Addressing Moderna’s annual R&D Day earlier this month, during which the company updates investors on its pipeline progress, CEO Stéphane Bancel summarized his company’s vision of advancing messenger RNA (mRNA) beyond its blockbuster COVID-19 vaccine.
“We believe our mRNA platform can solve the world’s greatest health challenges, from diseases impacting millions, to ultra-rare diseases impacting dozens, to medicines personalized down to the individual level,” Bancel said.
One of Moderna’s latest efforts to fulfill that vision emerged Wednesday, when the company joined AbCellera to launch a collaboration to develop mRNA-encoded antibody drugs by adding Moderna’s mRNA platform to AbCellera’s AI-based antibody discovery platform.
Through the partnership, whose value was not disclosed, AbCellera’s platform will identify therapeutic antibodies against up to six targets—to be selected by Moderna—by searching and analyzing natural immune responses.
Moderna and AbCellera are not disclosing which therapeutic areas the antibodies will address.
“What I can say is that it’s not a collaboration that’s restricted to infectious disease, which is where Moderna has recently been contributing in a big way,” AbCellera CEO and co-founder Carl Hansen, PhD, told GEN Edge.
Moderna’s COVID-19 vaccine (mRNA-1273, marketed in Europe as Spikevax™), launched in December 2020, generated $5.93 billion in sales for January–June 2021, placing it second among best-selling COVID-19 vaccines and drugs as ranked by GEN.
“A natural fit”
Hansen said COVID-19 was less a factor in the companies partnering than a shared desire to explore opportunities they see for advancing innovative antibodies.
“This particular interaction was not motivated directly by anything to do with the pandemic or infectious disease, but rather by starting to strike out in a new modality for antibody-based therapeutics,” Hansen said. “AbCellera exists to bring technology to help companies with innovation, to bring them quicker to the clinic, and this was a natural fit and one that we are very excited to be a part of.”
“It’s not often you get to be right at the forefront of what could be a whole new class of therapeutics,” he added.
Investors have signaled some enthusiasm for the collaboration. Since the deal was announced Wednesday, AbCellera shares have risen 10% from a closing price of $17.56 the day before the partnership was announced, to $18.81 on Wednesday and $19.37 as of 3 p.m. ET Thursday.
The collaboration gives Moderna rights to develop and commercialize antibodies resulting from the collaboration, through a process that bypasses the traditional way of manufacturing antibodies outside of the body, using CHO cells and bioreactors.
Instead, the process entails finding an antibody with a desired property or function. AbCellera will share the DNA sequence with Moderna, which will use its expertise in RNA to design a nanoparticle-based therapeutic with the antibody-encoding RNA. Once injected into a patient, their cells become the factory for making the therapeutic.
“The sequence of mRNA bases is derived directly from the sequence of bases that encode the antibody. And that provides a direct genetic correlation between the discovery information that we provide and the final drug, which is the mRNA molecule,” Hansen said. “It is potentially a faster route to the clinic, and it opens up some new ways, or at least facilitates some new ways to use antibodies that have not been really explored in the past, in part because of the time and expense associated with the manufacturing.”
Moderna has agreed to pay AbCellera research payments, as well as potential payments tied to achieving clinical and commercial milestones, and royalties on net sales of products.
“Moderna is obviously a world leader and a pioneer in that space and has proven their technology on the vaccine side,” Hansen said. “We get to join forces with them and bring the industry’s most versatile and fastest discovery engine, and so I’m excited about what that combination can achieve.”
The Moderna collaboration adds to the 138 discovery programs with 33 partners that AbCellera tallied at the end of the second quarter. The partnership will not impact AbCellera’s operational plan or business strategy, Hansen said.
That strategy entails large-scale investment in antibody discovery rather than offering discovery as part of a broader mix of services for biopharmas ranging from target identification to commercial development.
“We have taken that piece of discovery and disaggregated it from the value chain, and we are investing in technology at scale that we then bring to the market through partnerships,” Hansen said. “We let our partners access our platform, our people, our capabilities, and our data science to more quickly get their ideas from concept through to clinical development.”
“What that means is that we work with companies from the smallest biotech right up to the biggest, most enabled pharma partners,” he added.
Among AbCellera’s biggest pharma partners is Eli Lilly, with which AbCellera has developed two COVID-19 fighting antibodies: bebtelovimab (LY-CoV1404), which in May advanced into the clinic after generating positive preclinical data showing an ability to bind and neutralize all then-known circulating SARS-CoV-2 variants of concern, including Delta; and bamlanivimab, which was granted FDA EUA as monotherapy in November 2020, and in combination with Lilly’s etesevimab three months later. [On Thursday, the FDA expanded its EUA for bamlanivimab-etesevimab to include post-exposure prophylaxis to prevent SARS-CoV-2 infection or symptomatic COVID-19.]
At the start of the pandemic last year, within a week of receiving a blood sample from one of the first U.S. patients to recover from COVID-19, AbCellera put its rapid pandemic response platform to work, identifying more than 500 unique fully human antibody sequences, the most promising of which emerged as bamlanivimab following assessment by company researchers who drew upon expertise from the Dale and Betty Bumpers Vaccine Research Center of the NIH’s National Institute of Allergy and Infectious Diseases (NIAID).
Breaking the mold
“With Lilly, we broke the mold for the fastest discovery through IND for any drug, challenging the current drug development process. It does not need to take years and years,” Ester Falconer, PhD, AbCellera’s chief technology officer who led development of the AI-powered antibody discovery platform, told GEN earlier this year. Nearly six million cells were screened in three days, antibody genes were sequenced in an additional two days, and antibodies were generated and tested a week later—an incredible feat.”
Over the summer, the U.S. Assistant Secretary for Preparedness and Response halted administration of bamlanivimab and etesevimab, citing what it called weaker effectiveness against COVID-19 variants compared with other antibodies. While the combination resumed distribution on September 2, the disruption drove down AbCellera’s royalty revenues for the drug, which finished the second quarter at $21.2 million (compared with the $33.5 million projected by SVB Leerink).
That, in turn, led company revenues to fall short of investor expectations, to $27.6 million during Q2, well below what SVB reported as a Wall Street consensus estimate of $61.9 million.
AbCellera went public on December 11, generating $522.8 million in net proceeds, according to its Form 10-K annual report for 2020. On its first day of trading, AbCellera’s stock more than tripled its initial public offering (IPO) price of $20 a share to $71.91 later that day, before trading was halted via circuit-breaker. Shares have mostly fallen since then, reaching a low of $14.51 on July 27 before inching back up, as the company’s results fell short of investor expectations due to the bamlanivimab distribution halt.
Yet Puneet Souda, managing director, life science tools and diagnostics, and a senior research analyst with SVB Leerink, concluded in a research note last month that AbCellera’s prospects remained bright due to its technology and collaborations.
“We view AbCellera as a promising antibody drug discovery platform that is using its proprietary technology stack to deliver functional antibodies to its biopharma partners,” Souda wrote. SVB cut its price target on AbCellera on July 19 from $45 to $25 but maintained its “Outperform” rating.
Hansen said AbCellera’s emphasis on building up its technologies runs counter to the traditional wisdom of focusing on building a drug pipeline.
“We took a bit of an orthogonal or contrarian view to that, saying, ‘is that really true?’ And instead, ‘could we not focus on capabilities and technology?'” Hansen recalled. “When you realize that your product is going to be best-in-world capability—‘we’re going to do this, faster and better than anyone else on the planet’—then in order to justify and get value to that platform, you have to use it not once, not twice, not 10 times. You have to use it hundreds of times.
“No company could afford to do the full clinical and commercial development for hundreds of programs, so the emphasis on technology almost makes the business model the obvious choice,” he asserted. “And it’s one that allows us to stand side by side and to bolster the efforts of others in the industry instead of trying to compete along one narrow swath of therapeutics.”
Hansen said AbCellera structures its partnership agreements to emphasize milestones and royalties when the molecules it co-develops reach the clinic and advance through clinical trials.
“We share in their success. In that way, we’re building a portfolio that over the years will be hundreds of stakes across multiple programs, and that’s a very different profile than most biotechs, which have all their eggs in one or two baskets waiting for a Phase II clinical trial,” Hansen said. “So, we’re a very different kind of company and a company that’s focused on connecting with the very best innovation, wherever it is, and helping to accelerate that with technology.”
The Moderna collaboration is a great example of that model, Hansen added.
“This is a world leader in RNA therapeutics. They’ve got a huge opportunity in front of them. They need great capabilities in discovery to be able to execute on that opportunity. And we exist in the ecosystem to provide that, so they don’t have to rebuild it from scratch,” Hansen said. “That’s the essence of this collaboration.”
Moderna will manufacture the products it co-develops with AbCellera. Beyond the Moderna partnership, AbCellera plans to build its own 130,000-square-foot GMP manufacturing facility for therapeutic antibodies in Vancouver, BC, where the company is headquartered.
The manufacturing facility, set to start production in 2024, would be the first of its kind in Canada, and is estimated to cost about $250 million, of which about half ($125.6 million) is being funded through a grant from the Canadian government’s Strategic Innovation Fund (SIF).
“We don’t intend to build RNA manufacturing capabilities,” Hansen said.
The GMP plant is one of two new facilities AbCellera is building in Canada. About two miles west, the company broke ground in April on a 380,000-square-foot, two-building headquarters now under construction. One building is set to open in 2023, the other in 2024.
AbCellera has said the new headquarters will enable it to add hundreds of new staffers to its workforce, which has grown to about 350 people from 250 just since May.
While most of its growth reflects increasing antibody development and partnership activity, AbCellera is also growing via acquisition. On Monday, the company announced its purchase of Boston-based TetraGenetics for an undisclosed price that included upfront and milestone payments, in a deal that enabled AbCellera to add technology and expertise in the expression and purification of ion channels, G protein-coupled receptor (GPCR), and other transmembrane proteins implicated in pain and autoimmune disorders.
“[Acquiring] TetraGenetics is about bolstering our technology capabilities for a class of extremely difficult, but very, very high-value drug targets,” Hansen said. “One of the big challenges with those targets is that they’re just hard to make—you can’t produce them very easily. And TetraGenetics has built a best-in-the-world technology for the production of the actual proteins that’s one key piece to being able to crack this problem.”