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The U.S. Food and Drug Administration has pulled its emergency authorization of a COVID-19 antibody co-developed by Eli Lilly & Co. and Vancouver’s AbCellera Biologics Inc. ABCL-Q after determining the drug, called bebtelovimab, is not expected to neutralize the two latest subvariants of the virus’s dominant Omicron strain.

The announcement Wednesday takes away authorization from the last COVID-19 monoclonal antibody treatment, leaving antiviral drugs from Pfizer, Merck and Gilead Sciences as treatments for the disease, as well as convalescent plasma for some patients. AstraZeneca’s antibody Evusheld is also authorized for protection against COVID-19 infection in some people.

It is a setback for AbCellera, as its share of royalties from bebtelovimab, which is marketed by Eli Lilly, accounted for 92 per cent of the Canadian company’s US$101-million third-quarter revenue. Its stock fell by 3.7 per cent Wednesday.

Eli Lilly and its distributors have paused commercial distribution of the antibody until further notice from the FDA, while the U.S. government has paused fulfillment of any pending requests under its scheme to help Americans access the drug. Bebtelovimab received emergency authorization from the FDA in February.

BQ.1 and BQ.1.1 have become the dominant strains in the United States after a steady increase in prevalence over the past two months, surpassing Omicron’s BA.5 subvariant.

The FDA first disclosed in early November the Eli Lilly/AbCellera molecule was unlikely to work against the two Omicron subvariants, so Wednesday’s announcement was expected, Bloom Burton analyst Antonia Borovina said in an e-mail.

The companies are co-developing another antibody candidate they expect will be effective for COVID-19 patients against those variants. But AbCellera chief executive officer Carl Hansen told analysts three weeks ago he didn’t yet know if there was “a clear regulatory path for that development.” Ms. Borovina said approval might require more data than early in the pandemic, when the pair’s first COVID-19 antibody, called bamlanivimab, received rapid emergency authorization and was on the market in late 2020.

That throws into question how much AbCellera can continue to earn from its COVID-19 drugs. Ms. Borovina slashed her forecast for fourth-quarter revenue related to the COVID-19 antibodies to US$47.3-million from US$143-million – and to zero in the next two years – after the earlier FDA warning. She said she could revisit her forecast if the pair’s next drug wins approval. AbCellera has earned US$959-million in highly profitable royalties from its COVID-19 antibodies to date.

AbCellera’s COVID-19 success has at times overshadowed its ability to rapidly develop a slew of other antibody candidates using its multifaceted technology platform, which was spun out in 2012 from a cross-disciplinary lab at the University of British Columbia, where Dr. Hansen taught.

The company has signed partnerships for 164 development programs with 38 companies and started 92 of them; seven AbCellera-discovered molecules have entered the clinic. Partnership deals are structured to give AbCellera upfront research and development fees, milestone payments as drugs pass through trials, and finally royalties on sales.

With a report from Reuters