Let's go ahead and get started. My name is Ashleigh Acker, a biotech analyst on Alison Brassel's team here at Piper Sandler. Thank you for joining us at the Piper Sandler Healthcare Conference. It's my pleasure to introduce AbCellera Biologics. Joining us today for a fireside chat we have Senior Director of Strategic Finance and IR, Martin Hogan. Thank you for joining us for this fireside chat. This is meant to be an informal format, so if anyone in the audience has any questions, just raise your hand. So just to level set for investors, Martin, could you give a quick overview of the company, the AbCellera platform, what you've built over the last decade, and where you are with partnered and pre-partnered programs? And then we'll jump more into a fireside chat program with Q&A.
Absolutely. Well, first of all, thank you for hosting us, Ashleigh. It's a pleasure to be here again. I will be making some forward-looking statements today. Please take a look at our SEC filings for a full description of the risks involved. Yeah, when we think about AbCellera, we're at a super exciting time in the company's history. We started out really with a strong technological advantage based on searching deeply in natural immune systems for antibodies that could make good therapeutics. And that was really a technological platform advantage that we had built coming out of the University of British Columbia and Dr. Carl Hansen's lab. And we then were faced with the question of how do you deploy that capability? And clearly, it was in finding antibodies that could make good therapeutics, but we had none of the capabilities around that.
And so the right way to take that forward was by engaging with large and small pharma, biopharma, biotech companies who had ideas for antibody-based therapeutics but didn't have those same capabilities. And so we worked in partnership with them and overall did that for over 100 programs. And in the process, really built out the knowledge, the capabilities refined so that today we feel quite comfortable saying that, particularly where it comes to difficult targets, we probably have the world's best capability of finding antibodies against those. What then also happened organically in partnership was that we increasingly had partners who were looking for us to do more of the downstream assessment of the antibodies that we found. And we also realized there's a whole set of very difficult targets that many companies won't even touch because it's unclear whether finding antibodies against them is feasible or not.
Five years ago, we started working on GPCR and Ion Channel Targets, particularly Ion Channel Targets in-house, to develop the capability, prove to ourselves and others that it is possible for us to discover antibodies against those. That was really the core of what is now the shift towards internal programs. Having built those capabilities, having demonstrated them against some of the industry's most difficult targets for some of the most sophisticated partners that we have, we're now in a position where we can deploy those capabilities against targets that make sense to us internally. We're now very much focused on developing what is a growing and highly attractive internal pipeline.
Excellent. So let's talk about that transition a little bit. So you recently transitioned from a platform-focused company to a clinical -stage biotech. What investments or capabilities were built to support this transition, particularly as you're running early-stage clinical programs? And how seamless has this process been?
Yeah, that's a great question. And we always knew that this was a large investment and a big lift for us to do. I think most importantly, what we needed to build out were downstream capabilities, downstream from discovery and early antibody assessment. So, really being able to do translational biology, to do biophysical assessments, and then also to move into the manufacturing space on the one hand with CMC and manufacturing capabilities, where we just started operations for clinical manufacturing in our own facility in Vancouver, British Columbia. And then, of course, also the regulatory and clinical side of the business. And we're super happy to say that this big corporate goal that we had for this year, which was completing the investments and standing up those capabilities, has now been met.
When you add to it the investments we made in target assessment at the very front of the business, which, of course, in a partnership business, you don't need to have so much where partners select the targets, we can now honestly say that we are end-to-end integrated from assessing targets all the way through to manufacturing the clinical materials in support of studies.
Great.
How did that go? There are always challenges, but I think overall, we're looking at teams that are integrated, that are by and large co-located with 90% of the company in Vancouver, British Columbia, all within, call it a mile radius. So highly integrated teams, both in terms of location, in terms of how they work together. And I think we'll touch on that a bit more. So we're very happy to be where we're at, and we feel we are entirely ready to execute on using that capability to build an attractive internal pipeline.
Excellent. So, really quickly, I just wanted to talk about the partnership strategy evolution. So historically, partnerships were a core of AbCellera. How has the recent shift to internal programs influenced your approach to partnerships?
Yeah, it's a good question. Partnerships indeed were absolutely critical to the business. And of course, through the partnerships, I think over 40 partners for which we've successfully delivered over 100 drug discovery programs. The most important element to that was it allowed us to really refine our capabilities, to prove them, refine them to a point where we can be confident that whatever antibody discovery and development challenge we're taking on, we are the ones to do it, and particularly in the space of very difficult, very difficult targets. How has that approach changed? I think we're now at a point where, really late in 2023, we realized that we were at a bit of a crossroad where we had to make a choice about the kind of company that we wanted to be and to become. And we chose to become an independent drug developer.
When you make that choice, you do need to prioritize accordingly. We have stopped actively looking for new partnerships. We do still have ongoing partnerships where we're committed to our partners, firmly committed to deliver antibodies against the programs that we've agreed to work on. Would we selectively accept additional programs, particularly from existing partners, but also from exciting new ones? Quite possibly. They would have to meet the same criteria as our internal programs. I'm looking forward to talking about those a bit more. In addition, of course, they would have to be situations where we believe that we could not successfully prosecute that target by ourselves. A good example of this was in the antibody drug conjugate space, where we had no experience. A partnership at that time made really good sense.
And so, where we're standing now is we're looking at both the experience, the corresponding data that we've gathered on those programs. And of course, we've built out what we internally believe is a very attractive and, over time, hopefully others will agree, valuable portfolio of downstream stakes in drugs that are many of them yet to move into the clinic and some of them hopefully to get approved over the next years.
Excellent. Let's pivot to your internal programs. So let's talk a little bit about ABCL 635, which is a non-hormonal treatment of moderate to severe hot flashes, so vasomotor symptoms associated with menopause. So you recently disclosed the target and indication for this asset. Can you walk us through the start of the program? What makes the target and indication attractive?
Yeah, absolutely. That's a great question, and indeed, it is our most advanced program and probably the one that's most tangible, certainly from an external perspective, so what made 635 such an exciting program for us to pursue was that it really met the big criteria that we're looking for in terms of science that is clear and largely de-risked. In this case, we've had other biological evidence, but most importantly, also at the time that we started the program, we had seen the AbCellera molecule as a fezolinetant already demonstrate that engaging NK3R as a target works for significantly reducing hot flashes, and so we had de-risked biology. We saw a large unmet medical need, which we'll talk about in a second, and we also saw the potential for differentiation in addition to a very clear development path.
Also importantly, when it comes to differentiation, for us was NK3R is a GPCR target, so a difficult target. And so we felt this was a great opportunity to deploy our capabilities in a space where we were not then and, as of today, still aren't aware of anyone else advancing a biologic against the target. When we look at the market opportunity or the unmet medical need, importantly, there are about 40 million women of menopausal age in the United States alone. About a third of them suffer from moderate to severe vasomotor symptoms, hot flashes that can be absolutely debilitating, impacting quality of life, impacting career opportunities. And so, really, a condition that needs to be addressed. The standard of care as of today is menopause hormone therapy.
About half of women suffering the symptoms seek treatment, but also about 20% of women are either contraindicated or cannot tolerate MHT. And so that leaves over a million women seeking treatment, but up until recently, being left with no treatment option. And so in this space, the need really primarily is for non-hormonal options for treatment. And with the two small molecules, fezolinetant and elinzanetant, those now exist. Both of those molecules have been approved, but we saw that there's an opportunity to do better on a couple of counts, at least with an antibody treatment.
Great. Let's talk a little bit about the phase I trial that's currently evaluating this molecule. So, can you just walk us through the trial design? It also includes both menopausal women and healthy male volunteers. Can you just unpack the rationale behind that decision? And what are the key efficacy and biomarker measures you're looking at, and how that will help inform further development?
Absolutely. So when you look at the phase I design, it is really set up to prove out the three, I think, the three main things that we're looking for. The one, of course, which we kind of know going in is that we're seeing the kind of PK and PD dynamics that we've seen in preclinical studies. Importantly, of course, we're looking at safety, where our expectation is that being an antibody and there not being any target-specific safety signals from the two molecules that we've seen go before that we're expecting a very clean safety profile, so of course, we're evaluating that, and of course, we're looking for the right dose. In addition to that, and this is done with a quiet, as you would expect, with a SAD arm and a MAD arm to the study.
But importantly, we've added a third proof of concept arm where we're including 80 women who are suffering from moderate to severe vasomotor symptoms and where we are looking to see first efficacy signals. So you asked about biomarkers. We're looking at a range of hormones. One of them and the rationale for including healthy male volunteers in the SAD arm of the study is that engaging NK3R in men leads to a significant reduction in testosterone. And it is a very clear signal, much clearer than equivalent hormones in women, although we are looking at those as well. And that is giving us a signal as to whether we're getting good target engagement or not. And that really is the, or one might say was, the most important question as to whether it made sense to pursue the proof of concept. So that's the rationale for including men.
In the proof of concept, with a fully double-blinded study design and 80 participants, we are expecting to get an efficacy signal both in terms of frequency, severity, as well as some other endpoints that should give us the conviction as to whether we are looking at having a likely drug in our hands.
Excellent. I also want to spend some time on your other internal program, ABCL575. So that's a treatment for moderate to severe atopic dermatitis. And there's also potential applications for other inflammatory and autoimmune conditions. So, can you just quickly go over the mechanistic rationale? It's an OX40 ligand rather than the receptor. Can you explain the scientific rationale and how it differentiates this molecule?
Certainly. So ABCL575, when you look back at the criteria that we discussed for that we are discussing of where we're looking to focus with internal programs, really kind of falls outside a little bit in terms of it being a follower to Sanofi's amlitelimab in many ways. And it came to us through a partnership, a co-development partnership where the partner ultimately backed away. So, we're not this isn't a molecule where we're looking to be first in class or potentially only in class, as with other programs in our pipeline. But we are very excited about the large role that blocking the OX40, OX40 ligand axis can play, particularly in immune conditions. And we believe that the space is so large that there's room for many more than just a single molecule to win.
So that's why we decided to continue pursuing the molecule, even though it doesn't quite fit all of our normal criteria. In terms of differentiation, really the most important thing, and this is also what we're looking to demonstrate with our phase I trial, is that it is an exceptionally well-behaved molecule that it is, we've got every reason to believe that it is going to be completely well -tolerated and safe. And also importantly, we're looking at PK and PD, of course. And in the one angle where we may have room for differentiation from amlitelimab really is in half-life. We know that our antibody has a longer half-life. Whether that translates into a more extended dosing regime for patients or not is yet to be seen.
But overall, what we need to demonstrate here is that we are on all counts at least as good as amlitelimab in terms of behavior of the molecule. You also touched on the rationale for targeting OX40 versus OX40 ligand. Based on our understanding of the biology, it shouldn't really make a difference. I think the Amgen molecule targeting OX40 is not Fc -silenced. So that causes likely some of the side effects that we're seeing. But with an Fc- silenced molecule, and there are a number out there in other developers' hands, it, from our understanding, shouldn't really matter which side you target. Although so far, in fairness, the clinical data have looked slightly more favorable for targeting OX40 ligand, which is what we're targeting.
Excellent. So I think something that we're thinking about is the path forward for this molecule. What's gating phase I trials? And what would you specifically need to see in order to move this forward? And also, are you looking to partner this program or advance it independently?
Yeah, we believe that the class overall has large potential. Really, all that I think we're looking for and the potential partners for the molecule are looking for is confirmation that indeed the molecule behaves as well in the phase I study with respect to PK, PD safety in particular, as amlitelimab does. The excitement about the class stems from applicability far beyond atopic dermatitis and other immune conditions alone, potentially more likely in combination with other agents. Given the complexity and the potential across so many indications, it almost certainly makes more sense for the molecule to be developed by a larger player that has the capabilities that we don't, and where we believe this is going to be capital intensive, and we believe our capital is better deployed against the other exciting programs in our pipeline, 635, but then also beyond.
So we are both on the back of the attention that 575 has already gotten, as well as through all our partnerships in the past. We've been in conversations with players across the industry. And I think they, like us, are looking for phase I data to decide whether this would make sense for them to develop alone or in combination with something else.
Great. So let's talk about some of the earlier pipeline assets and some upcoming assets. Can you share any updates on ABCL688 or any other programs that you expect to enter the clinic in 2026? And are there any specific therapeutic areas or modalities that you're focusing on?
Yeah, thanks for asking about the earlier pipeline. It's easy to get focused on what is in the clinic already. We disclosed 688 as our Third Internal Program earlier this year. We said it also comes from our CMPT, so Complex Membrane Protein, GPCR, and Ion Channel Platform. So that's exciting about it. We've also disclosed that it is targeted at autoimmune conditions. We're playing our cards close to our chest with respect to everything else, but we are expecting to make an IND or Canadian equivalent CTA submission in the middle of 2026. And at that point, we'd then also disclose more about the molecule. We are excited about it. It's looking really good in our preclinical hands, if you will, so far. But you'll have to be patient with us to disclose more on that molecule.
Behind that is a pipeline of, I think we've disclosed over, I think at this point, over 20 internal programs. Many, about half, also in the Complex Membrane Protein Target space, and the other half in other modalities, so some of those include T-cell engagers, where we've built a really attractive platform, and then there are other often novel mechanisms that we're exploring that we're able to explore because of our capabilities in difficult target discovery. So we're excited about those. We think there are many potentially differentiated assets in there selected based on our criteria of, do we understand the science? Is there a significant unmet medical need and market opportunity? Are we able to differentiate from current and upcoming competitors? And do we have a clear development path?
We've got in that pipeline, that's how we've selected the programs, many programs that do really well on all four criteria.
Great. So we have a little bit more time. Maybe to wrap up, can we talk a little bit about your capital allocation? You've mentioned being well -capitalized and backed with government funding. Can you discuss your runway and capital allocation strategy moving forward as you focus on fully owned assets?
Absolutely, so we continue to be in a very strong capital position, partly based on the royalties that we earned on our success in COVID, where we continue to have about $680 million at the end of last quarter of available liquidity, which is certainly enough to keep advancing our internal pipeline for many years to come. I think our official statement is well over three years of continued investment in the pipeline that we can support with that. And that is the main use of the capital, is going to be we've got the capabilities, we've completed those investments this year.
So now it really is putting those capabilities to use in our internal pipeline with the committed government funding, as well as the cash and equivalents that we have on hand to pursue the programs that are in the pipeline, make selective additions to it, and hopefully advancing through the clinic with 635 and following molecules successfully.
Excellent. Well, thank you so much for joining us today.
Thank you. Thank you, Ashleigh. It was a pleasure.