So we're going to go ahead and get started. I'm Stephen Willey, one of the senior biotech analysts here at Stifel, and glad to have with us for the next session of AbCellera. Representing AbCellera is Martin Hogan. He is the senior director of strategic finance. We're going to have a discussion. If anyone has any questions along the way, feel free to raise your hand, and hopefully we'll get you acknowledged and your question answered. Martin, thanks for coming. Thank you. Before we jump into Q&A, are there any opening comments that you'd like to make around the AbCellera story and kind of where you guys are right now? I'll just start by saying thanks so much for hosting us. Real pleasure to be here. I'd be amiss not to point out that I will be making some forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act. Yeah, overall, I think we're sitting down at a really interesting point in AbCellera's history, evolution, trajectory, as we are, and I know we'll talk about that more today, but as we are really completing the transition from being a company that was platform and partnership-first to one that is a fully integrated biotech company with a strong internal pipeline, growing internal pipeline of assets that have the potential to be first in their class. All right, very good. Yeah, and I think that transition is something I probably want to spend a fair amount of time on here. But maybe before we get to that, we could just kind of talk a little bit about the technology, some of the legacy partnerships that you already have in place. And so broadly, how do you think about the differentiation of the antibody discovery engine that you have at the company relative to some of the other platforms that are out there in the space? And kind of what is it about the technology and workflow that you think separates AbCellera from the rest of the competitors? Sure, happy to talk about that. Really, when you look back, we've spent now a dozen years, over $500 million, investing in the teams, the technologies, the infrastructure that allows us, using proprietary technology developed originally by Dr. Carl Hansen at UBC, to discover antibodies even against the most difficult targets, and we have leveraged that capability in over 100 drug discovery programs with partners, as well as now well over a dozen internally. So while it's always difficult to point to any one specific thing in that capability, our ability to go from a nominated target all the way through, certainly easily to a fully assessed panel of antibodies has been practiced many times against the most difficult targets with success. And we've seen large, well-recognized partners, most recently Lilly, not just sign one agreement with us, but on the back of the work we have done, come back for more. So we'd argue that to us, and in the words and actions of our partners, demonstrated that we certainly have a unique ability at the front end to bring forward molecules that look like promising drug candidates, ultimately. Yeah, and then from there, really, it is a question of what are you applying that technology to. Okay. In terms of the legacy partner portfolio that you guys have, I know it's growing. It's growing at a pace that is a little bit lower than what it was before, just because it's been kind of de-emphasized a little bit. But can you just give us a snapshot of kind of what that looks like right now? And then I know you've refined the way that you talk about some of the partner-initiated programs to specifically focus on those that you have downstream economic leverage to. But I guess of those total partner programs where leverage exists, do you have any sense how many of those are still progressing through various stages of development and ultimately hoping to reach the clinic? Absolutely. So we've started over 100 drug development programs for partners, 95 of which, as of the end of September, carried downstream participation, typically in the form of royalties. And we're reporting on an annual basis. So this is at the end of last year; we had delivered 87 of those programs with downstreams back to partners, cumulative total, of which at that time, we believe that there were 38 that were still in various stages of active development. So that's about 44% of the ones that we had handed back. Important, I think, to note that the typical royalty on those programs, in addition to the milestone position, is somewhere in the range of 3%-5%, some a bit more, some significantly more, some less. And while we update that in our annual filing again, that rough picture still holds today, I'd say. So when we step back kind of a year or two from now and we look at those 95 programs that were partner-initiated with downstream economics, or I guess if you want to wrap in the 100 total, do you think that the net number of those programs that eventually reach the clinic will somehow provide a surrogate of the differentiation that you spoke to at the opening? Or do you just think that that's probably too small a sample size, there's all this target risk, there are all these strategic prioritization decisions that are made by our partners, and that number is probably not emblematic of anything? Yeah, that's a great question, Steve. Eventually, you would expect, indeed, that you would see a significant and maybe disproportionate number making it to the clinic. But that may indeed be over a much longer time horizon. There are many dynamics at play, both within the partners' organizations, as you alluded to, as well as in the market. And so the first signals that we get there may be indistinguishable from noise when you look at it quantitatively. What we are hoping is that qualitatively, when you see partners advancing molecules into the clinic and openly discussing them, the hope, if not expectation, is that at least many of them you'd look at and say, wow, these are really interesting molecules that also in our partners' hands are going after a first-in-class position. While the quantitative signal around differentiation may be a bit longer coming, we've got reason to believe that qualitatively this will be apparent earlier. Okay. And then how would you characterize the level of diversification within that partner portfolio, I guess specifically in terms of the target, the biological risk that target assumes, the modality, whether it's a bispecific or whatever, the therapeutic indication? Is there a balance that you've intentionally tried to strike as you've grown that out over the years? Yeah, good question. The result of our approach has been that we now look at a truly well-diversified portfolio across practically any dimension that you can think of, both in terms of partner type, partner size, area of indication, modality even, ranging from simple IgGs through bispecifics, Moderna with mRNA-delivered antibodies, ADCs, across modalities, also the full range. And that does also extend sort of to the biological risk inherent. Some are looking pretty straightforward, particularly where they're first-in-class against a difficult target. Some are a bit trickier. So it's a very well-diversified portfolio. Is it the result of intentional ways of partnering? I'd say mostly it's the result of having been quite open to good partners with good ideas and largely agnostic. And so what we find is that what we have worked on is a broad reflection of what good partners in the industry have been working on. Of course, the benefit of having a broadly applicable engine that can, both on the discovery as well as on the protein engineering side, really tackle a lot of the most important problems that our partners have been trying to solve. Okay. And I know this increased focus on becoming a fully integrated biotech, and we're going to kind of jump to that in a minute here. That's been taking up a lot of your effort, right? But you obviously still have the capacity to do more partnerships. And so what is the internal threshold that you have in place now to entertain the notion of whether or not you're willing to do another one of these partnerships? What are those variables? Is it a capacity-driven decision? Is it an economic-driven decision? Yeah, really good. There's, if you will, a convergence happening in terms of how we're looking at programs, irrespective of where the idea comes from. For internal programs, four things really matter. Do we like the science? Is there a commercial opportunity coupled to an unmet medical need here? Is there potential for really differentiating versus what others are trying to do in the field? Ideally, a path to being first-in-class or within reach, definitively being best-in-class. And then finally, is there a clear development path? And clear development path really through all stages of development, both in discovery as well as in preclinical development, and then through the clinic and an understanding of what commercialization could look like. So those are the four criteria that we're stringently applying to our internal programs and that we're increasingly applying to partner-initiated programs as well. And when it comes to partners, in addition to those four, we'll look at, do we think this is a good partner? And often you get conviction that somebody is a good partner because you've already worked with them and they proved to be a good partner. And then, as you point out, do the broad economics make sense? And the broad economics are not just the upfront milestones, downstream participation, but also a consideration for anything else that we stand to get strategically. So often that might mean, or increasingly that might mean that we'd enter into co-development relationships like we did with Prelude, with their degrader antibody conjugation technology, where they brought something unique to the table and together we can do something that neither party could have done alone. And that then is reflected in the economics where we start out with a 50/50 ownership stake. Okay. So maybe we can kind of shift gears now to this concept of AbCellera becoming this drug development-focused company. And so maybe you can just talk a little bit about what sparked that decision. And I guess how much of that decision was driven by competition within the antibody discovery space, some of the macro headwinds we've seen in the R&D ecosystem for the last two to three years, and/or your desire to try to accelerate this value creation process? Yeah, I'd say there were multiple vectors that really got us there. The first one, and we've been talking about this for longer than I think many people have been paying attention to, of course, was technology development, particularly against complex membrane protein targets, where even the antigen generation is a very difficult, sometimes impossible challenge to overcome. So for many years now, easily since 2020, maybe even 2019, we've been working on building the capabilities to pursue those targets where it's pretty clear that this is an attractive target for an antibody, but the technology just wasn't there to find antibodies against it, which also meant that a lot of potential partners would have considered these targets just impossible and wouldn't have paid us to try our hand at them. So that's the first source of internal programs is when we said, let's try and break those targets as you work on them and you succeed. And in several cases, we are succeeding. You end up with internal assets, and then it just makes sense to take them forward really to the point where you get full recognition for the value that you've delivered. So that's probably the first vector. The second vector really came from our work on the T-cell engager platform, having realized that T-cell engagers have huge potential, certainly in oncology, and now we're seeing beyond, and are limited by a lack of particularly CD3 engaging antibodies. We built the platform, and on the back of that platform, we decided it makes sense to launch programs both to validate that the approach works, but also, of course, to generate assets. The third and increasingly important element here is we have spent a dozen years and $500 million building the engine. It really is time to put it to use, and over that time working on partner programs, we've learned not just what it takes to deliver a program, but also how to think about what makes a good drug development program and have built out those capabilities, so now we're putting them to use, and we've talked about a rigorous target selection process. When you find good targets, you can go after them yourselves. You can preserve much more of the economics, particularly compared to waiting for somebody to eventually ask you to work on them. And then the final source of the internal pipeline, and this may be a fluke, but of course, is when a co-development partner decides not to continue the work, as happened in the case of EQRx and our molecule ABCL575. We're excited about that molecule, and we're happy to add it to our pipeline. So it's really from those four angles that we came to the point where it absolutely made sense to focus on internal development. And certainly those first three will fuel pipeline growth in the future. Okay. So I know you're nearing the completion of a sizable investment that you've made on the manufacturing front. I know when this was initially started, it was kind of positioned as this was going to be another kind of downstream component to the workflow that would increase the value of the deliverable that we're handing to a partner. And now that you've kind of made this transition, how do you then think about the capacity that's been built out, the capacity that is required at the company to execute on clinical development? And if there's any additional capacity remaining, what do you do with that? What do you do with all that excess capacity? Good question, and we've thought about this quite a bit as well. I think first, probably worth pointing out, most of those capabilities that are required to take programs all the way into and through certainly Phase 1 in the clinic, most of them we now have in place, including clinical development teams, the full slate of what's required preclinically, putting only the finishing touches on our GMP manufacturing capability expected to come online in 2025. The primary driver here really was strategic to say, if we've got this capability in-house, we can be faster by avoiding CDMO-related delays. You don't need to get in queue. You can start work in parallel with your final downstream development steps, if you will, so really accelerate the programs, and the second element here is increase flexibility on programs by bringing down the marginal cost. I mean, it's not an inexpensive facility to run, even with the government funding that we have to build it, but certainly your marginal cost is lower, and so you will be in a better position to do things at risk or to try out something else, things that would be cost prohibitive if you were reliant on a CDMO. In terms of the capacity, primarily, we do feel that from our internal programs, that growing pipeline, that'll keep the team reasonably busy, particularly combined with co-development programs where we also have partners who don't have internal capabilities, and so we'll be delighted to have access to our capabilities here, and we're also open and will explore opportunities with other partners, so our more traditional partnerships where it just makes sense for them to avail themselves of capacity that we have and accelerate their programs. What we're not looking to do really is to manufacture for programs where we didn't do the antibody discovery. So really it's strategic, focused on internal pipeline and co-dev with an extension into our discovery partnerships. Okay. And so would you say that this transition now is kind of complete, is mostly complete? Are there any additional functions or competencies that you need to invest in, whether it's on the clinical side, the discovery side, or do you feel like you have kind of put all the building blocks in place here? Yeah. The building blocks functionally are in place. There will be selective additions sort of to get to full capacity, particularly in manufacturing as you start ramping that up. Probably in clinical development as the number of programs entering and running through the clinic increases over time, but in terms of the capabilities, in terms of the leadership, we'd say that's complete. In terms of CapEx, we're nearly there. We're finishing the big spend this quarter and Q1 of next year, and then, yeah, we'll really be in a position to execute. Okay. So you'll be executing on two assets here initially, right, that go into the clinic in the second quarter of next year. I think you're guiding to CTA submissions into Q2. That's right. You have government funding for these two assets in place to support Phase 1 development. I know this funding's from the Canadian government, which is why they're CTAs and not INDs. But maybe you can just kind of talk about what that funding through Phase 1 requires about how you develop the asset, and can you talk about what Phase 1 clinical trial infrastructure looks like in Canada? Can you talk about how much data you need to generate within the confines of a Phase 1 study before you can move that outside of Canada and get into other sites in the U.S. and beyond? Yeah, I think I can answer that broadly. So you're right. The support we have is from the governments of Canada and British Columbia to take up to 17 programs all the way through to Phase 1 clinical trials. The requirement to receive that funding, or co-funding, I should say, which is almost half the cost of those programs, is to run the Phase 1 trials in Canada. Thankfully, Canada has a reasonably well-developed infrastructure, particularly for conducting Phase 1 trials. There's certainly for the indications that we're pursuing with ABCL635 and 575, there's also a good network of PIs, and patient recruitment also shouldn't be a problem, certainly not for those indications, and broadly speaking, Canada has a pretty active medical research environment, if you will, once you get into the clinic, and the FDA also generally accepts Canadian study results. Now, might we run in the future into a program where the right thing to do is to run the Phase 1 trial in the United States? We may, and if that were the case, we'd absolutely do so. But at least for the first programs that we're advancing, we're feeling confident that with the types of studies we need to run, Canada is not just economically favorable, but also a very sensible place for us. Okay. So you mentioned 575. This is an OX40 ligand antagonist. I know that there's a lot of enthusiasm out there for this target, just given the success that Sanofi has had thus far with its OX40, Amlitelimab in AD, and I think a bunch of other autoimmune diseases. So I guess you've talked about this as potentially being a best-in-class version. So when you look at Amlitelimab, where do you see the opportunity for differentiation based upon what you know thus far to be the case about 575? Based on what we know so far, it looks like we may be on track to have longer half-life, and that could result in a longer interval for dosing, and I think that is the key angle for potential differentiation. Now, it's early. Ultimately, everything will only be revealed on the back of clinical results, but what we've seen so far, and of course, we've done comparisons to the best of our ability, it's looking promising that for a molecule just as efficacious, we are looking at longer half-life, so that's a good starting point. Whether that's decisive or not, we'll see in the end. I think the other thing to keep in mind here is based on what we know now, it's a molecule that's really easy to manufacture, so behaves really well in the hands of the manufacturing teams, and is also potent. So that we've got a path here for easy subcutaneous delivery, and that may provide a further benefit on that journey. Ultimately, it'll be borne out in the clinic, but for now, we're feeling really good about the potential to have something that's better than what we've seen out there so far, at least. Okay. I think it's consensus now that targeting the OX40 ligand is probably a lot more advantageous, at least clinically, than targeting the OX40 receptor itself. I think there hasn't really been a lot of program announcements, surprisingly, around OX40 ligand. Do you have any kind of competitive intelligence which maybe informs how many of these Amlitelimab versions exist right now within the earlier stages of pharma and biotech pipelines? I would imagine it's probably something we're going to be seeing a lot of. Yeah. We obviously, Steve, also wonder about that. We have seen a good number of molecules around the world that are in various stages of preclinical and some in clinical development, both against the OX40 ligand as well as against OX40 itself. Clearly, Amlitelimab is in the lead here. I think just like our partner EQRx, we were excited by the early results shared from that molecule. Others must have been as well. We feel that we've got a, like we just talked, we feel that we've got a really good shot with 575 in this. Ultimately, whether it matters if you target OX40 or OX40 ligand, we'll see. We feel there's a good chance that it doesn't matter much as long as you're using a non-depleting antibody. I think that non-depleting seems to do the trick in terms of getting the clinical result you're looking for without producing the side effects that come with killing the target cell. We feel we're probably in a broad, fast-following group of molecules with a really good asset, and we're also not too worried about other assets in that group. When you touched on atopic dermatitis and other indications, we feel that overall, there's enough room in terms of size of the patient population as well as indications that, like in psoriasis, we could see a good number of biologics blockbusters that get approved and succeed in parallel. Okay. I know your other soon-to-be clinical stage asset is 635. This is kind of an undisclosed GPCR/ion channel target. I don't think we know which of those it is just yet. I know the AbCellera tech is seemingly really good at generating antibodies against what has been kind of a fairly intractable class of targets like this. Also going into the clinic, but taking 575 and, I guess, 635 together, how do you think about where AbCellera wants to take these drugs beyond Phase 1? Yeah. Do you think of something like 575 in the autoimmune space, obviously a very resource-intensive mandate, is that the inflection point for a partnering event, or do you think of something like 635, which I know that you've kind of suggested is being positioned towards this rarer metabolic or endocrine disease? Is that something that you would be comfortable taking beyond Phase 1? Really good question, so every program, every molecule has its own optimal clinical development path, and on that path, also, it's highly specific to the program when a partner really could add significant value over and above the things that we're capable of doing, and on 635, indeed, we feel that there are a few steps to take that to a full value inflection point, and before a partner could add significant value, so we may well work on that a little bit longer internally. With 575, we see that the opportunities, particularly because of the breadth of indications that one could pursue with the molecule, might mean that a large partner could add significant value to that program earlier, and also because whether that molecule is valuable or not may become apparent much earlier, given that we are following another molecule. So indeed, I think, as you point out, there are scenarios where we would find a partner in a valuable partnership for 575 earlier than would make sense for 635. And for future programs, it'll similarly depend. Okay. Last question. I guess I get to go host the lunch panel here. So you've talked about the TCE platform that you have. What's the likelihood that this platform and this library of novel CD3 variants that you've generated, either A, serves as the basis of just kind of more of a partnering-specific flow, B, serves as the basis for wholly owned pipeline expansion, or C, some combination of both? Yeah. I think the answer specifically is C. It's going to be a combination of both. We have launched multiple programs internally on that platform. Four, we've talked about three in oncology with PSMA, B7-H4, one undisclosed, and one in autoimmunity with CD19. We're really excited about that potential. There are some others behind there earlier. It doesn't make sense to talk about them yet. We'll take those forward. We may find partners for them. We're also open to deals just on the basis of the CD3s or partnerships where the partner also gets to leverage our target arm discovery capabilities and our really excellent bispecifics engineering capabilities. Overall, when you take that together with the $875 million in available liquidity to us, we're really positioned to execute on that strategy over the next years with confidence at scale, building out a broad, deep internal pipeline that we can take through to important clinical inflection points. We're feeling we're at a great moment here at the moment and also interesting, particularly for investors, a good chance that the successes that we're seeing internally will become more visible externally as we and partners advance molecules into the clinic over the next 18-24 months. All right. Very good. Martin, appreciate the time.