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spk01: Good day and thank you for standing by. Welcome to the Abcelera Q3 2021 Earnings Results and Business Update Conference Call. At this time, all participants are in the listen-only mode. As the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone. If you require any further assistance, please press the zero. And now I'd like to hand the conference over to your first speaker today, Trinh Simart, Chief Legal Officer. Thank you. Please go ahead.
spk06: Thank you. Good afternoon, everyone, and welcome to Abcelera's third 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, Absella's Chief Executive Officer and President, and Andrew Booth, Absella'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 post 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 could impact our future performance. A presentation and SEC filings are available on our investor relations website. Note that all dollars referred to on our call today are U.S. dollars. Now, I am pleased to turn the call over to Carl Hansen.
spk04: Thank you, Trin, and thank you, everyone, for joining us today. It's my pleasure to provide an update for the third quarter of 2021. We continue to focus on our long-term business objectives, and we've made strong progress executing across the organizations. We closed the quarter with nearly $800 million in liquidity, including over $750 million in cash, cash equivalents, and marketable securities, and over $40 million in accounts and accrued receivables. In addition to our strong financial position, we posted strong growth across key business metrics, including 17 new programs under contract, bringing our total number of programs to 155, nine new program starts, bringing our total number of starts to 69, and one new molecule that has entered the clinic, bringing our total number of molecules in the clinic to five. First, to frame the results from this quarter, it is important to stress our strategy and how we believe this will drive long-term value for patients, for our partners, and for our shareholders. There are no shortcuts in building a truly great company, We are focused on building something of substance, something that will endure, and something that hasn't existed before. We are building a vertically integrated technology stack that covers all steps in preclinical antibody discovery and development. What makes us different is that we are replacing the legacy approaches that had their roots in the 1980s with an interlocking chain of modern technologies, including microfluidics, genomics, single-cell analysis, protein engineering, computational methods, and artificial intelligence. These technologies are held together by software engineering and hyperscale data science that provides, and that we believe will continue to provide, increasing gains in efficiency and scalability across our workflow. Along with our investments in infrastructure and high-performance workforces, we believe our technology allows us to respond to any discovery challenge across the industry and to deliver candidates more quickly and with higher probability of success. We believe that we have already established best-in-world capabilities across this critical part of the drug development workflow. And we continue to expand our technology, now forward integrating with investments in translational science, CMC, and GMP manufacturing. We expect these capabilities to be in place in the first half of 2024. This will allow us to go from a drug target to delivering the DNA sequence of a lead antibody, the data needed to support an investigational new drug application filing, and the drug substance that supports clinical testing in Phase I and Phase II. By putting all these capabilities together, we believe we can help our partners bring drugs to patients faster and with greater probability of success. In the long run, our bold vision is to be recognized as the industry's premier drug discovery engine. to a built-in platform with capacity to deliver lead antibodies for over 100-plus discovery programs per year, and to be supporting dozens of these through IMD filing each year. All of this done in half the time that it currently takes. Building on our technology foundation, our business generates multiple sources of value for shareholders. These include upfront payments for tech assets, research payments for executing on programs, licensing fees, and milestones and royalties associated with clinical and commercial success of the molecules that we discovered. This year, we have expanded our deal structures to add new ways to capture value, including taking equity stakes and building in the option to invest and deepen our participation in molecules that have come from our platform. Through this business model, we are building a large and a diversified portfolio of stakes in the next generation of antibody-based therapies. By picking great partners, by leveraging technology advantages, and by working broadly across different indications and modalities, we believe we can generate long-term value and superior returns while at the same time not assuming the binary risk that is normally associated with drug development. Today, we have built a portfolio of 155 programs under contract, and 131 of these have downstream participations. We're working on indications that span oncology, pain, neurodegeneration, infectious disease, autoimmune disease, allergic inflammation, ophthalmology, women's health, and cardiovascular disease. Through our programs, we deliver antibodies to be developed for the full range of therapeutic modalities. This includes IgGs, IgMs, and IgAs, bispecific antibodies, single-chain antibodies, CAR-T cell therapies, radioisotope conjugates, and CNS-delivered antibodies. Finally, the power of our platform has attracted partnerships across the spectrum of drug development companies. This includes the most enabled companies like Lilly, Gilead, and Regeneron, fast-moving biotechs such as EQRX, Denali, and IgM, and also innovative emerging biotechs such as Empirico, Angios, and Cation. We continue to see strong and accelerated demand across our partnership business. In the third quarter, we added another 17 new programs under contract, Over the first nine months of the year, we have now added 52 programs under contract, as compared to 34 that were added over the same period in 2020. While the number of programs under contract will vary from quarter to quarter, we have now built up a robust book of work that we expect will translate into a steadily growing rhythm of annual program starts, which is when the work on each program actually begins. We will increasingly be focusing on program starts as a primary metric in building our portfolio and also as a reflection of our growing capacity to execute. In the third quarter, we started nine programs, bringing our total program starts to 69. This quarter, we also added two new multi-target partnerships that bring important and unique dimensions to our growing portfolio of programs, including opening up new geographic markets and pioneering new therapeutic modalities. Our most recent partnership, which is with Everest Medicines, represents our first engagement with a company focused on developing drugs in Asia. Everest is a late stage clinical development company whose leadership has a proven track record in the rapid development and commercialization of innovative therapeutics. This partnership is already off to a great start and has the potential to bring multiple molecules into the clinic with accelerated timelines. We look forward to working with them on 10 targets across multiple indications starting first with oncology. We are also excited about a new collaboration with Moderna to advance their portfolio of RNA-based medicines. This partnership will address six different targets. Over the past year, the massive impact of RNA vaccines has solidified RNA as an important and proven modality. Outside of vaccines, there are many other opportunities for RNA-based medicines, including antibodies. Through our collaboration with Moderna, we are pairing Abcelder's Discovery Engine with Moderna's industry-leading RNA platform to pioneer a new way of delivering antibodies. We will use our platform to find therapeutic antibodies and provide Moderna with a data package that includes the DNA sequence that encodes these antibodies. Moderna will then use their technology to deliver these sequences to the patient in the form of an RNA molecule so that the patient's own body can make the antibody and combat the disease. This bypasses the conventional manufacturing process that is used to make standard antibodies. In addition to having the potential to significantly accelerate the path towards clinical development, RNA delivery also provides opportunities to use antibodies in ways that would be difficult or impractical with conventional manufacturing methods. This is yet another example of how Accelerate can work through partnerships to unlock innovation and accelerate the development of new types of antibody-based medicines. It also highlights the importance of continued investment in our platform to open up new opportunities in drug development. An opportunity of particularly high value is the space of GPCR and ion channel proteins. These targets play key roles in cellular function and include many well-validated targets for a broad range of indications, spanning cancer, inflammation, pain, obesity, fibrosis, and more. While these drug targets are widely regarded as a large and untapped opportunity for therapeutic antibodies, they have proven largely intractable using existing technologies. For context, more than 50% of approved small molecule drugs are against GPCRs and ion channels. In many instances, small molecule development has been hampered by poor specificity and off-target toxicity, something antibodies are ideally suited to remedy. Despite this recognized opportunity, And despite intense work across the industry, there are only two approved antibodies against GPCRs, and to date, no antibodies against IM channels have even made it into clinical development. There are many challenges in tackling these targets, and we have an overarching technology development program to systematically address each of them. One of the most important is that many of these targets are extremely difficult to produce, which is the first step in discovery. In September, we acquired TetraGenetics, a Boston-based company that solves the production challenge and is able to provide the critical reagents, that is, sufficient quantities of highly pure GPCR and ion channel proteins. These proteins are used at every step of the discovery workflow to immunize, screen, characterize, and engineer therapeutic antibodies. We are integrating TetraGenetics into our tech staff to provide an optimized source of proteins for our antibody discovery efforts, and to solve a key challenge in pursuing these highly sought after but difficult to access drug targets. On that note, I'd like to extend a warm welcome to Paul Caluzzi and the rest of the talented team at Denver Genetics. Another example of an inorganic technology acquisition that we have made and which is now unlocking new opportunities and creating value is our acquisition of the OrthoMAP bi-specific platform last year. Bispecific antibodies are the fastest growing subset of antibodies in development. They represent a major growth driver within the $140 billion antibody therapeutics market. Despite early success, there are numerous technical challenges for successful development of bispecifics. These include challenges in discovery, challenges in selection of appropriate binding pairs, and challenges in protein engineering and manufacturing. Orthomab is a clinically validated platform which addresses the protein engineering and manufacturing challenges that have hampered the development of bispecifics. This platform uses advanced computational and experimental protein engineering methods to create IgG-like bispecific antibodies from any two starting antibody sequences. The resulting bispecifics are made using standard production and purification techniques. OrthoMAP also supports a variety of multi-specific formats that can be tailored to the target biology and to the desired mechanism of action. By integrating OrthoMAP into our existing technology stack, we can provide our partners with a rapid and complete solution for generating tailored, stable, and developable biospecific antibodies. Due to the flexibility and differentiation of the OrthoMAP platform, we're seeing inbound interest from many partners. To date, over a dozen programs under contract now include the use or the option to use our bispecific technology, and we are regularly starting discovery on bispecific antibody programs. We view OrthoMath as an important focus for our business development and one that is also being supported by high-value R&D to expand our platform. For example, we see a large and growing market opportunity in the use of bispecifics for T-cell redirection in oncology. specifically through CD3 receptor engagement on T cells. Finding anti-CD3 antibodies with the right properties, including appropriate affinity and epitope recognition, is critical to the success of this class of therapeutics and depends upon the antibodies being used and the targets that are being addressed. CD3 is a notoriously difficult target. As a result, there are limited options available for companies entering this space. In response to this need, this quarter, we initiated an internal effort to generate a proprietary panel of fully human CD3 antibodies. We plan to make these available alongside our OrthoMAP platform. By adding new Abcelera-owned CD3 antibodies with OrthoMAP and pairing that with our discovery capabilities and hydrocoid assays for functional assessment, we aim to provide a complete and high-value solution for drug developers wanting to develop the next generation of bispecific T-cell engagers. We anticipate having results to share with you on this project next year. In addition to solving the hardest problems, our business model also addresses another critical impediment that impacts the entire industry. Today, many drug developers are not able to access the technology, the expertise, the facilities, or the people that they need to quickly advance their therapeutic programs. By bringing our solutions to the market in a partnership model, we are working to close that gap. This is particularly powerful when launching new companies where access to our platform can dramatically accelerate discovery by removing the need to build internal capabilities. In these cases, our full-stack solution provides even more value, and as a result, we have had the opportunity to evolve our deal structures beyond royalties and milestones to capture that value. This now includes equity and equity-like participation and options to invest in molecules that we discover. Our collaboration with Invitex is one of the first examples of us taking an equity position in a collaboration partner. Invitex is developing biotherapeutics for animal health, and as one of the founding partners, we have been their discovery engine since inception. We initiated the first program in 2019, and this quarter, Invitex advanced the first molecule from this collaboration, IVX01, into the clinic. IVF01 is a canine-specific antibody treatment for an undisclosed chronic indication in dogs. This is the first program as part of a broad collaboration that includes multiple programs over multiple years. The use of biologics for the improvement of health and longevity of companion animals represents a new and growing subset of biologics. We look forward to continuing to launch programs with our partner, Invitex. Summing up, This quarter, we have continued to make excellent progress across our core business. We remain focused on our three top priorities, which include, first, building and executing on our partnership business to expand our diversified portfolio of royalty streams. Next, forward integration of the platform and scaling of our teams and facilities to support all antibody discovery activities up to an IND submission. And finally, investing in data science to further our technological differentiation and and to increase the speed and the scalability of our tech stack. And with that, I'll hand over to Andrew Booth, our CFO, to provide an overview of our third quarter 2021 financials. Andrew? Thanks, Carl. I'll start by highlighting our key business metrics. We ended the third quarter of 2021 with 155 programs under contract with 35 unique partners. That's a 65% increase in programs under contract as compared to the end of Q3 in 2020. We continue to see the combined positive impacts of our investments in our business development team and the increasing awareness of our platform on our business development activities. In the quarter, we added Moderna and Everest to our partnership portfolio. The programs with both of these partners include downstream participation in the form of milestones and royalties on net sales. Also in the quarter, we started nine new programs to take us to a cumulative number of 69 program starts, 17 of which were started in the first nine months of 2021. We continue to build capacity and to engage with many partners on preparations for their program starts. We also continue to expect a robust number of program starts as part of this generally increasing trend. While starts will always be somewhat irregular, as you would expect, the increase in programs under contract is a leading indicator of the long-term trajectory expected for program starts. Last quarter, we introduced a new business metric, molecules in the clinic, which represent the number of unique molecules for which an IND or equivalent application has been approved based on an antibody that was discovered by us or by a partner using licensed epicellular technology. We are pleased to report progress on this metric as we view it as an indication of our near and midterm potential revenue from downstream milestone fees and royalty payments in the longer term. In Q3, one new molecule reached the clinic, taking us to a total of five. Carl has already noted that this molecule, IVX01, is the result of our first program in a collaboration with Invitex. We congratulate the team for reaching this important milestone and look forward to progress on this and other programs in the future. As an update on our first molecule to reach the clinic, as noted in our previous earnings call, U.S. shipments of bamlanivimab with Lilly's edesivimab were paused in June because at the time, beta and gamma variants that were resistant to this combination were prevalent in the United States. On September 2nd, U.S. shipments of bamlanivimab together with edesivimab resumed. Since then, the U.S. government has distributed over 400,000 doses of vanlanivimab with edesivimab, which is on average over 50,000 doses per week. These shipments to the U.S. states were made from existing federal government supplies. The U.S. government has also recently ordered an additional over 600,000 doses of vanlanivimab with edesivimab from Lilly, at least 400,000 of which are expected to be delivered in Q4, with the balance in January of 2022. Additionally, in September, the European Commission entered into a framework agreement with Lilly under which European countries may purchase up to 220,000 doses of vanlanivimab in combination with edesivimab. The momentum we have so far achieved with number of partners, number of programs under contract, program starts, and molecules in the clinic at the end of Q3 has far outperformed our expectations from one year ago for the entire year of 2021. These will be key drivers of growth in the business and of shareholder value over the longer term. Looking at revenue, revenue in the quarter was $5.5 million. We earned our revenue predominantly from research fees, which accounted for $5.1 million. This is an increase from the same quarter last year and reflects activity with a diverse set of partners across a range of programs. As program starts increase, we would expect this trend of revenue from research fees over an increasingly diversified set of customers to continue to grow. As expected, we are reporting limited royalty revenues in this quarter of about $200,000 from new shipments of Bamlanivimab, which had been paused in the United States in June. When use of Bamlanivimab with edizivimab resumed, the U.S. government was able to draw on their existing supply of Bamlanivimab. This did not trigger new orders of Bamlanivimab to Lilly or royalties to us in the quarter. The recent US government order, which I discussed earlier, is in line with our belief that as COVID-19 becomes endemic, there is a potential for revenue from COVID-19 products, which we view as an upside and not integral to our long-term business strategy. Milestone revenue naturally occurs irregularly, and no revenue-linked milestone events occurred in Q3 of 2021. The milestone revenue in Q3 of 2020 was related to milestones achieved by Banlanivimab last year. Finally, we earned approximately $200,000 in the quarter in license fees from our Triani platform. Turning to operating expenses, our research and development spend for the quarter was $18 million, a $10 million increase over the previous year. This reflects our ongoing investments into R&D, which will continue to grow as we keep expanding our R&D team's capabilities and capacity. This allows us to deliver our partner programs with nine starts achieved in this quarter, as well as to enhance our technology stack organically. In sales and marketing, expenses for the quarter were just over $1 million, a doubling from the same quarter in 2020. This reflects the ongoing growth of our business development team, capabilities, reach, and capacity to connect with the strong demand that we continue to see, both inbound and outbound. General and administration expenses for the quarter were roughly $11 million, compared to $3 million in the second quarter of 2020. $3 million of this increase were related to higher non-cash stock-based compensation expenses, bringing us in line with publicly listed companies. The increase is otherwise driven by the need to support a much larger business and the associated legal and corporate development requirements of being a publicly listed company, as well as the ongoing investments to protect our intellectual property. For the third quarter, we are reporting a net loss of roughly $21 million, compared to an approximately $3 million loss in the third quarter of 2020. In terms of earnings per share, this works out to a loss of $0.08 per share on both a basic and diluted basis. This result reflects our ongoing investment to expand and enhance our discovery platform and to grow our diversified portfolio of long-term stakes in the next generation of antibody drugs while running discovery efforts for our partners. Looking at the first nine months of the year, we've generated revenues of $236 million and net income of over $93 million. That equates to an earnings per share of $0.34 on a basic and $0.29 on a diluted basis year to date. Looking at cash flows, operating activities for the first nine months of 2021 contributed over $261 million, which includes the collection of the accrued accounts receivable balance from December 2020 and strong royalties earned from BAML and IBIMAB in the first half of the year. On the investing activity side, the first nine months of the year show a $49 million investment in property, plant, and equipment, including the land purchase of our future GMP facility in Vancouver. The remainder was predominantly related to our tetragenetics acquisition and to construction financing of our facilities, which has been partially offset by funding received from the Government of Canada's Strategic Innovation Fund. As part of our Treasury strategy, we invested approximately $240 million in short-term marketable securities during the quarter. We finished the quarter with almost $800 million in short-term liquidity, including $754 million of cash, cash equivalents, and marketable securities, and about $44 million in accounts receivable and accrued accounts receivable. Given the recently announced purchase agreements for COVID antibodies from Lilly and the associated royalty due to Abcelera, we see the potential for our liquidity position to further improve in the near term. In summary, we continue to be in a very strong liquidity position that allows us to execute in our strategy and continue to build capacity to expand the platform and to pursue business and corporate development initiatives. We believe that we have sufficient liquidity for well beyond the next two years. And with that, we'll be happy to take your questions, and I'll turn it back to the operators.
spk01: Thank you, sir. We will now begin the question and answer session. As a reminder, if you would like to ask a question, please do so by pressing star 1 on your phone. Again, press star followed by the number 1 on your telephone keypad. We ask that you limit yourself to one question and one follow-up so we have time for as many questions as possible within the hour we have allotted. Please stand by while we compile the Q&A roster. Your first question is from Golmunda with Berenberg Capital. Your line is open.
spk05: Yeah. Hi there. Thank you for taking my questions. Um, the first one is just like to, um, ask around the program starts and the new pucks and the quarter, obviously a very, very strong performance. Is there any sort of common element to those either parts and program starts that you've seen, you know, between different types of customers, maybe split between the larger pharma customers or partners? Sorry.
spk04: or um or smart biotech um how do you uh how did you see the digital any trends in that uh sure gal this is carl i'm happy to take that one thanks for the question um so first uh with respect to uh additional pucks in the quarter uh those were largely attributable to the two partnerships that we mentioned uh both being multi-year multi-target deals with everest and with moderna in terms of program starts uh one of the things that we're very pleased with is the increasing diversity of different partners that are represented in program starts. And so that is a good mix of early stage, of large companies, and of the sort of mid-cap or mid to small cap biotech companies. I'll just add that from a business development perspective, we are seeing a lot of inbound from a mix of customers. As I mentioned, the buy-specific capabilities are definitely driving some of that. And in terms of performance, we have now added 55 new programs under contract in the first quarter. Pardon me. We've added 52 programs under contract in the first three months. Pardon me, nine months. Let me try that one more time. We have added 52 programs under contract in the last nine months. That is exceedingly – that is very strong and has exceeded our expectations for the year. And so we're feeling great about the business development and really, as we mentioned, are now turning our attention towards program executions.
spk05: Perfect. And then just as a follow-up, when I think about the new molecule in the clinic that you've reported from Embetix, in terms of that was based on your relationship back from a couple of years ago, right? So is that how you see most of these relationships playing out starting the program and then a couple of years in starting to kind of... In terms of the timing, that seems to be a pretty short timeline, but just any comment on that and whether that's something that could continue to see more of as we exit this year.
spk04: That's a great question. So this is the first program to come out of the Invitex collaboration. As we mentioned, it comes from a program that was initiated in 2019. So we are very pleased with the speed of that work, particularly given that at the time of initiating, Invitex was still just a company that was in the early stages of being formed. As a general trend, we believe that our investments in technology and also the partners that we are now making collaborations with and the types of programs that we're working on have the potential to result in increasingly fast timelines from initiation to programs in the clinic. Of course, it's going to take some time to bear that out, but it is a trend that we are certainly keeping our eye on and one that we think is is, you know, reinforcing our business thesis, which is that investments in technology and capacity and partnerships can help shorten that time from ideas to clinical testing.
spk03: Okay, thank you.
spk01: Your next question is from the line that's even really your line is open.
spk02: Yeah, good afternoon, thanks for the questions. Just wondering if you can maybe expand upon the CD3 work that you're doing. It sounds like you're developing your own in-house panel of novel CD3 targeting antibodies. I know that there's a lot of interest in the drug development space around trying to find some attenuated CD3 binders that maybe aren't as aggressive on the CRS side as some of the current piece on redirecting bispecifics right now. Would you just be interested in terms of how you're functionally characterizing these in-house and when you think these might be ready to pair up with the OrthoMap platform?
spk04: Thanks, Pete. Carl here. So first, I think a lot of your comments certainly resonate. As I mentioned, we see a lot of interest from companies, big and small, that are looking to get into this space with bispecific antibodies that can redirect T cells. It's one of the areas, I think, that has shown terrific promise, but also one of the areas where the technological hurdles are much higher than in other cases. So that's an opportunity for us. We're an enabler through technology. The OrthoMAP platform solves a big chunk of that by allowing you to pair antibodies and produce molecules that can be expressed well and are developable in a standard manufacturing process. With the T cell redirection, as you mentioned, there's now good evidence that the success of molecules depends very much not only on the properties of the CD3 engager, but also on how that particular CD3 engager has been paired with the binding partner, which of course depends on the target. And so there is a requirement of generating a large panel of CD3s so that you have the starting substrate to test those combinations. That's something that we have initiated. It's not yet done, but we feel confident in our capabilities to deliver on that. And in parallel, we are building internal capabilities to express those as bi-specifics and do the functional characterization so that we will have a full workflow that can start really just at the name of the target and can move that through to generating binders for the target, a panel of CD3s, and functional data that can help to assess which of those pairs and which CD3 molecule is best suited for that application. So that's the goal. There's a lot of work to do there. We've indicated that we hope to share progress on that in the new year. And I'll just emphasize that we do see this as an area where Abcelera is extremely well positioned to help companies more effectively bring therapies to patients, and one where we are devoting significant resources to make sure that we do that as quickly as possible.
spk02: Okay. Interesting. And then just on the Moderna collaboration, I know maybe it seems a little bit non-traditional relative to some of your other partnerships whereby there's a deliverable that you're providing, but Moderna still has to do a little bit of reverse engineering to turn it into a therapeutic. So can you maybe comment as to whether or not the economics of the per-program Moderna collaboration are consistent with, I guess, the base case economics that you're extracting across all these different partnerships?
spk04: Great question, Steve. First, on the Moderna collaboration in general, Moderna obviously is a company with tremendous resources right now and also world-class capabilities in RNA therapeutics. There is an opportunity to use RNA to deliver antibodies. and we are very pleased that they have selected Epsolar to be their discovery engine, recognizing that to attempt to build that internally would cause undue delays and ultimately result in working with technologies that are not where they need to be to prosecute those programs. In terms of the business terms, or maybe I'll back up a second. You mentioned that they still have work to do. At this point, when we hand off candidates, Right now, it is always or it is currently in our partner's hands to do the manufacturing towards the final therapeutic. Now, most often that is done through the traditional path, which is to generate a cell line and then to bring that through the regular GMP manufacturing process. In this case, the manufacturing instead is just to manufacture the RNA, and then the RNA is delivered to the patient. So conceptually, while the path is different, conceptually I don't think it's distinct from our more typical collaborations. And directly to the business terms, obviously we're not disclosing details, but the terms are in line with our recent partnerships. And I'd say as a general trend over the last couple of years, we are seeing our deal value go up in recognition of the platform and increasing demand that we're seeing from partners. Great. Thanks for taking the questions.
spk01: And the next question is from the line of Puneet Sudha with SVB Lyric. The line is open.
spk07: Hi, Carl. Thanks for taking the questions. So first on COVID and then two quick ones, if I could, on the products and the pipeline and partnerships. So on the 400,000 doses, that's a really great see in the fourth quarter for you and the rest in 2022. But as you saw, there was a strong data from Pfizer on antivirals and prior to that with Merck. With that in mind, what's your expectation for Ben Lanham and Mabin's 2022? I mean, obviously, there's been a lot of discussion around this among the investors. So just wanted to get your thoughts as to how you're thinking about this. And also wanted to just confirm that you're fully expecting the U.S. orders, the current at least the fourth quarter and the first quarter ones to come through.
spk04: Thanks, Puneet. Let me start by reiterating something that I think we've been consistent on through all the calls. We got involved with COVID-19 because we found ourselves with a technology that was needed at the time and could respond quickly. We are very proud of the work that we've done with our partner, Eli Lilly, in bringing now two molecules into the clinic and one Bamlanivimab and now Bamlanivimab with Edesivimab that have had a major impact in helping patients with COVID-19 over the past 12-plus months. In the near term, we have – or in recent times, we have seen family map and additive map shipping out in the U.S. And with the recent order, we are – given the recent order, we would expect that that would result in additional revenues, as you mentioned, in Q4 and Q1 of next year. Those revenues we view as upside and as non-dilutive financing that help us to reinvest in our core business, which is taking a much broader view of antibody therapeutics, investing for the long run to be able to help move ideas into molecules that can be tested in the clinic for hundreds of different programs over the coming years. So that's where our focus is. Now, in terms of the recent results on small molecules, both from Merck and Pfizer, I think both are impressive. The Pfizer result, if it stands, I think is very impressive and good news for the world. And certainly, one would expect that that would take some fraction, certainly, of the therapeutic applications of COVID-19. I still believe that there are patients that cannot easily be protected from vaccines and that antibodies would provide a prophylactic application that would be important for those patients. I also think that there's a scenario where antibodies would be chosen in place of small molecules, even in the therapeutic application. But of course, no one really has a clear view of how that's going to play out. If our molecules continue to be used, that will be great. We'll be happy to have helped with the COVID-19 problem. And of course, the revenue will help us to double down on the business. But as Andrew said, the results of COVID-19 is not something we view as integral to our business.
spk07: Got it. That was super helpful. On the buy-specific program, I mean, you briefly mentioned about that. That's obviously gaining traction for you. Wondering, with the new contracts, ads in the quarter, that was a 17 contract. That was obviously strong since the time of IPO contracts. Could you parse out for us at this point in time, what is the primary component, primary driver among the tech stack and overall services and turnaround times and overall partnership that you're offering that continues to bring increasingly more partners to you today? If you could parse that out and is there a differentiating factor today? technology-wise, service-wise, that continues to bring increasingly more partners to you?
spk04: Thanks, Puneet, for the question. It's one that's very difficult to answer directly because the needs of every partner from a technology perspective are going to depend very much upon the application, the modality, the targets that they're going after. There is a trend that we definitely see happening and one that I feel is a real tailwind for Accelera. We're certainly seeing that The provision of technology or capabilities in discovery and development we feel is bifurcating into two classes. There are groups that are running fee-for-service, low-cost solutions that are fragmented, and then there are companies like ourselves, and in fact I think we're unique in this capacity, that are investing in technology and bringing it together in a fully integrated workflow. When there are partners out there who are experienced in drug development and recognize the value of having the very best molecules, they're coming to us, and that's where we want to play. We want to work with people that appreciate technology, capabilities, speed, service, infrastructure, and know-how as ways to help them meet their goals of bringing therapies to patients more quickly.
spk07: Okay. And just last one, if I could, on Invitex, can you just – at least maybe size the market for us there, or I know you can't provide the indication, but maybe just help us understand, is this more of a proof of the platform again, or could this be more of a meaningful royalty if the product was to get to market? Just wanted to clarify that. Thanks.
spk04: Great question again, Puneet. So first of all, animal health is a relatively new application of biologics. It's one that in recent years has taken off much faster than I think people had expected. So there is clearly a need and a market opportunity for taking some of the innovations that have been applied over the years in human health and applying them to companion animals. With respect to the first program that's moving forward, we are very pleased about that program. We think it's a significant program, but any program that moves into the clinic is not one that we would see as being a main driver of our business. That's not how our business works. Our business is much more about providing solutions that over time build a large and diversified portfolio so that we can, in the long run, generate returns that are exceeding what is typical in the industry, but not be tied to any particular program and therefore not taking on the binary risk. Got it, guys. Thank you.
spk01: And your last question is from Dennis Resnick with BML. Your line is open.
spk03: Hi, good afternoon. Thank you for taking my question. Congrats on the quarter. Just a couple from me. So you guys have obviously had a very successful 2020, 2021 in terms of new program starts, programs under contract, and all the other key metrics. Can you talk a little bit about the vision for 2022 and what we should expect to see, the same run rate in key metric growth or maybe a little slight tapering as we move forward? And just a quick one, if you could provide some more context on what kind of ramp-up we can see you guys do upon the completion of the CMC and GMP manufacturing facilities. Thanks so much.
spk04: Thanks, Dennis. There's a few questions in there, so I'll try to make sure I get all of them, but feel free to redirect if I miss one of the points. So as we look at 2022, I don't think there are going to be any surprises. We have, through 2021, been investing in the platform, in infrastructure, and in building our workforce to build capacity to execute on the partnership business. And hand in hand in that, we've been making investments on our business development team to make sure that we're bringing in the programs under contract that are the leading indicators of the work that ultimately translates into START. At this point, as I mentioned in my prepared remarks, we've built a robust book of business, and we are now working closely with partners to make sure we've got the reagents, we've got the work plan set, and we're starting to see an uptick as a steady rhythm of starts in this quarter. And that trend, while it may go up and down with some variability from quarter to quarter, we expect to be growing rapidly. if averaged over some reasonable period off into the future. So next year is going to be a year of execution, of continuing to build our business development team and on focusing on moving programs as quickly as possible through our staff so that our partners can get them into Lake Beach Preclinical Development and ultimately to the clinic. In terms of the CMC and GMP manufacturing project, as I mentioned, that is a big project and our top priority in R&D and platform development. It includes translational science, building CMC capabilities, and building a new facility for GMP manufacturing. That project is currently on track. and it's scheduled to be live in the first half of 2024. Once live, I expect there'll be some ramp-up in terms of building, you know, the workforce and the capacity, but the facility is designed to be able to handle north of 30 programs per year. And so that's how we see that. And, of course, that's a project that will be, you know, at version one in 2024, and we'll continue to make investments to integrate it with the front end of the stack with an objective of shrinking the time, from initiation of a program to IND filing.
spk03: Thank you so much.
spk06: My pleasure.
spk01: And that ends the question and answer session for the call. I'll now hand the conference over to Carl Hansen, CEO, for closing remarks.
spk04: Great. Thank you, everyone, for joining us today. This is an exciting time for Acceleron. We're looking forward to keeping you updated on our progress on future calls. Have a great night.
spk01: This concludes today's conference call. Thank you for joining Humanities Connect.
spk04: Have a great night.
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