What happened

Shares of biotechnology outfit AbCellera Biologics (ABCL) were up 17.2% as of mid-session Friday following encouraging commentary within its second-quarter report.

So what

It certainly could have been worse.

For the three-month span ending in June, AbCellera Biologics turned $27.6 million worth of revenue into a loss of $0.01 per share. The bottom line compares unfavorably to the year-ago profit of $0.03 per share, although the top line was a marked improvement on the year-ago sales figure of $11.2 million.

These numbers, however, require major footnotes. Chief among them is the fact that not even the company itself quite knew what to expect in the second quarter.

AbCellera's area of focus is natural immune systems and the identification of antibodies, and that positions it perfectly for a viral pandemic like the one the COVID-19 contagion has evolved into. Eli Lilly's (LLY 0.45%) COVID treatment bamlanivimab was ultimately developed on AbCellera's antibody discovery efforts, and was approved for emergency use in November.

AbCellera Biologics enjoyed two strong quarters of royalty payments including $203 million worth of revenue in the first quarter alone. With the FDA retracting its emergency-use approval in the United States in April, though, it was impossible to meaningfully predict just how far the company's top line might tumble.

Plotting a rising bar chart on a chalkboard.

Image source: Getty Images.

As it turns out, that tumble was big. The company made clear with its second-quarter report, however, that it has lots of opportunity to continue capitalizing on the coronavirus we know as COVID-19. It's now working with 33 different discovery partners on 138 different programs looking at four different clinical molecules. All of those figures are well up from year-ago levels.

Now what

Don't read too much into Friday's surge. Shares had fallen from December's IPO price of $20 and first-public-trade price of $61 to Thursday's close of $15.19 on uncertainties it would justify its rich valuation. It was primed for a bounce headed into Friday's trading.

Nevertheless, it's becoming increasingly clear AbCellera Biologics will be able to play an important role in addressing what's turning into a long-lived pandemic that might never really go away. In the meantime, Friday's gain barely makes a dent in the multi-month pullback, leaving lots of upside for investors who can stomach the above-average risk.