Profile

AbCellera is using Artificial Intelligence and Machine Learning to focus on developing antibodies. This is a huge space of development with over 174 programs under contract and 101 program starts. They only work through partners and have no pipeline of their own. They use Artificial Intelligence to help sequence and design antibodies. They can even model the simulation of each antibody's response. They can use Machine Learning to help pick antibodies that perform exactly to specifications. They are developing programs for T cell engager, Ion Channels and GPCR receptors. They continue to expand their capabilities toward being able to develop programs up to the IND.

Management

I have only been following AbCellera for a short time, but so far I think CEO Carl Hansen is doing a great job with the company. He has demonstrated the ability of the company to work with partners to develop two antibodies for Covid that did really good royalties during the pandemic. They continue to add new partners and programs while improving their royalty sharing on new programs. They continue to expand their capabilities toward taking programs up to the IND point of development.

Science

AbCellera is using AI and Machine learning to develop antibodies for partners. They have 174 programs under contract with 8 of them now in the clinic with their programs. They are developing programs around T cell engagers, Ion Channels and GPCR receptors. Oncology makes up over 50% of their indications of target across their partnership programs.

Valuation

Cash $886 million

Revenues next year are estimated to decline by over 70% to $110 million. That is worth about $500 million based on a standard 5 multiplier for biotech companies.

I think they could yield over $2 billion royalties should all their programs work out. They get royalties on these programs. All their current programs are in the early stage of development so I would value that at .5x multiplier. That would make the pipeline worth about $1 billion in value.

All in, that is a $2.386 billion market cap. Based on the 287.6 million shares outstanding, that comes to $8.29.

Partnerships

They have 149 programs with downstream incentives in the form of milestones and/or royalties. Their average royalties across the pipeline for 2022 was 2.4% across 37 programs. This year is 4.1% across 111 programs.

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