Q4 2024 AbCellera Biologics Inc Earnings Call
Good afternoon, and welcome to accelerate for full year 2020 for a business update conference call. My name is to me and I will facilitate the audio portion of today's interactive broadcast if you would like to ask a question. Please press star one please.
Speaker Change: Press Star Zero should you need assistance during the call at this time I would like to turn the call over to <unk> and Soliris Chief legal and compliance Officer you May proceed.
Trent Steinmart: Thank you Hello, everyone. Thank you for joining us for accelerated 2020 for full year earnings call I'm trend Stein Mart accelerates chief legal and compliance officer, Dr. Carl Hansen, accelerates, President and CEO and Andrew Booth.
Trent Steinmart: Seller as CFO are joining me on the today's call. During this call, we anticipate making projections and forward looking statements based on our current expectations and according to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095, our actual results could differ materially due to several factors outlined in our latest Form 10-K.
Trent Steinmart: And subsequent forms 10-Q, and 8-K filed with the Securities and Exchange Commission.
Trent Steinmart: Seller is not obligated to update any forward looking statements, whether due to new information future events or otherwise our presentation today, including our earnings press release and SEC filings issued earlier today are available on our Investor Relations website.
Trent Steinmart: The information we provide about our pipeline is for the benefit of the investment community and is not intended to be promotional.
Trent Steinmart: As we transition to our prepared remarks. Please note that all dollars referred to during the call are U S dollars.
Carl: After our prepared remarks, we will open the lines for questions and answers now I will turn the call over to Carl.
Trent Steinmart: Okay.
Carl: Thanks, Brian and thank you everyone for joining us today.
Carl: Today I'll review the progress we made in 2024 and discuss our priorities for 2025.
Carl: 2024 was a year of significant change and accelerate in <unk>.
Carl: 2023, we decided to transition from a platform and partnership company to a clinical stage biotech.
Carl: Accordingly over the past 18 months, our focus has been on building, our internal pipeline and completing investments in our platform, but at the same time, improving efficiency and maintaining a strong cash position.
Carl: Through the year, we achieved the following milestones.
Carl: We advanced two programs <unk> 65, and <unk> 575, which are now positioned for Cta filing in Q2 of this year.
Carl: Behind these we are advancing a robust pipeline of internal programs in discovery.
Carl: Okay.
Carl: We completed our move into our new headquarters and are on track to bring our clinical manufacturing facility online in 2025.
Carl: Importantly, we expect significant investments in our platform and facilities to be complete in the first half of this year.
Carl: We are reducing the new discovery partnership activities.
Carl: And the first part of 2024, we engaged in two new partnerships and expanded one existing collaborations.
Carl: And finally, we closed the year with over $800 million in available liquidity and are in a strong position to execute on our strategy.
Carl: As we enter 2025 I believe we are in a unique position.
Carl: We are nearing completion of a multiyear build of our facilities and workforce.
Carl: We have a demonstrated.
Carl: We have a demonstrated competitive advantage and accretion of therapeutic antibodies.
Carl: And we have arrived here with over $800 million in liquidity.
Carl: Over the coming years, we will use our capital and our technology to create and develop a pipeline of wholly owned and combed drug development programs.
Carl: From here the most important strategic question is how do we allocate our time and our capital to build our pipeline.
Carl: How do we choose which programs to work on where do we double down where do we stop investing and when do we partner.
Carl: And choosing programs, we are explicitly indication agnostic, we are open to all opportunities, where we perceive an unmet need and an outside chance of succeeding in the clinic and in the market.
Carl: We assessed this by answering for central questions.
Carl: Yeah.
Do we have conviction in the science.
Carl: Second do we see a large unmet need and commercial opportunity.
Carl: <unk> is there a case for strong differentiation. So we can win in the market and lastly is there a clear development path.
Carl: At this stage, we are particularly focused on finding those opportunities where for a limited amount of cost and time, we can get proof of concept and built conviction in our programs.
Carl: In the perfect World, we would build a portfolio where every program scored highly on all of these different criteria.
Carl: The reality is that every program has its strengths and its weaknesses and these need to be wait together.
Carl: With that framework in mind I will share how we think about our first two programs <unk> 65, and <unk> 575.
Carl: <unk> 65, which is our lead program is for an undisclosed target and indication in the area of metabolic and endocrine condition.
Carl: This is a program that we are particularly excited about because it scores well across all four dimensions.
Carl: First from the pathway side. This is a target that has been well validated both in preclinical work and in the clinic with small molecules.
Carl: Accordingly, we believe that if we can achieve sufficient target engagement is likely to be both efficacious and safe.
Carl: Second we believe that this program would address an important unmet need with a significant commercial opportunity.
In our estimation there is a total addressable market of at least $2 billion in annual sales.
Carl: In terms of differentiation <unk> 65 has the potential to be a first in class antibody therapy.
Carl: We believe there is potential for differentiation in terms of the safety profile and we believe that a product that has a once monthly subcutaneous injection will be preferred by patients.
Carl: And lastly, this is a program, where a clear development path and well established biomarkers exists.
Carl: At the end of our phase one trial, we expect to have a clear view as to whether or not we are engaging the target and whether it's likely to work as a therapeutic.
Carl: We plan to disclose the target and the indication for <unk> 65 at our next earnings call.
Carl: Our second program <unk> 575 is a non depleting ox 40 ligand antagonist.
Carl: This is a program following <unk> app, which is a molecule. That's now in phase III by Sanofi in atopic dermatitis and is also being evaluated in phase III for several other indications.
Carl: In phase II <unk> has demonstrated efficacy that was comparable to the pixel and atopic dermatitis, and a clean safety profile and a longer duration, albeit with a slower time for the onset of that effect.
Carl: With this precedent we have high conviction that <unk> 575 will also prove to be efficacious and safe.
Carl: There is clearly a large commercial opportunity here.
Carl: Topic dermatitis is already north of a $10 billion market with biologic penetration in the single digit percentage range for the patient group.
Carl: We also note that <unk> theres approximately at 20% of patients that discontinued so that even as a second line therapy. This represents an attractive commercial opportunity.
Carl: Although there is also <unk> map from Lilly leverage target leverage.
Carl: <unk> targets, the IL 13 pathway and therefore has nearly complete overlap with the <unk> mechanism of action.
Carl: For this reason for patients that received a second line, having a distinct option like an ox 40 ligand antagonist is attractive.
Carl: Beyond atopic dermatitis, there's a good case to be made for the development of Oxford lagging antagonist across many autoimmune conditions.
Carl: As I mentioned <unk> is currently being evaluated for celiac disease, asthma, Hs alopecia and others.
Carl: We view success in these trials as potential upside that support the proposition that Oxford ligand will emerge as the dominant class and treating autoimmune conditions.
Carl: As compared to Amatil Nab the main differentiation thesis for <unk> 575 is a combination of high potency and excellent biophysical properties, making it amenable to a high concentration formulation and NFC that is engineered with a <unk> mutation to provide extended half life that supports less frequent dosing.
Carl: We view this as a modest case for differentiation, but one that could prove more or less important depending on what happens in ongoing trials with <unk> and the profile of other early stage, Oxford Laggan antagonist that are currently in late preclinical or early clinical development.
Carl: From a development perspective, there is a clear path and we expect to have a cta submitted in Q2 of 2025.
Carl: We expect the first readout for safety in PK in 2026, which is at the same time as <unk> 65.
Carl: In summary.
Carl: We view <unk> as a program with low scientific risks and a large potential market opportunity across multiple autoimmune indications.
Carl: But our program with risks associated with being in a competitive space with modest differentiation.
Carl: With <unk> 65, and <unk> 75 on track for entry into the clinic in 2025, we expect to complete our transition from a preclinical platform and partnership company to a clinical stage biotech.
Carl: Behind these programs, we have a robust portfolio of more than 20 preclinical programs that we view as having the potential to become highly differentiated assets.
Carl: As we focus our activities on our pipeline, we are reducing our new partnering activities and.
Carl: In the first half of 2024, we added two additional partnerships with Biogen and with Aramark in Viking and expanded our collaboration with Lilly.
Carl: Subsequent to the close of Q4, we entered into our first significant partnership based on our TCE platform with Abbvie. We first began working with at the end of 2022.
Carl: We see our TC platform as a source for internal programs and as a basis for future partnership activities.
Carl: And accordingly, we will continue to seek collaborations in this area.
Carl: Looking to 2025, we are focused on entering the clinic and bringing our manufacturing capabilities online.
Carl: Our priorities for the year are first to initiate phase one clinical trials for <unk> 65, and <unk> 75.
Carl: Second to nominate additional development candidates for Cta, enabling studies.
Carl: Third the complete platform investments by the end of the second quarter and fourth to start activities in our new clinical manufacturing facility.
Carl: In terms of key milestones, we expect to see the following to occur over the next 18 to 24 months.
Carl: Cta's and clinical starts in 2025, our first two development.
Carl: Our first two clinical Readouts in 2026, and the election of on average two additional development candidates per year.
Carl: And with that I'll hand, it over to Andrew to discuss our financials Andrew.
Andrew: Thanks Carl.
Andrew: As Karl pointed out <unk> continues to be in a strong liquidity position with approximately $650 million in cash and equivalents and with roughly $190 million in available committed government funding to execute on our strategy.
Andrew: In 2024, we continued to execute on our plans shifting our efforts towards internal programs and to completing our CMC and GMP investments.
Andrew: Looking at our key business metrics in the fourth quarter. We started to work on one partner initiated program, which takes us to a cumulative total of 96 programs with downstream participation.
Andrew: In 2024, we saw our partner have Dara advance its lead molecule ABB won 47 into phase one clinical trials and in addition to new molecules developed under a <unk> license gig agenda, Giga 564, and an undisclosed molecule were brought into the clinic.
Andrew: That brings us to accumulative total of 16 molecules to have reached the clinic as.
Andrew: As we have stated previously we view our growing list of progressing molecules in the clinic as specific examples of our near and midterm potential revenue from downstream milestone fees and royalty payments in the longer term.
Andrew: As we do annually, we will take a closer look at the progression of those 96 partner initiated programs with downstream participation.
Andrew: As of December 31, we were still actively leading are co leading the work on 14 of these programs for 76 programs. We have successfully completed the agreed scope of work and have transferred the resulting antibody sequences and data to our partners for evaluation and further development under their leadership.
Andrew: To the best of our knowledge our partners are actively progressing 37 of those 76 programs.
Andrew: Of the 51 programs that are actively progressing we believe that 42 are in late stage discovery.
Andrew: In preclinical development and four have reached clinical development.
Andrew: Overall, we view the progress of the molecules, we have discovered in our and our partners' hands positively and the attrition is consistent with our expectations over half of all programs with downstream participation that we have started are currently still progressing we look forward to more molecules from our programs, reaching the clinic over time and we will continue to report on these progression.
Andrew: <unk> to the clinic on a quarterly basis.
Andrew: Looking more broadly across the program starts in both our partner initiated portfolio as well as our accelerate initiated internal programs, we see significant diversification across therapeutic indications of our 96 partner initiated programs with downstream. The majority are in oncology and neurology immunology broadly reflecting the activity.
Andrew: Activity in the industry.
Andrew: As of December 2024, we also have 27 net seller initiated programs up from the 19 at the beginning of the year and all of the <unk> seller initiated programs are and in human health.
Andrew: It is from this set of programs that we aim to advance on average two programs per year into Cta, enabling studies.
Andrew: Turning to revenue and expenses revenue for the year was almost $29 million, mostly driven by research fees relating to work on partnered programs.
Andrew: This compares to revenue of approximately $38 million in 2023.
Andrew: We expect research fee revenue to trend lower as we are increasingly focused on internal and co development programs.
Andrew: Our research and development expenses for the year were approximately $167 million $8 million less than the previous year.
Andrew: This expense is driven by ongoing program execution, continuing platform development and our increasing investment in our internal programs.
Andrew: The overall decrease from the prior year reflects a specific one time payment of approximately $32 million related to investment in our internal programs that we made in 2023.
Andrew: In sales and marketing our expenses for 2024 were approximately $13 million, a small reduction relative to the previous year.
Andrew: And in General and administration expenses were approximately $73 million compared to roughly $61 million in 2023 with the increase largely driven by expenses related to the defense of our intellectual property.
Andrew: Looking at earnings we are reporting a net loss of roughly $163 million for the year compared to a loss of about $146 million the previous year.
Andrew: This year's loss includes noncash impairment charges for in process R&D of approximately $47 million.
Andrew: Net of their deferred tax impact.
Andrew: In terms of earnings per share. This year's result works out to a loss of <unk> 55 per share on a basic and diluted basis.
Andrew: Turning to cash flows operating activities for 2024 used approximately $110 million of cash and equivalents excluding.
Andrew: Excluding investments in marketable securities investment activities amounted to net $51 million, including just over $78 million invested in property plant and equipment driven by our ongoing work to establish CMC and GMP GMP manufacturing capabilities.
Andrew: The investments in PP&E were partially offset by government contributions and the cash proceeds from the sale of our stake in <unk> during the year.
Andrew: We expect our <unk> investments to continue in the first half of 2025 and be substantially complete by mid year.
Andrew: As a part of our Treasury strategy, we have nearly $470 million invested in short term marketable securities our investment activities for the year included approximately $170 million net decrease in these holdings.
Andrew: Altogether, we finished the year with over $650 million of cash cash equivalents and marketable securities.
Andrew: And as a reminder, we have received commitments for funding for our GMP facility and for the advancement of our internal pipeline from the government of Canada's strategic innovation fund and the government of British Columbia.
Andrew: This available capital does not show up on our balance sheet and with over $650 million in cash and equivalents and the unused portion of our secured government funding, we have approximately $840 million in total available liquidity to execute on our strategy.
Andrew: For 2025, we expect cash usage for operating activities to be similar to 2024, and we would expect investments in PP&E to be approximately half of what we spent in 2024 and weighted towards the first half of the year as we complete our investments in CMC and GMP capabilities.
Andrew: The cash used in 2025, we will prioritize advancing our two lead programs to the clinic building the preclinical pipeline and completing our investments in an integrated CMC GMP capabilities as previously.
Andrew: We communicated the new manufacturing facility is scheduled to come online at the end of 2025.
Andrew: With respect to our overall operating expenditures our capital needs are very manageable and we continue to believe that we have sufficient liquidity to fund well beyond the next three years of increasing pipeline investments.
Andrew: And with that we will be happy to take any questions operator.
Andrew: Thank you we will now begin the Q&A session. If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question. Please press star followed by two.
Andrew: Again to ask a question please press star one.
Andrew: As a reminder, if you are using a speaker phone. Please remember to pick up your handset before asking your question. The first question comes from Stephen Willey with Stifel. You May proceed.
Stephen Willey: Yes. Good afternoon, thanks for taking the questions and I appreciate the additional clarity around some of the metrics on the slide deck today.
Speaker Change: Maybe just a question for Carl you talked about being indication agnostic and I guess I appreciate that.
Stephen Willey: Concept there but.
Stephen Willey: How do you think about the longer term competencies that youre going to need to bring into the organization to effectively design and execute clinical trials across multiple different disease areas.
Stephen Willey: Thanks, Steve Great question.
Stephen Willey: We are explicitly indication agnostic obviously the reason for that is that it is a non trivial thing to find an attractive opportunity for drug development and we want to keep our aperture broad and we have a platform.
Stephen Willey: That can respond quite broadly across antibodies both in terms of targets and modalities. So for that reason, we're looking for a winter and we're looking broadly defined programs that we have really high conviction.
Stephen Willey: At this point, we have our first two programs that are moving into clinical development.
Stephen Willey: Part of that over the past year, we have made significant investments in building up translational science and the clinical development teams that are now in place to support those and so we're building that in a.
Stephen Willey: In a manner that is on time for the programs and driven by the programs and I do expect that that's going to be the case as we move forward. So what you will see in terms of hiring and recruitment from accelerator will be.
Stephen Willey: Heavy on the back end of the company looking at development in clinical development and the areas in which we need to build are going to be motivated by.
Stephen Willey: Where we see the best opportunities as our programs progress.
Stephen Willey: And so it's clear you need the expertise.
Stephen Willey: And we're confident we'll be able to bring it on time, but there is work to be done there. Both in terms of figuring out which are the best programs and then getting those teams in place.
Stephen Willey: Understood.
Speaker Change: And then congrats on getting the Abbvie collaboration done on the TCE side.
Speaker Change: Is there a finite number of candidates.
Speaker Change: Right.
Speaker Change: Thats contemplated under that collaboration.
Speaker Change: Maybe second to that I think you've talked about seeking new partnerships on the TCE side I know theres been a lot of chatter about.
Speaker Change:
Speaker Change: This is development that's happening in China, right now and the headwinds.
Speaker Change: Be posing to the sector itself are you seeing any kind of those headwinds as you're engaging with partners in discussions.
Speaker Change: Okay.
Speaker Change: Those are great questions first at the at the highest level.
Speaker Change: We are.
Speaker Change: Confident in the capabilities of the <unk> platform, that's been maturing. So we feel we're very well positioned and we are increasingly enthusiastic based not just on internal results, but also on what's happening in the market broadly and space of Tce's. So I think I've said it before but the.
Speaker Change: The activity is clearly heating up and thats being driven by some pretty impressive clinical results.
Speaker Change: That show that you can translate some of the success from blood cancers into solid tumors. So we feel we're well positioned for that and the collaboration with Abbvie for US is a terrific first collaboration where we've got a meaningful TCE deal and we're working together on multiple but a small number of targets.
Speaker Change: And with them. We are excited to explore what we think is some very promising scientific directions for Dcs that we think are going to be important.
Speaker Change: So the second part of your question about the increasing competitive dynamic coming from China. So we're certainly seeing that obviously that's been a big deal in the CD 19, CD three space that there's been several transactions there.
Speaker Change: For the most part of our for the most part our portfolio.
Speaker Change: Speaking broadly not just restricted to TCE is emphasizing highly differentiated first in class assets and so compared to some other peers I believe that our portfolio is likely quite robust to that dynamic you don't know what you don't know, but I'd be surprised if for many of these programs we saw.
Speaker Change: A lot of competition, there is always going to be some but a lot of competition coming.
Speaker Change: From China or elsewhere, so we're watching that carefully.
Speaker Change: But in the end the best you can do is find the good science and make sure you've got molecules that toe to toe stand up against whatever shows up from other other players.
Speaker Change: Alright, thanks for taking the questions.
Speaker Change: Thank you.
Speaker Change: Next question comes from Andrea <unk> with Goldman Sachs. You May proceed.
Speaker Change: Hi, all this is Tony on for Andrea Thanks for taking my questions.
Speaker Change: Two from US. Please first could you share any more color on the attrition rate for the partner initiated program and how should we expect that to trend on the forward and then similarly, what drove the decision to reduce the number of partnerships you're pursuing and how should we think about the longer term impact on new program starts.
Speaker Change: Hey, there its Andrew here I'll answer your first question on the attrition rate for the partnered programs.
Speaker Change: Those are so as I explained in my prepared remarks there.
Speaker Change: Those are what we have seen once we've handed back.
Speaker Change: The scope of work to our partners and there is going to be more details in the 10-K very similar to the same disclosure that we had at this time last year of the partner of those programs that we know are still being actively worked on by our by our partners, we don't disclose which are the ones.
Speaker Change: The identity of the partner or the identity with a target until they would hit the clinic and then you would expect to see more details on any one of those partnerships once they arrive at the clinic.
Speaker Change: And Carl here I'll take the second part of the question. So in September of 2023, we made a clear decision to transition from a partnership and platform model to being a clinical stage biotech.
Speaker Change: That is something that we have done successfully and that we will see come to fruition in Q2 and Q3 of this year as we get our first two Cta submitted and ultimately get into clinical development.
Speaker Change: The rationale for simultaneously ramping down.
Speaker Change: A large majority of the partnership business defined as we were running at let's say back in 2020 is that you need to make decisions in priority as to where you put your time and attention and your money.
Speaker Change: And we don't believe that you can work both those road simultaneously so.
Speaker Change: Making the decision to be a clinical stage biotech means putting your focus on that objective now the one area, where we still remain active in partnering and where I think there's some real potential to push forward the science to get interesting programs.
Speaker Change: And possibly to generate.
Speaker Change: Significant cash that would help the business is on the TCE front the deal with Abbvie is in line with that and we will continue to look for such opportunities going forward.
Speaker Change: I'll also just add that.
Speaker Change: While we are backing away from discovery style partnership businesses, we do remain active in partnering or collaborating with companies, where we see an opportunity to bring technologies together and we think that that can help put some interesting assets into our pipeline.
Speaker Change: So our recent.
Speaker Change: Collaboration would be the one we did with prelude where were working with them to bring forward a new modality that combines their small molecule chemistry with our antibody expertise.
Speaker Change: In those cases, we will evaluate those based on the criteria that I laid out do we like the science do we think there is an unmet need and market opportunity.
Speaker Change: Can we be differentiated and do we like the development path and if that looks good and we find good synergy with our partner then youll see us doing those but that'll be on an opportunistic basis.
Speaker Change: Okay. That's helpful. Thank you.
Speaker Change: Thank you. Our next question comes from Steve <unk>.
Kurt: Hey, Kurt with Macquarie. Please proceed.
Kurt: Hey, guys. Thanks for taking our questions I was hoping to get some more background on how the partnership with Abbvie came together.
Speaker Change: And then you guys were prudently selecting who you want to partner with.
Kurt: On your T cell engaging platform. Thank you.
I can take that one.
Speaker Change: So the backdrop of this is that now for two or three years, we have been investing significantly to build.
Speaker Change: Our TCE platform, which is comprised of a large and diverse and well optimized set of CD three molecules are bi specific platform.
Speaker Change: A set of high throughput assays for evaluating those and increasingly an understanding of.
Speaker Change: The biology that helps direct where you want to bring those molecules going forward. So we feel we're in a terrific spot.
Speaker Change: And in my view, we have certainly one of the best if not the best toolkit for designing Tce's.
Speaker Change: Provided that <unk> got a good thesis for where youre going to go in terms of indication and what you want that profile to look like so.
Speaker Change: So the partner partnering objective was to make a significant transaction with a large and enabled partner that has a commitment to really put some.
Speaker Change: And money into that space, we have previous collaboration with Abbvie. So we've got an excellent working relationship and have been productively working on the initial programs that of course was the basis to initiate a collaboration around TCE and with that we've come to a deal that we're very happy with.
Speaker Change: One that Sn.
Speaker Change: Essentially meets the objectives that we set some time ago to have our first transaction in TCE and sets the stage for what we think could be a much bigger and deeper collaboration with abbvie or with other partners.
Speaker Change: Great. Thank you.
Speaker Change: Thank you.
Speaker Change: Following comes from Jacqueline Chiesa with TD Securities You May proceed.
Jackie Chiesa: Hi, This is Jackie thanks for taking the question.
Speaker Change: Maybe shifting back towards the geopolitical side are you seeing any exposure to tariffs on the Canadian side and how much if any impact.
Speaker Change: Expect this could have on customer conversations.
Speaker Change: <unk> continued to be a play from this administration.
Speaker Change: Okay.
Speaker Change: This is Andrew I'm happy to take that.
Speaker Change: In terms of the retaliatory tariffs I think the contemplated retaliatory tariffs of products coming from the United States back into Canada actually in the guidance that set out by the Canadian government for those retaliatory tariffs there are a number of exemptions and actually products for bio manufacturing are included in those exemptions. So we wouldn.
Speaker Change: Expect any sort of material impact in our financials are in the operations from any of the products that we buy that are originating in the United States. So it looks as though that won't be have an impact in our operations at this point in time.
Speaker Change: And so I do believe that will.
Speaker Change: Even if the if those tariffs are to come in place it won't impact the way we are operating our business.
Speaker Change: Great and maybe just one more on pivoting to your internal pipeline.
Speaker Change: Are your plans with regards to carrying your assets towards commercialization.
Speaker Change: And looking for opportunities to partner or sell off the assets and if so kind of at what stage do you think you'd carry the asset too.
Jackie Chiesa: Sure Karl here happy to take that Jackie So the answer the answer really is that.
Speaker Change: We are constantly evaluating each program.
Speaker Change: And looking to.
Speaker Change: To optimize return on investment and the success of that program ultimately getting to the clinic into patients. So in some cases.
Speaker Change: We certainly would be onboard with taking a program into late stage clinical development and down the road, perhaps even to commercial although of course, that's quite a few years away from where we are today.
Speaker Change: In other programs there may be.
Speaker Change: A good case for getting it into the hands of another partner.
Speaker Change: As a case in point for <unk> 575.
Speaker Change: Our enthusiasm and excitement for that program is about what we perceive to be an immense potential for the ox 40 ligand class.
Speaker Change: One scenario is that that program ends up being transferred to a large committed partner that can simultaneously develop that program across multiple indications and maximize value.
Speaker Change: And probably that's the most likely scenario from where we sit today, but another scenario could be that we identify one or more indications, where we could develop it ourselves and create more value at least into phase II, perhaps even phase III.
Speaker Change: We don't know what the answer to that is it's going to depend on what happens with the program and what happens on competitive programs and we're going to make the best decision, but the short answer is that.
Speaker Change: For some programs, we would decide to partner very early if thats what made sense for others were prepared to take it all the way recognizing that since were just about to start clinical development.
Speaker Change: It's way off on the horizon and not taken.
Speaker Change: <unk> taken a lot of our attention in time right now.
Speaker Change: Great. That's super helpful. Thank you so much.
Speaker Change: Thank you.
Speaker Change: As a quick reminder, if you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: The next question comes from Michael Hoffman with BMO you May proceed.
Marc Maun: Hi, guys Marc Maun, Thank you for taking our question.
Marc Maun: 575, and 635 coming up on the Cta filing next quarter.
Speaker Change: Just wanted to ask what if any initial preparations are you making to these programs to enter the clinic and are there any nuances that you think are worth noting that that may change how you filed the Cta in the U S.
Alright, Thanks, Brian commentary there I appreciate it.
Speaker Change: Sure. So obviously.
Speaker Change: We began IND, enabling studies for <unk> six pardon me for 65% and 575.
Speaker Change: More than 18 months ago, and so there's been an immense amount of work getting prepared to bring them through.
Speaker Change: Ta, enabling studies and prepare the clinical teams and the clinical plan to execute on that all that is in place.
Speaker Change: Both programs have had proceeded very smoothly and so there is.
Speaker Change: At this point nothing, particularly noteworthy in terms of special considerations, we're confident with the plan and we're confident we have the team in place to execute on those.
Speaker Change: I appreciate it thanks guys.
Speaker Change: Thank you. The next question comes from Puneet <unk> with Leerink partners you May proceed.
Speaker Change: Yes, Michael on for <unk>. My question has to do with share and currently initiated program just looking relative to last year. It seems like most of the new program just started work.
Speaker Change: The ion channel <unk> I'm, just curious what is driving your decisions on initiating new program and if you think that the activity in 2024 is going to be similar to what you're expecting for 2025 in terms of program initiation.
Carl: Sure Carl here so.
Carl: I think the question was what are the considerations for initiating new programs. So the first thing I'll say is that in addition to 605 and 575, we have a preclinical pipeline at various stages of discovery.
Carl: That represents roughly 20 programs or so.
Carl: When we go to elective program, we are thinking about the framework that I mentioned in my prepared remarks. So we are looking for opportunities, where we have high conviction in our science, where we see a large unmet need where there is.
Carl: A clear path to differentiation and where we believe that the development and the clinical development would allow us to get an answer and build conviction either in the positive or the negative for the program for a relatively small amount of money and a relatively small amount of time.
Carl: In terms of the distribution of.
Carl: Target class in that portfolio. There is a large representation of multi passed transmembrane proteins iron channels and GPC ours and the reason for that is that first those are classes, where there are a lot of well known targets, where many of those targets have been validated by small molecules and there is a strong case for why <unk> antibody would be differentiated either in <unk>.
Carl: Safety or convenience or perhaps even efficacy.
Carl: It's also a place where we believe we can have.
Carl: Strong differentiation, because we have built our competitive advantage in the antibody discovery side.
Carl: It's our view that we are second to none in being able to prosecute what have been traditionally very difficult targets and we're certainly looking in that space for good opportunities to move forward.
Carl: So that that I think today, maybe 50, 50% or so of programs sit in the ion channel and GPC our class.
Carl: And moving forward.
Carl: First order approximation would be that that would remain roughly constant for the next few years, but by no means are we only looking at that target class in the pipeline.
Carl: Great. Thank you very much.
Carl: Thank you.
Carl: No other questions queuing, so a quick reminder.
Carl: Telephone keypad, if you'd like to ask a question.
Carl: Yeah.
Speaker Change: No more questions in queue I'll turn it back over to the team for closing remarks.
Speaker Change: Thank you everyone for joining us today. It is an exciting time for the company as we.
Speaker Change: Finish our transition from a platform and partnership business into a clinical stage biotech. We thank you all for joining and look forward to speaking to you on the next call.
Speaker Change: Yeah.
Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect your line.