OmniAb, Inc. Common Stock 2026 Q3 Earnings Call

You may begin now. Thank you, operator, and good morning, everyone.

This is Kurt Gustafson, OmniAb's Chief Financial Officer, and thank you all for joining our Third Quarter 2026 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 omniab.com. Before we begin, I would 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 of the 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, October 30, 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 this morning is Matt Foehr, OmniAb's President and CEO, and Amechi Nwachuku, our Chief Operating Officer. During today's call, Matt is going to cover some highlights. Amechi will provide an update on our xPloration program, and I will go through our financial results and guidance, and then we will open up the call to questions. With that, let me turn the call over to Matt.

Thanks, Kurt. Good morning, everyone, and thanks for joining our third quarter call. I will start now on slide 4, which includes some highlights from the third quarter. Our business here at OmniAb has been designed to benefit from diversified, long-term, and durable revenue streams. We continued to drive strong performance in the third quarter as our highly differentiated technology platforms are facilitating growth in partnerships and progression of programs. We have been and continue to be very active from a licensing perspective, and announced a major new deal in the quarter with Eli Lilly for a novel ion channel program.

We were really pleased to enter into this important new relationship with Lilly, as they're obviously focused on delivering medicines to address major unmet medical needs, and our differentiated expertise and established technologies that specifically relate to ion channels are well-positioned to help facilitate that and drive this new discovery program forward. Under the terms of that license deal, we received an upfront payment and are eligible to receive up to $370 million in research, development, and commercial milestone payments, as well as potential tiered royalties on global net sales. In Q3, we saw increased utilization of our differentiated technologies within our growing ecosystem of partners, and we also saw strong traction with our xPloration platform and steady progress across programs that our partners are advancing through various stages of development.

These themes were front and center at our Investor and Analyst Day that we held earlier this month, and we really appreciate everyone who joined us for that event here in Emeryville and on the video webcast. As highlighted at that event, xPloration, our AI-powered high-throughput single B-cell screening platform, is now available to all potential customers. This creates valuable opportunities for our business, and Amechi will speak to xPloration in more detail in his section. We also launched OmniTides, our new peptide discovery offering powered by our OmniUltra transgenic chicken. OmniTides is designed to provide an integrated discovery-to-synthesis workflow for partners, with available peptide manufacturing by qualified CROs to generate naturally optimized peptides for a range of growing therapeutic applications. Finally, our continued strong business performance has resulted in yet another raise to our 2026 revenue and cash outlook.

Kurt will speak to our updated guidance in greater detail during his portion of the presentation this morning. Moving now to slide 5. Our novel technologies here at OmniAb reinforce our position as a key enabling technology licensing partner and support both existing and new partnerships. Novel technologies and our capabilities, as well as our vantage point in the industry, keep us at the forefront of next-generation therapeutics discovery, and we think position us to create meaningful value for our stakeholders. Slide 5 shows our technology platform organized around how we help partners efficiently create, screen, and ultimately deliver novel therapeutics. This quarter, we advanced important elements of the platform, and I mentioned OmniTides, which incorporates in vivo optimization driven by Biological Intelligence, which is a term we coined several years back.

OmniTides leverages Biological Intelligence early in discovery, and that can support efficient progression to chemical synthesis and ultimately development. Our novel transgenic chicken-based technologies, and specifically OmniChicken and OmniUltra, shown on the left here, continue to attract new partners and drive new programs. Our OmniDeep offering, shown across the bottom of this slide, which is our suite of AI and machine learning tools woven throughout our technology stack, also drives significant value. That's along with the extremely important novel data layers that we have and can generate that can also create substantial business opportunities for us. I'll briefly review now some of our metrics, starting with slide 6. At the end of the third quarter, we had 111 active partners, which is a net increase from 110 at the end of the second quarter.

New licenses in Q3 included Yamaya Incorporated and Monash University, and that was partially offset by a single partner attrition event that was triggered by one of our larger partners acquiring one of our smaller ones. We have seen this from time to time and generally see these as positive events for assets that have been discovered with our technologies. We continue to have a nice diversified mix of partners and are proud that now nine of the 10 largest pharmaceutical companies in the world are active partners of OmniAb, which I think demonstrates the quality and the strength of our partner base. Moving on to slide number 7, you will see here our active programs metric. We ended the quarter with 433 active programs.

That is up from 407 at the end of 2025, reflecting 38 additions and 12 terminations so far this year, and we saw a net increase of eight programs in the third quarter alone. Attrition is obviously a normal part of the business as partners refine their pipelines and their investment and R&D priorities. Importantly, more than 98% of our active programs have contracted future economics to OmniAb, and across our portfolio, we have more than $3 billion in total contracted potential milestones with an average royalty rate of approximately 3.4%. On the clinical front, slide number 8 here shows our partners' active clinical programs and approved products. At the end of Q3, there were 34 active clinical programs and approved products that leverage our technologies. We have had four new clinical additions so far in 2026, and we continue to anticipate new clinical entrants in the very near term.

These active clinical programs carry approximately $340 million in remaining potential milestones to OmniAb. Turning to slide 9, this graphic summarizes the status of our clinical and commercial stage partner pipeline as of September 30th for programs that carry remaining downstream economics to OmniAb. The placement of each program here on this graphic is based on its most advanced status in any geography, market, or indication. The right-hand side of this slide continues to include what some of our partners view as important potential first-in-class or best-in-class medicines, and I will review some of those when I cover the next slide. I also note that subsequent to the end of Q3, just last week actually, batoclimab, which is shown here on slide number 9 in the registration column in blue, received approval in China for the treatment of generalized myasthenia gravis in adult patients who are anti-acetylcholine receptor antibody positive.

Batoclimab in China represents the fourth drug approved from our platform, so the next time we show this graphic with a full year 2026 status, one of the changes and updates of progression that investors will see is that batoclimab will slide over to the right into the approved column. I am moving now onto slide 10, which calls out a few recent partner program developments. The three programs starting from the left of this slide, IMVT-1402, TEV-408, and precemtabart tocentecan, all are being described as potential pipeline-in-a-product type assets with either first-in-class or best-in-class potential. These are programs that are going after indications with substantial unmet medical needs, with partners who are highly committed to rapid advancement. Also highlighted on this slide on the right side, you will see here the approval update related to batoclimab in China that I mentioned earlier.

Now, wrapping up my section on slide 11, we highlight here what we see as OmniAb's pillars of value. Our differentiated discovery technologies, innovative capabilities, and expanding partnerships, we think position us to drive durable, long-term value for our stakeholders. We have a growing pipeline and broad partnership base that supports substantial contracted downstream milestones and royalties from a diversified basket of promising potential first-in-class and best-in-class programs, while providing us unique industry insights that continue to inform our strategic priorities and our areas of focus. In addition, our expanding suite of innovative discovery technologies, including our chicken-based technologies, drive new partnerships and open additional avenues for licensing value creation both now and in the future. Further, our differentiated xPloration platform expands our reach and complements our existing discovery technology offerings while adding durable, meaningful revenue streams to the business.