Carl Hansen insists AbCellera Biologics Inc. ABCL-Q is more than just a COVID-19 drug developer and is working on antibodies for ailments such as cancer, immune deficiency disorders and vision problems.
“I would like to emphasize that we are not a COVID-19 company,” the AbCellera chief executive officer said on a conference call Thursday with analysts.
However, the Vancouver company’s flush financial results show its near-term success is still very much tied to its treatments for the virus and its variants, which delivered windfall returns in 2021 and are poised to do so again in 2022.
On Thursday, Canada’s most valuable biotechnology company said it generated US$139.3-million in revenue in the fourth quarter, compared with just US$34-million in the previous six months.
About 97 per cent of its fourth-quarter revenues came from its royalties on an order that partner Eli Lilly & Co. received from the U.S. government in September for 614,000 doses of bamlanivimab, an antibody treatment for COVID-19 that AbCellera discovered in 2020. Most of that – 435,000 doses – combined as a treatment with another antibody, was delivered in late 2021, with the rest due early this year.
Thanks to that order, AbCellera posted a US$59.9-million net profit in the quarter, or 19 US cents a share. For the year, AbCellera generated US$375.2-million in revenue and net income of US$153.5-million. It ended 2021 with US$723-million in cash, cash equivalents and marketable securities.
Bamlanivimab has brought AbCellera US$526-million in royalties to date, providing a “non-dilutive source of funding,” chief financial officer Andrew Booth said.
Mr. Booth said AbCellera now faces “meaningful near-term revenue potential” from its latest COVID-19 treatment.
This month, the U.S. Food and Drug Administration gave emergency-use authorization for a second AbCellera-Eli Lilly drug called bebtelovimab, which the Vancouver company says is by far the most potent antibody against the Omicron variant and its BA.2 subvariant, and can be administered by shot rather than infusion.
The U.S. government has ordered 600,000 doses for delivery by March 31, with an option to buy 500,000 more by July 31. Mr. Booth said AbCellera’s royalty rate on COVID-19 antibody deals that size range from the mid-teens to the mid-20s, which implies it should book well over US$100-million in revenue in the first quarter from bebtelovimab, plus tens of millions of dollars from delivering the balance of the fall order for bamlanivimab.
“Looking ahead, we expect the majority of 2022 revenue still to be derived from COVID antibodies,” Mr. Booth said. AbCellera said its COVID-19 antibodies have so far been delivered to more than one million patients, preventing 100,000-plus hospital admissions and 40,000 deaths.
AbCellera uses a unique mixture of technologies to rapidly crank out antibody after antibody in partnership with pharmaceutical companies. It speeds up the process of isolating and identifying antibodies that immune systems create to fight infections.
The company was built around technology developed at a cross-disciplinary biomedical research lab at the University of British Columbia lab, where Dr. Hansen taught, that combines data science, protein engineering, machine learning, bioinformatics and genomics.
A key step involves passing cells from a person or animal that has developed an immune response to a disease through a device with hundreds of thousands of tiny chambers. Using artificial intelligence, it tests antibodies produced by cells in each chamber simultaneously to determine which could become drugs.
AbCellera worked on developing fast medical responses for pandemics prior to COVID-19 through a contract with the U.S. Defence Department’s Defense Advanced Research Projects Agency in the late 2010s. That left it poised to respond as the virus spread in early 2020.
AbCellera obtained a blood sample from a recovered patient on Feb. 28, and within three days it had isolated hundreds of antibody candidates. Its partner, Eli Lilly, had a treatment in hand within months, which received FDA authorization and was in market by year’s end.
That unusually time-compressed success often overshadows AbCellera’s other work, which is expected to deliver results over a much longer period. Mr. Hansen said AbCellera has signed partnership deals for 156 programs with 36 companies ranging from startups to pharma giants, including 53 in the past year. The company also started 26 programs in 2021. Of those, 26 got under way in 2021. Five AbCellera-discovered molecules have entered trials, up from one – bamlanivimab – in 2020.
The deals are structured to give AbCellera upfront research and development fees, milestone payments as drugs enter the clinic and pass through trials, and finally, royalties on product sales. Its typical royalties are usually a fraction of what it is makes from the COVID-19 drugs but have increased from a mean of 2.5 per cent of sales in its early days to 4.3 per cent.
Dr. Hansen said deals now on the books could deliver up to US$4.6-billion in cumulative milestone payments, excluding potential royalties – although he stressed AbCellera only expects to earn a fraction of that given the high-risk nature of drug development.
Despite AbCellera’s success to date – including the largest initial public offering by a Canadian biotechnology company in December, 2020 – its stock has sold off in the past year. That has been in line with other biotech stocks after an easing of early pandemic investor hype for the sector and concerns about the impact of rising interest rates on early stage companies.
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