Absci Corporation — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Unaudited results. Absci is a generative-AI drug-creation company combining AI and laboratory capabilities to develop biologics.
Key financial metrics
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | $0.9 million | $1.3 million; down 29% |
| Operating expenses | $24.4 million | $25.8 million; down 5% |
| Operating loss | $23.5 million | $24.5 million |
| Net loss | $22.0 million | $23.4 million |
| Net loss per share, basic and diluted | $0.22 | $0.26 |
| Net cash used in operating activities | $17.9 million | $20.1 million |
| Cash, cash equivalents and short-term investments | $161.5 million | At March 31, 2024 |
| Long-term debt, current and noncurrent | Approximately $7.0 million | At March 31, 2024 |
Other income, primarily investment income, was $1.7 million; interest expense was $0.2 million. The filing does not present a gross profit or gross margin figure.
Liquidity, cash flow and capital
- Cash, cash equivalents and restricted cash totaled $76.3 million at quarter-end; restricted cash included $15.0 million held in escrow for contingent consideration.
- Investing activities used $76.7 million, largely reflecting purchases of short-term investments, partly offset by maturities. Financing activities provided $81.2 million.
- On March 1, 2024, Absci sold 19.205 million common shares at $4.50 per share, receiving $80.8 million in net proceeds. Shares outstanding were approximately 113.0 million at March 31 and 113.1 million as of April 30.
- Management expects available cash, cash equivalents and short-term investments to fund operating expenses, working capital and capital expenditures for at least 12 months following the filing. The company has incurred losses since inception and reported an accumulated deficit of $428.5 million.
Changes and business developments
- Revenue declined by $0.4 million, which management attributed to program progress, the timing of project milestones and the mix of ongoing program activity. Two partners generated approximately 99% of Q1 2024 revenue, versus one partner contributing approximately 93% in Q1 2023.
- Research and development expense fell 3% and selling, general and administrative expense fell 9%; management cited lower personnel and administrative costs, partly offset by higher stock-based compensation.
- Partner count remained at 24 and active programs at 16. Absci describes its model as combining partner programs with internal drug-asset development.
- Absci reported three wholly owned internal programs. ABS-101, targeting TL1A for inflammatory bowel disease, entered IND-enabling studies in February 2024; management expects to initiate Phase 1 studies in early 2025. ABS-201 is at lead-optimization stage, as is ABS-301.
Outlook, risks and unusual items
- Management expects significant ongoing spending on partnerships, platform development and internal programs. It expects R&D expense to increase over the long term; selling and marketing costs may rise as business-development efforts expand.
- Future revenue depends on securing partnerships, achieving milestones, partner decisions to license and advance candidates, and eventual development and commercialization. Absci does not control many partner development decisions and has not negotiated enough milestone- and royalty-bearing licenses to reliably forecast that revenue.
- The company may need additional capital if spending exceeds available resources or revenue and partnerships are insufficient. Equity financing could dilute shareholders; debt or preferred financing could impose restrictive terms. The existing shelf registration and at-the-market program provide potential financing capacity, but availability is not assured.
- Contingent consideration related to the Totient acquisition was valued at $12.75 million; a $15.0 million amount held in escrow is payable upon specified partnership or commercialization milestones.
- Stock-based compensation was approximately $3.6 million for the quarter. In March, Absci granted its CEO 1.5 million market-condition performance restricted stock units with a stated grant-date fair value of $5.5 million; no stock-price vesting thresholds had been met by quarter-end.
- Management reported no material changes to previously disclosed risk factors, no material litigation, and effective disclosure controls as of quarter-end. Forward-looking statements remain subject to development, financing, partner, regulatory and market uncertainties.
Important facts for investors to verify
- Whether the $161.5 million of cash, cash equivalents and short-term investments, together with the stated 12-month runway, remains sufficient as operating losses continue.
- Progress toward ABS-101 IND-enabling completion and the anticipated early-2025 Phase 1 start.
- Whether partner concentration changes, and whether the 16 active programs convert into licenses, milestones or royalties.
- The pace of cash use, internal-pipeline spending and any need for further financing or shareholder dilution.
- Potential obligations tied to the Totient contingent consideration and the development progress of partner programs, including the Phase 3 bentracimab program.