AbCellera Biologics Q2 2025 Earnings Call Transcript

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August 7, 2025

Key Takeaways

  • Positive Sentiment: Absella has received Health Canada authorization and initiated dosing in its Phase I trials for ABCL635 and opened the ABCL575 study, marking its transformation into a clinical-stage biotech.
  • Positive Sentiment: The company expanded its pipeline by advancing ABCL688 into IND-enabling studies, with an IND submission targeted for mid-2026.
  • Positive Sentiment: Absella’s new CMC/GMP manufacturing facility remains on track to come online in late 2025, supporting future clinical supply and internal production needs.
  • Positive Sentiment: With approximately $750 million in total available liquidity—including cash, equivalents, securities, and committed funding—the company is funded for over three years of pipeline advancement.
  • Neutral Sentiment: Second-quarter revenue rose to $17 million (driven by a one-time $10 million licensing payment) versus $7 million a year ago, while net loss narrowed to $35 million (EPS –$0.12).
AI Generated. May Contain Errors.
Earnings Conference Call
AbCellera Biologics Q2 2025
00:00 / 00:00

There are 10 speakers on the call.

Operator

Good afternoon, and welcome to Absella's Second Quarter twenty twenty five Business Update Conference Call. My name is Jason, and I'll facilitate the audio portion of today's interactive broadcast. At this time, I would like to turn the call over to Bryn Treymart, Absella's Chief Legal and Compliance Officer. You may begin.

Speaker 1

Thank you. Hello, everyone. Thank you for joining us for Absella's twenty twenty five second quarter earnings call. I'm Trent Steinmart, Absella's Chief Legal and Compliance Officer. Doctor.

Speaker 1

Karl Hansen, Absella's President and CEO and Andrew Booth, Absella's 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. Our actual results may differ materially due to several factors outlined in our latest Form 10 ks and subsequent Forms 10 Q and eight ks filed with the Securities and Exchange Commission. Absella is not obligated to update any forward looking statements whether due to new information, future events or otherwise. Our presentation today, including our earnings press release and SEC filings issued earlier today are available on our Investor Relations website.

Speaker 1

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, please note that all dollars referenced are U. S. Dollars. After our prepared remarks, we will open the lines for questions and answers.

Speaker 1

Now I'll turn the call over to Karl.

Speaker 2

Thanks, Trinh, and thank you, everyone, for joining us today. This quarter, we achieved a major company milestone, receiving Health Canada authorization to initiate EBSELRI's first two clinical trials for ABCL635 and ABCL575. Today, I'm pleased to announce that dosing has begun in our Phase I clinical trial evaluating ABCL635 for moderate to severe vasomotor symptoms. 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 I clinical trial for ABCL-five seventy five, and we anticipate dosing will begin shortly.

Speaker 2

I'm also pleased to announce that we have added a third program to our pipeline by advancing ABCL-six eighty eight into IND enabling studies. We ended the quarter with approximately seven fifty million dollars 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. 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. ABCL635 is a potential first in class therapeutic antibody being developed for the non hormonal treatment of moderate to severe vasomotor symptoms, more commonly known as hot flashes, that are associated with menopause. ABCL635 is a potential next generation NKTR antagonist designed to have both an improved safety profile and a more convenient dosing regimen.

Speaker 2

If ultimately successful, 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 ABCL635 in 2025. And today we are pleased to announce that we have begun dosing participants. The ABCL635 Phase I clinical trial is a randomized, placebo controlled, double blind study in men and postmenopausal women with or without BMS. Its purpose is to evaluate safety, pharmacokinetics, pharmacodynamics, and the frequency and severity of BMS with subcutaneous doses of ABCL635.

Speaker 2

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 ABCL635 is whether or not we can achieve sufficient target engagement. 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-twenty twenty six. Turning to our second program, ABCL575, we received authorization from Health Canada in May to initiate a Phase one clinical trial.

Speaker 2

The trial was opened in July and we anticipate dosing our first participant this quarter. This is a double blind placebo controlled study designed to assess safety and tolerability in healthy participants following subcutaneous doses of ABCL-five seventy five. ABCL-five seventy five 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 I and I indications. We recently presented preclinical data which demonstrates it has potent functional activity in vitro that is in line with amotilumab as measured by cytokine responses across a variety of cytokines including IL-thirteen, IL-five and IL-nine. As a reminder, ABCL-five seventy five is engineered with half life extension to support less frequent dosing.

Speaker 2

Based on PK data we have obtained from studies in FcRn humanized mice, we predict a human half life of approximately sixty seven days. Using this half life, our modeling predicts that a three hundred mg dosing of ABCL575 every six months should achieve circulating concentrations that remain above the efficacy threshold that was observed for amlutilumab. This prediction, once confirmed in clinical studies, would support a product profile with subcutaneous dosing once every six months. In addition to our clinical programs, we continue to allocate significant resources to internal discovery to build out our pipeline. This quarter, we advanced ABCL688 into IND and CTA enabling studies.

Speaker 2

ABCL688 is a potential antibody medicine for an undisclosed indication in autoimmunity. It is the third program in our pipeline and the second program derived from our GPCR and ion channel platform. Similar to ABCL635, for strategic reasons, we will not be disclosing additional information on ABCL688 until this program reaches the clinic. Our intent is to submit an IND in mid-twenty twenty six. For the remainder of the year, our priorities are as follows: executing on our clinical studies with ABCL635 and ABCL575 moving ABCL688 forward in IND enabling studies, advancing a fourth program from discovery into our pipeline, and finally bringing our clinical manufacturing capabilities online.

Speaker 2

And with that, I'll hand it over

Speaker 3

to Andrew to discuss our financials. Andrew? Thanks, Karl. As Karl pointed out, Absella continues to be in a strong liquidity position with approximately $580,000,000 in cash and equivalents and with roughly $170,000,000 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 on completing our CMC and GMP investments.

Speaker 3

Looking at our business metrics, in the second quarter, we started work on five partner initiated programs, which takes us to a cumulative total of 102 programs with downstream participation. Both ABCL635 and ABCL575 received their clinical trial authorizations in the second quarter, thus advancing into the clinic. They are the first Absella led molecules to reach the clinic, taking the cumulative total number of molecules to have reached the clinic, including those led by partners to 18. As we have previously stated, 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. Turning to revenue and expenses.

Speaker 3

Revenue for the quarter was approximately $17,000,000 comprising of research fees relating to work on partner programs and amounts related to licensing. This compares to revenue of $7,000,000 in the same quarter of 2024. The licensing fees of 10,000,000 stems from our Triany humanized rodent platform and mostly consists of a lump sum amount in this quarter. With respect to research fee revenue, as we have mentioned in the past, we expect these to continue to trend lower as we are increasingly focused on internal and co development programs. Our research and development expenses for the quarter were approximately $39,000,000 $2,000,000 less than last year.

Speaker 3

This expense reflects ongoing investment in our internal and co development programs. The slight decrease is related to the timing of larger program specific related expenses, which were larger in the second quarter of last year. In sales and marketing expenses for Q2 were about $3,000,000 a small reduction relative to the same quarter last year. And in general and administration, expenses were approximately $19,000,000 compared to roughly $20,000,000 in 2024. Included in these expenses are the ongoing expenses related to the defense of our intellectual property.

Speaker 3

Looking at earnings, we are reporting a net loss of roughly $35,000,000 for the quarter compared to a loss of $37,000,000 in the same quarter of last year. In terms of earnings per share, this result works out to a loss of $0.12 per share on a basic and diluted basis. Looking at cash flows, operating activities for the 2025 used approximately $44,000,000 in cash and equivalents. Excluding investments in marketable securities, investment activities amounted to a net $36,000,000 mostly in property, plant and equipment driven by the ongoing work to establish CMC and GMP manufacturing capabilities. The investments in PP and E were partially offset by government contributions.

Speaker 3

As a part of our treasury strategy, we have about $460,000,000 invested in short term marketable securities. Our investment activities for the quarter included an approximately $12,000,000 net increase in these holdings. Altogether, we finished the quarter with $580,000,000 of cash, cash equivalents and marketable securities. As a reminder, we have received commitments for funding for our GMP facility and the advancement of our internal pipeline from the Government of Canada's Strategic Innovation Fund and the Government of British Columbia. This available capital does not show up on our balance sheet.

Speaker 3

With over $580,000,000 in cash and equivalents and the unused portion of our secured government funding, we have around $750,000,000 in total available liquidity to execute on our strategy. The cash usage for the remainder of 2025 will continue to prioritize advancing our two lead programs through their Phase one 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 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 three years of increasing pipeline investments.

Speaker 3

And with that, we'll be happy to take your questions.

Operator

Our first question is from Andrea Newkirk with Goldman Sachs. Your line is now open.

Speaker 4

Everyone, this is Telani on for Andrea. Thanks for taking our questions and congrats on the progress this quarter. One quick one from us. Just given the recent news of the delayed PDUFA for our own Zanetem, do you guys anticipate any risks to the development path for June from a regulatory perspective? And what do you expect regulators will be most focused on in evaluating the drug profile as it advances in development?

Speaker 4

Thank you.

Speaker 2

You're breaking up a little bit at the end of the question. I did get the first part of it. So yes, there was a delay with elenzanatant. Our understanding is that the FDA requested additional information from Bayer and that information is forthcoming. I think the comment suggested that there was no concern raised about the approvability.

Speaker 2

And our expectation is that that will move forward to approval later this year. So beyond that, don't think we have anything any special insight into that. I didn't get the last part of the question. Could you please repeat?

Speaker 4

Sure. Sorry about that. Yes, was just wondering what do you think the FDA and other regulators will be focused on in evaluating six thirty five's profile as it moves forward in clinical development?

Speaker 2

Sure. There's now, I think, a well trod path for the NKTR class, both with fezalinotant and olanzanotant. Obviously, we need to demonstrate efficacy. As I mentioned in my prepared remarks, we're excited about the upcoming data and the readout midpoint next year. That should give us a lot of information about the efficacy and target engagement, which we do see as the primary scientific risk.

Speaker 2

On the safety side, as I mentioned on last call, so far what has been seen in the class for NKTR antagonist is some liver toxicity or the signal of liver toxicity as well as somnolence or sleepiness. We believe the somnolence is because of targeting not just NKTR, but also NKTR, which our antibody does not do. So we expect that that would not be a concern. And similarly, because we are the first in class antibody for this and antibodies are not metabolized in the liver as our small molecules. And because, there is little evidence of expression of NKTR in the liver, we don't expect that there will be liver tox associated with our drug.

Speaker 2

But of course, we need to demonstrate that in the trial. And I'm sure the regulators as the investment community will be looking at the two main things which we always look at which is efficacy and safety.

Speaker 4

That's helpful. Thank you.

Operator

Our next question is from Rikirupadavarakonda with Truist. Your line is now open.

Speaker 5

Hey guys, thank you so much for taking my question and congratulations on the progress this quarter. So for the ABCL635 Phase I trial, congrats first of all in getting the trial initiated efficiently. But now that you've initiated the trial, can you talk a little bit more about the specifics? Is there a certain what the total number of patients? And if there is a certain ratio of healthy men to postmenopausal women you expect to enroll?

Speaker 5

Adam, maybe a bit more broader question. You had previously said that fifty percent of menopausal women are hesitant to take HRT because of the concerns around the consequences. With Doctor. McCary being, he seems to be a very strong proponent of HRT. Do you think this might change the way that the market overall?

Speaker 5

Or do you think it's you you still have a substantial market?

Speaker 2

Sure. So first I'll maybe provide a little bit more information on the clinical trial. So as you might expect, the first parts of the trial are basically a single ascending dose than multiple ascending dose. In the single ascending dose, we'll include both menopausal men. Pardon me, that would be difficult to recruit.

Speaker 2

We will include both menopausal women and or healthy male volunteers. And in that part of the trial, we will be able to assess some biomarkers. In the MAD, we will be recruiting only post menopausal women and the combination of the SAD and the MAD could be roughly fifty six, 60 patients or so. Once we progress on to the proof of concept, we expect to enroll up to 80 patients. And in that case, in that phase of the study, we will of course be recruiting postmenopausal women with moderate to severe BMS.

Speaker 2

So to the second part of your question, there has been some discussion lately about the use of menopausal hormone therapy and some revisiting of the women's health study that was a study that I think cast a bit of a shade on the benefits of menopausal hormonal therapy for the treatment of BMS and other symptoms related to menopause. Our view has always been that the NKTR class is not in competition with hormone therapies. So it turns out that there are roughly twenty percent of the eligible population that either have contraindications, so have risk factors that mean they're not eligible for hormone therapy or that try hormone therapy and are unable to continue. So twenty percent of the population for which hormone therapy is not, meeting their needs. And then of course, there's some other portion of the eighty percent that are going to have, a preference not to use hormone therapy.

Speaker 2

So, if you look at the number of eligible patients in The U. S. Alone, that's a very large patient population. And we would need to only capture a relatively small portion of that market to have this drug be a So we're still very confident about the market opportunity.

Speaker 2

And we expect the conversation about MHT will continue as it should. And that doesn't change our view of the market, since we sort of had that in mind from the very beginning.

Speaker 5

Okay. Great. Thank you so much for the color. Really helpful.

Operator

Our next question is from Faisal Kushid with Leerink Partners. Your line is now open.

Speaker 6

Hey guys, thank you for taking the question. Really appreciate it. I just wanted to ask on the partnership and licensing revenue for the quarter. It seemed a little bit higher than kind of where you've been. Should that be an expectation kind of going forward?

Speaker 6

Or how should we think about sort of the cadence and sequencing of those funds coming in? Thank you.

Speaker 3

Yes, good question. This is Andrew here speaking, Faisal. No, you should not this was definitely a one off payment really related to activities post the acquisition of Triani that were completed really as an earn out to the former shareholders of Triani. So you'll see in addition to the $10,000,000 licensing revenue, a change in the contingent consideration on our balance sheet, which is really the balancing entry related to that transaction. So it's not something that we would expect to have happen in the future.

Speaker 7

Got it. Thank you.

Operator

Our next question is from Malcolm Hoffman with BMO. Your line is now open.

Speaker 8

Malcolm Hoffman on for Adam Seigerman from BMO. Can you remind us what key efficacy data we should be looking out for in the six thirty five Phase I study? I understand we're largely looking for safety in a Phase I, but what biomarker efficacy measures will start to give us kind of confidence and further development here from a competitive perspective?

Speaker 2

Sure. So Carl here. So, early in the study, we will be assessing some biomarkers, so LH and FSH in men and women. In the SAD, where there will be only healthy volunteers participating men and women, obviously, in men, 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.

Speaker 2

So that's the first check, but that is not, 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 eighty, postmenopausal women with moderate to severe BMS. And there we're going to be assessing, the frequency and severity of BMS, which is self reported. And so we won't have that data until sometime in mid twenty twenty six.

Speaker 2

But we think that study is sufficiently powered to give us coming out of that if it lines up the way that 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.

Speaker 8

Appreciate it. Thanks guys.

Operator

Our next question is from Jacqueline Tissow with TD Securities. Your line is now open.

Speaker 7

Hi, guys. I think I think it's supposed to be Brendan. I think Brendan from TD Securities on. Sorry about the confusion there. Thanks for taking all the questions, guys, and all the good color.

Speaker 7

It's great to see the VMS asset moving along. I actually just wanted to maybe ask another follow-up on that. Actually, just related to, target dosing in any respect. I fully appreciate it's still early days. A lot to kind of understand with, some of the biomarker data and what that realistically means for kind of uptake down the road.

Speaker 7

But, are there any special considerations when you're thinking about, you know, formulation or frequency of dosing that could kind of help, as you're thinking about clinical plan down the road and then just any ability to kind of target these kinds of patients from a commercial standpoint?

Speaker 2

Yes. I'm happy to give a little bit of color on that. So a lot of this rests on our preclinical work from which we believe that we've got an antibody that has a half life and a potency that would support once monthly dosing on a single subcutaneous dose. And that subcutaneous dose would be a high concentration formulation at one hundred and fifty mg per ml, at two ml. So remains to be seen.

Speaker 2

But based on what we've seen so far, we've got a molecule we believe hits that TPP. And of course, that's one of the things we're going to be testing, both efficacy and in the bioavailability and PK data that will come out of the Phase I study.

Speaker 7

Our

Operator

next question is from Stephen Wiley Your line is now open.

Speaker 9

Thanks for taking the question. This is Josh on for Steve, and congrats on the progress. So I noticed the healthy volunteer trial for May is now posted to clinicaltrials.gov. I noticed there was one Canadian site listed. And I guess just looking forward as like a longer term strategy, do you plan on activating any U.

Speaker 9

S. Sites beyond Phase one? Is this kind of related to like a capital commitment contingency with the governments of Canada and British Columbia to run all your trials in phase one in Canada first? And then I just have a follow-up.

Speaker 2

Yes. So we have activated a site in Canada that's an expert in dermatology. We are very pleased with that site and we think they have full capabilities to execute the Phase one study. Right now our focus is on that. From our perspective, the big thesis around May is our belief that the OX40 Ligand class is going to be an immense class, not just in atopic dermatitis, but in other autoimmune and inflammatory conditions.

Speaker 2

We think that the key readout we're going to get in the near term is going to be bioavailability and PK, confirming some of the preclinical work we've done and the modeling that I showed during my prepared remarks. And that the other big catalysts are going to come from outside of the company, in particular, some of the clinical development with amatilamab and other molecules in the class that are moving forward. So we are currently focused on that. We are also beginning to engage with the FDA and lay the foundation for the Phase two studies, which you would likely expect to include U. S.

Speaker 2

Sites. But we haven't triggered that yet and we have some time before we need to.

Speaker 9

Great. Thanks. And then just a follow-up. I know it's early. You said you won't disclose any details around six eighty eight for now, but could you maybe speak to some of the autoimmune indications of interest you might be considering for this asset?

Speaker 2

Yes, I'm afraid we're going to hold this one close to our chest for strategic reasons. What I will say is that this is a program that we're very bullish on. I'd put it in a similar category to ABCL635. It's one where we have a high conviction in the biology and where we think we can get some meaningful data early on. It's got a bit of a different competitive dynamic, but it's also a program we intend to move very quickly.

Speaker 2

And so our focus right now is getting that to the clinic as quickly as possible. And when we do, we'll be able to share more details with you. So sorry for being a little bit reticent on details, but I think it's probably in the best interest of the program.

Speaker 9

No worries. Thanks guys.

Operator

It looks like there are no more questions. So I'll pass the call back over to the management team for closing remarks.

Speaker 2

Just to say thank you everyone for the support and for joining us today and we look forward to updating you as we progress from where we are today into the clinic. Thanks very much.

Operator

That concludes the conference call. Thank you for your participation. Enjoy the rest of your day.

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