AbCellera Biologics (ABCL) Q2 2025 Earnings Call Transcript

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Date

Thursday, August 7, 2025, at 5 p.m. ET

Call participants

• Chief Executive Officer — Dr. Carl Hansen
• Chief Financial Officer — Andrew Booth
• General Counsel — Tryn Stimart

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Takeaways

• Liquidity position-- Approximately $750 million in available liquidity at the end of Q2 2025, consisting of $580 million in cash and equivalents and $170 million in committed government funding.
• Revenue-- $17 million in revenue, with $10 million from one-time licensing fees related to the Triani platform; $7 million in revenue was reported in the prior year, indicating a $10 million year-over-year increase, mainly due to the lump-sum licensing revenue.
• Research fees-- Expected to "continue to trend lower" as focus shifts further to internal and co-development programs, according to Booth.
• R&D expense-- Research and development expenses were approximately $39 million, $2 million less than the previous year, attributed to the timing of program-specific expenditures.
• Net loss-- Net loss was $35 million, compared to $37 million in the prior year. Loss per share was $0.12 basic and diluted.
• Cash usage-- Operating activities used approximately $44 million in cash and equivalents. Capital investments of $36 million mainly funded CMC and GMP capabilities, partially offset by government contributions.
• Clinical pipeline progress-- ABCL-635 and ABCL-575 received Health Canada clinical trial authorizations and initiated or prepared for dosing; ABCL-688 advanced to IND-enabling studies, becoming the third program in the pipeline.
• Molecules in clinic-- Total advanced to 18, including partner-led programs; two are AbCellera Biologics-led, marking the firm's transition to clinical-stage status.
• Manufacturing investment-- New integrated GMP facility remains on track to be operational by year-end, with cash deployment prioritized for this initiative and clinical advancements.
• Clinical trial design for ABCL-635-- Initial single- and multiple-ascending dose cohorts will target 56-60 participants in the ABCL-635 Phase One clinical trial, with up to 80 planned for the proof-of-concept stage in postmenopausal women.
• Key clinical timelines-- Initial safety and efficacy data from the ABCL-635 trial are anticipated in mid-2026; IND submission for ABCL-688 targeted for mid-2026.
• Licensing revenue sustainability-- Booth stated, "this was definitely a one-off payment ... not something that we would expect to have happen in the future," clarifying the nonrecurring nature of this quarter's licensing fee.
• ABCL-575 half-life-- Human half-life predicted at approximately 67 days, supporting semi-annual dosing once confirmed in clinical trials.
• Cash and marketable securities-- $580 million in cash, equivalents, and marketable securities at the end of Q2 2025; $460 million of this is invested in short-term marketable securities.
• Downstream milestone exposure-- 102 partner-initiated programs with downstream participation, with potential for future milestone and royalty revenue.

Summary

Strategic investments advanced AbCellera Biologics(ABCL 2.18%) from a platform to a clinical-stage company, highlighted by the initiation of two first-in-human studies and expansion of its internal pipeline. Pipeline progression included ABCL-635 and ABCL-575 reaching Canadian clinical trials, and ABCL-688 entering IND-enabling studies, aligning with management's stated 2025 objectives. Management reaffirmed guidance for sufficient liquidity to fund pipeline advancement and manufacturing buildout well beyond the next three years, supported by $750 million in available resources at the end of Q2 2025. The one-time $10 million licensing fee contributed to a temporary boost in revenue. Management clarified this will not recur, and emphasized a focus shift toward long-term value through clinical-stage assets.

• Dr. Hansen explained that "the main scientific risk for ABCL-635 is whether or not we can achieve sufficient target engagement," with proof-of-concept data expected to provide clarity in mid-2026.
• ABCL-575’s predicted dosing schedule of every six months is enabled by a "human half-life of approximately 67 days," as stated by management in the Q2 2025 earnings call.
• Research fee revenue is projected to "continue to trend lower" due to prioritization of internal and co-development programs, impacting future near-term revenue streams.
• The company expects to advance a fourth program from discovery into its pipeline. The buildout of its GMP clinical manufacturing facility is expected to be completed by year end.
• Government funding from the Strategic Innovation Fund and British Columbia is not included in the reported cash figures, as this available capital does not appear on the balance sheet.

Industry glossary

• NKTR antagonist: An antibody or small molecule therapy that targets the neurokinin-3 receptor (NKTR), often investigated for a role in managing vasomotor symptoms and menopause-related hot flashes.
• TriAni platform: A proprietary genetically engineered mouse technology used for generating fully human monoclonal antibodies.
• CMC: Chemistry, Manufacturing, and Controls — a regulatory classification covering product development processes essential for clinical trial applications and commercial production in biopharma.
• GMP: Good Manufacturing Practice — standards ensuring consistent quality and safety in pharmaceutical manufacturing.
• IND-enabling studies: Preclinical experiments required to support an Investigational New Drug application, often including pharmacology, toxicology, and manufacturing data.
• POC study: Proof-of-concept trial designed to provide initial evidence that a therapy has the intended biological activity or clinical efficacy.
• GPCR: G protein-coupled receptor, a large family of proteins commonly targeted in drug development.
• CTA: Clinical Trial Application — an application submitted to regulatory agencies to begin human trials, separate from the US IND process.

Full Conference Call Transcript

Dr. Carl Hansen: Thanks, Tryn, and thank you, everyone, for joining us today. This quarter, we achieved a major company milestone: receiving Health Canada authorization to initiate AbCellera Biologics Inc.'s first two clinical trials for ABCL-635 and ABCL-575. Today, I'm pleased to announce that dosing has begun in our Phase One clinical trial evaluating ABCL-635 for moderate to severe vasomotor symptoms. This marks the completion of the transition from a platform company to a clinical-stage biotech that we committed to back in 2023. After the end of the quarter, we also opened our Phase One clinical trial for ABCL-575, and we anticipate dosing will begin shortly.

I'm also pleased to announce that we have added a third program to our pipeline by advancing ABCL-688 into IND-enabling studies. We ended the quarter with approximately $750 million in available liquidity, and we are well-positioned to continue to execute on our strategy and are on track to complete our remaining goals for 2025. 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. ABCL-635 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.

ABCL-635 is a potential next-generation NKTR antagonist designed to have both an improved safety profile and a more convenient dosing regimen. 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 CPA process for ABCL-635 in 2025, and today, we are pleased to announce that we have begun dosing participants. The ABCL-635 Phase One clinical trial is a randomized, placebo-controlled, double-blind study in men and postmenopausal women with or without VMS. Its purpose is to evaluate safety, pharmacokinetics, pharmacodynamics, and the frequency and severity of VMS, with subcutaneous doses of ABCL-635.

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 ABCL-635 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-2026. Turning to our second program, ABCL-575, we received authorization from Health Canada in May to initiate a Phase One clinical trial. The trial was opened in July, and we anticipate dosing our first 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-575. ABCL-575 is an investigational antibody therapy targeting OX40 ligand and is being developed for the treatment of moderate to severe atopic dermatitis, and which also has broad potential in several other I&I indications. Recently presented preclinical data 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-13, IL-5, and IL-9. As a reminder, ABCL-575 is engineered with half-life extension to support less frequent dosing.

Based on PK data we've obtained from studies in FCRN humanized mice, we predict a human half-life of approximately 67 days. Using this half-life, our modeling predicts that a 300 mg dosing of ABCL-575 every six months should achieve circulating concentrations that remain above the efficacy threshold that was observed for amlotilumab. 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 ABCL-688 into IND and CTA-enabling studies. ABCL-688 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 ABCL-635, for strategic reasons, we will not be disclosing additional information on ABCL-688 until this program reaches the clinic. Our intent is to submit an IND in mid-2026. For the remainder of the year, our priorities are as follows: executing on our clinical studies with ABCL-635 and ABCL-575, moving ABCL-688 forward in IND-enabling studies, advancing a fourth program from discovery into our pipeline, and finally, bringing our clinical manufacturing capabilities online. And with that, I'll hand it over to Andrew to discuss our financials.

Andrew Booth: Thanks, Carl. As Carl pointed out, AbCellera Biologics Inc. continues to be in a strong liquidity position, with approximately $580 million in cash and equivalents, and with roughly $170 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 on completing our CMC and GMP investments. 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 ABCL-635 and ABCL-575 received their clinical trial authorizations in the second quarter, thus advancing into the clinic.

They are the first AbCellera Biologics Inc.-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, revenue for the quarter was approximately $17 million, comprising research fees relating to work on partner programs and amounts related to licensing. This compares to revenue of $7 million in the same quarter of 2024.

The licensing fees of $10 million stem from our TriAni humanized rodent platform and mostly consist 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 our internal and co-development programs. Research and development expenses for the quarter were approximately $39 million, $2 million less than last year. 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 million, a small reduction relative to the same quarter last year. And in general and administration, expenses were approximately $19 million compared to roughly $20 million in 2024. Included in these expenses are the ongoing expenses related to the defense of our intellectual property. Looking at earnings, we are reporting a net loss of roughly $35 million for the quarter, compared to a loss of $37 million in the same quarter of last year. In terms of earnings per share, this result works out to a loss of 12¢ per share on a basic and diluted basis.

Looking at cash flows, operating activities for 2025 used approximately $44 million in cash and equivalents. Excluding investments in marketable securities, investment activities amounted to a net $36 million, mostly in property, plant, and equipment, driven by the ongoing work to establish CMC and GMP manufacturing capabilities. The investments in PP&E were partially offset by government contributions. As a part of our treasury strategy, we have about $460 million invested in short-term marketable securities. Our investment activities for the quarter included an approximately $12 million net increase in these holdings. Altogether, we finished the quarter with $580 million 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. With over $580 million in cash and equivalents, and the unused portion of our secured government funding, we have around $750 million 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 end of 2025, as we had indicated in previous calls. With respect to our overall operating expenditures, our capital needs continue to be very manageable. We continue to believe that we have sufficient liquidity to fund well beyond the next three years of increasing pipeline investments. And with that, we'll be happy to take your questions.

Operator: If for any reason you'd like to remove that question, please press star followed by 2. Again, to ask a question, hit star 1 on your telephone keypad. Our first question is from Andrea Newkirk with Goldman Sachs. Your line is now open.

Telani Gisso: 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 delay to elanzanitan, do you guys anticipate any risk to the development path for ABCL-635 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? Thank you.

Dr. Carl Hansen: 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 elanzanitan. 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. Our expectation is that would move forward to approval later this year. So beyond that, I don't think we have any special insight into that. I didn't get the last part of the question. Could you please repeat?

Telani Gisso: Sorry about that. Yeah. I was just wondering what do you think the FDA and other regulators will be focused on in evaluating ABCL-635's profile as it moves forward in clinical development?

Dr. Carl Hansen: Sure. So you know, there's now, I think, a well-trodden path for the NKTR class, both with and without. 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. On the safety side, as I mentioned on the last call, so far, you know, what has been seen in the class for NKTR antagonists 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. We expect that would not be a concern. And similarly, because we are the first-in-class antibody for this indication and antibodies are not metabolized in the liver, as are 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. 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 are efficacy and safety.

Telani Gisso: That's helpful. Thank you.

Operator: Our next question is from Srikripa Devarakonda with Truist. Your line is now open.

Srikripa Devarakonda: Hey, guys. Thank you so much for taking my question, and congratulations on the progress this quarter. So for the ABCL-635 Phase One trial, can we first upon getting the trial initiated efficiently. But now that you've initiated the trial, can you talk a little bit more about the specifics? You know, 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? And then maybe a bit more broader question. You know, you'd previously said that 50% of menopausal women are hesitant to take HRT because of the concerns around consequences. With Dr.

McCarray being he seems to be a very strong proponent of HRT. Do you think this might change the way the market overall, or do you think you still have a substantial market?

Dr. Carl Hansen: 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 and multiple ascending dose. In a single ascending dose, we'll include both menopausal women and healthy men. 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 postmenopausal women, and the combination of the SAD and the MAD, you know, could be roughly, you know, 56, 60 patients or so. Once we progress on to the proof of concept, we expect to enroll up to 80 patients.

And in that phase of the study, we will, of course, be recruiting postmenopausal women with moderate to severe VMS. So to the second part of your question, you know, there has been some discussion lately about the use of menopausal hormone therapy and some revisiting of the women's health study that was, you know, a study that I think cast a bit of a shade on the benefits of menopausal hormonal therapy for the treatment of VMS 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, you know, there are roughly 20% 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. 20% of the population for which hormone therapy is not meeting their needs. And then, of course, there's some other portion of the 80% that are gonna have a preference not to use hormone therapy. So if you look at the number of eligible patients in the US 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 terrific success.

So we're still very confident about the market opportunity. 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.

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

Operator: Our next question is from Faisal Khushid with Leerink Partners. Your line is now open.

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

Andrew Booth: Yeah. Good question. This is Andrew here. Speaking, Faisal. No. You should not this was definitely a one-off payment. It 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 million 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.

Faisal Khushid: Got it. Thank you.

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

Malcolm Hoffman: Hi, Malcolm. I'm for Evan Seigerman from BMO. Alright. You remind us what key efficacy data we should be looking out for in the ABCL-635 Phase One study? I understand we're largely looking for safety in a Phase One, but what biomarker efficacy measures will start to give us kind of confidence and further development here from a competitive perspective? Thanks.

Dr. Carl Hansen: 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 the 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. 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.

As I mentioned, we will be enrolling up to 80 postmenopausal women with moderate to severe VMS, and there we're going to be assessing the frequency and severity of VMS, which is self-reported. And so we won't have that data until sometime in mid-2026. But we think that study is sufficiently powered to give us, you know, 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.

Malcolm Hoffman: Appreciate it. Thanks, guys.

Operator: Our next question is from Brendan Smith with TD Securities. Your line is now open.

Brendan Smith: Hey, guys. 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, and all the good color. 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. 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.

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

Dr. Carl Hansen: Yeah. I'm happy to give a little bit of color on that. So, you know, 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 150 mg per ml. At 2 ml. So remains to be seen. 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 gonna be testing both in the efficacy and in the bioavailability and PK data that'll come out of the Phase One study.

Brendan Smith: Okay. Got it. Great. Makes sense. Thanks, guys.

Operator: Our next question is from Stephen Willey with Stifel. Your line is now open.

Josh: Hi. Thanks for taking the question. This is Josh on for Stephen Willey, and congrats on the progress. So I noticed the healthy volunteer trial for May is now posted to clinicaltrials.gov. 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 US sites beyond Phase One? Is this unrelated 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.

Dr. Carl Hansen: Yeah. So we have activated a site in Canada that's an expert in dermatology. We are, you know, 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. You know, 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. We think that the key readout we're gonna 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 gonna come from outside of the company, in particular, some of the clinical development with amatilumab and other molecules in the class that are moving forward. So we are currently focused on that. We are also, you know, beginning to engage with the FDA and lay the foundation for the Phase Two studies, which you would likely expect to include US sites. But we haven't triggered that yet, and we have some time before we need to.

Josh: Great. Thanks. And then just a follow-up. I know it's early. You said you won't really disclose any details around ABCL-688 for now, but could you maybe speak to some of the autoimmune indications of interest you might be considering for this asset?

Dr. Carl Hansen: Yeah. I'm afraid we're gonna hold this one close to our chest for strategic reasons. What I will say is that, you know, this is a program that we're very bullish on. I'd put it in a similar category to ABCL-635. 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 that we intend to move forward as quickly as possible. And when we do, that we intend to move very quickly.

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

Josh: 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.

Tryn Stimart: 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.