Absci Corp (ABSI)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a clinical-stage biopharmaceutical company using an AI-native approach to develop differentiated antibody therapeutics. Our integrated drug creation platform combines Origin-1, our generative design model, with rapid validation using our lab-in-the-loop. We focus on underexplored mechanisms where unmet medical need is high and competition is low.

We have advanced our first two programs from AI design to IND (or foreign equivalent) in around 2 years with a total investment of approximately $15 million per program, compared to an industry average of 4–6 years at a cost of greater than $50 million. This combination of underexplored target selection and capital-efficient execution is central to our strategy.

Our lead product candidate, ABS-201, is an anti-prolactin receptor (PRLR) antibody engineered with an extended half-life to support a patient-friendly dosing interval. We believe PRLR is an underexplored target with the potential to provide durable, disease-modifying effects. If successfully developed, ABS-201 could establish a new treatment category in indications where current options remain inadequate. ABS-201 is being developed for two indications, pattern hair loss (PHL) and endometriosis, each with large affected populations and significant unmet need.

Pipeline Programs

Our pipeline is composed of programs which leverage our differentiated capabilities in de novo design, multi-parametric lead optimization, and reverse immunology. These programs have been designed to address areas with significant unmet medical needs with potential ‘first-in-class’, ‘best-in-class’, or ‘disease modifying’ profiles.

ABS-201 for the Treatment of PHL

ABS-201 is being evaluated in the HEADLINE™ Phase 1/2a clinical trial for PHL, a condition affecting approximately 80 million people in the United States. Our own patient and clinician surveys, as well as those of other parties, show broad dissatisfaction with current standard of care, which is limited by variable efficacy, poor compliance, and a lack of durable approaches. No approved therapy provides durable hair regrowth. This trial is designed to evaluate the safety, tolerability and preliminary efficacy of ABS-201 in healthy volunteers with and without PHL. The trial is a randomized, double-blind, placebo-controlled study expected to enroll up to 227 male and female healthy volunteers at multiple sites in Australia.

In June 2026, we announced positive interim Phase 1 data from the HEADLINE trial, which included interim blinded data indicating that the study drug appears well tolerated, with favorable safety data across all blinded single ascending dose (SAD) cohorts. Additionally, the estimated half-life of at least 65 days supports

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potential for ABS-201's targeted dosing interval of two or three injections over a six-month period. Interim proof-of-concept data, including data on exploratory efficacy endpoints, are expected in the second half of 2026 and full proof-of-concept data in early 2027.

ABS-201 for the Treatment of Endometriosis

Published literature suggests that PRL and PRLR may play a role in the development of endometrial lesions and associated pain in patients with endometriosis. As such, inhibition of PRLR signaling may influence pathways associated with lesion development and pain perception. As a result, ABS-201 may have the potential to affect both lesion growth and pain-related pathways. We intend to evaluate, and if possible, rely on the data generated from the HEADLINE trial, together with other available information, as part of our assessment of potential next steps for the ABS-201 program. We believe that the HEADLINE trial could provide supporting first-in-human safety, tolerability, and PK data that may inform the planned Phase 2 clinical trial evaluating ABS-201 in patients with endometriosis. Based on these and other considerations, we anticipate initiating a Phase 2 clinical trial evaluating ABS-201 in endometriosis in the fourth quarter of 2026, subject to review of available data, regulatory considerations and other factors, with potential proof-of-concept data in the second half of 2027.

ABS-202

ABS-202 is a second novel anti-PRLR antibody program, designed using our generative AI platform, currently in preclinical development as a potential treatment for an undisclosed immunology and inflammation indication.

Preclinical Stage Programs

We are advancing early-stage immunology and inflammation programs. We continue to use our platform to develop additional early-stage programs addressing challenging targets in various indications with areas of significant unmet medical need. We plan to provide more information about these additional programs selectively and to seek partnerships or out-licenses for select programs as they advance.

Financial results

Revenue was $0.3 million and $0.5 million for the three and six months ended June 30, 2026, respectively, compared to $0.6 million and $1.8 million for the three and six months ended June 30, 2025, respectively. The decrease in revenue is due to a combination of the timing of achieving project-based milestones and the mix of ongoing program activity under our drug creation agreements. We incurred a net loss of $33.2 million and $62.8 million for the three and six months ended June 30, 2026, respectively, compared to a net loss of $30.6 million and $56.9 million for the three and six months ended June 30, 2025, respectively. Research and development expenses increased by $5.1 million, or 14%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

As of June 30, 2026, we had an accumulated deficit of $687.6 million and cash equivalents and marketable securities totaling $201.1 million.

We expect to continue to incur significant expenses in connection with our ongoing activities, including as we:

•develop ABS-201 and other internally developed programs across diverse indications, including the advancement of these product candidates through preclinical and clinical development;

•continue to engage in discovery, research and development efforts and scale our activities through our existing and potential new partnerships;

•develop, acquire, in-license or otherwise obtain technologies that enable us to expand our Integrated Drug Creation platform capabilities; and

•attract, retain and motivate highly qualified personnel to join Absci in our mission.

Our corporate headquarters and primary research and development facilities are located in Vancouver, Washington in a 77,974 square foot facility that includes general administrative office space and laboratory

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space. Our AI Research Lab is located in New York, New York and our Innovation Center is located in Zug, Switzerland. Additionally, we have a research and development presence in Belgrade, Serbia.

AMD strategic collaboration

In January 2025, we entered into a strategic collaboration with Advanced Micro Devices, Inc. (AMD) with a goal to optimize the performance of AMD InstinctTM accelerators and ROCmTM software to support our AI drug creation, including our de novo antibody design models. Additionally, AMD invested $20.0 million through the purchase of 5,714,285 shares of our common stock in a private investment in public equity (PIPE) at a premium over the market price.

Components of Results of Operations

Revenue

Our revenue currently consists primarily of fees earned from our partners in conjunction with drug creation agreements utilizing our Integrated Drug Creation platform, which are presented as partner program revenue in our results of operations. These fees are earned and paid at various points throughout the terms of these agreements including upfront, upon the achievement of specified project-based milestones, and throughout the program. Future revenue may also be earned from our partners’ achievements of certain clinical, regulatory, and commercial milestones and through royalties as a percentage of net product sales.

We expect that our revenue will fluctuate from period to period due to the timing of executing additional partnerships, the contractual structure of existing and future partnerships, the measurement of progress towards completion of each program, the uncertainty of achieving technical milestones, and dependence on our partners’ program-related decisions.

Operating Expenses

Research and development

Research and development expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation), contract research services, contract manufacturing, consulting fees, laboratory supplies and facilities, and certain technology costs. These expenses are exclusive of depreciation and amortization. Research and development activities consist of continued development of our Integrated Drug Creation platform, internally developed programs, and partnered programs. We derive improvements to our Integrated Drug Creation platform from each type of activity. Research and development efforts apply to our Integrated Drug Creation platform broadly, as well as across programs.

We expect research and development expenses to continue to increase in absolute dollars as we advance the HEADLINE trial, prepare for and conduct the planned Phase 2 trial of ABS-201 in endometriosis, advance our other internally developed programs, and continue to invest in our Integrated Drug Creation platform.

Selling, general, and administrative

Selling, general, and administrative expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation) for executive, business development, legal, finance, human resources, information technology and other administrative functions. General and administrative expenses include certain professional service expenses, such as external legal, accounting, and other consultants, as well as insurance, certain technology costs, and allocated facility costs. These expenses are exclusive of depreciation and amortization.

As we expand our clinical development and regulatory operations, require additional administrative support, and prepare for the potential future commercial launch of a product candidate, we expect personnel-related costs may increase in absolute dollars while continuing to actively manage other general and administrative expenses.

We have a comprehensive intellectual property portfolio directed towards the many aspects of our Integrated Drug Creation platform, including those related to our internally developed programs, product candidates, proprietary cell lines and protein expression technologies, proprietary screening assays, antibody discovery methods, and generative AI models. We regularly file patent applications to protect innovations arising from our research and development. We also hold trademarks and trademark applications in the United States and

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foreign jurisdictions. Costs to secure and defend our intellectual property are expensed as incurred and are classified as selling, general and administrative expenses.

Depreciation and amortization

Depreciation and amortization expense consists of the depreciation expense of our property and equipment and amortization of our intangibles. Our equipment is used most actively as part of our lab operations.

Other income (expense)

Interest expense

Interest expense consists primarily of interest related to borrowings under our term debt and financed laboratory equipment.

Other income, net

Other income, net consists primarily of interest income from our cash, cash equivalents and marketable securities and realized and unrealized gains and losses on foreign currency transactions.

Results of Operations

The results of operations presented below should be reviewed in conjunction with our condensed consolidated financial statements and notes included elsewhere in this Quarterly Re

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a clinical-stage biopharmaceutical company using an AI-native approach to develop differentiated antibody therapeutics. Our integrated drug creation platform combines Origin-1, our generative design model, with rapid validation using our lab-in-the-loop. We focus on underexplored mechanisms where unmet medical need is high and competition is low.

We have advanced our first two programs from AI design to IND (or foreign equivalent) in around two years with a total investment of approximately $15 million per program, compared to an industry average of 4–6 years at a cost of greater than $50 million. This combination of underexplored target selection and capital-efficient execution is central to our strategy.

Our lead product candidate, ABS-201, is an anti-prolactin receptor (PRLR) antibody engineered with an extended half-life to support a patient-friendly dosing interval. We believe PRLR is an underexplored target with the potential to provide durable, disease-modifying effects. If successfully developed, ABS-201 could establish a new treatment category in indications where current options remain inadequate. ABS-201 is being developed for two indications, androgenetic alopecia (AGA) or pattern hair loss (PHL) and endometriosis, each with large affected populations and significant unmet need:

•Androgenetic Alopecia: ABS-201 is being evaluated in the HEADLINE™ Phase 1/2a clinical trial (NCT07317544) for AGA, a condition affecting approximately 80 million people in the United States. Our own patient and clinician surveys, as well as those of other parties, show broad dissatisfaction with current standard of care, which is limited by variable efficacy, poor compliance, and a lack of durable approaches. No approved therapy provides durable hair regrowth. We have dosed the first three single ascending dose cohorts with a favorable safety profile to date. Interim proof-of-concept data, including exploratory efficacy endpoints, are expected in the second half of 2026.

•Endometriosis: We plan to initiate a Phase 2 clinical trial of ABS-201 in endometriosis, a chronic condition estimated to affect approximately 10% of women of reproductive age worldwide. There is currently no FDA-approved disease-modifying therapy for endometriosis. The condition is associated with significant chronic pain, reduced quality of life, and impaired fertility, and treatment options are limited by inadequate long-term effectiveness and tolerability. PRLR signaling may contribute to both endometrial lesion development and pain-related pathways, which if demonstrated clinically, could support the potential for a non-hormonal and non-surgical treatment. A recent clinical trial has demonstrated clinical proof of concept for targeting PRLR for endometriosis. Our Phase 2 clinical trial for endometriosis is planned for the fourth quarter of 2026, subject to data from the ongoing HEADLINE trial and regulatory considerations.

Beyond ABS-201, we are advancing additional preclinical programs using our platform. We may seek partnerships or out-licensing arrangements for select pipeline assets, which would provide non-dilutive capital We believe we are positioned to execute on near-term catalysts while building long-term pipeline value.

Financial results

Revenue was $2.8 million for the year ended December 31, 2025 compared to $4.5 million for the year ended December 31, 2024 due to the number of ongoing partnered programs and respective timing of project-based milestones achieved. We incurred a net loss of $115.2 million for the year ended December 31, 2025 compared to a net loss of $103.1 million for the year ended December 31, 2024. Research and development expenses increased by $17.6 million, or 27%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.

As of December 31, 2025, we had an accumulated deficit of $624.8 million and cash equivalents and marketable securities totaling $144.3 million.

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We expect to continue to incur significant expenses in connection with our ongoing activities, including as we:

•develop ABS-201 and other internally developed programs across diverse indications, including the advancement of these product candidates through preclinical and clinical development;

•continue to engage in discovery, research and development efforts and scale our activities through our existing and potential new partnerships;

•develop, acquire, in-license or otherwise obtain technologies that enable us to expand our Integrated Drug Creation platform capabilities; and

•attract, retain and motivate highly qualified personnel to join Absci in our mission.

Our corporate headquarters and primary research and development facilities are located in Vancouver, Washington in a 77,974 square foot facility that includes general administrative office space and laboratory space. Our AI Research Lab is located in New York, New York and our Innovation Center is located in Zug, Switzerland. Additionally, we have a research and development presence in Belgrade, Serbia.

AMD strategic collaboration

In January 2025, we entered into a strategic collaboration with Advanced Micro Devices, Inc. (AMD) with a goal to optimize the performance of AMD InstinctTM accelerators and ROCmTM software to support our AI drug creation, including our de novo antibody design models. Additionally, AMD invested $20.0 million through the purchase of 5,714,285 shares of our common stock a private investment in public equity (PIPE) at a premium over the market price.

Components of Results of Operations

Revenue

Our revenue currently consists primarily of fees earned from our partners in conjunction with drug creation agreements utilizing our Integrated Drug Creation platform, which are presented as partner program revenue in our results of operations. These fees are earned and paid at various points throughout the terms of these agreements including upfront, upon the achievement of specified project-based milestones, and throughout the program. Future revenue may also be earned from our partners’ achievements of certain clinical, regulatory, and commercial milestones and through royalties as a percentage of net product sales.

We expect that our revenue will fluctuate from period to period due to, for example, the timing of executing additional partnerships, the contractual structure of future partnerships, the measurement of progress towards completion of each program, the uncertainty of the timing of milestone achievements and dependence on our partners’ program-related decisions.

Operating Expenses

Research and development

Research and development expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation), contract research services, contract manufacturing, consulting fees, laboratory supplies and facilities, and certain technology costs. These expenses are exclusive of depreciation and amortization. Research and development activities consist of continued development of our Integrated Drug Creation platform, internally developed programs, and partnered programs. We derive improvements to our Integrated Drug Creation platform from each type of activity. Research and development efforts apply to our Integrated Drug Creation platform broadly, as well as across programs.

We expect research and development expenses to increase in absolute dollars over the long term as we develop and advance our internally developed programs through pre-clinical and clinical activities, enter into additional partnerships, and continue to invest in technology enhancements.

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, any of our product candidates. We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in preclinical and clinical activities related to developing our product candidates, as our product candidates advance into later stages of development, as we begin to

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conduct larger clinical trials, as we seek regulatory approvals for any product candidates that successfully complete clinical trials, and incur expenses associated with hiring additional personnel to support our research and development efforts.

Selling, general, and administrative

Selling, general, and administrative expenses include personnel-related costs (comprised of salaries, benefits and share-based compensation) for executive, business development, legal, finance, human resources, information technology and other administrative functions. General and administrative expenses include certain professional service expenses, such as external legal, accounting, and other consultants, as well as insurance, certain technology costs, and allocated facility costs. These expenses are exclusive of depreciation and amortization.

As we expand our clinical development and regulatory operations and require further administrative support, and also prepare for a potential future commercial launch of a product candidate, we expect personnel-related costs may increase in absolute dollars and we expect to continue to actively manage other general and administrative expenses.

We have a comprehensive intellectual property portfolio directed towards the many aspects of our Integrated Drug Creation platform, including those related to our internally developed programs, product candidates proprietary cell lines and protein expression technologies, proprietary screening assays, antibody discovery methods, and generative AI models. We regularly file patent applications to protect innovations arising from our research and development. We also hold trademarks and trademark applications in the United States and foreign jurisdictions. Costs to secure and defend our intellectual property are expensed as incurred and are classified as selling, general and administrative expenses.

Depreciation and amortization

Depreciation and amortization expense consists of the depreciation expense of our property and equipment and amortization of our intangibles. Our equipment is used most actively as part of our lab operations.

We expect depreciation expense to fluctuate in future periods in line with continued growth in absolute dollars as we purchase additional equipment.

Other income (expense)

Interest expense

Interest expense, net, consists primarily of interest related to borrowings under our term debt and financed laboratory equipment.

Other income, net

Other income, net consists primarily of interest income from our cash, cash equivalents and marketable securities and realized and unrealized gains and losses on foreign currency transactions.

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Results of Operations

The results of operations presented below should be reviewed in conjunction with our consolidated financial statements and notes included elsewhere in this Annual Report. The following tables set forth our results of operations for the periods presented (In thousands):

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