AbCellera Biologics Inc

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 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.

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 95 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 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:

Current wording

The following table summarizes our key operating results for the three and nine months ended September 30, 2023 and September 30, 2024. All figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data:

Previous wording

Comparison of the three and six months ended June 30, 2023 and June 30, 2024:

Current wording

Comparison of the three and nine months ended September 30, 2023 and September 30, 2024:

Previous 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.

Current wording

Revenue decreased by $0.1 million from the three months ended September 30, 2023 compared to the three months ended September 30, 2024, and decreased $5.1 million from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. The decrease in research fees in both periods was attributable to the timing and progress of our research and development efforts.

Previous wording

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 wording

Research and development expenses increased by$3.1 million, or 8%, from the three months ended September 30, 2023 compared to the three months ended September 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,$0.6 million is attributable to compensation-related expenses and $2.5 million isattributable to facilities, supplies and services expenditure consistent with the overall growth of the Company.

Previous 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.

Current wording

Research and development expenses decreased by $5.9 million, or (5)%, from the nine months ended September 30, 2023 compared to the nine months ended September 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$6.2 million in compensation-related expenses and a$8.1 million increase in facilities, supplies and services expenditure consistent with the overall growth of the Company.

Previous wording

Sales and marketing expenses decreased by $0.7 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.

Current wording

Sales and marketing expenses decreased by $0.3 million, or (10)%, from the three months ended September 30, 2023 compared to the three months ended September 30, 2024 and decreased by $1.4 million, or (13)%, from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. The decrease in both periods 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 $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.

Current wording

General and administrative expenses increased by $4.8 million, or 33%, from the three months ended September 30, 2023 compared to the three months ended September 30, 2024. The increase was driven by a $1.2 million increase in compensation-related costs and a $3.6 million increase in legal, software, and other general administrative costs.

Previous wording

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.

Current wording

General and administrative expenses increased by $11.7 million, or 26%, from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. The increase was driven by a $2.9 million increase in compensation-related costs and a $8.7 million increase in legal, software, and other general administrative costs.

Previous wording

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 wording

Depreciation, amortization and impairment expenses increased by $61.4 million, or 364%, from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. In addition to the Trianni IPR&D impairment mentioned above, the remaining increase relates primarily to a full impairment charge of the carrying value of $32.0 million (or $23.7 million, net of deferred income tax) associated with the IPR&D acquired through the 2021 acquisition of TetraGenetics. The TetraGenetics impairment was a result of the Company's ongoing internal program prioritization.

Previous 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.

Current wording

Interest income decreased by$1.1 million, or(11)%, from the three months ended September 30, 2023 compared to the three months ended September 30, 2024 and decreased by$1.5 million, or (5)%, from the nine months ended September 30, 2023 compared to the nine months ended September 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$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.

Current wording

Grants and incentives increased by$0.7 million, or 23%, from the three months ended September 30, 2023 compared to the three months ended September 30, 2024 and decreased$0.7 million, or (7)%, from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. Changes in both periods were 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) 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.

Current wording

Other income increased by$15.9 million from the three months ended September 30, 2023 compared to the three months ended September 30, 2024. The increase was primarily attributable to a$16.5 million recognized gain onthe disposal of a non-marketable security, partially offset by fair value adjustments on the Trianni contingent consideration and a foreign exchange loss due to fluctuations in the Canadian and U.S. dollar exchange rate.

Previous wording

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.

Current wording

Other income incr eased by $44.9 million from the nine months ended September 30, 2023 compared to the nine months ended September 30, 2024. Further to the Tetragenetics 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 prioritization, resulting in a $32.4 million non-cash fair value gain. The remaining $16.5 million recognized gain onthe disposal of a non-marketable security was partially offset by fair value adjustments on the Trianni contingent consideration and a foreign exchange loss due to fluctuations in the Canadian and U.S. dollar exchange rate.

Previous 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.

Current wording

Income tax recovery increased by$0.9 million from the three months ended September 30, 2023 compared to the three months ended September 30, 2024 and decreased by$1.3 million from thenine months ended September 30, 2023 compared to thenine months ended September 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 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.

Current wording

As of September 30, 2024, we had $643.1 million of cash, cash equivalents and marketable securities, comprising $126.6 million in cash and cash equivalents and $516.5 million in marketable securities. The decrease of $117.4 million since December 31, 2023, was primarily from a combination of cash flow used in operations due to our continued research and development activity, investments in partnered and internal programs, our internal pipeline, investments in our corporate headquarters and GMP facility under construction, and offset by government contributions received in the nine months ended September 30, 2024.

Previous 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.

Current wording

Net cash used in operating activities increased from $24.3 million in the nine months ended September 30, 2023 to $100.6 million in the nine months ended September 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 in addition to working capital movements including higher levels of accounts and grants receivable in thenine months ended September 30, 2024.

Previous 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.

Current wording

Net cash used in investing activities decreased from $196.8 million used in investing activities in the nine months ended September 30, 2023 to $85.7 million provided by investing activities in the nine months ended September 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 thenine months ended September 30, 2024.

Previous 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.

Current wording

For the nine months ended September 30, 2023, net cash provided by financing activities was$6.6 million andincluded$6.6 million in proceeds from other long-term liabilities and a contingent consideration payment offset by proceeds from the exercise of options for common shares. Net cash provided by financing activities was $8.6 million for the nine months ended September 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 six months ended June 30, 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 nine months ended September 30, 2024.