Absci Corporation

Q2 2024 Earnings Conference Call

8/14/2024

speaker
Operator
2024 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 1-1 on your telephone. Here is an automated message advising your hand is raised.
speaker
Steve
To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alex Kahn, VP, Finance and Investor Relations. Please go ahead.
speaker
Alex Kahn
Thank you. Earlier today, Abcide released financial and operating results for the quarter ended June 30th, 2024. If you haven't received this news release, or if you would like to be added to the company's distribution list, please send an email to investors at Abcide.com. An archived webcast of this call will be available for a replay on Abcide's investor relations website at investors.abcide.com for at least 90 days after this call. Joining me today are Sean McLean, Abcide's founder and CEO, and Zach Jonason, Chief Financial Officer and Chief Business Officer. Christian Stegman, AFSCI's SVP of Drug Creation, will also join for Q&A following prepared remarks. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meaning of the federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties, and factors that could cause results to differ appears in the section titled Forward-Looking Statements in the Press Release ABSAI Issued Today and the documents or reports filed by ABSAI from time to time with the Excerities and Exchange Commission. Except as required by law, AppSci disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements, either because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast, August 14, 2024. With that, I'll turn the call over to Sean.
speaker
Christian Stegman
Thanks, Alex. Good afternoon, everyone, and thank you for joining us for our second quarter business update call. Today, I'm excited to be sharing updates around new and existing partnerships, as well as continued progress on our own internal pipeline of programs. As always, these achievements are a testament to the work our team does each and every day and reflects our platform's differentiated capabilities in AI drug creation for biologics. With our integrated drug creation platform's unique capabilities in creating differentiated antibody candidates, We believe we offer valuable proposition to potential partners to work together on therapeutic programs. Along those lines, we are pleased to announce that we have recently entered into a new collaboration with Memorial Sloan Kettering Cancer Center, a leading cancer treatment and research center, to jointly develop up to six therapeutic programs. MSK has an incredible record of groundbreaking translational and clinical innovations in oncology. By combining MSK's research expertise with our generative AI drug creation platform, we have the potential to unlock critical advances towards treating these devastating diseases. We at AbSci are proud to be adding another great partner to our list of collaborators, now including AstraZeneca, Merck, Almerol, NVIDIA, and others. And we look forward to working with MSK on these important programs. While work continues on our partner programs, we continue to make great progress on each of our internal programs, ABS-101, ABS-201, and ABS-301. And we are working towards advancing at least one additional internal asset program to a lead stage this year as well, starting with ABS-101, our anti-TL1a antibody. Today, we are excited to share results from our non-human primate studies for this program. demonstrating 2 to 3x extended half-life as compared to antibodies in clinical development, and further supporting this program's potential best-in-class profile. Supporting information for these studies can be found in our newly published corporate presentation on our investor website. We are also pleased to share that ABS-101 is observed to have an increased distribution in non-human primates as compared to anti-CO1a antibodies in clinical development. This could potentially lead to a therapeutic benefit, as steady state levels and tissue penetration could be achieved faster, potentially without the need for a loading dose. Additionally, CMC studies verify the ability to formulate ABS-101 at a high concentration of 200 mgs per ml, which supports further development of a subcutaneous formulation. We continue to advance ABS-101 through IMD-enabling studies as planned. and are confident in our program's ability to potentially demonstrate a truly differentiated product profile. We remain committed to advancing this program and expect to initiate Phase I clinical studies for ABS-101 in early 2025 with an interim data readout expected in the second half of 2025. Turning to ABS-201, our potential best-in-class dermatology program. ABS-201 is designed for an undisclosed dermatological indication with significant unmet needs, where the efficacy of the pharmacological standard of care is not satisfactory. As we advance this program, we see this target as underappreciated, where we could potentially be second to clinic for this target. We continue to anticipate selecting a development candidate for this program later this year. Finally, ABS 301, our potential first-in-class immuno-oncology program. ABS301 is a fully human antibody designed to bind to a novel target discovered through Abcide's reverse immunology platform. We continue to anticipate completion of mode of action validation studies for this program later this year. And as we continue to advance this program, we look forward to further updating you all in the future. For ABS201 and ABS301, we plan to share data from preclinical studies either at the end of this year or early next year. Looking at the rest of 2024, I'm excited for what's to come next. We remain focused on continued innovation and execution on our internal and our partner programs, all with the mission to create better biologics for patients faster. With that, I'll now turn the call over to Zach to walk through our new partnership, our outlook, and provide an update on our financials.
speaker
ABS-101
Zach? Thank you, Sean. As Sean mentioned, we are pleased to have recently announced our new collaboration with Memorial Sloan Kettering Cancer Center. a world-leading cancer treatment and research center, to discover and develop up to six novel oncology therapeutic programs using generative AI. Under the terms of the collaboration, world-leading research teams from both AbSci and MSK will work together to co-develop therapeutics designed using AbSci's integrated drug creation platform. We believe this co-development collaboration with MSK will leverage considerable synergies between the two organizations, The collaboration will combine MSK's target research and validation capabilities with our generative AI drug creation platform capabilities to potentially create differentiated antibody therapeutics towards novel oncology targets. Furthermore, ABSAI and MSK plan to collaborate on the early development of these therapeutic assets in advance of out-licensing or partnering them. By working with a premier research institution, such as MSK, on co-developing therapeutic programs, we aim to leverage R&D synergies that could lead to significant value creation through the generation of first-in-class therapeutics addressing significant unmet medical needs. Moreover, such co-development collaboration structures, which include cost-sharing, allow Abcide greater diversification on a capital-weighted basis. Our pipeline of potential new drug creation and co-development partnerships remains robust. Hence, we continue to anticipate signing partnerships with at least three more partners in addition to our multi-program partnership with MSK during 2024. This will bring us to a total of at least four new partnerships this year. We look forward to utilizing our expanding set of generative AI capabilities in existing and new partnerships. A particular focus area for existing and potential new partners is leveraging our platform to provide epitope specificity and epitope landscaping at both the local and global level. Our global epitope landscaping capability supports epitope selection by allowing testing and validation of the potency and MOA associated with different epitopes on a given antigen. Our local epitope landscaping capability then enables the identification of desired epitope interactions for potentially improving potency and MOA. That is, once an epitope is selected, our AI model exhaustively samples interface contacts with a designated epitope to further refine potency and MOA. Together, these capabilities offer the potential to enhance potency, reduce biological risk, improve and broaden IP claims, and to achieve differentiated MOA for a given program. We believe that these capabilities and others, such as the ability to design tunable selectivity multivalency, and pH-dependent binding make our platform highly attractive to potential partners. As Sean discussed, our growing portfolio of programs includes three wholly owned assets, ABS 101, ABS 201, and ABS 301, all of which were generated using our integrated drug creation platform. We continue to advance these internal programs according to plan. We also continue to make progress on new internal programs and expect to advance at least one additional internal therapeutic program to the lead stage later this year. As a reminder, our business model is focused on out-licensing or selling our internal programs and co-developed programs following value inflection proof points, anywhere from preclinical proof of concept to phase two clinical proof of concept. Turning now to our financials, revenue in the second quarter of 2024 was $1.3 million. as we continue to progress our partnered internal programs concurrently. Research and development expenses were $15.3 million for the three months ending June 30, 2024, compared to $12.1 million for the prior year period. This increase was primarily driven by increased lab operations, including direct costs associated with IND enabling studies for ABS 101, and an increase in stock compensation expense. Selling general and administrative expenses for $9.3 million for the three months ending June 30, 2024, compared to $9.4 million for the prior year period. This decrease was due to lower personnel costs and continued reductions in administrative costs, offset by an increase in stock compensation expense. Turning to our balance sheet, we ended the quarter with $145.2 million in cash, cash equivalents, and short-term investments. as compared to $161.5 million as of March 31, 2024. We continue to enhance our focus on high-value proprietary internal programs and co-development arrangements by also seeking high-quality drug creation partnerships with industry leaders who can bring talent and complementary expertise. We believe focusing on these initiatives to build a diversified portfolio of partnered programs rather than simply pursuing a higher volume of programs, best positions us for further success in the future. For 2024, we continue to expect a gross use of cash, cash equivalents, and short-term investments of approximately $80 million, including the expected cost associated with completing the IMD enabling studies for ABS 101 with a third-party CRO. And based on our current plans, we believe our existing cash, cash equivalents, and short-term investments will be sufficient to fund our operations into the first half of 2027. Altogether, we are very encouraged by the progress we have made on our internal programs and confident in our ability to execute on these and our partner programs over the course of 2024 and beyond. With that, I'll turn it back to Sean.
speaker
Christian Stegman
Thanks, Zach. The past few months have demonstrated our continued progress across all aspects of our business. advancing our internal programs, executing our partner programs, and signing additional partnerships with companies who see the value of our platform capabilities. As we continue to execute over the course of this year, we see a number of potential catalysts in the next six to 12 months and beyond. We look forward to updating you all along the way, including at our 2024 R&D Day to be held on December 12th in New York City. With that, I'll turn the call back over to the operator to begin Q&A. Operator?
speaker
Steve
To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. In the interest of time, we ask that you please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Steven Ma with TD Cowan. Your line is open.
speaker
Steven Ma
Great. Thanks for taking the questions. I had a question on ABS 101, the non-hemoprimate data. When you're saying that two to three times additional half-life and the bioavailability, is that based on head-to-head data that you use from ACCO competitor molecules, or is it based on publications on the clinical competitors?
speaker
Christian Stegman
Yeah, great question, Steve. So it is a head-to-head comparison with the clinical competitors. And Christian, do you want to dive into the details on that?
speaker
Steve
Yes. Thank you, Sean. Absolutely. We have indeed compared ADS-101 with two competitor molecules that are in clinical development. This is RVT3101 and MK7240, so the Royman molecule and the Merck molecule. And we could see in our study head-to-head that we have seen a two- to three-fold improvement in plasma half-lives of ABS101 over these two molecules. Does that answer your question?
speaker
Steven Ma
Yeah. I guess you got the sequences of the antibodies from their patents in, and then you express them yourself to do the head-to-head studies.
speaker
Steve
That's correct, yes.
speaker
Steven Ma
Okay, got it. All right. And then a quick one on the Memorial Sloan Kettering Partnership. Can you give us a little bit more detail on the level of the code development that your scientists and the MSK scientists are going to be working on? And also, if there's any IP sharing details you can share? And then if MSK is going to be providing any you know, patient real-world data or other data, genomics, genome profiling, or proteomics. Thank you.
speaker
Christian Stegman
Yeah, absolutely. Zach, I'll let you take that.
speaker
ABS-101
Sure. Yeah, Steve, we're really excited about this partnership with MSK. It's a, you should think of this as a 50-50 cost-sharing co-development platform where we're going to look at six different programs MSK will be bringing a lot of validation around novel targets, so that validation work could encompass all of the areas that you referenced. We will jointly decide on which programs to nominate into program development for us to work on from the drug creation side, and then would be collaborating throughout that process, including once we have a drug candidate, to advance those through IND enabling and potentially through phase one development.
speaker
Operator
Does that answer your question? Yeah, that does. Thanks. Thank you.
speaker
Steve
Our next question comes from Kripa Devarakonda with Truce. Your line is now open.
speaker
spk01
Hey, guys. Thank you so much for taking my questions. So I have a question about the ABS-101 non-human primate data. Obviously, it's the totality of the data and the totality of the profile of the drug that is important. And you laid out how the drug compares with the other drugs and different metrics. But I was wondering if you were to pick characteristic of the drug that you think would be tough to replicate for a competitor and help maintain the differentiation, which ones would you point to? Thank you.
speaker
Christian Stegman
Thanks, Kripa. Christian, you want to take that?
speaker
Steve
Yeah, absolutely. Great question. So I think in a nutshell, the totality of the data in the way we differentiate from competition is the combination of attributes we have combined here overall to achieve a best-in-class profile. So what we mean by a best-in-class profile, we have achieved very high affinity of both the TL1A trimer as well as the monomer. we have achieved significant plasma half-life extension over competitors. We've achieved very good CMC properties that allow us to formulate this molecule at 200 mgs per ml. And then finally, we have also worked on the immunogenicity profile, which will hopefully lead to lower anti-drug antibody rates in clinical development. So overall, I think it's the combination of different attributes all addressing liabilities of the competitor molecules that will make ABS-101 a highly differentiated acid.
speaker
spk01
Got it. And then you mentioned the 200 milligram per mil concentration. That's a pretty high concentration. I was just wondering if while you were designing the molecule itself, was there anything that was engineered to be able to give you this high level of solubility of the protein?
speaker
Steve
Yes, absolutely. The artificial intelligence engine we have built at AppSci clearly aids us in improving developability properties of all our antibodies. So, in essence, we are really leveraging artificial intelligence to basically improve our antibody profiles, and that certainly includes CMC properties that allow us these high concentrations.
speaker
spk01
Okay, great. Thank you so much.
speaker
Steve
Thank you. Our next question comes from George Farmer with Scotiabank.
speaker
George Farmer
Your line is open. Hi. Good afternoon. Thanks for taking my questions. Also, some more questions on the 101 NHP data. Can you talk about toxicity and how high you dose in these animals? I'm assuming this is part of your GLP tox studies. Is that right? You mentioned a number of partnerships that you're counting on closing this year. Can you give us a ballpark estimate of how much cash you think that will bring into the company? Thanks.
speaker
Christian Stegman
Yeah, thanks, George. Christian, you want to take the first one, and then Zach, you want to take the second one?
speaker
Steve
Absolutely. So yeah, you're correct. Our GLP toxicology studies are currently ongoing, and we will disclose the results of this study once they're once they're concluded and we have aligned on the publication strategy for those. We have not yet disclosed the doses of these studies.
speaker
ABS-101
Sure, and I can address the second question. So, we don't have guidance on cash inflows from partnerships, but we do have guidance on bringing in three additional partners in addition to the MSK partnership. this year. Some of those would likely be multi-program partnerships, and those could range from more traditional drug creation partnerships that have up-fronts and milestones, as well as development milestones and royalties, to arrangements that are like what we've done with MSK, which are co-development programs.
speaker
George Farmer
Okay, great. Sorry, Sean. Go ahead. Yeah.
speaker
Christian Stegman
Oh, I was just going to say, yeah, we've given guidance on the four partnerships. This is one out of the three, so we do expect another three to be announced from now through the end of the year.
speaker
George Farmer
Okay. Yes. Great. And then regarding the MSK partnership that you have, does MSK have publication rights? Can we expect that they'll be kind of actively publishing papers on the fruits of this collaboration, or is that going to be restricted in some way? That all flows through the joint steering committee. Oh, go ahead, Christian.
speaker
ABS-101
Oh, go for it, Zach. Yeah, I was just going to say that has to be done in joint collaboration as well. So we have a joint steering committee that oversees the partnership. And so publication decisions would run through that committee. Okay.
speaker
Christian Stegman
But the plan is to be able to publish the work in the future. Right.
speaker
ABS-101
Great.