"ABL Bio can hold out for about 2 years and 6 months with the cash on hand. If we receive the upfront payment from Eli Lilly within the year, I think turning a profit this year is also possible."
Chief Executive Lee Sang-hoon of ABL Bio said this about the company's financial status at a press briefing held on the 17th at the Four Seasons Hotel in Jung-gu, Seoul.
Lee said, "Depending on the timing of milestone inflows for technology transfer, cash flow may vary, and there are variables such as hidden expenses that arise during clinical trials, but we will secure cash through our own technology transfer rather than external financing."
ABL Bio in April transferred platform technology worth up to 4.1 trillion won to GSK plc, and on the 12th of this month transferred technology worth 3.8 trillion won to U.S.-based Eli Lilly. Under the deal to provide the "Grabody-B" platform, which delivers antibodies to the brain by crossing the blood-brain barrier (BBB), the company achieved technology export results totaling about 8 trillion won this year alone. On the back of this, the company's market capitalization neared 10 trillion won, placing it in the top four on KOSDAQ.
In particular, the deal with Lilly, the world's No. 1 drugmaker by market capitalization, drew positive reviews in the industry. The company not only carried out a technology transfer but also attracted an equity investment of 22 billion won from Lilly. It is the first time a global big pharma has taken part in a domestic biotech through an equity investment.
With the Lilly deal as momentum, the company plans to expand indications beyond central nervous system (CNS) diseases centered on Alzheimer's and Parkinson's to muscle and obesity. CEO Lee Sang-hoon said, "Eli Lilly is not only a leader in GLP-1 obesity treatments but also a global top company in the CNS field," adding, "We will use Grabody-B to broaden applications not only in CNS but also in muscle and obesity."
In joint research between ABL Bio and Ionis, Grabody-B also showed potential for delivery to muscle as well as the brain via a BBB shuttle. As data on obesity and muscle diseases is not yet sufficient, the company plans to continue additional studies.
On the back of this growth, expectations for improved earnings have risen. The cumulative operating loss for the third quarter was 14.7 billion won, narrowing from 40 billion won a year earlier, but the company remained in the red. The increase was driven by a sharp rise in research and development (R&D) expenses. Cumulative R&D expenses for the third quarter rose 42.4% to 72.2 billion won from 50.7 billion won a year earlier, while operating expenses also climbed 39.7% from 64.2 billion won to 89.7 billion won.
Lee said, "Last year alone we spent about 75 billion won on R&D, most of it clinical expenses," adding, "In particular, for antibody-drug conjugates (ADCs), the initial research alone costs 2–3 billion won, production costs 20 billion won, and analysis expenses are about twice those of existing bispecific antibodies." However, Lee added, "We are an R&D-centered company, so turning a profit is not an absolute goal in itself, but if we receive the 58.5 billion won upfront from Lilly within the year, turning operating profit positive is possible."
The company's cash position is relatively stable. After boosting capital through a paid-in capital increase last year, it holds about 117.2 billion won in cash and cash equivalents, and with Lilly's 22 billion won equity investment this month, available funds are expected to expand further. With the recent rise in the share price, there is also room for additional financing, analysts say.
Lee said, "While ABL Bio's platform technology transactions with GSK and Lilly are the largest in Korea, in the case of material technology transfer, once phase 1 is completed the scale is much larger," adding, "In addition to the platform, we will steadily pursue material technology transfer as well, and we will raise funds through internal technology achievements rather than market financing."
Along with Grabody-B, Lee pointed to the company's current development pipelines as future growth drivers: the bispecific antibody drug candidate "ABL001 (tovetissimig)" and the bispecific ADC candidates "ABL206" and "ABL209." For the ADC assets, strong tumor suppression compared with competing drugs was demonstrated in preclinical studies, and the company plans to submit investigational new drug (IND) applications sequentially for a U.S. phase 1 clinical trial—ABL206 within the year and ABL209 in the first quarter of next year.
ABL001 is a second-line treatment candidate for cholangiocarcinoma for which its global partner Compass Therapeutics is conducting phase 2/3 trials, and key metrics such as overall survival (OS) and progression-free survival (PFS) are scheduled to be announced in April next year.
Lee emphasized, "The approval status of ABL001 at the end of 2026 will be a critical turning point for the company," adding, "If approved, the royalties (running royalties) from Compass are expected to be at least 50 billion–200 billion won, and we will grow into a company with a virtuous cycle that reinvests in R&D."