AbCellera Biologics

IThe business

AbCellera finds antibodies. An antibody is a protein that sticks to one target in the body, and several of the best-selling drugs in the world are antibodies. The company was founded in Vancouver in November 2012 and now has 562 full-time staff.⁵¹⁰ For its first ten years it sold discovery work to other drug companies. Since 2023 it has changed into a drug developer that owns its own medicines. That change is the whole story, and it is not finished.

The old business is easy to measure. The company started 104 partner programs in which it holds a stake in the later success, and 19 molecules from its work or its technology reached human trials.⁵ Under those contracts it was paid for research, then milestone payments if a drug advanced, then a royalty if a drug sold. In 2020 it helped Eli Lilly find bamlanivimab, an antibody against COVID-19, and later bebtelovimab.⁵ Revenue was $233M in 2020, $375M in 2021 and $485M in 2022 R (reported).³⁵ Operating income was $216M in 2022.³ Then the pandemic antibodies stopped selling, and revenue fell to $38M in 2023.³ In the twelve months to June 2026 it was $66M C (calculated).³⁴

The company chose to cut the partner work. Its own annual report says that since 2023 it has reduced the volume of discovery partnerships to focus on its internal pipeline.⁵ The number of partner-led programs where it holds a stake and which it believes are progressing fell from 44 at the end of 2025 to 35 on 30 June 2026.⁴ So the old business is shrinking by design, and the new one has not yet earned anything.

What the company says it is now

In its 2025 annual report AbCellera calls itself a clinical-stage biotechnology company. It says it spent about $1B over nearly 15 years to build an integrated platform for finding and making antibody drugs, including a 130,000-square-foot clinical manufacturing site in Vancouver that opened in 2025.⁵ It says the big building is done and that the plan is to use what it built.⁴ The 10-Q says it expects to need less money for buildings and equipment from here, and it plans to assign or sublet the lab and office space built through its Beedie joint venture.⁴

ABCL635, the drug that matters most

ABCL635 is an antibody against the neurokinin 3 receptor, or NK3R, a receptor on a group of nerve cells in the brain that help set body temperature. When estrogen falls at menopause, these cells fire too much and the body dumps heat as a hot flash. Two pills that block the same receptor are already approved: Veozah, from Astellas, and Lynkuet, from Bayer.⁵⁹ ABCL635 is an antibody, not a pill, and the company designed it to be injected under the skin once a month.⁹

On 10 August 2026 the company reported the first four weeks of its Phase 2 trial. It enrolled 92 postmenopausal women with about 10 moderate or severe hot flashes a day, and gave half of them a single 600 mg injection and half a placebo.⁸⁹ At week 4 the drug group had 8.8 fewer hot flashes a day and the placebo group 3.5 fewer, a difference of 5.3 (p<0.001). That is an 83% fall against 33% on placebo.⁸⁹ Severity fell 58% against 12%.⁹ On sleep and on how patients rated their own change the drug was also ahead.⁸ In the drug group there were no serious adverse events and no severe ones. The most common side effects above placebo were headache, fatigue and injection-site reactions. One drug-group patient had a mild rise in liver enzymes that cleared in a week.⁹ The company states there was no liver signal to date.⁹

I read this as a good first result, with limits. There were 46 patients in each group. It was one dose, and the main measure was at four weeks; the company says the 12-week follow-up is still being completed.⁹ The company says the entry criteria match those of the pill trials, but no study put the antibody next to a pill, and the company’s own slide warns that cross-trial comparisons can mislead.⁹ A small trial can overstate an effect, and the first place I would look for a surprise is the 12-week and 24-week numbers, and liver tests in a larger group.

The other programs

ABCL575 blocks OX40 ligand, a signal in atopic dermatitis, which is a common itchy skin disease with many approved antibody treatments from Regeneron and Sanofi, Lilly, AbbVie and Pfizer.⁵ The company found it while working with EQRx, took control in September 2023, and says it does not plan to develop it past Phase 1 by itself.⁵ Top-line Phase 1 data are due this quarter.⁴ I give it a small value, since a Phase 1 safety result in healthy volunteers shows little about whether the drug works in disease.

ABCL688 and ABCL386 are earlier. They are in the stage called IND-enabling, which means the animal and manufacturing work needed to apply to start human trials. The company expects to start human trials for both in 2027.⁴ Half of its internal programs, it says, are against GPCRs and ion channels, the large family of cell-surface proteins that have been hard to hit with antibodies.⁵ ABCL635 and ABCL688 are the first two of that kind to be advanced.

The partners

The partner stakes are a quiet part of the value. Royalty rates in the 2015 to 2019 contracts run from 0% to 4% of sales, and in the 2020 to 2025 contracts from 1.5% to 9% (5th to 95th percentile).⁵ The company counts 12 molecules in the clinic where it holds a stake. Two are its own. None of the other ten is in a late human trial for a common disease, and the two furthest along, from Dechra, are for animals.⁴ So this is a set of lottery tickets with small royalties on each, and the company itself says the large majority of the value of each deal sits in milestones and royalties that depend on the partner’s success.⁴

Two new deals make the new strategy concrete. In June 2026 Jazz Pharmaceuticals agreed to pay $56M upfront for two research programs on T-cell engagers for stomach and gut cancers, plus $28M when a third program starts within 12 months. AbCellera can earn up to $792M per program in option fees and milestones, plus royalties from the mid-single digits to the low double digits.¹⁴¹³ In July Vertex agreed to pay $28M upfront for T-cell engagers for autoimmune disease, will pay all research and development costs, and owes tiered royalties and milestones whose size was not disclosed.⁷ The company says the two deals add more than $100M of upfront cash.¹³ These deals are paid for work, and they are not a bet on a drug, which makes them different from ABCL635.

Where revenue comes from now

Revenue in 2025 was $75.1M. Research fees were $27.2M, milestones $1.0M, and licensing and royalties $46.9M. Of that last number, $36.0M was a single payment from Bruker to settle a patent suit the company filed in 2020, and $10.8M was licensing revenue R (reported).⁵ Bruker also owes royalties on sales of its Beacon platform for the life of the licensed patents; the amount is not given.⁵ In the first half of 2026 revenue was $12.4M, of which $0.3M was licensing and royalties.⁴ The Jazz and Vertex cash is recorded as deferred revenue and will show up as revenue over years.⁴

AbCellera is a platform with one real drug, ten borrowed lottery tickets, a first payment from two big partners, and a cash pile. The shares are mostly a claim on ABCL635.

IIThe moat

I would like to see a protection that shows up in the numbers, and I cannot find one yet. The company says its edge is not one technology but the combination of know-how, teams and buildings that take a program from target to the clinic.⁵ That can be true and still be hard to value. A reader cannot check it from outside, and the proof would be drugs that arrive faster, cost less or work better than those from others. There is one such test so far, ABCL635, and it is four weeks old.

What the filings do show is how much it cost. About $1B went into the platform.⁵ Capital spending was $327M from 2021 to 2025 C (calculated).³ The business that paid for it, COVID antibodies, ended. The things AbCellera built are real: a mouse platform for human antibodies called Trianni, high-throughput screening, a team that handles hard membrane targets, and a manufacturing plant. But in this industry anyone can hire a contract manufacturer and buy discovery work, so the question is whether owning it all beats renting it.

I give the platform some credit, but not much value for it on its own. The test I would use is simple: does AbCellera earn a return on the money it spends on discovery? In the past it did, since the COVID years produced $431M of profit in three years C (calculated).³ It has not done that since. Losses from 2023 to the first half of 2026 total $554M C (calculated).³⁴

The government money helps and complicates. It lowers the cost of building, but some of it must be repaid if revenue thresholds are hit, at up to 1.4 times the amount granted.⁴ That is a claim on success, in other words, and I treat it as a small debt in the valuation E (estimate).

IIIThe competitive advantage

The edge that can be tested is ABCL635 against the two pills. Both pills work on the same receptor, so the market has already shown that blocking NK3R relieves hot flashes. That helps AbCellera, since the biology is proven. It also means any company can try the same target, and the claim to be best rests on a better profile.

The pills show what the market is like. Astellas sold Veozah for the year to March 2026: ¥46.6B worldwide, up from ¥33.8B, of which $269M was in the United States, up 33% from $202M R (reported).¹⁵ That is the first non-hormonal pill of its kind. In December 2024 the U.S. regulator added a boxed warning for rare but serious liver injury and asked for blood tests before and during treatment.¹⁶ Bayer’s Lynkuet arrived later; I did not find Bayer’s sales figure for it in a primary source, so I leave it out. The company’s slide says ABCL635 has fewer liver and gut findings and larger effects than the pills, with no head-to-head trial.⁹

The company gives its own market size. It says about 12M women in the United States have moderate-to-severe hot flashes, more than 6M seek treatment, and 1M or more could benefit from a safe non-hormonal treatment because hormone therapy does not suit them. At about $5,000 per patient a year, the price of the pills, it calls the market $6B or more.⁹ Management estimated this, and I treat it as a ceiling on what is claimed. Next to it, the leading pill sold $269M in the United States in its latest fiscal year.

There is a second headwind. In November 2025 the U.S. regulator started removing the boxed warnings on menopausal hormone therapy for heart disease, breast cancer and dementia, and said demand rose after the action.¹⁷ Hormone therapy is cheap and generic. The more acceptable it becomes, the smaller the group left for a non-hormonal drug. The company’s estimate that 20% of women cannot use hormone therapy is management’s.⁹

Who else could do this

The 10-K names Astellas and Bayer for hot flashes, and for atopic dermatitis names Regeneron and Sanofi, Lilly, AbbVie and Pfizer, with Kyowa Kirin, Apogee and Bristol-Myers Squibb in development.⁵ Large companies with antibody factories could make a once-monthly NK3R antibody. If AbCellera licenses ABCL635, it will depend on such a company to sell it. If it sells the drug itself, it competes with Astellas and Bayer in a field where it has never had a sales force. I do not know which it will choose. Its filings say it weighs in-house development against out-licensing for each program.⁴

On this site, the nearest healthcare comparison is Insulet, with a base value of $203 against a price of $149.68, about 26% below base. Eli Lilly’s base is $744 against $1,417.54, and Novo Nordisk’s $28 against $40.00. Those are profitable companies with sales. AbCellera is not that kind of company. It is a bet on one drug in a field with two products already selling.

The advantage is a drug that worked once, in 92 women, for four weeks, against two competitors already on the market. It may be real. It has not yet been tested at the scale the price assumes.

IVManagement

The company is run by its founders. Carl Hansen has been chief executive, president and chairman since the start in 2012. Véronique Lecault is the other co-founder and the chief technology officer. The chief financial officer, Andrew Booth, and the chief legal officer, Tryn Stimart, joined as officers in 2019.¹⁰ Hansen is also chairman, so the person who runs the company also leads the board. The board has a lead director, Michael Hayden, who is 74.¹⁰ Two new independent directors, Victor Sandor and Lynn Seely, joined in June 2026.¹³

How they are paid

Their pay is small in cash and large in options. In 2025 Hansen received a salary of $550,000, a bonus of $357,908 and options with a grant value of $5.36M, for a total of $6.29M R (reported).¹⁰ The proxy says that the committee grants 100% options for the long-term pay of the four named executives, vesting 25% after one year and then monthly over three years.¹⁰ An option pays only if the share price rises above the strike price. So these managers are paid to raise the price over four years, and they are not paid for time served. That is a good fit with owners if the price is the right measure. It is a poor fit if the price jumps on a four-week result and the options were struck months before.

Many were struck low. The January 2025 grants had a strike price of $2.93, including 2,730,109 options to Hansen.¹⁰ In the first half of 2026 the company granted 10.5M options at an average strike of $3.50.⁴ The shares closed at $11.12 on 2 November. The Hansen options are worth about $22M in the money C (calculated), and the whole stock of 66.3M options outstanding has a weighted strike of $4.83.⁶ I am not saying the grants were improper. They were made on a schedule the proxy describes. I am saying the cost of the good news falls partly on other holders through dilution, and that in the next year the option holders have more reason to take the price up than to hold back.

How much of their own money is in

A lot. Hansen owned 56.1M shares through a holding company at 1 April 2026, worth $624M at $11.12 C (calculated).¹⁰ The seven officers and directors as a group held 93.0M shares counting options, 28.4% of the total.¹⁰ Lecault declined her bonus for 2023, which the proxy notes.¹⁰ After the August share sale and the jump in price, two directors and the CFO bought shares in the open market.

The amounts are small. They total $1.55M against Hansen’s holding of over $600M. They still count, because a person who is only trying to sell does not buy at the price of the share sale. I weigh them as a mild plus.

What they did with capital over a full cycle

The company had a windfall and a reset. It listed in December 2020 and raised $522.8M of new equity.³ In three years of COVID work it earned $431M and its cash and securities peaked at $886M at the end of 2022 C (calculated).³²⁰ It then spent $327M on buildings and equipment from 2021 to 2025 and $530M on research from 2023 to 2025.³ Cash fell to $534M by the end of 2025.⁵ The accumulated earnings of +$117M at the end of 2024 turned into a deficit of $128M by June 2026.⁴⁵ The losses since 2023 now exceed the profits of 2020 to 2022.

I do not think the building was foolish. A drug developer needs manufacturing and the labs, and the company paid with money from a one-time income and public grants. But it was also the choice to build a $1B platform on a business whose main revenue was a pandemic. The test for the next cycle is the same: does the spending produce a drug that sells? The 10-K says the teams think like owners when they allocate capital.⁵ The record so far is that the spending came first and the drug came second.

What worries me about control

The chief executive owns about a fifth of the shares and is chairman. He is named, with the company, in a civil suit in British Columbia brought by the estate of John Schrader and ImmVivos. It alleges a breach of an implied partnership between Schrader and Hansen and infringement of a Canadian patent. The company calls it meritless, and says the other side has agreed to the patent’s invalidation.⁵⁴ I cannot judge the merits and do not weigh it heavily. I note it because it names the founder personally.

The managers have a lot of their own money in this and are paid in options. That aligns them with a higher share price, which is not the same as a drug that sells.

VFinancials

These are the numbers of a company that earned a lot from one product, lost it, and has since been paying for a new business out of the savings. The first table has the seven years since 2019.

Revenue and costs

Revenue is small and lumpy. In the twelve months to June 2026 it was $66M, about 14% of its 2022 level C (calculated). Research and development was $198M, and general and administrative costs were $68M C (calculated).³⁴ The operating loss was $225M and the net loss $165M C (calculated), helped by tax recoveries of about $31M a year and $8M of grants and incentives in the first half.³⁴ The 2024 operating line includes $90.9M of depreciation, amortization and impairment, against $22.2M in 2025.⁵

Cash, and what an owner can take out

Cash and securities fell from $886M at the end of 2022 to $534M at the end of 2025 and were $540M on 30 June 2026.²⁰⁵⁴ In the first half of 2026 operating cash flow was only −$7.6M. That number is misleading, because the half includes the $56M from Jazz and $36M from Bruker.⁴ Without them the burn was about $100M in six months, or $200M a year. Capital spending fell to $6M in the half.⁴ The next table builds the number I use.

Stock pay is a real cost. It was $55.8M in 2025, 74% of revenue C (calculated).³ Options outstanding on 30 June were 66.3M at a weighted strike of $4.83, with 9.8M restricted share units.⁶ The share count rose from 300.6M at the end of 2025 to 306.5M in June, and the August sale adds 17.4M shares and 3.1M pre-funded warrants, so the total is about 9% higher in 2026 C (calculated).⁴⁶ A pre-funded warrant is a share with the price paid up front, so I count it as a share.

The August share sale

On 12 August, two days after the data, the company agreed with Jefferies and J.P. Morgan to sell 17,435,897 shares at $9.75, with 3,076,926 pre-funded warrants for investors who chose them. Net proceeds were about $187.0M.⁶²³ The shares had closed at $6.93 on 7 August, before the data, and the last sale before pricing was $10.36 R (reported).²⁶ The company therefore sold at a 5.9% discount to that price and 41% above the price before the news C (calculated). The prospectus says the money will fund the pipeline, mostly ABCL635, and general purposes.⁶ The sale added 20.5M shares and warrants, 6.7% more than the 306.5M outstanding at June C (calculated), and gave $9.75-a-share buyers an immediate dilution of $6.67 in book value.⁶ A company with 36 months of cash that raises more after good news may be careful. It is also telling me it saw the price as worth selling into.

How long the cash lasts

The company says its cash, securities and government funding cover its needs for at least 36 months from the date of the 10-Q.⁴ The estimate I make is similar, if a partner pays for ABCL635’s Phase 3, and shorter if AbCellera does it alone. A Phase 3 program for a menopause drug is large. My assumption of $200M over three years is a guess based on typical trial size, since the company has not given a figure E (estimate).

The company has no debt and about $680M of cash, and it loses about $210M a year before stock pay. It has three to four years if nothing changes. The risk is not that it runs out of cash soon. It is that it spends the cash before the drug pays.

VIValuation

This is not an earnings valuation. AbCellera loses money, and there are no profits to project. I add up pieces instead: cash, a risk-weighted value for each drug, the partner stakes, and the cost of running the company. Each piece rests on a judgement that I show. Where I cannot judge, I show a range.

How this goes wrong

Before any numbers, I ask what would most likely hurt an owner. I see three ways.

The first is that ABCL635 fails to hold up. The result is one dose, four weeks and 46 patients per group.⁹ The 12-week data, a larger liver-safety record, or an immune reaction to an antibody taken monthly could each change the picture. Across all drugs, about half of those that reach Phase 3 fail there.²⁴ The share price has already moved from $6.93 to $11.12, a gain of 60% C (calculated).² A failure would take back most of that.

The second is that the company spends the cash well and still gets little. It loses about $210M a year C (calculated). If it sells ABCL635 to a partner at a modest price, or runs Phase 3 alone and then needs more money, the cash pile that makes up 60% of my base value shrinks. The August sale of shares at $9.75 shows the company will raise money when it can.⁶

The third is the price. If ABCL635 works and is approved, the shares could still lose money if the sales fall short of the figure now priced in. I calculate that figure below. The market sets it, and I can only say what it is.

What an owner can take out

There is nothing to take out today. Owner cash, operating cash flow less capital spending less stock pay, was −$171M in the twelve months to June 2026, and −$263M without the two one-off receipts C (calculated).⁵⁴ Reported earnings are better than that, since the net loss of $165M is helped by tax recoveries and grants. For anyone buying the shares, the cash coming in belongs to the future: royalties and milestones after 2030 in my base case.

What I cannot judge

Four inputs are unknowable from here, and the value moves with each. First, whether ABCL635 keeps its effect to week 12 and beyond; the company expects to report this and has not. Second, what a partner would pay for it. A royalty of 17% and an upfront of $250M are my guess from what the company says about deals of this kind, and it says upfronts for assets like it have reached triple-digit millions.⁵ Third, how big the market is. The company says $6B or more, the one pill whose sales I found sold $269M in the United States last year, and the real answer is somewhere between.⁹¹⁵ Fourth, the worth of the early pipeline and the T-cell engager work. Jazz and Vertex agreed to $112M of upfront payments for research, $28M of it due only when a third Jazz program starts, which shows some belief; I cannot see whether a drug comes out of it. I put it at $0 in the bear case and $139M in the base case, and I could be off by a multiple.

The discount rate

I use 11.0% on risk-adjusted cash flows. The 10-year Treasury yielded 4.91% on 2 November, and Damodaran’s implied equity risk premium was 4.20% on 1 October.²⁵²⁶ A beta of 1.4 to 1.5 gives 10.8% to 11.1%: ABCL’s weekly returns against the S&P 500 give a beta of 1.48 over two years and 1.39 over five.²⁷² I do not push the rate higher to cover clinical risk, because the probabilities already do that. Doing both would count the risk twice.

The chance of approval

For a drug that has passed Phase 2, the chance of approval is the chance it enters Phase 3 times the chance it passes it. From the BIO and Informa study, 52.4% of all drugs that enter Phase 3 reach approval, 57.1% in endocrine and 64.9% for monoclonal antibodies.²⁴ The same study finds 15.1% of Phase 2 drugs reach approval, 15.2% in endocrine and 22.1% for antibodies.²⁴ ABCL635 has a positive Phase 2 primary result, so I treat the Phase 2 hurdle as mostly passed, with 85% going on to Phase 3, and 55% to approval from there. That gives 47%, and I use 45% in the base E (estimate). The bear case is 28%, which assumes the 12-week data or the liver record disappoints. The bull case is 65%.

The three cases

My base case has ABCL635 licensed to a larger company in 2027 for $250M upfront, with a 17% royalty, $300M on approval and $300M if sales reach the top range.⁵ I give 80% to the deal happening. Phase 3 runs 2027 to 2029, launch is in 2030, and sales reach $1.5B in six years. That is five times the best pill in the United States today, and about a quarter of the company’s own $6B estimate E (estimate).¹⁵⁹ Sales hold to 2043 and then fall. AbCellera pays 15% cash tax. The early pipeline is worth $139M, the partner stakes $170M, ABCL575 $20M, and running the company costs $85M a year for ten years, less $90M of partner fees.⁴

The bear case has a 28% chance, peak sales of $0.6B, a 2031 launch and a poor deal: $100M upfront and a 12% royalty, and only a 65% chance of a deal. The early pipeline is worth nothing. The company keeps burning $100M a year for six years before it shrinks. The bull case has a 65% chance, sales of $4.5B, helped by cancer patients and markets outside the United States, and AbCellera runs the U.S. launch with a 45% margin at peak.⁹

Base value is $3.20, which I round to $3. Cash and other balance sheet items are $1.93 of it, ABCL635 and ABCL575 $1.69, and the early pipeline and partners, less the cost of running the company, −$0.41 E (estimate). I take the third group seriously as a cost. The company will spend about $85M a year on offices, labs, administration and management whatever it discovers, and I charge it against the value of the assets it supports.

What the price assumes

At $11.12 the market value is $4.16B on 374M diluted shares, and the enterprise value, after cash, is $3.49B C (calculated). Take away my values for everything except ABCL635 and the price leaves $3.61B for the drug, 6.3 times my base C (calculated). To get there with the base chance of approval and a licence, the drug needs peak sales of $18B. If AbCellera sells it in the US itself, it needs $8.7B; at a 60% chance of approval, $6.6B C (calculated). For scale, Veozah earned ¥46.6B, about $0.3B, worldwide last year, and the company’s own estimate is $6B or more.¹⁵⁹

I do not think the price is irrational. There are several ways it can make sense that my model cannot capture. The company could sell ABCL635 to a larger company at a price above my assumptions. The drug could succeed in more conditions than hot flashes. The early programs could be worth more than I think. Or Phase 3 could confirm a much better drug than the pills, in a market that grows more than I assume. I do not know. Each of these is possible, and the price needs a good deal of them at once.

The odds

To reach my bull case, several things must hold together. ABCL635 must be approved, which I put at 65%. Given approval, it must sell $4.5B, which I put at 40% since the one pill I could measure sells under a tenth of that. AbCellera must then run the U.S. launch well with no earlier large partner, which I put at 70%. Multiply them and the chance of the full bull is about 18% E (estimate). I do not mean the bull is that improbable as a share price. It means the earnings case for $11.12 needs a string of things to go right, and each added condition shrinks the odds. The base is likelier but pays $3.

My weights of 25%, 50% and 25% give $5.02 a share. I use them only as a check. The outcomes are not smooth. If the drug fails, the shares are worth near my bear. If it succeeds, they are worth the base or more. Averaging them hides that.

Quality and price

These are two separate questions. As a business, AbCellera has real assets: about $680M of cash, no borrowings, a positive Phase 2 result for a drug in a proven mechanism, and a platform that two large partners paid for this summer. As a purchase at $11.12, it asks me to pay about $3.5B for a business with $66M of revenue and a loss of $225M. My base is $3, the price is 271% above it, and my margin-of-safety price is $2. I take 35% off the base because a single drug drives most of the result, and because lease obligations of $136M and government claims sit ahead of the shares.⁴ That discount covers errors in my base. It does not cover the bear case, which sits at $1.

On this site, the nearest healthcare comparison, Insulet, has a base of $203 against a price of $149.68, 26% below base. Booking Holdings sits 34% below its base. The next-best use of the same dollar, in the pages I have built, is a business that earns money, at a price below my base. AbCellera is the opposite on both counts, and I say so without implying that it cannot rise.

Value is not a forecast of the share price. The shares moved from $5.71 at the end of July to $14.82 on 29 September, and to $11.12 now, with no change in the business except one trial result and a share sale.² The market can stay above value, or fall below it, for years.

VIIThe case for the price

What most people miss

The first fact is the cash. After the August sale and the Vertex payment I estimate $682M of cash and securities and no borrowings E (estimate).⁴⁶⁷ On 374M diluted shares that is $1.80 a share after the loan and the government claims, 16% of the price C (calculated). Jazz also owes $28M when a third program starts.¹³

The second is that the market for the pills is growing despite a safety warning. U.S. sales of Veozah rose from $202M to $269M in Astellas’s latest fiscal year, 33%, after the liver warning of December 2024 R (reported).¹⁵¹⁶ Some women and doctors accept the trade for relief.

The third is the size of the effect. The women had about ten moderate or severe hot flashes a day; the drug group lost 8.8 a day against 3.5 on placebo.⁸⁹ The placebo response is large, so the 5.3 difference is the number to remember. It says nothing about week 12.

The bull case

The company’s case is in its releases. Chief executive Carl Hansen said the Jazz and Vertex deals show the T-cell engager platform can advance programs into the clinic, adding over $100 million of upfront cash.¹³⁷ Chief medical officer Sarah Noonberg said on 10 August that the data show potential best-in-class relief from a single, well-tolerated injection.⁸ The slides put the market at $6B or more at pill prices.⁹ Baker Bros. Advisors, a biotechnology fund manager, held 33.0M shares at 30 June, up from 27.5M at 31 December, per its 13F filings.¹⁸ I found no statement from the firm about the company, so I give the position and no view. The chief financial officer and two directors bought $1.5M of shares after the August sale.¹¹¹²¹⁹

Against reality

If the Phase 3 trials repeat the Phase 2 result, if the drug is approved by about 2030, and if AbCellera sells it in the U.S. for $8.7B a year, the price is possible. A licence at 17% would need about $18B. My base has $1.5B and my bull $4.5B. So the price asks for about 1.9 times my bull sales, or a higher chance, a better deal or a buyer for the company. The evidence for the first step is one trial of 92 women over four weeks. The evidence for sales above $4B is the company’s market estimate and a pill that sold $269M in the U.S.

What a 10x would take. A tenfold share price is $111.20. On 400M diluted shares that is $45B, about 11 times today’s market value. At 20 times earnings it needs about $2.2B of net income, roughly $6B of revenue at a 35% net margin, ten years out, in 2036. The company says about 50 antibody drugs reached $1B of sales in 2025.⁵ My bull case has ABCL635 at $4.5B. A tenfold move needs several drugs at that level, and I do not think it is plausible from here for a company with this pipeline. I did not count how many companies of this size have done it, and I would put the chance at a few percent at most E (estimate).

Where I come down

The Phase 2 numbers and the cash moved me. The jump in the share price did not, and the sale of shares at $9.75 shows how the company valued the news. A licence at $250M upfront or more, a 12-week result close to the 4-week one and a partner-paid Phase 3 would raise my values. They stay at $1, $3 and $12, and the price is above my base.

VIIIRisks, and what would change my view

The risks I weigh most are in the valuation: the drug failing to hold up, the cash being spent before the drug pays, and the price already counting a success. Others matter too. The Phase 2 trial ran in Canada; a U.S. Phase 3 will need approval from the U.S. regulator, which has its own view on liver safety after the Veozah warning.⁴¹⁶ Competitors such as Astellas and Bayer have sales forces; AbCellera has none.⁵ The company’s manufacturing site opened in 2025 and has not yet made a drug for sale. The government funding has conditions and some of it is repayable.⁴ Costs and grants are partly in Canadian dollars, which creates an exchange-rate effect I have not tried to size.¹⁰ And key staff are founders who hold options that vest over four years.¹⁰

My view would change in either direction. A weak 12-week result, a liver event, or another sale of shares below $10 would lower it. A licence on strong terms, a clean 12-week result and a partner-paid Phase 3 would raise it.

Scenarios, and what they do to the base

The table reruns my model for five single changes. It does not add them up. The price already carries a good outcome on the drug, and carries none of these.

What I could not find

I did not find Bayer’s sales of Lynkuet in a primary document. I did not find a reason for the 9.4% fall on 2 November; the company has filed nothing since 24 August, and the Q3 report comes on 9 November.²⁸¹ I did not find the patent term for ABCL635 or the size of the Bruker royalty. I do not know what the company will charge or whether the regulator will accept the four-week main measure for approval. These are the points where my numbers are weakest.