Absci Corporation — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are to FY2022. This is an annual report, not a standalone Q4 earnings report.
Business context
Absci combines generative AI with synthetic biology and laboratory testing to create biologic drug candidates. Its business includes partner-funded drug creation programs and development of wholly owned pipeline assets. As of year-end, it reported 16 active partnered programs and three identified wholly owned programs: ABS-101 (TL1A, inflammatory bowel disease), ABS-201 (dermatology) and ABS-301 (immuno-oncology).
Financial and operating metrics
| Metric | FY2023 / year-end | FY2022 / comparison |
|---|---|---|
| Revenue | $5.7 million | $5.7 million |
| Operating loss | $115.5 million | $106.8 million |
| Net loss | $110.6 million; $1.20 per share | $104.9 million; $1.15 per share |
| Cash used in operating activities | $64.6 million | $81.3 million |
| Cash, cash equivalents and short-term investments | $97.7 million | $164.4 million |
| Long-term debt | $7.9 million, including current portion | $10.9 million, including current portion |
| Total assets / total liabilities | $217.3 million / $41.1 million | $321.0 million / $46.6 million |
Technology development revenue was $5.7 million, up $1.2 million (26%); collaboration revenue fell to zero from $1.2 million. Two partners accounted for 89% of FY2023 technology development revenue. Gross margin is not presented as a clear value in the filing. The company reported a $21.3 million non-cash goodwill impairment charge.
Material changes versus FY2022
- Total revenue was nearly unchanged, while the mix shifted from collaboration revenue to technology development fees.
- Research and development expense fell 18% to $48.1 million; selling, general and administrative expense fell 7% to $37.8 million. Total operating expenses nevertheless rose 8%, principally because of the goodwill impairment.
- Operating cash use improved by $16.7 million, but cash, cash equivalents and short-term investments declined by $66.7 million year over year.
- Cumulative partners increased from 19 to 24 and cumulative programs from 47 to 59; active programs remained at 16.
Outlook, commentary and risks
- Management said year-end cash, cash equivalents and short-term investments were expected to fund operating, working-capital and capital-expenditure needs for at least 12 months following the filing. The company also said it expects continued significant expenses and losses; the filing gives no specific revenue or earnings guidance.
- In September 2023, Absci announced a realignment and a 15% workforce reduction to focus resources on its internal pipeline and platform.
- In February 2024, Absci began IND-enabling studies for ABS-101. It planned an IND submission in Q1 2025 and a possible Phase 1 start in the first half of 2025; these are forward-looking plans, not completed milestones.
- No partner had licensed platform-generated assets for clinical or commercial use as of March 6, 2024, and Absci had received no milestone or royalty revenue to date. Future downstream economics depend on licensing and partner development decisions.
- Key risks include recurring losses and potential need for additional capital, partner and revenue concentration, uncertain adoption and performance of the platform, long and uncertain drug-development timelines, competition, and reliance on third parties for preclinical and clinical work.
- On March 1, 2024, after year-end, Absci sold 19.205 million shares at $4.50 per share, with estimated net proceeds of $80.8 million. This provides additional capital but dilutes existing shareholders.
Most important facts for investors to verify
- Whether the $97.7 million year-end liquidity figure, subsequent $80.8 million net offering proceeds and expected cash runway remain consistent with the company’s spending and development plans.
- Whether new or existing partnerships generate sufficient recurring fees and, importantly, executed licenses with milestone and royalty terms.
- Progress and timing of ABS-101 IND-enabling work, the planned IND filing and any Phase 1 initiation; also track development of ABS-201 and ABS-301.
- How partner concentration, program attrition and partner decisions affect revenue, given the absence of milestone and royalty revenue to date.
- The assumptions behind the $21.3 million goodwill impairment and whether further asset impairments or additional financing may be needed.
- The company reported effective disclosure controls and internal control over financial reporting at December 31, 2023; the auditor gave an unqualified opinion on the financial statements but did not audit internal control effectiveness.