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What changed in AbCellera Biologics Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AbCellera Biologics Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+830 added−750 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-20)

Top changes in AbCellera Biologics Inc.'s 2024 10-K

830 paragraphs added · 750 removed · 514 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

214 edited+30 added−46 removed94 unchanged
Biggest changeABCL635 is the first AbCellera-led asset derived from our GPCR- and ion-channel platform. We anticipate submission of an IND for ABCL635 in 2025. ABCL575: A potential best-in-class medicine for atopic dermatitis ABCL575 targets OX40 ligand and is being developed as a potential best-in-class therapy for the treatment of atopic dermatitis and other indications in autoimmunity and inflammation.
Biggest changeIt can potentially be a first-in-class therapy in an addressable market estimated at more than $2 billion in annual sales. ABCL635 is the first AbCellera-led asset derived from our GPCR- and ion-channel platform. We anticipate submission of a CTA for ABCL635 in Q2 2025.
Since our incorporation in 2012, we have accumulated over 10 years of experience in discovering therapeutic antibody candidates and have built substantial capabilities, scale, and expertise.
Since our incorporation in 2012, we have accumulated over 10 years of experience discovering therapeutic antibody candidates and have built substantial capabilities, scale, and expertise.
As discussed above, we also recognize that our ability to compete effectively for talent also depends on us maintaining a strong corporate culture, that our programs for training and development remain strong, and that we can continue to offer attractive working conditions.
As discussed above, we recognize that our ability to compete effectively for talent also depends on us maintaining a strong corporate culture, that our programs for training and development remain strong, and that we can continue to offer attractive working conditions.
Up to 10 targets, multi-year Oncology and undisclosed September 22, 2021 Moderna, Inc. Up to 6 targets, multi-year RNA-encoded antibodies September 15, 2021 EQRx, Inc. Multi-target, multi-year Oncology and immunology (initially) August 4, 2021 Tachyon Inc.
Up to 10 targets, multi-year Oncology and undisclosed September 22, 2021 Moderna, Inc. Up to 6 targets, multi-year RNA-encoded antibodies September 15, 2021 EQRx, Inc. Multi-target, multi-year Oncology and immunology (initially) August 4, 2021 10 Tachyon Inc.
Single target Neurological diseases June 12, 2018 Undisclosed mid-cap biopharmaceutical company Undisclosed Undisclosed January 25, 2018 Teva Pharmaceutical Industries Ltd. Single target Membrane protein June 13, 2017 Pfizer Inc. Multi-target, multi-year Membrane protein January 5, 2017 Undisclosed global biotechnology company Multi-target, multi-year Undisclosed November 4, 2016 Kodiak Sciences Inc. Single target Ophthalmology August 24, 2016 12 Teva Pharmaceutical Industries Ltd.
Single target Neurological diseases June 12, 2018 Undisclosed mid-cap biopharmaceutical company Undisclosed Undisclosed January 25, 2018 Teva Pharmaceutical Industries Ltd. Single target Membrane protein June 13, 2017 Pfizer Inc. Multi-target, multi-year Membrane protein January 5, 2017 Undisclosed global biotechnology company Multi-target, multi-year Undisclosed November 4, 2016 Kodiak Sciences Inc. Single target Ophthalmology August 24, 2016 Teva Pharmaceutical Industries Ltd.
In cases where we do not exercise our option to continue to invest, our stake typically converts to a royalty-and-milestones position, with royalty rates reflecting the value of our contributions to that point. For each staged investment we make in a co-development program, our effective royalty position is increased.
In cases where we do not exercise our option to continue to invest, our stake typically converts to a royalty-and-milestones position, with royalty rates reflecting the value of our contributions to that point. Our effective royalty position is increased for each staged investment we make in a co-development program.
Among other matters, such Anti-Corruption Laws prohibit corporations and individuals from directly or indirectly paying, offering to pay or authorizing the payment of money or anything of value to any foreign government official, government staff member, political party or political candidate, or certain other persons, in order to obtain, retain or direct business, regulatory approvals or some other advantage in an improper manner.
Among other matters, such Anti-Corruption Laws prohibit corporations and individuals from directly or indirectly paying, offering to pay or authorizing the payment of money or anything of value to any foreign government official, government staff member, political party or political candidate, or certain other persons, to obtain, retain or direct business, regulatory approvals or some other advantage in an improper manner.
Targeting OX40L has the potential to address a broad range of inflammatory conditions and autoimmune diseases, some of which include colitis/inflammatory bowel disease (IBD), asthma/atopy, and diabetes. OX40L blocking is currently under investigation for atopic dermatitis, asthma, alopecia areata, hidradenitis suppurativa (HS). We discovered ABCL575 during our collaboration with EQRx Inc.
Targeting OX40L has the potential to address a broad range of inflammatory conditions and autoimmune diseases, some of which include colitis/inflammatory bowel disease (IBD), asthma/atopy, and diabetes. OX40L blocking is under investigation for atopic dermatitis, asthma, alopecia areata, hidradenitis suppurativa (HS). We discovered ABCL575 during our collaboration with EQRx Inc.
These companies provide technological point-solutions that can be integrated into antibody discovery workflows within our partners’ laboratories or at CROs. 14 An example of a company that provides a technological point-solution that is integrated into antibody discovery workflows is Bruker Cellular Analysis ("Bruker") (on October 3, 2023, PhenomeX, the successor to Berkeley Lights was acquired by Bruker).
These companies provide technological point-solutions that can be integrated into antibody discovery workflows within our partners’ laboratories or at CROs. An example of a company that provides a technological point-solution that is integrated into antibody discovery workflows is Bruker Cellular Analysis ("Bruker") (on October 3, 2023, PhenomeX, the successor to Berkeley Lights was acquired by Bruker).
We believe that we can achieve this in three ways: 1. By achieving the technical breakthroughs that allow us to develop first-in-class or best-in-class drug candidates in high-value therapeutic applications where others have struggled or failed ( e.g. based on T-cell engagers, GPCRs, ion channels); 20 2.
We believe that we can achieve this in three ways: 1. By achieving the technical breakthroughs that allow us to develop first-in-class or best-in-class drug candidates in high-value therapeutic applications where others have struggled or failed ( e.g. based on T-cell engagers, GPCRs, ion channels); 2.
Issued patents from this family are expected to expire in July 2031, absent any disclaimers or extensions available. 25 Another patent family is directed to transgenic mammals that express canine-based immunoglobulins. This patent family contains eight pending applications, including in the U.S., Australia, Canada, China, Europe, Israel, Japan, and Korea.
Issued patents from this family are expected to expire in July 2031, absent any disclaimers or extensions available. Another patent family is directed to transgenic mammals that express canine-based immunoglobulins. This patent family contains eight pending applications, including in the U.S., Australia, Canada, China, Europe, Israel, Japan, and Korea.
One notable effort that started under a partner-initiated co-development agreement is the program to develop antibodies against OX40L. After our partner EQRx. Inc. was acquired in 2023 by Revolution Medicines, Inc., AbCellera took control of the program and advanced the resulting molecule, ABCL575, into IND-enabling studies.
One notable effort that started under a partner-initiated co-development agreement is the program to develop antibodies against OX40L. After our partner EQRx. Inc. was acquired in 2023 by Revolution Medicines, Inc., AbCellera took control of the program and advanced the resulting molecule, ABCL575, into IND/CTA-enabling studies.
Because we do not rely on third-party data, we are able to maintain strict data quality assurance and standardization. We believe this approach provides an advantage that increases the value of the data resulting from discovery programs, as we can extract informative insights by uncovering relationships that are hidden within the data.
Because we do not rely on third-party data, we are able to maintain strict data quality assurance and standardization. 3 We believe this approach provides an advantage that increases the value of the data resulting from discovery programs, as we can extract informative insights by uncovering hidden relationships within the data.
Undisclosed Undisclosed February 2, 2016 * Effective date of agreement Most of the programs with our partners will generate milestone payments to us if our partners reach certain preclinical, clinical, regulatory, and commercial milestones. In addition, programs that generate drug candidates which become commercial products may generate royalty payments to us on the net sales of those products.
Undisclosed Undisclosed February 2, 2016 * Effective date of agreement Most of the programs with our partners will generate milestone payments to us if our partners reach certain preclinical, clinical, regulatory, and commercial milestones. In addition, programs that create drug candidates which become commercial products may generate royalty payments to us on the net sales of those products.
We believe there has been chronic underinvestment in developing product-creation capabilities for antibody drug development. We also believe this step represents significant opportunities for learning and the development of capabilities that are transferable between different drug development projects. Finally, we believe this is the place where investments in technology can most effectively drive value.
We believe there has been chronic underinvestment in developing product-creation capabilities for antibody drug development. We also believe this step represents significant opportunities for learning and the development of capabilities that are transferable between different drug development projects. Finally, we believe this is where technology investments can most effectively drive value.
Because these companies would build these capabilities separate from their core area of focus, and because such businesses have limited time to develop these capabilities, we believe that such decentralized capabilities are unable to approach the state of the art in our industry. Ideation is dominated by innovative biotechnology companies Industry-wide, ideation is dominated by small biotechnology companies.
Because these companies would build these capabilities separate from their core area of focus, and because such businesses have limited time to develop these capabilities, we believe that such decentralized capabilities are unable to approach the state of the art in our industry. Ideation is dominated by innovative biotechnology companies Small biotechnology companies dominate industry-wide ideation.
Our programs broadly fall into two categories: Partner-Initiated Programs In partner-initiated programs, partners come to us with a target in mind and work with us to turn their idea into an antibody drug product. This is our first category of program, dating back to 2014. The volume of programs in this category has been high.
Our programs broadly fall into two initiation categories: Partner-Initiated Programs In partner-initiated programs, partners come to us with a target in mind and work with us to turn their idea into an antibody drug product. This is our first category of program, dating back to 2014. The volume of programs in this category has been high.
In the long term, as our portfolio matures and results in approved therapies, we believe our aggregate economic position from these programs has the potential to produce large revenues at near-100% margin. Co-development agreements Another structure for partner-initiated programs is a co-development agreement.
In the long term, as our portfolio matures and 15 results in approved therapies, we believe our aggregate economic position from these programs has the potential to produce large revenues at near-100% margin. Co-development agreements Another structure for partner-initiated programs is a co-development agreement.
We prioritize integration over the accumulation of stand-alone tools We believe that drug development cannot be broken down into a series of independent steps and see the development of new drugs as a single process with one end goal – the rapid delivery of successful antibody drugs to patients.
We prioritize integration over the accumulation of stand-alone tools We believe that drug development cannot be broken down into a series of independent steps and see the development of new antibody drugs as a single process with one end goal – the rapid delivery of successful medicines to patients.
We empower a more diverse set of innovators As our centralized infrastructure for antibody drug discovery lowers the barriers to entry in our industry, we create the conditions for smaller biotechnology companies to focus on what is unique and valuable in their businesses, and to compete on the merits of their ideas.
We empower a more diverse set of innovators As our centralized infrastructure for antibody drug discovery lowers the barriers to entry in our industry, we create the conditions for smaller biotechnology companies to focus on what is unique and valuable in their businesses, 12 and to compete on the merits of their ideas.
This distribution includes some therapeutics with sustained annual sales of tens of billions of dollars and many with annual sales over $1 billion (so-called “blockbusters”), as well as many that have more-limited commercial success. We aim to position our portfolio with particular exposure to therapeutics with high and very high commercial potential.
This distribution 19 includes some therapeutics with sustained annual sales of tens of billions of dollars and many with annual sales over $1 billion (so-called “blockbusters”), as well as many that have more-limited commercial success. We aim to position our portfolio with particular exposure to therapeutics with high and very high commercial potential.
Issued patents from this patent family are expected to expire in May 2035, absent any disclaimers or extensions available. 23 Lineage The Lineage patent portfolio complements our single-cell microfluidic intellectual property with downstream methods of sequencing reaction preparation, immune RepSeq and analysis.
Issued patents from this patent family are expected to expire in May 2035, absent any disclaimers or extensions available. Lineage The Lineage patent portfolio complements our single-cell microfluidic intellectual property with downstream methods of sequencing reaction preparation, immune RepSeq and analysis.
However, we believe that the long-term success of our business depends, in part, on our partners’ ability to successfully develop and sell products using the antibodies that we discover. The regulations that govern our pharmaceutical and biotechnology partners are those we therefore believe have the most significant impact on our business.
However, we believe that the long-term success of our business depends, in part, on our and our partners’ ability to successfully develop and sell therapeutic products using the antibodies we discover. The regulations that govern our pharmaceutical and biotechnology partners are those we therefore believe have the most significant impact on our business.
Investments are minimal in the case of partner-initiated discovery programs, where we typically cover the marginal cost of our work with near-term payments. For internal programs, the investments we make in the form of our initial technology development (and the subsequent advancement of development work for a particular program) are more substantial.
Investments are minimal in the case of partner-initiated discovery programs, where we typically cover the marginal cost of our work with near-term payments. For internal programs, our investments in the form of our initial technology development (and the subsequent advancement of development work for a particular program) are more substantial.
In the case of employees, the agreements provide that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.
In the case of employees, the agreements provide that all inventions conceived by the individual, related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property.
Spread across a number of smaller biotechnology companies, we believe that the costs to advance their ideas – both in 13 capital and in opportunity – can create serious economic barriers and inefficiencies that artificially restrict innovation and damage productivity in our industry.
Spread across a number of smaller biotechnology companies, we believe that the costs to advance their ideas – both in capital and in opportunity – can create serious economic barriers and inefficiencies that artificially restrict innovation and damage productivity in our industry.
This approach is intended to increase our partners’ probabilities of success in developing an antibody candidate, with a commensurate improvement in their return on investment. We are strategic in the selection of our partners We take a deliberate and strategic approach to selecting partners.
This approach is intended to increase our partners’ probabilities of success in developing an antibody candidate, with a commensurate improvement in their return on investment. 9 We are strategic in the selection of our partners We take a deliberate and strategic approach to selecting partners.
As product creators, we compete with other companies for access to ideas. The complexity and vastness of disease biology means that there is no universal approach to generating ideas for new drugs. Good ideas can come from anywhere.
As product creators, we compete with other companies for access to ideas. The complexity and vastness of disease biology means there is no universal approach to generating ideas for new drugs. Good ideas can come from anywhere.
Commercial sales. Today’s antibody therapeutics generate average peak sales of approximately $3 billion, following several years of ramping sales after commercialization. Substantial annual sales typically continue until the therapeutic patents expire. The average sales of therapeutics are derived from a long-tailed distribution of peak sales.
Today’s antibody therapeutics generate average peak sales of approximately $3 billion, following several years of ramping sales after commercialization. Substantial annual sales typically continue until the therapeutic patents expire. The average sales of therapeutics are derived from a long-tailed distribution of peak sales.
On a case-by-case basis, we may negotiate additional means of capturing value in addition to a reasonable royalty position, including equity or equity-like positions, options for deeper investment, or larger near-term payments.
On a case-by-case basis, we may negotiate additional means of capturing value in addition to a reasonable royalty or equivalent position, including equity or equity-like positions, options for deeper investment, or larger near-term payments.
In pursuing the growth of our portfolio, we are mindful of the strong connection between commercial success of our programs and our largest payouts, as well as of opportunity costs. We do not aim to simply maximize our number of program starts.
In pursuing the growth of our portfolio, we are mindful of the strong connection between commercial success of our programs and our largest payouts, as well as of opportunity costs. We do not aim to maximize our number of program starts.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished according to Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available through the “Investors” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We leverage our partners’ specialist insights into target biology and use our engine to generate what we believe are optimal clinical candidates for downstream development. Our investments in full integration also allow us to take a big-picture perspective on antibody drug discovery, starting with the end in mind and optimizing for the final developability of antibodies from the start.
We leverage our partners’ specialist insights into target biology and use our technology to generate what we believe are optimal clinical candidates for downstream development. Our investments in full integration also allow us to take a big-picture perspective on antibody drug discovery, starting with the end in mind and optimizing for the final developability of antibodies from the start.
Our engine integrates the collection, standardization, and storage of data with a suite of computational tools and an interactive interface that allows our scientists to quickly explore and interpret complex antibody data sets. Data from every experiment is securely stored in a central database designed to maintain the relationships that exist between different measurement types, samples, protocols, metadata, and antibodies.
AbCellera integrates data collection, standardization, and storage with a suite of computational tools and an interactive interface that allows our scientists to explore and interpret complex antibody data sets quickly. Data from every experiment is securely stored in a central database designed to maintain the relationships that exist between different measurement types, samples, protocols, metadata, and antibodies.
For a drug development program to ultimately achieve commercial success, several conditions generally need to be met: the therapeutic hypothesis must be valid; the drug candidate must be optimal-for-purpose ( e.g. effective, safe, manufacturing); the clinical trials must be designed and run appropriately; a significant medical need must be met; regulatory, logistical, and commercial matters must be handled well; and good organizational and financial support must be established and maintained throughout.
For a drug development program to ultimately achieve commercial success, several conditions generally need to be met: the therapeutic hypothesis must be valid; the drug candidate must be optimal-for-purpose ( e.g. effective, safe, manufacturable); the clinical trials must be designed and run appropriately; a significant medical need must be met; regulatory, logistical, and commercial matters must be handled well; and good organizational and financial support must be established and maintained throughout.
The royalty rates for these programs are generally higher than for our partner-initiated discovery programs. The potential for us to assume deeper ownership stakes through a co-development agreement allows us to capture more value from programs to which our engine can make an outsized contribution and from programs in which we have a particularly high level of conviction.
The royalty rates for these programs are generally higher than for our partner-initiated discovery programs. The potential for us to assume deeper ownership stakes through a co-development agreement allows us to capture more value from programs to which our capabilities can make an outsized contribution and from programs in which we have a particularly high level of conviction.
We enter into contracts that allow us rights to use the data that we generate for the purpose of improving our discovery and development engine and fueling machine-learning algorithms. We maintain strict firewall protocols so target-specific data derived from a partner cannot be used to inform the discovery on another project by a different partner.
We enter into contracts that allow us rights to use the data that we generate for the purpose of improving our discovery and development capabilities and fueling machine-learning algorithms. We maintain strict firewall protocols so target-specific data derived from a partner cannot be used to inform the discovery on another project by a different partner.
Our success depends in part on our ability to obtain and maintain intellectual property protection for the components of our discovery and development engine and products arising from the same; to defend and enforce our patents, to preserve the confidentiality of our trade secrets, and to operate without infringing valid and enforceable patents and other proprietary rights of third parties; and to identify new opportunities for intellectual property protection.
Our success depends in part on our ability to obtain and maintain intellectual property protection for the components of our discovery and development capabilities and products arising from the same; to defend and enforce our patents, to preserve the confidentiality of our trade secrets, and to operate without infringing valid and enforceable patents and other proprietary rights of third parties; and to identify new opportunities for intellectual property protection.
We are building a competitive advantage in going from target to clinic Already, we find that seamless data capture along an integrated end-to-end workflow allows us to improve our efficiency and ability to predict early in the discovery process how antibodies will behave later in development and manufacturing (Figure 2).
We are building a competitive advantage in going from target to clinic Already, we find that seamless data capture along an integrated end-to-end workflow allows us to improve our efficiency and ability to predict early in the discovery process how antibodies will behave later in development and manufacturing (Figure 1).
Through these and related activities we believe our Talent Development team plays a critical role in creating an effective organization that our teams are proud to be a part of. Our philosophy for hiring and recruitment Our philosophy for hiring is based on insights gained over more than a decade of building and managing interdisciplinary teams.
Through these and related activities we believe our Talent Development team plays a critical role in creating an effective organization that our teams are proud to be a part of. Our philosophy for hiring and recruitment Our philosophy for hiring is based on insights gained over a decade of building and managing interdisciplinary teams.
We enable new types of antibody therapies The differentiated capabilities of our engine make more and new kinds of antibody discovery possible. For instance, we believe our engine gives us a unique advantage in the discovery of antibodies that modulate the function of difficult transmembrane protein targets, such as G-protein-coupled receptors (“GPCRs”) and ion channels.
We enable new types of antibody therapies The differentiated capabilities of our capabilities make more and new kinds of antibody discovery possible. For instance, we believe our technology gives us a unique advantage in the discovery of antibodies that modulate the function of difficult transmembrane protein targets, such as G-protein-coupled receptors (“GPCRs”) and ion channels.
By accelerating antibody discovery and preclinical development to increase chances of the resulting therapeutic being first- or next-to-market, with correspondingly large market share (as discussed above); and 3. By following an approach to partner selection and program selection that avoids programs with apparently low commercial potential. Royalty rates .
By accelerating antibody discovery and preclinical development to increase chances of the resulting therapeutic being first- or next-to-market, with correspondingly large market share (as discussed above); and 3. By following an approach to partner selection and program selection that avoids programs with apparently low commercial potential and clinical development risk. Royalty rates .
Any patents that issue from this patent family are expected to expire in January 2036, absent any disclaimers or extensions available. The last patent family is directed toward methods for producing Fabs and IgG bispecific antibodies. This patent family includes one granted U.S. patent and one pending foreign counterpart patent application.
Any patents that issue from this patent family are expected to expire in January 2036, absent any disclaimers or extensions available. The last patent family is directed toward methods for producing Fabs and IgG bispecific antibodies. This patent family includes one granted U.S. patent, one pending U.S. non-provisional patent application, and one pending foreign counterpart patent application.
This patent family includes patents issued in the U.S. and Australia and granted in Europe, Japan, and Korea, as well as one pending U.S. non-provisional patent application and seven pending foreign counterpart patent applications. Issued patents from this patent family are expected to expire in March 2034, absent any disclaimers or extensions available.
This patent family includes patents issued in the U.S. and Australia and granted in Europe, Japan, and Korea, as well as one pending U.S. non-provisional patent application and four pending foreign counterpart patent applications. Issued patents from this patent family are expected to expire in March 2034, absent any disclaimers or extensions available.
We believe that our ability to connect with and pursue such ideas is reflected in the growth in our cumulative number of partners and our cumulative number of program starts. We believe our ability to accelerate drug development timelines and to unlock new types of targets puts us in a position to continue driving business development growth.
We believe that our ability to connect with and pursue such ideas is reflected in the growth in our cumulative number of program starts. 18 We believe our ability to accelerate drug development timelines and to unlock new types of targets puts us in a position to continue driving business development growth.
Issued patents from this family are expected to expire in July 2038, absent any disclaimers or extensions available. Another patent family is directed to long germline DH gene and long HCDR3 antibodies. This patent family contains one issued patent in Europe and one pending application in the U.S.
Issued patents from this family are expected to expire in July 2038, absent any disclaimers or extensions available. Another patent family is directed to long germline DH gene and long HCDR3 antibodies. This patent family contains two issued patents, one in Europe and the second in the U.S., and one pending application in the U.S.
These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.
These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual during the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.
Once the drug developer has committed to a therapeutic product, it needs to be thoroughly tested in patients to demonstrate safety and efficacy. This is the step that incurs most of the product development spend. It is also the step that represents the most frequent, and most expensive, point of failure.
Once the drug developer has committed to a therapeutic product, it must be thoroughly tested in patients to demonstrate safety and efficacy. This is the step that incurs most of the product development spend. It is also the step that represents the most frequent, and most expensive, point of failure.
We expect to use the proceeds from the financing to: 6 1. Complete the build of our facilities; 2. Establish and validate fully-integrated capabilities to take programs from concept to the clinic; and 3. Support the development of up to 17 internal programs up to and through Phase 1 clinical trials.
We expect to use the proceeds from the financing to: 1. Complete the build of our facilities; 5 2. Establish and validate fully integrated capabilities to take programs from concept to the clinic; and 3. Support the development of up to 17 internal programs up to and through Phase 1 clinical trials.
In May 2020, in support of this effort, we received a commitment for CAD $175.6 million ($125.6 million) in financing from the Government of Canada. Upon completion of our facilities, we expect to be able to support drug development programs from initiation to fill-finish.
In May 2020, in support of this effort, we received a commitment for CAD $175.6 million ($125.6 million) in financing from the Government of Canada. Upon completion of our facilities, we expect to support drug development programs from initiation to fill-finish.
Being a preferred partner in our industry also allows us to work on the programs that mean the most to partners. We also seek to work with companies that have the potential to be optimal partners for the final development and commercialization of our pipeline assets.
Being a strategic partner in our industry also allows us to work on the programs that mean the most to partners. We also seek to work with companies that have the potential to be optimal partners for the final development and commercialization of our pipeline assets.
Issued patents from this family are expected to expire in July 2031, absent any disclaimers or extensions available. Another patent family is directed to transgenic mammals that express bovine-based immunoglobulins. This patent family contains one issued U.S. patent.
Another patent family is directed to transgenic mammals that express canine-based immunoglobulins. This patent family contains two issued U.S. patents. Issued patents from this family are expected to expire in July 2031, absent any disclaimers or extensions available. Another patent family is directed to transgenic mammals that express bovine-based immunoglobulins. This patent family contains one issued U.S. patent.
To date, we have developed three specific technology platforms that we are leveraging to advance both internal and partner-initiated programs. 1. T-cell engager platform Our T-cell engager platform leverages hundreds of diverse CD3-binding antibodies to create bispecific antibodies that achieve potent tumor-cell killing with reduced cytokine release, which can help address dose-limiting toxicities.
To date, we have developed two specific technology platforms that we are leveraging to advance both internal and partner-initiated programs. 1. T-cell engager platform Our T-cell engager platform leverages hundreds of diverse CD3-binding antibodies to create bispecific antibodies that achieve potent tumor-cell killing with reduced cytokine release, which can help address dose-limiting toxicities. 2.
Building a winning culture requires investment and continuous diligent effort. Our Company and our Talent Development team works to develop and deliver the necessary processes, training programs, and events that we believe are essential for our culture to thrive.
Building a winning culture requires investment and continuous diligent effort. Our Company and our Talent Development team work to develop and deliver the necessary processes, training programs, and events that we believe are essential for our culture to thrive.
These represent a further amplification of our business model, as they enhance the potential economics in our portfolio by giving us and our partner the option – but not the obligation – to co-invest in the development of drug candidates.
These represent a further amplification of our business model, as they enhance the potential economics in our portfolio by giving us and our partner the option – but not the obligation – to co-invest in developing drug candidates.
To attract and retain top talent, we aim to offer total compensation that is competitive for any given role, as determined by market data on local, regional, or global conditions, as appropriate. In addition to competitive salaries, equity awards, and performance bonuses, our compensation includes comprehensive healthcare benefits, fitness and active-lifestyle benefits, and retirement-savings contributions.
To attract and retain top talent, we aim to offer competitive compensation for any given role, as determined by market data on local, regional, or global conditions, as appropriate. In addition to competitive salaries, equity awards, and performance bonuses, our compensation includes comprehensive healthcare benefits, fitness and active-lifestyle benefits, and retirement-savings contributions.
Our teams think like owners when making decisions to allocate time and capital across our business activities. Cognizant of the specific challenges that characterize biotechnology as a sector, we specialize in addressing hard but tractable engineering problems and avoid staking our fortunes on high-risk science projects.
Our teams think like owners when deciding to allocate time and capital across our business activities. Cognizant of the specific challenges that characterize biotechnology as a sector, we specialize in addressing hard but tractable engineering problems and avoid staking our fortunes on high-risk science projects.
Patent Portfolio We have developed an expansive patent portfolio with claims related to multiple aspects of our discovery and development engine, beginning with our first patent applications exclusively licensed from UBC, in 2013.
Patent Portfolio We have developed an expansive patent portfolio with claims related to multiple aspects of our discovery and development capabilities, beginning with our first patent applications exclusively licensed from UBC, in 2013.
These are two large and well-validated families of drug targets for which antibody discovery using traditional techniques has been extremely difficult. By unlocking access to these and other types of targets with antibodies, we believe that our engine has the potential to grow the market for antibody therapies.
These are two large and well-validated families of drug targets for which antibody discovery using traditional techniques has been extremely difficult. By unlocking access to these and other types of targets with antibodies, we believe that our capabilities have the potential to grow the market for antibody therapies.
We continuously assess new ways to improve our technology platform through license or acquisition of third-party patent portfolios, as was the case with our acquisitions of Lineage in 2017 and the OrthoMab platform from Dualogics LLC, or Dualogics, in 2020, our acquisition of Trianni, Inc., or Trianni, in 2020, our acquisition of TetraGenetics, Inc. in 2021, and our license agreements with Alloy Therapeutics LLC, or Alloy Therapeutics. 22 Our patent prosecution strategy encompasses the pursuit of protection for our discovery and development engine and tangentially related methods.
We continuously assess new ways to improve our technology platform through license or acquisition of third-party patent portfolios, as was the case with our acquisitions of Lineage in 2017 and the OrthoMab platform from Dualogics LLC, or Dualogics, in 2020, our acquisition of Trianni, Inc., or Trianni, in 2020, our acquisition of TetraGenetics, Inc. in 2021, and our license agreements with Alloy Therapeutics LLC, or Alloy Therapeutics. 21 Our patent prosecution strategy encompasses the pursuit of protection for our discovery and development capabilities and tangentially related methods.
We have developed specific platform technologies to unlock high-value drug targets, modalities, and classes As we further build the capabilities of our engine, we pursue technology development projects that we believe will open up new market segments in antibody therapeutics by unlocking new drug targets, modalities, and classes.
We have developed specific platform technologies to unlock high-value drug targets, modalities, and classes As we further build the capabilities, we pursue technology development projects that we believe will open up new market segments in antibody therapeutics by unlocking new drug targets, modalities, and classes.
We believe that many of these segments could represent multi-billion-dollar commercial opportunities for our partners. • Improve discovery speed : Bringing antibody treatments to market faster than the current industry standard would make a difference for those who need it.
We believe that many of these segments could represent multi-billion-dollar commercial opportunities for our partners. • Improve discovery speed : Bringing antibody treatments to market faster than the current industry standard would make a difference for those in need.
A partner’s recognition of the value we add to their program grows with each successful demonstration of our capabilities, either when we are able to show results from our work, particularly from internal programs, or during the inaugural programs we complete with them. Our investments in programs depend on the program type.
A partner’s recognition of the value we add to their program grows with each successful demonstration of our capabilities, either when we can show results from our work, particularly from internal programs, or during the inaugural programs we complete with them. Our investments in programs depend on the program type.
These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines.
These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations contaminate the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines.
We also utilize other forms of intellectual property protection, including trademark, copyright, internal know-how and trade secrets, when those other forms are better suited to protect a particular aspect of our intellectual property. Our belief is that our proprietary rights are strengthened by our comprehensive approach to intellectual property protection.
We also utilize other forms of intellectual property protection, including trademark, copyright, internal know-how and trade secrets, when those other forms are better suited to protect a particular aspect of our intellectual property. Our belief is that our comprehensive approach to intellectual property protection strengthens our proprietary rights.
We believe this dynamic has the potential to catalyze a structural change in how antibody drugs are developed. We create opportunities for a more-diverse set of innovators, and believe that our engine has the potential to expand the ecosystem and make our industry more efficient. 3.
We believe this dynamic has the potential to catalyze a structural change in how antibody drugs are developed. We create opportunities for a more-diverse set of innovators and believe that our capabilities have the potential to expand the ecosystem and make our industry more efficient. 3.
We believe that the integration of an optimized manufacturing process with our discovery and protein-engineering capabilities will create synergies in speed and efficiency and will allow us to more rapidly test and validate new antibody therapeutic formats, including bispecific antibodies and antibody conjugates. We expect to complete this facility and to have GMP manufacturing capabilities in use in 2025.
We believe that integrating an optimized manufacturing process with our discovery and protein-engineering capabilities will create synergies in speed and efficiency and will allow us to more rapidly test and validate new antibody therapeutic formats, including bispecific antibodies and antibody conjugates. We expect to complete this facility and to have GMP manufacturing capabilities in use in 2025.
We each begin discovery with a 50% stake in the program and have the option to invest to retain our ownership position on a stage-by-stage basis. Some programs in this category also include equity investments in partner companies.
We each begin discovery with a 50% stake in the program and can invest to retain our ownership position on a stage-by-stage basis. Some programs in this category also include equity investments in partner companies.
We accept that royalty-driven cash flows will only result when we have created value for patients, i.e. when the drug candidates that compose our pipeline and portfolio reach the market as successfully commercialized antibody drugs. This fundamental dynamic applies to our internal, co-development, and partner-led programs.
We accept that cash flows from drug sales will only result when we have created value for patients, i.e. when the drug candidates that compose our pipeline and portfolio reach the market as successfully commercialized antibody drugs. This fundamental dynamic applies to our internal, co-development, and partner-led programs.
Issued patents from this family are expected to expire in July 2039, absent any disclaimers or extensions available. Another patent family is directed to single chain VH and heavy chain antibodies. This patent family includes five issued patents including in the U.S., Canada, Australia, Europe, and Japan. There are three pending applications, including in the U.S., China, and Israel.
Issued patents from this family are expected to expire in July 2039, absent any disclaimers or extensions available. Another patent family is directed to single chain VH and heavy chain antibodies. This patent family includes six issued patents including in the U.S., Canada, Australia, Europe, Israel, and Japan. There are two pending applications, including in the U.S. and China.
We prioritize the outcome of an integrated end-to-end workflow over the accumulation of stand-alone tools. Where other providers in our industry may offer partial solutions or stand-alone instruments, we offer an integrated engine for the creation of new antibody drugs.
We prioritize the outcome of an integrated end-to-end workflow over the accumulation of stand-alone tools. Where other providers in our industry may offer partial solutions or stand-alone instruments, our integrated capabilities offer the creation of new antibody drugs.
Food and Drug Administration, or FDA, or the European Commission for the E.U. for a product, they must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical studies or marketing of the product in those countries.
Food and Drug Administration, or FDA, or the European Commission for the E.U. for a product, they must obtain the requisite approvals from regulatory authorities in foreign countries before the commencement of clinical studies or marketing of the product in those countries.
Our code of conduct, corporate governance guidelines and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available through the “Investors” portion of our website. 28
Our code of conduct, corporate governance guidelines and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available through the “Investors” portion of our website. 26
With our ongoing investments in the integrated target-to-clinic capability of our engine we are aiming to substantially reduce the time required for discovery and development, with a stated goal of – in the future – repeatedly moving from target nomination to an IND filing in two years or less.
With our ongoing investments in our integrated target-to-clinic capabilities, we are aiming to substantially reduce the time required for discovery and development, with a stated goal of – in the future – repeatedly moving from target nomination to an IND (or equivalent) filing in two years or less.
Any patents that issue from this family are expected to expire in August 2036, absent any disclaimers or extensions available. Another patent family is directed to enhanced immunoglobulin diversity. This patent family includes one issued patent in the U.S. and two pending applications, including one in the U.S. and one in Europe.
Another patent family is directed to enhanced immunoglobulin diversity. This patent family includes two issued patents in the U.S. and two pending applications, including one in the U.S. and one in Europe. Issued patents from this family are expected to expire in November 2036, absent any disclaimers or extensions available.
For this reason, we believe there is a serious structural challenge in the biotechnology industry that makes it difficult to turn biological insights into drugs that are ready for clinical testing. These problems, which are inherent in developing new drugs, are hard to solve. As the biotechnology industry matures and becomes increasingly competitive, the problems are getting harder.
For this reason, we believe there is a serious structural challenge in the biotechnology industry that makes it difficult to turn biological insights into drugs that are ready for clinical testing. These problems, inherent in developing new drugs, are hard to solve. As the biotechnology industry matures and becomes increasingly competitive, the issues are getting more complex.
Our partners will be subject to a variety of regulations in applicable jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of their products. Whether or not our partners obtain approval from the U.S.
We and our partners will be subject to various regulations in applicable jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of their products. Whether or not our partners obtain approval from the U.S.
Similarly, obtaining the right antibody for a particular program requires highly specialized capabilities relating to immunization, screening, high-throughput analytics, functional and biophysical characterization, protein engineering, and optimization. Efficient development of antibody therapies requires the integration of highly specialized skills, technology, and infrastructure – something that few firms are able to do successfully.
Similarly, obtaining the right antibody for a particular program requires highly specialized capabilities relating to immunization, screening, high-throughput analytics, functional and biophysical characterization, protein engineering, and optimization. Efficient development of antibody therapies involves the integration of highly 2 specialized skills, technology, and infrastructure – something that few firms can do successfully.
Finally, we believe that our strategy of using technology to positively impact the lives of patients is attractive to top talent who want to spend their days well and who value challenging work with a clear sense of purpose. Our discovery and development engine requires interdisciplinary talent Interdisciplinarity is a core feature of our business.
Finally, we believe that our strategy of using technology to impact the lives of patients positively is attractive to top talent who want to spend their days well and who value challenging work with a clear sense of purpose. 7 Our discovery and development capabilities require interdisciplinary talent Interdisciplinarity is a core feature of our business.
For example, Twist Bioscience markets and provides antibody discovery services using the Bruker Beacon platform to its customers. OUR APPROACH TO CAPITAL ALLOCATION We think like owners when making investments and have historically been profitable Our founders, leadership team, and employees own a significant portion of the equity in our Company.
For example, Twist Bioscience markets and provides antibody discovery services using the Bruker Beacon platform to its customers. 13 OUR APPROACH TO CAPITAL ALLOCATION We think like owners when making investments Our founders, leadership team, and employees own a significant portion of the equity in our Company.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the level of demand for our antibody discovery and development engine and solutions, which may vary significantly; • royalty payments received from our partnership with Lilly upon sales of bamlanivimab or bebtelovimab, which have varied significantly and were dependent on obtaining emergency use authorization by the FDA; • the timing and cost of, and level of investment in, research, development and commercialization activities relating to our discovery and development engine and initiation and advancement of internal programs, which may change from time to time; • the start and completion of programs in which our discovery and development engine is utilized; • the relative reliability and robustness of our discovery and development engine, including the data generation and computational tools within our discovery and development engine; • the introduction of new technologies, platform features or software, by us or others in our industry; • expenditures that we may incur to acquire, develop or commercialize additional technologies; • expenditures involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including costs related to our intellectual property litigation with Bruker, and the outcome of this and any other future patent litigation we may be involved in; • costs related to our civil litigation with the Estate of John Schrader, or Schrader, and the outcome of this and any other future civil litigation we may be involved in; • the degree of competition in our industry and any change in the competitive landscape of our industry, including consolidation among our competitors or future partners; • natural disasters, outbreaks of disease or public health crises, such as the COVID-19 pandemic; • the timing and nature of any future acquisitions or strategic partnerships; 30 • future accounting pronouncements or changes in our accounting policies; and • general social, political and economic conditions and other factors, including inflationary pressures and factors unrelated to our operating performance or the operating performance of our competitors.
Biggest changeThese fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • interest income from our cash management strategy, which is subject to variability due to cash, cash equivalents and marketable securities balances and market interest yields available to the Company; • the timing and cost of, and level of investment in, research, development and commercialization activities relating to our discovery and development capabilities and initiation and advancement of internal programs, which may change from time to time; • the cost of maintaining and running our GMP facility, activities which are new to us; • our ability to generate viable development candidates; 27 • the relative reliability and robustness of our discovery and development capabilities, including our data generation and computational tools; • the introduction of new technologies, platform features or software, by us or others in our industry; • costs that we may incur to acquire, develop or commercialize additional technologies; • costs and fees occurring in litigation that we may be involved in; • the degree of competition in our industry and any change in the competitive landscape of our industry, including consolidation among our competitors or future partners; • natural disasters, pandemics, outbreaks of disease or public health crises; • the timing and nature of any future acquisitions or strategic partnerships; • future accounting pronouncements or changes in our accounting policies; and • general social, political and economic conditions and other factors, including inflationary pressures and factors unrelated to our operating performance or the operating performance of our competitors.
We allocate our resources to pursue a particular development candidate or indication and, as a result, may fail to capitalize on other development candidates or indications that may be more profitable or for which there is a greater likelihood of success. We allocate our resources on certain research programs and development candidates.
We allocate our resources to pursue a particular development candidate or indication and, as a result, may fail to capitalize on other development candidates or indications that may be more profitable or for which there is a greater likelihood of success. We allocate our resources to certain research programs and development candidates.
We anticipate that some of the suppliers of critical components or materials for our processes may be single or sole source suppliers and the replacement of these suppliers or the identification and qualification of suitable second sources may require significant time, effort and expense, and could result in delays in production, which could negatively impact our business operations and revenue.
We anticipate that some of our suppliers of critical components or materials for our processes may be single or sole source suppliers and the replacement of these suppliers or the identification and qualification of suitable second sources may require significant time, effort and expense, and could result in delays in production, which could negatively impact our business operations and revenue.
Doing business internationally involves a number of risks including: • multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, tariffs, economic sanctions and embargoes, employment laws, regulatory requirements and other governmental approvals, permits and licenses; • failure by us or our distributors to obtain approvals to conduct our business in various countries; • differing intellectual property rights; • complexities and difficulties in obtaining intellectual property protection, enforcing our intellectual property and defending against third-party intellectual property claims; • difficulties in staffing and managing foreign operations; 50 • logistics and regulations associated with shipping systems and parts and components for systems, consumables and reagent kits, as well as transportation delays; • travel restrictions that limit the ability of marketing, presales, sales, services and support teams to service partners; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our data packages, and exposure to foreign currency exchange rate fluctuations; • international trade disputes that could result in tariffs and other protective measures; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the Canadian Corruption of Foreign Public Officials Act, or CFPOA, or U.S.
Doing business internationally involves a number of risks including: • multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, tariffs, economic sanctions and embargoes, employment laws, regulatory requirements and other governmental approvals, permits and licenses; • failure by us or our distributors to obtain approvals to conduct our business in various countries; • differing intellectual property rights; • complexities and difficulties in obtaining intellectual property protection, enforcing our intellectual property and defending against third-party intellectual property claims; • difficulties in staffing and managing foreign operations; • logistics and regulations associated with shipping systems and parts and components for systems, consumables and reagent kits, as well as transportation delays; • travel restrictions that limit the ability of marketing, presales, sales, services and support teams to service partners; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our data packages, and exposure to foreign currency exchange rate fluctuations; • international trade disputes that could result in tariffs and other protective measures; • natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; and • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the Canadian Corruption of Foreign Public Officials Act, or CFPOA, or U.S.
These factors include: • actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results; • the introduction of new technologies or enhancements to existing technology by us or others in our industry; 76 • our inability to establish additional collaborations; • departures of key scientific or management personnel; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or antibody discovery in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • overall performance of the equity markets; • sales of our common shares by us or our shareholders in the future; • trading volume of our common shares; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or shareholder litigation; • general political and economic conditions, including those resulting from the conflict between Russia and Ukraine and the attendant sanctions, in addition to the conflict in Israel and the Gaza strip, as well as social and political unrest in the Middle East and the related impact on our business and the markets generally; and • other events or factors, many of which are beyond our control.
These factors include: • actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results; • the introduction of new technologies or enhancements to existing technology by us or others in our industry; • our inability to establish additional collaborations; • departures of key scientific or management personnel; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; 78 • publication of research reports about us or our industry, or antibody discovery in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • overall performance of the equity markets; • sales of our common shares by us or our shareholders in the future; • trading volume of our common shares; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or shareholder litigation; • general political and economic conditions, including those resulting from the conflict between Russia and Ukraine and the attendant sanctions, in addition to the conflict in Israel and the Gaza strip, as well as social and political unrest in the Middle East and the related impact on our business and the markets generally; and • other events or factors, many of which are beyond our control.
Pursuant to our articles, unless we consent in writing to the selection of an alternative forum, the courts of the Province of British Columbia and the appellate courts therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action or proceeding asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of ours to us; (c) any action or proceeding asserting a claim arising out of any provision of the BCBCA or our articles (as either may be amended from time to time); or (d) any action or proceeding asserting a claim or otherwise related to our affairs, or the Canadian Forum Provision.
Pursuant to our articles, unless we consent in writing to the selection of an alternative forum, the courts of the Province of British Columbia and the appellate courts therefrom shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action or proceeding asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of ours to us; (c) any action or proceeding asserting a claim arising out of any provision of the BCBCA or our articles (as either may be amended from 74 time to time); or (d) any action or proceeding asserting a claim or otherwise related to our affairs, or the Canadian Forum Provision.
Among other things, these provisions include the following: • shareholders cannot amend our articles unless such amendment is approved by shareholders holding at least 66 2/3% of the shares entitled to vote on such approval; 71 • our board of directors may, without shareholder approval, issue preferred shares in one or more series having any terms, conditions, rights, preferences and privileges as the board of directors may determine; and • shareholders must give advance notice to nominate directors or to submit proposals for consideration at shareholders’ meetings.
Among other things, these provisions include the following: • shareholders cannot amend our articles unless such amendment is approved by shareholders holding at least 66 2/3% of the shares entitled to vote on such approval; • our board of directors may, without shareholder approval, issue preferred shares in one or more series having any terms, conditions, rights, preferences and privileges as the board of directors may determine; and • shareholders must give advance notice to nominate directors or to submit proposals for consideration at shareholders’ meetings.
In addition, the U.S. government has the right to require us or our licensors to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third-party if it determines that: (i) adequate steps have not been taken to commercialize the invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).
In 71 addition, the U.S. government has the right to require us or our licensors to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third-party if it determines that: (i) adequate steps have not been taken to commercialize the invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).
In addition, changes to the patent laws of the United States allow for various post-grant opposition 57 proceedings that have not been extensively tested, and their outcome is therefore uncertain. Furthermore, if third parties bring these proceedings against our patents, we could experience significant costs and management distraction. We rely on in-licenses from third parties.
In addition, changes to the patent laws of the United States allow for various post-grant opposition proceedings that have not been extensively tested, and their outcome is therefore uncertain. Furthermore, if third parties bring these proceedings against our patents, we could experience significant costs and management distraction. We rely on in-licenses from third parties.
As a result, the U.S. government may have certain rights to intellectual property embodied in our technology pursuant to the Bayh-Dole Act of 1980, or Bayh-Dole Act, and implementing regulations. These U.S. government rights in certain inventions developed under a government-funded program include a 68 non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose.
As a result, the U.S. government may have certain rights to intellectual property embodied in our technology pursuant to the Bayh-Dole Act of 1980, or Bayh-Dole Act, and implementing regulations. These U.S. government rights in certain inventions developed under a government-funded program include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose.
Although we devote resources to protect our information systems, we realize that cyberattacks are a threat, and there can be no assurance 46 that our efforts will prevent information security breaches that would result in business, legal, financial, or reputational harm to us, or would have a material adverse effect on our results of operations and financial condition.
Although we devote resources to protect our information systems, we realize that cyberattacks are a threat, and there can be no assurance that our efforts will prevent information security breaches that would result in business, legal, financial, or reputational harm to us, or would have a material adverse effect on our results of operations and financial condition.
Our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. In addition, certain countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to other parties. Furthermore, many countries limit the enforceability of patents against other parties, including government agencies or government contractors.
Our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. In addition, certain countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to other parties. 64 Furthermore, many countries limit the enforceability of patents against other parties, including government agencies or government contractors.
This may prevent or discourage unsolicited acquisition proposals or offers for our common shares that you may feel are in your best interest as one of our shareholders. 70 Sales of a substantial number of our common shares in the public market could cause our share price to fall significantly, even if our business is doing well.
This may prevent or discourage unsolicited acquisition proposals or offers for our common shares that you may feel are in your best interest as one of our shareholders. Sales of a substantial number of our common shares in the public market could cause our share price to fall significantly, even if our business is doing well.
Compliance with the various reporting and other requirements applicable to public companies requires considerable time and attention of management. We cannot assure you that we will satisfy our obligations as a public company on a timely basis. 77 The rules and regulations applicable to public companies require substantial legal and financial compliance costs and make some activities time-consuming and costly.
Compliance with the various reporting and other requirements applicable to public companies requires considerable time and attention of management. We cannot assure you that we will satisfy our obligations as a public company on a timely basis. The rules and regulations applicable to public companies require substantial legal and financial compliance costs and make some activities time-consuming and costly.
Any failure to prevent or mitigate security breaches or improper access to, use of, or disclosure of our clinical data or patients’ personal data could result in significant liability under state, federal and international law and may cause a material adverse impact to our reputation, affect our ability to conduct new studies, and potentially disrupt our business.
Any failure to prevent or mitigate security breaches or improper 53 access to, use of, or disclosure of our clinical data or patients’ personal data could result in significant liability under state, federal and international law and may cause a material adverse impact to our reputation, affect our ability to conduct new studies, and potentially disrupt our business.
Adjustments resulting from financial statement translations are included as a separate component of shareholders’ equity. 51 Our business activities are subject to the FCPA and other anti-bribery and anti-corruption laws of the United States and other countries in which we operate, as well as U.S. and certain foreign export controls and trade sanctions.
Adjustments resulting from financial statement translations are included as a separate component of shareholders’ equity. Our business activities are subject to the FCPA and other anti-bribery and anti-corruption laws of the United States and other countries in which we operate, as well as U.S. and certain foreign export controls and trade sanctions.
As a company, we have no previous experience in advancing and completing clinical trials, and navigating and complying with the related regulatory requirements, including with respect to the submission of a New Drug Application, 39 or NDA, or equivalent submission. We have not yet demonstrated our ability to independently conduct clinical development and obtain regulatory approval.
As a company, we have no previous experience in advancing and completing clinical trials, and navigating and complying with the related regulatory requirements, including with respect to the submission of a New Drug Application, or NDA, or equivalent submission. We have not yet demonstrated our ability to independently conduct clinical development and obtain regulatory approval.
The new laws will, among other things, impact how regulated businesses collect and process personal sensitive data, conduct data protection assessments, transfer personal data to affiliates, and respond to consumer rights requests. A number of other states have proposed new privacy laws, some of which are similar to the above discussed recently passed laws.
The new laws will, among other things, impact how regulated businesses collect and process personal 51 sensitive data, conduct data protection assessments, transfer personal data to affiliates, and respond to consumer rights requests. A number of other states have proposed new privacy laws, some of which are similar to the above discussed recently passed laws.
Our competitors and others may now and, in the future, have significantly larger and more mature patent portfolios than we currently have. In addition, future litigation may involve patent holding companies or other adverse patent owners who have no relevant product or service revenue and against whom our own patents may provide little or no deterrence or protection.
Our competitors and others may now and, in the future, have significantly larger and more mature patent portfolios than we currently have. In addition, 67 future litigation may involve patent holding companies or other adverse patent owners who have no relevant product or service revenue and against whom our own patents may provide little or no deterrence or protection.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted 60 narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.
Our principal shareholders and management own a significant percentage of our shares and will be able to exert significant influence over matters subject to shareholder approval. Our executive officers, directors, and 5% shareholders beneficially currently own over twenty percent of our common shares in the aggregate, based on ownership information filed by such holders.
Our principal shareholders and management own a significant percentage of our shares and will be able to exert significant influence over matters subject to shareholder approval. Our executive officers, directors, and 5% shareholders currently own over twenty percent of our common shares in the aggregate, based on ownership information filed by such holders.
If we are classified as both a CFC and a PFIC (as defined below), we generally will not be treated as a PFIC with respect to those U.S. Holders that meet the definition of a Ten Percent Shareholder during the period in which we are a CFC (referred to as the “CFC/PFIC overlap rule”). A “U.S.
If we are classified as both a CFC and a PFIC (as defined below), we generally will not be treated as a PFIC with respect to those U.S. Holders that meet the definition of a Ten Percent Shareholder during the period in which we are a CFC (referred to as 76 the “CFC/PFIC overlap rule”). A “U.S.
We have invested, and expect to continue to invest, in research and development efforts that further enhance our technology and platform. Such investments in technology are inherently risky and may affect our operating results. If the return on these investments is lower or develops more slowly than we expect, our revenue and operating results may suffer.
We have invested, and expect to continue to invest, in research and development efforts that further enhance our technology and platform. Such investments in technology are inherently risky and may affect our operating results. If the return on these investments is lower or develops more slowly than we expect, our operating results may suffer.
Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed 61 issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. 63 We are currently, and in the future may be, involved in litigation and other proceedings related to intellectual property, which could be time-intensive and costly and may adversely affect our business, financial condition, results of operations and prospects.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. We are currently, and in the future may be, involved in litigation and other proceedings related to intellectual property, which could be time-intensive and costly and may adversely affect our business, financial condition, results of operations and prospects.
Based on our current business plan, we believe our available liquidity from existing cash and cash equivalents, marketable securities, and anticipated cash flows from operations and government contributions, will be sufficient to meet our working capital and capital expenditure needs and expenditure required for later stage development of our internal pipeline to IND.
Based on our current business plan, we believe our available liquidity from existing cash and cash equivalents, marketable securities, and anticipated cash flows from operations and government contributions, will be sufficient to meet our working capital and capital expenditure needs and expenditure required for later stage development of our internal pipeline.
As a result of new standards, changes to existing standards and changes in their interpretation, we might be required to change our accounting policies, alter our operational policies, and implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or we may be required to restate our published financial statements.
As a result of new standards, changes to existing standards and changes in their interpretation, we might be required to change our accounting policies, alter our operational policies, and 75 implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or we may be required to restate our published financial statements.
Our management uses certain key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions and such metrics may not 41 accurately reflect all of the aspects of our business needed to make such evaluations and decisions, in particular as our business continues to grow.
Our management uses certain key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions and such metrics may not accurately reflect all of the aspects of our business needed to make such evaluations and decisions, in particular as our business continues to grow.
Any of the foregoing could harm our business, financial condition, results of operations and prospects. We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position.
Any of the foregoing could harm our business, financial condition, results of operations and prospects. 66 We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position.
A court of competent jurisdiction could hold that third-party patents are valid, enforceable and infringed, which could materially and adversely affect our ability and the ability of our licensor to commercialize any technology we may develop and any other technologies covered by the asserted third-party patents.
A court of competent jurisdiction could hold that third-party patents are 68 valid, enforceable and infringed, which could materially and adversely affect our ability and the ability of our licensor to commercialize any technology we may develop and any other technologies covered by the asserted third-party patents.
The existence of comprehensive privacy laws in different states in the country would make our 44 compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance.
The existence of comprehensive privacy laws in different states in the country would make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance.
Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the 58 licensor’s rights.
Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.
Any such access, disclosure or other loss of information could result in legal claims or 43 proceedings, liability under laws that protect the privacy of personal information, such as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and regulatory penalties.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, such as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and regulatory penalties.
Our facilities and equipment could be harmed or rendered inoperable or inaccessible by natural or man-made disasters or other circumstances beyond our control, including fire, earthquake, power loss, communications failure, war or terrorism, or another catastrophic event, such as a pandemic or similar outbreak or public health crisis, which may render it difficult or impossible for us to support our partners and develop updates, upgrades and other improvements to our discovery and development engine, advanced automation systems, and advanced application and workflow software for some period of time.
Our facilities and equipment could be harmed or rendered inoperable or inaccessible by natural or man-made disasters or other circumstances beyond our control, including fire, earthquake, power loss, communications failure, war or terrorism, or another catastrophic event, such as a pandemic or similar outbreak or public health crisis, which may render it difficult or impossible for us to support our partners and develop updates, upgrades and other improvements to our discovery and development capabilities, advanced automation systems, and advanced application and workflow software for some period of time.
The Company believes that Plaintiffs’ claim is meritless and frivolous in all respects and intends to defend itself appropriately. 66 Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
The Company believes that Plaintiffs’ claim is meritless and frivolous in all respects and intends to defend itself appropriately. Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities.
The assignment of intellectual property rights may not be self-executing, or the assignment 62 agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
To raise 69 capital, we may sell common shares, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common shares, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
To raise capital, we may sell common shares, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common shares, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
However, we are unable to predict whether and the extent to which the minimum annual payments under our partnership agreements will be exceeded, or the timing of the achievement of any milestones under these agreements, if they are achieved at all.
We are unable to predict whether and the extent to which the minimum annual payments under our partnership agreements will be exceeded, or the timing of the achievement of any milestones under these agreements, if they are achieved at all.
If Bruker succeeds in invalidating the asserted patents, the strength of our intellectual property portfolio could be adversely affected and our ability to protect our technology, business and reputation or to generate licensing revenue from our intellectual property would be adversely impacted.
If Bruker succeeds in invalidating the asserted patents, the strength of our intellectual property portfolio could be adversely affected 69 and our ability to protect our technology, business and reputation or to generate licensing revenue from our intellectual property would be adversely impacted.
Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions. Any of these factors could significantly harm our future international expansion and operations and, consequently, our business, financial condition, results of operations and prospects.
Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions. 56 Any of these factors could significantly harm our future international expansion and operations and, consequently, our business, financial condition, results of operations and prospects.
These include allowing third-party submission of prior art to the 56 USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings.
These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings.
Treasury Regulations. Recent proposed changes to PFIC regulations, if adopted, 74 would expand the definition of “U.S. Holder” for purposes of the CFC/PFIC overlap rule and other PFIC rules, elections, and reporting requirements discussed below.
Treasury Regulations. Recent proposed changes to PFIC regulations, if adopted, would expand the definition of “U.S. Holder” for purposes of the CFC/PFIC overlap rule and other PFIC rules, elections, and reporting requirements discussed below.
As to pending third-party applications, we cannot predict with any certainty which claims will issue, if any, or the scope of such issued claims. Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our discovery and development engine, including our systems, workflows, consumables and reagent kits.
As to pending third-party applications, we cannot predict with any certainty which claims will issue, if any, or the scope of such issued claims. Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our discovery and development capabilities, including our systems, workflows, consumables and reagent kits.
It is possible that none of our pending patent applications will result in issued patents in a timely fashion or at all, and even if patents are granted, they may not provide a basis for intellectual property protection of commercially viable products or 55 services, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties.
It is possible that none of our pending patent applications will result in issued patents in a timely fashion or at all, and even if 60 patents are granted, they may not provide a basis for intellectual property protection of commercially viable products or services, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties.
In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future products. We may not be aware of all third-party intellectual property rights potentially relating to our discovery and development engine.
In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future products. We may not be aware of all third-party intellectual property rights potentially relating to our discovery and development capabilities.
An unfavorable outcome in any such proceeding could require us to cease using the related technology or developing or commercializing our technology, or to attempt to license rights to it from the prevailing party, which may not be available on commercially reasonable terms, or at all. Third parties may assert that we are employing their proprietary technology without authorization.
An unfavorable outcome in any such proceeding could require us to cease using the related technology or developing or commercializing our technology, or to attempt to license rights to it from the prevailing party, which may not be available on commercially reasonable terms, or at all. Third parties may assert that we are practicing their proprietary technology without authorization.
These could include, but may not be limited to, the following: • Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets; • Potential or actual breach of statutory, regulatory or contractual obligations, including obligations that require the Company to maintain letters of credit or other credit support arrangements; and • Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements. 79 Item 1B.
These could include, but may not be limited to, the following: • Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets; • Potential or actual breach of statutory, regulatory or contractual obligations, including obligations that require the Company to maintain letters of credit or other credit support arrangements; and • Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements. 80 Item 1B.
Risks Related to Our Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our technology, including our discovery and development engine, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technologies or a platform similar or identical to ours, and our ability to successfully sell our data packages may be impaired.
Risks Related to Our Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our technology, including our discovery and development capabilities, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technologies or a platform similar or identical to ours, and our ability to successfully sell our data packages may be impaired.
These factors could involve financial institutions or financial 78 services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.
These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition, and stock price. From time to time, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition, and share price. From time to time, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.
Our success depends in large part on our ability to obtain and maintain adequate protection of the intellectual property we may own solely and jointly with others or otherwise have rights to, particularly patents, in the United States, Canada and in other countries with respect to our discovery and development engine, our software and our technologies, without infringing the intellectual property rights of others.
Our success depends in large part on our ability to obtain and maintain adequate protection of the intellectual property we may own solely and jointly with others or otherwise have rights to, particularly patents, in the United States, Canada and in other countries with respect to our discovery and development capabilities, our software and our technologies, without infringing the intellectual property rights of others.
Recently, in November 2023, we underwent restructuring to better align our efforts towards the clinical development of new antibody medicines for patients.
In November 2023, we underwent restructuring to better align our efforts towards the clinical development of new antibody medicines for patients.
If we lose these rights, our business may be materially adversely affected, our ability to develop improvements to our discovery and development engine may be negatively and substantially impacted, and if disputes arise, we may be subjected to future litigation as well as the potential loss of or limitations on our ability to incorporate the technology covered by these license agreements.
If we lose these rights, our business may be materially adversely affected, our ability to develop improvements to our discovery and development capabilities may be negatively and substantially impacted, and if disputes arise, we may be subjected to future litigation as well as the potential loss of or limitations on our ability to incorporate the technology covered by these license agreements.
In addition, similar to what other companies in our industry have experienced, we expect our competitors and others may have patents or may in the future obtain patents and claim that making, having made, using, selling, offering to sell or importing our discovery and development engine, or the systems, workflows, consumables and reagent kits that comprise our discovery and development engine, infringes these patents.
In addition, similar to what other companies in our industry have experienced, we expect our competitors and others may have patents or may in the future obtain patents and claim that making, having made, using, selling, offering to sell or importing our discovery and development capabilities, or the systems, workflows, consumables and reagent kits that comprise our discovery and development capabilities, infringes these patents.
Likewise, we or our partners have to make decisions about which clinical stage and preclinical drug candidates to develop and advance, and we or our partners may not have the resources to invest in all of the drug candidates that contain antibodies discovered using our discovery and development engine, or clinical data and other development considerations may not support the advancement of one or more drug candidates.
Likewise, we or our partners have to make decisions about which clinical stage and preclinical drug candidates to develop and advance, and we or our partners may not have the resources to invest in all of the drug candidates that contain antibodies discovered using our discovery and development capabilities, or clinical data and other development considerations may not support the advancement of one or more drug candidates.
On July 10, 2023, the European Commission adopted an adequacy decision for the new EU-US Data Privacy Framework (“DPF”), the new transatlantic framework designed to support transfers of personal data from the EU to companies in the US that self-certify compliance with the DPF’s privacy requirements, without having to implement 45 additional safeguards.
On July 10, 2023, the European Commission adopted an adequacy decision for the new EU-US Data Privacy Framework (“DPF”), the new transatlantic framework designed to support transfers of personal data from the EU to companies in the US that self-certify compliance with the DPF’s privacy requirements, without having to implement 52 additional safeguards.
Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to a new IND.
Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to a new application.
Accordingly, the evolving case law in the United States may adversely affect our and our licensors’ ability to obtain new patents or to enforce existing patents and may facilitate third-party challenges to any owned or licensed patents. Issued patents covering our discovery and development engine could be found invalid or unenforceable if challenged.
Accordingly, the evolving case law in the United States may adversely affect our and our licensors’ ability to obtain new patents or to enforce existing patents and may facilitate third-party challenges to any owned or licensed patents. Issued patents covering our discovery and development capabilities could be found invalid or unenforceable if challenged.
We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover our discovery and development engine and related technologies and uses thereof, as we deem appropriate. Our patents and patent applications in the United States, Canada and certain foreign jurisdictions relate to our technology.
We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover our discovery and development capabilities and related technologies and uses thereof, as we deem appropriate. Our patents and patent applications in the United States, Canada and certain foreign jurisdictions relate to our technology.
Moreover, our ability to earn specific types of income that will be treated as non-passive for purposes of the PFIC rules is uncertain with respect to future years. We believe we were not classified as a PFIC during the taxable year ended December 31, 2023.
Moreover, our ability to earn specific types of income that will be treated as non-passive for purposes of the PFIC rules is uncertain with respect to future years. We believe we were not classified as a PFIC during the taxable year ended December 31, 2024.
This requires us to attract partners and enter into agreements with them that contain obligations for the partners to pay us milestone payments as well as royalties on sales of approved products for the therapeutic candidates they develop that are generated utilizing our discovery and development engine.
This requires us to attract partners and enter into agreements with them that contain obligations for the partners to pay us milestone payments as well as royalties on sales of approved products for the therapeutic candidates they develop that are generated utilizing our discovery and development capabilities.
Any successful third-party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such patents or amendment to our patents in such a way that they no longer cover our discovery and development engine, which may lead to increased competition to our business, which could harm our business.
Any successful third-party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such patents or amendment to our patents in such a way that they no longer cover our discovery and development capabilities, which may lead to increased competition to our business, which could harm our business.
As we move into new markets and applications for our discovery and development engine, incumbent participants in such markets may assert their patents and other proprietary rights against us as a means of slowing our entry into such markets or as a means to extract substantial license and royalty payments from us.
As we move into new markets and applications for our discovery and development capabilities, incumbent participants in such markets may assert their patents and other proprietary rights against us as a means of slowing our entry into such markets or as a means to extract substantial license and royalty payments from us.
We believe that we and our non-U.S. subsidiaries will not be treated as CFCs in the 2022 taxable year solely by virtue of direct or indirect ownership by Ten Percent Shareholders. However, we believe that our non-U.S. subsidiaries may be treated as CFCs in the 2022 taxable year due to attribution rules that deem constructive ownership by our U.S. subsidiaries.
We believe that we and our non-U.S. subsidiaries will not be treated as CFCs in the 2023 taxable year solely by virtue of direct or indirect ownership by Ten Percent Shareholders. However, we believe that our non-U.S. subsidiaries may be treated as CFCs in the 2023 taxable year due to attribution rules that deem constructive ownership by our U.S. subsidiaries.
Our success depends on the skills, experience and performance of key members of our senior management team, scientists, software engineers, salespeople and our other employees. The individual and collective efforts of our employees will be important as we continue to develop our discovery and development engine, and as we expand our commercial activities.
Our success depends on the skills, experience and performance of key members of our senior management team, scientists, software engineers, salespeople and our other employees. The individual and collective efforts of our employees will be important as we continue to develop our discovery and development capabilities, and as we expand our commercial activities.
We may enter into agreements in the future, with other licensors under which we obtain certain intellectual property rights relating to our discovery and development engine. These agreements take the form of exclusive license or of actual ownership of intellectual property rights or technology from third parties.
We may enter into agreements in the future, with other licensors under which we obtain certain intellectual property rights relating to our discovery and development capabilities. These agreements take the form of exclusive license or of actual ownership of intellectual property rights or technology from third parties.
Even if such licenses are available, we may be required to pay the licensor in return for the use of such licensor’s technology, lump-sum payments, payments based on certain milestones such as sales volumes, or royalties based on sales of our discovery and development engine.
Even if such licenses are available, we may be required to pay the licensor in return for the use of such licensor’s technology, lump-sum payments, payments based on certain milestones such as sales volumes, or royalties based on sales of our discovery and development capabilities.
Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our discovery and development engine or technology are obtained, once the patent life has expired, we may be open to competition from others.
Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our discovery and development capabilities or technology are obtained, once the patent life has expired, we may be open to competition from others.
Filing, prosecuting and defending patents on our discovery and development engine, software, systems, workflows and processes in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Canada can be less extensive than those in the United States and Canada.
Filing, prosecuting and defending patents on our discovery and development capabilities, software, systems, workflows and processes in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States and Canada can be less extensive than those in the United States and Canada.
Such additional financing may not be available on terms acceptable to us or at all. In any event, we may consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons.
Such additional financing may not be available on terms acceptable to us or at all. We may consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons.
To execute on our business plan, we will need to successfully reach agreement with multiple regulatory agencies on clinical and pre-clinical studies required for registration, execute our clinical development and manufacturing plans; and manage our spending as costs and expenses increase due to clinical trials, and regulatory approvals.
To execute on our business plan, we will need to successfully reach agreement with multiple regulatory agencies on clinical and preclinical studies required for registration, execute our clinical development and manufacturing plans; and manage our spending as costs and expenses increase due to clinical trials, and regulatory approvals.
For example, as a result of the Russia sanctions and the potential retaliatory acts from Russia, we may be unable to obtain patent rights to our Trianni and microfluidic platforms as well as bamlanivimab which are protected in other jurisdictions around the world.
For example, as a result of the Russia sanctions and the potential retaliatory acts from Russia, we may be unable to obtain patent rights to our Trianni and microfluidic platforms which are protected in other jurisdictions around the world.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, our rights to certain components of our discovery and development engine are licensed to us on a non-exclusive basis.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, our rights to certain components of our discovery and development capabilities are licensed to us on a non-exclusive basis.
We rely heavily on trade secrets and confidentiality agreements to protect our unpatented know-how, technology and other proprietary information, including parts of our discovery and development engine, and to maintain our competitive position. However, trade secrets and know-how can be difficult to protect.
We rely heavily on trade secrets and confidentiality agreements to protect our unpatented know-how, technology and other proprietary information, including parts of our discovery and development capabilities, and to maintain our competitive position. However, trade secrets and know-how can be difficult to protect.
If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such rights, we may not be able to use these trademarks to develop brand recognition of our discovery and development engine.
If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such rights, we may not be able to use these trademarks to develop brand recognition of our discovery and development capabilities.
Future sales and issuances of our common shares or rights to purchase common shares, including pursuant to our Employee Share Option and Incentive Plan, or EIP, could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.
Future sales and issuances of our common shares or rights to purchase common shares, including pursuant to our Employee Share Option and Incentive Plan, or ESOIP, could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.
As a result, the quality and sophistication of our discovery and development engine is critical to our ability to conduct our research discovery activities and to deliver more promising molecules and to accelerate and lower the costs of discovery as compared to traditional methods for our partnerships.
As a result, the quality and sophistication of our discovery and development capabilities is critical to our ability to conduct our research discovery activities and to deliver more promising molecules and to accelerate and lower the costs of discovery as compared to traditional methods for our partnerships.
Our partners have significant discretion in determining when and whether to make announcements about the status of our partnerships, including about preclinical and clinical developments and timelines for advancing antibodies discovered using our discovery and development engine.
Our partners have significant discretion in determining when and whether to make announcements about the status of our partnerships, including about preclinical and clinical developments and timelines for advancing antibodies discovered using our discovery and development capabilities.
If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on certain aspects of our discovery and development engine.
If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on certain aspects of our discovery and development capabilities.
We depend on information technology and telecommunications systems for significant elements of our operations, including our laboratory information management system, our computational biology system, our knowledge management system, our customer reporting, our discovery and development engine, our advanced automation systems, and advanced application software.
We depend on information technology and telecommunications systems for significant elements of our operations, including our laboratory information management system, our computational biology system, our knowledge management system, our customer reporting, our discovery and development capabilities, our advanced automation systems, and advanced application software.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Governance The Chief Legal and Compliance Officer (CLO), and our dedicated information technology (IT) team, lead the Company's overall cybersecurity efforts. The CLO oversees the Company’s cybersecurity risk management through regular meetings with the IT team to discuss, as appropriate, risks from cybersecurity threats.
Biggest changeThe CLO oversees the Company’s cybersecurity risk management through regular meetings with the IT team to discuss, as appropriate, the risks and prevention of cybersecurity threats. Cybersecurity incidents are escalated based on defined incident severity criteria to management.
As part of our ERM process, our CLO and other senior management positions report on identified cybersecurity risks, as appropriate, to the Audit Committee and the Board. Management is responsible for the day-to-day management of risks we face, while our Board of Directors (Board), as a whole and through its committees, provides guidance on the oversight of risk management.
As part of our ERM process, our CLO and other senior management positions report on identified cybersecurity risks, as appropriate, to the Audit Committee and the Board of Directors (Board). Management is responsible for the day-to-day management of risks we face, while the Board as a whole and through its committees, provides guidance on the oversight of risk management.
We also maintain a cybersecurity incident response plan designed to help the Company defend against evolving cybersecurity threats, which sets out criteria for incident classification and procedures to escalate incidents to the appropriate stakeholders. We regularly monitor and assess the various components of our cybersecurity infrastructure, with the support of both internal and external resources.
We also maintain a cybersecurity incident response plan designed to help the Company defend against evolving cybersecurity threats, which sets out criteria for incident classification and procedures to escalate incidents to the appropriate stakeholders. Internally, we regularly monitor and assess the various components of our cybersecurity infrastructure, with the support of third-party consultants.
Added
Cybersecurity Governance The Chief Legal and Compliance Officer (CLO), and our dedicated information technology (IT) team, lead the Company's overall cybersecurity efforts. Together, our CLO and IT team have over 40 years of industry experience in implementing and managing information technology and information security systems, and members of our IT team maintain Certified Information Security Manager certifications.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn 2021, through our Dayhu and Beedie joint ventures, we began building out a new, dedicated corporate headquarters currently under construction that will provide us with 387,000 square feet of additional lab and office space under lease which expire 80 starting in 2037 with further renewal options.
Biggest changeThrough our Beedie joint venture, we are nearing the completion of construction of 220,000 square feet of additional lab and office space. The Dayhu and Beedie spaces are under lease which expire starting in 2037 and 2045, respectively, with further renewal options. Once complete, we intend to lease the Beedie laboratory and office space.
We also lease an additional 30,000 square feet of office and laboratory space across the other jurisdictions in which we operate, and we believe our facilities are adequate and suitable for our current needs and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
We also lease an additional 10,000 square feet of office and laboratory space across the other jurisdictions in which we operate, and we believe our facilities are adequate 81 and suitable for our current needs and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Further, our 123,000 square feet GMP facility is currently under construction on the land we purchased in 2022 in Vancouver. AbCellera Australia Pty. Ltd. , our wholly owned subsidiary, occupies approximately 40,000 square feet of office and laboratory space in Sydney, Australia, with a lease that expires in 2031.
Further, our 123,000 square feet clinical manufacturing (GMP) facility built on land we purchased in 2022 in Vancouver, will be completed in 2025. AbCellera Australia Pty. Ltd. , our wholly owned subsidiary, occupies approximately 40,000 square feet of office and laboratory space in Sydney, Australia, with a lease that expires in 2031.
Item 2. Properties. Our corporate headquarters and research and development facilities are located in Vancouver, British Columbia, where we lease approximately 130,000 square feet of space under leases expiring between 2024 and 2031.
Item 2. Properties. Our corporate headquarters and research and development facilities are located in Vancouver, British Columbia, where we lease approximately 260,000 square feet of space under leases expiring between 2026 and 2037. Through our Dayhu joint venture, we completed our new, dedicated corporate headquarters in 2024, that provides us 167,000 square feet of laboratory and office space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company believes the appeal is meritless and that the decision of the United States Patent Trial and Appeal Board will be upheld. Unfair Competition and Declaratory Judgment of Non-Infringement In August 2020, Bruker Cellular Analysis filed a complaint in the Northern District of California against us and our wholly-owned subsidiary Lineage Inc.
Biggest changeThe appeal filed by Bruker regarding IPR2021-1249 to the United States Court of Appeals for the Federal Circuit is pending oral argument with a date to be scheduled. The Company believes the appeal is meritless and that the decision of the United States Patent Trial and Appeal Board will be upheld.
Because the three aforementioned inter partes review matters have been resolved, we intend to seek relief from the Court to lift the pending stay and resume our patent infringement action against Bruker 81 Cellular Analysis. On August 4, 2023, the District Court lifted the stay in the pending matter against Bruker Cellular Analysis. The case has since resumed.
Because the three aforementioned inter partes review matters have been resolved, we intend to seek relief from the Court to lift the pending stay and resume our patent infringement action against Bruker Cellular Analysis. On August 4, 2023, the District Court lifted the stay in the pending matter against Bruker Cellular Analysis. The case has since resumed.
John Schrader and Dr. Hansen and further alleges patent infringement of an issued Canadian patent (No. 2,655,511) . The complaint seeks financial damages as well as other declarations. The Company recently filed a Notice of Application seeking to dismiss certain Company affiliates from the matter. No hearing date has been set. All co-defendants have been served.
John Schrader and Dr. Hansen and further alleges patent infringement of an issued Canadian patent (No. 82 2,655,511) . The complaint seeks financial damages as well as other declarations. The Company filed a Notice of Application seeking to dismiss certain Company affiliates from the matter. No hearing date has been set. All co-defendants have been served.
The Company is proceeding to seek dismissal of certain Company affiliates for lack of jurisdiction. No other activity is occurring with respect to this matter. The Company believes that Plaintiffs’ claim is meritless and frivolous in all respects and intends to defend itself appropriately. Item 4. Mine Safety Disclosures. None. 82 PART II
The Company is proceeding to seek dismissal of certain Company affiliates for lack of jurisdiction. No other activity is occurring with respect to this matter. The Company believes that Plaintiffs’ claim is meritless and frivolous in all respects and intends to defend itself appropriately. Item 4. Mine Safety Disclosures. None. 83 PART II
Removed
The complaint includes two counts of unfair competition and one count of non-infringement of a U.S. patent: Patent No. 10,058,839 (the “’839 patent”). Bruker Cellular Analysis is seeking, among other things, damages and a declaratory judgment of non-infringement of the ’839 patent.
Removed
We filed a motion to dismiss the action for lack of jurisdiction and failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil Procedure 12(b) 1, 2, and 6.
Removed
In January 2021, the Court determined that there was no jurisdiction over AbCellera or Lineage and dismissed the unfair competition claims but ordered jurisdictional discovery on a limited basis with respect to AbCellera only regarding Bruker Cellular Analysis’ request for declaratory judgment on the ‘839 patent. In July 2021, Bruker Cellular Analysis voluntarily dismissed this lawsuit.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Common Shares As of February 15, 2024, the latest practicable date prior to the date of this Annual Report on Form 10-K, there were approximately 75 holders of record of our common shares. Dividend Policy We have not declared nor paid any cash dividends on our share capital.
Biggest changeHolders of Common Shares As of February 21, 2025, the latest practicable date prior to the date of this Annual Report on Form 10-K, there were approximately 79 holders of record of our common shares. Dividend Policy We have not declared nor paid any cash dividends on our share capital.
Any future determination to pay dividends will be at the discretion of our 83 board of directors and will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant by our board of directors. Recent Sales of Unregistered Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant by our board of directors. Recent Sales of Unregistered Equity Securities None. 84 Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
An investment of $100 is assumed to have been made in our common share and each index on December 11, 2020 (the first day of trading of our common share) and its relative performance is tracked through December 31, 2023.
An investment of $100 is assumed to have been made in our common share and each index on December 11, 2020 (the first day of trading of our common share) and its relative performance is tracked through December 31, 2024.
Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 11 of Part III of this Annual Report. Item 6. Selected Financial Data. Reserved. 84
Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 11 of Part III of this Annual Report. Item 6. Selected Financial Data. Reserved. 85

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAll figures are in U.S. dollars and amounts are expressed in thousands, except earnings (loss) per share data: Twelve Months Ended December 31, Financial Performance 2021 2022 2023 Revenues: Research fees $ 19,076 $ 40,802 $ 35,556 Licensing revenue 20,778 696 969 Milestone payments 8,000 900 1,500 Royalty revenue 327,349 443,026 — Total revenue 375,203 485,424 38,025 Operating expenses: Royalty fees 45,516 66,436 — Research and development (1) 62,062 107,879 175,658 Other operating expenses 63,212 94,598 99,574 Total operating expenses 170,790 268,913 275,232 Income (loss) from operations 204,413 216,511 (237,207) Total other (income) (14,736) (22,588) (63,178) Net earnings (loss) before income tax 219,149 239,099 (174,029) Net earnings (loss) 153,464 158,519 (146,398) Net earnings (loss) per share attributable to common shareholders Basic $ 0.56 $ 0.56 $ (0.51) Diluted $ 0.48 $ 0.50 $ (0.51) Operating expenses include stock-based compensation: Research and development expenses 15,663 24,327 31,781 Sales and marketing expenses 2,120 3,134 5,129 General and administrative expenses 12,863 22,020 27,274 Financial Position and Liquidity December 31, 2022 December 31, 2023 Cash and cash equivalents $ 386,535 $ 133,320 Marketable securities 499,950 627,265 Total cash, cash equivalents, and marketable securities 886,485 760,585 Total assets 1,540,907 1,488,094 Total shareholders' equity 1,233,277 1,152,318 (1) Exclusive of depreciation, amortization, and impairment.
Biggest changeAll figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data: 87 Twelve Months Ended December 31, Financial Performance 2023 2024 Revenues: Research fees $ 35,556 $ 26,284 Licensing revenue 969 1,049 Milestone payments 1,500 1,500 Total revenue 38,025 28,833 Operating expenses: Research and development (1) 175,658 167,259 Sales, general and administrative (1) 75,179 85,490 Depreciation, amortization, and impairment 24,395 90,850 Total operating expenses 275,232 343,599 Loss from operations (237,207) (314,766) Total other income (63,178) (114,371) Net loss before income tax (174,029) (200,395) Net loss (146,398) (162,857) Net loss per share Basic $ (0.51) $ (0.55) Diluted $ (0.51) $ (0.55) Operating expenses include stock-based compensation: Research and development expenses 31,781 30,779 Sales and marketing expenses 5,129 5,781 General and administrative expenses 27,274 31,021 Financial Position December 31, 2023 December 31, 2024 Cash and cash equivalents $ 133,320 $ 156,325 Marketable securities 627,265 469,289 Total cash, cash equivalents, and marketable securities 760,585 625,614 Total assets 1,488,094 1,360,553 Total shareholders' equity 1,152,318 1,056,084 (1) Exclusive of depreciation, amortization, and impairment.
At the inception of the arrangement and at each reporting date thereafter, we evaluate whether the associated event is considered probable of achievement and estimate the amount to be included in the transaction price using the most likely amount method. Whether the criteria for achieving the milestone payments will be met in the future is highly uncertain.
Milestone Payments At the inception of the arrangement and at each reporting date thereafter, we evaluate whether the associated event is considered probable of achievement and estimate the amount to be included in the transaction price using the most likely amount method. Whether the criteria for achieving the milestone payments will be met in the future is highly uncertain.
Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur. The sales are based on sales data reported by our partners.
Royalty Revenue Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur. The sales are based on sales data reported by our partners.
To the extent that grant funding covers capital expenditures, a deferred credit is recorded on the balance sheet and recognized ratably over the benefit period of the related expenditure for which the grant was intended to compensate. 93 Tax credits primarily include benefits from the Canadian and Australian federal and local research and development programs and are non-refundable.
To the extent that grant funding covers capital expenditures, a deferred credit is recorded on the balance sheet and recognized ratably over the benefit period of the related expenditure for which the grant was intended to compensate. Tax credits primarily include benefits from the Canadian and Australian federal and local research and development programs and are non-refundable.
Our potential to grow revenue, in both the near and long term, is dependent on successfully engaging with strategic partners. For existing strategic partners, we seek to expand 87 our relationships with them to collaborate on additional programs initiated by them as well as to create a basis for potentially out-licensing some of our internal programs.
Our potential to grow revenue, in both the near and long term, is dependent on successfully engaging with strategic partners. For existing strategic partners, we seek to expand our relationships with them to collaborate on additional programs initiated by them as well as to create a basis for potentially out-licensing some of our internal programs.
We expect that our overall revenue will fluctuate from period to period due to the timing of securing additional programs under contract and the progress of our internal programs, the inherently 92 uncertain nature of the timing of milestone achievement, our dependence on the program decisions of our partners, and uncertainty in sales of our antibodies by our partners that generate royalty revenue.
We expect that our overall revenue will fluctuate from period to period due to the timing of securing additional programs under contract and the progress of our internal programs, the inherently uncertain nature of the timing of milestone achievement, our dependence on the program decisions of our partners, and uncertainty in sales of our antibodies by our partners that generate royalty revenue.
Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer. We allocate the transaction price to each distinct performance obligation identified in the contract based on relative observable standalone selling prices. Licensing Revenue.
Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer. We allocate the transaction price to each distinct performance obligation identified in the contract based on relative observable standalone selling prices.
Single target Neurological diseases June 12, 2018 Undisclosed mid-cap biopharmaceutical company Undisclosed Undisclosed January 25, 2018 Teva Pharmaceutical Industries Ltd. Single target Membrane protein June 13, 2017 Pfizer Inc. Multi-target, multi-year Membrane protein January 5, 2017 Undisclosed global biotechnology company Multi-target, multi-year Undisclosed November 4, 2016 Kodiak Sciences Inc. Single target Ophthalmology August 24, 2016 Teva Pharmaceutical Industries Ltd.
Single target Neurological diseases June 12, 2018 Undisclosed mid-cap biopharmaceutical company Undisclosed Undisclosed January 25, 2018 Teva Pharmaceutical Industries Ltd. Single target Membrane protein June 13, 2017 Pfizer Inc. Multi-target, multi-year Membrane protein January 5, 2017 Undisclosed global biotechnology company Multi-target, multi-year Undisclosed November 4, 2016 Kodiak Sciences Inc. Single target Ophthalmology August 24, 2016 91 Teva Pharmaceutical Industries Ltd.
The discovery effort commences on the later of (i) the day on which we receive sufficient reagents to start discovery of antibodies against a target and (ii) the day on which the kick-off meeting for the program is held.
The 89 discovery effort commences on the later of (i) the day on which we receive sufficient reagents to start discovery of antibodies against a target and (ii) the day on which the kick-off meeting for the program is held.
Up to 10 targets, multi-year Oncology and undisclosed September 22, 2021 91 Moderna, Inc. Up to 6 targets, multi-year RNA-encoded antibodies September 15, 2021 EQRx, Inc. Multi-target, multi-year Oncology and immunology (initially) August 4, 2021 Tachyon Inc.
Up to 10 targets, multi-year Oncology and undisclosed September 22, 2021 Moderna, Inc. Up to 6 targets, multi-year RNA-encoded antibodies September 15, 2021 EQRx, Inc. Multi-target, multi-year Oncology and immunology (initially) August 4, 2021 Tachyon Inc.
For royalties received from Lilly for commercial sales of bamlanivimab and bebtelovimab, royalty fees were due to collaboration partners in AbCellera’s DARPA P3 (Pandemic Preparedness Program) project focused on rapid pandemic response. Royalty fees are recorded when the third-party sale occurs. Research and development expenses.
For royalties received from Lilly for commercial sales of bebtelovimab in 2022, royalty fees were due to collaboration partners in AbCellera’s DARPA P3 (Pandemic Preparedness Program) project focused on rapid pandemic response. Royalty fees are recorded when the third-party sale occurs. Research and development expenses.
With no public market for our common shares prior to our IPO and limited historical data since, we determine the volatility for awards granted with reference to an analysis of reported data for a group of biotechnology companies that issued options with substantially similar terms.
With no public market for our common shares prior to our IPO and limited historical data since, we determine the volatility for awards granted with reference to an analysis of publicly reported data for a group of biotechnology and preclinical companies that issued options with substantially similar terms.
When applying the revenue recognition criteria of ASC 606 to research fees and milestone payments, management may apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, including whether options for additional goods or services represent a material right; allocating the transaction price to performance obligations within a contract; and assessing the recognition and possible future reversal of variable consideration.
When applying the revenue recognition criteria of ASC 606 to research fees and milestone payments, management may apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, including whether options for additional goods or services represent a material right; allocating the transaction price to performance obligations within a contract; estimating timing of completion of performance obligations; and assessing the recognition and possible future reversal of variable consideration.
Consequently, there is a significant risk that we may not earn all of the milestone payments from each of our arrangements. This uncertainty is considered resolved when the associated event giving rise to the milestone payment occurs. Royalty Revenue.
Consequently, there is a significant risk that we may not earn all of the milestone payments from each of our arrangements. This uncertainty is considered resolved when the associated event giving rise to the milestone payment occurs.
As the capabilities of our discovery and development engine have matured we are increasingly in a position to pursue attractive, well-validated targets ourselves, e.g. in the GPCR, ion channel, and TCE spaces. Such programs have the potential to yield first-in-class drug candidates in indications with substantial unmet medical need which we would wholly own.
As our discovery and development capabilities have matured, we are increasingly in a position to pursue attractive, well-validated targets 88 ourselves, e.g. in the GPCR, ion channel, and TCE spaces. Such programs have the potential to yield first-in-class drug candidates in indications with substantial unmet medical need which we would wholly own.
Research and development activities consist of discovery research for partners, investments made in co-development and internal programs, and internal development of our discovery and development engine. We have not historically tracked our research and development expenses on a partner-by-partner basis or on a product candidate-by-product candidate basis.
Research and development activities consist of discovery research for partners, investments made in co-development and internal programs, and internal development of our discovery and development capabilities. We have not historically tracked our research and development expenses on a partner-by-partner basis or on a product candidate-by-product candidate basis.
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 87 partner-initiated programs with downstream participation and have seen a cumulative total 13 molecules advanced into the clinic, as illustrated by the following chart.
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 96 partner-initiated programs with downstream participation and have seen a cumulative total 16 molecules advanced into the clinic, as illustrated by the following chart.
Recent Accounting Pronouncements See Note 3 to our annual consolidated financial statements appearing elsewhere in this Annual Report for a description of recent accounting pronouncements applicable to our consolidated financial statements. 104
Recent Accounting Pronouncements See Note 3 to our annual consolidated financial statements appearing elsewhere in this Annual Report for a description of recent accounting pronouncements applicable to our consolidated financial statements. 100
Other consists primarily of fair value adjustments of contingent consideration and marketable securities, and includes foreign exchange gains or losses due to fluctuations in exchange rates from the jurisdictions that we operate in against the U.S. dollar.
Other consists primarily of fair value adjustments of contingent considerations, marketable and non-marketable securities, and includes foreign exchange gains or losses due to fluctuations in exchange rates from the jurisdictions that we operate in against the U.S. dollar.
Amortization expense and impairment includes the amortization of intangible assets over their respective useful lives and impairment of certain IPR&D as further described in our notes to the consolidated financial statements. Other (Income) Expense Interest income. Interest income consists primarily of interest earned on cash, cash equivalent, and marketable securities balances. Grants and incentives.
Amortization expense and impairment includes the amortization of intangible assets over their respective useful lives and impairment of IPR&D as further described in our notes to the consolidated financial statements. 92 Other (Income) Expense Interest income. Interest income consists primarily of interest earned on cash, cash equivalents, and marketable securities balances. Grants and incentives.
These payments are not included in the table above as the amount and timing of such payments are not known as of December 31, 2023.
These payments are not included in the table above as the amount and timing of such payments are not known as of December 31, 2024.
For the licenses of our intellectual property the Company recognizes revenue from non-refundable, upfront fees when the license is transferred to the customer and the customer is able to use and benefit from the license. Milestone Payments.
Licensing Revenue For the licenses of our intellectual property the Company recognizes revenue from non-refundable, upfront fees when the license is transferred to the customer and the customer is able to use and benefit from the license.
Research and development expenses reflect the continued growth in program execution, platform development, forward integration, and investment in partnered and internal programs. Approximately $31.6 million of the increase is related to a specific one time payment in our investment in internal programs in 2023.
Research and development expenses reflect the continued progress in program execution, platform development, forward integration, and investment in partnered and internal programs. Approximately $31.6 million of the decrease is related to a specific one-time payment in our investment in internal programs in 2023.
(2) As of December 31, 2023, the contingent consideration payable had an estimated fair value of approximately $55.4 million, which has been included as a liability on our consolidated balance sheets. (3) Excludes financial arrangements disclosed in Note 8 and Note 12 to our audited consolidated financial statements.
(2) As of December 31, 2024, the contingent consideration payable had an estimated fair value of approximately $8.1 million, which has been included as a liability on our consolidated balance sheets. (3) Excludes financial arrangements disclosed in Note 8 and Note 12 to our audited consolidated financial statements.
This increase was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.
The decrease was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.
Forfeitures are accounted for as they occur. 103 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the expected share price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and our expected dividend yield.
We recognize revenue when we satisfy the performance obligations under the terms of a contract and control of our services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those services.
The Company applied ASC 606 to all arrangements to date. We recognize revenue when we satisfy the performance obligations under the terms of a contract and control of our services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those services.
We have also successfully executed and will continue to look for strategic technology acquisitions to improve, broaden and deepen our capabilities and expertise in antibody discovery and development, or those that offer opportunities to expand our business into adjacent therapeutic modalities.
Specifically, we are currently completing our investments in integrated preclinical development and antibody manufacturing. We have also successfully executed and will continue to look for strategic technology acquisitions to improve, broaden and deepen our capabilities and expertise in antibody discovery and development, or those that offer opportunities to expand our business into adjacent therapeutic modalities.
We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from these estimates under different assumptions or conditions.
We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
These factors also pose important challenges that we must successfully address to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A, Risk Factors. • Engaging with strategic partners.
These factors also pose important challenges that we must successfully address to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A, Risk Factors. • Pursuing drug discovery and development opportunities internally .
IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts. To test our IPR&D for impairment we first perform a qualitative assessment to determine if it is more likely than not that the carrying amount of our indefinite-lived intangible assets exceeds its fair value. If it is, a quantitative assessment is required.
To test our IPR&D for impairment we first perform a qualitative assessment to determine if it is more likely than not that the carrying amount of our indefinite-lived intangible assets exceeds its fair value. If it is, a quantitative assessment is required.
To maximize the value and impact of our work, we are advancing a pipeline of programs and strategically partnering with groups with novel science or innovative technology. We focus on the development of antibody-based drugs and are committed to improving discovery and development.
To maximize the value and impact of our work, we are advancing a pipeline of internal programs and strategically partnering with companies that have novel science, innovative technology, or a strong track record of bringing programs through clinical development. We focus on the development of antibody-based drugs and are committed to improving discovery and development.
These metrics may change or may be substituted for additional or different metrics as our business develops as further described below with respect to changes in this and upcoming reports.
We believe that the following metrics are important to understand our current business. These metrics may change or may be substituted for additional or different metrics as our business develops as further described below with respect to changes in this and upcoming reports.
Research fees that we recognize under our partnerships depend on our delivery of antibodies for development by our partners and delays by our partners in selecting targets and agreeing on statements of work will impact revenue recognition. • Successfully out-licensing drug candidates from our internal programs.
Research fees that we recognize under our partnerships depend on our delivery of antibodies for development by our partners and delays by our partners in selecting targets and agreeing on statements of work will impact revenue recognition. • Engaging with strategic partners.
Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials expenses for employees and contractors engaged in research and product development. These expenses are exclusive of depreciation, amortization, and impairment.
Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials expenses for employees and third-party research and development expenses for preclinical, discovery, and other research programs. These expenses are exclusive of depreciation, amortization, and impairment.
Our teams are selective in determining which partners we choose to engage with, focusing on the opportunities with the strong potential to generate significant value in the long term. • Our partners successfully developing and commercializing the antibodies that we discover.
Our teams are selective in determining which partners we choose to engage with, focusing on the opportunities with the strong potential to generate significant value in the long term. • Investing in enhancements to our discovery and development capabilities.
In estimating the fair value of the intangible assets and contingent consideration, we applied an income approach based on the present value of the relevant future estimated after-tax cash flows. The key assumptions include the amount and timing of revenues, success probability, and discount rates.
In estimating the fair value of the contingent consideration, we applied an income approach based on the present value of the relevant future estimated after-tax cash flows. The key assumptions include the amount and timing of revenues, success probability, and discount rates. See Note 15 to our consolidated financial statements for further information related to the contingent considerations.
If we had reported on our original metric of cumulative partnered program starts, the number would have been 101 for December 31, 2022. 90 The table below outlines the details of molecules in the clinic as of December 31, 2023: Molecule Most advanced stage Partner Therapy areas Program type Bamlanivimab (LY-CoV555) Marketed, EUA* Eli Lilly and Company Infectious disease – COVID-19 AbCellera-initiated; partner-led Bebtelovimab (LY-CoV1404) Marketed, EUA* Eli Lilly and Company Infectious disease – COVID-19 AbCellera-initiated; partner-led TAK-920/DNL919 Phase 1* Denali Therapeutics Inc.
The table below outlines the details of molecules in the clinic as of December 31, 2024: Molecule Most advanced stage Partner Therapy areas Program type Bamlanivimab (LY-CoV555) Marketed, EUA* Eli Lilly and Company Infectious disease – COVID-19 AbCellera-initiated; partner-led Bebtelovimab (LY-CoV1404) Marketed, EUA* Eli Lilly and Company Infectious disease – COVID-19 AbCellera-initiated; partner-led TAK-920/DNL919 Phase 1* Denali Therapeutics Inc.
Up to 4 targets, multi-year Multiple undisclosed March 16, 2020 * Invetx, Inc. Multi-target, multi-year Animal health February 23, 2020 Undisclosed Multi-target, multi-year Cell therapy September 25, 2019 * Gilead Sciences, Inc.
Multi-target, multi-year Animal health February 23, 2020 Undisclosed Multi-target, multi-year Cell therapy September 25, 2019 * Gilead Sciences, Inc.
Multi-target, multi-year Animal Health November 19, 2020 Kodiak Sciences Inc. Multi-target, multi-year Ophthalmology October 29, 2020 IGM Biosciences, Inc. Multi-target, multi-year Oncology and immunology September 24, 2020 Undisclosed Single target Bispecific June 3, 2020 * Eli Lilly and Company Up to 9 targets, multi-year COVID-19 program and additional indications May 22, 2020 * Regeneron Pharmaceuticals, Inc.
Multi-target, multi-year Oncology and immunology September 24, 2020 Undisclosed Single target Bispecific June 3, 2020 * Eli Lilly and Company Up to 9 targets, multi-year COVID-19 program and additional indications May 22, 2020 * Regeneron Pharmaceuticals, Inc. 4 targets, multi-year Multiple undisclosed March 16, 2020 * Invetx, Inc.
We expect that our revenue, particularly revenue arising from royalties of antibodies sold by our partners, will fluctuate from period to period due to variances in demand for such antibodies and the status of regulatory approvals or emergency use authorizations for such antibodies.
We expect that our revenue, particularly revenue arising from royalties of antibodies sold by our partners, will fluctuate from period to period due to variances in demand for such antibodies and the status of regulatory approvals. For example, our revenue from bebtelovimab stopped in 2022 when the FDA announced bebtelovimab was no longer authorized for emergency use in the U.S.
We expect to continue to incur significant expenses in connection with our ongoing activities, including as we: • invest in research and development activities to improve our antibody discovery and development engine including investments in completing the construction of our small-scale manufacturing facility and our new headquarters through our joint ventures; • pursue internal and co-development programs in preclinical and eventually clinical development; • market and sell our solutions to existing and new strategic partners; • expand and enhance operations to deliver programs, including investments in manufacturing; 85 • acquire businesses or technologies to support the growth of our business; • attract, hire and retain qualified personnel; and • continue to establish, protect and defend our intellectual property and patent portfolio, including our ongoing litigation .
We expect to continue to make significant investments in this area for the foreseeable future and expect to continue to incur significant expenses in connection with our ongoing activities, including as we: • invest in research and development activities to improve our antibody discovery and development capabilities, including investments in completing the construction of our small-scale manufacturing facility; • pursue internal and co-development programs in preclinical and eventually clinical development; • market and sell our solutions to existing and new strategic partners; • improve and enhance operations to deliver programs, including investments in manufacturing; • acquire businesses or technologies to support the growth of our business; • attract, hire and retain qualified personnel; and • continue to establish, protect and defend our intellectual property and patent portfolio, including our ongoing litigation . 86 To date, we have financed our operations primarily from revenue from our antibody discovery partnerships in the form of royalty revenue, government funding from grants, and from the issuance and sale of convertible preferred shares and notes, and common shares.
See Note 10 to our consolidated financial statements for additional information regarding stock-based compensation expense and the assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted in the years ended December 31, 2021, 2022, and 2023.
We have not paid, and do not anticipate paying, dividends on our common shares; therefore, the expected dividend yield is assumed to be zero. 99 See Note 10 to our consolidated financial statements for additional information regarding stock-based compensation expense and the assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted in the years ended December 31, 2022, 2023, and 2024.
Partner-initiated program starts with downstreams represent the number of unique partner-initiated programs where we stand to participate financially in downstream success for which we have commenced the discovery effort.
Cumulative Metrics December 31, 2023 December 31, 2024 Change % Partner-initiated program starts with downstreams 87 96 10 % Molecules in the clinic 13 16 23 % Partner-initiated program starts with downstreams represent the number of unique partner-initiated programs where we stand to participate financially in downstream success for which we have commenced the discovery effort.
As a result, we expect that our research and development expenses will continue to increase in absolute dollars in future periods and vary from period to period as a percentage of revenue. Sales and marketing expenses.
As a result, we expect that our research and development expenses will continue to vary from period to period in future periods as we continue to execute our strategy of building our pipeline of first-in-class and best-in-class medicines. Sales and marketing expenses.
As of December 31, 2021, 2022, and 2023, there were no liability classified options outstanding. Stock-based compensation expense is classified in our consolidated statements of income (loss) and comprehensive income (loss) based on the function to which the related services are provided. We recognize stock-based compensation expense for the portion of awards that have vested.
For non-employee awards, compensation expense is recognized as the services are provided, which is generally ratably over the vesting period. Stock-based compensation expense is classified in our consolidated statements of income (loss) and comprehensive income (loss) based on the function to which the related services are provided. We recognize stock-based compensation expense for the portion of awards that have vested.
From inception to December 31, 2023, the Company has recorded CAD $140.8 million ($109.1 million) of the funding, of which CAD $58.7 million ($46.1 million) relates to the maximum claim amount under phase 1 of the agreement and CAD $82.1 million ($63.1 million) in respect of phase 2 of the funding commitment.
From inception to December 31, 2024, the Company has incurred CAD $175.6 million ($134.6 million) of expenditures, of which CAD $58.7 million ($46.1 million) relates to the maximum claim amount under phase 1 of the agreement and CAD $116.9 million ($88.5 million) in respect of phase 2 of the funding commitment.
Neurology - Alzheimer's Disease AbCellera partner-initiated discovery Undisclosed Phase 1 Teva Pharmaceutical Industries Ltd. Neuroscience AbCellera partner-initiated discovery IVX-01 Clinical field study Invetx Animal Health AbCellera partner-initiated discovery Undisclosed Clinical field study Undisclosed Animal Health AbCellera partner-initiated discovery Undisclosed Clinical field study Undisclosed Animal Health AbCellera partner-initiated discovery NBL-012 Phase 1 NovaRock Biotherapeutics Inc.
Neurology - Alzheimer's Disease AbCellera partner-initiated discovery Undisclosed Phase 1 Teva Pharmaceutical Industries Ltd. Neuroscience AbCellera partner-initiated discovery ABD-147 Phase 1 (Fast Track- and Orphan drug- designated) Abdera Therapeutics Inc. Oncology AbCellera partner-initiated discovery IVX-01 Clinical field study Invetx, Inc. Animal Health AbCellera partner-initiated discovery Undisclosed Clinical field study Invetx, Inc.
We have generated positive operating cash flow cumulatively since our inception in 2012 and in every year from 2018 to 2022. We intend to significantly invest in our business, and as a result may incur operating losses and negative operating cash flows in future periods.
While we have generated positive operating cash flows in the past, we intend to significantly invest in our business, and as a result may continue to incur operating losses in future periods.
We intend to maintain our leading position through investments in research and development to refine and add capabilities in areas such as computation, protein engineering, immunization technologies, genetically engineered rodents and cell line selection. Specifically, we are currently completing our investments in integrated preclinical development and antibody manufacturing.
Our ability to maintain and expand our partnerships is dependent on the advantages our discovery and development capabilities deliver to our partners and our internal programs. We intend to maintain our leading position through investments in research and development to refine and add capabilities in areas such as computation, protein engineering, immunization technologies, genetically engineered rodents and cell line selection.
Research and Development December 31, Change 2022 2023 Amount % Research and development $ 107,879 $ 175,658 $ 67,779 63 % Research and development expenses increased by $67.8 million, or 63%, from the year ended December 31, 2022, compared to the year ended December 31, 2023.
Operating Expenses Research and Development December 31, Change 2023 2024 Amount % Research and development $ 175,658 $ 167,259 $ (8,399) (5)% Research and development expenses decreased by $8.4 million, or (5)%, from the year ended December 31, 2023, compared to the year ended December 31, 2024.
We expect to continue to incur substantial research and development expenses as we conduct discovery research for our partners and our internal programs.
We expect to continue to incur substantial research and development expenses as we execute on our internal pipeline and conduct discovery research for our partners. In addition, we plan to continue to invest in research and development to enhance our solutions and offerings to our partners, including manufacturing, and continue research and development on our pipeline of internal programs.
Other (Income) December 31, Change 2022 2023 Amount % Other $ 4,045 $ (6,776) $ (10,821) (268) % Other (income) increased by $10.8 million, or 268%, from the year ended December 31, 2022, compared to the year ended December 31, 2023.
Other Income December 31, Change 2023 2024 Amount % Other $ (6,776) $ (62,278) $ (55,502) 819% Other income increased by $55.5 million, or 819%, from the year ended December 31, 2023, compared to the year ended December 31, 2024.
We look for opportunities where we believe low-risk investments in building technology and operational efficiency can create a sustained competitive advantage and drive long-term value by making biologics drug development faster and more efficient. We structure our agreements in a way that is designed to align our partners’ economic interests with our own.
We look for opportunities where we believe low-risk investments in building technology and operational efficiency can create a sustained competitive advantage and drive long-term value by making biologics drug development faster and more efficient. We are leveraging our capabilities and technology platforms to develop internal programs and advance a pipeline of AbCellera programs with first-in-class and/or best-in-class potential.
We expect these expenses to vary from period to period as a percentage of revenue. Depreciation, amortization, and impairment. Depreciation expense consists of the depreciation of property and equipment used actively in the business.
We expect these expenses to remain consistent in the short term as we focus on our internal pipeline. Depreciation, amortization, and impairment. Depreciation expense consists of the depreciation of property and equipment used actively in the business.
The increase was attributable to compensation costs and other expenses related to our business development activity.
The decrease was attributable to a reduction in consulting fees and other expenses related to our business development activity.
We use the simplified method to determine the expected term, which is based on the average of the time-to-vesting and the contractual life of the options. We have not paid, and do not anticipate paying, dividends on our common shares; therefore, the expected dividend yield is assumed to be zero.
We use the simplified method to determine the expected term, which is based on the average of the time-to-vesting and the contractual life of the options.
This was primarily due to no contingent consideration payments made or long-term debt repaid in 2022. 100 Contractual Obligations and Commitments The following table summarizes our commitments to settle contractual obligations as of December 31, 2023, other than leases which are recognized as operating lease liabilities in our consolidated balance sheets: Payments Due by Period Total Less than 1 year 1 to 3 Years 3 to 5 Years More than 5 years Commitments (1) 238,805 — 88,226 150,579 — Contingent consideration payable (2) 55,388 50,474 1,575 1,593 1,746 Total $ 294,193 $ 50,474 $ 89,801 $ 152,172 $ 1,746 (1) Includes commitments, primarily related to the construction of our new facilities, in addition to our leased facility where the lease commencement date is subsequent to December 31, 2023.
Contractual Obligations and Commitments The following table summarizes our commitments to settle contractual obligations as of December 31, 2024, other than leases which are recognized as operating lease liabilities in our consolidated balance sheets: Payments Due by Period Total Less than 1 year 1 to 3 Years 3 to 5 Years More than 5 years Commitments (1) 180,836 36,210 11,982 11,982 120,662 Contingent consideration payable (2) 8,087 8,087 — — — Total (3) $ 188,923 $ 44,297 $ 11,982 $ 11,982 $ 120,662 (1) Includes commitments, primarily related to the construction of our new facilities, in addition to our leased facility where the lease commencement date is subsequent to December 31, 2024.
Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter. Business Combination, Goodwill and Intangible Assets Acquisitions of businesses are accounted for using the acquisition method.
Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter. Goodwill and Intangible Assets As part of our previous acquisitions in 2020 and 2021, Goodwill, License, Technology and In-Process Research and Development Intangible (“IPR&D”) intangible assets were recognized.
Our sales and marketing expenses consist primarily of salaries, benefits, incentive compensation, stock-based compensation costs for employees within our commercial sales functions, and marketing and travel expenses.
Our sales and marketing expenses consist primarily of salaries, benefits, incentive compensation, stock-based compensation costs for employees within our commercial sales functions, and marketing and travel expenses. We expect these expenses to remain consistent in the short term as we focus on our internal pipeline. General and administrative expenses.
We aim to build a competitive advantage in bringing antibody therapeutics from target into clinical testing by combining expertise, technologies, and infrastructure to build an integrated engine for antibody drug discovery and development .
We aim to build a competitive advantage in bringing antibody therapeutics from target into clinical testing by combining expertise, technologies, and infrastructure to build integrated capabilities for antibody drug discovery and development . W e think deeply about capital allocation and strive to maximize long-term value while mitigating the risks that are inherent in drug development.
We plan on investing significant resources in the preclinical and, eventually, clinical development of internal programs which will impact our financial results.
We plan on investing significant resources in the preclinical and, eventually, clinical development of internal programs which will impact our financial results. The investments in each program are undertaken at risk and may ultimately not yield a return. • Successfully out-licensing drug candidates from our internal programs.
Government of Canada and Government of British Columbia Contributions In 2020, we entered into a multi-year agreement with the Canadian government’s Strategic Innovation Fund, or SIF.
Sources of Liquidity Since our inception, we have financed our operations primarily from revenue in the form of research fees, milestone payments, and royalty payments from partners, government grants, and debt and equity financings. Government of Canada and Government of British Columbia Contributions In 2020, we entered into a multi-year agreement with the Canadian government’s Strategic Innovation Fund, or SIF.
Interest (Income) December 31, Change 2022 2023 Amount % Interest (income) $ (15,886) $ (42,247) $ (26,361) 166 % Interest income increased by $26.4 million, or 166%, from the year ended December 31, 2022, compared to the year ended December 31, 2023.
Interest Income December 31, Change 2023 2024 Amount % Interest income $ (42,247) $ (38,473) $ 3,774 (9)% Interest income decreased by $3.8 million, or (9)%, from the year ended December 31, 2023, compared to the year ended December 31, 2024.
Depreciation, Amortization, and Impairment December 31, Change 2022 2023 Amount % Depreciation, amortization, and impairment $ 27,843 $ 24,395 $ (3,448) (12) % Depreciation, amortization, and impairment expenses decreased by $3.4 million in 2023, or (12)% compared to the year ended December 31, 2022.
Depreciation, Amortization, and Impairment December 31, Change 2023 2024 Amount % Depreciation, amortization, and impairment $ 24,395 $ 90,850 $ 66,455 272% Depreciation, amortization, and impairment expenses increased by $66.5 million, or 272%, from the year ended December 31, 2023, compared to the year ended December 31, 2024.
Please also see the section titled “Cautionary Note Regarding Forward-Looking Statements.” Overview We are a team of scientists, engineers, creatives, and business professionals addressing the barriers of conventional antibody drug development.
Please also see the section titled “Cautionary Note Regarding Forward-Looking Statements.” Overview We are a team of scientists, engineers, and business professionals focused on discovering and developing first-in-class and best-in-class antibody-based medicines for indications with high unmet medical need.
Our financial performance may therefore be impacted by our ability to produce and out-license such drug candidates from our internal programs. • Investing in enhancements to our discovery and development engine. Our ability to maintain and expand our partnerships is dependent on the advantages our discovery and development engine delivers to our partners and our internal programs.
Our financial performance may therefore be impacted by our ability to produce and out-license such drug candidates from our internal programs. • Our partners successfully developing and commercializing the antibodies that we discover.
As part of our acquisitions of Trianni in 2020, and TetraGenetics in 2021, Goodwill, License, Technology and In-Process Research and Development Intangible (“IPR&D”) intangible assets were recognized. IPR&D is classified as indefinite-lived, is not amortized, and is evaluated for impairment on an annual basis on October 1 or more frequently if an 102 indicator of impairment is present.
IPR&D is classified as indefinite-lived, is not amortized, and is evaluated for impairment on an annual basis on October 1 or more frequently if an indicator of impairment is present. IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts.
Our partnership agreements include near-term payments for technology access, research and intellectual property rights, and downstream payments in the form of clinical and commercial milestones, and royalties on net sales. We also participate in alternative investment opportunities including equity in our business partners and various rights for deeper involvement in moving molecules forward.
We structure our agreements in a way that is designed to align our partners’ economic interests with our own. Our partnership agreements include near-term payments for technology access, research and intellectual property rights, and downstream payments in the form of clinical and commercial milestones, and royalties on net sales.
We focus a substantial portion of our resources on research and development efforts towards strengthening our discovery and development engine and developing a pipeline of internal and co-development programs. We expect to continue to make significant investments in this area for the foreseeable future, over time shifting effort from engine development towards engine application.
We focus a substantial portion of our resources on research and development efforts towards strengthening our discovery and development capabilities and developing a pipeline of internal and co-development programs.
Based on our current business plan, we believe that our available liquidity from existing cash, cash equivalents, marketable securities, receivables, and anticipated cash flows from operations and government contributions, will be sufficient to meet our working capital, capital expenditure needs, and expenditures required for later stage development of our internal pipeline.
Based on our current business plan, we believe that our available liquidity from existing cash, cash equivalents, 95 marketable securities, loan receivables, and government contributions, will be sufficient to meet our working capital and capital expenditure needs and do not anticipate the need of additional external funding over at least the next 36 months following the date of this report.
The quantitative test for impairment requires us to make judgments relating to future cash flows, growth rates and economic and market conditions. These evaluations are based on determining the fair value of the reporting unit using a valuation method such as discounted cash flow or a relative, market-based approach.
The quantitative test for impairment requires us to make judgments relating to future cash flows, probability of success of our research and development activities, growth rates and economic and market conditions. The Company further assessed the fair value of the reporting unit to the market capitalization of the Company to assess the reasonableness of the valuation approach.
At October 1, 2023, we performed a qualitative assessment for our annual impairment test of goodwill after concluding that it was not more likely than not that the fair value of the reporting unit was less than its carrying value. Consequently, the quantitative impairment test was not required.
As of October 1, 2024 , the Company updated its quantitative assessment for its annual impairment test of goodwill and concluded that the fair value of the reporting unit was more than its carrying value.
Further information with respect to these contributions are outlined in Note 12 to the consolidated financial statements. 99 Cash Flows The following table summarizes our cash flows for the periods presented: December 31, 2021 2022 2023 Net cash provided by (used in): Operating activities $ 244,584 $ 277,360 $ (43,877) Investing activities (332,247) (352,625) (221,108) Financing activities (3,886) (1,628) 10,356 Effect of exchange rate fluctuations on cash and cash equivalents (1,425) (9,599) 589 Net decrease in cash and cash equivalents $ (92,974) $ (86,492) $ (254,040) Operating Activities Net cash provided by operating activities decreased from $277.4 million generated in the year ended December 31, 2022, to $43.9 million cash used by operating activities in the year ended December 31, 2023.
Cash Flows The following table summarizes our cash flows for the periods presented: December 31, 2023 2024 Net cash provided by (used in): Operating activities $ (43,877) $ (108,556) Investing activities (221,108) 121,409 Financing activities 10,356 12,769 Effect of exchange rate fluctuations on cash and cash equivalents 589 (2,617) Net increase (decrease) in cash and cash equivalents $ (254,040) $ 23,005 Operating Activities Net cash used in operating activities increased from $43.9 million in the year ended December 31, 2023, to $108.6 million in the year ended December 31, 2024.
While our significant accounting policies are described in more detail in Note 3 to our audited consolidated financial statements, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements. 101 Revenue Recognition Our revenue primarily consists of research fees, licensing revenue, milestone payments and royalty revenue, which are generated through our performance of antibody discovery research for our partners, and licensing revenue, which we generated from our Trianni humanized rodent platform.
Revenue Recognition Our revenue primarily consists of research fees, milestone payments and royalty revenue, which are generated through our performance of antibody discovery research for our partners, and licensing revenue, which we generated from our Trianni humanized rodent platform. Promised deliverables to our global partners include research and development and licenses.
An increase of $8.4 million (or $6.3 million, net of deferred income tax) relates to a full impairment charge of the carrying value of one distinct program from our suite of next-generation mice acquired through our 2020 Trianni acquisition.
The increase is primarily attributable to recognizing a full impairment charge of the carrying value of $32.0 million (or $23.3 million, net of deferred income tax) associated with the IPR&D acquired through the 2020 acquisition of Trianni, due to discontinuing the development of the next-generation transgenic mice.
Sales and Marketing December 31, Change 2022 2023 Amount % Sales and marketing $ 11,270 $ 14,180 $ 2,910 26 % Sales and marketing expenses increased by $2.9 million, or 26%, from the year ended December 31, 2022, compared to the year ended December 31, 2023.
General and Administrative December 31, Change 2023 2024 Amount % General and administrative $ 60,999 $ 72,711 $ 11,712 19% General and administrative expenses increased by $11.7 million, or 19%, from the year ended December 31, 2023, compared to the year ended December 31, 2024.
If we determine, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in excess of the carrying amount cannot be assured, then a quantitative impairment test would be performed.
If this qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit that includes the goodwill is less than its carrying value, then a quantitative impairment test would be prepared to compare this fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value.
Dermatology, gastrointestinal, immunology Trianni license NBL-015/FL-301 Phase 1 NovaRock Biotherapeutics Inc. Oncology Trianni license NBL-020 Phase 1 NovaRock Biotherapeutics Inc. Oncology Trianni license NBL-028 Phase 1 NovaRock Biotherapeutics Inc.
Animal Health AbCellera partner-initiated discovery Undisclosed Clinical field study Invetx, Inc. Animal Health AbCellera partner-initiated discovery AB-2100 Phase 1/2 Arsenal Bio Oncology Trianni license Undisclosed Phase 1/2 Undisclosed Oncology Trianni license NBL-012 Phase 1 NovaRock Biotherapeutics Inc. Dermatology, gastrointestinal, immunology Trianni license NBL-015/FL-301 Phase 1 NovaRock Biotherapeutics Inc. Oncology Trianni license NBL-020 Phase 1 NovaRock Biotherapeutics Inc.
The increase included other income and a gain on fair value adjustments related to held-for-trading marketable securities and contingent consideration of $11.0 million and a foreign exchange gain of $0.4 million due to fluctuations in the Canadian and U.S. dollar exchange rate.
The remaining increase was attributable to a $16.5 million recognized gain on the disposal of a non-marketable security, partially offset by a decrease in fair value adjustments, including marketable securities, and a foreign exchange loss due to fluctuations in the Canadian and U.S. dollar exchange rate.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIf inflationary conditions continue to persist, our inability or failure to manage our costs could harm our business, financial condition, results of operations and cash flows. To the extent possible, we mitigate some inflation risk by negotiating longer-term agreements with our suppliers and contractors. Item 8. Financial Statements and Supplementary Data.
Biggest changeIf inflationary conditions continue to persist, our inability or failure to manage our costs could harm our business, financial condition, results of operations and cash flows. To the extent possible, we mitigate some inflation risk by negotiating longer-term agreements with our suppliers and contractors and utilize multiple sourcing options to diversify our supplier base, when possible. Item 8.
The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None. 105
Financial Statements and Supplementary Data. The financial statements required to be filed pursuant to this Item 8 are appended to this report. An index of those financial statements is found in Item 15. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None. 101
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk As of December 31, 2023, we had cash and cash equivalents of $133.3 million , restricted cash of $27.3 million , and marketable securities of $627.3 million , a majority of which was maintained in high credit quality and liquid held-for-trading marketable securities, term deposits, and bank accounts.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk As of December 31, 2024, we had cash and cash equivalents of $156.3 million , restricted cash of $27.3 million , and marketable securities of $469.3 million , a majority of which was maintained in high credit quality and liquid held-for-trading marketable securities, term deposits, and bank accounts.
We include assumptions of anticipated cost growth in the development of our cost of estimates, but if inflationary conditions continue over the long-term, our cost assumptions may not be sufficient to cover all cost escalation or may impact the availability of resources to execute on our operating goals on budget.
We include assumptions of anticipated cost growth in the development of our cost of estimates, but if inflationary conditions, including the impact of potential trade tariffs in Canada and the US, continue over the long-term, our cost assumptions may not be sufficient to cover all cost escalation or may impact the availability of resources to execute on our operating goals on budget.

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