$0.00
$0.39
bear $0.00
base $0.09
bull $0.39
margin of safety $0.05
market price* $8.25
Business condition attached to the margin of safety
Evidence that the company can fund itself: either signed partner or licensing payments that cover most of the annual cash operating loss (about $110 million a year at the first-half 2026 pace), or an upfront payment for ABS-201 large enough to fund at least three years of spending.
Absci is a drug-discovery company in Vancouver, Washington that uses its Integrated Drug Creation platform to design antibody drugs. It earns small fees from partners under drug creation agreements ($2.8 million in 2025, down from $4.5 million in 2024, with three partners making up 95% of it) and spends far more than that on its own research. Its lead program, ABS-201, is an antibody aimed at pattern hair loss and endometriosis. A Phase 1/2a trial (HEADLINE) began in December 2025, with early data expected in the second half of 2026 and a Phase 2 endometriosis trial planned for the fourth quarter of 2026. What the business earns today: nothing. Cash from operations was negative every year we measured: about $(60.6) million in 2021, $(81.3) million in 2022, $(64.6) million in 2023, $(72.4) million in 2024 and $(92.9) million in 2025. We subtract stock compensation ($18.3 million in 2025) because it is a real cost paid in shares, and we treat capital spending as maintenance because revenue has been flat to falling since 2022. That gives owner earnings of about $(112.8) million in 2025, or roughly $(0.82) per share. Over 2022 to 2025 the per-share loss ranged from $(1.17) to $(0.82), with a middle value near $(0.84); we use that window because it reflects the company as a full-year public business after its 2021 IPO. The first half of 2026 was worse in dollars: operating cash flow of $(53.9) million versus $(38.7) million a year earlier. The per-share loss has held steady only because the share count has grown, from about 91 million in 2022 to about 171.6 million at the end of July 2026. In the first half of 2026 alone the company raised $106 million by selling stock. Growth: we credit none. The drugs are in early trials, partner revenue is falling, and no contract, backlog or record of repeatable earnings exists to put growth in hand. Trial results, future partnerships and any approvals are not counted, because none has happened yet. Amortization of acquired intangibles (about $3.4 million a year) is a non-cash charge; it does not change the result because no earnings growth is credited. For 2026 we assume the loss continues at the first-half pace, which is a larger dollar loss than 2025 (owner earnings of about $(112.8) million in 2025 against $(91.9) million in 2024). What the shares are worth: the only value we can point to is the balance sheet, and it is being spent. At June 30, 2026 the company held about $201 million in cash and marketable securities against $22.8 million of total liabilities, or roughly $1.04 per share of net liquid assets on 171.6 million shares. Because owner earnings already reflect interest paid, we do not subtract debt again; the small liabilities matter mainly as a claim on that cash. Bear case, $0.00 per share: spending keeps rising at the recent pace (operating cash outflow up about 39% in the first half of 2026 versus a year earlier), taking cash use to roughly $150 million a year. The cash would be gone before the end of 2027 with nothing earned in return, leaving no value for shareholders without new stock sales that would dilute them. Base case, $0.09 per share: spending continues at about $108 million a year, the first-half 2026 pace, through the end of 2027, covering the disclosed 2026 and 2027 data readouts. About $39 million of cash would remain, less $22.8 million of liabilities, roughly $16 million or $0.09 per share after discounting at 6%. No success from ABS-201 is included. Bull case, $0.39 per share: management curtails spending after twelve months at the current pace, for example by partnering or out-licensing programs, which the company says it may do. That leaves about $70 million of net cash, or $0.41 per share, which is about $0.39 after discounting one year at 6%. It still gives no value for drug success, because none is yet demonstrated. The margin-of-safety price is $0.05 because the base case is thin, the outcome is highly uncertain, and the company has repeatedly sold new shares to fund itself (about $106 million in the first half of 2026 alone). The shares would be worth far more only if ABS-201 works or partners pay much more than they do now; we cannot credit either today. What would prove this wrong: positive ABS-201 data leading to a large partnership, or a sharp cut in spending that preserves the roughly $1 per share of net cash.