ABCL 10-K & 10-Q changes, risk factors and insider trading

We expect to continue to incur expenditures,expenditures as we operate our business. We expect to incur losses for the foreseeable future. We cannot accurately predict the timing or amount of our increased expenses, or when andwhen, if at all, we may be able to achieve profitability. Our net loss for the years ended December 31, 20242025 and 20232024 was $162.9$146.4 million and $146.4$162.9 million, respectively. Our accumulated earningslosses at December 31, 20242025 and 2023accumulated earnings at 2024 was $116.9$29.5 million and $279.8$116.9 million.million, respectively.

Our success depends on our ability to develop and monetize a therapeutic,drug, either on our ownindependently or where we havethrough significant economic participation. IfUnless orand until either of those events occur, we do not anticipate being able to generate sufficient revenue to achieve profitability.

Developing a therapeuticdrug on our own will require us to be successfulsucceed in a range of challenging activities for which wethat are onlystill in the preliminary stages, including developing productdrug candidates, obtaining regulatory approval, manufacturing, and commercializing approved products.drugs. We may never succeed in these activities and generate revenue from productdrug sales from our internal pipeline that isare significant enough to achieve profitability.

Even if we achieve profitability, it may not be sustained. Our failure to become or remain profitable would depress our market value and impair our ability to raise capital, expand our business,pipeline, develop other productdrug candidates, or continue our operations. A decline in the value of our company could also cause our stockholders to lose all or part of their investment.

We have, and continue to receive, other forms of revenue from our partnership contracts and are eligible to receive future milestones and royalties related to potential future success of antibodies that we have discovered under past and existing agreements. We are unable to predict whether and the extent to which the minimum annual payments under our partnership agreements will be exceeded, or the timing of the achievement of any milestones under these agreements, if they are achieved at all. In some cases, the timing and likelihood of payments to us under these agreements is dependent on our partners’ successful utilization of the antibodies discovered using our discovery and development capabilities, which is outside of our control. Because of these factors, our revenue could vary materially from period to period.

•the timing and cost of, and level of investment in, research, clinical development and commercialization activities relating to our discovery and development capabilities and initiation and advancement of internal programs, which may change from time to time;

•the timing and nature of any future acquisitions or strategic partnerships;

We may need to raise additional capital to fund our existing operations, improve our discovery and development capabilities, advance internal programs,programs through the clinic, or expand our operations. If we are unable to raise additional capital on terms acceptable to us or at all or generate cash flows necessary to maintain or expand our operations,operations and pipeline investments, we may not be able to compete successfully, which would harm our business, operations, and financial condition.

Based on our current business plan, we believe our available liquidity from existing cash and cash equivalents, marketable securities, and anticipated cash flows from operations and government contributions, will be sufficient to meet our working capital and capital expenditure needs and expenditure required for later stage development of our internal pipeline.needs. Although it is difficult to predict our funding requirements, we do not anticipate the need for additional external funding over at least the next thirty-six (36) months following the date of this report. If our available cash resources together with our anticipated cash flow from operations are insufficient to satisfy our liquidity requirements including because of the realization of other risks described in this annual report, we may be required to raise additional capital prior to such time through issuances of equity or convertible debt securities, entrance into a credit facility or another form of third-party funding or seek other debt financing, including real estate and asset backed financing on the significant investments we have funded towards our corporate headquarters and GMP facility which are currently under construction.facility. Such additional future financing may not be available on terms acceptable to us or at all.

•expand our discoverydiscovery, development, clinical and developmentregulatory capabilities;

•the cost of expanding our operations, including our planned GMP activities;

•our rate of progress in selling access to our discovery and development capabilities, the initiation and advancement of internal programs and marketing activities associated therewith;

The various ways we could raise additional capital carry potential risks. If we raise funds by issuing equity securities, dilution to our shareholders would result. Any preferred equity securities issued also would likely provide for rights, preferences or privileges senior to those of holders of our common shares. If we raise funds by issuing debt securities, those debt securities would have rights, preferences and privileges senior to those of holders of our common shares. Debt financing and preferred equity financing, if available, may also involve agreements that include covenants restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making product acquisitions, making capital expenditures, or declaring dividends. For example, in December 2025, we obtained financing secured against our office building held in our Dayhu joint venture. This financing, along with our agreement with the Strategic Response Fund (SRF), previously Strategic Innovation Fund,Fund or(SIF), SIF,subjects us to certain restrictive covenants. Our agreement with the SRF requires that we obtain prior consent infor thespecific eventcorporate thatactions, such as when an individual or company (or two or more of them acting in concert)entity acquires the direct or indirect beneficial ownership of 20% or more of our voting securities. InSimilarly, our December 2025 financing includes covenants that restrict our ability to sell or transfer the eventsecured property without lender consent isand notchange obtained,of thecontrol agreementprovisions maywhen beany terminatedperson andor group acquires beneficial ownership of more than 25% of our voting shares. If we willfail to comply with these covenants or obtain necessary consents, we could be obligated to repay all or a portion of the contribution amounts from SIF.SRF and the outstanding principal under our financing, which would have a material adverse effect on our business, financial condition, and results of operations.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, if we require it, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances could be significantly limited, and could have a material adverse effect on our business, financial condition, results of operationsoperations, and prospects.

From time to time, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that future deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including conflicts in Europe and the Middle East and elsewhere, and the related impact on our business and the markets generally. Sanctions imposed by the United States and other countries in response to such conflicts, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability. Continued disruptions in the banking system, both in the U.S. or abroad, may impact our or our customers’ liquidity and, as a result, negatively impact our business and operating results. If the current equity and credit markets deteriorate, the value and liquidity of our cash, cash equivalents and marketable securities may fluctuate substantially and it may make any necessary debt or equity financing more difficult, more costlycostly, and more dilutive. Although we have not realized any significant losses on our cash, cash equivalentsequivalents, and our diversified portfolio of high credit quality marketable securities, future fluctuations in their value could result in significant losses and could have a material adverse impact on our results of operations and financial condition. In addition, failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performanceperformance, and share price. There is also a risk that one or more of our current service providers, manufacturers and other partners may not survive an economic downturn, which could directly affect our ability to attain our operating goals on schedule and on budget.

Risks Related to our Business and the Development and Commercialization of Our ProductDrug Candidates

We utilize our antibody discovery and development capabilities to identify antibodies for further development and potential commercialization by us and our partners. As a result, the quality and sophistication of our discovery and development capabilities is critical to our ability to conduct our research discovery activities and to deliver more promising moleculesdrug and to accelerate and lower the costs of discovery as compared to traditional methods for our partnerships.candidates. In particular, our business depends, among other things, on:

•our discovery and development capabilities to successfully identify therapeuticdrug antibodiescandidates on the desired timeframes that can ultimately be used as medicines to prevent and treat diseases;

•our ability to partner drug candidates from our internally developed pipeline;

•the timing and scope of any approval that may be required by regulatory bodies for therapeuticsdrugs that are developed based on antibodies discovered by us;

•the impact of our investments in innovation and commercial growth;growth.

There can be no assurance that we will successfully address any of these or other factors that may affect the ability of our discovery and development capabilities to create viable molecules that ultimately lead to commercially viable therapeutics.drugs. If we cannot create commercially viable therapeutics,drugs, our business, financial condition, results of operationsoperations, and prospects could be adversely affected.

Our strategy focuses on the development of antibody-based drugs and improving the way these drugs are discovered and developed. Our strategy assumes a certain degree of growth in capital and capacity. Factors such as insufficient capital, inflation, supply chain interruptions, inadequate forecasting, increases in construction material costs, or labor shortages could interfere with the successful execution of our strategy and our ability to timely build infrastructure and processes to support our business. If we cannot successfully execute on our strategy, this could negatively impact our future results of operations and market capitalization. For additional discussion of our business strategy, please see the section entitled “Item 1. Business” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

We allocate our resources to pursue a particular developmentdrug candidate or indication and, as a result, may fail to capitalize on other developmentdrug candidates or indications that may be more profitable or for which there is a greater likelihood of success.

We allocate our resources to certain research programs and developmentdrug candidates. As a result, we may forgo or delay pursuit of opportunities with other developmentdrug candidates or for our current development candidates in other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable and profitable market opportunities. Our spend on current and future research and development programs and ongoing clinical development of drug candidates for specific indications may not yield commercially viable therapeutics. If we do not accurately evaluate the commercial potential or target market for a particular development candidate, we may relinquish valuable rights to that candidate through collaboration, licensing or other commercialization opportunities.medicines.

Development of a biological molecule or other drug is inherently uncertain, and it is possible that none of the antibody-drugdrug candidates discovered using our antibody discovery and development capabilities that are further developed by us or our partners will receive marketing approval or become viable commercial products,drugs, on a timely basis, or at all.

We have used our discovery and development capabilities to offer antibodies to partners who are engaged in antibody discovery and development. These partners include large cap pharmaceutical companies, biotechnology companies of all sizescompanies, and non-profit and government organizations. While we receive upfront payments from our partners generated through technology access and discovery research fees, we estimate that the vast majority of the economic value of the contracts that we enter with our partners is in the downstream payments that are payable if certain milestones are met or approved productsdrugs are sold. Due to our reliance on our partners, the risks relating to productdrug development, regulatory clearance, authorization or approvalapproval, and commercialization apply to us derivatively through the activities of our partners. While we believe our discovery and development capabilities are capable of identifying high quality antibodies, there can be no assurance that our partnerships will successfully develop, secure marketing approvals forfor, and commercialize any therapeuticsdrugs based on the antibodies that we discover. As a result, we may not realize the intended benefits of our partnerships.

Due to the uncertain, time-consuming and costly clinical development and regulatory approval process, there may not be successful development of any drug candidates with the antibodies that we discover, or we and our partners may choose to discontinue the development of these drug candidates for a variety of reasons, including due to safety, risk versus benefit profile, exclusivity, competitive landscape, commercialization potential, production limitations or prioritization of their resources. It is possible that none of these drug candidates will ever receive regulatory approval and, even if approved, such drug candidates may never be successfully commercialized. For example, under our research agreement with Lilly, we are eligible to receive and have received payments upon the achievement of certain development milestones and are eligible to receive royalties resulting from sales of both COVID-19 and non-COVID-19 products that incorporate antibodies we discovered. While we have received milestone and royalty payments fromin thisthe collaboration,past, there can be no assurance that we will receive additional milestone payments or any royalties in the future.

In addition, even if thesesuch drug candidates receive regulatory approval in the United States, the drug candidates may never obtain approval or commercializebe such drugscommercialized outside of the United States, which would limit their full market potential and therefore our ability to realize theirfull potential downstream value. Furthermore, approved drugs may not achieve broad market acceptance among physicians, patients, the medical communitycommunity, and third-party payors, in which case revenue generated from their sales would be limited. Likewise, we or our partners have to make decisions about which clinical stage and preclinical drug candidates to develop and advance, and we or our partners may not have the resources to invest in all of the drug candidates that contain antibodies discovered using our discovery and development capabilities,platform, or clinical data and other development considerations may not support the advancement of one or more drug candidates. Decision-making about which drug candidates to prioritize involves inherent uncertainty, and our partners’ development program decision-making and resource prioritization decisions, which are outside of our control, may adversely affect the potential value of thoseour partnerships.economic stakes in drug programs. Additionally, subject to its contractual obligations to us, if one more of our partners is involved in a business combination, the partner might deemphasizede-emphasize or terminate the development or commercialization of any drug candidate that utilizes an antibody that we have discovered. If one of our strategic partners terminates its agreement with us, we may find it more difficult to attract new partners.

The failure to effectively advance, marketmarket, and commercialize drug candidates with the antibodies that we discover could have a material adverse effect on our business, financial condition, results of operationsoperations, and prospects, and cause the market price of our common shares to decline. In addition to the inherent uncertainty in drug development addressesaddressed above, our ability to forecast our future revenues may be limited.

For partners who have contractual obligations to us, thiswe poses a number of additional risks, includingbear the risk that they may not perform their contractual obligations to us to our standards, in compliance with applicable legal or contractual requirements, in a timely manner or at all; they may not maintain the confidentiality of our proprietary information; and disagreements or disputes could arise that could cause delays in, or termination of, the research, development or commercialization of productsdrugs using our antibodies or result in litigation or arbitration.

In addition, certain of our partners are large, multinational organizations that run many programs concurrently, and we are dependent on theirour partners' ability to accurately track and make milestone payments to us pursuant to the terms of our agreements with them. Any failure by them to inform us when milestones are reached and make related payments to us could adversely affect our results of operations.

Any of these factors could adversely impact their financial condition and results of operations, which could impair their ability to meet their contractual obligations to us, which may have a material adverse effect on our business, financial conditioncondition, and results of operations.

Since our inception, we have dedicated a substantial portion of our resources on the development of our capabilities and the technology that we incorporate to further enhance our antibody discovery and development capabilities, and our internal pipeline. These investments may involve significant time, risks, and uncertainties, including the risk that the expenses associated with these investments may affect operating results and that such investments may not generate sufficient technological advantage relative to alternatives in the market which would, in turn, impact revenues to offset liabilities assumed and expenses associated with these new investments. The industry in which we operate changes rapidly as a result of technological and drug developments, which may render our solutionsplatform relatively less desirable.capable. We believe that we must continue to invest a significant amount of time and resources in our discovery and development capabilities, and our internal pipeline,capabilities to maintain and improve our competitive position. If we do not achieve the benefits anticipated from these investments, if the achievement of these benefits is delayed, or if our discovery and development capabilities are not able to acceleratedeliver thedrug process of antibody discovery and development as quicklycandidates as we anticipate, or if our internal pipelinepipeline, is not successful, our revenuerevenue, and operating results may be adversely affected.

From time to time, we may make public statements regarding the expected timing of certain milestones and key events, as well as regarding developments and milestones under our partnerships, to the extent that our partners have publicly disclosed such information or permit us to make such disclosures. Certain of our partners have also made public statements regarding their expectations for the development of programs under partnership with us and they and other partners may in the future make additional statements about their goals and expectations for partnerships with us. The actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our or our current and future partners’ antibody discovery and development programs, the amount of time, effort, and resources committed by us and our current and future partners, and the numerous uncertainties inherent in the development of drugs. As a result, there can be no assurance that our partners’ current and future programs in which we hold economic stakes will advance or be completed in the time frames we or they expect. If our partners fail to achieve one or more of these milestones or other key events as planned, our business could be materially adversely affected and the price of our common shares could decline.

For programs that are leadled by a partner, but for which we have downstream economic participation, our future success is dependent on the eventual approval and commercialization of productsdrugs developed by our partners for which we have no control over the clinical development plan, regulatory strategy or commercialization efforts.

Our business model is dependent on the eventual progression of therapeuticdrug candidates discovered or initially developed utilizing our discovery and development capabilities into clinical trials and commercialization. This requires us to attractfind partners and enter into agreements with them that contain obligations for the partners to pay us milestone payments as well as royalties on sales of approved productsdrugs for the therapeuticdrug candidates they develop that are generated utilizing our discovery and development capabilities. Given the nature of our relationships with our partners, we do not control the progression, clinical development, regulatory strategy or eventual commercialization, if approved, of these therapeuticdrug candidates. As a result, our future success and the potential to receive milestones and royalties are entirely dependent on our partners’ efforts over which we have no control. Additionally, unless publicly disclosed by our partners, we do not have access to information related to our partners’ preclinical studies or clinical trial results, including serious adverse events, or ongoing communications with the relevant health authorities regarding our partners’ development strategy, which limits our visibility into how such programs may be progressing. If our partners determine not to proceed with the future development of a drug candidate discovered or initially developed utilizing our discovery and development capabilities, or if they implement preclinical, clinical or regulatory strategies that ultimately do not result in the further development or approval of the therapeuticdrug candidate, we will not receive the benefits of our partnerships, which may have a material and adverse effect on our operations.

We may not be able to file applications or amendments to commence additional clinical trials on the timelines we expect, and even if we are able to,to file as expected, the regulatory body may not permit us to proceed.

We may not be able to file applications (e.g.e.g., CTA,clinical trial applications (“CTA”) or investigational new drug applications “IND”) for our internal pipeline candidates on the timelines we expect. For example,Specifically, we are currently conducting Phase 1/2 clinical trials for ABCL635 and ABCL575 in Canada under Health Canada CTAs, and we intend to submit IND applications to the FDA to initiate Phase 3 trials in the United States upon their completion. There is no guarantee that the FDA will accept data from these foreign Phase 1/2 trials as sufficient to support a U.S. Phase 3 start. The FDA may experiencerequire delaysus withto enablingconduct additional bridging studies or manufacturingrepeat delays.Phase 1/2 trials within the United States, which would prevent us from initiating Phase 3 trials on our expected timeline. Moreover, we cannot be sure that submission of a clinicalCTA trialor application (CTA)IND will result in allowing the start of clinical trials, or that, once begun, issues will not arise that suspend or terminate clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to a new application. Any failure to file a clinical trial application on the timelines we expect or to obtain regulatory approvals for our trials may prevent us from completing our clinical trials or commercializing our productsdrug candidates on a timely basis, if at all.

We have no marketed proprietary productsdrugs and have not yet independently started late-stage clinical development, which makes it difficult to assess our ability to independently develop future productdrug candidates and monetize any resulting products.drugs.

As a company, we have no previous experience in advancing and completing clinical trials, and navigating and complying with the related regulatory requirements, including with respect to the submission of a New Drug Application, or NDA, or equivalent submission. We have not yet demonstrated our ability to independently conduct late-stage clinical development and obtain regulatory approval. To execute on our business plan, we will need to successfully reach agreement with multiple regulatory agencies on clinical and preclinical studies required for registration, execute our clinical development and manufacturing plans; and manage our spending as costs and expenses increase due to clinical trials, and regulatory approvals. If we are unsuccessful in accomplishing these objectives, we will not be able to develop any future productdrug candidates independently and could fail to realize the potential advantages of doing so.

We have a limited number of productdrug candidates, all which are still in preclinical development.candidates. If we do not obtain regulatory approval of one or more of our productdrug candidates, or experience significant delays in doing so, our business will be materially adversely affected.

We currently have no productsdrugs approved for sale or marketing in any country, and may never be able to obtain regulatory approval for any of our productdrug candidates. As a result, we are not currently permitted to market any of our productdrug candidates in any country until we obtain regulatory approval from the relevant health authorities. OurThe productmajority of our drug candidates are in preclinical development and as of December 31, 2024 we have not submitted an application, or received marketing approval, for any of our productdrug candidates. Obtaining regulatory approval of our productdrug candidates will depend on many factors, including:

WeAbCellera areis a teamclinical-stage ofbiotechnology scientists, engineers, and business professionalscompany focused on discovering and developing first-in-class and best-in-class antibody-based medicines for indications with high unmet medical need. To address the barriers of conventional antibody drug development, we have built the capabilities to advance innovative, differentiated antibody drug programs, from target to the clinic. To maximize the value and impact of our work, we are advancing a pipeline of internal programs and strategically partnering with companies that have novel science, innovative technology, or a strong track record of bringing programs through clinical development.

We focus on the development of antibody-basedantibody drugs and are committed to improving discovery and development. We aim to build a competitive advantage in bringing antibody therapeuticsdrugs from target into clinical testing by combining expertise, technologies, and infrastructure to build integrated capabilities for antibody drug discovery and development. We think deeply about capital allocation and strive to maximize long-term value while mitigating the risks that are inherent in drug development. We look for opportunities where we believe low-risk investments in building technology and operational efficiency can create a sustained competitive advantage and drive long-term value by making biologicsantibody drug development faster and more efficient.

We are leveraging our capabilitiesplatform and technology platforms to develop internal programs and advance a pipeline of AbCelleraAbCellera-led programs with first-in-class and/or best-in-class potential. We evaluate these programs individually to determine thewhether advisabilityto of entering intopursue preclinical and clinical development ourselves,in-house, enteringenter into collaborations with partners, or out-licensing programsout-license to optimize their development and clinical and commercial potential.

We focus a substantial portion of our resources on research and development efforts towards strengthening our discovery and development capabilities and developing a pipeline of internal and co-development programs. We expect to continue to make significant investments in this area for the foreseeable future and expect to continue to incur significant expenses in connection with our ongoing activities, including as we:

•invest in research and development activities to improve our antibody discovery and development capabilities, including investments in completing the construction of our small-scale manufacturing facilitycapabilities;

•pursueadvance our internal and co-development programs in preclinical and eventually clinical development;

The Company has advanced two AbCellera-led programs into IND-enabling studies. The programs align with the Company's strategy of building value, both through strategic partnerships, and through internal discovery and development of potential first-in-class and best-in-class antibody therapies. We have started a cumulative total 96104 partner-initiated programs with downstream participation and have seen a cumulative total 1619 molecules advanced into the clinic, as illustrated by the following chart.

The following table summarizes our key operating results for the years ended December 31, 2022, 2023,2024, and 2024.2025. All figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data:

We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiplethe factors as described below, each of which presents growth opportunities for our business. These factors also pose important challenges that we must successfully address to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A, Risk Factors.

•Pursuing drug discovery and development opportunities internally. As our discovery and development capabilities have matured, we are increasingly in a position to pursue attractive, well-validated targets ourselves, e.g. in the GPCR, ion channel, and TCE spaces. Such programs have the potential to yield first-in-class drug candidates in indications with substantial unmet medical need which we wouldcan whollypursue own.internally. We plan on investing significant resources in the preclinical and, eventually,and clinical development of internal programs whichthat will impact our financial results. The investments in each program are undertaken at risk and may ultimately not yield a return.

•Successfully out-licensing drug candidates from our internal programs. We believe that our internal programs may result in drug candidates of interest to other drug developers with capabilities complimentarycomplementary to our own. Where these capabilities can be expected to enhance the value of our drug candidate, we may seek to out-license. Successful out-licensing agreements could generate substantial up-frontupfront payments in addition to later milestone payments and royalties. Our financial performance may therefore be impacted by our ability to produce and out-license such drug candidates from our internal programs.

•Our partners successfully developing and commercializing the antibodies that we discover. We estimate that, based on the terms of our existing contracts and estimates of historical rates of success of antibody drug development, the vast majority of the potential value for each program is represented by potential future milestone payments and royalties rather than research fees. As a result, we believe our business and our future results of operations will be highly reliantimpacted onby the degree to which our partners successfully develop and commercialize the antibodies that we discoverhave discovered based on contracts with our partners. As our partners continue to advance development of the antibodies that we have discovered, we expect to start receiving additional milestone payments and royalties if any partners commence commercial sales of such antibodies.

•Engaging with strategic partners. Our potential to grow revenue, in both the near and long term,long-term, is dependent on successfully engaging with strategic partners. For existing strategic partners, weWe seek to expand our relationships with themexisting topartners collaborate on additional programs initiated by themalso as well as to create a basis for potentially out-licensing some of our internal programs. Our teams are selective in determining which partners we choose to engage with, focusing on the opportunities with the strong potential to generate significant value in the long term.long-term.

•Investing in enhancements to our discovery and development capabilities. Our ability to maintaingenerate a pipeline of potential first-in-class internal programs and expand our partnerships is dependent on the strength and advantages of our discovery and development capabilities deliver to our partners and our internal programs.capabilities. We intend to maintain our leading position through selective investments in research and development to refine and add capabilitiescapabilities, including in areas such as computation, protein engineering, immunization technologies, genetically engineered rodents and cell line selection. Specifically, we are currently completing our investments in integrated preclinical development and antibody manufacturing. We have also successfully executed and will continue to look for strategic technology acquisitions to improve, broaden and deepen our capabilities and expertise in antibody discovery and development, or those that offer opportunities to expand our business into adjacent therapeutic modalities. We intend to continue to devote resources to continue to improve our discovery differentiation which will impact our financial performance.

Key Business Metrics

We regularly review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe that the following metrics are importantuseful for understanding our business to understand our current business.date. These metrics may change or may be substituted for additional or different metrics as our business develops as further described below with respect to changes in this and upcoming reports.

Partner-initiated program starts with downstreams represent the number of unique partner-initiated programs where we stand to participate financially in downstream success for which we have commenced the discovery effort. The discovery effort commences on the later of (i) the day on which we receive sufficient reagents to start discovery of antibodies against a target and (ii) the day on which the kick-off meeting for the program is held. We view this metric as an indicationindicator of theour partners' project selection and initiation of projects by our partners and the resulting potential for near-term payments. Cumulatively, partner-initiated program starts with downstream participation indicate our total opportunities to earn downstream revenue from milestone fees and royalties (or royalty equivalents) in the mid- to long-term.

Molecules in the clinic represent the count of unique molecules for which an Investigational New Drug, or IND, New Animal Drug, or equivalent under other regulatory regimes, application has reached "“open"” status or has otherwise been approved based on an antibody that was discovered either by us or by a partner using licensed AbCellera technology. Where the date of such application approval is not known to us, the date of the first public announcement of a clinical trial will be used for the purpose of this metric. We view this metric as an indication of our near- and mid-term potential revenue from milestone fees and potential royalty payments in the long term.long-term.

Our revenue is comprised ofcomprises partnership research fees, licensing revenue, development milestones,milestone payments, and licensing and royalty payments from commercial products.revenue. Research fees consist primarily of technology access fees, which are generally generated upon execution of our partnership agreements, and discovery research fees,fees. whichWe are generated through our performance of antibody discovery research for our partners. Licensing revenue is primarily from our licensing of our humanized rodent platform, Trianni™. Our partnership agreements also entitle usentitled to receive payments upon the satisfaction of clinical, approval,regulatory, and commercial milestonesmilestones. asLicensing welland asroyalty revenue is derived from the transfer of intellectual property rights and the commercialization of our technology and molecules. This includes upfront payments for the grant of platform licenses, the sale of licensed research tools, and royalties earned on our partners’ commercial sales of the molecules thator wetechnology discover.incorporating our IP.

We expect that our revenue, particularly revenue arising from royalties of antibodies sold by our partners, will fluctuate from period to period due to variances in demand for such antibodies and the status of regulatory approvals. For example, our revenue from bebtelovimab stopped in 2022 when the FDA announced bebtelovimab was no longer authorized for emergency use in the U.S. We expect that our overall revenue will fluctuate from period to period due to the scope and timing of securingactivities additionalwith programs under contractcurrent and thepotential progressfuture of our internal programs,partners, the inherently uncertain nature of the timing of milestone achievement, our dependence on the program decisions of our partners, and uncertainty in sales of our antibodies by our partners that may generate royalty revenue.

Research and development expenses. Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials expenses for employees and third-party research and development expenses for preclinical,discovery, discovery,preclinical and clinical development, and other research programs. These expenses are exclusive of depreciation, amortization, and impairment. Research and development activities consist of discovery research for partners, investments made in co-development and internal programs, discovery research for partners, clinical trial costs, and internal development of our discovery and development capabilities. We have not historically tracked our research and development expenses on a partner-by-partner basis or on a productdrug candidate-by-productcandidate-by-drug candidate basis.

We expect to continue to incur substantial research and development expenses as we executegrow onand progress our internal pipelinepipeline, including through clinical trials, and conduct discovery research for our partners. In addition, we plan to continue to selectively invest in researchour discovery and development to enhance our solutions and offerings to our partners,capabilities, including manufacturing,in manufacturing and continue research and development on our pipeline of internal programs. As a result, we expect that our research and development expenses willto continue to vary from period to period in future periods as we continue to execute our strategy ofto buildingbuild our pipeline of first-in-class anddrug best-in-class medicines.candidates.

GeneralSales, general, and administrative expenses. GeneralSales, general, and administrative expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation costs for employees in our executive, accounting and finance, office administration, legallegal, marketing, and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. We expect theseour core sales, general, and administrative expenses to remain consistent in the shortnear term aswhile we focusanticipate ona decrease in total expenses driven by lower legal fees following the resolution of our internalpatent pipeline.litigation.

Depreciation, amortization, and impairment. Depreciation expense consists of the depreciation of property and equipment used actively in the business.business, including our manufacturing facility which was placed in service and began depreciating in the fourth quarter of 2025. Amortization expense and impairment includes the amortization of intangible assets over their respective useful lives and impairment of IPR&D as further described in our notes to the consolidated financial statements.

Grants and incentives. Grants and incentives include cost recovery on activities that qualified for approved projects supported by grant funding or tax credits. Grants primarily includeprovide the benefitbenefits from programs administered by the Canadian federal and provincial governments. To the extent that grant funding covers capital expenditures, a deferred credit is recorded on the balance sheet and recognized ratably over the benefit period of the related expenditure for which the grant was intended to compensate.

Revenue decreasedincreased by $9.2$46.3 million from the year ended December 31, 2023,2024, compared to the year ended December 31, 2024.2025. The decreaseincrease in research feesrevenue in 20242025 was primarily attributable to the$10.8 timingmillion in licensing revenue recognized and progressa $36.0 million payment as part of our researchsettlement andof developmentpatent efforts.litigation. See Note 3 of our consolidated financial statements for further details on the settlement.

GeneralSales, General, and Administrative

Depreciation, amortization, and impairment expenses increaseddecreased by $66.5$68.7 million, or 272%,(76)%, from the year ended December 31, 2023,2024, compared to the year ended December 31, 2024.2025. The increasedecrease is primarily attributable to recognizingthe 2024 recognition of a full impairment charge of the carrying value of $32.0 million (or $23.3 million, net of deferred income tax) associated with the IPR&D acquired through the 2020 acquisition of Trianni, due to discontinuing the development of the next-generation transgenic mice.mice The Company also recognizedand a full impairment charge of the carrying value of $32.0 million (or $23.3 million, net of deferred income tax) associated with the IPR&D acquired through the 2021 acquisition of TetraGenetics. Both impairment charges were a result of the Company's ongoing internal program prioritization. The remaining increasevariance in depreciation and amortization expense was duedriven toby the re-assessmentmix of the useful lifelives of certain technologyour assets, partiallyincluding offsetour bymanufacturing afacility decreasewhich began depreciating in licensethe amortizationfourth inquarter 2024.of 2025.

Interest income decreased by $3.8$10.1 million, or (926)%, from the year ended December 31, 2023,2024, compared to the year ended December 31, 2024.2025. The decrease was primarily driven by a decrease in our average cash, cash equivalents, and marketable securities balances, and ainterest decreaseyields in interest rates in 2024.2025.

Grants and incentives decreasedincreased by $0.5$0.3 million, or (4)%,2%, from the year ended December 31, 2023,2024, compared to the year ended December 31, 2024.2025. The decreaseamount was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.

Other (Income) Expense

Other income increaseddecreased by $55.5$65.0 million, or 819%,104%, from the year ended December 31, 2023, compared2024, to other expenses of $2.7 million in the year ended December 31, 2024.2025. Further to the TetraGenetics intangible asset impairment discussion above, in 2024, the TetraGenetics and Trianni contingent consideration was adjusted to reflect the expected value due to the impact from the Company's ongoing internal program prioritization and expected achievement of a milestone required for an earn-out payment associated with a specific license. The Company recorded a non-cash fair value gain of $47.3 million related to the contingent consideration adjustments.adjustments in 2024. The remaining increasedecrease was attributable to a $16.5 million recognized gain on the disposal of a non-marketable security,security in 2024, partially offset by a decrease in fair value adjustments, including marketable securities, and a foreign exchange loss due to fluctuations in the Canadian and U.S. dollar exchange rate.

Income tax recovery increaseddecreased by $9.9$6.4 million, or 36%,(17)%, from the year ended December 31, 20232024 compared to the year ended December 31, 2024.2025. The movementincome tax recovery in each period was drivenprimarily byattributable to the carry back of current netyear losstax andlosses ato changerecover income taxes paid in effectiveprior income tax rates.years.

As of December 31, 2024,2025, we had $625.6$533.8 million of cash, cash equivalents, and marketable securities, comprised of $156.3$128.5 million in cash and cash equivalents and $469.3$405.3 million in marketable securities. The decrease of $135.0$91.8 million since December 31, 2023,2024, was from a combination of cash flow used in operations and investing activities due to our continued research and development activity,activity investmentsfor internal programs in partnereddiscovery, preclinical, and internalclinical development as well as for partnered programs, inand our internal pipeline, andinvestments in our corporate headquarters and GMPclinical facilitymanufacturing underfacility, construction,partially offset by government contributionscontributions, distributions received through our Dayhu joint venture, and repayment of the loan we previously made to our JV partner Dayhu in the year ended December 31, 2024.2025. See Note 8 of our consolidated financial statements for further details on the distribution.

While we have generated positive operating cash flows in the past, we intend to significantly invest in our business, and as a result may continue to incur operating losses in future periods. We will continue to use our significant available liquidity from our cash, cash equivalents, and marketable securities to fund and invest in research and development efforts towards expanding our capabilities and expertise, execute and build our internal pipeline, and the expansion of our corporate headquarters, clinical manufacturing facility and related infrastructure, including optimization of long-term office-lease arrangements. Moving intoIn 2025, we aresubstantially on track to completecompleted our final large platform investments in our clinical manufacturing facility and our corporate headquarters. With the completion of these large platform investments, we expect a significant reduction in investing cash flows,outflows, shifting our capital allocation from building capabilities to using them as we execute our strategy of building on our pipelineinternal of first-in-class and best-in-class medicines.pipeline. Based on our current business plan, we believe that our available liquidity from existing cash, cash equivalents, marketable securities, loan receivables, and government contributions, will be sufficient to meet our working capital and capital expenditure needs and do not anticipate the need offor additional external funding over at least the next 36 months following the date of this report.

In 2020, we entered into a multi-year agreement with the Canadian government’s Strategic Response Fund (SRF), previously the Strategic Innovation Fund,Fund or SIF.(SIF). Under this agreement, up to CAD $175.6 million ($125.6 million) was committed by the Government of Canada to support research and development efforts related to the discovery of antibodies to treat COVID-19, and to build technology and manufacturing infrastructure for antibody therapeuticsdrugs against future pandemic threats. FromThe inceptionCompany tohas made the full investment and has received the maximum available funding under the agreement as of December 31, 2024, the Company has incurred CAD $175.6 million ($134.6 million) of expenditures, of which CAD $58.7 million ($46.1 million) relates to the maximum claim amount under phase 1 of the agreement and CAD $116.9 million ($88.5 million) in respect of phase 2 of the funding commitment.2025.

Net cash used in operating activities increased from $43.9 million in the year ended December 31, 2023, to $108.6 million in the year ended December 31, 2024.2024, to $131.3 million in the year ended December 31, 2025. The increase in cash flows used in operations was attributable to research and development activity, program execution, and investment in partnered and internal programs in addition to working capital movements including highera levelsreduction ofin accountsgovernment andcontributions grants receivablereceived in the year ended December 31, 2024.2025.

Net cash associatedprovided withby investing activities changeddecreased from $221.1$121.4 million used in investing activities in the year ended December 31, 2023,2024, to $121.4$87.8 million provided by investing activities in the year ended December 31, 2024.2025. The increasedecrease in cash provided by investing activities in 20242025 was primarily attributable to absence of a specificreduction one-timein investmentgrant thatfunding occurredreceived in the firstperiod, quarter of 2023, receipt of grant funding, andfewer proceeds from sale of marketable securitiessecurities, and payment of specific program investments, partially offset by distributions from loan repayments by equity-accounted investees in the year ended December 31, 2024.2025.

We expect to continue to incur expenditures as we operate our business. We expect to incur losses for the foreseeable future. We cannot accurately predict the timing or amount of our increased expenses, or when, if at all, we may achieve profitability. Our net loss for the years ended December 31, 2025 and 2024 was $146.4 million and $162.9 million, respectively. Our accumulated losses at December 31, 2025 and accumulated earnings at December 31, 2024 was $29.5 million and $116.9 million, respectively.

Based on our current business plan, we believe our available liquidity from existing total cash andbalances (cash, cash equivalents, and restricted cash), marketable securities, and anticipated cash flows from operations and government contributions, will be sufficient to meet our working capital and capital expenditure needs. Although it is difficult to predict our funding requirements, we believe that our available liquidity from existing cash, cash equivalents, marketable securities, loan receivables, and government contributions, will be sufficient to meet our working capital and capital expenditure plansneeds over at least the next 36 months following the date of this report. Because our core operational focus is advancing our clinical pipeline, management evaluates this total non-dilutive capital accessible to execute our strategy (including our ability to access our reimbursement-based government contributions, which cannot be utilized for general corporate purposes). If our available cashcapital resources together with our anticipated cash flow from operations are insufficient to satisfy our liquidity requirements including because of the realization of other risks described in this report, we may be required to raise additional capital prior to such time through issuances of equity or convertible debt securities, entranceenter into a credit facility or another form of third-party funding or seek other debt financing, including real estate and asset backed financing on the significant investments we have funded towards our corporate headquarters and GMP facility. Such additional future financing may not be available on terms acceptable to us or at all.

•Our present and future funding requirements will depend on many factors, including:

•our ability to successfulsuccessfully employ our newly constructed GMP facility to advance our pipeline;

From time to time, we may make public statements regarding the expected timing of certain milestones and key events, as well as regarding developments and milestones under our partnerships, to the extent that our partners have publicly disclosed such information or permit us to make such disclosures. Certain of our partners have also made public statements regarding their expectations for the development of programs under partnership with us and they and other partners may in the future make additional statements about their goals and expectations for partnerships with us. For example, while our recent collaboration agreements with Jazz Pharmaceuticals PLC and Vertex Pharmaceuticals Inc. provide for our eligibility to receive significant potential future milestone payments. The receipt of any such future option fees, milestone payments, or royalties under these and other agreements is entirely contingent upon the successful achievement of specified research, clinical, regulatory, and commercial milestones by our partners. The actual timing and achievement of these events can vary due to a number of factors such as delays or failures in our or our current and future partners’ antibody discovery and development programs, the amount of time, effort, and resources committed by us and our current and future partners, and the numerous uncertainties inherent in the development of drugs. As a result, there can be no assurance that our partners’ current and future programs in which we hold economic stakes will advance or be completed in the time frames we or they expect.expect, or that we will realize any of these potential future payments. If our partners fail to achieve one or more of these milestones or other key events as planned, our business could be materially adversely affected and the price of our common shares could decline.

We may not be able to file applications (e.g., clinical trial applications (“CTA”) or investigational new drug applications (“IND”) applications for our internal pipeline candidates on the timelines we expect. Specifically, we are currently conducting a Phase 1/2 clinical trialstrial for ABCL635 and a Phase 1 trial for ABCL575 in Canada under Health Canada CTAs,CTAs. Upon completion and review of the data, we intend tomay submit an IND applicationsapplication to the FDA for ABCL635 to initiate Phase 3 trials in the United States upon their completion.States. There is no guarantee that the FDA will accept data from thesea foreign Phase 1/2 trialstrial as sufficient to support a U.S. Phase 3 start. The FDA may require us to conduct additional bridging studies or repeat Phase 1/2 trials within the United States, which would prevent us from initiating Phase 3 trials on our expected timeline. Moreover, we cannot be sure that submission of a CTA or IND will result in allowing the start of clinical trials, or that, once begun, issues will not arise that suspend or terminate clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an application, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to a new application. Any failure to file a clinical trial application on the timelines we expect or to obtain regulatory approvals for our trials may prevent us from completing our clinical trials or commercializing our drug candidates on a timely basis, if at all.

Interim, preliminary or top-line data from our clinical trials, including Phase 1/2 clinical data for ABCL635, that we may announce or publish may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

We may publish interim, preliminary or top-line data from clinical trials. For example, we are publicly disclosing preliminary, toplinetop-line Phase 1 clinical data for our internal program, ABCL635 and anticipate toplinetop-line clinical data from the Phase 2 trial to be disclosed in Q3August 2026. ToplineTop-line data is based on a preliminary analysis of then-available safety, tolerability, and pharmacokinetic data, and is subject to change following a more comprehensive review. Because Phase 1 clinical trials involve a small number of patients and are primarily designed to evaluate safety and dosing rather than efficacy, preliminary or early signals observed are not necessarily predictive of final results or the results of later-stage trials. Material differences between our preliminary, toplinetop-line data and final data, or a failure to replicate positive early results in subsequent, larger-scale trials, could result in clinical holds, development delays, or the discontinuation of the ABCL635 program. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary or top-line data previously published. As a result, interim, preliminary and top-line data should be viewed with caution until the final data are available. Adverse differences between interim, preliminary or top-line data and final data could significantly harm our reputation and business prospects. Past results of clinical trials may not be predictive of future results.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically more extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure. Any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular drug candidate or our business. Similarly, even if we are able to complete our planned and ongoing preclinical studies and clinical trials of our drug candidates according to our current development timeline, the positive results from such preclinical studies and clinical trials of our drug candidates may not be replicated in subsequent preclinical studies or clinical trial results. Moreover, preclinical, non-clinical and clinical data are often susceptible to varying interpretations and analyses and many companies that believed their drug candidates performed satisfactorily in preclinical studies and clinical trials nonetheless failed to obtain the relevant regulatory approval. Further, the use of certain data derived from cross-study comparisons are not based on any head-to-head clinical trials. Such clinical trial data may not be directly comparable due to differences in study protocols, conditions and patient populations. Accordingly, these cross-trial comparisons may not be reliable predictors of the relative efficacy or other benefits of ABCL635 compared to other product candidates that may be approved or that are or are in development.

The manufacture of biological drug products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques, process, and quality controls. Manufacturers of biologic products often encounter difficulties in production and sourcing, particularly in scaling up or out, validating the production process and assuring high reliability of the manufacturing processes (including the absence of contamination), in light of variations and supply constraints of key components. These problems include logistics and shipping; difficulties with production costs and yields; quality control, including consistency, stability, purity, and efficacy of the product; product testing; operator error and availability of qualified personnel; as well as compliance with applicable federal, state, and foreign regulations. If contaminants are discovered in the supply of our drug product or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We may have stability, purity, and efficacy failures; deficiencies; or other issues relating to the manufacture of our drug candidates. Our research and development activities also involve the controlled use of potentially hazardous substances, including chemical and biological materials, by our third-party manufacturers. We and our contract manufacturers are subject to local laws and regulations governing the use, manufacture, storage, handling, and disposal of medical and hazardous materials. Although we believe that our and our manufacturers’ procedures for using, handling, storingstoring, ,andand disposing of these materials comply with legally prescribed standards, we cannot eliminate the risk of contamination or injury, and any related liability, resulting from medical or hazardous materials.

There have been U.S. Congressional inquiries, presidential executive orders, and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. For example, under the American Rescue Plan Act of 2021, effective January 1, 2024, Medicaid statutory rebates will no longer be capped at 100% of AMP (average manufacturer price). Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of drug s,drugs, which could have a material impact on our business. Additionally, in July 2021, the U.S. administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to the executive order, on September 9, 2021, the Department of Health and Human Services (“HHS”) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles. As discussed above, the United States Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single-source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes. Various industry stakeholders have initiated lawsuits against the federal government asserting that the price negotiation provisions of the Inflation Reduction Act are unconstitutional. The impact of these judicial challenges as well as future actions and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear. The implementation of cost containment measures, including the prescription drug provisions under the Inflation Reduction Act, as well as other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drug candidates if approved. Complying with any new legislation and regulatory changes could be time-intensive and expensive, resulting in a material adverse effect on our business.

In the EU similar political, economic, and regulatory developments may affect our ability to profitably commercialize any future drugs. In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific drugs and therapies. Our future drug s,drugs, if any, might not be considered medically reasonable and necessary for a specific indication or cost-effective by third-party payors, an adequate level of reimbursement might not be available for such drug s,drugs, and third-party payors’ reimbursement policies might adversely affect our or our partners’ ability to sell any future drug profitably.

Our business and current and future relationships with customers and third-party payors,payors are subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security, and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens, and diminished profits and future earnings.

We currently derive the majority of our revenue based upon scientific and engineering research and development and testing conducted in Vancouver, British Columbia. Our facilities and equipment could be harmed or rendered inoperable or inaccessible by natural or man-made disasters or other circumstances beyond our control, including fire, earthquake, power loss, communications failure, war or terrorism, or another catastrophic event, such as a pandemic or similar outbreak or public health crisis, which may render it difficult or impossible for us to advance our pipeline of internal programs, support our partners, and improve our capabilities, advanced automation systems, and other critical business activities for some period of time. The inability to address system issues could develop if our facilities are inoperable or suffer a loss of utilization for even a short period of time, may result in t harm to our reputation, and we may be unable to repair our reputation in the future. Furthermore, our facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace. It would be difficult, time-consuming, and expensive to rebuild our facilities, to locate and qualify new facilities, or license or transfer our proprietary technology to a third-party. Even in the event we are able to find a third-party to assist in research and development efforts, we may be unable to negotiate commercially reasonable terms to engage with the third-party. Any physical damage done to our GMP facility, specifically, would more significantly impact our operations there due to the validation requirements of the facility and the supplies held within it.

On October 14, 2022, the Estate of John Schrader and ImmVivos Pharmaceuticals Inc. filed a lawsuit naming as co-defendants the Company, some of its affiliates and Dr. Carl Hansen, the Company's CEO. The lawsuit was filed in the Supreme Court of British Columbia (Vancouver). The complaint alleges breach of an implied partnership or joint venture between Dr. John Schrader and Dr. Hansen and further alleges patent infringement of an issued Canadian patent (No. 2,655,511). The complaint seeks financial damages and other declarations. The Company has filed a Notice of Application seeking to dismiss certain Company affiliates from the matter. No hearing date has been set. All co-defendants have been served. The Company isrecently proceedingobtained consent to seekthe dismissalinvalidation of certainthe CompanyImmvivos affiliates'511 forpatent lackand removal of jurisdiction.patent infringement allegations. The Company believes that Plaintiffs’ remaining claim is meritless in all respects and intends to defend itself appropriately.

The market price of our common shares may be volatile, including the market's reaction to near-term clinical milestones, such as our recent Phase 1 clinical data release and the toplinetop-line data from the Phase 2 trial anticipated in the third quarterAugust of 2026; consequently, you could lose all or part of your investment.

•the market's reaction to near-term clinical milestones, specifically our recent Phase 1 data release and the toplinetop-line data from the Phase 2 trial anticipated in the third quarterAugust of 2026;

The majority of our cash and cash equivalents are maintained in high credit quality and liquid held-for-trading marketable securities, bank accounts and term deposits at Canadian banking institutions. Cash and cash equivalents held in depository accounts may exceed the C$100,000 Canadian Deposit Insurance Corporation insurance limits. Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, in the first quarter of 2023, a number of financial institutions in the U.S. were placed into receivership by the Federal Deposit Insurance Corporation. Any material loss that we may experience in the future could have a material adverse effect on our financial condition and could materially impact our ability to pay our operational expenses or make other payments. Although we were not a depositor with any such financial institution placed into receivership, if the banking institutions that hold our deposits were to fail, we could lose all or a portion of those amounts held in excess of applicable insurance limitations. In such an event, our access to our cash in amounts adequate to finance our operations could be significantly impaired by the financial institutions with which we have arrangements directly facing liquidity constraints or failures.

•our expectations regarding the success, clinical advancement, and market acceptance of our internal pipeline of drug candidates, including expectations regarding the preliminary, topline,top-line, or early-stage clinical data for ABCL635, as well as our antibody discovery and development capabilities;

•our ability to achieve projected discovery, preclinical development, and clinical milestones for our internal programs, including the toplinetop-line data from the Phase 2 trial anticipated in the third quarterAugust of 2026 for ABCL635, as well as our partners’ ability to achieve projected discovery and development milestones and other anticipated key events, including commercial sales resulting in royalties owed to us, in the expected timelines or at all;

•our ability to leverage our full platform capabilities - from target identification to investigational new drug, or Investigational New Drug (“IND”), application submission and to clinical development - to advance our internal pipeline of drug candidates, as well as to support our partners;

We are leveraging our platform and to develop internal programs and advance a pipeline of AbCellera-led programs with first-in-class potential. We evaluate these programs individually to determine whether to pursue preclinical and clinical development in-house, enter into collaborations with partners, or out-license to optimize their development and clinical and commercial potential.

InWe 2025, wepreviously achieved critical regulatory and clinical trial milestonemilestones for ABCL635 and ABCL575 by submitting Clinical Trial Applications (CTAs) to Health Canada, receiving No Objection Letters from Health Canada, authorizing both CTAs,ABCL575, and initiatinginitiated dosing participants in clinical trials for both programs in Canada during the second half of 2025.

TheFor ABCL635, the Phase 1/2 clinical trial of ABCL635 is a randomized, placebo-controlled, double-blind study in healthy men and postmenopausal women with or without vasomotor symptoms (VMS). Its purpose is to evaluate safety, pharmacokinetics, pharmacodynamics, as well as frequency and severity of VMS with subcutaneous doses of ABCL635. In January 2026, following an interim assessment of the safety, tolerability, and pharmacodynamic data collected from healthy volunteers in the Phase 1 portion of the study, we announced the dosing of first patients in the Phase 2 portion of the ongoing Phase 1/2 clinical trial.

In May 2026, we announced positive interim Phase 1 data for ABCL635. Treatment with ABCL635 achieved potent and sustained reduction in biomarkers of target engagement, demonstrated a favourablefavorable safetytolerability profile with all doses well-tolerated and no observed liver toxicity or serious adverse events,events reported to date, and pharmacokinetic data supports monthly dosing. TheEnrollment of the Phase 2 study ishas currentlybeen enrollingcompleted withand toplinethe top-line data readout anticipatedis expected in Q3 2026.August.

TheFor ABCL575, the Phase 1 clinical trial of ABCL575 is a randomized, placebo-controlled, double-blind study to assess safety and tolerability in healthy participants following subcutaneous doses of ABCL575. We anticipate the topline data readoutDosing for the Phase 1 study has been completed with the top-line data readout expected in Q4 2026. At present, we have no plans to pursue development past Phase 1.

WeIn 2025, we advanced aABCL688 thirdand program, ABCL688,ABCL386 into IND/CTA-enabling studies in the second quarter of 2025.studies. ABCL688 is an antibody drug candidate for an undisclosed indication in autoimmunity and is the second program from our G protein-coupled receptor (GPCR) and ion channel platform to advance into IND/CTA-enabling studies. We anticipate submission of an IND/CTA for ABCL688 in 2027. TheABCL386 is an antibody drug candidate against an undisclosed target in oncology. ABCL386 is in IND/CTA-enabling activities, and we anticipate initiating Phase 1/2 clinical trials in patients in 2027. Both programs align with the Company's strategy of building value, both through partnerships, and through internal discovery and development of potential first-in-class antibody drugs.

The following table summarizes our key operating results for the three and six months ended MarchJune 31,30, 2025 and MarchJune 31,30, 2026. All figures are in U.S. dollars and amounts are expressed in thousands, except loss per share data:

In January 2026, following an interim review of safety, tolerability, and pharmacodynamic data from healthy volunteers in the Phase 1 portion of the ABCL635 Phase 1/2 clinical trial, we announced the dosing of first patients in the Phase 2 portion of the ongoing ABCL635 Phase 1/2 clinical trial, following an interim review of safety, tolerability, and pharmacodynamic data from healthy volunteers from the Phase 1 portion of the study.

In May 2026, we announced positive interim Phase 1 data for ABCL635. Treatment with ABCL635 achieved potent and sustained reduction in biomarkers of target engagement, demonstrated a favourablefavorable safety profile with all doses well-tolerated and no observed liver toxicity or serious adverse events, and pharmacokinetic data supportssupported monthly dosing. TheEnrollment of the Phase 2 study ofhas ABCL635been iscompleted currentlyand enrollingthe with toplinetop-line data readout anticipatedis expected in Q3August of 2026.

The table below outlines the details of molecules in the clinic as of MarchJune 31,30, 2026:

Comparison of the three and six months ended MarchJune 31,30, 2025 and MarchJune 31,30, 2026:

Total research and development expenses increased by $4.2$6.8 million, or 10%,17%, from the three months ended MarchJune 31,30, 2025, compared to the three months ended MarchJune 31,30, 2026. Of the total increase, external clinical program costs were $3.8$5.1 million for the three months ended MarchJune 31,30, 2026 compared to nil$0.8 million for the three months ended MarchJune 31,30, 2025, as ABCL575 and ABCL635 entered the clinic intowards the end of the second quarter of 2025. Preclinical and discovery costs decreasedwere by $1.9$6.9 million period-over-period to $8.0 million, primarily driven by prior-period preclinical spend from ABCL635 and ABCL575remained IND/CTA-enablingconsistent activities.period over period. Total compensation expense, including stock-based compensation, was $23.5$22.2 million for the three months ended MarchJune 31,30, 2026 and remained substantially unchanged compared to the prior period. Similarly, unallocated internal costs of $11.3$11.7 million for the three months ended MarchJune 31,30, 2026 remainedwere consistent period over period.

Sales, general, and administrative expenses decreased by $6.7$8.1 million, or (3537)%, from the three months ended MarchJune 31,30, 2025 compared to the three months ended MarchJune 31,30, 2026 and decreased by $14.9 million, or (36)%, from the six months ended June 30, 2025 compared to the six months ended June 30, 2026. Total compensation expense, inclusive of stock-based compensation, was $11.0$11.3 million for the three months ended MarchJune 31,30, 2025, compared to $9.0$8.8 million for the three months ended MarchJune 31,30, 2026 and $22.3 million for the six months ended June 30, 2025, compared to $17.9 million for the six months ended June 30, 2026. The decrease in compensation expense is a result of our continued optimization of headcount in light of our internal pipeline focus. Legal, software, and other general administrative costs were $8.0$10.7 million for the three months ended MarchJune 31,30, 2025, compared to $3.3$5.0 million for the three months ended MarchJune 31,30, 2026 and $18.8 million for the six months ended June 30, 2025 compared to $8.3 million for the six months ended June 30, 2026. The decrease was primarily due to a legal settlement in December 2025 and a resulting reduction in legal fees incurred in 2026.

Depreciation and amortization expense increased by $1.5 million, or 28%, from the three months ended MarchJune 31,30, 2025 compared to the three months ended MarchJune 31,30, 2026 and increased by $3.0 million, or 28%, from the six months ended June 30, 2025 compared to the six months ended June 30, 2026. The increase was primarily due to the commencement of depreciation of our clinical manufacturing facility that was put in service in December 2025.

Interest and Other (Income) Expense

Interest and other income decreased by $1.9$9.6 million, or (34100)%, from the three months ended MarchJune 31,30, 2025 compared to the three months ended MarchJune 31,30, 2026 and decreased by $11.5 million, or (76)%, from the six months ended June 30, 2025 compared to the six months ended June 30, 2026. The decrease was primarily driven by foreign exchange in the period due to fluctuations in the Canadian and U.S. dollar exchange rate andrate, interest income was driven by our cash, cash equivalents, and marketable securities balances and interest rate yields in the period.period, and other fair value adjustments.

Grants and incentives increased by $0.2 million, or 4%, from the three months ended MarchJune 31,30, 2025 compared to the three months ended MarchJune 31,30, 2026 and increased by $0.3 million, or 4%, from the six months ended June 30, 2025 compared to the six months ended June 30, 2026. The change was primarily driven by activity relating to research and development expenditures that are eligible for reimbursement under government programs for the period.

Income tax recovery decreasedincreased by $1.0$1.9 million from the three months ended MarchJune 31,30, 2025 compared to the three months ended MarchJune 31,30, 2026 and increased by $0.9 million from the six months ended June 30, 2025 compared to the six months ended June 30, 2026. The decreaseincrease was primarily driven by the availability of carry-back of losses to recover previously paid taxes.

As of MarchJune 31,30, 2026, we had $504.7$540.1 million of cash, cash equivalents and marketable securities, comprising $77.1$120.1 million in cash and cash equivalents and $427.7$420.0 million in marketable securities. The decreaseincrease of $29.1$6.3 million since December 31, 2025, was primarily fromdriven by the full receipt of a combination$36.0 million litigation settlement, of which was receivable at December 31, 2025, and a $56.0 million upfront payment to discover and develop next-generation T-cell engaging (TCE) multispecific antibodies. This was partially offset by cash flow used in operations due to our continued research and development activity for internal programs in discovery, preclinical, and clinical development as well as for partnered programs. This was partially offset by the first $18.0 million installment of a $36.0 million litigation settlement, with the remaining $18.0 million expected in the second quarter of 2026.

We intend to continue to significantly invest in our business, and as a result may continue to incur operating losses in future periods. We will continue to use our available liquidity from our cash, cash equivalents, and marketable securities to fund and invest in research and development efforts towards expanding our capabilities and expertise, grow and advance our internal pipeline. Simultaneously, we intend to optimize our long-term office-lease arrangements and intend to assign or fully sublease the office and laboratory space constructed through the Beedie JV.

We substantially completed our final large platform investments in our clinical manufacturing facility and our corporate headquarters in 2025. With the completion of these large platform investments, we expect a reduction in investing cash outflows, shifting our capital allocation from building capabilities to using them as we execute our strategy of building on our internal pipeline. Based on our current business plan, we believe that our available liquidity from existing total cash balances (cash, cash equivalents, and restricted cash), marketable securities, loan receivables, and government contributions, will be sufficient to meet our working capital and capital expenditures over at least the next 36 months following the date of this report.

In May of 2023, we entered into multi-year contribution agreements with the Government of Canada and the Government of British Columbia. Under the agreements, up to $166.7 million ($225.0 million CAD) and $55.6 million ($75.0 million CAD) was committed by the Government of Canada and the Government of British Columbia, respectively, to build new capabilities in Canada to develop, manufacture, and deliver antibody medicines to patients through Phase 1 clinical trials and build expertise in translational science, technical operations, and clinical operations and research. At MarchJune 31,30, 2026, our government contribution agreements provided an estimated CAD $173.9$156.1 million ($125.0$110.0 million) in total available funding eligible for future claims. See the notes to our condensed consolidated financial statements for further information related to the government contributions.

Net cash used in operating activities increaseddecreased from $11.6$44.0 million in the threesix months ended MarchJune 31,30, 2025 to $33.5$7.6 million in the threesix months ended MarchJune 31,30, 2026. The increasedecrease in cash flows used in operations was primarily attributable to a $56.0 million upfront payment received to discover and develop next-generation TCE multispecific antibodies, the full receipt of a $36.0 million litigation settlement that was receivable at December 31, 2025, and working capital movementsmovements, includingpartially theoffset timing of payments related to our preclinical and clinical activities andby upfront payments received in Q1 2025 that did not recur in the current period, partially offset by a reduction in accounts and grants receivable in three months ended March 31, 2026.period.

Net cash providedused by investing activities wasdecreased $7.9from $23.9 million forin threethe six months ended MarchJune 31,30, 2025, compare2025 to $25.1$13.7 million used in investing activities in the threesix months ended MarchJune 31,30, 2026. The changedecrease in cashflows used by investing activities was primarily attributable to a $36.2 million reduction in proceeds from marketable securities, partially offset by a decrease in purchases of property and equipment and other long-term assetsassets, partially offset by a $26.5 million reduction in net proceeds from marketable securities as cash was used to purchase additional marketable securities in the threecurrent months ended March 31, 2026.period.

Net cash provided by financing activities increased from $6.0$2.6 million in the threesix months ended MarchJune 31,30, 2025 to $7.2$13.6 million in the threesix months ended MarchJune 31,30, 2026. The increase was primarily attributable to proceeds from government contributions and other long-term liabilities.

Detailed information about our critical accounting policies and estimates is set forth in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to these policies duringsince the three months ended March 31, 2026.then.