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AbCellera Reports Q3 2021 Business Results

  • Total revenue of $6 million, compared to $9 million in Q3 2020
  • Nine program starts in the quarter bringing cumulative total to 69, up 35% from Q3 2020
  • Net loss of ($0.08) per share (basic and diluted) compared to a net loss of ($0.02) per share (basic and diluted) in Q3 2020

AbCellera (Nasdaq: ABCL), a technology company with a centralized operating system for next-generation antibody discovery, today announced financial results for the third quarter of 2021. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

“We continue to execute on our long-term business strategy and have achieved another quarter of strong business development and growth in the key metric of program starts,” said Carl Hansen, Ph.D., CEO and President of AbCellera. “Our focus remains on the following top priorities: execution of our partnership business, forward integration of the platform to support all antibody drug discovery activities for the submission of an Investigational New Drug application, and investments in data science to increase the speed and scalability of our tech stack.”

Q3 2021 Business Summary

  • Earned $5.5 million in total revenue.
  • Incurred net loss of $21.4 million, compared to a net loss of $2.7 million in Q3 2020.
  • Added 17 programs under contract and two new partners, resulting in a cumulative total of 155 programs under contract with 35 different partners.
  • Started discovery on nine programs, bringing the cumulative number of program starts to 69.
  • Confirmed one new molecule advanced into the clinic, bringing the cumulative total to five.
  • Acquired TetraGenetics to expand capabilities for high-value transmembrane protein targets.

Key Business Metrics

Metric

 

September 30,

2020

 

 

September 30,

2021

 

 

Change %

 

Number of discovery partners

 

 

26

 

 

 

35

 

 

 

35

%

Programs under contract, cumulative

 

 

94

 

 

 

155

 

 

 

65

%

Program starts, cumulative

 

 

51

 

 

 

69

 

 

 

35

%

Molecules in the clinic

 

 

1

 

 

 

5

 

 

 

400

%

AbCellera added 17 discovery programs in Q3 to reach a cumulative total of 155 discovery programs as of September 30, 2021 (up 65% from 94 on September 30, 2020), that are either completed, in progress, or under contract with 35 different partners (up from 26 on September 30, 2020). AbCellera started discovery on an additional nine programs in Q3 to reach a cumulative total of 69 program starts (up from 51 on September 30, 2020). AbCellera's partners advanced one additional molecule into the clinic in Q3 2021, bringing the cumulative total to five.

Discussion of Q3 2021 Financial Results

(expressed in thousands)

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research fees

 

$

4,362

 

 

$

5,128

 

 

$

17,247

 

 

$

14,330

 

Licensing revenue

 

 

-

 

 

 

190

 

 

 

-

 

 

 

20,692

 

Milestone payments

 

 

5,000

 

 

 

-

 

 

 

8,000

 

 

 

8,000

 

Royalty revenue

 

 

-

 

 

 

190

 

 

 

-

 

 

 

192,850

 

Total revenue

 

 $

9,362

 

 

 $

5,508

 

 

 $

25,247

 

 

 $

235,872

 

  • Revenue – Total revenue was $5.5 million, compared to $9.4 million in Q3 2020, which is attributable to the reduction of milestone payments associated with COVID-19 treatments. Royalties associated with bamlanivimab were $0.2 million due to a temporary pause in usage until September 2, 2021 by the Assistant Secretary for Preparedness and Response and the Food and Drug Administration. Shipments from existing U.S. supply then resumed on a weekly basis, and subsequent to the end of the quarter, Eli Lilly reported that the U.S. government has ordered 614,000 additional doses of bamlanivimab with etesevimab to be delivered by January 31, 2022. The partnership business produced research fees of $5.1 million, compared to $4.4 million in Q3 2020. Licensing revenue was $0.2 million.
  • Research & Development (R&D) Expenses – R&D expenses were $17.5 million, compared to $7.5 million in Q3 2020, reflecting continuing investments in the capacity and capabilities of AbCellera’s discovery and development platform.
  • Sales & Marketing (S&M) Expenses – S&M expenses were $1.2 million, compared to $0.6 million in Q3 2020.
  • General & Administrative (G&A) Expenses – G&A expenses were $11.3 million, compared to $3.0 million in Q3 2020, with the increase driven primarily by investments to support the growth of the company, non-cash stock-based compensation in line with publicly listed companies, and protecting intellectual property.
  • Net Loss – Net loss was $21.4 million, or ($0.08) per share on both a basic and diluted basis compared to a net loss of $2.7 million, or ($0.02) per share on a basic and diluted basis, in Q3 2020.
  • Liquidity – $753.5 million of cash, cash equivalents, and marketable securities and $43.6 million in accounts and accrued receivable.

Conference Call and Webcast

AbCellera will host a conference call and live webcast to discuss these results today at 2:00 p.m. Pacific Standard Time (5:00 p.m. Eastern Standard Time).

The live webcast of the earnings conference call can be accessed on the Events and Presentations section of AbCellera’s Investor Relations website. A replay of the webcast will be available through the same link following the conference call.

About AbCellera Biologics Inc.

AbCellera is a technology company that searches, decodes, and analyzes natural immune systems to find antibodies that its partners can develop into drugs to prevent and treat disease. AbCellera partners with drug developers of all sizes, from large pharmaceutical to small biotechnology companies, empowering them to move quickly, reduce costs, and tackle the toughest problems in drug development. For more information, please visit www.abcellera.com.

Definition of Key Business Metrics

We regularly review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions. We believe that the following metrics are important to understand our current business. These metrics may change or may be substituted for additional or different metrics as our business develops. For example, as our business matures and to the extent programs are discontinued, we anticipate updating these metrics to reflect such changes.

Number of discovery partners represents the unique number of partners with whom we have executed partnership contracts. We view this metric as an indication of the competitiveness of our technology stack and our current level of market penetration. The metric also relates to our opportunities to secure programs under contract.

Programs under contract represent the number of antibody development programs that are under contract for delivery of discovery research activities. A program under contract is counted when a contract is executed with a partner under which we commit to discover antibodies against one selected target. A target is any relevant antigen for which a partner seeks our support in developing binding antibodies. We view this metric as an indication of commercial success and technological competitiveness. It further relates to revenue from technology access fees. The cumulative number of programs under contract with downstream participation is related to our ability to generate future revenue from milestone payments and royalties.

Program starts represent the number of unique programs under contract for which we have commenced the discovery effort. The discovery effort commences on the later of (i) the day on which we receive sufficient reagents to start discovery of antibodies against a target and (ii) the day on which the kick-off meeting for the program is held. We view this metric as an indication of our operational capacity to execute on programs under contract. It is also an indication of the selection and initiation of discovery projects by our partners and the resulting near-term potential to earn research fees. Cumulatively, program starts with downstream participation indicate our total opportunities to earn downstream revenue from milestone fees and royalties in the mid- to long-term.

Molecules in the clinic represent the count of unique molecules for which an Investigational New Drug, or IND, New Animal Drug, or equivalent under other regulatory regimes, application has been approved based on an antibody that was discovered either by us or by a partner using licensed AbCellera technology. Where the date of such application approval is not known to us, the date of the first public announcement of a clinical trial will be used for the purpose of this metric. We view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long term.

AbCellera Forward-looking Statements

This press release contains forward-looking statements, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations.

In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.

Source: AbCellera Biologics Inc.

AbCellera Biologics Inc.

Condensed Consolidated Statements of Income (Loss) and

Comprehensive Income (Loss)

(All figures in U.S. dollars. Amounts are expressed in thousands except share and per share data)

(Unaudited)

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research fees

 

$

4,362

 

 

$

5,128

 

 

$

17,247

 

 

$

14,330

 

Licensing revenue

 

 

-

 

 

 

190

 

 

 

-

 

 

 

20,692

 

Milestone payments

 

 

5,000

 

 

 

-

 

 

 

8,000

 

 

 

8,000

 

Royalty revenue

 

 

-

 

 

 

190

 

 

 

-

 

 

 

192,850

 

Total revenue

 

 

9,362

 

 

 

5,508

 

 

 

25,247

 

 

 

235,872

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty fees

 

 

-

 

 

 

-

 

 

 

-

 

 

 

23,622

 

Research and development(1)

 

 

7,495

 

 

 

17,450

 

 

 

20,757

 

 

 

44,853

 

Sales and marketing(1)

 

 

626

 

 

 

1,217

 

 

 

1,610

 

 

 

5,086

 

General and administrative(1)

 

 

2,968

 

 

 

11,271

 

 

 

6,116

 

 

 

28,958

 

Depreciation and amortization

 

 

41

 

 

 

3,666

 

 

 

1,508

 

 

 

10,493

 

Total operating expenses

 

 

11,130

 

 

 

33,604

 

 

 

29,991

 

 

 

113,012

 

Income (loss) from operations

 

 

(1,768

)

 

 

(28,096

)

 

 

(4,744

)

 

 

122,860

 

Other (income) expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense

 

 

2,262

 

 

 

1,256

 

 

 

3,556

 

 

 

595

 

Grants and incentives

 

 

(1,337

)

 

 

(4,380

)

 

 

(10,217

)

 

 

(12,174

)

Total other (income) expense

 

 

925

 

 

 

(3,124

)

 

 

(6,661

)

 

 

(11,579

)

Net earnings (loss) before income tax

 

 

(2,693

)

 

 

(24,972

)

 

 

1,917

 

 

 

134,439

 

Income tax (recovery)

 

 

-

 

 

 

(3,592

)

 

 

-

 

 

 

40,923

 

Net earnings (loss)

 

$

(2,693

)

 

$

(21,380

)

 

$

1,917

 

 

$

93,516

 

Foreign currency translation adjustment

 

 

-

 

 

 

(1,508

)

 

 

-

 

 

 

644

 

Comprehensive income (loss)

 

$

(2,693

)

 

$

(22,888

)

 

$

1,917

 

 

$

94,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share attributable to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

$

(0.08

)

 

$

0.01

 

 

$

0.34

 

Diluted

 

$

(0.02

)

 

$

(0.08

)

 

$

0.01

 

 

$

0.29

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

153,049,739

 

 

 

278,933,760

 

 

 

152,413,300

 

 

 

273,642,542

 

Diluted

 

 

153,049,739

 

 

 

278,933,760

 

 

 

237,723,530

 

 

 

323,323,053

 

 

​​1 Exclusive of depreciation and amortization

AbCellera Biologics Inc.

Condensed Consolidated Balance Sheet

(All figures in U.S. dollars. Amounts are expressed in thousands except share data)

(Unaudited)

 

 

December 31,

2020

 

 

September 30,

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

594,116

 

 

$

517,694

 

Marketable securities

 

 

-

 

 

 

235,785

 

Total cash, cash equivalents, and marketable securities

 

 

594,116

 

 

 

753,479

 

Accounts and accrued receivable

 

 

213,239

 

 

 

43,633

 

Other current assets

 

 

5,970

 

 

 

6,635

 

Total current assets

 

 

813,325

 

 

 

803,747

 

Long term assets:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

17,923

 

 

 

91,584

 

Intangible assets

 

 

115,153

 

 

 

148,821

 

Goodwill

 

 

31,500

 

 

 

49,457

 

Investments in and loans to equity accounted investees

 

 

19,247

 

 

 

47,507

 

Other long-term assets

 

 

8,388

 

 

 

31,616

 

Total long-term assets

 

 

192,211

 

 

 

368,985

 

Total assets

 

$

1,005,536

 

 

$

1,172,732

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

20,195

 

 

$

24,072

 

Current portion of contingent consideration payable

 

 

13,411

 

 

 

12,122

 

Income taxes payable

 

 

36,152

 

 

 

6,590

 

Accrued royalties payable

 

 

27,143

 

 

 

595

 

Deferred revenue

 

 

6,589

 

 

 

6,170

 

Total current liabilities

 

 

103,490

 

 

 

49,549

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Operating lease liability

 

 

3,715

 

 

 

27,264

 

Deferred revenue and grant funding

 

 

25,894

 

 

 

59,682

 

Contingent consideration payable

 

 

9,148

 

 

 

44,948

 

Deferred tax liability

 

 

26,161

 

 

 

36,197

 

Other long-term liabilities

 

 

6,620

 

 

 

1,695

 

Total long-term liabilities

 

 

71,538

 

 

 

169,786

 

Total liabilities

 

 

175,028

 

 

 

219,335

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common shares: no par value, unlimited authorized shares at December 31, 2020 and September 30, 2021: 269,497,768 and 281,151,877 shares issued and outstanding at December 31, 2020 and September 30, 2021 respectively

 

 

710,387

 

 

 

718,088

 

Additional paid-in capital

 

 

5,919

 

 

 

26,945

 

Accumulated other comprehensive income

 

 

-

 

 

 

644

 

Accumulated earnings

 

 

114,202

 

 

 

207,720

 

Total shareholders' equity

 

 

830,508

 

 

 

953,397

 

Total liabilities and shareholders' equity

 

$

1,005,536

 

 

$

1,172,732

AbCellera Biologics Inc.

Condensed Consolidated Statement of Cash Flows

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

 

Nine months ended September 30,

 

 

 

2020

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

1,917

 

 

$

93,516

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

1,507

 

 

 

3,060

 

Amortization of intangible assets

 

 

821

 

 

 

7,432

 

Amortization of operating lease right-of-use assets

 

 

335

 

 

 

1,895

 

Stock-based compensation

 

 

3,775

 

 

 

21,608

 

Deferred tax expense

 

 

-

 

 

 

(3,267

)

Other

 

 

440

 

 

 

888

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts and accrued research fees receivable

 

 

(16,992

)

 

 

(34,329

)

Accrued royalties receivable

 

 

-

 

 

 

194,327

 

Income taxes payable

 

 

-

 

 

 

(29,563

)

Accounts payable and accrued liabilities

 

 

2,890

 

 

 

(313

)

Deferred revenue

 

 

22,431

 

 

 

9,051

 

Accrued royalties payable

 

 

-

 

 

 

(26,548

)

Operating lease liabilities

 

 

594

 

 

 

(327

)

Deferred grant income

 

 

4,592

 

 

 

27,324

 

Other assets

 

 

(898

)

 

 

(3,458

)

Net cash provided by operating activities

 

 

21,412

 

 

 

261,296

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(8,171

)

 

 

(49,022

)

Purchase of intangible assets

 

 

(5,000

)

 

 

-

 

Repayment of loan to related parties

 

 

1,573

 

 

 

-

 

Purchase of marketable securities

 

 

-

 

 

 

(245,314

)

Proceeds from marketable securities

 

 

-

 

 

 

9,527

 

Receipt of grant funding

 

 

-

 

 

 

9,807

 

Acquisitions

 

 

-

 

 

 

(11,457

)

Long-term investments and deposits

 

 

-

 

 

 

(17,534

)

Investment in and loans to equity accounted investees

 

 

-

 

 

 

(27,105

)

Net cash used in investing activities

 

 

(11,598

)

 

 

(331,098

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt

 

 

(16,971

)

 

 

(1,823

)

Payment of contingent consideration

 

 

-

 

 

 

(2,550

)

Proceeds from long-term debt

 

 

15,516

 

 

 

872

 

Payment of liability for in-licensing agreement

 

 

-

 

 

 

(5,000

)

Short-term borrowings

 

 

(387

)

 

 

-

 

Issuance of common shares pursuant to exercise of stock options

 

 

893

 

 

 

2,781

 

Proceeds from issuance of preferred shares - series A2 financing

 

 

74,663

 

 

 

-

 

Net cash provided by (used in) financing activities

 

 

73,714

 

 

 

(5,720

)

Effect of exchange rate changes on cash and cash equivalents

 

 

-

 

 

 

(900

)

Increase (decrease) in cash and cash equivalents

 

 

83,528

 

 

 

(76,422

)

Cash and cash equivalents, beginning of period

 

 

7,553

 

 

 

594,116

 

Cash and cash equivalents, end of period

 

$

91,081

 

 

$

517,694

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for operating lease obligation

 

 

567

 

 

 

26,976

 

Purchase of intangible assets in exchange for in-licensing agreement payable

 

 

9,060

 

 

 

-

 

 

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