OmniAb (OABI) Q2 2024 earnings summary

Executive summary

• Achieved strong growth in new partnerships and licenses, reaching 83 active partners and 333 active programs as of June 30, 2024, with 32 in clinical or approved stages; partnership base grew 30% over two years.

• Q2 2024 revenue rose to $7.6M from $6.9M year-over-year, driven by higher service revenue and accelerated deferred revenue from a discontinued GSK program.

• Net loss for Q2 2024 was $13.6M ($0.13/share), improving from $14.7M ($0.15/share) in Q2 2023; cash and investments totaled $57.2M at quarter end.

• Significant clinical progress included TEVA's TEV-56278 entering Phase 1, CStone's sugemalimab receiving EMA approval, and new technology advances such as xPloration patents and OmnidAb publication.

• The company continues to invest in R&D and platform improvements, expecting ongoing losses as it grows.

Financial highlights

• Q2 2024 total revenue was $7.6M, up 10% year-over-year, with service revenue up 70% to $4.2M and license/milestone revenue at $3.1M; royalty revenue remained stable at $0.3M.

• Net loss narrowed to $13.6M from $14.7M year-over-year; loss per share improved to $(0.13) from $(0.15); operating expenses decreased to $23.9M from $26.4M.

• G&A expense decreased to $8M from $8.7M, mainly due to lower share-based compensation and non-recurring prior year costs.

• $1.2M impairment on legacy unpartnered programs increased amortization of intangibles; $2.6M reduction in contingent liabilities recorded as other operating income.

• Cash and investments were $57.2M as of June 30, 2024, down from $87.0M at year-end 2023; gross margin for Q2 2024 was 68%.

Outlook and guidance

• 2024 total operating expenses expected to be slightly less than 2023; cash use in 2024 projected similar to 2023 (excluding a $35M milestone), with a substantial decrease expected in 2025.

• Milestone payments and royalties are expected to drive long-term revenue growth as more partner programs reach commercialization.

• Current cash and operations expected to fund the business for at least 12 months and for the foreseeable future.