Q3 2022 Abcellera Biologics Inc Earnings Call
Seller as Chief Executive Officer, and President and Andrew Booth, Accelerants, Chief Financial Officer.
The webcast portion of this call contains a slide presentation that we will refer to during the call. If you are following along on the phone and wish to access the slide portion of this presentation. You may do so on the Investor Relations section of our website.
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This presentation may contain forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Any forward looking statements are based on management's current expectations and are subject to certain risks and uncertainties. Please review our SEC filings for risk factors that could impact our future performance our presentation and <unk> SEC filings are available on our Investor Relations website note.
Note that all dollars referred to during our call today are U S dollars now I am pleased to turn the call over to Dr. Carl Hansen.
Okay.
Thanks, Trent and thanks, everyone for joining us today.
My pleasure to provide an update on our business for the third quarter of 2022.
Today November eight mark the 10th anniversary of <unk> incorporation.
We founded et cetera on a bold idea to.
To deliberately rethink and rebuild the critical product creation step in bringing new antibody therapies to the world.
After a decade of company building, we believe we now have the industry's most powerful engine for antibody discovery.
Along the way we've grown from six founders in a lab to a business of nearly 500 people spread across four countries and three continents.
We've earned a reputation as a leader in the industry and have worked on over 90 different programs and have succeeded where others have failed.
We've also validated our platform not just once but twice and bringing therapies to patients delivering authorized antibodies bound <unk> and depth of love them out for the COVID-19 pandemic in what was arguably the most competitive and time sensitive drug development effort in history.
For a young company our competitive position is exceptional.
We've assembled an outstanding team we have put in place the core proprietary technologies that we need to execute our strategy and we have nearly 600000 square feet of state of the art facilities that are either operational or under construction.
Over this 10 year period, we have achieved all of this while building a balance of over $450 million and accumulated earnings and have nearly $900 million in total cash equivalents and marketable securities.
It is on this solid foundation that we embark on the next decade of accelerating innovation and taking our business to the next level.
Our business strategy is simple.
First it has to be the best in the world and bringing antibody therapies from target to the clinic and.
And second it is to use this capability with partners to build a large and diversified portfolio of stakes in future antibody drugs.
This is fundamentally a win win strategy.
We provide partners with a full solution and a competitive technology advantage in taking their programs through the clinic.
In exchange, we share in the future success of therapies that are ultimately delivered to patients in need.
In addition for our shareholders. This model smoothes out the binary risk of biotech investing by providing access to a curated slice of the market that is enriched for its best parts.
We assemble our portfolio you can deal structures that are tailored to each opportunity and each partner.
Our programs fall into three categories.
First partner initiated discovery programs.
Partner initiated co development programs and third pre partnered programs that arise from our ongoing technology development efforts.
And our most typical discovery partnerships deals are structured around partner initiated work and include upfront research fees clinical milestones and single digit royalties on net sales.
Through these deals we generate antibody candidates to deliver back to partners for further preclinical development and IND, enabling studies.
We know that we are succeeding when molecules, we've helped to discover progressed through to the clinic.
This quarter, we can update you on two partners, bringing accelerate discovered antibodies closer to patients.
First an antibody discovered by <unk> for an unnamed partner entered clinical development at the start of the quarter.
This phase one molecule is indicated for the treatment of all timers disease, which is a huge area of unmet need.
Second this quarter Regeneron elected to advanced antibody forward in preclinical development that was discovered as part of our 2020 partnership.
This molecule targets, an undisclosed G protein coupled receptor or <unk>.
<unk> are a large and valuable class that is widely regarded as one of the most challenging for antibody discovery.
Success in this program highlights the ability of our discovery technology to address difficult targets and also to move the needle for highly enabled partners like regeneron.
Last year, we announced our co development partnership structure that represents a further amplification of our business model enhancing the potential economics in our portfolio by giving us the option, but not the obligation to invest in the co development of molecules in order to retain and up to 50% stake.
To date, we have initiated a total of seven programs under the structure with four different partners.
For the most advanced co development programs, we have discovered high quality lead candidates that meet program requirements and are undergoing optimization.
In 2023, we expect to select final lead candidates for one or more of these programs positioning them for IND, enabling studies.
Finally in the last quarter, we introduced to you our pre partnered programs, which is the third way, which we create value.
As a reminder, these are wholly owned assets discovered in connection with our high value technology development work to unlock new areas in drug development.
The two main areas for a pre partnered programs are currently T cell engages and difficult memory protein targets, specifically <unk> and <unk> channels.
Last quarter, we shared with you the progress we've made over the past year in developing our CD three T cell engagement platform, which offers access to what we believe is now the deepest and most diverse CD three panel in the industry.
In combination with the orphan that platform. This panel offers unprecedented opportunities for T cell engage your optimization and continues to attract a high level of interest.
We will present, new data on the characteristics of this panel at the 2022 annual meeting of the society for immunotherapy of cancer or <unk>, which will be held later this week in Boston.
Now moving on to our efforts to unlock <unk> and ion channels.
We believe that continued progress in this area across all partnership models will drive substantial value for our business.
To date, our technology development efforts have been applied to roughly a dozen <unk> and ion channel pre partnered program targets.
In some cases this work is still at an early stage.
For other targets, we have made exciting progress and while technical risk remains we anticipate sharing data on one or more of these clinical candidates from these programs in 2023.
In summary at solar is ideally positioned for another decade of success.
We will continue on our strategy investing to become the global leader in antibody product creation.
Before I hand over to Andrew I would like to provide an update on <unk> and our COVID-19 program.
Through much of Q3 petrol of map continued to be the only authorized monoclonal antibody that remained effective against all variance of concern.
More recently, two new variance be Q1 and be Q1 dot one have emerged in our experiments suggest that these variance are likely to be resistant to berth load map.
In response to this and as part of our continuing collaboration with Eli Lilly we have identified a new lead antibody candidate that is highly potent and that we expect will be effective against the Q1, <unk> one and all other known variance of concern.
We believe this candidate has high potential to address an ongoing medical need both for therapy and prophylaxis in COVID-19.
If a clear path for clinical development and patient access can be established together with Eli Lilly, we stand ready to move these molecules forward quickly as we have done in the past.
And with that I'll now hand, it over to Andrew Booth, our CFO to provide an overview of our third quarter 2022 financials Andrew.
Thanks Carl.
I'll start by highlighting our progress made on our key business metrics in the third quarter of 2022.
As we continue to see strong momentum in the business.
This quarter, we started work on four new discovery programs, taking us to accumulative total of 92 program starts.
Overall, we have started work on 23 programs over the trailing 12 months, which represents a quarter of all the programs that we have ever started with partners. This demonstrates the continued strong growth of our portfolio.
All four starts in the quarter include downstream participation.
We signed no new programs under contract in the quarter and we ended the third quarter of 2022 with 164 programs under contract with 38 unique partners.
While the number of starts the navy any given quarter will be irregular we expect the trajectory of starts to continue to be strong.
Importantly, the numbers included in our key business metrics do not include the pre partnered technology development efforts initiated by <unk> that Carl referenced earlier in the call.
For our molecules that are clinical stage, we are excited to see another molecule from a discovery partnership reached the clinic, bringing our total number of molecules in the clinic to seven as Carl mentioned earlier. This new molecule was discovered by US in partnership with an undisclosed partner and is under clinical trials with an indication in Alzheimer's disease.
We continue to view, our growing list of molecules in the clinic as specific examples of our near and midterm potential revenue from downstream milestone fees and long term royalty payments.
With respect to marketed molecules Lilly announced in Q2 that they had begun commercial sales of <unk> to states hospitals and health care providers, which subsequently materialized in Q3.
Turning to revenue revenue in the quarter was approximately $101 million.
This was driven in large part by the roughly $93 million of royalties. We earned from shipments of <unk> in the quarter from both the 139000 doses to the U S government and from the first commercial sales of approximately 60000 doses.
While we expect some <unk> sales to continue in Q4 future sales are uncertain, given the impact of potentially resistant variance case counts and the availability of other treatments.
As Carl mentioned the situation with Covid remains fluid we have always viewed these royalties earned from Colby from sales of our COVID-19 antibody as a source of non dilutive funding.
With or without future royalties from Covid antibodies, our strategy is to invest in forward integration and scale, our business with world leading capabilities in antibody discovery and development from target to the clinic.
Looking at other revenues this quarter, we earned $7 million in research fees relating to work on discovery programs compared to approximately $5 million in Q3 of 2021.
This increase reflects the growing scale and capabilities of our discovery engine and the underlying robustness of our business.
This quarter's revenues also included some small amounts related to milestone payments and licensing fees.
Turning to operating expenses, our research and development expenses for the third quarter were nearly $27 million.
Representing a roughly $9 million increase over the same period of the previous year.
The increase reflects continuing investments as we continue to expand the capacity of our teams and business to deliver on a growing number of discovery programs, while organically scaling and expanding our internal capabilities.
Approximately two thirds of our R&D efforts continue to be directed at enhancing the capabilities of our discovery and development engine with about one third relating to execution on discovery programs.
In sales and marketing expenses for the quarter were approximately $3 million compared.
Compared to approximately $1 million in Q3 of 2021. This increase reflects continuing investments in the business development.
General and administration expenses for the quarter were almost $14 million compared to approximately $11 million in Q3 of 2021.
The increase is driven by the need to support the growing business overall.
Sure.
Looking at earnings this quarter, we are reporting a net profit of approximately $27 million.
This compares to a loss of roughly 21 1 million in Q3 of 2021.
This result reflects the recognition of royalties on <unk> offsetting our investments to expand our capabilities, while continuing to run discovery efforts for our partners in terms of earnings per share. This quarter's result works out to a profit of <unk> <unk> per share on a basic and <unk> <unk> per share on a diluted basis.
We continue to expect to be profitable for the full fiscal year of 2000 22022.
Looking at cash flows operating cash flows for the first nine months of 2022 contributed $246 million to cash as a part of our Treasury strategy, we keep almost $500 million invested in short term marketable securities and our investment activities for the first nine months of the year included approximately $250 million.
The increase in those holdings, all other investments amounted to approximately $80 million largely related to the purchase of property plant and equipment as well as payments connected with our facilities expansion.
Altogether, we finished the quarter with well over $850 million of cash equivalents in marketable securities. We are in a strong liquidity position that allows us to fully execute on our strategy with excellent visibility and runway. We believe that we have sufficient liquidity to fund well beyond the next three years of investment and growth.
And with that we'll be happy to take your questions.
Operator.
If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question. Please press star one as a reminder, if youre using a speakerphone. Please remember to pick up your handset before asking your question Paul.
So you briefly as questions are registered.
The first question comes from the line.
Do Kim of Piper Sandler. Please proceed.
Hi, Thanks for taking my question and congrats on the progress.
I was hoping you could talk a little bit more about the discovery process.
That takes four going against a GPC our target is it different than your conventional target.
And.
Does it have extended discovery timelines and specifically for regeneron.
When they take responsibility of the antibody candidate.
Are they starting at.
R&D, enabling studies at this point.
Great. Thanks, Joe This is Carl Hanson I'll take those two questions in turn so first your question related to differences.
In discovery against non GPC, our targets are more standard targets and <unk> and perhaps ill even frame that by expanding the question to talk about the ion channels as well which are both within.
This effort that we're running.
So <unk> and ion channels represent.
A huge class of targets are two of the largest target classes.
There are many high profile targets that are out there that had been well validated either through clinical development of small molecules, but where perhaps specificity or toxicity has been issue or that are well validated through other mechanisms.
And where antibodies are believed to be.
A very attractive modality.
Two to solve some of those challenges.
Despite that <unk> started classes have been.
We have been notoriously difficult to run discovery against and the reasons are not just one thing. The reasons are manifold. It includes port Immunogenicity of the targets. It includes a small <unk>.
<unk>, we're real estate that's available for binding antibody and it also includes.
The need for a special capabilities and functional assays and identify antibodies that are both developable and that have the right functional activity against the target. So it's not one thing.
What is really needed is a lattice work of technologies that allow you with high probability to go from a target name through to a molecule that does what it's supposed to do is efficacious and also has the properties to develop it as a drug.
We have been working in this space now for many years and for just about three years now I've had a long range intensive R&D effort.
Put in place all of those different technologies and leverage <unk> core platforms.
To unlock that space. So once once that technology development has been done.
The timelines for development of those targets are not different but of course many of these would.
We'd still be considered some of the hardest in the industry and we are still doing work to break those open.
With respect to the Regeneron collaboration.
As mentioned, we worked with Regeneron productively on a GPC, our target and we've helped them to overcome the formidable hurdle of finding a candidate that's ready for further development.
That molecule is not yet in an R&D, enabling studies, but.
Our belief and the indication from Regeneron is that they are now moving that molecule towards those studies and ultimately towards the 90.
Great. Thank you for all those details that was very helpful.
Thank you.
The next question comes from the line of.
Puneet Sounder SD.
<unk>.
Please proceed.
Hi, you have Michael on for Puneet. Thank you for taking my question. My first question is about.
The early pipeline. So we've been hearing a little bit about increased caution for capital spending by Biopharma now wonder if that's at all reflected in the program.
Or new programs under contract or do you think.
If youre seeing any sort of similar impact on your pipeline and then one quick question about <unk> 11, New Covid Nab I was wondering if the development timeline for this new mab would be at all similar to backflow of Nab or.
In fact, the equivalent kind of.
As the pandemic data and extend it that affects the timeline. Thank you.
Michael This is Carl so maybe I'll start by answering your question on <unk> and the new lead that we've identified as a next generation or third generation molecule for COVID-19.
So as you know we have.
Now.
Slide our platform three times to come up with solutions for COVID-19, and the first of course was bound the never Mab, which was done at tremendous speed in combination with Eli Lilly.
That was I believe and still is.
Record and speed in developing a therapeutic.
The next one was <unk>, where we focused on breadth and potency and in this case, we have now developed.
We've now discovered a new antibody that we believe has the potency and breadth to cover the current situation with COVID-19, and what is in the foreseeable future.
I would expect that.
The timeline to bring that to the clinic and then through clinical development.
Would be similar to what we've done in the past with Eli Lilly provided that we're.
We're successful in finding a clear regulatory path for that development and I do know that.
There have been conversations between Eli Lilly and the FDA about how that would proceed I don't know the status of that but we are ready with that solution. If if that opening is there.
Now moving onto the other part of your question.
Which I believe was related to program starts.
There certainly is some element of the macro environment that everyone's keeping in Ireland, but I will remind you that in the Q4 call of last year. We indicated that we were shifting our business development priority from volume from the number of programs and partners that we have secured two priority.
<unk> the highest value deals and we expected that we would do fewer deals, but do some deals that we have greater participation in and where as we forward integrate we are doing more of the work for our program.
For us that is one of the ways in which we maximize the overall value of the portfolio.
That is what has been happening over the last couple of quarters.
And I did mention some exciting progress on the co development programs, where we have completely in house brought these from an E mail with a target right through to what we expect in 2023 will be a development candidate.
And on those programs as I mentioned, we have currently at 50% ownership stake in an option to co invest and maintain that ownership stake.
So there are now seven programs in that bucket.
With four different partners.
And of course, as we apply more effort and do more of the work program. We expect that the total number of programs, we're going to be lower we expect the total value will be higher and importantly, its our belief that the timelines to clinical development will be faster in the probability of each program getting to clinical development will also be very significantly improved.
Got it thank you very much.
Thank you. The next question comes from.
Our of.
Pardon.
Aaron Berg.
Please proceed.
John Congrats on the quarter.
Just two for me.
Given you announced the Regeneron program entering preclinical studies should.
Should we expect similar announcements on future programs that enter preclinical studies and then as a follow to that are you able to disclose how many programs are.
Currently in preclinical studies based on the.
The answer.
Great question, Yes, so we typically do not make an announcement when programs move towards preclinical studies.
In this particular case.
We did make an announcement in part because we had not formally announced that deal back in 2020 and also because.
The significant progress with a high profile partner and moving.
Forward a program against a very difficult target. So I would consider this the exception and we will not.
Routinely be.
Given progress updates on molecules until they reach.
And for sure and perhaps earlier on a case by case basis.
Got it thanks, and then one more for me just any updates on the timeline regarding the GMP facility.
Yes, you remember previously Hey, Gaurav, it's Andrew speaking here previously you had indicated that the GMP facility was on track for the end of 2024, I'd say in terms of having that facility up and working on our first batches in qualification batches at the end of 2024.
We're still on track for that with the first commercial batches being in 2025, so that would be.
That so roughly on schedule with where we were and how we've indicated previously.
Awesome I appreciate it guys.
Thank you. The next question comes from Stephen Wiley of.
Stifel. Please proceed.
Yeah. Good afternoon, thanks for taking the questions.
With respect to the in house work, that's being done on <unk>.
Chad on the <unk> side.
I understand the Regeneron lead candidate was developed.
The velocity of the mouse.
So that would generally.
Are you guys using the <unk> transgenic platform for the in house GPC our work.
Thanks, Steve Carl here, So yes, the program with Regeneron took advantage of last few months with our internal work.
Really.
Intimately connected with long range R&D efforts on.
Unlocking target space and unlocking new modalities.
T cell engagements as well as <unk> and ion channels.
We are using the <unk> platform.
We have access to another transgenic platform and on a case by case basis. We also use other sources of diversity.
Including different animal species, such as <unk>.
Wild type rats and.
In other animals in order to maximize the chance of finding leads that can be developed of course, if we start with humanized rodents then the path to final candidate is shorter but for many of these targets. The name of the game is getting a molecule over the finish line period, because they've been out of reach for a long time and so we don't pull punches on that.
Okay, and I guess, maybe just sticking on the.
On the on the <unk>.
House development work.
You mentioned youll be presenting simba.
CD three variant data at Citi.
Believe in the abstract you also talk about how you've identified some.
I don't know if you were to call the beads.
Identified candidates.
Both Egfr CD three targeting.
Should we anticipate that.
There is an opportunity to maybe move these.
Forward into into.
Perhaps I IND, enabling studies at some point.
Yes, Steve so the update at <unk>.
Will be later this week and so I don't want to steal any thunder from that.
Some of that work will be showing a further characterization of the expansion of the panel and we believe that thats one of the critical steps to being able to generate optimal therapeutic molecules. The work that will be presented on Egfr I would characterize as proof of concept. So we do not intend.
And do not expect that work to lead to assets, although of course, we could be surprised.
Did mentioned on a previous call that in order to validate the hypothesis that in <unk>.
<unk> diversity and quality of CD, three combined with ortho Mab can lead to therapeutic candidates with a better profile in terms of cell, killing and cytokine release, we have initiated some work internally on well known targets that are focused on solid tumors. We are not yet at the point to share that data. So I don't expect.
Sharing that data at city, but that we will share that as those programs mature.
Okay and then just lastly are you able to say whether or not.
The new clinical candidate from the undisclosed partner.
Can all farmers.
That has downstream economics associated with it.
Yes, it does have downstream economics.
Thank you okay, great. Thanks for taking my questions.
Yeah.
Thank you next question comes from Gary Nachman of BMO.
Please proceed.
Hi, guys good afternoon.
For the for New program starts and <unk> to get to 92 is there anything that you're doing differently now versus a couple of years ago in terms of feed to start these programs or how you approach them.
And you also had four new starts in the second quarter is that a good cadence to think about.
And then are you, making any further inroads with the vcs after the Atlas and firsthand partnerships that you announced last quarter that seem like.
A nice initiatives for you and maybe a lot of room to run there. So I'm curious if you're making any more progress there and if you think we're going to hear about more of those partnerships going forward.
Yeah, Hey, Gary It's Andrew here I'll take the first part and then when it comes to the question about the Vcs I'll hand off to Carl.
So with the program starts it's the same definition of what constitutes a program starts as we as we have always been using it's quite a rigorous definition. There is always going to be some variability quarter to quarter. Importantly, when you said hey is there anything we're doing differently I think what's important and Carl mentioned it on one of the previous questions is that.
In each of the programs, we're doing more and more work and so.
If we use programs starts is kind of a measure of both capacity and value that is being generated we are doing more and more work in each of them. So.
The fewer program starts shouldnt be an indication of less capacity within the within the company nor should it be an indication of less value that is being created because we are adding more and more to each of the programs and as you can see even in the increase in expenditure from our R&D that is <unk>.
<unk> significantly and still a similar percentage of it is being spent on the efforts in partnership and program discovery compared to this time last year. So I think.
A way to think about the program starts going forward is that the rough.
Roughly what we've seen in the past year or so.
We'll probably be a good indication of what's going to be in the future. We still have a full book of work from the large number of 164 programs under contract, which our partners will continue to call with whatever frequency that they that they determined is correct and that is how we will continue moving going forward.
And perhaps I'll pick up from there and respond to your question about.
<unk> strategy of engaging with high profile and top vcs to assist in the early stages of company creation and product development.
I would agree with you that we see that as an opportunity that has a lot of headroom and also one that really exemplifies our business model and what we think we can do for the industry. So it's not just about having great scientific insight that insight needs to be connected with strong technical team.
<unk>, which we can provide with the facilities and technology, which we have built in our engine and also with the management teams and the capital to move those forward to the clinic and then through the clinic to build new companies.
We have over the last couple of years spent.
Big effort or put a big effort into <unk>.
Completing our process. So that we can fully integrate from an E mail and the specification of a drug target right through to a value inflection point and by connecting with the right partners. We believe that allows for.
Company creation with much better economics, much better timelines, we have previously announced a couple of other deals. We have also been continuing those conversations with various groups and.
I am hopeful and I am confident that youll see more of that in the future.
Okay, great and if I could squeeze in one other follow up just on the molecule advancing into the clinic for Alzheimer's.
Pretty exciting.
And you mentioned, there's good downstream economics, but anything you can tell us just about that program maybe at a high level your discovery efforts with it.
Something unique about it.
In terms of the antibody discovery and that's being moved forward.
I know that's with an undisclosed partner, but I don't know it just it sounds like a nice important program. So anything more you could say volatile.
Thanks, Gary.
We think that it's a very significant announcement, mostly because it adds further weight.
Two validation of the platform that our work is now moving forward molecules are getting to the clinic for important unmet medical need.
The top partner.
I don't think that I can go into the details of the program given that.
We still haven't identified who the partner is.
And.
We'd want to wait until that is fully in the open before we say anymore about it.
Okay fair enough. Thanks.
Okay. Thank you. The next question comes from.
Tonia Berthing Bloom Burton.
Please proceed.
Hi, there. Thank you for taking my questions.
My first one is just related to your commentary on the program starts and how youre, adding more value per program. So I'm. Just wondering can we expect your average royalty rate, which I think average is around 5% now can we expect that to tick up.
As you are doing more work per program.
Hey, Anthony it's Andrew here.
Yes, great question, if you'll remember, we disclose kind of aggregate royalty rates and how they've moved over time in the 10-K.
From in the earlier years up to 2018.
They averaged about two 5% and in the 2000 2000 2021 time frame.
They went up to four 2% I think was dominion royalty.
We do see as we are doing more work, we do see the value of each of these programs to accelerate increasing I think most notably and probably in the extreme in the co ownership.
A case, where that Carl mentioned, where we have actually a 50% ownership stake as.
As we start those programs and then an option to invest in order to maintain that 50% ownership stake going forward. Those are of course extremely valuable programs and will be accretive to the average royalty rate overall as there as they are in the portfolio. So in the in those sorts of cases, absolutely we.
We would expect the overall value and especially in the royalty or equivalent in the in the.
In the program will increase.
Importantly, as well, though it is not included in the program starts number there is the pre.
Pre partnered programs that Carl alluded to where those are wholly owned but it is still our intention to be partnering those out at the rate to a point in time.
And those once we have because we've done more work on them and because we have retired more risk.
And put in more of development on our own steam we would expect the economics to those to be.
To be considerably accretive to the overall portfolio in that four 2% again in the extreme case. The first pre partnered program of course of course was the COVID-19 molecule and while the.
The situation was exceptional there it resulted in a very high royalty sort of proving out the business model that we've chosen overall how to capture value in the success of the molecules that we work on.
Okay.
And then just moving to the Regeneron deal.
I believe the deal with focused on four different targets and one is advancing to preclinical development. So just wondering is there still a possibility to advance our three targets or was it just this one target that was selected.
Forward.
Yes. So the original deal was with report targets. This is just the first one that has moved forward and the other programs are still lives. So we're hopeful that those will also move forward.
Okay and then.
Related to that we've seen some.
Other big pharma is acquiring technologies to new GP CR.
John Discovery in house, So maybe you could just speak to.
What was the key selling point for executing this deal with regeneron with a primarily focus on the speed of the platform or was it.
Were you able to demonstrate that you could identify.
Drug candidates that they couldn't in house.
Yes.
I wouldn't speculate on what was the single.
Value proposition that resulted in the deal with Regeneron I'd say.
Our multi target partnership and there is.
A multiplicity of ways in which we see synergy between our capabilities in there and obviously regeneron is a very.
Very well enabled and sophisticated partner and one that we are.
We're very happy to be working with.
More generally.
In the in the class of <unk>, and I would put iron channels and other difficult targets in there.
That tends to be one of the places where we have had the most engagement with a large and well enabled firms.
And typically it is because.
These groups have tried or they have experience with similar target classes and have realized that the existing conventional technologies are not up to the task and so the value proposition there to take a target or a program that is completely stuck.
Get it unstuck can help move it towards clinical development in what are often potentially first in class.
Very high value unmet medical need indications.
Okay. Thanks for that color.
Thank you there are currently no additional questions registered at this time, so I will pass the conference back over to Carl Hansen for closing remarks.
Yes.
Thank you everyone for joining the call today, we look forward to providing further updates and wish you a good night.
That concludes the conference call. Thank you for your participation you may now disconnect.