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The AbCellera Biologics Inc. logo is seen on a door at the company's offices in Vancouver, on Wednesday, December 2, 2020.DARRYL DYCK/The Globe and Mail

AbCellera Biologics Inc. posted a loss in the second quarter as revenue plummeted by more than 85 per cent from the previous three-month period when the company booked substantial returns.

The Vancouver-based biotech company incurred a loss of US$2.3-million on US$27.6-million of revenue in the three months ended June 30. In the previous quarter, it hauled in US$117.2-million in profit on US$202.7-million in revenue.

AbCellera partners with pharmaceutical companies through drug discovery programs to develop antibody-based drugs, using its technology to make the process more efficient than conventional methods. AbCellera’s COVID-19 antibody, known as bamlanivimab, was brought to market in partnership with U.S.-based Eli Lilly and Co. last year to provide temporary immunity to patients with mild and medium symptoms. Royalties from bamlanivimab made up 85 per cent of the company’s total revenues in the first quarter of 2021.

In June, U.S. shipments of bamlanivimab were halted because the Beta and Gamma variants of COVID-19 were resistant to it.

“We expected royalty revenues to be well below in Q2‚” Andrew Booth, AbCellera’s chief financial officer, said on a Thursday earnings call. He attributed the loss to the company’s investment in research and development, which the company spent US$15-million on in the quarter.

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Seventy-seven per cent, or US$21.2-million, of AbCellera’s revenue in the most recent quarter came from bamlanivimab royalties. The company is partnering with Eli Lilly to develop bebtelovimab, another antibody drug that it says is highly effective against the COVID-19 Delta variant, which is more transmissible than previous variants and can produce harsher symptoms in those with the virus.

“We believe there is potential for sustained revenue from COVID products,” Mr. Booth said. “We view all royalties from COVID products as a … source of funding for the company and a proof point of what happens when one of the many programs in our portfolio is successful.”

AbCellera entered 19 new discovery programs in the quarter, bringing it to a total of 138. Each deal earns the company research fees, milestone payments and eventually royalties as the drugs enter the market.

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