1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
ABCM
Event Date
2020-10-22
Sector
Health Care
Subsector
Biotechnology
Offer Range
$17.50-$17.50
Shares Offered
8.95M
$3.7B
Implied Upside vs Midpoint
Description
We are a global life science company focused on identifying, developing and distributing high-quality reagents and tools for our customers at the forefront of life science research. Our products are used by researchers to study biological pathways, which is critical for scientific research, diagnostics and drug discovery. Our mission is to provide life science researchers with highly validated products and services to advance biological research and achieve their goals faster. We do this by continuously innovating and providing our customers with high-quality tools, together with expert customer support. Our product offering includes an extensive portfolio of antibodies and related protein research tools that are fundamental to our customers’ research and experimental workflow. Our customers are primarily scientists and researchers in academic institutions, research institutes and pharmaceutical, biotechnology and diagnostics companies. Headquartered in Cambridge, United Kingdom, we operate across 15 locations around the world, supported by our world-class team of approximately 1,500 employees, including over 200 with PhDs, and have served customers in over 130 countries. Our addressable market can be broadly classified into two categories, based on the application of our products and type of customer they serve: • Research use only (“RUO”) proteomic tools. We believe the global market for RUO antibodies and reagents is valued at approximately $3 billion as of 2019 and, as of 2019, was expected to grow at around 4% per annum (excluding any impact from COVID). These products include protein binding reagents, such as antibodies and immunoassays, and related reagents. Our research products are used to detect, quantify, visualize and modify proteins in scientific research experiments, which we believe serve as mission critical tools, to enable our customers to develop insights about targets and pathways of interest. Our customers include academic labs for scientific research and clinical labs in pharmaceutical and biotechnology companies. Our catalogue revenue, the substantial majority of which is purchased for RUO, accounted for 93.5% of our total revenue for the fiscal year ended June 30, 2020. • Antibody development for clinical application. Antibodies are a critical component in many in vitrodiagnostic (“IVD”) assays and can also be used as therapeutic agents for the treatment of diseases, including cancers and immune-related diseases. In recent years, through the custom development of new antibodies and the out-licensing of our existing antibodies to biopharmaceutical and diagnostic companies, we have extended the commercial potential of our products into these markets. The substantial majority of our custom products and licensing revenue (“Custom Products and Licensing revenue”), which includes custom development services, IVD sales and royalty and license income, is generated from these activities, and accounted for 6.5% of our total revenue for the fiscal year ended June 30, 2020. Life science researchers are increasingly seeking higher quality tools and reagents, which deliver consistent, reproducible results, save time, uncover deeper biological insights and advance their research. We believe customers place their trust in Abcam because of our reputation for providing reliable, highly validated products with market leading specificity and high sensitivity, comprehensive and transparent product data, fast delivery and exceptional customer support. According to CiteAb, our products were cited in approximately half of all life science publications in 2019, and we were the most cited company in approximately 40% of the top 2,000 most studied protein targets as of June 30, 2020. Our platform offers quality, breadth and service to customers globally ~100,000 ~20,000 130+ products, in-house recombinant countries served available online products ________________ ____________________ __________________ ~ 50% #1 24-48 hrs ~1,500 revenue from in- share of global time to ship most employees house products(1) antibody citations(2) products __________________ ____________________ _________________ _________ Figure 1, Information as of June 30, 2020, except as otherwise stated (1) In the fiscal year ended June 30, 2019 (2) CiteAb, for 2019 We have developed an industry leading innovation platform that is informed by data analytics, research area specialists and the relationships we have built with our customers, all of which enable us to anticipate and align our innovation efforts with our customers’ research priorities. Today, approximately two-thirds of our primary antibody innovation pipeline is driven by our proprietary algorithms that interrogate a wide variety of internal and external data sources, including research literature and our web data, to predict product and market demand, which inform our development efforts. We leverage this data to anticipate which tools researchers will need in the future in order to help advance their research, as well as to identify breakthrough opportunities in areas where there is a lack of high-quality products or where we identify custom opportunities in collaboration with our customers. We believe this capability and, in particular, our unique ability to leverage our extensive proprietary data, provides us with strategic advantage and helps us sustain and extend our position as a market leader within the life science tools market. We offer a large and differentiated portfolio of approximately 100,000 products with over 300,000 SKUs as of June 30, 2020. Our flexible sourcing model enables us to grow our product offering in line with researchers’ needs. This is achieved by developing and manufacturing in-house products, as well as sourcing products from our original equipment manufacturer (“OEM”) suppliers. We demand high product quality standards from our suppliers, and we enhance the utility of these products for our customers by providing additional data and product validation as well as by making them available through our global distribution platform and customer service. Over the last five years, we have increased focus on the development of in-house products for research areas we expect to have high demand. This focus has seen our proprietary product portfolio grow to represent 51% of our total revenue for the fiscal year ended June 30, 2020, compared to 28% of our total revenue in the fiscal year ended June 30, 2012. We are continuously expanding our portfolio to provide our customers with additional solutions and further expand within our addressable markets. Utilizing the foundations laid by our innovation platform and strategic acquisitions, our strategy is to leverage our capabilities to continue expansion into adjacencies and more comprehensive product offerings, including primary conjugated antibodies, singleplex and multiplex immunoassays, proteins and edited cell lines. In addition, through partnerships with biopharmaceutical and diagnostic companies, the potential application of our products is being extended into diagnostic and therapeutic markets. We make our extensive product characterization and validation data available to our customers across our portfolio. This data is sourced by our in-house laboratories, our network of collaborators and independent consumer product reviews. Researchers use this to be able to select the right product for their highly specific needs. Stringent quality control and validation processes are carried out by our global laboratories to check the activity, stability and performance of our products. We are continuing to invest in product validation in order to raise quality standards and differentiate ourselves in the marketplace. For example, our award winning knockout CRISPR gene editing program is one of the most accepted and trusted validation processes for antibody specificity, and we have been recognized for carrying out the largest number of knockout validations for antibodies in the industry, according to CiteAb, who presented us with the award in 2020. Our investment in product validation helps us meet our customers’ increasing demand for higher quality research tools. Having established one of the first digital platforms in our industry over 20 years ago, our website, search engine optimization and data remain a strategic advantage. As a part of our core strategy, we now aim to build on our position by establishing a highly personalized, cross-platform digital relationship with our customers, wherein we are able to uniquely understand and anticipate their needs. Coupled with greater personalization of the user experience and the creation of a more dynamic and agile content management system, our goal is to provide customers with more relevant products and services to help them achieve their research goals, improve online conversion rates, capture a greater share of business from existing customers and generate business from new customers. Since 2001, we have sold our products and services to customers in over 130 countries through a variety of channels, including our ecommerce sites, a network of distributors and a targeted field sales team. In the fiscal year ended June 30, 2020, our worldwide customer base consisted of approximately 750,000 life science researchers. As of June 30, 2020, we had seven manufacturing facilities and a global distribution network that enables prompt delivery to our customers, with orders generally shipped within 24 to 48 hours of ordering. --- We were incorporated as a private limited company with the legal name Tayvin 103 Limited under the laws of England and Wales on February 12, 1998 with the company number 03509322. On March 26, 1998, we changed our company name to Abcam Limited, and on October 26, 2005, we re-registered as a public listed company with the name Abcam plc. Our principal office is located at Discovery Drive, Cambridge Biomedical Campus, Cambridge, United Kingdom, CB2 0AX, and our telephone number is +(44) 1223 696000. Our website address is www.abcam.com. Our agent for service of process in the United States is Abcam Inc., 1 Kendall Square, Suite B2304 Cambridge, Massachusetts 02139-1517, United States of America.
Abcam plc annual income statement and balance sheet, FY 2020 to FY 2022, as reported in SEC filings (GBP).
| Metric | FY 2020 | FY 2021 | FY 2022 |
|---|---|---|---|
| Revenue | GBP 260M | GBP 315M | GBP 362M |
| Gross profit | GBP 180M | GBP 225M | GBP 271M |
| Operating income | GBP 10.4M | GBP 7.1M | (GBP 10.1M) |
| Net income | GBP 12.5M | GBP 4.4M | (GBP 8.5M) |
| Metric | FY 2020 | FY 2021 | FY 2022 |
|---|---|---|---|
| Total assets | — | GBP 1.0B | GBP 1.1B |
| Total liabilities | — | GBP 345M | GBP 330M |
| Total equity | GBP 501M | GBP 656M | GBP 727M |
| Cash & equivalents | GBP 187M | GBP 95.1M | GBP 89.0M |