Why AbCellera Biologics Is Still A Buy Despite Dropping Royalties: Analyst On Long-Term Prospects
Portfolio Pulse from Nabaparna Bhattacharya
Benchmark analyst Robert Wasserman has reiterated a Buy rating on AbCellera Biologics Inc. (ABCL), but lowered the price target to $12 due to reduced valuations for other drug discovery stocks. AbCellera's shares have declined recently as royalties from sales of R&D partner Eli Lilly And Company's (LLY) COVID-19 antibody therapeutics have disappeared. However, the analyst notes that AbCellera has seven molecules in the clinical pipeline and the long-term prospects for new partnerships and royalty revenues look positive.

August 31, 2023 | 7:18 pm
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NEUTRAL IMPACT
Eli Lilly's COVID-19 antibody therapeutics, which were a source of royalties for AbCellera Biologics, are no longer generating revenue. However, this does not seem to impact Eli Lilly's position significantly.
The disappearance of royalties from Eli Lilly's COVID-19 therapeutics has impacted AbCellera Biologics' revenue. However, the news does not provide any direct negative or positive implications for Eli Lilly, hence a neutral score is given.
CONFIDENCE 75
IMPORTANCE 40
RELEVANCE 50
POSITIVE IMPACT
Despite a recent decline in share price and disappearing royalties from Eli Lilly's COVID-19 therapeutics, AbCellera Biologics has positive long-term prospects with seven molecules in the clinical pipeline and potential for new partnerships and royalty revenues.
The analyst's reiteration of a Buy rating on ABCL, despite lowering the price target, indicates a positive outlook for the company. The potential for new partnerships and royalty revenues, along with seven molecules in the clinical pipeline, are likely to positively impact the stock in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 100