Absci Corp., a Vancouver-based company behind a multi-faceted drug development platform, went public on Thursday. This is another sign of the growing interest in new approaches to drug development – a traditionally risky business.
Absci focuses on accelerating drug development in preclinical stages. The company has developed and acquired a handful of tools that can predict drug candidates, identify potential drug targets, and test therapeutic proteins on billions of cells and identify those worth pursuing.
“We provide a fully integrated end-to-end solution for pharmaceutical drug development,” Absci founder Sean McClain told TechCrunch. “Think of it like searching the Google indexes for the discovery and biofabrication of protein drugs.”
The IPO was initially priced at $ 16 per share, with a pre-currency valuation of around $ 1.5 billion, by deposit S-1. The company is offering 12.5 million common shares and plans to raise $ 200 million. However, Absci stock has already swelled to $ 21 per share at the time of writing. The common shares trade under the symbol “ABSI”.
The company has chosen to go public now, McClain says, to increase the company’s ability to attract and retain new talent. “As we continue to grow and evolve rapidly, we need access to top talent, and the IPO gives us incredible visibility for talent acquisition and retention,” says McClain.
Absci was founded in 2011 with a focus on the manufacture of proteins in E.Coli. In 2018, the company launched its first commercial product called SoluPro – a biogenerated E.Coli system that can build complex proteins. In 2019, the company stepped up this process by implementing a “protein printing” platform.
Since its inception, Absci has grown to 170 employees and raised $ 230 million – the most recent inflow was a $ 125 million cross-funding round that closed in June 2020 led by Casdin Capital and Redmile Group. But this year, two major acquisitions completed Absci’s offering, from protein manufacturing and testing to AI-activated drug development.
In January 2021, Absci acquired Denovium, a company using deep learning AI to categorize and predict protein behavior. Denovium’s “engine” had been driven on more than 100 million proteins. In June, the company also acquired Totient, a biotechnology company that analyzes the immune system’s response to certain diseases. At the time of the Totient acquisition, the company had already reconstructed 4,500 antibodies gleaned from immune system data from 50,000 patients.
Absci already had protein manufacturing, evaluation and screening capabilities, but the acquisition of Totient enabled it to identify potential targets for new drugs. The Denovium acquisition added an AI-based engine to aid in protein discovery.
“What we are doing now is feeding [our own data] in deep learning models and that’s why we acquired Denovium. Before Totient, we were doing drug discovery and cell line development. This [acquisition] allows us to be fully integrated where we can now also do target discovery, ”said McClain.
These two acquisitions place Absci in a particularly active niche in the world of drug development.
For starters, there has been notable fiscal interest in developing new drug development approaches, even after decades of poor drug R&D returns. In the first half of 2021, Assess have reported that developers of new drugs have raised $ 9 billion in IPOs on Western Stock Exchanges. This despite the fact that drug development is traditionally high risk. R&D returns for biopharmaceuticals hit a record low of 1.6% in 2019 and rebounded to just around 2.5%, a 2021 Deloitte report notes.
In the world of drug development, we’ve seen AI play an increasingly important role. This same Deloitte report notes that “most biopharmaceutical companies attempt to integrate AI into drug discovery and development processes.” And, drug discovery projects received the largest amount of AI investment in 2020, according to the Stanford University Artificial Intelligence Index. Annual Report.
More recently, the prospects for using AI in drug development have been bolstered by companies that have taken a candidate through preclinical development stages.
In June, Insilico Medicine, a Hong Kong-based start-up, announced that it had brought an AI-identified drug candidate for idiopathic pulmonary fibrosis through the stages of preclinical testing – a feat that helped shut down a $ 255 Million Series C Round. Founder Alexander Zharaonkov told TechCrunch that the PI drug will begin a clinical trial of the drug at the end of this year or early next year.
With a hand in AI and protein manufacturing, Absci has already positioned itself in a crowded space, but filled with hype. But in the future, the company will still have to define the details of its business model.
Absci pursues a business model of partnership with drug manufacturers. This means that the company does not intend to conduct its own clinical trials. Rather, it expects to earn income through “milestone payments” (subject to reaching certain milestones in the drug development process) or, if drugs are approved, royalties on sales.
This offers some advantages, McClain says. The company is able to avoid the risk of drug candidate failure after millions of R&D dollars have been invested in testing and can invest in the development of “hundreds” of drug candidates at a time.
At this point, Absci currently has nine “active programs” with drug manufacturers. The company’s cell line manufacturing platforms are used in drug testing programs at eight biopharmaceutical companies, including Merck, Astellas and Alpha Cancer technologies (others are withheld). Five of those projects are in the preclinical stage, one is in phase 1 clinical trials, one is in phase 3 clinical trial and the last one is focused on animal health, according to the company’s S-1 dossier.
One company, Astellas, is currently using Absci’s discovery platforms. But McClain notes that Absci has only just deployed its drug discovery capabilities this year.
However, neither of these partners has officially licensed any of Absci’s platforms for clinical or commercial use. McClain notes that all nine active programs have milestones and royalty “potentials” associated with them.
The company has a long way to go in terms of profitability. So far this year, Absci has generated total revenue of around $ 4.8 million, up from around $ 2.1 million in 2019. Nonetheless, costs have remained high and S-1 records indicate that the company has suffered net losses over the past two years. In 2019, the company reported $ 6.6 million in net losses in 2019 and $ 14.4 million in net losses in 2020.
The company’s S-1 attributes these losses to expenses related to research and development costs, building an intellectual property portfolio, hiring staff, raising capital and supporting these. activities.
Absci recently completed construction of a 77,000 square foot facility, McClain notes. Thus, in the future, the company foresees the potential to increase the scale of its operations.
In the immediate future, the company plans to use the money raised during the IPO to increase the number of programs using Absci’s technology, invest in R&D and continue to refine new products based on it. Company AI.