Vancouver antibody developer AbCellera Biologics Inc. more than doubled the target size of its initial public offering Monday to as much as US$450-million in what would shatter the record for the largest debut public financing by a Canadian biotechnology company.
It could also establish AbCellera as Canada’s most valuable publicly traded early-stage drug developer – indeed, 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 company initially set out plans last month to raise US$200-million on the Nasdaq Stock Market in an offering underwritten by investment banks Credit Suisse, Stifel Nicolaus, Berenberg Capital Markets, SVB Leerink and Canada’s BMO Capital Market.
But on Monday the company said in a filing with the U.S. Securities and Exchange Commission it now plans to sell 23 million shares at between US$14 and US$17 a share. Its underwriters also have the option to buy another 3.45 million shares at the offering price. That means AbCellera would raise gross proceeds of between US$322-million and US$449.7-million if the offering is successful.
The company and its underwriters began marketing the offering to investors on Monday; it is expected to close this month, with the stock set to start trading before the holidays under the ticker ABCL. Los Angeles-based Capital World Investors has indicated it is prepared to buy 20 per cent of the offering, AbCellera said .
Even at the low end, that would far surpass the US$253-million that Montreal cancer drug developer Repare Therapeutics Inc. raised in June from its Nasdaq debut in what then set the record for the largest IPO by a Canadian biotechnology company.
AbCellera is also poised to become Canada’s most valuable public biotechnology company with the offering. The company had 243-million shares outstanding before the offering – excluding 54 million-plus shares issuable under granted stock options. Even if it completed its IPO at the low end of its price range, AbCellera would have a market capitalization of more than US$3.7-billion, well ahead of the leader, fellow Vancouver drug developer Zymeworks Inc., whose market capitalization stands at US$2.5-billion.
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.
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 last spring partnered with drug giant Eli Lilly to produce a drug for COVID-19 patients called bamlanivimab, which was authorized in November for emergency use by the U.S. Food and Drug Administration and Health Canada. 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
The company 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.
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 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 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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Sean Silcoff