OmniAb Highlights $3B Milestone Pipeline, AI Antibody Platform at Conference

OmniAb (NASDAQ:OABI) Chief Financial Officer Kurt Gustafson outlined the company’s antibody-discovery platform, partner pipeline and revenue model during a company presentation, emphasizing a strategy built around licensing technology to pharmaceutical and biotechnology companies rather than developing drugs internally.

Gustafson said OmniAb engineers transgenic animals whose immune systems produce fully human antibodies in response to foreign targets such as viruses, cancer cells or other antigens. Pharmaceutical and biotech partners use the platform to identify potential drug candidates, while OmniAb receives upfront license payments, research-service revenue, development milestones and potential royalties on commercialized products.

“At the end of the day, this is a licensing model,” Gustafson said. “We do not develop drugs. We help partners find drugs.”

Technology combines animal models and AI screening

The company’s platform includes transgenic mice, rats and chickens designed to generate fully human antibodies, as well as technologies for bispecific antibodies and other antibody formats. Gustafson described the company’s approach as combining “biological intelligence,” or the animals’ immune response, with artificial intelligence-enabled screening tools.

Among the company’s platforms, OmniDab is intended to generate smaller, single-domain antibodies modeled on llama antibodies but with fully human sequences. Gustafson said the smaller format may be useful for diseases involving the brain because such antibodies can cross the blood-brain barrier.

OmniAb’s xPloration screening instrument is designed to analyze millions of cells and identify antibodies that bind to a selected target. The system uses imaging, AI analysis and a laser-based process to isolate selected antibodies into plates for further analysis, according to Gustafson.

The company initially developed xPloration for its own discovery workflow but has begun offering the instruments to partners. Gustafson said OmniAb’s research indicated that B-cell screening represents an approximately $500 million market.

• xPloration instruments sell for about $500,000 each, according to Gustafson.
• The platform also uses single-use chips and plates, creating a consumables revenue opportunity.
• OmniAb expects xPloration sales of approximately $2 million to $3 million this year, with sales projected to double in 2027 and again in 2028, Gustafson said.

Partner network includes major pharma companies

Gustafson said OmniAb has 110 partners, including eight of the top 10 pharmaceutical companies. Those partners had 425 active programs under development as of June 30, a figure the company reports net of programs that have been discontinued or otherwise exited.

The aggregate potential milestones tied to the 425 active programs exceed $3 billion, according to Gustafson, with an average royalty rate of 3.4%. OmniAb also had 34 programs in clinical development, representing about $340 million in remaining potential milestones.

Gustafson highlighted several partner assets, including Immunovant’s IMVT-1402, an FcRn-targeting program being evaluated in multiple indications. He said the program had produced data in difficult-to-treat rheumatoid arthritis and is expected to report pivotal-program results in myasthenia gravis and Graves’ disease next year. He noted that analysts covering Immunovant project peak sales of about $3 billion for the drug, though those projections are not OmniAb guidance.

He also discussed Teva’s TEV-408, an IL-15 program in phase II development for celiac disease and vitiligo. Teva has reported data in both indications and plans to evaluate the asset in certain dermatitis conditions and alopecia, Gustafson said. Teva has characterized the opportunity as a potential $2.5 billion product, he added.

Gustafson further noted that Johnson & Johnson’s ramantamig advanced from phase I directly to phase III during the year. He said OmniAb expects a “steady drumbeat” of clinical data from partner programs over the next 15 months.

Financial outlook and royalty strategy

Milestones currently account for the largest share of OmniAb’s revenue, followed by research-service revenue, Gustafson said. Royalty revenue remains limited because the company has only a small number of approved products currently sold in China, generating about $1 million annually.

For the year, OmniAb expects revenue of $32 million to $36 million. Gustafson said the company began the year with $54 million in cash and had $52 million as of June 30, adding that the company expected to end the year at roughly that level as it approaches cash breakeven.

He characterized the model as highly scalable because the company’s research and development spending is principally used to maintain animal colonies and advance platform technologies. As the partner base and program count grow, operating expenses do not necessarily need to rise at the same rate, he said.

During a question-and-answer session, Gustafson said licensing negotiations generally begin from a standard term sheet but vary based on partner preferences. Large pharmaceutical companies often seek lower royalty rates and may be willing to make higher upfront or milestone payments, while smaller biotechnology companies may favor lower initial payments in exchange for larger back-end economics.

He said most OmniAb royalty rates cluster within a few percentage points of the company’s 3.4% average, rather than ranging widely across agreements.

Gustafson also said OmniAb is not currently pursuing sales of its royalty interests to royalty-focused investors. While the company would listen to proposals, he said management prefers to retain royalties and benefit from potential future product sales. “We’d rather kind of sit and wait and harvest those royalties when they come in,” he said.

About OmniAb (NASDAQ:OABI)

OmniAb, Inc is a biotechnology company that develops and licenses antibody discovery technologies for use in drug research and development. Its platform is designed to help biopharmaceutical companies generate fully human and species-diverse antibodies that can be evaluated as potential treatments for a range of diseases.

The company’s technology portfolio includes genetically engineered animal platforms, such as OmniRat, OmniMouse and OmniChicken, which are used to produce antibody candidates against challenging biological targets.