OABI OmniAb Biotech (NASDAQ)

[Ferg]

OmniAb develops novel antibodies using a variety of development platforms.  These antibody candidates are licensed to third party pharmaceutical companies (aka 'partners') for testing and, assuming clinical trials and everything else goes to plan, are eventually taken to market.  OABI earns revenues from partners via licence sales, milestone payments (e.g. achieving various clinical trial stages) plus royalties on eventual product sales.  Costs and risks of the clinical trials are borne by the partners, not OABI.

OABI currently has 305 antibody programmes, made up of:

• 261 at the discovery stage
• 15 at the pre-clinical stage
• 22 in phase 1 clinical trials
• 2 in phase 2 clinical trials
• 1 in phase 3 clinical trials
• 1 has been submitted to the FDA for BLA and
• 3 have been approved and taken to market

7 years ago there were 21 programmes and only 1 had progressed beyond the discovery stage.

OABI is a new entity spun out of Ligand (NASDAQ: $LGND) late 2022.  They were rolled into a SPAC at an estimated value of US$10 per share.  This immediately collapsed to under US$3 in October 2022.  Current SP is US$5.46.  This proved to be good buying around the $3-$4 mark.  This is very early days and one can still get in at what will be viewed as the ground floor in years to come in what is IMO a deep value play (this is not investment advice, merely my opinion).  Initial holders from the spin off are eligible for additional shares via warrants at certain SP milestones and dates which could have a slight dilutive impact for new shareholders.

Investor page here: https://investors.omniab.com/overview/default.aspx
Q2 results for 2023 are here

Currently making a loss but this is about future prospects and cash management.  Cashflows are forecast to be breakeven this year.  No interest bearing debt.

Risks are aplenty so a strong constitution, extra undies and a long term outlook are required for holding OABI.

IMO this is less risky than a pure biotech play given the 300 drugs still in development and approval stages, and the 70+ partners involved. To date partners have filed in excess of 300 patents.

Upside is blockbuster drugs are possible using this model.  Refer previous owner LGND's sale of Promacta for US$827m in 2019 and LGND's Kyprolis is also a potential blockbuster.  Write up on LGND can be viewed here.

CEO, Matt Foehr, talks to the NASDAQ listing here:

[Ferg]

Q3 results released.  Loss of 16c per share was mainly driven by non cash items of intangible amortisation and the exec share scheme, plus continued cash spend on R&D.  Operating cash flow is positive.  No debt.

Revenue for Q3 down versus last year, but are up versus the 9 months to Sept 30.

18 new discovery programmes added so far in 2023 bringing the total to 269.  12 programmes have advanced 1 step through the discovery/clinical trial/NDA process and there have been 8 new licence agreements signed so far this year.

Q3 release summary is here:
https://investors.omniab.com/investors/news/news-details/2023/OmniAb-Reports-Third-Quarter-2023-Financial-Results-and-Business-Highlights/default.aspx

Presentation is here:
https://s29.q4cdn.com/628890072/files/doc_financials/2023/q3/OmniAb-Research-and-Technology-Event_110923.pdf

Financials are here:
https://s29.q4cdn.com/628890072/files/doc_financials/2023/q3/a77d74fe-35f6-46cd-9e99-d4d5743bb3eb.pdf

[Ennui]

This interests me. Thank you for posting.  I have been following the share since your first post.  In a nutshell (IMO) they are early stage testing site for vaccines (for which you want to elicit an antibody response) including mRNA technology. I wonder what part AI may play in the future to model antibody response based on results so far.  I need to investigate more of the references on their website to understand. So now I have a job and will report back.

[Ferg]

Thanks for that and I would be happy to hear your feedback.

They describe themselves thus: "OmniAb's discovery platform provides pharmaceutical industry partners access to diverse antibody repertoires and high-throughput screening technologies to enable discovery of next-generation therapeutics".

So I would say they were more therapies than vaccines, as evidenced by the treatments brought to market under their old parent Ligand.  But I am not a medical expert so this could just be terminology getting in the way.

I am however curious about your thoughts on mRNA and OmniAB given I couldn't find any references to mRNA on their website or in their press releases.

[Ennui]

Further research done, withdraw my vaccine comment.  Antibodies are essentially carriers for a quite a variety of medications, mostly oncology at this stage but no doubt a wide variety of immune types as well. I followed through some of the meds that have made it to commercial success, and as usually the case they now are trying to expand the treatment to other cancers. Not sure if that means repeat business for omniAB or not.

Noticeable what has been published so far on website is using rat.  I wonder if the GE animals are their moat?

mRNA technology will be super interesting to see how it develops and whether this company has part to play in that puzzle.

Need to have a look at financials next.