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spk01: Good day and thanks for standing by. Welcome to the Accelera Q1 2021 earnings result and business update conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Trin Steinmark, Chief Legal Officer and Chief Compliance Officer. Please go ahead.
spk04: Thank you. Good afternoon, everyone, and welcome to Abcelera's first quarter 2021 business update. We are pleased to have you with us today where we will discuss the results announced in our press release issued after the market closed today, which you can find on our investor relations website. With me on the call are Dr. Carl Hansen, Abcelera's chief executive officer and president, and Andrew Booth, Abcelera's chief financial officer. The webcast portion of this call contains a slide presentation that we will refer to during the call. Those of you following along on the phone who wish to access the slide portion of this presentation may do so on the investor relations section of our website. For those who have accessed the streaming portion of the webcast, please be aware that there may be a delay and that you will not be able to pose questions via the web. This presentation may contain forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements are based on management's current expectations and are subject to certain risks and uncertainties. Please review our SEC filings for risk factors that impact our future performance. Our presentation and SEC filings are available on our investor relations website. Note that all dollars referred to during our call today are U.S. dollars. Now I am pleased to turn the call over to Carl Hansen. Thank you, Trent. And thank you to everyone for joining us today. I'm excited to share with you the results of our first quarter of 2021, which saw us carrying forward momentum from 2020 and achieving strong growth performance across all areas of our business. But before I do that, I'd like to pull back and take a few minutes to revisit our long-term vision for what we are building here at Accelera and for the magnitude of the opportunity that we see before us. Put plainly, our vision is to build the most technologically advanced antibody drug discovery engine in the world and to redefine the state of the art for the industry, not just today, but for decades to come. This is a bold vision. It is one that we are uniquely positioned to achieve. We believe that the technology stack that we've assembled over the last nine years offers capabilities in the discovery of therapeutic antibodies that are already unmatched in combined metrics of speed, versatility, quality, and diversity. Despite our leading position today, we are far from done. Over the coming years, we will continue to invest aggressively in building our technology stack to push back the frontiers of what is possible. This is not only about invention and innovation. It is also about building modern facilities to empower interdisciplinary R&D. It is about industrialized molecular biology automation, and it is about integration of CMC and GMP manufacturing. It will require increasingly powerful computational tools based on artificial intelligence that can take advantage of hyperscale data science to predict drug-like properties. It is also about building an elite workforce, one that is inspired by the opportunity to work on technologies that can radically change how drug development is done. Perhaps most importantly, it is about maintaining a culture of innovation and constant improvement across all dimensions of our organization. This is what we are building at Accelera. Our business model is unique in that it emphasizes collaboration and partnership. We aim to empower partners, large and small, that are committed to translating science into new therapies that help people. For smaller companies, we believe we can unlock innovation and value, both by stripping out the redundancy of everyone attempting to rebuild internal capabilities, and also by allowing great science to connect with best-in-world capabilities. For the larger and more enabled companies, we believe our efforts will open up new disease areas and new target classes, and also that our model enables increased speed, efficiency, and adaptability by using Abcelera as an extension of their R&D teams. We expect to work on the development of hundreds of potential drugs to treat a wide array of diseases spanning cancer, inflammation, neurodegeneration, infectious disease, and beyond. Through this work, we aim to create long-term shareholder value by building a large and diversified portfolio of royalty positions in the next generation of antibody-based therapies. To achieve this vision, our efforts today are focused on expanding our capabilities, building capacity, and extending our commercial reach. Our key growth strategies include, one, increasing the number of programs under contract by expanding our commercial reach. Two, forward integration of our tech staff to include translational sciences, CMC, and GMP manufacturing capabilities. Three, scaling our teams and facilities. advancing internal R&D to further our technological differentiation, and five, leveraging proprietary data science to drive continual improvements in speed, precision, and automation, and to increase the predictive power in the selection of antibody development candidates. We see programs under contract, or PUCs, as a key indicator of our long-term commercial success. We intend to use our platform to generate a portfolio of hundreds of royalty positions, forging new partnerships and expanding our work with existing partners. This quarter, we added 16 pucks and two new partnerships. You will note that this included expanding a previous single-target deal with Gilead Sciences into a new multi-year, multi-target agreement that also included licensing of the Triani flagship mouse. Through continual expansion of our capabilities and the addition of new technologies, we will also look to bring more value to our partners and to increase the royalties associated with our partnership deals. Total revenue for the quarter was $203 million, and we ended the quarter with over $680 million in cash and over $190 million in accrued accounts receivable. Our strong cash position and our ongoing revenue stream from COVID-19 programs provides capital to quickly scale our teams, expand capacity, and extend our technological advantage. As I mentioned, Abcelera is about building technology out at scale. In the long run, we envision scaling up our tech stack to occupy over a million square feet of office and lab space, with facilities custom designed to foster innovation at the nexus of sciences, bringing together software developers, data scientists, biologists, engineers, and business leaders. We envision integration of computation with industrialized automation to create a modern factory for innovation and drug development. We envision AbCellera as a premier destination for the brightest and the most creative minds, for people who seek challenge and want to work at the leading edge. As a first and exciting step towards this vision, we recently announced our plans to build a 380,000 square foot tech campus right here in the heart of Vancouver. We are also adding capabilities to further support full chemistry manufacturing and control, or CMC, and good manufacturing practice, GMP manufacturing. This will provide our partners with a full solution from target to an investigational new drug application submission. We are finalizing plans to build our new GMP facility here in Vancouver in close proximity to our headquarters, and I look forward to sharing more about this in the near future. As expressed already, bold technology development is a pillar of Epsilor's growth strategy. Executing on this requires strong leadership across the company. Accordingly, we were fiercely proud to announce the promotion of Dr. Esther Faulconer to Chief Technology Officer earlier this year. Prior to her promotion to CTO, Dr. Faulconer was Head of Research and Development, overseeing our activities in genomics, microfluidics, biochemistry, protein engineering, data science, and machine learning. She led the development of Epsolar's pandemic preparedness platform and led its deployment last year against COVID-19. This effort resulted in the discovery and the development of Bammanivimab and now of 1404. Esther has proven herself to be a truly exceptional scientist and a strong leader. We congratulate her on her new position and the opportunity that sits before her. Which brings us to our update on COVID-19. As you know, last year we demonstrated the power of our platform and the drive of our team with the discovery of Bammanivimab. In addition to being the first antibody therapy for COVID-19 to reach the clinic and the first to receive emergency use authorization, Bamlanivimab has also been by far the most broadly used antibody therapy to date against COVID-19. In the US alone, Bamlanivimab has been used to treat well over 400,000 patients. It has prevented tens of thousands of hospitalizations and it has saved more than 11,000 lives. To address emerging variants, bamlanivimab has been evaluated in clinical trials with two other antibodies, including edesivimab and VIR7831. In February, the combination of bamlanivimab and edesivimab was authorized for emergency use in the U.S., and due to the rise in new variants, Lilly recently transitioned to this combination, with bamlanivimab alone no longer authorized for emergency use in the United States. Knowing that additional antibodies would be needed to combat emerging variants, we deployed our platform once again to come up with a new antibody that we believe has potential to become a long-term solution for COVID-19 as the virus becomes endemic. As anticipated on the last earnings call, this second antibody, named 1404, has since moved into clinical testing to treat patients with mild to moderate COVID-19, making it the second clinical asset from a Solaris platform in under a year. 14.04 has combined breadth and potency that we believe give it potential as a best-in-class solution for COVID-19. In terms of breadth, in preclinical studies, 14.04 has been shown to be effective against SARS-CoV-2 and all currently known variants of concern. This includes those variants first identified in the UK, South Africa, Brazil, California, and New York. We also have high confidence that it will be effective against the B.1.617 variant, which first emerged in India. In terms of potency, 14.04 has been shown to neutralize SARS-CoV-2 at exceptionally low concentrations. This means that it has the potential to be scaled up quickly, and also that it is well-suited for administration as a subcutaneous injection instead of as an infusion. We believe that the prospect of a potent and broadly neutralizing antibody that can be given as a simple shot rather than an infusion would be game-changing. It would facilitate much broader use and impact of antibody therapies to fight COVID-19 around the world. 14.04 is currently being evaluated both alone and in a three-way combination together with faminivimab and edesivimab. We expect clinical testing to progress quickly, and if all goes well, submission for emergency use authorization could occur this summer. I want to highlight that as a new public company with only 260 people, we have now succeeded in bringing two therapeutic antibodies into clinical development in less than 12 months. There could be no stronger evidence of the power of our platform or the strength of our team. Moreover, I believe this is just a glimpse of what we intend to achieve over the next decade and across many disease areas. And with that, I'll turn it over to Andrew Booth, our CFO, to provide an overview of our first quarter 2021 financials. Thanks, Carl. First, I'll talk about our key performance indicators. We ended the quarter with 119 programs under contract with 29 different partners. That is a 63% increase in programs under contract as compared to the end of Q1 in 2020. We believe that we are starting to see the combined positive impacts of several factors with this increase in business development activity. These factors include our investment in the business development team and the profile that our platform has received both from the success of our COVID antibody programs and the broader publicity of the technology that we have received from our IPO and being a public company. Importantly, this growth also reflects the success that we have had in our initial programs with some partners who are now looking to work on more programs with us. We saw that extension of partnerships with several groups in 2020, and again in the first quarter with the expanded relationship with Gilead. During the quarter, we saw two more program starts in order to take us to 59 cumulative starts. Note that we are not including our work on 1404 as a new start. The 1404 effort was part of the same COVID antibody program that we started in 2020, which had already delivered bamlanivimab. As a reminder, program starts occur when our partners are ready to trigger the work on a selected target, including having all the appropriate reagents ready for us to start discovery and their teams ready to continue development when they get our results back. This can be variable. It's not unusual for there to be a lot of preparatory work and lag before we actually start a program after signing an agreement with a partner. At the same time, we expect a robust number of program starts in 2021, with the increase in pucks as the leading indicator of this. Looking at revenue, revenue in the quarter was nearly $203 million, 44 times what it was in Q1 2020. We have significant royalties and a milestone payment from Banlanibimab in our results that were not present in the first quarter of 2020. We achieved royalty revenues of $171 million and a milestone payment of $7 million in Q1. These are all attributable to the Lilly sales of Bamlanivimab, both alone and in combination with Edesivimab. The milestone Bamlanivimab reached in Q1 was the first commercial sale in Europe. Directly attributable to the $171 million in royalty revenue we earned from Lilly sales of Bamlanivimab were $20 million in royalty fees payable to the NIH. the net impact of royalties on income from operations during the quarter was therefore $151 million. As noted in our previous earnings call, we view these royalties primarily as a non-dilutive source of funding for the company, and importantly, as a proof point of what can happen when one of the many programs in our portfolio is successful. As expected, And as per Lilly's guidance on their last quarterly earnings call, we would expect royalty revenues in Q2 to be below where they have been in Q1. We remain optimistic at the prospect of long-term revenue stream from COVID products, including Bamlanivimab and 1404. You will notice that we have also added a new line to our income statement related to license fees. We generated $20 million in license fees from our recently acquired Triani Humanized Rodent Platform. While the primary benefit of the Trani platform lies in enhancing the technology stack of our discovery programs, it is worth noting that within just a few short months, we've integrated that acquisition and recouped 22% of the original purchase price. In the future, we will continue to offer licenses to the flagship mouse to our partners, as well as integrated into our core discovery offering. Note that the licenses are generally one-off events, which we would expect to occur irregularly. Meanwhile, We continue to invest and develop the next generation of animals internally to expand these capabilities. While our business model emphasizes participation in downstream economics, we also receive income from the research we do for our partners. We earn research fees of approximately $4 million, which are attributable to the range of discovery programs we worked on for our partners. This is slightly less than the first quarter of 2020, where we received substantial fees from our paid COVID-related discovery work from DARPA. Turning to operating expenses, our research and development spend in the quarter was approximately $12 million, a threefold increase over the previous year. We expect that our investment into R&D will continue to grow as we can keep expanding our R&D team's capabilities and capacity. This allows us to deliver on our partner programs, as well as to enhance our technology stack organically. In sales and marketing, expenses for the first quarter were about $3 million, an almost six-fold increase from the same quarter in 2020. This reflects significant growth in our business development team, capabilities, reach, and capacity to connect with the strong global demand that we are seeing. This expense also includes an $800,000 donation to fund a clinical study related to Bamladivimab in Canada. In general and administration expenses for the quarter, they were roughly $6 million, also a significant increase from 2020, driven by the need to support a much larger business and meet the requirements of being a publicly listed company. Looking at earnings, our net earnings were $117 million compared to a $2 million loss in the first quarter of 2020. As with our last quarter, this is in large part due to the success of Bamlanivimab. In terms of earnings per share, this works out to a basic earnings of 43 cents per share and diluted earnings of 37 cents per share. Turning to cash flows, Operating activities contributed $109 million, which includes the collection of accrued accounts receivable balance from December 2020. On the investing activities side, besides CapEx of nearly $4 million, you will note that we are also showing a $12 million investment in equity investees. This relates to our Vancouver facilities expansions, which are structured as joint ventures with our development partners, Dehue and Beatty Group, where Abcelera owns 50% of the facilities. We finished the quarter with $686 million of cash and cash equivalents, and $193 million of accrued accounts receivable. We continue to maintain a strong liquidity position that allows us to continue to build capacity, expand the platform, and pursue business development initiatives. And with that, we'll be happy to take your questions, and I'll turn it back to the operator.
spk01: As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. Please limit yourself to one question and one follow-up to allow time for everyone's question. Please stand by while we compile the Q&A roster. Our first question comes from Tiago Fox with credits. Your line is open.
spk04: Hey, thanks for taking the question. Programs under contract seem to be moving at a fairly good pace, and you did mention that it's a leading indicator and outlined some of the factors that may impact the timing of converging a buck to a new program start. I am curious if what is the potential factors that may lead to some attrition between the two, right? Because since the decision is partially driven by the partner, there may be some shift in priorities or a new biology find. I'm curious if you have any expectations specifically for that. And to the extent that you're comfortable discussing, since you said that we can expect a robust number in 2021, during the first two days in Q2, are you seeing a change in that pace? And would you expect to see a performance kind of similar to what you've seen historically? I'm trying to understand exactly what, a little better, what robust could mean. But thanks. Fantastic. Tiago, Carl Hansen here. Happy to take the first part of that question. Maybe I'll then hand off to Andrew Booth. So your question was, what was our thinking about potential attrition between programs under contract and subsequent starts. The first thing I'll say to that is that historically, we have had very little, if any, attrition. So in the deals that we've done historically, which have included several deals that were multi-year, multi-target agreements, all of those thus far have converted into programs that are either completed or actively being pursued within EPCELERA. That doesn't mean that it is not possible, that there would be some attrition between the two. I think that probably happens if you sign up for deals with companies that have multiple slots that they anticipate and for some business reason decide that they no longer want to pursue those. We have built that into some of our internal models, but to date that has not been a very substantial factor. I will add that one of the things that is difficult to predict is the timing of those, and it is more common that based on scientific data or decisions at the partner, there may be starts that come at a later time than is originally anticipated. And that is something that we try to manage, but at the same time, it's important for us that the partners have conviction in their targets and that all of the reagents and materials are in place so that we can begin a program that has the best chance possible to actually make it through to the clinic. For the last part of your question, perhaps I'll hand off to Andrew. Yeah, thanks, Carl. Tiago, so as you know, so many of our deals with partners, especially these repeat deals, are for multiple targets over multiple years. So we would expect them to be started over a longer period of time. And the large number of pucks compared to program starts, you know, is not a backlog, but rather sales and business development activity that we've done well in advance and secured. And as Carl said, you know, quite a high degree of confidence that we will execute on them. It's not unusual for a lot of prep and a lag before we start a program. And we see, and as a result, again, this metric can be variable, but we do see a robust number of programs starts for the duration of 2021. So I think we have a high degree of confidence that while this metric was maybe a bit low in the first quarter, we see a high degree of confidence for the remainder of the year. Perfect. Awesome. Thanks a lot for the details. Appreciate it. Congrats on the progress.
spk01: Our next question comes from Stephen Wiley. Stephen, your line is open.
spk02: Yeah, good afternoon. Thanks for taking the questions. Congrats on the progress. So I know that building out the workflow via new technology is a focal point, and I know that's something that you've talked about with respect to putting some of the BAM royalties to use. But I guess maybe you can just provide a little bit of color around, you know, where you are in that process right now. I guess how much bandwidth do you feel you have at this point to integrate new tech into the workflow? And I guess with valuations now having been reset across the space, does that make you any more opportunistic over the near term?
spk04: Great question, Steve. So Carl here. So on the first part of that, we have – your question was asking where are we in the process and where do we see opportunities in the future. This strategy of rebuilding at the forefront of what is possible with modern technologies – a complete solution for antibody drug discovery is one that we set off to complete almost nine years ago. So we have been on this path for quite some time. It is now very well advanced, and as I said in my opening remarks, I do believe that we have a pole position, at least at the front end of this process. So today, from going from target biochemistry through to discovery and selecting high-quality candidates, We have invested in technologies that provide diversity, speed, adaptability that we think sit at the very front of the industry. It is not at all complete. One of the big themes that we touched on and that you will see in the coming months and years is is the emphasis on forward integration. So building out the capabilities to do translational science, the CMC, and the manufacturing. And that is one big theme, which will allow us to have more control and accelerate the development of programs, particularly from groups that are not enabled internally, to get those to the clinic faster and to get better molecules to the clinic faster. In addition to that, one of the big themes is achieving scale and efficiency, and that is through a combination of R&D and protocol development, but also a very heavy emphasis on data science, being able to organize operations, collect data from the many different points at which we have experimental capabilities, and and then to aggregate that and use things like machine learning or other AI-based algorithms to accelerate the process of looking through that data and getting increasing returns in terms of speed and efficiency. That's something that's going to play out, not over a year, but it's going to play out over several years, if not decades. I think there's a lot of headroom there as to where technology can go. Given valuations in the space, there certainly are opportunities where we could see companies with platform technologies or capabilities that would be very synergistic with what we're doing. At this point, we wouldn't comment much more on that, but of course the emphasis is always on finding the most direct and fast path to achieving the long-term goal, and at the same time making sure that we're not taking shortcuts and we're putting the very best people and the very best technologies in place.
spk02: Got it. I appreciate the response. And then just a quick follow-up on 1404. So I know you had previously intimated, I guess, there being some kind of regulatory perspective regarding the utility of accommodations to cover resistant variants. But I guess I'm just kind of wondering, based on the preclinical data that was published for 1404, what does 1404 that drug combined with BAND and edesivimab by you from a biological perspective?
spk04: Fantastic question. You know, 1404, I did touch on in the prepared comments. It is an antibody with spectacular potency and breadth. So in addition to being, you know, as potent or more potent than anything else that we've seen, certainly in clinical development, perhaps anything that we've seen at all, We have shown in the lab that it can neutralize all the variants of concern. And in fact, it recognizes an epitope on the spike protein that when we look across all the genomic data that's available around the world for COVID-19, appears to be not mutated at any significant level anywhere. So from that perspective, it is currently an antibody that we would predict to be effective against everything that exists in the world for COVID-19. So from that scientific fact set, My straight answer would be it's not clear that a combination would buy you anything except for insurance. And it is important to be sober about this, that any monoclonal antibody has a theoretical and a practical vulnerability that a variant could come up that would render it no longer effective. the immediate solution for that is to look for combinations. So a combination, say, with Bamlanivimab or a combination with another antibody would provide a backstop to that scenario that we do not predict will be likely to happen soon, but you never know. And, you know, perhaps more importantly, the last 12 months with Bamlanivimab and Adacivimab show that we are able to apply our technology and to do this again. So if we found that another variant came up and was catching hold and posed a threat to people anywhere in the world, we would deploy that platform again, and I expect that Lilly would be happy to stand behind us in that effort.
spk02: Understood. Thanks for taking the questions.
spk01: Our next question comes from Gail Linda with Ehrenberg. Your line is open.
spk03: Yeah, hi. Hi, Carl, Andrew and the team. Just wanted to touch on one thing that I guess we've started seeing when we reported full year results. And I think it's becoming a little bit more pronounced now as well. You've added 16 programs on the contract across three partners effectively, as you mentioned. So that average is starting to increase, and it's something that's kind of getting pulled out. And I guess my question, Dara, is are we starting to see that the platform itself is less of a proof of concept because we're starting to see more expansions effectively? And is that kind of the early indicator that you've been waiting for in terms of kind of getting the confidence that, you know, there's a number of partners that you have, but those partners can significantly ramp up the number of programs that they want to engage with you? Thank you.
spk04: Thanks, Cal, for that question. Right off the bat, I'd say it's very clear that our platform is not a proof of concept. It's a platform that's delivered on many of the hardest programs in the industry and over the past year has resulted in two clinical phase assets. So I think we've certainly proven the speed, the power, the versatility of that across many different indications or target classes and with many partners. In terms of the mix, or in terms of the ratio of programs under contract versus partners, I think that is likely to be variable, and it is mostly driven by the state of our relationship with partners. As I mentioned, the expansion with Gilead was based on success. We are definitely seeing that people are looking to engage now, skipping over that first interaction and going right to a multi-target deal. I think that's a great example. signal of confidence in the market and demonstration of the technology. But there will also be mixed into that smaller firms that don't have a real use case for more than one or two programs, these smaller companies. And that is a sector of the market that we think presents a huge opportunity to unlock great innovation, target ideas, science, entrepreneurs that for a long time have been stranded without access to the capabilities needed to bring their ideas forward to clinical testing. And the more that we do of those, you can expect that will be more partners but fewer targets per partner. And, of course, that will be reflected in the ratio of talks to partners.
spk03: Got you. I guess I have a follow-up just on that specifically. So that's exactly how I've been thinking. When you think about a future growth, is it about engaging new partners? And when you think about kind of new programs, the most likely to come from the smaller biotech firms or large pharma? How would that balance be in the long run after trying to estimate particular costs? I'm just trying to understand the balance, what you believe will happen.
spk04: It's always difficult to predict how that's going to play out, but we certainly do not expect that it will be lopsided on either the large partners or the small partners. I believe there's going to be a healthy mix all the time. What's maybe more interesting or perhaps what is behind that and drives it is the value proposition. And for the larger, very well-enabled companies, companies like the Eli Lalit, who are sophisticated and have built up formidable capabilities internally, these partnerships will be driven by the need to get into target classes or to move faster than conventional technologies allow. And that is one of the reasons we invest so heavily in R&D, because we want to be the de facto solution for people that need to get into these areas that have been traditionally out of reach. For the smaller companies, The discovery problems may be easier, but the barriers to moving them forward are extremely high and difficult to overcome. And those are barriers of facilities, technology, expertise, teams, the need for investment, and in all these cases, the need to move quickly because we live in a competitive world and there are patients that are waiting for those therapies. So we are dedicated to solving both of those problems. And perhaps in the very long run, you know, even finding increases in speed and efficiencies such that the big enabled partners will start to see us as a natural extension of their teams where they can flex up and flex down depending on what's needed at the time and the opportunity that's before them.
spk03: That's really helpful. Thank you. Appreciate it.
spk01: Our next question comes from . Your line is open.
spk02: Yeah. Hi, Carl. Thanks for taking the question. And Andrew, maybe first one cleanup question. Just wanted to understand the 52 program, the release had about 52 programs. The slide deck had about 54. And I think you mentioned 59 program starts on the call. So I just, Maybe I missed it. Can you just clarify how those numbers tie together? And am I missing something? Because it was 52 in the last quarter. And are we now at 59 cumulative program starts?
spk04: So thanks for the question, Punita, and the clarification. So you are correct that in the end of 2020, we were at 52 program starts. And I'm looking at the slide right now and the text that I said, and we are at 54 at the end of the first quarter. And I'm not sure where you got the 59 number from, but the numbers I'm looking at were 52 at the end of 2020 and 54 at the end of 2021.
spk02: got it so two programs starts okay excellent and then on the one more clarification on the the 16 um uh the pucks or the new contracts that you um added i just wanted to clarify you know eight were with gilead uh where additional eight uh were with other companies or um are is our majority of those is still uh very much gilead programs
spk04: No, of the 16, and actually, sorry, Tiffany here just told me that in my dialogue I must have misspoke and said 59, so thanks for the clarification. It should be 54 at the end of the first quarter. The second question, 16 new programs under contract. Yeah, eight of those were with Gilead. And they, of course, were an existing customer, so they did not contribute to the additional two customers that we added in the first quarter. And those additional two customers contributed to the additional eight programs that were signed up in the first quarter. Okay, got it. Thanks for that clarification.
spk02: And then, you know, how should we be, I know it's a complicated question given all that's happening around COVID. How should we be thinking about the royalty revenue here in the second quarter? I mean, obviously, you've got 1404 combo with that sumab, there are new strains that are emerging. So I appreciate that it's not an easy one. But I You know, anything you can provide there that helps us think about the royalties in the second quarter, that would be helpful.
spk04: Thanks, Vineet. Carl here. I'll take that one. You know, so first just to echo, you know, given all of the variables that are out there, you know, vaccines, adoption, other antibodies coming in, you know, changes from monotherapy to combination therapy, We would not hazard a guess at what will be revenues from royalties in Q2, though we do expect, based on guidance from Lily, that they'll be lower. Now, obviously, royalty revenue is a highlight of our recent results, but frankly, I think it's a bit of a distraction from the long-term value we're building in the company. While an important proof point, we firmly believe that this is one program that And it represents a small value, a small part of the value that we're building in the platform. So the long-term vision here is to build a large portfolio of hundreds of programs. And we see, as Andrew has said, the revenue coming from COVID-19 royalties right now as a wonderful tailwind. It is a non-diluted source to help to double down on that vision. And we also see COVID-19 royalties as being... source of revenue for the long run, because we believe that COVID-19 is likely going to be here to stay. And that is why we are excited about molecules like BAM and perhaps even more the same power of a molecule like 1404 that could be manufactured at scale, delivered broadly, and has that combination of potency and breadth that makes it a real candidate to be a best-in-class contender here.
spk02: Okay, great. That's super helpful. And last one, if I could squeeze in, in terms of the Triani revenues, those were pretty meaningful this quarter. Obviously, you're pointing those out as one-time or one-off meaningful revenues. But still, this line is now going to be in the model. You know, maybe, Andrew, can you comment on how should we be thinking about that, you know, sort of going forward and anything you can provide on, you know, what drove this, you know, meaningful $20 million in the quarter? What was anything about that project would be very helpful. Thank you.
spk04: Yeah, thanks for the question, Puneet, and happy to give some clarification. As I mentioned in the prepared remarks, we would expect this to be irregular. It's really dependent on which partners and what access to the platform they're looking for. As was mentioned in the press release with Gilead, that included a license to the TrianiMouse platform, so that was a main driver. of the revenues we saw in the first quarter. But we will continue to add, you know, license revenues. And if I remember correctly from a short period of time ago, in our last call, you actually asked where were the license revenues from the Triani platform. And I did kind of mention we would be including that as a separate line item, and we will continue that in our future. Just wanted to point out, of course, that if you look back – to the acquisition we did of Triani. This is just an outstanding example of the return we believe we're going to get from that acquisition. Over 20% of the purchase price of the company covered in the first quarter of this year, and we are just as excited about the next generation animals that we are investing heavily in. Even to Steve's earlier question about M&A, where we've done the repertoire sequencing acquisition in the past, the Orthomab by specific platform acquisition in the past, and this Triani mouse platform in the past, and have really set those up to be ready to deploy and integrated immediately, showing that we have the capabilities and the muscles to be able to do that. I think it's a great proof point of our inorganic strategy. Okay, great. Thank you.
spk01: Our next question comes from . Your line is open.
spk04: Hi, good afternoon. Thanks for taking my questions. I wanted to ask about the 16 new programs under contract this quarter. It's a pretty good step up in programs.
spk02: How much visibility do you have in future new programs, is this a pace that you can maintain based on the discussions you're having with partners, or is it just something too unpredictable?
spk04: Hey, Joe. Andrew, I'll take the first crack at that at least. As we mentioned in the last call, and I mentioned the prepared remarks earlier, You know, we are staffing up our business development activity and we have the most robust pipeline we've seen in business development in the history of the company. I think the strong performance in the first quarter is really proof of that. We have built the team and you see it in the increased expenses in the first quarter in BD. so that we can be fielding all these opportunities. I would reiterate the same comments from the last quarterly call, that we still have the strongest and most robust pipeline that we have seen in the history of the company, even after closing these 16 programs under contract in the first quarter. So we are not giving guidance of where it will be for the full year, but we still have a robust pipeline in front of us. Great. Thanks for that. And a question about one of the recent partnerships you have, the NGOs partnership where you took some equity as part of the deal. Could you talk about what kind of opportunities there are out there in these newly formed biotechs and getting creative economic terms like equity stakes And if you're thinking about generating an internal pipeline and creating biotechs around that. Thanks, Joe. Carl here. I'll take that question. You know, resonating with my comments to the previous question, we see this sector as one that has been ignored and not served well, and one where there's a tremendous opportunity to unlock value. And just to sort of paint the picture there, Currently, if you are an innovator, if you're coming out of an academic institution, you have an idea, preclinical data that shows this is a viable pathway to target, antibodies would be the way. Getting that off the ground has been traditionally very difficult. It has required huge amounts of capital and time. And that disconnect between, or that friction between these ideas and between the platforms, capabilities, people, and expertise to execute on them leaves a lot of great science and a lot of great therapies, frankly, or potential therapies on the table. So our model serves this group of innovators very well. We have set up to be a centralized discovery engine that they can access through partnership Our vision is to let these innovators get access to all the capabilities they need while staying focused on the thing that they know well, which is not the technology development for discovery, but rather the biology or the particular modality that they're trying to develop. Now, when we move up that chain, we can provide much, much more value. And we will, of course, look to strike deals that allow us deeper participation through milestones and royalties. But at some point, you hit sort of a roof as to what is practical and in the best interest of the company at that early stage. In that case, one way that you can flex is into equity and create alignment between us and those companies. so that we're rooting for their success as well as for the success of the assets. So that is something that we have done already in the past. We've done deals that include equity with Invitex, which is a company that is really pioneering the use of antibodies in animal health. We have done it recently with a company, Abdera, that is bringing forward very innovative drugs targeting cancer with radioisotopes. And now this deal with NGOs follows on that, and in this case built on some really deep insights into the biology and some terrific scientists. And we believe that there's a lot of excitement about both their program and more generally about this model of unlocking innovation. That's very helpful. Congrats on the progress.
spk03: Thanks, Bill.
spk01: There are no further questions at this time. I'll turn the call back over to Carl for closing remarks.
spk04: Thank you, and thank you all for joining us. Just to sum up, this has been a very exciting time for Accelera, and we're looking forward to keeping you updated on our progress on future calls. Very best, everyone.
spk01: This concludes this conference call. Thank you for participating. You may now disconnect.
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