Absci(ABSI) - 2023 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2023, were $3,367,000, compared to $1,002,000 for the same period in 2022, representing a 236% increase [18]. - Technology development revenue increased to $3,367,000 for the three months ended June 30, 2023, from $636,000 in the prior year, a growth of 429% [18]. - Total operating expenses rose to $46,355,000 for the three months ended June 30, 2023, compared to $29,889,000 in the same period of 2022, an increase of 55% [18]. - The net loss for the three months ended June 30, 2023, was $41,672,000, compared to a net loss of $28,680,000 for the same period in 2022, reflecting a 45% increase in losses [18]. - The company reported an operating loss of $42,988,000 for the three months ended June 30, 2023, compared to an operating loss of $28,887,000 in the same period of 2022 [18]. - Comprehensive loss for the three months ended June 30, 2023, was $41,723,000, compared to a comprehensive loss of $28,718,000 for the same period in 2022 [18]. - The net loss for the six months ended June 30, 2023, was $65,027,000, compared to a net loss of $58,174,000 for the same period in 2022, representing an increase in loss of approximately 11% [24]. - Basic and diluted net loss per share for the three months ended June 30, 2023, was $(0.45), compared to $(0.32) for the same period in 2022 [78]. Assets and Liabilities - Total current assets decreased from $186,863 thousand as of December 31, 2022, to $148,037 thousand as of June 30, 2023, representing a decline of approximately 20.8% [15]. - Total liabilities decreased from $46,594 thousand to $38,754 thousand, a decline of about 16.8% [15]. - Total stockholders' equity decreased from $274,414 thousand to $215,399 thousand, a decline of about 21.5% [15]. - As of June 30, 2023, total assets measured at fair value amounted to $63,562,000, a decrease from $109,526,000 as of December 31, 2022 [70][73]. - The company held $15.0 million in escrow contingent upon the achievement of specific milestones [75]. Cash Flow - Net cash used in operating activities for the first half of 2023 was $39,353,000, a decrease from $43,728,000 in the same period of 2022, indicating improved cash flow management [24]. - The company reported a total of $42,851,000 in net cash provided by investing activities for the six months ended June 30, 2023, compared to a net cash used of $18,080,000 in the prior year [24]. - As of June 30, 2023, the company held cash equivalents and short-term investments totaling $63,562,000, a decrease from $109,526,000 at the end of 2022, primarily due to increased investments in short-term securities [35]. Expenses - Research and development expenses were $12,112,000 for the three months ended June 30, 2023, down from $16,241,000 in the same period of 2022, a decrease of 25% [18]. - Selling, general, and administrative expenses decreased to $9,410,000 for the three months ended June 30, 2023, from $10,507,000 in the prior year, a reduction of 10% [18]. - Total stock-based compensation expense for the three months ended June 30, 2023, was $3.054 million, a decrease from $4.247 million for the same period in 2022 [55]. Goodwill and Impairment - The company experienced a goodwill impairment of $21,335,000 for the three months ended June 30, 2023 [18]. - The company reported a goodwill impairment of $21,335,000 for the six months ended June 30, 2023, indicating a significant decline in market capitalization [24]. - As of June 30, 2023, the net carrying value of goodwill was $0, down from $21.3 million as of December 31, 2022, reflecting a complete impairment [45]. - The Company recognized a non-cash, pre-tax goodwill impairment charge of $21.3 million for the three months ended June 30, 2023, indicating that the recorded goodwill was fully impaired as of that date [45]. - The Company performed a quantitative impairment evaluation of goodwill using both income and market approaches, with significant assumptions including forecasted revenues and a discount rate reflecting the weighted average cost of capital [44]. Investments and Securities - The company’s investments in U.S. treasury bills as of June 30, 2023, had a fair market value of $63,539,000, with unrealized losses of $14,000 due to interest rate changes [35]. - The aggregate intrinsic value of outstanding stock options as of June 30, 2023, was calculated based on the fair value of common stock at $1.52 per share [57]. - The Company had 17,020,870 stock options outstanding as of June 30, 2023, with a weighted average exercise price of $3.50 per share [57]. Tax and Legal Matters - The effective income tax rate from continuing operations was 0.0% for the six months ended June 30, 2023 [81]. - The company has $1.8 million of unrecognized tax benefits as of June 30, 2023 [82]. - The company does not expect a significant increase or decrease in unrecognized tax benefits within the next twelve months [82]. - The Company is not currently party to any material claims or legal proceedings, indicating a stable legal environment [51]. Future Projections - The company aims to leverage its Integrated Drug Creation platform to shorten preclinical development of biologics, anticipating growth in the biologics market [6]. - The company is focused on attracting new partners and entering into technology development agreements to enhance revenue potential from milestone and royalty obligations [6]. - Future amortization expense for intangible assets is estimated to be $1.686 million for the remaining six months of 2023 and $3.370 million for each of the years 2024 and 2025 [49]. - As of June 30, 2023, the Company had $1.3 million of unrecognized compensation expense related to outstanding shares of restricted stock expected to be recognized over a remaining weighted-average period of 1.5 years [63].