Assembly Biosciences (ASMB) PT Raised to $39 at Guggenheim

Guggenheim analyst Vamil Divan raised the price target on Assembly Biosciences (NASDAQ: ASMB) to $39.00 (from $31.00) while maintaining a Buy rating.

The analyst commented: "Interim data from Assembly's Phase 1b study that was released last month demonstrated striking efficacy and a clean safety profile for ABI-5366, a potential once-weekly oral treatment for recurrent genital herpes (rGH). Importantly, the 350 mg QW dose cohort (Cohort 2) led to impressive 94% reduction in viral shedding rate, besting competitor reductions (and our expectations) of an 80-85% reduction, while blinded safety data support a clean profile. Further, on the clinical (and regulatory) endpoint of lesion days, the 350 mg cohort led to a significant 94% reduction in lesion rate, setting up critical validation ahead of subsequent clinical studies. Next, the company continues to enroll ABI-5366 (including a once-monthly regimen in subsequent Cohort 3) and ABI-1179, with the studies on track for an additional update this Fall and with preparation underway for Phase 2 start in mid-2026. Net-net, we believe the early data validate both Assembly's PK work and the potency and PK of ABI-5366, and confirm a go forward regimen in genital herpes, with subsequent data from the once-monthly regimen or ABI-1179 now as potential upside. With better-than-expected efficacy and the company now well capitalized following its $175M raise, we view Assembly as exceptionally well positioned ahead of Phase 2 start. With results exceeding our Bull Case scenario and ABI-5366 positioned to be best-in-class in what we view as a potential blockbuster novel weekly or monthly treatment, we are increasing our PoS to 75% (from 65%), increasing our assumed monthly price to $500 (from $300), lowering our discount rate to 12% (from 15%) with the reduced funding risk, and incorporating the recent equity financing. Our price target increases to $39/shr (from $31/shr), or an equity value of ~$820M on a fully diluted basis assuming full exercise of warrants. We reiterate our BUY rating on ASMB shares."

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