In the recent Q1 2024 earnings call, AbCellera (NASDAQ: ABCL) outlined its strategic focus on enhancing its internal pipeline and expanding platform investments. The biotechnology company reported a net loss of $41 million for the quarter but remains confident in its financial position, with $725 million in cash and equivalents on hand.
AbCellera is actively seeking strategic partnerships and is optimistic about securing a deal to provide access to its TCE platform, which is considered unique in its ability to address challenges unmet by other platforms.
The company is also progressing with its internal molecule, ABCL635, targeting metabolic and endocrine disorders, and is engaged in discussions for a platform deal. Notably, AbCellera has secured funding from the government of British Columbia for co-funding molecules through the clinic over an eight-year period.
Key Takeaways
- AbCellera's focus remains on advancing their internal pipeline, with particular emphasis on their TCE platform.
- The company reported a net loss of $41 million for the quarter but has significant cash reserves of approximately $725 million.
- AbCellera is confident in its liquidity to fund pipeline and platform investments for the next three years.
- Active discussions are underway for strategic partnerships to access AbCellera's differentiated TCE platform.
- The company's internal molecule, ABCL635, is being developed for metabolic and endocrine disorders, with clinical development considerations underway.
- AbCellera has two development candidates in IND enabling studies, aiming to begin Phase 1 trials in 2025.
Company Outlook
- AbCellera anticipates a positive impact from the recent rebound in biotech funding.
- The company is open to co-development and company creation deals, leveraging its strategic partnerships.
- The pace of asset progression into the clinic will be determined by the quality of scientific and clinical data.
Bearish Highlights
- The company acknowledged the challenges in treating solid tumors and the need for further work in models and the clinic.
- A net loss of $41 million was reported for the quarter, reflecting the ongoing investments in research and development.
Bullish Highlights
- AbCellera's TCE platform shows promise with high tumor cell killing and low cytokine release in in vivo models.
- The company's partnership with Biogen (NASDAQ:BIIB) aims to efficiently transport antibodies across the blood-brain barrier, a significant scientific challenge.
Misses
- Specific details regarding the internal program targeting GPCR & Ion Channel for metabolic and endocrine disorders are withheld for strategic reasons.
Q&A Highlights
- Discussions with partners are ongoing, and the company is open to resolving potential conflicts with partners regarding internal program development.
- AbCellera has closed a deal with Viking and ArrowMark, where successful antibody therapeutics ideas could lead to a new co-company, with AbCellera obtaining an equity stake.
This earnings call sheds light on AbCellera's strategic direction and financial health as it continues to develop its innovative TCE platform and seeks to establish significant partnerships within the biotech industry. With a strong cash position and government co-funding, the company appears well-positioned to advance its pipeline and expand its platform investments in the coming years.
InvestingPro Insights
In light of AbCellera's recent Q1 2024 earnings call, certain financial metrics and insights from InvestingPro provide a deeper understanding of the company's current position. With a market capitalization of approximately $1.19 billion, the company's valuation reflects the high-risk, high-reward nature of biotech investments.
The reported net loss aligns with the InvestingPro Tip that analysts do not expect the company to be profitable this year, emphasizing the long-term investment horizon typically associated with biotech firms.
InvestingPro Data also reveals a negative Price/Earnings (P/E) ratio of -7.92, which is consistent with the company's lack of profitability over the last twelve months. This is further corroborated by a negative EBITDA of roughly $212.81 million, indicating significant operational losses despite the company's strategic initiatives.
On a more positive note, AbCellera holds more cash than debt on its balance sheet, which is a reassuring sign for investors concerned about the company's financial sustainability. This is complemented by the fact that liquid assets exceed short-term obligations, providing the company with a degree of financial flexibility to continue funding its research and development efforts.
InvestingPro Tips highlight that AbCellera's financial strategy does not currently include paying dividends to shareholders, which is typical for growth-focused companies in the biotech sector that reinvest earnings into research and development.
For investors looking for additional insights and metrics, there are more InvestingPro Tips available, which can be accessed through the company-specific link at https://www.investing.com/pro/ABCL. Take advantage of our special offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Abcellera Biologics Inc (ABCL) Q1 2024:
Operator: Good afternoon and welcome to AbCellera's Q1, 2024 Business Update Conference Call. My name is Harry and I will facilitate the audio portion of today's interactive broadcast. [Operator Instructions]. At this time, I would like to turn the call over to Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. Please go ahead.
Tryn Stimart: Good morning. Good afternoon and good evening to everyone listening around the world. Thank you for joining us for AbCellera's 2024 first quarter earnings call. I'm Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. Joining me on today's call are Dr. Carl Hansen, AbCellera's President and CEO and Andrew Booth, AbCellera's Chief Financial Officer. During this call, we anticipate making projections and forward-looking statements based on our current expectations and pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Our actual results could differ materially due to several factors as set forth in our latest form 10-K and subsequent forms 10-Q and 8-K filed with the Securities and Exchange Commission. AbCellera does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Our presentation today including our earnings press release issued earlier today and our SEC filings are available on our Investor Relations website. The information we provide about our 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 referred to during the call are in 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.
Carl Hansen: Thanks, Tryn, and thank you everyone for joining us today. As AbCellera continues to evolve into a clinical biotech company, we are directing our resources towards three main priorities. Our first priority is advancing our internal pipeline, including ABCL635 and ABCL575. Both programs are in manufacturing and IND enabling studies and are on track for IND submissions in 2025. Our second priority is completing platform investments that are focused on forward integration, including establishing our clinical manufacturing capabilities. We are on track to start our first engineering runs at our facility next year. And finally, our third priority is executing partnerships that we view as strategic to our long-term vision of becoming a scalable drug development company. This quarter, we presented new data on our TCE platform, which we view as both an important source of internal programs and as a basis for strategic partnerships. Over the past two years, we have built a platform to create TCEs, a class which we believe has potential to be one of the most important therapies for cancer and liquid tumors. Last month, we presented four posters at the annual meeting of the American Association for Cancer Research to update our progress on this effort. A highlight of this work is that we have shown we can reproducibly generate TCEs that show high tumor cell killing and remarkably low cytokine release. This graph shows results comparing AbCellera-generated TCEs against clinical benchmarks for three different tumor targets, PSMA, 5T4, and B7-H4. The top row of the graph shows that our TCEs achieve equivalent tumor cell killing with potency that is comparable or superior to the three clinical benchmarks. The middle row shows interfering gamma secretion that in each case is below the level of the benchmarks and the bottom row shows the secretion of TNF-alpha, a cytokine that is perhaps the most important mediator of excessive inflammatory responses. AbCellera's TCEs show remarkably low TNF-alpha secretion compared to the clinical benchmarks and in the case of PSMA, TNF-alpha is close to zero across the entire range of antibody concentrations tested. When we started this work, it was our hypothesis that we would need a large number of anti-CD3s and that it would be a combinatorial problem to find the right pair of CD3 and tumor binding arms to achieve these results. Instead, what we have found is that within our panel of hundreds of CD3s, there are three small families of related CD3 binders that can be used to achieve the rare property of potent tumor cell killing with low cytokine release and that this can be done repeatedly across different tumor targets. Starting with a large number of CD3 binding antibodies allowed us to identify these rare subsets that we are now prioritizing in TCE development. The focus of our work is now to test if these properties translate to in vivo models and to advance a subset of programs forward in development. From a technology development perspective, our TCE platform is now nearly complete. In addition to having highly differentiated and proprietary CD3s, we have also developed panels of antibodies that can be used to enhance T-cell activation and survival via Signal 2 costimulation and have demonstrated the ability to target MHC peptide antigens. These results were also shared at AACR. Moving to strategic partnerships, this quarter we announced a collaboration with Biogen for a novel target that enables the delivery of biotherapeutics across the blood-brain barrier. And last week, we announced a collaboration with Viking and ArrowMark focused on the creation of asset-based companies, similar to what we previously did with Versant Ventures in the formation of Abdera. And with that, I will hand it over to Andrew to discuss our financials. Andrew?
Andrew Booth: Thanks, Carl. AbCellera continues to be in a strong liquidity position with approximately $725 million in cash and equivalents and with approximately $240 million in available government funding to execute on our strategy. In the first quarter of 2024, we continued to execute on our plans to complete our CMC and GMP investments and to advance both partner-initiated and internal programs. Looking at our key business metrics, in the first quarter, we started work on three partner-initiated programs, which takes us to a cumulative total of 90 partner-initiated programs with downstream participation. In Q1 2024, no additional molecule is advanced into the clinic, and we maintained a cumulative total of 13 molecules to have reached the clinic. We'd also like to congratulate Arsenal Bio, who in April announced the first patient dose in a Phase 1-2 trial for AB2100, which is in development as a treatment for clear cell renal cell carcinoma. We view our growing list of progressing molecules in the clinic as specific examples of our near and midterm potential revenue from downstream milestone fees and royalty payments in the longer term. Turning to revenue and expenses, revenue in the quarter was $10 million, almost entirely driven by research fees relating to work on partner-initiated programs. This compares to research fee revenue of approximately $11 million in Q1 2023. In light of our focus on select high-quality programs with increased long-term participation, particularly through code development, this was a good quarter for program research fees. Our research and development expenses for the quarter were approximately $39 million, roughly $13 million less than the same period of the previous year. This expense is driven by ongoing program execution, continuing platform development, and our increasing investment in our internal program pipeline. The decrease compared to Q1 last year reflects the absence of approximately $20 million in one-time expenses related to co-development and internal programs that were incurred in Q1 of 2023. In sales and marketing, expenses for Q1 were about $3 million, a small reduction relative to last year, and in GN&A, expenses were just over $17 million, compared to roughly $15 million in Q1 of 2023. Looking at earnings, we are reporting a net loss of roughly $41 million for the quarter, compared to a loss of $40 million in the same quarter of last year. The loss reflects the continued investments in our business, particularly CMC and GMP manufacturing capabilities, platform, and internal programs. In terms of earnings per share, this quarter result works out to a loss of $0.14 per share on a basic and diluted basis. Looking at cash flows, operating activities for Q1 used roughly $42 million, of which over $10 million were related to seasonal or transient working capital increases. As we have stated in the past, we expect our operating cash flow to be irregular and often negative as we continue to invest in our strategic partnerships, our capabilities, and our internal pipeline. As part of our treasury strategy, we have over $570 million invested in short-term marketable securities. Our investment activities for the quarter include an approximately $57 million net decrease in these holdings. All other investment activities amounted to approximately $27 million, including approximately $24 million invested in property and equipment. Investments in property and equipment are, of course, driven in large part by our ongoing work to establish CMC and GMP manufacturing capabilities. We expect these investments to continue at approximately the Q1 rate through 2024 and be substantially complete in early 2025. Altogether, we finish the quarter with approximately $725 million of total cash, cash equivalents, and marketable securities. And as a reminder, our continuing GMP facility buildout is separately co-funded by the Government of Canada's Strategic Innovation Fund. In addition, in 2023, we secured $220 million from the Governments of Canada and British Columbia. This available capital does not show up on our balance sheet. With over $725 million in cash and equivalents and the unused portion of our secured government funding, we continue to have just under $1 billion in total available liquidity to execute on our strategy. With respect to our overall operating expenditures, our capital needs are very manageable. We continue to believe that we have sufficient liquidity to fund well beyond the next three years of pipeline and platform investments. And with that, we'd be happy to take your questions. Operator?
Operator: Thank you. We will now begin Q&A. [Operator Instructions] And for our first question today, we'll go to the line of Andrea Tan of Goldman Sachs. Please go ahead. Your line is open.
Andrea Tan: Good afternoon. Thanks for taking our question. Carl, maybe on the back of your data presentation to AACR, how are you thinking about what additional data need to be generated to spur strategic interest in a transaction? And then just curious when you've spoken in the past about doing a deal that captures the value of the platform, can you just remind us again what that would entail or how would you assess the merits of such a deal? Thanks so much.
Carl Hansen: Thanks, Andrea. I'm happy to take that. So first, let me say that we've been working on the platform and in the area of TCEs now for roughly two and a half years. Over that time, we have made terrific progress on building the platform, which provides the building blocks to create TCEs that we believe can have highly differentiated capabilities as demonstrated in vitro. That's really the punch line from the data that we showed at AACR. The focus now, of course, is on being able to take that data and show that it translates into in-vivo models and then ultimately to the clinic and ultimately that it makes a difference for patients. In terms of deal making, we remain optimistic that we'll be able to make a deal for access to the platform. When I look across other platforms in the industry, I do believe that we have something that is differentiated and can solve problems that others cannot. And we continue to engage in conversations and I'd say that the response broadly is an appreciation of the science and the toolkit that's there. So that is something we're actively working on and I wouldn't speculate on what the timing of that would be. In the meantime, we're also moving these forward on the translational side, as I said, towards in-vivo models and towards the clinic. We see that as being a major value driver. So, one of the overarching realities of the field is that people are very excited about this class. People that are working in the class are starting to see that there's data coming in on solid tumors that's encouraging. And broadly speaking, I think there's a consensus that this will be a very important class of immunotherapies. At the same time, no one knows exactly how to crack solid tumors. And so there's going to need to be work done in models and done in the clinic. We're going to do some of that here at AbCellera, but we're also going to need to engage with partners to make sure that platform is used broadly and that currently is the focus.
Andrea Tan: Got it. Is there a scenario where you would consider advancing one of these maybe independently and this would become a third internally developed program?
Carl Hansen: Yes, absolutely. So we, as I said in my prepared remarks, we see the platform as highly differentiated and we see it as an important basis or foundation on which to make strategic partnerships in the area of TCEs, both in oncology and also in autoimmunity, but we also see it as an important source of internal programs. And one of the things that is probably most exciting about TCEs is that once you have the platform in place, once you really start to understand the science behind it and you crack that open, there are numerous opportunities that can then be prosecuted with, I wouldn't say little lift, but with higher probability of success because we expect there will be some transfer from one program to the other. So we're quite excited about that and we definitely do see this as one of the sources of internal programs that we would be willing to take forward in the clinic ourselves.
Andrea Tan: Thanks so much.
Operator: Our next question today is from the line of [indiscernible] of Truist. Please go ahead, your line is open.
Unidentified Analyst: Hey guys, thank you so much for taking my question. I have a follow-up question on the TCE platform. Where do you think, beyond discovery, what do you think you add greater value to the broader TCE space in general? And do you think that that is currently being recognized by strategic more broadly? And I know this. I'll ask a question about a follow-up to one of the prior questions in a different way. In the slides that you presented, you have shown multiple different TCEs targeting PSMA, 5T4, B7-H4. And you mentioned that all of them are differentiated from clinical benchmarks. How will you decide if you were to develop one internally, which ones to develop? Is it how unique it is first-in-class or is it you improving on the competitive landscape? Thank you.
Carl Hansen: That's a great question. So first, I think you asked, what do we bring outside of discovery? And the short answer is that at this point, we have put in place a platform, which is a toolkit for making TCEs. And what we have shown is that we can bring those forward to create molecules. I would characterize that as discovery. So at this point, we haven't shown value outside of discovery. That happens when you move into translational models and then move into the clinic. And that will take time and that is something that we're pushing forward. Now, what we think is different in the platform is that the broad diversity of CD3s has allowed us to better understand how to engage CD3 on T cells and how that interplay between how you engage CD3 and how you engage a tumor antigen can control the response of T cells. In the examples that are shown on the graph, the objective was to get high potency of killing with a minimal cytokine release to address one of the problems in TCEs, which has been dose limiting toxicity associated with CRS. So some of those examples and PSMA highlighted specifically, you could not have imagined a more compelling example of being able to completely decouple potent cell killing from cytokine release. That's an astonishing result. And it's one that we're excited about, but we have not yet shown, as I said, that it will translate into animal models and then into the clinic. And that's the next step. So that's part of it. The other part, of course, in discovery is that AbCellera has for 10 years been making a living, working with some of the best in the world, solving some very difficult discovery problems. And when you think about not just CD3, but the other side of engaging the tumor, there are multiple targets where even finding a good binder or certainly a diversity of binders can be difficult. And so that, coupled with the bi-specific engineering, provides a complete solution to this problem that we intend to show will be a validated solution in the clinic. Of course, that's going to take some time. Now, your other question was, of the programs that you've shown, how are you going to decide which ones to bring forward? I mean, the short answer is that it's a combination of commercial considerations, meaning competition, as well as primarily the science. So we have, to date, started five different programs in oncology. We've also started a program in autoimmunity. At this point there's two of the programs in oncology that we're not going to be bringing forward. The other ones we are bringing forward into animal studies. And then we're going to need to make a decision based on the results we have, based on the data, based on what's happening out in the field, and based on what we think the biggest opportunity is. And then, of course, weighing that up against some of the other programs that we have coming from other platforms, such as the GPCRs & Ion Channel platform.
Unidentified Analyst: Great. Thank you so much.
Operator: Our next question today is from the line of Jacqueline Kisa of TD Securities. Please go ahead. Your line is open.
Jacqueline Kisa: Hi, this is Jacqueline Kisa on for Steven Mah. Thanks so much for taking the questions. Just to start, on the Viking ArrowMark new co-structure, do you maintain any equity ownership and could you describe what happens if the new co gets acquired?
Andrew Booth: Yes, it's Andrew. Happy to take that Jacqueline. So the partnership we have with ArrowMark is at first a discovery partnership where we will work with them in order to find the antibodies against targets that they elect. They would then go into new co where we would have founding equity in those companies. And then we would -- ArrowMark and Viking would fundraise independently around those in order to advance them further towards the clinic. We would then be a regular equity holder and it's in a very similar fashion that we have done the deal with Abdera. I also would note that Viking was one of the equity participants in the transaction, the series be announced by Abdera. So it's a very similar structure to that deal.
Jacqueline Kisa: Great. Thank you. And then, just with regards to your GMP Biologic Manufacturing Facility, are there any changes to the timing of that development and has that downstream capability that's been created impacted your partnership discussions?
Andrew Booth: Yes, I think there have been no recent changes to the timing there. Just as we said in the full year earnings call a few months ago, we're expecting our first engineering batches in 2025, and Carl reiterated that today in prepared remarks. With regards to the interest from partners, I think certainly in our co-development programs, the transaction and partnership you just mentioned, there are of course interest in those capabilities, and those capabilities would be on time online in around the right time for when those molecules might be advancing through to IND Enabling studies. So I think that those really marry up very well with each other.
Jacqueline Kisa: Excellent. And then if I could just sneak one more in, just on your Biogen partnership, are you getting any more traction with the Camelid antibodies, and how does that interest compare to the other offerings that you have?
Carl Hansen: Carl here. So I'm not sure exactly what you're referring to in the Camelid antibodies for the Biogen deal. So the Biogen deal is exciting for two reasons. One, we have an opportunity to work with a new partner that's one of the heavy weights in the space. So we're excited about that as the start of a relationship that we hope will be able to grow over time. And secondly, the program is focused on being able to solve what is one of the really huge problems in biologics, which is being able to efficiently transport antibodies and other types of biologics across the blood brain barrier. So we're going at that based on a lot of groundwork by Biogen. And we think it's an exciting program. It's at the very early stages. But if successful, we think that that could make a big difference, not just for Biogen, but for the field.
Jacqueline Kisa: Great. Thank you. I appreciate it.
Operator: Our next question today is from the line of Scott Schoenhaus of KeyBanc. Please go ahead. Your line is open.
Scott Schoenhaus: Hi, team. Most of my questions have been asked, but I just wanted to touch on the three additional partner initiated programs. Can you just give us more color on the partners themselves, kind of therapies you're engaging with on these new programs? Just broad color if you could provide it. That's my first question. Thanks.
Andrew Booth: Hey, Scott, I think the three, we don't normally disclose the details about the programs, that's a partner initiation, but what we do is on an annual basis, you can find it in our full year results, show kind of a broadly across the number of programs we started, how they're distributed through different therapeutic areas. And what we started in the first quarter is really tracks really closely to what we have seen in the past.
Scott Schoenhaus: Okay, great. I know it's hard to give specifics on that. I guess my follow-up question would be on the internal molecule, the ABCL635. Do you still plan to take that through phase two on its own? And that's it for me. Thanks.
Carl Hansen: Thanks, Scott. Carl here. I'll take that one. So 635, just remind everyone, is an internal program against the GPCR & Ion Channel target for an indication in metabolic and endocrine disorders. It's one that we believe has the potential to be a first-in-class therapy and a program for which we're very excited. For strategic reasons, we have not disclosed any more than I just recounted here. In terms of our plans for clinical development, at this point, we're focused on getting this one to the start line in clinical development. We do believe that the nature of this program means that we'll get a lot of information in terms of proof-of-concept and safety from the early trials. And if those look good, then I think there's a real path for us taking this molecule further. But we're not committing to that until we see the data and we see where we are as a company at that point.
Scott Schoenhaus: Thank you.
Operator: Our next question today is from the line of Stephen Willey of Stifel. Please go ahead. Your line is open.
Stephen Willey: Yes, good afternoon. Thanks for taking the questions. Maybe just a follow-up on the TCE line of questioning. So, I know you spoke about having optimism regarding being able to make a deal that provides access to the platform, but it also sounds like such deal would probably require you to carve out some targets for internal development. So is the translational work that you're hoping to complete the in-vivo work, is that rate limiting at all to your ability to get a broader platform deal done?
Carl Hansen: So Steve, Carl here. So I don't think that our work on the programs we've initiated is a bottleneck to doing a platform deal of significance with a partner and we're engaged in discussions all the time on that front. You're asking a reasonable question in that we have started some work internally and it could well be that there's a partner that's interested in programs that are already in flight at AbCellera. That for me is not a problem. We disclose the programs that we've started when we engage in these conversations. If there's interest, then we can always have a business discussion about it. And if we believe that there's a deal that makes sense from both sides, that's a positive thing. If not, the TCE space in oncology and autoimmunity has a very large number of potential opportunities. And I'm not at all worried that we'd find that a conflict in something we're working on with a partner would get in the way of coming together to see this platform do what it really can.
Stephen Willey: Okay. And on the CD28 co-stim [ph] side, I'm guessing the objective there is to leverage CD3 and CD28 engagement on the same scaffold. Is that correct?
Carl Hansen: That's another good question. So we have generated binders for a couple of targets for co-stimulation, recognizing that T-cell exhaustion and T-cell survival is another important problem that needs to be solved if you want to bring TCEs to solid tumors. So we're running experiments internally with those right now and starting to understand how that science plays out. At this point, we haven't made a decision as to what the best format would be. And of course, as you know, Steve, there are leaders in the field that are approaching TRI specifics with dual engagement. There are some that are looking at two antibodies delivered together. I think both of those have merit. We're obviously watching that closely, but we're also doing work internally to see what looks best in our hands.
Stephen Willey: Okay. Maybe just one financial question. So, Andrew, I know you mentioned kind of the year-over-year impact on R&D spend with respect to the $20 million one time in '23, but just curious about the sequential step down from 4Q. And I know that there was a restructuring that was announced in I'm not sure how far along that is in terms of completion, but just wondering if kind of the sequential down stroke in R&D spend is kind of indicative of maybe what a trajectory should look like for the remainder of the year? Thank you.
Andrew Booth: Yes. Hey, Steve, Andrew here. Yes, absolutely. The restructuring, first of all, is completely done. So that would have been taken care of in the Q4 numbers. And I think that to -- I think your real question there is, is the Q1 number a good indication of what the go forward R&D expense is going to be. And I would say yes, it is a good indication. And yes, it's quite a difference from Q1 of 2023 because of that $20 million one time, which we called out at the time as well. If you remember this time last year, we did indicate there was a $20 million one time expense related to co-development in internal programs. So we thought it was just prudent to point that out again and why there's that reduction.
Stephen Willey: Got it. Thanks for taking the questions.
Operator: Our next question today is from the line of Puneet Souda of Leerink Partners. Please go ahead. Your line is open.
Unidentified Analyst: Hi, you have Michael on for Puneet. My first question has to do with the deal that you closed with Viking and ArrowMark. I was curious. So I know you mentioned a couple of years ago, you did deal with Atlas (NYSE:ATCO) Venture in Versant. Has the structure of these new partnerships evolved in any meaningful way relative to those prior deals, kind of as your platform itself has also been evolving?
Carl Hansen: Hi, Michael, Carl here. So I'll take that one. I don't know if we've disclosed the details of the structures of previous deals. This opportunity to sum it up is based on relationship with both Viking and ArrowMark. And having gotten to know both teams and have a lot of respect for what they bring to the table in terms of target ideas and in terms of the ability to bring capital and teams together around assets to form companies. The structure here is that those two groups will bring forward ideas for first-in-class antibody therapeutics. We vet these and we come together on a work plan. ArrowMark and Viking fund the R&D to take that concept through to a development candidate. And if successful, that development candidate creates the basis for a new co. As Andrew mentioned on a previous question, we obtain an equity stake in that new co-company and we also maintain downstream stake in the molecules through milestones and royalties that are comparable and on the healthy side of what we've done traditionally in the partnership business. So that's not dissimilar from certainly the deal that we did with Versant in the creation of Abdera. We like that deal a lot and it's one of the things that we have called out previously as being squarely in the bucket of strategic partnerships.
Unidentified Analyst: Okay. Got it. And then my next question has to do with I guess this recent update in biotech funding. I know you've been mostly focusing on strategic partnerships and your internal pipeline, but I was curious if you think if this funding were sustained, if there'd be any sort of impact on other parts of business or maybe even with the more VC [ph] firm type deal, that would potentially I guess grow the number of potential new codes?
Andrew Booth: Hey, it's Andrew here. Yes, I think that's -- it's possible. It's great to have a bit of a rebound in the biotech funding environment. And I think that can only provide a bit of a tailwind for our own business. But our real focus here is on advancing our own internal programs, building completing the platform and then on our strategic partnerships. Now, if ideas are funded and we believe that they're good ideas and partners come to us with an interesting opportunity, I mean, absolutely, we take a look at that and are certainly open in the co-development as well as the company creation kind of deal structures that we have been doing recently.
Unidentified Analyst: Great. Thank you.
Operator: [Operator Instructions] And our next question today is from the line of Evan Seigerman of BMO. Please go ahead. Your line is open.
Unidentified Analyst: Hello, this is Conor on Evan. Thanks for taking our question. I just have one follow-up on how you're thinking about phasing of OpEx as you look to bring assets into clinic. Is there a sweet spot of how many assets you might look to have in the clinic at any given time and then sort of partner out any additional assets beyond that? Or I don't know, just curious about that. Thank you.
Andrew Booth: Hey there, Conor, Andrew here. Yeah, good question. Of course, every program has its own nuances and it's difficult to predict because it's going to be driven by the scientific data and the clinical data about how many will advance. At the moment, as you know, we have two development candidates in IND enabling studies with the objective of having both of those at IND and starting a Phase 1 in 2025. We do have some funding available through this strategic innovation fund in the government of British Columbia that we announced last year that brought in that essentially were co-funding for a number of molecules through to the clinic over like an eight-year period. But that the rate at which they go in is very much going to depend on how good are the programs, what does the data look like and what the timing is as we bring them through IND enabling studies. So it's very difficult to try and predict any sort of regular pace.
Unidentified Analyst: Thank you.
Operator: And I'm showing no further questions at this time. So I'd like to hand back over to Carl Hansen for any closing remarks.
Carl Hansen: Just thank you for everyone for joining us today. This remains an exciting time at the company and we're looking forward to keeping you updated on future calls.
Operator: This concludes today's conference call. Thank you all for joining. You may now disconnect your lines.
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