Development candidates entering into IND-enabling studies for keeping us on this cadence of a couple of programs every year, moving forward into the clinic on average as a target. Lastly, we will finally in 2025 complete our investments in our CMC and GMP manufacturing. Those next programs will be the first programs going through our own cell line development, CMC and GMP manufacturing, done all kind of the vertical integration journey we started a good number of years ago with these integrated capabilities focused on therapeutic antibodies.
All right, great. Maybe we could also talk a little bit about the recent expansion of your collaboration with AbbVie. Right? Maybe you just zoom out and speak to the broader picture of how the overall partnership and sort of what that expansion entails.
Yeah, absolutely. This goes back, this partnership with AbbVie, we actually started, I think it was in late 2023. This is an expansion focused on our work in the T- cell engager space. Our work on T- cell engagers started a few years ago as we realized there was a scarcity of tools for manipulating, activating, and engaging T- cells really around anti-CD3 antibodies, where we took our platform and developed a broad and diversified portfolio or panel of CD3 antibodies with the hypothesis that you could optimize the pairing of how you engage with T- cells and how you present them to tumors in order to broaden or optimize the therapeutic window. We've been working at that for some time, publishing our progress on that, both AACR and SITC over a number of years, and often mentioning we're searching for a partner for that or for a number of partners. It would start with a partner that we will engage and license a number of those antibodies in order to help them advance their own T- cell efforts. We think AbbVie is the first of what we would expect to be a stream of partnerships in the T- cell engaging space that we expect to unravel over the coming years.
I guess how does the T- cell engagers fit into the bigger picture at AbCellera?
Yeah, I think how it fits in the bigger picture is that the tools to manipulate T- cells are notoriously a difficult problem for finding effective antibodies. That has been a good use of our platform. This panel of antibodies is now a toolset that we can use to engage with these partners and advance assets on our own. Going back to our own internal pipeline, we announced a couple of assets that we'll be bringing forward on our own steam in the T- cell engaging space to further validate the science and validate the platform. In addition, it's a focus of our strategic partnerships. We do have a strong history of dealing with partners, folks like Lilly, which is another group that we expanded with last year, and AbbVie, this one most recent partnership. There are others, of course, in that group.
I would say it fits in that space as it is a good use of our technical capabilities in therapeutic antibody discovery that are then partnered with a tumor targeting arm and brought to our partners who have looked for these tools as they advance their own efforts in T- cells. As I think you're aware, in oncology, there are three kind of major modalities that are being looked at right now. One is the engagement of T- cells. Another is in antibody radioisotope conjugates. We have a strong partnership there with AbCellera. Another is ADCs, antibody drug conjugates, or even antibody degrader conjugates, of which we have a partnership we've announced with Prelude. It is more of an approach in these different promising modalities in order to tackle a very difficult area such as oncology.
That's great. I think the broader platform. Are there any, from where the T- cell engager platform within AbCellera stands today, are there any additional white spaces that you think you're especially well positioned to kind of capitalize on moving forward, just as you kind of think about the growth potential for the platform?
Yeah, I would broaden that outside of the T- cell engagers. We have focused on in the past kind of two areas that we look at. One is the T- cell engagers I've already spoken of. The other is this area around what we call complex membrane protein targets or the ion channel and GPCR class of targets. Again, a notoriously difficult target class for cracking with therapeutic antibodies. Typically, we've been looking for opportunities in the past for our partners have come to us to solve some of those difficult problems. We have invested in the platform in order to succeed with first-in-class antibodies against that target class. We believe that's a great place to look for our internal pipeline. You can expect the molecules that we move forward in that pipeline to be of that variety, such as the ABCL635 molecule that's going to be advancing to the clinic in the second quarter.
Yeah, that is a great segue. Let's double-click on some of the pipeline assets now. Maybe let's start with ABCL575, and then we will get to ABCL635. Maybe just remind us really quickly the mechanistic points of differentiation here and why this drug in this space.
Yeah, I'll take a quick history on how we got to this drug with ABCL575. This dates back, I think, to a partnership that was either in 2021 or 2022 with a partner called EQRx. You may remember them. They had a model around fast followers. This was after we had had our success in COVID, where we very rapidly found antibodies against COVID that we had licensed to Eli Lilly. And EQRx came to us because of that speed with this model of finding best-in-class antibodies as fast followers for proven biology. The biology they were following here was that of Kymab. And Sanofi had purchased Kymab, really pursuing their OX40 ligand with an indication in atopic dermatitis. That is actually a pathway broadly implicated across different I&I conditions.
That's a very promising pathway. The results from Sanofi have been excellent. That was the origins of this product. EQRx had some of their own difficulty. That molecule reverted to us. It's not that typical caricature of the difficult target space. Because it was already disclosed by EQRx, we continued to disclose and not hold confidential what that target was. Also because that is a molecule that we are advancing, because we think that could be a giant target class because of the success of Sanofi. We have an opportunity of differentiation there because of a longer half-life than the Sanofi molecule. Although what's yet to be seen is what dosing Sanofi achieves with the results from their phase III in atopic dermatitis. Maybe even just as interesting is the broad range of indications that they're addressing in a broad phase II in other I&I conditions.
We are moving our molecule forward into phase I with safety, tolerability, and then also, importantly, PK data, which should be available around the time that Sanofi reads out their molecule. I think that that will be probably the biggest value inflection point on that molecule, is that readout of Sanofi. If it is as broad and far-reaching as it could be, it will be very important to have other molecules already advanced into the clinic.
I know this is great. I think we all know the AB space is quite competitive. There's a lot of different options for patients with varying efficacy and tolerability. Where do you see OX40 fitting into that landscape longer term?
Yeah, I think in atopic dermatitis, as you know, the leader here is with Dupixent. The penetration of Dupixent for patients with atopic dermatitis could be better. They've not got a giant penetration. There are some patients that are unresponsive to Dupixent. We think that the OX40 ligand class or even the OX40, OX40 ligand, of which there are several competitors in there, could be definitely differentiating because it's a different mechanism of action than Dupixent. That could provide a lot of relief to patients with atopic dermatitis. That is a giant class of drug, as you know, especially if you start getting more penetration.
Our view on this is that there could be multiple entrants in there, not dissimilar to psoriasis, where the market is so large it's supported multiple blockbuster drugs. Especially not only in atopic dermatitis, but as I mentioned in these other indications, it could be broadly applicable across some of these other indications. It is likely a candidate for us to out-license once some of that data is available. We will wait to see the data or wait to see if there is something in phase II that would be good for us to carve out for ourselves. Importantly, we are going to see both the data from Sanofi as well as our own phase I data to give us a good idea of what to do next.
Okay. So then maybe we can shift a little bit to ABCL635. I know you mentioned that too. So maybe just remind us again, mechanistically, potential point of differentiation and where this stands now.
Yeah, this is more of a caricature of what we expect to come in the pipeline after. A first-in-class antibody against a target where we would consider the biology to be well validated by small molecules that have come before that have some, let's say, undesirable side effects, where we think that our molecule will be very well positioned with its in the metabolic and endocrine space. We have been specific to say that it is not in weight loss because there is a lot of attention in weight loss at the moment. We do believe that the total addressable market here could be around $2 billion or with peak sales of around $2 billion. As I mentioned, it is an antibody, to our knowledge, the first-in-class antibody against this target. We will be disclosing more about that. You can expect in our Q1 earnings call, which is in the first week of May.
Great. Okay. Maybe kind of let's zoom back out a little bit from the individual assets. Let's talk about kind of pipeline strategy here, because obviously you have a number of partner assets, a number of internal programs. I know the vision is shifting just a bit as some of these clinical assets start to advance. Right? How do you decide what to keep for AbCellera? How do you decide what to partner? What does your pipeline look like five years from now?
Yeah, this is a great question. We think, I would say, deeply about this. Even when we were in the partnering mode, when we were looking at a royalty position that we were to obtain on molecules, when you defer your own economics to the success of the molecule, you really want to do some diligence on whether you want to only work on molecules that you really believe are going to succeed. On what basis do you believe they're going to succeed? We've developed a bit of a metric for this that Carl went into some detail on in our last earnings call just from last week. The first is we have to like the science. Is the science and the biology well validated?
We have to like the market potential. Is the commercial opportunity there significant enough with a large enough unmet medical need that we believe we could make a difference? The third is the differentiation. The fourth is what does the clinical development path look like? On that, how much money do we have to put to work before we get some dispositive data, ideally in phase I? If we look at our first two assets as an example, the ABCL575, we know the science works. Sanofi has kind of really validated that pathway. We know the market is huge. We know the clinical development path. It's pretty much following what Sanofi has been able to do. Where it struggles a little bit is on the differentiation, as you pointed out. We do have a view on perhaps a longer half-life and therefore less frequent dosing.
It's unclear how important that's going to be. We're not really going to know until we start to see the data. Whereas the ABCL635 molecule, I would say, actually scores very well on all four of these points. It's a well-validated biology, a big commercial potential. It's a first-in-class antibody. We do believe that the clinical development path is such that we'll have some proof of concept data without a huge outlay of capital, even in our phase I trial. That's the metrics that we would use for a lot of the assets that are in the pipeline and even the metrics we use when we look at when partners come to us and ask us to do partnered work and if they bring some kind of unique technology to the table where we might even enter into a co-development agreement with them. We put all of the programs that we work on under the same lens and metric in order to understand, is this really a program worth us entering into and getting involved in?
Yeah, I mean, that last point is important, I think, for the partnerships too. In your conversations with existing and potential partners in recent months, kind of looking forward now, are there any trends or indications or areas of focus that people are especially thinking about, talking about, trying to move into that maybe the industry is not appreciating fully?
I'd say on cancer, we talked about that already. There's a number of modalities, our mechanisms in action, that we think are very promising. I think we don't, ourselves at AbCellera, confine ourselves or confine the aperture to a certain therapeutic area. We are looking really at where is our technology going to help us uniquely find assets that maybe others have struggled to find. That's where we come into these difficult-to-find targets. Proteins where there's very little of the protein exposed on the surface of the cell, and they're very difficult to find too, let alone get any sort of function out of them. I think that's where our partners come to us typically. We've said it in the past, when they're stuck, when they've tried through their own internal efforts, and our technology might be able to get them unstuck. That, of course, is going to be a point of differentiation for us and something that's important along those metrics I mentioned in terms of us moving any programs forward. It's really therapeutic area agnostic.
We think that that's okay through phase I. The clinical development team, which has been a focus of ours in order to recruit and develop the talent for designing clinical trials. We believe we've done a great job at this with Jeff Nickel, who we've brought on to help us with our clinical development team and build out that team in order to figure out how to design those trials for phase I to get some sort of proof of concept data. If we progress based on the data into some phase II, we'll have to bolster that team more.
Yeah, and I think this also touches on another important point. Look, I think when you're talking about particular partners, it's like, what is it when partners come to you? What is it that they have to say about your specific platform, your technology, that they say, I have to work with AbCellera for this? What is the most common pinpoint there that kind of connects your different partnerships together that they say, I have to go to you for this specifically because I want to develop this aspect?
I think in the past, it's been the capabilities of the platform to find antibodies that have eluded their own efforts. In the T-cell engager space, it's been, I think, a real understanding that the work that AbCellera has done in engaging and activating T-cells has been excellent science done by our team and published. I think the oncology teams that have looked at this science without exception have been quite impressed. It is that science that had encouraged AbbVie to come into a partnership and that differentiation of this toolset that we have. In the future, it will also be these assets that we're developing. They will look at these assets.
Much like The Street, I think The Street is looking at AbCellera. I hope they like the investments that we've made. We hear all the time that they like the technology we have. They like the investments we made, our position on building an integrated front end, because antibody is not any one thing. It's a combination of things from target to the clinic. I think people like the validation we have with these partners. People definitely like the cash we have on the balance sheet and that we've turned our attention to developing drugs, because that's how you really increase value within drug development. The big question that's out there is, I sure hope you pick good targets. That's why we've been talking recently about what are the metrics under which we pick targets, those four that I just talked to you about in terms of the science, the commercial opportunity, the differentiation, the clinical development path. What's remaining for The Street to understand is what targets are we picking?
We haven't given The Street a lot to go on. I think that's going to change in 2025 as we started with the disclosure of what ABCL635 is, as well as those that come in the pipeline afterwards to put us on a track to, on average, put two a year. Ultimately, for partners, it will be, what's the clinical data you've got? Why should I get really excited about this program if I like the target selection? Now show me that the molecule you'll have developed is, in fact, a best-in-class molecule. That will only come with clinical data. That also is going to be on the 12-18 month kind of time horizon with the internal pipeline.
Over the long run, this is really much more kind of biotech-structured type of company 10 years from now rather than split? Or how are you thinking about that?
Yeah, I think you asked a question earlier, which is like, hey, what does it look like a few years from now? I think we have made these investments. It means that the marginal cost to bring one more antibody through the front end of discovery and development is actually quite low, especially with the CMC and GMP capabilities. Ideally, we can do that on a reasonable time frame. I would say some of the best in the world, actually, more than reasonable. Fast forward a few years, if we're successful at bringing a couple of molecules into the clinic every year, people will look at what we hope people will look at is that we are very thoughtful about the targets we pick and that those metrics that we use are the right metrics.
They point to the pipeline that we have there and understand that that's one of the best pipelines in the industry of differentiated molecules. Yes, the technological capability has been there for AbCellera. It's easy to jump into the technical details of any one kind of technical vertical within the capability we have. Really what matters is, do I believe that that molecule is going to be a drug? Did you direct that capability towards a really good idea or target? Did you pick that target well? Our goal is, fast forward a few years, you've got a portfolio of those clinical programs and a preclinical pipeline behind it with a proven ability to pick targets and generate those best-in-class assets. I think that's what the market will appreciate.
I think that's what partners will appreciate if they either come to us to buy those assets or out-license those assets, recognizing that we don't have the firepower to move all those through to later-stage clinical trials. Partnering will be an important part of our future, just like any biotech, and that we have the capability to do that repeatedly. That will be the positioning we're hoping to get in over the coming few years.
Okay, great. Yeah, I also did want to spend just a couple of minutes, actually, on something that we're seeing in the headlines almost every day, which is AI.
Right. Yeah.
I know you all, it's been a focus for you too. And it's one of your many focuses. Maybe just kind of remind us, first of all, what is the purview of the focus within AbCellera integrating AI? But realistically, what do you think it can actually do to the platform and the technology over the near to midterm?
Yeah, I think an important point on the AI, or let's say more broadly, machine learning, computation, data collection, this is where the integration that we have had from start to finish we think is vitally important. How do you get the data sets that are helping you improve not only make it possible through computation and high-throughput screening, et cetera, to pull things together, but collecting the data to make it possible to understand what you're solving for?
We are still, and we've been a bit outspoken about the de novo antibody discovery using AI. That skepticism of that particular application of AI shouldn't diminish our enthusiasm of using AI throughout the platform on things where you do know what the answer looked like or you do know what's solvable. If we have started with immunizations and immune response and then searching deeply through those natural immune systems to find antibodies that will make good therapeutic antibodies, there is some protein engineering, especially in the difficult target space, that is left. Do these molecules express well, transfect well, aggregate in solution? Do they have charge patches on them? All these things that kind of block that molecule from being a good candidate to be a drug where the problems are solvable and you can apply machine learning techniques and tools. The most important thing is at the end, you have a molecule that looks like it's going to be a drug.
If you have that, you'll know that AbCellera got the technology right, whether it was from the humanized rodent platform, the screening, or all the protein engineering and AI and computation and data that ties it all together. The important thing to see is, do I believe that that molecule looks like it's going to be a drug? Do I like its properties? Did you pick a good target to work on in the first place? You'll see that through these first-in-class antibodies against these difficult targets. That's where I think the proof is going to be in the pudding.
We're actually seeing the biggest benefit already with some of the AI integration. Is it time from target identification to get into the clinic? Is it just cost savings on individual types of experiments? Give us a sense of where is it actually being leveraged the best, do you think?
In the ion channel space, where we've been working on ion channels for some time, and to our knowledge, there are not functional antibodies against ion channels that have entered into the clinic. If we're able to even find one, you would say it's an infinite improvement in time from being able to find something that previously was not discoverable. Without these tools and computation, you wouldn't even be able to try. I think they're necessary in order to bring the platform together. We, again, and over time, are only going to become increasingly important. In order to feed those AI engines, what's going to become important is the data you have curated along the whole discovery and development kind of process or workflow. We do not know of a company in a much better situation than AbCellera for having that curated data to help in that process. Right now, we see largely more on the back end, the protein engineering. Eventually, it will start moving, and we are going to be in a great position to capitalize on that.
In just the last couple of minutes here, I do want to ask, look, kind of looking ahead next 12 to 18 months, what are you thinking are the most important value creation opportunities for AbCellera? Maybe what is The Street not quite appreciating or misunderstanding from where it stands today?
I'll take the first part of that question first, which is over the next 12 - 18 months, we expect our first two molecules to enter into the clinic and have patients dosed. Actually, in that 12 to 18-month time frame, given the nature of those indications, we do expect to have phase I data back. Sometime, yeah, in sort of the first half of 2026, that's definitely possible. We also would expect to see what are the next candidates that are in the pipeline to bring us to this, on average, couple of programs a year that are going to be targeting to enter the clinic. The other, of course, is the GMP manufacturing that I mentioned coming online towards the end of 2025 and then being online in 2026.
Those would be sort of some of the big milestones to look out for over the next 12-18 months. I think we're particularly excited about ABCL635, also excited about the next molecules that are going to be coming in behind in the pipeline. What is The Street missing in terms of valuation? It's funny. It's been a character-building opportunity watching the share price for many in the biotech community over the last number of years. AbCellera hasn't been immune to that. We do find ourselves in an enviable capital position with about $650 million in cash and an additional almost $200 million in available liquidity from the government of Canada and the government of British Columbia funding that we've received that is used directly towards advancing this pipeline and through phase I.
We actually have a low cost of capital position in order to advance a good number of programs through the first phase of clinical trials. It seems that that's not being well appreciated by the market, where we're trading close to cash and certainly under total available liquidity, and not getting much credit for the value of these programs, which I'm somewhat sympathetic, especially in ABCL635's case, because we haven't disclosed it yet. That will be coming up shortly. Although the caricature we've painted for it in terms of size of the addressable market and those other characteristics, I think, are bang on what those molecules are. The strength of that pipeline, I think a lot of people are waiting to see what is in that pipeline, and are those indeed going to be good molecules? Clinical data ultimately will be the definitive proof.
We do have enough capital to see us through that. We burned about $110 million in operating activities last year. Expect that to be somewhat similar this year. We used just over $50 million net in property, plant, and equipment investments. We expect that will slow down to be about half of that this year as we finish these investments in the CMC and GMP capabilities. If you add that up, you see we have a good number of years of available liquidity and time to play out and reveal more of the portfolio and get clinical data and back it up with a killer pipeline. Those are the focus over the coming 12-18 months and even a little beyond.
All right, great. I think with that, we are at time. I appreciate you guys sticking around. Always a pleasure.
Okay, thanks very much.