AbCellera Biologics Inc
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
ABCL$11.88+6.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001628280-24-021159
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001628280-24-035248
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 104 current paragraphs.
77 unchanged; 18 reworded; 6 added; 3 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Recent Developments
Current report
On July 18, 2024, Invetx announced its upcoming acquisition by Dechra Pharmaceuticals for up to $520 million in total consideration. AbCellera is a founding partner in Invetx, has a low-single-digit royalty stake in Invetx’s programs, and a mid-single-digit equity ownership position.
Current report
On July 31, 2024, we announced an expanded collaboration with Lilly to discover therapeutic antibodies for programs in immunology, cardiovascular disease, and neuroscience.
Current report
Depreciation, Amortization, and Impairment
Current report
Depreciation, amortization, and impairment expenses increased by$30.9 million, or 551%, from the three months ended June 30, 2023 compared to the three months ended June 30, 2024 andincreased by $30.2 million, or 272%, from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. The increase relates primarily to a full impairment charge of the carrying value of $32.0 million (or $23.2 million, net of deferred income tax) associated with the IPR&D acquired through the 2021 acquisition of TetraGenetics. The impairment was a result of the Company's ongoing internal program portfolio prioritization.
Current report
Other (income) increased by$34.1 million from the three months ended June 30, 2023 compared to the three months ended June 30, 2024. The increase included a gain on fair value adjustments related to held-for-trading marketable securities and Trianni contingent consideration of$2.4 million, partially offset bya foreign exchange loss of$0.7 million due to fluctuations in the Canadian and U.S. dollar exchange rate. Further to the intangible asset impairment discussion above, at June 30, 2024, the fair value of the contingent consideration was adjusted to reflect the expected value of the Company's ongoing internal program portfolio prioritization, resulting in a$32.4 million non-cash fair value gain.
Removed paragraphs (3)
Previous report
As noted in our Annual Report on Form 10-K filed with the SEC on February 20, 2024, we updated our key business metrics to better reflect the value from our pipeline of internal and co-development programs. Previously reported business metrics "number of discovery partners" and "programs under contract" have been discontinued and AbCellera-initiated programs and programs without downstream participation have been excluded from program starts and we report on the number of partner-initiated program starts with downstreams in the current and comparative period.
Previous report
Depreciation and Amortization
Previous report
Depreciation and amortization expenses decreased by$0.7 million, or(12)%, from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The decrease relates primarily to the amortization of intangible assets in the current period.
Reworded paragraphs (18)
Previous wording
The Company has advanced two AbCellera-led programs into IND-enabling studies. The programs align with the Company's strategy of building value, both through strategic partnerships, and through internal discovery and development of potential first-in-class and best-in-class antibody therapies. We have started a cumulative total of 90 partner-initiated programs with downstream participation and have seen a cumulative total 13 molecules advanced into the clinic, as illustrated by the following chart.
Current wording
The Company has advanced two AbCellera-led programs into IND-enabling studies. The programs align with the Company's strategy of building value, both through strategic partnerships, and through internal discovery and development of potential first-in-class and best-in-class antibody therapies. We have started a cumulative total of 93 partner-initiated programs with downstream participation and have seen a cumulative total 14 molecules advanced into the clinic, as illustrated by the following chart.
Previous wording
The following table summarizes our key operating results for the three months ended March 31, 2023 and March 31, 2024. All figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data:
Current wording
The following table summarizes our key operating results for the three and six months ended June 30, 2023 and June 30, 2024. All figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data:
Previous wording
(1)Exclusive of depreciation and amortization
Current wording
(1)Exclusive of depreciation, amortization, and impairment
Previous wording
Comparison of the three months ended March 31, 2023 and March 31, 2024:
Current wording
Comparison of the three and six months ended June 30, 2023 and June 30, 2024:
Previous wording
Revenue decreased by $2.2 million from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The decrease in research fees was attributable to the timing and progress of our research and development efforts and no new milestones were reached within the quarter.
Current wording
Revenue decreased by $2.7 million from the three months ended June 30, 2023 compared to the three months ended June 30, 2024, and decreased $5.0 million from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. The decrease in research fees in both periods was attributable to the timing and progress of our research and development efforts and was partially offset by two milestones reached within 2024.
Previous wording
Research and development expenses decreased by$13.4 million, or(25)%, from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. Research and development expenses reflect the continued growth in program execution, platform development, forward integration, and investment in partnered and internal programs, all of which contribute to increased capabilities and capacity of AbCellera's engine for antibody discovery and development. The decrease is attributable to specific one-time investments in co-development and internal programs of approximately $20.0 million made in the first quarter of 2023. The overall decrease was partially offset by an increase of$3.8 million in compensation-related expenses and a$2.9 million increase in facilities, supplies and services expenditure consistent with the overall growth of the Company.
Current wording
Research and development expenses decreased by $8.9 million, or (10)%, from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. Research and development expenses reflect the continued growth in program execution, platform development, forward integration, and investment in partnered and internal programs, all of which contribute to increased capabilities and capacity of AbCellera's engine for antibody discovery and development. The decrease is attributable to specific one-time investments in co-development and internal programs of approximately $20.0 million made in the first quarter of 2023. The overall decrease was partially offset by an increase of$5.6 million in compensation-related expenses and a$5.5 million increase in facilities, supplies and services expenditure consistent with the overall growth of the Company.
Previous wording
Sales and marketing expenses decreased by $0.4 million, or (11)%, from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The decrease was attributable to a reduction in consulting fees and other expenses related to our business development activity.
Current wording
Sales and marketing expenses decreased by $0.7 million, or (18)%, from the three months ended June 30, 2023 compared to the three months ended June 30, 2024. The decrease was attributable to a reduction in consulting fees and other expenses related to our business development activity.
Previous wording
General and administrative expenses increased by $2.2 million, or 15%, from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The increase was driven by a $1.0 million increase in compensation-related costs and a $1.2 million increase in legal, software, and other general administrative costs.
Current wording
General and administrative expenses increased by $4.7 million, or 30%, from the three months ended June 30, 2023 compared to the three months ended June 30, 2024. The increase was driven by a $0.8 million increase in compensation-related costs and a $4.0 million increase in legal, software, and other general administrative costs.
Previous wording
Interest income increased by$0.6 million, or 7%, from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The increase was primarily driven by an increase in interest rates on our cash and cash equivalents and marketable securities balances in the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023.
Current wording
Interest income decreased by$1.0 million, or(9)%, from the three months ended June 30, 2023 compared to the three months ended June 30, 2024 and decreased$0.3 million, or (2)%, from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. The decrease was primarily driven by a decrease in our average cash and cash equivalents and marketable securities balances in the respective periods.
Previous wording
Grants and incentives decreased by$0.1 million, or (3)%, from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. This decrease was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.
Current wording
Grants and incentives decreased by$1.3 million, or (28)%, from the three months ended June 30, 2023 compared to the three months ended June 30, 2024 and decreased$1.4 million, or (17)%, from the six months ended June 30, 2023 compared to the six months ended June 30, 2024.. This decrease was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.
Previous wording
Other (income) decreased by$5.1 million from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The decrease included loss on fair value adjustments related to held-for-trading marketable securities and contingent consideration of$4.8 million anda foreign exchange loss of$0.4 million due to fluctuations in the Canadian and U.S. dollar exchange rate.
Current wording
Other (income) incr eased by $29.0 million from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. The $32.4 million fair value gain discussed in the three months ended June 30, 2024 above was partially offset by fair value adjustments related to held-for-trading marketable securities and contingent consider ation of$2.4 million anda foreign exchange loss of$1.0 million due to fluctuations in the Canadian and U.S. dollar exchange rate.
Previous wording
Income tax recovery decreased by$5.9 million from the three months ended March 31, 2023 compared to the three months ended March 31, 2024. The decrease was driven by the current net loss in the period and a change in effective income tax rates.
Current wording
Income tax recovery increased by$3.8 million from the three months ended June 30, 2023 compared to the three months ended June 30, 2024 and decreased by$2.1 million from thesix months ended June 30, 2023 compared to thesix months ended June 30, 2024. The movement in each period was driven by the current net loss and a change in effective income tax rates.
Previous wording
As of March 31, 2024, we had $698.0 million of cash, cash equivalents and marketable securities, comprising $123.6 million in cash and cash equivalents and $574.5 million in marketable securities. The decrease of $62.6 million since December 31, 2023, was primarily from a combination of cash flow used in operations due to our continued research and development activity, our internal pipeline, continued investment in the capacity and capabilities of our discovery and development engine, investments in our corporate headquarters and GMP facility under construction, and offset by government contributions received in thethree months ended March 31, 2024.
Current wording
As of June 30, 2024, we had $670.4 million of cash, cash equivalents and marketable securities, comprising $148.3 million in cash and cash equivalents and $522.0 million in marketable securities. The decrease of $90.2 million since December 31, 2023, was primarily from a combination of cash flow used in operations due to our continued research and development activity, our internal pipeline, continued investment in the capacity and capabilities of our discovery and development engine, investments in our corporate headquarters and GMP facility under construction, and offset by government contributions received in the six months ended June 30, 2024.
Previous wording
We have generated positive operating cash flow cumulatively since our inception in 2012 and in every year from 2018 to 2022. We intend to significantly invest in our business, and as a result may incur operating losses in future periods. We will continue to use our significant available liquidity from our cash, cash equivalents and marketable securities to fund and invest in research and development efforts towards expanding our capabilities and expertise along our discovery and development engine, the building of our business development team and marketing our solutions to new and existing partners, and the expansion of our corporate headquarters, GMP facility and related infrastructure, including optimization of long-term office-lease arrangements. Based on our current business plan, we believe that our available liquidity from existing cash, cash equivalents, marketable securities, loan receivables, and government contributions, will be sufficient to meet our working capital and capital expenditure needs and do not anticipate the need of external funding over at least the next 36 months following the date of this report.
Current wording
While we have generated positive operating cash flows in the past, we intend to significantly invest in our business, and as a result may continue to incur operating losses in future periods. We will continue to use our significant available liquidity from our cash, cash equivalents and marketable securities to fund and invest in research and development efforts towards expanding our capabilities and expertise along our discovery and development engine, the building of our business development team and marketing our solutions to new and existing partners, and the expansion of our corporate headquarters, GMP facility and related infrastructure, including optimization of long-term office-lease arrangements. Based on our current business plan, we believe that our available liquidity from existing cash, cash equivalents, marketable securities, loan receivables, and government contributions, will be sufficient to meet our working capital and capital expenditure needs and do not anticipate the need of additional external funding over at least the next 36 months following the date of this report.
Previous wording
Net cash used in operating activities decreased from $44.1 million in the three months ended March 31, 2023 to $41.7 million in the three months ended March 31, 2024. The decrease in cash flows used in operations is attributable to working capital movements including higher levels of accounts and other payables in Q1 2023 and timing and amounts of government contributions received in Q1 2024.
Current wording
Net cash used in operating activities increased from $24.2 million in the six months ended June 30, 2023 to $71.7 million in the six months ended June 30, 2024. The increase in cash flows used in operations was attributable to research and development activity, program execution, and investment in partnered and internal programs.
Previous wording
Net cash used in investing activities decreased from $149.6 million used in investing activities in the three months ended March 31, 2023 to $29.9 million provided by investing activities in the three months ended March 31, 2024. The decrease in cash used in investing activities wasprimarily attributable to specific one-time investments that occurred in the first quarter of 2023 and proceeds from marketable securities in the first quarter of 2024.
Current wording
Net cash used in investing activities decreased from $184.0 million used in investing activities in the six months ended June 30, 2023 to $82.0 million provided by investing activities in the six months ended June 30, 2024. The decrease in cash used in investing activities was primarily attributable to specific one-time investments that occurred in the first quarter of 2023, receipt of grant funding, and proceeds from marketable securities in thesix months ended June 30, 2024.
Previous wording
Net cash used in financing activities was $0.5 million for the three months ended March 31, 2023 due to the payment of an intangible asset obligation and contingent consideration payment, partly offset by proceeds from long-term liabilities and the exercise of options for common stock. Net cash provided by financing activities was $2.8 million for the three months ended March 31, 2024 due to proceeds from other long-term liabilities and the exercise of stock options.
Current wording
For the six months ended June 30, 2023, net cash used in financing activities included a$0.9 million contingent consideration payment, partially offset by proceeds from the exercise of options for common stock. Net cash provided by financing activities was $5.5 million for the six months ended June 30, 2024 due to proceeds from other long-term liabilities and the exercise of stock options.
Previous wording
Detailed information about our critical accounting policies and estimates is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes to these policies during the three months ended March 31, 2024.
Current wording
Detailed information about our critical accounting policies and estimates is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no significant changes to these policies during the six months ended June 30, 2024.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Research and development expenses increased by$4.5 million, or 12%, from the three months ended June 30, 2023 compared to the three months ended June 30, 2024. Research and development expenses reflect the continued growth in program execution, platform development, forward integration, and investment in partnered and internal programs, all of which contribute to increased capabilities and capacity of AbCellera's engine for antibody discovery and development. Of the total increase,$1.8 million is attributable to compensation-related expenses and $2.7 million isattributable to facilities, supplies and services expenditure consistent with the overall growth of the Company.
Current report — wording carried from elsewhere
Sales and marketing expenses decreased by $1.1 million, or (15)%, from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. The decrease was attributable to a reduction in consulting fees and other expenses related to our business development activity.
Current report — wording carried from elsewhere
General and administrative expenses increased by $6.9 million, or 22%, from the six months ended June 30, 2023 compared to the six months ended June 30, 2024. The increase was driven by a $1.8 million increase in compensation-related costs and a $5.2 million increase in legal, software, and other general administrative costs.