Antibody Discovery Platform

# Executive Summary * The antibody discovery industry is undergoing a rapid transformation, with AI/ML-powered platforms emerging as the key driver of competitive advantage, enabling faster discovery and the pursuit of difficult-to-drug targets. * A significant shift towards high-value, complex antibody formats, particularly bispecifics (projected 44% CAGR) and antibody-drug conjugates (ADCs), is creating new revenue opportunities for platforms with specialized capabilities. * Strategic partnerships and outsourcing remain the financial lifeblood of the industry, providing non-dilutive capital, though leading players are evolving their models from volume-based licensing to selective co-development and internal pipeline creation. * High R&D costs and the complexity of biologics development exert significant pressure on profitability, resulting in industry-wide net losses and making strong balance sheets a critical factor for long-term viability. * Three distinct strategic models are emerging: the integrated platform-to-pipeline company (AbCellera), the pure-play technology licensor (OmniAb), and the AI-native drug creator (Absci). * The overall market is poised for strong growth, with various estimates projecting a Compound Annual Growth Rate (CAGR) of approximately 10-15% through 2035, fueled by the persistent global demand for novel, targeted therapies for chronic diseases. ## Key Trends & Outlook The antibody discovery landscape is undergoing a technology-driven transformation, where the integration of Artificial Intelligence and Machine Learning is the primary determinant of competitive success. AI-based platforms, a sub-segment projected to grow at a 22% CAGR between 2025 and 2033, are enabling companies to shorten discovery timelines significantly, with some players like Absci claiming up to a 50% reduction in speed. This technological leap allows for the design of antibodies against historically "difficult-to-drug" targets, unlocking new therapeutic areas and increasing the value of discovery partnerships. This trend is amplified by the market's pivot towards advanced antibody formats. Platforms capable of generating bispecific antibodies are positioned to capture a share of a market forecasted to grow at an astounding 44% annually between 2025 and 2034. Companies are investing heavily in specialized capabilities, such as OmniAb's bispecific-ready transgenic animals (OmniFlic and OmniClic) and AbCellera's T-cell engager platform, to meet this demand. The financial model for platform providers is rooted in the ongoing trend of pharmaceutical companies outsourcing R&D, with over 60% of recent partnership deals signed since 2021. This provides crucial, non-dilutive funding through fees, milestones, and royalties. However, strategies are diverging: some, like OmniAb, pursue a scalable licensing model with a broad base of 100 active partners and 381 active programs, while others, like AbCellera and Absci, are becoming more selective, using partnerships to fund a strategic pivot towards developing their own high-value, proprietary drug pipelines. The convergence of AI-powered discovery and the demand for complex, multi-specific drugs creates a significant opportunity for platforms that can efficiently design and optimize these next-generation therapeutics. The primary risk remains the substantial and rising cost of R&D, which pressures margins and necessitates a strong balance sheet to sustain operations through long development cycles. Absci's R&D expenses increased by 34% year-over-year in Q2 2025, while AbCellera reported $42.5 million in R1 2025. The industry-wide pattern of net losses underscores this financial fragility, making access to capital and prudent cash management critical for survival and success. ## Competitive Landscape The antibody discovery market is highly concentrated, with North America accounting for the largest share of the market. Within this competitive environment, players differentiate primarily on their proprietary technology platforms and strategic business models. One distinct strategic approach is that of the Platform-to-Pipeline Integrator, where companies leverage a successful, technology-driven discovery platform to generate initial revenue through partnerships, then strategically reinvest that cash flow and expertise to build and advance a proprietary pipeline of wholly-owned drugs. This model aims to capture significantly greater downstream value by owning the full economics of a successful drug, with the platform serving as a powerful, de-risked engine for pipeline creation. However, it is extremely capital-intensive, requiring massive investment in clinical development and manufacturing, and introduces significant clinical trial risk. AbCellera Biologics Inc. exemplifies this strategy, explicitly transitioning to a clinical-stage biotech and investing heavily in a clinical manufacturing (GMP) facility expected to be online by the end of 2025 to support its proprietary pipeline candidates. In contrast, the Pure-Play Technology Licensor model focuses exclusively on innovating and scaling a differentiated discovery technology, making it broadly available to partners across the industry. Revenue is generated entirely through licensing fees, milestone payments, and royalties on partners' successes. This model is highly scalable and capital-efficient, diversifying risk across numerous partner programs while avoiding the high costs and binary risks of clinical development. OmniAb, Inc. operates under this model, with its business thriving on collaboration and boasting 100 active partners and 381 active programs by Q2 2025. Its success is tied to the progression of this broad portfolio managed by others. A third approach is that of the AI-Driven Drug Creator, which positions AI and generative biology as the central, core competency, not just a tool. This advanced computational capability is used to design novel drugs *de novo* for difficult targets, pursuing a balanced portfolio of high-value internal programs and selective, deep co-development partnerships. This strategy offers the potential for breakthrough discoveries and significant acceleration of timelines, attracting premium partnerships and investor interest. Absci Corporation embodies this model with its "Integrated Drug Creation platform," which combines generative AI with a synthetic biology wet lab in a "lab in the loop" feedback system, forming its core identity. Absci is advancing internal programs like ABS-101 while securing high-value partnerships, such as its expanded collaboration with Almirall. ## Financial Performance Reported revenues in the antibody discovery platform industry are volatile and bifurcating, driven by the lumpy and unpredictable timing of milestone payments inherent in partnership-based models. Recent quarters show significant year-over-year declines for platform-derived revenue, with AbCellera reporting a 58% decrease in Q1 2025 and OmniAb experiencing a 48.7% decline in Q2 2025. This volatility is a direct feature of the outsourcing/partnership model, where GAAP revenue recognition can lag behind actual cash receipts and does not always reflect the creation of long-term value in the form of future royalties. OmniAb's Q2 2025 revenue decline, despite adding six new license agreements and growing to 100 active partners, perfectly illustrates the disconnect between short-term reported revenue and underlying business momentum. {{chart_0}} The entire sector is currently unprofitable, with significant and growing net losses. Quarterly net losses range from OmniAb's -$15.9 million in Q2 2025 to AbCellera's -$45.6 million in Q1 2025. This lack of profitability is a direct consequence of the high R&D costs required to stay at the cutting edge of technology advancements and to fund the strategic pivot to internal pipelines. Companies are in a high-investment phase, building the technological platforms and clinical assets they expect to generate profits in the future. Absci's 34% year-over-year increase in R&D expenses in Q2 2025 is a clear example of the aggressive investment required to advance an internal pipeline and AI platform, driving its -$30.6 million net loss. Capital allocation in the industry is almost exclusively directed towards internal growth, specifically R&D, technology, and infrastructure, rather than shareholder returns. This investment focus is dictated by the intense technological competition and the strategic shift towards capturing more value through proprietary pipelines. Companies are in a race to build the best platform and advance their own assets through the clinic. AbCellera's significant capital expenditure on a new corporate headquarters and a clinical GMP manufacturing facility, with substantial completion expected in the first half of 2025 and the GMP facility online by the end of 2025, is a prominent example of investing in infrastructure to support a long-term, integrated strategy. Balance sheet strength is mixed and represents a key point of competitive divergence. Given the high cash burn from R&D, a strong balance sheet and extended cash runway are critical for executing long-term strategy without being beholden to volatile capital markets. This financial strength allows companies to weather the pre-profitability phase and make strategic investments. AbCellera's liquidity position, with $605.3 million in cash, cash equivalents, and marketable securities as of March 31, 2025, and a projected cash runway of well beyond three years, provides it with maximum strategic flexibility compared to peers. Absci reported $117.5 million in cash as of June 30, 2025, with a runway extended into the first half of 2028 after a July 2025 capital raise, while OmniAb had $41.6 million as of June 30, 2025, with a $30 million private placement extending its runway into the second half of 2026. {{chart_1}}