TORONTO – It took the Vancouver, British Columbia-based biotech three times, but before the week in mid-December was over, Abcellera Biologics Inc. had finally closed its IPO on the Nasdaq, hoovering up gross proceeds of $555.5 million. Anxiously waiting investors had barely time to breathe the morning of Dec. 15, when the biotech’s stock began surging upwards, tripling in value from an initial $20 share to trade at higher than $70 by the afternoon.

With a market capitalization of $12.65 billion and the largest biotech IPO in Canadian history, it was, said Anup Srivastava, Canada Research Chair for capital markets at Calgary’s Haskayne School of Business, “something almost every tech company dreams about and works for.”

Srivastava told BioWorld that “for this company, the path to Nasdaq has been very quick, even by the quickest standards. This normally takes 10 to 15 years for a company to establish itself and go through several rounds of funding to get listed. This is a very important event in a company’s life.”

On the trail of an emerging IPO

Abcellera was launched in 2012 around the development of a drug discovery platform that searches, decodes and analyzes immune systems to find antibodies that can be used to prevent and treat disease. It’s a painstaking process that can take years but is just as grueling on the financial front: how to find investors willing to take a shot on untested technology by a largely untried company.

Abcellera did better than most, bursting out of the gate two years ago with a $30 million grant from the U.S. Defense Advanced Research Projects Agency under its Pandemic Prevention Platform to adapt and pressure test the company’s platform for responding to a real-world pandemic in less than 55 days. Caught up in a real pandemic in May 2020, Ottawa unzipped CA$175.6 million (US$124.7 million) to support Abcellera's discovery of antibodies for use in drugs to treat COVID-19.

But Abcellera wasn’t done. That same month, a CA$144 million series B funding round came its way, driven by the U.S.-based health care-focused fund, Orbimed, and California-based investor DCVC Bio. Scroll forward to November, which saw Abcellera paying $90 million to acquire San Francisco-based Trianni Inc. for its fourth and largest strategic technology purchase to that point.

All important signals for Abcellera, said Srivastava, including Ottawa’s public dollar announcement. Except in rare instances, governments shy away from kick-starting nascent technologies with early-stage capital. “Government can fund only a few promising ventures, which in a way ensures a market for the product because for some companies, government is a main buyer,” Srivastava noted.

So, it was prior to Abcellera’s Dec. 15 announcement that it was granted interim authorization by Health Canada for a human antibody it had developed in collaboration with Eli Lilly and Co. For Ottawa, the proof lay in clinical trials in which an antibody developed through that partnership led to a treatment that reduces viral load, symptoms, and hospitalizations for patients with mild-to-moderate COVID-19.

Ottawa’s funding contribution “will support Abcellera Biologics as they use their world-leading technology to rapidly identify solutions for COVID-19,” Canada’s Minister of Innovation, Science and Industry Navdeep Bains beamed. Abcellera CEO Carl Hansen could hardly have been more pleased. “Each and every one of us is affected, and our teams stand together, galvanized to fight this outbreak,” Hansen said in a company announcement.

Canada’s largest tech IPO

A year that augured a continued, decade-long downward slide in IPOs had suddenly perked up. Yes, Abcellera demonstrated genuine smarts in maximizing attention to its drug discovery platform. But Srivastava gave equal credit to the pandemic. Everything turned on a dime in March when far from being “horrible” news, COVID-19 appeared to boost the biotech industry’s fortunes.

“This year has been terrific for biotech companies and anything that has COVID associated with it,” said Srivastava. His sole fear: that we replicate the dotcoms of the early 2000s, swept away in a wave of false euphoria.

Still, Abcellera has become the latest Canadian tech company to surpass the $1 billion valuation mark. Srivastava’s prognosis for Abcellera is muted, however. “I do not think this company can justify its valuation based on revenues and profits. I think most likely what will happen is that this company will come out with some successful product and will eventually be bought out by a big pharma.”

No huge marketing setup or production lines are whirring away at Abcellera’s facilities in British Columbia, Srivastava noted. Instead, a large pharmaceutical company will come looking for “a gold mine,” i.e., a fully developed biotechnology ready to launch. A case in point: Pfizer’s team-up with German-Turkish firm Biontech SE to produce its COVID-19 vaccine in early December.

“It will be a pharma company that has the marketing muscle, the distribution muscle and financial wherewithal to do this,” said Srivastava.