Company Overview - AbCellera Biologics Inc. is highlighted as a unique developmental concern, marking the first analysis since mid-February of the current year [2]. Investment Insights - The Biotech Forum has seen significant discussions around profitable buy-write or covered call strategies on selected biotech stocks, indicating a focus on trading ideas within the biotech sector [3]. Analyst Position - The analyst has disclosed a beneficial long position in AbCellera Biologics shares, indicating personal investment interest and confidence in the company's potential [4].

Financial Data and Key Metrics - Revenue for Q3 2024 was approximately $7 million, driven by research fees from partnered programs, consistent with Q3 2023 [12] - Research and development expenses increased to $41 million, up $3 million from the previous year, due to ongoing program execution and internal pipeline investments [12] - Sales and marketing expenses decreased slightly to $3 million, while general and administrative expenses rose to $19 million, primarily due to intellectual property defense costs [13] - Net loss for the quarter was $51 million, including a non-cash impairment charge of $32 million related to discontinued development of next-generation transgenic mice [14] - Cash and equivalents stood at $670 million, with an additional $210 million in available government funding, bringing total liquidity to $880 million [18] Business Line Data and Key Metrics - The company initiated two new partner programs in Q3 2024, bringing the cumulative total to 95 programs with downstream participation [11] - ABD-147 received orphan drug designation from the FDA, highlighting the potential for future milestone fees and royalty payments [11] - The company expects research fee revenue to decline as it shifts focus to internal and co-development programs [12] Market Data and Key Metrics - The company completed the move to its new headquarters in Vancouver and is on track to bring its GMP manufacturing facility online in 2025 [8] - The company expanded its partnership with Eli Lilly, focusing on co-development collaborations with shared ownership of resulting assets [9] Company Strategy and Industry Competition - The company is transitioning from a platform company to a clinical-stage biotech, with a focus on advancing internal programs and building platform capabilities [6] - The first two pipeline programs, ABCL635 and ABCL575, are on track for CTA filings in Q2 2025, with a broad portfolio of discovery-stage programs in development [7] - The company is prioritizing co-development collaborations and leveraging its TCE platform, with updated data to be presented at CITSE [9] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's transition to a clinical-stage company, with a focus on delivering value to patients and shareholders [10] - The company anticipates further investments in its translational and development teams as the pipeline advances [8] - Management highlighted the strong liquidity position, with sufficient funds to support operations and investments for the next three years [18] Other Important Information - The company reported a non-cash impairment charge of $32 million related to the discontinuation of next-generation transgenic mice development [14] - Investments in property, plant, and equipment totaled $63 million, partially offset by government contributions and proceeds from the sale of a stake in Invatex [16][17] Q&A Session Summary Question: Competitive landscape for OX40 and OX40 ligand therapies [20] - Management discussed the advantages of OX40 ligand-targeted therapies, emphasizing the non-depleting mechanism of ABCL575 compared to competitors [21][22] - The company remains bullish on the potential of OX40 ligand antibodies, with preclinical data expected to be presented in 2025 [24] Question: Data expectations for T-cell engagers at CITSE [26] - The company will present updated data on its TCE platform, including programs demonstrating desired profiles in killing and cytokine response [27] Question: Independent development of TCE programs [30] - The company has the liquidity and capabilities to advance two to three new development candidates per year, with potential for equity financing or out-licensing in the future [31][32] Question: Clinical trial site requirements for government funding [35] - Phase 1 trials for ABCL575 and ABCL635 will be conducted in Canada to qualify for government funding, with potential expansion to the US or globally if needed [36][37] Question: Market potential and competition for ABCL635 [39] - ABCL635 targets a multi-pass transmembrane protein in metabolic and endocrine disorders, with a conservative addressable market of over $2 billion [40] Question: Ramp-up of spending and resource allocation [43] - The company expects R&D expenses to remain stable in 2025, with a significant reduction in CapEx as facility builds are completed [44] Question: Positioning of ABCL575 relative to IL receptor antibodies [46] - ABCL575 is expected to enter as a second-line therapy behind DUPIXENT, with potential to move to first-line due to its durability advantages [47][48] Question: Ideal partnership for the TCE platform [51] - The company is focused on collaborations that advance the science of TCEs, with an emphasis on creating effective and safe therapies for cancer patients [52][53] Question: Update on GMP facility and Biosecure Act impact [56] - The GMP facility is on track to bring its first molecules online in late 2025, with the company well-positioned to benefit from geopolitical shifts in manufacturing [57][58][59] Question: Prioritization of internal programs [60] - The company's near-term priorities include capital allocation decisions to identify a major winner, building a differentiated portfolio, and maintaining operational efficiency [60] Closing Remarks - Management thanked participants and expressed optimism about future updates [62]

Company Performance - AbCellera Biologics Inc. reported a quarterly loss of $0.17 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.14, and compared to a loss of $0.10 per share a year ago, indicating an earnings surprise of -21.43% [1] - The company posted revenues of $6.51 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 27.30%, and down from $6.6 million in the same quarter last year [2] - Over the last four quarters, AbCellera has surpassed consensus EPS estimates only two times and has not beaten consensus revenue estimates during this period [2] Stock Performance - AbCellera Biologics shares have declined approximately 52.2% since the beginning of the year, contrasting with the S&P 500's gain of 20.1% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.14 on revenues of $9.57 million, and for the current fiscal year, it is -$0.55 on revenues of $35.86 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which AbCellera belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact AbCellera's stock performance [5]

Q3 2024 BUSINESS UPDATE COPYRIGHT © ABCELLERA NOVEMBER 4, 2024 DISCLAIMER This presentation 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 beliefs and assumptions and on information currently available to management. All statements contained in this presentation other than statements of historical fact are forward-looking statements, includi ...

Financial Performance - Total revenue for the three months ended September 30, 2024, was $6,507,000, a decrease of 1.4% compared to $6,599,000 for the same period in 2023[9] - The net loss for the three months ended September 30, 2024, was $51,107,000, compared to a net loss of $28,610,000 for the same period in 2023, representing an increase in loss of 78.4%[9] - The company reported a comprehensive loss of $50,266,000 for the three months ended September 30, 2024, compared to a comprehensive loss of $28,171,000 for the same period in 2023[9] - The company had a basic net loss per share of $0.17 for the three months ended September 30, 2024, compared to $0.10 for the same period in 2023[9] - The net loss for the nine months ended September 30, 2023, was $99,248,000, compared to a net loss of $128,647,000 for the same period in 2024, indicating a decrease in losses[15] Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $100,170,000, an increase of 62.8% from $61,489,000 in the same period of 2023[9] - Research fees for the nine months ended September 30, 2024, were $21,516,000, compared to $26,812,000 for the same period in 2023, reflecting a decline of 19.8%[9] - Research and development expenses for the nine months ended September 30, 2024, totaled $121,183,000, a decrease of 4.6% from $127,036,000 in the same period of 2023[9] - The company experienced a significant increase in depreciation, amortization, and impairment expenses, which rose to $36,919,000 for the three months ended September 30, 2024, compared to $5,735,000 for the same period in 2023[9] - The company reported a depreciation expense of $10,437,000 for the nine months ended September 30, 2024, compared to $8,874,000 in 2023[15] Cash Flow and Liquidity - Cash used in operating activities for the nine months ended September 30, 2023, was $24,266,000, while it increased to $100,556,000 in 2024[15] - Total cash, cash equivalents, and restricted cash at the end of the period was $199,712,000 for September 30, 2023, down from $153,930,000 in 2024[15] - Cash flows from investing activities resulted in a net cash used of $196,785,000 for the nine months ended September 30, 2024, compared to a net cash provided of $85,706,000 in 2023[15] - The company holds marketable securities totaling $516.5 million as of September 30, 2024, with a weighted average life of approximately 0.5 years[47] Shareholder Equity - The total shareholders' equity as of September 30, 2024, was $1,078,094,000, a decrease from $1,152,318,000 as of December 31, 2023[11] - The weighted-average common shares outstanding for the three months ended September 30, 2024, were 294,851,945, compared to 289,496,841 for the same period in 2023[9] - The weighted-average common shares outstanding increased from 288,750,387 in the nine months ended September 30, 2023, to 293,930,702 in 2024[22] Government Contributions - The Company entered into multi-year contribution agreements with the Government of Canada and the Government of British Columbia totaling CAD $300.0 million ($222.3 million) to develop antibody medicines and enhance capabilities in Canada[52] - The Government of Canada committed up to CAD $225.0 million ($166.7 million), with CAD $56.2 million ($41.6 million) being non-repayable and the remaining amounts being repayable starting in 2033[52] - The repayable funding from the Government of Canada is payable over fifteen years, with a conditionally repayable portion based on a percentage of the Company's revenue[52] - The Government of British Columbia committed up to CAD $75.0 million ($55.6 million), including CAD $37.5 million ($27.8 million) for eligible infrastructure investments and a conditional portion based on achieving defined milestones[52] - The Company recorded CAD $57.2 million ($42.4 million) from the Government of Canada funding and CAD $37.2 million ($27.6 million) from the Government of British Columbia funding as of September 30, 2024[52] - The total deferred government contributions recognized on the consolidated balance sheets as of September 30, 2024, amounted to CAD $149.9 million ($112.5 million)[53] - Government contributions are amortized into other income over an average life of approximately 8 years[53] Other Financial Metrics - The company recognized a gain of $16.5 million from the disposal of non-marketable securities in the quarter ended September 30, 2024[41] - The fair value of contingent consideration liabilities related to Trianni increased to $20.2 million as of September 30, 2024, from $20.0 million at the beginning of the period[43] - The company incurred lease expenses of $4,000,000 for both the three and nine months ended September 30, 2024, consistent with the previous year[29] - Stock options outstanding under the Pre-IPO Plan decreased to 27,263,018 shares as of September 30, 2024, from 30,647,575 shares as of December 31, 2023[33] - Stock-based compensation expense for the nine months ended September 30, 2024 was $52.4 million, up from $47.7 million for the same period in 2023[37] Market Risk - The Company believes its exposure to market risk has not changed materially since the last annual report[109]

Financial Performance - Total revenue for Q3 2024 was $6.5 million, a slight decrease from $6.6 million in Q3 2023[5] - Net loss for Q3 2024 was $51.1 million, or $(0.17) per share, compared to a net loss of $28.6 million, or $(0.10) per share in Q3 2023[5] - Net loss for the nine months ended September 30, 2024, was $128,647, compared to a net loss of $99,248 for the same period in 2023[18] - Cash used in operating activities for the nine months ended September 30, 2024, was $100,556, significantly higher than $24,266 for the same period in 2023[18] Expenses - Research and Development (R&D) expenses increased to $41.0 million, up from $37.9 million in Q3 2023, reflecting growth in program execution and platform development[5] - Sales and Marketing (S&M) expenses decreased to $3.1 million from $3.5 million in Q3 2023[5] - General and Administrative (G&A) expenses rose to $19.1 million, compared to $14.4 million in Q3 2023[5] - The company reported a significant increase in amortization and impairment of intangible assets, rising to $67,848 from $7,985[18] Assets and Liabilities - Total assets increased to $1,488,094 from $1,392,828, representing a growth of approximately 6.9%[17] - Total current assets rose to $871,985, up from $742,883, indicating an increase of about 17.4%[17] - Total liabilities increased to $335,776 from $314,734, marking a rise of about 6.7%[17] - Total shareholders' equity grew to $1,152,318, compared to $1,078,094, an increase of approximately 6.9%[17] Cash and Liquidity - Total cash, cash equivalents, and marketable securities amounted to $670.4 million, with an additional $205 million in available non-dilutive government funding, totaling over $875 million in liquidity[5] - Cash and cash equivalents at the end of the period were $199,712, down from $414,651, reflecting a decrease of approximately 51.9%[18] - Proceeds from marketable securities were $735,989, up from $642,913, indicating an increase of approximately 14.5%[18] Collaborations and Developments - Cumulative partner-initiated program starts with downstreams reached 95, an increase of 13% from 84 as of September 30, 2023[3] - The number of molecules advanced to the clinic increased by 40% to 14 from 10 as of September 30, 2023[3] - The company expanded its collaboration with Eli Lilly to discover therapeutic antibodies for various diseases[2] - AbCellera completed the consolidation into its new headquarters in Vancouver, marking a significant milestone in its infrastructure investments[2] Capital Expenditures - Purchases of property and equipment amounted to $62,766, slightly higher than $62,516 in the previous period[18]

Core Insights - AbCellera is a market leader in antibody discovery, focusing on building an integrated platform for antibody discovery and development aimed at generating best-in-class antibody medicines [1] Company Overview - The company has validated its technology with over 100 successful applications, showcasing its capability in the antibody discovery sector [1]

Core Viewpoint - AbCellera's stock has dropped significantly, with a 47% decline since September, attributed to falling revenues and increased R&D expenditures, leading to a cautious investment recommendation of "hold" for prospective investors [1][15]. Financial Performance - In Q2 2023, AbCellera's revenue fell to $10.1 million from $45.9 million in Q2 2022, with a net loss of $30.5 million [2]. - By Q2 2024, revenue further declined by 27% year-over-year to $7.3 million, while operating expenses increased, resulting in a net loss of $36.9 million [3][5]. - The company reported $133.32 million in cash and cash equivalents and $627.265 million in marketable securities as of June 30, 2024, indicating a strong balance sheet despite ongoing losses [11]. Research and Development - The number of molecules in clinical trials increased from nine to 14 over the past year, reflecting progress in the pipeline [5]. - R&D expenses rose to $40.9 million in Q2 2024, contributing to the widening net loss [5]. - AbCellera has expanded its partnership with Eli Lilly to discover therapeutic antibodies across various clinical areas, which may enhance its pipeline [7]. Market Challenges - The company faces skepticism from the market due to fiscal inefficiencies and the diminishing impact of COVID-19 related revenues [1]. - The nature of drug development poses significant risks, with many drugs in the pipeline still in early stages and unlikely to reach market [9][14]. - Historical data suggests that only about 5% of Phase 1 oncology drugs make it to market, indicating a challenging environment for AbCellera's drug candidates [10]. Investment Outlook - The stock is expected to remain volatile, with speculative valuation until one or two drugs achieve market visibility [12]. - The cash runway extends beyond 2026 based on current cash burn rates, providing some financial stability in the near term [11]. - A cautious "hold" recommendation is advised, with existing investors encouraged to maintain their positions while prospective investors should consider waiting [15].

Financial Data and Key Metrics Changes - AbCellera reported revenue of $7 million in Q2 2024, a decrease from approximately $10 million in Q2 2023, primarily due to a shift in focus towards internal and co-development programs [13][14] - The company experienced a net loss of roughly $37 million for the quarter, compared to a loss of nearly $31 million in the same quarter of the previous year, resulting in a loss of $0.13 per share [14][15] - Operating activities for the first half of 2024 used approximately $72 million, with total cash, cash equivalents, and marketable securities at $698 million at the end of the quarter [15][16] Business Line Data and Key Metrics Changes - The company initiated work on three partner-initiated programs in Q2 2024, bringing the cumulative total to 93 programs with downstream participation [12] - The cumulative total of molecules that have reached the clinic increased to 14, with the advancement of ABD-147 into the clinic [13] Market Data and Key Metrics Changes - AbCellera has approximately $700 million in cash and equivalents and $220 million in available government funding, providing over $900 million in total available liquidity to execute its strategy [12][16] - The company noted a trend of decreasing research fee revenue as it focuses more on internal programs, which is expected to continue in the coming quarters [14][41] Company Strategy and Development Direction - The company is prioritizing three main areas: advancing its internal pipeline, completing investments in platforms and facilities, and executing select strategic partnerships [6] - AbCellera is focusing on T cell engager (TCE) programs, with ongoing development in oncology and autoimmune indications, aiming for better safety and efficacy profiles compared to existing therapies [9][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential of their TCE platform, highlighting the progress made in preclinical studies and the potential for differentiation in the market [20][22] - The company is actively engaging with key players in the TCE space and is focused on translating in vitro data into in vivo models [19][20] Other Important Information - AbCellera announced an expansion of its partnership with Eli Lilly, building on a successful collaboration that began in March 2020 [11] - The company congratulated partners Abdera and Invetx on their recent advancements, indicating strong collaboration and potential future revenue streams from these partnerships [10][11] Q&A Session Summary Question: Interest in advancing TCE programs in oncology vs autoimmune indications - Management indicated that they are advancing multiple TCE programs simultaneously and are focused on demonstrating efficacy in vivo models before making further development decisions [19][20] Question: Competitive landscape for CD19 TCE in autoimmune diseases - Management acknowledged the crowded space but emphasized their focus on developing a product with strong efficacy and convenience compared to existing therapies [25][26] Question: Differentiation of OX40 ligand vs OX40 approaches - Management discussed the potential of their OX40 program and its long-lasting effects, positioning it as a best-in-class asset in the treatment of atopic dermatitis and other autoimmune conditions [31][32] Question: Economics of collaborations with large partners - Management expressed satisfaction with the collaboration renewals, indicating that the financial components have evolved positively, reflecting the value of their platform [44][45] Question: Impairment assessment in the quarter - Management clarified that the impairment was related to contingent consideration and in-process R&D from previous acquisitions, which was non-cash and roughly offsetting [47] Question: Engagement levels with new partners - Management noted a focus on building internal programs and strategic partnerships, indicating a lower volume of new partnerships compared to previous years [51] Question: Status of Viking ArrowMark collaboration - Management described the collaboration as being in early stages but expressed optimism about its potential to create new companies once development candidates are identified [53]

AbCellera 42 2024 BUSINESS UPDATE AUGUST 6, 2024 DISCLAIMER 2024 BUSINESS UPDAT This presentation 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 beliefs and assumptions and on information currently available to management. All statements contained in this presentation other than statements of historical fact are forward-looking statements, i ...