AbCellera Biologics(US:ABCL)2022-02-25 04:15Financial 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]