OmniAb Q2 FY26 earnings call OABI

OmniAb's business model is designed for long-term, durable revenue streams, with programs derived from its discovery technologies consistently advancing into and through later-stage clinical development. This progression enhances visibility into future value from milestones and potential royalty generation, solidifying OmniAb's role as a key enabling technology licensing partner. The company noted significant movement in later stages of development, with additional programs now in Phase 1, Phase 2, and Phase 3.

The proprietary high-throughput single B cell screening platform, Exploration, leverages machine learning and artificial intelligence. This platform offers multiple revenue streams, including instrument sales, proprietary single-use consumables, and annual software subscriptions. Two instruments were sold in Q2, and strong commercial interest continues to expand the sales pipeline, with early feedback highlighting rapid runtimes, ease of use, and overall robustness.

At the end of Q2, OmniAb reported 34 active clinical programs and approved products utilizing its technologies, including four new clinical entrants in 2026. Notably, two programs, J&J's romantamig and Merck KGA's percentibarc-tocentican, advanced directly from Phase 1 to Phase 3 during Q2. Boehringer Ingelheim's BI878 program is also progressing in Phase 2 for a MASH indication, highlighting significant movement in the later stages of development.

OmniAb highlighted increasing clinical validation for its genetically engineered chicken antibody discovery technologies, OmniUltra and OmniDab, with six programs now in Phase I or Phase II. The evolutionary distance of chickens as a biological host allows for robust immune responses and diverse antibody repertoires against novel targets, opening new market opportunities and driving partner interest, especially for high-value targets like ion channels and GPCRs.

The company continues to expand its platform through ongoing innovation, leveraging its partner ecosystem to enhance technologies and workflows. The OmniDeep brand, a suite of in silico AI/ML tools, is integrated throughout OmniAb's technology stack. This platform utilizes proprietary data from transgenic animals and the Exploration platform to generate high-quality input data, driving efficiency and accelerating the pace of drug discovery, particularly for novel oncology targets.

Q2 FY26 revenue saw a substantial year-over-year increase, primarily driven by higher milestone revenue. Despite this growth, OmniAb demonstrated operational efficiency, with R&D and G&A costs showing decreases from a true operating perspective. This efficiency contributed to an improved net loss for both the quarter and year-to-date, with management emphasizing that 35-40% of operating expense is non-cash, making cash operating expense a key performance measure.