7 unchanged sentences
We aim to become the centralized operating system for next generation antibody discovery.
−Removed: Our full-stack, artificial intelligence-, or AI, powered drug discovery platform searches and analyzes the database of natural immune systems to find antibodies that can be developed as drugs.
+Added: Our full-stack, artificial intelligence-, or AI, powered antibody discovery platform searches and analyzes the database of natural immune systems to find antibodies that can be developed as drugs.
We believe our technology increases the speed and the probability of success of therapeutic antibody discovery, including enabling discovery against targets that may otherwise be intractable.
−Removed: Rather than advancing our own clinical pipeline of drug candidates, we forge partnerships with drug developers of all sizes, from large cap pharmaceutical to small biotechnology companies.
+Added: We forge partnerships with drug developers of all sizes, from large cap pharmaceutical to small biotechnology companies.
We empower them to move quickly, reduce cost and tackle the toughest problems in drug development.
12 unchanged sentences
Our partnership agreements include near-term payments for technology access, research and intellectual property rights, and downstream payments in the form of clinical and commercial milestones, and royalties on net sales.
+Added: We also participate in alternative investment opportunities including equity in our business partner and various rights for deeper involvement in moving molecules forward.
Longer-term we are eligible to receive additional payments upon satisfaction of clinical and commercial milestones, which we refer to as milestone payments, as well as royalties on sales of products derived from antibodies that we discover for our partners.
1 unchanged sentence
We generated revenue of $233.2 million and $375.2 million for the years ended December 31, 2020 and 2021, respectively.
−Removed: As of December 31, 2020, we had a total of 27 partners for whom we were conducting drug discovery activities.
−Removed: For the year ended December 31, 2019, two of our partners accounted for 47% and 15% of revenue, and eleven partners accounted for the remaining 38% of revenue.
+Added: As of December 31, 2021, we had a total of 36 partners for whom we were conducting antibody discovery activities.
For the year ended December 31, 2020, three of our partners accounted for 35%, 25% and 14% of our research fees revenue and eight partners accounted for the remaining 26% of research fees revenue.
For the year ended December 31, 2020 we recognized our first clinical milestone payments and royalty revenue streams, totaling $213.3 million, exclusively from our partnership with Lilly.
+Added: For the year ended December 31, 2021, four of our partners accounted for 29%, 17%, 11% and 10% of our research fees revenue and 12 partners accounted for the remaining 33% of research fees revenue.
+Added: For the year ended December 31, 2021, we recognized milestone payments of $7.0 million and royalty revenue of $327.3 million exclusively from our partnership with Lilly.
Our partnership with Lilly constituted one of the partnerships that generated 10% or more of our consolidated revenues during the one or more periods described above.
−Removed: With respect to the other partners, we do not believe the loss of any one or
−Removed: more of such partners would have a material adverse effect on us and our subsidiaries taken as a whole.
+Added: With respect to the other partners, we do not believe the loss of any one or more of such partners would have a material
+Added: adverse effect on us and our subsidiaries taken as a whole.
We have also grown the number of programs that we have under contract with our partners, as illustrated by the following charts.
−Removed: We have achieved such growth in our business with a modest sales and marketing infrastructure, consisting of a limited number of business development personnel supported by marketing staff that have historically been primarily focused on scientific writing.
We incurred sales and marketing expenses of $3.8 million and $6.9 million for the years ended December 31, 2020 and 2021, respectively.
−Removed: We are significantly increasing investment into our business development team and into marketing our solutions to new and existing partners.
+Added: We are increasing investment into our business development team and into marketing our solutions to new and existing partners.
We focus a substantial portion of our resources on research and development efforts towards deepening our technology and expertise along our technology stack, and we expect to continue to make significant investments in this area for the foreseeable future.
1 unchanged sentence
We incurred general and administrative expenses of $11.9 million and $41.8 million for the years ended December 31, 2020 and 2021, respectively.
−Removed: We have also experienced significant growth in our workforce in recent periods, increasing from 107 employees as of December 31, 2019 to 206 employees as of December 31, 2020.
We expect to continue to incur significant expenses, and we expect such expenses to increase substantially in connection with our ongoing activities, including as we:
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operate as a public company.
−Removed: To date, we have financed our operations primarily from revenue from our drug discovery partnerships in the form of research fees, government funding from grants, external borrowings, and from the issuance and sale of convertible preferred shares and notes, and common shares.
−Removed: Our net loss for the year ended December 31, 2019 was $2.2 million and our net earnings for the year ended December 31, 2020 was $118.9 million.
−Removed: As of December 31, 2020, we had accumulated earnings of $114.2 million and we had cash and cash equivalents totaling $594.1 million.
−Removed: The following chart illustrates key milestones achieved since our inception.
+Added: To date, we have financed our operations primarily from revenue from our antibody discovery partnerships in the form of revenue, government funding from grants, external borrowings, and from the issuance and sale of convertible preferred shares and notes, and common shares.
+Added: Our net earnings for the year ended December 31, 2020 was $118.9 million and our net earnings for the year ended December 31, 2021 was $153.5 million.
+Added: As of December 31, 2021, we had accumulated earnings of $267.7 million and we had balance of cash, cash equivalents, and marketable securities totaling $723.0 million.
Recent Developments
−Removed: In March 2020, we entered into a discovery partnership agreement with Eli Lilly and Company, or Lilly, pursuant to which we will perform discovery research for a number of targets for Lilly that will result in antibodies for Lilly to develop and potentially commercialize.
−Removed: This partnership includes the licensing of bamlanivimab, a monoclonal antibody designed to block viral attachment of the COVID-19 virus and its entry into human cells as well as other candidate antibodies against COVID-19 discovered by AbCellera.
−Removed: On June 1, 2020, 90 days after program initiation, bamlanivimab moved to first-in-human testing and progressed to Phase 3 clinical trials by July 2020.
−Removed: For the year ended December 31, 2020, we received an aggregate of $15.0 million upon the satisfaction of clinical and approval milestones by Lilly and recognized $198.3 million in royalty revenue related to bamlanivimab.
−Removed: Royalty revenues of $198.3 are reduced by the associated royalty fees payable to the National Institutes of Health of $27.1, resulting in a final amount received of $171.2 after royalty fee payments.
−Removed: This royalty impact, incorporating the related royalty fees payable, is based on our royalty arrangements of low- to mid-teens for aggregate sales for COVID-19 therapeutics below $125.0 million and mid-teens to mid-twenties on aggregate sales above $125.0 million.
−Removed: In March 2020, we completed an equity financing, raising an aggregate of $75.0 million in gross proceeds through the sale and issuance of Series A2 convertible preferred shares.
−Removed: In connection with this financing, we also entered into a senior secured credit agreement with OrbiMed Royalty & Credit Opportunities III, LP, or OrbiMed, which provided for term debt in an aggregate amount of $30.0 million.
−Removed: In July 2020, we repaid funds borrowed under the credit agreement facility in full and retired the credit facility with OrbiMed .
−Removed: Immediately prior to the completion of our IPO, our convertible preferred shares and notes were converted to common shares.
−Removed: In April 2020, we entered into a multi-year agreement with the Canadian government’s Strategic Innovation Fund, or SIF.
−Removed: Under this agreement, CAD $175.6 million ($125.6 million) was committed by the Government of Canada.
−Removed: To date, our business has required only minimal expenditures for manufacturing activities.
−Removed: As part of our strategy to expand our market by delivering a full solution through forward integration, we plan to add capabilities and infrastructure to support GMP manufacturing, and we intend to apply such SIF funding towards this goal.
−Removed: In November 2020, we acquired Trianni.
−Removed: In connection with the acquisition, our U.S.
−Removed: subsidiary entered into an agreement and plan of merger for an initial purchase price of $90.0 million, subject to certain adjustments for working capital, indebtedness and expenses.
−Removed: Upon consummation of the merger, Trianni became our wholly-owned subsidiary.
−Removed: We paid the purchase price for the acquisition using the proceeds from the issuance of the Convertible Notes in an aggregate amount of $90.0 million.
−Removed: The Convertible Notes will mature on October 30, 2025, unless prepaid or converted earlier, and will bear interest from October 30, 2021 at an annual rate of 5%, payable annually in arrears on October 30 of each year, beginning on October 30, 2022.
−Removed: Interest on the Convertible Notes is payable in cash or in the form of additional nonconvertible notes.
−Removed: The Convertible Notes are convertible at the option of the noteholders into our common shares under certain circumstances, including upon the closing of this offering.
−Removed: Convertible Notes converted upon the closing of this offering will convert at a price of 85% of the IPO price.
−Removed: In December 2020, we completed Abcellera’s IPO on the Nasdaq.
−Removed: The Company completed the sale of 27,772,500 shares of its common shares in the IPO at a price to the public of $20.00 per share.
−Removed: The Company raised gross proceeds of $555.5 million, or aggregate net proceeds of $522.8 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.
−Removed: Immediately prior to the completion of our IPO, our convertible preferred shares and notes were converted to common shares.
+Added: In February 2022, we announced that bebtelovimab (LY-CoV1404), the second antibody developed through our collaboration with Lilly, received EUA from the FDA for the treatment of mild-to-moderate COVID-19.
+Added: Lilly announced in February 2022 that they entered into a purchase agreement with the U.S.
+Added: government to supply up to 600,000 doses of bebtelovimab no later than March 31, 2022, with an option of 500,000 additional doses no later than July 31, 2022, for at least $720 million.
Key Factors Affecting Our Results of Operations and Future Performance
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Our partners successfully developing and commercializing the antibodies that we discover.
−Removed: We have historically generated nearly all of our revenue from research fees.
We estimate that, based on the terms of our existing contracts and estimates of historical rates of success of antibody drug development, the vast majority of the potential value for each program under contract is represented by potential future milestone payments and royalties rather than research fees.
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As our partners continue to advance development of the antibodies that we have discovered, we expect to start receiving additional milestone payments and royalties if any partners commence commercial sales of such antibodies.
−Removed: For example, recent public announcements by our partner Lilly have indicated that the bamlanivimab antibody is advancing through late stage clinical trials.
−Removed: We received development milestone payments of $15.0 million from this partnership during year ended December 31, 2020.
−Removed: If this product candidate receives marketing approval and is successfully commercialized by Lilly, we are entitled to receive approval milestones payments and royalties on such sales.
−Removed: The total aggregate amount of clinical and approval milestones related to this partnership is up to $29.0 million.
−Removed: On October 7, 2020, Lilly submitted a request for an EUA for the bamlanivimab single agent therapy to the FDA, which was granted on November 9, 2020.
−Removed: On October 28, 2020, Lilly announced an agreement with the U.S.
−Removed: government to supply 300,000 vials of bamlanivimab for $375.0 million and on December 2, 2020, Lilly announced the purchase by the U.S.
−Removed: government of an additional 650,000 doses of bamlanivimab for $812.5 million.
−Removed: On October 29, 2020, Lilly also announced a fixed price contract for procurement of bamlanivimab in the amount of $312.5 million with the U.S.
−Removed: Army Contracting Command.
−Removed: On November 22, 2020, Lilly was granted authorization for the bamlanivimab single agent therapy by Health Canada under the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19.
−Removed: On November 24, 2020, Lilly announced an
−Removed: agreement with the Canadian government to supply 26,000 doses of bamlanivimab for the three month period between December 2020 and February 2021, for $32.5 million.
−Removed: Under our partnership with Lilly, we are entitled to receive a specified percentage of proceeds that Lilly receives from these sales.
Rate and timing of selecting and initiating discovery projects by our partners.
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The rate and timing of such selection and initiation differs from partner to partner.
−Removed: Because the vast majority of research fees that we are entitled to recognize under our partnerships depend on our delivery of antibodies for development by our partners, any delays by our partners in selecting targets and agreeing on statements of work will impact revenue recognition.
+Added: Research fees that we recognize under our partnerships depend on our delivery of antibodies for development by our partners and delays by our partners in selecting targets and agreeing on statements of work may impact revenue recognition.
Investing in enhancements to our technology stack.
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We intend to maintain our leading position through research and development investments to refine and add capabilities in areas such as computation, protein engineering, immunization technologies, genetically engineered rodents and cell line selection.
−Removed: We have successfully closed and will continue to look for strategic technology acquisitions to improve, broaden and deepen our capabilities and expertise in antibody drug discovery and development, or those that offer opportunities to expand our partnership business into adjacent therapeutic modalities.
+Added: We have successfully closed and will continue to look for strategic technology acquisitions to improve, broaden and deepen our capabilities and expertise in antibody discovery and development, or those that offer opportunities to expand our partnership business into adjacent therapeutic modalities.
We intend to devote substantial resources to continue to improve our technological differentiation which will impact our financial performance.
1 unchanged sentence
As we secure additional programs under contract and as our partners initiate discovery programs, our operational capacity to execute such research activities may become strained.
−Removed: We are making significant investments in capital and time to increase our ability to address future growth, including building new headquarters, building a new small-scale manufacturing plant, investing in research and development and hiring more talented personnel across functions.
−Removed: We have new facilities under development scheduled to take occupancy in 2021 that are intended to materially expand capacity.
−Removed: Over the past twelve months, we have grown our workforce by 93%, moving from 107 to 206 full time employees as of December 31, 2020.
+Added: We are making significant investments in capital and time to increase our ability to address future growth, including building new headquarters through our Dayhu and Beedie joint ventures, building a new small-scale manufacturing plant, investing in research and development and hiring more talented personnel across functions.
+Added: We have new facilities under development scheduled to take occupancy in early 2022 and 2023 that are intended to materially expand capacity.
As we expand our workforce, we expect a significant increase in our operating expenses, including stock - based compensation.
2 unchanged sentences
We believe that the following metrics are important to understand our current business.
−Removed: These metrics may change or may be substituted for additional or different metrics as our business develops.
+Added: These metrics may change or may be substituted for additional or different metrics as
+Added: our business develops.
For example, as our business matures and to the extent programs are discontinued, we anticipate updating these metrics to reflect such changes.
Year Ended December 31,
+Added: Cumulative Metrics
Number of discovery partners
−Removed: Programs under contract, cumulative
−Removed: Program starts, cumulative
+Added: Programs under contract
+Added: Program starts
Programs in the clinic
+Added: The table below outlines the details of molecules in the clinic as of December 31, 2021:
+Added: Most advanced stage
+Added: Therapy areas
+Added: Bamlanivimab (LY-CoV555)
+Added: Marketed, Emergency Use Authorization (EUA)
+Added: Eli Lilly and Company
+Added: Infectious disease – COVID-19
+Added: Discovery partnership
+Added: Bebtelovimab (LY-CoV1404)
+Added: Eli Lilly and Company
+Added: Infectious disease – COVID-19
+Added: Discovery partnership
+Added: NovaRock Biotherapeutics Inc.
+Added: Dermatology, gastrointestinal, immunology
+Added: Trianni license
+Added: NovaRock Biotherapeutics Inc.
+Added: Trianni license
+Added: Clinical field study
+Added: Animal health
+Added: Discovery partnership
Number of discovery partners represents the unique number of partners with whom we have executed partnership contracts.
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We view this metric as an indication of our operational capacity to execute on programs under contract.
−Removed: It is also an indication of the selection and initiation of discovery projects
−Removed: by our partners and the resulting near-term potential to earn research fees.
+Added: It is also an indication of the selection and initiation of discovery projects by our partners and the resulting near-term potential to earn research fees.
Cumulatively, program starts with downstream participation indicate our total opportunities to earn downstream revenue from milestone fees and royalties in the mid- to long-term.
−Removed: Programs in the clinic represent the count of unique programs for which an Investigational New Drug, or IND, New Animal Drug or Pre-Market Approval, or PMA, application, or equivalents under other regulatory regimes, has been filed based on an antibody that was discovered by us.
−Removed: Where the date of such application is not known to us, the date of the first public announcement of clinical trials will be used instead for the purpose of this metric.
+Added: Molecules in the clinic represent the count of unique molecules for which an Investigational New Drug, or IND, New Animal Drug, or equivalent under other regulatory regimes, application has been approved based on an antibody that was discovered either by us or by a partner using licensed AbCellera technology.
+Added: Where the date of such application approval is not known to us, the date of the first public announcement of a clinical trial will be used for the purpose of this metric.
We view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long term.
+Added: Summary partnership agreements with pharmaceutical and biotechnology companies that include downstream participation from 2016 to Dec ember 3 1 , 2021 :
+Added: # of Targets & Duration
+Added: Therapeutic Indication or Modality
+Added: Date Announced
+Added: Everest Medicines
+Added: Up to 10 targets, multi-year
+Added: Oncology and undisclosed
+Added: September 22, 2021
+Added: Up to 6 targets, multi-year
+Added: RNA-encoded antibodies
+Added: September 15, 2021
+Added: Multi-target, multi-year
+Added: Oncology and immunology (initially)
+Added: August 4, 2021
+Added: Single target
+Added: August 3, 2021
+Added: Undisclosed biotech
+Added: Up to 4 targets, multi-year
+Added: June 30, 2021
+Added: Multi-target, multi-year
+Added: Ophthalmology
+Added: Undisclosed biotech
+Added: Multi-target, multi-year
+Added: Up to 5 targets, multi-year
+Added: April 14, 2021
+Added: Gilead Sciences
+Added: 8 targets, multi-year
+Added: April 1, 2021
+Added: Abdera Therapeutics
+Added: 9 targets, multi-year
+Added: January 14, 2021
+Added: Multi-target, multi-year
+Added: Animal Health
+Added: November 19, 2020
+Added: Kodiak Sciences
+Added: Multi-target, multi-year
+Added: Ophthalmology
+Added: October 29, 2020
+Added: IGM Biosciences
+Added: Multi-target, multi-year
+Added: Oncology and immunology
+Added: September 24, 2020
+Added: Single target
+Added: Up to 9 targets, multi-year
+Added: COVID-19 program and additional indications
+Added: Regeneron Pharmaceuticals
+Added: Multi-target, multi-year
+Added: Multiple undisclosed
+Added: March 16, 2020
+Added: Multi-target, multi-year
+Added: Animal health
+Added: February 23, 2020
+Added: Multi-target, multi-year
+Added: September 25, 2019
+Added: Gilead Sciences
+Added: Single target
+Added: Infectious disease
+Added: June 13, 2019
+Added: Denali Therapeutics
+Added: 8 targets, multi-year
+Added: Neurological diseases
+Added: February 28, 2019
+Added: Up to 10 targets, multi-year
+Added: February 14, 2019
+Added: Autolus Therapeutics
+Added: Single target
+Added: Cell therapy (CAR-T)
+Added: November 29, 2018
+Added: Denali Therapeutics
+Added: Single target
+Added: Neurological diseases
+Added: June 12, 2018
+Added: Undisclosed mid-cap biopharma
+Added: January 25, 2018
+Added: Teva Pharmaceutical Industries
+Added: Single target
+Added: Membrane protein
+Added: June 13, 2017
+Added: Multi-target, multi-year
+Added: Membrane protein
+Added: January 5, 2017
+Added: Undisclosed global biotech
+Added: Multi-target, multi-year
+Added: November 4, 2016
+Added: Kodiak Sciences
+Added: Single target
+Added: Ophthalmology
+Added: August 24, 2016
+Added: Teva Pharmaceutical Industries
+Added: February 2, 2016
+Added: * Effective date of agreement
Components of Results of Operations
−Removed: Our revenue is comprised of partnership research fees, development milestones and royalty payments from commercial products.
+Added: Our revenue is comprised of partnership research fees, licensing revenue, development milestones, and royalty payments from commercial products.
Research fees consist primarily of technology access fees, which are generally generated upon execution of our partnership agreements, and discovery research fees, which are generated through our performance of antibody discovery research for our partners.
+Added: Licensing revenue is primarily from our licensing of our humanized rodent platform, Trianni™.
Our partnership agreements also entitle us to receive payments upon the satisfaction of clinical, approval, and commercial milestones as well as royalties on our partners’ commercial sales of the molecules that we discover.
−Removed: We expect revenue to increase over time as we secure additional programs under contract and conduct discovery efforts for our partners, and as our partners continue the development of the antibodies that we deliver.
−Removed: We expect that our revenue will fluctuate from period to period due to the timing of securing additional programs under contract, the inherently uncertain nature of the timing of milestone achievement and our dependence on the program decisions of our partners.
+Added: We expect that our revenue, particularly revenue arising from royalties of antibodies sold by our partners, will fluctuate from period to period due to variances in demand for such antibodies and the status of regulatory approvals or emergency use authorizations for such antibodies.
+Added: We expect that our overall revenue will fluctuate from period to period due to the timing of securing additional programs under contract, the inherently uncertain nature of the timing of milestone achievement, our dependence on the program decisions of our partners and uncertainty in sales of our antibodies by our partners that generate royalty revenue.
Operating Expenses
2 unchanged sentences
Royalty fees are not included in every program.
−Removed: For royalties received from Lilly for commercial sales of bamlanivimab, royalty fees were due to collaboration partners in AbCellera’s DARPA P3 (Pandemic Preparedness Program) project focused on rapid pandemic response.
+Added: For royalties received from
+Added: Lilly for commercial sales of bamlanivimab , royalty fees were due to collaboration partners in AbCellera’s DARPA P3 (Pandemic Preparedness Program) project focused on rapid pandemic response.
Royalty fees are recorded when the third-party sale occurs.
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Sales and marketing expenses.
−Removed: Our sales and marketing expenses consist primarily of salaries, benefits, and stock-based compensation costs for employees within our commercial sales functions, as well as marketing, travel expenses and information technology costs that are directly associated with sales and marketing efforts, such as client relationship management tools and other information technology data tools to provide insight into market segments and trends.
−Removed: This activity has been complemented with research and development staff attending a variety of scientific conferences, which has helped increase the business development pipeline.
−Removed: The associated expenses are included in research and development expenses as scientific conference attendance is primarily related to our research and development efforts.
+Added: Our sales and marketing expenses consist primarily of salaries, benefits, incentive compensation and stock-based compensation costs for employees within our commercial sales functions, as well as marketing, travel expenses and information technology costs that are directly associated with sales and marketing efforts, such as client relationship management tools and other information technology data tools to provide insight into market segments and trends.
We expect our sales and marketing expenses to increase in absolute dollars as we expand our commercial sales, marketing and business development teams;
3 unchanged sentences
General and administrative expenses.
−Removed: General and administrative expenses primarily consist of salaries, benefits and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees,
−Removed: general corporate costs and allocated overhead expenses.
+Added: General and administrative expenses primarily consist of salaries, benefits, incentive compensation and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses.
General and administrative expenses also include all rent and facilities expenses for all employees, regardless of department or function.
6 unchanged sentences
Interest income.
−Removed: Interest income consists of interest earned on cash balances in our Bank of Montreal cash accounts.
−Removed: In 2020, following the closing of our preferred share financing, interest income also included interest earned on money market funds administered by Bank of Montreal.
−Removed: Interest and Other (Income) Expense.
−Removed: Interest expense consists primarily of interest related to borrowings under our credit agreements.
−Removed: For the years ended December 31, 2018 and 2019, we had credit and overdraft agreements with Bank of Montreal.
−Removed: In 2020, prior to the closing of our preferred share financing, we repaid and terminated all material Bank of Montreal credit agreements.
−Removed: In connection with our preferred share financing, we entered into a new credit agreement with OrbiMed.
−Removed: In the third quarter of 2020, we repaid this credit agreement with OrbiMed and retired all of the credit facility.
+Added: Interest income consists primarily of interest earned on cash, cash equivalent, and marketable securities balances.
+Added: Interest and other expense.
+Added: Interest expense consists primarily of financing fees, fair value adjustments of contingent consideration and investments, and includes interest on borrowings under any credit agreements.
Foreign exchange (gain) loss, net.
−Removed: Foreign exchange (gain) loss, net, consists primarily of income or loss due to fluctuation in exchange rates between the Canadian dollar and the U.S.
+Added: Foreign exchange (gain) loss, net, consists of income or loss due to fluctuation in exchange rates in the foreign jurisdictions that we operate in.
All of our historical revenue has been generated in U.S.
1 unchanged sentence
Grants and incentives include cost recovery on activities that qualified for approved projects supported by grant funding or tax credits.
−Removed: Grants primarily include the benefit from programs administered by the Canadian government’s Ministry of Innovation, Science and Economic Development, such as their Industrial Research Assistance Program, which impacts 2018 and 2019, and the Strategic Innovation Fund, which impacts the twelve months ended December 31, 2020.
+Added: Grants primarily include the benefit from programs administered by the Canadian government’s Ministry of Innovation, Science and Economic Development, Strategic Innovation Fund.
To the extent that grant funding covers capital expenditures, a deferred credit is recorded on the balance sheet and recognized ratably over the benefit period of the related expenditure for which the grant was intended to compensate.
1 unchanged sentence
federal and state research and experimentation tax credits.
−Removed: Depending on our Canadian tax status, either a refundable cash or tax credit is accrued for every dollar spent in eligible research and development activities.
−Removed: In Australia, government investment tax credits are in the form of a tax credit for our Australian entity Channel Biologics Pty Ltd.
−Removed: federal and state tax credits are a general business credit based on eligible research and development expenditures for our U.S.
−Removed: subsidiaries.
−Removed: Refundable tax credits are included in grants and incentives.
−Removed: Tax credits are included in a note in the financial statements.
+Added: Where we qualify for refundable tax credits, these are included in grants and incentives in the year the qualifying expenditure is made.
+Added: Non-refundable tax
+Added: credits are recognized as a reduction to income tax expense in the year they are earned and are included in a note in the financial statements.
We expect to continue to benefit from these tax programs in the future.
4 unchanged sentences
Research fees
+Added: Licensing revenue
Milestone payments
15 unchanged sentences
Net earnings (loss) before income tax
−Removed: Provision for income tax
−Removed: Net earnings (loss) for the year
+Added: Income tax expense
+Added: Net earnings (loss)
+Added: Foreign currency translation adjustment
+Added: Comprehensive income (loss)
Net earnings (loss) per share attributable to common shareholders
3 unchanged sentences
Year Ended December 31,
−Removed: (in thousands)
−Removed: Research and development
−Removed: Sales and marketing
−Removed: General and administrative
+Added: Research and development expenses
+Added: Sales and marketing expenses
+Added: General and administrative expenses
Total stock-based compensation
3 unchanged sentences
Research fees
+Added: Licensing revenue
+Added: Milestone payments
+Added: Royalty revenue
Total revenue
−Removed: Revenue increased by $2.8 million, or 31%, from the year ended December 31, 2018 to the year ended December 31, 2019.
−Removed: The increase was primarily driven by a higher number of programs under contract executed in 2019 for which we received research fees associated with discovery work conducted for our partners.
−Removed: There was no clinical milestone payment revenue in the years ended December 31, 2018 and 2019.
+Added: Revenue increased by $142.0 million from the year ended December 31, 2020 to the year ended December 31, 2021.
+Added: In 2021, we received milestone revenue upon the first commercial sale in Europe by Lilly relating to molecule bamlanivimab for treatment of COVID-19 in the amount of $7.0 million and $1.0 million in milestone payments from Trianni licenses.
+Added: Royalty revenue of $327.3 million for the year ended December 31, 2021 are directly associated with the specified percentage of proceeds that Lilly received from the sales of bamlanivimab.
+Added: We earned $20.8 million in licensing revenue related to the Trianni humanized rodent platform business.
+Added: The significant growth we delivered in program starts drove higher research fees in the year on non-COVID-19 discovery programs, offset by fees earned last year against our COVID-19 discovery program leading to a net decrease in research fees of $0.8 million.
Operating Expenses
−Removed: Research and Development
Year Ended December 31,
(in thousands, except percentages)
+Added: Royalty fees increased by $18.4 million from the year ended December 31, 2020 to the year ended December 31, 2021.
+Added: Royalty fees are directly attributable to the royalty revenues received by the Company from sales of bamlanivimab by Lilly due to AbCellera’s collaborators in pandemic response.
+Added: Research and Development, Exclusive of Depreciation and Amortization
+Added: Year Ended December 31,
+Added: (in thousands, except percentages)
Research and development
−Removed: Research and development expenses increased by $4.3 million, or 74%, from the year ended December 31, 2018 to the year ended December 31, 2019.
−Removed: The increase was primarily driven by increased headcount in the research and development function and associated expenses consisting primarily of personnel compensation in the amount of $2.5 million.
−Removed: In addition, expenses related to materials supporting research and development activities increased $0.9 million.
+Added: Research and development expenses increased by $32.7 million, or 111%, from the year ended December 31, 2020 to the year ended December 31, 2021 reflecting continuing strong investments in the capacity and capabilities of AbCellera’s antibody discovery and development platform.
+Added: $13.2 million of the increase is due to the increase in compensation expense consistent with increased headcount.
+Added: $10.2 million of the increase relates to stock-based compensation expense.
+Added: $13.6 million of the increase is attributed to an increase in facilities, research materials, supplies and services consistent with the overall increase in research and development activities.
+Added: The overall increase was partly offset by the decrease in IPR&D expense of $4.2 million attributable to the 2020 purchase of the OrthoMab bispecific platform, and licensing fees incurred during the prior period.
Sales and Marketing
3 unchanged sentences
Sales and marketing expenses increased by $3.1 million, or 80%, from the year ended December 31, 2020 to the year ended December 31, 2021.
−Removed: The increase was primarily driven by increased compensation expense in the amount of $0.3 million and the engagement of a public relations consulting firm of $0.2 million.
+Added: The increase was primarily driven by increased headcount in business development and marketing staff which resulted in an increase of $1.5 million in compensation expenses.
+Added: $0.8 million of the increase is attributable to a donation made to Surrey Hospital to fund a study related to bamlanivimab in Canada.
+Added: The remaining increase of $0.5 million is attributable to increased recruiting and consulting fees.
General and Administrative
3 unchanged sentences
General and administrative expenses increased by $29.9 million, or 251%, from the year ended December 31, 2020 to the year ended December 31, 2021.
−Removed: The increase was primarily driven by increased headcount within the general and administrative function and associated expenses consisting primarily of personnel compensation in the amount of $0.7 million.
+Added: $11.7 million of the increase in general and administrative expense is related to the increased impact of non-cash stock-based compensation expense.
+Added: $4.1 million of the increase is related to increased compensation expense, excluding stock-based compensation, which was driven by increased headcount within the general and administrative function.
+Added: $7.3 million is attributable to legal fees and other corporate matters relating to being a public company and protecting our intellectual property.
+Added: $6.7 million of the increase in general and administrative expense is due to increased expenditures related to rent and facilities expense, software, insurance premiums, and increased general office and expenses to support the growth of the Company.
+Added: Depreciation and Amortization
Year Ended December 31,
(in thousands, except percentages)
−Removed: Depreciation expense increased by $0.7 million, or 75%, from the year ended December 31, 2018 to the year ended December 31, 2019.
−Removed: The increase was primarily driven by a significant investment in capital assets made in 2018 and 2019 for laboratory space at our Vancouver Yukon Street facility and associated equipment in that facility in the amount of $5.3 million and $4.0 million, respectively.
+Added: Depreciation and amortization
+Added: Depreciation and amortization expense increased by $9.6 million, or 199%, from the year ended December 31, 2020 to the year ended December 31, 2021.
+Added: Depreciation expense increased by $2.1 million due to the depreciation of equipment and facilities related to capital equipment purchases of $8.4 million in the year.
+Added: Amortization expense increased by $7.5 million due to the amortization of acquired intangible assets over their respective useful lives.
Other (Income) Expense
4 unchanged sentences
Interest income increased by $3.0 million, or 1037%, from the year ended December 31, 2020 to the year ended December 31, 2021.
−Removed: The increase was primarily driven by a larger average cash balance maintained in the year ended December 31, 2019 compared to the prior period.
+Added: The increase was primarily driven by a larger average cash and cash equivalents balances maintained in the year ended December 31, 2021 compared to the prior period.
Interest and Other Expense
2 unchanged sentences
Interest and other expense
−Removed: There was no material change in interest and other expenses for the year ended December 31, 2018 compared to the year ended December 31, 2019.
−Removed: Some interest was charged on the Bank of Montreal loan carried during these two periods.
+Added: Interest and other expense decreased by $1.3 million, or 20% from the year ended December 31, 2020 to the year ended December 31, 2021.
+Added: $4.9 million of the decrease relates to combined interest, and cancellation fees and legal fees on early retirement of the OrbiMed credit agreement in July 2020, in addition to interest expense on the credit facility for the period before retirement.
+Added: This was offset by a $3.4 million increase in fair value adjustments of contingent consideration and investments.
Foreign Exchange (Gain) Loss
2 unchanged sentences
Foreign exchange (gain) loss
−Removed: Foreign exchange (gain) loss decreased by $0.5 million from the year ended December 31, 2018 to the year ended December 31, 2019.
−Removed: Foreign exchange gains and losses are driven primarily by the Canadian dollar cash balances that we maintain and the relative exchange rates between Canadian dollars and U.S.
+Added: Foreign exchange (gain) loss increased by $0.6 million from the year ended December 31, 2020 to the year ended December 31, 2021.
+Added: Foreign exchange gains and losses are driven primarily by foreign denominated cash balances that we maintain and the relative exchange rates against the U.S.
Grants and Incentives
3 unchanged sentences
Grants and incentives increased by $9.2 million, or 110%, from the year ended December 31, 2020 to the year ended December 31, 2021.
−Removed: This amount is associated with the Canadian SR&ED refundable tax credit program.
−Removed: With this program, we are able to claim eligible research and development expenses and earn a refundable tax credit after applying the applicable rate.
−Removed: The 2018 refundable tax credit was $1.4 million and the 2019 refundable tax credit was $1.1 million.
−Removed: This change in the effective claim amount
−Removed: is largely due to our growth.
−Removed: As a larger enterprise we no longer qualify for the enhanced claim rate extended to smaller businesses in Canada.
+Added: The increase was primarily driven by an increase in activity relating to research and development expenditures that are eligible for the SIF project.
+Added: Income Tax Expense
+Added: Year Ended December 31,
+Added: (in thousands, except percentages)
+Added: Income tax expense
+Added: Income taxes increased by $26.8 million, or 69%, from the year ended December 31, 2020 to the year ended December 31, 2021.
+Added: For the year ended December 31, 2021, our provision for income taxes is $65.7 million primarily relating to current net earnings and partly offset by deferred income taxes due to timing of differences between accounting net income and taxable income.
Comparison of the Years Ended December 31, 2019 and 2020
2 unchanged sentences
Research fees
+Added: Licensing revenue
Milestone payments
39 unchanged sentences
This investment in the general and administrative function was necessary to support both the overall growth of the Company as well as to prepare for being a listed company.
−Removed: $2.1 million is attributable to legal fees incurred with respect to Berkley litigation and legal IP matters.
+Added: $2.1 million is attributable to legal fees incurred with respect to Berkeley litigation and legal IP matters.
Depreciation and Amortization
30 unchanged sentences
Grants and incentives increased by $6.5 million, or 369%, from the year ended December 31, 2019 to the year ended December 31, 2020.
−Removed: The increase was primarily driven by expenses for which there was cost recovery related to the SIF project entered into between us and the Government of Canada in April 2020, in the amount of $6.8 million.
+Added: The increase was primarily driven by expenses for which there was cost recovery related to the SIF project
+Added: entered into between us and the Government of Canada in April 2020, in the amount of $6.8 million.
Any additional cash from the SIF project that we receive for eligible capital expenditure activities will result in recognition of a deferred credit on the balance sheet.
3 unchanged sentences
Liquidity and Capital Resources
−Removed: As of December 31, 2020, we had $594.1 million of cash and cash equivalents.
−Removed: During 2020, we raised gross proceeds of $75.0 million through the sale and issuance of Series A2 convertible preferred shares in March 2020, a convertible note of $90.0 million to fund the acquisition of Trianni, and gross proceeds of $555.5 million, or $522.8 million net, from our IPO in December 2020.
−Removed: We also secured an additional CAD$175.6 million ($125.6 million) in SIF funding from the Government of Canada for future infrastructure investment to grow the business.
−Removed: In addition to our financings, we also have amounts receivable of $198.3 million at December 31, 2020 that were received subsequent to year end.
−Removed: Immediately prior to the completion of our IPO, our convertible preferred shares and notes were converted to common shares.
+Added: As of December 31, 2021, we had $723.0 million of cash, cash equivalents, and marketable securities, comprising $476.1 million in cash and cash equivalents and $246.8 million in marketable securities.
+Added: The increase of $128.9 million since December 30, 2020 was primarily from cash flow from operations and driven by the receipt of accounts receivable relating to royalties from bamlanivimab in the year ended December 31, 2021.
We have generated positive operating cash flow cumulatively since our inception in 2012 and in every year since 2018.
We intend to significantly invest in our business, and as a result may incur operating losses in future periods.
−Removed: We will continue to invest in research and development efforts towards expanding our capabilities and expertise along our technology stack, as well as building our business development team and marketing our solutions to new and existing partners.
−Removed: Based on our current business plan, we believe the net proceeds from this offering, together with our existing cash and cash equivalents and anticipated cash flows from operations, will be sufficient to meet our working capital and capital expenditure needs over at least the next 24 months following the date of this report.
−Removed: Our future capital requirements will depend on many factors, including, but not limited to our ability to successfully secure additional programs under contract with new and existing partners, the successful identification and discovery of antibodies for our partners and the successful development and commercialization by our partners of the antibodies that we deliver.
−Removed: If we are unable to execute on our business plan and adequately fund operations, or if the business plan requires a level of spending in excess of cash resources, we may be required to negotiate partnerships in which we receive greater near-term payments at the expense of potential downstream revenue.
−Removed: Alternatively, we may need to seek additional equity or debt financing, which may not be available on terms acceptable to us or at all.
−Removed: To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders.
−Removed: Debt financing and preferred equity financing, if available, may involve agreements that include covenants restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making product acquisitions, making capital expenditures, or declaring dividends.
−Removed: If we are unable to generate sufficient revenue or raise additional capital when desired, our business, financial condition, results of operations and prospects would be adversely affected.
+Added: We will continue to invest in research and development efforts towards expanding our capabilities and expertise along our technology stack, the building of our business development team and marketing our solutions to new and existing partners, and the expansion of our future office headquarters, and related infrastructure, including execution of long-term office-lease arrangements.
+Added: Based on our current business plan, we believe that our existing cash and cash equivalents and anticipated cash flows from operations, will be sufficient to meet our working capital and capital expenditure needs over at least the next 24 months following the date of this report.
Sources of Liquidity
−Removed: Since our inception, we have financed our operations primarily from revenue in the form of research fees and milestone payments from partners, government grants, debt and equity financings.
−Removed: Revenue from Research Fees
−Removed: We receive payments from our partnerships in the form of technology access and discovery research fees as we conduct discovery activities for our partners.
−Removed: Such fees are recognized as revenue in the period when the discovery work is performed.
−Removed: Revenue from Milestone and Royalty Payments
−Removed: We are entitled to additional payments with respect to discovery programs with our partners upon the satisfaction of development and approval milestones, as well as royalties upon sales, if any, by our partners of the antibodies that we discover.
−Removed: In 2020, we received the first milestone and royalty payments related to bamlanivimab, a molecule discovered by us in connection with our partnership with Lilly.
−Removed: Bamlanivimab received Emergency Use Authorization by from the U.S.
−Removed: Food and Drug Administration, or FDA, on November 9, 2020.
−Removed: On November 22, 2020, Lilly was granted authorization for bamlanivimab by Health Canada under the Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19.
−Removed: Similar authorizations for bamlanivimab have been granted in Europe, the Middle East and Africa.
−Removed: Bamlanivimab together with etesevimab received EUA from the FDA for the treatment of mild-to-moderate COVID-19 in high-risk patients on February 9, 2021.
−Removed: Through its COVID-19 Treatment Guidelines, the National Institutes of Health recommended the use of bamlanivimab together with etesevimab to treat early COVID-19 in high-risk patients on February 23, 2021.
−Removed: Bamlanivimab alone and together with etesevimab received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use, on March 5, 2021:
−Removed: the harmonized, European Union, or EU, -level opinion on the efficacy, quality, and safety of the antibodies can be used by EU member states when making decisions on the possible use of the therapies at a national level prior to market authorization.
−Removed: Under our partnership with Lilly, we are entitled to receive a specified percentage of proceeds that Lilly receives from these sales.
−Removed: In 2020, we recognized a total of $198.3 million in royalty revenue related to sales of bamlanivimab.
+Added: Since our inception, we have financed our operations primarily from revenue in the form of research fees, milestone payments, and royalty payments from partners, government grants, and debt and equity financings.
Financings and Option Exercises
−Removed: As of December 31, 2020, we have raised a total of $688.4 million from the issuance of common shares in our IPO, the issuance and sale of convertible preferred shares and notes, common shares, net of costs associated with such financings, and exercises of employee share options.
−Removed: Prior Credit Agreements
−Removed: In 2018, we entered into a credit agreement with Bank of Montreal that provided for a term loan, a revolving credit facility and a facility for travel expenses.
−Removed: Interest on this facility accrued at a prime floating rate plus 1.5% per annum.
−Removed: In March 2020, we retired our term loan and revolving credit facility with Bank of Montreal.
−Removed: We continue to maintain a credit facility for travel expenses.
−Removed: As part of our $105.0 million Series A2 financing in March 2020, we entered into a senior secured credit agreement with OrbiMed, which provided for a term loan in an aggregate amount of $30.0 million for a five-year term.
−Removed: Borrowings under this facility bore interest at a rate per annum equal to an applicable margin of 6% plus the higher of LIBOR for the applicable interest period and
−Removed: In July 2020, we repaid funds borrowed under this facility in full and retired the credit facility with OrbiMed.
−Removed: All associated security interests with this credit facility were released.
−Removed: Ministry of Western Economic Diversification under the Western Innovation Initiative
−Removed: Starting in April 2015, we have obtained funding from the Canadian Ministry of Western Economic Diversification, or WD Canada, under the Western Innovation Initiative, or WINN, and the Business Scale-up and Productivity, or BSP, programs.
−Removed: WINN and BSP are Canadian federal government initiatives which provide financing to projects that meet certain program criteria.
−Removed: The funding covers project expenditures for the purchase of capital equipment and the payment of project-related expenses.
−Removed: The terms of these WD Canada loans include a draw of the loan over the three years of a project, one year of no repayments for the loan followed by repayment over five years in equal installments of the principal amount of the loan.
−Removed: These loans are provided at zero interest and are unsecured.
−Removed: As of December 31, 2020, we have three loans with WD Canada for projects started in 2015, 2016, and 2019, representing total available funding of $5.7 million.
−Removed: As of December 31, 2020, approximately $2.4 million remained outstanding that was borrowed under this initiative, and these loans are repayable in installments through to 2028.
+Added: As of December 31, 2020, we raised a total of $688.4 million from the issuance of common shares in our IPO, the issuance and sale of convertible preferred shares and notes, common shares, net of costs associated with such financings, and exercises of employee share options.
+Added: As of December 31, 2021, we raised proceeds of $4.0 million from the exercise of employee share options.
Government of Canada’s Strategic Innovation Fund
11 unchanged sentences
The Canadian government has committed up to CAD $111.7 million ($79.9 million) for this project, contingent upon costs incurred and paid, with the rest to be co-funded by us through partnering with a developer and taking a co-ownership position in the resulting facilities.
−Removed: Completion and approval of a feasibility study is required to further advance this project and prior to any SIF reimbursement for this stage.
SIF funding for this project is expected to occur between 2021 and 2025.
−Removed: Repayment of SIF assistance received for this stage of the project will be calculated as a percentage rate of AbCellera’s revenue, with payment made to the Government of Canada on an annual basis during the repayment period starting in 2027.
+Added: Repayment of SIF assistance received for this stage of the project will be calculated as a percentage rate of AbCellera’s revenue, with payment made to the Government of Canada on an annual basis during the repayment period of fifteen years starting in 2027.
Repayment on this stage of the project is conditional on revenue thresholds being achieved in seven years, a year following the completion of the project and over the subsequent ten-year period.
If the revenue threshold is not met, the SIF funding contribution will be non-repayable.
−Removed: This funding and its associated conditional repayment is not secured by any of our assets or that of the project.
−Removed: As of December 31, 2020, we have claimed a total of $0.1 million under this second stage of the project.
+Added: This funding and its associated conditional repayment is not secured by any of our assets or that of the project, and includes certain non-financial covenants and restrictive covenants on dividend payments or other shareholder distributions that would prevent the Company in satisfying its obligations under the arrangement.
+Added: As of December 31, 2021, we have claimed a total of $21.6 million under this
+Added: second stage of the project.
+Added: No amounts have been accrued related to the repayment terms as the conditions are estimated to be non-probable at December 31, 2021.
We conduct work, incur expenses and fund all costs from our own cash resources.
On a quarterly basis, we submit claims to the SIF for eligible reimbursable expenses.
−Removed: As of December 31, 2020, we have claimed a total of $12.4 million under SIF.
+Added: For the year ended December 31, 2021, we claimed a total of $47.1 million under SIF.
The following table summarizes our cash flows for the periods presented:
4 unchanged sentences
Financing activities
+Added: Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents, and restricted cash
Operating Activities
+Added: Net cash provided by operating activities increased from $22.7 million in the year ended December 31, 2020 to $244.6 million in the year ended December 31, 2021.
+Added: The increase resulted primarily from increased revenue from royalty and licensing streams, satisfaction of clinical milestones under our partnership with Eli Lilly, and continued discovery research activities, as well as upfront payments from securing new multi-year, multi-target contracts with partners.
Net cash provided by operating activities increased by $20.0 million from $2.7 million in the year ended December 31, 2019 to $22.7 million in the year ended December 31, 2020.
The increase resulted primarily from increased revenue from discovery research activities, securing new multi-year, multi-target contracts with partners that involved up front technology access fees upon execution of the contract, and payments resulting from the satisfaction of clinical milestones under our partnership with Lilly.
−Removed: Net cash provided by operating activities decreased by $0.9 million from $3.6 million in the year ended December 31, 2018 to $2.7 million in the year ended December 31, 2019.
−Removed: The decrease resulted primarily from fewer large contracts with technology access fees entered into in 2019 as compared to 2018.
Investing Activities
+Added: Net cash used in investing activities increased from $119.8 million in the year ended December 31, 2020 to $332.2 million in the year ended December 31, 2021.
+Added: The increase in investing activities during 2021 were directly attributed to our investment in marketable securities in addition to real estate, particularly our land purchase related to our future GMP facility.
+Added: Additional investing activities during the period were related to facilities and equipment expenditures in our Vancouver offices, the acquisition of TetraGenetics, and investment in equity accounted investees, offset by grant funding received in the period.
Net cash used in investing activities was $5.8 million in the year ended December 31, 2019 compared to $119.8 million in the year ended December 31, 2020.
1 unchanged sentence
By contrast, in the year ended December 31, 2019, investments were limited to equipment used primarily in our research and development activities.
−Removed: Net cash used in investing activities was $5.3 million during the year ended December 31, 2018 compared to $5.8 million in the year ended December 31, 2019.
−Removed: The increase in cash used was primarily driven by issuance of related party loans.
Financing Activities
+Added: Net cash provided by financing activities decreased from $683.7 million for the year ended December 31, 2020 to net cash used by financing activities of $3.9 million for the year ended December 31, 2021.
+Added: This was primarily due to proceeds from Series A2 financing, convertible debentures, and common stock from the IPO in 2020.
Net cash provided by financing activities was $0.2 million for the year ended December 31, 2019 compared to net cash provided by financing activities of $683.7 million for the year ended December 31, 2020.
1 unchanged sentence
By contrast, no major equity financing was completed in 2019.
−Removed: Net cash provided by financing activities was $12.2 million for the year ended December 31, 2018 compared to $0.2 million for the year ended December 31, 2019.
−Removed: Net cash provided by financing activities for the year ended December 31, 2018 resulted primarily from the Series A preferred share financing, common share equity issuances, and drawdowns from the Bank of Montreal credit agreement to fund facilities expansion in 2018.
−Removed: Net cash provided by financing activities during the year ended December 31, 2019 resulted primarily from the proceeds from debt at Bank of Montreal used to help finance equipment at our Vancouver Yukon Street facility.
Contractual Obligations and Commitments
1 unchanged sentence
Payments Due by Period
−Removed: Less than 1 year
−Removed: More than 5 years
−Removed: Long-term debt obligations, including interest (1)
Commitments ( 1)
1 unchanged sentence
Contingent consideration payable ( 2)
−Removed: Includes obligations outstanding as of December 31, 2020 related to funding obtained from WD Canada under the WINN and BSP programs.
−Removed: The funding covers project expenditures for the purchase of capital equipment and the payment of project-related expenses.
−Removed: The terms of these WD Canada loans include a draw of the loan over the three years of a project, one year of no repayments for the loan followed by repayment over five years in equal installments of the principal amount of the loan.
−Removed: These loans are provided at zero interest and are unsecured.
Includes several leased facilities where the lease commencement dates are subsequent to December 31, 2021.
9 unchanged sentences
Berkeley Lights Litigation
−Removed: In July, August and September 2020, we filed suits against Berkeley Lights, in the U.S.
−Removed: District Court for the District of Delaware alleging that Berkeley Lights directly infringes and indirectly causes infringement of one or more of our patents.
−Removed: On December 3, 2020, the judge assigned to these three lawsuits ordered that they be transferred to the U.S.
−Removed: District Court for the Northern District of California.
−Removed: In August 2020, Berkeley Lights filed suit against us and our subsidiary Lineage Biosciences Inc.
−Removed: District Court for the Northern District of California seeking (i) declaratory judgment of non-infringement of U.S.
−Removed: 10,058,839, or the 839 patent;
−Removed: (ii) a finding of unfair competition and false advertising under the Lanham Act;
−Removed: and (iii) a finding of unfair business practices under the California Business and Professions Code.
−Removed: We believe the action filed by Berkeley Lights is without merit and have moved to dismiss the above action for lack of jurisdiction and failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil Procedure 12(b) 1, 2, and 6.
−Removed: See Item 3 “Legal Proceedings” for additional information.
+Added: See Item 3 “Legal Proceedings” for detailed information.
The timing of the incurrence of legal expenses relating to pending litigation is difficult to predict and the outcome of litigation is inherently uncertain.
Related costs and outcomes could materially affect our financial condition and operating results in future periods.
−Removed: Off-Balance Sheet Arrangements
−Removed: We have no undisclosed off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial condition.
Critical Accounting Policies and Estimates
6 unchanged sentences
Revenue Recognition
−Removed: Our revenue currently primarily consists of research fees, milestone payments and royalty revenue, which are generated through our performance of antibody discovery research for our partners.
−Removed: Promised deliverables to our global partners include research and development.
+Added: Our revenue primarily consists of research fees, milestone payments and royalty revenue, which are generated through our performance of antibody discovery research for our partners, and licensing revenue, which we generated from our Trianni humanized
+Added: rodent platform .
+Added: Promised deliverables to our global partners include research and development and licenses .
The Company applied ASC 606 to all arrangements to date.
−Removed: In accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , or ASC 606, we account for revenue from contracts with partners, whom we view as customers under ASC 606, which includes the following five steps:
−Removed: (i) identify the contract(s) with a customer;
−Removed: (ii) identify the performance obligations in the contract;
−Removed: (iii) determine the transaction price;
−Removed: (iv) allocate the transaction price to the performance obligations in the contract;
−Removed: and (v) recognize revenue when or as we satisfy a performance obligation.
−Removed: For instances where promises are not distinct at contract inception , they are combined into a single performance obligation.
−Removed: An option to acquire additional goods and/or services is evaluated on both quantitative and qualitative aspects to determine if such an option provides a material right to the customer that the customer would not have received without entering into the contract.
−Removed: If so, the option is accounted for as a separate performance obligation.
−Removed: If not, the option is considered a marketing offer and is accounted for as a separate contract upon the customer’s election.
−Removed: When applying the revenue recognition criteria of ASC 606 to research fees and milestone payments, management applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations;
−Removed: allocating transaction price to performance obligations within a contract;
−Removed: determining when performance obligations have been met;
−Removed: assessing the recognition and future reversal of variable consideration;
−Removed: and when determining and applying appropriate methods of measuring progress for performance obligations satisfied over time.
−Removed: We allocate the transaction price to each performance obligation identified in the contract on a relative standalone selling price basis.
−Removed: Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer.
−Removed: We generally use output methods to measure the progress toward satisfaction of performance obligations that are satisfied over time.
−Removed: Due to different types of end customers and differences in the nature of work involved, revenue contracts require formal inspection and approval of experiments and research plans at each stage of work.
−Removed: Therefore, the output method is the most faithful depiction of our performance.
+Added: We recognize revenue when we satisfy the performance obligations under the terms of a contract and control of our services is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those services.
+Added: When applying the revenue recognition criteria of ASC 606 to research fees and milestone payments, management applies significant judgment when evaluating whether contractual obligations represent distinct performance obligations, including whether options for additional goods or services represent a material right;
+Added: allocating the transaction price to performance obligations within a contract;
+Added: and assessing the recognition and possible future reversal of variable consideration.
Research Fees.
−Removed: We negotiate technology access fees and discovery research fees in our partnership contracts that are recognized as revenue in the period when the discovery work is performed.
The transaction price generally includes fixed fees due at contract inception as well as fixed fees payable at the beginning and end of different phases of the discovery research services performed.
−Removed: We utilize either the expected value method or the most likely amount method to estimate the amount of variable consideration to include in the transaction price, as most appropriate in the circumstances.
+Added: Revenue is recognized based on the amount of the transaction price that is allocated to each respective performance obligation when or as the performance obligation is satisfied by transferring a promised good and/or service to the customer.
+Added: We allocate the transaction price to each distinct performance obligation identified in the contract based on relative observable standalone selling prices.
Milestone Payments.
−Removed: At the inception of the arrangement, we evaluate whether the associated event is considered probable of achievement and estimate the amount to be included in the transaction price using the most likely amount method.
−Removed: In determining the transaction price, we constrain the transaction price for variable consideration to limit its inclusion so that it only includes the amount that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
−Removed: The process of successfully achieving the criteria for the milestone payments is highly uncertain.
+Added: At the inception of the arrangement and at each reporting date thereafter, we evaluate whether the associated event is considered probable of achievement and estimate the amount to be included in the transaction price using the most likely amount method.
+Added: Whether the criteria for achieving the milestone payments will be met in the future is highly uncertain.
Consequently, there is a significant risk that we may not earn all of the milestone payments from each of our arrangements.
−Removed: Management applies significant judgment when assessing the likelihood of milestones being achieved and when allocating the transaction price to each performance obligation for revenue recognition purposes.
+Added: This uncertainty is considered resolved when the associated event giving rise to the milestone payment occurs.
Royalty Revenue.
Royalty revenue is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur.
+Added: The sales are based on sales data reported by our partners.
+Added: Differences between actual and estimated royalty revenue will be adjusted for in the period in which they become known, which is generally expected to be the following quarter.
Business Combination, Goodwill and Intangible Assets
6 unchanged sentences
Goodwill, which is not amortized, will be evaluated for impairment on an annual basis on October 1 or more frequently if an indicator of impairment is present.
−Removed: Goodwill is subject to a two-step impairment test on an annual basis.
−Removed: The first step compares the fair value of the reporting unit to its carrying amount, which includes the goodwill.
−Removed: When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired, and the second step of the impairment test is unnecessary.
−Removed: If the carrying amount exceeds the implied fair value of the reporting unit, the second step measures the amount of the impairment loss.
−Removed: If the carrying amount exceeds the fair value of the reporting unit, an impairment loss is recognized equal to that excess.
−Removed: As part of our acquisition of Trianni on November 3, 2020, Goodwill, License, Technology and In-Process Research and Development Intangible (“IPR&D”) intangible assets were recognized.
−Removed: The fair value of the aggregate intangible assets was determined to be $103.6 million and goodwill was $31.5 million at the acquisition date.
−Removed: IPR&D is classified as indefinite-lived and is not amortized.
+Added: As part of our acquisitions of Trianni in 2020, and TetraGenetics in 2021, Goodwill, License, Technology and In-Process Research and Development Intangible (“IPR&D”) intangible assets were recognized.
+Added: The fair value of the aggregate intangible assets was determined to be $103.6 million and $43.3 million and goodwill was $30.9 million and $16.9 million at the acquisition dates related to Trianni and TetraGenetics, respectively.
+Added: IPR&D is classified as indefinite-lived, is not amortized, and is evaluated for impairment on an annual basis on October 1 or more frequently if an indicator of impairment is present.
IPR&D becomes definite-lived upon the completion or abandonment of the associated research and development efforts.
−Removed: License and Technology intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, which was based on an analysis of the expected use of the asset by us, any legal, regulatory or contractual provisions that may limit the useful life, the effects of obsolescence, competition and other relevant economic factors, and consideration of the expected cash flows used to measure the fair value of the intangible asset.
−Removed: Amortization begins when intangible assets with finite lives are put into use.
−Removed: If events or changes in circumstances indicate impairment, the Company measures recoverability by a comparison of the asset’s carrying amount to the estimated undiscounted future cash flows expected to be generated by the asset.
−Removed: If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.
−Removed: The costs incurred in establishing and maintaining patents for intellectual property developed internally are expensed in the period incurred .
+Added: At December 31, 2021, our IPR&D was $72.4 million.
+Added: To test our IPR&D for impairment we first perform a qualitative assessment to determine if it is more likely than not that the carrying amount of our indefinite-lived intangible assets exceeds its fair value.
+Added: If it is, a quantitative assessment is required.
+Added: Based on our qualitative assessment, we determined there were no potential indicators of impairment of our indefinite-lived intangible assets at October 1, 2021 and during the remainder of 2021.
+Added: For our annual goodwill impairment test, we begin with a qualitative assessment to determine whether a quantitative impairment test is necessary.
+Added: If we determine, after performing an assessment based on the qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, or that a fair value of the reporting unit substantially in excess of the carrying amount cannot be assured, then a quantitative impairment test would be performed.
+Added: The quantitative test for impairment
+Added: requires us to make judgments relating to future cash flows, growth rates and economic and market conditions.
+Added: These evaluations are based on determining the fair value of the reporting unit using a valuation method such as discounted cash flow or a relative, market-based approach.
+Added: At October 1, 2021, we performed a qualitative assessment for our annual impairment test of goodwill after concluding that it was not more likely than not that the fair value of the reporting unit was less than its carrying value.
+Added: Consequently, the quantitative impairment test was not required.
+Added: The Company concluded that there were no impairment indicators related to goodwill during the remainder of 2021.
+Added: As part of our ongoing planned research and development and execution of our programs under contract, changes to our plans due to internal and external factors out of our control could impact the amount and timing of projected future cash flows.
+Added: As a result, these unplanned changes could result in us performing a quantitative impairment test in the future, which could result in a potential non-cash impairment charge associated with our goodwill or intangible assets, which would reduce our future earnings.
In connection with our acquisition of Trianni, we may be required to make future payments to former shareholders of Trianni upon the achievement of certain earn-out provisions related to a specific customer license ending on April 9, 2024.
−Removed: As of December 31, 2020, the contingent consideration payable had an estimated fair value of approximately $22.6 million, which has been included as a long-term liability on our consolidated balance sheet.
+Added: As of December 31, 2021, the contingent consideration payable had an estimated fair value of approximately $22.9 million, which has been included as a current liability on our consolidated balance sheet.
+Added: In connection with our acquisition of TetraGenetics, contingent consideration payable at December 31, 2021 is 35.9 million, all of which is a long-term liability.
Contingent consideration payable is a financial liability and measured at its fair value at each reporting period, with any changes in fair value from the previous reporting period recorded in the statement of income (loss) and comprehensive income (loss).
−Removed: See Note 19 to our consolidated financial statements detailing the accounting for the Trianni acquisition, including the valuation methodology and key assumptions we used in estimating the fair value of the assets acquired, liabilities assumed, and contingent consideration payable.
+Added: In estimating the fair value of the intangible assets and contingent consideration, we applied an income approach based on the present value of the relevant future estimated after-tax cash flows.
+Added: The key assumptions include the amount and timing of revenues, success probability, and discount rates.
+Added: A 10% change in these key assumptions associated with the recognition of intangible assets and contingent consideration would not have a material impact on the amounts recognized.
+Added: See Note 21 to our consolidated financial statements for further information related to the accounting for the above acquisitions.
Stock-Based Compensation
9 unchanged sentences
We expect to continue to do so until we have adequate historical data regarding the volatility of the trading price of our common shares on the Nasdaq Stock Market.
−Removed: The risk-free interest rate is determined by reference to the Bank of Canada Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
+Added: The risk-free interest rate is determined by reference to government treasury yield curves in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.
The expected term represents the period that the stock-based awards are expected to be outstanding.
33 unchanged sentences
The October 28, 2020 announcement by Eli Lilly of an agreement with the U.S.
−Removed: government to supply 300,000 vials of bamlanivimab for $375.0 million for which we are eligible to receive royalties in the low- to mid-twenties was not assigned a
−Removed: probability weighting due to the substantial uncertainty as to the likelihood of receipt of the EUA that is a precondition for any sales of the antibody to occur and upon which our eligibility to receive royalties depends.
+Added: government to supply 300,000 vials of bamlanivimab for $375.0 million for which we are eligible to receive royalties in the low- to mid-twenties was not assigned a probability weighting due to the substantial uncertainty as to the likelihood of receipt of the EUA that is a precondition for any sales of the antibody to occur and upon which our eligibility to receive royalties depends.
The process of acquiring Trianni , Inc.
4 unchanged sentences
Stock options granted after October 2020 and prior to our IPO, the awards had a per-share exercise price based on the factors described above.
−Removed: The EUA application for the bamlanivimab single agent therapy was granted by the FDA on November 9, 2020.
+Added: The EUA application for the bamlanivimab single agent therapy was granted by the FDA on November 9, 2020 and on December 2, 2020, the U.S government announced the purchase of an additional 650,000 doses of bamlanivimab for $812.5 million.
Following the completion of our IPO, the fair value of our common shares are determined based on the quoted market price of our common shares.
3 unchanged sentences
Impact of the COVID-19 Pandemic
−Removed: In March 2020, the World Health Organization declared the outbreak of a novel coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the United States and worldwide.
−Removed: As with many companies around the world, our day to day operations were disrupted with the imposition of work from home policies and requirements for physical distancing for any personnel present in our offices and laboratories.
−Removed: The pandemic has also disrupted our sales and marketing activities as shelter-in-place orders, quarantines, travel restrictions and other public health safety measures have impacted our ability to interact with our existing and potential partners for our solutions.
−Removed: There is significant uncertainty as to the trajectory of the pandemic and its impacts on our business in the future.
+Added: In March 2020, the World Health Organization declared the outbreak of a novel coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the world.
+Added: As with many companies around the world, our day to day operations evolved to include work from home policies and requirements for physical distancing for any personnel present in our offices and laboratories.
+Added: The pandemic impacted our business development activities as shelter-in-place orders, quarantines, travel restrictions and other public health safety measures limited our ability to interact with our existing and potential partners.
+Added: The impact of the pandemic continues to raise uncertainties which may impact our business going forward.
We could be materially and adversely affected by the risks, or the public perception of the risks, related to the COVID-19 pandemic or similar public health crises.
Such crises could adversely impact our ability to conduct on-site laboratory activities, expand our laboratory facilities, secure critical supplies such as reagents, laboratory tools or immunized animals required for discovery research activities, and hire and retain key personnel.
+Added: In addition, the sustainability of an economic recovery remains unclear as inflationary pressures have increased in Canada, U.S.
+Added: and globally and efforts to combat the virus have been complicated by new variants.
The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic, outbreak, or other public health crisis and actions taken to contain or prevent the further spread, among others.
1 unchanged sentence
We remain focused on maintaining our operations, liquidity and financial flexibility and continue to monitor developments as we deal with the disruptions and uncertainties from the COVID-19 pandemic.
−Removed: JOBS Act Accounting Election
−Removed: We qualify as an “emerging growth company” as defined in the JOBS Act.
−Removed: An emerging growth company may take advantage of reduced reporting requirements that are not otherwise applicable to public companies.
−Removed: These provisions include, but are not limited to:
−Removed: not being required to comply with the auditor attestation requirements on the effectiveness of our internal controls over financial reporting;
−Removed: not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis);
−Removed: reduced disclosure obligations regarding executive compensation arrangements;
−Removed: exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
−Removed: We may use these provisions until the last day of our fiscal year in which the fifth anniversary of the completion of this offering occurs.
−Removed: However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.07 billion, or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
−Removed: The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, until those standards apply to private companies.
−Removed: We have elected to take advantage of the benefits of this extended transition period and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
−Removed: Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
−Removed: Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will adopt the recently issued accounting standard.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.