Q2 2021 Abcellera Biologics Inc Earnings Call

And cash and over $60 million in accounts receivable and accrued accounts receivable.

Carl L.G. Hansen: and over $60 million in accounts receivable and accrued accounts receivable. In addition to our strong liquidity position, we maintained our four momentum, showing strong growth in our core business across key performance indicators, including 19 new programs under contract, bringing our total number of programs to 138, six new programs started, bringing the total number of starts to 60, and three new molecules that have entered the clinic, bringing the total number of molecules in the clinic to four.

In addition to our strong liquidity position, we maintained our four momentum showing strong growth in our core business across key performance indicators, including.

19, new programs under contract, bringing our total number of programs to 138.

Six new program starts, bringing the total number of starts to 60 and three new molecules that are entered into the clinic, bringing the total number of molecules in the clinic before.

Carl L.G. Hansen: Two of those molecules are from our COVID-19 program with Eli Lilly, which continues to be both a proof point for our technology capabilities and business model and a source of non-diluted funding. Unfortunately, and despite the vaccine rollout, we are seeing a strong uptick in COVID-19 cases globally, with well over 100,000 cases reported daily in the U.S. alone.

Two of those molecules are from our COVID-19 program with Eli Lilly, which continues to be both a proof point for our technology capabilities and business model and a source of non dilutive funding.

Unfortunately, and despite vaccine rollout we are seeing a strong uptick in COVID-19 cases globally with well over 100000 cases reported daily in the U S alone.

Carl L.G. Hansen: Our first COVID-19 therapeutic antibody is BAMMath. Baminivimab administered together with Edithimab was paused in June because, at the time, the beta and gamma variants, which are resistant to this combination, were prevalent in the U.S. Today, the most prevalent variant, both in the U.S. and globally, is the Delta variant. Preclinical data demonstrate that Balmenefamab and Edisivimab administered together retain neutralization activity against the Delta variant, as well as other variants currently in circulation in many countries.

Our first COVID-19 therapeutic antibody as dominant a map.

Downloaded a map administered together with Edison <unk> map was paused in June because at the time, the beta and gamma variants, which are resistant to this combination were prevalent in the U S.

Today, the most prevalent variant both in the U S and globally is the Delta variant.

Preclinical data demonstrate that permanent madmen Edison map administered together retain neutralization activity against the Delta variant as well as other variants currently in circulation and many countries.

Carl L.G. Hansen: I note that there is an existing supply of Baminemab and Edisivimab that we believe could be used effectively to help patients today, both in the U.S. and around the world. Our second therapeutic antibody for COVID-19, 1404, which is now known as Bephtilovamab, is currently in phase two clinical testing with Eli Lively. Preclinical results posted to a preprint server in June demonstrate that Peptim of the Map is an exceptionally potent antibody that binds to a highly conserved region of the spike protein.

I note that there is an existing supply of <unk> and <unk> that we believe could be used effectively to help patients today, both in the U S and around the world.

Our second therapeutic antibody for COVID-19, <unk> four which is now known as <unk> is currently in phase II clinical testing with Eli Lilly.

Preclinical results posted to our preprint server in June demonstrate that that some of the map is an exceptionally potent antibody that binds to a highly conserved region of the spike protein.

Carl L.G. Hansen: The data also show that Deptelumab is effective against all variants of concern and of interest, including the alpha, beta, gamma, epsilon, iota, kappa, and delta variance. Deptil of a map is being evaluated alone and in the three-way combination together with the families of amab and edisivimab. As indicated in our last quarterly call, we expect top-line data from these trials this summer. We look forward to clinical results from Eli Lilly on the use of Bephylizumab and believe it has strong potential to be an effective tool in the long-term fight against COVID-19.

The data also show that <unk> is effective against all variance of concern and of interest, including the Alpha beta and Gamma Epsilon Iota Capa and Delta variance.

<unk> has been evaluated alone and in the three way combination together with family of <unk> and <unk> as.

As indicated in our last quarterly call, we expect topline data from these trials this summer.

We look forward to clinical results from Eli Lilly on the use of depth liver Mab and believe it has strong potential to be an effective tool in the long term fight against COVID-19.

Carl L.G. Hansen: As previously noted on earnings calls, our work in COVID-19 represents only one program in our portfolio. In total, we have 138 programs under contract with 33 different partners. These programs span nearly every indication for therapeutic antibodies and associated modalities are used. Of the 138 programs in our portfolio, we know the therapeutic areas for 95 of them, with the remainder attributable to slots into which targets had yet to be elected. These programs target indications in oncology, pain, nerve regeneration, infectious disease, autoimmune disease, allergic inflammation, ophthalmology, women's health, cardiovascular disease, and metabolic disorders.

As previously noted on earnings calls our work in COVID-19 represents only one program in our portfolio.

In total we have 138 programs under contract with 33 different partners.

These programs span nearly every indication for therapeutic antibodies and associated modalities are used.

Of the 138 programs in our portfolio, we know that therapeutic areas for 95 of them with the remainder attributable to slots into which targets have yet to be elected.

These programs target indications in oncology pain nerve regeneration infectious disease autoimmune disease allergic inflammation, ophthalmology women's health cardiovascular disease and metabolic disorders.

Carl L.G. Hansen: Beyond therapeutic areas, our portfolio includes a range of different target types. About 28% of the targets our partners have selected fall into the difficult or challenging areas, and they will be considered intractable using legacy technologies. These include multipath transmembring protein targets, high homology targets, peptides MHC complex targets, and others.

Beyond therapeutic areas our portfolio includes a range of different target types.

About 28% of the targets our partnership selected fall into the difficult or challenging area and they will be considered intractable using legacy technologies.

These include multi past trends membrane protein targets.

Hi, homology target peptide MHC complex targets and others.

Carl L.G. Hansen: In pursuing therapies against their targets, our partners are looking to leverage the next generation of antibody modalities. Each of these brings its own specific and demanding requirements, making diversity and data analytics critical. Today we're working with our partners on programs that cover the full range of target modalities, including IGGs, IGAs, and IGAs by specific antibodies, leveraging our proprietary orthomaps technology, single-chain antibodies, Cart-T cell therapies, radio-isopoogate, and CNS-delivered antibodies. The value our capabilities provide to partners is reflected in our deal structures, which include downstream participation that directly increases with the challenge of finding the right antibody for the target.

In pursuing therapies against their targets our partners are looking to leverage the next generation of antibody modalities.

Each of these brings its own specific and demanding requirements, making diversity and data analytics critical.

Today, we are working with our partners on programs that cover the full range of target modalities, including <unk> <unk> and Iga.

Bi specific antibodies leveraging our proprietary <unk> technology.

Chain antibodies car T cell therapies, radioisotope conjugates and CNS delivered antibodies.

The value our capabilities provides a partners is reflected in our deal structures, which include downstream participation that directly increases with the challenge of finding the right antibody for the target.

While the majority of our programs with downstream participation or with partners that are publicly listed companies, mostly in the large cap and mid cap bracket. We also work selectively with much earlier stage ventures.

Carl L.G. Hansen: While the majority of our programs with downstream participation are with partners that are publicly listed companies, mostly in the large cap and mid-cap bracket, we also work selectively with much earlier stage ventures. Most of these programs are with companies considered biotech.

Most of these programs are with companies considered biotech, but for a significant number of programs. We are working with a range of global pharma partners.

Carl L.G. Hansen: But for a significant number of programs, we are working with a range of global pharmaceutical partners. During this work, we aim to create long-term shareholder value, building a large and diversified portfolio of royalty and other downstream positions in the next generation of antibody-based therapy. And we are seeing that our portfolio captures strong diversification across therapeutic areas, modalities, and partner types. Within the total portfolio, we have started work on 60 programs. Currently, once we deliver candidates in the associated data packages to our partners, they take on late-stage preclinical development that ultimately leads to an I&D application. This process typically takes two to four years, depending on the program and depending on the experience and resources of our partners.

During this work we aim to create long term shareholder value building, a large and diversified portfolio of royalty and other downstream positions and the next generation of antibody based therapies.

And we are seeing that our portfolio capture strong diversification across therapeutic areas modalities and partner types.

Within the total portfolio, we have started work on 60 programs.

Currently once we deliver candidates and the associated data packages to our partners. They take on the late stage preclinical development that ultimately lead to an IND application.

This process typically take two to four years, depending on the program and depending on the experience and resources of our partners.

Carl L.G. Hansen: As previously discussed, we plan to greatly accelerate the timeline to IND application down to one year through forward integration, adding CMC and GMP manufacturing capabilities to our tech staff. Additionally, this quarter, we secured a site for our new 130,000 square foot antibody manufacturing facility. When complete, this facility will allow us to provide our partners with a full and integrated solution that goes from Target right through to IND submission. Turning to business development, our pipeline continues to be strong, showing strong demand for our partnership business and adding more deals with different types of companies.

As previously discussed we plan to greatly accelerate the timeline to IND application down to one year through forward integration.

CMC and GMP manufacturing capabilities to our tech stack.

This quarter, we secured a site for our new 130000 square foot antibody manufacturing facility.

When complete this facility will allow us to provide our partners with a full and integrated solution that goes from target right through to IND submission.

Turning to business development, our pipeline continues to be strong showing strong demand for our partnership business and adding more deals with different types of companies.

Carl L.G. Hansen: Of the 35 programs under contract that were added in the first half of this year, all programs include downstream participation, typically achieved through clinical development milestones, commercial development milestones, and royalties. Over the past year, the general trend has been increasing royalty positions, reflecting additional technology capabilities, an expanded scope of work, and our recognized leading position in the market.

Of the 35 programs under contract that were added in the first half of this year. All programs include downstream participation typically achieved through clinical development milestones commercial development milestones and royalties.

Over the past year, the general trend has been increasing royalty position, reflecting additional technology capabilities and expanded scope of work and a recognized leading position in the market.

Carl L.G. Hansen: This also encompasses partnerships with equity or equity-like positions as a way for us to capture yet more value. What I'm excited about this quarter is that we announced two new deals, one with Tachyon and one with EQRX, that represent a further amplification of our business model, through which we have the option to invest in the subsequent stages of preclinical and commercial development for a greater share of the assets. We believe that these deal structures have the potential to create more long-term value for our shareholders, providing the option to deepen our position in select programs and, in turn, yielding economics similar to an internal pipeline, while still staying true to our business model of being a technology enabler for the industry. Today, our approaches to capture downstream value can generally be grouped in three broad categories.

This also encompasses partnerships with equity or equity like positions as a way for us to capture yet more value.

What im excited about this quarter is that we announced two new deals one with tachyon and one with <unk> that represent a further amplification of our business model through which we have the option to invest in the subsequent stages of preclinical clinical and commercial development for a greater share of the assets.

We believe that these deal structures have the potential to create more long term value for our shareholders, providing the option to deepen our position in select programs and in turn yielding economics similar to an internal pipeline, while still staying true to our business model of being a technology enabler for the industry.

Today, our approaches to capture downstream value can generally be grouped in three broad categories.

Carl L.G. Hansen: First, royalties and milestones, where milestone payments are earned at various points of clinical and commercial progress, and royalties that are typically, but not exclusively, in the low to mid single-digit range. Second, Discovery Partnerships with equity or equity-like participation, which has been a feature in the last year of deals that include Invitex, Avdara, and Angios. And third, deals that include an option to invest, as mentioned, which are similar to those we've announced with partners, Takyon, and EQRX.

First royalties and milestones where milestone payments are earned at various points of clinical and commercial progress and royalties that are typically but not exclusively in the low to mid single digit range.

Second.

Discovery partnerships with equity or equity like participation, which has been a feature within the last year of deals that include Inditex have Dara and Ngos and third deals that include an option to invest as mentioned.

<unk> are similar to those we've announced with partners <unk> and <unk>.

Carl L.G. Hansen: Within our portfolio of 138 programs under contract, we have an equity or equity-like position in about two dozen programs, and we have almost a dozen programs where we have the option to invest in the molecules we discover. In the future, we may expand our deal text further as we explore new ways to capture the value of our partnership model. To lead our VD efforts and the expansion of our commercial team, we recently welcomed industry veteran Neil Berkeley as Chief Business Officer. Berkeley brings more than 20 years of strategic planning and corporate and business development expertise across a wide range of transactions and therapeutic indications. We were excited to have them join our leadership team.

Within our portfolio of 138 programs under contract, we have an equity or equity like position in about two dozen programs and we have almost a dozen programs, where we have the option to invest in the molecules we discover.

In the future we may expand our deal Peck's further as we explore new ways to capture the value of our partnership model.

To lead our BD efforts and the expansion of our commercial team. We recently welcomed industry veteran Neil Berkeley, as Chief business Officer.

Neil brings more than 20 years of strategic planning and corporate and business development expertise across a wide range of transactions and therapeutic indications. We're excited to have him join our leadership team.

Carl L.G. Hansen: Before handing off to Andrew to discuss the financial results, I'd like to re-emphasize how our efforts today support our long-term vision for making drug discovery faster, more efficient, and more cost-effective. First, we believe our technology can solve discovery problems and unlock new opportunities for therapeutic antibody development, and that this will be a source of continued growth within the industry. Second, our strategy emphasizes technology integration at scale.

Before handing off to Andrew to discuss the financial results I'd like to reemphasize, how our efforts to date support our long term vision for making drug discovery faster more efficient and more cost effective.

First.

We believe our technology can solve discovery problems and unlock new opportunity for therapeutic antibody development and this will be a source of continued growth within the industry.

Second our strategy emphasizes technology integration at scale. This is not just state of the art technologies in IP, but also the assembly of a world class team of scientists data systems facilities equipment and processes into a high performing hole that is a critical advantage to achieving compounding returns and to create.

Carl L.G. Hansen: This is not just state-of-the-art technologies and IP but also the assembly of a world-class team of scientists, data systems, facilities, equipment, and processes into a high-performing pipeline that is a critical advantage to achieving compounding returns and to creating a long-term competitive advantage. Third, we are leveraging vertical integration as a central theme to accelerate and also have control over the entire preclinical process. And fourth, we're continuing to invest in technological differentiation to broaden our reach across the industry.

Our long term competitive advantage.

Third we are leveraging vertical integration as a central theme to accelerate and also to have control over the entire preclinical process.

And fourth we're continuing to invest in technological differentiation to broaden our reach across the industry. Examples of this include our Bispecific Humanized road and technologies as well as internal efforts that we believe in time will unlock high value target spaces that are currently out of reach.

Carl L.G. Hansen: Examples of this include our Biospecific and Humanized Rodin Technologies, as well as internal efforts that we believe, in time, will unlock high-value target spaces that are currently out of reach. In the long run, our goal is to replace the legacy technologies of today and the traditional models of doing business, and to help the industry achieve continuous growth and become more efficient. We believe that we have already established a world-leading technology position, which we are now bringing to the market at scale, and that we have created a new technology curve that will lead to continual improvement, not just now, but for decades to come. And with that, I'll turn it over to Andrew Booth, our CFO, to provide an overview of our second quarter of 2021 financial results. Thanks, Charles.

In the long run our goal is to replace the legacy technologies of today and the traditional models of doing business and to help the industry continuous growth and become more efficient.

We believe that we have already established a world leading technology position, which we are now bringing to the market at scale.

And that we have created a new technology curve that will lead to continuous improvement not just now but for decades to come.

And with that I'll turn it over to Andrew Booth, our CFO to provide an overview of our second quarter of 2021 financials.

Thanks Carl.

Andrew Booth: Let me start by highlighting our key business metrics. We ended the first half of 2021 with 138 programs under contract with 33 different partners. That's an 82% increase in programs under contract as compared to the end of Q2 in 2020. We continue to see the combined positive impacts of investment in our business development team and the increasing awareness of our platform on our business development activity. In the quarter, we added Takion and EQRX, as well as two other new undisclosed partners, to our partnership portfolio. As is the case for all new programs under contract after 2018, the 19 new programs in Q2 include downstream participation for Ecceler.

Let me start by highlighting our key business metrics. We ended the first half of 2021 with 138 programs under contract with 33 different partners.

82% increase in programs under contract as compared to the end of Q2 in 2020.

We continue to see the combined positive impacts of investments in our business development team and the increasing awareness of our platform and our business development activity.

In the quarter, we added tachyon and EQ Rx as well as two other new undisclosed partners through our partnership portfolio.

As is the case for all new programs under contract. After 2018, the 19 new programs in Q2 include downstream participation for a seller.

Andrew Booth: Reflecting the substantial value we bring to both the Takyon and EQRX programs, we have negotiated the ability to deepen our position in the success of the molecules we discover. We are doing this through options to invest in the molecules for a greater share of the resulting product sales. Also in the quarter, we started six more programs to take us to 60 cumulative starts, eight of which occurred during the first half of 2021.

Reflecting the substantial value, we bring to both tachyon EQ Rx programs, we have negotiated the ability to deepen our position in the participation of the success of the molecules we discover.

We are doing this through options to invest in the molecules for a greater share of the resulting product sales.

Also in the quarter, we started six more programs to take us to 60 cumulative starts eight of which occurred during the first half of 2021.

Andrew Booth: We continue to build capacity and engage with many partners on preparations for their program start. We expect a robust number of program starts in the second half of 2021 as a part of this generally accelerating trend. And while starts will always be somewhat irregular, the increase in programs under contract is a leading indicator of the longer-term trajectory expected for program starts.

We continue to build capacity and to engage with many partners on preparations for their program starts.

We expect a robust number of program starts in the second half of 2021 as a part of this general generally accelerating trend and.

And while starts will always be somewhat irregular to increase and programs under contract is a leading indicator of the longer term trajectory expected for program starts.

Andrew Booth: Starting this quarter, we will share with you our new business metric, molecules in the clinic. Molecules in the clinic represent the number of unique molecules for which an IND or equivalent application has been approved based on an antibody that was discovered by us or by a partner using licensed debsellerate technology. We view this metric as an indication of our near and midterm potential revenue from downstream milestone fees and royalty payments in the longer term.

Starting this quarter, we will share with you our new business metric molecules in the clinic.

Molecules in the clinic represent the number of unique molecules for which an IND or equivalent application has been approved based on an antibody that was discovered by us or by our partner using licensed <unk> technology. We view this metric as an indication of our near and midterm potential revenue from downstream milestone fees and royalty.

Payments and the longer term.

Andrew Booth: In Q2, three more molecules have followed Bamlanivimab to reach the clinic, taking us to a total of four. Carl has already talked about Theptolevamab, which reached Phase 2, the second antibody from our COVID antibody program with Lilly. The other two, NBL 12, which recently reached Phase 1 and NBL 15, with an approved I&D, are molecules which Novorot discovered using the Triani flagship mouse under license. We congratulate the team at Nova Rock on achieving these important milestones and wish them well in their quest to help patients suffering from inflammatory diseases and those suffering from gastric cancer.

In Q2, three more molecules have followed them when did the math to reach the clinic, taking us to a total of four Karl has already talked about that to love them at reaching phase III. The second antibody from our Covid antibody program with Lilly.

The other two NBL 12, which recently reached phase one and NBL 15, with an approved IMD or molecules, which <unk> discovered using the <unk> flagship mouse under license, we congratulate the team at <unk> on achieving these important milestones and wish them well in their quest to help patients suffering from inflammatory.

Eases and those suffering from gastric cancer.

Andrew Booth: As you can see, the change in metric from our former reporting of discovery programs in the clinic was required to reflect two new dynamics. First, one program can yield multiple molecules, as is the case for the single COVID-19 antibody discovery program with Lilly, which produced both vanlonivimab and Vephylamab. Second, as a part of an acquisition, we may come to own stakes in molecules for which the company is also entitled to milestone payments and royalties, although the discovery was not performed as an ebbseller program. This is the case for several Triani humanized rodent license agreements, like the one with Novorov.

As you can see the change in metrics from our former reporting of discovery programs in the clinic was required to reflect two new dynamics.

One program can yield multiple molecules as is the case for the single COVID-19 antibody discovery program with Lilly, having produced both <unk> and best of luck on that.

As a part of an acquisition, we may come to own stakes in molecules for which the company is also entitled to milestone payments and royalties. Although the discovery was not performed as an accelerant program. This is the case for several <unk> humanized rodent license agreements like the one with Millbrook.

Andrew Booth: We believe that this updated metric, together with the additional list of molecules, will give you a better understanding of Aeselera's clinically advanced downstream portfolio, a portfolio that already includes over a dozen other preclinical assets resulting from Auxlera discovery programs that have downstream participation for the company. Turning to revenue. Revenue in the quarter was nearly $28 million, two and a half times what it was in Q2 of 2020. We earned over $20 million in royalties from Lilly's sales of Bamlanipamab in combination with Edisibimab that were not present in the second quarter of 2020.

We believe that this updated metric together with the additional list of molecules. We will give you a better understanding of <unk> clinically advanced downstream portfolio a portfolio that already includes over a dozen other preclinical assets, resulting from accelerated discovery programs that have downstream participation for the company.

Turning to revenue.

Revenue in the quarter was nearly $28 million two five times what it was in Q2 of 2020, we earned over $20 million in royalties from Lilly sales of <unk> in combination with <unk> that were not present in the second quarter of 2020.

Andrew Booth: A reminder that directly attributable to the royalty revenue we earn from Lilly's sales of Bamranivimab, where approximately $3.5 million in royalty fees are payable to the NIH. As discussed on our last earnings call, we expected royalty revenues in Q2 to be well below where they were in Q1.

A reminder, that directly attributable to the royalty revenue. We earned from <unk> sales of <unk> were approximately $3.5 million in royalty fees payable to the NIH.

As discussed on our last earnings call, we expected royalty revenues in Q2 to be well below where they were in Q1 as per Lilly's recent guidance the outlook for royalties from Lilly sales of existing Covid products for the remainder of 2021 is likely diminished net.

Andrew Booth: As per Lilly's recent guidance, the outlook for royalties from Lilly's sales of existing COVID products for the remainder of 2021 is likely diminished. Nevertheless, we believe there's potential for sustained revenue from COVID products, including Bamilab and Bephtalabamab, for three key reasons. First, COVID is unfortunately, but apparently, on a trajectory to become endemic. Second, Amlinibamab, together with Edisibimab, has neutralization activity against the majority of variants, including and, in particular, against the now dominant delta variance. And third, Thephtolovamab has been shown in preclinical studies to be highly potent and effective against variants of concern, including the Delta Variants.

The less we believe there is potential for sustained revenue from COVID-19 products, including <unk> and <unk> for three key reasons.

First COVID-19 is unfortunately, but apparently on a trajectory to become endemic.

<unk> together with that as diplomat has neutralization activity against the majority of variance, including and in particular against the now dominant Delta variant.

And third <unk> has been shown in preclinical studies to be highly potent and effective against variance of concern, including the delta variance.

Andrew Booth: As previously noted, we view all royalties from COVID products as a non-dilutive source of funding for the company, and importantly, as a proof point of what happens when one of the many programs in our portfolio is successful. For example, in our Triani platform, an acquisition which we completed in 2020, it continued to contribute directly to our top line, generating milestone payments of a million dollars and licensing fees of approximately $300,000 in the quarter

As previously noted we view all royalties from Covid products as a non dilutive source of funding for the company and importantly, as a proof point of what happens when one of the many programs in our portfolio is successful.

Andrew Booth: That brings the total revenue from the Trani Platform in the first half of the year to over $20 million. The primary benefit of the Trani platform, of course, lies in enhancing the technology stack of our discovery programs, and we continue to invest in and develop the next generation of animals internally to expand those capabilities, and we're pleased to see the licensees succeed with the Triani flagship mouse in their own programs.

In our <unk> platform and.

An acquisition, which we completed in 2020, it continued to contribute directly to our topline generating milestone payments of $1 million and licensing fees of approximately $300000 in the quarter.

That brings the total revenue from the training platform in the first half of the year to over $20 million. The primary benefit of the training platform of course lies in enhancing the technology stack of our discovery programs and we continue to invest and develop the next generation of animals internally to expand those capabilities.

And we're pleased to see the licensees succeed with the trainee flagship most in their own programs.

Andrew Booth: Lastly, we earned research fees of approximately $5 million in the quarter, which are attributable to the range of discovery programs we worked on for our partners. This is $3 million less than in the second quarter of 2020, where we received substantial fees from our paid COVID-related work with DARPA and with Lilly. Looking at operating expenses, our research and development spend in the quarter was $15 million, a nearly $6 million increase over the previous year.

Lastly, we earned research fees of approximately $5 million in the quarter, which are attributable to the range of discovery programs. We worked on for our partners. This is a $3 million less than in the second quarter of 2020, where we received substantial fees from our paid COVID-19 related work with DARPA and with Lilly.

Looking at operating expenses, our research and development spend in the quarter was $15 million and nearly $6 million increase over the previous year, we expect that our investments into R&D will continue to grow as we keep expanding our R&D team's capabilities and capacity. This allows us to deliver on our partner program.

Andrew Booth: We expect that our investments in R&D will continue to grow as we keep expanding our R&D team's capabilities and capacity. This allows us to deliver on our partner programs, as well as to enhance our technology stack organically. In sales and marketing, expenses for the quarter were just over a million dollars, a nearly three-fold increase from the same quarter last year. This reflects the ongoing growth of our business development team, capabilities, reach, and capacity to connect with the strong global demand that we continue to see.

As well as to enhance our technology stack organically.

In sales and marketing expenses for the quarter were just over $1 million a nearly threefold increase from the same quarter. In 2020. This reflects the ongoing growth of our business development team capabilities reach and capacity to connect with the strong global demand, but we continue to see.

Andrew Booth: General and administration expenses for the quarter were roughly $11 million compared to nearly $2 million in the second quarter of 2020. Almost $5 million of this increase is related to higher non-cash stock-based compensation, bringing us in line with other publicly listed companies. The increase is otherwise driven by the need to support a much larger business and the associated legal and corporate requirements of being a publicly listed company, as well as ongoing investments to protect our intellectual property.

General and administration expenses for the quarter were roughly $11 million compared to nearly $2 million in the second quarter of 2020.

Almost $5 million of this increase are related to higher noncash stock based compensation, bringing us in line with other publicly listed companies the.

The increases otherwise driven by the need to support a much larger business and the associated legal and corporate requirements of being a publicly listed company as well as ongoing investments to protect our intellectual property.

Andrew Booth: For the second quarter, we are reporting a net loss of approximately $2 million, compared with a nearly $7 million profit in the second quarter of 2020. In terms of earnings per share, this works out to a loss of one cent per share on both a basic and diluted basis. This approximately break-even result is the net effect of, on the one hand, our ongoing investments to expand and enhance our discovery program and to grow our diversified portfolio of long-term stakes in the next generation of antibody drugs, and on the other hand, the early success enjoyed by our first molecules in the market.

For the second quarter, we are reporting a net loss of approximately $2 million compared with nearly $7 million profit in the second quarter of 2020 in terms of earnings per share. This works out to a loss of <unk> <unk> per share on both a basic and diluted basis.

This approximately breakeven result is the net effect of on the one hand, our ongoing investments to expand and enhance our discovery program and to grow our diversified portfolio of long term steaks in the next generation of antibody antibody drugs and on the other hand. The early success enjoyed by our first molecules in the.

Market.

Andrew Booth: Looking at the entire first half of the year, we have generated revenue of $230 million and a net income of over $150 million. That equates to an earnings per share of 42 cents on a basic and 36 cents on a diluted basis year to date. Turning to cash flows, operating activities for the first six months of 2021 contributed almost $267 million, which included the collection of the accrued accounts receivable balance from December 2020 and the strong first quarter royalties earned from Ban Linivam.

Looking at the entire first half of the year, we have generated revenue of $230 million and a net income of over $150 million that equates to an earnings per share of <unk> 42 on a basic and <unk> 36 on a diluted basis year to date.

Turning to cash flows operating activities for the first six months of 2021 contributed almost $267 million, which includes the collection of the accrued accounts receivable balance from December 2020, and the strong first quarter for royalties earned from them and have them at all.

Andrew Booth: On the investing activity side, the first half of the year shows a $33 million land purchase for our GMP facility in Vancouver. Note that half of this investment will be reimbursed from our Government of Canada's SIF funding, making the net investment approximately $17 million once the claim has been received. The roughly $21 million of cash flow to equity investees in the first half included investments for construction financing of our facilities. This cash funding will be returned to us upon completion of construction and on the subsequent more market takeout financing, earning us a low single-digit interest in the interim.

On the investing activity side, the first half of the year shows a $33 million land purchase for our GMP facility in Vancouver note that half of this investment will be reimbursed from our government of Canada, <unk> funding, making the net investment approximately $17 million. Once the claim has been received.

The roughly $21 million of cash flow to equity Investees in the first half included investments for construction financing of our facilities. This cash funding will be returned to us upon completion of construction and on the subsequent more market takeout financing, earning us low single digit interest in the interim.

Andrew Booth: We finished the quarter with almost $793 million of cash and cash equivalents and nearly $65 million of accounts receivable and accrued accounts receivable. In the first half of the year, we built this strong liquidity position that allows us to execute our strategy and continue to build capacity, expand the platform, and pursue business and corporate development initiatives. And with that, we'll be happy to take your questions.

We finished the quarter with almost $793 million of cash and cash equivalents and nearly $65 million of accounts receivable and accrued accounts receivable.

In the first half of the year. We built this strong liquidity position that allows us to execute our strategy and continue to build capacity expand the platform and pursue business and corporate development initiatives and with that we'll be happy to take your questions.

Operator.

Operator: Thank you. And as a reminder, to ask a question, you will need to press star 1 on the telephone keypad. Again, that will be star 1 on the telephone keypad to ask a question. To withdraw your question, press the pound key. Please stand by while we'll compile the Q&A roster. The first question comes from Tiaga Frost on the line of Credit Suisse. Your line is now open. You may ask the question.

Thank you and as a reminder to ask a question you will need to press star one on the telephone keypad again that will be tier one on the telephone keypad to ask a question to withdraw your question press the pound key.

Please standby, while we compile the Q&A roster.

Hi, The first question comes from the line of Thiago <unk> of Credit Suisse. Your line is now open you may ask a question.

Tiaga Frost: Thanks for the good question. And congrats on the progress. So just a couple of questions for me on the business development context here. So you've added another 19 programs under contract, which again combined with your Q1 results kind of puts you well ahead of, at least Paralus modeling, but I'm curious if you can provide any comments on the actual pipeline and what it looks like in terms of leads. Is this space, a new pace that is actually sustainable over the remainder of the year? And similar questions then arise from new program starts.

Hey, Thanks for taking my question and congrats on the progress. So just a couple of questions for me on the business development context here.

So you've added another 19 programs under contract.

Which again combined with your Q1 results.

Puts you well ahead of our leased warehouse lines, but I'm curious if you can provide any comments on the actual pipeline and what does it look in terms of leads.

Space you base that is actually sustainable over the remainder of the year.

Carl L.G. Hansen: Again, you went from two in the first quarter to six, and you provided some comments around that area, but it does increase something that is sustainable as you grow the programs under contract portfolio. Thanks. Thanks, Tiago. Carl here, and I'll take those questions.

And similar question then from from New program starts again, you went from <unk> to <unk>.

First quarter two clinics.

You provided some comments around that area, but it does increase also something that is sustainable as you grow the programs under contract portfolio. Thanks.

Thanks, Thiago Carl here I'll take those questions. So.

Carl L.G. Hansen: So first, with respect to the addition of 19 programs under contract and whether or not that's sustainable, our view is that every indication is that there's very strong demand for our offering, and we have only just begun to really build out the commercial force. When we launched early in the year, the strategy was to build out capacity and start to build up the business development team. The addition of Neal has been a great boost there, as well as other senior members that we've brought in recently.

So first with respect to the addition of 19 programs under contract.

Whether or not that sustainable.

Our view is that every indication is that there is very strong demand for our offering.

And we have only just begun to really build out the commercial force.

When we launched into the year the strategy was to build out capacity and to start to build up the business development team. The addition of Neil has been a great.

Is there as well as other senior members that we've brought onto the team recently.

Carl L.G. Hansen: That, combined with a growing recognition of our leading position in the industry and the expansion of our technology base, particularly the Trani platform and the Orthomad platform, I think are all strong tailwinds for the future. I'll just temper that by saying that we do expect there to be variability from quarter to quarter, and we are taking a long view on the commercial enterprise. And in the long view, we do expect strong growth driven by business development and by expanded technology.

That combined with a growing recognition of our leading position in the industry and the expansion of our technology base and particularly the training platform and the ortho <unk> platform.

I think are all strong tailwind for the future all just temper that by saying that we.

We do expect there to be variability from quarter to quarter, and we are taking a long view on the commercial enterprise and in the long view, we do expect.

Strong growth.

Driven by business development and by extended technology.

Carl L.G. Hansen: In terms of execution, there was, I think, a healthy uptick from two starts in the last quarter to six starts this quarter. However, as discussed last time, that will also be variable from quarter to quarter. But generally, as the business development pipeline fills up, and as we start to build out the capacity, we do expect that trend to be positive, although I wouldn't say that it'll necessarily be so from quarter to quarter. Perfect, no, understood.

In terms of the execution there was I think a healthy uptick from two starts in the last quarter to six starts this quarter.

As discussed last time that will also be variable from quarter to quarter, but generally as a business development pipeline fills up and as we start to build out the capacity, we do expect that trend to be positive although I wouldn't.

Necessarily be so from quarter to quarter.

Perfect understood Congrats again on the progress.

Thanks, Kevin.

Galmonda: Thank you. We have the next question. It comes on the line from Galmonda of Bernberg. Your line is now open. You may ask your question.

Thank you. The next question comes from the line of Tom on death, Brian Baird. Your line is now open you may ask your question.

Carl L.G. Hansen: Yeah, hi, thanks for taking my questions. The first one is just kind of to expand on what we were just talking about and think about the existing capacity that you have. I guess, you know, the 19-pucks in the quarter are pretty impressive. But how do we think about capacity? What could be doable if your commercial team really ramps up to where you want to be, say, in a year or seven? Thanks, Carl here, and I'll take that one again.

Yes, hi, thanks for taking my questions.

The first one is just kind of expand on what we were just talking about and thinking about.

On the existing capacity that you have.

I guess the 19.

In the quarter pretty impressive.

But how do we think about the capacity to what could be doable, if Europe commercial team really ramped up to where you want it to be.

Let's say in a year or so.

Thanks.

Carl here I'll take that one again.

Carl L.G. Hansen: So first of all, I think it's important to stress that program starts are currently not bottlenecked by capacity. There's a delay between putting programs under contract and getting a work plan in place and having the reagents and the kickoff meeting that are needed for us to count that as a start. And so because of that, there is often work that is done for some time in assembling all of that material to begin that happens prior to us reporting out a program start.

So first of all I think it's important to stress that.

The program starts are currently not bottleneck by capacity.

The delay between putting programs under contract and getting a work plan in place and having the reagents and the kickoff meeting that are needed for us to count that as a start and so because of that there is often work that is done for some time and assembling all of that material to begin that.

That happens prior to us.

Reporting out a program to start.

Carl L.G. Hansen: Also, you know, we have the capacity today to do significantly more programs. Of course, when we don't have those starts ongoing, we also have a very heavy investment in platform development, and we have the ability to shift that back and forth if needed. But given the investments that we've made, as well as the improvements in technology and efficiency that come with data science, we don't anticipate a pinch on capacity in execution, although, of course, we need to keep our foot on the gas to make sure that remains the case. Okay.

Also.

We have the capacity today to do significantly more programs of course, when we when we don't have those start ongoing. We also have a very heavy investment on platform development and we have the ability to shift that back and forth if needed, but given the investments that we've made as well as the improvements in technology and efficiency that comes with the data.

Science, we don't anticipate a pinch on capacity and execution, although of course, we need to keep our foot on the gas mixture that remains the case.

Carl L.G. Hansen: And then just kind of thinking strategically right now, the way you think about engaging, obviously you have done with downstream participation with all your new programs on the contract. But just when you engage with partners, what do you tend to prefer these days? I'm thinking something along the lines of equity investment and the way you're thinking about equity participation or, potentially, a smaller, less developed partner who has a big upside, I guess, because of that?

Okay, perfect and then.

Just kind of thinking strategically right.

Right now the way you think.

The way you think the engaging obviously have downward downstream participation with all Europe.

New programs under contract.

So is it when you engage with partners what do you tend to prefer these days.

Thinking something along the lines of ultra equity investment in the way you're thinking about with your participation or potentially.

A smaller less development partner, who has a big upside I guess because above or.

How do you balance that with kind of Europe.

Chip pharma customers when you're thinking about taking your programs.

Carl L.G. Hansen: Or how do you balance that with kind of your flagship pharma customers when you're kind of thinking about taking new programs from? Yeah, I would not say that we have, you know, a preferred customer profile or a preferred business model. What we focus on is finding the perfect match between partners' needs, the technology, and the structure of the deal that we're putting in place. And what we're looking for there is to find high-quality partners that are working on great science.

Yes, I would not say that we have.

A preferred cut.

Customer profile or our preferred business model, what we focus on is finding the perfect match between the partners needs the technology and the structure of the deal that we're putting in place and what we're looking for there is to find high quality partners that are working on great science.

Carl L.G. Hansen: To date, we have managed to secure what I consider to be an elite group of partners that have the wherewithal to develop drugs or that have very innovative ideas at the early stage of the process and are needing the technology to move that forward. This quarter, a great example of that is the deal that we announced with EQRX, where we've taken a different deal structure and one where, in addition to providing value in the technology, we have now created an option for us to deepen our position in these programs. with the ability to invest at various stages. So that's one example of us being flexible in dealmaking in a way that aligns interests and creates maximum value for our shareholders.

To date, we have managed to secure what I consider to be an elite group of partners.

That have the wherewithal to develop drugs or that have very innovative ideas at the early stage of the process and our need and the technology to move that forward.

This quarter a great example of that is the deal that we announced with <unk>, where we've taken a different deal structure.

And one where in addition to providing value in the technology. We have now created an option for us to deepen our position in these programs.

With the ability to invest at various stages. So that's one example of us being flexible in dealmaking in a way that aligns interest in creating maximum value for our shareholders.

Carl L.G. Hansen: Thank you, thanks, Carl. I appreciate it. Have a great rest today.

Thank you. Thanks, Carl appreciate it have a great day.

Thank you next question, we have from the line of Stephen Willey of Stifel. Your line is now open you may ask your question.

Stippon-Willi: Thank you. Next question we have from the line of Stippon-Willi, Obstifel. Your line is now open, and you may ask your question.

Carl L.G. Hansen: Yeah, good afternoon. Thanks for taking the questions, and congratulations on the progress. I guess maybe just the initial question on business mix. So I guess when you look at the programs on a contract where you have gastro participation, I think you said there were 115 of them.

Yeah. Good afternoon, thanks for taking my questions and congratulations on the progress.

I guess, maybe just additional question.

Business mix, so I guess when you look at the.

Programs under contract, which you have to ask.

And I think you said there.

Yes.

There's 24, that's within global pharma and just kind of wondering if that 20% or so distribution is in line with where you want the mix of business to be and.

And I guess, there's a little bit more challenging.

When some of that business on the big pharma side, just given the fact that there may be some internal infrastructure on the workflow side or maybe just some inertia.

Is there anything that you can speak to on that front.

Carl L.G. Hansen: There's 24 that's within global pharma, and I was just kind of wondering if that 20% or so distribution is in line with where you want the mix to go. And I guess it's a little bit more challenging to win some of that business from the big pharmacists, just given the fact that there may be... structure in the workforce against anything that you've got. Sure, thanks for the question. I think where I start with that one is that, you know, and solar has a platform that we've built over the last 10 years that is both able to solve problems that have traditionally been out of reach and also exceptionally

Thanks for the question.

I think where I'd start with that one is that.

Solar has the platform that we've built over the last 10 years.

That is both able to solve problems that have traditionally been out of reach and also is exceptionally versatile and I believe that's reflected in the diversity of our portfolio.

Carl L.G. Hansen: And I believe that's reflected in the diversity of our portfolio. So if you look at our portfolio and the programs, we've got everything from small private companies to the large pharmaceutical companies. We're working on pretty much every indication for which antibodies are being developed. We are doing programs that are connecting to a whole range of modalities, including classic antibodies and next generation molecules.

If you look at our portfolio and the programs we've got everything from the small private companies to the large pharmaceutical companies. We are working on pretty much every indication.

For which antibodies are being developed.

We're doing programs that are connecting in to a whole range of modalities, including classic antibodies and next generation molecules.

Carl L.G. Hansen: So in many ways, there's a lot of diversification in that portfolio, and that is a key part of our strategy. On the flip side, all of those programs have something in common, and that is that we have conviction in the science. We have conviction and faith in the leadership teams. The deal with EQRX is a terrific example of seasoned drug developers that are taking a very innovative commercial approach to developing drugs.

So in many ways, there's a lot of diversification in that portfolio and that is a key part of our strategy on the flip side all of those programs have something in common and it is that we have conviction in the science.

We have conviction and faith in our leadership teams. The Dod <unk> been a terrific example of seasoned drug developers that are taking a very innovative commercial approach to developing drugs.

Carl L.G. Hansen: And, of course, all of those programs have in common that they're being driven by best-in-class technology, and that is the value that we're bringing to the partnership. Okay, and then I guess when you look at the mix of targets, I guess whether it's plunging or a big is there a correlation there between, I guess, targets that are difficult and the business mix, I.E. is one of the ones, swabbing you with the more difficult targets.

And of course, all of those programs have also income and that they're being driven on best in class technology and that is the value that we're bringing to the partnerships.

Okay and then.

Yes.

Look at the mix of targets.

Whether it's.

<unk> or bit more conventional.

Is there a correlation there between I guess.

<unk> typical and the business mix I E.

Yes.

Whose lobbing even more difficult.

<unk>.

Carl L.G. Hansen: That's correct. It's not a hard rule, but as you might expect, you know, the large and highly enabled groups are the ones that have spent, you know, a decade or more building up their own technologies, their own teams, expertise, and capacity. And so there will be many programs that they have for which they believe they have the tools in-house to prosecute those. You know, our objective in the long run is to be able to show increases in speed and efficiency.

That's correct.

It's not a hard rule, but as you might expect.

The the large and highly enabled groups or.

Are the ones that have spent a decade or more and building up their own technologies their own teams and expertise and capacity and so there will be many programs that they have for which they believe they have the tools in house to prosecute those our objective in the long run is to.

Be able to show increases in speed and efficiency that can help us to better capture that market and to provide value to those customers in those target classes.

Carl L.G. Hansen: that can help us to better capture that market and to provide value to those customers in those target classes. But those large and enabled groups also have a big roster of programs that have either been worked on ineffectively or have been put on the shelf because they're generally deemed to be intractable. We are, you know, laser-focused on the investments to push back that frontier of technology and unlock those target spaces. In many cases, a good example being GPCRs and ion channels, we have had success.

But those large and enabled groups also has a big roster of programs that have either been worked on in effectively or have been put on the shelf because they are generally deemed to be intractable.

We are laser focused on the investments to push back that frontier of technology and unlock those targets basis.

In many cases are good example, being <unk> the iron channels. We have had success I believe we were at the front of the pack, but the work is not yet done. So this is an effort that's going to persist.

Carl L.G. Hansen: We are at the front of the pack, but the work is not yet done. So this is an effort that's going to persist, you know, in the coming years. And over time, I believe we're going to be able to help those groups to move forward therapeutics into areas that have been neglected, not for reasons of a lack of targets or clinical validation, but rather for technological limitations.

In the coming years and over time, I believe we're going to be able to help those groups to move forward therapeutics into areas that have been neglected not for reasons of a lack of targets or clinical validation, but rather for technology limitations.

Carl L.G. Hansen: Got it. That's very helpful. Thanks for taking the questions, and congrats on getting three more. You bet. Thanks so much.

Got it.

Thanks for taking the questions.

Congrats on getting three more.

Our candidates.

You bet. Thanks, so much.

Gary Nackman: Thank you. We have the next question comes from the line of Gary Nackman at BMO Capital. Your line is now open. You may ask a question.

Thank you you may have the next question comes from the line of Gary Nachman of BMO Capital. Your line is now open you may ask a question.

Carl L.G. Hansen: Hi, good afternoon. First, on the three new molecules into the clinic, that was certainly good to see. The 1404, we should see that data this summer, but when can we start to see some clinical data for the two new Novorak molecules? And what sort of milestones does that trigger if you give us just the order of magnitude? Thanks, Karen.

Hi, good afternoon.

Three new molecules into the clinic that was certainly good to see.

The $14 four we should see that data in the summer, but when can we start to see some clinical data for the two new <unk> molecules and what sort of milestones does that trigger.

Given that.

The magnitude.

Carl L.G. Hansen: So first of all, the two Novo Rock assets are at the very beginning of clinical development, one having just entered phase one, I believe, and the other one with an approved I&D application. So we typically structure deals to get milestones at the initiation of the various phases of clinical development, so phase one, two, and three. Phase one data normally doesn't take that long. Phase two trials are longer, depending on the indication and the clinical design, of course, enrollment.

Thanks, Karen.

So first of all the <unk> assets are at the very beginning of clinical development. One having just entered phase one I believe and the other one with an approved IND application.

So we are typically structured deals to get milestones at the initiation of the various phases of clinical development from phase one two and three.

Phase one data normally doesn't take that long phase II trials are longer depending on the indication and the clinical design of course enrollment it's worth highlighting that <unk> of course is the driver of those programs and these are programs that we acquired through the acquisition of <unk>.

Carl L.G. Hansen: It's worth highlighting that Nova Rock, of course, is the driver of those programs, and these are programs that we acquired through the acquisition of Triani. So they will be taking the lead in reporting out any data that comes from those development efforts. For us, it's a terrific endorsement of the Trani platform and, I hope and believe, a foreshadowing of what we can expect over the coming months and years from that platform as it's implemented in the program.

So they will be taking the lead and reporting out any data that comes from those development efforts for us.

It's a terrific endorsement of the training platform and I hope and believe a foreshadowing of what we can expect to come over the coming months and years from that platform as it's put in the hands of partners and also used extensively in our technology stack.

Andrew Booth: hands of partners and also used extensively in our technology staff. Okay, and just to clarify, so when you show that for 012, so you're looking at three therapeutic areas, that's three separate programs, correct? But that's what you talked about earlier; you could have a single molecule doing several different programs. No, I think what I mentioned in the, this is Andrew speaking, Gary.

Okay, and just to clarify so when you show that for 012 that you are looking at three therapeutic areas. That's three separate programs.

So thats what you talked about earlier you could have a single molecule.

Several different programs.

No I think what I mentioned and this is Andrew speaking Gary what I mentioned is that we can have one program or AD seller of discovery program that can yield multiple molecules that make it to the clinic. So. The example, there was the Covid program, which counts as one program in one program started and our capital metrics, but it has yielded two molecule.

Andrew Booth: What I mentioned is that we can have one program or, at Cellar, a discovery program that can yield multiple molecules that make it to the clinic. So the example there was the COVID program, which counts as one program and one program start in our typical metrics, but it yielded two molecules that have made it to the clinic, Phamilimab and Bephtalovamab.

Those that have made it to the clinic. So then when <unk> and <unk>.

Andrew Booth: In the case of the Nover Rock assets, they're going after specific indications. I think you can find the details of exactly how those clinical trials are getting set up publicly. Okay.

In the in the case of the <unk> assets Theyre going after specific indications and I think you can find the details of the.

Exactly how those clinical trials are getting setup publicly.

Okay.

And then on my notes out go ahead, yes, yes, just was going to point out that we made that second metric for these molecules in the clinic, where they are using licensed technology and we did the tree any acquisition, which is we've been working very well. It's a beautiful addition to the technology stack, we're able to integrated immediately into.

Andrew Booth: Yeah, I just wanted to point out that we made that second metric for these molecules in the clinic where they're using licensed technology. And, you know, we did the Triani acquisition, which is going very well. It's a beautiful addition to the technology stack. We're able to integrate it immediately into our business development activities.

Our business development activities.

Andrew Booth: And in addition, we are able to generate revenues from the licenses, as we've seen, like, well over $20 million in the first half of the year. And when we bought the portfolio, when we bought the company, it came with a portfolio of previous licenses that had been licensed out, of which Nover Rock is one. And there are over 20 of those licenses which have downstream milestones and royalties, which we would expect to see hitting these metrics in the future.

And in addition, we are able to generate revenues from the licenses as we've seen like well over $20 million in the first half of the year and when we bought the portfolio. When we bought the company. It came with a portfolio of previous licenses that have been licensed out of which <unk> is one and there are over 20 of those licenses which have downstream.

Myles stones, and royalties, which we would expect to see hitting these metrics into the future, but just as a reminder, that those 20 or so licenses are not included in the programs that we have in our other key metrics those are exclusively our own accelerator derived antibody discovery programs, but.

Andrew Booth: But just as a reminder, those 20 or so licenses are not included in the programs that we have in our other key metrics; those are exclusively our own ebcelera-derived antibody discovery programs. But when they, when those licensees have molecules that hit the clinic, we will count them in this other metric. It's one of the reasons we needed to change the definition of that metric. Okay, but it's very helpful.

When they when those license fees have molecules that hit the clinic, we will count them in this other metric. It's one of the reasons, we needed to change the definition of that metric.

Okay, that's very helpful.

Carl L.G. Hansen: And then you highlighted EQRX and Tachyon, your recent partnerships with this sort of new deal structure with more downstream potential value. So I'm curious about those types of partnerships and deals; how long were those in the works? Like, you know, it takes a while to get those types of deals done. And then that's also sort of playing into the cadence that you're talking. talking about new programs for the rest of the year.

And then just you highlighted the EQ Rx in the backyard.

<unk> partnership.

With this sort of new deal structure.

With more downstream and so value.

I'm curious are those types of partnerships and deals how long were those in the works like that.

Take a while to get those types of deals done and then that's also sort of playing into the cadence that you're talking about the new programs for the rest of the year, but just wondering.

Carl L.G. Hansen: I'm just wondering if COVID could cause any delays to some programs, just in terms of being able to communicate with potential partners, that color would be helpful. You know, it's hard to put a hard number on what the representative sales cycle is. There's quite a range.

Covid.

That could cause any delays to some programs that are in terms of being able to communicate with potential partners.

That color would be helpful.

It's hard to put.

Hard a hard number on what is the.

Representative sales cycle, there is quite a range it depends on the firm.

Carl L.G. Hansen: It depends on the firm, and it depends on whether or not you come into any difficulty in negotiating the contract. Typically, from first engagement to assignment of the term sheet is anywhere from a month to three months. And from that term sheet to a contract can be, you know, a couple months to much, much longer if you run into some contractual difficulties. It is important, and we do have a strong funnel, so we maintain, you know, that activity. And so, you know, you need to keep working on this, but there's a robust business development pipeline, and we're in good shape for the future.

And it depends on whether or not you've come into any difficulty in negotiating the contract typically from first engagement to a signed term sheet is anywhere from a month to three months.

And from that term sheet to a contract can be a couple of months to much much longer if you run into some.

Contractual difficulties.

It is important and we do have a strong funnel, so we maintain that activity and so.

<unk>.

You need to you need to keep working on this but there is there is a robust business development pipeline and where we are in good shape for the future.

Okay, great. Thank you.

Operator: Thank you. There are no other questions at this time. I would like to hand the conference back to Mr. Carl Hansen for closing remarks.

Thank you there are no. Other question at this time I would like to hand, the conference back to Mr. Hansen for closing remarks.

Carl L.G. Hansen: Thank you very much. We'd like to finish by thanking everyone for joining us today and to reiterate that this is an exciting time for Asellera, and we're looking forward to ongoing calls to keep you updated on our progress in the future. Thank you, everyone.

Okay. Thank you very much just we'd like to finish by thanking everyone for joining us today and to reiterate.

This is an exciting time for accelerator and we're looking forward to ongoing calls to keep you updated on our progress in the future.

Everyone.

Operator: Thank you, ladies and gentlemen. That concludes today's conference calls. Thank you all for participating. You may now disconnect.

Thank you ladies and gentlemen that concludes today's conference call. Thank you all for participating you may now disconnect.

Yeah.

Operator: The

Yeah.

Yes.

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