Absci Corporation — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023; filed May 15, 2023. Unaudited financial statements. Absci develops biologic drug candidates using an integrated generative-AI and synthetic-biology platform, working with partners and pursuing an internal pipeline.
Financial performance and position
| Metric | Q1 2023 | Q1 2022 / prior date |
|---|---|---|
| Revenue | $1.269 million | $0.819 million |
| Operating expenses | $25.754 million | $29.622 million |
| Operating loss | $24.485 million | $28.803 million |
| Net loss | $23.355 million | $29.494 million |
| Net loss per share, basic and diluted | $0.26 | $0.33 |
| Net cash used in operating activities | $20.119 million | $21.149 million |
| Cash and cash equivalents plus short-term investments | $144.258 million | $164.431 million at Dec. 31, 2022 |
| Total debt, excluding lease obligations | $10.268 million | $10.930 million at Dec. 31, 2022 |
| Total assets / stockholders’ equity | $295.808 million / $253.965 million | $321.008 million / $274.414 million at Dec. 31, 2022 |
Revenue was entirely technology development revenue in Q1 2023, up 55% year over year; collaboration revenue was zero versus $0.365 million. The filing does not provide a meaningful gross margin. Operating cash burn was $20.1 million. Cash, cash equivalents and restricted cash together were $28.318 million at quarter-end; restricted cash included $15.027 million held in connection with contingent consideration. Current assets were $165.317 million and current liabilities $27.201 million.
Changes versus the comparable period
- Technology development revenue rose $0.815 million, attributed to program progress, milestone timing and program mix.
- R&D expense fell 20% to $12.657 million, primarily due to lower laboratory operating costs and a prior-year contingent-consideration remeasurement.
- Selling, general and administrative expense fell 12% to $9.593 million, mainly from reduced stock-based compensation and administrative costs.
- Depreciation and amortization increased 21% to $3.504 million, primarily due to leasehold improvements.
- Other income increased to $1.458 million from $0.125 million, mainly reflecting investment income. Interest expense rose to $0.321 million from $0.195 million.
Outlook, risks and unusual items
- Management said available cash, cash equivalents and short-term investments should fund operating expenses, working capital and capital needs for at least the next 12 months after filing. The company expects significant ongoing expenses and losses.
- Business prospects depend on securing partnerships, expanding programs, partners choosing to license and advancing candidates through development and commercialization. Absci does not control partners’ development decisions or timing of potential milestone and royalty revenue.
- The company reported 20 cumulative partners, 48 cumulative programs and 17 active programs at March 31, 2023; it cautioned that active programs may be discontinued and do not assure future licensing or development.
- Equipment financing carries 8%–10% imputed interest, is secured by certain tangible assets and includes financial covenants and subjective acceleration clauses. Absci reported covenant compliance at quarter-end.
- A $12.750 million Level 3 contingent-consideration liability relates to the Totient acquisition; the associated $15.0 million escrow is payable upon specified milestones. No material litigation or material changes to previously disclosed risk factors were reported. Management considered disclosure controls effective.
Most important facts for investors to verify
- Whether the reported cash runway remains adequate as operating losses continue, and how unrestricted liquidity compares with restricted cash.
- Whether partner additions, active programs and milestone activity translate into durable revenue, licenses and downstream payments.
- Progress and partner decisions for the 17 active programs, including the Phase 3 bentracimab cell-line program now assumed by SFJ Pharmaceuticals.
- Future spending, financing needs and potential dilution; the company had an effective $250 million shelf registration statement but had not issued securities under it as of the filing.
- Achievement and timing of Totient contingent-consideration milestones, and the effect of stock-based compensation and outstanding equity awards.