Good afternoon, and welcome to Abseller's third quarter 2025 business update conference call. My name is Cameron, and I'll facilitate the audio portion of today's interactive broadcast. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. And if you are having any issues during the call, please press star followed by zero on your telephone keypad. But at this time, I would like to turn the call over to Trent Steimart, Abcellaris Chief Legal and Compliance Officer. You may proceed.

Hello, everyone. Thank you for joining us for Abcellaris' third quarter 2025 earnings call. I'm Trent Steimart, Abcellaris Chief Legal and Compliance Officer. Dr. Carl Hansen, Abcellaris President and CEO, and Andrew Booth, Abcellaris Chief Financial Officer, are also on today's call. During this call, we anticipate making projections and forward-looking statements based on our current expectations and in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results could differ materially due to several factors outlined in our latest Form 10-K and subsequent Forms 10-Q and 8-Q filed with the Securities and Exchange Commission. Epseller is not obligated to update any forward-looking statements, whether due to new information, future events, or otherwise. Our presentation today, our earnings press release, and our SEC filings are available on our Investor Relations website. The information we provide about our pipeline is intended for the investment community and is not promotional. As we transition to our prepared remarks, please note that all dollars referred to during the calls 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.

Thanks, Trin, and thank you everyone for joining us today. Last quarter, we completed our transition from a platform company to a clinical stage biotech with the initiation of our phase one clinical trials for ABCL 635 and ABCL 575. Both trials are progressing to plan and remain on track for readouts next year. I'm pleased to report that this quarter we have also started activities at our new clinical manufacturing facility, And we have substantially completed our platform investments. We ended the quarter with approximately $680 million in available liquidity to execute in our strategy. And as we close out the year, we are confident in achieving all our corporate priorities, including advancing at least one more development candidate into IND enabling studies. A highlight of this quarter was the appointment of Dr. Sarah Neumberg as chief medical officer. Sarah is a physician scientist with over 20 years of clinical drug development experience. She has worked across a broad range of modalities and indications and has led programs through all stages of development from discovery through to approval. You can expect Sarah to join future earnings calls to provide updates on our clinical pipeline. With Sarah taking the helm, Dr. Jeff Nickel will be stepping down as our SVP of development. I'd like to thank Jeff for his leadership in building development as we transitioned from a platform company to a clinical stage biotech. And with that, I will hand it over to Andrew to discuss our financials. Andrew. Thanks, Carl.

As Carl pointed out, Abcelera continues to be in a strong liquidity position with approximately $520 million in cash and cash equivalents and with roughly $160 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 leveraging our CMC and GMP investments. looking at our business metrics in the third quarter we started work on one additional partner initiated program which takes us to a cumulative total of 103 programs with downstream participation with phase one trials for abcl 635 and abcl 575 underway we maintained a cumulative total of of molecules to have reached the clinic at 18 including both our own pipeline and those led by partners as we have stated previously we view the overall progress of molecules in the clinic as potential source of near and midterm revenue from milestone from downstream milestone fees fees and royalty payments in the longer term turning to revenue and expenses revenue for the quarter was nine million dollars predominantly from research fees relating to work on partner programs this compares to revenue of approximately seven million dollars in the same quarter of last year. With respect to research fee revenue, as we have mentioned in the past, we expect these to continue to trend lower as we increasingly focus on our internal pipeline. Our research and development expenses for the quarter were $55 million, approximately $14 million more than last year. This expense reflects the focus on investment in our internal and co-development programs. The increase over the recent run rate expense levels in Q3 is largely due to specific investments of $15 million on two internal programs. In sales and marketing, expenses for Q3 were just under $3 million, a small reduction relative to the same quarter of last year. And in general and administration, expenses were approximately $22 million compared to roughly $19 million in Q3 of 2024. Included in these expenses are the ongoing expenses related to the defense of our intellectual property. Looking at earnings, we're reporting a net loss of roughly $57 million for the quarter compared to a loss of about $51 million in the same quarter of last year. In terms of earnings per share, this result works out to a loss of 19 cents per share on a basic and diluted basis. Looking at cash flows, operating activities for the first nine months of 2025 used approximately $97 million in cash and equivalents. Excluding investments in marketable securities, investment activities amounted to $49 million year-to-date. This is predominantly in property plant and equipment driven by investments in establishing clinical manufacturing, which are now substantially complete as we had expected. The investments in PPE were partially offset by government contributions and as a part of our treasury strategy we have 413 million dollars invested in short-term marketable securities our investment activities for the quarter included a 62 million dollar net divestment of these holdings altogether we finished the quarter with 523 million dollars of total cash cash equivalents and marketable securities and as a reminder we have received commitments for funding for 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, and with over $520 million in cash and equivalents and the unused portion of our secured government funding, we have approximately $680 million in available liquidity to execute on our strategy. In addition, we have available liquidity in our ownership of both Vancouver-based lab and office buildings as well as our GMP manufacturing facility both of which have been financed off of our balance sheet the operating cash usage for the remainder of 2025 will continue to prioritize advancing our two lead programs through their phase one clinical studies and building a strong pre-clinical pipeline with respect to our overall company expenditures our capital needs are very manageable and 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. Operator.

Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you'd like to remove your question, press star followed by two. Again, to ask a question, press star one. And as a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. And we will pause here briefly as questions are registered. The first question comes from the line of Malcolm Hoffman with BMO. You may proceed.

Hi, welcome on for Evan. Thanks for taking our question. I want to ask how to think about partner-initiated programs in the clinic. These look somewhat stagnant since 2024, and to be clear, we appreciate the conversion to more Abcelro-led development, but just wanted to understand why these partner-initiated programs may not be progressing clinically. They're just a timing issue. And then a second one about Dr. Nuenberg and her new role as CMO. Can you comment on why you felt like now was the appropriate time to bring Dr. Nuenberg in? And what do you think she uniquely brings to Upsilera that the company may have lacked before? Thanks.

Sure. So I'm happy to take that one. Carl Hansen here. So first on the partner-initiated programs. So as you know, in the early stages of the company and through until 2023, our business was primarily focused on a partnership mode where we were doing discovery on behalf of partners and keeping a position in the resulting molecules, both in royalties and in milestones. We have handed off a large number of those, and as Andrew mentioned, I believe we have initiated about 103 programs to date. We do expect that some fraction of those are going to move forward into clinical development, and we continue to report on that. I would say that our experience has been that it takes longer than we had initially anticipated. So, we have examples where programs that were handed off ultimately go into clinical as much as six years later. So, it's difficult to make an assessment as to what will be the number of those that ultimately make it into clinical development, but we do think that there is value there that's going to accrue over time, as mentioned by Andrew on his prepared remarks. Moving to the question of bringing Sarah on, obviously, you know, in 2023, we made the definitive decision to back away from that partnership business and to move into doing drug development on our own behalf. Over the past few months, we've succeeded in bringing the first two programs into clinical development. We have a robust pipeline coming behind that. And as the portfolio matures, we definitely thought it was time to bring in a senior executive with experience in clinical development, and also that the company was at a position where we would be able to attract someone that was absolutely top-notch. So we're thrilled to have Sarah on board, and we look forward to working with her and with you over the coming years as the pipeline matures.

Appreciate it, guys. Thanks for the caller.

The next question comes from the line of Andrea Newkirk with Goldman Sachs. You may proceed.

Hi, everyone. Good evening. Thanks so much for taking the question. Carl, I was just wondering if you might be willing to speak a little bit on the data disclosure strategy that you plan on taking for the Phase 1635 study, particularly given you do have the various cohorts, SAD, MAD, dosing, as well as the proof of concept section where you're evaluating efficacy. Just curious if this will all come within one disclosure, and then if you could help frame expectations for the profile you would deem supportive to continue advancing this further into a phase two study? And then I have one following that. Thank you.

Thanks, Andrea. So to your first question, you know, our expectation is to make a single disclosure after we have completed the proof of concept part where we have a double-blind placebo-controlled evaluation of ABCL 635 in the patient population that it's intended for. We do expect that will come sometime in the new year. I think we had said before around mid-new year, but give that a couple of months on either side for error bars. What we're looking for is that we have a safety signal and we have efficacy that shows that we're in the game to have a competitive product against the other products that are now in the market. And the study is powered to do that. So somewhere around midpoint next year, we should know a lot about this program. So far, we're encouraged by what we're seeing. Everything is on track. And if that continues on track, then we're getting ready to be in position to aggressively move it into later stage trials.

Got it. Okay. And if you do achieve your desired target product profile when you see the data emerge next year, how validating would that be for your platform and technology? And do you think there is read-through to the rest of your pipeline?

it's a great question um so you know we we have highlighted before that one of the areas where we've been investing for a long time and where i believe we have world-class capabilities is in making antibodies against ion channel and gpcr targets obviously nk3r is a gpcr target so it's the first from that platform to move forward i think that's strong evidence that the platform is working and that we can make highly differentiated molecules. Of course, you know, evidence of a platform doesn't happen with a single asset, and our intent is to follow that up again and again with other molecules from that pipeline that we're equally excited about.

Okay. Thanks so much for the caller.

The next question comes from the line of Stephen Willey with Stiefel. You may proceed.

Hey, good afternoon. This is Josh. I'm for Steve. Thanks for taking our question. Is there anything you can tell us about how enrollment is going in the phase one trial for 575 and maybe potentially some color on some of the doses you've reached in this cohort?

Sure. So, in terms of enrollment, as I mentioned, the program is going as expected, so everything is on track and at the pace that we anticipated. We are not disclosing preliminary results in terms of how far we got in dosing, but as I said, we're encouraged by what we're seeing. And so far, everything is as expected.

And then just another quick one. I know you said on the QQ call, you were in line to declare a potential fourth abseller-led candidate by the end of this year. Are you guys still on track to do so?

Yes, that's correct. I think I said that in my prepared remarks that we are on track before the end of the year to bring an additional development candidate forward, and that would be the fourth in the Okay, great.

Thanks for saying that question.

The next question comes from the line of Faisal Khurshid with Leering Partners. You may proceed.

Hi, guys. Thank you for taking the question. On 6-5, could you speak to us about whether there's a specific benchmark or bar that you would want to see on testosterone reduction in healthy male volunteers?

Sure. So, I wouldn't punch out a specific level, but there is good literature out there disclosing testosterone levels from small molecules that were in development, particularly fesolinotant, and so we would, within the power of the study, look for something that shows that we're getting engagement that is at least as good as that to move forward.

Got it. And then could you also discuss the risk of engaging this target with a MAP even as a CNS target?

Sure. That's a great question. I think it's one that I touched on an earlier call. So we believe that the pathway, the NK3R pathway, is very well validated, and so that if we can engage NK3R in the relevant neurons, that it's highly likely to be an efficacious drug. The NK3R is expressed in candy neurons in the arcuate nucleus, and those neurons are connect both to the endocrine system and also go through the blood-brain barrier into the thermoregulatory center of the brain. So we expect that we should be able to engage NKTR in the arcuate nucleus, and given our understanding of the biology, we believe that that should be sufficient to be efficacious in treating VMS. But of course, we have not yet proven that, and so we need to wait for the proof-of-concept study in that readout to have conviction to move the program forward.

Got it. Thank you.

Next question comes from the line of Steve Dessert with KeyCorp. You may proceed.

Hey, thanks, guys. Steve on for Scott. I was hoping you could talk about what the benefits are of 635 versus existing hormonal treatments for hot flashes. And then as a follow-up, are there any molecules currently being developed that would compete directly with 635? Thank you.

Sure. So, 635 is not being developed as a substitute for hormonal therapies. It's being developed as an alternative to menopausal hormone therapy. I think as I mentioned on a previous call, there are roughly 12% of women that have a strong contraindication against using menopausal hormone therapy. In addition to that, about 8% that end up discontinuing because of adverse events or tolerability. So there's a significant portion of women that have fewer options or cannot avail themselves of MHT, which is the first-line therapy for treating BMS. In terms of alternative therapies, of course, there are now two molecules that have approval. One is Vioza by Astellis, and one is Linquit by Bayer. Those are both now on the market. We believe that we're in a great position to have these two products out there, providing good options for people that need these treatments, and build the market for us so that we can come in with a molecule that we believe can be differentiated in dosing, in safety, and potentially also in efficacy, depending on how we do a target engagement.

Great.

The next question comes from the line of Brendan Smith with TD Securities. You may proceed.

Hey, this is Jackie on for Brendan. Just a quick one, and maybe just to remind us, but with earlier in competitors like Dupixent and Sanofi's asset, what do you expect we need to see from the Phase 1 data for 575 to really solidify the drug's positioning within the pretty competitive landscape?

Sure. So, 575 is obviously coming behind amlitilumab and also rocatilumab from Amgen. And our differentiation thesis when we began this program was really about less frequent dosing. What has happened recently, particularly with the readout in the COAST trial with amlitilumab, is that they have shown that the class is efficacious, although not as efficacious as was expected, as Dupixent had been on previous trials. So it looks like it's going to be approved as a second-line therapy. But they also showed that the one-month dosing and three-month dosing were relatively equivalent. So at this point, we have a drug that the data would suggest would allow for even less frequent dosing, perhaps six months. It's unclear how important that's going to be in a clinical setting. So our position in 575 right now is that we have a terrific molecule. The early readouts are going to show safety, obviously, but also PK and half-life that would support that dosing hypothesis. and probably the most important catalysts are going to come from outside of epcelera and they will be readouts on amlitilumab or the ox40 ox40 ligand class and other indications that are being evaluated by sanofi and by others great thank you there are currently no questions registered so as a brief reminder if you would like to ask a question please press star followed by one on your telephone keypad there are no additional questions waiting at this time i would

now like to pass the conference back for any closing remarks.

Thank you, everyone, for joining us today. This is an exciting time for Upselera, and we're moving into 2026 with some exciting progress in the pipeline, both in programs that are coming and what's in the clinic. And we look forward to updating you on future calls. Thanks so much.

That concludes today's call. Thank you for your participation, and enjoy the rest of your day.