Abcellera reports q3 2022 business results
Vancouver, british columbia--(business wire)--abcellera (nasdaq: abcl), a technology company with a centralized operating system for next-generation antibody discovery, today announced financial results for the third quarter of 2022. all financial information in this press release is reported in u.s. dollars, unless otherwise indicated. “at abcellera’s 10-year anniversary, we find ourselves in a remarkable competitive position, having scaled to a global company of nearly 500 employees and equipped with what is increasingly recognized as the industry’s leading engine for antibody discovery and development,” said carl hansen, ph.d., founder, and ceo of abcellera. “looking forward, our strong cash position will allow us to continue executing on our strategy to integrate digital and experimental technologies to help deliver therapies to patients with greater speed and precision while also building a large and diversified portfolio of stakes in the next generation of antibody therapies.” q3 2022 business summary earned $101.4 million in total revenue. generated net income of $26.6 million, compared to a net loss of $21.4 million in q3 2021. programs under contract remain unchanged at a cumulative total of 164 programs under contract with 38 different partners. started discovery on four programs, bringing the cumulative number of program starts to 92. reporting the advancement of an additional molecule to phase 1 clinical trials, taking the total to seven molecules cumulatively advanced to the clinic. key business metrics cumulative metrics september 30, 2021 september 30, 2022 change % number of discovery partners 35 38 9% programs under contract 155 164 6% program starts 69 92 33% molecules in the clinic 5 7 40% abcellera maintained a cumulative total of 164 discovery programs throughout q3 (up from 155 on september 30, 2021), that are either completed, in progress, or under contract with 38 different partners (up from 35 on september 30, 2021). abcellera started discovery on an additional four programs in q3 to reach a cumulative total of 92 program starts (up from 69 on september 30, 2021). an abcellera partner advanced a molecule into phase 1 clinical trials, bringing the cumulative total to seven molecules in the clinic. discussion of q3 2022 financial results revenue – total revenue was $101.4 million, compared to $5.5 million in q3 2021. royalties associated with bebtelovimab were $93.3 million. the partnership business produced research fees of $7.5 million, compared to $5.1 million in q3 2021. milestone payments were $0.4 million and licensing revenue was $0.2 million. research & development (r&d) expenses – r&d expenses were $26.6 million, compared to $17.5 million in q3 2021, reflecting continuing investments in the capacity and capabilities of abcellera’s engine for antibody discovery and development. sales & marketing (s&m) expenses – s&m expenses were $3.1 million, compared to $1.2 million in q3 2021. the increase reflects continued investments in business development. general & administrative (g&a) expenses – g&a expenses were $13.8 million, compared to $11.3 million in q3 2021, with the increase driven by investments to support the growth of the company. net earnings – net earnings were $26.6 million, or $0.09 per share on a basic and $0.08 on a diluted basis, compared to a net loss of $21.4 million, or ($0.08) per share on a basic and diluted basis in q3 2021. liquidity – $868 million of cash, cash equivalents, and marketable securities. conference call and webcast abcellera will host a conference call and live webcast to discuss these results today at 2:00 p.m. pacific time (5:00 p.m. eastern time). the live webcast of the earnings conference call can be accessed on the events and presentations section of abcellera’s investor relations website. a replay of the webcast will be available through the same link following the conference call. about abcellera biologics inc. abcellera is a technology company that searches, decodes, and analyzes natural immune systems to find antibodies that its partners can develop into drugs to prevent and treat disease. abcellera partners with drug developers of all sizes, from large pharmaceutical to small biotechnology companies, empowering them to move quickly, reduce costs, and tackle the toughest problems in drug development. for more information, please visit www.abcellera.com. definition of key business metrics we regularly review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions. we believe that the following metrics are important to understand our current business. these metrics may change or may be substituted for additional or different metrics as our business develops. for example, as our business matures and to the extent programs are discontinued, we anticipate updating these metrics to reflect such changes. number of discovery partners represents the unique number of partners with whom we have executed partnership contracts. we view this metric as an indication of the competitiveness of our technology stack and our current level of market penetration. the metric also relates to our opportunities to secure programs under contract. programs under contract represent the number of antibody development programs that are under contract for delivery of discovery research activities. a program under contract is counted when a contract is executed with a partner under which we commit to discover antibodies against one selected target. a target is any relevant antigen for which a partner seeks our support in developing binding antibodies. we view this metric as an indication of commercial success and technological competitiveness. it further relates to revenue from technology access fees. the cumulative number of programs under contract with downstream participation is related to our ability to generate future revenue from milestone payments and royalties. program starts represent the number of unique programs under contract for which we have commenced the discovery effort. the discovery effort commences on the later of (i) the day on which we receive sufficient reagents to start discovery of antibodies against a target and (ii) the day on which the kick-off meeting for the program is held. we view this metric as an indication of our operational capacity to execute on programs under contract. it is also an indication of the selection and initiation of discovery projects by our partners and the resulting near-term potential to earn research fees. cumulatively, program starts with downstream participation indicate our total opportunities to earn downstream revenue from milestone fees and royalties in the mid- to long-term. molecules in the clinic represent the count of unique molecules for which an investigational new drug, or ind, new animal drug, or equivalent under other regulatory regimes, application has been approved based on an antibody that was discovered either by us or by a partner using licensed abcellera technology. where the date of such application approval is not known to us, the date of the first public announcement of a clinical trial will be used for the purpose of this metric. we view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long term. abcellera forward-looking statements this press release contains forward-looking statements, including statements made pursuant to the safe harbor provisions of the private securities litigation reform act of 1995. the forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. all statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations. in some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. these statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. these risks, uncertainties and other factors are described under "risk factors," "management's discussion and analysis of financial condition and results of operations" and elsewhere in the documents we file with the securities and exchange commission from time to time. we caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. as a result, the forward-looking statements may not prove to be accurate. the forward-looking statements in this press release represent our views as of the date hereof. we undertake no obligation to update any forward-looking statements for any reason, except as required by law. source: abcellera biologics inc. abcellera biologics inc. condensed consolidated statements of income (loss) and comprehensive income (loss) (all figures in u.s. dollars. amounts are expressed in thousands except share and per share data) (unaudited) three months ended september 30, nine months ended september 30, 2021 2022 2021 2022 revenue: research fees $ 5,128 $ 7,508 $ 14,330 $ 29,378 licensing revenue 190 154 20,692 531 milestone payments - 400 8,000 400 royalty revenue 190 93,321 192,850 433,570 total revenue 5,508 101,383 235,872 463,879 operating expenses: royalty fees - 15,035 23,622 64,882 research and development(1) 17,450 26,582 44,853 79,634 sales and marketing(1) 1,217 3,089 5,086 8,579 general and administrative(1) 11,271 13,792 28,958 42,470 depreciation and amortization 3,666 5,150 10,493 14,025 total operating expenses 33,604 63,648 113,012 209,590 income (loss) from operations (28,096 ) 37,735 122,860 254,289 other (income) expense other (income) expense 1,256 (6,702 ) 595 (7,343 ) grants and incentives (4,380 ) (2,150 ) (12,174 ) (8,879 ) total other (income) (3,124 ) (8,852 ) (11,579 ) (16,222 ) net earnings (loss) before income tax (24,972 ) 46,587 134,439 270,511 income tax (recovery) expense (3,592 ) 19,963 40,923 82,099 net earnings (loss) $ (21,380 ) $ 26,624 $ 93,516 $ 188,412 foreign currency translation adjustment (1,508 ) (1,293 ) 644 (997 ) comprehensive income (loss) $ (22,888 ) $ 25,331 $ 94,160 $ 187,415 net earnings (loss) per share attributable to common shareholders basic $ (0.08 ) $ 0.09 $ 0.34 $ 0.66 diluted $ (0.08 ) $ 0.08 $ 0.29 $ 0.60 weighted-average common shares outstanding basic 278,933,760 285,322,719 273,642,542 284,639,599 diluted 278,933,760 315,818,163 323,323,053 314,183,994 (1) exclusive of depreciation and amortization abcellera biologics inc. condensed consolidated balance sheet (all figures in u.s. dollars. amounts are expressed in thousands except share data) (unaudited) december 31, 2021 september 30, 2022 assets current assets: cash and cash equivalents $ 476,142 $ 371,973 marketable securities 246,835 496,233 total cash, cash equivalents, and marketable securities 722,977 868,206 accounts and accrued receivable 160,576 105,964 restricted cash 25,000 25,000 other current assets 21,247 46,499 total current assets 929,800 1,045,669 long-term assets: property and equipment, net 111,616 200,602 intangible assets, net 148,392 142,548 goodwill 47,806 47,806 investments in and loans to equity accounted investees 50,313 66,718 other long-term assets 30,642 49,066 total long-term assets 388,769 506,740 total assets $ 1,318,569 $ 1,552,409 liabilities and shareholders' equity current liabilities: accounts payable and other liabilities $ 32,017 $ 25,866 current portion of contingent consideration payable 22,934 32,531 income taxes payable 35,683 23,018 accrued royalties payable 22,506 17,822 deferred revenue 7,536 6,815 total current liabilities 120,676 106,052 long-term liabilities: operating lease liability 36,413 71,591 deferred revenue and grant funding 60,758 62,202 contingent consideration payable 35,886 25,392 deferred tax liability 37,370 34,143 other long-term liabilities 1,733 2,857 total long-term liabilities 172,160 196,185 total liabilities 292,836 302,237 commitments and contingencies shareholders' equity: common shares: no par value, unlimited authorized shares at december 31, 2021 and september 30, 2022: 283,257,104 and 285,761,492 shares issued and outstanding at december 31, 2021 and september 30, 2022, respectively 722,430 730,427 additional paid-in capital 35,357 64,384 accumulated other comprehensive income (loss) 280 (717 ) accumulated earnings 267,666 456,078 total shareholders' equity 1,025,733 1,250,172 total liabilities and shareholders' equity $ 1,318,569 $ 1,552,409 abcellera biologics inc. condensed consolidated statement of cash flows (expressed in thousands of u.s. dollars) (unaudited) nine months ended september 30, 2021 2022 cash flows from operating activities: net income $ 93,516 $ 188,412 cash flows from operating activities: depreciation of property and equipment 3,060 6,212 amortization of intangible assets 7,432 7,844 amortization of operating lease right-of-use assets 1,895 3,686 stock-based compensation 21,608 36,158 other (2,379 ) 3,304 changes in operating assets and liabilities: accounts and accrued research fees receivable (34,329 ) (3,675 ) accrued royalties receivable 194,327 43,966 income taxes payable (29,563 ) (34,934 ) accounts payable and accrued liabilities (313 ) (1,151 ) deferred revenue 9,051 (4,094 ) accrued royalties payable (26,548 ) (4,684 ) deferred grant revenue 27,324 6,630 other assets (3,785 ) (1,226 ) net cash provided by operating activities 261,296 246,448 cash flows from investing activities: purchases of property and equipment (49,022 ) (58,330 ) purchase of intangible assets - (2,000 ) purchase of marketable securities (245,314 ) (670,430 ) proceeds from marketable securities 9,527 418,238 receipt of grant funding 9,807 14,100 acquisitions (11,457 ) - long-term investments and other assets (17,534 ) (17,370 ) investment in and loans to equity accounted investees (27,105 ) (19,770 ) net cash used in investing activities (331,098 ) (335,562 ) cash flows from financing activities: repayment of long-term debt and contingent consideration (4,373 ) (323 ) proceeds from debt and exercise of stock options 3,653 2,406 payment of liability for in-licensing agreement (5,000 ) (4,060 ) net cash used in financing activities (5,720 ) (1,977 ) effect of exchange rate changes on cash and cash equivalents (900 ) (9,963 ) decrease in cash and cash equivalents (76,422 ) (101,054 ) cash and cash equivalents and restricted cash, beginning of period 594,116 501,142 cash and cash equivalents and restricted cash, end of period $ 517,694 $ 400,088 restricted cash included in other assets - 3,115 total cash, cash equivalents and restricted cash shown on the balance sheet $ 517,694 $ 396,973 supplemental disclosure of non-cash investing and financing activities property and equipment in accounts payable 2,224 2,213 right-of-use assets obtained in exchange for operating lease obligation 26,976 46,239
