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Andrew Booth

Thanks Carl.
As Carl pointed out, Abcellera continues to be in a strong liquidity position with approximately $630 million in cash and equivalents and with roughly $180 million in available committed government funding to continue to execute on our strategy.
We are continuing our plans with a focus on internal programs and completing our CMC and GMP investments.
Looking at our key business metrics in the fourth quarter, we started to work on one partner initiated program which takes us to a cumulative total of 97 programs with downstream participation.
We saw no new molecules advancing into the clinic in the quarter, maintaining our cumulative total of 16 molecules to have reached the clinic, and we understand the development of the four Trianni licensed molecules that Novarock advanced into phase one are currently paused.
As we have stated previously, we view the overall progress of molecules in the clinic as a potential source of near and midterm revenue from downstream milestone fees and royalty payments in the longer term.
Turning to revenue and expenses, revenue for the quarter was about $4 million mostly driven by research fees relating to the work on partnered programs. This compares to revenue of $10 million in the same quarter of 2024.
As we have mentioned in the past, we expect research fee revenue to continue to trend lower as we increasingly focus on internal and co-development programs.
Our research and development expenses for the quarter were approximately $43 million and $3 million dollars more than last year.
This expense is driven by increasing investment in our internal and co-development programs.
In sales and marketing, expenses for Q1 were about $3 million a modest reduction relative to the same quarter last year, and in general in administration, expenses were approximately $16 million compared to roughly $17 million in Q1 of 2024.
Looking at earnings We are reporting a net loss of roughly $46 million for the quarter compared to a loss of around $41 million in the same quarter last year. In terms of earnings per share, this result works out to a loss of $0.15 per share on a basic and diluted basis.
Looking at cash flows, operating activities for Q1 of 2025 used approximately $12 million in cash and equivalents, excluding investments in marketable securities.
Investment activities amounted to a net $17 million mostly in property plant and equipment driven by our ongoing work to establish CMC and GMP manufacturing capabilities.
The investments in [PP&E] were partially offset by government contributions.
And as a part of our treasury strategy, we have nearly $450 million invested in short-term marketable securities. Our investment activities for the quarter included approximately $25 million net decrease in these holdings.
Altogether we finished the quarter with over $630 million of total cash equivalents, and marketable securities.
As a reminder, we have received commitments for funding for our GMP facility and for the advancement of our internal pipeline from the government of Canada's Strategic Innovation Fund and the government of British Columbia.
This available capital does not show up on our balance sheet. With over $630 million in cash and equivalents and the unused portion of our secured government funding, we have approximately $810 million in total available liquidity to continue executing on our strategy.
The cash usage for the remainder of 2025 will continue to prioritize advancing our two lead programs to the clinic, building the pre-clinical pipeline, and completing our investment in the integrated CMC and GMP capabilities.
As previously communicated, the new manufacturing facility is scheduled to come online at the end of 2025.
With respect to our overall operating expenses, our capital needs are very manageable. We continue to believe that we have sufficient liquidity to fund well beyond the next three years of increasing pipeline investments, and with that, we'll be happy to take questions.

Operator

Thank you.
We will now begin the Q&A portion of the call.
(Operator Instructions)
Our first question comes from Brendan Smith with TD Securities. You may now proceed.

Question and Answer Session

Hi, this is Jackie on for Brendan. Congrats on the quarter and thank you for taking my question.
Maybe just a quick one on 635. What do you expect this asset needs to see in terms of phase one data and any follow up data to really capture that competitive edge given the head start that peers have, going beyond just, that it's more of a nicer dose and the preferred kind of type of medicine.

Carl Hansen

Sure, I'm happy to take that question, Carl, here.
So, obviously, there's some recent activity in the approval of NK3R antagonists with Fezolinetant and Elinzanetant.
That's a terrific outcome for patients that are looking for non-hormonal treatments.
We view, the validation and the success of those molecules as very positive for this program. There's going to be some time required to communicate to medical practitioners and patients and to start to build the class, and we are positioned with a molecule that would take advantage of that growing awareness and would be positioned if it is successful, to launch into what has become a large and established class.
In terms of, what we need to see in the phase one studies, we haven't disclosed the design of those studies, but we will be looking, of course, at safety, but also at some very important data on biomarkers which are an early sign of target engagement and on the latter part of the study evaluating efficacy in in a population of participants.
So, one of the really attractive things about this program is that by midpoint next year we should have data that tells us a lot about the success of the program and the science, and with that we'd be in a position to double down and to invest further from a differentiation perspective, which was, related to or part of your question, really it's two things.
The first is we do believe that an antibody that is specific to NK3R can have a cleaner safety profile.
Which is something that we believe is highly valued and differentiated and perhaps even more in differentiation is the dosing.
As mentioned in my prepared remarks, we have conducted a study that shows that a majority of women would prefer to have a once monthly subcutaneous self-administered injection over a daily pill.
And for women that have experience with auto injectors, that number goes up to about 70%.
With the growing use of auto injectors, particularly in the [GOP] one class, we see that as a trend that's going to continue to grow over time. It's a matter of convenience.
It's a matter of compliance, and you know people that have busy lives would prefer to have something that is, something you do once a month and then you don't have to worry about it after that.
If we are successful, and of course we're just at the very beginning of this, so you know our eyes are laser focused on getting this early data, but if successful again it launches into a large class, and we think that there's a significant population, in fact, the majority, that would prefer that format.

No, that's very helpful.
Thank you.
Then maybe one just a quick one, what should we expect to see from the upcoming 575 free clinical data tomorrow, presented at the medical meeting?

Carl Hansen

Sure, yeah.
So, we are presenting at [SI], as I mentioned, the pre-clinical data will include, some early early animal work that supported the filing, and probably the most important data is the first glimpse at [PK] analysis and predictions of what that would lead to in human studies.
The main pillar of differentiation for ABCL575 is that we believe it will be differentiated in having a superior dosing regimen, and we're aiming for having, at least three months, if not six months dosing and are optimistic that you'll be pleased with the data when you see it.
Great, thank you so much.

Operator

Thank you.
My next question comes from Andrea Newkirk with Goldman Sachs, who may now proceed.

Hi all, this is Tawane on for Andrea.
Thanks for taking the questions and congrats on the progress.
Just one another quick one on 635. Given the risk you had mentioned facing the program around translatability of the NK3R engagement from the pre-clinical studies into humans, is there a precedent you could point to that gives you confidence that those observations will still hold in the clinical setting?

Carl Hansen

That's a great question.
So, you know we have preclinical data including data on NHP that give us, a lot of reason to be optimistic that this will translate into humans.
And so I think I am being circumspect largely because drug development is a humbling industry and you're often surprised and of course non-human primates are not humans, so it needs to be shown there.
In terms of precedent, there are There are some antibodies, I believe, CGRP receptor that are in a similar part of the brain, so there is some precedent, but you know this is a different pathway and the details of where the neurons are in that part of the brain.
And of course, behind that, whether or not we have complete understanding of the pathway, which we believe we do, but sometimes you can be surprised, all of those things need to be de-rest and the important thing for ABCL635 is that.
The development path allows us to test both of those main risks early in clinical development through the through a biomarker readout and early efficacy.
So, it's not, it's not that I would bet against it, but I think in all drug development we should be cautious and not assume that things are going to translate directly from nonhuman primates to humans.

Okay, understood, thank you.
And then just one more if I may, with both 575 and 635 now advancing into the clinic, how are you thinking about the next development candidates?
And is there any line of sight at the time as to what targets or indications might be selected or of interest?

Carl Hansen

Sure, I'll take that one again.
Yeah, so we are, building our our portfolio and making investment decisions according to the framework that I outlined in some detail in the last earnings call and that I alluded to at the start at the start today.
Basically we're looking for high conviction biology with a large unmet medical need, a compelling case for differentiation, and importantly, a development path that allows us to get as much information as quickly as possible and it doesn't pose, undue risk or or require a huge amount of time and money to get those early answers.
Beyond that we are target agnostics, so we have been looking broadly across indications, broadly across biology to look for opportunities that we're excited about.
A substantial portion of that that effort has brought us to the difficult target classes, so ion channels and GPCRs, and as I said in my prepared remarks, it's likely that the next development candidate that will come up will be another one that is either a GPCR or ion channel that builds on what has been years of technology and capability building to unlock that class, and we're quite excited about that.
Typically we will not be discussing targets or indications until a program has moved at least to development candidate and once it is a development candidate we will disclose the indication the target if we believe that that is strategically wise and we will avoid doing that if we think that there's a downside in terms of competition.
And so depending on what the target is, we'll either disclose very early as we did with 575, or we will hold it closer to our chest and disclose it closer to CPA filing as we have done with NK3R.

Makes sense thank you.

Operator

Our next question comes from Puneet Souda with Lerink Partners. You may now proceed.

Puneet Souda

My first one has to do with the 575 asset.
So, during the quarter we saw some updates from lacotinlamab as well as amletelamab and asthma. I was wondering if you had any comments on how those readouts inform your updated view of the opportunities for the particular asset.

Carl Hansen

Yes, Carl, here I'm happy to take that one. Thanks for the question, Puneet.
So, first of all, our investment thesis in 575 is is reinforced by the hypothesis that the Ox40 ligand class is going to be a huge class, important not just in atopic dermatitis, which is obviously a huge market, but also we'll find applications across other indications.
Over the last quarter, I think there's been, several points that confirm and reinforce that hypothesis. So, there is the Sanofi trial in asthma, and while they did not read out on the top line, there was a subset of patients for which they got 70% responses, which is excellent.
That subset of patients are the patients with high eosinophil counts, which is the same patient group for which [Dupiant] is being used and so we view that as a very strong positive signal that Ox40 ligand is going to have applications and be an important therapeutic option in asthma. And of course, Sanofi has put their money where their mouth is they're advancing that into phase three, so we see that as a very positive outcome.
In addition to that, there was a readout for another Ox40 ligand molecule from imaging with some early efficacy in alopecia, which again highlights that Ox40 ligand will have applications broadly in INI, and while it has not been widely covered.
Sanofi has decided to advance an Ox40 ligand TNF-alpha by specific for HS.
So, that is another example of Ox40 ligand being important in HS and also reinforces a second pillar of our investment thesis, which is that Ox40 ligand is a particularly good pathway or Ox40 ligand is a particularly good pathway for combination therapy.
You asked also about rocatinlamab they've released additional data. I mean, I would say that the data is disappointing compared to what has been seen with amlatilumab.
It's not clear if that is a reflection of the difference between targeting Ox40 ligand and Ox40, or if it's a difference with the mechanism of action, because rocatinlamab is of course a depleting antibody, whereas we have an FC effector null variant which will not deplete cells.
So, all of that we view as being very positive and a tailwind for the program, in our shop we're currently focused on getting the early phase one data.
The most important part of that is going to be demonstrating the long extended PK, and then a lot of the big catalysts are going to come from outside of Abcellera and examples of the Ox40 ligand class working at other indications.
Or working in combination are things that we believe, add value to that program and make it more attractive, going forward. So we're keeping an eye on that just like you are.

Puneet Souda

Okay, and then I want maybe a bit of a deep cut, but, given pharma tariffs, there's been a lot of talk about where IP gets domiciled as a Canada-based company.
I was wondering if that becomes an element of discussion when you're thinking about, spinning off assets to potential partners.

Andrew Booth

Hey thanks. It's Andrew here.
I think at the moment we haven't had a discussion in terms of spinning off assets. We have our intellectual property up here in Canada and for now it remains a good jurisdiction for us to hold intellectual property, so we haven't had many discussions further than that.

Puneet Souda

Got it, thank you.

Operator

Thank you.
Our next question comes from Malcolm Hoffman with BMO. You may now proceed.

Malcolm Hoffman

Hi, I'm Malcolm Hoffman for Evan Sugarman from BMO.
You called up for Nova Rock molecules in the clinic that have been paused. Can you provide some more context to this pause and what it means for future development, and then kind of extending off the conversation around IP in Paris.
I know a decent amount of the manufacturing capabilities for Abcellera, based in Canada. Is there any consideration for potentially producing US-based manufacturing redundancies to kind of address that? Potential risk in the future.
Thank you.

Andrew Booth

Yeah, sure, I'm happy to take that one. With regard to the Nova Rock molecules, I think we just thought it prudent to disclose what we had seen on their own website.
We believe it's related to fundraising, which is not uncommon in the current in the present environment for them to complete fundraising in order to continue those trials.
But we'll keep an eye on that and give any updates as we see it with regards to the manufacturing facility, and we do have this manufacturing facility in Canada.
Right now we are, we have built this manufacturing facility in order to support us in our phase one, phase two clinical trials, so still during research phase of the manufacturing the product, and as as we have mentioned, our first two molecules, we are advancing them through to CTA in Canada, but even as it's still, even if wear trials in the United States.
I don't believe it will be an issue in moving those products over the border in order to conduct those clinical trials.
We haven't given any thought. It's still quite early to think about when we get to commercial, when we think about commercial manufacturing for any of these molecules, where that might be done, and that's still a topic for much in the distant future.

Malcolm Hoffman

Appreciate it, Thank you guys.

Operator

Thank you.
Our next question comes from Srikripa Devarakonda, which is, you may now proceed.

Srikripa Devarakonda

Hey guys, congrats on all the progress and thank you so much for taking my question.
I know you've not yet talked about trial design, but as you go through your planning, I was wondering if there are any specific learnings from all the other trials relevant to 635 that have already been done.
That can help you optimize your trials and also if I'm not mistaken, as a target has had NK3R has had a long history in terms of drug development with earlier trials focused on neuropsychiatry, wondering if there's good enough understanding and if that could be, I know it's really early stages, but there is a potential to expand beyond VMS.
Thank you.

Carl Hansen

Carl, here I'll take that. I'm actually not aware of the development of NK3R in neurological indications. I think there is some precedent for NK1R, which is the second target that is hit by Elinzanetant. Beyond that, I don't think I'd be able to comment.
Coming back to the development path, it is a big advantage that there is a clear development path that has now been successfully navigated by two products.
So, it's obvious what the final endpoints should be the patient population, how to set that up.
So, we have an advantage from that perspective in that we don't have a lot of ambiguity as to what will be the bar for getting approval of ABCL635.
We haven't yet disclosed details of the clinical development plan. But as for my previous comments, our emphasis right now is to design the first trial and not to pull punches so that we can take as much risk off the off the table as soon as possible.
So, we are looking in this first trial, not just to get a look at safety, which we believe will be good, but you always have to prove that, but also to get early evidence from biomarkers on target engagement and an early read on efficacy.
So, once we have that in hand, then if it looks the way that we we hope, we would be working to accelerate the path forward to development, and there's already some thinking and planning around that, but of course it depends upon regulatory engagement and on the data that we get from the phase one trial.

Srikripa Devarakonda

Okay great thank you so much.

Operator

Thank you.
Our next question comes from Stephen Willey for Stifel. You may now proceed.

Hey thanks for taking our question. This is Josh on for Steve.
Quick one on 635 in terms of the development plan, do you think you and I know you said that you haven't really disclosed the full plan just yet, but do you think you'd have to go into healthy volunteers first to kind of establish the preliminary PKPD and safety analysis ?
and then just to follow up on some of the questions related to biomarkers and target engagement.
Could you maybe just provide us with some color on what types of biomarkers you'll be looking at preliminarily to get a sense as to the target engagement here?
And then I just have a follow up.

Carl Hansen

Sure, yeah, so the short answer is in the early part of the trial we will be enrolling healthy volunteers and connecting that with your second question, we expect to enrol both male and female healthy volunteers and the most reliable biomarker of NK3R engagement would be testosterone levels.
So that's probably one of the early readouts that we get, which gives you some strong evidence of target engagement, but of course that's not conclusive until you can show that that also translates into efficacy.

Great, thank you.
And then just my follow up was on the PSMA by CD3 T-cell engager presentation you guys made it [ACR] could you just maybe tell us about, and I know it's early, but is there anything you could tell us about which format you currently believe can have the best target profile in terms of threading the needle on both efficacy and safety as it pertains to CRS risk.
And then, is this you know what's the timeline for maybe nominating a development candidate and is there kind of an appetite for out licensing with BD?, or is this something that you maybe want to develop internally?

Carl Hansen

Yeah, I'll start with the question about about format and honestly that is the multi-billion dollar question that everyone across the industry is trying to answer, at ACR as as in previous years, at a high level there is increasing, I'd say accelerating enthusiasm for TCE as a class.
A lot of that has been driven by very exciting data in solid tumours.
When you talk to all the different groups, it's also apparent that it doesn't look as though there's going to be one technology and one solution that is the magic bullet for every solid tumours or for every target.
And many pharma companies and the big players who have committed to the space, and I would say that list is growing quickly, are placing multiple bets because you need to do these experiments in the clinic to find out what is working.
Our approach to this has been to not cut corners but to do the hard work to put in place, the tools, the workflows, the assays, to start to systematically investigate.
Which targets, which formats, which modalities, perhaps even combinations with co-stimulation are going to be needed to get efficacy and tolerable safety in the clinic.
And that foundation is allowing us to make in our shop what I believe is some pretty rapid progress, but we are of course only one company in an ecosystem that's working on this problem and we're also working with partners to solve this as well.
So, when we start to get, a hook on the science or when the breakthroughs come, we're going to be very well positioned to capitalize on that, and we're already seeing, some really promising results with some of the internal programs.
You asked if we'd be open to licensing, or if we bring them into the portfolio, and I think both those options are on the table. I think I said in my prepared remarks we see this as both a platform for for building our pipeline as well as for partnering.
And we make those decisions based on, the opportunity and the framework that I described in response to the previous question.
So, TBD there. But we are increasingly excited about the TC space, and it should be no surprise to anyone that if the class is to have the promise that everyone believes it does, which is to provide, perhaps not curative but very meaningful treatments to patients who have no options in cancer.
That isn't something that's going to come easily and it's going to take the combined efforts of many groups in the clinic as well as in the lab.
And so that's that's something we're committed to and we think it's going to be a long game.

Okay great.
Thank you for taking the questions.

Operator

Thank you.
There are no questions waiting at this time, so I'll pass the conference back over to the management team for any further remarks.

Carl Hansen

No further remarks. Just thank you everyone for joining us today. We're excited about the progress and looking forward to the next call.
Take care.

Operator

That concludes today's conference call.
Thank you for your participation. You may now disconnect your line.