AI-Driven Antibody Platform Will Unlock Major Aesthetic And Women’s Health Markets

Catalysts

About Absci

Absci applies generative AI and biologics engineering to design and develop differentiated antibody therapeutics.

What are the underlying business or industry changes driving this perspective?

• Acceleration of ABS-201 into a Phase I/IIa trial for androgenetic alopecia, targeting interim proof-of-concept data in the second half of 2026, positions Absci to tap a large cash-pay aesthetic market and could drive step function growth in product revenue and operating leverage if efficacy is confirmed.
• Expansion of ABS-201 into endometriosis with a Phase II proof-of-concept trial planned for 2026, supported by strong mechanistic and competitor data, gives Absci exposure to a massive underserved women’s health market that can materially increase long term revenue visibility and earnings power.
• Best in class potential for ABS-201, including prolonged half-life, high concentration subcutaneous dosing and favorable preclinical pain and lesion data, supports a durable competitive moat that can translate into premium pricing, higher gross margins and improved long term net margins.
• Capital efficient development strategy that reuses ABS-201 safety data across both AGA and endometriosis, combined with the decision to partner ABS-101 and oncology assets, allows Absci to advance multiple multibillion dollar opportunities while limiting cash burn and supporting a faster path to positive operating income.
• Growing external validation of AI enabled drug discovery, together with Absci’s demonstrated ability to generate differentiated antibodies like ABS-301 and ABS-501, is driving increasing large pharma interest in platform partnerships that can add nondilutive collaboration revenue and milestone flows, improving earnings and extending the cash runway.

Assumptions

This narrative explores a more optimistic perspective on Absci compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts. How have these above catalysts been quantified?

• The bullish analysts are assuming Absci's revenue will grow by 277.3% annually over the next 3 years.
• The bullish analysts are not forecasting that Absci will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Absci's profit margin will increase from -4071.2% to the average US Biotechs industry of 16.0% in 3 years.
• If Absci's profit margin were to converge on the industry average, you could expect earnings to reach $24.2 million (and earnings per share of $0.13) by about December 2028, up from $-114.6 million today.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 93.3x on those 2028 earnings, up from -4.4x today. This future PE is greater than the current PE for the US Biotechs industry at 18.9x.
• The bullish analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.05%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• ABS-201 and ABS-101 are still in early clinical stages, so any underwhelming efficacy, safety signals or trial design issues in AGA or endometriosis could derail the company’s lead value drivers. This could limit the ability to scale product revenue and delay the path to positive earnings.
• The long timeline to key proof-of-concept readouts in the second half of 2026 for AGA and the second half of 2027 for endometriosis leaves a multi-year window in which sentiment could deteriorate if interim data are ambiguous or delayed. This could put sustained pressure on the share price and constrain future capital-raising options that underpin cash flow and earnings.
• Success of competitor prolactin receptor programs such as HMI-115 and continued reliance on legacy AGA treatments increase the risk that ABS-201 fails to achieve clear best-in-class differentiation in real-world use. This would limit pricing power, compress gross margins and reduce long-term net margins.
• The strategic pivot away from internal development of ABS-101, ABS-301 and ABS-501 increases dependence on finding strong pharma partners on attractive terms. Any slippage or weaker-than-expected deals would reduce anticipated nondilutive collaboration revenue and milestone inflows, shortening the cash runway and pressuring earnings.
• Absci’s model depends on large, multibillion-dollar markets that are partially cash pay and discretionary in nature, such as aesthetic hair regrowth, and on the continued willingness of pharma to fund AI-based drug creation. Any macro slowdown, reimbursement pushback or waning enthusiasm for AI drug discovery would dampen demand for its therapies and partnerships, limiting revenue growth, operating leverage and eventual net margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Absci is $10.0, which represents up to two standard deviations above the consensus price target of $8.26. This valuation is based on what can be assumed as the expectations of Absci's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $10.0, and the most bearish reporting a price target of just $5.8.
  
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2028, revenues will be $151.2 million, earnings will come to $24.2 million, and it would be trading on a PE ratio of 93.3x, assuming you use a discount rate of 7.1%.
  
• Given the current share price of $3.39, the analyst price target of $10.0 is 66.1% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.