AbCellera (ABCL) Q3 2026 Earnings Call Transcript

DATE

Monday, Nov. 9, 2026

CALL PARTICIPANTS

• Chief Legal and Compliance Officer - Tryn Stimart
• President and Chief Executive Officer - Carl L. Hansen
• Chief Medical Officer - Sarah Noonberg
• Chief Financial Officer - Andrew Booth

TAKEAWAYS

• Revenue -- $10.6 million, primarily comprising research fees.
• Net Loss -- $40.8 million, or $0.13 per share.
• Total Cash and Marketable Securities -- $790 million at quarter end, including $600 million in short-term holdings.
• Available Liquidity -- over $890 million, reflecting the inclusion of over $100 million in committed government funding.
• Capital Raise -- $200 million via an oversubscribed equity offering completed following the release of Phase II clinical data.
• ABCL635 VMS Frequency Reduction -- 8.8 events per day decrease at four weeks, compared to a reduction of 3.5 events in the placebo group.
• ABCL635 VMS Percent Improvement -- 83% reduction from baseline, representing a 50% placebo-adjusted difference.
• ABCL635 VMS Severity Improvement -- 1.4 point reduction on a three-point scale, versus a 0.3 point reduction for placebo.
• ABCL635 Complete Resolution Rate -- 37% of participants experienced 100% resolution of moderate to severe events, compared to 2.2% for placebo.
• ABCL635 Patient Response Rate -- 61% of participants achieved at least a 90% improvement in event frequency.
• ABCL575 Half-life -- 65 days, supporting a target dosing interval of once per quarter.
• Research and Development Expenses -- $43.5 million, reflecting focused investment in internal pipeline programs.
• Sales, General, and Administrative Expenses -- $13.6 million, declining from $25 million last year due to the conclusion of intellectual property litigation.
• Operating Cash Flow -- $19 million generated in the first nine months of 2026, including upfront payments from Vertex and Jazz.
• Capital Expenditures -- $8 million for the year-to-date period, primarily offset by received government grants.
• Partnered Programs -- 34 active programs where the company holds downstream stakes, down from 44 at the end of 2025.
• Molecules in Clinic -- 12 progressing molecules in which the company holds downstream interests.
• Headcount -- 562 employees as of the current reporting period.

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RISKS

• Noonberg stated, "we do not expect that efficacy is maintained through the full 12 weeks," noting that the single-dose Phase II trial of ABCL635 is designed to monitor declining efficacy during an eight-week washout period.
• Hansen stated, "based on these external results, we will not pursue development of ABCL575 in atopic dermatitis," following clinical failures of similar drugs from Sanofi and Amgen.

SUMMARY

AbCellera Biologics Inc. (NASDAQ:ABCL) reported the transition toward late-stage clinical development following Phase II efficacy data for its lead program, ABCL635. Management stated the company has secured a liquidity position of over $890 million to support multiyear pipeline investments and the initiation of Phase III trials in 2027. The company discontinued development of its OX40 ligand program in atopic dermatitis following unfavorable external clinical results in the class. Strategy is now focused on advancing ABCL635 into late-stage development for menopausal symptoms and expanding its application to VMS associated with cancer treatments.

• Carl Hansen stated, "by next year, AbCellera will transition into a late-stage clinical development company."
• The company launched ABCL992, a next-generation half-life extended analog of ABCL635, which entered IND-enabling activities in the third quarter.
• Management introduced ABCL646, a potential first-in-class antibody antagonist against an ion channel target, a category where the company believes it holds a competitive advantage.
• The internal pipeline expanded with the addition of ABCL385, an investigational antibody candidate for an undisclosed indication in oncology.
• Management reported that clinician feedback on ABCL635 results was positive, with some physicians characterizing the efficacy data as superior to existing hormone therapies.
• The company expects to initiate mid-stage clinical trials for ABCL635 in breast and prostate cancer-associated VMS populations in 2027.

INDUSTRY GLOSSARY

• VMS (Vasomotor Symptoms): Hot flashes and night sweats commonly associated with menopause or hormone suppression therapy.
• NK3R (Neurokinin 3 Receptor): A neuronal receptor in the hypothalamus that regulates body temperature and is a target for nonhormonal VMS treatments.
• OX40 Ligand: A protein involved in T-cell activation and survival, targeted for the treatment of autoimmune and inflammatory diseases.
• IND (Investigational New Drug): An application to the FDA to begin clinical trials in humans.
• OLE (Open-Label Extension): A trial phase where all participants and researchers know which drug is being administered, often following a blinded study.
• MIDD (Model-Informed Drug Development): A regulatory program that uses mathematical models to inform drug dose selection and trial design.

Full Conference Call Transcript

Operator: Good afternoon, and welcome to AbCellera's Q3 2026 Business Update Conference Call. My name is Kara, and I will facilitate the audio portion of today's interactive broadcast. [Operator Instructions] At this time, I would like to turn the call over to Tryn Stimart, Chief Legal and Compliance Officer. You may proceed.

Tryn Stimart: Hello, everyone. Thank you for joining us for AbCellera's Third Quarter 2026 Earnings Call. I'm Tryn Stimart, AbCellera's Chief Legal and Compliance Officer. Speaking on today's call are Dr. Carl Hansen, AbCellera's President and CEO; Dr. Sarah Noonberg, AbCellera's Chief Medical Officer; and Andrew Booth, AbCellera's Chief Financial Officer. During this call, we may make statements about our strategic priorities and financial outlook based on our current expectations and in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those described.

Please review the Risk Factors section of our most recent Form 10-K and subsequent 10-Q filings with the SEC for a more detailed discussion of these risks. AbCellera assumes no obligation to update any forward-looking statements to reflect events or circumstances after today's date. Our presentation today, our earnings press release and our SEC filings are available on our Investor Relations website. The information we provide about our pipeline is intended for the investment community and is not promotional. As we transition to our prepared remarks, please note that this call is being recorded and will be available for replay on our Investor Relations website and that all dollars referred to during the call are U.S. dollars.

After our prepared remarks, we will open the line for questions and answers. I will now turn the call over to Carl.

Carl L. Hansen: Thanks, Tryn, and thank you, everybody, for joining us today. Q3 was a transformative quarter for AbCellera, driven primarily by our positive top line Phase II results for ABCL635, which is an investigational antibody for the nonhormonal treatment of moderate to severe vasomotor symptoms or hot flashes. The Phase II study was designed to evaluate efficacy and safety at 4 weeks following a single 600-milligram injection of ABCL635. The data, which we announced on August 10, show that ABCL635 has strong potential to redefine the standard of care for nonhormonal treatment of hot flashes.

On the strength of these data, we have an exciting opportunity to develop a potential category-defining women's health product with clear differentiation across efficacy, safety and convenience. In line with this, we believe our data also significantly expands the commercial prospects for ABCL635, and we are fully committed to bringing it into late-stage development next year. In the next few slides, I'll review the key results and put them into context with respect to existing therapies. Our first key efficacy endpoint was reduction in the frequency of moderate and severe hot flashes.

This slide shows the effect of ABCL635 plotted as change from baseline values using both the primary analysis on the left, which included only values from weeks 2, 3 and 4, as well as a prespecified sensitivity analysis on the right that included week 1 data as well. I first note that our data shows rapid onset of benefit with a significant placebo-adjusted treatment difference of 2.6 events already present at week 1 and then increasing improvements over the full 4-week period. At 4 weeks, the ABCL635 group has a mean reduction of 8.8 events per day compared to a mean reduction of only 3.5 events per day in the placebo group, representing a placebo-adjusted treatment difference of 5.3 events.

Expressed as a percent change from baseline, the ABCL635 group experienced an 83% reduction from baseline in daily events compared to a 33% reduction in the placebo group for a placebo-adjusted treatment difference of 50%. Notably, the benefit of ABCL635 was highly consistent across subgroup analyses and the data were robust to a variety of sensitivity analyses. Our second key efficacy endpoint was reduction in the severity of VMS, which is reported on a 3-point scale, representing mild, moderate and severe events. As with frequency, we see a rapid onset of benefit with significant improvement at the 1-week time point and increasing improvement out to 4 weeks.

At 4 weeks, the mean severity scores decreased by 1.4 points in the ABCL635 group versus 0.3 points for the placebo group for a placebo-adjusted difference of 1.1 points. When expressed as a percent change from baseline, the ABCL635 group experienced a 58% mean reduction in severity from baseline compared to a 12% mean reduction in the placebo group for a placebo-adjusted difference of 46%. As an alternative to reporting population averages, another valuable way to look at the data is to assess the fraction of patients that experienced different ranges of treatment benefit.

In the table on the left, you can see that 37% of ABCL635 participants had complete or 100% resolution of moderate or severe events at 4 weeks. This is compared to only 2.2% of placebo patients. To our knowledge, these levels of complete resolution of moderate and severe events have not been reported for any non-hormonal VMS treatments and are at least comparable, if not superior, to reports from studies of hormone therapy. Furthermore, nearly 61% of ABCL635 participants had at least a 90% improvement from baseline in the number of moderate to severe events compared to only 8.7% of placebo patients and a full 78%, more than 3/4 of patients, at over 75% reduction.

These large and clinically meaningful benefits were also observed for severity as shown in the table on the right. While acknowledging the potential limitations in making cross-trial comparisons, it is worth evaluating our observed treatment effects against data collected similarly at 4 weeks from the registrational studies of the 2 approved small molecule NK3R antagonists, fezolinetant and elinzanetant. Looking at the placebo-adjusted reduction in frequency of moderate and severe VMS expressed as a percentage of the baseline levels, our placebo-adjusted treatment effect is 50%, which is approximately twice as large as the 20% to 25% reductions reported in Phase III studies of fezolinetant and elinzanetant.

An even greater difference in treatment effect was observed in improvements in VMS severity with a roughly 3.5 to fivefold greater benefit as compared to the registrational studies of fezolinetant and elinzanetant. Importantly, these markedly enhanced treatment effects were achieved without any clear signal of gastrointestinal or liver toxicity. This slide summarizes adverse events reported in at least 2 patients in either treatment group, regardless of relationship, occurring during the first 4 weeks of treatment. ABCL635 demonstrated a favorable tolerability profile across the data set. Overall, there was a numerically higher number of patients with at least 1 adverse event in the ABCL635 group compared with the placebo group.

There were no serious or severe adverse events in the ABCL635 group compared to 1 placebo patient with a serious adverse event and 2 placebo patients with severe adverse events. Similar to the data in the Phase I study, ABCL635 was associated with an increased incidence of headache with the majority rated as mild and transient across both treatment groups. Fatigue was also reported more often in the ABCL635 group, although all events were mild. Importantly, we did not see any evidence of gastrointestinal toxicity in this study despite it being consistently reported with the 2 approved small molecule NK3R inhibitors.

In fact, we observed a lower incidence of nausea in the ABCL635 group and no events of diarrhea or abdominal pain compared to multiple patients reporting these events in the placebo group. Summing up, our Phase II data showed a combination of breakthrough efficacy and favorable tolerability. Based on this, we believe ABCL635 has the potential to redefine the standard of care for nonhormonal treatment of hot flashes. Looking forward, we are committed to advancing ABCL635 into late-stage development and are actively working through the FDA's model-informed drug development, or MIDD, program to gain alignment on dose selection for subsequent studies. We expect to disclose additional data through 12 weeks and the open-label extension, or OLE, data in early 2027.

As a reminder, in terms of efficacy, the primary objective of the Phase II trial was to evaluate the benefit of a single dose of ABCL635 over the course of 4 weeks. This is the data we have just reviewed. The remaining portion of the 12-week data is to monitor the decline in efficacy over the final 8-week washout period with this data used to support exposure response modeling for late-stage dose selection. Following the initial 12-week period, OLE data will provide an additional 4-week assessment, allowing us to characterize repeat dose dynamics in the treatment group alongside initial active exposure in the placebo group. We expect to initiate late-stage development for menopause, VMS, in 2027.

And in parallel, we are expanding the indications for ABCL635 to include hot flashes caused by hormone suppression associated with breast and prostate cancer treatment, and we expect to initiate clinical trials in these 2 populations in 2027. Finally, today, we are pleased to announce a new program, ABCL992, which is the next-generation half-life extended analog of ABCL635. ABCL992 entered IND-enabling activities in Q3. Building on our landmark data from ABCL635, we believe this program will advance another therapeutic option that provides even greater convenience to patients through extending dosing interval and facilitates broader patient reach. Moving on from ABCL635.

And as previously guided, today, we are presenting Phase I results from our second clinical candidate, ABCL575, which is a long-acting investigational antibody targeting OX40 Ligand. ABCL575 entered clinical development as a potential best-in-class follower of Sanofi's amlitelimab, which at the time was in Phase III studies for atopic dermatitis. Earlier this year, based on disappointing clinical data, development of amlitelimab was discontinued in atopic dermatitis. Separately, late-stage clinical studies of Amgen's rocatinlimab, an OX40-targeted antibody, also led to discontinuation. Based on these external results, we will not pursue development of ABCL575 in atopic dermatitis.

And while we believe the OX40, OX40 Ligand class has potential in other autoimmune conditions, we do not currently have plans to develop it beyond Phase I. With that, I'll hand it over to Sarah to discuss our top line results from the Phase I study. Sarah?

Sarah Noonberg: Thank you, Carl. Despite setbacks in the OX40, OX40 Ligand class, the top line results from the Phase I clinical trial of ABCL575 demonstrated a favorable tolerability and PK profile that were very much in line with our target product profile. As a reminder, our Phase I study was a randomized, double-blind, placebo-controlled, single ascending dose study in 40 healthy volunteers aged 18 to 65. Participants were randomized 3:1 to receive a single dose of ABCL575 at a dose of 75 milligrams to 900 milligrams subcutaneously or matching placebo. Given the expected long half-life of ABCL575, participants were followed for approximately 1 year. Study endpoints included safety, tolerability and pharmacokinetics.

The following data reflects a near complete data set with the final participants approaching their last study visit. 30 participants received a single dose of ABCL575 and 10 received a single dose of placebo. The overall study population had a roughly even split between males and females and an average age of 44 years. There were no clinically important imbalances among treatment groups. ABCL575 demonstrated a favorable tolerability profile in this data set. This slide summarizes adverse events reported in at least 2 participants in either treatment group regardless of relationship. There were no serious or severe adverse events in the ABCL575 group and 1 severe adverse event in the placebo group.

The overall adverse event rate was comparable between the 2 treatment groups with about 57% of ABCL575 participants reporting at least 1 adverse event compared with 60% on placebo. The most common adverse events were injection site reactions and headache that were neither dose-dependent nor markedly different between ABCL575 and placebo group. There were no safety findings indicative of clinically important immunosuppression in this data set. In terms of pharmacokinetics, ABCL575 showed sustained exposure that was approximately dose proportional across the dose range. With the data available to date, the mean half-life was approximately 65 days, ranging from 43 days in the lowest dose cohort to 79 days in the 600-milligram cohort.

This is in line with the mean half-life of 67 days predicted from our preclinical data. We also compared our exposures against an efficacy target threshold of 4 micrograms per milliliter. That threshold is inferred from published clinical data on amlitelimab. At clinically relevant dose level, exposures were maintained well above that threshold for over 12 weeks. Taken together, these data support dosing once a quarter or less frequently, which was a key aspect of our target product profile. In summary, our Phase I study met its primary endpoints, including a favorable tolerability and PK profile that supports extended dosing interval.

As Carl mentioned, based on external developments in the OX40, OX40 Ligand class, we do not intend to pursue clinical development further at this time. I would like to thank the study participants, investigators and the site team for their contributions and commitment to this study. I'll turn the call back to Carl, who can share additional corporate development updates for the quarter.

Carl L. Hansen: Thanks, Sarah. Having just reviewed our clinical results for ABCL635 and ABCL575, I'd like to pull back and share some perspective on what this means for AbCellera. A little over a year ago, we were in preclinical studies and working to make the difficult transition from a platform company to a clinical biotech. As of today, we have brought our first 2 programs successfully through early-stage clinical development. With ABCL635, we have delivered breakthrough results that open a path to creating a transformative product in women's health. And by next year, AbCellera will transition into a late-stage clinical development company. Clinical success has created an exciting opportunity, and taking advantage of this opportunity requires resources.

Following the release of our Phase II data for ABCL635, we completed a significantly oversubscribed $200 million capital raise. With a strengthened balance sheet, we can bring ABCL635 into late-stage development while continuing to invest in our broader pipeline. Turning to this pipeline. While investor attention has been overwhelmingly focused on ABCL635, we believe this is but the first example of our platform delivering value. Our goal is to prove this by repeatedly inventing and developing programs that emphasize innovation and that have potential to be breakthrough medicines. Today, we have several updates to our pipeline. First, our previously disclosed programs, ABCL688 and ABCL386, continue to progress through IND-enabling activities.

As mentioned earlier, we have added a new program, ABCL992, which is a next-generation version of ABCL635 engineered for less frequent dosing. And today, we are also announcing 2 additional programs, ABCL385, a new program for an undisclosed indication in oncology, and ABCL646, a potential first-in-class antibody antagonist against an undisclosed ion channel target. As with previous programs, we do not expect to disclose further information on ABCL385 and ABCL646 until they enter clinical development. In summary, Q3 was a breakthrough quarter for AbCellera. We delivered compelling clinical data for ABCL635 that sets the stage for late-stage development next year.

In parallel, we successfully completed our studies of ABCL575, have advanced ABCL688 and ABCL386 and have added 3 new programs, ABCL992, ABCL385 and ABCL646, to our pipeline. With these accomplishments, we have successfully delivered on all our stated 2026 corporate priorities. With completion of our financing, we are in an excellent financial position as we close out 2026, and we're expecting that 2027 will be another significant year for AbCellera. And with that, I'll hand it over to Andrew to discuss our financials. Andrew?

Andrew Booth: Thanks, Carl. As Carl pointed out, AbCellera continues to be in a strong liquidity position with over $790 million in cash and equivalents and with over $100 million in available committed government funding to execute on our strategy. We are continuing to execute on our plans with a focus on internal programs and leveraging our process development and clinical manufacturing investments. Turning to revenues and expenses. Revenues for the quarter were over $10 million compared to a total revenue of approximately $9 million in the same quarter of 2025. The revenue this quarter consisted mostly of research fees.

Our research and development expenses for the quarter were approximately $44 million as we continue to focus on investments in our internal programs. R&D expenses in the same quarter last year were approximately $12 million higher due to a couple of specific investments in internal programs in Q3 of 2025. In sales, general and administration, expenses were approximately $14 million compared to $25 million last year. The large decrease in SG&A expenses relates to the conclusion of our intellectual property litigation and to changes in teams following the focus on our internal pipeline.

Looking at earnings, we are reporting a net loss of roughly $41 million for the third quarter of 2026 compared to a loss of about $57 million a year earlier. In terms of earnings per share, this result works out to a loss of $0.13 per share on a basic and diluted basis. Looking at cash flows. Altogether, we finished the quarter with over $790 million of cash and marketable securities. Operating activities for the first 9 months of the year generated $19 million in cash. Included in the operating cash flow are the receipt of upfront payments under our TCE deals with Jazz and Vertex as well as the Bruker litigation settlement paid out in 2026.

As Carl mentioned, we concluded our oversubscribed equity raise of $200 million in the quarter. The proceeds from this raise, combined with government funding and employee stock option exercises, resulted in $214 million of financing cash inflows. Excluding marketable securities, investment activities year-to-date included approximately $8 million of capital expenditures, offset by a similar amount in government grants received. As a part of our treasury strategy, we now have about $600 million invested in short-term marketable securities. Our investment activities for the quarter included a $197 million net investment in these holdings.

As a reminder, we have received commitments for funding the advancement of our internal pipeline from the Government of Canada's Strategic Innovation Fund and the Government of British Columbia. This available capital does not show up in our balance sheet. With over $790 million in cash and equivalents and the unused portion of our secured government funding, we have over $890 million in available liquidity to execute on our strategy. In addition, we have further available liquidity from our ownership of our other Vancouver-based lab and office building as well as our GMP facility.

With respect to overall company expenditures, our capital needs are very manageable, and we continue to believe that we have sufficient liquidity to fund at least the next 3 years of pipeline investments. And with that, we'll be happy to take your questions. Operator?

Operator: [Operator Instructions] Your first question comes from the line of Evan Seigerman with BMO Capital Markets.

Evan Seigerman: Congrats on all the progress this past quarter. So I know you presented the 635 data at 2 conferences this past quarter following the data disclosure. Can you share what feedback you got from clinicians in the field and, kind of, what their level of excitement is? And more importantly, what did you learn from those clinicians that help you inform, kind of, next steps in development of this asset?

Sarah Noonberg: Evan, thanks for the question. And really, it was a remarkable reception that we had both at IMS in Rio and TMS, The Menopause Society, in San Diego this past month. I would say the reception that we've gotten was nothing short of incredible, fantastic, can't wait to participate when are we starting Phase III. And I would say that we were hearing that these results are even better than what physicians have been experiencing with hormonal therapy. And certainly, the hormonal therapy data that was presented with the latest hormone therapy, estetrol, at least on a side-by-side comparison, much stronger. So they are anxiously awaiting our next steps.

We've had consultant meetings with KOLs at both meetings, and we have gotten a lot of good encouragement to move as quickly as we can.

Operator: Your next question comes from the line of Steve Seedhouse with Cantor.

Steven Seedhouse: Congrats on all the progress. I wanted to ask 2 slightly different questions. First is just on 992, the new asset, new NK3R long-acting asset. Anything in your market research that suggests this extended dose interval could meaningfully change, sort of, the receptivity or the market adoption of that asset? And just how do you plan to develop it in parallel, thinking -- obviously, you're in a few different indications with 635. I don't know if you're planning on maybe one in oncology or one in post-menopause, if you could talk about that. And then I have a quick follow-up.

Carl L. Hansen: Sure, Steve. Carl here. I'll maybe start the answer, and Sarah might be able to add something after the fact. So first of all, we did some market research early on in 635, where we did ask questions looking at the importance of dosing like once daily as a pill versus 1 month versus 3 months. The general trend was that people preferred, there's a majority preference for a once-monthly injectable. And I'd say that the people that believed that you could deliver a molecule that would last for 3 months were also very excited about that. But in the interviews, you had some patients that just thought, hey, that's too good to be true.

So we view that as very positive. In terms of our view of the opportunity here, first of all, we find ourselves in an unbelievable position having this type of data with this kind of strength and there aren't a lot of competing molecules around. We anticipate that there will be groups out there that immediately think, well, I'm going to follow that up with a half-life extended version. And so we've had this molecule in the wings ready to go, and we're able to bring it into IND-enabling activities immediately following the data. So we're well ahead of that response that we expect to see from the market.

And that's part of shoring up our position and making sure we make the most out of the opportunity. In addition to patient convenience, the other part, and I did, I think, mention this slightly in my prepared remarks, is that a longer dosing interval means that you have to make fewer doses per patient. That, of course, improves the cost of goods, but also makes it easier to satisfy a broader reach of demand. And we think that's going to be an important, at least optionality, as this program goes forward.

Steven Seedhouse: Very good. My follow-up was just you have a handful of new lines in the pipeline here. The internal pipeline is expanding pretty rapidly. I was curious, are you thinking about this as AbCellera just has the desire and capacity to develop all of these wholly owned broad internal pipelines? Or are you looking to or open to licensing out some of these assets as they translate into the clinic and continue to advance, separate from OX40, I mean, because obviously, that one is parked for now.

Carl L. Hansen: Sure. So I mean, our stated strategy for some time has been not to be a one-trick pony, but to be able to show we can reproducibly generate medicines that are exciting and worth bringing into clinical development. You're seeing that now come into play as the pipeline fills up. Everything we've brought forward, we have conviction in. Of course, we're going to see how they work, and we'll see at the early clinical data. That will be part of deciding what to bring forward. And then at every moment we decide to bring a program forward, we're having to make a decision as to resource allocation and bandwidth.

Today, we feel like we have got our hands around this well that we can fund it in the early stage and that it's going to create value. And we're going to keep looking at that as we move forward. But there may well be opportunities to out-license. It's going to depend on the program.

Operator: Your next question comes from the line of Roger Song with Jefferies.

Jiale Song: Maybe just regarding the early next year data update with the strong 4-week data, understanding the single dose 8-week washout period. Just curious, if possible, we can see the 8 weeks and 12 weeks comparable to orals? And what's your internal modeling suggesting you? And then regarding the open-label extension, you set the bar high for yourself, but just in terms of the open label, what's the design of patient that could be -- potentially will see some difference between the first 4 weeks versus the extension 4 weeks?

Sarah Noonberg: Roger, I'll take this. In terms of what we expect from the 8-week and 12-week, just as a reminder, this was a single dose study. So the expectation is we see our most pronounced results around the 4-week time point. That's why we chose that as a prespecified efficacy analysis time point. And the goal of continuing to follow patients for efficacy and safety through 8 and 12 weeks was to see how efficacy decreases as exposure decreases and to build an exposure response model that would then support dose selection. So given that this is only a single dose, we don't expect that efficacy is maintained through the full 12 weeks.

And in fact, if that were the case, it'd be harder to build that exposure response model for dose selection. So the goal is to watch as drug washes out, and we've already disclosed our half-life. So we expect the drug washes out to look at how efficacy changes, and that supports our model-informed drug development pathway. So the 4-week efficacy is what we expected in terms of our efficacy data. And if you say, well, what are our expectations in the open label, I think what we would like to see is when placebo patients cross over, they have a similar degree of benefit. I think that will provide orthogonal data supportive.

And then we look forward to sharing what happens when the active patients receive a second dose. So there'll be both an efficacy and a safety data set that will come early next year. And I think it just will provide continued conviction that we have in this program to move it into late-stage development.

Carl L. Hansen: If I could just add one more thing, Roger. You asked about the comparison to the small molecules and efficacy. So we did mention that at week 1, we already have efficacy that looks comparable to the small molecules. And as Sarah mentioned, as the drug washes out, we're going to see efficacy decline. Since we're starting so much better, we expect that at some point, we're going to cross over that. But of course, that isn't the goal. Our goal is not to make a drug at this point that is equal in efficacy, but one that has a formidable advantage in efficacy. So we're looking to preserve that as we decide on the final dosing.

Operator: Your next question comes from the line of Brian Cheng with JPMorgan.

Lut Ming Cheng: Maybe just first, as we think about the next data cut from the washout and also the OLE, just curious if you can talk about the size of the OLE portion? Just how many patients have been rolled over so far into the OLE? And I have a quick follow-up.

Sarah Noonberg: Brian, I'll take that. I don't want to preclude the data that we'll be sharing, but I can say that the uptake of the open-label extension was extremely high, as you might expect, given the efficacy results seen at 4 weeks. So you will see the vast majority of patients as part of that data set.

Lut Ming Cheng: Great. And then on 992, as you think about the next step moving into later-stage development, what is the ultimate strategy to develop 992? Is it for -- do you have a specific set of indications in mind that will be better served with a longer half-life? Or just more -- should we think of it as more of a life cycle management behind 635?

Carl L. Hansen: I appreciate the question. So as mentioned, we see an opportunity to have a product that we could create for more patients and one that would have an extended dosing interval. I think that's got some important advantages commercially. We haven't yet run that to ground. So exactly how we're going to position the 2 products is probably not something we're ready to talk about today. What I will say is that the existence of 992 is in no way a move away from 635. We are all in on 635. We think that's going to be a terrific product.

And we're just looking to reinforce that with one that's even better and that anticipates how we expect people to react to it.

Operator: Your next call comes from the line of Andrea Newkirk with Goldman Sachs.

Andrea Tan: I also have one follow-up on 992 there. Just if you're able to share what specific modifications were utilized to extend the half-life. And Carl, I just wanted to follow up on the target half-life for injection interval that you believe would be advantageous here. Just curious what that target is? Is it every 3 months that you mentioned? And then I have a follow-up.

Carl L. Hansen: Sure. So in terms of the modification, we haven't yet disclosed anything about the sequence of 992. What I will say is that we've used engineering practices that we're free to use and that have been well trodden. And so we have high confidence that this will play out the way that we expect. In terms of dosing interval, ABCL635 originally, the TPP was for a once-monthly dosing. Obviously, based on the data we've shown, we're well within that. And so the question now is what exactly is the dosing to meet that.

We do expect that the follow-on product would have a dosing interval that probably safely twice, perhaps 3 or even more in terms of dosing interval, but we have to do some studies still to nail that down. So I don't want to get ahead of ourselves here.

Andrea Tan: Okay. And then just, I guess, maybe taking a step back and broadly, as you think about the progress that you've made with these first 2 internal programs, I'd be curious just your thoughts on what the primary translational and mechanistic read-through are from those initial programs to the broader pipeline that you have.

Carl L. Hansen: I'm sorry, could you rephrase that question? I'm not sure that I got the full thrust of it.

Andrea Tan: Sure. Just, I guess, maybe on the back of 635 and 575 and the progress that you've seen there. Just curious on the readthrough that you see to the rest of your pipeline.

Carl L. Hansen: Sure. So the progress on 575 and 635, as I mentioned, shows that we have successfully navigated that transition from being a platform company to standing up a clinical team and successfully executing those programs. On 635, the next big lift is going to be to build that out into late-stage development and to be able to take it forward to approval. So that's the read-through on the operational side. In terms of read-through on the platform, 635, I think, is a good archetype of the type of program we're trying to bring forward. So well-validated biology, large unmet need, very sparse competition and a difficult target where our platform has been able to deliver.

We've got other programs behind coming like that. I might call out, for instance, 646 that today we disclosed is an antagonist against an ion channel target. That's an area where we've been working for a long time, where we think we have a very strong competitive advantage. And if it were to go forward and ultimately be a drug, it would be the first antibody against an ion channel target that's been done. So trying to get into that new target space is definitely something that we are focused on. And we think that's important in what is becoming an increasingly competitive world.

Operator: Your next question comes from the line of Kripa Devarakonda with Truist Securities.

Srikripa Devarakonda: Congratulations on the progress in the last few months. I just wanted to clarify a time line. From my understanding, the 12-week data were expected by year 2026 -- by end of the year. Am I right? And if so, wondering what has driven the move to early 2027. I guess the question I really have is, do you have all the data internally for the finalization of the Phase III trial design? You are in conversations with regulators? And then I have a follow-up question.

Sarah Noonberg: Thanks for the question. There is nothing unusual from an operational standpoint. The data is coming in. We're doing the monitoring and analysis. And really, it's the preferred timing of release of this data between late 2026 and early 2027. So there is nothing that fundamentally has changed.

Srikripa Devarakonda: And do you have all the data internally for the finalization of the Phase III trial design or the conversations you're having with regulators?

Sarah Noonberg: We are in the midst of regulatory discussions, KOL discussions about the clinical trial designs. I think we have a clear pathway that has been laid out by the 2 small molecules. So I think overall, there are going to be little surprises, but there are additional endpoints and design aspects as well as sample size and populations that we're still under discussions with. So we have all that we need in terms of the feedback, but going through regulatory discussions and finalizing our dose takes a little bit of time. And while we're doing that, we are scaling up our manufacturing processes. So we remain on track to initiate late-stage studies in 2027.

Srikripa Devarakonda: Okay. Just a follow-up question. In August, I think when we talked about it, you raised the possibility of a head-to-head study. Are you still considering including an active competitor? Or is this something that we have to wait for once you're done with your trial design?

Sarah Noonberg: At this point, we're not going to be sharing any more information about our pivotal study or late-stage design, but we will be disclosing that in the coming months.

Operator: Your next question comes from the line of Allison Bratzel with Piper Sandler.

Peter Spanogiannopoulos: This is Peter on for Allison. So you expect to advance 635 into VMS associated with breast and prostate cancer treatments next year. Which populations and settings are you prioritizing? And what might those initial trials look like? Also, what needs to be established in the menopause program before those studies can begin?

Sarah Noonberg: Thanks, Peter. In terms of breast, I think the overall study design can be inferred from the OASIS-4 study of elinzanetant, where they ran a pivotal study in the breast cancer population. So I would expect that you'd see a lot of similarity in that study design. And just as a reminder, the treatment effect seen with elinzanetant was highly comparable in VMS associated with naturally occurring menopause and VMS associated with breast cancer treatment. So while we have not studied that patient population yet, we have a lot of conviction that we will see a similarly strong treatment effect. In terms of prostate cancer, that's much less data available, some case reports and early studies.

So there, we'll be doing a little bit more work in terms of defining the patient population and correct study endpoints. So there, we expect to initiate mid-stage studies in 2027. But I think the expected treatment effect, just given what we have heard from urologists that have used oral small molecules in patient populations with fairly problematic VMS, has been very encouraging. I think we have less of a handle right now on what the exact patient population should look like, but those are ongoing and very active discussions and certainly a lot of enthusiasm from the field.

Operator: Your next question comes from the line of Alice Nettleton with UBS.

Avery Arcuri: This is Avery on for Alice. Congrats on all the progress with 635 today. So a couple from us. First, since your last investor call, can you talk maybe a little bit about any important market developments in menopause that give you greater confidence in the market growth and more specifically in the opportunity for 635? And then separately, you recently presented the Phase I SAD/MAD data at TMS, where the immunogenicity looked quite low with 2% antidrug antibodies. So what gives you confidence that this will hold with longer-term and broader exposure?

Carl L. Hansen: Sure. I'll start on the market side. So I don't know if a lot has changed over the last quarter, but what we are seeing is quite a dramatic turn of attention towards treating VMS. I think that was probably in large part prompted by the removal of the box warning on hormone therapy and what has been a dramatic increase in women that are seeking and expect to get treatment for problematic VMS. So that for us is a tailwind. We've always positioned the product not as a substitute for hormone therapy, but as a great alternative for those that either cannot tolerate or have contraindications against or who choose that they don't want to take hormone therapy.

The other thing I think that's interesting is the way that the small molecules have played out. And I think one of the things that's happening in the market is there's some I won't say friction, but it's -- there is some discussion around the risk benefit and the use of these over some other therapies that are being used as nonhormonal options, particularly SSRIs, for instance. And here, we think we've got a product that will have a very clear efficacy advantage, and we intend or we hope to have a safety profile that looks like it has thus far.

And so we think that we could be positioned to be really standing alone as NK3R option and perhaps even any option for non-hormonal treatment.

Sarah Noonberg: And I'll chime in, in terms of your question around immunogenicity. Ultimately, our conviction comes from in silico modeling as well as some early preclinical data. Ultimately, clinical data will give us a lot more conviction. So more data will come as we see repeated dose from the open-label extension, and that's something that we'll continue to monitor. But really, this is something that we'll need to play out with repeat and longer-term studies. So stay tuned, but certainly, our current data set is very encouraging, and there's nothing in our modeling or what we've seen preclinically that gives us any concern.

Operator: Your next question comes from the line of Brendan Smith with TD Cowen.

Brendan Smith: Congrats on all the progress here. I wanted to actually ask about the earlier stage pipeline. I think you've got now 4 or 5 new assets in IND-enabling studies. So I mean, how many of those should we reasonably expect to hit maybe Phase I over the next year, let's say? I guess, how are you prioritizing the timing of those entering the clinic? And maybe just what are some of the gating factors, kind of, dictating some of those decisions at this point?

Carl L. Hansen: Sure. So just responding to your question about the timing of the assets. So obviously, 635 is a big focus right now. It's the one that has gone the furthest. Behind that, we're starting to build what we think is quite a compelling pipeline. As I mentioned before, ABCL688 and 386 continue to go through IND-enabling activities. Both of those have a time line that would bring them into the clinic in 2027. Behind that, we've just announced 992. It started IND-enabling activities this past quarter in Q3. So it will be sometime definitely not in 2027 that it will be in the clinic, but perhaps in 2028.

And for 646 and 385, we haven't given any further guidance, but we will update those as they get closer to clinical development.

Operator: There are no further questions at this time. I will now turn the call back to Carl Hansen for closing remarks.

Carl L. Hansen: Great. Thank you, everyone, for joining us today. It's been a great quarter, and we look forward to speaking to you again next quarter.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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