AbCellera Biologics Inc. 10-Q

Item 1A. Risk Factors. There have been no material changes to the risk factors from the information provided in Item 1A. Risk Factors of our 2020 Annual Report on Form 10-K, with the exception of the below . Our quarterly and annual operating results have fluctuated significantly in the past and may fluctuate significantly in the future, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations. Our quarterly and annual operating results have fluctuated in the past and may fluctuate in the future, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to: • the level of demand for our antibody discovery platform and solutions, which may vary significantly; • the timing and cost of, and level of investment in, research, development and commercialization activities relating to our platform and technology, which may change from time to time; • the start and completion of programs in which our platform is utilized; • the relative reliability and robustness of our platform, including the data generation and computational tools within our technology stack; • the introduction of new technologies, platform features or software, by us or others in our industry; • expenditures that we may incur to acquire, develop or commercialize additional technologies; • expenditures involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including costs related to our intellectual property litigation with Berkeley Lights, and the outcome of this and any other future patent litigation we may be involved in; • the degree of competition in our industry and any change in the competitive landscape of our industry, including consolidation among our competitors or future partners; • natural disasters, outbreaks of disease or public health crises, such as the COVID-19 pandemic; • the timing and nature of any future acquisitions or strategic partnerships; • future accounting pronouncements or changes in our accounting policies; and • general social, political and economic conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors. For example, 2020 was the first year in which we received payments from a partner beyond upfront fees. The antibody, bamlanivimab developed by Eli Lilly and Company, or Lilly, has undergone clinical testing and has received Emergency Use Authorization from the FDA, and we have received associated milestone payments and royalties on net sales in 2020 and during the three months ended March 31, 2021. Lilly progressed into these clinical trials at a greatly accelerated pace as a result of the Coronavirus Treatment Acceleration Program, which is a special emergency program for possible coronavirus therapies created by the FDA in 2020 to expedite the development of potentially safe and effective life-saving treatments to combat the COVID-19 pandemic. With respect to other or future product candidates, there is no assurance that any of our partners or collaborators will be able to advance a product candidate through clinical development on this timeframe again in the future, or at all. We initiated our partnering program in 2015 and have only had this one program result in milestone and royalty payments to us to date and we have not yet had a program receive marketing approval. There is no guarantee that we will continue to generate the levels of revenue, particularly milestone and royalty revenues, from our partnerships as we have experienced in recent periods. For example, in April 2021, the FDA revoked the EUA for bamlanivimab as monotherapy, but maintained the EUA for bamlanivimab and etesevimab when administered together. Such decisions or similar decisions by regulatory agencies may adversely impact the payments that we receive from bamlanivimab in future periods. In addition, we have only recently begun to generate licensing revenue from our Trianni humanized 25 rodent platform. There can be no assurance that we will continue to generate or expand our licensing revenue from this product offering in future periods. The effect of one of the factors discussed above, or the cumulative effects of a combination of factors discussed above, could result in large fluctuations and unpredictability in our quarterly and annual operating results. As a result, comparing our operating results on a period-to-period basis may not be meaningful. Investors should not rely on our past results as an indication of our future performance.