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AbCellera Reports Q3 2023 Business Results

VANCOUVER, British Columbia–(BUSINESS WIRE)–$ABCLAbCellera (Nasdaq: ABCL) today announced financial results for the third quarter of 2023. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.


“In the third quarter we achieved a company milestone with AbCellera advancing two AbCellera-led programs into IND-enabling studies,” said Carl Hansen, Ph.D., founder and CEO of AbCellera. “These programs exemplify our strategy of building value, both through strategic partnerships, and through internal discovery and development of potential first-in-class antibody therapies.”

Q3 2023 Business Summary

Key Business Metrics

Cumulative Metrics

 

September 30, 2022

 

September 30, 2023

 

Change %

Number of discovery partners

 

38

 

42

 

11 %

Programs under contract

 

164

 

182

 

11 %

Partnered program starts

 

92

 

110

 

20 %

Molecules in the clinic

 

7

 

10

 

43 %

AbCellera reached a cumulative total of 182 programs under contract (up from 164 on September 30, 2022) that are either completed, in progress, or under contract with 42 different partners as of September 30, 2023 (up from 38 on September 30, 2022). AbCellera started discovery on an additional four partner-initiated programs to reach a cumulative total of 110 partnered program starts in Q3 2023 (up from 92 on September 30, 2022). AbCellera’s partners have advanced a cumulative total of ten molecules into the clinic (up from seven on September 30, 2022).

Discussion of Q3 2023 Financial Results

Conference Call and Webcast

AbCellera will host a conference call and live webcast to discuss these results today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern 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 breaking the barriers of conventional antibody discovery to bring better medicines to patients, sooner. AbCellera’s engine integrates expert teams, technology, and facilities with the data science and automation needed to propel antibody-based medicines from target to clinic in nearly every therapeutic area with precision and speed. AbCellera provides innovative biotechs and leading pharmaceutical companies with a competitive advantage that empowers them to move quickly, reduce cost, 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.

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 engine and our 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 or deliver 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 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.

Partnered 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 potential for near-term payments. Cumulatively, partnered 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 current 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.

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,

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

Research fees

 

$

7,508

 

 

$

6,413

 

 

$

29,378

 

 

$

26,812

 

Licensing revenue

 

 

154

 

 

 

186

 

 

 

531

 

 

 

784

 

Milestone payments

 

 

400

 

 

 

 

 

 

400

 

 

 

1,250

 

Royalty revenue

 

 

93,321

 

 

 

 

 

 

433,570

 

 

 

 

Total revenue

 

 

101,383

 

 

 

6,599

 

 

 

463,879

 

 

 

28,846

 

Operating expenses:

 

 

 

 

 

 

 

 

Royalty fees

 

 

15,035

 

 

 

 

 

 

64,882

 

 

 

 

Research and development(1)

 

 

26,582

 

 

 

37,917

 

 

 

79,634

 

 

 

127,036

 

Sales and marketing(1)

 

 

3,089

 

 

 

3,468

 

 

 

8,579

 

 

 

11,080

 

General and administrative(1)

 

 

13,792

 

 

 

14,369

 

 

 

42,470

 

 

 

45,025

 

Depreciation and amortization

 

 

5,150

 

 

 

5,735

 

 

 

14,025

 

 

 

16,859

 

Total operating expenses

 

 

63,648

 

 

 

61,489

 

 

 

209,590

 

 

 

200,000

 

Income (loss) from operations

 

 

37,735

 

 

 

(54,890

)

 

 

254,289

 

 

 

(171,154

)

Other (income) expense

 

 

 

 

 

 

 

 

Interest (income)

 

 

(5,556

)

 

 

(10,740

)

 

 

(7,609

)

 

 

(31,278

)

Grants and incentives

 

 

(2,150

)

 

 

(2,828

)

 

 

(8,879

)

 

 

(10,779

)

Other

 

 

(1,146

)

 

 

(2,046

)

 

 

266

 

 

 

(3,670

)

Total other (income)

 

 

(8,852

)

 

 

(15,614

)

 

 

(16,222

)

 

 

(45,727

)

Net earnings (loss) before income tax

 

 

46,587

 

 

 

(39,276

)

 

 

270,511

 

 

 

(125,427

)

Income tax (recovery) expense

 

 

19,963

 

 

 

(10,666

)

 

 

82,099

 

 

 

(26,179

)

Net earnings (loss)

 

$

26,624

 

 

$

(28,610

)

 

$

188,412

 

 

$

(99,248

)

Foreign currency translation adjustment

 

 

(1,293

)

 

 

439

 

 

 

(997

)

 

 

(69

)

Comprehensive income (loss)

 

$

25,331

 

 

$

(28,171

)

 

$

187,415

 

 

$

(99,317

)

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share attributable to common shareholders

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

 

$

(0.10

)

 

$

0.66

 

 

$

(0.34

)

Diluted

 

$

0.08

 

 

$

(0.10

)

 

$

0.60

 

 

$

(0.34

)

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

285,322,719

 

 

 

289,496,841

 

 

 

284,639,599

 

 

 

288,750,387

 

Diluted

 

 

315,818,163

 

 

 

289,496,841

 

 

 

314,183,994

 

 

 

288,750,387

 

 

(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, 2022

 

September 30, 2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

386,535

 

 

$

172,422

 

Marketable securities

 

499,950

 

 

 

613,418

 

Total cash, cash equivalents, and marketable securities

 

886,485

 

 

 

785,840

 

Accounts and accrued receivable

 

38,593

 

 

 

37,446

 

Restricted cash

 

25,000

 

 

 

25,000

 

Other current assets

 

75,413

 

 

 

71,232

 

Total current assets

 

1,025,491

 

 

 

919,518

 

Long-term assets:

 

 

 

Property and equipment, net

 

217,255

 

 

 

277,209

 

Intangible assets, net

 

131,502

 

 

 

124,076

 

Goodwill

 

47,806

 

 

 

47,806

 

Investments in and loans to equity accounted investees

 

72,522

 

 

 

62,887

 

Other long-term assets

 

46,331

 

 

 

80,694

 

Total long-term assets

 

515,416

 

 

 

592,672

 

Total assets

$

1,540,907

 

 

$

1,512,190

 

Liabilities and shareholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and other liabilities

$

33,150

 

 

$

35,708

 

Contingent consideration payable

 

44,211

 

 

 

53,929

 

Accrued royalties payable

 

19,347

 

 

 

3,094

 

Deferred revenue

 

21,612

 

 

 

17,508

 

Total current liabilities

 

118,320

 

 

 

110,239

 

Long-term liabilities:

 

 

 

Operating lease liability

 

76,675

 

 

 

75,185

 

Deferred revenue

 

19,516

 

 

 

16,382

 

Deferred government contributions

 

40,801

 

 

 

84,072

 

Contingent consideration payable

 

16,054

 

 

 

5,308

 

Deferred tax liability

 

33,178

 

 

 

33,178

 

Other long-term liabilities

 

3,086

 

 

 

5,051

 

Total long-term liabilities

 

189,310

 

 

 

219,176

 

Total liabilities

 

307,630

 

 

 

329,415

 

Commitments and contingencies

 

 

 

Shareholders’ equity:

 

 

 

Common shares: no par value, unlimited authorized shares at December 31, 2022 and September 30, 2023: 286,851,595 and 289,777,654 shares issued and outstanding at December 31, 2022 and September 30, 2023, respectively

 

734,365

 

 

 

747,914

 

Additional paid-in capital

 

74,118

 

 

 

109,384

 

Accumulated other comprehensive (loss)

 

(1,391

)

 

 

(1,460

)

Accumulated earnings

 

426,185

 

 

 

326,937

 

Total shareholders’ equity

 

1,233,277

 

 

 

1,182,775

 

Total liabilities and shareholders’ equity

$

1,540,907

 

 

$

1,512,190

 

 

AbCellera Biologics Inc.

Condensed Consolidated Statement of Cash Flows

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

 

 

Nine months ended September 30,

 

 

2022

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net earnings (loss)

$

188,412

 

 

$

(99,248

)

Cash flows from operating activities:

 

 

 

Depreciation of property and equipment

 

6,212

 

 

 

8,874

 

Amortization of intangible assets

 

7,844

 

 

 

7,985

 

Amortization of operating lease right-of-use assets

 

3,686

 

 

 

4,926

 

Stock-based compensation

 

36,158

 

 

 

47,735

 

Other

 

3,304

 

 

 

(6,354

)

Changes in operating assets and liabilities:

 

 

 

Research fee and grant receivable

 

(3,675

)

 

 

(35,495

)

Accrued royalties receivable

 

43,966

 

 

 

9,273

 

Income taxes payable

 

(34,934

)

 

 

28,685

 

Accounts payable and accrued liabilities

 

(1,151

)

 

 

(1,852

)

Deferred revenue

 

(4,094

)

 

 

(7,238

)

Accrued royalties payable

 

(4,684

)

 

 

(16,253

)

Deferred grant income

 

6,630

 

 

 

30,377

 

Other assets

 

(1,226

)

 

 

4,319

 

Net cash provided by (used in) operating activities

 

246,448

 

 

 

(24,266

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(58,330

)

 

 

(62,516

)

Purchase of intangible assets

 

(2,000

)

 

 

(560

)

Purchase of marketable securities

 

(670,430

)

 

 

(744,674

)

Proceeds from marketable securities

 

418,238

 

 

 

642,913

 

Receipt of grant funding

 

14,100

 

 

 

15,023

 

Long-term investments and other assets

 

(17,370

)

 

 

(36,757

)

Investment in and loans to equity accounted investees

 

(19,770

)

 

 

(10,214

)

Net cash used in investing activities

 

(335,562

)

 

 

(196,785

)

Cash flows from financing activities:

 

 

 

Payment of liability for in-licensing agreement, contingent consideration, and other

 

(4,383

)

 

 

(1,049

)

Proceeds from long-term debt and exercise of stock options

 

2,406

 

 

 

7,640

 

Net cash provided by (used in) financing activities

 

(1,977

)

 

 

6,591

 

Effect of exchange rate changes on cash and cash equivalents

 

(9,963

)

 

 

(479

)

Decrease in cash and cash equivalents

 

(101,054

)

 

 

(214,939

)

Cash and cash equivalents and restricted cash, beginning of period

 

501,142

 

 

 

414,651

 

Cash and cash equivalents and restricted cash, end of period

$

400,088

 

 

$

199,712

 

Restricted cash included in other assets

 

3,115

 

 

 

2,290

 

Total cash, cash equivalents, and restricted cash shown on the balance sheet

$

396,973

 

 

$

197,422

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

Property and equipment in accounts payable

 

2,213

 

 

 

12,948

 

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

 

46,239

 

 

 

3,586

 

 

Contacts

Inquiries

Media: Jessica Yingling, Ph.D.; media@abcellera.com, +1(236)521-6774

Business Development: Murray McCutcheon, Ph.D.; bd@abcellera.com, +1(604)559-9005

Investor Relations: Josephine Hellschlienger, Ph.D.; ir@abcellera.com, +1(778)729-9116

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