Absci: AI-Driven Platform Could Establish Best-In-Class TL1A Drug Targeting Profile

Summary:

• Absci Corporation’s initiation of a phase 1 study using ABS-101 for the treatment of patients with IBD expected early 2025, with interim data to be released in the 2nd half of 2025.
• ABS-101 aims to differentiate itself with unique features like de novo antibody creation, multiparameter lead optimization, and reverse immunology, potentially offering superior potency and dosing flexibility.
• The global Crohn’s Disease treatment market is expected to reach $17.80 billion by 2033.
• The ulcerative colitis treatment market is expected to reach $14.77 billion by 2033.

Absci Corporation (NASDAQ:ABSI) is working on developing the use of its biologic drug ABS-101 for the treatment of patients with inflammatory bowel disease [IBD]. This drug is already de-risked in the fact that it is an anti-TL1A antibody which has been proven to work with several other drugs in clinical development or those which have already been approved to treat autoimmune disorders.

If this is the case, then why even bother looking at this biotech? That’s because it is taking an entirely different approach to improve upon the targeting of TL1A for inflammatory disorders. For starters, it is using AI-driven technology it has developed to form biologic that have a greater chance of success. This is done with its technology known as its Integrated Drug Creation platform, which is looking to use AI to enhance biological drug development.

That is, the ability to develop drugs like ABS-101 with a de Novo approach. In essence, the AI doesn’t use an established database to create a drug target, but instead creates an entirely new never-before-seen molecule. To take it even further, its tech establishes other advantages like reducing preclinical development time by a huge margin [removal of lead optimization being needed] and to be in a position to dose patients subcutaneously.

The importance of going over this company is because it is gearing up to have a few catalysts for investors to look forward to. The first catalyst of which involves the initiation of the phase 1 study using ABS-101 for the treatment of patients with IBD. From there, the second catalyst of which to expect from this program would be interim results from this early-stage trial for the treatment of patients with IBD in the 2nd half of 2025.

ABS-101 For The Treatment Of Patients With Irritable Bowel Disorder

The first and main clinical program from Absci Corporation would be the development of ABS-101, which will be used to target patients with inflammatory bowel disease. The first-in-human clinical study has not yet been initiated, more about that below, but it is first important to go over what IBD is and what the possible market opportunity for it could be. Irritable Bowel Disorder [IBD] is a type of disorder characterized as inflammation of the digestive tract.

It is critical to note that there are two types of IBD, both of which are large markets for this biotech to go after with its AI-driven cytokine biological drug development. The two disorders of IBD in question are:

• Crohn’s Disease
• Ulcerative Colitis.

When looking at Crohn’s Disease [CD], this may involve inflammation of the entire digestive tract, although it could also only have specific areas affected. The global Crohn’s Disease treatment market is expected to reach $17.80 billion by 2033. This is one of the large market opportunities that it could go after.

The other one that it could target would be Ulcerative Colitis [UC]. When looking into this disorder, this is classified as inflammation being only confined to the large intestine of the digestive system. Plus, along with the fact that such inflammation only occurs on the inner lining of the intestine. The ulcerative colitis treatment market is expected to reach $14.77 billion by 2033. The thing is that there are many other TL1A drugs in development. Therefore, this biotech is taking a balanced approach in using an established class of drugs, but at the same time generating an entirely different biologic with its platform technology.

It needs to create some type of product differentiation compared to other anti-TL1A antibody drugs in some fashion. Its platform technology approach is unique in that there are three things that it utilizes to create the best in class TL1A drug, as follows:

• De novo antibody creation — Creating a targeting of drugs with a new approach never before seen in other databases using its AI technology
• Multiparameter lead optimization — quicker preclinical development of a biologic with reduced lead optimization and quicker path for drug development
• Reverse immunology drug development — deploying reverse immunology to establish superior target profile because <5% of biologics achieve success from discovery to launch.

The bottom-line is that it wants to be unique with its TL1A drug it is developing. It could end up allowing ABS-101 to have differentiated features compared to other anti-TL1A antibody drugs of the same class. Thus, possibly establishing greater potency [efficacy], epitope specificity [efficacy done right with minimal off-target effects] and epitope interaction [superior mechanism of action]. Best part of all is that its Integrated drug Creation Platform technology can make use of any type of drug to be established like: Monoclonal antibody, bispecific protein drug, fusion protein drug and more.

The company was able to release highly positive preclinical data from non-human primate [NHP] testing. It was shown that ABS-101 had an extended half-life 2 times and/or 3 times more potent than competing drugs, like RVT-3101 from Roche (OTCQX:RHHBY) and MK-7240 from Merck (MRK). Why is such an extended half-life advantage achieved in NHP testing important? That’s because if this translates well to humans, then ABS-101 can be dosed Q8W or Q12W [once every 8 weeks and once every 12 weeks respectively]. A second advantage this drug could have would be a superior biodistribution profile.

A good thing about this is to have more rapid tissue penetration compared to other anti-TL1A drugs. Even better, Absci’s drug may not even have the requirement of a loading dose. Lastly, it might or may not have an advantage in terms of dosing. Thus far, it has been able to achieve drug substance formulation of 200 mg/mL. If this is the case, then it could be possible to give ABS-101 to IBD patients with a subcutaneous formulation.

The bottom-line is that ABS-101 could possibly be the best-in-class anti-TL1A antibody drug in development. Of course, that’s if this profile is established in human testing. Speaking of which, a phase 1 study using this drug to treat these patients is expected to begin in the early part of 2025. If this early-stage trial initiation goes well, then it will be in a position to release interim data from this phase 1 study in the 2nd half of 2025.

The hope is that the drug can achieve the several advantages noted above. In addition, what might also set it apart might be the fact that it goes after both TL1A monomer and trimer targets. This might create an efficacy advantage, but that just depends on how well clinical testing goes.

Financials

According to the 10-Q SEC Filing, Absci Corporation had cash, cash equivalents, and short-term investments of $145.2 million as of June 30th of 2024. The reason for the cash on hand is that back in March 2024 it sold a total of 19,205,000 shares of its common stock at an offering price of $4.50 per share. This helped it to raise total net proceeds of $80.8 million after deducing expenses. The company is likely going to end up raising additional funds soon enough.

Why do I believe this to be the case? That’s because it states in its 10-Q SEC Filing that it believes it has enough cash on hand to fund its operations, or cash runway, for at least the next 12 months. Thus, I think it is going to raise cash after an upcoming news release or other catalyst that may cause the stock price to trade higher. A good thing to note is that it does have a solid financial option to use if it decides to do so.

This would be regarding a Sales Agreement With Cowen and Company LLC stablished as an “at-the-market” offering agreement program. This is an ATM agreement by which it could occasionally offer and sell up to $100 million. As of June 30th, 2024, no securities have been issued regarding this agreement. Again, this is an option if management decides to utilize it.

It burns about $24.6 million in cash per quarter. This is broken down into selling, general and administrative expenses of $9.3 million & Research and development expenses of $15.3 million.

Risks To Business

There are several risks that investors should be aware of before investing in Absci Corporation. The first risk to consider would be regarding the development of ABS-101 for the treatment of patients with IBD as an anti-TL1A antibody. Even though preclinical testing in NHPs has shown to achieve 2X to 3X extended half-life over competing TL1A drugs, there is no assurance that this will be reproduced in phase 1 human testing or beyond. The second risk to consider here would be that even if Absci eventually receives regulatory approval for ABS-101, it will still have to go up against Merck, Roche, and Sanofi (SNY)/Teva Pharmaceuticals (TEVA). Speaking of which, Sanofi and Teva are in the process of developing an anti-TL1A antibody drug for the treatment of patients with inflammatory disorders. This drug being worked on is known as TEV-48574.

The second risk to consider would be in terms of the development of ABS-201 for the treatment of patients with dermatology and ABS-301 being worked on for immunology indications. Each is being advanced as a potential best-in-class and first-in-class drug, respectively. A development candidate is expected to be selected for the ABS-201 program in the 2nd half of 2024. The risk is that there is no assurance that such a clinical product will be selected, nor that it will eventually do well in all stages of clinical testing. In terms of ABS-301, it is expected that mode-of-action validation studies are expected to be completed for it in the 2nd half of 2024. The risk here is that there is no assurance that completion of such activities will eventually result in a product being developed to move forward with in human clinical testing.

The third risk to consider would be in terms of the partnership established between the company and Memorial Sloan Kettering Cancer Center [MSK]. The goal of both of these entities are to combine their expertise to generate 6 programs using the generative AI approach. Absci is to provide its Integrated Drug Creation Platform, while MSK is going to provide its research expertise in the field of oncology. The risk here is that there is no assurance that one or all 6 of these programs will be established for human clinical stage testing. Nor, that upon the release of data from clinical studies, that the data to be generated will be enough to warrant further investment regarding this partnership.

The fourth and final risk to consider would be in terms of the other partnerships that the company has been able to establish. It appears that many are interested in this de novo approach of establishing highly differentiated cytokine biologics to treat patients with various disorders. It has been able to generate partnerships with the likes of Nvidia (NVDA), AstraZeneca (AZN), Merck (MRK) and Almirall. The risk here is that some of these partnerships might involve upfront payments, milestone payments and/or tiered royalty agreements. Thus, there is no guarantee that these collaboration agreements will be able to generate such payments, nor that these partnerships are going to last. Any of these entities could terminate the collaboration agreement in place for any reason.

Conclusion

The premise of this company is that has been able to establish a highly innovative AI approach to drug development. I went over above the prospects of its ability to use its Integrated Drug Creation Platform. The purpose? To take currently available established targets such as anti-TL1A drugs targeting inflammatory disorders and enhancing upon the safety, potency and/or efficacy profile of it. Regarding ABS-101 for the treatment of patients with IBD, this is being done by using the AI approach I described above. In essence, having several competitive advantages over the other pharmaceutical companies developing a TL1A drug molecule.

This would be in terms of less frequent dosing Q8W or Q12W, reverse immunology targeting for enhanced efficacy, superior lead optimization development and others. Speaking of the ability to improve lead optimization, this technological approach shortens pre-clinical development from 5 to 7 years down to a possible timeline of 18 to 24 months. This allows it to continue to develop its own drugs like ABS-101, ABS-201, ABS-301 and partnered drugs as well. With interim data readout of ABS-101 in IBD in the 2nd half of 2025, plus an innovative approach to developing cytokine biological drugs with its unique Integrated Drug Creation Platform, I believe that investors could benefit with any potential gains made here.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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