AbCellera Biologics Inc.

Q1 2022 Earnings Conference Call

5/10/2022

spk03: seen any kind of impact on the business development front. And, you know, I guess whether or not you think that the model that you guys provide to a potential company is more attractive in a liquidity-constrained environment than perhaps it is when things are better.
spk04: Thanks, Steve Perel here. Yeah, so, you know, obviously it's been trying times in the market. As As mentioned on the comments, our business is in terrific shape, so we're strong and we're executing on our strategy. That's not the case broadly. That said, recently we have seen a strong uptick on the CD3 work. It's probably too early to know exactly how market conditions are going to impact all partners, but I would agree with you that our model provides a way for companies to continue advancing programs, to do that more quickly and more capital efficient. efficiently while preserving their resources. So we typically structure our deals with value sharing based on success in clinical development and ultimately in the approval of therapies. And that lines up well with companies that are cautious about building internal capabilities and taking on you know, the complexity and cost of distributed outsourcing. So we think that could well be a tailwind, but I think it's still a bit early to tell.
spk03: All right, that's helpful. Thanks for taking the questions.
spk08: Thank you, Stephen. Our next question comes from Borav Guvtura with Buran Capital Markets.
spk07: Borav, your line is out.
spk01: So when looking at new puck opportunities, are you only entertaining deals that, you know, entitle a seller at a downstream participation, or are you still open to... Andrew here. No, when we...
spk05: we really only look exclusively at business development opportunities that have downstream participation. So that has been the case for some time. I guess there are some with the Gates Foundation or Delta where we have managed to So really investments in the platform and capabilities, and sometimes those deals we would do on a case-by-case basis. So it's a very different dynamic in that grant funding environment than it is when you're doing discovery on actually a commercial, potentially commercial molecule. And all of those deals have downstream participation. And then, you know, if you're looking more long-term, term, right?
spk01: At what level are you looking to continue diversifying the modality exposure?
spk05: You know, do you expect a broader focus on monoclonal antibodies to continue to dominate the pipeline, including from new pucks as well? Or do you eventually envision, you know, having a more modality-balanced pipeline as, you know,
spk01: It seems like you guys are continuing to explore new modalities that they've seen fit.
spk04: Carl here. I can take that one. So we are squarely focused on therapeutic antibodies defined quite broadly. So that would include monoclonal, bispecifics, other modalities that include antibodies as part of the composition of matter. Looking forward, we expect that main drivers of this sector are going to be discoveries in biology that are amenable to antibody therapies in a variety of different ways. It's also going to be new modalities that allow you to use antibodies to get novel mechanisms of action. Within that class, we are very bullish on the future of five specifics and are making big investments on that. Large numbers of well-validated... a giant market opportunity, but where the industry has struggled mightily over the past couple of decades to find molecules that are suitable for development.
spk01: We have a long-term research effort on that front, looking particularly at GPCRs and ion channels.
spk04: Those are tough problems, but we're making good progress, and we aim to be a major enabler for that part of the sector.
spk07: Thanks, Gav. Our next question comes from Gary Notchman with BMO Capital Markets.
spk08: Gary, your line is now open.
spk06: Great. Hi, guys. Good afternoon. So for the six molecules in the clinic, What's the earliest that we might hear about some clinical data from the non-LILI BMAP molecules? You added one in the first quarter through Triani. Could you be on pace to put a few molecules in the clinic every year from your different partnerships? And when could those other four generate good revenue for you, you know, whether it's in terms of hitting certain milestones or ultimately, you know, getting to market? But that's probably still a ways away.
spk05: Yeah, hey, Gary, good to hear from you.
spk01: Yeah, exactly right. This is why we focus on the portfolio. Of course, we have a large portfolio.
spk05: that is, we would expect consistently molecules from that portfolio would start to hit the clinic. Of course, we also expect some attrition in that portfolio. That's just the nature of drug development. With regards to those molecules that are the six that we show, of course, two of them are the COVID-related molecules, so we've seen the progress of those. And we don't have a lot of visibility on individual programs, and actually we've designed the portfolio strategy to, you know, move away from looking at programs.
spk01: We will start to see that as a more steady. stream.
spk05: And then we will be watching the progress of those molecules as they advance through the clinic. There'll certainly be some milestone revenue, and I would think that there will be some material milestone revenue in the coming years. But remember, these molecules right now, aside from the COVID molecules, are in phase one. So they're still very early in the clinical development. and they'll mature over the coming three to five years. And as they progress through, we've got millions of dollar milestones, which every time a molecule would advance through clinical development, and we would expect to see that and recognize it as it happens.
spk06: Okay, that's helpful. And then, Carl, regarding the panel of CD3 antibodies, Can you have multiple partnerships for different types of cancers? How soon can you potentially partner those? Are there any real gating factors? And then would you potentially keep some of these for yourself? I mean, it sounds like from what you said earlier that you're probably going to partner out all of these antibodies. So I'm just curious if there's even a possibility that you might keep some of these for your own development on.
spk04: Thanks, Kerry. First, we do not have plans to, in the foreseeable future, move into clinical development with these. It is really about building technologies that enable this class of therapeutics. The underlying hypothesis here is that it is not true that a single or a small number of CD3 antibodies are optimal for any given tumor antigen or class. To me that is, on its face, very likely to be true. It hasn't yet been proven, largely because people have been restricted in the diversity that they have. So we have taken the initiative to build, in a very short time, what I believe is the biggest panel in the industry. And we now are going to do work internally combining those with a variety of different tumor antigens to prove that the potency and T cell activation is dependent upon the appropriate combination of CD3 and the tumor binder and is not something that you can solve with just one arm. So that work I feel we need to do to validate and get people to understand that paradigm of thinking about this class. In terms of partnering, we're already getting a ton of interest. So we've had, I'd say, almost twice the business development activity in the last month than is typical, and most of that has been driven by companies that are in the oncology space that haven't been able to secure technologies to get a good position in what looks to be one of the most exciting classes of therapeutics. and they see this as an opportunity to get ahead, and we exist as an organization to help people more quickly and effectively develop better drugs. So that's what we're focused on right now.
spk06: Okay, that's great. That's it for me. Thanks.
spk08: Thank you, Gary. Our next question comes from Doe Kim with Piper Sandler. Doe, your line is now open.
spk02: Great. Good afternoon, everyone. Thanks for taking my question. I just have one. I know you can't say much about the empirical collaboration program, the first one that you completed, Discovery. But I was hoping that you could talk about maybe how challenging it would be to get antibodies to this first GPCR target using conventional means and how you were able to get your process through.
spk04: Thanks, Joe. Yeah, we're very excited about that program. You know, so it's difficult to say for any given target how difficult it would be with, you know, with one technology or another. What I can say is that in this case, you know, it's a GPCR target, which is widely viewed as one of the most difficult classes, probably next to ion channels. What is, you know, particularly impressive about this one is that we went from initiation of this to generation of a very large panel of antibodies and many highly potent functional antibodies that have moved into in vivo testing at a speed that I believe is unprecedented for this class. So we are very excited about the quality and diversity of this program, of molecules that have been developed in this program, but also on the speed. And I see this as a proof point, yet another proof point, for our main thesis that if you spend the time to really build the engine, if you work on the technology to increase performance and generate speed, you can turn ideas into therapeutic candidates much faster than has conventionally been done in the industry. That's something that we showed before on Bamlanivimab. We showed a best-in-class molecule with Betsalovimab. We have generated what I think is the largest panel of CD3 in the space of six months. And the first program with Empirico shows us also succeeding on GPCR targets. So our goal is to keep performing and layering on that evidence, demonstrating that we've got a technology that is really moving the needle for therapeutic antibodies.
spk02: Thanks, Carl. Congrats on the progress.
spk08: Thank you, Joe. Our next question comes from Antonia Boravino, your line is now open. Great, thanks for taking my question. Most of them have been answered, so just a couple. So I know that you're very limited with what you can discuss regarding the Triani partner program advancing into the clinic, but just wondering if you could remind us of the typical deal structure for the Triani partnerships and how they compare to the rest of your pipeline. And then if you could just give us an update on what you're forecasting for your cash runway. Thanks.
spk05: yeah thanks uh thanks antonio good to hear from you um on the triani licenses uh you know the these molecules are or these agreements for things that were negotiated by triani when it was under different ownership um we are typically seeing low single digit royalty amounts on these uh and milestones that are typical of of our own programs But the royalty rates are significantly lower, I would say, than the typical program. And as we outlined in the 10K on our full year results for 2021, we showed what those average royalty rates are for our internal programs and the programs that we have under contract. For the cash runway, as we noticed here, we have a very healthy cash balance. And we indicated in the remarks that even with the big investment that we're making in facilities and team and expanding the team in all this work that we're doing advancing the platform and technology, we have a sufficient runway for at least the next three years, even given that very large investment that we're planning to make in the platform.
spk08: Thank you, Antonia. That concludes today's question and answer session. I will now pass the conference back over to Carl Hansen for any closing remarks.
spk04: Thank you, everyone, for joining us today. This is an exciting time for Accelera. Thank you for attending, and we look forward to keeping you updated on our progress on future calls.
spk08: That concludes today's Abcelera Biologics Incorporated Quarter 1 2022 Earnings Results and Business Call. Thank you for your participation. You may now disconnect your line.
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