absi-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission file number 001-40646

ABSCI CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						85-3383487
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

18105 SE Mill Plain Blvd Vancouver, WA						98683
(Address of Principal Executive Offices)						(Zip Code)

(360) 949-1041

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock. $0.0001 par value

ABSI

The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had outstanding 113,556,334 shares of $0.0001 par value common stock as of July 31, 2024.

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		Page No.
Part I Financial Information (Unaudited)		5
Item 1.	Unaudited Condensed Consolidated Financial Statements	5
	Unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	5
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2024 and 2023	6
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	7
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	28
Item 4.	Controls and Procedures	28

Part II Other Information		29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our forward-looking statements include, but are not limited to, statements that may relate to our management team’s plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors”. Forward-looking statements can often be identified by the use of terminology such as “may,” “might,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking. In particular, these forward-looking statements include, but are not limited to:

•our expectations regarding our further development of, successful application of, and the rate and degree of market acceptance of, our Integrated Drug Creation platform, including progress towards fully in silico biologic drug discovery;

•our expectations regarding our ability to leverage our proprietary Integrated Drug Creation platform to shorten preclinical development of biologics;

•our expectations regarding the markets for our services and technologies, including the growth rate of the biologics market;

•our ability to attract new partners and enter into drug creation agreements that contain milestone and royalty obligations in favor of us;

•our potential to receive revenue from the achievement of milestones and from royalties on net sales under agreements with our partners with respect to products originating from our Integrated Drug Creation platform;

•our ability to enter into license agreements for our existing Active Programs with those partners who do not currently have milestone payment and royalty obligations to us;

•our ability to manage and grow our business by expanding our relationships with existing partners or introducing our proprietary Integrated Drug Creation platform to new partners and developing drug candidates for our own internal drug discovery efforts;

•our expectations regarding our current and new partners’ continued development of, and ability to commercialize, drug candidates generated utilizing our proprietary Integrated Drug Creation platform;

•our plans and expectations regarding the initiation, timing, progress, results, and cost of our internal discovery, research and development programs, including current and future preclinical and clinical trial timelines, of programs using our proprietary Integrated Drug Creation platform, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, and the period during which the results of the trials will become available;

•our strategy;

•our expectations and estimates of our expenses, ongoing losses, future revenue, capital requirements and our need for or ability to obtain additional funding before we can expect to generate additional revenue;

•our estimates of the sufficiency of our cash and cash equivalents and short-term investments;

•our calculations and estimates related to the valuation of our intangible assets;

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•our ability to establish, maintain or expand collaborations, partnerships or strategic relationships;

•our ability to provide our partners with a full drug discovery solution and the application of artificial intelligence across our Integrated Drug Creation platform;

•our ability to obtain, maintain and enforce intellectual property protection for our platform technologies, products, as well as the duration of such protection and our ability to operate our business without infringing on the intellectual property rights of others;

•our ability to attract, hire and retain key personnel and to manage our growth effectively;

•our expectations regarding use of our cash and cash equivalents and short-term investments;

•our financial performance and that of companies in our industry and the financial markets generally;

•the volatility of the trading price of our common stock;

•our competitive position and the development of and projections relating to our competitors or our industry;

•the effects of the organizational realignment that we announced in September 2023;

•the impact of laws and regulations;

•our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act); and

•global economic conditions, including market volatility, acts of war and civil and political unrest, and our expectations about market trends and effects from inflation.

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements, including those set forth under the heading “Risk Factors” in Part II, Item 1A of this Quarterly Report. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Should one or more of the risks or uncertainties described in this Quarterly Report on Form 10-Q materialize, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures, or investments we may make or enter into. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report. We qualify all of our forward-looking statements by these cautionary statements.

Except as otherwise indicated, references in this Quarterly Report on Form 10-Q to “Absci,” the “Company,” “we,” “us,” and “our” refer to Absci Corporation and its subsidiaries.

The contents of our website and social media postings, or any other website that may be accessed from our website or social media postings, shall not be deemed incorporated by reference in any filing under the Securities Act.

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Part I. Financial Information

Item 1. Financial Statements

ABSCI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



	June 30,		December 31,
(In thousands, except for share and per share data)	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	42,936	$	72,362
Restricted cash	16,508		16,193
Short-term investments	102,310		25,297
Receivables under development arrangements, net	44		2,189
Prepaid expenses and other current assets	3,388		4,537
Total current assets	165,186		120,578
Operating lease right-of-use assets	4,475		4,490
Property and equipment, net	36,546		41,328
Intangibles, net	46,568		48,253

Restricted cash, long-term	1,141		1,112
Other long-term assets	1,613		1,537
TOTAL ASSETS	$	255,529	$	217,298
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,694	$	1,503
Accrued expenses	16,853		19,303
Long-term debt	3,124		3,258
Operating lease obligations	1,606		1,679
Financing lease obligations	218		641
Deferred revenue	1,972		3,174
Total current liabilities	25,467		29,558
Long-term debt, net of current portion	3,121		4,660
Operating lease obligations, net of current portion	5,257		5,643
Finance lease obligations, net of current portion	6		76
Deferred tax liability, net	175		186
Deferred revenue, long-term	—		966
Other long-term liabilities	15		33
TOTAL LIABILITIES	34,041		41,122

STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.0001 par value; 500,000,000 shares authorized; 113,444,491 and 93,087,675 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	11		9
Additional paid-in capital	674,811		582,699
Accumulated deficit	(453,220)		(406,495)
Accumulated other comprehensive loss	(114)		(37)
TOTAL STOCKHOLDERS' EQUITY	221,488		176,176
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	255,529	$	217,298

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ABSCI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In thousands, except for share and per share data)	2024		2023		2024		2023
Revenues
Technology development revenue	$	1,270	$	3,367	$	2,168	$	4,636

Total revenues	1,270		3,367		2,168		4,636
Operating expenses
Research and development	15,261		12,112		27,497		24,769
Selling, general and administrative	9,346		9,410		18,090		19,003
Depreciation and amortization	3,384		3,498		6,800		7,002
Goodwill impairment	—		21,335		—		21,335
Total operating expenses	27,991		46,355		52,387		72,109
Operating loss	(26,721)		(42,988)		(50,219)		(67,473)
Other income (expense)
Interest expense	(150)		(256)		(326)		(577)
Other income, net	2,121		1,583		3,832		3,041
Total other income, net	1,971		1,327		3,506		2,464
Loss before income taxes	(24,750)		(41,661)		(46,713)		(65,009)
Income tax expense	—		(11)		(12)		(18)
Net loss	$	(24,750)	$	(41,672)	$	(46,725)	$	(65,027)




Net loss per share: Basic and diluted	$	(0.22)	$	(0.45)	$	(0.44)	$	(0.71)

Weighted-average common shares outstanding: Basic and diluted	112,934,086		91,827,780		106,163,709		91,654,578

Comprehensive loss:
Net loss	$	(24,750)	$	(41,672)	$	(46,725)	$	(65,027)
Foreign currency translation adjustments	43		(42)		(4)		(56)
Unrealized (loss) gain on investments	(25)		(9)		(73)		30
Comprehensive loss	$	(24,732)	$	(41,723)	$	(46,802)	$	(65,053)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ABSCI CORPORATION

UNAUDITED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY



(In thousands, except for share and per share data)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss			Total Stockholders' Equity
						Shares			Amount
Balances - December 31, 2023			93,087,675	$	9		$	582,699	$	(406,495)	$	(37)	$	176,176
Issuance of common shares, net of issuance costs of $411			19,205,000	2			80,825		—		—		80,827
Issuance of shares under stock plans, net of shares withheld for tax payments			706,247	—			1,630		—		—		1,630
Stock-based compensation			—	—			3,544		—		—		3,544

Foreign currency translation adjustments			—	—			—		—		(47)		(47)
Unrealized loss on investments			—	—			—		—		(48)		(48)

Net loss			—	—			—		(21,975)		—		(21,975)
Balances - March 31, 2024			112,998,922	$	11		$	668,698	$	(428,470)	$	(132)	$	240,107
Issuance of shares under stock plans, net of shares withheld for tax payments			483,455	—			760		—		—		760
Stock-based compensation			—	—			5,353		—		—		5,353
Forfeiture of common stock			(37,886)	—			—		—		—		—
Foreign currency translation adjustments			—	—			—		—		43		43
Unrealized loss on investments			—	—			—		—		(25)		(25)

Net loss			—	—			—		(24,750)		—		(24,750)
Balances - June 30, 2024			113,444,491	$	11		$	674,811	$	(453,220)	$	(114)	$	221,488

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(In thousands, except for share and per share data)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss			Total Stockholders' Equity
						Shares			Amount
Balances - December 31, 2022			92,411,103	$	9		$	570,454	$	(295,929)	$	(120)	$	274,414
Issuance of shares under stock plans, net of shares withheld for tax payments			171,899	—			229		—		—		229
Stock-based compensation			—	—			2,652		—		—		2,652
Forfeiture of common stock			(101,030)	—			—		—		—		—
Foreign currency translation adjustments			—	—			—		—		(14)		(14)
Unrealized gain on investments			—	—			—		—		39		39

Net loss			—	—			—		(23,355)		—		(23,355)
Balances - March 31, 2023			92,481,972	$	9		$	573,335	$	(319,284)	$	(95)	$	253,965
Issuance of shares under stock plans, net of shares withheld for tax payments			108,621	—			116		—		—		116
Stock-based compensation			—	—			3,041		—		—		3,041

Foreign currency translation adjustments			—	—			—		—		(42)		(42)
Unrealized loss on investments			—	—			—		—		(9)		(9)

Net loss			—	—			—		(41,672)		—		(41,672)
Balances - June 30, 2023			92,590,593	$	9		$	576,492	$	(360,956)	$	(146)

SEC Form 10-Q filed by Absci Corporation