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What changed in AbCellera Biologics Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AbCellera Biologics Inc.'s 2024 and 2025 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 2025 report.

+776 added−864 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-27)

Top changes in AbCellera Biologics Inc.'s 2025 10-K

776 paragraphs added · 864 removed · 612 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

146 edited+76 added−129 removed63 unchanged
Biggest changeFor a discussion of the risks we face relating to intellectual property, see “Risk Factors—Risks Related to our Intellectual Property—If we are unable to obtain and maintain sufficient intellectual property protection for our technology, including our platform and Celium, our proprietary antibody visualization software, 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.” Government Regulation Our focus is on the discovery and development of antibodies for ourselves and for our partners to improve patients' lives.
Biggest changeFor a discussion of the risks we face relating to intellectual property, see “Risk Factors” herein. Government Regulation Our focus is on the discovery and development of antibodies for ourselves and for our partners to improve patients’ lives. We are involved in the discovery, development, manufacturing, and clinical trials activities of these prospective future medicines.
We grant equity awards, comprising of share options and restricted share units, to all employees. We do this because we believe that shared ownership promotes employee retention, creates alignment, and promotes a sense of shared ownership in the long-term success of our Company.
We grant equity awards, comprising share options and restricted share units, to all employees. We do this because we believe that shared ownership promotes employee retention, creates alignment, and promotes a sense of shared ownership in the long-term success of our Company.
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.
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.
In many cases, this results in cash flows that are further in the future. We do this because we believe that the real value from drug development is realized when drugs deliver value to patients. This drives our emphasis on sharing in the economics of successful drugs, developed both with our partners and internally.
In many cases, this results in cash flows that are further in the future. We do this because we believe that the real value from drug development is realized when drugs deliver value to patients. This drives our emphasis on sharing in the economics of successful drugs, developed both internally and with our partners.
We build systems to support our people We believe a strong corporate culture is essential for the recruitment, development, and retention of exceptional employees and teams. Although leaders must model corporate values and desired behaviors, we do not believe culture can be invented or enforced from the top of an organization.
We build systems to support our people We believe a strong corporate culture is essential for the recruitment, development, and retention of exceptional employees and teams. Although leaders must model corporate values and desired behaviors, we do not believe culture can be invented or enforced only from the top of an organization.
Instead, we see the responsibility for building and stewarding our culture as shared across our entire organization. We believe culture starts from individuals with shared core values and a common sense of purpose, and that culture emerges and is strengthened through a network of interactions and relationships built on mutual trust and appreciation.
Instead, we see the responsibility for building and stewarding our culture as shared across our entire organization. We believe culture starts from individuals with shared core values and a common 9 sense of purpose, and that culture emerges and is strengthened through a network of interactions and relationships built on mutual trust and appreciation.
Second, it brings forward all positive cash flows from a program with a corresponding impact on their net present value. Notably, some programs in our portfolio may progress faster than average for reasons beyond the speed of our discovery and development capabilities.
Second, it brings forward all positive cash flows from a program with a corresponding impact on their net present value. Notably, some programs in our pipeline and portfolio may progress faster than average for reasons beyond the speed of our discovery and development capabilities.
The immune repertoire patents and applications that we obtained from Lineage form the basis for the sequencing technologies that we currently use in our discovery and development capabilities. 22 The acquisition of Lineage included a patent portfolio comprising four patent families. One patent family is directed toward methods of determining the immune repertoire of a subject.
The immune repertoire patents and applications that we obtained from Lineage form the basis for the sequencing technologies that we currently use in our discovery and development capabilities. The acquisition of Lineage included a patent portfolio comprising four patent families. One patent family is directed toward methods of determining the immune repertoire of a subject.
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.
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 25 governmental fines.
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.
These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual during the 19 individual’s relationship with us is to be kept confidential and not disclosed to third parties, except in specific circumstances.
We 25 believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not adversely affect our business. We cannot predict, however, how changes in these laws may affect our future operations. Anti-Corruption Laws We are subject to the U.S.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not adversely affect our business. We cannot predict, however, how changes in these laws may affect our future operations. Anti-Corruption Laws We are subject to the U.S.
Single target Oncology August 3, 2021 Undisclosed biotechnology company Up to 4 targets, multi-year Undisclosed June 30, 2021 * Angios Multi-target, multi-year Ophthalmology May 6, 2021 Undisclosed biotechnology company Multi-target, multi-year Oncology May 6, 2021 * Empirico Inc. 5 targets, multi-year Undisclosed April 14, 2021 Gilead Sciences, Inc. 8 targets, multi-year Undisclosed April 1, 2021 Abdera Therapeutics Inc. 9 targets, multi-year Oncology January 14, 2021 Invetx, Inc.
Single target Oncology August 3, 2021 Undisclosed biotechnology company Up to 4 targets, multi-year Undisclosed June 30, 2021 * Angios Multi-target, multi-year Ophthalmology May 6, 2021 Undisclosed biotechnology company Multi-target, multi-year Oncology May 6, 2021 * 12 Empirico Inc. 5 targets, multi-year Undisclosed April 14, 2021 Gilead Sciences, Inc. 8 targets, multi-year Undisclosed April 1, 2021 Abdera Therapeutics Inc. 9 targets, multi-year Oncology January 14, 2021 Invetx, Inc.
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.
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.
The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
The processes for obtaining marketing approvals in the United States, Canada and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
Government authorities in the United States, at the federal, state and local level, and in the European Union, or E.U., and other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of pharmaceutical products, including biological products such as those that our partners develop.
Government authorities in the United States, at the federal, state, and local level, Canada, and in the European Union, or E.U., and other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacturing, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of pharmaceutical products, including biological drugs such as those that our partners develop.
For 76 programs, we have successfully completed the agreed scope of work and transferred the resulting antibody sequences and data to our partners for evaluation and further development under their leadership. For a historical total of six programs – less than 10% – we did not succeed in finding antibodies that met the partner’s target specifications.
For 84 programs, we have successfully completed the agreed scope of work and transferred the resulting antibody sequences and data to our partners for evaluation and further development under their leadership. For a historical total of six programs – less than 10% – we did not succeed in finding antibodies that met the partner’s target specifications.
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 .
By accelerating antibody discovery and preclinical development to increase chances of the resulting drug being first- or next-to-market, with correspondingly large market share (as discussed above); and 3. By following an approach to program and partner selection that avoids programs with apparently low commercial potential and clinical development risk. Royalty rates .
Under the UNC Agreement, we have an exclusive license to UNC’s rights under three patent families. One patent family is directed toward methods of producing an antigen-binding fragment, or Fab. This patent family includes three issued U.S. patents, and one patent granted in Europe.
Under the UNC Agreement, we have a non-exclusive license to UNC’s rights under three patent families. One patent family is directed toward methods of producing an antigen-binding fragment, or Fab. This patent family includes three issued U.S. patents, and one patent granted in Europe.
Accelerating drug development – beyond the obvious benefit for patients – positively impacts the value of an ultimately successful drug in two ways. First, it increases the therapeutic’s chance of being first (or next) to market with a large and lasting impact on market share.
Accelerating drug development – beyond the obvious benefit for patients – positively impacts the value of an ultimately successful drug in two ways. First, it increases the drug’s chance of being first (or next) to market with a large and lasting impact on market share.
While we believe we have built a competitive advantage in the discovery of antibody-based therapeutics, we face potential competition from many different sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private research institutions.
While we believe we have built a competitive advantage in the discovery of antibody-based drug, we face potential competition from many different sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions, governmental agencies, and public and private research institutions.
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.
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 drugs. Whether or not we and our partners obtain approval from the U.S.
Our partnership agreements to date have commonly included: (i) near-term payments for access, research, and intellectual property rights; (ii) downstream payments in the form of clinical and commercial milestones; and (iii) royalties on net sales of therapeutics.
Our partnership agreements to date have commonly included: (i) near-term payments for access, research, and intellectual property rights; (ii) downstream payments in the form of clinical and commercial milestones; and (iii) royalties on net sales of drugs.
Typical partnership agreements for partner-initiated discovery programs include (i) near-term payments for access, research, and intellectual property rights; (ii) downstream payments in the form of clinical and commercial milestones; and (iii) royalties on net sales of therapeutics.
Typical partnership agreements for partner-initiated discovery programs include (i) near-term payments for access, research, and intellectual property rights; (ii) downstream payments in the form of clinical and commercial milestones; and (iii) royalties on net sales of drugs.
Supporting such partners on their discovery challenges allows us to demonstrate our capabilities and earn trust for future partnerships. Our agreements emphasize participation in the success of antibody therapeutics Our agreements emphasize participation in the success and upside of the future antibody therapeutics we help to discover and develop.
Supporting such partners on their discovery challenges allows us to demonstrate our capabilities and earn trust for future partnerships. Our agreements emphasize participation in the success of antibody medicines Our agreements emphasize participation in the success and upside of the future antibody medicines we help to discover and develop.
We invest in and operate our business with the belief that we can favorably impact each driver of value in our portfolio: Program starts . Each program that we start has the potential to turn an idea into a new marketed therapy.
We invest in and operate our business with the belief that we can favorably impact each driver of value in our portfolio: Program starts . Each program that we start has the potential to turn an idea into a new marketed drug.
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.
Building a winning culture requires investment and continuous diligent effort. Our Company and our Talent Development team work to create and deliver the necessary processes, training programs, and events that we believe are essential for our culture to thrive.
When a drug developer licenses or partners a drug or drug-candidate molecule to another party for further clinical or commercial development, the original owner commonly negotiates an upfront payment. Such payments reflect a portion of the expected value of the molecule.
When a drug developer licenses or partners a drug or drug candidate with another party for further clinical or commercial development, the original owner commonly negotiates an upfront payment. Such payments reflect a portion of the expected value of the molecule.
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.
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 drug candidates 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.
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.
Finally, we believe that our strategy of using our platform and capabilities 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. Our discovery and development capabilities require interdisciplinary talent Interdisciplinarity is a core feature of our business.
This patent family includes fourteen issued patents including in the U.S., Australia, the Russian Federation, Europe, India, Israel, Canada, China and Japan. Patents issuing from this family are expected to expire in July 2031, absent any disclaimers or extensions available. 23 Another patent family is directed to enhanced production of immunoglobulins.
This patent family includes thirteen issued patents including in the U.S., Australia, the Russian Federation, Europe, India, Israel, Canada, China, and Japan. Patents issuing from this family are expected to expire in July 2031, absent any disclaimers or extensions available. Another patent family is directed to enhanced production of immunoglobulins.
Both the Vancouver and Sydney regions are consistently ranked amongst the most liveable cities in the world. Both also have world-class universities that train large pools of talent in fields relevant to our work, including computer science, biochemistry, genomics, engineering, cell biology, and immunology.
Both the Vancouver and Sydney regions 10 are consistently ranked amongst the most livable cities in the world. Both cities also have world-class universities that train large pools of talent in fields relevant to our work, including computer science, biochemistry, genomics, engineering, cell biology, and immunology.
We believe this framework has allowed us to build an exceptional team at all levels and develop strong leaders that drive our business's continued long-term growth. How we structure our pay and compensation packages We believe our long-term success depends on our ability to compete for top talent.
We believe this framework has allowed us to build an exceptional team at all levels and develop strong leaders to drive our continued long-term success. How we structure our pay and compensation packages We believe our long-term success depends on our ability to compete for top talent.
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.
Our investments in programs depend on the program type. 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.
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.
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 the U.S., and one pending application in the U.S.
Our position in a partner-initiated co-development program generally reflects our proportionate contribution to the program. The royalty (or equivalent) rates that apply at each point where we can continue our co-investments depend on 20 our cumulative contribution to the program's funding.
Our position in a co-development program generally reflects our proportionate contribution to the program. The royalty (or equivalent) rates that apply at each point where we can continue our co-investments depend on our cumulative contribution to the program's funding.
Between 2020 and 2024, we negotiated an increased mean royalty rate of 4.2% across our programs with downstream participation signed in the period and our agreement to partner our COVID-19 antibody asset to Lilly. A quarter of these programs signed in the 2020 to 2024 period can achieve royalty rates above 5.0%.
Between 2020 and 2025, we negotiated an increased mean royalty rate of 4.2% across our programs with downstream participation signed in the period and our agreement to partner our COVID-19 antibody asset to Eli Lilly and Company. A quarter of these programs signed in the 2020 to 2025 period can achieve royalty rates above 5.0%.
We invest with a long-term perspective We allocate capital with a long-term perspective and our largest investments have been in the intellectual capital, infrastructure, and capabilities that we have built over the years. Using these assets, we make capital-efficient investments in the discovery and development of new antibody drugs, with the largest value tied to their long-term success.
We invest with a long-term perspective We allocate capital with a long-term perspective and our largest investments have been in the intellectual capital, infrastructure, and capabilities that we have built over the years. Using these assets, we make capital-efficient investments 14 in the discovery and development of new antibody drug candidates, with the largest value tied to their long-term success.
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.
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 that become marketed medicines may generate royalty payments to us on the net sales of those drugs.
As such, the size of such payments typically scales with the drivers of drug- or drug-candidate-value, being importantly expected peak sales if approved, remaining risk to achieve marketed status, and expected additional development and commercialization costs. Upfront payments are typically negotiated in combination with milestone payments and royalties in an out-licensing or partnering agreement.
As such, the size of such payments related to a drug or drug candidate typically scales with the drivers of its value: expected peak sales if approved; remaining risk to achieve marketed status; and expected additional development and commercialization costs. Upfront payments are typically negotiated in combination with milestone payments and royalties in an out-licensing or partnering agreement.
We foster and enjoy high levels of employee engagement We see employee engagement and retention as two important measures of the health of a company. We measure our employee engagement and ability to retain professional talent regularly. In 2024, we had a voluntary turnover rate of 4.7%.
We foster and enjoy high levels of employee engagement We see employee engagement and retention as two important measures of the health of a company. We measure our employee engagement and ability to retain professional talent regularly. In 2025, we had a voluntary turnover rate of 6.7%.
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.
We believe that we can achieve this in three ways: 1. By achieving the technical breakthroughs that allow us to develop first-in-class drug candidates in high-value therapeutic applications where others have struggled or failed (e.g ., based on GPCRs, ion channels, multispecifics); 2.
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.
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 is one pending application in the U.S.
These are designed to: • Encourage relationship-building across interdisciplinary teams; • Share information broadly, to promote mutual appreciation and to ensure our employees see how their work and the work of others connects to our overall strategy; • Craft mentorship networks and leadership-training systems that help our employees develop strong leadership skills; • Promote our corporate values and engage in conversations with our teams to understand how our values apply across the organization; • Develop and deliver a curriculum of learning and development programs to accelerate career progression; and • Offer events that help build strong relationships and a shared sense of purpose and community.
These are designed to: • Establish expectations of high performance; • Share information broadly, promote mutual appreciation, and ensure our employees see how their work and the work of others connects to our overall strategy; • Craft mentorship networks and leadership-training systems that help our employees develop strong leadership skills; • Promote our corporate values and engage in conversations with our teams to understand how our values apply across the organization; • Develop and deliver a curriculum of learning and development programs to accelerate career progression; and • Offer events that help build strong relationships and a shared sense of purpose and community.
Agreements may include alternative approaches to capture value, including equity in our business partner and various options for deeper investment in moving drug candidates forward. As of December 31, 2024, we have started 96 partner-initiated programs that have the potential for milestone and royalty payments.
Agreements may include alternative approaches to capture value, including equity in our business partner and various options for deeper investment in moving drug candidates forward. 11 As of December 31, 2025, we have started 104 partner-initiated programs that have the potential for milestone and royalty payments.
This patent family includes six issued patents including in the U.S., Israel, Australia, Europe, and Japan. There are four pending applications including one in the U.S. and three in pending foreign counterparts, including Canada, Europe, and Korea. Any patents that issue from this family are expected to expire in February 2037, absent any disclaimers or extensions available.
This patent family includes seven issued patents including in the U.S., Israel, Australia, Europe, Canada, and Japan. There are three pending applications including one in the U.S. and two in pending foreign counterparts, including Europe and Australia. Any patents that issue from this family are expected to expire in February 2037, absent any disclaimers or extensions available.
We work closely with our partners on these programs, leveraging their insight and expertise into target and disease biology and modality while using our discovery and development capabilities to create value. Depending on the terms of the program, we may perform work from target specification as far as the delivery of a final drug candidate.
We have worked closely with our partners on these programs, leveraging their insights and expertise in target and disease biology and modality, while using our discovery and development capabilities to create value. Depending on the terms of the program, we may perform work from target specification as far as the delivery of a final drug candidate.
OTHER MATTERS Intellectual Property We strive to protect the proprietary technologies that we believe are important to our business, including seeking and maintaining patent protection intended to cover the compositions of matter of our product candidates, their methods of use, related technology, and other inventions that are important to our business.
OTHER MATTERS Intellectual Property We strive to protect the proprietary technologies that we believe are important to our business, including seeking and maintaining patent protection for the compositions of matter of our drug candidates, their methods of use, related technology, and other inventions that are important to our business.
UNC may terminate the agreement governing the license if there is a material breach by us of the agreement and we fail to cure such breach, which breaches include but are not limited to our failure to deliver payment to UNC when due, to provide progress reports, to meet or achieve performance milestones or to possess and maintain insurance, or the execution of a sublicense that complies with the terms of the agreement.
UNC may terminate the agreement 21 governing the license if we have not practiced the technology for a period of two years, or if there is a material breach by us of the agreement and we fail to cure such breach, which breaches include but are not limited to our failure to deliver payment to UNC when due, to provide progress reports, to meet or achieve performance milestones or to possess and maintain insurance, or the execution of a sublicense that complies with the terms of the agreement.
Another patent family is also directed to enhanced production of immunoglobulins. This patent family includes two issued patents in Australia and Israel and four pending applications, including in Canada, Europe, China, and Korea. Any patents that issue from this family are expected to expire in August 2036, absent any disclaimers or extensions available.
Another patent family is also directed to enhanced production of immunoglobulins. This patent family includes three issued patents in Australia, Europe, and Israel and two pending applications in Canada and China. 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.
Instead, for a given program that undergoes clinical development, obtains marketing approval, and is successfully commercialized, we expect the bulk of the revenues to result to be associated with our downstream royalty or profit-share rights and commercial milestone payments. Our approach is to maximize the expected net present value of our stakes in future antibody drugs.
Instead, for a given program that undergoes clinical development, obtains marketing approval, and is successfully commercialized, we expect the bulk of the revenues to result from our downstream royalty or profit-share rights and commercial milestone payments. Our approach to partnering has been to maximize the expected net present value of our stakes in future 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 before the commencement of clinical studies or marketing of the product in those countries.
Food and Drug Administration, or FDA, Health Canada, or the European Commission for the E.U. for a drug, we and they must obtain the requisite approvals from regulatory authorities in foreign countries before the commencement of clinical studies or marketing of the drug candidate in those countries.
Figure 3: Our large, diversified portfolio of stakes in next-generation antibody therapies. * As of December 31, 2024 Drivers of value in our portfolio and pipeline The value of our portfolio and pipeline is driven by several factors, which we believe include: • Our number of downstream stakes in drug discovery programs (our “ program starts ”); • The probability of success of a drug discovery program; • The expected timeline for a program to proceed through development and to commercial sales; • The potential for upfront payments from out-licensing or partnering pipeline assets; • The expected resulting commercial sales if a program is successful; • Our economic stake in a program’s commercial success (with most of the value being defined by the royalty rates associated with each program); and • The value of other downstream stakes which we may obtain as part of our agreements.
Drivers of value in our portfolio and pipeline The value of our portfolio and pipeline is driven by several factors, which we believe include: • Our number of downstream stakes in drug discovery programs (our “ program starts ”); • The probability of success of a drug discovery program; • The expected timeline for a program to proceed through development and to commercial sales; • The potential for upfront payments from out-licensing or partnering pipeline assets; • The expected resulting commercial sales if a program is successful; • Our economic stake in a program’s commercial success (with most of the value being defined by the royalty rates associated with each program); and • The value of other downstream stakes which we may obtain as part of our agreements.
We also structure agreements with additional approaches to capture value, including through equity in our business partners and various options for deeper investment in moving therapeutic candidates forward. We believe the long-term value of our business will be driven by downstream milestone payments and royalties on the net sales of a resulting therapeutic.
We have also structured agreements with additional approaches to capture value, including through equity in our business partners and various options for deeper investment in moving drug candidates forward. We believe the long-term value of this portfolio will be driven by downstream milestone payments and royalties on the net sales of a resulting drug.
Market transactions between other drug developers have been reported with upfront payment amounts for T-cell engager molecules in the double-digit-million dollar range while those for potentially more valuable GPCR-targeting drug candidates have shown triple-digit-million dollar amounts, depending on the stage of their pre-clinical or clinical development. Commercial sales.
Market transactions between other drug developers have been reported with upfront payment amounts, e.g., for T-cell engagers in the double-digit million-dollar range, while those for potentially more valuable GPCR-targeting drug candidates have shown triple-digit million-dollar amounts, depending on the stage of their preclinical or clinical development. Commercial sales.
Diversification reduces the risk associated with individual drug development programs. Because our capabilities are broadly applicable to antibody-based drug development, we can access the full depth and breadth of programs in the biotechnology industry. Our resulting portfolio of partner-initiated programs and internal pipeline are well-diversified across therapeutic areas (Figure 3), modalities, and partner types.
Diversification reduces the risk associated with individual drug development programs. Because our capabilities are broadly applicable to antibody-based drug development, we can access the full depth and breadth of different therapeutic indications and programs in the biotechnology industry. Our resulting portfolio of stakes in partner-led programs and our internal pipeline are well-diversified across therapeutic areas, modalities, and partner types.
Issued patents from this family are expected to expire in May 2042, absent any disclaimers or extensions available. Another patent family is directed to Adam6 knock-in mice. This patent family contains one issued patent in Europe. Issued patent is expected to expire in August 2039, absent any disclaimers or extensions available. Another patent family is directed to heavy chain-only antibodies.
Issued patents from this family are expected to expire in May 2042, absent any disclaimers or extensions available. Another patent family is directed to Adam6 knock-in mice. This patent family contains one issued patent in Europe. The issued patent is expected to expire in August 2039, 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.
This patent family includes patents issued in the U.S. and Australia and granted in Europe, Japan, and Korea, as well as three pending foreign counterpart patent applications. Issued patents from this patent family are expected to expire in March 2034, absent any disclaimers or extensions available.
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.
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 five pending applications in Australia, Canada, Europe, Israel, and Korea. This patent family contains two issued patents in China and Japan.
We believe the combination of (i) these regions providing access to large talent pools and less-developed biotechnology sectors, and (ii) our willingness to hire for potential and invest in employee training and development are key factors contributing to our success in discovering, attracting, and retaining top talent.
We believe the combination of these regions providing access to large talent pools and less-developed biotechnology sectors and our willingness to hire for potential and invest in employee training and development is contributing to our success in discovering, attracting, and retaining top talent.
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.
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 antibody discovery and development problems and avoid high-risk science projects.
Information on our website is not part of this Annual Report on Form 10-K or any of our other filings with the SEC unless specifically incorporated herein by reference. In addition, our filings with the SEC may be accessed through the SEC’s website at www.sec.gov.
Information on our website is not part of this Annual Report on Form 10-K or any of our other filings with the SEC unless specifically incorporated herein by reference. In addition, our filings with the SEC are available on the SEC’s website at www.sec.gov.
Failure on any one factor often leads to program-failure overall. Historically, such failures have resulted in success rates for drug development programs estimated to be in the mid-single-digit percentage range. Through our investments and capabilities, we aim to raise the probability of success of the programs in our portfolio and pipeline.
Failure on any one factor often leads to program failure overall. Historically, such failures have led to success rates for drug development programs estimated at mid-single digit percentages. Through our investments and capabilities, we aim to raise the probability of success of the programs in our pipeline and portfolio.
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.
We have used, and expect to use, the proceeds from the financing to build our facilities; establish and validate fully integrated capabilities to take programs from concept to the clinic; and support the development of up to 17 internal programs up to and through Phase 1 clinical trials.
Historical results are not necessarily indicative of future results. Of the 96 partner-initiated programs with downstream participation that we had started as of December 31, 2024, we were still actively leading or co-leading the work on 14 of these programs.
Historical results are not necessarily indicative of future results. Of the 104 partner-initiated programs with downstream participation that we had started as of December 31, 2025, we were still actively leading or co-leading the work on 14 of them.
Historically, the time for antibody discovery projects to reach Phase 1 clinical trials from target selection has been estimated at approximately 5.5 years. On average, antibody drugs have taken between seven and ten years to reach market-authorization from the start of Phase 1 clinical trials.
Historically, the time for antibody discovery projects to reach Phase 1 clinical trials from target selection has been estimated at approximately 5.5 years. On average, antibody drugs have taken between seven and ten years to reach market-authorization from the start of Phase 1 clinical trials. Each year, over 300 antibody drug candidates enter Phase 1 clinical trials.
Our average royalty rates reflect the increasing value we create for our industry The range and progression of our royalty (and equivalent) positions reflect the value that we create and our ability to capture that value. As of December 31, 2024, we started 96 partner-initiated programs with downstream participation. These 96 programs have a mean royalty rate of 3.2%.
Our average royalty rates reflect the increasing value we create The range and progression of our royalty (and equivalent) positions reflect the value that we create and our ability to capture that value. As of December 31, 2025, we have started 104 partner-initiated programs with downstream participation. These 104 programs have a mean royalty rate of 3.3%.
Our geographic locations give us an advantage in recruitment Attracting and retaining large teams of highly trained scientists and engineers is one of the most critical challenges in executing on our strategy. We believe that we have a significant recruitment advantage by virtue of our largest research facilities being in Vancouver, Canada, and Sydney, Australia.
Our geographic locations give us an advantage in recruitment Attracting and retaining large teams of highly trained specialists in drug discovery, development, and manufacturing is one of the most critical challenges in executing on our strategy. We believe that we have a significant recruitment advantage by virtue of our largest facilities being in Vancouver, Canada, and Sydney, Australia.
This can be the case for therapeutics against rare disease; those with breakthrough designation; drugs that are best-in-class and following a well-understood development path; in a pandemic response situation (as demonstrated by bamlanivimab and bebtelovimab); and in animal therapeutics. Upfront payments from out-licensing or partnering pipeline assets .
This can be the case for therapeutics against rare diseases; those with breakthrough designation; drugs that are best-in-class and following a well-understood development path; in a pandemic response situation (as demonstrated by bamlanivimab and bebtelovimab, two therapeutic antibodies against COVID-19 discovered by AbCellera); and in animal therapeutics. Upfront payments from out-licensing or partnering pipeline assets .
Overall, we view the progress of the molecules we have discovered in our and our partners’ hands positively. Over half of all programs with downstream participation that we have started are currently still progressing. 17 Our portfolio and pipeline are well-diversified We believe an optimal portfolio is diversified, long-term, and robust.
Overall, we view the progress of the molecules we have discovered, in our hands and those of our partners, positively. Approximately one half of all programs with downstream participation that we have started are currently still progressing. 16 Our portfolio and pipeline are well-diversified We believe an optimal portfolio is diversified, long-term, and robust.
Royalties are the economic expression of our win-win approach to partnering, tying our financial success in a program to that of our partner and to the benefit that the commercialized drug brings to patients. Royalties on net sales are nearly 100%-margin revenue to the recipient, less volatile than a share of profits, and inherently protected against inflation.
Royalties are the economic expression of our win-win approach to partnering, linking our financial success in a program to our partner’s success and to the commercialized drug’s benefit to patients. Royalties on net sales are nearly 100%-margin revenue to the recipient, less volatile than a share of profits, and inherently protected against inflation.
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.
Obtaining patent protection is not the only way we protect our proprietary rights. 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. We believe that our comprehensive approach to intellectual property protection strengthens our proprietary rights.
We evaluate these programs individually to determine the advisability of entering into preclinical and clinical development ourselves, entering into collaborations with partners, or out-licensing programs to optimize their development and clinical and commercial potential.
We evaluate our internal programs individually to determine the advisability of pursuing and continuing clinical development ourselves, entering into collaborations with partners, or out-licensing programs to optimize their development and clinical and commercial potential.
Lastly, the UBC Core Patent license includes a patent family directed toward methods for determining lymphocyte receptor chain pairs, for example, antibody heavy and light chain pairs. This patent family includes two issued U.S. patents, two granted patents in Europe, and one granted patent in Canada, as well as one pending U.S. non-provisional patent application.
Lastly, the UBC Core Patent license includes a patent family directed toward methods for determining lymphocyte receptor chain pairs, for example, antibody heavy and light chain pairs. This patent family includes three issued U.S. patents, three granted patents in Europe, and one granted patent in Canada.
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.
This distribution includes some drugs with sustained annual sales of tens of billions of dollars, many with annual sales over $1 billion (so-called “blockbusters”), and many with more limited commercial success. We aim to position our portfolio with particular exposure to drug candidates with high and very high commercial potential.
This portfolio consists of a patent family that is directed to the novel antibodies, and methods of using the antibodies to treat a still undisclosed indication. This patent family has one pending International (PCT) patent application. Issued patents from this family are expected to expire in October 2044, absent any disclaimers or extensions available.
Our OX40L portfolio consists of a patent family that is directed to novel anti-OX40L antibodies, and methods of using the anti-OX40L antibodies to treat atopic dermatitis. This patent family has one pending International (PCT) patent application. Patents issued to this family are expected to expire in October 2044, absent any disclaimers or extensions.
AbCellera has the potential to earn significant upfront payments from out-licensing or partnering pipeline assets from both, internal as well as co-development programs.
AbCellera has the potential to earn significant upfront payments from out-licensing or partnering pipeline assets from internal programs.
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.
We enter into contracts that grant us the right to use the data we generate to improve our discovery and development capabilities and fuel 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.
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.
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. Another patent family is directed to transgenic mammals that express canine-based immunoglobulins.
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 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, Inc., or Alloy Therapeutics.
We believe the near-term and clinical milestone payments we earn from programs are only a small proportion of the expected total value that we ascribe to an individual program.
We believe the near-term and clinical milestone payments we earn from programs represent only a small share of the expected total value we ascribe to each program.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn particular, our business depends, among other things, on: • our discovery and development capabilities to successfully identify therapeutic antibodies on the desired timeframes that can ultimately be used to prevent and treat diseases; • our ability to successful employ our newly constructed GMP facility to advance our pipeline; 29 • our ability to utilize our discovery and development capabilities to build a robust pipeline of potential development candidates; • our ability to partner our internally developed pipeline; • our ability to increase awareness of the capabilities of our technology and solutions; • our partners’ and potential partners’ willingness to adopt new technologies; • whether our discovery and development capabilities reliably provide advantages over legacy and other alternative technologies and is perceived by customers to be cost effective; • the rate of adoption of our solutions by pharmaceutical companies, biotechnology companies of all sizes, government organizations and non-profit organizations and others; • the relative reliability and robustness of our discovery and development capabilities; • the timing and scope of any approval that may be required by regulatory bodies for therapeutics that are developed based on antibodies discovered by us; • the impact of our investments in innovation and commercial growth; • negative publicity regarding our or our competitors’ technologies resulting from defects or errors; and • our ability to further validate our technology through research and accompanying publications.
Biggest changeIn particular, our business depends, among other things, on: • our discovery and development capabilities to successfully identify drug candidates on the desired timeframes that can ultimately be used as medicines to prevent and treat diseases; • our capabilities to successfully advance our current and future drug candidates through clinical trials; • our ability to successful employ our newly constructed GMP facility to advance our pipeline; 29 • our ability to utilize our discovery and development capabilities to build a robust pipeline of potential development candidates; • our ability to partner drug candidates from our internally developed pipeline; • the rate at which partners continue to develop molecules in which we hold an economic stake; • the timing and scope of any approval that may be required by regulatory bodies for drugs that are developed based on antibodies discovered by us; • the impact of our investments in innovation and commercial growth.
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.
Such additional future 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.
In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
In addition, government funding of other agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Although we believe that our manufacturers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot eliminate the risk of contamination or injury, and any related liability, resulting from medical or hazardous materials.
Although we believe that our and our manufacturers’ procedures for using, handling, storing ,and disposing of these materials comply with legally prescribed standards, we cannot eliminate the risk of contamination or injury, and any related liability, resulting from medical or hazardous materials.
However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
However, we cannot be certain that such agreements have been entered into with all relevant parties, or that our trade secrets and other confidential proprietary information will not be disclosed, or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of our common shares and is (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S. person under applicable U.S.
Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of our 74 common shares and is (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S. person under applicable U.S.
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.
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.
These 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.
These 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, clinical 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; • 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; 27 • 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 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.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration (including any kickback, bribe or rebate), directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, impose criminal or civil penalties, as applicable, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government (including the Medicare and Medicaid programs) or other third-party payor claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • HIPAA established the federal offense of health care fraud, which among other things, imposes criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of 47 the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g. public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by HITECH, and its implementing regulations, which imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without the appropriate authorization by entities subject to the law, such as health plans, healthcare clearinghouses and healthcare providers and their respective business associates and their covered subcontractors; • the federal Open Payments program under the Physician Payments Sunshine Act, created under Section 6002 of the PPACA and its implementing regulations, requires applicable group purchasing organizations and manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to “payments or other transfers of value” made in the previous year to covered recipients, including physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors, other health care professionals (such as nurse practitioners and physician assistants) and teaching hospitals, and information regarding ownership and investment interests held by physicians (as defined above) or their immediate family members; and • analogous and similar state and foreign laws and regulations, including: state anti-kickback and false claims laws that may apply to our business practices (including research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by state governmental and non-governmental third-party payors, including private insurers); state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government; state laws that require drug manufacturers to track gifts and other remuneration and items of value provided to healthcare professionals and entities and file reports relating to pricing and marketing information; and state and foreign laws that govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The applicable federal, state, and foreign healthcare laws and regulations that may affect our ability to operate include the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration (including any kickback, bribe or rebate), directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; 46 • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, impose criminal or civil penalties, as applicable, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government (including the Medicare and Medicaid programs) or other third-party payor claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • HIPAA established the federal offense of health care fraud, which among other things, imposes criminal liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (i.e., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services relating to healthcare matters; • HIPAA, as amended by HITECH, and its implementing regulations, imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without the appropriate authorization by entities subject to the law, such as health plans, healthcare clearinghouses, and healthcare providers and their respective business associates and their covered subcontractors; • the federal Open Payments program under the Physician Payments Sunshine Act, created under Section 6002 of the PPACA and its implementing regulations, requires applicable group purchasing organizations and manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to “payments or other transfers of value” made in the previous year to covered recipients, including physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, other health care professionals (such as nurse practitioners and physician assistants), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians (as defined above) or their immediate family members; and • analogous and similar state and foreign laws and regulations, including: state anti-kickback and false claims laws that may apply to our business practices (including research, distribution, sales, and marketing arrangements and claims involving healthcare items or services reimbursed by state governmental and non-governmental third-party payors, including private insurers); state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government; state laws that require drug manufacturers to track gifts and other remuneration and items of value provided to healthcare professionals and entities and file reports relating to pricing and marketing information; and state and foreign laws that govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Due to the uncertain, time-consuming and costly clinical development and regulatory approval process, there may not be successful development of any drug candidates with the antibodies that we discover, or we and our partners may choose to discontinue the development of these drug candidates for a variety of reasons, including due to safety, risk versus benefit profile, exclusivity, competitive landscape, commercialization potential, production limitations or prioritization of their resources.
Due to the uncertain, time-consuming and costly clinical development and regulatory approval process, there may not be successful development of any drug candidates with the antibodies that we discover, or we and our partners may choose to discontinue the development of these drug candidates for a variety of reasons, including due to safety, risk versus benefit profile, exclusivity, competitive landscape, commercialization potential, production limitations or prioritization of their 30 resources.
If we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business, these acquisitions may not strengthen our competitive position, the transactions may be viewed negatively by partners or investors, we may be unable to retain key employees of any acquired business, relationships with key suppliers, manufacturers or partners of any acquired business may be impaired due to changes in management and ownership, and we could assume unknown or contingent liabilities.
If we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business, these acquisitions may not strengthen our competitive position, the transactions may be viewed 53 negatively by partners or investors, we may be unable to retain key employees of any acquired business, relationships with key suppliers, manufacturers or partners of any acquired business may be impaired due to changes in management and ownership, and we could assume unknown or contingent liabilities.
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.
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 services, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties.
In response to Biden’s executive order, on September 9, 2021, the Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
In response to the executive order, on September 9, 2021, the Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.
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.
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. 66 Third parties may assert that we are practicing their proprietary technology without authorization.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, impose certain requirements relating to the privacy, security, transmission and breach reporting of individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses and healthcare providers and their respective business associates that perform services for them that involve individually identifiable health information.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations, impose certain requirements relating to the privacy, security, transmission, and breach reporting of individually identifiable health information upon entities subject to the law, such as health plans, healthcare clearinghouses, and healthcare providers as well as their respective business associates that perform services for them that involve individually identifiable health information.
If we were to experience an attempted or successful cybersecurity attack of our information systems or data, the costs associated with the investigation, remediation and potential notification of the attack to counterparties, data subjects, regulators or others, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants, could be material.
If we were to 52 experience an attempted or successful cybersecurity attack of our information systems or data, the costs associated with the investigation, remediation, and potential notification of the attack to counterparties, data subjects, regulators or others, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants, could be material.
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.
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.
If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or grant licenses on terms unfavorable to us. We do not intend to pay dividends on our common shares, so any returns will be limited to the value of our common shares.
If we raise additional funds through partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or grant licenses on terms unfavorable to us. We do not intend to pay dividends on our common shares, so any returns will be limited to the value of our common shares.
We may need increased product liability coverage when we begin the commercialization of our product candidates. Insurance coverage is becoming increasingly expensive. As a result, we may be unable to maintain or obtain sufficient insurance at a reasonable cost to protect us against losses that could have a material adverse effect on our business.
We may need increased product liability coverage when we begin the commercialization of our drug candidates. Insurance coverage is becoming increasingly expensive. As a result, we may be unable to maintain or obtain sufficient insurance at a reasonable cost to protect us against losses that could have a material adverse effect on 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.
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.
We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. If we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder.
We may seek additional capital through a combination of public and private equity offerings, debt financings, partnerships and alliances and licensing arrangements. If we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder.
Furthermore, our future profitability may be adversely affected by strict price controls imposed by many governments, particularly in the EU. Pricing and reimbursement negotiations with governmental authorities in these countries can be lengthy and complex, often requiring additional clinical trials to demonstrate cost-effectiveness compared to existing therapies.
Furthermore, our future profitability may be adversely affected by strict price controls imposed by many governments, particularly in the EU. Pricing and reimbursement negotiations with governmental authorities in these countries can be 43 lengthy and complex, often requiring additional clinical trials to demonstrate cost-effectiveness compared to existing therapies.
Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious software, bugs or viruses, human acts and natural disasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems.
Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious software, software bugs or viruses, human acts, and natural disasters. Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, and similar disruptive problems.
Significant political and economic developments in international markets for which we intend to operate, or the perception that any of them could occur, creates further challenges for operating in these markets in addition to creating instability in global economic conditions. Our business is subject to risks relating to foreign currency exchange rates.
Significant political and economic developments in international markets for which we intend to operate, or the perception that any of them could occur, creates further challenges for operating in these markets in addition to creating instability in global economic conditions. 55 Our business is subject to risks relating to foreign currency exchange rates.
We cannot predict the impact of such changes and cannot be certain of our future compliance. 58 Our discovery and development capabilities, and internal programs, utilize various species of animals that could contract disease or die and could otherwise subject us to controversy and adverse publicity, which may interrupt our business operations or harm our reputation.
We cannot predict the impact of such changes and cannot be certain of our future compliance. Our discovery and development capabilities, and internal programs, utilize various species of animals that could contract disease or die and could otherwise subject us to controversy and adverse publicity, which may interrupt our business operations or harm our reputation.
If there is not sufficient reimbursement for our products, it is less likely that our products will be widely used. The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drugs vary from country to country. Many countries require approval of the sale price of a drug before it can be marketed.
If there is not sufficient reimbursement for our drugs, it is less likely that our drugs will be widely used. The regulations that govern marketing approvals, pricing, coverage, and reimbursement for new drugs vary from country to country. Many countries require approval of the sale price of a drug before it can be marketed.
Additionally, a number of states are considering or have enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products candidates.
Additionally, a number of states are considering or have enacted state drug-price-transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our drug candidates.
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.
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.
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.
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.
Various industry stakeholders have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional. The impact of these judicial challenges as well as future actions and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.
Various industry stakeholders have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional. The impact of these judicial challenges as well as future actions and agency rules implemented by the 44 government on us and the pharmaceutical industry as a whole is unclear.
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.
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 additional safeguards.
We may face increased risk in our collection efforts, including long collection cycles and the risk that we may never collect at all, which could require to write-off significant accounts receivable and recognize bad debt expenses, which could adversely affect our business, financial condition, results of operations and prospects.
We may face increased risk in our collection efforts, including long collection cycles and the risk that we may never collect at all, which could require us to write-off significant accounts receivable and recognize bad debt expenses, which could adversely affect our business, financial condition, results of operations, and prospects.
Any changes we make to our technology, including changes that may be required for commercialization or that cause them to have what we view as more advantageous properties may not be covered by our existing patent portfolio, and we may be required to file new applications and/or seek other forms of protection for any such alterations to our technology.
Any changes we make to our technology, including changes that may be required for commercialization or that cause them to have what we view as more advantageous properties may not be covered by our existing patent portfolio, and we may be 59 required to file new applications and/or seek other forms of protection for any such alterations to our technology.
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.
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.
The various ways we could raise additional capital carry potential risks. If we raise funds by issuing equity securities, dilution to our shareholders would result. Any preferred equity securities issued also would likely provide for rights, preferences or privileges senior to those of holders of our common shares.
The various ways we could raise additional capital carry potential risks. If we raise funds by issuing equity securities, dilution to our shareholders would result. Any preferred equity securities issued also would likely provide for rights, 28 preferences or privileges senior to those of holders of our common shares.
The actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our or our current and future partners’ antibody discovery and development programs, the amount of time, effort, and resources committed by us and our current and future partners, and the numerous uncertainties inherent in the development of drugs.
The actual timing of these events can vary due to a number of factors such as delays or failures in our or our current and future partners’ antibody discovery and development programs, the amount of time, effort, and resources committed by us and our current and future partners, and the numerous uncertainties inherent in the development of drugs.
If contaminants are discovered in our supply of our product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We may have stability, purity, and efficacy failures, deficiencies, or other issues relating to the manufacture of our product candidates.
If contaminants are discovered in the supply of our drug product or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We may have stability, purity, and efficacy failures; deficiencies; or other issues relating to the manufacture of our drug candidates.
For example, the FDA recently authorized the state of Florida to import certain prescription drugs from Canada 45 for a period of two years to help reduce drug costs, provided that Florida’s Agency for Health Care Administration meets the requirements set forth by the FDA. Other states may follow Florida.
For example, the FDA recently authorized the state of Florida to import certain prescription drugs from Canada for a period of two years to help reduce drug costs, provided that Florida’s Agency for Health Care Administration meets the requirements set forth by the FDA. Other states may follow Florida.
These information technology and telecommunications systems support a variety of functions, including manufacturing operations, laboratory operations, data analysis, quality control, customer service and support, billing, research and development activities, scientific and general administrative activities. A significant risk in implementing these systems, for example, is the integration and communication between separate IT systems.
These information technology and telecommunications systems support a variety of functions, including manufacturing operations, laboratory operations, data analysis, quality control, customer service and support, billing, research and development activities, scientific, and general administrative activities. A significant risk in implementing these systems, for example, is the integration and communication between separate systems.
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.
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.
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.
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 60 competition to our business, which could harm our business.
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.
Should 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.
Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure and that of any third-party provider we may utilize, may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance or other disruptions.
Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure and that of any third-party provider we may utilize, may be vulnerable to attacks by hackers or software viruses or breached due to employee error, malfeasance or other disruptions.
The majority of our cash and cash equivalents are maintained in high credit quality and liquid held for trading marketable securities, bank accounts and term deposits at Canadian banking institutions. Cash and cash equivalent held in depository accounts may exceed the C$100,000 Canadian Deposit Insurance Corporation insurance limits.
The majority of our cash and cash equivalents are maintained in high credit quality and liquid held-for-trading marketable securities, bank accounts and term deposits at Canadian banking institutions. Cash and cash equivalents held in depository accounts may exceed the C$100,000 Canadian Deposit Insurance Corporation insurance limits.
The implementation of cost containment measures, including the prescription drug provisions under the Inflation Reduction Act, as well as other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product candidates if approved.
The implementation of cost containment measures, including the prescription drug provisions under the Inflation Reduction Act, as well as other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drug candidates if approved.
Further, a California ballot initiative, the California Privacy Rights Act, or CPRA, was passed by California voters on November 3, 2020. The CPRA, which became effective on January 1, 2023, creates additional obligations with respect to processing and storing personal information.
Further, a California ballot initiative, the California Privacy Rights Act, or CPRA, was passed by California voters on November 3, 2020. The CPRA, which became effective on January 1, 2023, creates additional obligations with respect to 50 processing and storing personal information.
A successful liability claim, or series of claims, in which judgments exceed our insurance coverage could adversely affect our business, financial condition, results of operations and prospects, including preventing or limiting the use of our discovery and development capabilities to discover antibodies.
A successful 54 liability claim, or series of claims, in which judgments exceed our insurance coverage could adversely affect our business, financial condition, results of operations, and prospects, including preventing or limiting the use of our discovery and development capabilities to discover antibodies.
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.
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.
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.
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.
Furthermore, a clinical trial may be suspended or terminated by us, the relevant human subjects review board for the institutions in which such trials are being conducted, the Data Monitoring Committee for such trial, or by the relevant health authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the relevant health authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Furthermore, a clinical trial may be suspended or terminated by us, the relevant human subjects review board for the institutions in which such trials are being conducted, the Data Monitoring Committee for such trial, or by the relevant health authorities due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the relevant health authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
The UK is not subject to the EC’s new standard contractual clauses but has published its own transfer mechanism, the International Data Transfer Agreement and International Data Transfer Addendum (“IDTA”), which enable transfers from the UK, and has also implemented a similar Transfer Impact Assessment requirement.
The UK is not subject to the EC’s new standard contractual clauses but has published its own transfer mechanism, the International Data Transfer Agreement and International Data Transfer Addendum (“IDTA”), which enable transfers from the UK, and has also 51 implemented a similar Transfer Impact Assessment requirement.
The loss of any member of our senior management team or our ability to attract and retain talent across the Company, including senior management, could adversely affect our business. We are highly dependent upon our senior management and other members of our management team as well as our senior scientists, software engineers and salespeople.
The loss of any member of our senior management team or our ability to attract and retain talent across the Company, including senior management, could adversely affect our business. We are highly dependent upon our senior management and other members of our management team as well as our senior scientists, and software engineers.
In the future, we may identify third-party intellectual property and technology we may need to license in order to engage in our business, including to develop or commercialize new technologies or services, and the growth of our business may depend in part on our ability to acquire, in-license or use this technology.
In the future, we may identify third-party intellectual property and technology we may need to license in order to engage in our business, including to develop or commercialize new drugs, technologies, or services, and the growth of our business may depend in part on our ability to acquire, in-license or use this technology.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States and Canada, and even where such protection is nominally available, judicial and governmental enforcement of such intellectual property rights may be lacking.
In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as those of the United States and Canada, and even where such protection is nominally available, judicial and governmental enforcement may be lacking.
In addition, we may receive in the future, correspondence from third parties referring to the relevance of such third parties’ intellectual property to our technology, our workflows or our advanced automated systems, and we are currently engaged in litigation with such third parties (i.e. Bruker and Schrader).
In addition, we may receive in the future, correspondence from third parties referring to the relevance of such third parties’ intellectual property to our technology, our workflows or our advanced automated systems, and we are currently engaged in litigation with such third parties (i.e., Schrader).
If a public health outbreak or pandemic occurs, particularly in regions where we or our strategic partners and suppliers do business, we could experience disruptions that could significantly impact our current and planned clinical trials, preclinical research and other business activities, including: • disruption to and delays in preclinical research activities due to extended closure or reduced capacity of lab facilities; • further delays or difficulties in enrolling patients in our ongoing and planned clinical trials; • patients discontinuing their treatment or follow-up visits; • further delays or difficulties in clinical site initiation, including limitations on access to sites, limitations to site initiation activities that can be carried out remotely, and limitations on the number of clinical site staff on site from time to time; • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by relevant governments, employers and others; • shortages, disruptions in supply, logistics or other activities related to the procurement of materials and other supplies, which could have a negative impact on our ability to conduct preclinical research, initiate or complete our clinical trials or commercialize our product candidates; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials; 46 • interruption of key business activities due to illness and/or quarantine of key individuals and delays associated with recruiting, hiring and training new temporary or permanent replacements for such key individuals, both internally and at our third-party service providers and strategic partners; • limitations in resources that would otherwise be focused on the conduct of our business or our current or planned clinical trials or preclinical research, including because of sickness, the desire to avoid contact with large groups of people, restrictions on travel, or prolonged stay-at-home or similar working arrangements; • delays in receiving approvals from regulatory authorities to initiate our planned clinical trials; • changes in regulations as part of a response to public health outbreaks or pandemics, which may require us to change the ways in which our clinical trials are conducted and incur unexpected costs, or require us to discontinue clinical trials altogether; • delays in necessary interactions with regulators and relevant health authorities, ethics committees and other important agencies and contractors due to limitations in employee resources or furlough of government or contractor personnel; • disruptions to our strategic partners’ operations, which could delay the development of our product candidates in certain geographical regions and thereby affect the timing of development and commercial milestone payments and royalties on potential future product sales we may receive; and • limitations on our ability to recruit any necessary preclinical research, clinical, regulatory and other professional staff on the timeframe required to support our research and development programs.
If a public health outbreak or pandemic occurs, particularly in regions where we or our partners and suppliers do business, we could experience disruptions that could significantly impact our current and planned clinical trials, preclinical research and other business activities, including: • disruption to and delays in preclinical research activities due to extended closure or reduced capacity of lab facilities; • delays or difficulties in enrolling patients in our ongoing and planned clinical trials; • patients discontinuing their treatment or follow-up visits; • delays or difficulties in clinical site initiation, including limitations on access to sites, limitations to site initiation activities that can be carried out remotely, and limitations on the number of clinical site staff on site from time to time; 45 • interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by relevant governments, employers and others; • shortages, disruptions in supply, logistics or other activities related to the procurement of materials and other supplies, which could have a negative impact on our ability to conduct preclinical research, initiate or complete our clinical trials or commercialize our drug candidates; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials; • interruption of key business activities due to illness and/or quarantine of key individuals and delays associated with recruiting, hiring, and training new temporary or permanent replacements for such key individuals, both internally and at our third-party service providers and partners; • limitations in resources that would otherwise be focused on the conduct of our business or our current or planned clinical trials or preclinical research, including because of sickness, the desire to avoid contact with large groups of people, restrictions on travel, or prolonged stay-at-home or similar working arrangements; • delays in receiving approvals from regulatory authorities to initiate our planned clinical trials; • changes in regulations as part of a response to public health outbreaks or pandemics, which may require us to change the ways in which our clinical trials are conducted and incur unexpected costs, or require us to discontinue clinical trials altogether; • delays in necessary interactions with regulators and relevant health authorities, ethics committees and other important agencies and contractors due to limitations in employee resources or furlough of government or contractor personnel; • disruptions to our partners’ operations, which could delay the development of our drug candidates in certain geographical regions and thereby affect the timing of development and commercial milestone payments and royalties on potential future drug sales we may receive; and • limitations on our ability to recruit any necessary preclinical research, clinical, regulatory, and other professional staff on the timeframe required to support our research and development programs.
Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors including the size and nature of the patient population, the proximity of subjects to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, ability to obtain and maintain patient consents, risk that enrolled subjects will drop out before completion, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.
Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors including the size and nature of the patient population, the proximity of subjects to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, ability to obtain and maintain patient consents, risk that enrolled subjects will drop out before completion, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved or developed for the indications we are investigating.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in a necessity to replace current third parties, resulting in the possibility of supply delays, clinical holds on our trials, sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business, financial condition, results of operations and growth prospects.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in a necessity to replace current third parties, resulting in the possibility of supply delays, clinical holds on our trials, sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of drug candidates or medicines, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business, financial condition, results of operations, and growth prospects.
An interruption in the availability of raw materials or our laboratory operations could occur if we encounter delays, quality issues or other difficulties in securing these consumables, equipment, reagents or other materials, and if we cannot then obtain an acceptable substitute.
An interruption in the availability of raw materials or our laboratory operations could occur if we encounter delays, quality issues or other difficulties in 56 securing these consumables, equipment, reagents or other materials, and if we cannot then obtain an acceptable substitute.
These requirements include submissions of safety and other post-approval information and reports, as well as continued compliance with cGMP and good clinical practice (“GCP”), for any clinical trials that we or our strategic partners conduct after approval.
These requirements include submissions of safety and other post-approval information and reports, as well as continued compliance with cGMP and good clinical practice (“GCP”), for any clinical trials that we or our partners conduct after approval.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our shares could decrease, which might cause our share price and trading volume to decline. 79 Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our shares could decrease, which might cause our share price and trading volume to decline. 77 Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect the Company’s current and projected business operations and its financial condition and results of operations.
However, the steps we have taken to protect our proprietary rights may not be adequate to enforce our rights as against such infringement, misappropriation or violation of our intellectual property. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.
However, the steps we have taken to protect our proprietary rights may not be adequate to enforce our rights against such infringement, misappropriation or violation of our intellectual property. We may not be able to detect unauthorized use of, or take appropriate steps to enforce, our intellectual property rights.
As part of our ongoing planned research and development activities, significant adverse changes to our plans due to internal and external factors out of our control (including general and industry economic conditions, prolonged decline in the market value of our common shares, and the probability of success of our internal and partner-initiated programs) would increase the likelihood that we would record an impairment charge to our goodwill and/or intangible assets, which could have an adverse non-cash accounting impact on our results of operations.
As part of our ongoing planned research and development activities, significant adverse changes to our plans due to internal and external factors out of our control (including general and industry economic conditions, prolonged decline in the market value of our common shares, and the probability of success of our internal and partner-led programs) would increase the likelihood that we would record an impairment charge to our goodwill and/or intangible assets, which could have an adverse non-cash accounting impact on our results of operations.
In the ordinary course of our business, we collect and store petabytes of sensitive data, including legally protected health information, personally identifiable information, intellectual property and proprietary business information owned or controlled by ourselves or our strategic partners.
In the ordinary course of our business, we collect and store petabytes of sensitive data, including legally protected health information, personally identifiable information, intellectual property and proprietary business information owned or controlled by ourselves or our partners.
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 69 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”).
If any such in-license is terminated, or if the licensed patents fail to provide the intended exclusivity, competitors or other third parties might have the freedom to market or develop technologies similar to ours.
If any such in-license is terminated, or if the licensed patents fail to provide the intended exclusivity, competitors or other third parties might have the freedom to market or 61 develop technologies similar to ours.
The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies. Attackers have used Artificial intelligence and machine learning to launch more automated, targeted and coordinated attacks against targets.
The techniques used by cyber criminals change frequently, may not be recognized until launched, and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations, or hostile foreign governments or agencies. Attackers have used artificial intelligence and machine learning to launch more automated, targeted, and coordinated attacks against companies.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with 42 third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product; • withdrawal of the product from the market or voluntary or mandatory product recalls; • fines, warning letters or holds on clinical trials; • refusal by the FDA, EMA, Health Canada or another applicable regulatory authority to approve pending applications or supplements to approved applications filed by us or our strategic partners, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; and • injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with a drug, including adverse events of unanticipated severity or frequency, or with third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the drug; • withdrawal of the drug from the market or voluntary or mandatory product recalls; • fines, warning letters or holds on clinical trials; • refusal by the FDA, EMA, Health Canada or another applicable regulatory authority to approve pending applications or supplements to approved applications filed by us or our partners, or suspension or revocation of drug license approvals; • product seizure or detention, or refusal to permit the import or export of products; and • injunctions or the imposition of civil or criminal penalties.
Even if we do prevail in any future litigation related to intellectual property rights, the cost and time requirements of the litigation could negatively impact our financial results. 70 Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Even if we do prevail in any future litigation related to intellectual property rights, the cost and time requirements of the litigation could negatively impact our financial results. 68 Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
In addition, failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and share price.
In addition, failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our strategy, financial performance, and share price.
Since our inception, we have dedicated a substantial portion of our resources on the development of our capabilities and the technology that we incorporate to further enhance our antibody discovery and development capabilities, and our internal pipeline.
Since our inception, we have dedicated a substantial portion of our resources on the development of our capabilities and the technology that we incorporate to further enhance our antibody discovery and development capabilities, and our internal 31 pipeline.
The FDA has also imposed consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed for companies that engaged in such prohibited activities. If we cannot successfully manage the promotion of our approved product candidates, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
The FDA has also imposed consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed for companies that engaged in such prohibited activities. If we cannot successfully manage the promotion of our approved drug candidates, we could become subject to significant liability, which would materially adversely affect our business and financial condition.
Material modifications in method of product candidate manufacturing or formulating, and price controls imposed by governments may adversely affect our future profitability. As product candidates are developed through preclinical to late-stage clinical trials, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered in an effort to optimize processes and results.
Material modifications in method of drug product manufacturing or formulating, and price controls imposed by governments may adversely affect our future profitability. As drug candidates are developed through preclinical to late-stage clinical trials, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered in an effort to optimize processes and results.
The ability of the relevant health authorities to review and clear or approve new product candidates can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the relevant health authority's ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the relevant health authority's ability to perform routine functions.
The ability of the relevant health authorities to review and clear or approve new drug candidates can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the relevant health authority's ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the relevant health authority's ability to perform routine functions.
Treasury Department’s Office of Foreign Assets Controls, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 48 U.S.C. § 201, the U.S.
Treasury Department’s Office of Foreign Assets Controls, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S.
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.
These could include, but may not be limited to, the following: • Delayed access to deposits or other financial assets or the loss of uninsured 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. 78 Item 1B.
We cannot guarantee that the relevant health authorities will view any of our product candidates as having adequate safety and efficacy profiles even if favorable results are observed in these clinical trials, and we may receive unexpected or unfavorable feedback from the relevant health authorities regarding satisfaction of safety, purity and potency (including clinical efficacy), amongst other factors.
We cannot guarantee that the relevant health authorities will view any of our drug candidates as having adequate safety and efficacy profiles even if favorable results are observed in these clinical trials, and we may receive unexpected or unfavorable feedback from the relevant health authorities regarding satisfaction of safety, purity, and potency (including clinical efficacy), amongst other factors.
Given the nature of our relationships with our partners, we do not control the progression, clinical development, regulatory strategy or eventual commercialization, if approved, of these therapeutic candidates. As a result, our future success and the potential to receive milestones and royalties are entirely dependent on our partners’ efforts over which we have no control.
Given the nature of our relationships with our partners, we do not control the progression, clinical development, regulatory strategy or eventual commercialization, if approved, of these drug candidates. As a result, our future success and the potential to receive milestones and royalties are entirely dependent on our partners’ efforts over which we have no control.
In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to a variety of factors, including, but not limited to, changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols and the rate of dropout among clinical trial participants.
In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same drug candidate due to a variety of factors, including, but not limited to, changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the clinical trial protocols, and the rate of dropout among clinical trial participants.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate, if approved, is prescribed or used.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could affect the prices we may obtain for any of our drug candidates for which we may obtain regulatory approval or the frequency with which any such drug candidate, if approved, is prescribed or used.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs 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.
Biggest changeAs part of our ERM process, our CLO and other senior management positions, as appropriate, report identified cybersecurity risks 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.
The 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.
The CLO oversees the Company’s cybersecurity risk management through regular meetings with the IT team to discuss, as appropriate, cybersecurity risks and prevention measures. Cybersecurity incidents are escalated based on defined incident severity criteria to management.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeThe Dayhu and Beedie spaces are under lease which expire starting in 2037 and 2045, respectively, with further renewal options. Once complete, we intend to assign or fully sublease the office and laboratory space constructed through the Beedie joint venture.
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.
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 79 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 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.
Further, our 130,000 square feet clinical manufacturing (GMP) facility built on land we purchased in 2022 in Vancouver, was completed in late 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.
Added
In December 2025, we obtained financing secured against this laboratory and office space as further described in Note 8 of our annual consolidated financial statements for the year ended December 31, 2025. Through our Beedie joint venture, we are nearing the completion of construction of 220,000 square feet of additional lab and office space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are currently involved in the following litigation matters: Patent Infringement Litigation In July 2020, we filed a complaint against Bruker Cellular Analysis (on October 3, 2023, PhenomeX, the successor to Berkeley Lights was acquired by Bruker Cellular Analysis), in the United States District Court for the District of Delaware, alleging that Bruker Cellular Analysis infringed and continues to infringe, directly and indirectly, the following patents exclusively licensed by the Company, including U.S.
Biggest changeWe are currently involved in the following litigation matters: Patent Infringement Litigation In July 2020, we filed a complaint against Bruker Cellular Analysis (on October 3, 2023, PhenomeX, the successor to Berkeley Lights was acquired by Bruker Cellular Analysis), in the United States District Court for the District of Delaware, alleging that Bruker Cellular Analysis infringed and continued to infringe, directly and indirectly certain patents.
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.
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 has 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. 83 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 in all respects and intends to defend itself appropriately. Item 4. Mine Safety Disclosures. None. 80 PART II
Removed
Patent Nos. 10,107,812; 10,274,494; 10,466,241; 10,578,618; 10,697,962; 10,087,408; 10,421,936 and 10,704,018, by making, using, offering for sale, selling and/or importing Bruker Cellular Analysis’ Beacon Optofluidic System.
Added
In December 2025, the parties settled the case, resolving the patent infringement litigation.
Removed
In August 2020, we filed an additional related complaint against Bruker Cellular Analysis in the United States District Court for the District of Delaware, alleging that Bruker Cellular Analysis infringed and continues to infringe, directly and indirectly, U.S. Patent Nos. 10,718,768; 10,738,270; 10,746,737 and 10,753,933.
Added
As part of the settlement, Bruker Cellular Analysis will receive a license under the patents and Bruker Cellular Analysis will pay AbCellera an upfront payment as well as future royalty payments on sales of Bruker Cellular Analysis’ Beacon Optofluidic platform products worldwide through the life of the licensed patents.
Removed
In September 2020, we filed another complaint against Bruker Cellular Analysis in the United States District Court for the District of Delaware, alleging that Bruker Cellular Analysis infringed and continues to infringe, directly and indirectly, U.S. Patent Nos. 10,775,376; 10,775,377 and 10,775,378.
Removed
On December 3, 2020, the judge assigned to these three lawsuits ordered that they be transferred to the U.S. District Court for the Northern District of California.
Removed
In these lawsuits, we are seeking, among other things, a judgment of infringement, a permanent injunction and damages (including lost profits, a reasonable royalty, reasonable costs and attorney’s fees and treble damages for willful infringement). In February 2021, these lawsuits were consolidated and assigned to the Honorable Judge Lucy Koh.
Removed
In February 2021, Bruker Cellular Analysis filed a motion seeking leave to amend its counterclaims to add the allegations of unfair competition (as plead in the case described below) against AbCellera only.
Removed
In July 2021, the Court allowed Bruker Cellular Analysis to amend its counterclaims to add the unfair competition claims subject to our right to seek dismissal with prejudice should the counterclaims not overcome objections previously presented by us to the court. The Company is continuing to oppose the unfounded counterclaim and we intend to seek dismissal with prejudice.
Removed
In March 2021, the court set this matter down for a jury trial with a December 12, 2022 start date. In July 2021, Bruker Cellular Analysis filed a Petition for inter partes review of U.S. Patent No. 10,087,408 that we exclusively license from the University of British Columbia.
Removed
In July 2021, Bruker Cellular Analysis filed a second Petition for inter partes review of U.S. Patent No. 10,421,936 that we exclusively license from the University of British Columbia. In August 2021, Bruker Cellular Analysis filed a third Petition for inter partes review of U.S. Patent No. 10,738,270 that we exclusively license from the University of British Columbia.
Removed
In August 2021, the court stayed the patent litigation against Bruker Cellular Analysis in view of the Petitions for inter partes Review filed by Bruker Cellular Analysis. In January 2022, the PTAB denied one petition and instituted one petition. In February 2022, the PTAB denied the final petition. Trial on the instituted petition occurred in November 2022.
Removed
In January 2023, the PTAB issued its Final Written Decision with respect to our U.S. Patent No. 10,087,408 rejecting all of Bruker Cellular Analysis’ grounds of unpatentability and determining that none of the challenged claims are unpatentable.
Removed
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.
Removed
No trial date has been set. The Company maintains its belief in the merits of this infringement matter and will continue to enforce its intellectual property portfolio worldwide. On July 26, 2023, Bruker Cellular Analysis filed a Notice of Appeal in IPR2021-1249 matter.
Removed
The 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAn 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.
Biggest changeAn investment of $100 is assumed to have been made in our common shares and each index on December 31, 2020, and its relative performance is tracked through December 31, 2025. Pursuant to applicable SEC rules, all values assume reinvestment of the full amount of all dividends; however, no dividends have been declared on our common shares.
We currently intend to retain any future earnings to fund the development and expansion of our business, and, therefore, we do not anticipate paying cash dividends on our share capital in the foreseeable future.
We intend to retain any future earnings to fund the development and expansion of our business and therefore do not anticipate paying cash dividends on our share capital in the foreseeable future.
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.
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. 81 Recent Sales of Unregistered Equity Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
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
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. 82
Holders 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.
Holders of Common Shares As of February 19, 2026, the latest practicable date prior to the date of this Annual Report on Form 10-K, there were approximately 88 holders of record of our common shares. Dividend Policy We have not declared nor paid any cash dividends on our share capital.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares have been listed on The Nasdaq Global Select Market under the symbol “ABCL” since December 11, 2020. Prior to that date, there was no public trading market for our common shares.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common shares are listed on The Nasdaq Global Select Market under the symbol “ABCL”.
Removed
Pursuant to applicable SEC rules, all values assume reinvestment of the full amount of all dividends, however no dividends have been declared on our common share to date.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe increase in cash provided by investing activities in 2024 was primarily attributable to absence of a specific one-time investment that occurred in the first quarter of 2023, receipt of grant funding, and proceeds from marketable securities in the year ended December 31, 2024. 96 Financing Activities For the year ended December 31, 2023 , net cash provided by financing activities was $10.4 million and included $11.6 million in proceeds from other long-term liabilities and the exercise of options for common shares, partially offset by a contingent consideration payment.
Biggest changeNet cash provided by financing activities was $14.1 million for the year ended December 31, 2025 and included primarily proceeds from other long-term liabilities, partially offset by a contingent consideration payment made in the second quarter of 2025.
Purchase and Other Obligations In the normal course of business, we enter into contracts with third parties for research and development supplies and other services. These contracts generally do not contain minimum purchase commitments and are cancellable contracts.
Purchase and Other Obligations In the normal course of business, we enter into contracts with third parties for research and development supplies and services. These contracts generally do not contain minimum purchase commitments and are cancellable contracts.
In 2024, a full impairment charge of the carrying value associated with our IPR&D assets was recognized due to our ongoing internal program prioritization, as further described in the notes to the consolidated financial statements. 98 Goodwill is evaluated for impairment on an annual basis as of October 1, or more frequently if an indicator of impairment is present.
In 2024, a full impairment charge of the carrying value associated with our IPR&D assets was recognized due to our ongoing internal program prioritization, as further described in the notes to the consolidated financial statements. Goodwill is evaluated for impairment on an annual basis as of October 1, or more frequently if an indicator of impairment is present.
Actual results could therefore differ materially from these estimates under different assumptions or conditions. 97 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.
Actual results could therefore differ materially from these estimates under different assumptions or conditions. 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 and estimates to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.
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.
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 drugs and are committed to improving discovery and development.
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.
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 loss and comprehensive 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.
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.
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 96 fair value.
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.
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.
The Company may enter into certain agreements with strategic partners in the ordinary course of operations that may include contractual milestone payments related to the achievement of pre-specified research, development, regulatory and commercialization events and indemnification provisions, which are common in such agreements.
The Company may enter into certain agreements with partners in the ordinary course of operations that may include contractual milestone payments related to the achievement of pre-specified research, development, regulatory, and commercialization events and indemnification provisions, which are common in such agreements.
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.
We base our estimates on historical experience and on various other factors that we believe are reasonable 95 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.
Pursuant to the agreements, the Company may be obligated to make research and development and regulatory milestone payments upon the occurrence of certain events and upon receipt of royalty payments in the low single-digits to mid-twenties based on certain net sales targets.
Pursuant to the agreements, the Company may be obligated to make research and development and regulatory milestone payments upon the occurrence of certain events and upon receipt of royalty payments in the low single-digits to mid-twenties percent based on certain net sales targets.
We intend to continue to devote resources to continue to improve our discovery differentiation which will impact our financial performance. Key Business Metrics We regularly review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
We intend to continue to devote resources to continue to improve our discovery differentiation which will impact our financial performance. Business Metrics We regularly review the following business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Single target Neuroscience March 11, 2024 Undisclosed Multi-target, multi-year Undisclosed December 28, 2023 Undisclosed biotechnology company Multi-target, multi-year Undisclosed December 20, 2023 * Undisclosed biotechnology company Multi-target, multi-year Undisclosed December 4, 2023 * Prelude Therapeutics Up to 5 targets, multi-year Oncology November 1, 2023 Regeneron Pharmaceuticals, Inc.
Single target Neuroscience March 11, 2024 Undisclosed Multi-target, multi-year Undisclosed December 28, 2023 88 Undisclosed biotechnology company Multi-target, multi-year Undisclosed December 20, 2023 * Undisclosed biotechnology company Multi-target, multi-year Undisclosed December 4, 2023 * Prelude Therapeutics Up to 5 targets, multi-year Oncology November 1, 2023 Regeneron Pharmaceuticals, Inc.
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.
Licensing and Royalty 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.
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.
Based on our current business plan, we believe that our available liquidity from existing cash, cash equivalents, 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 for additional external funding over at least the next 36 months following the date of this report.
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 aim to build a competitive advantage in bringing antibody drugs 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.
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.
Amortization expense and impairment includes the amortization of intangible 90 assets over their respective useful lives and impairment of 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 equivalents, and marketable securities balances. Grants and incentives.
Further to the TetraGenetics intangible asset impairment discussion above, the TetraGenetics and Trianni contingent consideration was adjusted to reflect the expected value due to the impact from the Company's ongoing internal program prioritization and expected achievement of a milestone required for an earn-out payment associated with a specific license.
Further to the TetraGenetics intangible asset impairment discussion above, in 2024, the TetraGenetics and Trianni contingent consideration was adjusted to reflect the expected value due to the impact from the Company's ongoing internal program prioritization and expected achievement of a milestone required for an earn-out payment associated with a specific license.
General and administrative expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation costs for employees in our executive, accounting and finance, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses.
Sales, general, and administrative expenses. Sales, general, and administrative expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation costs for employees in our executive, accounting and finance, office administration, legal, marketing, and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses.
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.
The remaining decrease was attributable to a $16.5 million recognized gain on the disposal of a non-marketable security in 2024, 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.
Under this agreement, up to CAD $175.6 million ($125.6 million) was committed by the Government of Canada to support research and development efforts related to the discovery of antibodies to treat COVID-19, and to build technology and manufacturing infrastructure for antibody therapeutics against future pandemic threats.
Under this agreement, up to CAD $175.6 million ($125.6 million) was committed by the Government of Canada to support research and development efforts related to the discovery of antibodies to treat COVID-19, and to build technology and manufacturing infrastructure for antibody drugs against future pandemic threats.
Where the date of such application approval is not known to us, the date of the first public announcement of a clinical trial will be used for the purpose of this metric. We view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long term.
Where the date of such application approval is not known to us, the date of the first public announcement of a clinical trial will be used for the purpose of this metric. We view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long-term. Discussion of Future Changes.
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
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. 97
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.
The commitment amounts are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.
Results of Operations The following information includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2024.
Results of Operations The following information includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2025.
Grants and incentives include cost recovery on activities that qualified for approved projects supported by grant funding or tax credits. Grants primarily include the benefit from programs administered by the Canadian federal and provincial governments.
Grants and incentives include cost recovery on activities that qualified for approved projects supported by grant funding or tax credits. Grants primarily provide benefits from programs administered by the Canadian federal and provincial governments.
The Company also concluded that there were no impairment indicators related to goodwill during the remainder of 2024 . The nature of the biotechnology business is high-risk and requires that we invest significantly in research and development.
The Company concluded that there were no impairment indicators related to goodwill during the remainder of 2025. The nature of the biotechnology business is high-risk and requires that we invest significantly in research and development.
The Company recorded a non-cash fair value gain of $47.3 million related to the contingent consideration adjustments.
The Company recorded a non-cash fair value gain of $47.3 million related to the contingent consideration adjustments in 2024.
A comparison of the years ended December 31, 2022 and 2023, can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 20, 2024 and is incorporated herein by reference.
A comparison of the years ended December 31, 2023 and 2024, can be found in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025 and is incorporated herein by reference.
We believe that our internal programs may result in drug candidates of interest to other drug developers with capabilities complimentary to our own. Where these capabilities can be expected to enhance the value of our drug candidate, we may seek to out-license. Successful out-licensing agreements could generate substantial up-front payments in addition to later milestone payments and royalties.
We believe that our internal programs may result in drug candidates of interest to other drug developers with capabilities complementary to our own. Where these capabilities can be expected to enhance the value of our drug candidate, we may seek to out-license. Successful out-licensing agreements could generate substantial upfront payments in addition to later milestone payments and royalties.
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.
As our discovery and development capabilities 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 can pursue internally.
Net cash provided by financing activities was $12.8 million for the year ended December 31, 2024 primarily due to proceeds from other long-term liabilities and the exercise of stock options.
Financing Activities For the year ended December 31, 2024 , net cash provided by financing activities was $12.8 million and was primarily due to proceeds from other long-term liabilities.
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 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 antibody drug development faster and more efficient. We are leveraging our platform and to develop internal programs and advance a pipeline of AbCellera-led programs with first-in-class potential.
Financial Highlights The following table summarizes our key operating results for the years ended December 31, 2022, 2023, and 2024.
Financial Highlights The following table summarizes our key operating results for the years ended December 31, 2024, and 2025.
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.
The programs align with the Company's strategy of building value, both through partnerships, and through internal discovery and development of potential first-in-class antibody drugs. We have started a cumulative total 104 partner-initiated programs with downstream participation and have seen a cumulative total 19 molecules advanced into the clinic, as illustrated by the following chart.
Other than the amounts included in the above table, these contingent future payments are not included in the table above as they entail uncertainties in relation to the amount and timing of such payments as they are contingent upon future events, such as achieving certain commercial milestones or generating future product sales.
These future payments are not included above as they entail uncertainties in relation to the amount and timing of such payments as they are contingent upon future events, such as achieving certain commercial milestones or generating future drug sales.
As a result, we believe our business and our future results of operations will be highly reliant on the degree to which our partners successfully develop and commercialize the antibodies that we discover based on contracts with our partners.
As a result, we believe our business and our future results of operations will be highly impacted by the degree to which our partners successfully develop and commercialize the antibodies that we have discovered based on contracts with our partners.
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.
The decrease is primarily attributable to the 2024 recognition of 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 and 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 2021 acquisition of TetraGenetics.
From inception to December 31, 2024, the Company has incurred CAD $67.3 million ($49.4 million) and CAD $37.5 million ($27.8 million) in expenditures with respect of the funding from the Government of Canada and the Government of British Columbia, respectively. Further information with respect to these contributions are outlined in Note 12 to the consolidated financial statements.
From inception to December 31, 2025, the Company has incurred CAD $121.5 million ($88.5 million) and CAD $37.5 million ($27.8 million) in expenditures with respect of the funding from the Government of Canada and the Government of British Columbia, respectively. Further information with respect to these contributions are outlined in Note 12 to the consolidated financial statements.
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, the Company first performs a qualitative assessment to determine if it is more likely than not that the carrying amount of the Company’s indefinite-lived intangible assets exceeds their fair value. If it is, a quantitative assessment is required.
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.
We believe the following metrics are useful for understanding our business to date. 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.
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.
Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our partner or licensee occur. The sales are based on sales data reported by our partners and licensees.
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 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.
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.
These payments are not included in the total above as the amount and timing of such payments are not known as of December 31, 2025.
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.
With limited historical public trading data since our IPO, we determine the volatility for awards granted with reference to an analysis of publicly reported data for a group of preclinical, and clinical-stage biotechnology companies that issued options with substantially similar terms.
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.
Cumulative Metrics December 31, 2024 December 31, 2025 Change % Partner-initiated program starts with downstreams 96 104 8 % Molecules in the clinic 16 19 19 % 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.
With the completion of these large platform investments, we expect a significant reduction in investing cash flows, shifting our capital allocation from building capabilities to using them as we execute our strategy of building on our pipeline of first-in-class and best-in-class medicines.
With the completion of these large platform investments, we expect a reduction in investing cash outflows, shifting our capital allocation from building capabilities to using them as we execute our strategy of building on our internal pipeline.
Critical Accounting Policies and Estimates We have prepared our consolidated financial statements in accordance with U.S. GAAP. Our preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and judgments on an ongoing basis.
GAAP. Our preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and judgments on an ongoing basis.
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.
We plan on investing significant resources in the preclinical and clinical development of internal programs that 85 will impact our financial results. The investments in each program are undertaken at risk and may ultimately not yield a return. • Successfully designing and executing clinical trials.
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.
These expenses are exclusive of depreciation, amortization, and impairment. Research and development activities consist of investments made in co-development and internal programs, discovery research for partners, clinical trial costs, 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 drug candidate-by-drug candidate basis.
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.
We expect that our overall revenue will fluctuate from period to period due to the scope and timing of activities with current and potential future partners, 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 may generate royalty revenue.
The decrease was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.
The amount was primarily driven by research and development expenditures eligible for reimbursement under government programs for the period.
The increase in cash flows used in operations was attributable to research and development activity, program execution, and investment in partnered and internal programs in addition to working capital movements including higher levels of accounts and grants receivable in the year ended December 31, 2024.
The increase in cash flows used in operations was attributable to research and development activity, program execution, and investment in partnered and internal programs in addition to working capital movements including a reduction in government contributions received in the year ended December 31, 2025.
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.
Cash Flows The following table summarizes our cash flows for the periods presented: December 31, 2024 2025 Net cash provided by (used in): Operating activities $ (108,556) $ (131,295) Investing activities 121,409 87,750 Financing activities 12,769 14,082 Effect of exchange rate fluctuations on cash and cash equivalents (2,617) 1,097 Net increase (decrease) in cash and cash equivalents $ 23,005 $ (28,366) 94 Operating Activities Net cash used in operating activities increased from $108.6 million in the year ended December 31, 2024, to $131.3 million in the year ended December 31, 2025.
Key Factors Affecting Our Results of Operations and Future Performance We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business.
With Phase 2 enrollment underway, we anticipate top-line clinical results for both phases in Q3 2026. Key Factors Affecting Our Results of Operations and Future Performance We believe that our financial performance has been, and will continue to be, primarily driven by the factors described below, each of which presents growth opportunities for our business.
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.
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. Goodwill and Intangible Assets From previous acquisitions, Goodwill, License, Technology and In-Process Research and Development Intangible (“IPR&D”) intangible assets were recognized.
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.
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, 2023, 2024, and 2025.
Oncology Trianni license NBL-028 Phase 1 NovaRock Biotherapeutics Inc. Oncology Trianni license GIGA-564 Phase 1 GigaGen, Inc. Oncology Trianni license Undisclosed Phase 1* Undisclosed Undisclosed Trianni license *Expect no further progress/no ultimate approval.
Oncology Trianni license NBL-020 Phase 1 (paused) NovaRock Biotherapeutics Inc. Oncology Trianni license NBL-028 Phase 1 (paused) NovaRock Biotherapeutics Inc. Oncology Trianni license Undisclosed Phase 1 2 Undisclosed Undisclosed Trianni license 1 If partner-led 2 Expect no further progress/no ultimate approval.
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.
We seek to expand our relationships with existing partners also as a basis for potentially out-licensing some of our internal programs. 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.
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.
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. We view this metric as an indicator of our partners' project selection and initiation and the resulting potential for near-term payments.
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.
Please also see the section titled “Cautionary Note Regarding Forward-Looking Statements.” Overview AbCellera is a clinical-stage biotechnology company focused on discovering and developing antibody-based medicines for indications with high unmet medical need.
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.
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; • advance our internal programs in preclinical and clinical development; • 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.
Investing Activities Net cash associated with investing activities changed from $221.1 million used in investing activities in the year ended December 31, 2023, to $121.4 million provided by investing activities in the year ended December 31, 2024.
Investing Activities Net cash provided by investing activities decreased from $121.4 million in the year ended December 31, 2024, to $87.8 million in the year ended December 31, 2025.
Molecules in the clinic represent the count of unique molecules for which an Investigational New Drug, or IND, New Animal Drug, or equivalent under other regulatory regimes, application has reached "open" status or has otherwise been approved based on an antibody that was discovered either by us or by a partner using licensed AbCellera technology.
Cumulatively, partner-initiated program starts with downstream participation indicate our total opportunities to earn downstream revenue from milestone fees and royalties (or royalty equivalents) in the mid- to long-term. 86 Molecules in the clinic represent the count of unique molecules for which an Investigational New Drug, or IND, New Animal Drug, or equivalent under other regulatory regimes, application has reached “open” status or has otherwise been approved based on an antibody that was discovered either by us or by a partner using licensed AbCellera technology.
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.
Animal Health Partner-led AB-2100 Phase 1/2 Arsenal Bio Oncology Trianni license AB-3028 IND authorized Arsenal Bio Oncology Trianni license Undisclosed Phase 1/2 Undisclosed Oncology Trianni license GIGA-564 Phase 1 GigaGen, Inc. Oncology Trianni license NBL-012 Phase 1 (paused) NovaRock Biotherapeutics Inc. Dermatology, Gastrointestinal, Immunology Trianni license NBL-015/FL-301 Phase 1 (paused) NovaRock Biotherapeutics Inc.
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.
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.
All 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.
All figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data: 84 Twelve Months Ended December 31, Financial Performance 2024 2025 Revenues: Research fees $ 26,284 $ 27,208 Milestone payments 1,500 1,000 Licensing and royalty revenue 1,049 46,920 Total revenue 28,833 75,128 Operating expenses: Research and development (1) 167,259 186,829 Sales, general, and administrative (1) 85,490 83,231 Depreciation, amortization, and impairment 90,850 22,171 Total operating expenses 343,599 292,231 Loss from operations (314,766) (217,103) Total other income (114,371) (39,508) Loss before income tax (200,395) (177,595) Net loss (162,857) (146,412) Net loss per share Basic $ (0.55) $ (0.49) Diluted $ (0.55) $ (0.49) Operating expenses include stock-based compensation: Research and development expenses 30,779 30,147 Sales, general, and administrative expenses 36,802 25,645 Financial Position December 31, 2024 December 31, 2025 Cash and cash equivalents $ 156,325 $ 128,513 Marketable securities 469,289 405,313 Total cash, cash equivalents, and marketable securities 625,614 533,826 Total assets 1,360,553 1,356,950 Total shareholders' equity 1,056,084 966,904 (1) Exclusive of depreciation, amortization, and impairment.
Income Tax Recovery December 31, Change 2023 2024 Amount % Income tax recovery $ (27,631) $ (37,538) $ (9,907) 36% Income tax recovery increased by $9.9 million, or 36%, from the year ended December 31, 2023 compared to the year ended December 31, 2024.
Income Tax Recovery December 31, Change 2024 2025 Amount % Income tax recovery $ (37,538) $ (31,183) $ 6,355 (17)% Income tax recovery decreased by $6.4 million, or (17)%, from the year ended December 31, 2024 compared to the year ended December 31, 2025.
As our partners continue to advance development of the antibodies that we have discovered, we expect to start receiving additional milestone payments and royalties if any partners commence commercial sales of such antibodies. • Rate and timing of selecting and initiating discovery projects by our partners.
As our partners continue to advance development of the antibodies that we have discovered, we expect to start receiving additional milestone payments and royalties if any partners commence commercial sales of such antibodies. • Engaging with partners. Our potential to grow revenue, in both the near and long-term, is dependent on successfully engaging with partners.
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.
Depreciation, Amortization, and Impairment December 31, Change 2024 2025 Amount % Depreciation, amortization, and impairment $ 90,850 $ 22,171 $ (68,679) (76)% Depreciation, amortization, and impairment expenses decreased by $68.7 million, or (76)%, from the year ended December 31, 2024, compared to the year ended December 31, 2025.
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 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 will continue to use our significant available liquidity from our cash, cash equivalents, and marketable securities to fund and invest in research and development efforts towards expanding our capabilities and expertise, execute and build our internal pipeline, and the expansion of our corporate headquarters, clinical manufacturing facility and related infrastructure, including optimization of long-term office-lease arrangements.
We will continue to use our significant available liquidity from our cash, cash equivalents, and marketable securities to fund and invest in research and development efforts towards expanding our capabilities and expertise, grow and advance our internal pipeline.
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.
As of October 1, 2025 , the Company 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.
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.
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.
The decrease of $135.0 million since December 31, 2023, was from a combination of cash flow used in operations and investing activities due to our continued research and development activity, investments in partnered and internal programs, in our internal pipeline, and in our corporate headquarters and GMP facility under construction, offset by government contributions received in the year ended December 31, 2024.
The decrease of $91.8 million since December 31, 2024, was from a combination of cash flow used in operations due to our continued research and development activity for internal programs in discovery, preclinical, and clinical development as well as for partnered 93 programs, and investments in our corporate headquarters and clinical manufacturing facility, partially offset by government contributions, distributions received through our Dayhu joint venture, and repayment of the loan we previously made to our JV partner Dayhu in the year ended December 31, 2025.
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.
Operating Expenses Research and Development December 31, Change 2024 2025 Amount % Research and development $ 167,259 $ 186,829 $ 19,570 12% Research and development expenses increased by $19.6 million, or 12%, from the year ended December 31, 2024, to the year ended December 31, 2025.
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.
In addition, we plan to continue to selectively invest in our discovery and development capabilities, including in manufacturing and continue research and development on our pipeline of internal programs. As a result, we expect our research and development expenses to continue to vary from period to period as we execute our strategy to build our pipeline of first-in-class drug candidates.
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.
We expect to receive future royalties under the agreement, but the amount and timing is unpredictable. Operating Expenses Research and development expenses. 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 discovery, preclinical and clinical development, and other research programs.
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.
See Note 8 of our consolidated financial statements for further details on the distribution. We intend to continue to significantly invest in our business, and as a result may continue to incur operating losses in future periods.
Undisclosed Undisclosed February 2, 2016 * Effective date of agreement Components of Results of Operations Revenue Our revenue is comprised of partnership research fees, licensing revenue, development milestones, and royalty payments from commercial products.
Undisclosed Undisclosed February 2, 2016 * Effective date of agreement 89 Components of Results of Operations Revenue Our revenue comprises partnership research fees, development milestone payments, and licensing and royalty revenue. Research fees consist of technology access fees, which are generally generated upon execution of our partnership agreements, and discovery research fees.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed10 unchanged
Biggest changeFinancial 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
Biggest changeFinancial 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.
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.
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 U.S., 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.
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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk As of December 31, 2025, we had cash and cash equivalents of $128.5 million , restricted cash of $26.7 million , and marketable securities of $405.3 million , a majority of which was held in high-credit-quality, liquid, held-for-trading marketable securities, term deposits, and bank accounts.
We are further exposed to the risk that the fair value of the contingent consideration payable, and operating lease liability will vary as a result of changes in market interest rates.
We are further exposed to the risk that our operating lease liability will vary as a result of changes in market interest rates.

Other ABCL 10-K year-over-year comparisons