ALGS Part 3: The Combination Play - Why Aligos Wins Even When Competitors Succeed

1) The Cure Equation No One Has Solved

Functional cure in HBV requires solving two problems simultaneously. Solve only one, and the virus finds a way back.

Problem 1: Suppress viral replication and deplete cccDNA
The reservoir needs to shrink. As long as cccDNA sits in the nucleus churning out new virus and antigens, the infection persists. Standard nucleoside analogs suppress replication but don't touch the reservoir. Capsid modulators can affect cccDNA replenishment, but prior generations failed due to resistance.

Problem 2: Clear the antigen burden
HBsAg floods the bloodstream at levels thousands of times higher than needed for immune recognition. This massive antigen load exhausts T-cells and prevents the immune system from clearing infected hepatocytes. Even if you suppress the virus, the antigen burden keeps the immune system paralyzed.

No single drug class has solved both.

Nucleoside analogs: Excellent at suppression, near-zero impact on antigens. Patients can stay on tenofovir for decades with undetectable HBV DNA and barely see HBsAg move. The antigen factory keeps running.

RNA-targeting agents (ASOs, siRNAs): Designed to knock down viral RNA and reduce antigen production. They can achieve dramatic HBsAg reductions - 1 to 2+ logs in weeks. But as monotherapy, they don't suppress cccDNA or replication effectively. Stop treatment, and the virus roars back from the reservoir.

Capsid modulators: The promise was to do both - suppress replication and impact antigens. But first-generation CAMs hit the resistance wall. Bersacapavir, vebicorvir - strong initial suppression, minimal antigen impact, then breakthrough.

The cure equation remains unsolved: Backbone (cccDNA suppression) + RNA agent (antigen knockdown) = Functional Cure

Every serious HBV cure program is now pursuing combinations. The question isn't whether combinations are needed - that's settled. The question is: which backbone will the RNA agents pair with?

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2) The RNA Wars: ASOs vs siRNAs

The competition to provide the RNA half of the equation is fierce, well-funded, and fragmented.

GSK - Bepirovirsen (ASO)
The most advanced RNA program. GSK's antisense oligonucleotide is in Phase 3 trials, combining with nucleoside analogs. The data so far: 10-15% functional cure rates in combinations, with tolerability issues (injection site reactions, flu-like symptoms, renal concerns). It works for a subset of patients, but the efficacy ceiling looks low and the safety profile is challenging.

Vir Biotechnology + Gilead - VIR-2218 (siRNA)
High-profile partnership with billions in potential milestones. The siRNA approach promises more durable knockdown with less frequent dosing. Early data showed strong HBsAg reductions, but durability after stopping treatment remains the question. Clinical timelines have stretched - initial optimism has been tempered by execution delays.

Roche (via Dicerna/Novo Nordisk licensing) - siRNA program
Roche is advancing an siRNA program through Phase 2 using assets licensed from Dicerna (now owned by Novo Nordisk). Interestingly, Roche also holds a ~9% stake in Aligos despite no formal partnership. They're hedging across multiple mechanisms - their own RNA play and a position in the leading CAM-E.

Arrowhead Pharmaceuticals - ARO-HBV (RNAi)
Arrowhead's RNAi platform has shown strong preclinical signals for antigen knockdown. They're exploring both monotherapy and combinations, but clinical data remains limited compared to GSK and Vir.

Here's the strategic insight: none of these RNA programs has an ideal backbone partner.

Nucleoside analogs don't reduce antigens. First-generation CAMs showed resistance. GSK, Vir, Roche, and Arrowhead are all forced to combine their RNA agents with imperfect backbones - or wait for something better.

ALG-000184 could be that better option. And Aligos doesn't need to "win" the RNA race. They just need to be the backbone that every RNA winner pairs with.

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3) ALG-170675: The Internal Wild Card

But Aligos didn't stop at building a backbone. They've quietly developed their own RNA option.

ALG-170675 is a next-generation antisense oligonucleotide (ASO) co-developed with Xiamen Amoytop Biotech, who holds China rights. The program was presented at EASL 2025 with preclinical data showing:

• Potency comparable to GSK's bepirovirsen - the current ASO benchmark
• Improved liver targeting - better tissue distribution reduces off-target effects
• Lower renal toxicity in preclinical models - addressing one of the major tolerability concerns with first-generation ASOs

This is strategic optionality. If external RNA partnerships materialize - excellent, ALG-000184 becomes the backbone for a partnered combination. If external partnerships fall through or take too long - Aligos has an internal ASO to advance its own combination independently.

The Amoytop partnership is particularly interesting. China represents roughly 116 million of the 254 million global HBV patients - nearly half the market. Amoytop brings local regulatory expertise, clinical infrastructure, and funding for the China development path. Aligos retains rest-of-world rights.

This isn't a company with one shot on goal. It's multiple parallel pathways:

1. ALG-000184 as superior monotherapy (B-SUPREME superiority trial)
2. ALG-000184 as backbone for external RNA partner combinations
3. ALG-000184 + ALG-170675 internal combination (China via Amoytop, ROW if needed)

Each pathway has independent value. Any one succeeding transforms the company. Multiple succeeding compounds the upside.

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4) The Backbone Paradox

This is where Aligos's strategy becomes both brilliant and risky.

The brilliance: ALG-000184's value increases as the RNA field advances - even when competitors succeed.

Think about it. If GSK's bepirovirsen gets approved but only delivers 10-15% cure rates with nucleoside analogs, physicians will want a better backbone. If Vir/Gilead's siRNA shows great knockdown but rebounds without sufficient cccDNA suppression, they'll need a better backbone. If Roche's Dicerna program advances, they might partner with the company they already own 9% of rather than develop a competing CAM.

Every RNA program that shows promise but falls short of monotherapy cure validates the need for ALG-000184.

This is strategic optionality at the portfolio level. Aligos doesn't compete with the RNA programs - it complements all of them. The company wins if:

• GSK's ASO succeeds but needs a better backbone → Pair with 184
• Vir/Gilead's siRNA succeeds but needs cccDNA suppression → Pair with 184
• Roche wants to advance their RNA + already owns Aligos stock → Partner on 184
• All external options fail or disappoint → Use internal ALG-170675 + 184

The risk is dependency. If RNA approaches broadly fail - if antigen knockdown doesn't translate to functional cure regardless of backbone - then the combination thesis weakens. ALG-000184 would still have value as a superior suppressive therapy, but the "cure backbone" premium evaporates.

But here's the hedge: the B-SUPREME trial tests monotherapy superiority. If ALG-000184 meaningfully outperforms tenofovir as a single agent, it has standalone value independent of any combination strategy.

The backbone paradox: The company's value grows as competitors validate the need for better backbones, but it doesn't need competitors to succeed. It's a win-regardless positioning.

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5) The Deal-Making Track Record: Network and Capability

In biotech, the ability to attract Big Pharma partnerships matters as much as the science itself. Aligos has consistently demonstrated both the network and execution capability to work with top-tier partners.

The Alios Precedent - $1.75B Exit to J&J
Before Aligos even existed, this management team (Blatt, Symons, Chanda) built Alios BioPharma and sold it to Johnson & Johnson for $1.75 billion in cash. They didn't just develop good science - they structured the deal, navigated pharma partnership dynamics, and executed a clean exit. That's a proven playbook.

Merck Collaboration - Demonstrated Access to Top-Tier Pharma
Aligos secured a research collaboration with Merck, one of the world's largest pharmaceutical companies, with milestone potential exceeding $460 million. The collaboration was ultimately terminated (disclosed in 2024), but the fact that it was secured in the first place demonstrates something critical: this team has the network, credibility, and scientific quality to get Merck - a company with deep expertise in antivirals and metabolic disease - to the table.

Not every partnership works out. Strategic priorities shift, programs evolve, and terminations happen across the industry. But the ability to attract and execute a deal with a partner of Merck's caliber validates that Aligos can operate at the enterprise pharma level. The network exists. The deal-making capability is proven.

Roche - The 9% Stake With Strategic Optionality
Roche holds approximately 9% of Aligos equity despite having no formal partnership or licensing agreement. This isn't passive index investing - Roche actively chose this position.

Meanwhile, Roche is advancing its own siRNA program (via Dicerna/Novo licensing). Why hold equity in a capsid modulator company while developing your own RNA agent?

Because they see the combination potential. Acquiring equity early establishes a relationship, provides insight into the science, and creates optionality for future partnerships without the premium of a competitive auction. If Roche's siRNA needs a backbone partner, they're already at the table. If they decide to combine internally, they have a stake in the most advanced CAM-E.

Either way, Roche sees value here that the current market cap doesn't reflect.

Amoytop - Active China Partnership Providing Capital and Infrastructure
Xiamen Amoytop isn't just a regional licensing partner. They're actively sponsoring clinical trials in China for ALG-170675, providing capital, regulatory expertise, and clinical infrastructure Aligos wouldn't otherwise access.

China represents roughly 116 million of the 254 million global HBV patients - nearly half the market. Amoytop's partnership essentially gives Aligos a funded development path to the world's largest patient population without diluting the parent company. This is operational validation - not just equity or milestones on paper, but active collaboration and resource commitment.

What This Demonstrates:
The common thread isn't that every deal succeeds - it's that this team consistently attracts serious pharma interest. J&J paid $1.75B for the last company they built. Merck partnered on a multi-hundred-million-dollar collaboration. Roche took an equity stake. Amoytop is funding China development.

These aren't small biotech partnerships or venture investors taking flyers. These are pharmaceutical giants and established regional players committing capital and resources because they see the science quality and management capability.

The network is real. The deal-making track record is proven. And the current $63 million market cap prices Aligos as if none of that matters.

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6) The Ecosystem Endgame

Step back and look at the entire HBV landscape in 2026-2027.

The RNA programs will report. GSK's Phase 3 bepirovirsen data. Vir/Gilead's siRNA combinations. Roche's Dicerna-licensed program. Arrowhead's RNAi. Some will succeed modestly, some will disappoint, maybe one surprises to the upside.

But all of them - every single one - will face the same question: Is this enough as monotherapy? Or do we need a better backbone?

If the answer is "we need a better backbone," there's only one capsid modulator in Phase 2 with:

• 100% suppression in 96-week human data
• Multi-log antigen reductions
• Zero resistance mutations
• A regulatory pathway for chronic suppression
• Data readouts arriving precisely when RNA programs need combination partners

That's ALG-000184.

The convergence happens in 2026-2027. RNA programs report combinations with nucleoside analogs and show modest functional cure rates. Aligos reports B-SUPREME interim data showing superiority (or not) over tenofovir. Post-treatment follow-up data reveals durability signals off-therapy.

If the stars align - if ALG-000184 shows both monotherapy superiority and combination potential - suddenly every RNA program in existence has a decision to make: continue with suboptimal backbones, or partner with the only CAM-E that's proven it can do what first-generation CAMs couldn't.

That's when the M&A logic kicks in. Gilead, Roche, or GSK could acquire Aligos outright and pair ALG-000184 with their RNA programs internally. Or they could partner, paying Aligos hundreds of millions in milestones to secure rights.

The Alios precedent is instructive. J&J paid $1.75 billion in cash for a preclinical/early clinical antiviral company run by the same leadership team. That was 2015. Aligos has more advanced assets, more clinical proof-of-concept, and the same proven team.

But here's the problem the market keeps screaming about: none of that matters if the cash runs out first.

At a $70 million market cap versus $123 million in cash, the market is saying the science is worth less than zero. The catalysts are compressed into an 18-month window. The post-treatment data hits in November 2025. B-SUPREME interim arrives in 2026. MASH partnerships could land any day.

In Part 4, we confront the math everyone's obsessing over: whether the runway outlasts the skepticism, why the November data might already be signaling victory in the abstract titles, and what happens when a company trades below its cash balance right before multiple catalysts converge.

The question isn't whether Aligos has the assets. The question is whether the market reprices before the cash clock runs out—or after.