Absci Corporation (ABSI), a trailblazer in the realm of data-first generative AI drug creation, has emerged as a formidable player in the biopharmaceutical industry. With its pioneering Integrated Drug Creation™ platform, the company is revolutionizing the way biologics are discovered and developed, offering the potential to dramatically accelerate the path from research to the clinic.
Company Background
Established in August 2011, Absci's journey has been marked by a relentless pursuit of innovation. The company was initially organized as a limited liability company in the state of Oregon, with the goal of improving upon traditional biologic drug discovery by using artificial intelligence (AI) to simultaneously optimize multiple drug characteristics that may be important to development and therapeutic benefit. In April 2016, the company converted to a limited liability company in Delaware, further solidifying its corporate structure. A significant milestone was reached in October 2020 when Absci converted from a Delaware LLC to a Delaware corporation, providing more flexibility for future growth and expansion.
Throughout its early years, Absci faced challenges common to many startups, including securing funding and establishing its technological capabilities. However, the company steadily grew its team and made progress on advancing its platform. The company's headquarters are located in Vancouver, Washington, where it has continued to develop and refine its proprietary Integrated Drug Creation™ platform.
Integrated Drug Creation™ Platform
At the heart of Absci's success lies its Integrated Drug Creation™ platform, a cutting-edge system that seamlessly combines AI-driven in silico design with scalable wet lab validation. By harnessing the power of generative AI models, the platform can rapidly generate billions of potential drug candidates, including antibodies, and screen them against a multitude of attributes to identify the most promising leads. This approach has the potential to dramatically shorten the traditional drug discovery timeline, which can often take 5-7 years, to as little as 18-24 months.
Strategic Collaborations
Absci's strategic collaborations have further bolstered its capabilities. In 2024, the company announced a groundbreaking partnership with AstraZeneca, a global biopharmaceutical leader, to leverage Absci's Integrated Drug Creation™ platform for the development of an AI-designed antibody targeting an oncology indication. Within just six months, Absci was able to deliver the first milestone - a novel antibody sequence designed using its proprietary AI models. This achievement serves as a testament to the platform's versatility and the company's ability to accelerate the drug discovery process.
Moreover, Absci's recent collaboration with Twist Bioscience, a pioneer in silicon-based DNA synthesis, has further expanded the company's reach. The partnership combines Absci's generative AI expertise with Twist's advanced DNA synthesis capabilities, enabling the rapid design and preclinical development of novel therapeutic antibodies.
Financials and Liquidity
Absci's financial position has shown both promise and challenges. For the fiscal year 2023, the company reported revenue of $5.72 million, with a net loss of $110.57 million. Operating cash flow for the year was negative $64.64 million, while free cash flow stood at negative $65.50 million. In the most recent quarter (Q3 2024), revenue was $1.70 million, representing a 58% decrease year-over-year due to the timing of project-based milestones and the mix of ongoing programs. The net loss for Q3 2024 was $27.40 million.
As of the latest reported quarter in 2024, Absci had $127.1 million in cash, cash equivalents, and short-term investments, providing resources to fund its ongoing operations and strategic initiatives. This represents a decrease from $145.2 million as of June 30, 2024. The company's liquidity position remains strong, with a current ratio and quick ratio of 4.08 as of December 31, 2023. Absci's debt-to-equity ratio stands at a conservative 0.06, indicating a low level of leverage.
For 2024, Absci has revised its guidance, now expecting the gross use of cash, cash equivalents, and short-term investments to be approximately $75 million, which is $5 million below their previous expectation. The company believes that its existing financial resources will be sufficient to fund operations into the first half of 2027, based on current plans.
Strategic Investment
The company's commitment to innovation has not gone unnoticed. In 2024, Absci received a $20 million strategic investment from semiconductor giant Advanced Micro Devices (AMD), underscoring the growing demand for AI-driven solutions in the biopharmaceutical industry. This partnership will leverage AMD's high-performance computing capabilities to further enhance Absci's AI drug discovery capabilities.
Business Segments and Revenue Streams
Absci operates primarily in two key business segments:
1. Technology Development Revenue: This is Absci's primary source of revenue, derived from technology development agreements with partners. These agreements utilize Absci's Integrated Drug Creation platform to generate and validate biologic drug candidates. Revenue from these agreements fluctuates based on the timing of new partnerships, contractual structures, and milestone achievements.
2. Internal Pipeline: Absci is developing its own pipeline of drug candidates, showcasing the full potential of its platform. As of June 30, 2024, the company had three wholly-owned internal pipeline programs focused on cytokine biology, along with several undisclosed programs under evaluation.
Research and Development
Absci's commitment to innovation is reflected in its research and development expenses, which were $18 million for Q3 2024, compared to $11 million in the prior year period. This increase underscores the company's focus on advancing its proprietary programs and enhancing its platform capabilities.
Proprietary Programs
Absci is making significant progress with its proprietary programs:
1. ABS-101 (potential best-in-class TL1A antibody): The company plans to initiate Phase 1 clinical studies in the first half of 2025, with an interim data readout expected in the second half of 2025.
2. ABS-201 (potential best-in-class dermatology program): Absci anticipates selecting a development candidate for this program in 2024 and plans to share additional data at its R&D Day in December 2024.
3. ABS-301 (potential first-in-class immune-oncology program): The company expects to complete mode-of-action validation studies in the first half of 2025, with data to be shared shortly after.
Industry Trends
The biologics market, in which Absci operates, is expected to grow at a compound annual growth rate (CAGR) of 12% from 2024 to 2067, driven by the aging global population. This trend bodes well for Absci's long-term growth prospects as demand for innovative biologic therapies continues to rise.
Challenges and Outlook
Despite the promising progress, Absci is not without its challenges. The biopharmaceutical industry is inherently complex, with regulatory hurdles, competition, and technological risks posing potential obstacles. The company's recent revenue decline highlights the volatility inherent in its business model, which is heavily dependent on milestone achievements and partner program decisions.
However, Absci's diversified portfolio of partnerships and internal programs, coupled with its strong financial position and reduced cash burn rate, positions it well to navigate these challenges and continue its trajectory of innovation. The company's ability to expand its platform capabilities, secure new and deepen existing partnerships, and advance its internal pipeline will be crucial in determining its future financial and operational success.
As Absci forges ahead, its focus on creating better biologics for patients, faster, through the power of generative AI and strategic collaborations, positions it as a potential leader in reshaping the future of drug discovery and development in the rapidly evolving biopharmaceutical landscape.