Financial Performance - Total revenue for the second quarter of 2022 was $45,917, representing a 66.1% increase compared to $27,643 in the same period of 2021[13] - Royalty revenue for the first half of 2022 was $340,249, up from $192,661 in the first half of 2021, marking a 76.7% increase[13] - Net income for the six months ended June 30, 2022, was $161,788, compared to $114,898 for the same period in 2021, representing an increase of 40.7%[3] - Total revenue for the three months ended June 30, 2022, was $45.9 million, an increase of $18.3 million or 66% compared to $27.6 million for the same period in 2021[97] - Total revenue for the six months ended June 30, 2022, was $362.5 million, an increase of $132.1 million or 57% compared to $230.4 million for the same period in 2021[98] - Royalty revenue increased by $12.1 million or 57% to $33.2 million for the three months ended June 30, 2022, driven by sales of bebtelovimab[97] - Royalty fees for the six months ended June 30, 2022, were $49.8 million, an increase of $26.2 million or 111% compared to $23.6 million for the same period in 2021[99] Expenses and Losses - Net loss for Q2 2022 was $(6,785), compared to a net loss of $(2,323) in Q2 2021[13] - Operating expenses for Q2 2022 totaled $54,313, an increase from $34,676 in Q2 2021, representing a 56.5% rise[13] - The company incurred research and development expenses of $26.7 million and $53.1 million for the three and six months ended June 30, 2022, respectively, compared to $15.0 million and $27.4 million for the same periods in 2021, reflecting an increase of approximately 78% and 94%[77] - General and administrative expenses increased by $3.2 million or 29% to $14.4 million for the three months ended June 30, 2022, due to increased software and licensing expenditures[103] - Sales and marketing expenses increased by $1.8 million or 141% to $3.1 million for the three months ended June 30, 2022, driven by business development activities[102] - The company reported a net loss of $6.8 million for the three months ended June 30, 2022, compared to a net loss of $2.3 million for the same period in 2021[79] Assets and Liquidity - Total current assets rose to $1,143,955 as of June 30, 2022, compared to $929,800 as of December 31, 2021, an increase of 23%[11] - Total assets increased to $1,593,784 as of June 30, 2022, from $1,318,569 as of December 31, 2021, reflecting a growth of 20.8%[11] - Cash and cash equivalents increased to $790,615 as of June 30, 2022, from $476,142 as of December 31, 2021, a growth of 65.9%[11] - As of June 30, 2022, the company had cash, cash equivalents, and marketable securities totaling $1,022.3 million, providing a strong liquidity position for future investments[80] - The company believes its existing cash and cash equivalents will be sufficient to meet working capital and capital expenditure needs for at least the next 36 months[131] Research and Development - The company’s research and development activities are focused on improving the speed and success probability of therapeutic antibody discovery[4] - The company has invested significantly in research and development to enhance its antibody discovery platform, which may impact operating results if returns on these investments are lower than expected[157] - The company expects to continue incurring significant expenses related to research and development, marketing, and operational expansion, which may increase substantially in the future[77] - The company has 164 discovery programs that are either completed, in progress, or under contract with 38 partners as of June 30, 2022, indicating a robust partnership network[72] Partnerships and Collaborations - The company continues to forge partnerships with drug developers of all sizes, enhancing its market presence and capabilities[4] - The company has multiple partnership agreements with pharmaceutical and biotechnology companies, including up to 10 targets with Everest Medicines and up to 6 targets with Moderna[92] - The company has received milestone and royalty payments from its collaboration with Eli Lilly, but future payments are uncertain due to potential development challenges and market acceptance issues[147] - The partnership with Eli Lilly has produced two antibodies, bamlanivimab and bebtelovimab, both of which received Emergency Use Authorizations (EUAs) from the FDA[167] Regulatory and Compliance Risks - The company is subject to industry-wide FDA and regulatory risks, which could materially harm its business if there is a reduction in the number of new drug applications approved[149] - Compliance with evolving data privacy laws, such as the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA), may increase operational complexity and costs[182] - The company may face fines of up to €20,000,000 or 4% of total worldwide annual turnover for non-compliance with GDPR regulations[184] - The company is subject to scrutiny regarding compliance with anti-bribery and anti-corruption laws, which could affect its reputation and operations[208] Growth and Expansion - New facilities are under development, scheduled for occupancy in early 2023, to materially expand operational capacity[84] - The company is expanding its commercial organization to effectively market solutions to existing and new partners, which may require significant recruitment efforts[189] - The company is expanding its facilities in Vancouver and internationally, which may face delays and higher costs due to the complexity of construction and rezoning requirements[168] Market and Competitive Landscape - The company faces significant competition in the life sciences technology market, with competitors having advantages such as larger customer bases and greater financial resources[161] - The company must adapt to rapid technological changes and respond to competitors' innovations to maintain its market position[172] - The company’s commercial success depends on the quality of its antibody discovery platform and its acceptance by partners in the market[137] Operational Challenges - The company may struggle to manage its growth effectively, which could impact its ability to execute its business strategy and maintain operational efficiency[154] - The operational capacity may become strained as more discovery programs are initiated, leading to increased operating expenses[84] - The company relies on partners for drug development, and any failure by these partners to meet contractual obligations could adversely affect its business[151]

Financial Data and Key Metrics Changes - The company ended Q1 2022 with over $780 million in cash, cash equivalents, and marketable securities, positioning it well for long-term strategy execution [7][41] - Revenue for Q1 2022 was $317 million, primarily driven by $307 million in royalties from bamlanivimab and bebtelovimab [32] - Earnings for Q1 2022 were reported at $168 million, compared to approximately $117 million in Q1 2021, resulting in earnings per share of $0.59 on a basic basis [38][39] Business Line Data and Key Metrics Changes - The company started six new programs in Q1 2022, bringing the cumulative total to 84 program starts, with a year-over-year increase in program starts [27][28] - There are currently 158 programs under contract, a 33% increase compared to Q1 2021 [28] - The company has seen a total of six molecules advance into the clinic, with one additional molecule receiving IND approval from the FDA [29][31] Market Data and Key Metrics Changes - The company anticipates that the majority of total 2022 revenue will come from royalties on COVID antibodies, with 600,000 doses of bamlanivimab shipped to the U.S. government in Q1 [33][35] - The U.S. government retains an option to purchase an additional 500,000 doses, which could further impact revenue [33] Company Strategy and Development Direction - The company aims to establish a dominant competitive advantage in the therapeutic antibody space by investing in technology, workforce, and infrastructure [8][12] - Investments are focused on building a centralized engine for antibody discovery, executing partner programs, and developing new technology to unlock new target classes [9][10] - The company is prioritizing deals with greater downstream participation to build a diversified portfolio [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong liquidity position, which allows for continued investment in capacity and platform capabilities [42] - The company is not pivoting to internal drug development but is focused on building a competitive advantage in the discovery process [49][50] - There is a strong uptick in business development discussions, particularly in response to recent data presented at industry conferences [62] Other Important Information - The company has invested significantly in expanding its facilities, with three new facilities brought online in Q1 2022 [14] - Over 25% of the R&D team is dedicated to software development, data science, and machine learning, which is seen as essential for scaling antibody discovery [16] Q&A Session Summary Question: Comparison of Empirico experience and future partnerships - Management clarified that the option to co-fund programs is not co-development but allows for capital allocation based on confidence in the indication and quality of molecules [45] Question: Shift towards internal development - Management reiterated that the focus remains on supporting partners and not pivoting to internal programs, although long-range R&D efforts are ongoing [49][50] Question: Irregularity in program starts - Management acknowledged that program starts may be irregular but emphasized the importance of long-term trends and increased work per program [52][53] Question: Impact of market conditions on business development - Management noted a strong uptick in business development activity, suggesting that their model is attractive in a liquidity-constrained environment [62][64] Question: Clinical data from molecules in the clinic - Management expects a steady stream of molecules entering the clinic and anticipates milestone revenue in the coming years [75] Question: CD3 antibodies and partnership potential - Management indicated strong interest from partners in the CD3 antibodies and plans to validate their technology before pursuing partnerships [79]

Financial Performance - Total revenue for the three months ended March 31, 2022, was $316,581,000, representing a 56% increase from $202,741,000 in the same period of 2021[13] - Royalty revenue surged to $307,017,000 in Q1 2022, up from $171,496,000 in Q1 2021, marking an increase of 79%[13] - Net earnings for Q1 2022 were $168,573,000, up from $117,221,000 in Q1 2021, indicating a growth of 44%[13] - Revenue increased from $202.7 million in Q1 2021 to $316.6 million in Q1 2022, representing a growth of 56%[74] - Net income for the three months ended March 31, 2022, was $168,573, compared to $117,221 for the same period in 2021, representing a 43.7% increase[17] Expenses - Total operating expenses rose to $91,631,000 in Q1 2022, compared to $44,667,000 in Q1 2021, reflecting a 105% increase[13] - Research and development expenses rose from $12.4 million in Q1 2021 to $26.4 million in Q1 2022, an increase of 113%[75] - General and administrative expenses increased from $6.4 million in Q1 2021 to $14.3 million in Q1 2022, a rise of 124%[75] - Stock-based compensation expense increased from $5,427 million for the three months ended March 31, 2021, to $12,291 million for the same period in 2022, reflecting a growth of approximately 126%[42] Cash and Assets - Cash and cash equivalents increased from $476,142,000 on December 31, 2021, to $545,718,000 on March 31, 2022, a rise of 15%[11] - Total assets grew from $1,318,569,000 on December 31, 2021, to $1,592,289,000 on March 31, 2022, an increase of 20%[11] - Cash, cash equivalents, and marketable securities totaled $786.1 million as of March 31, 2022[77] Shareholder Information - Total shareholders' equity increased from $1,025,733,000 on December 31, 2021, to $1,207,507,000 on March 31, 2022, reflecting an 18% growth[11] - The company reported a basic net earnings per share of $0.59 for Q1 2022, compared to $0.43 for Q1 2021, representing a 37% increase[13] Research and Development - The company continues to invest significantly in R&D and expects expenses to increase substantially due to ongoing activities[75] - The company aims to become the centralized operating system for next-generation antibody discovery, leveraging its AI-powered platform to enhance therapeutic antibody discovery[19] - The company has invested significantly in research and development to enhance its antibody discovery platform, which may affect operating results if returns are lower than expected[150] Partnerships and Collaborations - The company had 158 discovery programs under contract with 36 partners as of March 31, 2022[70] - The partnership with Eli Lilly has produced two antibodies, bamlanivimab and bebtelovimab, both of which received Emergency Use Authorizations (EUAs) from the FDA[160] - The company must maintain and expand partnerships to ensure the success of its antibody discovery programs, which are critical for revenue generation[132] Regulatory and Compliance Risks - The company is subject to industry-wide FDA and regulatory risks, which could materially harm its business if there is a reduction in the number of new drug applications approved[141] - The company is subject to the FCPA and other anti-corruption laws, with potential violations leading to significant legal and operational consequences[201] - The company faces risks related to data security and compliance with regulations like HIPAA and CCPA, which could lead to significant penalties and reputational damage[171] Future Outlook - The company anticipates significant increases in operating expenses due to investments in research and development, marketing, and infrastructure expansion[116] - The company expects to recognize approximately $5.3 million in revenue in the next 12 months related to milestone payments from a collaboration with Eli Lilly[46] - The company may need to raise additional capital to fund operations and expansion, with existing cash expected to meet needs for at least the next 36 months[124] Market and Competition - The company faces significant competition in the life sciences technology market, with competitors like Berkeley Lights and 10X Genomics providing similar technologies[154] - The company must adapt to rapid technological changes and respond to competitors' new products to remain competitive[165] Operational Challenges - The company is currently facing challenges in obtaining director and officer liability insurance, which may lead to higher costs and reduced coverage, impacting the ability to attract qualified board members[196] - The ongoing COVID-19 pandemic may exacerbate challenges in integration and operational efficiency following recent acquisitions[209]

Corporate Overview - AbCellera had $754 million in cash, cash equivalents & marketable securities as of September 30, 2021[8] - AbCellera had $44 million in accounts & accrued receivable as of September 30, 2021[8] - AbCellera has over 10 years of expertise since it was founded in 2012[17] - AbCellera has invested $100Ms in tech development & acquisitions[17] - AbCellera has 380+ employees[17,34] Programs and Partnerships - AbCellera has 155 cumulative programs under contract[8] - AbCellera has 5 molecules in the clinic[8,41] - 72% of AbCellera's targets are difficult targets, while 28% are standard targets[21] Technology and Capabilities - AbCellera has 500K+ sq ft of facilities (total lab, office, & manufacturing spaces by 2024)[17] - AbCellera's technology stack includes SOURCE, SEARCH, DECODE, ANALYZE, and ENGINEER stages to optimize antibody discovery[19,32] - AbCellera's proprietary software, Celium™, is designed to visually explore data, interrogate parameters, and inform downstream selection and validation[90]

Financial Data and Key Metrics Changes - Abcellera reported a revenue of $375 million for 2021, with $327 million coming from royalties on bamlanivimab shipments, $8 million from milestone fees, and $21 million from licensing fees [56][65] - The company ended 2021 with over $720 million in cash, cash equivalents, and marketable securities, a 22% increase from December 2020 [68] - Earnings for 2021 were over $153 million, translating to earnings per share of $0.56 on a basic basis and $0.48 on a diluted basis [65] Business Line Data and Key Metrics Changes - In 2021, Abcellera started 26 new drug discovery programs, bringing the total number of program starts to 78 [53][56] - The company ended the year with 156 programs under contract, a 51% increase compared to 2020 [53][56] - Four new molecules entered the clinic in 2021, bringing the total to five [53][56] Market Data and Key Metrics Changes - The antibody therapeutics market is estimated at $170 billion and is expected to grow to over $350 billion by 2030, with a historical compound annual growth rate of over 10% [10][11] - Oncology represents just over half of Abcellera's 65 human health programs, indicating a strong focus on this growth area [20] Company Strategy and Development Direction - Abcellera aims to become the technology leader in early drug development, covering activities from target discovery to clinical testing [11][13] - The company is focusing on strategic partnerships for deeper participation in discovered molecules, moving towards a model that emphasizes program starts over contracts [17][18] - Investments in forward integration are planned to enhance capabilities in translational science and manufacturing, with a GMP facility expected to be operational by 2024 [96][98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to find high-value work and expects strong growth in program starts throughout 2022 [75][88] - The company views COVID-19 royalties as a non-dilutive funding source to support investments in capacity and platform capabilities [61][62] - Management acknowledged the high-risk nature of drug development and emphasized the importance of a diversified portfolio to mitigate risks [29][30] Other Important Information - The company has made substantial progress in enhancing technologies for antibody discovery, including the integration of the TetraGenetics platform [50] - Abcellera's COVID-19 program with Eli Lilly has generated significant royalties, demonstrating the value of its business model [26][27] Q&A Session Summary Question: What is the expected pace of new program starts in 2022? - Management indicated that the pace of new program starts is expected to increase, driven by improved efficiency and capacity [75][76] Question: Will the company prioritize technology acquisitions given current market conditions? - Management confirmed that they are in a strong liquidity position and will remain opportunistic regarding technology acquisitions [79][80] Question: What does the pipeline look like for higher-value partnerships? - Management stated that they are in discussions with multiple companies and are being selective in partnerships to maximize value [91][92] Question: How much work remains for forward integration? - Management indicated that forward integration is a continuous evolution, with a focus on building capabilities for IND filing by 2024 [96][98] Question: Will the company be able to raise typical royalty rates? - Management clarified that 5% is not the limit for royalty rates, with many recent deals exceeding this threshold [118]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39781 AbCellera Biologics Inc. (Exact name of Registrant as specified in its Charter) British Columbia Not Applicable (State or other ...

Financial Data and Key Metrics Changes - The company closed Q3 2021 with nearly $800 million in liquidity, including over $750 million in cash and cash equivalents [6] - Revenue for the quarter was $5.5 million, primarily from research fees, which accounted for $5.1 million, reflecting an increase from the same quarter last year [28][29] - The net loss for Q3 2021 was approximately $21 million, compared to a loss of about $3 million in Q3 2020 [31] Business Line Data and Key Metrics Changes - The company added 17 new programs under contract in Q3 2021, bringing the total to 155 programs, a 65% increase compared to Q3 2020 [24] - There were 9 new program starts in Q3 2021, totaling 69 program starts year-to-date [24][28] - One new molecule entered the clinic, bringing the total to 5 molecules in the clinic [6][26] Market Data and Key Metrics Changes - The company is working on a diverse range of indications, including oncology, pain, neurodegeneration, infectious disease, autoimmune disease, and more [12] - The partnership with Everest Medicines marks the company's first engagement in Asia, focusing on oncology [14] Company Strategy and Development Direction - The company aims to be recognized as the industry's premier drug discovery engine, with a capacity to deliver lead antibodies for over 100 discovery programs per year [10] - Investments in technology and infrastructure are expected to enhance efficiency and scalability across workflows [8] - The company is expanding its deal structures to include equity stakes and options to invest in discovered molecules [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for partnerships and the increasing number of programs under contract, which are expected to translate into a growing rhythm of program starts [13] - The company views the recent orders for COVID-19 products as upside and not integral to its long-term business strategy [49] Other Important Information - The company acquired TetraGenetics to address production challenges for GPCR and ion channel proteins, which are critical for antibody discovery [17] - The OrthoMab platform is being integrated to support the development of bispecific antibodies, which are a major growth driver in the antibody therapeutics market [19][20] Q&A Session Summary Question: What common elements are seen in new program starts? - The strong performance in new programs was largely due to partnerships with Everest and Moderna, with a diverse mix of partners contributing to program starts [36] Question: How do relationships typically play out in terms of timelines? - The first program from the Invetx collaboration was initiated in 2019, indicating a trend towards faster timelines from initiation to clinical testing [37][39] Question: Can you expand on the CD3 work being done? - The company is developing an in-house panel of CD3 targeting antibodies, with plans to characterize these for pairing with the OrthoMab platform [40][42] Question: How does the Moderna collaboration differ from other partnerships? - The collaboration with Moderna involves delivering candidates for RNA-based therapeutics, with business terms consistent with other partnerships [43][44] Question: What are the expectations for bamlanivimab in 2022? - The company expects additional revenues from bamlanivimab orders in Q4 and Q1 of the following year, viewing these as non-dilutive financing for core business investments [48][49] Question: What is the vision for 2022 regarding key metrics? - The company anticipates continued growth in key metrics, with a focus on executing partnerships and moving programs through the development pipeline [55]