AbCellera Biologics Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 2, 2023

There are 10 speakers on the call.

Operator

Good afternoon, and welcome to AbCellera's 3rd Quarter 2023 Business Update Conference Call. My name is Kate, and I will facilitate the audio portion of today's interactive broadcast. At this time, I would like to turn the call over to Trent Stein Mart, Absellera's Chief Legal and Compliance Officer. You may proceed.

Speaker 1

Thank you. Good afternoon, and welcome to Accelera's Q3 2023 business update. We are pleased to have you with us today as we discuss the results announced in our press release issued after the market closed today, which you can find on our Investor Relations website. Presentation. With me on the call today are Doctor.

Speaker 1

Carl Hansen, AbCellera's Chief Executive Officer and President and Andrew Booth, AbCellera's Chief Financial Officer. Presentation. Access to the slide portion of this presentation, you may do so on the Investor Relations section of our website. For those of you who have accessed the streaming portion of the webcast, Please be aware that there may be a delay and that you will not be able to post questions via the web. This presentation may contain forward looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker 1

Any forward looking statements are based on management's current expectations and are subject to certain risks and uncertainties. Please review our SEC filings for risk factors that could impact our future performance. Presentation. Our presentation and SEC filings are available on our Investor Relations website. Note that all dollars referred to during our call today are U.

Speaker 1

S. Dollars. Presentation. Now I am pleased to turn the call over to Doctor. Carl Hansen.

Speaker 2

Thanks, Trinh. The highlight this quarter is that we are advancing assets from 2 abserela led programs into IND enabling studies. The first asset, ABCL-five seventy five, targets OX40 ligand and is being developed as a potential best in class therapy for the treatment of atopic dermatitis and other indications in autoimmunity and inflammation. We discovered ADCL-five seventy five during our collaboration with EQRx as part of a co development program that was initiated in 2021. We took ownership of this program in September after EQRx was acquired by Revolution Medicines.

Speaker 2

AVCL-five seventy five has been designed with potency, PK and develop ability to enable less frequent dosing, which provides a potential for differentiation. At present, We believe ABCL-five seventy five has the potential to be one of the first assets to follow amlutelimab, which has been developed by Sanofi and which recently had a positive Phase 2 readout providing evidence for the potential of this new class. Our second asset, ABCL-six thirty five is against an undisclosed target with an indication in metabolic and endocrine conditions. It has the potential to be a 1st in class therapy in a market segment estimated at more than $2,000,000,000 in annual sales. For strategic reasons, we will disclose more details of this program and indication only once it reaches the clinic.

Speaker 2

ADCL-six thirty five is the first accelerated asset derived from our GPCR and ion channel platform and is aligned with our strategy of leveraging our expertise and technology advantage to create an internal pipeline of 1st in class assets. We anticipate additional development candidates in the next 12 to 18 months from this platform and we will announce them only when we have committed to move them forward into IND enabling studies. We would caution that studies leading to an IND carry significant risk. That said, if things progress as expected, we would anticipate IND submissions for both ABCL-five seventy five and ABCL-six thirty five in 2025. For both programs, we see the potential to get early efficacy data from clinical trials.

Speaker 2

We believe that these two assets and future programs will provide growing evidence that we can repeatedly generate potential 1st in class and best in class therapies. Given the breadth of our discovery activities, We anticipate generating more assets than we will have the bandwidth or capital to advance ourselves. Thus, we will be selective in the ones we bring forward into the clinic and expect partnering and out licensing to remain an important part of our strategy. Turning to partnering, in September, we announced a new partnership with Incyte working in the area of oncology. We also expanded our existing collaboration with Regeneron.

Speaker 2

Under the original agreement, Regeneron has exercised its rights to advance antibody candidates from 2 completed programs, including one against a GPCR target. Other programs are still active. In addition to the 2 partnerships completed in the quarter, yesterday we also announced a collaboration with Prelude Therapeutics to co develop novel precision antibody drug conjugates or ADCs in oncology. We're excited to be working with the Prelude team on the development of a new class of therapeutics with the 1st program focused on antibodies armed with small molecule protein degraders. In summary, I would like to highlight that developments over this quarter are aligned with key business objectives that we laid out last year.

Speaker 2

First, we said we would elect at least one candidate from our GPCR and ion channel platform and at least one candidate from a co development platform for IND enabling studies in 2023. With the commitment to advance ABCL-five seventy five and ABCL-six thirty five, we have achieved that milestone. 2nd, we said we would focus on high value strategic partnerships. Our deals with groups like Regeneron, Prelude and Incyte are aligned with this strategy. We also said we would advance our T cell engager platform and expect it to enter into a significant transaction in 2023.

Speaker 2

The science and the development of this platform continue to progress as expected. And tomorrow, our team will be presenting new data at SITC in San Diego. While we haven't completed a transaction yet, we have increasing conviction in our TCE platform, both in its potential to generate internal assets and as a basis for strategic partnerships. And with that, I will hand it over to Andrew to discuss our financials. Andrew?

Speaker 2

Thanks, Karl. First, let

Speaker 3

me highlight progress made on our key business metrics during the Q3 of 2023. This Over the trailing 12 months, we've started work on 18 partner initiated programs. We agreed to 5 new programs under contract in the quarter and ended the Q3 of of 2023 with 182 programs under contract with 42 unique partners. As we've stated in the past, we continue to focus on strategic partnerships rather than on deal volume. Our key business metrics do not include programs that are initiated by Appcelera internally.

Speaker 3

In Q3 of 2023, we saw NovoRock advance an additional molecule into the clinic for a cumulative total of 10 molecules in the clinic. We view our growing Mistah 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. Turning to revenue. Revenue in the quarter was approximately $7,000,000 almost entirely driven by research fees relating on work on partnership initiated discovery programs. This compares to research fee revenue of approximately $8,000,000 in Q3 of 2022.

Speaker 3

This reduction of research fee revenue is consistent with our increasing focus on more strategic partnerships where Abcelora has a larger participation in the long term value of the program. This quarter's revenue also includes some small amounts related to licensing fees. And unlike a year ago, there were no royalties and no milestone payments earned in the quarter. Turning to operating expenses. Our research and development For the Q3, we're approximately $38,000,000 representing a roughly $11,000,000 increase over the same period of the previous year.

Speaker 3

This increase reflects the growth of program execution, continuing platform development and our investment in internal programs. In sales and marketing, expenses for the quarter were $3,500,000 compared to just over $3,000,000 in Q3 of 2022. And in general and administration, expenses were just over $14,000,000 compared to just under $14,000,000 in Q3 of the previous year, reflecting good operating leverage. Looking at earnings, we're reporting a net loss of roughly $29,000,000 This compares to earnings of approximately $27,000,000 in Q3 of 2022. The loss reflects our continued investments in the business and the absence of the royalty revenues that were present in Q3 of the previous year.

Speaker 3

In terms of earnings per share, this quarter's results work out to a loss of $0.10 per share on a basic and diluted basis. Looking at cash flows, operating activities for the 1st 9 months of 2023 used roughly CAD24 1,000,000

Speaker 4

of the company.

Speaker 3

Of note, from operations and investment activities in the Q3, we used approximately $10,000,000 of cash. As a part of our treasury strategy, we have over $600,000,000 invested in short term marketable securities. Our investment activities for The 1st 9 months of the year include approximately $113,000,000 net increase in these holdings. All other investment activities amounted to approximately $95,000,000 including approximately $62,000,000 invested in property, plant and equipment and approximately $37,000,000 in other long term investments. Investments in property, plant and equipment are, of course, driven in large part by our ongoing work to establish CMC and GMP manufacturing capabilities.

Speaker 3

Altogether, we finished the quarter with over $813,000,000 of total cash, cash equivalents and marketable securities. We have historically been successful at raising non dilutive sources of capital. And as a reminder, our continuing GMP facility build out is separately co funded by the Government of Canada's Strategic Innovation Fund. This available capital does not show up on our balance sheet. With over $800,000,000 on the balance sheet and the unused portion of our previously secured government funding.

Speaker 3

We continue to have over $1,000,000,000 in total available liquidity. This is more than our liquidity position from 1 year ago when we reported our Q3 of 2022 financials. With respect to our operating expenditures, Our capital needs are very manageable and we will remain in a strong liquidity position that allows us to execute on our strategy, which includes advancing abcellara led programs towards and into the clinic with excellent visibility and runway. We continue to believe that we have sufficient liquidity to fund well beyond the next 3 years of platform and pipeline investments and overall growth. And with that, we'll be happy to take your questions.

Speaker 3

Operator?

Operator

Thank you. We will now begin the question and answer session. The first question will be from the line of Allison Bradsell with Piper Sandler. Your line is now open. Hi, good afternoon.

Operator

Thank you for taking my question and thanks for the update. I guess, Could you maybe just speak more on what we can expect to see for the T cell engager platform tomorrow, in the posters at SITC? And really just help frame what's the bar you think potential partners are really looking for in order to have confidence that your TCE platform from really is best in class and pull the trigger on a partnership. Your latest thoughts on the setup there would be really helpful. Thanks.

Speaker 2

Sure. Thanks, Allison. Karl here happy to take that. So we have continued to make great progress here. The SITC presentations really focus on 2 developments on the R and D platform.

Speaker 2

One of them is the advancement of the platform towards being able to generate antibodies against MHC peptide targets. We see that as highly differentiated and a capability that opens up a broad array of targets that are expressed inside the cell, but they get presented to the surface of the cell And are highly specific to tumors. So being able to do that solves one of the key problems in TCEs, which is being able to find targets that are specific and reduce the on target off tumor toxicity. The other big highlight is evidence that shows that combining a broad diversity of CD3 binders with the ORTHIMAB platform and being able to change both the affinity of binders and the epitope importantly allows you to obtain profiles in the mixture of cytokine release and killing that you cannot obtain using just Afiniti alone or many of the existing antibodies. That was the original thesis and we have continued to push that forward and see it as very compelling in cases in particular where dose limited toxicity has been a problem.

Speaker 2

What's not being shown at SITC, Something we're also excited about is more recent data that very clearly shows that you can decouple Cell killing from cytokine release. That's something that has been pursued for some time. And in our hands, we think we have by far the clearest demonstration of that as compared to benchmarks that we've tested our antibodies against. So all of that is going very well. The timing of a transaction I think is always difficult to predict.

Speaker 2

But we are engaged with the top groups built relationships over the last year and on all fronts I think it's going in the right direction.

Operator

Presentation. Thank you. The next question will be from the line of of Robin Karnauskas with Truist. Your line is now open.

Speaker 5

Hi, guys. Thanks for my question. I'm going to ask one that you may not be able to answer, but maybe you can address it more broadly as to your capabilities. So Regeneron this morning mentioned that their AUX40 on their call may not be optimal, the targeted may not be safe versus ZYPITZAN. How can you design things differently with this molecule to improve its specificity or make it a safe therapeutic index achievable and maybe less potent payload, cable linker, bystander.

Speaker 5

If you want to address that molecule specifically for competitive reasons, maybe just address like your capabilities more broadly, because I think a lot of companies are facing these challenges where they have a suboptimal drug that could be better and how are you thinking about that? Thanks.

Speaker 2

Sure, Robin. I'm happy to take that. So I think your question was related to ABCL575, which is our antibody that we're bringing forward against OX40 ligand. Maybe a few things to say about that. We're excited about that one for a few reasons.

Speaker 2

One is, we see this as a very compelling class, not just for atopic dermatitis, but for a wide array of different conditions and inflammation. It is a pathway for which there is a robust scientific literature that suggests that it is able to affect multiple pathways in the inflammation cascade, and that it can do it in a way, that not only suppresses the activation and proliferation of T effector cells and T memory cells that are associated with disease, but also that can interact with T regulatory cells to help to reset homeostasis in the immune system. That body of evidence makes it a compelling pathway. The recent readout from Sanofi that we mentioned Looks completely in line with that. So it looks to be safe.

Speaker 2

It looks to be effective. And what was interesting in that study is that, the effect seemed to get better over time, which What you'd expect if you were able to reset the immune system. So for all those reasons, we think the pathway is very exciting and has broad potential in a Growing space in atopic dermatitis and also in other conditions. ABCL-five seventy five, as I said, we believe is one of the first behind it. Now you don't know what people have inside their pipelines that they haven't disclosed.

Speaker 2

But based on disclosures, we think this one has the potential to be one of the first to come behind it. And we have engineered it in a way that we think provides the combination of potency and developability and formulation and half life that would give an advantage in dosing. So that's why we're excited about that particular one. As it compares, I think you mentioned Regeneron and Dupixent. Dupixent is Our view is that in inflammation not every patient responds to therapies that are available and there is a lot of interest in finding alternatives and perhaps even combining therapies in the future.

Speaker 2

So, we don't see that as No negative at all, but rather as an example of the huge opportunity that exists in this space.

Speaker 5

And just as a follow-up, Do you think you can improve upon? I mean their view is that it's current ones they have are just not going to or current ones that are on the market are too dirty, I would use that word, like they're too broad. Like what accelerator technology can you use to understand to make a better FOX 40 because that is a hot target right now. So maybe expand upon your technology as well and then I'll get back in the queue.

Speaker 2

Great. Thanks, Robin. So, to be clear, so we have an antibody that is going against OX40 ligand, not OX40. There is of course an OX40 antibody that has been developed by Amgen. That antibody is a depleting antibody.

Speaker 2

So it's an antibody that binds to OX40, which is presented on T cells and that causes the ablation of those T cells. There's some evidence that that may cause problems. I mean, I don't want to speculate too much. The antibody that we have engages on OX40 for the ligand, which is not presented on T cells, but rather on antigen presenting cells. And our antibody has been engineered to be non ablating.

Speaker 2

So it has Fc function that does not result in the killing of the antigen presenting cells. Very similar to ametelumab, which I mentioned, which is being developed by Sanofi. So we don't see A problem with it being dirty. We don't see a big problem with toxicity. And of course, we're getting that information from the disclosure that Sanofi has made and they've got the most advanced molecule.

Speaker 2

So to our knowledge, this looks like a quite clean profile and one that's effective and one that has a lot of potential in inflammation and other conditions.

Speaker 5

Great. Thank you.

Operator

Thank you. The next question will be from the line of for Andrea Tan with Goldman Sachs. Your line is now open.

Speaker 6

Carl, maybe one more question for you on 575 here. Strategically, can you speak to the decision to pursue atopic derm as the initial indication? Just curious given how crowded that landscape is, if there are other indications where mechanistically it might make sense to also bring this asset forward, but one where you could have an advantage of being 1st in class? Thanks so much.

Speaker 2

Thanks, Andrew. That's a great question. I mean, Atopic dermatitis is the most obvious place because there is the data out already showing efficacy. It's also in derma is one of the easier places to get early clinical data that shows efficacy, let's say, in a Phase 1 or IIa trial. From other molecules.

Speaker 2

This has a very high likelihood of working not just in atopic dermatitis but in other conditions. That's our sense right now. But this is a competitive space as you mentioned. So right now what's most important is that we not delay in getting this molecule through

Speaker 4

to the

Speaker 2

start of clinical development and through the early trials. There's going to be a lot of consideration and thinking between here and there. And so We may change tack, but it's also perhaps worth saying that at some point, I think it would be advantageous to find a large and highly enabled partner to accelerate clinical development because this is a molecule that would have potential in a variety of different classes and something that probably is done best by a big company. So that That would be our current feeling right now in terms of subsequent steps. But as I said, the priority right now is to get this through to clinical development and to get that early proof of concept.

Speaker 6

Perfect. And maybe a follow-up there. Can you just remind us of your willingness to advance these programs on your own, I guess maybe the extent to which you would bring them through clinical development.

Speaker 2

Sure. I'm happy to address that. This is a question that I get a lot and it's often framed as, what is your strategy for internal programs? My response to this is normally that it's wrong to think of a single strategy for internal programs. Every program Needs to be considered on its own merits.

Speaker 2

Every program will have different timelines, different costs, different operational challenges and clinical development. And of course, as things progress, there'll be different priorities in the company and capital allocation and different strategic opportunities. The way we think about it is that right now we have committed to bring AVCL-six 35 and 575 through to the end of Phase 1. It's possible that could get intercepted with the right business opportunity, but we are full steam ahead to do that. After we get to that point, We will evaluate the risk reward and do what's best for the business and where we think we're going to get the best return on investment.

Speaker 2

And I would not take it off the table that we would advance 1 into further trials, if we thought that that was the best path. And just, Andrew, if

Speaker 3

I can add there as well, as Andrew speaking, the announcement we had earlier in the year about receiving some government funding Allow us to move molecules that included funding molecules that we would advance into Phase 1 and receive some significant amount of government funding that make it quite capital efficient for us So this is completely consistent with that announcement and that strategy.

Operator

Thanks so much guys. Thank you. The next question will be from the line of of Stephen Willey with Stifel. Your line is now open.

Speaker 7

Yes, good afternoon. Thanks for taking the questions And congrats on procuring the OX40 ligand antibody. I think it's interesting that These have both been birthed by antibody platform discovery companies. I guess with respect to the Prelude deal, can you just talk a little bit about What you think makes a good antibody for the purposes of delivering a degrader? I guess, do you want to have the same level of high internalization that you Sometimes see on some more kind of chemo conventional ADCs or is there a different Kind of chemical angle that you want to take here.

Speaker 7

And just given that, I think the degrader that they're hoping to administer here the SMARCA-two, which is I think relevant in SMARCA-four deficient tumors is Probably relevant across a variety of different tumor types, requiring a variety of different target antigens. Does this collaboration contemplate the notion that you could develop multiple antibody scaffolds that are targeted towards a specific tumor type? And then they can just kind of cut and paste their version of a Smart2 Degreader on top of that. Thanks.

Speaker 2

Thanks, Steve. Great questions. Let me start by saying that we're excited about the collaboration. We have emphasize our focus on strategic partnerships. This one is certainly a 5 star strategic partnership in that we have 2 teams that are very experienced and have deep expertise on two sides of the molecule that you need, the small molecule development and the antibody development coming together to enable what we think will be an exciting new class of antibody conjugates.

Speaker 2

The first program, as you rightly pointed out, is an antibody conjugate for a degrader. It's We pointed out is an antibody conjugate for a degrader. It will be related to Smarka. I think that may have even been mentioned in the press release. The question about what exactly do you want an antibody to do to be effective, I think Is the thing that we're going to be working together to figure out.

Speaker 2

We've got some hypothesis about what might be needed, but The proof is ultimately in the assays that you do preclinically, to show that you can get a good therapeutic index and deliver enough integrator to get the effect that you want in the tumors. So this is the first of the programs. There certainly is the potential for that particular small molecule degrader to go into different cancers and that would require a different antibody. So that's on the table. The collaboration has the potential also to go into other antibody drug conjugates where The concept is to use small molecules, not just as sort of a blunt instrument poison like many cytotoxics, But to be much more targeted at Precision Pathways.

Speaker 2

And that could be degraders, that could also be other molecular entities that the team at Prelude is able to bring forward. So we're at the very beginning of this, one of the big values for both teams as we get into a new space and we'll be learning and working together. And we're excited about the chance to do something that makes a difference for patients. And hopefully and I've got confidence this will be a successful one and we'll be able to update you as it progresses.

Speaker 7

Very good. Thanks for taking the questions.

Operator

Thank you. The next question will be from the line of Puneet Souda with Leerink Partners. Your line is now open.

Speaker 4

Yes. Hey, Karl, Andrew, thanks for taking the questions. Couple of questions here. Just maybe first a simple one for 575 and 675. When do we See the early data here for both of them.

Speaker 4

Maybe just let's start there.

Speaker 2

Yes. So, for 575, I expect that we will provide some data, some preclinical data ahead of IND filing. I'm not sure exactly on the timeline right now, but we'll update you with that as it comes along. For 635 as mentioned, for strategic reasons, we do not think it would be wise or in the interest of the business to disclose target or even the indication. And so that one we're going to keep close to our chest, until it gets to IND.

Speaker 3

And Puneet, just as a reminder, Carl mentioned in his prepared remarks, but the IMPs These would be in

Speaker 4

2025. Yes, yes. So that's I was that's kind of related to my sort of second question is, Andrew, can you just remind us what the level of investment or CapEx that you have towards the GMP facility, sort of the outlay that you have for 2024 here before the opening of that facility. And obviously, if you have a drug that's going to be filed into sort of IND. There's a lot of early stage work that needs to be done.

Speaker 4

So Can you maybe talk about sort of how are you going to set the priority for or who's going to set the priority for what is going to be manufactured in that GMP facility? And then maybe just if you look at the overall capacity in the CDMO landscape today, there's a bit of an overcapacity situation. Does that impact you at all as you think about how to fill that facility in 2025?

Speaker 2

Hey, Puneet. Carl here. Maybe I'll start and Andrew can fill in if I missed something. So, first of all, for the first two programs, APCL-five seventy five and 635, we will be having these manufactured by a third party, since our manufacturing facility is not up and running. And for both programs, we believe it's imperative these move forward as quickly as possible.

Speaker 2

The manufacturing capability should come online in 2025. That's the same year that the INDs we expect to be filed for 635 and 575. The first programs through the GMP facility are very likely to be AbCellra internal programs. We also expect that we'll be doing programs that come from strategic partnerships, obviously with firms that do not have large manufacturing capabilities internally. The last part of your question was, does it affect you that there is a slowdown, let's say, in a lot of the CDMO market that I think is broadly tracking the macro environment today.

Speaker 2

Perhaps there is some effect of that, but We are expecting to use our facility not as a CDMO. So we're not going to be taking inbound on molecules that we have not developed ourselves. So the pipeline that we expect to put into the manufacturing facility is molecules that have been done either internally or at Appcellara or that have been done at Appcellara in collaboration with partners. And so based on that, I think we've got a good line of sight as to what will be used in the facility.

Speaker 4

Got it. And then maybe this is a sort of tangential question. The BEACON platform for antibody discovery changed hands and now acquired by Bruker. Could you maybe update us on if that changes your thinking a bit on the sort of the competitive landscape there? And I just wanted to make sure What's left on the litigation front there, if you could just clarify?

Speaker 4

Thank you.

Speaker 3

Yes. Sure, Puneet. Let me take that one. So as you know, the litigation with, Berkeley Lights at at the time and now Bruker. Started a couple of years ago, it went to the response was an attempt to invalidate the patents, which then stood up The IPR stood up in our favor, and our patents are have been declared legitimate and in full force.

Speaker 3

That litigation was stayed during that process and has now been unstayed, and the litigation is now underway. We intend to continue to pursue that through the courts now in the hands of Bruker, and we will wait to see what the outcome of that proceeding is, but we would expect that to continue over the course of 2024 and maybe even into 2025.

Speaker 4

Okay, fair. Okay. Thanks guys.

Operator

Thank you. The next question will be from the line of Stephen Ma with Cowen. Your line is now open.

Speaker 8

Great. Thanks for taking the questions. On the new partner adds, can you give us some color on what you're seeing given the macro environment? Maybe give us some color on your the level of your inbound discussions with potential partners and if these inbounds and discussions are weighted more to one type of player larger or smaller. And I ask that given that Prelude was a little bit on the smaller side.

Speaker 2

Yes. So, Karl here happy to take that. First, on the macro, I think you don't have to be a biotech analyst to see that this is a bear market for biotech and has been for some time. So what that means is that there is absolutely a slowdown in the formation of new companies and financing new companies. The companies that are out are preserving capital.

Speaker 2

They are prioritizing programs. And all of that results in a smaller ocean of opportunities for partnering. So that said, we have for the last 2 years been consistently communicating that our focus is not on deal volume. Our focus is on finding strategic partnerships, where strategic Means, one of 2 things. It either means that we found a company that is bringing a unique technology, such as Prelude We're a company that is bringing unique target insight in biology.

Speaker 2

And that together with them, we have a great opportunity to make therapeutic that we have conviction in and that we're able to get a significant stake in that therapeutic. So that's the first category of strategic. The second category is relationship building and setting up deeper engagements with some of the very large and well enabled companies, companies like Regeneron, companies like Insight. So examples from this quarter that line up with that. That means that we are looking at lower volume.

Speaker 2

It also means that we're primarily looking at the bigger firms. The bigger firms Are quite robust in this market. They're continuing to invest in R and D. And so I don't think that we're going to see a lot of impact on that and we're just going to continue with our strategy.

Speaker 8

Okay, great. Thanks for the color. And if we can just have one more. Has there been any changes to the timing of the GMP Biologics And then also as you start building out that down chain capability, is that impacting your partnership discussions. And again, I ask because I wanted to just curious to know if maybe the Prelude collaboration was helped by the G and P

Speaker 3

Yes. I'll take the first part of that question, Steve. It's Andrew here. So we continue to invest in both the CMC and GMP Manufacturing. I think our plan is to have the first sort of pilot batches and engineering batches for CMC development happening in 2024, so that will be in next year.

Speaker 3

And the first the engineering batches qualification batches of The production facility would be in 2025 and those that is also when the first batch is from the facility that would ultimately go to support a Phase 1. That does mean that the discovery on the programs that we're starting today could be advanced through our own CMC cell line development and then GMP manufacturing capabilities. And I think that is of interest to partners, but I'll maybe let Carl comment a little bit more on that.

Speaker 2

Yes. Not too much to add except that We have a variety of discussions, particularly in the space of new venture creation or early companies, obviously, that are not equipped with manufacturing capabilities internally, where the integration of the front end discovery, lead presentation, translational science, CMC, GMP altogether is a very attractive part of working with Appcelera. It provides way to substantially shrink the time in going from an idea through to the start of clinical development and frankly release a huge amount of hassle that exists particularly for smaller firms when they're having to set up CDMO networks and relationships and manage that and jockey with the bigger firms to make sure that their programs are coming in, in the right slots and with some flexibility. So, we see it as a Very important strategic advantage. That's why we're investing in it.

Speaker 2

It's a heavy lift to put it together, but We're crossing that right now and are confident that we'll have that in place in 2025 as Andrew said.

Speaker 4

Okay, great. Thank you.

Operator

Thank you. The next question will be from the line of Malcolm Hoffman with BMO. Your line is now open.

Speaker 9

Hi guys, Nakam on for Evan. I wanted to First ask about ABCL-five seventy five. It's noted that the molecule had been designed with greater potency and PK to enable less frequent dosing than benchmark molecules. Are you able to provide more color on what those benchmark molecules are? Are they approved assets or other in development molecules from Opcella?

Speaker 9

Thanks.

Speaker 2

Sure. So to be clear, what I said is that it's been Engineered and selected to have a combination of potency, PK and developability, particularly meaning high creation formulations that we believe would allow it to be dosed less frequently than existing benchmark molecules. We are of course testing the ones that are disclosed out there amongst them are the clinical assets including the one I mentioned earlier.

Speaker 9

Great. Thank you.

Operator

Thank you. At at this time. There are no additional questions registered in the queue. So I will turn the call back over to Carl for final remarks.

Speaker 2

Thank you everyone for joining the call today. This remains an exciting time for AbCellera with 2 big milestones in advancing our development candidates forward. We look forward to keeping you updated on future calls and wish you well.

Operator

That concludes today's conference call. Thank you all for your participation and you may now disconnect your lines.

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