OmniAb, Inc. (NASDAQ:OABI) Q4 2024 Earnings Conference Call March 18, 2025 4:30 PM ET Company Participants Kurt Gustafson - Chief Financial Officer Matt Foehr - President & Chief Executive Officer Conference Call Participants Joe Pantginis - H.C. Wainwright Kripa Devarakonda - Truist Securities Operator Good afternoon and welcome to OmniAb Inc's Fourth Quarter and Full Year 2024 Financial Results and Business Update Conference call. At this time, all participants are in a listen-only mode. Following the pre ...

Core Viewpoint - OmniAb, Inc. reported a quarterly loss of $0.12 per share, slightly better than the Zacks Consensus Estimate of a loss of $0.13, and improved from a loss of $0.14 per share a year ago, indicating a positive earnings surprise of 7.69% [1] Financial Performance - The company posted revenues of $10.8 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 18.21%, and showing significant growth from $4.82 million in the same quarter last year [2] - Over the last four quarters, OmniAb has surpassed consensus EPS estimates two times and has also topped consensus revenue estimates two times [2] Stock Performance - OmniAb shares have declined approximately 10.5% since the beginning of the year, compared to a decline of 3.5% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.18 on revenues of $6.16 million, and for the current fiscal year, it is -$0.46 on revenues of $47.55 million [7] Industry Outlook - The Medical - Drugs industry, to which OmniAb belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries tend to outperform the bottom 50% by more than 2 to 1 [8]

Q4 and Full Year 2024 Financial Results & Business Update Nasdaq: OABI March 18, 2025 1 Disclaimer 2 We caution you that this presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operations and financial position, including our financial guidance for 2025, business strategy, our expectations regarding the application of, and the rate and degree of market acceptance of, o ...

Financial Performance - The company has incurred losses on an as-reported basis for the last several years and may not generate sufficient revenue to achieve and maintain profitability[104]. - For the years ended December 31, 2024 and 2023, the company's revenue was $26.4 million and $34.2 million, respectively, with net losses of $62.0 million and $50.6 million[132]. - The company has incurred net losses historically and expects to continue incurring losses as it invests in research and development[132]. - The company may need to raise additional capital to fund operations and achieve goals, with existing cash and cash equivalents expected to meet needs for at least the next 12 months[125]. - The company’s ability to forecast future revenues may be limited due to its reliance on partners for the development and commercialization of therapeutic candidates[110]. - The company relies on a limited number of partners for revenue, and the loss of any significant partner could adversely impact its business[130]. Market and Competitive Landscape - The life sciences and biotech platform technology market is highly competitive, with significant competition in therapeutic antibody discovery[145]. - The company must continue to invest in its platform and technology to maintain a competitive position in a rapidly changing industry[153]. - The company’s platform must demonstrate advantages over legacy technologies to maintain market acceptance, which is critical for its business[118]. - The company faces challenges in marketing its solutions due to its pricing model, which is structured to capture downstream revenues[148]. Regulatory and Compliance Risks - The company currently faces limited direct regulation by the FDA, but future oversight could increase compliance costs and operational uncertainty[181]. - Compliance with healthcare laws and regulations may expose the company and its partners to civil penalties and reputational harm[182]. - The evolving landscape of data privacy laws, including the GDPR, could impose significant fines up to €20 million or 4% of annual global revenue for breaches[186]. - The regulatory framework for AI Technologies is rapidly evolving, potentially impacting the company's operations and compliance costs[189]. - New laws regulating AI Technologies are expected to enter into force in the U.S. and EU, which may require significant resource allocation for compliance[190]. Intellectual Property Risks - The company may incur substantial litigation costs if it fails to protect its intellectual property, which could impair its competitive position[201]. - Changes in patent law could diminish the value of patents, impacting the company's ability to protect its technology[209]. - The company cannot ensure that its pending patent applications will lead to issued patents, which could impact its ability to maintain a competitive advantage[236]. - The company may face challenges in acquiring or licensing necessary technologies on acceptable terms, which could hinder future commercialization efforts[220]. - The company relies on trade secrets and confidentiality agreements to protect its proprietary information, but there is uncertainty regarding the effectiveness of these measures[235]. Operational Risks - The company relies on third parties for hosting mouse and rat colonies and supplying laboratory equipment, which may impact its research and development efforts if these parties do not perform satisfactorily[104]. - Information technology systems are critical for operations, and any failure could harm business performance and reputation[165]. - The company’s facilities are vulnerable to damage from disasters, which could jeopardize research and development efforts[172]. - The company is exposed to risks of employee misconduct, which could lead to legal sanctions and significant reputational harm[256]. Stock and Securities Risks - The market price of the company's common stock is likely to be highly volatile, and significant sales of its securities could cause stock prices to decline[108]. - The company has issued warrants for an aggregate of 19,012,156 shares of common stock, with an exercise price of $11.50 per share, which may lead to dilution for existing shareholders[293]. - The company may face significant costs and management distractions from potential securities class action litigation due to share price volatility[269]. - The company is classified as an emerging growth company and smaller reporting company, allowing it to take advantage of reduced reporting requirements until it surpasses $1.235 billion in total annual gross revenue or $700 million in market value[284]. Capital and Funding Risks - The company may consider raising additional capital for strategic investments or acquisitions, even if it believes it has sufficient funds for current operations[127]. - The company faces potential disruptions to its operations due to pandemics or public health emergencies, which could delay research and development activities and increase operating costs[266]. - Market, interest, and credit risks may reduce the value of investments, with potential liquidity shortages due to recent financial institution closures[194]. Miscellaneous Risks - The company may incur liability, including litigation exposure, penalties, and fines, due to potential security breaches affecting personal information[180]. - The company faces risks from security breaches and data loss, which could compromise sensitive information and disrupt operations[177]. - The company is subject to complex export and import laws, with potential criminal liability for violations that could adversely affect its business[259].

Revenue Performance - Revenue for Q4 2024 was $10.8 million, a 125% increase from $4.8 million in Q4 2023, driven by higher license and milestone revenue [3] - Full year 2024 revenue was $26.4 million, down from $34.2 million in 2023, primarily due to the recognition of a $10.0 million TECVAYLI milestone in 2023 [6] - Total revenue for Q4 2024 was $10,804,000, a significant increase of 124% compared to $4,822,000 in Q4 2023 [30] - License and milestone revenue rose to $8,650,000 in Q4 2024, up from $1,713,000 in Q4 2023, representing a growth of 404% [30] Expenses and Losses - Research and development expense for Q4 2024 was $13.3 million, a decrease of 10.1% from $14.8 million in Q4 2023 [4] - Net loss for Q4 2024 was $13.1 million, or $0.12 per share, compared to a net loss of $14.1 million, or $0.14 per share in Q4 2023 [5] - Research and development expenses for the year were $55,110,000, a slight decrease from $56,525,000 in 2023 [30] - Operating expenses totaled $100,893,000 for the year, down from $103,583,000 in 2023, showing a reduction of 2.6% [30] - The company reported a basic and diluted net loss per share of $0.12 for Q4 2024, compared to $0.14 in Q4 2023 [30] Cash Flow and Assets - Cash use in 2024 was $38.9 million, and OmniAb anticipates lower cash use in 2025 [8] - Cash and cash equivalents increased to $27,598,000 in 2024 from $16,358,000 in 2023, marking a growth of 68.5% [28] - Total assets decreased to $325,558,000 in 2024 from $375,225,000 in 2023, reflecting a decline of 13.2% [28] - Total liabilities reduced to $37,940,000 in 2024, down from $60,640,000 in 2023, indicating a decrease of 37.4% [28] Partnerships and Development - As of December 31, 2024, OmniAb had 91 active partners and 363 active programs, including 32 programs in clinical development [9] - Five new OmniAb-derived antibodies entered clinical trials in 2024, indicating ongoing innovation and development [9] - The company signed 10 new license agreements in 2024, including two in Q4 with Incyte Corporation and Photinia Biosciences [9] Future Outlook - OmniAb expects 2025 revenue to be in the range of $20 million to $25 million, with operating expenses projected between $90 million and $95 million [8] - OmniAb launched OmniHub in December 2024, a bioinformatics portal designed to enhance data visualization and secure data transfer for partners [10] Share Information - The weighted-average shares outstanding increased to 104,795,000 in Q4 2024 from 100,162,000 in Q4 2023 [30]

Core Viewpoint - Kuehn Law, PLLC is investigating potential breaches of fiduciary duties by officers and directors of OmniAb, Inc. related to self-dealing, which may entitle shareholders to damages and corporate governance reforms [1]. Group 1 - The investigation by Kuehn Law focuses on whether certain officers and directors of OmniAb, Inc. have engaged in self-dealing that could harm shareholder interests [1]. - Shareholders of OmniAb, Inc. may be eligible for damages and reforms in corporate governance as a result of the investigation [1]. Group 2 - Long-term shareholders of OmniAb, Inc. are encouraged to contact Kuehn Law for a free consultation regarding their rights and potential claims [2]. - Kuehn Law covers all case costs and does not charge its investor clients, emphasizing the importance of timely action for shareholders [2]. Group 3 - The firm highlights the significance of shareholder participation in maintaining the integrity and fairness of financial markets, encouraging investors to voice their concerns [3].

Financial Data and Key Metrics Changes - OmniAb reported its third quarter 2024 financial results, with specific metrics and figures to be detailed in the accompanying slides available on their website [3]. Business Line Data and Key Metrics Changes - Detailed performance metrics for each business line were not provided in the available content [5]. Market Data and Key Metrics Changes - Specific market data and key metrics were not disclosed in the provided content [5]. Company Strategy and Development Direction and Industry Competition - The management emphasized the importance of forward-looking statements and the inherent risks and uncertainties associated with them, indicating a cautious approach to future projections [4]. Management Comments on Operating Environment and Future Outlook - Management has not yet provided specific comments regarding the operating environment or future outlook in the available content [5]. Other Important Information - The conference call was recorded and is time-sensitive, with the information being accurate only as of the date of the live broadcast, November 12, 2024 [5]. Q&A Session All Questions and Answers - No specific questions or answers from the Q&A session were included in the provided content [5].

Core Insights - OmniAb, Inc. reported a quarterly loss of $0.16 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.14, marking an earnings surprise of -14.29% [1] - The company's revenues for the quarter ended September 2024 were $4.17 million, missing the Zacks Consensus Estimate by 52.95%, and down from $5.48 million a year ago [2] - The stock has underperformed, losing about 25.5% since the beginning of the year, while the S&P 500 gained 25.8% [3] Financial Performance - Over the last four quarters, OmniAb has surpassed consensus EPS estimates two times [2] - The current consensus EPS estimate for the upcoming quarter is -$0.11 on revenues of $12.14 million, and for the current fiscal year, it is -$0.58 on revenues of $32.3 million [7] Industry Context - The Medical - Drugs industry, to which OmniAb belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of OmniAb's stock may be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Revenue Performance - Total revenue for the three months ended September 30, 2024, was $4.172 million, a decrease of 24% from $5.477 million in the same period of 2023[153]. - License and milestone revenue for the nine months ended September 30, 2024, was $5.216 million, down 73% from $18.986 million in the prior year, primarily due to the recognition of significant milestones in the previous period[155]. - Service revenue for the three months ended September 30, 2024, was $2.479 million, an 18% decline from $3.016 million in the same period of 2023[153]. - Royalty revenue for the nine months ended September 30, 2024, was $955,000, a 3% increase from $931,000 in the same period of 2023[155]. Operating Expenses - The company reported total operating expenses of $23.936 million for the three months ended September 30, 2024, a decrease of 7% from $25.792 million in the same period of 2023[156]. - Research and development expenses for the three months ended September 30, 2024, were $13.318 million, a slight decrease of 4% from $13.867 million in the same period of 2023[156]. - Total operating expenses decreased by $3,346,000 or 4% to $74,209,000 for the nine months ended September 30, 2024, compared to $77,555,000 in 2023[161]. - Research and development expenses for the nine months ended September 30, 2024, were $41,804,000, a slight increase of $45,000 or 0% compared to $41,759,000 for the same period in 2023[161]. Net Loss and Cash Flow - The net loss for the nine months ended September 30, 2024, was $48,965,000, an increase of $12,399,000 or 34% from a net loss of $36,566,000 in 2023[164]. - Cash used in operating activities for the nine months ended September 30, 2024, was $35,792,000, a decrease of $47,260,000 compared to cash provided of $11,468,000 in 2023[172]. - Cash provided by investing activities for the nine months ended September 30, 2024, was $37,499,000, an increase of $60,605,000 compared to cash used of $23,106,000 in 2023[172]. - As of September 30, 2024, the company had cash, cash equivalents, and short-term investments totaling $59,400,000, sufficient to support operations for at least the next 12 months[167]. Future Capital and Investments - The company anticipates raising additional capital in the future to expand its business and pursue strategic investments, with potential proceeds of up to $218.6 million from warrant exercises, contingent on market conditions[170][169]. - The company entered into an Open Market Sale Agreement to sell up to $100,000,000 in common stock through an "at the market" offerings program[169]. Partnerships and Programs - As of September 30, 2024, the company had 86 active partners and 352 active programs utilizing the OmniAb technology platform, an increase from 77 partners and 325 programs as of December 31, 2023[142][149]. - The company had 33 active clinical programs as of September 30, 2024, an increase from 32 programs as of December 31, 2023[149][152]. - The company has three approved products from its partners, remaining unchanged since December 31, 2023[149][152]. Royalty and Compensation - The royalty rates for antibody discovery contracts are currently in the low- to mid-single digits, with the royalty term typically linked to the composition-of-matter patents filed by partners[146]. - Research and development expenses included $16.4 million in share-based compensation and $16.0 million in depreciation and amortization for the nine months ended September 30, 2024[173]. Tax Rate - The effective tax rate for the nine months ended September 30, 2024, was (12.9)%, compared to (17.5)% for the same period in 2023[164].

| --- | --- | --- | --- | --- | --- | |----------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | Q3 2024 Financial Results & Business Update | | | | | | | Nasdaq: OABI | | | | | | | November 12, 2024 | | | | | | 1 Disclaimer 2 We caution you that this presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operatio ...