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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. ABCL-Q, continuing to cash in on its COVID-19 antibodies, reported on Tuesday that it achieved more than US$100-million in revenue and a healthy profit for the third quarter out of the past four.

But the Vancouver-based biotechnology company warned its COVID-fighting antibody bebtelovimab, which is sold by partner Eli Lilly & Co. and accounted for 92 per cent of its quarterly revenue, is unlikely to work against the two latest variants of the virus, BQ.1 and BQ.1.1.

The company and Eli Lilly are developing another antibody candidate they expect will be effective for COVID-19 patients against those variants. But AbCellera chief executive officer Carl Hansen said he didn’t yet know if there was “a clear regulatory path for that development.”

Bloom Burton analyst Antonia Borovina cautioned in an e-mail that it could take eight to nine months for a follow-up drug to get approval from the U.S. Food and Drug Administration. Approval might require more data than early in the pandemic, she said, when the duo’s first COVID-19 antibody, called bamlanivimab, received rapid emergency authorization and was on the market by late 2020.

She said that throws into question how much royalties AbCellera can generate from its COVID-19 treatments, which she previously thought would bring in US$143-million in the fourth quarter, US$285-million in 2023 and US$143-million in 2024. In a research note, she slashed that forecast to US$47.3-million in the fourth quarter and to zero in the next two years, though she said she could revisit that forecast based on FDA actions.

Ms. Borovina cut her stock price target to US$25 from US$30. On Wednesday, AbCellera stock closed at US$11.81 on the Nasdaq, down 3.5 per cent.

AbCellera’s quick work to develop antibodies to treat COVID-19 patients has delivered unusually lucrative results for a 10-year-old biotechnology startup and established it as Canada’s most valuable company in the sector. The company said it generated US$101.4-million in revenue during its third quarter ended Sept. 30 and a net profit of US$26.6-million.

That brings AbCellera’s revenue after nine months to US$463.9-million with net income of US$187.4-million. It generated US$375.2-million in revenue last year and US$233.2-million in 2020, and net income of US$153.4-million and US$118.9-million in the respective periods after rapidly identifying COVID-19 antibodies from early patients who developed immunity and partnering with Lilly to get the drugs quickly to market. To date, it has earned US$959-million in COVID-19 antibody royalties.

Ms. Borovina said despite the setback on bebtelovimab, revenue from COVID-19 drugs were “always expected to be a short-term opportunity and does not impact the long-term value of the company.”

Chief financial officer Andrew Booth called the royalties “a source of non-dilutive funding” for AbCellera, which has US$868.2-million in cash, cash equivalents and marketable securities, enough to fund at least three years of operations.

AbCellera rapidly develops treatments using technology spun out of a cross-disciplinary lab at the University of British Columbia, where Dr. Hansen had taught, which combined 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 small device with hundreds of thousands of tiny chambers. Using artificial intelligence, AbCellera tests antibodies produced by cells in each chamber simultaneously to determine which could become drugs. AbCellera went public in late 2020, smashing Canadian records for the amount raised and market capitalization achieved.

AbCellera’s COVID-19 drugs showcased what the technology could do often overshadowed its other efforts, which are expected to deliver results over a longer period.

The company has signed partnerships for 164 programs with 38 companies, ranging from startups to pharma giants, and has started 92 of them, including four in the third quarter – a pace Ms. Borovina characterized as slow.

Seven AbCellera-discovered molecules have entered the clinical research stage. Its deals are structured to give the company upfront research and development fees as well as milestone payments as drugs enter the clinic and pass through trials, and finally, royalties on product sales.

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