AbCellera Reports Full Year 2020 Business Results

By Laverne J. Tiffany 4 years ago

  • Total revenue of $233 million1 in 2020, up 1,908% year-over-year

  • Total revenue from research fees of $20 million, up 71% year-over-year

  • Total programs under contract of 103, up 72% year-over-year

  • EPS of $0.53 (basic) and $0.45 (diluted) compared to $0.01 loss per share in 2019

AbCellera (NASDAQ: ABCL), a technology company with a centralized operating system for next-generation antibody discovery, today announced financial results for the full year 2020 with the following highlights.

“AbCellera had a breakthrough year, demonstrating strong growth across every area of the business and the effectiveness of our technology and business model through our discovery of the first monoclonal antibody therapy for COVID-19,” said Carl Hansen, Ph.D., President and CEO of AbCellera. “Each program improves our platform, and we continue to invest in new technologies that enhance and expand our capabilities to discover high-quality, potent antibodies for our partners. With our strong cash position, profitability, and cash generation, we are aggressively executing on building our centralized operating system to help bring new antibody therapies to patients faster and more efficiently.”

2020 Business Highlights

  • Strong financial performance led by $233 million in total revenue, including $213 million in milestones and royalties.

  • Generated $119 million in net earnings, up from a $2 million loss in 2019.

  • Expanded partnership business to 103 cumulative programs under contract with 27 partners generating $20 million in research fees (71% growth over $12 million in 2019).

  • Established strong liquidity position with approximately $720 million raised from gross equity financings ($75 million series A2, $90 million convertible note, and $555 million IPO proceeds), and $23 million in positive cash flow from operations to end the year with $594 million in cash and cash equivalents, and $212 million in accrued accounts receivable. AbCellera’s strong cash position will be used to build capacity, expand platform capabilities, and pursue business development initiatives.

  • Secured $126 million from the Government of Canada for future infrastructure investments, including CMC and GMP manufacturing capabilities.

  • Acquired Trianni for $90 million to add new capabilities that expand diversity and reduce program timelines by sourcing fully human antibodies from rodents.

  • Acquired the OrthoMab™ bispecific platform to integrate capabilities for engineering bispecific antibodies.

  • Achieved notable COVID-19 program milestones, including bamlanivimab entering clinical trials and receiving authorization in 15 countries across North America, the European Union, the Middle East, and Africa.

  • Announced the appointment of John Montalbano and Peter Thiel to the Board of Directors.

Key Business Metrics2

As of December 31, 2020, AbCellera had 103 discovery programs (up 72% from 60 in 2019) that are either completed, in progress, or under contract with 27 partners (up from 22 in 2019). AbCellera has started discovery on a cumulative total of 52 of these programs (up from 43 in 2019).

Bamlanivimab, being developed by partner Eli Lilly and Company (Lilly), is the first antibody discovered by AbCellera to have reached the clinic and commercial markets. Bamlanivimab is the first monoclonal antibody therapy for COVID-19 in the world to reach human testing and to be authorized for emergency use.

Year Ended December 31,

Change

Metric

2019

2020

%

Number of discovery partners

22

27

23

%

Programs under contract, cumulative

60

103

72

%

Program starts, cumulative

43

52

21

%

Programs in the clinic

–

1

N/M

Discussion of 2020 Financial Results

Year Ended December 31,

Change

2019

2020

Amount

%

(in thousands, except percentages)

Revenue

Research fees

$

11,612

$

19,848

$

8,236

71

%

Milestone payments

–

15,000

15,000

N/A

Royalty revenue

–

198,307

198,307

N/A

Total revenue

$

11,612

$

233,155

$

221,543

1908

%

  • Revenue – Total revenue was $233.2 million in 2020, up 1,908% from $11.6 million in 2019. Research fees increased by $8.2 million, or 71%, as a result of growth in our partnership business. The success of bamlanivimab generated our first milestone payments of $15.0 million and our first royalty revenue of $198.3 million.

  • Royalty fees – Royalty fees to the National Institutes of Health, attributable entirely to royalty payments on bamlanivimab, were $27.1 million as compared to $0 in 2019.

  • Research & Development (R&D) expenses – R&D expenses were $29.4 million in 2020, as compared to $10.1 million in 2019, reflecting investments in the technology platform and increased partnership activity. R&D expenses included non-recurring charges of $4.0 million for IPR&D related to the acquisition of the OrthoMab platform and $4.3 million related to Liability Classified Options in connection with the company’s conversion to USD as functional currency.

  • Sales & Marketing (S&M) expenses – S&M expenses were $3.8 million in 2020, as compared to $1.3 million in 2019, driven by an expansion of the team.

  • General & Administrative (G&A) expenses – G&A expenses were $11.9 million in 2020, as compared to $2.7 million in 2019, with the increase driven by investments to support the growth of the company and preparations to be a listed company, as well as non-recurring charges of $1.9 million supporting financing activities.

  • Net Earnings – Net earnings in 2020 were $118.9 million, or $0.53 per share and $0.45 per share on a basic and diluted basis, respectively, as compared to a net loss of $2.2 million, or $0.01 per share on both a basic and diluted basis in 2019.

  • Liquidity – AbCellera ended 2020 with $594.1 million of cash and cash equivalents and $212.3 million in accrued accounts receivable, most of which have subsequently been received. AbCellera ended the year with $2.4 million in debt from a Government of Canada zero interest repayable funding program. The company retired all other debt agreements in the year and incurred a non-recurring $4.2 million expense charge for interest and cancellation fees for early retirement.

Conference Call and Webcast

AbCellera will host a conference call and live webcast to discuss these results today at 2:00 p.m. Pacific Daylight Time (5:00 p.m. Eastern Daylight Time).

The live webcast of the earnings conference call can be accessed on the Events and Presentations section of AbCellera’s Investor Relations website at https://investors.abcellera.com. A replay of the webcast will be available through the same link following the conference call.

About AbCellera Biologics Inc.

AbCellera is a technology company that searches, decodes, and analyzes natural immune systems to find antibodies that its partners can develop into drugs to prevent and treat disease. AbCellera partners with drug developers of all sizes, from large pharmaceutical to small biotechnology companies, empowering them to move quickly, reduce costs, and tackle the toughest problems in drug development. To learn more, please visit us at www.abcellera.com.

Definition of Key Business Metrics

We regularly review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe that the following metrics are important to understand our current business. These metrics may change or may be substituted for additional or different metrics as our business develops. For example, as our business matures and to the extent programs are discontinued, we anticipate updating these metrics to reflect such changes.

Number of discovery partners represents the unique number of partners with whom we have executed partnership contracts. We view this metric as an indication of the competitiveness of our technology stack and our current level of market penetration. The metric also relates to our opportunities to secure programs under contract.

Programs under contract represent the number of antibody development programs that are under contract for delivery of discovery research activities. A program under contract is counted when a contract is executed with a partner under which we commit to discover antibodies against one selected target. A target is any relevant antigen for which a partner seeks our support in developing binding antibodies. We view this metric as an indication of commercial success and technological competitiveness. It further relates to revenue from technology access fees. The cumulative number of programs under contract with downstream participation is related to our ability to generate future revenue from milestone payments and royalties.

Program starts represent the number of unique programs under contract for which we have commenced the discovery effort. The discovery effort commences on the later of (i) the day on which we receive sufficient reagents to start discovery of antibodies against a target and (ii) the day on which the kick-off meeting for the program is held. We view this metric as an indication of our operational capacity to execute on programs under contract. It is also an indication of the selection and initiation of discovery projects by our partners and the resulting near-term potential to earn research fees. Cumulatively, program starts with downstream participation indicate our total opportunities to earn downstream revenue from milestone fees and royalties in the mid- to long-term.

Programs in the clinic represent the count of unique programs for which an Investigational New Drug, or IND, New Animal Drug or Pre-Market Approval, or PMA, application, or equivalents under other regulatory regimes, has been filed based on an antibody that was discovered by us. Where the date of such application is not known to us, the date of the first public announcement of clinical trials will be used instead for the purpose of this metric. We view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long term.

AbCellera Forward-looking Statements

This press release contains forward-looking statements, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management. All statements contained in this release other than statements of historical fact are forward-looking statements, including statements regarding our ability to develop, commercialize and achieve market acceptance of our current and planned products and services, our research and development efforts, and other matters regarding our business strategies, use of capital, results of operations and financial position, and plans and objectives for future operations.

In some cases, you can identify forward-looking statements by the words “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks, uncertainties and other factors are described under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in the documents we file with the Securities and Exchange Commission from time to time. We caution you that forward-looking statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. As a result, the forward-looking statements may not prove to be accurate. The forward-looking statements in this press release represent our views as of the date hereof. We undertake no obligation to update any forward-looking statements for any reason, except as required by law.

AbCellera Biologics Inc.

Condensed Consolidated Statement of Operations

(Expressed in thousands of U.S. dollars except share and per share data)

2019

2020

Revenue

Research fees

$

11,612

$

19,848

Milestone payments

–

15,000

Royalty revenue

–

198,307

Total revenue

11,612

233,155

Operating expenses

Royalty fees

–

27,143

Research and development3

10,113

29,393

Sales and marketing3

1,263

3,842

General and administrative3

2,749

11,910

Depreciation and amortization

1,604

4,836

Total operating expenses

15,729

77,124

Income (loss) from operations

(4,117

)

156,031

Other (income) expense

Interest income

(155

)

(293

)

Interest and other expense

209

6,511

Foreign exchange (gain) loss

(186

)

300

Grants and incentives

(1,774

)

(8,320

)

Total other (income) expense

(1,906

)

(1,802

)

Net earnings (loss) before income tax

(2,211

)

157,833

Provision for income tax

–

38,915

Net earnings (loss) and comprehensive income (loss) for the period

$

(2,211

)

$

118,918

Net earnings (loss) per share to common shareholders

Basic

$

(0.01

)

$

0.53

Diluted

$

(0.01

)

$

0.45

Weighted-average common shares outstanding

Basic

151,327,560

159,195,023

Diluted

151,327,560

263,129,765

AbCellera Biologics Inc.

Condensed Consolidated Balance Sheet

(Expressed in thousands of U.S. dollars except share data)

December 31,
2019

December 31,
2020

Assets

Current assets

Cash and cash equivalents

$

7,553

$

594,116

Accounts receivable

2,124

903

Accrued accounts receivable

1,152

212,336

Other current assets

1,811

5,970

Total current assets

12,640

813,325

Long term assets

Property and equipment, net

8,480

17,923

Intangible assets

–

115,153

Goodwill

–

31,500

Equity investee

–

19,247

Other long-term assets

585

8,388

Loans to related parties

1,783

–

Total long-term assets

10,848

192,211

Total assets

$

23,488

$

1,005,536

Liabilities and shareholders’ equity

Current liabilities

Accounts payable and accrued liabilities

$

2,579

$

20,005

Current portion of contingent consideration payable

–

13,411

Income taxes payable

–

36,152

Accrued royalties payable

–

27,143

Deferred revenue

3,236

6,589

Current portion of long-term debt

2,080

190

Total current liabilities

7,895

103,490

Long-term liabilities

Operating lease liability

2,642

3,715

Long-term debt

1,363

2,198

Deferred revenue and grant funding

1,336

25,894

Contingent consideration payable

–

9,148

Deferred tax liability

–

26,161

Other long-term liabilities

–

4,422

Total long-term liabilities

5,341

71,538

Total liabilities

$

13,236

$

175,028

Shareholders’ equity

Common shares: no par value, unlimited authorized shares at
December 31, 2019 and 2020: 151,681,382 and 269,497,768
shares issued and outstanding at December 31, 2019 and 2020
respectively

5,122

710,387

Convertible preferred shares unlimited authorized shares at
December 31, 2019 and 2020: 2,105,264 and nil issued and
outstanding at December 31, 2019 and 2020 respectively

7,546

–

Additional paid-in capital

2,300

5,919

Accumulated earnings (deficit)

(4,716

)

114,202

Total shareholders’ equity

10,252

830,508

Total liabilities and shareholders’ equity

$

23,488

$

1,005,536

AbCellera Biologics Inc.

Condensed Consolidated Statement of Cash Flows

(Expressed in thousands of U.S. dollars)

2019

2020

Cash flows from operating activities:

Net income (loss)

$

(2,211

)

$

118,918

Cash flows from operating activities

Depreciation of property and equipment

1,604

2,317

Amortization of intangible assets

–

2,519

Amortization of operating lease right-of-use-assets

243

435

Stock-based compensation

890

8,397

Extinguishment of long-term debt

–

3,700

Accretion and other

194

830

Deferred tax expense

–

2,098

Unrealized foreign exchange gains and losses

–

177

Changes in operating assets and liabilities

Accounts and accrued research fees receivable

(1,803

)

(5,467

)

Accrued royalties receivable

–

(197,553

)

Investment tax credit receivable

1,593

–

Income taxes payable

–

36,412

Accounts payable and accrued liabilities

150

6,601

Operating lease liabilities

2,784

(350

)

Deferred revenue

(6

)

21,810

Accrued royalties payable

–

27,143

Other operating assets and liabilities

(744

)

(5,297

)

Net cash provided by operating activities

2,694

22,690

Cash flows from investing activities

Purchases of property and equipment

(3,997

)

(9,673

)

Purchase of intangible assets

–

(5,000

)

Repayment (issuance) of related party loans

(1,783

)

1,783

Acquisition of Trianni

–

(87,643

)

Investment in equity investees

–

(19,247

)

Net cash used in investing activities

(5,780

)

(119,780

)

Cash flows from financing activities

Repayment of long-term debt

(399

)

(19,942

)

Proceeds from long-term debt

193

15,490

Proceeds from convertible debentures

–

89,990

Short-term borrowings

387

(387

)

Issuance of common shares pursuant to exercise of stock options

25

1,000

Net proceeds from issuance of common shares

–

522,840

Proceeds from issuance of preferred shares – series A1 financing

(11

)

–

Proceeds from issuance of preferred shares – series A2 financing

–

74,662

Net cash provided by financing activities

$

195

$

683,653

Increase (decrease) in cash and cash equivalents

(2,891

)

586,563

Cash and cash equivalents, beginning of year

10,444

7,553

Cash and cash equivalents, end of year

$

7,553

$

594,116

1 All financials are reported in USD.
2 See definitions of Key Business Metrics
3 Exclusive of depreciation and amortization

Source: AbCellera Biologics Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210329005703/en/

Contacts

Inquiries
Media: Jessica Yingling, Ph.D.; [email protected], +1(236)521-6774
Business Development: Kevin Heyries, Ph.D.; [email protected], +1(604)559-9005
Investor Relations: Melanie Solomon; [email protected], +1(778)729-9116

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