Atlantic stal Acquisition II(ACAB) - 2024 Q4 - Annual Report

Merger and Financial Agreements - The merger between Atlantic Coastal Acquisition Corp. II and Legacy Abpro was completed on November 13, 2024, resulting in the issuance of approximately 50 million shares of New Abpro common stock[34]. - New Abpro received an initial milestone payment of $2 million from Celltrion under a collaboration agreement, with potential net sales milestone payments of up to$1.75 billion and development milestone payments of up to $4 million[42]. - New Abpro entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to$5 million, with the potential for additional share issuance under certain conditions[37]. - A Convertible Promissory Note for $3 million was issued to YA, with net proceeds of$2.755 million and a maturity date of November 13, 2025[39]. - The Forward Purchase Agreement with YA involved the purchase of 100,000 shares at approximately $11.36 per share, totaling around$1.1 million[38]. - The collaboration with Abpro Bio for ABP-201 includes an initial equity investment of $30 million and potential net sales milestones of up to$485 million[43]. - AbMed is responsible for operational activities and bears all costs necessary to operate under the collaboration with AstraZeneca, which includes up to $244 million in milestone payments[168]. - The agreement with Celltrion includes a 50/50 profit split from commercialization, with potential payments totaling over$1.75 billion in development and sales milestones[174]. - Abpro Bio has agreed to pay a low double-digit percentage royalty in the low teens, with potential payments totaling approximately $540 million based on development and sales milestones[178]. - NJCTTQ has agreed to pay up to$405 million in milestones based on commercial approval and sales in its territory, with reciprocal low single-digit royalties[181]. Product Development and Clinical Trials - ABP-102 is designed to target HER2+ solid tumors and is expected to enter clinical trials in the first half of 2026, with a projected global HER2+ market growth to $12.1 billion by 2030 at a CAGR of 1.5$10.3 billion in sales, with key products including PERJETA ($4.6 billion), KADCYLA ($2.3 billion), HERCEPTIN ($2.2 billion), and ENHERTU ($1.2 billion)[103]. - The global oncology therapeutics market is forecasted to reach $250 billion by 2024, growing at a CAGR of 12$143 billion in 2019[98]. - The global ophthalmology market is expected to grow from $51 billion in 2022 to$84 billion by 2030, at a CAGR of 6.4%[99]. - The global market for DME and Wet AMD treatments is significant, with Eylea and Lucentis accounting for over $10.4 billion in worldwide sales in 2022[133]. - DME is projected to affect nearly 592 million people worldwide by 2042, increasing the burden on healthcare resources[131]. - The global liver cancer therapeutics market is projected to reach$12.9 billion by 2030, with ABP-110 targeting GPC3 and CD3 for hepatocellular carcinoma expected to enter clinical trials in the first half of 2027[153]. - The global gastric cancer market is projected to reach $13.1 billion by 2029, with ABP-150 targeting claudin 18.2 and CD3 also expected to initiate clinical trials in the first half of 2027[160]. Research and Development Capabilities - The leadership team has extensive experience from companies like Celgene, LG Chem, and Moderna, enhancing the company's capabilities in antibody development[59]. - The DiversImmune and MultiMab platforms are utilized for developing next-generation antibody therapeutics, enhancing specificity and efficacy in treatment[44][45]. - The DiversImmune platform aims to generate high affinity and specificity antibodies rapidly, addressing key bottlenecks in the antibody therapeutics industry[75]. - The MultiMab platform allows for the construction of diverse bi- and multi-specific antibody formats, optimizing product candidates for various diseases[80]. - The B cell cloning platform isolates neutralizing antibodies to SARS-CoV-2 and other viruses, enhancing the company's therapeutic capabilities[87]. - The engineered design of ABP-102 promotes selectivity for T cell activation and killing of HER2-high and intermediate target cells, enhancing its therapeutic index[109][117]. Regulatory and Compliance Challenges - The FDA's approval process for therapeutic products requires substantial time and financial resources, including compliance with various regulations[202]. - The company must submit a Biologics License Application (BLA) to the FDA, which includes results from nonclinical studies and clinical trials[213]. - The FDA reviews the BLA to determine if the proposed product is safe, potent, effective, and manufactured in accordance with current Good Manufacturing Practices (cGMP)[214]. - The company may face administrative or judicial sanctions if it fails to comply with U.S. regulatory requirements during the product development or approval process[203]. - The FDA requires a Risk Evaluation and Mitigation Strategy (REMS) plan for certain product approvals, which must be submitted by the sponsor if deemed necessary[216]. - The FDA may withdraw approval if compliance with regulatory requirements is not maintained post-approval, potentially leading to market withdrawal of the product[217]. - Therapeutic manufacturers must register with the FDA and are subject to periodic inspections to ensure compliance with current Good Manufacturing Practices (cGMP)[218]. Intellectual Property and Licensing - The company holds two patent families for ABP-102, with expected expiration in 2042, and one patent family for ABP-110, expiring in 2033[191][192]. - The company owns a patent family for ABP-150, with pending applications expected to expire in 2041[193]. - As of December 31, 2024, the company owns one patent family for the ABP-201 product candidate, expected to expire in 2042[194]. - The company has licensed three patent families from MedImmune/AstraZeneca, with patents in these families expected to expire before the commercialization of ABP-201[195]. - One licensed patent family includes three issued U.S. patents and is expected to expire in 2025[196]. - The second licensed patent family includes two issued U.S. patents and is expected to expire in 2037[197]. - The third licensed patent family also includes two issued U.S. patents and is expected to expire in 2037[198]. - The company plans to apply for patent term extensions upon receiving FDA approval for its product candidates, depending on clinical study lengths[199]. Employment and Operational Structure - The company currently has six full-time employees, three of whom are engaged in research and development activities, and three hold M.D. or Ph.D. degrees[238]. - The company occupies approximately 13,974 square feet of office and laboratory space in Woburn, Massachusetts, under a lease expiring on September 30, 2025[239]. - The company also occupies approximately 2,800 square feet of office and laboratory space in Burlington, Massachusetts, under a lease expiring on April 30, 2025, primarily for research and development activities[239]. - There are currently nine furloughed employees, and none of the employees are represented by a labor union or covered by a collective bargaining agreement[238]. Market and Legislative Environment - The company anticipates that healthcare reform measures may result in more rigorous coverage criteria and additional downward pressure on product pricing[235]. - Legislative changes in the U.S. are focused on increasing transparency in drug pricing and reducing costs under Medicare, which may impact the company's product candidates[233]. - The company is subject to potential revenue generation challenges due to healthcare reforms that may affect anticipated revenue from successfully developed product candidates[237]. - The implementation of cost containment measures may hinder the company's ability to achieve profitability or commercialize products[237]. - The company is monitoring ongoing legislative and regulatory proposals that could broaden healthcare availability and lower costs, which may impact its operations[237].