AbCellera Reports Q3 2022 Business Results

Rhea-AI Summary

AbCellera (Nasdaq: ABCL) reported impressive Q3 2022 financial results, with total revenue of $101.4 million, up from $5.5 million year-over-year. The company achieved net earnings of $26.6 million, or $0.09 per share, reversing a net loss of ($21.4 million) in Q3 2021. Program starts increased by 33% to a cumulative total of 92, and the number of molecules in clinical trials rose to 7. With a strong cash position of $868 million, AbCellera is well-positioned for future growth in antibody discovery.

Positive

• Total revenue of $101.4 million, a significant increase from $5.5 million in Q3 2021.
• Net earnings of $26.6 million, compared to a net loss of $21.4 million in Q3 2021.
• Cumulative program starts grew by 33% to 92.
• Seven molecules advanced to Phase 1 clinical trials, a 40% increase from the prior year.
• Strong liquidity with $868 million in cash, cash equivalents, and marketable securities.

Negative

• R&D expenses rose to $26.6 million from $17.5 million, indicating higher investment costs.
• Sales & marketing expenses increased significantly to $3.1 million, reflecting ongoing business development investments.
• General & administrative expenses increased to $13.8 million from $11.3 million, driven by growth-related expenses.

• 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

VANCOUVER, British Columbia--(BUSINESS WIRE)-- 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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221104005576/en/

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

Source: AbCellera Biologics Inc.

FAQ

What were AbCellera's total revenues for Q3 2022?

AbCellera reported total revenues of $101.4 million for Q3 2022.

How did AbCellera's net earnings change in Q3 2022 compared to Q3 2021?

AbCellera's net earnings for Q3 2022 were $26.6 million, compared to a net loss of $21.4 million in Q3 2021.

What is the current number of program starts for AbCellera as of Q3 2022?

As of Q3 2022, AbCellera has a cumulative total of 92 program starts.

How many molecules has AbCellera advanced to clinical trials?

AbCellera has advanced a total of seven molecules to Phase 1 clinical trials.

What is AbCellera's liquidity position as of Q3 2022?

AbCellera has a strong liquidity position with $868 million in cash, cash equivalents, and marketable securities.