Vancouver antibody developer AbCellera Biologics Inc. is set to start trading on the Nasdaq Exchange Friday as Canada’s most valuable Canadian biotechnology company by a wide margin after increasing the size of its initial public offering for the third time this week.
Its hotly awaited IPO will shatter the record for the largest debut public financing by a Canadian biotechnology company as AbCellera becomes the latest in a slew of Canadian companies in the sector to surpass a US$1-billion valuation.
AbCellera said in a filing late Thursday with the U.S. Securities and Exchange Commission it would sell 24.15 million shares at US$20 a share in the offering. Its underwriters Credit Suisse, Stifel Nicolaus, Berenberg Capital Markets, SVB Leerink and Canada’s BMO Capital Market will get the option to subsequently buy an additional 3.62 million shares at the offering price.
That means AbCellera will raise US$483-million in gross proceeds from the offering (excluding the underwriters’ option), which a source familiar with the deal said was 20 times oversubscribed by prospective investors. The Globe and Mail is not identifying the source because they are not authorized to discuss the deal.
With 266.3 million shares outstanding, that would give AbCellera a valuation heading into trading on the Nasdaq of US$5.32-billion.
That would also make AbCellera more than twice as valuable by market capitalization as Canada’s most valuable publicly traded biotech company, Zymeworks Inc., as well as one of the most valuable companies in that sector to go public this year in the U.S., based on the pre-IPO valuation it’s targeting. The previous record holder for the largest IPO by a Canadian biotech developer is Montreal’s Repare Therapeutics Inc., which raised US$253-million when it went public on Nasdaq in June.
AbCellera initially set out plans last month to raise US$200-million on Nasdaq. Then, on Monday, the company said it planned to sell 23 million shares at between US$14 and US$17 a share, with Los Angeles-based Capital World Investors indicating it was prepared to buy 20 per cent of the offering. It upped that range to between US$17 and US$18 earlier on Thursday. The stock will begin trading Friday under the ticker ABCL.
The offering could also make chief executive and founder Carl Hansen a billionaire. The 46-year-old scientist owns 26 per cent of AbCellera, or 61.8 million shares, valued at US$1.24 billion based on the final IPO pricing.
Then, things stand to change on Friday in a big way. This year has seen big swings for IPOs. Some have soared by dozens of percentage points on their opening day, while Hamilton’s Fusion Pharmaeuticals, meanwhile, made no gains from its US$17 share price on its first day of trading in June and has since traded down.
AbCellera’s IPO filing comes on the heels of an exciting year for the company, which is one of the most prominent early-stage companies in the race to bring COVID-19 treatments to market.
AbCellera, which partnered over the past three years on a prescient program of the U.S. Defense Advanced Research Projects Agency to develop rapid treatments in response to pandemics, last spring partnered with drug giant Eli Lilly to produce a drug for COVID-19 patients called bamlanivimab.
The U.S. Food and Drug Administration and Health Canada authorized the treatment in November for emergency use. The U.S. government has thus far ordered 950,000 doses of bamlanivimab from Eli Lilly for US$1.19-billion, while Health Canada has ordered 26,000 doses for US$32.5-million.
AbCellera last month appointed Silicon Valley billionaire venture capitalist Peter Thiel, one of its top investors, and former RBC Global Asset Management CEO John Montalbano to its board, and announced the US$90-million purchase of a biotechnology company that uses genetically engineered mice to help discover antibodies.
AbCellera’s offering would cap off a historic year for Canada’s biotechnology sector, which has already set records for public and private financing, in step with a particularly strong year for the global industry.
AbCellera was spun out in 2012 from the University of British Columbia’s interdisciplinary Michael Smith Laboratories, where Dr. Hansen ran the bioengineering group.
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Using technology developed at the lab, AbCellera speeds up the process of isolating and identifying antibodies created by humans to fight infections. Its “antibody discovery engine” process involves passing blood samples from a person who has developed an immunity to a disease through a credit-card-sized “microfluidic” device with hundreds of thousands of tiny chambers. With the help of artificial intelligence, it tests antibodies produced by cells in each chamber simultaneously, homing in on those that have the potential to be developed into drugs.
The system unearths antibody-based drugs more quickly, cheaply and effectively than conventional methods. For example, through its partnership with Eli Lilly, within three days of receiving a blood sample from a recovered COVID-19 patient this spring, AbCellera isolated hundreds of antibody candidates for a drug. Within 90 days, bamlanivimab was in clinical trials.
Observers in the biotechnology world are particularly excited about AbCellera because it is not hanging its fortunes on a single drug but rather on a platform that can continuously spin out promising treatments. The 174-person company has partnered with drug makers on 94 drug-discovery programs, signing 71 deals that see it earn research fees, milestone payments and royalties as molecules in development as potential treatments advance from the lab to the market.
AbCellera’s public filings with the SEC reveal that it has more than doubled revenues annually, on average, since 2014, increasing them from US$11.6-million in 2019 to US$25.2-million in the first nine months of this year for a US$1.9-million profit.
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