mechanisms of action (MOA) as ours could adversely impact the perception of the therapeutic use of our product candidates and our ability to enroll individuals in clinical studies. 26 The clinical and commercial success of our potential products will depend in part on the public and clinical communities’ acceptance of novel classes of product candidates.
Negative data from clinical studies using a competitor’s product candidates with the same or similar mechanisms of action (MOA) as ours could adversely impact the perception of the therapeutic use of our product candidates and our ability to enroll individuals in clinical studies.
If any product candidate we develop or acquire in the future receives FDA or other regulatory approval, we expect to continue our reliance on one or more third-party contractors to manufacture our products.
We rely on third-party manufacturers to supply the quantities of our investigational product candidates used in our clinical and nonclinical studies. If any product candidate we develop or acquire in the future receives FDA or other regulatory approval, we expect to continue our reliance on one or more third-party contractors to manufacture our products.
Our use of third parties may increase the risk that we will not have sufficient quantities of our product candidates or other products on time or at an acceptable cost. We rely on third-party manufacturers to supply the quantities of our investigational product candidates used in our clinical and nonclinical studies.
We rely on third parties to formulate and manufacture our product candidates and products that we study in combination with our product candidates. Our use of third parties may increase the risk that we will not have sufficient quantities of our product candidates or other products on time or at an acceptable cost.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.
If we fail to comply with any applicable federal, state or foreign legal requirement, we could be subject to penalties. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.
We expect our collaboration with Gilead to be a critical part of the development, manufacture and commercialization of our product candidates. If this collaboration is unsuccessful, our business could be adversely affected.
We expect our collaboration with Gilead to be a critical part of the development, manufacture and commercialization of our product candidates.
The risk of a cybersecurity incident or security breach or disruption, particularly through cyberattacks or cyber intrusion, has escalated as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
The risk of a cybersecurity incident or security breach or disruption, particularly through cyberattacks or cyber intrusion, has escalated as the frequency, intensity and sophistication of attempted attacks and intrusions from around the world have increased, become increasingly difficult to detect and could be enhanced or facilitated by artificial intelligence.
In addition, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property.
In addition, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches.
For example, any loss of clinical study data from completed or ongoing or planned clinical studies could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. If a computer security breach affects our systems or results in the unauthorized release of personally identifiable information, our reputation could be materially damaged.
For example, any loss of clinical study data from completed or ongoing or planned clinical studies could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
In addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products might require us to incur substantial compliance costs that could materially and adversely affect our business, financial condition and results of operations. 29 Our employees, independent contractors, consultants, collaborators and CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could result in significant liability for us and harm our reputation.
In addition, the federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products might require us to incur substantial compliance costs that could materially and adversely affect our business, financial condition and results of operations.
Any such patent application may have priority over our patent applications, which could further require us to obtain rights from third parties to issued patents covering such products and technologies.
Any such patent application may have priority over our patent applications, which could further require us to 41 obtain rights from third parties to issued patents covering such products and technologies. We cannot guarantee that the manufacture, use or marketing of any product candidates that we develop will not infringe third-party patents.
Research, development and commercialization goals, including data releases, may not be achieved in the timeframes that we publicly estimate, which could have an adverse impact on our business and could cause our stock price to decline. We set goals and make public statements regarding our expectations on timing of certain accomplishments, developments and milestones under our research and development programs.
If these third parties provide inaccurate, misleading, or incomplete data, our business, prospects, and results of operations could be materially and adversely affected. Research, development and commercialization goals, including data releases, may not be achieved in the timeframes that we publicly estimate, which could have an adverse impact on our business and could cause our stock price to decline.
Adverse geopolitical and macroeconomic developments, such as ongoing military conflicts, related sanctions, actual and anticipated changes in interest rates, economic inflation and the responses by central banking authorities to control such inflation, could affect our ability to access capital as and when needed.
Adverse geopolitical and macroeconomic developments, such as potential worsening global economic conditions or economic downturn, ongoing military conflicts, related sanctions, actual and anticipated changes in interest rates, economic inflation and the responses by central banking authorities to control such inflation, and tariffs or the imposition and enforceability of tariffs, trade wars, barriers or restrictions, or threats of such actions and the related uncertainty thereof including uncertainties regarding the ability to obtain refunds for previously paid tariffs that have subsequently been invalidated, could affect our ability to access capital as and when needed.
If these third parties provide inaccurate, misleading, or incomplete data, our business, prospects, and results of operations could be materially and adversely affected. Significant disruptions of information technology systems or breaches of data security, including cybersecurity incidents, could materially and adversely affect our business, results of operations and financial condition.
Significant disruptions of information technology systems or breaches of data security, including cybersecurity incidents, could materially and adversely affect our business, results of operations and financial condition. We collect and maintain information in digital form and are increasingly dependent on information technology systems and infrastructure to operate our business.
We collect and maintain information in digital form and are increasingly dependent on information technology systems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information.
In the ordinary course of our business, we collect, store and transmit large 34 amounts of confidential information, including trade secrets, other proprietary business information and confidential personal data.
Our internal information technology systems and infrastructure, and those of our current and any future collaborators, contractors and consultants and other third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, system outages, terrorism, war, telecommunication and electrical failures, cyberattacks, cybersecurity 25 incidents or cyber intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.
The information technology systems and infrastructure of our current and any future collaborators, contractors and consultants and other third parties on which we rely, are also vulnerable to such incidents.
Noncompliance with the EU GDPR may result in monetary penalties of up to €20 million or 4% of worldwide revenue, whichever is higher.
Failure to comply with the EU GDPR or the UK GDPR can result in significant fines and other liability, including, under the EU GDPR, fines of up to €20 million (or £17.5 million under the UK GDPR) or four percent (4%) of global revenue, whichever is greater.
In addition, we may be subject to patient privacy regulation by both the federal government and the states and foreign jurisdictions in which we conduct our business. If we fail to comply with any applicable federal, state or foreign legal requirement, we could be subject to penalties. Regulators globally are imposing greater monetary fines for privacy violations.
For example, there are federal and state healthcare laws and regulations that govern prescription drug marketing practices, including off-label promotion, and increased scrutiny of direct-to-consumer advertisements. In addition, we may be subject to patient privacy regulation by both the federal government and the states and foreign jurisdictions in which we conduct our business.
Such policy shifts, including efforts to downsize the federal workforce, remove job elimination protections for federal workers, limit certain communications, and potentially interfere with user fee reauthorization, may affect the FDA review process and average review times at the FDA may fluctuate as a result.
In addition, the HHS may change the user fee reauthorization process or fail to reauthorize user fee programs. As a result, average review times at the FDA may fluctuate, and the outcome of any such review process may be impacted.
Removed
It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information. We have outsourced elements of our information technology infrastructure and, as a result, a number of third-party vendors may or could have access to our confidential information.
Added
In August 2025, Gilead purchased additional shares of our common stock and warrants to purchase additional shares of our common stock. In December 2025, Gilead exercised its option and took an exclusive license to our HPI program, and in March 2026, Gilead declined to exercise its option to license 4334 or defer its option until completion of Phase 2 studies.
Removed
The costs to us to mitigate network security problems, bugs, viruses, worms, malicious software programs, system outages and security vulnerabilities or incidents could be significant, and our efforts to address these problems may not be successful.
Added
In addition, failure or delays can occur at any time during the nonclinical and clinical study process, resulting in additional operating expenses or harm to our business.
Removed
If unsuccessful, these problems could cause interruptions, delays, cessation of service and other harm to our business and our competitive position, including material disruption of our product development programs.
Added
Furthermore, we are exposed to a number of risks related to our CROs, vendors, suppliers and other service providers that are located outside of the United States, many of which may be beyond our control.
Removed
In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal, state and non-U.S. privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Clinical Health Act of 2009, and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission, state breach notification law and the European Union (EU) General Data Protection Regulation (EU GDPR).
Added
The ongoing shutdown of the U.S. Department of Homeland Security (DHS) could prevent the U.S. Customs and Border Protection (CBP) from performing normal business functions on which the operation of our business relies, which could negatively impact our business. The ongoing DHS shutdown has resulted in agencies, such as CBP, have been deemed “essential” and are continuing to operate.
Removed
We would also be exposed to a risk of loss or litigation and potential liability, which could materially adversely affect our business, results of operations and financial condition.
Added
Disruptions at the CBP and other agencies, including furloughs and reductions in workforce, are subject to the political process, which is inherently unpredictable. Although we have yet to encounter significant delays at ports of entry due to the shutdown, in past government shutdowns, CBP delays were common in areas requiring manual review or discretionary approvals.
Removed
The EU GDPR applies to any company established in the EU as well as to those outside the EU if they collect and use personal data in connection with the offering of goods or services to individuals in the EU or the monitoring of their behavior.
Added
If the current shutdown continues, the resulting delays and other disruptions could have a material adverse effect on our business. Our clinical studies require shipping clinical samples from our clinical study sites around the world to the United States for analysis and processing.
Removed
The EU GDPR enhances 28 data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers.
Added
CBP delays in import operations and CBP delays in inspecting imports, including difficulties with these samples clearing customs, may delay or otherwise adversely affect our ongoing clinical studies and their timelines, many of which have been communicated publicly. 31 Top-line, preliminary or interim data may not accurately reflect the final results of a particular study.
Removed
The EU GDPR may increase our responsibility and liability in relation to personal data that we process and we may be required to put in place additional mechanisms to ensure compliance with the EU GDPR, including as implemented by individual countries.
Added
We set goals and make public statements regarding our expectations on timing of certain accomplishments, developments and milestones under our research and development programs.
Removed
Compliance with the EU GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of personal data, such as healthcare data or other sensitive information, could greatly increase our cost of developing our products or even prevent us from offering certain products in jurisdictions that we may operate in.
Added
The clinical and commercial success of our potential products will depend in part on the public and clinical communities’ acceptance of novel classes of product candidates.
Removed
The California Consumer Privacy Act (CCPA) also created new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
Added
We rely on information technology systems that we or our third-party providers operate to process, transmit and store electronic information and otherwise to conduct our day-to-day operations (including confidential business, personal and patient health information in connection with our preclinical and clinical studies and our employees), which information technology systems may become subject to cyberattacks and other security breaches, and system outages.
Removed
The CCPA requires covered companies to provide certain disclosures to consumers about its data collection, use and sharing practices, and to provide affected California residents with ways to opt-out of certain sales or transfers of personal information.
Added
A successful cyberattack could cause serious negative consequences for us, including, without limitation, the disruption of operations, the theft, misappropriation, destruction or other compromises of confidential or proprietary information (including financial information, corporate strategic plans, trade secrets and other intellectual property and data), improper access to, use or disclosure of personal and patient health information, other misappropriation of assets, and financial loss.
Removed
While there is currently an exception for protected health information that is subject to HIPAA and clinical study regulations, as currently written, the CCPA may impact our business activities. The uncertainty surrounding the implementation of the CCPA exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information.
Added
Although we devote resources to protect our information systems, we realize that cyberattacks remain a threat, and there can be no assurance that our efforts (or those of our employees, contractors, consultants and the third-party providers on which we rely) will prevent security breaches that would result in business, legal, financial or reputational harm to us, or would have a material adverse effect on our results of operations and financial condition.
Added
In addition, although we carry cyber insurance, in the event of a material security incident, such coverage may not be sufficient to cover all losses.
Added
Any failure to prevent or mitigate security breaches or improper access to, use of, or disclosure of our clinical data or patients’ personal data could result in significant liability under various U.S. state and federal laws and regulations and laws of foreign jurisdictions regarding data privacy and security (or require notification to governmental agencies, the media or individuals pursuant to such laws) and may cause a material adverse impact to our reputation, affect our ability to use collected data, conduct new studies and potentially disrupt our business.
Added
Our internal computer systems, or those of our third-party CROs or other contractors or consultants, may fail or suffer other disruptions, which could result in a material disruption of our current or future product candidates’ development programs.
Added
Despite the implementation of security, business continuity and back-up measures, in addition to cyberattacks and security incidents described above, our internal computer systems and those of our third-party CROs and other contractors and consultants are vulnerable to damage from natural disasters, terrorism, war and telecommunication and electrical failures.
Added
While we have not experienced any such system failure, or accident to date, if such an event were to occur and cause interruptions in our operations (or those of our business partners or other third parties on which we rely), it could result in a material disruption of our programs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed8 unchanged
Biggest changeOur cybersecurity program includes systems and processes that are designed to assess, identify and manage material risks from cybersecurity threats and includes: maintenance and monitoring of information security policies aligned with global regulatory controls; user and employee awareness of cyber policies and practices; simulated phishing exercises; information systems configuration management; identity and information asset protection; infrastructure security systems; and cyber threat operations with regular monitoring and threat hunting.
Biggest changeOur cybersecurity program includes systems and processes that are designed to assess, identify and manage material risks from cybersecurity threats and includes: maintenance and monitoring of information security policies aligned with global regulatory controls; user and employee awareness of cyber policies and practices; simulated phishing exercises; information systems configuration management; identity and information asset protection; infrastructure security systems; and cyber threat operations with regular monitoring and threat hunting, including system penetration tests through a third-party service provider.
These include cybersecurity assessors, consultants, and other external cybersecurity experts to assist in the identification, verification, and validation of material risks from cybersecurity threats, as well as to support associated mitigation plans when necessary. 33 Cybersecurity is integrated into our overall risk management systems, including our annual enterprise risk management, internal controls, business continuity and crisis management, third-party risk management, insurance risk management, and employee compliance processes.
These include cybersecurity assessors, consultants, and other external cybersecurity experts to assist in the identification, verification, and validation of material risks from cybersecurity threats, as well as to support associated mitigation plans when necessary. 43 Cybersecurity is integrated into our overall risk management systems, including our annual enterprise risk management, internal controls, business continuity and crisis management, third-party risk management, insurance risk management, and employee compliance processes.
Our Cyber Incident Response Team, comprised of our Vice President, General Counsel and Corporate Secretary, our Executive Director, Accounting and Treasury, and our Executive Director, Information Technology, consults with, or provides input to each of these programs to ensure that material risks from cybersecurity threats are appropriately assessed, identified, and managed.
Our Cyber Incident Response Team, comprised of our Vice President, General Counsel and Corporate Secretary, our Vice President, Finance, and our Executive Director, Information Technology, consults with, or provides input to each of these programs to ensure that material risks from cybersecurity threats are appropriately assessed, identified, and managed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeRegardless of the outcome, litigation can have an adverse effect on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Saf ety Disclosures Not applicable. 34 PART II
Biggest changeRegardless of the outcome, litigation can have an adverse effect on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Saf ety Disclosures Not applicable. 44 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−2 removed1 unchanged
Biggest changeRecent Sales of Unregistered Securities There were no unregistered sales of equity securities in 2024. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K.
Biggest changeRecent Sales of Unregistered Securities There were no unregistered sales of equity securities in 2025. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K. Item 6. [Reserved] 45
Holders of Record As of March 14, 2025, there were 49 stockholders of record, which excludes stockholders whose shares were held in nominee or street name by brokers. Dividend Policy We have never declared or paid any dividends and do not anticipate paying any dividends on our common stock in the foreseeable future.
Holders of Record As of March 13, 2026, there were 56 stockholders of record, which excludes stockholders whose shares were held in nominee or street name by brokers. Dividend Policy We have never declared or paid any dividends and do not anticipate paying any dividends on our common stock in the foreseeable future.
Removed
Reverse Stock Split On January 31, 2024, following approval by our stockholders, our board of directors approved the implementation of a reverse stock split of our common stock at a ratio of 1-for-12 (the Reverse Stock Split).
Removed
The Reverse Stock Split was effective as of February 9, 2024, and our common stock began trading on the Nasdaq Global Select Market on a post-split basis on February 12, 2024. All share and per share amounts of our common stock presented in this Annual Report on Form 10-K have been adjusted to reflect the Reverse Stock Split.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

69 edited+61 added−31 removed64 unchanged
Biggest changeThe following table summarizes the period-over-period changes in our research and development expenses (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2024 2023 2024 vs. 2023 2024 vs. 2023 External program expenses: Research and discovery $ 8,985 $ 9,741 $ (756 ) (8 %) 6250 6,396 421 5,975 1419 % 5366 6,215 2,869 3,346 117 % 1179 4,239 — 4,239 100 % 4334 2,646 1,947 699 36 % Vebicorvir (VBR) (43 ) (1) 1,755 (1,798 ) (102 %) 3733 — 3,383 (3,383 ) (100 %) ABI-H2158 — 226 (226 ) (100 %) Total external program expenses 28,438 20,342 8,096 40 % Employee and contractor-related expenses 23,819 22,956 863 4 % Facility and other expenses 3,676 5,602 (1,926 ) (34 %) Total research and development expenses $ 55,933 $ 48,900 $ 7,033 14 % (1) Reflects net amounts refundable to us after the final reconciliation of costs of the clinical trial conducted pursuant to the Clinical Trial Collaboration Agreement with Arbutus Biopharma Corporation, which was terminated in February 2023.
Biggest changeWe use our employee and infrastructure resources, as well as certain third-party costs, across multiple research and development programs, and we do not specifically allocate these costs to our programs. 56 The following table summarizes the period-over-period changes in our research and development expenses (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2025 2024 2025 vs. 2024 2025 vs. 2024 External program expenses: 5366 $ 9,353 $ 6,215 $ 3,138 50 % 1179 8,119 4,239 3,880 92 % 6250 5,780 6,396 (616 ) (10 %) 4334 890 2,646 (1,756 ) (66 %) 7272 (1) 2,300 — 2,300 100 % Research and discovery 8,161 8,985 (824 ) (9 %) VBR — (43 ) (2) 43 (100 %) Total external program expenses 34,603 28,438 6,165 22 % Employee and contractor-related expenses 26,729 23,819 2,910 12 % Facility and other expenses 3,481 3,676 (195 ) (5 %) Total research and development expenses $ 64,813 $ 55,933 $ 8,880 16 % (1) In October 2025, we transitioned our discovery and development from 7423 to its parent molecule, 7272, which is currently in regulatory filing-enabling preclinical studies.
During the 12-year collaboration term (subject to payment of certain extension fees) and for a specified period thereafter, Gilead may exercise its opt-in rights, on a program-by-program basis, at one of two timepoints—completion of a certain Phase 1 study or completion of a certain Phase 2 study for the first product within the program—upon payment of an opt-in fee ranging from $45.0 million to $125.0 million per program depending on the type of program and when the option is exercised.
During the 12-year collaboration term (subject to payment of certain extension fees) and for a specified period thereafter, Gilead may exercise its opt-in rights, on a program-by-program basis, at one of two timepoints—completion of a certain Phase 1 study or, upon payment of a deferral fee and completion of a certain Phase 2 study for the first product within the program—upon payment of an opt-in fee ranging from $45.0 million to $125.0 million per program depending on the type of program and when the option is exercised.
Initial infection can be asymptomatic or can be marked by serious symptoms, including painful skin lesions, swelling of lymph nodes and urinary problems that can persist for two to three weeks. While genital herpes can be caused by either HSV-1 or HSV-2, recurrences are more likely to be experienced by individuals infected by HSV-2.
Initial infection can be asymptomatic or can be marked by serious symptoms, including painful skin lesions, swelling of lymph nodes and urinary problems that can persist for two to three weeks. While genital herpes can be caused by either HSV-1 or 46 HSV-2, recurrences are more likely to be experienced by individuals infected by HSV-2.
Unlike nucleoside analogs, these compounds do not require phosphorylation by the HSV thymidine kinase (TK) and ongoing viral replication to become active drugs. As a result, HPIs are active immediately upon reactivation of latent HSV-1 and HSV-2. Furthermore, 36 HPIs are active against TK-deficient HSV-1 and HSV-2, which is a major mechanism of resistance to nucleoside analogs.
Unlike nucleoside analogs, these compounds do not require phosphorylation by the HSV thymidine kinase (TK) and ongoing viral replication to become active drugs. As a result, HPIs are active immediately upon reactivation of latent HSV-1 and HSV-2. Furthermore, HPIs are active against TK-deficient HSV-1 and HSV-2, which is a major mechanism of resistance to nucleoside analogs.
NTCP is highly expressed on human hepatocytes, where it serves as one of several proteins involved in the 38 transport of bile acids. The binding of specific small or large molecules to NTCP has been shown to effectively inhibit the interaction of HBsAg with NTCP, which prevents HBV and HDV from infecting hepatocytes.
NTCP is highly expressed on human hepatocytes, where it serves as one of several proteins involved in the transport of bile acids. The binding of specific small or large molecules to NTCP has been shown to effectively inhibit the interaction of HBsAg with NTCP, which prevents HBV and HDV from infecting hepatocytes.
As a next-generation CAM, 4334 was optimized to potently disrupt viral replication (MOA #1) and prevent the establishment and replenishment of new cccDNA (MOA #2). In contrast, while active against MOA #1, first-generation CAMs have not demonstrated adequate potency to sufficiently block cccDNA formation (MOA #2).
As a next-generation CAM, 4334 was optimized to potently disrupt viral replication (MOA #1) and prevent the establishment and replenishment of new cccDNA (MOA #2). In contrast, while active against MOA #1, first-generation CAMs have not demonstrated adequate potency to sufficiently block MOA #2.
In a variety of cell culture models, 4334 has demonstrated the ability to reduce production of HBV DNA levels as well as the surrogate markers for cccDNA establishment: HBV e antigen (HBeAg), HBV core-related antigen (HBcrAg) and HBV pre-genomic RNA (pgRNA).
In a variety of cell culture models, 4334 has demonstrated the ability to reduce production of HBV DNA levels as well as 50 the surrogate markers for cccDNA establishment: HBV e antigen (HBeAg), HBV core-related antigen (HBcrAg) and HBV pre-genomic RNA (pgRNA).
Additionally, we expect our research and development expenses to increase over the coming years as we continue the development of our product candidates. As a result, our operating losses are likely to be substantial over the next several years and thereafter if none of our product 41 candidates are approved or successfully launched.
Additionally, we expect our research and development expenses to increase over the coming years as we continue the development of our product candidates. As a result, our operating losses are likely to be substantial over the next several years and thereafter if none of our product candidates are approved or successfully launched.
We account for contract modifications, defined as changes in the scope or price (or both) of a contract that are approved by the parties to the contract, such as a contract amendment, when the parties to a contract approve a modification that either creates new, or changes existing, enforceable rights and obligations of the parties to the contract.
We account for contract modifications, defined as changes in the scope or price (or both) of a contract that are approved by the parties to the contract, such as a contract amendment, when the parties to a contract approve a modification that 54 either creates new, or changes existing, enforceable rights and obligations of the parties to the contract.
Pursuant to the Gilead Equity Agreements, Gilead made an upfront equity investment of $15.2 million by purchasing from us 1,089,472 shares of our common stock at a purchase price of $13.92 per share.
Pursuant to the Gilead Equity Agreements, Gilead made an upfront equity investment of $15.2 million by purchasing 52 from us 1,089,472 shares of our common stock at a purchase price of $13.92 per share.
Examples of estimated amortized or accrued research and development expenses include fees to: • contract research organizations (CROs) and other service providers in connection with clinical studies; • contract manufacturing organizations (CMOs) in connection with the production of clinical trial materials; and • vendors in connection with nonclinical development activities.
Examples of estimated amortized or accrued research and development expenses include fees to: • contract research organizations (CROs) and other service providers in connection with clinical studies; 55 • contract manufacturing organizations (CMOs) in connection with the production of clinical trial materials; and • vendors in connection with nonclinical development activities.
We estimated the SSP of extension fees and opt-in rights pursuant to the Gilead Collaboration Agreement using significant estimates, including forecasted revenues and costs, development timelines, discount rates, and probabilities of technical and regulatory success.
We estimated the SSP of extension fees and opt-in rights pursuant to the modified Gilead Collaboration Agreement using significant estimates, including forecasted revenues and costs, development timelines, discount rates, and probabilities of technical and regulatory success.
In addition, people with recurrent genital herpes often experience associated psychosocial impacts, including anxiety, concerns about transmission, depression and social stigma. Immunocompromised patients may experience more severe and prolonged symptoms due to increased recurrence rates. HPIs are antiviral agents in development for the treatment of recurrent genital herpes, with a clinically-validated mechanism of action.
In addition, people with recurrent genital herpes often experience associated psychosocial impacts, including anxiety, concerns about transmission, depression and social stigma. Immunocompromised individuals may experience more severe and prolonged symptoms due to increased recurrence rates. HPIs are antiviral agents in development for the treatment of recurrent genital herpes, with a clinically-validated mechanism of action.
Genital herpes recurrence can cause painful genital lesions that can lead to increased transmission and debilitate patients, and symptoms may become more serious with additional episodes. Additional complications include increased risk of HIV infection, as 30% of HIV infections acquired through sexual transmission are attributable to HSV-2 infection.
Genital herpes recurrence can cause painful genital lesions that can lead to increased transmission and debilitate individuals, and symptoms may become more serious with additional episodes. Additional complications include increased risk of HIV infection, as 30% of HIV infections acquired through sexual transmission are attributable to HSV-2 infection.
Most people with initial symptomatic genital herpes who are infected with HSV-2 have frequent recurrences, generally between three and 15 per year, including over four million people in the United States and France, Germany, Italy and Spain (collectively, the EU4) and the United Kingdom (UK).
Most people with initial symptomatic genital herpes who are infected with HSV-2 have frequent recurrences, generally between three and 15 per year, impacting over four million people in the United States and France, Germany, Italy and Spain (collectively, the EU4) and the United Kingdom (UK).
During the term, Gilead will continue to support the collaboration through extension fees of $75.0 million in each of the third, fifth and seventh years of the collaboration. The Gilead Collaboration Agreement is subject to termination by either party for the other party’s uncured, material breach or insolvency.
During the term, Gilead will continue to support the collaboration through extension fees of $75.0 million in each of the third, fifth and seventh anniversaries of the collaboration. The Gilead Collaboration Agreement is subject to termination by either party for the other party’s uncured, material breach or insolvency.
These uncontrolled viral infections increase the risk of severe disease and serious complications, including organ rejection, graft loss and death, and impacted approximately 95,000 people receiving transplants in 2021 in the United States and Europe.
These uncontrolled herpesvirus infections increase the risk of severe disease and serious complications, including organ rejection, graft loss and death, and impacted approximately 95,000 people receiving transplants in 2021 in the United States and Europe.
As of 2022, of the 254 million people living with chronic HBV infection, only approximately 33 million, or 13%, were aware of their infection, and only approximately 7 million, or 3%, of those diagnosed received treatment.
Of the 254 million people living with chronic HBV infection, only approximately 33 million, or 13%, were aware of their infection, and only approximately 7 million, or 3%, of those diagnosed received treatment.
The inhibition of HBV and HDV infection by molecules that bind NTCP has been demonstrated in vitro, in animal models and clinically. Notably, bulevirtide, a peptide blocker of NTCP, is the only approved therapy for HDV (approved in Europe). 6250 uses the same clinically-validated MOA as bulevirtide.
The inhibition of HBV and HDV infection by molecules that bind NTCP has been demonstrated in vitro, in animal models and clinically. Notably, bulevirtide, a peptide blocker of NTCP, is the only approved therapy for HDV. 6250 49 has the same clinically-validated MOA as bulevirtide.
Our pipeline includes multiple clinical-stage investigational therapies, including: (1) two helicase-primase inhibitors (HPI) targeting recurrent genital herpes; (2) an orally bioavailable hepatitis delta virus (HDV) entry inhibitor; and (3) a highly potent next-generation capsid assembly modulator (CAM) designed to disrupt the replication cycle of hepatitis B virus (HBV) at several key points.
Our pipeline includes multiple clinical-stage investigational therapies, including: (1) two long-acting helicase-primase inhibitors (HPI) for the treatment of recurrent genital herpes; (2) an orally bioavailable hepatitis delta virus (HDV) entry inhibitor; and (3) a highly potent next-generation capsid assembly modulator (CAM) designed to disrupt the replication cycle of hepatitis B virus (HBV) at several key points.
The effect of any change made to an estimated input component and, therefore revenue recognized, would be recorded as a change in estimate. Such changes in estimate could have a material impact on the revenue recognized in a future period.
The effect of any change made to an estimated input component or variable consideration and, therefore revenue recognized, would be recorded as a change in estimate. Such changes in estimate could have a material impact on the revenue recognized in a future period.
We have based this estimate on assumptions that may prove to be wrong, and we may utilize our available capital resources sooner than we currently expect. Our contractual obligations include operating lease obligations totaling $3.9 million as of December 31, 2024, of which $0.8 million are short-term.
We have based our estimate on assumptions that may prove to be wrong, and we may utilize our available capital resources sooner than we currently expect. Our contractual obligations include operating lease obligations totaling $3.2 million as of December 31, 2025, of which $0.8 million are short-term.
Research Programs In addition to our investigational therapy programs that have nominated development candidates and have advanced into clinical studies or CTA-enabling studies, our research team continues to actively focus on proprietary research to discover and develop novel antivirals to treat serious viral diseases. Collaboration and License Agreement Gilead Sciences, Inc.
Research Programs In addition to our investigational therapy programs that have nominated development candidates and have advanced into clinical studies or regulatory-filing enabling studies, our research team continues to actively focus on proprietary research to discover and nominate novel antivirals to treat serious viral diseases. Collaboration and License Agreement Gilead Sciences, Inc.
For contracts with customers, we apply the following five-step model, each of which requires judgment, in order to determine this amount: (1) identification of the promised goods or services in the contract; (2) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (3) measurement of the transaction price, including the constraint on variable consideration; (4) allocation of the transaction price to the performance obligations; and (5) recognition of revenue when (or as) we satisfy each performance obligation.
For contracts with customers, we apply the following five-step model, each of which requires judgment, in order to determine this amount: (1) identification of the contract(s) with a customer; (2) identification of the performance obligations in the contract, including whether they are distinct in the context of the contract; (3) measurement of the transaction price, including the constraint on variable consideration; (4) allocation of the transaction price to the performance obligations; and (5) recognition of revenue when (or as) we satisfy each performance obligation.
HDV may be significantly underdiagnosed, because there were no HDV-targeted therapies approved until very recently, and the first therapy approved is only approved in Europe. HDV is known to accelerate disease progression and increase the incidence of liver cirrhosis and liver cancer, which results in higher morbidity and mortality rates than HBV alone.
HDV may be significantly underdiagnosed, because there were no HDV-targeted therapies approved until very recently, and the first therapy approved is only approved in European Union (EU), Australia and Canada. HDV is known to accelerate disease progression and increase the incidence of liver cirrhosis and liver cancer, which results in higher morbidity and mortality rates than HBV alone.
The current standard of care treatment for HDV is off-label pegylated interferon-α (IFN-α) injected weekly or, in Europe, a large, complex peptide inhibitor that requires daily injections, bulevirtide. There are no approved HDV treatments in the United States, and the large, complex peptide blocker is the only approved HDV treatment in the Europe.
The current standard of care treatment for HDV is off-label pegylated interferon-α (IFN-α) injected weekly or, in the EU, Australia and Canada, a large, complex peptide inhibitor that requires daily injections, bulevirtide. There are no approved HDV treatments in the United States.
In addition to 5366, we are also advancing 1179, a structurally-differentiated HPI with single digit nanomolar potency against HSV-1 and HSV-2 and a nonclinical PK and safety profile to date that is supportive of a potential long-acting treatment by once-weekly oral administration.
In addition to 5366, we have also begun the clinical development of 1179, a structurally-differentiated HPI with single digit nanomolar potency against HSV-1 and HSV-2 and a nonclinical PK and safety profile to date that is supportive of a potential long-acting treatment by once-weekly oral administration.
As a result of these limitations, we identified an opportunity to develop an oral, broad-spectrum NNPI for transplant-associated herpesvirus infections, which could greatly advance treatment. In December 2024, we nominated 7423 as our development candidate to undergo CTA-enabling studies, which are ongoing.
As a result of these limitations, we identified an opportunity to develop an oral, broad-spectrum NNPI for transplant-associated herpesvirus infections, which could greatly advance treatment. 51 In December 2024, we nominated 7423, a prodrug, as our development candidate to undergo regulatory filing-enabling studies.
As of December 31, 2024, we had an accumulated deficit of $825.9 million. Because we do not generate revenue from any of our product candidates, our losses will continue as we further develop and seek regulatory approval for, and commercialize, our product candidates.
As of December 31, 2025, we had an accumulated deficit of $832.0 million. Because we do not generate revenue from any of our product candidates, our losses will continue as we further develop and seek regulatory approval for, and commercialize, our product candidates.
We initiated a Phase 1a clinical study of 6250 during the fourth quarter of 2024, and we expect interim safety, PK and biomarker data from single-ascending and multiple-ascending doses cohorts in healthy participants in the third quarter of 2025.
A Phase 1a clinical study of 6250 was initiated in the fourth quarter of 2024, and in August 2025, we announced interim PK, biomarker and safety data from single-ascending and multiple-ascending doses cohorts in healthy participants.
Prior to Gilead’s potential exercise of its opt-in, we are primarily responsible for all discovery, research and development on both our programs and the two Gilead-contributed programs. Following Gilead’s opt-in, Gilead will control the further discovery, research, development, and commercialization on any optioned programs.
Prior to Gilead’s potential exercise of its opt-in, we are primarily responsible for all discovery, research and development on both our programs and the two Gilead-contributed programs.
Income tax expense was insignificant during the year ended December 31, 2023. Liquidity and Capital Resources Sources of Liquidity As a result of our significant research and development expenditures and the lack of any FDA-approved products to generate product sales revenue, we have not been profitable and have generated operating losses since we were incorporated in October 2005.
Liquidity and Capital Resources Sources of Liquidity As a result of our significant research and development expenditures and the lack of any FDA-approved products to generate product sales revenue, we have not been profitable and have generated operating losses since we were incorporated in October 2005.
We anticipate releasing data from the 400 mg cohort in the first half of 2025. Transplant-Associated Herpesviruses In a transplant setting, when patients are experiencing immunosuppression, they are at high risk of uncontrolled viral replication and severe disease brought on by one or more herpesviruses, including cytomegalovirus (CMV), HSV-1, HSV-2, varicella zoster virus (VZV) and Epstein-Barr virus (EBV).
Transplant-Associated Herpesviruses In a transplant setting, when patients are experiencing immunosuppression, they are at high risk of uncontrolled viral replication and severe disease brought on by one or more herpesviruses, including cytomegalovirus (CMV), HSV-1, HSV-2, varicella zoster virus (VZV) and Epstein-Barr virus (EBV).
The following table summarizes the period-over-period changes in our interest and other income, net (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2024 2023 2024 vs. 2023 2024 vs. 2023 Interest and other income, net $ 5,573 $ 3,451 $ 2,122 61 % Interest and other income, net was $5.6 million for the year ended December 31, 2024, compared to $3.5 million for the year ended December 31, 2023.
The following table summarizes the period-over-period changes in our interest and other income, net (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2025 2024 2025 vs. 2024 2025 vs. 2024 Interest and other income, net $ 5,996 $ 5,573 $ 423 8 % Interest and other income, net was $6.0 million for the year ended December 31, 2025, compared to $5.6 million for the year ended December 31, 2024.
The $10.0 million payment received in connection with the First Amendment to the Gilead Collaboration Agreement is creditable towards future collaboration-related payments payable by Gilead. 40 If Gilead exercises its opt-in right to any current or future program under the collaboration, we are eligible to receive up to $330.0 million in potential regulatory and commercial milestones on that program, in addition to royalties ranging from the high single-digits to high teens, depending on the clinical stage of the program at the time of the opt-in.
If Gilead exercises its opt-in right to any current or future program under the collaboration, we are eligible to receive up to $330.0 million in potential regulatory and commercial milestones on that program, in addition to royalties ranging from the high single-digits to high teens, depending on the clinical stage of the program at the time of the opt-in.
To reach that goal, we discovered and are developing a novel, potent, long-acting HPI for recurrent genital herpes, 5366, which demonstrated low nanomolar potency in vitro against both HSV-1 and HSV-2 clinical isolates and a favorable nonclinical safety profile in the U.S.
To reach that goal, we discovered and began the clinical development of a novel, potent, long-acting HPI for recurrent genital herpes, 5366, which demonstrated low nanomolar potency in vitro against both HSV-1 and HSV-2 clinical isolates and a favorable nonclinical safety profile in the U.S. Food and Drug Administration's (FDA) Good Laboratory Practice (GLP) toxicology studies.
The following table summarizes the period-over-period change in our general and administrative expenses (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2024 2023 2024 vs. 2023 2024 vs. 2023 General and administrative expenses $ 18,007 $ 22,909 $ (4,902 ) (21 %) General and administrative expenses were $18.0 million for the year ended December 31, 2024, compared to $22.9 million for the year ended December 31, 2023.
The following table summarizes the period-over-period change in our general and administrative expenses (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2025 2024 2025 vs. 2024 2025 vs. 2024 General and administrative expenses $ 19,608 $ 18,007 $ 1,601 9 % General and administrative expenses were $19.6 million for the year ended December 31, 2025, compared to $18.0 million for the year ended December 31, 2024.
Our pipeline also includes a novel, oral broad-spectrum non-nucleoside polymerase inhibitor (NNPI) targeting transplant-related herpesviruses, which is currently undergoing studies to enable a regulatory filing, and we have additional research programs against multiple antiviral targets.
Our pipeline also includes a novel, oral broad-spectrum non-nucleoside polymerase inhibitor (NNPI) for the treatment of transplant-related herpesviruses, which is currently undergoing studies to enable a regulatory filing, and we have additional research programs against multiple antiviral targets. In December 2025, pursuant to our collaboration with Gilead Sciences, Inc.
We concluded there continues to be a single combined performance obligation consisting of a series of distinct research and development services, and therefore, the remaining services under the First Amendment to the Gilead Collaboration Agreement are distinct from the research and development services already provided.
For both contract modifications, we concluded there continues to be a single combined performance obligation consisting of a series of distinct research and development services (R&D Services), and therefore, the remaining services under the modified agreement are distinct from the R&D Services already provided.
We concluded none of the options in the contract are performance obligations at the outset of the arrangement as they are contingent upon 42 option exercise, are capable of being distinct from the research and development services and are not offered at a discount to their SSP.
For both modifications, we concluded none of the options in the contract were performance obligations as they were contingent upon option exercise, were capable of being distinct from the R&D Services and were not offered at a discount to their SSP.
We have funded our operations through December 31, 2024 principally through equity 45 financings, raising an aggregate of $648.0 million in net proceeds, and strategic collaborations, raising an aggregate of $200.9 million. Future Funding Requirements We expect our future operating expenses to increase substantially over the coming years as we continue to advance our candidates into the clinic.
We have funded our operations through December 31, 2025 principally through equity financings, raising an aggregate of $821.8 million in net proceeds, and strategic collaborations, raising an aggregate of $236.2 million. Funding Requirements We expect our future operating expenses to increase over the coming years as we continue to expand our pipeline and advance our candidates.
Accordingly, we accounted for the First Amendment as a termination of the existing contract and the creation of a new contract and are recognizing the revenue on a prospective basis by reassessing the transaction price and allocating it to the remaining research and development services.
Accordingly, we accounted for each modification as a termination of the existing contract and the creation of a new contract and are recognizing the revenue prospectively by reassessing the transaction price and allocating it to the remaining R&D Services.
Our HBV and HDV Programs The World Health Organization (WHO) estimates that 254 million people worldwide are chronically infected with HBV as of 2022, and 1.2 million new infections occur each year.
For more information regarding Gilead’s exercise of its option, see “Collaboration and License Agreement—Gilead Sciences, Inc.—Option Exercise.” Our HBV and HDV Programs The World Health Organization (WHO) estimates that 254 million people worldwide are chronically infected with HBV as of 2022, and 1.2 million new infections occur each year.
HSV-1 and HSV-2 are acquired by oral or genital contact either during symptomatic or asymptomatic reactivation of the virus. Both viruses replicate in neurons, where they can remain latent for the rest of the individual’s life and periodically reactivate, with the virus spreading, replicating and causing disease in epithelial tissues.
Both viruses replicate in neurons, where they can remain latent for the rest of the individual’s life and periodically reactivate, with the virus spreading, replicating and causing disease in epithelial tissues.
A Phase 1a study demonstrated that 4334 was well-tolerated when administered orally as single or multiple doses. In addition, the PK data support 4334 as a once daily oral therapy and predicts best-in-class activity against both MOA #1 and MOA #2. During the second quarter of 2024, we dosed our first participant in a Phase 1b clinical study of 4334.
A Phase 1a study demonstrated that 4334 was well-tolerated when administered orally as single or multiple doses. During the second quarter of 2024, we dosed our first participant in a Phase 1b clinical study of 4334.
We recognize revenue under the Gilead Collaboration Agreement over time using a cost-based input method, which continues to be appropriate following the First Amendment to the Gilead Collaboration Agreement. Revenue related to certain performance obligations that are satisfied over time could be materially impacted as a result of changes in the estimated total research effort required to satisfy those obligations.
Revenue related to certain performance obligations that are satisfied over time could be materially impacted as a result of changes in the estimated total research effort required to satisfy those obligations.
Our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in our reporting changes in estimates in any particular period.
Our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in our reporting changes in estimates in any particular period. Adjustments to prior period estimates have not been material for the years ended December 31, 2025 and 2024.
Income Tax Expense The following table summarizes the period-over-period changes in our income tax expense (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2024 2023 2024 vs. 2023 2024 vs. 2023 Income tax expense $ 330 $ 33 $ 297 900 % Income tax expense was $0.3 million for the year ended December 31, 2024 due to taxable income incurred from the upfront payments received under the Gilead Collaboration in 2023.
Income tax expense was $0.3 million for the year ended December 31, 2024 due to taxable income incurred from the upfront payments received under the Gilead Collaboration in 2023.
Among the subset of participants with detectable HBV RNA at baseline, a mean decline of 2.5 log 10 U/mL for HBV RNA was observed. As anticipated, limited changes in viral antigens were observed for the study population over the 28-day treatment period. These initial antiviral data are consistent with the high potency seen preclinically for 4334.
Among the subset of participants with detectable HBV RNA at baseline, mean declines of 2.5 log 10 U/mL and 2.3 log 10 U/mL were observed over 28 days in the participants receiving 150 mg and 400 mg, respectively. As anticipated, limited changes in viral antigens were observed for the study population over the 28-day treatment period.
We determined the First Amendment to the Gilead Collaboration Agreement represents a contract modification within the scope of the revenue from contracts with customers guidance.
We entered into the First Amendment to the Gilead Collaboration Agreement in December 2024 and a letter agreement in July 2025. We determined each of these amendments to the Gilead Collaboration Agreement represent a contract modification within the scope of the revenue from contracts with customers guidance.
Adjustments to prior period estimates have not been material for the years ended December 31, 2024 and 2023. 43 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 Collaboration Revenue The following table summarizes the period-over-period changes in our collaboration revenue (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2024 2023 2024 vs. 2023 2024 vs. 2023 Collaboration revenue $ 28,520 $ 7,163 $ 21,357 298 % Collaboration revenue was $28.5 million for the year ended December 31, 2024 compared to $7.2 million for the year ended December 31, 2023.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 Collaboration Revenue The following table summarizes the period-over-period changes in our collaboration revenue (in thousands, except for percentages): Year Ended December 31, $ Change % Change 2025 2024 2025 vs. 2024 2025 vs. 2024 Collaboration revenue from a related party $ 72,303 $ 28,520 $ 43,783 154 % Collaboration revenue was $72.3 million for the year ended December 31, 2025 compared to $28.5 million for the year ended December 31, 2024.
During the first quarter of 2024, we filed a Clinical Trial Application (CTA) to support initiation of a Phase 1a/b clinical study for 5366, which was approved in April 2024, and we dosed our first participant in the Phase 1a portion of this study during the second quarter of 2024.
For additional information regarding the option exercise, see “Collaboration and License Agreements—Gilead Sciences, Inc.—Option Exercise.” During the first quarter of 2024, we filed a Clinical Trial Application (CTA) to support initiation of a Phase 1a/b clinical study for 5366, which was approved in April 2024.
One self-limited Grade 2 alanine transaminase elevation was observed in a cohort evaluating the highest dose of 300 mg. There were no treatment-related Grade 3 or 4 laboratory abnormalities and no protocol-defined stopping criteria were met. There were no clinically significant ECG abnormalities or patterns of AEs or laboratory abnormalities noted.
There were no serious AEs in any dose cohort. No protocol defined stopping criteria were met. There were no clinically significant electrocardiogram abnormalities or patterns of AEs noted. One Grade 2 ALT elevation was observed in the cohort evaluating the highest single-dose level of 25 mg.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 was $40.2 million, compared to net cash used in investing activities of $69.1 million for the same period in 2023. The increase in cash flows from investing was due to higher proceeds from maturities of our marketable securities, which exceeded purchases in 2024.
Investing Activities Net cash used in investing activities was $113.5 million for the year ended December 31, 2025, compared to net cash provided by investing activities of $40.2 million for the same period in 2024. The change was primarily due to our purchases of marketable securities following our financing in August 2025, as we invested the proceeds from those offerings.
There are still high titer (greater than 10 4 HSV-2 DNA copies/mL) shedding episodes under this current standard of care for recurrent genital herpes, which can lead to recurrent episodes and transmission of genital herpes. Based on the limitations of current therapies, we see a path to advancing the treatment paradigm for people suffering from recurrent genital herpes.
There are still high titer (greater than 10 4 HSV-2 DNA copies/mL) shedding episodes under this current standard of care for recurrent genital herpes, which can lead to recurrent episodes and transmission of genital herpes. In addition, nucleoside analogs also carry a high pill burden as a lifelong daily treatment, with doses ranging from one to three times daily.
Our future capital requirements will depend on many factors, including: • our ability to raise capital despite macroeconomic and geopolitical events impacting financial markets, such as rising inflation, potential effects of changes in federal government regulation or policies, including changes in or new tariffs, and market volatility; • our ability to realize future potential benefits pursuant to the Gilead Collaboration and maintain the collaboration; • the scope, progress, results and costs of our ongoing drug discovery, nonclinical development, laboratory testing and clinical studies of our product candidates and any additional clinical studies we may conduct in the future; • our ability to manufacture, and to contract with third parties to manufacture, adequate supplies of our product candidates for our clinical studies and any eventual commercialization; • the costs, timing and outcome of regulatory review of our product candidates; and • the costs of preparing, filing and prosecuting patent applications in the United States and abroad, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims.
We also enter into contracts in the normal course of business with CROs for clinical trials and CMOs for clinical supply manufacturing and with vendors for nonclinical research studies and other services and products for operating purposes, which generally provide for termination within 30 days of notice. 58 Our future capital requirements will depend on many factors, including: • our ability to realize future potential benefits pursuant to the Gilead Collaboration and maintain the collaboration; • the future development costs we would incur if we elect to participate in the Profit-Share for programs advanced by Gilead under the Gilead Collaboration; • the scope, progress, results and costs of our ongoing drug discovery, nonclinical development, laboratory testing and clinical studies of our product candidates and any additional clinical studies we may conduct in the future; • our ability to manufacture, and to contract with third parties to manufacture, adequate supplies of our product candidates for our clinical studies and any eventual commercialization; • the costs, timing and outcome of regulatory review of our product candidates; and • the costs of preparing, filing and prosecuting patent applications in the United States and abroad, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims.
Food and Drug Administration's (FDA) Good Laboratory Practice (GLP) toxicology studies, with high safety margins and minimal potential for off-target effects. In addition, we are developing a second novel, potent, long-acting HPI for genital herpes, 1179, which was in-licensed to us as part of our collaboration with Gilead.
In addition, we began development of a second novel, potent, long-acting HPI for genital herpes, 1179, which was in-licensed to us as part of our collaboration with Gilead.
In addition, variable consideration (including regulatory and commercial milestones) must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price. Research and Development Contract Costs and Accruals As part of the process of preparing our consolidated financial statements, we are required to estimate certain research and development expenses.
Research and Development Contract Costs and Accruals As part of the process of preparing our consolidated financial statements, we are required to estimate certain research and development expenses.
Operations Since our inception, we have had no revenue from product sales and have funded our operations principally through debt financings prior to our initial public offering in 2010 and through equity financings and collaborations since then.
We will also have the right to opt in to share 40% of all costs and profits in the United States (the Profit-Share) in lieu of receiving milestones and royalties for that program in the United States after receipt of a development plan and budget from Gilead. 53 Operations Since our inception, we have had no revenue from product sales and have funded our operations principally through debt financings prior to our initial public offering in 2010 and through equity financings and collaborations since then.
We expect to continue to raise capital when and as needed and at the time and in the manner most advantageous to us. We expect our existing cash, cash equivalents and marketable securities will enable us to fund our operations into the middle of 2026.
We expect to continue to raise capital when and as needed and at the time and in the manner most advantageous to us. As of December 31, 2025, we held cash, cash equivalents and marketable securities of $248.1 million. Based on our current operating plan, we believe we have sufficient funds to meet our operating requirements into 2028.
Research and development expenses were $55.9 million for the year ended December 31, 2024 compared to $48.9 million for the year ended December 31, 2023.
Research and development expenses were $64.8 million for the year ended December 31, 2025, compared to $55.9 million for the year ended December 31, 2024. The $8.9 million increase was primarily driven by higher external program expenses as we advanced our pipeline.
(BeiGene) upon our discontinuing development of ABI-H3733 (3733), which left no products licensed to BeiGene and no remaining performance obligations. Research and Development Expenses Research and development expenses consist primarily of employee-related expenses, fees paid to CROs and CMOs, lab supplies and other third-party expenses that support our research and discovery, nonclinical and clinical activities.
Research and Development Expenses Research and development expenses consist primarily of employee-related expenses, fees paid to CROs and CMOs, lab supplies and other third-party expenses that support our research and discovery, nonclinical and clinical activities. External program costs represent a significant portion of our research and development expenses, which we track by product candidate once it has been nominated.
We submitted the CTA for a Phase 1a/b study of 1179 in September 2024, which was approved in October 2024. We dosed our first participant in the Phase 1a portion of this study during the fourth quarter of 2024. In February 2025, we announced positive interim data for the Phase 1a portion of the 1179 study.
We submitted the CTA for the study in September 2024, which was approved in October 2024. We reported interim data from two oral weekly dose cohorts in the Phase 1b portion of the 1179 study in December 2025.
In contrast, in 2023 our purchases of marketable securities exceeded proceeds because of additional funds available to invest from the upfront payment received from Gilead under the Gilead Collaboration Agreement. Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $29.4 million, compared to $13.8 million for the same period in 2023.
Financing Activities Net cash provided by financing activities was $174.7 million for the year ended December 31, 2025, compared to $29.4 million for the same period in 2024.
If we are unable to raise additional funds when needed, we may be required to reduce staff, delay, scale back or discontinue our product development and clinical studies or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 46 Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 Net cash (used in) provided by operating activities $ (51,117 ) $ 22,743 Net cash provided by (used in) investing activities 40,171 (69,138 ) Net cash provided by financing activities 29,449 13,818 Net increase (decrease) in cash and cash equivalents $ 18,503 $ (32,577 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $51.1 million, compared to net cash provided by operating activities of $22.7 million for the same period in 2023.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2025 2024 Net cash used in operating activities $ (41,093 ) $ (51,117 ) Net cash (used in) provided by investing activities (113,468 ) 40,171 Net cash provided by financing activities 174,667 29,449 Net increase in cash and cash equivalents $ 20,106 $ 18,503 Operating Activities Net cash used in operating activities was $41.1 million for the year ended December 31, 2025, compared to $51.1 million for the same period in 2024.
We reported interim clinical results from the initial 150 mg cohort in December 2024, which indicated that 4334 39 maintained clinical exposures multiple folds above those anticipated to be required for potent viral activity and inhibition of cccDNA formation. A mean decline in HBV DNA of 2.9 log 10 IU/mL was observed in a population of predominately HBeAg negative participants.
In addition, results for both cohorts indicated that 4334 maintained clinical exposures multiple folds above those anticipated to be required for potent viral activity and inhibition of cccDNA formation.
In addition, during December 2024, we identified a development candidate, 7423, in our broad-spectrum NNPI program targeting transplant-associated herpesviruses. Recurrent Genital Herpes/HSV-1 and HSV-2 Genital herpes can be caused by either herpes simplex virus type 1 (HSV-1) or herpes simplex virus type 2 (HSV-2).
Recurrent Genital Herpes/HSV-1 and HSV-2 Genital herpes can be caused by either herpes simplex virus type 1 (HSV-1) or herpes simplex virus type 2 (HSV-2). HSV-1 and HSV-2 are acquired by oral or genital contact either during symptomatic or asymptomatic reactivation of the virus.
Across the Part A (Phase 1a) cohorts 37 evaluated as of the February 13, 2025 data cutoff date, 1179 had a mean half-life of approximately four days when dosed orally, supporting once-weekly oral dosing, the target profile for 1179.
Across the cohorts evaluated to date, a mean half-life of approximately four days was observed for 6250 when dosed orally, supporting the once-daily oral dosing profile target. Given this half-life, accumulation was observed in the multiple-dose cohorts with exposures on the last day of dosing generally reaching six- to seven-fold higher than the exposure seen after the first dose.
The decrease in operating cash flows was primarily due to $90.7 million received under the Gilead Collaboration Agreement in 2023, partially offset by cost savings in rent and related expenses attributable to our corporate headquarters sublease, which commenced in November 2023, and the timing of vendor invoicing and payments.
The decrease was primarily due to $25.2 million more cash received under the Gilead Collaboration Agreement in 2025 compared to 2024, partially offset by higher operating expenses in 2025 from the advancement of our clinical pipeline, most notably due to costs incurred for our HPI program.
Removed
Our Clinical Programs and Regulatory Filing-Enabling Program Since the beginning of 2024, we have initiated: (1) both the Phase 1a and Phase 1b portions of a Phase 1a/b study of 5366, long-acting HPI for recurrent genital herpes; (2) the Phase 1a portion of a Phase 1a/b study of 1179, also a long-acting HPI for recurrent genital herpes; (3) a Phase 1a study of 6250, an orally bioavailable HDV entry inhibitor; and (4) a Phase 1b study of 4334, a highly potent, next-generation CAM for chronic HBV infection.
Added
(Gilead and the Gilead Collaboration), Gilead exercised its option to license our HPI program for the treatment of recurrent genital herpes, including our long-acting investigational candidates ABI-1179 (1179) and ABI-5366 (5366).
Removed
We expect to initiate the Phase 1b portion of the Phase 1a/b study of 1179 in the first half of 2025.
Added
For additional information regarding Gilead’s exercise of its option, see “Collaboration and License Agreement—Gilead Sciences, Inc.—Option Exercise.” Our Clinical Programs and Regulatory Filing-Enabling Program 2025 was a pivotal year for us, as we reported data readouts for 5366, 1179, 4334 and 6250 as follows: • February 2025: o 1179 – Positive Phase 1a interim results in the Phase 1a/b study • June 2025: o 4334 – Positive Phase 1b topline results • August 2025: o 5366 – Positive Phase 1b interim results from the weekly dosing cohorts in the Phase 1a/b study o 6250 – Positive Phase 1a interim results • December 2025: o 1179 – Positive Phase 1b interim results in the Phase 1a/b study o 5366 – Positive Phase 1b interim results from the monthly dosing cohorts in the Phase 1a/b study In addition, during December 2024, we identified a development candidate, ABI-7423 (7423), in our broad-spectrum NNPI program targeting transplant-associated herpesviruses. 7423 is a prodrug, and in October 2025, we transitioned our development from 7423 to 7272, its parent molecule. 7272 is currently in regulatory filing enabling studies.
Removed
We announced interim results from the Phase 1a portion of the 5366 study in September 2024, interim results from the Phase 1b study of 4334 in December 2024 and interim results from the Phase 1a portion of the 1179 study in February 2025.
Added
There is also high treatment variability among those taking nucleoside analogs, as many seeking care may not consistently receive suppressive therapy. Based on the limitations of current therapies, we see a path to advancing the treatment paradigm for people suffering from recurrent genital herpes.
Removed
In September 2024, we announced positive interim data for the Phase 1a portion of the 5366 study. Interim results exceeded our objectives for this Phase 1a study and support 5366’s progression into Phase 1b, which we initiated during the third quarter of 2024.
Added
As Gilead has exercised its option to exclusively license our HPI program, including 5366 and 1179, development will be in Gilead’s sole control following completion of the Phase 1a/b studies of 5366 and 1179, which we are managing until they are complete.
Removed
Across the Part A (Phase 1a) cohorts evaluated, 5366 had a mean half-life of approximately 20 days when dosed orally, supporting once-weekly oral dosing, the target profile for 5366, as well as showing the potential for once-monthly oral dosing. We plan to explore both once-weekly and once-monthly oral dosing regimens in the Part B (Phase 1b) portion of the study.
Added
We reported interim data from the Phase 1b portion of the 5366 study in August 2025, focused on two different oral doses of 5366 administered on a once-weekly basis.
Removed
In the Part A cohorts, 5366 has been well-tolerated with a favorable safety profile observed with exposure of up to 70 days. Treatment-emergent adverse events (AEs) were all mild to moderate in intensity and all were considered not related to study treatment by the study investigators; there have been no serious AEs in any dose arm.

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