Absci Corp

Previous wording

Total revenue was $1.3 million and $2.2 million for the three and six months ended June 30, 2024, respectively, and $3.4 million and $4.6 million for the three and six months ended June 30, 2023, respectively, due to timing of project-based milestones achieved and the mix of ongoing programs utilizing our Integrated Drug Creation platform. We incurred a net loss of $24.8 million and $46.7 million for the three and six months ended June 30, 2024, respectively, compared to a net loss of $41.7 million and $65.0 million for the three and six months ended June 30, 2023, respectively, which include a non-cash goodwill impairment charge in the amount of $21.3 million recorded during the quarter ended June 30, 2023. Research and development expenses increased by $2.7 million, or 11%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. As of June 30, 2024, we had an accumulated deficit of $453.2 million and cash and cash equivalents and short-term investments totaling $145.2 million.

Current wording

Total revenue was $1.7 million and $3.9 million for the three and nine months ended September 30, 2024, respectively, and $0.7 million and $5.4 million for the three and nine months ended September 30, 2023, respectively, due to timing of project-based milestones achieved and the mix of ongoing programs utilizing our Integrated Drug Creation platform. We incurred a net loss of $27.4 million and $74.1 million for the three and nine months ended September 30, 2024, respectively, compared to a net loss of $22.0 million and $87.0 million for the three and nine months ended September 30, 2023, respectively. The net loss for the nine months ended September 30, 2023 includes a non-cash goodwill impairment charge in the amount of $21.3 million recorded during the quarter ended June 30, 2023. Research and development expenses increased by $9.7 million, or 27%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. As of September 30, 2024, we had an accumulated deficit of $480.6 million and cash and cash equivalents and short-term investments totaling $127.1 million.

Previous wording

•Develop our internal pipeline: We are in the process of selectively creating our own drug candidates and intend to advance them to value inflection points anywhere from preclinical validation through to clinical trials prior to out-licensing for further clinical advancement by a partner or other third party.

Current wording

•Develop our internal pipeline: We are in the process of selectively creating our own drug candidates and intend to advance them to value inflection points anywhere from preclinical validation through to clinical trials prior to out-licensing for further clinical advancement by a partner or other third party. We may also utilize significant resources in the design and execution of clinical trials to support our internal pipeline.

Previous wording

•Successfully complete our drug creation activities with partners and enter into licensing arrangements: Our business model relies upon entering into licensing arrangements with our partners to advance the drug candidates we generate through preclinical validation and clinical trials thru to commercialization. Both our ability to successfully complete drug creation activities to meet the needs of a partner, and the partner’s prioritization of the relevant program, impact the likelihood and timing of any election by a partner to enter into a follow-on licensing arrangement. There is no assurance that a partner will elect to license our technology for the development of any drug candidates.

Current wording

•Successfully complete our drug creation activities with partners and enter into licensing agreements: Our business model relies upon entering into licensing agreements with our partners to advance the drug candidates we generate through preclinical validation and clinical trials thru to commercialization. Both our ability to successfully complete drug creation activities to meet the needs of a partner, and the partner’s prioritization of the relevant program, impact the likelihood and timing of any election by a partner to enter into a follow-on licensing agreement. There is no assurance that a partner will elect to license our technology for the development of any drug candidates.

Previous wording

•Continued significant investments in our research and development of new technologies and platform technology expansion: We are seeking to further refine and expand our proprietary platform technology and the scope of our capabilities, which may or may not be successful. This includes, but is not limited to, novel target identification, de novo discovery, incorporation of non-standard amino acids (Bionic protein creation), and application of artificial intelligence across our Integrated Drug Creation platform. We may also invest significantly in developing our clinical trials. We expect to incur significant expenses to advance our discovery, research and development efforts or to invest in and/or acquire complementary technologies, but these efforts may not be successful.

Current wording

•Continued significant investments in our research and development of new technologies and platform technology expansion: We are seeking to further refine and expand our proprietary platform technology and the scope of our capabilities, which may or may not be successful. This includes, but is not limited to, novel target identification, de novo discovery, incorporation of non-standard amino acids (Bionic protein creation), and application of artificial intelligence across our Integrated Drug Creation platform. We expect to incur significant expenses to advance our discovery, research and development efforts or to invest in and/or acquire complementary technologies, but these efforts may not be successful.

Previous wording

We are aware of clinical stage assets targeting TL1A that are being developed by third parties, including Merck, Roche, and Sanofi. For purposes of comparing the potential clinical attributes of drug candidates in our ABS-101 program to certain of these other competitive clinical stage assets, we generated putative molecules and performed a head-to-head preclinical comparison against several of our drug candidates in our ABS-101 program. In these preclinical studies, ABS-101 candidates exhibited attributes consistent with a potentially superior product profile by demonstrating equal or superior potency data from multiple biophysical and cellular assays, in addition to improved developability properties. Further preclinical studies demonstrated ABS-101 candidates' abilities to bind both the TL1A monomer and trimer, which could potentially lead to differentiated clinical efficacy. We believe these attributes support the program’s potential to create an efficacious candidate conducive to subcutaneous dosing. Furthermore, in vitro and preliminary in vivo PK studies demonstrated the potential for extended half-life, supporting the objective for significantly improved dosing intervals. While we are encouraged by these preclinical results, we cannot assure you that similar results will be observed in clinical studies of ABS-101. Additionally, while we endeavored to create molecules with the same attributes as those of competitive product candidates under development, we cannot assure that the molecules we created are similar or better than those being developed by our competitors, nor can we assure that direct comparisons of our clinical product candidate to those of our competitors will produce similar results.

Current wording

We are aware of clinical stage assets targeting TL1A that are being developed by third parties, including Merck, Roche, and Sanofi. For purposes of comparing the potential clinical attributes of drug candidates in our ABS-101 program to certain of these other competitive clinical stage assets, we generated putative molecules and performed a head-to-head preclinical comparison against several of our drug candidates in our ABS-101 program. In these preclinical studies, ABS-101 candidates exhibited attributes consistent with a potentially superior product profile by demonstrating equal or superior potency data from multiple biophysical and cellular assays, in addition to improved developability properties. Further preclinical studies demonstrated ABS-101 candidates' abilities to bind both the TL1A monomer and trimer, which could potentially lead to differentiated clinical efficacy. We believe these attributes support the program’s potential to create an efficacious candidate conducive to subcutaneous dosing. Furthermore, in vitro and in vivo PK studies demonstrated the potential for extended half-life, supporting the objective for significantly improved dosing intervals. While we are encouraged by these preclinical results, we cannot assure you that similar results will be observed in clinical studies of ABS-101. Additionally, while we endeavored to create molecules with similar or better attributes as those of competitive product candidates under development, we cannot assure that the molecules we created are similar or better than those being developed by our competitors, nor can we assure that direct comparisons of our clinical product candidate to those of our competitors will produce similar results.

Previous wording

In February 2024, we initiated IND-enabling studies to further evaluate certain properties of ABS-101. Based on these IND-enabling studies, we expect to initiate Phase 1 clinical studies for ABS-101 in early 2025, subject to clearance of an IND or equivalent regulatory filing.

Current wording

In February 2024, we initiated IND-enabling studies and expect to initiate Phase 1 clinical studies for ABS-101 in the first half of 2025, subject to clearance of an IND or equivalent regulatory filing.

Previous wording

We expect depreciation expense to stabilize following the completion of the build-out of our primary facility, though it may fluctuate in the future in line with continued growth and compute demands in absolute dollars if we purchase additional equipment.

Current wording

We expect depreciation expense to fluctuate in future periods in line with continued growth and compute demands in absolute dollars as we purchase additional equipment.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

The following table summarizes our results of operations for the three and six months ended June 30, 2024 and 2023 (In thousands, except for percentages):

Current wording

The following table summarizes our results of operations for the three and nine months ended September 30, 2024 and 2023 (In thousands, except for percentages):

Previous wording

Technology development revenue decreased by $2.1 million, or 62% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and decreased by $2.5 million, or 53%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, driven by a combination of overall program progress, the timing of project-based milestones achieved, and the mix of ongoing program activity.

Current wording

Technology development revenue increased by $1.0 million, or 129% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and decreased by $1.5 million, or 28%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven by a combination of overall program progress, the timing of project-based milestones achieved, and the mix of ongoing program activity.

Previous wording

The following table summarizes our operating expenses for the three and six months ended June 30, 2024 and 2023 (In thousands, except for percentages):

Current wording

The following table summarizes our operating expenses for the three and nine months ended September 30, 2024 and 2023 (In thousands, except for percentages):

Previous wording

Research and development expenses increased by $3.1 million, or 26%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily attributable to an increase in lab operations costs, including direct costs associated with IND-enabling studies for ABS-101, of $2.3 million, an increase in stock-based compensation of $0.7 million, an increase in administrative costs of $0.1 million, and an increase in personnel costs of less than $0.1 million.

Current wording

Research and development expenses increased by $7.0 million, or 63%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily attributable to an increase in lab operations costs, including direct costs associated with IND-enabling studies for ABS-101, of $3.8 million, an impairment charge of $1.1 million for assets that met the held-for-sale criteria during the period, an increase in stock-based compensation of $1.0 million, and an increase in personnel costs of $0.8 million.

Previous wording

Research and development expenses increased by $2.7 million, or 11%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily attributable to an increase in lab operations costs of $2.3 million, an increase in stock-based compensation of $1.1 million, offset by a decrease in personnel costs of $0.7 million.

Current wording

Research and development expenses increased by $9.7 million, or 27%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily attributable to an increase in lab operations costs of $6.1 million, an impairment charge of $1.1 million for assets that met the held-for-sale criteria during the period, and an increase in stock-based compensation of $2.2 million.

Previous wording

Selling, general, and administrative expenses decreased by $0.1 million, or 1%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily attributable to decreased insurance and other administrative costs of $1.0 million, a decrease in personnel costs of $0.6 million, offset by an increase in stock-based compensation of $1.6 million.

Current wording

Selling, general, and administrative expenses decreased by $0.2 million, or 3%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily attributable to a decrease in personnel costs of $1.7 million, decreased insurance and other administrative costs of $0.5 million, offset by an increase in stock-based compensation of $1.9 million.

Previous wording

Selling, general, and administrative expenses decreased by $0.9 million, or 5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily attributable to decreased insurance and other administrative costs of $2.1 million, a decrease in personnel costs of $0.9 million, offset by a $2.0 million increase in stock-based compensation.

Current wording

Selling, general, and administrative expenses decreased by $1.2 million, or 4%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily attributable to decreased insurance and other administrative costs of $2.6 million, a decrease in personnel costs of $2.5 million, offset by a $4.0 million increase in stock-based compensation.

Previous wording

Depreciation and amortization expense decreased by $0.1 million, or 3% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and decreased by $0.2 million, or 3%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, remaining relatively consistent between periods.

Current wording

Depreciation and amortization expense decreased by $0.2 million, or 4% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and decreased by $0.4 million, or 3%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, remaining relatively consistent between periods.

Previous wording

Interest expense was $0.2 million for the three months ended June 30, 2024, compared to $0.3 million for the three months ended June 30, 2023, representing a decrease of $0.1 million, or 41% and $0.3 million for the six months ended June 30, 2024, compared to $0.6 million for the six months ended June 30, 2023, representing a decrease of $0.3 million, or 44%, primarily attributable to decreased finance lease and long-term debt obligations.

Current wording

Interest expense was $0.1 million for the three months ended September 30, 2024, compared to $0.2 million for the three months ended September 30, 2023, representing a decrease of $0.1 million, or 43% and $0.5 million for the nine months ended September 30, 2024, compared to $0.8 million for the nine months ended September 30, 2023, representing a decrease of $0.4 million, or 43%, primarily attributable to decreased finance lease and long-term debt obligations.

Previous wording

Other income, net, was $2.1 million for the three months ended June 30, 2024, compared to $1.6 million for the three months ended June 30, 2023, representing an increase of $0.5 million, or 34% and $3.8 million for the six months ended June 30, 2024 compared to $3.0 million for the six months ended June 30, 2023, representing an increase of approximately $0.8 million, or 26%, primarily attributable to increases in investment income from cash, cash equivalents and short-term investments due to higher balances and interest rates.

Current wording

Other income, net, was $1.7 million for the three months ended September 30, 2024, compared to $1.6 million for the three months ended September 30, 2023, representing an increase of $0.1 million, or 6% and $5.5 million for the nine months ended September 30, 2024 compared to $4.6 million for the nine months ended September 30, 2023, representing an increase of approximately $0.9 million, or 19%, primarily attributable to increases in investment income from cash, cash equivalents and short-term investments due to higher balances and interest rates.

Previous wording

As of June 30, 2024, we had $145.2 million of cash, cash equivalents and short-term investments.

Current wording

As of September 30, 2024, we had $127.1 million of cash, cash equivalents and short-term investments.

Previous wording

We have incurred net operating losses since inception. As of June 30, 2024, our accumulated deficit was $453.2 million. To date, we have funded operations through issuances and sales of equity securities and debt, in addition to revenue generated from our drug creation agreements. We believe that our cash, cash equivalents and short-term investments will be sufficient to meet our operating expenses, working capital and capital expenditure needs over at least the next 12 months following the date of this filing.

Current wording

We have incurred net operating losses since inception. As of September 30, 2024, our accumulated deficit was $480.6 million. To date, we have funded operations through issuances and sales of equity securities and debt, in addition to revenue generated from our drug creation agreements. We believe that our cash, cash equivalents and short-term investments will be sufficient to meet our operating expenses, working capital and capital expenditure needs over at least the next 12 months following the date of this filing.

Previous wording

In 2022, we received a total of $12.0 million of proceeds from equipment financing arrangements. Terms of the agreements require monthly payments over 42-48 month periods with imputed interest rates ranging from 8%-10%. As of June 30, 2024, the combined outstanding balance on these agreements is $6.2 million.

Current wording

In 2022, we received a total of $12.0 million of proceeds from equipment financing arrangements. Terms of the agreements require monthly payments over 42-48 month periods with imputed interest rates ranging from 8%-10%. As of September 30, 2024, the combined outstanding balance on these agreements is $5.4 million.

Previous wording

In the six months ended June 30, 2023, net cash used in operating activities was $39.4 million and consisted primarily of a net loss of $65.0 million adjusted for non-cash items, including depreciation and amortization expense of $7.0 million, stock-based compensation of $5.7 million, goodwill impairment of $21.3 million, and a net increase in operating assets and liabilities in the amount of $6.1 million.

Current wording

In the nine months ended September 30, 2024, net cash used in operating activities was $55.4 million and consisted primarily of a net loss of $74.1 million adjusted for non-cash items, including depreciation and amortization expense of $10.2 million, stock-based compensation of $14.4 million, impairment of $1.1 million for assets that met the held for sale criteria during the period, and a net increase in operating assets and liabilities in the amount of $4.2 million.

Previous wording

In the six months ended June 30, 2024, net cash used in operating activities was $34.7 million and consisted primarily of a net loss of $46.7 million adjusted for non-cash items, including depreciation and amortization expense of $6.8 million, stock-based compensation of $8.9 million, and a net increase in operating assets and liabilities in the amount of $1.8 million.

Current wording

In the nine months ended September 30, 2023, net cash used in operating activities was $49.7 million and consisted primarily of a net loss of $87.0 million adjusted for non-cash items, including depreciation and amortization expense of $10.5 million, stock-based compensation of $8.2 million, and goodwill impairment of $21.3 million.

Previous wording

In the six months ended June 30, 2024, net cash used in investing activities was $75.4 million primarily from purchases of short-term investments of $131.2 million, partially offset by cash provided by maturities of short-term investments of $56.0 million.

Current wording

In the nine months ended September 30, 2024, net cash used in investing activities was $60.6 million primarily from purchases of short-term investments of $159.5 million, partially offset by cash provided by maturities of short-term investments of $99.0 million.

Previous wording

In the six months ended June 30, 2023, net cash provided by investing activities was $42.9 million primarily from maturities of short-term investments of $135.9 million, partially offset by cash used for purchases of short-term investments of $92.6 million.

Current wording

In the nine months ended September 30, 2023, net cash provided by investing activities was $63.0 million primarily from maturities of short-term investments of $185.9 million, partially offset by cash used for purchases of short-term investments of $122.2 million and purchases of lab equipment of $0.8 million.

Previous wording

In the six months ended June 30, 2024, net cash provided by financing activities was $81.1 million. The net cash provided resulted primarily from proceeds of $80.8 million from the issuance of common stock from a public offering and proceeds of $2.4 million from the issuance of common stock from stock option exercises and our 2021 ESPP, partially offset by principal payments of $2.2 million made for financed equipment.

Current wording

In the nine months ended September 30, 2024, net cash provided by financing activities was $81.5 million. The net cash provided resulted primarily from proceeds of $80.8 million from the issuance of common stock from a public offering and proceeds of $3.8 million from the issuance of common stock from stock option exercises and our 2021 ESPP, partially offset by principal payments of $3.1 million made for financed equipment.

Previous wording

In the six months ended June 30, 2023, net cash used in financing activities was $2.3 million primarily from cash used for principal payments of $2.7 million made for financed equipment, partially offset by proceeds of $0.3 million from the issuance of common stock from option exercises and our 2021 ESPP.

Current wording

In the nine months ended September 30, 2023, net cash used in financing activities was $3.2 million primarily from cash used for principal payments of $4.0 million made for financed equipment, partially offset by proceeds of $0.7 million from the issuance of common stock from option exercises and our 2021 ESPP.

Previous wording

This report should be read in conjunction with the consolidated financial statements in our 2023 Annual Report on Form 10-K where we include additional information on our business, operating segments, risk factors, critical accounting estimates, policies, and the methods and assumptions used in our estimates, among other important information.

Current wording

This report should be read in conjunction with the consolidated financial statements in our 2023 Annual Report on Form 10-K where we include additional information on our business, risk factors, critical accounting estimates, policies, and the methods and assumptions used in our estimates, among other important information.

Previous wording

There were no material changes in our critical accounting policies and estimates during the six months ended June 30, 2024.

Current wording

There were no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2024.