Investing in fundamentally strong stocks that are flying under the radar should enable you to generate market-beating returns over time. One of the best Canadian stocks that you may not have heard of is AbCellera Biologics (NASDAQ:ABCL), which trades on a U.S. exchange.
Valued at a market cap of US$1.17 billion, ABCL stock went public in late 2020 and currently trades almost 94% from all-time highs. AbCellera Biologics discovers and develops antibody-based medicines for unmet medical needs using its proprietary antibody discovery platform.
The Vancouver-based company’s pipeline includes ABCL635 for metabolic and endocrine conditions, as well as ABCL575 for autoimmune disorders such as atopic dermatitis.
AbCellera maintains strategic research collaborations and licensing partnerships with major pharmaceutical companies, including Eli Lilly, Biogen, and Viking Global Investors.
Is this Canadian stock a good buy right now?
AbCellera Biologics reported third-quarter results, which highlighted the completion of its transformation from a platform company to a clinical-stage biotechnology firm. Notably, phase-one trials for lead candidates ABCL635 and ABCL575 are on schedule with readouts expected next year.
The Vancouver-based antibody discovery company posted quarterly revenue of US$9 million, predominantly from research fees on partnered programs, compared with US$7 million in the prior-year period.
Its net loss widened to US$57 million, or US$0.19 per share, from US$51 million in the third quarter of 2024, as research and development expenses increased by US$14 million year over year to US$55 million, driven by internal pipeline investments.
AbCellera ended the third quarter (Q3) with US$680 million in total liquidity, comprising US$520 million in cash and US$160 million in unused committed government funding from Canada’s Strategic Innovation Fund and the Province of British Columbia.
Over the last three quarters, it has spent US$97 million to support its operations and allocated US$49 million towards investments in establishing clinical manufacturing capabilities, which are now substantially complete. AbCellera holds an additional US$413 million in short-term marketable securities as part of its treasury management strategy.
The company appointed Dr. Sarah Noonberg as its chief medical officer. Noonberg brings over 20 years of experience in clinical drug development across multiple therapeutic modalities and indications, with a track record of leading programs from discovery through regulatory approval.
AbCellera also initiated work on one additional partner program during the quarter, bringing the cumulative total to 103 programs with downstream participation while maintaining 18 molecules that have reached clinical development, including both internal and partner-led candidates.
CEO Carl Hansen outlined the company’s differentiation strategy for lead programs.
- ABCL635 targets vasomotor symptoms in menopausal women through NK3 receptor antagonism, positioning against recently approved small molecules from Astellas and Bayer with potential advantages in dosing frequency, safety, and efficacy.
- The proof-of-concept trial is designed to demonstrate competitive performance, with a readout anticipated around mid-2026.
- ABCL575 represents a fully human, half-life extended monoclonal antibody for T-cell-mediated autoimmune conditions, such as atopic dermatitis, with potential for six-month dosing intervals compared to one-month and three-month schedules, as demonstrated by competitor amlitelimab.
Management reaffirmed confidence in achieving all corporate priorities for the year, including advancing at least one additional development candidate into IND-enabling studies before year-end, which would represent the fourth molecule in the internal pipeline.
AbCellera expects research fee revenue to continue trending downward as the focus shifts toward proprietary programs, while maintaining sufficient capital to fund investments beyond three years of increasing pipeline development.
Is the Canadian stock undervalued right now?
Analysts tracking AbCellera forecast revenue to increase from US$28.8 million in 2024 to US$201.44 million in 2029. Compared to 2025, adjusted earnings are forecasted at US$0.35 per share in 2029, representing a significant improvement from a loss per share of US$0.66 in that year.
If the Canadian stock is priced at 20 times forward earnings, which is reasonable, it should trade around US$7 in early 2029, indicating an upside potential of 80% from current levels. Wall Street is even more bullish on the small-cap biotech stock and expects it to more than triple, given consensus price targets.
