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AbCellera was founded in 2012 to discover antibodies from natural immune systems. Their recent S-1 highlights their unique business model and long-term potential to bring a wide-set of medicines to patient:
“Interface of computation, engineering and biology”
“Mission is to improve health with technologies that transform the way that antibody-based therapies are discovered”
“We aim to become the centralized operating system for next generation antibody discovery”
“Technology increases the speed and the probability of success of therapeutic antibody discovery, including enabling discovery against targets that may otherwise be intractable”
The company has built a platform to search natural immune systems for antibodies and screen them against a given target. With this, AbCellera has built a large licensing and partnership business. Recently, the company partnered with Eli Lilly to develop an antibody therapeutic to treat COVID-19. Within 3 weeks, AbCellera sourced their antibody drug candidate from the blood sample of a convalescent patient. In 90 days, the candidate was undergoing clinical trials and was recently given authorization to treat patients.
This is one case study of the large series of partnerships AbCellera has built. Given the large impact of immunology on human health and the commoditization of antibodies, the company has the potential to transform patient lives across a wide-range of diseases spanning oncology, inflammation, infectious disease, and neurodegeneration.
Highlights
AbCellera is centered around a microfluidic device - their instrument can run two microfluidic chips in parallel for a total of 512K chambers per two-hour run. Over that time, each chamber is imaged ~10 times (700 images/second) generating a dataset of over 5M images per run. With this data, AbCellera identifies single B-cells and their corresponding antibodies with desired functional properties.
Antibody therapeutics generate well over $100B in annual sales and represent half of the top 10 best selling drugs in the world. Thirty-six of these medicines so far have reached sales of over $1B with the overall market growing over 10% and projected to be well above $200B in ~5 years. Beyond antibodies, AbCellera is looking into other biologic formats (i.e. bispecifics, ADCs) and cell therapies (i.e. CAR-T).
AbCellera’s business model relies on the company forging partnerships with drug development companies and for COVID-19, with governments. AbCellera’s partners “select a target and define the antibody properties needed for therapeutic development.” The company provides an integrated platform to hand off an antibody candidate to their partner. AbCellera receives upfront and milestone payments along with royalties on the drug candidates they discover.
Team
Carl Hansen (Co-Founder and CEO) and the team spun out AbCellera from the University of British-Columbia. Peter Thiel is still pretty young. Carl probably has another 20-30 years in him to lead and build his company.
Investors
The cap table shows that Carl still owns over half of the company. Pretty amazing.
Technology
Over the last 8 years, AbCellera has built a series of technologies to unlock the full repertoire of natural antibodies. The company combines high-throughput screening, microfluidics, and genomics to discover potential antibody therapeutics. This approach solves two main problems in the field:
Finding antibodies (Ab) for validated targets that currently do not have a suitable Ab
Increase access to antibody drug development by vertically integrating the entire discovery process
AbCellera is centered around a microfluidic device - their instrument can run two microfluidic chips in parallel for a total of 512K chambers per two-hour run. Over that time, each chamber is imaged ~10 times (700 images/second) generating a dataset of over 5M images per run. With this data, AbCellera identifies single B-cells and their corresponding antibodies with desired functional properties:
Multiplexed target binding on up to six targets
Affinity-based enrichment
Multiplexed cell-binding
Ligand blocking
The genomics part of the company’s technology relies on RepSeq (from their acquisition of Lineage Biosciences in 2017), which automates single-cell sequencing. “RepSeq uses high-throughput sequencing to perform near-comprehensive profiling of the repertoire of heavy and light chain antibody genes that are present in a sample. In its highest-throughput. implementation, a single RepSeq sequencing run can generate approximately 800 million antibody sequences.”
So AbCellera combines their microfluidic devices with RepSeq to screen and sequence single B-cells. This allows their technology to identify rare antibodies that others would have missed out on - “using the sequences of hundreds to thousands of antibodies with known properties, we are able to search RepSeq data from related samples to identify closely related families of antibodies that can be arranged in a lineage to reconstruct their evolution during the immune response. These expanded family trees provide valuable insights for vaccine research and are sources of ready-made alternative therapeutic candidates in cases where an antibody of interest has one or more suboptimal properties:”
“Shown that the combination of single-cell analysis and RepSeq can expand the number of therapeutic antibody candidates by more than 10-fold in a single experiment, increasing the number of candidates from hundreds to thousands”
“Enriching for sequences of value by isolating target-specific immune cells that go into a RepSeq experiment can amplify the number of therapeutic antibody candidates”
AbCellera segments their technology platform into 6 parts:
Source - “combine proprietary immunization with genetically engineered mouse technologies including the proprietary suite of humanized mice [AbCellera] acquired in November 2020 from Trianni”
Search - use their microfluidic technology to screen for antibodies
Find - use RepSeq to find functional antibodies
Analyze - use their Celium software tool to search the data they generate
Engineer - from their June 2020 acquisition of OrthoMab, AbCellera uses their protein engineering platform to design new biologic formats (i.e. bispecifics)
Deliver - get to an antibody candidate
Market
Antibody therapeutics generate well over $100B in annual sales and represent half of the top 10 best selling drugs in the world. Thirty-six of these medicines so far have reached sales of over $1B with the overall market growing over 10% and projected to be well above $200B in ~5 years. Beyond antibodies, AbCellera is looking into other biologic formats (i.e. bispecifics, ADCs) and cell therapies (i.e. CAR-T).
AbCellera segments their market opportunity into 4 parts:
Tractable target for large companies - replacing incumbent technologies, like animal hybridoma and displays, with AbCellera’ technology platform
Intractable targets for large companies - developing antibody candidates for difficult targets like GPCRs and ion channels
Tractable targets for emerging companies - increasing the capabilities of their partners with “(i) access to a fully integrated technology stack (ii) accelerate their efforts with timely access to the necessary teams and facilities and (iii) improve the quality of the final antibody leads”
Intractable targets for emerging companies - helping companies develop first-in-class medicines
Business model
AbCellera’s business model relies on the company forging partnerships with drug development companies and for COVID-19, with governments. AbCellera’s partners “select a target and define the antibody properties needed for therapeutic development.” The company provides an integrated platform to hand off an antibody candidate to their partner. AbCellera receives upfront and milestone payments along with royalties on the drug candidates they discover.
At the S-1 filing, AbCellera had 94 discovery programs (in progress with 26 partners) with 71 having potential for milestone and royalty payments. Recent examples are:
IgM Biosciences- multi-target, multi-year partnership focused on oncology and immunology and announced on September 24, 2020
Eli Lilly - multi-year partnership with 9 targets focused on COVID-19 and additional indications and announced on May 22, 2020
Gilead Sciences - single target partnership focused on infectious disease and announced on June 13, 2019
Denali - multi-year partnership with eight targets focused on neurological diseases and announced on February 28, 2019
Novartis - multi-year partnership with up to 10 targets and announced on February 14, 2019
Government of Canada - commitment of up to ~$125M to expand efforts related to the discovery of antibodies for use in drugs to treat COVID-19, and to build technology and manufacturing infrastructure and announced on May 3, 2020
Bill & Melinda Gates Foundation - two-year agreement focused on high-priority infectious diseases including HIV, malaria and tuberculosis and announced on March 14, 2019
Valuation
AbCellera is a pretty large company by market capitalization. Its valuation is driven by a few parts:
The company’s partnerships and assets they have royalties on
Revenue from these deals
Updates on COVID-19 program with Eli Lilly (i.e. sales and whether the vaccine rollout is not efficiently)
Overtime, for AbCellera to become the next $100B biotechnology company since Gilead, the company will need to scale its partnership business and shift toward an internal pipeline. Given AbCellera’s large balance sheet, they can execute a strategy similar to Millennium and in-license/acquire their own pipeline and talent.
Mention highlights in the S-1
Antibody: 320
Platform: 168
Biologics: 135
COVID-19: 90
Patients: 33
Licensing: 28
Bispecifics: 3
CAR-T: 3