Executive Summary

Q2 revenue was $7.61M (+9.6% y/y; +100% q/q), driven by a one-time $1.3M acceleration of deferred service revenue from GSK’s ion channel program discontinuation; net loss improved to $13.63M and EPS to -$0.13 from -$0.19 in Q1. Management reiterated 2H weighting of milestones.
Guidance tightened: total operating expenses now expected to be slightly less than 2023 (previously “approximately the same”), cash use similar to 2023 (ex-TECVAYLI milestone), and substantially lower in 2025 on milestone cadence leverage.
Business momentum: 83 active partners (+3 q/q), 333 active programs (+6 q/q), 32 clinical/commercial programs; new licenses with DAAN Bio, Topaz Therapeutics, 92Bio, and MSKCC; continued expansion of OmnidAb and xPloration AI-enabled screening platform.
Stock reaction catalysts: near-term partner readouts and starts (e.g., acasunlimab Phase 3 initiation in 2024; sugemalimab EU approval progressing to commercialization partnerships; Teva’s TEV-56278 entered clinic), plus expected 2H milestone weighting and 2025 cash burn inflection.

What Went Well and What Went Wrong

What Went Well

Added multiple new partners (DAAN Bio, Topaz Therapeutics; recently 92Bio and MSKCC) and grew partners/programs net of attrition; “this year has the potential to be our best year ever in new partners and licenses.”
Technology leadership reinforced: OmnidAb peer-reviewed publication and xPloration platform progress with AI/deep learning integration; new patents on microcapillary array screening.
Financial discipline: G&A down y/y on lower SBC and non-recurring ERP costs; operating expenses now expected slightly below 2023; cash of $57.2M at quarter-end supports runway.

What Went Wrong

Revenue mix lifted by non-recurring service revenue acceleration ($1.3M) due to GSK discontinuation; underlying milestone revenue remained 2H-weighted.
Asset attrition: GSK discontinued small molecule Nav1.1; Roche returned Kv7.2 rights post-quarter—OmniAb will seek repartnering but near-term revenue impact limited.
YTD revenue down sharply versus 2023 due to prior-year milestone timing (TECVAYLI EU $10M in 2023), highlighting dependence on partner milestones for growth.

Financial Results

P&L vs Prior Periods and y/y

Metric	Q2 2023 (oldest)	Q1 2024	Q2 2024 (newest)
Revenue ($USD Millions)	$6.95	$3.80	$7.61
Net Loss ($USD Millions)	$(14.73)	$(18.96)	$(13.63)
Diluted EPS ($)	$(0.15)	$(0.19)	$(0.13)
Net Income Margin (%)	-212.1%	-499.0%	-179.0%

Notes:

Q2 revenue increase due to $1.3M accelerated service revenue from GSK program termination; milestone revenue remains 2H-weighted per management.
Net margin improvement q/q reflects higher revenue and other operating income from CVR liability reduction ($2.6M) and non-cash impairment effects (amortization up due to $1.2M).

Revenue Mix

Revenue Mix	Q2 2023 (oldest)	Q1 2024	Q2 2024 (newest)
License & Milestone ($M)	$4.33	$0.72	$3.13
Service ($M)	$2.45	$2.77	$4.17
Royalty ($M)	$0.17	$0.32	$0.32

KPIs

KPI	Q4 2023 (oldest)	Q1 2024	Q2 2024 (newest)
Active Partners	77	80	83
Active Programs	325	327	333
Clinical/Commercial Programs	32	31	32

Balance Sheet Snapshot: Cash, cash equivalents & ST investments were $57.2M at 6/30/24; $69.0M at 3/31/24; $87.0M at 12/31/23.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Operating Expenses	FY 2024	Approximately same as 2023	Slightly less than 2023	Raised efficiency (lowered opex)
Cash Use	FY 2024	Similar to 2023, excluding $35M TECVAYLI milestone	Similar to 2023, excluding $35M TECVAYLI milestone	Maintained
Cash Use	FY 2025	Substantially lower than 2024	Substantially lower than 2024	Maintained
Cash Runway	Ongoing	Sufficient capital to fund operations	Sufficient capital to fund operations	Maintained
Effective Tax Rate	Forward	Low-to-mid teens going forward (can fluctuate)	No update provided in Q2	Maintained prior commentary

Drivers: Lower opex reflects SBC and ERP non-recurring costs abating, and tighter expense control; 2025 cash use drop expected from increased milestone inflows as programs advance stages.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023, Q1 2024)	Current Period (Q2 2024)	Trend
AI/Technology (OmniDeep, xPloration)	Launched OmniDeep; emphasized AI/ML and VAE models; growing interest; OmnidAb launch drew strong partner demand.	Demonstrated distributed deployability of xPloration; presented at PEGS; new patents issued; platform leverages AI/ML for throughput gains.	Strengthening adoption and IP protection
Partner Pipeline & Milestones	6 new clinical starts in 2023; 4–6 expected in 2024; milestones 2H-weighted.	TEV-56278 (Teva) entered clinic; acasunlimab Phase 3 planned; 2H milestone weighting reiterated.	Building toward catalysts
Ion Channel Portfolio Reprioritization	Highlighted 5 discovery-stage programs with GSK/Roche and >$1B milestones potential.	GSK discontinued Nav1.1; Roche returned Kv7.2 (post-Q2); CVR liability reduced; repartnering optionality.	Mixed: pruning with optionality
Royalty/Commercialization Updates	Steady China royalties (e.g., sugemalimab); TECVAYLI milestone timing drove 2023 revenue.	Sugemalimab EU approval; 3% royalty rate; commercialization partner search ongoing—timing uncertain.	Potential future uplift, timing TBD
BD Mix and Funding Environment	Despite sector headwinds, partner count/programs grew; expanded BD in US/EU/Asia.	Strong quarter for new program starts; well-funded startups increasing; inbound interest rising.	Positive momentum

Management Commentary

“Given the velocity of new deals and a growing book of business, this year has the potential to be our best year ever in new partners and licenses.” — CEO Matt Foehr
“This revenue was consistent with our expectations with the exception of higher service revenue… [GSK program] triggered an acceleration of $1.3 million in service revenue.” — CFO Kurt Gustafson
“Operating expenses… now expect total operating expenses in 2024 to be slightly less than total operating expenses in 2023.” — CFO
“xPloration… can be paired with deep learning and AI… to really increase throughput.” — CEO

Q&A Highlights

Exploration platform strategy: optionality to provide instruments to partners in future; IP characterized as microcapillary-based, unique, and AI-integrated.
Milestone visibility: forecasts based on mix of public and partner information; more program visibility as assets enter the clinic.
Asset returns & repartnering: CNS small molecule assets from GSK/Roche at discovery/preclinical stages; co-ownership enables repartnering opportunities.
2025 revenue/cash dynamics: primary driver expected to be milestone revenue; royalties currently modest, potential incremental EU royalties from sugemalimab.

Estimates Context

S&P Global consensus estimates for Q2 2024 revenue and EPS were unavailable for OABI due to missing CIQ mapping in the SPGI dataset; therefore, beat/miss assessment versus Street cannot be determined this quarter. [SpgiEstimatesError: Missing CIQ mapping for ticker 'OABI']

Where estimates may need to adjust:

2H milestone weighting reiterated and new clinical starts increase the probability of milestone timing into late 2024/2025; revenue phasing expectations should reflect the one-time $1.3M service revenue uplift in Q2 and potential incremental sugemalimab royalties in EU subject to commercial partner execution.

Key Takeaways for Investors

Revenue quality: headline Q2 growth benefited from a non-recurring $1.3M service revenue acceleration; focus on 2H milestone cadence for sustainable growth.
Expense discipline: opex guide tightened lower vs 2023; expect operating leverage as partner/program count grows without material opex increases.
Pipeline catalysts: watch acasunlimab Phase 3 initiation in 2024, Immunovant batoclimab/IMVT-1402 data timeline, and additional OmniAb-derived entries into the clinic (target 4–6 in 2024).
Royalties optionality: sugemalimab EU approval with a 3% royalty rate could add royalties as commercialization partners are secured; timing remains uncertain.
Repartnering potential: returned CNS ion channel assets present optional licensing opportunities; near-term revenue impact likely limited but supports optionality.
Cash trajectory: expect substantially lower cash use in 2025 driven by milestone inflows; current cash of $57.2M supports runway.
Trading setup: narrative hinges on execution of partner catalysts and visibility into milestones in 2H; technology differentiation (OmnidAb, xPloration+AI) and partner growth support medium-term multiple expansion if milestones convert.

Appendix: Additional Data and Disclosures

Other operating income in Q2 includes a $2.6M reduction in contingent liabilities (CVRs) primarily due to GSK/Roche program changes; amortization increased due to a $1.2M impairment tied to legacy Ab Initio programs.
Royalty detail: sugemalimab carries a 3% royalty on worldwide sales; EU commercialization partner pending.

Note: Consensus estimates (S&P Global) were unavailable for OABI this quarter; beat/miss vs Street cannot be assessed.

OmniAb, Inc. (OABI)·Q2 2024 Earnings Summary