AbCellera Reports Q3 2022 Business Results

  • Total revenue of $101 million, compared to $6 million in Q3 2021
  • Four program starts in the quarter, bringing cumulative total to 92, up 33% from Q3 2021
  • Net earnings of $0.09 per share on a basic and $0.08 on a diluted basis, compared to a net loss of ($0.08) per share (basic and diluted) in Q3 2021

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 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

“At AbCellera’s 10-year anniversary, we find ourselves in a remarkable competitive position, having scaled to a global company of nearly 500 employees and equipped with what is increasingly recognized as the industry’s leading engine for antibody discovery and development,” said Carl Hansen, Ph.D., founder, and CEO of AbCellera. “Looking forward, our strong cash position will allow us to continue executing on our strategy to integrate digital and experimental technologies to help deliver therapies to patients with greater speed and precision while also building a large and diversified portfolio of stakes in the next generation of antibody therapies.”

Q3 2022 Business Summary

  • Earned $101.4 million in total revenue.
  • Generated net income of $26.6 million, compared to a net loss of $21.4 million in Q3 2021.
  • Programs under contract remain unchanged at a cumulative total of 164 programs under contract with 38 different partners.
  • Started discovery on four programs, bringing the cumulative number of program starts to 92.
  • Reporting the advancement of an additional molecule to Phase 1 clinical trials, taking the total to seven molecules cumulatively advanced to the clinic.

Key Business Metrics

Cumulative Metrics

 

September 30, 2021

 

September 30, 2022

 

Change %

Number of discovery partners

 

 

35

 

 

38

 

 

9%

Programs under contract

 

 

155

 

 

164

 

 

6%

Program starts

 

 

69

 

 

92

 

 

33%

Molecules in the clinic

 

 

5

 

 

7

 

 

40%

AbCellera maintained a cumulative total of 164 discovery programs throughout Q3 (up from 155 on September 30, 2021), that are either completed, in progress, or under contract with 38 different partners (up from 35 on September 30, 2021). AbCellera started discovery on an additional four programs in Q3 to reach a cumulative total of 92 program starts (up from 69 on September 30, 2021). An AbCellera partner advanced a molecule into Phase 1 clinical trials, bringing the cumulative total to seven molecules in the clinic.

Discussion of Q3 2022 Financial Results

  • Revenue – Total revenue was $101.4 million, compared to $5.5 million in Q3 2021. Royalties associated with bebtelovimab were $93.3 million. The partnership business produced research fees of $7.5 million, compared to $5.1 million in Q3 2021. Milestone payments were $0.4 million and licensing revenue was $0.2 million.
  • Research & Development (R&D) Expenses – R&D expenses were $26.6 million, compared to $17.5 million in Q3 2021, reflecting continuing investments in the capacity and capabilities of AbCellera’s engine for antibody discovery and development.
  • Sales & Marketing (S&M) Expenses – S&M expenses were $3.1 million, compared to $1.2 million in Q3 2021. The increase reflects continued investments in business development.
  • General & Administrative (G&A) Expenses – G&A expenses were $13.8 million, compared to $11.3 million in Q3 2021, with the increase driven by investments to support the growth of the company.
  • Net Earnings – Net earnings were $26.6 million, or $0.09 per share on a basic and $0.08 on a diluted basis, compared to a net loss of $21.4 million, or ($0.08) per share on a basic and diluted basis in Q3 2021.
  • Liquidity – $868 million of cash, cash equivalents, and marketable securities.

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 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 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.

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,

 

 

 

2021

 

 

2022

 

 

2021

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research fees

 

$

5,128

 

 

$

7,508

 

 

$

14,330

 

 

$

29,378

 

Licensing revenue

 

 

190

 

 

 

154

 

 

 

20,692

 

 

 

531

 

Milestone payments

 

 

-

 

 

 

400

 

 

 

8,000

 

 

 

400

 

Royalty revenue

 

 

190

 

 

 

93,321

 

 

 

192,850

 

 

 

433,570

 

Total revenue

 

 

5,508

 

 

 

101,383

 

 

 

235,872

 

 

 

463,879

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Royalty fees

 

 

-

 

 

 

15,035

 

 

 

23,622

 

 

 

64,882

 

Research and development(1)

 

 

17,450

 

 

 

26,582

 

 

 

44,853

 

 

 

79,634

 

Sales and marketing(1)

 

 

1,217

 

 

 

3,089

 

 

 

5,086

 

 

 

8,579

 

General and administrative(1)

 

 

11,271

 

 

 

13,792

 

 

 

28,958

 

 

 

42,470

 

Depreciation and amortization

 

 

3,666

 

 

 

5,150

 

 

 

10,493

 

 

 

14,025

 

Total operating expenses

 

 

33,604

 

 

 

63,648

 

 

 

113,012

 

 

 

209,590

 

Income (loss) from operations

 

 

(28,096

)

 

 

37,735

 

 

 

122,860

 

 

 

254,289

 

Other (income) expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (income) expense

 

 

1,256

 

 

 

(6,702

)

 

 

595

 

 

 

(7,343

)

Grants and incentives

 

 

(4,380

)

 

 

(2,150

)

 

 

(12,174

)

 

 

(8,879

)

Total other (income)

 

 

(3,124

)

 

 

(8,852

)

 

 

(11,579

)

 

 

(16,222

)

Net earnings (loss) before income tax

 

 

(24,972

)

 

 

46,587

 

 

 

134,439

 

 

 

270,511

 

Income tax (recovery) expense

 

 

(3,592

)

 

 

19,963

 

 

 

40,923

 

 

 

82,099

 

Net earnings (loss)

 

$

(21,380

)

 

$

26,624

 

 

$

93,516

 

 

$

188,412

 

Foreign currency translation adjustment

 

 

(1,508

)

 

 

(1,293

)

 

 

644

 

 

 

(997

)

Comprehensive income (loss)

 

$

(22,888

)

 

$

25,331

 

 

$

94,160

 

 

$

187,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share attributable to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.08

)

 

$

0.09

 

 

$

0.34

 

 

$

0.66

 

Diluted

 

$

(0.08

)

 

$

0.08

 

 

$

0.29

 

 

$

0.60

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

278,933,760

 

 

 

285,322,719

 

 

 

273,642,542

 

 

 

284,639,599

 

Diluted

 

 

278,933,760

 

 

 

315,818,163

 

 

 

323,323,053

 

 

 

314,183,994

 

 

(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, 2021

 

 

September 30, 2022

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

476,142

 

 

$

371,973

 

Marketable securities

 

 

246,835

 

 

 

496,233

 

Total cash, cash equivalents, and marketable securities

 

 

722,977

 

 

 

868,206

 

Accounts and accrued receivable

 

 

160,576

 

 

 

105,964

 

Restricted cash

 

 

25,000

 

 

 

25,000

 

Other current assets

 

 

21,247

 

 

 

46,499

 

Total current assets

 

 

929,800

 

 

 

1,045,669

 

Long-term assets:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

111,616

 

 

 

200,602

 

Intangible assets, net

 

 

148,392

 

 

 

142,548

 

Goodwill

 

 

47,806

 

 

 

47,806

 

Investments in and loans to equity accounted investees

 

 

50,313

 

 

 

66,718

 

Other long-term assets

 

 

30,642

 

 

 

49,066

 

Total long-term assets

 

 

388,769

 

 

 

506,740

 

Total assets

 

$

1,318,569

 

 

$

1,552,409

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and other liabilities

 

$

32,017

 

 

$

25,866

 

Current portion of contingent consideration payable

 

 

22,934

 

 

 

32,531

 

Income taxes payable

 

 

35,683

 

 

 

23,018

 

Accrued royalties payable

 

 

22,506

 

 

 

17,822

 

Deferred revenue

 

 

7,536

 

 

 

6,815

 

Total current liabilities

 

 

120,676

 

 

 

106,052

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Operating lease liability

 

 

36,413

 

 

 

71,591

 

Deferred revenue and grant funding

 

 

60,758

 

 

 

62,202

 

Contingent consideration payable

 

 

35,886

 

 

 

25,392

 

Deferred tax liability

 

 

37,370

 

 

 

34,143

 

Other long-term liabilities

 

 

1,733

 

 

 

2,857

 

Total long-term liabilities

 

 

172,160

 

 

 

196,185

 

Total liabilities

 

 

292,836

 

 

 

302,237

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common shares: no par value, unlimited authorized shares at December 31, 2021 and September 30, 2022: 283,257,104 and 285,761,492 shares issued and outstanding at December 31, 2021 and September 30, 2022, respectively

 

 

722,430

 

 

 

730,427

 

Additional paid-in capital

 

 

35,357

 

 

 

64,384

 

Accumulated other comprehensive income (loss)

 

 

280

 

 

 

(717

)

Accumulated earnings

 

 

267,666

 

 

 

456,078

 

Total shareholders' equity

 

 

1,025,733

 

 

 

1,250,172

 

Total liabilities and shareholders' equity

 

$

1,318,569

 

 

$

1,552,409

 

AbCellera Biologics Inc.

Condensed Consolidated Statement of Cash Flows

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

 

 

Nine months ended September 30,

 

 

 

2021

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

93,516

 

 

$

188,412

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Depreciation of property and equipment

 

 

3,060

 

 

 

6,212

 

Amortization of intangible assets

 

 

7,432

 

 

 

7,844

 

Amortization of operating lease right-of-use assets

 

 

1,895

 

 

 

3,686

 

Stock-based compensation

 

 

21,608

 

 

 

36,158

 

Other

 

 

(2,379

)

 

 

3,304

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts and accrued research fees receivable

 

 

(34,329

)

 

 

(3,675

)

Accrued royalties receivable

 

 

194,327

 

 

 

43,966

 

Income taxes payable

 

 

(29,563

)

 

 

(34,934

)

Accounts payable and accrued liabilities

 

 

(313

)

 

 

(1,151

)

Deferred revenue

 

 

9,051

 

 

 

(4,094

)

Accrued royalties payable

 

 

(26,548

)

 

 

(4,684

)

Deferred grant revenue

 

 

27,324

 

 

 

6,630

 

Other assets

 

 

(3,785

)

 

 

(1,226

)

Net cash provided by operating activities

 

 

261,296

 

 

 

246,448

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(49,022

)

 

 

(58,330

)

Purchase of intangible assets

 

 

-

 

 

 

(2,000

)

Purchase of marketable securities

 

 

(245,314

)

 

 

(670,430

)

Proceeds from marketable securities

 

 

9,527

 

 

 

418,238

 

Receipt of grant funding

 

 

9,807

 

 

 

14,100

 

Acquisitions

 

 

(11,457

)

 

 

-

 

Long-term investments and other assets

 

 

(17,534

)

 

 

(17,370

)

Investment in and loans to equity accounted investees

 

 

(27,105

)

 

 

(19,770

)

Net cash used in investing activities

 

 

(331,098

)

 

 

(335,562

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt and contingent consideration

 

 

(4,373

)

 

 

(323

)

Proceeds from debt and exercise of stock options

 

 

3,653

 

 

 

2,406

 

Payment of liability for in-licensing agreement

 

 

(5,000

)

 

 

(4,060

)

Net cash used in financing activities

 

 

(5,720

)

 

 

(1,977

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(900

)

 

 

(9,963

)

Decrease in cash and cash equivalents

 

 

(76,422

)

 

 

(101,054

)

Cash and cash equivalents and restricted cash, beginning of period

 

 

594,116

 

 

 

501,142

 

Cash and cash equivalents and restricted cash, end of period

 

$

517,694

 

 

$

400,088

 

Restricted cash included in other assets

 

 

-

 

 

 

3,115

 

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

 

$

517,694

 

 

$

396,973

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Property and equipment in accounts payable

 

 

2,224

 

 

 

2,213

 

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

 

 

26,976

 

 

 

46,239

 

 

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