Revenue Growth - Total revenue for the three months ended September 30, 2022, was $101,383,000, a significant increase from $5,508,000 in the same period of 2021, representing a growth of approximately 1,738%[13] - Research fees and licensing revenue for the nine months ended September 30, 2022, reached $29,378,000, compared to $14,330,000 for the same period in 2021, indicating a growth of about 105%[13] - For the nine months ended September 30, 2022, net income was $188,412, compared to $93,516 for the same period in 2021, representing a 101.5% increase[17] - The company recognized $2.0 million in revenue from deferred revenue during Q3 2022, compared to $1.5 million in Q3 2021, marking a 33% increase[46] - The company expects to recognize approximately $3.4 million in revenue in the next 12 months related to milestone payments from a collaboration with Eli Lilly[48] Financial Performance - The company reported a net loss of $21,380,000 for the three months ended September 30, 2022, compared to a net loss of $21,380,000 in the same period of 2021, showing a recovery from previous losses[13] - The company’s diluted net earnings per share for the three months ended September 30, 2022, was $0.08, compared to $(0.08) for the same period in 2021, indicating a turnaround in earnings performance[13] - For the three months ended September 30, 2022, the company reported net earnings attributable to common shareholders of $26,624, compared to a net loss of $21,380 for the same period in 2021, resulting in basic earnings per share of $0.09[27] Assets and Liabilities - Total current assets increased from $929,800,000 as of December 31, 2021, to $1,045,669,000 as of September 30, 2022, reflecting a growth of approximately 12.5%[11] - Total assets rose from $1,318,569,000 as of December 31, 2021, to $1,552,409,000 as of September 30, 2022, marking an increase of about 17.7%[11] - The company’s cash, cash equivalents, and marketable securities totaled $868,206,000 as of September 30, 2022, up from $722,977,000 as of December 31, 2021, indicating a growth of about 20.1%[11] - The current portion of contingent consideration payable increased from $22,934,000 to $32,531,000, reflecting a rise of approximately 42%[11] - Shareholders' equity increased from $1,025,733,000 as of December 31, 2021, to $1,250,172,000 as of September 30, 2022, representing a growth of about 22%[11] - As of September 30, 2022, total cash, cash equivalents, and restricted cash amounted to $396,973, down from $517,694 at the end of the previous period[17] - As of September 30, 2022, the company had total accounts payable and other liabilities of $25,866 thousand, a decrease from $32,017 thousand as of December 31, 2021[38] Operating Expenses - Operating expenses for the three months ended September 30, 2022, totaled $63,648,000, compared to $33,604,000 for the same period in 2021, representing an increase of approximately 89%[13] - The company’s stock-based compensation expense for the nine months ended September 30, 2022, was $36,158, an increase from $21,608 in the same period of 2021[17] - Stock-based compensation expense increased from $7.7 million in Q3 2021 to $11.8 million in Q3 2022, representing a 53% increase[44] Investments and Collaborations - The company aims to become the centralized operating system for next-generation antibody discovery, leveraging its AI-powered platform[19] - AbCellera Biologics Inc. has partnerships with various drug developers, ranging from large pharmaceutical companies to small biotechnology firms[19] - The company received total payments of $28.4 million under a research collaboration agreement with Eli Lilly, including an upfront payment of $26.7 million[48] - The company has made equity investments of $18.8 million in the Dayhu joint venture and $14.7 million in the Beedie joint venture as of September 30, 2022[33] - The outstanding related party loan balance to the Dayhu joint venture increased from $18.0 million as of December 31, 2021, to $33.2 million as of September 30, 2022[34] Other Financial Metrics - The company incurred approximately $15.0 million in expenses related to research and development and regulatory milestone payments during Q3 2022[58] - The company recognized a lease liability of $41.1 million upon commencing a lease for office and laboratory space in Vancouver, Canada[60] - The fair value of contingent consideration liabilities increased from $22.9 million to $24.7 million for Trianni and decreased from $35.9 million to $33.2 million for TetraGenetics during the nine months ended September 30, 2022[53] - Deferred revenue decreased from $35.4 million in September 2021 to $30.9 million in September 2022, a decline of approximately 13%[46] - The company’s accumulated comprehensive other income (loss) was $(717) as of September 30, 2022, indicating fluctuations in foreign currency translation adjustments[17] Property and Equipment - The company’s total property and equipment increased from $121,442 thousand as of December 31, 2021, to $216,339 thousand as of September 30, 2022, with net property and equipment amounting to $200,602 thousand[29] - The company’s intangible assets net book value was $142,548 thousand as of September 30, 2022, with a gross carrying amount of $162,973 thousand and accumulated amortization of $20,425 thousand[31] Stock Options and Shares - The company’s stock option activity shows 34,809,900 options outstanding as of September 30, 2022, with a weighted average exercise price of $0.88[40] - The company granted 3,938,280 shares under the 2020 Share Option and Incentive Plan, with 8,675,247 options outstanding as of September 30, 2022[41] - As of September 30, 2022, the company had 3,155,073 restricted share units (RSUs) outstanding, with a weighted average grant date fair value of $14.00[43] Impact of COVID-19 - The company’s future financial results may be impacted by ongoing developments related to the COVID-19 pandemic, although no specific events have been identified that would require updates to estimates or assumptions[24]

Financial Data and Key Metrics Changes - The company ended Q2 2022 with over $1 billion in cash, cash equivalents, and marketable securities, indicating a strong liquidity position [6][41] - Revenue for the quarter was $46 million, driven largely by $33 million in royalties from COVID antibody shipments [32] - The net loss for Q2 2022 was approximately $7 million, compared to a loss of $2 million in Q2 2021, resulting in a loss of $0.02 per share [39] Business Line Data and Key Metrics Changes - The company started four new programs in Q2 2022, bringing the cumulative total to 88 program starts, with a 19% increase in programs under contract compared to Q2 2021 [26][27] - Six molecules are currently in the clinic, with a U.S. government purchase order for 150,000 doses of bebtelovimab received and partially fulfilled by Eli Lilly [30][31] Market Data and Key Metrics Changes - The company expects continued strength in research fees and anticipates the majority of total 2022 revenue to be derived from royalties on COVID antibodies [34][35] - The new commercial sales arrangement by Eli Lilly is expected to result in additional royalties for the company as usage normalizes [35] Company Strategy and Development Direction - The long-term strategy focuses on building a competitive advantage in antibody product creation and leveraging technology to drive drug development efficiency [12][9] - The company aims to attract top-tier talent and expand its operations and capabilities, benefiting from industry rationalization and consolidation [8][7] Management's Comments on Operating Environment and Future Outlook - Management believes the current market environment presents a strong tailwind for the business, despite challenges faced by competitors [6] - There is no indication of a slowdown in development from partners, as high-quality firms are expected to continue moving their programs forward [92][93] Other Important Information - The company has signed new deals with premier venture capital firms to unlock breakthrough science, allowing early-stage companies to start discovery immediately [15] - The company is focused on technology development efforts that could lead to valuable assets, with a strategy to partner these assets for clinical and commercial development [23][64] Q&A Session Summary Question: Can you provide more context on the first adventurous deal and its potential for replication? - Management sees a huge opportunity in using investments in technology along with a partnering business model to allow the best ideas to compete effectively [45][46] Question: What is the next step for the COVID antibody royalties? - The transition from government purchase orders to direct sales by Eli Lilly is viewed positively, simplifying the supply chain [52][53] Question: What are the short-term plans for the over $1 billion in cash? - The company plans to invest heavily in capability building and vertical integration, with a focus on R&D and sales and marketing [54][55] Question: How broad are the pre-partner programs across different therapeutic categories? - The focus is on technology development to solve significant problems, with potential for multiple therapeutic opportunities [60][62] Question: What is the exposure to small biotech companies in the contract portfolio? - Approximately 60% to 75% of programs under contract are with biotech companies, reflecting a broad distribution across the sector [71][72]

Financial Highlights - The company reported total revenue of $45.9 million in Q2 2022, driven by royalties from bebtelovimab [29] - The company experienced a net loss of $6.8 million, equivalent to $0.02 per share (basic and diluted) [37] Business Updates - The company maintains a strong cash position with substantial cash, cash equivalents, and marketable securities [8] - The company has cumulative programs under contract [8] - The company highlights the complexity and technology-intensive nature of the path from target identification to Investigational New Drug (IND) status [10] - The company aims to deliver value by accelerating drug development, innovating in previously inaccessible areas, and leveling the playing field for partners [11] Technology Development - The company is developing a T-cell engager platform, with data indicating a wide range of functional activities from its CD3 antibody panel [18] - The company's pre-partnered programs include a Pandemic Response Platform and a GPCRs & Ion Channels Platform [21] - The company's pandemic response technology led to two COVID-19 antibody treatments and treated over 2.5 million patients [22] Partnerships and Programs - The company has 38 discovery partners [27] - The company has 6 molecules in the clinic as of June 30, 2022, including bamlanivimab and bebtelovimab [28]

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]