OmniAb Q3 Earnings Call Highlights

Key Points

• OmniAb raised its 2026 outlook, increasing revenue guidance to $35 million–$39 million and lowering projected operating costs. The company expects to end the year with $53 million–$57 million in cash and said it is on track to be roughly cash-flow break-even.
• Third-quarter revenue rose to $4.0 million, while the nine-month total reached $31.8 million, driven by partner milestones, services and xPloration. The company also highlighted its Eli Lilly ion-channel deal, which includes an upfront payment and up to $370 million in potential milestones plus royalties.
• xPloration gained commercial traction with another placement at a major pharmaceutical company; OmniAb expects revenue of $2 million–$3 million in 2026 and annual doubling through 2028. The company also launched OmniTides, a peptide-discovery offering aimed at expanding partnerships and therapeutic applications.

OmniAb NASDAQ: OABI reported higher third-quarter revenue and raised its full-year 2026 revenue and year-end cash outlook, citing partner-program milestones, expanding service revenue and early commercial progress for its xPloration B-cell screening platform.

Third-quarter revenue rose to $4.0 million from $2.2 million in the prior-year period, primarily driven by service and xPloration revenue, Chief Financial Officer Kurt Gustafson said. For the first nine months of 2026, revenue reached $31.8 million, compared with $10.3 million a year earlier, largely reflecting milestone revenue from partner program advancement.

The company reported a third-quarter net loss of $15.7 million, or $0.12 per share, compared with a net loss of $16.5 million, or $0.14 per share, a year earlier. Through nine months, OmniAb’s net loss narrowed to $29.3 million, or $0.23 per share, from $50.6 million, or $0.46 per share, in the comparable 2025 period.

Guidance Raised as Operating Costs Decline

OmniAb increased its 2026 revenue guidance to a range of $35 million to $39 million, from prior guidance of $32 million to $36 million. Gustafson said the higher outlook reflected milestone revenue achieved during the year.

The company lowered its projected total costs and operating expenses by $1 million, now expecting a range of $83 million to $87 million. It also reduced expected non-GAAP cash costs and operating expenses by $1 million, to $50 million to $54 million.

OmniAb expects to finish 2026 with $53 million to $57 million in cash, compared with $64.2 million of cash and investments at the end of the third quarter. Gustafson said the company began the year with $54 million in cash, implying that it expects the business to be “basically break-even” from a net cash-flow perspective for the full year.

Total costs and operating expenses were $20.4 million in the third quarter, unchanged from the prior-year period. Lower research and development expense was offset in part by modest increases in general and administrative expense and other operating expense, including higher cost of sales associated with instrument sales.

Lilly Deal, Partner Expansion and Clinical Pipeline

President and Chief Executive Officer Matt Foehr highlighted a new licensing agreement with Eli Lilly for a novel ion channel program. Under the deal, OmniAb received an upfront payment and may receive up to $370 million in research, development and commercial milestone payments, along with potential tiered royalties on global net sales.

Gustafson said service revenue from the Lilly collaboration is expected to begin contributing in the fourth quarter. He also pointed to multiyear ion channel service agreements signed late last year and earlier in 2026 as contributors to service revenue growth.

OmniAb ended the third quarter with 111 active partners, up from 110 at the end of the second quarter. New licenses included agreements with Yemaya Incorporated and Monash University, partially offset by one partner attrition event after a larger partner acquired a smaller partner. Foehr said nine of the world’s 10 largest pharmaceutical companies are now active partners of OmniAb.

Active programs totaled 433 at quarter-end, up from 407 at the end of 2025. The company recorded 38 program additions and 12 terminations during the year through the third quarter. More than 98% of active programs have contracted future economics for OmniAb, according to Foehr, with more than $3 billion in total potential milestones and an average royalty rate of approximately 3.4% across the portfolio.

OmniAb also had 34 active clinical programs and approved products using its technologies at the end of the third quarter. Those programs carried approximately $340 million in remaining potential milestone payments to the company.

Subsequent to quarter-end, Harbour BioMed’s batoclimab received approval in China for adults with anti-acetylcholine receptor antibody-positive generalized myasthenia gravis. Foehr said batoclimab represents the fourth drug approved from OmniAb’s platform. He said it was too early to determine pricing or the eventual impact on royalty revenue.

xPloration Commercial Rollout

Chief Operating Officer Amechi Nwachuku said OmniAb expanded commercial access to xPloration, an AI-powered, high-throughput single B-cell screening platform. The company estimates the platform addresses a market opportunity of more than $500 million.

During the third quarter, OmniAb placed another xPloration unit with a top global pharmaceutical company. Nwachuku said the company is seeing interest from large pharmaceutical companies, contract research organizations and smaller biotechnology companies.

The xPloration business model includes instrument sales as well as recurring revenue from consumables, software and services. Nwachuku said instrument sales begin the customer relationship, while proprietary chips and other consumables generate usage-based revenue as customers conduct experiments.

• OmniAb expects xPloration revenue of $2 million to $3 million in 2026.
• The company expects xPloration revenue to double in 2027.
• It expects revenue to double again in 2028.

Nwachuku said capital-budgeting processes at customers can make the instrument sales cycle roughly 12 to 18 months. He added that early in the platform’s commercial life cycle, most xPloration revenue comes from instrument placements, while recurring revenue could become more significant over time.

New OmniTides Offering and Revenue Mix

OmniAb also introduced OmniTides, a peptide discovery offering based on its OmniUltra transgenic chicken technology. Foehr said the offering is intended to provide an integrated discovery-to-synthesis workflow, including access to peptide manufacturing through qualified contract research organizations.

During the question-and-answer session, Foehr said OmniTides has attracted interest from potential partners, including in metabolic applications and other therapeutic areas. He said the offering could expand the company’s partner base and diversify the therapeutic areas pursued with its technology.

Looking ahead, Gustafson said milestone revenue is expected to remain OmniAb’s largest revenue contributor for the next several years. He identified Immunovant’s IMVT-1402 as a program that could begin making royalty revenue a more substantial part of the growth story, with forecasts indicating a potential start in late 2028. He also said service revenue and xPloration revenue are expected to contribute to growth alongside milestones and eventual royalties.

About OmniAb (NASDAQ:OABI)

OmniAb, Inc is a biotechnology company that develops and licenses antibody discovery technologies for use in drug research and development. Its platform is designed to help biopharmaceutical companies generate fully human and species-diverse antibodies that can be evaluated as potential treatments for a range of diseases.

The company's technology portfolio includes genetically engineered animal platforms, such as OmniRat, OmniMouse and OmniChicken, which are used to produce antibody candidates against challenging biological targets.

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