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Why AbCellera Biologics Stock Jumped 19.4% Last Month

By Keith Noonan – Oct 7, 2021 at 7:59AM

Key Points

  • AbCellera stock made gains after the company announced major new partnerships.

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Despite last month's gains, the biotech stock is now down roughly 61% year to date.

What happened

Shares of AbCellera Biologics (ABCL 1.01%) gained 19.4% in September, according to data from S&P Global Market Intelligence. The stock jumped in the middle of the month after the biotech company announced that it had formed a new partnership with Moderna and continued to climb after it detailed another new partnership with Everest Medicines.

ABCL Chart

ABCL data by YCharts

AbCellera published a press release on Sept. 15 announcing it had entered into a multi-year collaboration and license agreement with Moderna identify and analyze natural immune system responses to therapeutic antibodies. The company then announced on Sept. 22 that it had secured a 10-year partnership with China-based Everest Medicines for antibody discovery. 

DNA and spike proteins.

Image source: Getty Images.

So what

AbCellera has an artificial intelligence powered platform for discovering antibodies and notably helped Eli Lilly develop its bamlanivimab treatment for COVID-19. The new agreement with Moderna outlined six therapeutic antibody targets and will give Moderna the right to commercialize the antibodies resulting from the collaboration. The partnership with Everest is targeting 10 therapeutic antibodies. 

AbCellera typically generates the large majority of its revenue from royalties, so the new partnerships don't necessarily mean that the biotech company will see a major sales windfalls from the collaborations. However, if AbCellera's research yields results that are used in treatments that are brought to market, its sales and earnings could skyrocket. 

Now what

AbCellera Biologics has been losing ground early in October's trading. The company's share price is down roughly 20.8% this month so far. 

ABCL Chart

ABCL data by YCharts

AbCellera now has a market capitalization of roughly $4.3 billion. While the company was able to rise above market momentum in September's trading, it looks like volatility for growth-dependent tech and biotech stocks is catching up to it this month. There doesn't appear to be any business-specific news driving this month's sell-offs, but the current bout of volatility impacting the market suggests that more big swings may be on the horizon. 

AbCellera's analysis and development platform is showing promise, and the fact that the company continues to attract major partnerships is encouraging. However, the company's outlook remains somewhat speculative, and that primes the stock for volatility when turbulence hits the market. For investors looking to benefit from biotech trends, AbCellera has the makings of an appealing long-term investment candidate. However, it's not a low-risk stock, and trading could be bumpy in the near term. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends AbCellera Biologics Inc. and Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AbCellera Biologics Inc. Stock Quote
AbCellera Biologics Inc.
ABCL
$13.00 (1.01%) $0.13
Eli Lilly And Stock Quote
Eli Lilly And
LLY
$371.16 (0.02%) $0.08
Moderna Stock Quote
Moderna
MRNA
$181.46 (3.15%) $5.54

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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