Abcellera reports q3 2021 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 2021. all financial information in this press release is reported in u.s. dollars, unless otherwise indicated. “we continue to execute on our long-term business strategy and have achieved another quarter of strong business development and growth in the key metric of program starts,” said carl hansen, ph.d., ceo and president of abcellera. “our focus remains on the following top priorities: execution of our partnership business, forward integration of the platform to support all antibody drug discovery activities for the submission of an investigational new drug application, and investments in data science to increase the speed and scalability of our tech stack.” q3 2021 business summary earned $5.5 million in total revenue. incurred net loss of $21.4 million, compared to a net loss of $2.7 million in q3 2020. added 17 programs under contract and two new partners, resulting in a cumulative total of 155 programs under contract with 35 different partners. started discovery on nine programs, bringing the cumulative number of program starts to 69. confirmed one new molecule advanced into the clinic, bringing the cumulative total to five. acquired tetragenetics to expand capabilities for high-value transmembrane protein targets. key business metrics metric september 30, 2020 september 30, 2021 change % number of discovery partners 26 35 35 % programs under contract, cumulative 94 155 65 % program starts, cumulative 51 69 35 % molecules in the clinic 1 5 400 % abcellera added 17 discovery programs in q3 to reach a cumulative total of 155 discovery programs as of september 30, 2021 (up 65% from 94 on september 30, 2020), that are either completed, in progress, or under contract with 35 different partners (up from 26 on september 30, 2020). abcellera started discovery on an additional nine programs in q3 to reach a cumulative total of 69 program starts (up from 51 on september 30, 2020). abcellera's partners advanced one additional molecule into the clinic in q3 2021, bringing the cumulative total to five. discussion of q3 2021 financial results (expressed in thousands) three months ended september 30, nine months ended september 30, 2020 2021 2020 2021 revenue: research fees $ 4,362 $ 5,128 $ 17,247 $ 14,330 licensing revenue - 190 - 20,692 milestone payments 5,000 - 8,000 8,000 royalty revenue - 190 - 192,850 total revenue $ 9,362 $ 5,508 $ 25,247 $ 235,872 revenue – total revenue was $5.5 million, compared to $9.4 million in q3 2020, which is attributable to the reduction of milestone payments associated with covid-19 treatments. royalties associated with bamlanivimab were $0.2 million due to a temporary pause in usage until september 2, 2021 by the assistant secretary for preparedness and response and the food and drug administration. shipments from existing u.s. supply then resumed on a weekly basis, and subsequent to the end of the quarter, eli lilly reported that the u.s. government has ordered 614,000 additional doses of bamlanivimab with etesevimab to be delivered by january 31, 2022. the partnership business produced research fees of $5.1 million, compared to $4.4 million in q3 2020. licensing revenue was $0.2 million. research & development (r&d) expenses – r&d expenses were $17.5 million, compared to $7.5 million in q3 2020, reflecting continuing investments in the capacity and capabilities of abcellera’s discovery and development platform. sales & marketing (s&m) expenses – s&m expenses were $1.2 million, compared to $0.6 million in q3 2020. general & administrative (g&a) expenses – g&a expenses were $11.3 million, compared to $3.0 million in q3 2020, with the increase driven primarily by investments to support the growth of the company, non-cash stock-based compensation in line with publicly listed companies, and protecting intellectual property. net loss – net loss was $21.4 million, or ($0.08) per share on both a basic and diluted basis compared to a net loss of $2.7 million, or ($0.02) per share on a basic and diluted basis, in q3 2020. liquidity – $753.5 million of cash, cash equivalents, and marketable securities and $43.6 million in accounts and accrued receivable. conference call and webcast abcellera will host a conference call and live webcast to discuss these results today at 2:00 p.m. pacific standard time (5:00 p.m. eastern standard 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 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, 2020 2021 2020 2021 revenue: research fees $ 4,362 $ 5,128 $ 17,247 $ 14,330 licensing revenue - 190 - 20,692 milestone payments 5,000 - 8,000 8,000 royalty revenue - 190 - 192,850 total revenue 9,362 5,508 25,247 235,872 operating expenses: royalty fees - - - 23,622 research and development(1) 7,495 17,450 20,757 44,853 sales and marketing(1) 626 1,217 1,610 5,086 general and administrative(1) 2,968 11,271 6,116 28,958 depreciation and amortization 41 3,666 1,508 10,493 total operating expenses 11,130 33,604 29,991 113,012 income (loss) from operations (1,768 ) (28,096 ) (4,744 ) 122,860 other (income) expense other (income) expense 2,262 1,256 3,556 595 grants and incentives (1,337 ) (4,380 ) (10,217 ) (12,174 ) total other (income) expense 925 (3,124 ) (6,661 ) (11,579 ) net earnings (loss) before income tax (2,693 ) (24,972 ) 1,917 134,439 income tax (recovery) - (3,592 ) - 40,923 net earnings (loss) $ (2,693 ) $ (21,380 ) $ 1,917 $ 93,516 foreign currency translation adjustment - (1,508 ) - 644 comprehensive income (loss) $ (2,693 ) $ (22,888 ) $ 1,917 $ 94,160 net earnings (loss) per share attributable to common shareholders basic $ (0.02 ) $ (0.08 ) $ 0.01 $ 0.34 diluted $ (0.02 ) $ (0.08 ) $ 0.01 $ 0.29 weighted-average common shares outstanding basic 153,049,739 278,933,760 152,413,300 273,642,542 diluted 153,049,739 278,933,760 237,723,530 323,323,053 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, 2020 september 30, 2021 assets current assets: cash and cash equivalents $ 594,116 $ 517,694 marketable securities - 235,785 total cash, cash equivalents, and marketable securities 594,116 753,479 accounts and accrued receivable 213,239 43,633 other current assets 5,970 6,635 total current assets 813,325 803,747 long term assets: property and equipment, net 17,923 91,584 intangible assets 115,153 148,821 goodwill 31,500 49,457 investments in and loans to equity accounted investees 19,247 47,507 other long-term assets 8,388 31,616 total long-term assets 192,211 368,985 total assets $ 1,005,536 $ 1,172,732 liabilities and shareholders' equity current liabilities: accounts payable and other liabilities $ 20,195 $ 24,072 current portion of contingent consideration payable 13,411 12,122 income taxes payable 36,152 6,590 accrued royalties payable 27,143 595 deferred revenue 6,589 6,170 total current liabilities 103,490 49,549 long-term liabilities: operating lease liability 3,715 27,264 deferred revenue and grant funding 25,894 59,682 contingent consideration payable 9,148 44,948 deferred tax liability 26,161 36,197 other long-term liabilities 6,620 1,695 total long-term liabilities 71,538 169,786 total liabilities 175,028 219,335 commitments and contingencies shareholders' equity: common shares: no par value, unlimited authorized shares at december 31, 2020 and september 30, 2021: 269,497,768 and 281,151,877 shares issued and outstanding at december 31, 2020 and september 30, 2021 respectively 710,387 718,088 additional paid-in capital 5,919 26,945 accumulated other comprehensive income - 644 accumulated earnings 114,202 207,720 total shareholders' equity 830,508 953,397 total liabilities and shareholders' equity $ 1,005,536 $ 1,172,732 abcellera biologics inc. condensed consolidated statement of cash flows (expressed in thousands of u.s. dollars) (unaudited) nine months ended september 30, 2020 2021 cash flows from operating activities: net income $ 1,917 $ 93,516 cash flows from operating activities: depreciation of property and equipment 1,507 3,060 amortization of intangible assets 821 7,432 amortization of operating lease right-of-use assets 335 1,895 stock-based compensation 3,775 21,608 deferred tax expense - (3,267 ) other 440 888 changes in operating assets and liabilities: accounts and accrued research fees receivable (16,992 ) (34,329 ) accrued royalties receivable - 194,327 income taxes payable - (29,563 ) accounts payable and accrued liabilities 2,890 (313 ) deferred revenue 22,431 9,051 accrued royalties payable - (26,548 ) operating lease liabilities 594 (327 ) deferred grant income 4,592 27,324 other assets (898 ) (3,458 ) net cash provided by operating activities 21,412 261,296 cash flows from investing activities: purchases of property and equipment (8,171 ) (49,022 ) purchase of intangible assets (5,000 ) - repayment of loan to related parties 1,573 - purchase of marketable securities - (245,314 ) proceeds from marketable securities - 9,527 receipt of grant funding - 9,807 acquisitions - (11,457 ) long-term investments and deposits - (17,534 ) investment in and loans to equity accounted investees - (27,105 ) net cash used in investing activities (11,598 ) (331,098 ) cash flows from financing activities: repayment of long-term debt (16,971 ) (1,823 ) payment of contingent consideration - (2,550 ) proceeds from long-term debt 15,516 872 payment of liability for in-licensing agreement - (5,000 ) short-term borrowings (387 ) - issuance of common shares pursuant to exercise of stock options 893 2,781 proceeds from issuance of preferred shares - series a2 financing 74,663 - net cash provided by (used in) financing activities 73,714 (5,720 ) effect of exchange rate changes on cash and cash equivalents - (900 ) increase (decrease) in cash and cash equivalents 83,528 (76,422 ) cash and cash equivalents, beginning of period 7,553 594,116 cash and cash equivalents, end of period $ 91,081 $ 517,694 supplemental disclosure of non-cash investing and financing activities right-of-use assets obtained in exchange for operating lease obligation 567 26,976 purchase of intangible assets in exchange for in-licensing agreement payable 9,060 -
