Absci Corp SEC 10-K Report

Absci Corp, a biotechnology company specializing in the rapid creation and optimization of antibody therapeutics through its proprietary Integrated Drug Creation platform, has released its 2024 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the competitive biotech industry.

Financial Highlights

Total Revenue: $4.5 million, a decrease of $1.2 million or 21% compared to the previous year due to the timing of achieving project-based milestones and the mix of ongoing program activity.

Operating Loss: $(108.9) million, improved from $(115.5) million in the previous year, reflecting a decrease in total operating expenses.

Net Loss: $(103.1) million, improved from $(110.6) million in the previous year, primarily due to the absence of a goodwill impairment charge that was present in the prior year.

Net Loss Per Share: $(0.94), improved from $(1.20) in the previous year, reflecting the reduced net loss and increased weighted-average common shares outstanding.

Business Highlights

Integrated Drug Creation Platform: Absci Corp utilizes a proprietary platform that combines generative AI models with synthetic biology to design and optimize antibody therapeutics. This platform allows for rapid creation and validation of antibody designs, potentially reducing the time to clinic from the industry average of 4-6 years to around two years.

AI-Driven Drug Creation: The platform leverages generative AI to create epitope-specific product candidates, including those targeting hard-to-drug targets. The AI models are trained on both proprietary and public datasets, enabling multi-parametric optimization of drug attributes such as binding affinity and pharmacological profile.

Lab-in-the-Loop Process: The company's lab-in-the-loop process integrates data generation, AI design, and wet lab validation, allowing for the screening of millions of antibody sequences in weeks. This iterative cycle enhances the predictive capabilities of the AI models and accelerates drug creation.

Internally Developed Programs: As of December 31, 2024, Absci Corp has identified four wholly owned programs focusing on cytokine biology, with ABS-101 and ABS-201 as key development candidates targeting Inflammatory Bowel Disease and androgenic alopecia, respectively.

Partnered Programs: The company has active collaborations with multiple partners, including Owkin, Invetx, and AstraZeneca, across various therapeutic areas such as oncology and dermatology. These partnerships aim to leverage the Integrated Drug Creation platform for drug creation and co-development.

ABS-101 Development: ABS-101 is being developed as a treatment for Inflammatory Bowel Disease, with preclinical studies showing high affinity and potency. The candidate targets the immune-regulator TL1A and is expected to offer longer dosing intervals and improved patient compliance.

ABS-201 Development: ABS-201 targets the prolactin receptor for the treatment of androgenic alopecia. Preclinical studies have demonstrated high affinity, potency, and early efficacy in hair regrowth models, suggesting potential for durable hair regrowth.

Future Outlook: The company plans to continue expanding its portfolio of internally developed and partnered programs, focusing on AI-designed antibody therapeutics. It aims to enhance its platform's capabilities through continuous investment in technology and team expertise.

Human Capital and Culture: Absci Corp emphasizes a strong corporate culture with values such as innovation, diversity, and community. It offers competitive compensation, benefits, and development opportunities to attract and retain talent.

Intellectual Property: The company maintains a robust intellectual property estate with numerous patents covering its Integrated Drug Creation platform and internally developed programs. It also relies on trade secrets and confidentiality agreements to protect its proprietary technologies.

Strategic Initiatives

Strategic Initiatives: Absci Corp is focused on leveraging its Integrated Drug Creation platform to develop internally owned programs and expand partnerships. It aims to advance these programs to certain value inflection points before considering out-licensing or partnering opportunities. The company is also investing in research and development to enhance its platform capabilities, including novel target identification and application of AI.

Capital Management: The company has engaged in several capital management activities, including a public offering of common stock, which raised $80.8 million, and an 'at the market offering' program that generated $1.6 million. Additionally, the company secured $20 million through a private investment in public equity with Advanced Micro Devices, Inc. Equipment financing arrangements provided $12 million in proceeds, with outstanding balances of $4 million as of December 31, 2024. The company also maintains a shelf registration statement allowing for the issuance of up to $250 million in securities.

Future Outlook: Absci Corp plans to continue investing in its Integrated Drug Creation platform and expand its capabilities. It anticipates significant expenses related to research and development and aims to secure additional partnerships to drive revenue growth. The company expects its cash, cash equivalents, and short-term investments to be sufficient to meet its operating needs for at least the next 12 months. Future capital requirements will depend on the success of its development programs and ability to secure new partnerships.

Challenges and Risks

Financial Condition and Need for Additional Capital: Absci Corp faces significant risks related to its financial condition and need for additional capital. With a limited operating history since beginning commercial operations in 2018, the company has primarily generated revenue from drug creation activities through partnerships. The company does not anticipate generating revenue from commercial product sales until it successfully completes clinical development and achieves regulatory approval for its internally developed programs, which are still in preclinical development. The company has incurred significant losses since inception, with net losses of $103.1 million and $110.6 million for the years ended December 31, 2024, and 2023, respectively. As of December 31, 2024, the company had an accumulated deficit of $509.6 million.

The company expects its operating expenses to increase as it advances its internally developed programs into clinical development. It will need to raise additional capital to fund operations and improve its Integrated Drug Creation platform. If unable to raise additional capital on acceptable terms, the company may not be able to compete successfully, which would harm its business, operations, and financial condition.

Partnership Strategy: Absci Corp is also exposed to risks related to its partnership strategy. Substantially all of its historical revenue is related to partnered drug creation activities, and it has not demonstrated the ability to enter into a sufficient number of partnerships providing for long-term license arrangements under which it is entitled to receive milestone payments or royalties on net product sales. The company has not received any such milestone or royalty revenues to date, and it may be years before it realizes any such revenues, if at all.

Risks Related to Biologic Drug Development: Biologic drug development is inherently uncertain, and it is possible that the company's technology may not succeed in discovering appropriate molecules or producing cell lines. Even if successful, it is possible that none of the product candidates created using the company's Integrated Drug Creation platform will achieve development or regulatory milestones, including marketing approval, or become viable commercial technologies, on a timely basis or at all.

The company relies on third parties to conduct preclinical studies and any eventual clinical trials. If those third parties do not perform as contractually required, fail to satisfy legal or regulatory requirements, miss expected deadlines, or the relationship terminates prematurely, the company's internally developed programs could be delayed, more costly, or unsuccessful, and such programs may never obtain regulatory approval or commercialization.

Management’s Discussion and Analysis: Management has identified the need to raise additional capital as a primary challenge. The company expects its current cash, cash equivalents, and short-term investments to be sufficient to meet its working capital and capital expenditure needs over at least the next 12 months. However, if available resources and anticipated cash flow from operations are insufficient to satisfy liquidity requirements, the company will be required to raise additional capital through issuances of equity or convertible debt securities, entrance into a credit facility, or another form of third-party funding.

Market Risks: The company is exposed to market risks, including fluctuations in the availability and price of laboratory materials and equipment, which could have an adverse effect on its ability to meet drug creation goals with partners. An interruption in laboratory operations or technology transfer activities could occur if the company encounters delays, quality issues, or other difficulties in securing consumables, equipment, reagents, or other materials, and if it cannot then obtain an acceptable substitute.

SEC Filing: Absci Corp [ ABSI ] - 10-K - Mar. 18, 2025