1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
ABCL
Event Date
2020-12-11
Sector
Health Care
Subsector
Pharmaceuticals
Offer Range
$20.00-$20.00
Shares Offered
24.15M
270.93M
$4.6B
8.9%
Implied Upside vs Midpoint
Description
We believe that the surest path to a better future is through technological advancement and that the new frontier of technology lies at the interface of computation, engineering and biology. Our mission is to improve health with technologies that transform the way that antibody-based therapies are discovered. We aim to become the centralized operating system for next generation antibody discovery. Our full-stack, artificial intelligence-, or AI, powered drug discovery platform searches and analyzes the database of natural immune systems to find antibodies that can be developed as drugs. We believe our technology increases the speed and the probability of success of therapeutic antibody discovery, including enabling discovery against targets that may otherwise be intractable. Rather than advancing our own clinical pipeline of drug candidates, we forge partnerships with drug developers of all sizes, from large cap pharmaceutical to small biotechnology companies. We empower them to move quickly, reduce cost and tackle the toughest problems in drug development. As of September 30, 2020, we had 94 discovery programs that are either completed, in progress or under contract with 26 partners. As a recent example, in a collaboration with Eli Lilly and Company, or Lilly, we applied our technology stack to co-develop LY-CoV555, a potential antibody therapy to treat and prevent COVID-19. Starting from a single blood sample obtained from a convalescent patient, we and our partners identified a viable antibody drug candidate within three weeks that advanced into clinical testing 90 days after initiation of the program. Lilly progressed into these clinical trials at a greatly accelerated pace as a result of the Coronavirus Treatment Acceleration Program, which is a special emergency program for possible coronavirus therapies created by the U.S. Food and Drug Administration, or FDA, in 2020 to expedite the development of potentially safe and effective life-saving treatments to combat the COVID-19 pandemic. With respect to other or future product candidates, there is no assurance that any of our partners or collaborators will be able to advance a product candidate into clinical development on this timeframe again in the future, or at all. We initiated our partnering program in 2015 and have only had this one program result in clinical milestone payments to us to date and we have not yet had a program receive marketing approval. Antibodies, which are proteins generated by natural immune systems to fight infection and disease, are amongst the fastest growing class of drugs and are used across multiple therapeutic areas, including oncology, inflammation, neurodegeneration and many others. In 2019, antibody-based therapeutics accounted for over $140.0 billion in sales worldwide and represented five of the top 10 selling therapeutics. The rise of genomics, high-throughput biology and genetic engineering has greatly expanded the opportunity and the ecosystem of innovators working to advance the development of antibody-based therapeutics. There has been a proliferation of biopharmaceutical companies pursuing innovative drug candidate formats and new targets. As new entrants continue to emerge, we believe the total addressable market will continue to expand. As the field of antibody therapeutics evolves, finding novel antibodies with desired therapeutic properties has become increasingly competitive and demanding. We believe that there are two fundamental problems hindering the discovery and development of next generation antibody-based therapeutics. The first is the state of technology: because of the limitations of legacy discovery approaches, there are many well-validated targets for which suitable antibodies cannot be found. The second is access: most companies are forced to cobble together fragmented solutions and lack the facilities and expertise needed to prosecute their antibody programs. Both of these problems contribute to the rising cost of drug development and delay bringing needed therapies to patients. Many emerging and established life sciences companies have been built around technologies that focus on one or a limited number of steps in the discovery process, including immune repertoire sequencing, or RepSeq, single-cell analysis, AI, and transgenic rodent platforms. We believe we uniquely integrate proprietary technologies that address each of these steps, creating a complete solution for our partners. Over the last eight years, we have developed and assembled technologies that unlock the database of natural antibodies. We are democratizing the industry by providing our partners of all sizes with access to our centralized operating system. --- Some notable technologies within our stack that compound the productivity and efficiency of each step of the discovery process include: • Source. We combine proprietary immunization with genetically engineered mouse technologies, including the proprietary suite of humanized mice we acquired in November 2020 in connection with our acquisition of Trianni, Inc., or Trianni, to provide a diverse source of human antibodies. • Search. Our patented microfluidic single-cell screening technology combines speed, throughput, efficiency, resolution and versatility, enabling rapid and deep searches of natural antibody responses. • Find. Following the acquisition of Lineage Biosciences Inc., or Lineage, in March 2017, we integrated high-throughput RepSeq technology with our single-cell screening technology to provide leading capabilities for the comprehensive profiling and functional characterization of antibody diversity. • Analyze. Our internally developed platform, Celium, a powerful computational engine for mining, interacting and visualizing the terabytes of data generated during an antibody discovery campaign, combines software, AI and visualization tools to organize, compute and interactively explore large multidimensional data sets. • Engineer. We acquired rights to the OrthoMab bispecific technology in June 2020, which is a versatile and clinically-validated protein engineering solution to design and produce bispecific antibodies. The marriage of advanced data collection and computation creates a flywheel effect that augments our technology. As we run our partnership business, we are amassing unique, multi-dimensional data sets that link measurements at the level of single immune cells with the properties of the antibodies they make and the DNA sequences that encode their function. A single antibody discovery project can generate millions of DNA sequences and single-cell measurements, as well as thousands of target-specific antibodies, each characterized by hundreds of data points. Every project generates more data about the antibody immune response. This creates a competitive advantage whereby Celium extracts insights from the data that allows us to accelerate wet lab experimentation with in silico computation in a continuously iterative process. Because our computation is grounded on real world data, the output of Celium is not theoretical predications. We find real molecules that have been optimized by nature. Our business thesis is based on the belief that technological advancement can improve the drug development process and that maximizing the value and impact of our work is best achieved through partnerships. In March 2020, we tested these beliefs as we mobilized our response to the COVID-19 pandemic. Working with our partner Lilly, we were able to progress from initiation of discovery to clinical trials in only 90 days. The first clinical development candidate in this collaboration, LY-CoV555, is undergoing clinical trials as both a monotherapy and in combination with another antibody as potential therapeutics for COVID-19. On September 16, 2020, Lilly released the first interim Phase 2 clinical data for the monotherapy arms of the BLAZE-1 study, which showed that treatments of COVID-19 infected patients with LY-CoV555 resulted in a 72% risk reduction in hospitalization as compared to placebo in a study of 465 patients. BLAZE-1 is a randomized, double-blind, placebo-controlled Phase 2 study conducted by Lilly that is designed to assess the efficacy and safety of LY-CoV555 and an additional Lilly product candidate for the treatment of symptomatic COVID-19 in the outpatient setting. The monotherapy arms of BLAZE-1 enrolled mild-to-moderate recently diagnosed COVID-19 patients and the primary endpoint was met at a 2800 mg dose level. Lilly also announced that LY-CoV555 was well-tolerated, with no drug-related serious adverse events reported. In addition to the BLAZE-1 study described above, LY-CoV555 is being evaluated in three other clinical trials, one of which is a Phase 3 trial for prophylaxis of COVID-19. LY-CoV555 was also evaluated in a Phase 3 trial in hospitalized patients. Based on trial data that suggested that LY-CoV555 is unlikely to help hospitalized COVID-19 patients recover from this advanced stage of their disease, Lilly announced on October 26, 2020 that it has stopped enrolling additional patients for treatment with LY-CoV555 in this study. The other clinical trials of LY-CoV555 referred to above to evaluate LY-CoV555 for treatment of mild to moderate COVID-19 and for prophylaxis remain active. On October 7, 2020, Lilly submitted a request for an Emergency Use Authorization, or EUA, for the LY-CoV555 monotherapy to the FDA, which was granted on November 9, 2020. On October 28, 2020, Lilly announced an agreement with the U.S. government to supply 300,000 vials of LY-CoV555 for $375.0 million and on December 2, 2020, Lilly announced the purchase by the U.S. government of an additional 650,000 doses of LY-CoV555 for $812.5 million. On October 29, 2020, Lilly also announced a fixed price contract for procurement of LY-CoV555 in the amount of $312.5 million with the U.S. Army Contracting Command. On November 22, 2020, Lilly was granted authorization for the LY-CoV555 monotherapy by Health Canada under the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19. On November 24, 2020, Lilly announced an agreement with the Canadian government to supply 26,000 doses of LY-CoV555 for the three month period between December 2020 and February 2021, for $32.5 million. Under our partnership with Lilly, we are entitled to receive a specified percentage of proceeds that Lilly receives from these sales. As proud as we are to have played a role in the global response to COVID-19, we believe it is only an example of how our technology can accelerate drug discovery. Our business has historically been both high growth and capital efficient. Revenues have grown at a 109% CAGR since 2014. We have generated positive operating cash flow cumulatively since our inception in 2012 and in every year since 2018. Our partnership agreements include: (i) payments for technology access and performance of research, (ii) downstream payments in the form of clinical and commercial milestones and (iii) royalties on net sales of any approved therapeutics. We structure our agreements in a way that is designed to align our partners’ economic interests with our own. While the vast majority of our historical revenue reflects upfront payments from research programs, we believe the long-term value of our business will be driven by downstream milestone and royalty payments. For the years ended December 31, 2018 and 2019 and the nine months ended September 30, 2019 and 2020, our revenue was $8.8 million, $11.6 million, $8.4 million and $25.2 million, respectively. For the years ended December 31, 2018 and 2019 and the nine months ended September 30, 2019 and 2020, our net income (loss) was $0.3 million, $(2.2) million, $(0.6) million and $1.9 million, respectively. As of September 30, 2020, we have entered into agreements for 94 partnered discovery programs, 71 of which include the potential for milestone and royalty payments from our partners. --- We were incorporated in 2012 under the Business Corporations Act (British Columbia), or the BCBCA. Our principal executive offices are located at 2215 Yukon Street Vancouver, British Columbia, V5Y 0A1, Canada and our telephone number is (604) 559-9005. We have six wholly owned subsidiaries, Lineage, a Delaware corporation, Trianni, a California corporation, AbCellera US Holdings Inc., a Delaware corporation, AbCellera Properties Inc., a BCBCA company, AbCellera Properties Columbia Inc., a BCBCA company, and Channel Biologics Pty Ltd., a proprietary company registered in New South Wales, Australia. Our website address is www.abcellera.com.
AbCellera Biologics Inc. annual income statement and balance sheet, FY 2021 to FY 2025, as reported in SEC filings.
| Metric | FY 2021 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | $375M | $38.0M | $28.8M | $75.1M |
| Operating income | $204M | ($237M) | ($315M) | ($217M) |
| Net income | $153M | ($146M) | ($163M) | ($146M) |
| Metric | FY 2021 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | $1.3B | — | $1.4B | $1.4B |
| Total liabilities | $293M | — | $304M | $390M |
| Total equity | $1.0B | $1.2B | $1.1B | $967M |
| Cash & equivalents | $476M | $158M | $156M | $129M |