Q4 2025 AbCellera Biologics Inc Earnings Call

February 24, 2026

Operator: 25 Business Update Conference Call. My name is Chelsea. I will facilitate the audio portion of today's interactive broadcast. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. At this time, I would like to turn the call over to Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. You may proceed.

Speaker #1: 25 business update conference call. My name is Chelsea, and I will facilitate the audio portion of today's interactive broadcast. After today's prepared remarks, we will host a question-and-answer session.

Speaker #1: If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. At this time, I would like to turn the call over to Tryn Stimart, AbCellera's Chief Legal and Compliance Officer.

Speaker #1: You may proceed.

Speaker #2: Thank you. Hello, everyone, and thank you for joining us today for AbCellera's full year 2025 earnings call. I'm Tryn Stimart, AbCellera's Chief Legal and Compliance Officer.

Trin Stimert: Thank you. Hello, everyone, and thank you for joining us today for AbCellera's full year 2025 earnings call. I'm Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. Dr. Carl Hansen, AbCellera's President and CEO, and Andrew Booth, AbCellera's Chief Financial Officer, will be speaking on today's call. Also, Sarah Noonberg, our Chief Medical Officer, is on the call with us. During this call, we may make projections and forward-looking statements based on our current expectations and in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results could differ materially due to factors as outlined in our latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities and Exchange Commission. AbCellera is not obligated to update any forward-looking statements, whether due to new information, future events, or otherwise.

Tryn Stimart: Thank you. Hello, everyone, and thank you for joining us today for AbCellera's full year 2025 earnings call. I'm Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. Dr. Carl Hansen, AbCellera's President and CEO, and Andrew Booth, AbCellera's Chief Financial Officer, will be speaking on today's call. Also, Sarah Noonberg, our Chief Medical Officer, is on the call with us. During this call, we may make projections and forward-looking statements based on our current expectations and in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results could differ materially due to factors as outlined in our latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities and Exchange Commission. AbCellera is not obligated to update any forward-looking statements, whether due to new information, future events, or otherwise.

Speaker #2: Dr. Carl Hansen, AbCellera's President and CEO, and Andrew Booth, AbCellera's Chief Financial Officer, will be speaking on today's call. Also, Sarah Nunberg, our Chief Medical Officer, is on the call with us.

Speaker #2: During this call, we may make projections and forward-looking statements based on our current expectations and in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker #2: Our actual results could differ materially due to factors as outlined in our latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities and Exchange Commission.

Speaker #2: AbCellera is not obligated to update any forward-looking statements, whether due to new information, future events, or otherwise. Our presentation today, our earnings press release, and our SEC filings are available on our investor relations website.

Trin Stimert: Our presentation today, our earnings press release, and our SEC filings are available on our investor relations website. The information we provide about our pipeline is intended for the investment community and is not promotional. As we transition to our prepared remarks, please note that all dollars mentioned during the call are US dollars. After our prepared remarks, we will open the lines for questions and answers. Now, I turn the call over to Carl.

Tryn Stimart: Our presentation today, our earnings press release, and our SEC filings are available on our investor relations website. The information we provide about our pipeline is intended for the investment community and is not promotional. As we transition to our prepared remarks, please note that all dollars mentioned during the call are US dollars. After our prepared remarks, we will open the lines for questions and answers. Now, I turn the call over to Carl.

Speaker #2: The information we provide about our pipeline is intended for the investment community and is not promotional. As we transition to our prepared remarks, please note that all dollars mentioned during the call are US dollars.

Speaker #2: After our prepared remarks, we will open the lines for questions and answers. Now, I turn the call over to Carl.

Speaker #3: Thanks, Tryn. And thank you, everyone, for joining us today. Today, I'll review the progress AbCellera made in 2025 and share my perspective on the state of our business and the unique setup for strong value creation in 2026 and 2027.

Carl Hansen: Thanks, Tryn, and thank you everyone for joining us today. Today, I'll review the progress AbCellera made in 2025 and share my perspective on the state of our business and the unique setup for strong value creation in 2026 and 2027. A year ago, as we started 2025, I emphasized AbCellera's overarching goal of becoming a vertically integrated clinical-stage biotech, and that to successfully make this transition, we would need to deliver on four priorities. First, initiation of Phase One trials for our first two programs. Second, nomination of at least one new development candidate. Third, completion of our platform investments, and fourth, initiation of activities at our new clinical manufacturing facility. We successfully delivered on all these objectives and exceeded one priority by nominating not one, but two development candidates, and we finished the year with around $700 million in available liquidity.

Speaker #3: A year ago, as we started 2025, I emphasized AbCellera's overarching goal of becoming a vertically integrated clinical-stage biotech and that to successfully make this transition, we would need to deliver on four priorities.

Speaker #3: First, initiation of phase one trials for our first two programs. Second, nomination of at least one new development candidate. Third, completion of our platform investments.

Speaker #3: And fourth, initiation of activities at our new clinical manufacturing facility. We successfully delivered on all these objectives and exceeded one priority by nominating not one, but two development candidates.

Speaker #3: And we finished the year with around 700 million in available liquidity. Now, as we start 2026, we have in place an integrated platform that a competitive advantage in antibody discovery and development, a growing pipeline with multiple first-in-class programs and important near-term clinical readouts, and the capital that is needed to continue executing on our strategy.

Carl Hansen: Now, as we start 2026, we have in place an integrated platform that... a competitive advantage in antibody discovery and development, a growing pipeline with multiple first-in-class programs and important near-term clinical readouts, and the capital that is needed to continue executing on our strategy. Our transition to a clinical-stage biotech is complete, and our focus has fully shifted from building our platform to building our pipeline. We achieved a great deal in 2025. At the beginning of the year, our pipeline consisted of 2 preclinical programs, ABCL635 and ABCL575. Today, both programs are in clinical testing, and in January, we announced that our lead program, ABCL635, had advanced into a randomized, double-blind, placebo-controlled phase two study. In 2025, we also added 2 new programs to our pipeline. ABCL688 is an antibody drug candidate for an undisclosed indication in autoimmunity.

Speaker #3: Our transition to a clinical-stage biotech is complete, and our focus has fully shifted from building our platform to building our pipeline. We achieved a great deal in 2025.

Speaker #3: At the beginning of the year, our pipeline consisted of two preclinical programs, ABCL 635 and ABCL 575. Today, both programs are in clinical testing, and in January, we announced that our lead program, ABCL 635, had advanced into a randomized double-blind placebo-controlled phase two study.

Speaker #3: In 2025, we also added two new programs to our pipeline. ABCL 688 is an antibody-drug candidate for an undisclosed indication in autoimmunity. Announced at our Q2 earnings, this is the third program added to our pipeline and the second program that's derived from our GPCR and ion channel platform.

Carl Hansen: Announced at our Q2 earnings, this is the third program added to our pipeline and the second program that's derived from our GPCR and ion channel platform. A fourth program, ABCL386, was nominated as a development candidate in Q4 and is a potential first-in-class antibody drug candidate in oncology. ABCL688 and ABCL386 are both in IND-enabling activities. We expect to submit INDs or CTAs for both programs and to initiate phase 1/2 studies in patients in 2027. Behind these first four programs, we have more than 20 programs in discovery. We anticipate advancing a fifth program into IND-enabling activities in the first half of 2026. The most important data disclosure in 2026 will be the phase 2 readout of ABCL635, which is anticipated for Q3.

Speaker #3: A fourth program, ABCL 386, was nominated as a development candidate in Q4 and is a potential first-in-class antibody-drug candidate in oncology. ABCL 688 and ABCL 386 are both in I&D enabling activities, and we expect to submit I&Ds or CTAs for both programs and to initiate phase one two studies in patients in 2027.

Speaker #3: Behind these first four programs, we have more than 20 programs in discovery, and we anticipate advancing a fifth program into I&D enabling activities in the first half of 2026.

Speaker #3: The most important data disclosure in 2026 will be the phase two readout of ABCL 635, which is anticipated for Q3. This readout has potential to be highly de-risking and to tell us whether or not we are likely to have our first winner.

Carl Hansen: This readout has potential to be highly de-risking and to tell us whether or not we are likely to have our first winner. In the positive scenario, success will be data that supports our target product profile, which includes efficacy at least comparable to RINVOQ and Vijoice, a differentiated safety profile, and an advantage in dosing convenience with once-monthly subcutaneous self-injection. We believe this profile would support a product that has blockbuster potential. Of course, drug development is uncertain, and it is possible that we fail to see efficacy comparable to small molecules. As we started development, we identified a key scientific risk in achieving sufficient target engagement of KNDy neurons in the infundibular nucleus. Based on biomarker data from the Phase I portion of our study, we believe that ABCL635 can achieve high target engagement in those neurons. Accordingly, our estimated probability of success has increased.

Speaker #3: In the positive scenario, success will be data that supports our target product profile, which includes efficacy at least comparable to Linquit and Viosa, a differentiated safety profile, and an advantage in dosing convenience with once-monthly subcutaneous self-injection.

Speaker #3: We believe this profile would support a product that has blockbuster potential. Of course, drug development is uncertain, and it is possible that we fail to see efficacy comparable to small molecules.

Speaker #3: As we started development, we identified a key scientific risk in achieving sufficient target engagement of candy neurons in the infundibular nucleus. Based on biomarker data from the phase one portion of our study, we believe that ABCL 635 can achieve high target engagement in those neurons.

Speaker #3: Accordingly, our estimated probability of success has increased. We believe the largest remaining uncertainty is that our understanding of the biology of hot flashes is incomplete.

Carl Hansen: We believe the largest remaining uncertainty is that our understanding of the biology of hot flashes is incomplete. This question will be answered by the ongoing phase II portion of the study. If we get a positive readout, we intend to move ABCL635 quickly into late-stage development. In the case of a negative readout, our progression to a late-stage clinical company will be delayed. However, in either scenario, we are committed to advancing the other programs in our pipeline with a focus on developing first-in-class opportunities. Looking at the overall pipeline, we anticipate 2 clinical readouts in 2026 and the potential for multiple catalysts in 2027. By mid-2027, we expect to have 5 clinical-stage programs across a range of compelling indications in large markets.

Speaker #3: And this question will be answered by the ongoing phase two portion of the study. If we get a positive readout, we intend to move ABCL 635 quickly into late-stage development.

Speaker #3: In the case of a negative readout, our progression to a late-stage clinical company will be delayed. However, in either scenario, we are committed to advancing the other programs in our pipeline with a focus on developing first-in-class opportunities.

Speaker #3: Looking at the overall pipeline, we anticipate two clinical readouts in 2026 and the potential for multiple catalysts in 2027. By mid-2027, we expect to have five clinical-stage programs across a range of compelling indications in large markets.

Speaker #3: As mentioned previously, pending positive data from the phase two study of ABCL 635, we intend to proceed with late-stage studies for hot flashes associated with menopause and, in addition, we would also look to initiate phase two studies of ABCL 635 for hot flashes associated with cancer treatment.

Carl Hansen: As mentioned previously, pending positive data from the Phase II study of ABCL635, we intend to proceed with late-stage studies for hot flashes associated with menopause, in addition, we would also look to initiate Phase II studies of ABCL635 for hot flashes associated with cancer treatment. These pipeline developments will play out over the next 18 months. Looking at 2026, our key priorities are to deliver top-line readouts for ABCL635 Phase II and ABCL575 Phase I studies, to advance ABCL688 and ABCL386 through IND-enabling activities, and to add one new development candidate to our pipeline. With approximately $700 million in total liquidity, we believe we have the capital to see these programs through to value inflections and to continue to press our advantage in discovery and to build a pipeline through internal innovation.

Speaker #3: These pipeline developments will play out over the next 18 months. Looking at 2026, our key priorities are to deliver top-line readouts for ABCL 635 Phase 2 and ABCL 575 Phase 1 studies, to advance ABCL 688 and ABCL 386 through IND-enabling activities, and to add one new development candidate to our pipeline.

Speaker #3: With approximately 700 million in total liquidity, we believe we have the capital to see these programs through to value inflections, and to continue to press our advantage in discovery and to build a pipeline through internal innovation.

Speaker #3: And with that, I will hand it over to Andrew to discuss our financials. Andrew?

Carl Hansen: With that, I will hand it over to Andrew to discuss our financials. Andrew?

Speaker #4: Thanks, Carl. As Carl pointed out, AbCellera continues to be in a strong liquidity position, with approximately $560 million in cash and equivalents, and with roughly $140 million in available committed government funding to execute on our strategy.

Andrew Booth: Thanks, Carl. As Carl pointed out, AbCellera continues to be in a strong liquidity position, with approximately $560 million in cash and equivalents, and with roughly $140 million in available committed government funding to execute on our strategy. We are continuing to execute on our plans with a focus on internal programs and leveraging our process development and clinical manufacturing investments. Looking at our business metrics, in Q4, we started work on one additional partner-initiated program, which takes us to a cumulative total of 104 programs with downstream participation. Given our focus on the advancement of our proprietary pipeline, and as noted in our SEC filings, we will stop reporting on our partner-initiated program starts on a quarterly basis in 2026.

Speaker #4: We are continuing to execute on our plans with a focus on internal programs and leveraging our process development and clinical manufacturing investments. Looking at our business metrics, in the fourth quarter, we started work on one additional partner-initiated program, which takes us to a cumulative total of 104 programs with downstream participation.

Speaker #4: Given our focus on the advancement of our proprietary pipeline and, as noted in our SEC filings, we will stop reporting on our partner-initiated programs' starts on a quarterly basis in 2026.

Speaker #4: Turning to molecules in the clinic, ArsenalBio received an IND authorization for AB3028, a molecule discovered using licensed Trianni technology, taking the cumulative total number of molecules to have reached the clinic to 19.

Andrew Booth: Turning to molecules in the clinic, Arsenal Bio received an IND authorization for AB-3028, a molecule discovered using licensed Trianni technology, taking the cumulative total number of molecules to have reached the clinic to 19. As Carl highlighted, ABCL-635 advanced into the phase II portion of its clinical trial, and Imvax advanced an undisclosed animal health molecule into pivotal studies. As we have stated previously, we view the overall progress of molecules in the clinic as a potential source of near- and mid-term revenue from downstream milestone fees and royalty payments in the longer term. As we have been doing annually, we'll take a closer look at the progression of those 104 partner-initiated programs with downstream participation. As of 31 December, we were still actively leading or co-leading the work on 14 of these programs.

Speaker #4: As Carl highlighted, ABCL 635 advanced into the phase two portion of its clinical trial and Invitex advanced an undisclosed animal health molecule into pivotal studies.

Speaker #4: As we have stated previously, we view the overall progress of molecules in the clinic as a potential source of near- and mid-term revenue from downstream milestone fees, and royalty payments in the longer term.

Speaker #4: As we have been doing annually, we'll take a closer look at the progression of those 104 partner-initiated programs with downstream participation. As of December 31st, we were still actively leading or co-leading the work on 14 of these programs.

Speaker #4: For 84 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 Booth: For 84 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. To the best of our knowledge, our partners are actively progressing 34 of these 84 programs. Of the 48 programs that are actively progressing, including those still in our hands, we believe that 37 are in discovery, 5 in preclinical development, and 6 have reached clinical development. Overall, we view the progress of the molecules that we have discovered in our and our partners' hands positively, and the attrition is consistent with our expectations. Around half of all programs with downstream participation that we have started are currently still progressing.

Speaker #4: To the best of our knowledge, our partners are actively progressing 34 of these 84 programs. Of the 48 programs that are actively progressing, including those still in our hands, we believe that 37 are in discovery, 5 in preclinical development, and 6 have reached clinical development.

Speaker #4: Overall, we view the progress of the molecules that we have discovered in our and our partners' hands positively and the attrition is consistent with our expectations.

Speaker #4: Around half of all programs with downstream participation that we have started are currently still progressing. We look forward to more molecules from our program reaching the clinic over time and we will continue to report on these progressions to the clinic on a quarterly basis.

Andrew Booth: We look forward to more molecules from our program reaching the clinic over time, and we will continue to report on these progressions to the clinic on a quarterly basis. Turning to revenue and expenses, revenue for the year was $75 million, comprising $27 million relating to work on partnered programs and $47 million from licensing and royalty payments. This compares to a total revenue of approximately $29 million in 2024. $36 million of the licensing and royalty stems from settling our patent infringement claims against Bruker. With respect to research fee revenues, as we have mentioned in the past, we expect these to trend lower as we focus on our internal pipeline. Our research and development expenses for the year were $187 million, approximately $20 million more than last year.

Speaker #4: Turning to revenue and expenses, revenue for the year was 75 million dollars, comprising 27 million dollars relating to work on partnered programs, and 47 million dollars from licensing and royalty payments.

Speaker #4: This compares to a total revenue of approximately 29 million dollars in 2024. 36 million dollars of the licensing and royalty stems from settling our patent infringement claims against Brooker.

Speaker #4: With respect to research fee revenues, as we have mentioned in the past, we expect these to trend lower as we focus on our internal pipeline.

Speaker #4: Our research and development expenses for the year were 187 million dollars, approximately 20 million dollars more than last year. This expense reflects the focus on investment in our internal programs.

Andrew Booth: This expense reflects the focus on investment in our internal programs. In sales, general, and administration expenses, they were approximately $83 million, compared to roughly $86 million in 2024. Included in these expenses in both years are costs related to the now settled Bruker litigation. Looking at earnings, we are reporting a net loss of roughly $146 million for the year, compared to a loss of about $163 million last year. In terms of earnings per share, this result works out to a loss of $0.49 per share on a basic and diluted basis. Looking at cash flows, operating activities for all of 2025 used approximately $130 million in cash and equivalents.

Speaker #4: In sales, general and administration expenses, they were approximately 83 million dollars compared to roughly 86 million dollars in 2024. Included in these expenses, in both years, are costs related to the now settled Brooker litigation.

Speaker #4: Looking at earnings, we are reporting a net loss of roughly $146 million for the year, compared to a loss of about $163 million last year.

Speaker #4: In terms of earnings per share, this result works out to a loss of 49 cents per share on a basic and diluted basis. Looking at cash flows, operating activities for all of 2025 used approximately 130 million dollars in cash and equivalents.

Speaker #4: Excluding liquidity received from marketable securities and real estate, all other investment activities amounted to 46 million dollars for the year. We made these investments predominantly in property, plant, and equipment to establish clinical manufacturing capabilities, a project which is now substantially complete as we had expected.

Andrew Booth: Excluding liquidity received from marketable securities and real estate, all other investment activities amounted to $46 million for the year. We made these investments predominantly in property, plant, and equipment to establish clinical manufacturing capabilities, a project which is now substantially complete, as we had expected. Notably, these investments in PP&E were partially offset by government contributions. Compared to outsourced manufacturing, our clinical manufacturing facility allows us to control our supply chain, improve flexibility, accelerate timelines, and better protect our intellectual property. Our real estate investments in our headquarter building yielded $63 million in liquidity in Q4, consisting of a loan repayment from our JV partner and flow through commercial mortgage financing. As a part of our treasury strategy, we have $405 million invested in short-term marketable securities.

Speaker #4: Notably, these investments in PP&E were partially offset by government contributions. Compared to outsourced manufacturing, our clinical manufacturing facility allows us to control our supply chain, improve flexibility, accelerate timelines, and better protect our intellectual property.

Speaker #4: Our real estate investments and our headquarter buildings yielded 63 million dollars in liquidity in the fourth quarter, consisting of a loan repayment from our JV partner and flow-through commercial mortgage financing.

Speaker #4: As a part of our treasury strategy, we have 405 million dollars invested in short-term marketable securities. Our investment activities for the year included a 70 million dollar net divestment of these holdings.

Andrew Booth: Our investment activities for the year included a $70 million net divestment of these holdings. Altogether, we finished the quarter with $561 million of total cash equivalents, and marketable securities. As a reminder, we have received commitments for funding the advancement of our internal pipeline from the Government of Canada Strategic Innovation Fund and the Government of British Columbia. This available capital does not show up on our balance sheet. With over $560 million in cash and equivalents and the unused portion of our secured government funding, we have approximately $700 million in available liquidity to execute on our strategy. In addition, we have further available liquidity in the ownership of our other Vancouver-based lab and office building, as well as our GMP facility, both of which have been financed off of our balance sheet.

Speaker #4: Altogether, we finished the quarter with $561 million of total cash, cash equivalents, and marketable securities. As a reminder, we have received commitments for funding the advancement of our internal pipeline from the Government of Canada's Strategic Innovation Fund and the Government of British Columbia.

Speaker #4: This available capital does not show up on our balance sheet. With over a 560 million dollars in cash and equivalents and the unused portion of our secured government funding, we have approximately 700 million dollars in available liquidity to execute on our strategy.

Speaker #4: In addition, we have further available liquidity in the ownership of our other Vancouver-based lab and office building, as well as our GMP facility. Both of which have been financed off of our balance sheet.

Speaker #4: The operating cash usage for 2026 will continue to prioritize the advancement of our lead programs through their clinical studies completing I&D enabling activities for ABCL 688 and ABCL 386 and to build a strong preclinical pipeline behind these assets.

Andrew Booth: The operating cash usage for 2026 will continue to prioritize the advancement of our lead programs through their clinical studies, completing IND-enabling activities for ABCL688 and ABCL386, and to build a strong preclinical pipeline behind these assets. With respect to our overall company expenditures, our capital needs are very manageable, and we continue to believe that we will have sufficient liquidity to fund well beyond the next three years of pipeline investments. With that, we'll be happy to take any questions. Operator?

Speaker #4: With respect to our overall company expenditures, our capital needs are very manageable and we continue to believe that we will have sufficient liquidity to fund well beyond the next three years of pipeline investments.

Speaker #4: And with that, we'll be happy to take any questions. Operator?

Speaker #3: We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Srikripa Devarakonda with Truist Securities. Your line is open. You may go ahead.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of kripa Devarakonda with Truist Securities. Your line is open. You may go ahead.

Speaker #3: To withdraw your question, press star 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device.

Speaker #3: Please stand by while we compile the Q&A roster. Your first question comes from the line of krippa.deveraconda with truest securities. Your line is open.

Speaker #3: You may go ahead.

[Analyst] (Truist Securities): Hi, this is Anna on for Kripa. Thanks so much for taking our question. Just wanted to ask a question about ABCL575. I was just wondering how you guys are thinking about the potential for 575 as a combination regimen, just given its profile. Are there any targets that might make sense to combine with 575 to maximize the benefit? Thanks.

Speaker #4: Hi. This is Anna on from Krippa. Thanks so much for taking our question. Just wanted to ask a question about ABCL 575. I was just wondering how you guys are thinking about the potential for 575 as a combination regimen, just given its profile.

Speaker #4: Are there any targets that might make sense to combine with 575 to maximize the benefit? Thanks.

Carl Hansen: Thanks, Anna. Carl here. I can at least start the answer here. Yes, you know, we have, you know, for a long time, expressed conviction in OX40 Ligand as a class. I think we're seeing data that is making that clear that there's, you know, a very, you know, broad effect on the immune system, one that is a bit slower to come up, but that has good durability. We do think that the safety profile makes that an attractive target for combinations, as is being investigated by some other companies. Certainly, both internally, we're thinking about that, as well as having some discussions with external parties that might have an asset that would combine with it.

Speaker #5: Thanks, Anna. Carl here. I can at least start the answer here. So yes, we have for a long time expressed conviction in Oxford Elagin as a class.

Speaker #5: I think we're seeing data that is making that clear that there's a very broad effect on the immune system, one that is a bit slower to come up, but it has good durability.

Speaker #5: And we do think that the safety profile makes that an attractive target for combinations, as is being investigated by some other companies. So certainly, both internally, we're thinking about that, as well as having some discussions with external parties that might have an asset that would combine with it.

Carl Hansen: you know, for the, for the near term, our strategy on ABCL575 is unchanged. It's currently in the phase 1 trial, and we look forward to reading that out at the end of the year.

Speaker #5: For the near term, our strategy on ABCL-575 is unchanged. It's currently in the Phase 1 trial, and we look forward to reading that out at the end of the year.

[Analyst] (Truist Securities): Thank you so much.

Speaker #4: Thank you so much.

Speaker #3: Your next question comes from Evan Seigerman with BMO Capital Markets. Your line is now open. Please go ahead.

Operator: Your next question comes from Evan Seigerman with BMO Capital Markets. Your line is now open. Please go ahead.

[Analyst] (BMO Capital Markets): Hi, Malcolm, on for Evan. Thanks for taking our question. Thinking about potential oncology-based VMS studies, what sort of indications seem most appealing for exploration here? Obviously, breast and prostate seem like strong options, but anything beyond this? Just to follow up to that, do you think you need to be better than other agents like XELJANZ in these studies, or is it just a different profile good enough here, given limited treatment availability for non-hormonal therapies? Thanks.

Malcolm Hoffman: Hi, Malcolm, on for Evan. Thanks for taking our question. Thinking about potential oncology-based VMS studies, what sort of indications seem most appealing for exploration here? Obviously, breast and prostate seem like strong options, but anything beyond this? Just to follow up to that, do you think you need to be better than other agents like XELJANZ in these studies, or is it just a different profile good enough here, given limited treatment availability for non-hormonal therapies? Thanks.

Speaker #6: Hi, I'm Malcolm Mon for Evan. Thanks for taking our question. Thinking about potential oncology-based BMS studies, what sort of indications seem most appealing for exploration here?

Speaker #6: Obviously, breast and prostate seem like strong options, but anything beyond this? And then just a follow-up to that, do you think you need to be better than other agents like Ellen Zantant and these studies?

Speaker #6: Or is it just a different profile good enough here given limited treatment availability for non-hormonal therapies? Thanks.

Speaker #7: Hi, Malcolm. This is Sarah. I'll take that question. I think you're spot on in terms of where we think there's opportunity in oncology BMS.

Andrew Booth: Hi, Malcolm. This is Sarah. I'll take that question. I think you're spot on in terms of where we think there's opportunity in oncology, VMS. Obviously, breast cancer being the larger of those two patients on aromatase inhibitors, Tamoxifen, that experience particularly severe hot flashes, as well as those that go on to oophorectomy. We're also interested in exploring prostate cancer patients in men who are on ADT or even those who get hot flashes from other androgen receptor or AR pathway inhibitors. Those are areas of interest to us, and we'll continue to explore that.

Sarah Noonberg: Hi, Malcolm. This is Sarah. I'll take that question. I think you're spot on in terms of where we think there's opportunity in oncology, VMS. Obviously, breast cancer being the larger of those two patients on aromatase inhibitors, Tamoxifen, that experience particularly severe hot flashes, as well as those that go on to oophorectomy. We're also interested in exploring prostate cancer patients in men who are on ADT or even those who get hot flashes from other androgen receptor or AR pathway inhibitors. Those are areas of interest to us, and we'll continue to explore that.

Speaker #7: Obviously, breast cancer being the larger of those two patients on aromatase inhibitors, tamoxifen, that experience particularly severe hot flashes, as well as those that go on to oophorectomy.

Speaker #7: We're also interested in exploring prostate cancer patients and men who are on ADT or even those who get hot flashes from other androgen receptor or AR pathway inhibitors.

Speaker #7: So those are areas of interest to us, and we'll continue to explore that. In terms of the second part of your question, our base case scenario is that, even with equivalent efficacy, there's huge room for differentiation in terms of safety—lack of a liver signal, which is part of our target product profile—and not requiring liver monitoring that is a part of the administration of the other two small molecules.

Andrew Booth: In terms of the second part of your question, you know, our base case scenario is that even with equivalent efficacy, there's huge room for differentiation in terms of safety, lack of a liver signal, which is part of our target product profile, and not requiring-

Sarah Noonberg: In terms of the second part of your question, you know, our base case scenario is that even with equivalent efficacy, there's huge room for differentiation in terms of safety, lack of a liver signal, which is part of our target product profile, and not requiring-

Sarah Noonberg: ... liver monitoring that is a part of the administration of the other two small molecules. We see that as a major differentiating factor, as well as the convenience of once-monthly dosing. That said, you know, we do believe there is potential for improved efficacy. We see that as an upside, and that improved efficacy would come from deeper and more sustained target engagement. Obviously, that's going to need to play out over the course of our phase II portion, then even more importantly, in phase III studies.

Speaker #7: We see that as a major differentiating factor, as well as the convenience of once-monthly dosing. That said, we do believe there is potential for improved efficacy.

Speaker #7: We see that as an upside, and that improved efficacy would come from deeper and more sustained target engagement. And obviously, that's going to need to play out over the course of our Phase 2 portion, and then even more importantly, in Phase 3 studies.

Speaker #6: Appreciate it.

Brendan Smith: Appreciate it.

Malcolm Hoffman: Appreciate it.

Speaker #3: Your next question comes from Allison Bratzel with Piper Sandler. Your line is now open. You may go ahead.

Operator: Your next question comes from Allison Bratzel with Piper Sandler. Your line is now open. You may go ahead.

Speaker #8: Hey, good afternoon, guys. One question from me just on 635. I know you've talked about encouraging target engagement data and how that's increased your probability of success.

Allison Bratzel: Hey, good afternoon, guys. One question for me, just on 635. I know you've talked about encouraging target engagement data, and how that's increased your probability of success in VMS. Could you just expand on that? You know, will that data be presented or published, or can we expect to see it in Q3 with the data readout? Then just on 575, you know, there have been some developments in the OX40 Ligand class over the last couple of months. Just could you talk to how you view the overall class and, you know, if you feel the bar has been raised for advancing 575? Thank you.

Speaker #8: In BMS, could you just expand on that? Will that data be presented or published, or can we expect to see it in Q3 with the data readout?

Speaker #8: And then, just on 575, there have been some developments in the Oxford Elagin class over the last couple of months. Just could you talk to how you view the overall class, and if you feel the bar has been raised for advancing 575?

Speaker #8: Thank you.

Speaker #7: Hi, Allison. This is Sarah. In terms of the first part of your question, we expect to release the phase one portion of the study that will have safety as well as our target engagement data at the same time as our phase two portion.

Sarah Noonberg: Hi, Allison. This is Sarah. In terms of the first part of your question, we expect to release the phase I portion of the study that will have safety as well as our target engagement data at the same time as our phase II portion. As Carl mentioned, that is planned for Q3 of this year, so we don't expect any announcements before then at this time. In terms of 575, obviously, we're following that space fairly closely. Not only the efficacy data that Sanofi has released with their subsequent phase III readouts, but also with regard to safety and the event of Kaposi's sarcoma. That's, you know, that has put a little bit of a mark on OX40 Ligand, however, not necessarily unexpected and not inconsistent with what's been reported, let's say, for JAK inhibitors.

Speaker #7: And as Carl mentioned, that is planned for Q3 of this year. So we don't expect any announcements before then at this time. In terms of 575, obviously, we're following that space fairly closely.

Speaker #7: Not only the efficacy data that Sanofi has released with their subsequent phase three readouts, but also with regard to safety and the event of Kaposi's sarcoma that's that has put a little bit of a mark on Oxford Elagin.

Speaker #7: However, not necessarily unexpected, and not inconsistent with what's been reported, let's say, for JAK inhibitors. So I agree with Carl, our overall investment thesis in 575 hasn't changed.

Sarah Noonberg: You know, I agree with Carl. Our overall investment thesis in ABCL575 hasn't changed. We believe that OX40 Ligand is a pretty compelling target. We believe that there's a place for it in the market, either alone or in combination. We're committed to getting it through to a phase I readout and be phase II-ready. You know, we'll continue to look at opportunities as well as engage potential partners. I don't see that the event of Kaposi's sarcoma meaningfully changes its value proposition. It is a very potent immunomodulatory. It acts upstream, and so it's not unexpected. Overall, we still see that the safety profile of this class of drugs, particularly OX40 Ligand, is overall very favorable with respect to other members of immunomodulatory drugs.

Speaker #7: We believe that Oxford Elagin is a pretty compelling target. We believe that there's a place for it in the market, either alone or in combination.

Speaker #7: We're committed to getting it through to a phase one readout and be phase two ready. And we'll continue to look at opportunities, as well as engage potential partners.

Speaker #7: But I don't see that the event of Kaposi's sarcoma meaningfully changes its value proposition. It is a very potent immunomodulatory. It acts upstream. And so it's not unexpected.

Speaker #7: But overall, we still see that the safety profile of this class of drugs, particularly Oxford Elagin, is overall very favorable with respect to other members of immunomodulatory drugs.

Speaker #6: And Carl here, I was just going to add on top of that that coming into clinical development with the Oxford Elagin asset, our view in atopic dermatitis was that Oxford Elagin as a class would end up as second line to Dupixent.

Carl Hansen: Carl here, I was just going to add on top of that, you know, coming into clinical development with the OX40 Ligand asset, our view in atopic dermatitis was that OX40 Ligand as a class, would end up as second line to DUPIXENT. I think we still believe that's going to be the case, and the data that's been presented by Sanofi supports that. That, you know, as a monotherapy, looks like it's going to be a drug. It's probably going to be a very important drug, perhaps not DUPIXENT-like, but an important drug that has indications, indication potential well beyond atopic dermatitis. As per the question before, we think it also is a class that has good potential in combination.

Speaker #6: I think we still believe that's going to be the case. And the data that's been presented by Sanofi supports that. So that, as a monotherapy, looks like it's going to be a drug.

Speaker #6: It's probably going to be a very important drug—perhaps not Dupixent-like, but an important drug that has indications potential well beyond atopic dermatitis. And as per the question before, we think it also is a class that has good potential in combination.

Speaker #6: And the response to the Kaposi sarcoma is perhaps a bit overblown given that the class has been so safe to date. And I think that's one of the things to remember that overall, the safety profile has been excellent thus far for the class.

Carl Hansen: The response to the Kaposi's sarcoma, you know, is perhaps a bit overblown, given that the class has been so safe to date. I think that's one of the things to remember, that overall, the safety profile has been excellent thus far for the class.

Speaker #8: Thank you.

Allison Bratzel: Thank you.

Speaker #3: Your next question comes from Brendan Smith with TD Cohen. Your line is now open. You may go ahead.

Operator: Your next question comes from Brendan Smith with TD Cowen. Your line is now open. You may go ahead.

Speaker #6: Great. Thanks for taking the questions, guys. Actually, just wanted to follow up a bit more on 635 to kind of just dig in. Can you maybe just give us a sense of what that Q3 update will really look like in terms of, at least what you know now in terms of patient numbers, maybe range of doses tested, and really duration of follow-up there?

Brendan Smith: Great, thanks for taking the questions, guys. I actually just wanted to follow up a bit more on ABCL635, to kind of just dig in. Can you maybe just give us a sense of what that Q3 update will really look like in terms of at least what you know now in terms of patient numbers, maybe range of doses tested, and, really duration of follow-up there, kind of just trying to benchmark really what we'll see in terms of follow-up in Q3 between the phase 1 and phase 2 that you're running? Thanks.

Speaker #6: Kind of just trying to benchmark really what we'll see in terms of follow-up in Q3 between the phase one and phase two that you're running.

Speaker #6: Thanks.

Speaker #7: Sure. So in Q3, the readout should include the phase one portion, which is both a single ascending dose portion and a multiple ascending dose portion.

Sarah Noonberg: Sure. In Q3, the readout should include the phase one portion, which is both a single ascending dose portion and a multiple ascending dose portion. The multiple ascending dose portion has three doses spread four weeks apart, as well as importantly, the randomized, double-blind, placebo-controlled phase two part of the study. That key readout, the proof of concept, will be at four weeks, and we believe that's more than sufficient to be able to see the pharmacology and degree of efficacy and safety in a placebo-controlled cohort. The efficacy readouts are quite typical of what would be seen in a phase three study, so frequency and severity of hot flash, as well as preliminary looks at quality of life measures at four weeks.

Speaker #7: The multiple ascending dose portion has three doses spread four weeks apart. As well as importantly, the randomized double-blind placebo-controlled phase two part of the study.

Speaker #7: And that key readout, the proof of concept, will be at four weeks. And we believe that's more than sufficient to be able to see the pharmacology and degree of efficacy and safety in a placebo-controlled cohort.

Speaker #7: The efficacy readouts are quite typical of what would be seen in a phase three study. So frequency and severity of hot flash as well as preliminary looks at quality of life measures at four weeks.

Speaker #6: Perfect. Thank you.

Brendan Smith: Perfect. Thank you.

Speaker #3: Your next question comes from Steven Willie with Stifle. Your line is now open. Please go ahead.

Operator: Your next question comes from Stephen Willey with Stifel. Your line is now open. Please go ahead.

Speaker #6: Yeah. Good afternoon. Thanks for taking the questions. Just curious, so as this pipeline begins to expand and I guess you have two additional compounds now in I&D enabling studies, it sounds like there'll be another one nominated to move into I&D enabling here before the end of the year.

Stephen Willey: Yeah, good afternoon. Thanks for taking the questions. Just curious, so as, as this pipeline begins to expand and, you know, I guess you have two additional compounds now in IND-enabling studies, it sounds like there'll be another one nominated to move into IND-enabling here before the end of the year. How much clinical trial infrastructure can you maintain at this point? How many programs can you actively have in development? I guess that question also contemplates, you know, moving 635 into a potentially pivotal study next year. Thanks.

Speaker #6: How much clinical trial infrastructure can you maintain at this point? How many programs can you actively have in development? And I guess that question also contemplates moving six 635 into a potentially pivotal study next year.

Speaker #6: Thanks. Sure, Steve. Carl here, I'll take the start of it. And Sarah might want to add something after. So in terms of clinical development capacity, in late 2023, we made the decision to move from the partnership business to clinical development.

Carl Hansen: Sure, Steve, Carl here. I'll take the start of it, and Sarah might want to add something after. In terms of clinical development capacity, you know, in late 2023, we made the decision to move from the partnership business to clinical development. You know, over that time, we have completely reshaped the company internally and moved a lot of resources into biology, translational medicine, early development, and now increasingly in clinical development. If you look at that slide that went up in terms of, you know, the expectation of programs and when they might get into the clinic, as well as the upcoming Phase 3 study, and perhaps another program with a new development candidate coming in the first half of this year, it's clear there's going to be a lot of things happening at once.

Speaker #6: Over that time, we have completely reshaped the company internally and moved a lot of resources into biology translational medicine, early development, and now increasingly in clinical development.

Speaker #6: So if you look at that slide that went up in terms of the expectation of programs and when they might get into the clinic, as well as the upcoming phase three study, and perhaps another program with a new development candidate coming in the first half of this year, it's clear there's going to be a lot of things happening at once.

Speaker #6: And we have the resources and the means and the intent to build up that operational capacity to make sure that we meet those goals.

Carl Hansen: We have, we have the resources and the means and the intent to build up that operational capacity to make sure that we meet those goals. Of course, there's still work to be done, but we're excited about the programs, and we want to make sure we don't under-resource them.

Speaker #6: But of course, there's still work to be done. But we're excited about the programs and we want to make sure we don't under-resource them.

Speaker #6: Okay. And then maybe just to dig in a little bit more on 575, I know you're talking about 2027 will be kind of a decision point in terms of either further development or out-licensing.

Stephen Willey: Okay. Then maybe just to dig in a little bit more on 575. I know, you know, you're talking about 2027 will be kind of a decision point in terms of either further development or out-licensing. How much of that decision will be determined by what you are seeing from that molecule internally from phase I versus some of the external extrinsic factors in terms of partner ability, strategic appetite, et cetera, et cetera? How do those things weigh?

Speaker #6: How much of that decision will be determined by what you are seeing from that molecule internally from phase one, versus some of the external, extrinsic factors in terms of partner abilities, strategic appetite, etc., etc.?

Speaker #6: How do those things weigh?

Sarah Noonberg: You know, I would say largely it's going to be based on external factors. We've had some, you know, good preclinical data that's allowed us to estimate their half-life and, you know, overall, in terms of the phase 1 study, we haven't hit any surprises. You know, we're very confident that we have a molecule that meets its expectations in phase 1. I would say that, you know, the bigger decision is going to be based on the external aspects of the landscape, and you know, what we may find in terms of potential partnership opportunities, as well as continuing to think about how we may use five seven five, either in combination or potentially as a bispecific.

Speaker #7: I would say largely it's going to be based on external factors. We've had some good preclinical data that's allowed us to estimate there are half-life and overall in terms of the phase one study.

Speaker #7: We haven't hit any surprises. And so we're very confident that we have a molecule that meets its expectations in phase one. But I would say that the bigger decision is going to be based on the external aspects of the landscape and what we may find in terms of potential partnership opportunities, as well as continuing to think about how we may use 575 either in combination or potentially as a bispecific.

Speaker #6: All right. Thanks for taking the questions.

Stephen Willey: All right. Thanks for taking the questions.

Speaker #3: There are no further questions at this time. I will now turn the call back to Carl Hansen for closing remarks.

Operator: There are no further questions at this time. I will now turn the call back to Carl Hansen for closing remarks.

Speaker #6: Thank you, everyone, for joining the call today. We believe AbCellera is at an exciting point, and we look forward to providing updates over the coming year.

Carl Hansen: Thank you, everyone, for joining the call today. We believe F-star is at an exciting point, and we look forward to providing updates, over the coming year. Thanks very much.

Speaker #6: Thanks very much.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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