Q2 2025 AbCellera Biologics Inc Earnings Call
Speaker #1: Good afternoon and welcome to Abcellera . S Second Quarter 2025 Business Update conference call . My name is Jason , and I'll facilitate the audio portion of today's interactive broadcast .
Speaker #1: At this time , I would like to turn the call over to Tryn Stimart Abcellera Chief Legal and Compliance Officer . You may begin .
Speaker #2: Thank you . Hello , everyone . Thank you for joining us for Abcellera 2025 second quarter earnings call . I'm Tryn Stimart Abella as chief legal and compliance officer .
Speaker #2: Doctor Carl Hansen Abseiler as president and CEO and Andrew Booth as chief financial officer are also on the call . During today's call , we anticipate making projections and forward looking statements based on our current expectations and following the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 .
Speaker #2: Our actual results may differ materially due to several factors outlined in our latest form 10-K and subsequent forms 10-q and 8-K filed with the Securities Exchange Commission .
Speaker #2: Abcellera is not obligated to update any forward looking statements , whether due to new whether due to new information , future events or otherwise .
Speaker #2: Our presentation today , including our earnings press release and SEC filings issued earlier today , are available on our Investor Relations website . The information we provide about our antibody therapy pipeline is for the benefit of the investment community is not intended to be promotional as we transition to our prepared remarks .
Speaker #2: Please note that all dollars referenced are US dollars . After our prepared remarks , we will open the lines for questions and answers .
Speaker #2: Now I'll turn the call over to Karl .
Speaker #3: Thank you , Erin , and thank you , everyone for joining us today . This quarter , we achieved a major company milestone , receiving Health Canada authorization to initiate Astellas first two clinical trials for Abcl 635 and Abcl 575 .
Speaker #3: Today , I'm pleased to announce that dosing has begun in our phase one clinical trial evaluating Abcl 635 for moderate to severe vasomotor symptoms .
Speaker #3: This marks completion of the transition from a platform company to a clinical stage biotech that we committed to back in 2023 . After the end of the quarter , we also opened our phase one clinical trial for Abcl 575 , and we anticipate dosing will begin shortly .
Speaker #3: I'm also pleased to announce that we have added a third program to our pipeline by advancing Abcl 688 into IND enabling studies . We ended the quarter with approximately $750 million in available liquidity , and we are well positioned to continue to execute on our strategy and are on track to complete our remaining goals for 2025 .
Speaker #3: These include continuing to build our pipeline by advancing at least one more development candidate into IND , enabling studies , completing platform and infrastructure investments , and starting to use these capabilities in clinical manufacturing .
Speaker #3: Abcl 635 is a potential first in class therapeutic antibody being developed for the nonhormonal treatment of moderate to severe vasomotor symptoms , more commonly known as hot flashes that are associated with menopause .
Speaker #3: Abcl 635 is a potential next generation Nk3 antagonist , designed to have both an improved safety profile and a more convenient dosing if ultimately successful .
Speaker #3: We believe it can be a highly differentiated product that would launch into a large and established market . We successfully completed the CTA process for Abcl 635 in Q2 of 2025 , and today , we are pleased to announce that we have begun dosing participants .
Speaker #3: The Abcl 635 phase one clinical trial is a randomized , placebo controlled , double blind study in men and postmenopausal women with or without BMS .
Speaker #3: Its purpose is to evaluate safety , pharmacokinetics , pharmacodynamics , and the frequency and severity of VMs with subcutaneous doses of abcl 635 .
Speaker #3: The primary endpoint of the study is safety , and a key secondary endpoint is pharmacokinetics . As I mentioned on the last earnings call , we believe the main scientific risk for BCL 635 is whether or not we can achieve sufficient target engagement .
Speaker #3: We expect this will be addressed through biomarker and proof of concept studies that are part of our phase one design . As previously stated , we expect initial safety and efficacy data from this trial in mid 2026 .
Speaker #3: Turning to our second program Abcl 575 , we received authorization from Health Canada in May to initiate a phase one clinical trial . The trial was opened in July , and we anticipate dosing our first participants this quarter .
Speaker #3: This is a double blind , placebo controlled study designed to assess safety and tolerability in healthy participants following subcutaneous doses of abcl 575 .
Speaker #3: Abcl 575 is an investigational antibody therapy targeting ox40 ligand that is being developed for the treatment of moderate to severe atopic dermatitis , and which also has broad potential in several other indications .
Speaker #3: We recently presented pre-clinical data which demonstrates it has potent functional activity in vitro that is in line with Mab , as measured by cytokine responses across a variety of cytokines , including IL 13 , IL five and IL nine .
Speaker #3: As a reminder , Abcl 575 is engineered with half life extension to support less frequent dosing . Based on PK data we've obtained from studies in fcrn humanized mice .
Speaker #3: We predict a human half life of approximately 67 days using this half life . Our modeling predicts that a 300 milligram dosing of Abcl 575 every six months should achieve circulating concentrations that remain above the efficacy threshold that was observed for Mab .
This expense reflects ongoing investment in our internal and Co development programs. Despite decrease is related to the timing of larger programs specific related expenses, which were larger in the second quarter of last year.
Million dollars, a small reduction relative to the same quarter last year. And in general, in administration expenses were approximately 19 million compared to roughly 20 million in Q2 of 2024.
Included in these expenses are the ongoing expenses related to the defense of our intellectual property.
Looking at earnings, we are reporting a net loss of roughly 35 million for the quarter, compared to a loss of 37 million in the same quarter of last year.
In terms of earnings per share, this result works out to a loss of 12 cents per share on a basic and diluted basis.
Looking at cash flows.
Operating activities for the first half of 2025 used approximately 44 million in cash and equivalents excluding investments in marketable Securities investment, activities amounted to a net 36 million mostly in property plant and Equipment driven by the ongoing work to establish CMC and GMP manufacturing capabilities.
The investments in pp&e were partially offset by government contributions.
As a part of our treasury strategy, we have about 460 million dollars invested in short-term marketable. Securities our investment activities for the quarter included an approximately 12 million net increase in these whole
Altogether. We finished the quarter with 580 million of cash, cash, equivalents and marketable securities.
This available Capital does not show up on our balance sheet.
With over 580 million in cash and equivalents and the unused portion of our secured Government funding, we have around 750 million dollars in total available liquidity to execute on our strategy.
The cash cash usage for the remainder of 2025 will continue to prioritize advancing our 2 lead programs through their Phase. 1 clinical studies building the preclinical pipeline and completing our investment in the integrated clinical manufacturing capabilities.
Our new manufacturing facility is on track to come online at the end of 2025, as we had indicated in previous calls.
With respect to our overall operating expenditures. Our Capital needs continue to be very manageable. We continue to believe that we have sufficient liquidity to fund. Well beyond the next 3 years of increasing pipeline Investments.
And with that, we'll be happy to take your questions.
if you'd like to ask a question please press star, followed by 1 or your telephone keypad,
If for any reason you'd like to remove that question, please press star. Followed by 2 again. To ask a question. It is star 1 on your telephone keeps
Our first question is from Andrea Newkirk, with Goldman Sachs, your line is now open.
21. This is Tani on for Andrea, thanks for taking our questions, and congrats on the progress, this quarter. Um, 1 quick 1 from us, uh, just give me the weeks to news of the delay to do for Alan xanath. Do you guys anticipate any risks to the development path for 635 to a regular for a perspective? And what do you expect? Regulators will be most focused on in evaluating the drug profile as it advances. The development. Thank you.
You're breaking up a little bit, at the end of the question, I did get the first part of it, so, uh, yes, there was a delay with Ellen xanthan, um, our understanding is that, uh, the FDA requested additional information from bear and that information is forthcoming. I think the comment suggested that there was no concern raised about the approval and our expectation is that, uh, that would move forward to approval later this year. So, uh, beyond that, I don't think we have anything, uh, any special insight into that. Um, I I didn't get the last, the last part of the question. Could you, please repeat?
Sure. Sorry about that. Um, yeah I was just wondering, what do you think the FDA and other Regulators we focused on in an evaluating uh 635 profile as it moves forward in clinical development.
I'm sure. So uh, you know, there's there's now I think a well trod path. Uh, for the nkr class. Both with Fez latent and Ellen Zenit tant. Um, obviously, you know, we need to demonstrate advocacy. As I mentioned, in my prepared remarks, uh we're excited about the upcoming data and the readout midpoint next year. Uh that should give us a lot of information about um the efficacy and targeting engagement, which we do see as the primary scientific risk.
Which are antibody does not do so. We expected that would not be a concern and similarly um, because we are the first in class antibody for this indication and antibodies are not metabolized in the liver as our small molecules. Uh, and because uh, there is little evidence of uh, expression of MK3 are in the liver. We don't expect that there will be liver tox associated with our drug. Uh, but of course you know, we need to demonstrate that in the trial and I'm sure the Regulators as as the investment Community will be looking at the 2, main things, which we always look at which is efficacy and safety.
I have a couple. Thank you.
Our next question is from Greek here. Uh, Dev with ruis your line is now open.
Hey guys, thank you so much for taking
Congratulations on the progress of quarter. Um, so for the abcl 635, Phase 1 trial, you know, congrats, first of all, I'm getting the child initiated efficiently. Um, but now that you've initiated the trial, can you talk a little bit more about the specifics? Um, you know, is there a certain what the the total number of patients? And if there is a certain ratio of, you know, healthy men to postmenopausal women, you expect to enroll. Um and at a maybe a bit more broader question. Um, you know you'd previously uh said that 50% of menopausal
Women are hesitant to take HRT because of the concerns around the consequences with Dr. McCary being, uh, he seems to be a very strong proponent of HRT. Do you think this might change the way the the market overall, or do you think it's you? You still have a substantial Market
Uh, sure. So first, I'll, I'll maybe provide a little bit more information on the clinical trial. Um, so as you might expect, uh, you know, the first parts of the trial are, basically, a single ascending dose in multiple ascending dose, uh, in the single ascending dose, uh, will include both, uh, menopausal men, a sure. Pardon me, pardon me. Uh, that'd be that'd be difficult to recruit. Um, we will include both, uh, menopausal women and healthy healthy men, our health healthy male volunteers, um, uh, and in that part of the trial, we will be able to assess some biomarkers, uh, in the mad. We will be recruiting only post-menopausal, uh, women and the combination of the SAT and the Mad, uh, you know, could be roughly, you know, 56 60 patients or so.
Uh, once we progress on to the proof of concept, uh, we expect to enroll up to 80 patients and in that uh in that case, in that phase of the study, uh, we will, of course be recruiting, uh, post-menopausal women with moderate to severe BMS.
Um, you know, uh, so to the second part of your question, you know, there has been, uh, you know, some discussion lately about, uh, the use of menopausal hormone therapy and some revisiting of the women's health study, uh, that was, you know, a study that I think cast a bit of a, a shade on the benefits of menopausal, hormonal therapy for the treatment of VMS and other other symptoms related to menopause.
Um, you know, our our view has always been that the nkr class is not in competition with hormone therapies. Uh so it turns out that, you know, there are roughly 20% of the eligible population that either have contraindications. Uh, so have risk factors that mean they're not eligible for hormone therapy or that. Try hormone therapy and are unable to continue. So, 20% of the population for which hormone therapy is not, um, meeting their needs. And then, of course, there's some other portion of the 80% that are going to have, uh, a preference not to use hormone therapy. So, uh, if you look at the number of eligible patients, in the us alone, uh, that's a very large patient population and we would, we would need to only, you know, capture a relatively small portion of that market uh to have this drug be a terrific success. And so we're we're still very confident about the market opportunity and we expect the conversation about mhd will continue. Uh,
As it should. Uh, and that, um, you know, that, uh, doesn't change our view of the market or, uh, since we sort of had that in mind from the very beginning,
The color really helpful.
Our next question is from fisel. CID with Lee rank Partners. Fine is now.
Sequencing of those funds coming in. Thank you.
Yeah, good question. This is uh, uh, this is Andrew here speaking. Fuzzel the, um, the, uh, no, you should not. Uh, this was definitely a 1-off payment, really related to, uh,
Activities post the acquisition of triani, uh, that were that were completed, uh, really, as an earnout to the former shareholders of tranny. So you'll see, in addition to the 10 million licensing Revenue, a change in the contingent consideration on our balance sheet, which is really the the balancing entry related to that transaction. So it's not something that we would expect to have happen in the future.
Got it. Thank you.
Our next question is from Malcolm, Hoffman with BMO, the Line is now open.
For the amount. Uh, can you remind us? What key efficacy data we should be looking at for in the 6355? Phase 1 Study. I understand we're largely looking for safety in a phase 1, but what biomarker efficacy measures will start to give us kind of confidence and the for the development here from a competitive perspective,
Thanks.
Uh sure. So Carl here. So um early in the study we will be assessing some biomarkers. Uh so LH and FSH in men and women uh in the sad where there will be um only healthy, volunteers participating, men and women obviously in the in the men, uh, we'll be able to assess testosterone in the women estradiol. So all of those I think are a really positive indication and we expect to see those biomarkers modulated by treatment at the higher doses. Uh, so that's the first check. But that is not um equal to efficacy. So the real measure of efficacy needs to wait until the POC study. And as I mentioned, we will be enrolling up to 80 uh post-menopausal women with moderate to severe BMS. And their we're going to be assessing uh, the frequency and severity of VMS, which is self-reported. Um, and so we won't have that data until sometime in mid 2026, uh, but we think that that study is sufficiently powered to give us, um, you know, coming out of that. Uh, if if it lines up the way that we, we hope, and expect
A lot of confidence that we've got something that looks like a drug and that we intend to move forward.
Appreciate it. Thanks guys.
Our next question is from Jacqueline kiso with TD security, your line is now open.
Hey guys, I think I think it's supposed to be Brendan. I think Brendan from TD. Security is on. Um sorry about the confusion there. Um thanks for taking all the questions guys and all the good caller. Expect to see the VMS have been moving along. Um, I actually just wanted to maybe ask another follow-up on that actually just related to um
Uh, Target dosing in any respect, I fully appreciate, it's still early days, a lot to kind of understand with um, some of the biomarker data and what that really realistically means for kind of uptake down the road. But, um, are there any special considerations when you're thinking about, you know, formulation or or frequency of dose and that could kind of help? Um, as you're thinking about, uh, clinical plan down the road and then, um, just any ability to kind of Target these kinds of patients from a commercial standpoint.
I'm, I'm happy to give a little bit of color on that. So, um, you know, a lot of this, uh, rests on our pre-clinical work, uh, from which we believe that we've got an antibody, um, that has a half-life and a potency, uh, that would support once monthly dosing on a single subcutaneous dose, uh, and that's subcutaneous, dose, would be a high concentration formulation at 150 makes per mil, uh, at 2 mils. So, um,
Remains to be seen. But based on what, what we've seen so far, we've got a molecule. We believe it's that TPP. And of course, that's 1 of the things. We're going to be testing both in the efficacy and in the bioavailability, and PK data that will come out of the phase 1 study.
Okay, got it. Great makes sense. Thanks guys.
Our next question is from Stefan. Wy with you, it's not
Hey, thanks for taking the question. This is Josh on for Steve and congrats on the progress. Um, so I noticed the healthy volunteer trial for 575 is now posted to clinical trials.gov. Um, I noticed there was 1 Canadian site listed and I guess just looking forward as like a longer term strategy. Do you plan on activating in the US sights Beyond Phase 1? Is this kind of related to like a capital commitment contingency with the
Um British Columbia to run, all your trials, in Phase 1 in Canada first um and then I just have follow-up.
Yeah, so we we have activated a site uh in Canada that's an expert in dermatology. Um we are you know very pleased with that site and we think they have full capabilities to execute uh The Phase 1 Study. Uh right now our focus is on that um, you know, from our perspective
Uh, the big thesis around 575 is our belief that the ox 40 Lagan class is going to be an immense class, not just any topic dermatitis, but in other, um, autoimmune and inflammatory conditions.
Uh we we think that the key readout we're going to get in the near term is going to be uh bioavailability and PK uh confirming some of the pre-clinical work. We've done and the modeling that I showed during my prepared remarks and that the other big uh catalysts are going to come from outside of the company, uh in particular, some of the clinical development with amab and other molecules in the class that are moving forward. Um, so we are, we are currently focused on that. Uh, we are also, you know, beginning to engage, uh, with the FDA and lay the, the foundation for the phase 2. Phase 2 studies, which, uh, you you would likely expect to include us sites, uh, but we haven't figured that yet and we have some time before we need to
Great, thanks. And then, um, just follow up. Uh, I know it's early. You said you won't really disclose any details around 688 for now, but could you maybe speak to some of the autoimmune indications of interest? You might be considering for this asset.
Yeah, I'm I'm afraid we're going to hold this 1 close to our chest, uh, for strategic reasons. Um, what what I will say is that, uh, you know, this is a program that that we're very bullish on. I'd put it in a similar category uh, to abcl 635. It's 1 where we have a high conviction in the biology and where we think we can get some meaningful data early on.
Um, it's got a bit of a different competitive Dynamic, uh, but it's also a program that, uh, that we intend to move very quickly. And so, our Focus right now is getting that to the clinic as quickly as possible and when we do, uh, we'll be able to share more details with you. Um, so sorry for being, you know, a little bit, uh, reticent on details, but I think it's probably in the best interest of the program.
No worries. Thanks guys.
It looks like there are no more questions. So I'll pass the call back over to the management team for closing remarks.
Just to say thank you everyone for the support and for joining us today. And we look forward to updating you uh as we uh progress from where we are today into the clinic. Thanks very much.
That concludes the conference call. Thank you for your participation. Enjoy the rest of your day.