OmniAb, Inc.

and thank you for joining our fourth quarter and full year 2024 financial results conference call. There are slides to accompany today's prepared remarks, and they're available in the investor section of our website at www.omniab.com. Before we begin, I'd like to remind listeners that comments made during this call by management will include forward-looking statements within the meaning of 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 this live broadcast, today, March 18, 2025. 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 OmniApp'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. And with that, let me turn the call over to Matt.

Thanks, Kurt. Good afternoon, everyone, and thanks for joining us today. Starting now with slide number four, I am pleased to report strong performance and momentum in 2024 as we achieve double digit percentage growth in both the number of active partners and the number of active programs that leverage our technology. Our partners clinical stage programs are advancing and we're encouraged by the progress that they're making. We introduced new technologies and enhancements that are positively impacting our partnerships and driving efficiencies in our increasingly scalable business. These innovations are not only differentiating our business, but are also attracting new partners and creating opportunities for significant future growth potential. Potential key royalty assets are beginning to come into focus, along with other building blocks of value that we expect will drive our growth in the coming years. As we look ahead here in 2025, we're excited about the opportunities we're seeing and we're confident in our plans. This schematic here on slide number five provides a bit of an outline along with some details on how we view our business and how one can look at the interconnected elements of value here in Omnia. Starting with the upper left corner, our novel platform technologies continue to differentiate us and create new partnerships and also drive our existing partners to start new programs. We have deep relationships with a growing number of partner companies, And those relationships create a unique vantage point in the industry that informs our thinking about new technology innovations and launches, as well as any strategic technology acquisitions. We now have a long track record in this area. Value creation really starts with the additions to our pipeline, as mentioned in the center of the slide. And here we've driven double-digit percentage growth over multiple years and have done so through a variety of industry macro environments. which I think is a statement about the resilience of our model and the broad applicability of our technologies. As programs progress into clinical development, as depicted on the top of the circle on the right side of this slide, they generally start to become more publicly visible. And those programs will generally drive realization of contracted milestone payments. And ultimately, we expect some of these programs will advance to become royalty-bearing assets, which is a core element of value. A royalty is defined simply as a percentage of top-line revenue, and royalties can create steady streams of durable cash flows that increase with higher product sales. There are a number of factors that drive value for a particular royalty asset, including the partner and their level of investment, elements of the program as it becomes a product, and its commercial potential or total addressable market, which can be impacted by things like the number of indications or the number of geographies that are being pursued. Any of these elements or a combo of them can drive significant value at various points in a program or product's life cycle. As more programs progress, our platform continues to have more visibility across the industry and continues to be even more validated. And we believe that also drives more additions to the pipeline. We're highly committed to our model and are focused on building value for all of our stakeholders in this highly leverageable business framework. I'll touch now on a few of our key business metrics, starting here on slide number six with active partners. We're pleased to report an 18% year-over-year growth in the number of active partners, showing our ongoing efforts to expand and diversify our partnership base. As of December 31st, 2024, we had 91 active partners. In the fourth quarter, we added new platform licenses with Insight Corporation and Fotinia Biosciences. And new commercial partners included NBP Pharma and Taiyo Pharma. As shown in the call-out box pie charts, our partner diversity spans academia, commercial, and discovery partners. And you also see a breakdown, a geographic breakdown of our partners here as well. Our growing partner count reflects the industry's strong interest in our technologies and is also a recognition of our dedication to innovation and collaboration. Over recent years, we've shown steady growth in active partners through various cycles in the biotech and pharma sectors. Turning now to slide number seven, we also saw robust year-over-year growth in the number of active programs at a 12% increase. As of December 31st, the number of active programs increased to 362 net of attrition. We had a particularly productive fourth quarter in terms of additions. Last year, as we have seen and as was reported more broadly in the industry, some pharma companies strategically realigned and reprioritized their therapeutic programs and pipelines. While these realignments are frequently driven by goals to concentrate on more impactful areas of research, as well as to adapt to evolving market demands and regulatory landscapes, they often reflect attrition as an inherent aspect of the drug development process. As shown in the call-out bar graph, we had 31 terminations and 69 active program additions in 2024. I think it's really important to note here that more than 98% of our active programs have contracted future economics to us, which positions us well to create future value for our shareholders. Now on slide eight, as of December 31st, the number of active clinical programs and approved products by partners was 32. Our partners have now initiated or completed over 200 separate human clinical trials with OmniAB-derived programs, which is an indication of their significant investment and conviction around the programs. These trials span a range of therapeutic areas, including oncology, immunology, and other indications. This extensive downstream clinical activity highlights the trust and the confidence our partners have in the novel therapeutics that are coming out of our plasma. In 2024, five OmniAb-derived programs entered the clinic. In Q4, a new J&J program targeting GPRC5D and InnoLake Pharma's anti-C40 agonist program both entered phase one clinical trials. Based on dialogue with our partners, we see potential for approximately five to seven new entries into clinical development for novel OmniAb-derived programs in 2025. As I just mentioned, in 2024, five novel OmniAB-derived programs entered the clinic. And here on slide number nine, you see those new clinical additions on the top part of the slide, which includes programs with TEVA, Merck KGA, GenMAP, J&J, and Innalake. In 2024, we also saw five programs exit clinical development. shown on the bottom part of this slide, resulting in a flat net year-over-year growth in active clinical programs. Clinical attrition programs included two from GENVAB, which were removed from clinical development in Q3 and Q4 but remain active in earlier stages, according to company disclosures. While the Roche and Amgen programs reported in Q1 and Q4 of last year, are no longer active, they have minimal to no impact on the value of our partner portfolio due to the lack of any remaining economics to us. And overall, while the attrition of certain programs reflects the dynamic nature of the drug development process, the addition of new clinical entrants highlights ongoing innovation and the potential of our technology for discovering new therapeutic options. So together, they sort of highlight both the challenges and the opportunities in therapeutic discovery and development. Slide 10 highlights the annual growth in our portfolio of post-discovery stage assets. And I will mention here that we are excited about the diversity and potential therapeutic impacts of the asset in our preclinical stage bucket, shown here in the orange slice of the pie chart, and hope to be able to shed more light on its specific contents and programs that are in that orange slice in the coming quarters. Here on slide 11, you'll find what we are now calling our prior format for showing clinical stage and later partnered pipeline programs. Over time, the pipeline has been getting a bit large for this traditional format, and recognizing the opportunity for improvement, we're now introducing a new format for presenting our partnered clinical pipeline. The new format is here on slide 12 and provides an overview of clinical and commercial programs organized from phase one through to late stages and approvals displayed from left to right. Program placement is based on a program's most advanced clinical status and this layout only includes programs where OmniAB has future or remaining economic interests. By including clinical and commercial stage partner programs, that do not have future or remaining economic benefits to us, such as teclistamab or teragolamab, we aim to focus attention on financially impactful programs. We think this layout will help stakeholders more quickly synthesize the value of our clinical and commercial stage pipeline. Also, it gives us the ability to easily highlight new and additional indications and geographies that are being pursued by our partners. We believe that by clearly presenting these elements, will better illustrate the unique value proposition of each individual program. Now, I'll touch on just a few recent partner highlights. Our press release that was issued this afternoon covers some additional updates from Q4 and recent months, but I wanted to spotlight a few specific programs that we see as standouts. Slide 13 reviews GenMADS Acosunlumab, which is a bispecific antibody that targets PD-L1 and 4,1BB. GENMAB recently, and I believe for the first time, highlighted a potential billion dollar market opportunity for acosunlumab in non-small cell lung cancer, emphasizing the addressable patient populations in the US, Japan, and the EU. They're pushing forward with the last stages of clinical development of acosunlumab and announced that a phase three trial as a second line therapy in non-small cell lung cancer is now enrolling patients. GENMAB also expects to provide an additional phase two data update for Acosunumab this year, and we potentially expect that at ASCO. On slide 14, you can see that TETA has highlighted continued progress in their now more prominent innovative medicines pipeline, and have been showcasing advancements with OmniRAT-derived TEV408, and omni-chicken-derived TDV278. 408 is a potent anti-IL-15 neutralizing antibody that's currently being developed for the treatment of celiac disease and vitiligo. And 278, which is an anti-PD-1 IL-2 fusion protein, is being developed in oncology. Moving on now to slide number 15, where we have immune advance programs, IMVT-1402 and Batoclumab. Batoclumab is a promising anti-FCRN monoclonal antibody for treating autoimmune diseases. And IMVT-1402 is a next-generation anti-FCRN antibody that's designed for deep IgG reduction with minimal side effects. We think these assets are poised for significance, driven by large total addressable markets with multiple indications. Immunovant describes IMVT-1402 as a potentially best-in-class, highlighting its promising therapeutic potential. They recently outlined several near-term milestones and catalysts for both IMVT-1402 and Baticlumab. They're currently enrolling patients in pivotal Phase IIb studies for Graves' disease and difficult-to-treat rheumatoid arthritis for IMVT-1402. They plan to initiate registrational programs for three additional indications by March 31st of this year and aim to evaluate IMVT-1402 in a total of 10 indications by March 31st of next year. For batoclumab, as you can see here, Amitabh expects multiple data readouts and some that are in the very near future. Evaluate Pharma published an industry report at the beginning of this year that included a summary of their analysis of the 10 most valuable R&D programs on a net present value basis across the entire pharmaceutical industry. And we were happy to see Baticlumab and IMVT-1402 both highlighted on that top 10 list. Now on slide number 16, as we look ahead now in 2025, We anticipate several catalysts that will drive our continued growth and position the business for success. Pipeline expansion and advancement remain key elements, with significant progress expected in clinical and future royalty programs. We're excited about the potential for new deals that are in progress and the launch of novel technologies that we think should have a substantial impact on the industry, with more on those launches to be revealed during the year. We focused on and looked to further leverage our relationships and what we call the OmniAb ecosystem of partners that we've created over the years. This allows us to think about and analyze the economic returns for technology expansion and technology launch options that are available to us. And I think the tech launch options that we've invested in and are planning on this year can create significant opportunity and potential returns, and we're excited about that. Our partner base has continued to grow and diversify, providing a solid foundation for sustained expansion. And with a clear business model that's now positioned to be leveraged more efficiently, we think we're well equipped to create value for our stakeholders and achieve our strategic objectives. And with that, let me now turn the call back over to Kurt for a discussion of our fourth quarter financial results and our 2025 outlook. Kurt?

Thank you, Matt. I'll start with slide 18 with our revenue in the fourth quarter of 2024. Total revenue increased substantially reaching $10.8 million compared with $4.8 million for the same period in 2023. This increase was primarily due to higher license and milestone revenue driven by new deals and the clinical advancement of our partner programs. Service revenue declined as we completed work on certain small molecule ion channel programs that were then transitioned over to the partner. Regarding royalties, typically we receive sales data from our partners on a lag. So we record royalty revenue based on estimated net sales of our partner's products. When we do receive the final sales data, any difference between our actual results and the prior estimates are adjusted in the period in which they become known. In the fourth quarter, we received an update on some information regarding the sales of sucomelamab and zimborelamab in China during 2024 and accounted for that downward adjustment in the fourth quarter to reflect this new information. Turning to slide 19, let's take a look at our operating expense. Operating expense in the fourth quarter would have been lower than the prior year period if not for a $2.7 million impairment charge related to certain small molecule ion channel intangible assets. The impairment charge was a result of a shift in our focus for ion channels from small molecules to antibodies. This shift resulted in the impairment of certain small molecule-related and tangible assets. For R&D and G&A expense, both decreased versus the prior year, primarily due to lower stock-based compensation expense and reduced outside expenses as we continued to drive efficiencies in our business. We take a look at the quarterly P&L on slide 20 and focus here on the bottom part of the P&L. Our net loss for the fourth quarter of 2024 was 13.1 million or 12 cents a share versus a net loss of 14.1 million or 14 cents per share in the prior year period. So moving on to slide 21, you can see that for the full year, total revenue increased when excluding the $10 million milestone related to the first commercial sale of tequistamab in the EU. was recorded last year. The increase then in license and milestone revenue, excluding this $10 million, was driven by advancement in our partners' clinical programs and new licensing deals. Service revenue declined slightly year over year, primarily due to the completion of certain ion channel programs, which was slightly offset by an increase in our service revenue for our antibody discovery work. Additionally, royalty revenue is lower than the prior year primarily due to the highly competitive PD1, PDL1 market dynamics in China, which led to lower product sales. Going over to slide 22, full-year operating expense was lower in 2024 compared with 2023. Our R&D expense was flat, while the G&A expense decreased mainly due to non-recurring consulting and service costs in 2023 related to our spin-out as a public company. as well as lower legal and stock-based comp expenses. And also note that the total impairment charges taken during the year was 3.8 million. Moving on to slide 23, if we take a look at the full-year P&L and once again focus on the bottom part of the schedule, the net loss for 2024 was $62 million, or 61 cents per share, compared with the net loss of 50.6 million, or 51 cents per share, for 2023. On to slide 24, if you break out the year by quarter, you'll note a few things. First, as we had previously guided, revenue was weighted toward the second half of the year. And you'll also note a general trend of both lower R&D expense and lower G&A expense over time. And as I'll discuss in a moment, we expect this trend to continue into 2025. On the amortization of intangibles, this is usually fairly stable, but we had a couple of impairments one in the second quarter and one in the fourth quarter that caused those particular quarters to deviate from their baseline. Turning to slide 25, you'll see our balance sheets for both 2024 and 2023. The company is well capitalized and we exited 2024 with 59.4 million in cash, which was at the top end of the guidance range that we provided during our last earnings call. As we mentioned on our Q3 earnings call in November, We had raised $11.4 million in net proceeds off of the ATM. Most of this was in the third quarter, but a portion was in the fourth quarter. We have not raised any additional amounts off the ATM program beyond what we reported at that time. I also want to point out one other item on the balance sheet as it relates to some of the guidance we are introducing today. The third line down in the liabilities section is deferred revenue. Most of this was placed on the balance sheet years ago prior to OmniAd becoming a standalone company from upfront payments received for the small molecule ion channel licenses. As we complete work on those programs, the revenue is recognized and the deferred revenue balance is reduced as it amortizes over the research terms of those projects. You'll note that this balance is now down to just $2.5 million. As a final topic, let's turn to slide 26. where we introduce our 2025 financial guidance. This is the first time we've ever provided revenue guidance, and this guidance is based on information that our partners have disclosed to us, as well as information that our partners have disclosed publicly about their programs. Based on this information, we expect that 2025 revenue will be in a range of $20 to $25 million. But I want to draw your attention to the lighter shaded regions of the bars on the graph on the left. Note that a significant portion of the revenue in 2024 was non-cash. In fact, close to one-third of the revenue earned last year did not result in actual cash received in that year. A significant portion of our service revenue has been the amortization of deferred service revenue that I just mentioned. One of the primary factors driving the revenue decline in 2025 is that this non-cash portion of service revenue is decreasing. And in fact, from a cash perspective, we actually expect an increase in the amount of cash that we will receive from our partners in 2025 compared to the cash that we received in 2024. So while revenue may be decreasing, it's only the non-cash piece that's causing the decrease. Moving to operating expense, I mentioned the strategic shift we made in our ion channel business to focus on antibodies. This shift also resulted in an alignment of our specific staffing needs with the amount and type of work we're doing in this area and resulted in a reduction to our ion channel related headcount earlier this quarter. While this will result in some charges in the first quarter, we still expect our operating expense for the year to decrease in 2025 relative to 2024. More specifically, total operating expense is expected to be in the range of 90 to $95 million. I also want to point out that historically, about 40% of our operating expense has been non-cash, primarily from the amortization of intangibles and stock-based compensation, and we expect 2025 to be similar. As for our cash use, we expect our cash use in 2025 to be lower than in 2024, excluding the proceeds from our 2024 ATM issuance. As a point of reference, our cash use in 2024 was $38.9 million, when you exclude the $11.4 million of proceeds from the ATM. One additional comment about our tax rate. While our tax rate might fluctuate from quarter to quarter, we expect the full-year effective tax rate in 2025 to be around 0%, as our valuation allowance is expected to largely offset the tax benefit associated with our net loss. This tax benefit will eventually be realized when the company becomes profitable. While the biotech industry is certainly going through some volatility, our business has continued to perform well. The leadership here at Amniab have run businesses for many years and we're committed to growing the business while at the same time staying fiscally responsible to position us for continued success. And with that, I'll open up the call for questions. Operator?