Artificial intelligence (AI) is transforming industries, including pharmaceuticals. Its capability to enhance drug discovery enables swift compound identification, significantly accelerating the traditional approach to developing new therapies and medicines. From molecule discovery to refining validation processes, AI's applications in drug development appear boundless. The global AI market in this field is projected to expand at a 29.7% CAGR by 2030.
Absci Corporation (ABSI), a biotech company in this niche, pioneers AI-driven drug development through its Integrated Drug Creation platform. By leveraging extensive datasets, advanced AI algorithms, and rigorous wet lab validation, it rapidly produces high-quality drug candidates, significantly lowering costs and enhancing research success.
This biotech stock just won a new “Buy” rating at Guggenheim, adding to the list of Wall Street bulls who have given ABSI their top recommendation. With analysts calling for significant upside potential, here’s a closer look at this AI-powered biotech.
About Absci Stock
Absci Corporation (ABSI), founded in 2011 and headquartered in Vancouver, Washington, blends generative AI with cutting-edge wet lab technologies to revolutionize drug creation. By harnessing AI, Absci optimizes multiple characteristics of biologics simultaneously, enhancing the efficiency and potential therapeutic benefits of drug discovery.
With a market cap of $443.3 million, Absci is a component of the benchmark Russell 2000 Index (RUT). Through collaborations with giants like Memorial Sloan Kettering (MSK) Cancer Center and AstraZeneca (AZN), this small-cap biotech company is shaping the future of medicine with data-first innovation.
The penny stock is notably volatile, and has pulled back 40% from its April high of $6.72. It's up 200% over the past 52 weeks, but down 4.1% on a YTD basis.
Absci Reports Q2 Results
Shares of Absci rose 10.1% on Aug. 15 after its Q2 earnings results. Its revenue declined to $1.3 million for the period, reflecting a mix of partnered and internal program developments. However, its net loss shrank by 40.6% year over year to $24.8 million, with the loss per share down by 51% to $0.22.
Research and development expenses rose to $15.3 million, driven by IND-enabling studies for ABS-101. Absci held $145.2 million in cash and short-term investments, up from $97.7 million as of Dec. 31, 2023, which it expects to fund operations for at least 12 months. The biotech is still incurring losses as expenses ramp up, which means additional equity or debt financing is likely in the future.
In fiscal Q2, Absci teamed up with Memorial Sloan Kettering to harness generative AI for up to six groundbreaking therapeutic programs. Together, their world-class research teams will co-develop innovative treatments using Absci’s Integrated Drug Creation platform.
Moreover, Absci made strides with ABS-101, showcasing impressive results from non-human primate studies that reveal a 2x to 3x extended half-life compared to existing antibodies. This promising candidate also exhibits enhanced biodistribution, potentially improving therapeutic benefits by achieving steady-state levels quickly.
Also, Absci confirmed the formulation capabilities of ABS-101 at a high concentration, paving the way for subcutaneous delivery. With Phase 1 trials slated for early 2025, Absci has more innovative assets, including ABS-201 and ABS-301, in the pipeline.
What Do Analysts Expect for Absci Stock?
On Oct. 2, Guggenheim initiated coverage of ABSI with a “Buy” rating and a price target of $10. The firm sees Absci as a leader in harnessing AI to revolutionize biologics, thanks to its cutting-edge platform that quickly screens millions of antibody variants.
“We believe that by gaining deep first-hand experience with generative AI and truly understanding its strengths and weaknesses in drug design, Absci is poised to outperform trend-following competitors,” wrote Guggenheim in a note accompanying the initiation.
The brokerage firm set a price target of $10 for ABSI, higher than the Wall Street average of $8.29 - which indicates an expected upside potential of 110.4%.
ABSI has a consensus “Strong Buy” rating overall. Out of the eight analysts covering the stock, seven suggest a “Strong Buy,” and one maintains a “Hold” rating.
