AbCellera Biologics(ABCL) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q2 2023 was approximately $10 million, a decrease from approximately $13 million in Q2 2022, primarily due to a shift away from higher upfront fee programs [18][20] - Net loss for the quarter was roughly $31 million, compared to a net loss of approximately $7 million in Q2 2022, reflecting continued investments in the business and absence of royalty revenues [20] - Operating expenses for R&D were approximately $36 million, a $10 million increase year-over-year, indicating growth in program execution and platform development [19] Business Line Data and Key Metrics Changes - The company started work on five new discovery programs in Q2 2023, bringing the cumulative total to 106 partnered program starts [16] - The number of programs under contract remained at 177 with 41 unique partners, with no new programs signed in the quarter [16][17] - Nine molecules were reported in the clinic, indicating ongoing potential revenue from downstream milestone fees and long-term royalty payments [17] Market Data and Key Metrics Changes - The antibody therapeutics market was estimated to generate annual sales of $250 billion in 2022 and is projected to exceed $400 billion by 2030 [10] - The company secured $222 million in non-dilutive financing from the governments of Canada and British Columbia as part of an eight-year project worth $519 million [13][14] Company Strategy and Development Direction - The company aims to build a technological advantage in its antibody discovery engine and assemble a diversified portfolio of economic positions and programs for commercialization [10] - A significant focus is on building capabilities in translational science, process development, and manufacturing, expected to be completed by 2025 [11] - The strategy emphasizes quality over quantity in partnerships, focusing on programs that are likely to succeed in clinical trials [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its strategy with a strong liquidity position, having over $820 million in cash and equivalents [22] - The company is cautious about the current expectations surrounding AI in drug discovery, emphasizing that while there are opportunities, the science is not yet ready to deliver on all applications [25][31] - Management noted a macroeconomic trend where fewer companies are being started, leading partners to prioritize existing programs [50] Other Important Information - The company is actively engaged in discussions regarding the future of co-development programs with EQRx, indicating a path forward regardless of the outcome of EQRx's acquisition [33] - The company is building a GMP manufacturing facility that will support both pre-partnered and co-development programs [60] Q&A Session Summary Question: AI's impact on drug discovery - Management acknowledged the buzz around AI but clarified that current AI technologies do not significantly impact antibody discovery [25][26] Question: Future of EQRx co-development programs - Management confirmed three co-development programs with EQRx and indicated ongoing discussions about their future [33] Question: Milestone expectations for the year - Management stated that they do not provide short-term guidance on milestones but do not foresee a different trajectory than in the past [40] Question: Capacity for new program starts - Management confirmed that they have the capacity to handle multiple active programs and can scale up as needed [66] Question: Updates on COVID-19 antibody development with Eli Lilly - Management indicated ongoing engagement with Eli Lilly and readiness to proceed with clinical development when the path is clear [69]