Earnings Call Transcript - OABI Q4 2022

Operator, Operator

Good afternoon, ladies and gentlemen, and welcome to the OmniAb, Inc., Fourth Quarter and Full Year of '22 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Thursday, March 30, 2023. And I would now like to turn the conference over to Kurt Gustafson. Please go ahead.

Kurt Gustafson, CFO

Thank you, Operator and good afternoon. This is Kurt Gustafson, OmniAb's Chief Financial Officer. Thank you all for joining OmniAb's fourth quarter 2022 financial results conference call. I'd like to remind listeners that there are slides to accompany today's remarks. Those slides are available in the investors section of our website at omniab.com. Before we begin, I'd like to remind listeners that comments made during this call 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 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 this live broadcast, today March 30, 2023. 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 on the call today is Matt Foehr, President and CEO. During today's call, Matt and I will provide highlights on the company's operations, partner and technology updates, and our recent financial results. At the conclusion of the prepared remarks, we'll open the call to questions. So with that, let me turn the call over to Matt.

Matt Foehr, President & CEO

Thanks, Kurt. Good afternoon, everyone, and thanks for joining this, our first financial results and business highlights conference call. Since 2016, OmniAb has grown and evolved through multiple strategic acquisitions and organic technology investment initiatives to become a leader in the integrated antibody discovery space. In November last year, we completed our spin-off from Ligand Pharmaceuticals, resulting in OmniAb becoming an independent publicly-traded company. With that transaction close, I'm confident we're well positioned with our current corporate structure, our operational focus and our deep domain expertise to now capitalize on the growth opportunities that are ahead of us and in doing so make an enduring impact on global human health. That promise of impacting human health energizes our team of just over 100 employees and positions us very well for the future. OmniAb's highly scalable business model of licensing our discovery platform globally enables our partners to rapidly develop innovative therapeutics. Our partners value that we continue to push the frontiers of enabling technologies. We believe we're the industry's only four-species antibody discovery platform, making OmniAb the most diverse host system for fully human and bi-specific antibody discovery. With our proven platform technology, the number of partners with access to OmniAb antibodies has grown significantly, to a total of 69 with 291 active programs now including three product approvals. I'll get to further details on our performance metrics on the next slide. But another point I'd like to make here is that we're participating in a large and growing market, with global sales of antibody pharmaceutical products projected to reach approximately $279 billion in 2025, up from about $180 billion in recent years. Some of the best-selling drugs today are antibody-based medicines. And these are just some of the factors that drive the industry's demand for cutting-edge discovery technology. Our technology platform continues to prove its value to partners. Our teams made great strides in growing our portfolio with the addition of 13 new partnerships in 2022, including an expansion deal with an existing partner. We added more new partners in 2022 than in any other year of this technology's history, which we feel positions the business for future growth. As I mentioned, we have 291 programs currently being developed or commercialized by our partners. We recognized royalty revenue from the initial commercial sale of both Zimberelimab and sugemalimab in China. And it's also important to note that the numbers in the graphs on these slides are net of attrition. Our platform continues to generate new clinical programs. And we now have rat-derived, mouse-derived and chicken-derived antibodies that have entered human clinical trials. By year-end, our platform had generated a cumulative total of 28 clinical or approved antibodies, including three new programs that entered the clinic during the second half of 2022. Each of these programs has a different modality, which further demonstrates the flexibility of our technology. The three new programs include Merck's antibody drug conjugate, anti-CEACAM5 in advanced solid tumors; Genmab and BioNTech's hexabody anti-CD27 in malignant solid tumors; and Janssen's trispecific antibody in relapsed or refractory multiple myeloma. There were two programs that came out of clinical development in 2022, as two of our partners realigned the therapeutic area focus of their pipelines. That said, the clinical attrition rate of OmniAb antibodies remains very low. There are now more than 140 different clinical trials underway or completed by our partners. More than 27,000 subjects are to be or have been enrolled in clinical trials that are testing OmniAb-derived antibodies. This is a representation of the significant investments that our partners are making in the downstream development of antibodies discovered using our technologies. Based on dialogue with partners, we see potential for approximately three to five new entries into clinical development for novel OmniAb-derived antibodies in 2023, with programs addressing major unmet medical needs. On Slide 7, we break out our 291 programs by stages of development. You can see there's a large and growing base in the discovery stage totaling 251 programs, and now 14 programs in preclinical. In the clinic, our partners have programs totaling 19 in Phase 1, two in Phase 2, and two in Phase 3. And as I mentioned, there are three approved products derived from OmniAb technologies. We believe generating large, diverse antibody repertoires of high-quality antibodies increases the likelihood of success in discovering an antibody with optimal therapeutic characteristics. Many of our partners are using a number of our different engineered animals, and in some cases, more than one of our sources for a single program. OmniChicken has been the fastest growing source species, as OmniChicken antibodies bind to diverse epitopes on human targets with high affinity and also offer excellent profiles for development. OmniFlic and OmniClic are fixed and common light chain engineered rats and chickens, designed for efficient discovery of bispecific antibodies, which are of growing interest to the pharmaceutical industry. And OmniTaur provides access to antibodies with unique structural characteristics for challenging targets. I note that OmniRat, which is our largest source category here on this slide, has been available to our partners the longest, and was launched first. Our partners tell us they place a high value on our ability to provide flexibility to meet their evolving scientific needs. And our technology stack can be leveraged to develop multiple therapeutic formats and modalities as shown on Slide 9. By generating large and diverse repertoires of high-quality antibodies, we believe the biological intelligence of our technologies increases the probability of success of therapeutic antibody discovery and helps limit the attrition of antibody product candidates. Our partners continue to advance programs through development, and some made public announcements about their progress during the fourth quarter and into this year. Notably, we received $35 million in milestone payments from our partner, Janssen related to TECVAYLI which Kurt will talk more about in a moment. Moving to batoclimab, Harbour BioMed recently announced positive top-line results from its Phase 3 clinical trial for the treatment of generalized Myasthenia Gravis. In addition, Immunovant announced the initiation of a Phase 3 trial of batoclimab in thyroid eye disease, and a pivotal Phase 2b trial in chronic inflammatory demyelinating polyneuropathy. Turning to Zimberelimab, Gilead and Arcus Biosciences announced positive results from the fourth interim analysis of the ARC-7 Phase 2 clinical trial in patients with first-line, metastatic non-small cell lung cancer. And for sugemalimab, EQRx announced that the UK and European regulatory agencies accepted its marketing authorization applications for first-line treatment of metastatic non-small cell lung cancer. In addition to that, CStone announced other updates in China as well. Our technology stack is driven by the biological intelligence of our engineered transgenic animals, paired with our high-throughput screening technologies to enable the discovery of high-quality, fully human antibody therapeutic candidates for a wide range of diseases. As I mentioned, we believe we are the industry's only four species in-vivo antibody discovery platform making OmniAb the most diverse host repertoires that are available. Our experience and our collective dialogue with our partners gives us critical insight into the industry. And it creates a positive feedback loop to advance and innovate around our proprietary platforms. We also have a suite of in-silico tools for therapeutic discovery and optimization that are woven throughout our various technologies and capabilities. These tools include structural modeling, large multi-species antibody databases, artificial intelligence, and machine learning sequence models and more. These capabilities enhance our ability for rapid identification of candidates with the right affinity, specificity, and developability profiles, which leads to more effective and efficient drug development by our partners. In addition, we have extensive capabilities centered around ion channels and transporters that were established and built around small molecules and have clear potential in multiple formats and modalities. And we think we can create possibilities for completely new paradigms for approaching ion channel and transporter targets. We continue to invest in innovating around our technology while evaluating strategic technology acquisitions and licensing opportunities to further broaden our capabilities. For example, in February, we entered into a license agreement with mAbsolve for its Fc Silencing Platform technology. The agreement provides us with exclusive sub-licensable access to the STR technology, which will provide our partners with the ability to efficiently silence effector functions to help discover and develop safe and effective therapeutics. This is the latest example of creative expansion of our platform. We're also excited to roll out new innovations relating to our platform this year, and our launches of new technologies will generally coincide with major antibody engineering and antibody discovery conferences this year. As I mentioned, we believe we're well positioned for future growth, as we leverage our highly scalable business model and support our partners' pipelines as they expand and advance into the clinic. Through our business development efforts, we plan to add more license agreements and more partners to our portfolio. Further, we remain committed to investing in our proprietary technology platform to enhance our position as a leader in the marketplace and to continue to offer our partners versatility in workflows. As just one example, during the fourth quarter of this year, we plan to launch a heavy chain-only transgenic chicken, which we see as an important new innovation that our partners will want to access. We look forward to keeping you updated on these developments through the year. And with that I will turn the call back over to Kurt for a discussion of the financials.

Kurt Gustafson, CFO

Thanks, Matt. Before I turn to a discussion of our financial results, I'd like to spend a few moments reviewing our business model and how our license agreements are structured with our partners. One of the key points of the structure of our deals is that they are designed to align the economic and scientific interests of both parties. What I mean by this is that deals are structured so that we get paid when our partners have success. We try to keep access to the technology at a relatively low cost to encourage our partners to utilize the technology as much as they want. In terms of deal structure, agreements typically include an upfront payment for access to our full technology stack. There's also a potential for us to earn collaboration or service revenue, should a partner ask us to do work for them. And there are also milestone payments related to the advancements of programs in the clinic and regulatory approval. And lastly, royalties on net sales of our partners' products. We believe the long-term growth in revenue will primarily be driven by royalties. However, I expect that most of the growth in the next few years will be driven by milestone payments. Turning now to our financial results, as a reminder, OmniAb was part of Ligand for the first 10 months of the year. So the financial results prior to November 1 were prepared on a carve-out basis. Starting with revenue, total revenue for the fourth quarter of 2022 was $35.3 million compared to $15.3 million in the prior year quarter. The revenue increase was primarily due to the recognition of the U.S. based Teclistamab milestone of $25 million in the quarter. We expect to recognize the remaining $10 million of milestone revenue for the first commercial sale in Europe later in 2023. There are specific accounting criteria for the recognition of this milestone as revenue. And as of today, we don't believe these criteria have been met. And so it is likely that this $10 million will not be recognized even in the first quarter, but likely later in the year. Our service revenue is down slightly as a result of less work performed for some of our ion channel partners, partly due to the success with some of these programs as they advance into the next stage of development. Operating expenses for the fourth quarter were $26.3 million, compared with $20.4 million in 2021. The increase included expense necessary to support our standalone structure as an independent public company. This includes increases in staff costs as we've hired people in various G&A functions, as well as other typical public company costs. However, I would note that this quarter also included approximately $2 million of expenses that were more onetime in nature. Net income for the quarter was $6.8 million or $0.07 per diluted share, versus a net loss of $3.1 million or loss of $0.04 per share in the year-ago period. For the full year 2022, total revenue was $59.1 million. The increase in revenue was primarily due to the recognition of additional milestone revenue I just spoke of, as well as royalty revenue from our partners' sales of Zimberelimab and sugemalimab. Operating expenses for 2022 were approximately $85.7 million compared with $70.4 million for 2021. The increase was driven primarily by the same items that drove the increase in the fourth quarter, and mostly relate to the growth in our R&D infrastructure, as well as OmniAb preparing to be a standalone company. Net loss for the full year was $22.3 million or $0.26 per share, versus a net loss for 2021 of $27 million or $0.33 per share. I also wanted to make a couple of comments about taxes. A new federal tax law went into effect at the beginning of 2022 that changed the way R&D expenses are deducted. Under the new law, U.S. R&D expenses generally have to be amortized and expensed over a five-year period. As a result of this tax law change, combined with the recognition of the Teclistamab milestone, we are going to be a cash taxpayer for the fourth quarter sub period where we were an independent company. And we also expect to be a cash taxpayer for the full year of 2023. At the end of the day, this is really just a timing difference for taxes, as we will eventually realize the full benefits of all of our R&D costs. Let me also make a few comments about the share count for EPS. Both our full year and Q4 share count numbers used for EPS represent a blended share count for the period prior to the spin-out, which was approximately 82.6 million shares, and the shares outstanding post the spin-out, which was approximately 98.9 million. Going forward, the 98.9 million basic shares outstanding will be the more appropriate base figure to use for EPS calculations. Just as a reminder of various components of our capital structure, in addition to the public float shares, we have approximately 16 million of earn-out shares outstanding, as well as various employee equity awards and warrants. The earn-out shares expire five years after the close of the spin-out transaction and half vest at the price of $12.50, and the other half vest at a price of $15. The warrants also have a five-year life and a strike price of $11.50. You'll see on the face of our financial statements that we have 115 million shares issued and outstanding. This is the combination of the basic share count as well as the earn-out shares. We ended the year with $88.3 million in cash, cash equivalents, and short-term investments. As previously disclosed in January, we received $35 million in milestone payments from Janssen related to the launch of Teclistamab. With the addition of these milestone payments, we are in a strong capital position. The business has been running fairly close to breakeven cash flow on an operating basis for the last couple of years. So we believe that our current cash balance gives us sufficient runway to fund our operations for the foreseeable future. As for specific guidance, we expect that our cash balance at the end of 2023 will be slightly higher than the balance as of 12/31/22. I'll close my comments with a discussion of our financial outlook for 2023. For perspective, I thought it might be helpful by starting to look at our operating expenses over the four quarters of 2020. So the fourth quarter was the first quarter that OmniAb started reporting as a standalone public company. As such, the fourth quarter provides the best representative base level of our operating expenses going forward. As Matt mentioned, we will continue to invest in R&D, so I would expect our quarterly R&D costs in 2023 to grow off this Q4, 2022 base. On the G&A side, remember that the G&A line included close to $2 million of expenses that were non-recurring in nature. If you exclude those one-time expenses, our G&A expense level for the fourth quarter is largely in line with what we are expecting in subsequent quarters throughout 2023 with some nominal growth. One final comment, I'm pleased to announce that we've hired a new Head of Investor Relations. Her name is Neha Singh and I look forward to introducing her to all of you in the coming weeks. With that, I'd like to open up the call for questions.

Operator, Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Your first question comes from the line of Robyn Karnauskas from Truist Securities. Please go ahead.

Nishant Gandhi, Analyst

Hi, this is Nishant. I'm on for Robyn. Congrats on all the progress, and thank you for taking my questions. So question around royalty, I mean, I know you have signed a lot more deals with key partners last year, and then now your platform is validated with more than 25 programs in clinic. So for programs going forward, do you expect to negotiate higher royalties for any of your programs, considering you have got a lot of validation for your projects? And second on pipeline diversity, I see with programs in clinics, you have a lot more molecules in oncology. So is that a consideration for you going forward to diversify into new disease areas and sign new partnerships in new disease areas? Thank you.

Kurt Gustafson, CFO

Yeah, maybe I'll take the first part of that, Matt and you can talk about the second part. With regards to royalties, you're absolutely right to sort of point out that as the platform has become more validated, we've actually been able to garner better economics on some of the deals. So I can't predict what that is going forward. But if I go take a look at historically, and take a look at the average royalty rate for deals signed in sort of each of the last five years, you'll see a slight trend in terms of higher royalty rates through those deals that are signed. And I think that's just a function of, as you point out, the validation of the technology has done that. So we hope that continues, but it's difficult to project going forward. But Matt on the diversity question.

Matt Foehr, President & CEO

Yeah, thanks, Nishant for the question. Yeah, you point out that for the programs that have matriculated into the clinic first, if you look across that and our platform now has generated a total of, cumulative total of 28 clinical programs. So it's highly validated from that perspective. But you're correct. The majority of those from a therapy area perspective are in oncology, although there are some in GI disease, in immunology, also some in inflammation. But as you look at our pie chart that we have in Slide 7 of the deck, the breakdown there as you go deeper into the pipeline, especially in preclinical as well as discovery, we're beginning to see the platform used across therapy areas, as one might expect, things like CNS diseases, inflammation, women's health, infectious diseases and other areas. So I think over time we'll see that diversity build up in the clinic as those programs progress and matriculate through development.

Nishant Gandhi, Analyst

Great, thank you.

Operator, Operator

Thank you. And your next question comes from the line of Stephen Willey from Stifel. Please go ahead.

Unidentified Analyst, Analyst

Hey, thanks for taking the question. This is Josh on for Steve. So I guess we'll start with which of your transgenic animal platforms garnered the most interest? And how do you see the further development and prioritization of these platforms changing in the coming years? Then I have a few follow-up questions.

Matt Foehr, President & CEO

Great. Thanks, Josh for the question. Yeah, we included some data this time to break down a little bit the distribution of the source, antibody sourced technology that our partners are leveraging. So if you look across our portfolio, a little more than half of the programs that are being actively moved through development by our partners leverage our OmniRat platform. OmniRat was actually the first platform that we launched, the first and is a widely used transgenic rat. The mouse space, obviously, there are mice out there, but the rat is quite unique. And it's been proven over time to produce robust antibody responses for our partners. There's also a lot of efficiency and flexibility that OmniRat presents for our partners allowing us to feed flexibly into their work streams. We've actually even set up breeding colonies of OmniRat for some of our partners who are spinning up multiple programs a year. So OmniRat, obviously is a large source. In terms of the fastest growing, in terms of percentage growth, I point to OmniChicken. The chicken has advantages largely because of its evolutionary distance. Chickens are evolutionary very distant from humans and mice and rats. That creates a lot of advantages for our partners that they like to leverage. And we've been able to really increase the number of partners leveraging OmniChicken by about 10x, since the time it was acquired and became part of the OmniAb platform technology. And downstream of that, we also see nice growth in the bispecific space, both with our OmniFlic, which is a transgenic rat with a fixed light chain, and OmniClic, which is a transgenic chicken with a common light chain. If you look across actually our downstream clinical programs that our partners are progressing through the clinic, a large number of those actually are bispecific antibodies. And that's a growing area of interest for partners as well. Beyond that, I'd also point to OmniTaur. While it's a small percentage of active programs today, it's an area that is a lot of interest, a lot of inbound interest as our BD team is talking to new potential partners, given the fact that those cow-inspired antibody structural features have the potential to open up new approaches to antibody-based therapies that many partners say they've not been able to access before. So we're excited about that as well.

Unidentified Analyst, Analyst

Awesome, I guess that feeds nicely into my second question with regard to how do you typically prioritize partnerships between kind of smaller cap biotech companies to large pharma? Is there kind of a large discrepancy you're seeing? And then are you generally seeing less BD activity from smaller cap companies as a function of kind of macro R&D budget tightening?

Matt Foehr, President & CEO

I would like to share a few thoughts, and Kurt may want to contribute as well. Last year, we established more new partnerships than in any previous year in our history. A significant portion of these partnerships has resulted from inbound interest, particularly from scientists who have had positive experiences at one licensed partner and then transitioned to a new company seeking access to our technologies. This trend is intriguing and significant, as it highlights our growth opportunities. As a result, we are expanding our business development team to effectively handle the increasing inbound interest in accessing advanced technologies, especially as the industry trends towards antibody-based treatments. Many of our new partners are early-stage biotech firms that offer fascinating biological innovations. We also maintain existing partnerships with several large pharmaceutical companies that are heavy users of our platform. We are consistently engaged in discussions with multiple parties at various development stages and are always negotiating new licensing agreements. These discussions include major pharmaceutical companies, which recognize our commitment to ongoing innovation and our focus on staying at the forefront of antibody discovery. This commitment attracts both biotechs with compelling biology and large pharmaceutical firms. Kurt, would you like to add anything?

Kurt Gustafson, CFO

I would add that, generally, we don’t need to prioritize these issues because that would be necessary only if we faced a capacity problem, and we don’t have that issue. For instance, when we discuss work with the OmniRat, our partners typically handle everything after we supply the rats. This business model is highly scalable for us, so there’s no need to prioritize one deal over another. Our focus is on signing up as many partners as possible and encouraging them to utilize our technology extensively.

Unidentified Analyst, Analyst

Great. And then lastly, just regarding the new J&J trispecific asset, do you dissociate this to be a royalty-bearing asset? Or will it have similar deal structures, same with Teclistamab?

Matt Foehr, President & CEO

Yeah, the deal with J&J was struck very early after OmniRat was launched? And actually it was a deal that was signed by a predecessor company that we acquired, O&E. And the way that deal was structured is that upon the commercial launch there's a payment in the U.S. and then a payment in Europe. So it's simpler than the Teclistamab deal, right? So that's $35 million in payments for those markets for that asset.

Unidentified Analyst, Analyst

Great. Thanks for taking the question.

Operator, Operator

Thank you. And your next question comes from the line of Joe Pantginis from H.C. Wainwright. Please go ahead.

Joseph Pantginis, Analyst

Hello everyone, good afternoon. It's great to be part of your first independent earnings call. My first question is regarding your business development efforts and your business model. The partner numbers and the development programs you have seem to serve as a natural marketing tool. How would you characterize your business development efforts in 2023 in terms of inbound interest compared to the marketing initiatives you've undertaken?

Matt Foehr, President & CEO

Yeah, thanks, Joe. Your point about it being an inherent marketing tool it couldn't be more correct. I think we've benefited historically by partners, talking about the success they've had with our platform at podiums at antibody engineering or protein engineering conferences. And that happens consistently. We see it. I can think of an example of Amgen recently highlighting their successful use of OmniFlic at one of the antibody conferences just very recently. And that drives a lot of the inbound interest. And the majority of the deals we've struck have come from that sort of thing where partners are talking about their success with the platform, and that drives others to understand it. Also, the level of clinical validation, I think is important as well. And now with the number of clinical programs that have been produced by our platform, that creates increased visibility for others who are in the antibody discovery space. One of the things we are focused on and have been more recently is really expanding our business development reach, one to capitalize on that opportunity. We're actually increasing our attendance at both business development-related, licensing-related, and related conferences this year. We're partnering with some of our partners for joint presentations and publications. And we think all of those things position us to really capitalize on the opportunity that's been built on the innovation and the continued innovation that we're committed to going forward. So as I said, at any one time we're always negotiating new license deals, new partnerships, and we're excited about the way we're positioned now and the way our team's managing it.

Joseph Pantginis, Analyst

That's really helpful. Matt. Thanks for that. And I guess the other aspect with regard to your underlying business, you alluded to in your prepared comments, you said OmniChicken, for example, in your prepared comments was the fastest growing, and new technology, you're constantly working there. And you're looking to present at like antibody engineering conferences. So maybe, without giving away the special sauce right now, but what kind of general tech improvements are you looking at, and you'll be able to share with the street.

Matt Foehr, President & CEO

We plan to launch innovations centered around our technology at major antibody and protein engineering conferences throughout the year. We view innovation as an ongoing process regarding our platform. We hold a unique and significant position in the industry with 69 partners and numerous active programs that allow us to engage in meaningful dialogue with these partners to understand not only their current needs but also to anticipate their future technological directions. When we observe similar feedback from both large pharmaceutical companies and smaller biotech firms, we gain valuable insight into which innovations will be applicable across the industry. A past example is our experience with launching OmniFlic and OmniClic, which highlighted the emergence of the bispecific field years ago. This insight prompted us to engineer heavy-chain only chicken in collaboration with one of our large pharma partners. We expect to make this heavy-chain-only antibody, which possesses many beneficial characteristics, available for launch in the fourth quarter of this year. These antibodies may open new therapeutic avenues and offer additional biological advantages that we believe our partners will find valuable. We anticipate introducing this at a significant conference in the fourth quarter.

Joseph Pantginis, Analyst

Great, thanks for the color guys.

Matt Foehr, President & CEO

Thanks Joe.

Operator, Operator

Thank you. And your next question comes from the line of Steven Mah from Cowen. Please go ahead.

Steven Mah, Analyst

Great. Thanks for the questions. I have a two-part question on your active partners. If I'm doing the math right, looks like there is 13 new partner ads and 12 rolling off in the quarter. So the question is of these 12 programs that rolled off, were any of these paused or were they just terminated? Or could they possibly resurface? And then the second part, could you give us a sense for these 12 partners that rolled off? Are they mostly big pharma or large biotechs or small biotechs? Thanks.

Matt Foehr, President & CEO

Thank you, Steve. I'm having some trouble understanding your calculations. I want to point out that we added 12 new partners throughout last year and also reached an expansion agreement with an existing partner. There may be some confusion, possibly between quarterly and annual figures. We did not have any partners exiting. There might need to be some clarification on this or on the interchange of programs or partners.

Steven Mah, Analyst

No, I didn't do my math right. Yeah, sorry, I was looking. This is my first call with you guys. But yeah, got you. Got it.

Matt Foehr, President & CEO

Good.

Steven Mah, Analyst

And then on the 13 new partner adds, could you give us some color on the partner type and then pharma or biotech, and then you said OmniChicken is growing the fastest. Could you give us a sense of what percentage of these new partners added for OmniChicken?

Matt Foehr, President & CEO

Yeah, I think I can give you a little color there. Of the 12 new partners added last year, the majority were biotechs and these are companies with well-funded companies who are bringing a program forward. We have a high standard for what we count as an active partner and an active program. And we have some really interesting biology that I think excites our scientists and has the impact and potential for impacts on health in interesting ways. So that is an area our team is continuing to be excited about. In terms of how many are leveraging our various technologies, it's really a mix, right, in terms of what attracts partners to our platform. One is the flexibility to use on the chicken, say for a program where that is an ideal approach. But at the same time, some of those new partners may also be using OmniRat or OmniFlic as well. So it really is a mix and partners do value the fact that they get access to multiple technologies when they take a license with us. And we can really have a deeply scientific dialogue and pair the technologies with their needs, not only from a scientific perspective but also from an operational perspective in terms of what works best for them.

Steven Mah, Analyst

Okay, great. And then if I can sneak one last one in, this agreement with mAbsolve, could you give us a sense of the deal structure on that? Is it like a joint venture? Or is it just a strict licensing fee? And are they eligible to receive any milestones or royalties from you?

Matt Foehr, President & CEO

Certainly, I'll provide more detail on that. First, regarding the economic aspect, there are no downstream economic commitments with mAbsolve. This is a licensing agreement that allows us to exclusively use their STR Fc Silencing technology with antibodies developed using the OmniAb platform. There are no downstream obligations to mAbsolve. To elaborate further, the FC-mediated immune effector activities are essential for an antibody's natural function, but in many therapeutic antibodies, these interactions can be unwanted or result in negative effects. While there are different methods to eliminate effector function, they often have significant limitations. We were impressed by the STR Fc Silencing Platform developed by mAbsolve, which was recently detailed in a PLoS ONE paper. It represents what we consider to be the most effective silent FC mutations identified so far. Therefore, it has the potential to enhance safety and efficacy for therapeutic antibodies and Fc fusion proteins, which we can now provide to our partners going forward. I hope that clarifies things a bit more.

Steven Mah, Analyst

Yeah, that's helpful. Thank you. And apologies for the mix-up on the new partners.

Matt Foehr, President & CEO

No problem at all.

Kurt Gustafson, CFO

Thanks Steve.

Operator, Operator

Thank you. Your next question comes from Puneet Souda from SVB Securities. Please go ahead.

Puneet Souda, Analyst

Hey, guys. Thanks for taking my questions, Matt and Kurt. So first one is on, maybe if I could ask a high-level question on, obviously the small biotech funding is a major question out there. We are seeing that from the companies that provide tools and capabilities to the small biotechs. Sort of maybe give us a view of what you're seeing from your perspective. How are you including that in your calculation for the year? And if you can, I'm wondering if you can talk about the programs sort of for the full year. I know you talked about ion channel partners were slightly down. But you also talked about clinical attrition remains very low, which is a positive in my view, but wanted you to calibrate us on what's going on among the small biotechs? Is that something you're considering into your calculation for the full year?

Matt Foehr, President & CEO

Thanks, Puneet. This is Matt, and Kurt may have some comments as well. We're closely monitoring the industry and have a good understanding of the global situation. Recently, there has been significant investment in biotech companies, particularly reflecting on last year, which saw the highest number of new partnerships. There seems to be a consistent dedication to discovery. On a larger scale, discovery is crucial, and we haven't observed the negative impacts you mentioned in our discussions with partners. At conferences, the predominant focus is on new approaches to antibody-based targets and innovative structural elements that only our scientists may be able to clarify or provide access to. There is a strong emphasis on staying at the forefront of innovation during the discovery phase. We'll continue to keep an eye on the landscape, but last year we established more new partnerships than ever before, indicating a solid commitment from new partners to leverage the technology and accelerate projects. I hope that provides some insight. Kurt, do you have anything to add?

Kurt Gustafson, CFO

I mean, I think that's right. I mean, had you told me a year ago that we would sign more deals in 2022 than ever, I might have questioned that just given the sort of the state of funding in the biotech universe. But clearly, we're still seeing interest.

Puneet Souda, Analyst

Right, that's great and encouraging given the backdrop we're seeing out there. One other question on maybe for Kurt, on the cash side and position you have and when you look at the capabilities that you have currently on the animal platform, diverse platform across the board, that's where the strength is. But when you look at the overall technologies hit the stat in terms of screening, identifying the right antibodies down the line, assays and whatnot, given that valuations have sort of come down across the space in some of those technologies, and maybe even to the private markets, how do you think about the overall, your technology stack and capabilities, and investments into that? Should we think about more internal work or organic? Or should we think about more opportunities that you can explore out there to improve that capabilities?

Kurt Gustafson, CFO

I think the short answer is both. However, I don't believe we need to pursue mergers and acquisitions since there's nothing missing from our technology stack. That being said, we are exploring certain technologies that we believe would complement our existing stack. We're keeping an eye out for those opportunities. Some of this may involve acquiring external technology, while some will come from our internal investments. We have a strategic plan for enhancing our technology stack, and we will execute that plan, which will likely include a mix of internal investment and acquiring new technology.

Puneet Souda, Analyst

Got it. And then last one on the OmniChicken platform, you were talking about potential additions to that with cow-inspired ultra-long CDRs. So can you just provide an update on that, where that stands?

Matt Foehr, President & CEO

Yeah, yeah, thanks, Puneet. Yeah, we didn't cover it in prepared remarks today. We were highlighting the launch of the heavy chain-only chicken that we will do in Q4. But you're right to bring up part of the rationale for the OmniTaur platform and for acquiring the business where that originally resided, was that it opens the possibility for us to engineer those unique cow-like properties of long CDR-H3 into a humanized chicken host. And there's a lot of science behind that. And our team is doing great work progressing that, something that we are very excited about, and we feel we're uniquely positioned, perhaps the only people on the planet that can do that. And that is a program we will be talking more about in the future. And it's the kind of innovation that I think attracts partners to us because they realize the impact that can have, especially in areas like CNS diseases, or other infectious diseases or emergency settings or a variety of targets that having that structural characteristic built into a humanized chicken host creates some pretty substantial and meaningful opportunities downstream, especially well matched with our capabilities around ion channels and transporters as well, because ion channels and transporters are targets where that technology could be even more meaningful. So you pair that with our extreme high throughput electrophysiology capabilities that were built up over many, many years, we're talking decades that we believe we may have some of the largest capacity in the world, anywhere in the world for screening ion channel and transporters. So you pair something like that capability, they are engineering in, in OmniTaur, OmniTaur like chicken, if you will, to just use general terms, that's something that could have a pretty significant impact to the industry downstream. And that's something we expect we'll be talking more about in the future. But it's just another example of some of the things we're working on around tech expansion and advancement internally.

Puneet Souda, Analyst

Got it. Super, and congrats on the first quarterly call and it's a solid one. Thank you.

Kurt Gustafson, CFO

Thank you.

Matt Foehr, President & CEO

Thanks Puneet.

Operator, Operator

Thank you. Mr. Foehr, there are no further questions at this time. Please proceed.

Matt Foehr, President & CEO

Great. Thanks. I'd like to thank you all for joining today's call, and for your questions and engagement. And as I close out the call here, I also want to take a really quick moment to thank our employees as completing a split out from a public company is a substantial project and takes some business stamina, relentless attention to detail and collaborative teamwork to do. And we've had that to do that all while running and growing the business, supporting our partners, innovating around the technology as well. So I want to thank the employees. And I will say that together, we feel great about our positioning and our ability to build value for all stakeholders, which includes, of course our partners, and of course importantly, you the investors. So we keep these things top of mind here at OmniAb. And so just wanted to close out with that. I'll also mention that we'll be at a couple of investor conferences in the near term. We'll be at the H. C. Wainwright BioConnect Conference at the NASDAQ headquarters in New York City on May 2, and we're also planning on attending the EF Hutton Global Conference on May 11, which is also in New York City. So we'll look forward to keeping you updated on our progress and hope everybody has a great day. Thank you.

Operator, Operator

Thank you. That does conclude our conference for today. Thank you all for participating. You may now disconnect.