OmniAb, Inc. (NASDAQ:OABI) Q3 2023 Earnings Call Transcript

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Our business is really designed and funded for continued innovation and intelligent technology expansion. We’re obviously launching an exciting new technology today, our OmnidAb heavy-chain OmniChicken. And importantly, our innovation engine for either producing new transgenic animals or new elements of our technology is becoming more and more efficient. We’re able to do it faster. We’re able to do it more cost effectively. And that’s something that I think will feed well — to feed the business well into the future. We will launch other novel technologies next year as well, and we also expect to roll out other new partner experience enhancements as we call them, in 2024 and beyond. So I’m going to step back for a moment and talk a little bit about the antibody market.

This is a growing market for a variety of reasons. The antibodies are projected to have sales of $279 billion by 2025, up from $238 billion last year. There were 51 blockbuster antibodies. So these are antibodies with sales of over $1 billion in 2022. And the five best-selling antibodies had approximately $75 billion of sales last year. The importance of discovery technology focused on antibodies continues to increase for a variety of reasons. There have been decades of foundational and basic biology research and scientific advancement that are helping create what I see as a continuing need for cutting-edge antibody-related discovery technologies. A lot of foundational investment that is driving that present day and future demand, really starting all the way back with Nixon’s war on cancer back in the 1970s.

And then a number of other scientific advancements that contributed to antibodies becoming a more and more important modality for treating disease. Those include hybridoma, the cloning, obviously, the human genome project and the advent of proteomics as well as other advancements in immunology and a deeper understanding of immunology, molecular biology and higher and higher-speed computing, all of which drive that demand for discovery technology. In addition to that, the industry success rates, the success rates that our industry, the pharmaceutical industry has enjoyed over recent years have been far higher for antibodies than traditional small molecule pills that you may put in your mouth. Overall, the historical success rates for antibodies have been roughly double that for small molecules when you compare it over the fullness of time.

There are also other factors that are driving interest in antibodies, the Inflation Reduction Act, which is shifting R&D spending of large pharma partners away from small molecules is also driving interest in antibodies. And then the data on the right-hand side, in the blue of this slide is actually very new data. This was just presented a couple of weeks ago by the Antibody Society, who do a very meticulous tracking of antibody success rates for antibodies that are being pursued in a therapeutic way by commercial sponsors. So we find this data, one, extremely relevant and also very interesting given what it’s showing. And if you look at it very closely, the way the Antibody Society does is, is they’re tracking these on an individual basis.

And you see in the bar charts moving left to right, and there are overlapping periods here because of the way in which they report the data, and the way in which they track the data. But you can see over time that it appears that the industry is also getting better at developing antibody-based therapeutics. So not only have the historical success rates had been better than small molecules, other macro factors driving investment away from small molecules to antibody-based modalities, but the industry is also getting better at developing antibody-based medicines. So I’m going to talk a little bit about some recent metrics in the business. We’ve signed eight new license agreements so far this year. We announced new platform agreements with GigaMune and Polaris Therapeutics that were both signed in Q3 and more recently entered into a new platform license agreement with a global pharma company, a well-established global pharma company that was also signed recently.

So our active partner count has grown to 76 as of the end of the quarter. And as you can see in the bar chart, we’ve continued to grow the number of active partners net of attrition over a number of cycles in the biotech space. We also think there’s strength and diversity in the types of partners that we are attracting and bringing in, and that creates multiple paths to potential value creation downstream. We’ve also seen nice growth and advancement of active programs. We started this year with 291 active programs and we ended Q3 with 314 active programs, net of attrition. So you can see that growth reflected on the left-hand side, in the bar chart. And then on the pie chart on the right, you see that we’ve had nice growth in diversity as well as graduation and advancement, if you will, of programs.

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