Gilead Sciences, Inc. (GILD) just moved forward with its first programs under a 2023 collaboration deal, exercising an option to exclusively license Assembly Biosciences, Inc. (ASMB)'s experimental herpes treatments. The announcement on Monday signals Gilead's confidence in two investigational compounds, ABI-1179 and ABI-5366, designed to tackle recurrent genital herpes with a once-weekly pill.

The stakes are considerable. Genital herpes, caused by herpes simplex virus (HSV), affects over four million people across the U.S. and major European markets. It's a chronic infection that causes painful lesions, psychological distress, and increases the risk of HIV acquisition. HSV type 2 infections typically recur multiple times per year, yet the therapeutic landscape hasn't changed in over a quarter century. No new HSV treatments have been approved in the U.S. or Europe for more than 25 years.

Weekly Dosing Could Change the Game

Interim Phase 1b data for both ABI-5366 and ABI-1179 showed antiviral activity and clinical improvements, including a significant reduction in virus-positive lesions. Perhaps more importantly, both compounds demonstrated pharmacokinetic and safety profiles that support once-weekly oral dosing. For patients managing a chronic condition with frequent recurrences, the convenience factor alone could be transformative compared to daily medication regimens.

The Deal Structure

Under the terms hammered out in their 2023 collaboration agreement, Assembly Bio receives a $35 million payment as Gilead takes over sole responsibility for clinical development and commercialization. But Assembly Bio isn't walking away entirely. The company remains eligible for up to $330 million in regulatory and commercial milestones, plus tiered royalties on net sales.

There's also an interesting twist: Assembly Bio can opt in next year to share 40% of all costs and profits in the United States instead of receiving milestones and royalties for the U.S. market. That decision comes after Assembly Bio receives development plans and budgets from Gilead, giving them a chance to evaluate whether betting on the program's success makes more financial sense than taking guaranteed milestone payments.

Meanwhile, Progress on HIV Prevention

In separate news on Friday, the U.K. Medicines and Healthcare products Regulatory Agency approved Gilead's lenacapavir (Yeytuo) for preventing sexually transmitted HIV-1 infection in adults and adolescents. Lenacapavir works by reducing the risk of the HIV-1 virus multiplying and spreading throughout the body if someone is exposed to the virus.

The treatment involves a combination approach: an injection once every six months, with the first dose accompanied by two days of oral tablets. It's another example of Gilead pushing toward long-acting therapies that reduce the burden of daily medication.

Gilead Sciences shares were down 0.22% at $124.02 at the time of publication on Monday.