AbCellera Biologics Inc.

Good afternoon and welcome to Absolera's first quarter 2023 Business Update conference call. My name is Terri and I will facilitate the audio portion of today's interactive broadcast. If you need any assistance during the call, please press star zero to signal a conference specialist. At this time, I would like to turn the call over to Trinh Stymart, Absolera's Chief Legal and Compliance Officer. Please go ahead.

Thank you. Good afternoon and welcome to Abcelera's first quarter 2023 business update. We're pleased to have you with us today as we 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 today 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. If you are following along on the phone and wish to access the slide portion of this presentation, you may do so on the investor relations section of our website. For those of you 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. 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 Dr. Carl Hansen.

Thank you, Trinh, and thanks, everyone, for joining us today. It's my pleasure to provide an update on our business for the first quarter of 2023. Through the first quarter, we continue to allocate our resources for the execution of our long-term strategy, investing in building teams, technology, and infrastructure to create the industry's preferred engine for antibody therapeutics and using this engine with partners to develop a diversified portfolio of stakes in future antibody therapies. This is a long-term strategy designed to create an increasing competitive advantage to maximize value creation and to mitigate the risk that is inherent in drug development. We continue to make progress on both objectives of our strategy. With respect to our engine, at the front end, from program launch to lead candidate generation, I believe we now have capabilities that are unmatched in the industry and that continue to improve. At the middle of our engine, over the past 12 months, we have brought online a set of powerful new technologies and workflows for antibody engineering, high throughput assessment of drug-like properties, and lead optimization. These capabilities are now being deployed in partnered and pre partnered programs and enable us to move programs quickly from idea right through to final drug candidate. A major focus is now on building the back end of our platform, including drug manufacturing and regulatory capabilities. We're making good progress in recruiting the leadership to these efforts and are actively building the labs and facilities that are needed for these functions. I'm confident we are on track and believe these efforts will prove highly valuable to our partners and will provide Abcelera a major strategic advantage to all dimensions of our business. Underpinning our workflows, we continue to invest in the automation and software systems that are critical to integration, efficiency, and scale, and that are the foundation for the development and deployment of machine learning methods. In terms of building our portfolio, We continue to prioritize programs that maximize long term shareholder value and not near term cash flow or volume of partnerships. With the technology, the teams, and the infrastructure in place, perhaps the most valuable input for adding value to our portfolio are the new ideas for medicines. We believe that good ideas can come from anywhere. For the large majority of our programs, ideas come from our partners. Our partners come to us because we can help them get to their next value inflection point with greater certainty, speed and capital efficiency. Depending on the resources and program requirements, these collaborations contribute programs to our portfolio that can be structured with different risk reward profiles, including partner initiated discovery programs and co-development programs. Another rich source of program ideas are antibody development problems that are widely known in the industry, but that are generally believed to be unsolvable. We invest in sustained technology development efforts that seek to unlock these high value opportunities. This requires working on multiple targets. As this work proceeds, these pre-partnered programs can generate wholly owned assets that anticipate partner needs. Although these programs represent a small fraction of our portfolio, they have the potential to create the most value on a program-by-program basis when partnered. Moreover, success in our pre-partnered work will demonstrate that our strategy is working and that our technology can open up new market opportunities, thereby attracting more program ideas from partners. Regardless of the source of the idea and regardless of the program type, all programs are ultimately handed to partners. Each contributes to building a large portfolio that is diversified across partners, risk-reward profiles, modalities, and indications. Being open to working on the best possible ideas regardless of the source allows our engine to create maximum value for shareholders, partners, and patients. T-cell engagers, or TCEs, provide a specific example of how our pre-partnered programs arise from technology development work that has the potential to open up new areas and make us a preferred partner for an entire class. TCEs are amongst the most promising new modalities in cancer therapy. First proven effective in liquid tumors, recent clinical data supports the potential of TCEs in treating a wide array of solid tumor types. T cell engagers are antibodies with two arms that are designed to simultaneously bind to cancer cells and specific immune cells called T cells. TCEs work by bringing T cells and cancer cells together and stimulating the T cells to kill the cancer cells. Two key challenges, both associated with toxic side effects, must be overcome to realize the full potential of TCEs in treating cancer. The first challenge is to achieve the appropriate strength of T cell activation. Activation that is too low results in poor efficacy, while overstimulating T cells can result in cytokine release syndrome, a systemic inflammatory response that can limit treatment and result in severe or life threatening toxicity. The second challenge with TCEs is specificity. That is to generate antibodies that recognize targets that are present only on cancer cells and that are not present on healthy cells. In April, Epsil represented two posters at the 2023 American Association for Cancer Research meeting that demonstrate how our TCE platform can address both of these challenges. Today, I would like to highlight the main findings from this work. With respect to the first challenge, that of controlling the level of T cell activation, the level of activation is determined by the bispecific format, as well as the properties and pairing of the source antibodies. The vast majority of TCEs activate T cells by binding to a protein called CD3. Because CD3 is a notoriously difficult target, there are very few accessible CD3 antibodies from which to make bispecifics. This limits the ability to control the level of T cell activation. In fact, approximately three-quarters of TCEs in the clinic are derived from a single mouse CD3 antibody, SP34-2. that was discovered in the 1980s and has suboptimal properties, including the induction of strong cytokine release. To solve this challenge, we launched a technology development project about 18 months ago to build a platform that could quickly generate TCEs that achieve the optimal balance between tumor cell killing and cytokine release. Our hypothesis was that there is no single CD3 that is well suited for every application. and that a large and diverse panel of CD3s is an essential resource for creating TCEs with superior properties. One of our posters at AACR demonstrated data on our newly generated CD3 panel and its use in building optimized TCEs against two cancer targets, EGFR and PSMA. Key results from this poster are as follows. First, We have built what we believe to be by far the industry's largest collection of CD3 binders with more than 500 unique antibodies. This panel offers unmatched diversity of binding properties and binding locations, excellent developability, and is highly differentiated from commonly used molecules. Second, this panel allowed us to effectively control T cell activation against both targets and to achieve the desired profile of potent tumor cell killing with low cytokine release. Third, In all cases, the resulting TCEs had superior properties as compared to those built with the commonly used SP34-2 CD3 binder. And fourth, that the performance of different TCEs depends on the tumor target and the level of target expression on the cancer cells. Together, these results support our hypothesis and demonstrate the potential of our platform to quickly generate TCEs that are engineered to have optimal properties. In our second poster, we presented an approach to addressing the second challenge of finding antibodies that are highly specific to cancer cells. Central to this challenge is that there are few known proteins that are expressed only on the surface of cancer cells and not on the surface of healthy cells. Because there are many more cancer-specific proteins expressed inside cancer cells, the ability to target these with antibodies would open up a huge number of potential targets. One way of doing this is to target fragments of cancer proteins known as peptides that are naturally presented at the surface of cancer cells by the major histocompatibility complex, or MHC. This process of peptide presentation by MHC is a part of natural immune surveillance and occurs in all cell types in the body. The potential of targeting cancer through MHC peptides has attracted high interest and is being pursued with different approaches, most commonly with cell therapies or engineered T-cell receptors, or called TCRs. An alternative approach is to use antibodies known as TCR mimetics that are highly specific to MHC peptide complexes. Discovering such antibodies is extremely challenging, and to date, there are only two examples that have made it into clinical development. Our poster demonstrated that we can quickly generate antibodies against a well-validated cancer-specific MHC peptide target derived from the protein MAJ4, for which there has been a clinical stage TCR memetic. We screened more than a million cells and found more than a dozen fully human antibodies with high affinity, good developability, and specificity to MAJ4 that is comparable or superior to the clinical benchmark. Perhaps most significant is the speed and ease with which this result was obtained from a single screening campaign and without the need for subsequent antibody engineering. This result shows that we have capabilities that can readily address a large and essentially untouched class of tumor targets for TCEs. Importantly, TCR mimetic antibodies can also be used in other therapeutic modalities, including antibody drug conjugates, radiopharmaceuticals, and cell therapy. As such, We believe this is a technological advance that has broad implications for precision oncology. Another area we are focused on is unlocking difficult membrane protein targets. I am pleased to share that we had a new molecule enter the clinic this quarter against this challenging target class. This program is from one of AbCellera's first discovery partnership agreements with Teva Pharmaceuticals and is directed against a difficult membrane protein target for an undisclosed indication. I would like to congratulate Teva on this milestone, and we are pleased to see the work from this collaboration progressing forward to help patients. As I've mentioned on previous calls, Abcelera's discovery engine and business model can also help to expand the ecosystem of drug developers by leveling the playing field for innovative new ventures. Again, this is about finding the best ideas and the best innovators and connecting them with technology to create new opportunities and in some cases, new companies that might not otherwise be possible. This quarter, we are pleased to congratulate our partner, Abdera, who announced last month a $142 million financing. Abdera's proprietary technology develops next-generation radiopharmaceuticals to treat cancer. Abcelera was a founding partner in Abdera, and we started our first program with them in March of 2021. Avdera has announced that they have elected the first clinical candidate from this program, a radiopharmaceutical for the treatment of cancer. The company plans to file an IND in 2024. It's worth emphasizing the remarkable speed by which this company has gone from concept to high-growth biotech with their first clinical candidate, a growing pipeline, and backing by top-tier investors. Avcelera Pardon me, sorry. Finishing up, Abcelera is now in a position of enviable strength. We have a strong balance sheet and remain focused on the fundamentals of our long-term strategy. Accordingly, we are directing our energy and capital to three key activities. First, expanding the capabilities of our discovery engine, including forward integration with manufacturing, regulatory, and clinical capabilities. continuing our technology development efforts to unlock new target classes and modalities, including T-cell engagers, GPCRs, and ion channels, and advancing high-quality programs and partnerships to build our portfolio. We believe continuous work and progress against these priorities will create the maximum long-term value while minimizing risk. This quarter, we have brought evidence that this strategy is working in the form of a new molecule in the clinic, the co-founding and financing of an exciting new company in the area of radiopharmaceuticals, and data showing that our engine can solve key problems in developing new T-cell engagers for the treatment of cancer. We look forward to sharing more evidence of progress later this year with anticipated milestones, including election of the first clinical candidates from partner-initiated co-development and pre-partnered programs. And with that, I will hand it over to Avcelera to discuss our financials. I will hand it over to Andrew to discuss our financials. Andrew?