What’s the Fool’s “Newly IPO’d Canadian Disruptor” with a Peter Thiel connection?

Checking out a teaser pitch from Motley Fool Canada

By Travis Johnson, Stock Gumshoe, August 11, 2021

This ad actually came through a couple weeks ago, but it caught my eye this morning when I was trying to decide what to cover today… mostly because of the big Peter Thiel pitch they use to get our attention.

The ad is from the Motley Fool’s Stock Advisor Canada service (C$99/yr), which essentially tries to emulate the US Stock Advisor strategy, and sometimes has overlapping picks, but recommends at least one Canada-listed stock per month along the way.

And this is one of those Canadian companies, apparently.

The ad does include a good spiel about Thiel, whose reputation grew mostly from the early success he had in founding PayPal and then, to oversimplify, using the wealth from that to get into venture capital, including becoming the first outside investor in Facebook and working, sometimes with other members of the “PayPal Mafia” (Elon Musk, Max Levchin, Reid Hoffman, etc.) to build and fund other technology companies…

“Here are just some of the other companies that Thiel has helped lift off the ground:
AirBnB
LinkedIn
Palantir Technologies (as the company founder!)
Yelp
Spotify
SpaceX (Fun Fact: By the time Thiel backed SpaceX, he’d already known Elon Musk for years. Musk was one of PayPal’s co-founders.)

“With such a stellar track record of discovering amazing companies early and growing them into mammoths, you may be wondering—where is Peter Thiel investing today?”

… and then they drop some hints about this secret stock:

“[Peter Thiel] recently gobbled up 14.3 MILLION shares of a little-known company based right here in Canada.

“This groundbreaking organization specializes in a world-changing technology that a Shark Tank billionaire predicts will create the world’s first trillionaire!

“And right now, they’re using this technology to serve one of the fastest-growing markets on the entire planet—a market that experts predict will nearly triple to $350.1 billion USD by 2027!”

OK, so that narrows it down to “something to do with artificial intelligence” — whenever you hear that “first trillionaire” bit, it’s pretty much always a reference to Mark Cuban, who is often quoted as saying some variation of this, I think the first time he said it was in 2017:

“The world’s first trillionaires are going to come from somebody who masters A.I. and all its derivatives and applies it in ways we never thought of.”

Other clues?

“This Thiel-backed Canadian company has just gone public, which means we have a unique opportunity to get in early and experience potentially record-breaking returns! ….

“Here at Motley Fool Canada, we just released an exclusive new BUY report on this potentially massive Thiel-backed stock.

“In this report, you’ll learn:

“Why we believe this company could soon lead their $2.44 trillion industry

“Why the US Department Of Defense contacted them to create a technology-backed solution to fight viral pandemics…years before the emergence of COVID-19

“Why their balance sheet is currently loaded with cash….”

So what’s the stock? This is, sez the Thinkolator, the US-listed Canadian biotech AbCellera Biologics (ABCL), for whom Peter Thiel is still a Director… and he did invest fairly heavily in AbCellera last year, before it went public, participating in their convertible preferred share and convertible note offerings, and did control roughly 14.3 million shares as of the last update in April.

And the good news? If you were excited about this Thiel-backed company going public but missed out on it at the time… well, it’s a LOT cheaper now. The actual IPO offering priced at $20 back in December, but the stock never traded anywhere near that level, opening in the high $50s thanks at least in part to enthusiasm about their connection to COVID treatments. It has gone pretty steadily down since, so now sits at about $15.

So I can answer at least one of those questions for you… why is their balance sheet loaded up with cash? Because they just raised $500 million in December in their IPO. And will end up with probably a total of close to $500 million more in net royalty payments from their COVID-19 antibodies (more on that in a minute).

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And why did the DoD work with them pre-COVID to fight pandemics? Because their system for rapid human antibody discovery was appealing enough to seem like a potentially important part of pandemic response plans.

This is a company I’ve looked at before, most recently when they came up in my coverage of a Stansberry teaser in March, and there hasn’t been much to really change my opinion — so this is pretty similar to what I said at the time:

ABCL is another of the AI-powered “drug discovery” platforms that we’ve looked at a few times (most recently Schrodinger (SDGR) here) — here’s how they describe themselves:

“AbCellera is a technology company that searches, decodes, and analyzes natural immune systems to find antibodies that its partners can develop into drugs to prevent and treat disease. AbCellera’s full-stack, AI-powered drug discovery platform integrates modern technologies from engineering, microfluidics, single-cell analysis, high-throughput genomics, machine learning, and hyper-scale data science. AbCellera partners with drug developers of all sizes, from large pharmaceutical to small biotechnology companies, empowering them to move quickly, reduce costs, and tackle the toughest problems in drug development.”

The latest investor presentation is here, should you wish to dig deeper. They think of themselves as a technology company, and like a lot of the drug discovery firms they have at least some partnership connections to pretty much all the big pharmaceutical companies.

And while there’s not much of a steady state or predictable rev