Good afternoon, and welcome to AbCellera's Second Quarter 2025 Business Update Conference Call. My name is Jason, and I'll facilitate the audio portion of today's interactive broadcast. At this time, I would like to turn the call over to Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. You may begin.

Thank you. Hello, everyone. Thank you for joining us for AbCellera's 2025 Second Quarter Earnings Call. I'm Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. Dr. Carl Hansen, AbCellera's President and CEO; and Andrew Booth, AbCellera's Chief Financial Officer, are also on the call. During today's call, we anticipate making projections and forward-looking statements based on our current expectations and following the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially due to several factors outlined in our latest Form 10-K and subsequent Forms 10-Q and 8-K filed with the Securities Exchange Commission. AbCellera is not obligated to update any forward-looking statements, whether due to new information, future events or otherwise. Our presentation today, including our earnings press release and SEC filings issued earlier today are available on our Investor Relations website. The information we provide about our antibody therapy pipeline is for the benefit of the investment community and is not intended to be promotional. As we transition to our prepared remarks, please note that all dollars referenced are U.S. dollars. After our prepared remarks, we will open the lines for questions and answers. Now, I'll turn the call over to Carl.

Thank you, Tryn, and thank you, everyone, for joining us today. This quarter, we achieved a major company milestone, receiving Health Canada authorization to initiate AbCellera's first 2 clinical trials for ABCL635 and ABCL575. Today, I'm pleased to announce that dosing has begun in our Phase I clinical trial evaluating ABCL635 for moderate to severe vasomotor symptoms. This marks completion of the transition from a platform company to a clinical stage biotech that we committed to back in 2023. After the end of the quarter, we also opened our Phase I clinical trial for ABCL575, and we anticipate dosing will begin shortly. I'm also pleased to announce that we have added a third program to our pipeline by advancing ABCL688 into IND-enabling studies. We ended the quarter with approximately $750 million in available liquidity, and we are well positioned to continue to execute on our strategy and are on track to complete our remaining goals for 2025. These include; continuing to build our pipeline by advancing at least one more development candidate into IND-enabling studies, completing platform and infrastructure investments, and starting to use these capabilities in clinical manufacturing. ABCL635 is a potential first-in-class therapeutic antibody being developed for the nonhormonal treatment of moderate to severe vasomotor symptoms, more commonly known as hot flashes that are associated with menopause. ABCL635 is a potential next-generation NK3R antagonist designed to have both an improved safety profile and a more convenient dosing regimen. If ultimately successful, we believe it can be a highly differentiated product that would launch into a large and established market. We successfully completed the CTA process for ABCL635 in Q2 of 2025. And today, we are pleased to announce that we have begun dosing participants. The ABCL635 Phase I clinical trial is a randomized, placebo-controlled, double-blind study in men and postmenopausal women with or without VMS. Its purpose is to evaluate safety, pharmacokinetics, pharmacodynamics, and the frequency and severity of VMS with subcutaneous doses of ABCL635. The primary endpoint of the study is safety, and a key secondary endpoint is pharmacokinetics. As I mentioned on the last earnings call, we believe the main scientific risk for ABCL635 is whether or not we can achieve sufficient target engagement. We expect this will be addressed through biomarker and proof-of-concept studies that are part of our Phase I design. As previously stated, we expect initial safety and efficacy data from this trial in mid-2026. Turning to our second program, ABCL575, we received authorization from Health Canada in May to initiate a Phase I clinical trial. The trial was opened in July, and we anticipate dosing our first participants this quarter. This is a double-blind, placebo-controlled study designed to assess safety and tolerability in healthy participants following subcutaneous doses of ABCL575. ABCL575 is an investigational antibody therapy targeting OX40 ligand that is being developed for the treatment of moderate to severe atopic dermatitis and which also has broad potential in several other immune and inflammatory indications. We recently presented preclinical data that demonstrates it has potent functional activity in vitro that is in line with Amlitelimab, as measured by cytokine responses across a variety of cytokines, including IL-13, IL-5, and IL-9. As a reminder, ABCL575 is engineered with half-life extension to support less frequent dosing. Based on PK data we have obtained from studies in FcRn humanized mice, we predict a human half-life of approximately 67 days. Using this half-life, our modeling predicts that a 300-milligram dosing of ABCL575 every 6 months should achieve circulating concentrations that remain above the efficacy threshold that was observed for Amlitelimab. This prediction, once confirmed in clinical studies, would support a product profile with subcutaneous dosing once every 6 months. In addition to our clinical programs, we continue to allocate significant resources to internal discovery to build out our pipeline. This quarter, we advanced ABCL688 into IND and CTA-enabling studies. ABCL688 is a potential antibody medicine for an undisclosed indication in autoimmunity. It is the third program in our pipeline and the second program derived from our GPCR and ion channel platform. Similar to ABCL635, for strategic reasons, we will not be disclosing additional information on ABCL688 until this program reaches the clinic. Our intent is to submit an IND in mid-2026. For the remainder of the year, our priorities are as follows: executing on our clinical studies with ABCL635 and ABCL575; moving ABCL688 forward in IND-enabling studies; advancing a fourth program from discovery into our pipeline; and finally, bringing our clinical manufacturing capabilities online. And with that, I'll hand it over to Andrew to discuss our financials.

Thanks, Carl. As Carl pointed out, AbCellera continues to be in a strong liquidity position with approximately $580 million in cash and equivalents and with roughly $170 million in available committed government funding to execute on our strategy. We are continuing to execute on our plans with a focus on internal programs and on completing our CMC and GMP investments. Looking at our business metrics. In the second quarter, we started work on 5 partner-initiated programs, which takes us to a cumulative total of 102 programs with downstream participation. Both ABCL635 and ABCL575 received their clinical trial authorizations in the second quarter, thus advancing into the clinic. They are the first AbCellera-led molecules to reach the clinic, taking the cumulative total number of molecules to have reached the clinic, including those led by partners, to 18. As we have previously stated, we view the overall progress of molecules in the clinic as a potential source of near and mid-term revenue from downstream milestone fees and royalty payments in the longer term. Turning to revenue and expenses. Revenue for the quarter was approximately $17 million, comprising of research fees relating to work on partner programs and amounts related to licensing. This compares to revenue of $7 million in the same quarter of 2024. The licensing fees of $10 million stem from our Trianni humanized rodent platform and mostly consists of a lump sum amount in this quarter. With respect to research fee revenue, as we have mentioned in the past, we expect these to continue to trend lower as we are increasingly focused on our internal and co-development programs. Our research and development expenses for the quarter were approximately $39 million, $2 million less than last year. This expense reflects ongoing investment in our internal and co-development programs. The slight decrease is related to the timing of larger program-specific related expenses, which were larger in the second quarter of last year. In sales and marketing, expenses for Q2 were about $3 million, a small reduction relative to the same quarter last year. And in general and administration, expenses were approximately $19 million compared to roughly $20 million in Q2 of 2024. Included in these expenses are the ongoing expenses related to the defense of our intellectual property. Looking at earnings, we are reporting a net loss of roughly $35 million for the quarter compared to a loss of $37 million in the same quarter of last year. In terms of earnings per share, this result works out to a loss of $0.12 per share on a basic and diluted basis. Looking at cash flows. Operating activities for the first half of 2025 used approximately $44 million in cash and equivalents. Excluding investments in marketable securities, investment activities amounted to a net $36 million, mostly in property, plant and equipment, driven by the ongoing work to establish CMC and GMP manufacturing capabilities. The investments in property, plant, and equipment were partially offset by government contributions. As a part of our treasury strategy, we have about $460 million invested in short-term marketable securities. Our investment activities for the quarter included an approximately $12 million net increase in these holdings. Altogether, we finished the quarter with $580 million of cash, cash equivalents, and marketable securities. As a reminder, we have received commitments for funding for our GMP facility and the advancement of our internal pipeline from the Government of Canada's Strategic Innovation Fund and the Government of British Columbia. This available capital does not show up on our balance sheet. With over $580 million in cash and equivalents and the unused portion of our secured government funding, we have around $750 million in total available liquidity to execute on our strategy. The cash usage for the remainder of 2025 will continue to prioritize advancing our two lead programs through their Phase I clinical studies, building the preclinical pipeline, and completing our investment in the integrated clinical manufacturing capabilities. Our new manufacturing facility is on track to come online at the end of 2025, as we had indicated in previous calls. With respect to our overall operating expenditures, our capital needs continue to be very manageable. We continue to believe that we have sufficient liquidity to fund well beyond the next three years of increasing pipeline investments. And with that, we'll be happy to take your questions.

Our first question is from Andrea Newkirk with Goldman Sachs.

This is Tolani on for Andrea. Congrats on the progress this quarter. One quick one from us. Just given the recent news of the delayed PDUFA for elinzanetant, do you guys anticipate any risk to the development path for 635 from a regulatory perspective? And what do you expect regulators will be most focused on in evaluating the drug's profile as it advances in development?

You were breaking up a little bit at the end of the question. I did get the first part of it. So, yes, there was a delay with elinzanetant. Our understanding is that the FDA requested additional information from Bayer, and that information is forthcoming. I think the comment suggested that there was no concern raised about the approvability. And our expectation is that that would move forward to approval later this year. So, beyond that, I don't think we have any special insight into that. I didn't get the last part of the question. Could you please repeat?

Sure. Sorry about that. Yes, I was just wondering what do you think the FDA and other regulators will be focused on in evaluating 635's profile as it moves forward in clinical development?

Sure. So, there's now, I think, a well-tried path for the NK3R class, both with fezolinetant and elinzanetant. Obviously, we need to demonstrate efficacy. As I mentioned in my prepared remarks, we're excited about the upcoming data and the readout midpoint next year that should give us a lot of information about the efficacy and target engagement, which we do see as the primary scientific risk. On the safety side, as I mentioned on the last call, so far, what has been seen in the class for NK3R antagonists is some liver toxicity or at least a signal of liver toxicity, as well as somnolence or sleepiness. We believe the somnolence is because of targeting not just NK3R but also NK1R, which our antibody does not do. So, we expect that that would not be a concern. And similarly, because we are the first-in-class antibody for this indication and antibodies are not metabolized in the liver as our small molecules and because there is little evidence of expression of NK3R in the liver, we don't expect that there will be liver toxicity associated with our drug. But, of course, we need to demonstrate that in the trial. And I'm sure the regulators, as the investment community, will be looking at the 2 main things, which we always look at, which is efficacy and safety.

Our next question is from Srikripa Devarakonda with Truist.

Congratulations on the progress this quarter. For the ABCL635 Phase I trial, congratulations on getting it started efficiently. Now that the trial has begun, can you provide more details? What is the expected total number of patients, and is there a particular ratio of healthy men to postmenopausal women that you plan to enroll? Additionally, Adam, I have a broader question. You mentioned earlier that 50% of menopausal women are reluctant to take HRT due to concerns about its effects. With Dr. Makary being a strong supporter of HRT, do you believe this could shift the overall market perception, or do you still see a significant market opportunity?

Sure. First off, I’ll provide a bit more information on the clinical trial. The initial phases of the trial include a single ascending dose followed by a multiple ascending dose. The single ascending dose will involve both menopausal women and healthy male volunteers, allowing us to assess some biomarkers. In the multiple ascending dose phase, we will exclusively recruit postmenopausal women. The combination of the single and multiple ascending doses will likely involve around 56 to 60 patients. As we move into the proof-of-concept stage, we plan to enroll up to 80 patients, specifically postmenopausal women with moderate to severe vasomotor symptoms. Regarding the use of menopausal hormone therapy and recent discussions surrounding women’s health studies, these studies suggested potential drawbacks of hormonal treatments for managing symptoms related to menopause. We believe that the NK3R class is not competing with hormone therapies. It's important to note that approximately 20% of eligible individuals either have contraindications to hormone therapy or have tried it and found it unsuitable. Additionally, among the remaining 80%, some will prefer not to use hormone therapy. When considering the eligible patient population in the U.S. alone, this represents a significant market. We only need to capture a small share of that to achieve substantial success with this drug. Therefore, we remain very optimistic about the market opportunity, and we anticipate ongoing discussions about hormonal therapy, which won't alter our perspective since we’ve considered these factors from the outset.

Our next question is from Faisal Khurshid with Leerink Partners.

I just wanted to ask on the partnership and licensing revenue for the quarter. It seems a little bit higher than kind of where you've been. Should the expectation kind of going forward or how should we think about sort of the cadence and sequencing of those funds coming in?

Yes. Good question. This is Andrew here, Faisal. No, you should not consider this a recurring event. This was definitely a one-time payment related to activities after the acquisition of Trianni, which were finalized as an earn-out to the former shareholders of Trianni. In addition to the $10 million in licensing revenue, you'll notice a change in the contingent consideration on our balance sheet, which is the balancing entry for that transaction. Therefore, we do not anticipate this happening again in the future.

Our next question is from Malcolm Hoffman with BMO.

Hi, Malcolm Hoffman on for Evan Seigerman from BMO. Can you remind us, what key efficacy data we should be looking out for in the 635 Phase I study? I understand we're largely looking for safety in a Phase I, but what biomarker efficacy measures would start to give us kind of confidence in the further development here from a competitive perspective?

Sure. So, Carl here. So early in the study, we will be assessing some biomarkers, so LH and FSH in men and women. In the SAD, where there will be only healthy volunteers, participating men and women. Obviously, in the men, we'll be able to assess testosterone, and in the women, estradiol. So, all of those, I think, are a really positive indication, and we expect to see those biomarkers modulated by treatment at the higher doses. So, that's a first check, but that is not equal to efficacy. So the real measure of efficacy needs to wait until the proof-of-concept study. And as I mentioned, we will be enrolling up to 80 postmenopausal women with moderate to severe VMS. And there, we're going to be assessing the frequency and severity of VMS, which is self-reported. And so, we won't have that data until sometime in mid-2026. But we think that that study is sufficiently powered to give us, coming out of that, if it lines up the way that we hope and expect, a lot of confidence that we've got something that looks like a drug and that we intend to move forward.

Our next question is from Jacqueline Kisa with TD Securities.

I think it's supposed to be Brendan. I think you have Brendan from TD Securities on. Sorry about the confusion there. Good color. It's great to see the VMS asset moving along. I actually just wanted to maybe ask another follow-up on that, actually, just related to target dosing in any respect. I fully appreciate that it's still early days. A lot to kind of understand with some of the biomarker data and what that realistically means for kind of uptake down the road. But are there any special considerations when you're thinking about formulation or frequency of dosing that could kind of help as you're thinking about clinical plan down the road and then just any ability to kind of target these kinds of patients from a commercial standpoint?

Yes. I'm happy to give a little bit of color on that. So, a lot of this rests on our preclinical work from which we believe that we've got an antibody that has a half-life and a potency that would support once monthly dosing on a single subcutaneous dose. And that subcutaneous dose would be a high concentration formulation at 150 mg per ml at 2 mls. So, remains to be seen. But based on what we've seen so far, we've got a molecule we believe hits that TPP. And of course, that's one of the things we're going to be testing both in the efficacy and in the bioavailability and PK data that will come out of the Phase I study.

Our next question is from Stephen Willey with Stifel.

This is Josh on for Steve, and congrats on the progress. So, I noticed the healthy volunteer trial for 575 is now posted at clinicaltrials.gov. I noticed there was one Canadian site listed. And I guess just looking forward as like a longer-term strategy, do you plan on activating any U.S. sites beyond Phase I? Is this kind of related to like a capital commitment contingency with the governments of Canada and British Columbia to run all your trials in Phase I in Canada first? And then I just have a follow-up.

Yes. So, we have activated a site in Canada that's an expert in dermatology. We are very pleased with that site, and we think they have full capabilities to execute the Phase I study. Right now, our focus is on that. From our perspective, the big thesis around 575 is our belief that the OX40 ligand class is going to be an immense class, not just in atopic dermatitis, but in other autoimmune and inflammatory conditions. We think that the key readout we're going to get in the near term is going to be bioavailability and PK, confirming some of the preclinical work we've done and the modeling that I showed during my prepared remarks. And the other big catalysts are going to come from outside of the company, in particular, some of the clinical development with Amlitelimab and other molecules in the class that are moving forward. So, we are currently focused on that. We are also beginning to engage with the FDA and lay the foundation for the Phase II studies, which you would likely expect to include U.S. sites, but we haven't triggered that yet, and we have some time before we need to.

Great. And then just a follow-up. I know it's early. You said you won't really disclose any details around 688 for now. But could you maybe speak to some of the autoimmune indications of interest you might be considering for this asset?

Yes. I'm afraid we're going to hold this one close to our chest for strategic reasons. What I will say is that this is a program that we're very bullish on. I'd put it in a similar category to ABCL635. It's one where we have a high conviction in the biology and where we think we can get some meaningful data early on. It's got a bit of a different competitive dynamic, but it's also a program that we intend to move very quickly. And so, our focus right now is getting that to the clinic as quickly as possible. And when we do, we'll be able to share more details with you. So, sorry for being a little bit reticent on details, but I think it's probably in the best interest of the program.

It looks like there are no more questions. So, I'll pass the call back over to the management team for closing remarks.

Just to say thank you, everyone, for the support and for joining us today, and we look forward to updating you as we progress from where we are today into the clinic. Thanks very much.

That concludes the conference call. Thank you for your participation. Enjoy the rest of your day.