So this is your correct title?
Yeah.
Correct title.
Yeah.
Okay, great. Thank you for joining us here today for our fireside chat with AbCellera. I have with us Andrew Booth, the CFO of the company. So just to start, Andrew, maybe if you wanted to give a brief introduction about AbCellera and what you do.
Absolutely. Thanks, Louise. First, just a reminder, I might be making some forward-looking statements, so please, check our SEC documents for the full list of risks. So AbCellera is an antibody discovery and development company. We started out of the lab of Dr. Carl Hansen, he's our founding CEO at UBC. Starting with the premise of like, to rebuild the front end of drug discovery related, laser-focused on therapeutic antibodies in order to get onto a new technology curve, in order to discover the antibodies, typically unknown biotarget biology that have eluded the best of the best in antibody discovery.
And so we've invested heavily into the capabilities of the platform, going from the target identification all the way through to the clinic, over the last 12 years, and we have built what we believe are best-in-world capabilities for antibody therapeutic discovery and increasingly development. We started taking that technology to the market by providing it to partners in return for a fee, and importantly, a position or a royalty on the success of the drug, that we discovered for our partners. That evolved over time to increasing that royalty percentage and participation in the success of the molecule, to co-developments, and even now to our wholly owned programs.
So we've been advancing, especially over the last year or so, being more, certainly more advertising more and emphasizing more our, our own therapeutic development programs, and we have two such programs in IND-enabling studies that are going to enter into the clinic next year.
Okay, great. So you have partnered with a lot of big names in the pharmaceutical industry. How has that shaped the strategy of your company? And maybe if you could talk about some of those partnerships, including your most recent one with Eli Lilly?
Absolutely. Over the years, we have partnered with Gilead, with Regeneron, with AbbVie, Incyte, Biogen recently, of course, Eli Lilly. And over the years, and especially in the earlier years, they would come to us really when they're stuck, so on therapeutic antibody development. That was really a great way for us to understand what are really the biggest problems, and in our investments in this technology, how do we make sure we have a technology position that can crack some of those most difficult problems? And we've worked very collaboratively with all of those groups in order to advance the platform, and importantly, advance their therapeutic programs. We would call those groups our strategic partners. They are...
I think we have a very strong relationship with all of them, and Eli Lilly is probably one of our most successful partnerships. At first, we entered into a discovery and development agreement with them back in twenty twenty for a range of antibody targets. It was up to eight, and added a ninth target, which was the program we worked on pandemic response. So actually, AbCellera was the antibody discovery and development engine behind Lilly's therapeutic antibodies against COVID. And it was those that went first to the clinic, and then they were also the longest-standing antibodies against COVID that were in the clinic during the pandemic. Over the years, Eli Lilly chose their slots with us.
How it works is, we agree on a number of programs they can work on with us, they let us know the target, we agree on a statement of work, and then we execute on that statement of work, returning the sequences back to our partners. Recently, Eli Lilly had gone through the eight targets that were negotiated back in 2020 and wanted to expand, and I think it's a great example of the validation of the work that we do, the capabilities, as well as the relationships that we build with these partners, that they come back and expand for additional targets. Recently, we expanded our collaboration with Eli Lilly by an additional four targets. Over about a year ago, we expanded our relationship with Regeneron for an additional number of targets as well.
So two very, very well-enabled antibody discovery groups where we have managed to establish a really strong relationship, and I think that's very validating of the company, the teams, and the technology.
Okay, great. Any other potential collaborations in the works? And you can speak on a high level, and if so, what areas would it be for manufacturing, product? How do you think about all of that?
Yeah, I would say in a number of areas. In the last year, we've developed a new collaboration with Biogen, for example. Partnerships that we're looking at, and I know we're gonna maybe talk about it later, is in our T-cell engager space. So you could envision a partnership with a big pharma group or a group within the T cells. We could also see additional work we're gonna do with expanding our partnerships with other well-established development groups. And you mentioned specifically on the manufacturing. So we have, in 2020, entered into a project to build out the CMC and GMP capabilities. So it kind of is the last step of the vertical integration of our technology.
From target to the clinic, so we're able to do our own cell line development, CMC, and then ultimately GMP manufacturing, in order to support our programs going through a phase I clinical trial. We'll be providing that activity to those services or capabilities to our development or discovery partnerships, as well as our own internal programs. You could expect to see us moving our co-development products, for example, those are molecules that we own fifty-fifty with a development partner, through that manufacturing, and perhaps even some of our molecules that are in company creation or not with big, large, well-enabled companies where they don't have access to that kind of capability.
Okay. I've also noticed that you've moved towards more internally developed products.
Mm-hmm.
What's your thinking there?
Yeah, in the earlier days, we would do projects in addition for a fee up front, as I mentioned earlier, for a royalty. And just to give a sense of that, we have well over a hundred such royalty positions that we've established, that are typically in the low to mid-single digit range. As we developed our capabilities more and more, and our reputation for doing this high-quality work, as well as we did more of the downstream development of a program, we would increase our royalty position. And we went from starting for a royalty, then starting for perhaps some equity in a company, as well as the royalty, then full co-development, and the logical progression of that was to work on our own wholly owned programs.
We started that effort some years ago, focusing on difficult targets. And our typical way to position this was, when you're working on extremely advanced technology to crack some of the difficult target space, you have to be working on real things. And those real things are basically assets against targets that are well known. And in addition to advancing the technology, you will have a first-in-class asset against a target with well-validated biology, with an antibody therapeutic. That was the origins of what it has become our internal pipeline. We've started, you know, 19 or 20 such programs, two of which are going to enter the clinic next year: ABCL-635 and ABCL-575. We can talk a little bit more about those.
They'll be getting to IND in Q2 of next year, and we have a pipeline of development or discovery and development programs behind them, and we'll start to announce the next development candidates that are entering into IND-enabling studies as those progress.
Okay, great. Can you talk a little bit more about ABCL-575?
Mm-hmm
And your decision to enter into a crowded space, atopic dermatitis?
Yeah. So, ABCL-575 is against the target OX40 ligand, and actually, this is a molecule that came out of a partnership that we initiated, I believe it was in 2021 with EQRx. So EQRx had a model of being a fast follower, and they came to us because, well, we're fast. And they had identified OX40 ligand as a potential target following Sanofi's acquisition of Kymab. So we went and entered into that program to find a molecule against OX40 ligand. Unfortunately for EQRx, they had some trouble in the market, and ultimately, that molecule reverted to us. So we ended up taking control of that molecule. And it is in what is looking to be a bit of a crowded space.
We announced our development candidate last year, about this time last year, and we have been moving it forward to the clinic, and have since learned, you know, Apogee has got something. Amgen is also taking a position with OX40 rather than OX40 ligand. And it looks like it's a very important pathway in atopic dermatitis, but also in other cases of inflammation. And this is going to be a large, we believe, a large class of drugs. Our molecule has an opportunity for differentiation in its half-life, in which meaning, which we, we anticipate would translate to less frequent dosing. So there is an opportunity for differentiation there.
It's a molecule where we are happy to take it through to phase one, but ultimately are looking for a partner, and maybe one of our strategic partners, to hand this molecule off to so that they can do a proper multi-arm clinical trial, perhaps in phase two. Because it's a foot race, it's really about speed of getting to the clinic and then through clinical trials.
Okay, great. Can you talk about ABCL-635 and the market opportunity there, and what do you like about your product?
Yeah. I think ABCL-635 is much more of the character of what we would expect to come from AbCellera in the future, where it's a first-in-class antibody therapeutic against a difficult target. So this is in the multi-pass membrane protein target space, so ion channels and GPCRs. So this is a molecule where we're very excited about this molecule, so it would be a first-in-class antibody therapeutic against. We haven't disclosed what the target is, but we have said that the indication is in metabolic and endocrine. And not to get people too excited, it's not in obesity and weight loss, but it's in a different metabolic and endocrine condition. We think there's an addressable market here of at least $2 billion, so it has the potential to be a blockbuster drug.
Importantly, when looking at this, it has a lot of the characteristics, as I mentioned, of what we're looking for in the development candidates that you would expect to follow. Difficult targets where we have a unique ability to find the therapeutic antibody. We really like the science. We think there's a large unmet medical need. We think we have a real opportunity for differentiation, and the clinical development path is quite clear. It's something that we actually can get through phase one, maybe have some efficacy readout in phase one. We're quite optimistic about how this is going to progress and look forward to disclosing what that is, probably in the Q2 2025 timeframe.
Okay, great, and then, is there any other timelines you can share on the development of this product, in addition to disclosing what that indication will be?
I would say just we would expect the phase one to take roughly a year, so a relatively quick phase one, but that's all we have disclosed thus far. I think when we do disclose what the target is, just as we have done in our T-cell engager space, we've been quite forthcoming with the science. We've been very proud about the way we publish our data, and you could expect something similar for 635.
Okay, great. So we've noticed that you've had remarkable success in company creation.
Mm.
Curious how these ventures, you know, how you build upon these and how they enhance the shareholder value for you?
Yeah, absolutely. As I mentioned, in the early days, we had a fee plus a royalty, and we expanded that when we were adding a lot of value to taking an equity position in the company. The first of which was actually with Invetx. So, a company doing antibody therapeutic antibodies for animal health. We took an equity position in that company, and actually, they recently sold to Dechra, and are advancing a number of programs that we discovered for them through the clinic. The next was with a company with Abdera. So, a radiopharmaceutical company, radio antibody conjugates, radioisotope antibody conjugates. And that. Well, there was a relationship there with Versant Ventures, which is, I think, a very kind of a friend. I would say a friend to AbCellera. They know of our capabilities well.
They helped to start that company up with us as the discovery partner, and we've since entered into a similar type relationship with Atlas, and most recently with ArrowMark and Viking, a collaboration that they did, where we will do the antibody discovery activities, we will take a royalty position in the drug, and in addition, we will get an equity position in the companies that are created. So for us, we think it expresses the value we're bringing to those partnerships, and also brings an opportunity for a near-term cash flow event from the equity than waiting for the very long time that it would take to get a royalty position out of those molecules.
Okay, great. Wanted to switch gears to your T-cell engager platform, and what you'd like to do with this, and the market opportunity to you.
Mm-hmm. So we identified a number of years ago that something that was holding back T cell engagers was the scarcity of CD3 antibodies. With CD3s, we'll engage the T cell, activate it, and bring it towards a tumor cell in order to, you know, have the T cell start fighting a cancer in the case of an oncology target. We recognize that CD3 is a very difficult target to find antibodies against, and we endeavored to build up a panel of CD3 antibodies that would allow an optimization tuning of engaging and presenting a T cell to a tumor cell.
We believe that with the right matching, that we could find the profile of CD3 antibodies that would activate tumor killing and minimize cytokine release, and therefore avoid some of the safety issues that many of these programs have suffered through. And while we found that that was true in our discovery of that you can optimize this pairing, in our discovery programs for CD3s, we also found a set of antibodies that strongly engage and activate tumor killing without the associated cytokine release, which allows for better safety profile, an enhanced dosing and ultimately better efficacy as a result. So we've been publishing those results of that panel at AACR and SITC over the last number of years, showing the progression.
You know, most recently, we announced we're taking a few molecules or four molecules forward into the development candidates as assets ourselves, in order to prove out this biology in vivo and ultimately in primate studies and perhaps even in the clinic. So, those are against PSMA, B7-H4, an undisclosed target in oncology, and another target with CD19 that would be used in autoimmunity for ablating B cells. So those programs are moving forward in order for us to be able to show in vivo what we have shown in vitro, that we can engage T cells and activate cell killing without having this negative side effect of cytokine release. So this. I believe our work here has attracted a lot of attention.
This is when you mentioned, are there any new partnerships, and in what space would we anticipate them to be in? We've been working for quite some time to find a partner in order to partner the T cell platform with. It's one of the things where it's taken much longer than we had anticipated and even than we had broadcasted, but we remain with conviction in this panel and believe that T cells are going to be a very important part of oncology, as well as autoimmunity, and we believe we have the best panel out there of CD3s in order to unlock those spaces.
Okay. Wanted to take a break here and see if there are any questions from the audience before we move on. Oh, go ahead. Why hasn't it been issued yet?
Yeah, I think a part of this is we wanna make sure we do the right deal in any kind of partnership agreement, and we haven't seen the deal that we like yet. And another is, I think there's a lot of questions because T cell engagers have hit some headwinds, but with pharmaceutical partners in their own clinical development, a lot of people are kind of reassessing what exactly is their T cell strategy and what are the pieces that they need. So I think that has caused some hesitation in the marketplace and the desire for further and further validation of how we're progressing those programs. So we remain with conviction as I mentioned.
We had originally thought we could partner out some of these building blocks in order for our partners to do that validation themselves, but I think the partners, the prospective partners, have looked to AbCellera to do that validation, and so we're continuing to do that in vivo validation, and as I mentioned, by moving these assets forward, not just the tools and the components, but actual molecules forward, that will prove out our theory here, both in vivo and then ultimately in human.
Anything else? Okay, I'll keep going then.
Okay.
So what are some of the key catalysts, in addition to disclosing your endocrine product, that we'll see over the next 12 months or so?
Yeah, I think, definitely the two INDs that we're going to bring forward. We still have some conviction on doing a T-cell partnership, although having been burned on calling the timeline, we're not calling the timeline, but, something to look out for over the next twelve months. In addition, we've been investing in this manufacturing, CMC manufacturing capability in Vancouver, for quite some time. We are near the end of that development, so of that infrastructure development. So our first batches will be coming off of our pilot plant, as well as our GMP manufacturing facility over the next twelve-ish months, so certainly in twenty twenty-five. That'll be another milestone to look out for.
And then new partnerships, as you mentioned, we continue to do these strategic partnerships, and we would expect to see the molecules from those partnerships advancing through to the clinic. We report out on the number of molecules in our partners' hands that have moved through to the clinic. It's a total of about 13 at the moment with AbCellera technology, and we would expect more to be going into INDs and into phase I's, as well as some of those potentially advancing into phase I/II's.
Okay. I noticed that you have strong liquidity-
Mm.
And also cash balance, so what do you plan to do with all that money?
Well, we have, as of the end of Q2, approximately $700 million in cash. We have also, I would say, been quite resourceful in finding non-dilutive sources of capital through funding from the Government of Canada. The Government of Canada is funding 50% of the cost of our expansion into CMC and GMP capabilities, to the tune of about $125 million, all total. In addition, another engagement we did with the government of British Columbia and the Government of Canada, where they are contributing $225 million to our development out of our platform, as well as advancing a number of therapeutic programs through preclinical and ultimately phase I.
Right now, we have about $225 million unused, of that combined, those combined two grants. That brings our total liquidity to well over $900 million. So, we're in a very comfortable position, especially in tough markets, I would say. What you can expect us to do is put our heads down and work on these programs in the pipeline, finish this build that we have started, so we have best in the world integrated capabilities from target identification through to vial of drug substance that we can bring into a phase I, and that we will start using that platform for our partners, but more, also very importantly, for our own internal programs, which we expect to do about two a year, moving them through to IND or to get development candidates.
Okay, great. And then to close here, just curious what your ultimate vision for the company is?
Yeah, I think, it's maybe easiest to explain the ultimate vision of the company by looking at peers that are out there, let's say, that we admire. So, certainly looking at Regeneron, where they started as a very strong technology in, in antibody discovery and then managed to develop great molecules and do good partnerships and BD deals that allowed them to become a more integrated and, and sustainable drug development company, bringing these, world-leading drugs to patients. And I think getting to that ability, where we have laid the foundations on the capability to do that repeatedly and having. W e need to get a couple of winners, as it is the case for all biotech companies, so that that can really be a sustainable thing that we grow and scale over time and aspire to be a company like a Regeneron or a Vertex-
Okay.
As an example.
Great, Andrew, thank you for your time today and hosting this Fireside Chat with us.
Thanks very much, Louise.