OmniAb, Inc.

All participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to Kurt Gustafsson, OmniAb Inc. Chief Financial Officer. You may begin. Thank you.

Thank you, Operator, and good afternoon, everyone. Thank you all for joining our second quarter 2023 Financial Results Conference call. There are slides to accompany today's remarks, and they are available in the Investors section of our website at omniab.com. Before we begin, I'd like to remind listeners that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from any anticipated results. These forward-looking statements are qualified by the cautionary statements contained in today's press release and our SEC filings. Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast today, August 10, 2023. Except as required by law, OmniAB undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Joining me on the call today is Matt Foer, OmniAB's President and CEO. During today's call, Matt and I will provide highlights on the company's operations, partner and technology updates, and our recent financial results. At the conclusion of the prepared remarks, we'll open the call to questions. With that, let me turn the call over to Matt.

Thanks, Kurt. Good afternoon, everyone, and thanks for joining our second quarter conference call. I'll start today with an overview of our business here on slide number four of the deck. At the core of OmniAd's business model is our proprietary discovery technology platform that's designed to help partners discover innovative therapeutics quickly and efficiently. In a simple sense, it's a model based on licensing innovative technologies to partners. OmniAd is differentiated in the marketplace by having the most diverse host systems for fully human and bispecific antibody discovery, with the industry's only four-species platform. That includes transgenic mice, rats, chickens, and cow-based technologies. Our partners have an increasing number of antibodies and clinical trials that are from our technology, and the versatility of our platform continues to be demonstrated in the number of modalities and formats being employed by our partners, both preclinically and clinically. We offer flexibility to meet our partners' evolving scientific needs. as we believe generating large and diverse repertoires of high-quality antibodies increases the likelihood of success in optimizing desired therapeutic characteristics. Our technology and our core capabilities are driven by what we call the biological intelligence of our transgenic animals and are further strengthened by our innovative, high-throughput screening and other technologies. There are 74 partners with access to our technology or to OmniAb antibodies with over 300 programs in various stages of research and development. The antibody space is one of the fastest growing parts of the drug industry, with a market size expected to be larger than $250 billion within a couple of years. We believe we're in a great position to capitalize on this opportunity with our unique and expanding technology offerings. We're constantly innovating our technology stack, and this past May we introduced our newly branded OmniDeep offering, which is a suite of in silico capabilities, including structural modeling, large multi-species antibody databases, molecular dynamic simulations, artificial intelligence, and machine and deep learning sequence models that are applicable across our technology platforms to further enhance our partner's discovery process. In addition, we plan to introduce our novel heavy chain only OmniChicken, that we will be branding as OmniDAB in the fourth quarter of this year. And I'll say more detailed concepts of OmniDAB and our excitement around that technology until later this year when we launch it. On this next slide, I just want to reiterate that as a company and as a team, We're mission-driven to enable the rapid discovery of innovative pharmaceutical products by pushing the frontiers of drug discovery technologies. We're poised for continued growth, as shown here on slide number six, by the new license agreements we signed during the second quarter. In Q2, our team closed four new platform license agreements, one with Merck Inc. and one with Neurocrine Biosciences, as well as platform deals with Stanford University and Seattle Children's Hospital. Regarding Merck, this is a new agreement and is with the U.S. Merck and Company, not to be confused with the German Merck KGAA, with whom we also have an agreement. We reached a total of 74 active partners at quarter end, up from a partner count of just slightly more than 60 as of a year ago. Our discovery platform continues to garner interest in the industry among a diversified group of leading global pharmaceutical companies, allowing us to leverage our highly scalable business model. Adding partners like Merck Inc., who are global leaders in the industry and who are committed to using the power of leading edge science to improve lives, bolsters our growing list of partners. We believe this is a testament to our effective and efficient discovery technologies, to our in-house expertise for scientific collaboration services, our mindset for developing a deep understanding and also prioritizing the current and the future needs of our partners, as well as our commitment to continued innovation. Here on slide number eight, our portfolio of active programs increased to 305, with 29 programs in the clinic under regulatory review or approved for commercialization at the end of Q2. During the second quarter, we added a net total of four new programs to our portfolio. Importantly, I want to note that when we report program count, we do so net of attrition, as attrition is expected in the pharmaceutical industry. In this quarter, attrition was seen only in the discovery stage of our partnered pipeline. The pie chart on the right-hand side of the slide breaks down our 305 programs by stage of development. The discovery phase consists of 261 programs in addition to 15 programs now in the preclinical stage. In the clinic, at the end of June, our partners had 22 programs in phase one, two programs in phase two, one in phase three, as well as one program currently under regulatory review. There are three approved drugs utilizing omniab-derived antibodies. and we're recognizing royalty revenue from commercial sales of Zimbarilumab and Sugimalumab in China, both of which are also being pursued in other geographies. We saw some nice progression of programs in the quarter as well, with three programs transitioning from the discovery stage to the preclinical stage, with two programs moving from the preclinical stage into their first human clinical trials, and with one phase three program moving to a regional filing for approval, shown here on this slide number eight pie chart on the right as BLA stage. Our large and growing portfolio features a diversified set of partners utilizing a variety of formats and modalities, as I mentioned earlier. I'd also like to note here that the count of active programs has increased from 270 in the year-ago period up to 305 programs at the close of the second quarter, noting again that this is net of program attrition. Despite some of the industry's challenges, including evolving financing environment and funding constraints, especially for some of the smaller players in our industry, our portfolio continues to expand from a combination of new and existing partners. We don't feel that it's entirely unexpected that macro factors can influence the velocity of growth of some of our business metrics. And although we see a slightly lower number of net new program additions compared to last year, Omniab is in a very solid position for continued growth with an increasing number of both active programs and active partners. Moving now on to slide number nine. As I mentioned, in the second quarter, two new programs entered the clinics. with Immunivant, who initiated a Phase I clinical trial of IMVT-1402, which is a sub-Q FCRN inhibitor. Also, Gloria Pharmaceuticals initiated a Phase I-II study to investigate the safety, tolerability, and preliminary efficacy of GLS-012 as a monotherapy in combination with GLS-010 in subjects with advanced solid tumors that had progressed following standard treatment. We've now had three new programs enter the clinic in the first half of this year, and we expect a potential one to two more to enter the clinic before year end. I want to note that when 2023 began, we indicated that we expected three to five new programs to enter the clinic this year. By the end of June, we'd already reached three, and we're now focused on an upward range of four to five new clinical programs for the year. Our partners made numerous public announcements about their clinical and commercial progress during the second quarter and in recent weeks. And I'll highlight a few of them on this slide, slide number 10, starting with bataquamab. During the second quarter, we earned milestone revenue related to advancement of bataquamab into pivotal studies in two additional indications of CIDP and TED. These are additional indications from the phase three work that was started in generalized myasthenia gravis earlier in the year. In addition, Harbor Biomed announced that China's NMPA accepted its biologics license application for the treatment of generalized myasthenia gravis. And for the same indication, Hanol announced that they're progressing towards initiation of a phase three trial in Japan later this year. As for the next generation anti-FCRN IMVT-1402, I mentioned that Immunovan initiated a phase one trial to evaluate safety, tolerability, and pharmacodynamics and they communicated that initial data are expected in the second half of this year. One of our newer partners, Cessation Therapeutics, announced that they've received authorization to initiate a phase one clinical trial. CSX1004 was first discovered via collaboration with Scripps Research Institute and subsequently licensed to Cessation for development. Cessation is developing this compound for the prevention of fentanyl overdose. which is an indication that obviously has an important and urgent unmet medical need. At Pivo Therapeutics announced data for its bispecific AML drug candidate, APV0436, and that it plans to initiate two phase two clinical trials in AML populations. And lastly, we achieved a research progression milestone for small molecule inhibitors of a genetically validated target relevant to neurological diseases in one of our ion channel collaborations with GSK. This triggered a $2 million progression payment for OmniAB and Kurt will discuss the accounting for this. We're particularly excited about this program with GSK as it demonstrates the capabilities of our highly differentiated ion channel and transporters technology platform. Ion channels are key components in a variety of biological processes that involve rapid changes in cells. and they hold therapeutic potential in a broad range of indications, including neurological and metabolic diseases, pain, cancers, infectious diseases, and many others. As a result, ion-channel drug discovery provides a compelling opportunity, although it's been a challenging area for the industry to identify drugs to these high-value targets. Our ion-channel platform at OmniAb leverages our proprietary expertise in a combination of biological assays, medicinal chemistry, and in silico and computational chemistry applications to enable the discovery of ion channels targeting therapeutics in a variety of formats and modalities. We believe our differentiated core capabilities can assist partners in their advancement of drug discovery against this target class. We're continuously expanding our capabilities in this area. and we believe we have one of the most experienced teams of ion channel experts anywhere. We have an extensive bank of custom cell lines, reagents, and assays that are designed to accelerate ion channel drug discovery and development, and that's what attracts partners to this element of our technology and capabilities. As these are higher value and more difficult targets to identify, we structure our collaboration agreements accordingly. These deals provide for exclusivity on various targets and, as a result, have higher milestone payments and higher royalty percentages than we typically get for standard platform access agreements. We have agreements with GSK for two neurology targets that are in discovery phase, and another partner is Roche for three undisclosed targets that are also in the discovery phase. In total, we're eligible to receive a billion dollars in milestones on these five programs alone, along with royalties should a program be commercialized. And this last slide for me, which is slide number 13 in our deck, highlights our key areas of focus going forward. And it describes why we believe we're well positioned for future growth and can make an enduring impact on our industry and ultimately on global human health. Our business is highly scalable and we're focused on increasing partners and expanding programs by continuing to invest in technologies and innovations to power the discovery and development of effective therapeutic candidates. A focus on stakeholders and building value for stakeholders is at the foundation of what we do. And that focus is guided in collaboration with our board of directors and it's present in every employee here as well. While I mentioned our board of directors, I do also want to acknowledge on today's call that earlier this week, with heavy hearts, we announced the passing of a beloved board member here at OmniAB, Sunil Patel. Sunil was an accomplished biotech executive who was a longtime colleague and a co-architect of what we're building here at OmniAB. And I'll add that the team here is honoring Sunil's contribution and legacy as we continue to do our important work expand our technology, and grow our business. And now, before I hand the call back over to Kurt, I'll finish by saying that we look forward to keeping the investment community updated as we execute on our strategy. And with that, I'll pass it back over to Kurt now for a discussion of our second quarter financial results. Kurt?