AbCellera Biologics Inc. ($ABCL)

My name is Andrew Booth. I'm the CFO at AbCellera, and it's my pleasure to walk you through the company and give you an update as to where we are at with our pipeline. Just a reminder, I'll be making certain forward-looking statements, and please check our SEC materials for all of the risks associated. Just as a quick recap of AbCellera. So AbCellera is a company based in Vancouver, Canada, also with offices in Montreal, Canada and in Sydney, Australia. Founded in 2012 out of our Founder and CEO, Carl Hansen's lab from the University of British Columbia. We undertook a mission to rebuild the focus on technology and rebuild the front end of drug discovery really focused on therapeutic antibodies. We originally took that business plan to the market in a partnership model, where we've worked on over 100 therapeutic antibody programs for our partners, accumulating a portfolio of royalties in those molecules over a period of about 10 years or so. We were also well known for the work we did during COVID. We were the discovery engine behind Eli Lilly's COVID antibodies and had a royalty on those molecules, which brought in close to $1 billion in nondilutive funding in order to continue our investment into the platform. And in addition, during that time, we've also partnered with the Government of Canada, bringing in additional funds to the tune of about $400 million to continue the build-out of our infrastructure and capabilities as well as advance a portfolio of programs in our own pipeline through all the preclinical work and even into Phase I. And that recently has been the real focus of the company. Since 2023, we positioned away from the partnership model and more to a focus on our own proprietary pipeline, where we have 2 molecules in the clinic and another 2 in IND-enabling activities that are expected to move to the clinic in the near future, and I'll talk about those later in the pitch. Importantly, we are here still in a very strong liquidity position with about $655 million in total liquidity that we are using to advance our pipeline and that is sufficient liquidity to take us through at least the next 3 years of pipeline and investments and also continuing the portfolio of early discovery programs, which will be the source of future of our own proprietary clinical programs. As I mentioned, for about 10 years or so, we worked in partnership with many different companies, really validating the discovery capabilities that we have. We would -- this was a very capital-efficient model for us to build up the capabilities within the company. And as I mentioned off the top, we have a portfolio of royalties. Looking back, perhaps the most valuable contribution to the company that this partnership model brought was working on the toughest of problems brought to us by some of the industry's best. That allowed us to focus and build our capabilities and really focus on somewhere where we believe we have a competitive advantage in discovering antibodies for difficult targets. We would call these our complex membrane protein targets specifically ion channel and GPCR targets, working on novel modalities, including these multi-specifics and what we would call next-generation ADCs. And importantly, as we try to discover or try to determine where do we point this capability, we look at indications across different therapeutic areas because as we say, if we're already focusing on these difficult targets, the ion channels and GPCRs or areas where our competitive advantage would give us a unique ability to find therapeutic antibodies, it doesn't make sense to further close the aperture on a specific therapeutic area. So at the moment, especially in the preclinical work and in the early clinical work, we are indication agnostic. Looking at where our current pipeline sits at the moment, we have our lead molecule, which is ABCL635. It is an antibody antagonist against NK3R, a Neurokinin-3 receptor. It is a relevant target in the indication of hot flashes really associated with menopause. And we'll be talking a lot more about that program as I progress through the pitch here. We have a second molecule, which is ABCL575. It is against OX40 ligand. This originally was a molecule that we worked on in partnership with EQRx. EQRx had some challenges to their business model and eventually were bought by Revolution Medicines and this molecule reverted to us. We have taken it through Phase I. And initially, this was a fast follower molecule to Sanofi's amlitelimab which they purchased off of Kymab through the acquisition of Kymab. The bet here was that if successful, this would be a very important pathway, and we looked to partner this if Sanofi had been successful. It's fair to say that the OX40 class of drugs has had a few headwinds in the past year. I think amlitelimab's readout in Phase III was -- did not really reproduce the Phase II results that they had and there were some safety signals, both from amlitelimab and also rocatinlimab OX40 that was advanced by Amgen. Our intention here is really to take this through to the end of Phase I and then not allocate any more capital on it. We do believe it will be as advertised in terms of a long half-life suitable for every 6-month dosing, but we will wait to see if there's any partnering opportunities, but we'll not be continuing that on our own steam. And behind that, we have 2 molecules, ABCL688, ABCL386. 688 is in autoimmunity and 386 is oncology. We haven't given very many other details about that -- about either of those programs really because it's a competitive world out there, and we would rather keep our cards close to our chest as we advance that in preclinical work until we get to the clinic, and they are both on track to be in the clinic in 2027. But really, I'll focus a lot of the program today on the NK3R asset. So ABCL635 is a first-in-class antibody for the treatment of VMS, also known as hot flashes. It is, as I mentioned earlier, an antibody antagonist against neurokinin-3 receptor. And it has come from our GPCR9 channel work that we've done over the years, and I'll get into a little bit of the market and of the biology there. So this is potentially a very large market. When we look at menopause and specifically hot flashes associated with menopause, approximately 12 million women by our estimates in the United States suffer moderate to severe hot flashes at any moment in time. Approximately 50% of those are 6 million seek treatment. And where we are really targeted is on those that -- where hormone replacement therapy is either -- is not appropriate, either they are contraindicated, hard or soft contraindicated or cannot tolerate hormone replacement therapy. And by our estimates, that is about 20% of the population. So just multiplying that through 20% of the 6 million women is approximately 1.2 million women. There are 2 small molecules one by Astellas and another by Bayer that have recently received approval. Astellas is in their second year of sales had quite a successful launch, we would say, with $300 million being sold in their second year despite some of the drawbacks. And the Bayer molecule just recently received approval in late 2025. Both of those molecules are priced at roughly about $5,000 in annual cost for the treatment. And so just looking at the 1.2 million women and about $5,000 of net cost, that for us indicates about a $6 billion total addressable market for this class of drugs, really only for those where hormone replacement therapy is not an option. And our thesis here is that women who find themselves in that category will be looking for non-hormonal options for treating one of the most -- one of the largest symptoms associated with menopause, of course, being hot flashes. So just going into a little bit of biology here. What we see is that the pathway that we are looking at here is the NK3R, a neurokinin-3 receptor that are on KNDy neurons in the hypothalamus. Now a thesis we had early is that these KNDy neurons are exposed to -- the role of these KNDy neurons is to detect hormone levels in the blood. So we believe that despite being in the hypothalamus, they're in this part of the hypothalamus called the infundibular nucleus, which has got a fenestrated blood-brain barrier. And because of their role in detecting hormone levels in the blood, we believe that they have access to the systemic circulation and therefore, could be hit targeted by an antibody. Now the role of neurokinin-3 here, as I mentioned, is it gets regulated by the presence of estrogen. And then in the absence of estrogen drives the GnRH pathway through to the production of estrogen to kind of balance this. And in the state of menopause where estrogen has dropped, these NK3R neurons are overstimulated and therefore, are driving sort of a feedback loop to produce estrogen. And of course, going through menopause, there is not the production of estrogen and this feedback loop then causes projections into the preoptic area of the hypothalamus which then gives signals to the thermal regulatory center within the brain that causes this pulsation of hot flashes. So the mechanism that we are looking to engage here with our ABCL635 is to block that signal to the NK3R pathway, therefore, suppressing this kind of pulsating projections that are going and ultimately reducing the hot flashes. Now there are -- this is a well-proven biology. Really, the leaders here are both Astellas with fezolinetant that is marketed under the brand name of Veozah and Bayer, who has elinzanetant marketed under the brand name of Lynkuet. These are 2 small molecules, as I mentioned, that have received approval in the recent past. Fezolinetant approved in 2023, does have some drawbacks. And specifically, there is required liver monitoring because of a liver signal. And in fact, it has also received a boxed warning since its launch. Despite that, as I mentioned, it has achieved $300 million in second year of sales. And elinzanetant by Bayer recently approved just in the fall of last year. They do have required liver monitoring, although not a box warning as fezolinetant does. They also have an additional warning associated with somnolence. And that is because this molecule is both an NK1R and NK3R antagonist. And it was originally developed for NK1R, which is known to cause some issues with sleep. We are with ABCL635, just a pure NK3R antagonist, and we -- therefore, we don't expect to have those same side effects. Recently, and just on the May 11 earnings call that we had, we disclosed the results of our Phase I study, including the trial design of both SAD portion and a MAD portion. You'll see the trial design here on the page, and I won't go over it in detail, but these slides are available off of our website. We did see a very favorable tolerability profile. You see here some of the events that we're seeing in the variety of cohorts for the SAD, and you see also the placebo effects here. We think overall, this is a very clean safety profile that we then quickly had moved -- and I'll show you some of the biomarker and PK/PD data in a couple of slides. We moved this forward quickly into the Phase II. There were a couple of adverse events that we note here, specifically on the headache that was seen in the 900-milligram cohort. We do make some elaboration on this because these cohorts were dosed together and kept together in a room. We're in a kind of a dormitory style room with all of the participants together. They were not allowed to have kind of a joy sort of regular daily pleasures such as coffee, which we also assume, also led to some of the headache, particularly in that one cohort. You notably, you'll see there were no -- none of those effects in the 600 milligram, although we don't expect that the headache was due to the administration of the dose, but rather to those who were deprived of coffee for a couple of days. So overall, we felt very comfortable with the safety profile, and we looked to the liver signal included in the safety profile. As I mentioned, fezolinetant did have a liver signal here -- a liver signal. And if we look here at the variety of metrics that we use to detect if we would have any liver signal, you see we're well within or well below the upper range of normal in each of the measurements we had here, confirming our belief that an antibody being not metabolized in the liver would have a clean safety profile for use in this indication. We also looked at what the PK profile is here. Our target product profile is to have a once-monthly subcutaneous injection, and we saw that the PK profile closely matched what our modeling was that supported this administration, and we feel very comfortable with a half-life of about 25 days to support the monthly profile that we were targeting. On the left of this slide, you do notice the similar diagram as I talked about before. Importantly, this mechanism driving the GnRH pathway gave us a nice biomarker that was used by Astellas in the progressive -- in the clinical development of fezolinetant, and that is testosterone in healthy males. So what we see is that this same pathway, the GnRH pathway that is the feedback loop for driving estrogen also in males drives testosterone. And it was believed and actually fezolinetant provided this nice biomarker and the data, which you see on the right, that if you suppress NK3R that in males, it will also suppress testosterone. And because there is a nice steady level of testosterone in males, you could use this in order to be a measure of target engagement. The risk of entering the Phase I for ABCL635 was, can we indeed hit this part of the brain with an antibody and we were able to significantly derisk that using this biomarker. On the right, you see the fezolinetant data. You see that on the time frame of a single day, they do get the target engagement and a dose-dependent target engagement. The orange line that you see there is close to their clinical dose of 45 milligrams a day. This is 46 milligrams that they used in this study. And the doses that give deeper target engagement of 90 milligrams and 180 milligrams are also labeled on that chart. And we see that there is this dose dependence on target engagement, which is what we were hoping to replicate with our antibody in the Phase I trial. Here, what you see are the results of that biomarker, validating that we, indeed, with ABCL635, do engage the target. What you see on the dark blue line at the bottom is the 900-milligram dose. The blue line above that is the 600-milligram dose. That's in bold because that's the dose that we're taking forward into our Phase II. And you see that in comparison to the fezolinetant data, which with their dose, they get a number of hours of coverage of getting the suppression and engagement of the target to the tune of maybe 40% change in testosterone levels. At our target dose of 600 milligrams, at least as a loading dose, we get, say, about 60% reduction in testosterone, making us feel very good that we do engage the target. And most notable here as well or also notable is that on the right with the fezolinetant data, which is dosed daily, you see the change in this -- with a fairly short half-life, the change in this engagement over the course of that 24-hour period. On the left, because we are intending to dose monthly, you'll see that the time scale is over the course of that month. So it takes up to a week in order to get full target engagement, but then you see sustained target engagement over the course of those 4 weeks. So we saw this in our Phase I and felt very good about the ability to engage the target. And on the basis of this moved quickly into the Phase II. And as I mentioned, we released this data in just a number of weeks ago in our Q1 earnings on May 11. We also saw the reduced stimulation of the -- in other areas of GnRH pathway in FSH and LH, both meeting what we would consider to be a strong target engagement. So our target product profile here is to have favorable at least as good efficacy as the small molecules, a clean safety signal and preferred dosing of this once-monthly subcutaneous dosing. We are now moving forward into the Phase II -- sorry, I thought I had some more information on the Phase II there. We're moving forward into the Phase II, which is a double-blind, placebo-controlled trial with 80 patients with 40 patients in the placebo arm and 40 patients in the treatment arm with 4-week endpoint and 12-week follow-up. What we are testing here, if indeed -- so what we are testing here is the frequency and severity of hot flashes reported on the 4-week time frame. And importantly, we saw this data in the Phase I of target engagement is very derisking in terms of can we engage the target in the infundibular nucleus. Unfortunately, testosterone is only a measure of target engagement and not a biomarker of hot flashes. What remains to be a risk is -- the risk that remains is if it is necessary also to suppress NK3R because it is expressed in the preoptic nucleus, which is behind the blood-brain barrier. The current hypothesis is that it is sufficient to engage and suppress NK3R in the infundibular nucleus, which we have shown in our Phase I is we can do. And if that is indeed the sufficient biology, then we feel very, very good about reading out positively in our Phase II. But there does remain the open question as to whether it is necessary to also engage the NK3R inside the preoptic nucleus. And that, of course, is the study that we're doing with our Phase II. We're moving forward with a 600-milligram dose with the target product profile of a 300-milligram maintenance dose because of the half-life of the molecule. We expect that 600 milligrams does kind of emulate what the steady-state engagement would be of the target at a 300-milligram monthly dose. And because of our formulation at 150 mg per mL in a 2 mL standard auto-injector, we would expect to have -- to be able to deliver that 300 milligrams in a single monthly subcutaneous dose. So we feel very good about where we stand. And we have a highly derisking Phase II readout coming up in the not-too-distant future. We have indicated that this is going to be in the third quarter. So within the next few months, we will get this data. And of course, we'll be excited to share it once we have it. Just looking forward at this pipeline and what we're expecting to see here in 2026 and then looking forward into 2027. We, of course, do have this Phase I/II of ABCL635. And if positive, we would continue into a Phase III study and pivotal trial in 2027. In addition, we would advance ABCL635 for the treatment of VMS in indications of oncology, specifically in breast cancer for any women on tamoxifen where you have a medically induced menopause, you also have -- you also -- those patients do suffer from VMS associated with that medically induced menopause and are looking for, of course, non-hormonal treatments in order to deal with some of the symptoms and get symptom relief. In addition, that same pathway leads to VMS in those receiving prostate cancer treatment, where one of the most uncomfortable side effects of that treatment is also in hot flashes. So we would be moving forward a couple of Phase II studies, specifically in VMS relating to those oncology treatments. As I mentioned off the top, we'll continue our readout of 575, and we would expect that also in 2026. And we will continue the IND-enabling activities of 688 and 386 with the intention to file those INDs and start clinical trials in 2027. We have indicated as well that we would move our next at least one candidate into IND-enabling activities in 2026 with a stretch goal of also bringing that molecule into the clinic in 2027. And importantly, we have a pipeline or funnel of discovery programs behind that, that are in some form of discovery and preclinical development with the goal, as we have said for a couple of years, to bring 1 to 2 molecules per year into IND-enabling activities and then subsequently into the clinic. The goal there is to continue this cadence of 1 or 2 molecules into the clinic over the coming years. And as I mentioned off the top, we do have sufficient capital to continue on that trajectory for the foreseeable future and certainly for the next 3 years of execution on this plan. And with that, I have a few minutes left here if there happen to be any questions.

[indiscernible].

Yes. The Astellas and Bayer actually have kind of blazed the trail for us here. And what we're looking for is a statistically significant and clinically meaningful reduction in the frequency and severity of hot flashes at the 4-week endpoint. Specifically in terms of the frequency, what we'd be looking for is a reduction of at least 2 moderate-to-severe hot flashes per day, and that would be on the order of what the clinical efficacy has been of the approved small molecules. And that is off of a baseline where we've been screening really moderate-to-severe hot flashes with, let's say, similar to Veozah and Lynkuet of about 50 hot flashes a week, so on the order of 7 or 8 per day. And so it would be a reduction of about that 20% of those hot flashes or 2 per day would be equivalent efficacy of the small molecules. And of course, continuing with the clean safety profile, and we would expect to see additional data, although the Phase I data seems quite reasonable to believe that we will hit our target product profile of a once-monthly subcutaneous injection. We do have reason to believe that Veozah left some efficacy on the table because they were dose limited by toxicity. You can see that from their Phase II study. And we will see if the -- given the mechanism of action here and the clean safety profile of an antibody, if we can access some of that efficacy that was left on the table. But really, we think that with the equivalent efficacy, the safety profile and the once-monthly injection that this is a potential blockbuster drug. Any other questions? Okay. Well, thank you for your time.