OmniAb, Inc. Common Stock 2026 Q2 Earnings Call

Thank you, operator, good afternoon, everyone. Thank you all for joining our second quarter 2026 financial results conference call. There are slides to accompany today's prepared remarks, they're 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 by OmniAb's management 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 6th, 2026.

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 this afternoon is Matt Foehr, OmniAb's President and CEO, as well as Amechi Nwachuku, our recently appointed Chief Operating Officer. During today's call, Matt is going to cover some business highlights I'll review our Q2 financial results and update our full-year guidance, then we'll open the call to questions. With that, let me turn the call over to Matt.

Thanks, Kurt. Good afternoon, everyone, thanks for joining our second quarter call. I'll start now on slide number four. We continue to see momentum in the business with the second quarter's strong performance led by advancements in our portfolio of partnered programs. Our business here at OmniAb has been designed to benefit from long-term and durable revenue streams. We're excited to report that the programs derived from our differentiated discovery technologies continue to move into the clinic and to make progress through later-stage clinical development. This clinical progression gives visibility into the value that can be realized as our pipeline matures and as an increasing number of partnered programs reach milestones and approach potential royalty generation. Our novel technologies reinforce our position as a key enabling technology licensing partner and support both existing and new partnerships.

Novel differentiated technologies and our capabilities keep us at the forefront of next-generation discovery, enabling meaningful value creation for our stakeholders and the broader industry. We're pleased to note that both of our most recently launched antibody generation technologies, which are OmniUltra and OmnidAb, are opening up new markets and important new opportunities for us. We're seeing an increase in our chicken-derived technologies producing programs that are now in clinical trials. For xPloration, we saw the sale of two instruments during the quarter as we continue to build a very strong foundation for that element of our business. We think xPloration gives us an important opportunity to broaden our reach, diversify our revenue streams, and deliver greater value for our stakeholders and for our customers.

Ongoing discussions with our partners, some very recent market research, and our growing funnel of high-quality prospects evaluating the xPloration system for use in their labs gives us increasing confidence in the potential market opportunity. We're also really excited to have welcomed here Amechi to our team, who's an established and highly experienced global executive to help lead and grow the business. Lastly, we're encouraged by the continued progress across our partner programs that drove another very strong quarter for us. We're again raising our full year 2026 financial guidance by increasing both our revenue and our cash outlook, which we view as important indicators of the value that's embedded in our growing portfolio of partnered programs that have contracted downstream economics. Kurt will speak to our updated guidance in greater detail during his remarks.

I'd also like to take a moment to highlight the continued expansion of our platform as our innovation engine advances novel technologies that we believe further differentiate and strengthen our value proposition. We have a growing ecosystem of partners. That gives us a pulse on the work that partners are doing and that they plan to do. It also gives us a unique vantage point on the industry's needs more broadly. We leverage that vantage point as we continue to enhance our technologies, our workflows, and our capabilities. I want to highlight xPloration here on this slide number five. xPloration extends our business and nicely complements our novel antibody generation technologies. xPloration is our proprietary high-throughput single B-cell screening platform that leverages machine learning and artificial intelligence.

The platform includes a competitively priced instrument and proprietary single-use consumables, as well as annual software subscriptions and maintenance contracts. It therefore has potential to generate multiple revenue streams to our business. We achieved an important milestone within Q2 with the sale of two instruments, while strong commercial interest continues to expand our sales pipeline. Early feedback highlights xPloration's rapid runtimes, ease of use, and overall robustness. With these user benefits, we strongly believe we have the right technology at the right time, as we're entering an era when our partners and the broader industry increasingly recognize the value of lab automation and high value and high impact instrumentation for large-scale proprietary data generation and AI and ML-aided screening and selection.

We continue to be very excited about what this technology can contribute to the business and look forward to sharing more with you at our upcoming Investor and Analyst Day on October 6th, that I'll talk more about in a moment. I'll turn now to some of our metrics, starting on slide number six. At the end of the second quarter, we had 110 active partners. In Q2, new licenses included agreements with EnRosa Therapeutics and argenx. argenx is especially notable given that they're a global leader with a strong heritage of innovative R&D and are described as, "leading a new era of innovation in immunology." We think our technologies are well-positioned for some of the things that we think they're looking to achieve in novel drug discovery.

The mix of our partners across discovery stage companies, large pharma, and academic institutions remains really well-balanced. A majority of our partners are headquartered here in the U.S., with the remainder primarily in Europe and in Asia. We're also proud that eight of the 10 largest pharmaceutical companies in the world continue to be active partners of OmniAb, which we believe demonstrates the quality and the strength of our partner base and further validates the value of our technology platforms. I'll move on to slide number seven, and you'll see here our active programs metric. We ended the quarter with 425 active programs, with an increase that reflects both the addition or new program starts and some normal attrition that occurs as partners refine their pipelines and their priorities. Importantly, about 98% of our active programs include contracted future economics to OmniAb.

Across our portfolio, we have more than $3 billion in total contracted potential milestone payments on standard antibody licenses, with an average contracted royalty rate of approximately 3.4%. On the clinical front, slide number eight here shows our partners' active clinical programs and approved products. At the end of Q2, there were 34 active clinical programs and approved products that leverage our technologies. That total reflects both new entrants into the clinic and attrition. We've had four new clinical entrants so far in 2026, and we continue to anticipate new clinical entrants. We've seen important clinical advancement within these active clinical programs year to date, and we're looking forward to further positive advancement activity later this year. I note that we have approximately $340 million in remaining contracted potential milestone payments to OmniAb for these active clinical stage programs.

Also, as mentioned on the slide here, there are now six programs in phase I or phase II clinical trials that are derived from our novel genetically engineered chicken antibody discovery technologies, specifically OmnidAb and OmniChicken. I think it's worth noting that OmniAb is the only company in the world with a transgenic chicken platform that creates fully human antibody sequences. Traditionally, many therapeutic targets are highly conserved or similar in sequence among mammals, and that adds to the value proposition of our transgenic chickens. Part of the advantage of a chicken platform is based on the evolutionary distance of a chicken as a biological host for discovery versus other animals, specifically mammals. This distance allows our chickens to create a robust response and a diverse set or a library, if you will, of antibodies against novel targets that a mammal or other approaches likely wouldn't.

We have a number of different types of genetically engineered chickens that can create unique antibody repertoires and help discover drugs such as traditional heavy and light chain antibodies, common light chain formats, single domain antibodies, ultralong CDRH3 domains, dual modality antibodies, and now even peptides. These capabilities open market opportunities and are driving partner interest. We're seeing increasing interest in our engineered chicken platforms, and now with further clinical validation, we think that can drive even more interest. Turning now to slide nine, this graphic summarizes our clinical and commercial stage partner pipeline for active programs that carry downstream economics to OmniAb. The placement of any program here is based on its most advanced stage in any geography or in any indication.

As you can likely tell, there's been some significant movement in the later stages of development with additional programs now in phase I, in phase II, and in phase III, with some bigger events having happened just in Q2. I'll call out two programs that jumped from phase I directly into phase III during Q2. ramantamig, which is J&J's trispecific antibody for multiple myeloma, and Merck KGaA's precemtabart tocentecan, which is a CEACAM5-ADC for colorectal cancer. I'll also mention here the Boehringer Ingelheim BI 878 program, which is shown on the pipeline here in phase II. BI is pursuing a MASH indication, which is an important market and is a major health challenge. The right-hand side of this graphic is continuing to get more crowded with what some of our partners view as important potential first-in-class or best-in-class medicines.