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ABCL Stock Surges 121% in 3 Months: Here's What You Need to Know
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Key Takeaways
ABCL635 delivered positive phase II data, cutting hot flash frequency 83% from baseline after one dose.
AbCellera secured major Vertex and Jazz deals, strengthening its TCE platform and adding upfront payments.
ABCL had more than $675M in liquidity & raised another $200M through a public offering.
AbCellera Biologics (ABCL - Free Report) has delivered a sharp rally over the past three months, with the stock soaring 121% compared with the industry’s 6.6% growth. The move has been driven primarily by a combination of strong clinical progress for its pipeline candidate ABCL635, new partnership deals, strong financial stability and improved investor confidence in its antibody-discovery platform.
Image Source: Zacks Investment Research
Top-Line Data on ABCL635 Emerges as Key Catalyst
The biggest catalyst for the stock rise was the announcement of positive top-line data in August from the phase II clinical study evaluating ABCL635, its lead pipeline asset. It is an investigational neurokinin 3 receptor antagonist antibody being developed by AbCellera for the subcutaneous treatment of moderate-to-severe vasomotor symptoms (VMSM-S) associated with menopause.
The study met its primary endpoints as ABCL635 significantly reduced the frequency and severity of VMSM-S (hot flashes) in postmenopausal women after a single dose. At week four, patients receiving ABCL635 achieved an 83% reduction in the frequency of hot flashes from baseline versus 33% with placebo. The mean placebo-adjusted treatment difference was 50%, with a statistical significance of P<0.001. The treatment significantly reduced symptom severity and improved sleep and patients' overall perception of improvement.
The August results were important because investors had been waiting for the phase II readout. In May, AbCellera reported positive phase I data supporting the potential for once-monthly subcutaneous dosing. Therefore, positive phase II data provided a significant clinical validation of the program rather than simply representing an early-stage laboratory development. Momentum continued into September as AbCellera announced that it will present additional phase II data at a conference in October.
Investor sentiment was strengthened in late July, when AbCellera announced a collaboration with Vertex Pharmaceuticals (VRTX - Free Report) to discover multi-specific T-cell engagers (TCEs) for autoimmune diseases and other conditions. AbCellera is entitled to receive $28 million in upfront payments and became eligible for additional preclinical, development, regulatory and commercial milestones, as well as tiered royalties on potential sales. Vertex will fund research and development under the agreement. The deal expanded AbCellera's TCE platform beyond oncology into autoimmune diseases.
The Vertex deal followed the agreement with Jazz Pharmaceuticals (JAZZ - Free Report) in mid-June to discover and develop next-generation TCEs for multiple gastrointestinal cancers and other solid tumors.
Under the agreement, AbCellera received a $56-million upfront payment for the first two programs and could receive an additional $28 million when a third program begins. Each program could generate up to $792 million in option fees and development, regulatory, and commercial milestones, in addition to tiered royalties on sales.
The deal gave investors additional evidence that AbCellera's antibody-discovery and TCE technology can attract large pharmaceutical partners and generate non-dilutive funding.
AbCellera's business development activity also improved its financial position.
At the end of the second quarter, the company had more than $565 million in cash and marketable securities, plus $110 million in available non-dilutive government funding, for total available liquidity of more than $675 million. The Jazz and Vertex collaborations are also expected to provide more than $100 million in upfront cash commitments.
In August, the company strengthened its balance sheet through an oversubscribed $200-million public offering. Although the share issuance creates dilution, the proceeds are intended to fund continued development of ABCL635 and AbCellera's broader pipeline.
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Image: Bigstock
ABCL Stock Surges 121% in 3 Months: Here's What You Need to Know
Key Takeaways
AbCellera Biologics (ABCL - Free Report) has delivered a sharp rally over the past three months, with the stock soaring 121% compared with the industry’s 6.6% growth. The move has been driven primarily by a combination of strong clinical progress for its pipeline candidate ABCL635, new partnership deals, strong financial stability and improved investor confidence in its antibody-discovery platform.
Image Source: Zacks Investment Research
Top-Line Data on ABCL635 Emerges as Key Catalyst
The biggest catalyst for the stock rise was the announcement of positive top-line data in August from the phase II clinical study evaluating ABCL635, its lead pipeline asset. It is an investigational neurokinin 3 receptor antagonist antibody being developed by AbCellera for the subcutaneous treatment of moderate-to-severe vasomotor symptoms (VMSM-S) associated with menopause.
The study met its primary endpoints as ABCL635 significantly reduced the frequency and severity of VMSM-S (hot flashes) in postmenopausal women after a single dose. At week four, patients receiving ABCL635 achieved an 83% reduction in the frequency of hot flashes from baseline versus 33% with placebo. The mean placebo-adjusted treatment difference was 50%, with a statistical significance of P<0.001. The treatment significantly reduced symptom severity and improved sleep and patients' overall perception of improvement.
The August results were important because investors had been waiting for the phase II readout. In May, AbCellera reported positive phase I data supporting the potential for once-monthly subcutaneous dosing. Therefore, positive phase II data provided a significant clinical validation of the program rather than simply representing an early-stage laboratory development. Momentum continued into September as AbCellera announced that it will present additional phase II data at a conference in October.
Partnership Deals Boost ABCL’s Platform Validation
Investor sentiment was strengthened in late July, when AbCellera announced a collaboration with Vertex Pharmaceuticals (VRTX - Free Report) to discover multi-specific T-cell engagers (TCEs) for autoimmune diseases and other conditions. AbCellera is entitled to receive $28 million in upfront payments and became eligible for additional preclinical, development, regulatory and commercial milestones, as well as tiered royalties on potential sales. Vertex will fund research and development under the agreement. The deal expanded AbCellera's TCE platform beyond oncology into autoimmune diseases.
The Vertex deal followed the agreement with Jazz Pharmaceuticals (JAZZ - Free Report) in mid-June to discover and develop next-generation TCEs for multiple gastrointestinal cancers and other solid tumors.
Under the agreement, AbCellera received a $56-million upfront payment for the first two programs and could receive an additional $28 million when a third program begins. Each program could generate up to $792 million in option fees and development, regulatory, and commercial milestones, in addition to tiered royalties on sales.
The deal gave investors additional evidence that AbCellera's antibody-discovery and TCE technology can attract large pharmaceutical partners and generate non-dilutive funding.
AbCellera Biologics Inc. Price and Consensus
AbCellera Biologics Inc. price-consensus-chart | AbCellera Biologics Inc. Quote
Stronger Financial Position
AbCellera's business development activity also improved its financial position.
At the end of the second quarter, the company had more than $565 million in cash and marketable securities, plus $110 million in available non-dilutive government funding, for total available liquidity of more than $675 million. The Jazz and Vertex collaborations are also expected to provide more than $100 million in upfront cash commitments.
In August, the company strengthened its balance sheet through an oversubscribed $200-million public offering. Although the share issuance creates dilution, the proceeds are intended to fund continued development of ABCL635 and AbCellera's broader pipeline.
ABCL’s Zacks Rank
AbCellera currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.