Mid-cap hot-flash drugmaker AbCellera soars on upbeat mid-stage clinical data

Shares of Canadian biotech AbCellera Biologics, which was backed at an early stage by Peter Thiel, surged around 35% on the Nasdaq on Monday to reach a three-year high. The company reported successful clinical trial data for its experimental treatment for hot flashes, which it believes could be best in class.

AbCellera jumped around 35% on Monday to close at $9.34 apiece, their highest level since summer 2023. The stock was down around 0.5% in premarket trading on Tuesday as of this writing.

Markets were reacting to the release of data from a mid-stage, phase II clinical trial of ABCL635. The drug is designed to block the biological mechanisms behind menopausal symptoms, the most common of which are hot flashes and night sweats.

The results showed reductions in both the frequency and severity of menopausal symptoms, with no serious adverse reactions among the patients, AbCellera said in the press release.

“We believe ABCL635 has potential to be a blockbuster product,” AbCellera CEO Carl Hansen said on a conference call with investors, as Bloomberg reported. “The efficacy data is beyond even the most aggressive upside scenario we had dared to consider.”

The company believes the drug could significantly improve women’s lives. Hot flashes affect up to 80% of women and can persist for many years after the final menstrual period, affecting quality of life, including sleep, concentration, mood, work, social activities, and relationships, AbCellera noted.

AbCellera was founded in 2012 by a group of scientists from the University of British Columbia. They wanted to commercialize technology that can rapidly identify antibodies in human blood for use in developing medicines. The technology played a key role in creating a treatment for COVID-19. In a matter of days, AbCellera screened more than 5 million blood cells from a patient who had recovered from COVID-19, identified 500 unique antibodies, and created a molecule.

Pharmaceutical giant Eli Lilly acquired the rights to the drug, registered it under the name bamlanivimab, conducted clinical trials, and secured authorization from regulators in the U.S. and Europe for its emergency use. Eli Lilly later stopped selling it following the emergence of new variants of the virus.

Palantir cofounder Peter Thiel joined AbCellera’s board in November 2020 and remained on it until 2024. In December 2020, the company went public through an IPO on the Nasdaq, offering just over 24 million shares at $20 apiece. By midday on its first day of trading, the stock had soared 250%. Since then, however, the company has lost almost 85% of its value.

Nevertheless, Wall Street remains upbeat. The stock has nine “buy” ratings from analysts, according to MarketWatch data. The average target price of $14.90 per share implies 60% upside from the last closing price.