Q4 2024 OmniAb Inc Earnings Call & Business Update
Speaker Change: Good afternoon and welcome to OmniAb, Inc's fourth quarter and full year 2024 financial results and business update conference call. At this time, all participants are now
Speaker Change: Importantly, this conference call contains time sensitive information that is accurate only as of the date of this live broadcast today March 18th 2025, except as required by law <unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this call.
Speaker Change: Joining me on the call today is omni abbs president and CEO.
Speaker Change: 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 and with that let me turn the call over to Matt.
Matt: Thanks Kurt.
Speaker Change: Afternoon, everyone and thanks for joining us today I'm.
Matt: Starting now with slide number four.
Matt: I am pleased to report strong performance and momentum in 2024, as we achieved double digit percentage growth in both the number of active partners and the number of active programs that leverage our technology.
Matt: Our partners' clinical stage programs are advancing and we're encouraged by the progress that they're making.
Matt: We introduced new technologies and enhancements that are positively impacting our partnerships and driving efficiencies in our increasingly scalable business.
Matt: These innovations are not only differentiating our business, but are also attracting new partners and creating opportunities for significant future growth potential.
Matt: But gentle key royalty assets are beginning to come into focus along with other building blocks of value that we expect will drive our growth in the coming years.
Matt: As we look ahead here in 2025, we're excited about the opportunities, we're seeing and we're confident in our plants.
Matt: This schematic here on slide number five provides a bit of an outline along with some details on how we view our business and one can look at the interconnected elements of value here on Omnia.
Matt: Starting with the upper left corner, our novel platform technologies continued to differentiate us and create new partnerships and also drive our existing partners to start new programs.
Matt: We have deep relationships with a growing number of partner companies and those relationships create a unique vantage point in the industry that informs our thinking about new technology innovations and launches as well as any strategic technology acquisitions. We now have a long track record in this area.
Matt: Value creation really starts with the additions to our pipeline as I mentioned in the center of the slide.
Matt: We've driven double digit percentage growth over multiple years and it does go through a variety of industry macro environments, which I think is a statement about the resilience of our model and the broad applicability of our technologies.
Matt: As programs progressing to clinical development as depicted on the top of the circle on the right side of this slide.
Matt: It really starts to become more publicly visible.
Matt: And those programs will generally drive realization of contracted milestone payments.
Matt: And ultimately we expect some of these programs will advance to become royalty bearing assets, which is a core element of value.
Matt: A royalty as defined simply as a percentage of topline revenue and royalties can create steady streams of durable cash flows that increased with higher product sales.
Matt: There are a number of factors that drive value for a particular royalty asset, including the partner and their level of investment.
Elements of the program as it becomes a product.
Matt: And its commercial potential or total addressable market, which can be impacted by things like the number of indications or the number of geographies that are being pursued.
Matt: Any of these elements or a combo of them can drive significant value at various points in a program or product lifecycle.
Matt: Yeah.
Matt: As more programs progress our platform continues to have more visibility across the industry and continues to be even more validated and we believe that also drives more additions to the pipeline.
Matt: We're highly committed to our model and our focus on building value for all of our stakeholders in this highly levered gimbal business framework.
Matt: I'll touch now on a few of our key business metrics starting here on slide number six with active partners. We're pleased to report an 18% year over year growth in the number of active partners showing our ongoing efforts to expand and diversify our partnership base.
Matt: As of December 31, 2024, we had 91 active partners in the fourth quarter, we had a new platform licenses with insight Corporation info Tinea Biosciences, and new commercial partners included M. B P pharma and Biopharma.
Matt: As shown in the Callout box pie charts, our partner diversity spans academia commercial and discovery partners and you also see a breakdown a geographic breakdown of our partners here as well.
Matt: Our growing partner count reflects the industry's strong interest in our technologies and there's also a recognition of our dedication to innovation and collaboration.
Matt: Over recent years, we've shown steady growth in active partners through various cycles in the biotech and pharma sectors.
Matt: Yeah.
Turning now to slide number seven.
Matt: We also saw robust year over year growth in the number of active programs in a 12% increase as of December 31st the number of active programs increased to 362 net of attrition.
Matt: We had a particularly productive fourth quarter in terms of additions.
Matt: Last year as we have seen and as was reported more broadly in the industry on pharma companies strategically realigned and re prioritize their therapeutic programs and pipelines. While these realignments are frequently driven by goals to concentrate on more impactful areas of research as well as to adapt to evolving market demands and regulatory lag.
Matt: Capes, they often reflect attrition has an inherent aspect of the drug development process.
Matt: As shown in the Callout bar graph, we had 31 terminations and 69 active program additions in 2024.
Matt: I think it's really important to note here that more than 98% of our active programs have contracted future economics to us.
Matt: Which positions us well to create future value for our shareholders.
Matt: Now on slide eight as of December 31st the number of active clinical programs and approved products by partners was 32.
Matt: Our partners have now initiated or completed over 200 separate human clinical trials with army Abderite programs, which is an indication of their significant investment and conviction around the programs.
Matt: These trials span a range of therapeutic areas, including oncology immunology and other indications.
Matt: This extensive downstream clinical activity I liked the trust and the confidence our partners have in the novel Therapeutics that are coming out of our platform.
Matt: In 2024.
Matt: Five omni I'm derived programs entering the clinic.
Matt: In Q4, our new J&J program targeting G. P. R C five D and.
Matt: And in a late farm is anti <unk> 40 agonist program, both entered phase one clinical trials.
Matt: Based on dialogue with our partners, we see potential for approximately five to seven new entries into clinical development for novel Omnia derived programs in 2025.
Okay.
Matt: As I just mentioned in 'twenty 'twenty four five novel Omni Abderite programs entered the clinic and here on slide number nine you see those new clinical additions on the top part of this slide which includes programs with Teva Merck K G. A genmab J&J in Italy.
Matt: In 2024, we also saw five programs exit clinical development.
Matt: Shown on the bottom part of this slide resulting in a flat net year over year growth in active clinical programs.
Matt: Clinical nutrition programs, including two from Genmab, which were removed from clinical development in Q3, and Q4, but we're here, but remain active in earlier stages. According to company disclosures.
Matt: While the Roche Amgen programs reported in Q1, and Q4 of last year are no longer active they have minimal to no impact on the value of our partnered portfolio due to the due to the lack of any remaining economics to us.
Matt: And overall, while the attrition of certain programs reflects the dynamic nature of the drug development process. The addition of new clinical entrants highlights ongoing innovation and the potential of our technologies for discovering new therapeutic options.
Matt: So together they sort of highlight both the challenges and the opportunities in therapeutic discovery and development.
Matt: Slide 10 highlights the annual growth in our portfolio of post discovery stage assets.
Matt: And I will mention here that we are excited about the diversity and potential therapeutic impacts of the assets in our preclinical stage bucket shown here in the Orange slice of the Pie chart.
Matt: And hope to be able to shed more light on it.
Matt: Contents and programs that are in that orange slice in the coming quarters.
Matt: Here on slide 11, you'll see.
Matt: What we are now calling our prior format for showing clinical stage and later partner pipeline programs.
Matt: Over time, the pipeline has been getting a bit large for the traditional format.
Matt: And I think the opportunity for improvement, we're now introducing a new format for presenting our partnered clinical pipeline.
Matt: The new format is here on slide 12, and provides an overview of clinical and commercial programs organized from phase one through to late stages and approvals displayed from left to right.
Matt: [noise] program placement is based on our programs most advanced clinical status and its way out only includes programs, where omnia has future or remaining economic interests.
Matt: By excluding clinical and commercial stage partner programs that do not have future remaining economic benefits to us such as the cluster mab or chair of Golar Mab, we aim to focus attention on financially impactful programs.
Matt: We think just play out will help stakeholders more quickly synthesize the value of our clinical and commercial stage pipeline also gives us the ability to easily highlight new and additional indications and geographies that are being pursued by our partners.
Matt: We believe that by clearly presenting these elements will better illustrate the unique value proposition of each individual program.
Matt: Now I'll touch on just a few recent partner highlights.
Matt: Our press release that was issued this afternoon cover some additional updates from Q4 in recent months, but I wanted to spotlight a few specific programs that we see as standouts.
Matt: Slide 13 reviews Genmab access on the map, which is a bi specific antibody that targets PDL, one and four one b D J.
Matt: Genmab recently and I believe for the first time highlighted a potential billion dollar market opportunity for ACA sunlabob in non small cell lung cancer.
Matt: Emphasizing the addressable patient populations in the U S, Japan and the EU.
They are pushing forward with the last stages of clinical development of ACA, Sunlabob and announced that a phase III trial as a second line therapy.
Matt: Second line therapy in non small cell lung cancer is now enrolling patients.
Matt: Genmab also expects to provide an additional phase two data update for a similar map this year and we would potentially expect that had ask up.
Matt: Yeah.
Matt: On Slide 14, you can see that that has highlighted continued progress and they're now more prominent innovative medicines pipeline and had been showcasing advancements with omni rat derived T V 408, and omni chicken derived T E V 2784.
408 is a potent anti IL 15, neutralizing antibody. That's currently being developed for the treatment of celiac disease and vitiligo.
Matt: 278, which is an anti PD one IL two fusion protein is being developed in oncology.
Matt: Moving on now to slide number 15.
Matt: We have an immune advanced programs <unk> 14 O two embattle map.
Matt: Medical Mab is a promising anti F CRM monoclonal antibody for treating autoimmune diseases and IMTT 14 O. Two is a next generation anti F. <unk> antibody, that's designed for deep IGD reduction with minimal side effects.
Matt: We think these assets are poised for significant driven by large total addressable markets with multiple indications.
Matt: I mean that describes I am fortunate to as a potentially best in class highlighting its promising therapeutic potential.
Matt: Yeah.
Matt: They recently outlined several near term milestones and catalysts for both IMTT fortino to embark on a map. They are currently enrolling patients in pivotal phase III studies for graves disease and difficult to treat rheumatoid arthritis for IMTT 14 O two.
Matt: They plan to initiate a registrational programs for three additional indications by March 31st of this year.
Matt: And aim to evaluate <unk> 14 O two and a total of 10 indications by March 31 of next year.
Matt: For battle on the Datacom App as you can see here a minute, Matt expects multiple data readouts.
Matt: Some that are in the very near future.
Matt: Evaluate pharma public published an industry report at the beginning of this year that included a summary of their analysis of the 10, most valuable R&D programs on a net present value basis across the entire pharmaceutical industry.
Matt: And we were happy to see Bataclan, Mab and <unk> 14 O. Two both highlighted on that top 10 list.
Matt: Yeah.
Matt: Now on slide number 16, as we look ahead now in 2025, we anticipate several catalysts that will drive our continued growth and position the business for success.
Matt: Pipeline expansion and advancement remain key elements.
Matt: Significant progress expected in clinical and future royalty programs.
Matt: We're excited about the potential for new deals that are in progress and the launch of novel technologies that we think should have a substantial impact on the industry with more on those launches to be revealed during the year.
Matt: We focused on and look to further leverage our relationships and what we call. The army App ecosystem of partners that we've created over the years.
Matt: This allows us to think about and analyze the economic returns for technology expansion and technology launch options that are available to us and I think the tech launch options that we've invested in and are planning on this year can create significant opportunity and potential returns and we're excited about that.
Matt: Our partner basis continue to grow and diversify providing a solid foundation for sustained expansion.
Matt: And with a clear business model that is now positioned to be leveraged more efficiently.
Matt: We think we're well equipped to create value for our stakeholders and achieve our strategic objectives.
Kurt: And with that let me now turn the call back over to Kurt.
Kurt: For a discussion of our fourth quarter financial results and our 2025 outlook Kurt.
Kurt: Thank you, Matt I'll start with slide 18.
Kurt: Our revenue in the fourth quarter of 2024 <unk>.
Kurt: Total revenue increased substantially reaching $10 8 million compared with $4 8 million for the same period in 2023 this increase.
Kurt: This was primarily due to higher license and milestone revenue driven by new deals and the clinical advancement of our partner programs.
Kurt: Service revenue declined as we completed work on certain small molecule ion channel programs that were then transitioned over to the partner.
Kurt: Regarding royalties typically we receive sales data from our partners on a lag. So we record royalty revenue based on estimated net sales of our partners' products. When we do receive the final sales data any difference between our actual results and the prior estimates are adjusted in the period in which they become known.
Kurt: In the fourth quarter, we received an update an update on some information regarding the sales of <unk> Zimbra Ela Mab in China during 2024 and accounted for that downward adjustment in the fourth quarter to reflect this new information.
Kurt: Turning to slide 19, let's take a look at our operating expense.
Kurt: Operating expense in the fourth quarter would have been lower than the prior year period, if not for a $2 $7 million impairment charge related to certain small molecule ion channel intangible assets the.
Kurt: The impairment charge was a result of a shift in our focus for ion channels from small molecules to antibodies. This shift resulted in the impairment of certain small molecule related intangible assets.
Kurt: For R&D and G&A expense, both decreased versus the prior year, primarily due to lower stock based compensation expense and reduced outside expenses as we continued to drive efficiencies in our business.
We take a look at the quarterly P&L on slide 20 and focus.
Kurt: Focus here on the bottom part of the P&L, our net loss for the fourth quarter of 2024 was $13 1 million or 12 cents a share versus a net loss of $14 1 million or 14 cents per share in the prior year period.
Kurt: So moving on to slide 21, you can see that for the full year total revenue increased when excluding the $10 million milestone related to the first commercial sale to <unk> in the EU was recorded last year.
Kurt: The increase then in license and milestone revenue. Excluding this $10 million was driven by advancement in our partners' clinical programs and new licensing deals.
Kurt: Service revenue declined slightly year over year, primarily due to the completion of certain ion channel programs, which was slightly offset by an increase in our service revenue for our antibody discovery work.
Kurt: Additionally, our royalty revenue was lower than the prior year, primarily due to the highly competitive PD, one PD lone PD L. One market dynamics in China, which led to lower product sales.
Kurt: Going over to slide 22 full year operating expense was lower in 2024 compared with 2023.
Kurt: Our R&D expense was flat, while the G&A expense decrease mainly due to nonrecurring consulting and service costs in 2023 related to our spin out as a public company as well as lower legal and stock based comp expenses.
Kurt: And also note that the total impairment charges taken during the year was $3 8 million.
Kurt: Moving on to slide 23, if we take a look at the full year P&L and once again focus on the bottom part of this schedule. The net loss for 2024 was $62 million or <unk> 61 per share compared with a net loss of $50 6 million or <unk> 51 per share for 2023.
Kurt: Yeah.
Kurt: Onto slide 24, if you break out the year by quarter, you'll note a few things first as we had previously guided revenue was weighted towards the second half of the year and you'll also note a general trend of both lower R&D expense and lower G&A expense over time.
Kurt: And as I'll discuss in a moment, we expect this trend to continue into 2025.
Kurt: On the amortization of intangibles. This is usually fairly stable, but we had a couple of impairments one in the second quarter and one in the fourth quarter.
Kurt: Those particular quarters to deviate from their baseline.
Kurt: Turning to slide 25, you'll see our balance sheets for both 2024 and 2023.
Kurt: The company is well capitalized and we exited 2024 with $59 4 million in cash which was at the top end of the guidance range that we provided during our last earnings call.
Kurt: As we mentioned on our Q3 earnings call in November we had raised $11 4 million in net proceeds off of the ATM.
Most of this was in the third quarter, but a portion was in the fourth quarter. We have not raised any additional amounts off the ATM program beyond what we reported at that time.
Kurt: I also want to point out one other item on the balance sheet as it would relate to some of the guidance. We are introducing today. The third line down in the liability section is deferred revenue. Most of this was placed on the balance sheet years ago prior to <unk>, becoming a standalone company.
Kurt: From upfront payments received for the small molecule ion channel licenses.
Kurt: As we complete work on those programs. The revenue is recognized in the deferred revenue balance is reduced as it amortize over the research terms of those projects Youll note that this balance is now down to just $2 $5 million.
Kurt: Okay.
Kurt: As a final topic, let's turn to slide 26, where we introduce our 2025 financial guidance.
Kurt: This is the first time, we've ever provided revenue guidance and.
Kurt: And this guidance is based on information that our partners have disclosed to us as well as information that our partners have disclosed publicly about their programs.
Kurt: Based on this information, we expect that 2025 revenue will be in a range of $20 million to $25 million.
Kurt: But I want to draw your attention to the lighter shaded regions of the bars.
Kurt: On the graph on the left note that a significant portion of the revenue in 2024 was noncash in fact close to one third of the revenue earned last year did not result in actual cash received in that year.
Kurt: A significant portion of our service revenue has been the amortization of deferred service revenue that I just mentioned.
Kurt: One of the primary factors driving the revenue decline in 2025 is that this noncash portion of service revenue is decreasing.
And in fact from a cash perspective, we actually expect an increase in the amount of cash that we will receive from our partners in 2025 compared to the cash that we received in 2024.
Kurt: So while revenue may be decreasing it's only the noncash piece, that's that's causing the decrease.
Kurt: Moving to operating expense I mentioned this strategic shift we made in our ion channel business focused on antibodies. This shift also resulted in an alignment of our specific staffing needs with the amount and type of work. We're doing in this area and resulted in a reduction to our ion channel related head count earlier this quarter.
Kurt: This will result in some charges in the first quarter, we still expect our operating expense for the year to decrease in 2025 relative to 2024.
More specifically total operating expense is expected to be in the range of $90 million to $95 million.
Kurt: I also want to point out that historically about 40% of our operating expense has been noncash primarily from the amortization of intangibles and stock based compensation and we expect 2025 to be similar.
Kurt: As for our cash use we expect our cash used in 2025 to be lower than in 2024, excluding the proceeds from our 2020 for ATM issuance.
Kurt: As a point of reference our cash used in 2024 was $38 9 million when you exclude the $11 4 million of proceeds from the ATM.
Kurt: Okay.
Kurt: One additional comment about our tax rate, while our tax rate might fluctuate from quarter to quarter. We expect a full year effective tax rate in 2025 to be around zero percent.
Kurt: As our valuation allowance is expected to largely offset the tax benefit associated with our net loss. This tax benefit will eventually be realized when the company becomes profitable.
Kurt: While the biotech industry is certainly going through some volatility our business has continued to perform well.
Kurt: The leadership here at <unk> have run businesses for many years and we're committed to growing the business while at the same time, staying fiscally responsible to position us for continued success.
Kurt: I'll open up the call for questions operator.
Kurt: Yes.
Kurt: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone.
Kurt: You will hear a prompt that youre kind of spring race.
Kurt: Should you wish to decline for the polling process. Please press star followed by the number too.
Kurt: If you're using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.
Kurt: Your first question comes from the line of Joel but units from H C. Wainwright. Your line is now open.
Joel: Hey, guys. Good afternoon, thanks for taking the questions. A couple if you don't mind so first.
Joel: Matt with regard to attrition rates. Obviously this is a normal part of our biotech drug development, just curious I might assume that a lot of it or the majority has to do with you know clinical development moves number one but are there any attrition numbers.
Joel: Numbers that might be due to technical issues.
Speaker Change: Yeah, Thanks, Joe No I wouldn't describe.
Speaker Change: Attrition as related to technical issues at all.
Speaker Change: This the attrition we saw last year.
Speaker Change: Through the year about.
Speaker Change: Big pharma pipeline.
Speaker Change: Realignment, which was pretty widely reported through the year I think a lot of dynamic changes.
Speaker Change: In the big pharma space have planned now.
Speaker Change: Many of the big farmers to focus more on efforts, where they can really be differentiated and maybe even in some instances to aim even bigger in CNS and areas like that.
Speaker Change: So that caused I think some of the big farmers to realign their there.
Speaker Change: Clinical pipelines.
Speaker Change: But beyond that I think the rest of the attrition that we saw I would characterize us as kind of normal.
Types of attrition that you see in the various stages of drug development of note Q4 was a really strong quarter for us in terms of additions.
Speaker Change: And I think that as positioned as well.
Speaker Change: For this year, so that was generally good to see.
Speaker Change: No that's very helpful and I assume that I just wanted to ask and then in your prepared comments and in your slide deck, you gave a little bit of a tease of new Tech Rollouts. This year. So curious you know any further information you can share and does it come from.
Speaker Change: Any of your existing platforms or the sort of brand new rollouts of tech.
Speaker Change: Yeah, Great Great question, Joe. Thanks, I mean, we we think our commitment innovation is really a significant competitive advantage.
Speaker Change: One we've seen that now over the years and we hear it from our partners is as we're talking to them and we have been investing activity in innovation for the last few years and those investments that we have made.
Speaker Change: Are informed by really deep relationships with our partners that helps us form our thoughts on both and also form our technical and our business conviction around new technologies and workflow enhancements that.
Speaker Change: That we consider innovation that can really drive value.
Speaker Change: Here's we launched omni Dab, which is an engineered chicken with a human framework for discovering novel single domain antibodies.
Speaker Change: That has attracted a significant number of new partners.
Speaker Change: It's driving some nice growth in our active programs.
Speaker Change: And it's also substantially diversifying.
Therapy areas that are being pursued by our partners into CNS and radio pharma and other areas, but when we when you think about innovation I also include things like omni deep, which we launched in recent years also which.
Speaker Change: And silicon tools, AI and machine learning elements that are woven throughout our tech platform, but are also driving new programs, creating new opportunities and that after that we launched omni hub at the end of last year.
Speaker Change: Which is a platform for bioinformatics tools that enhance our workflows for our partners and the feedback on omni hub is has been candidly fantastic. So.
Speaker Change: It's a long lead them to say to answer your question just in this year.
Speaker Change: We're really excited about the new technologies that we're planning to launch I think they can impact our ecosystem of partners and the industry more broadly.
Speaker Change: And I'll just in generally.
Speaker Change: That the things we launched this year are very much within our strategy and the themes that we've talked about previously in terms of they'll enable a discovery of high quality candidates more quickly and efficiently they're.
Speaker Change: They're highly scalable.
Speaker Change: Expand our existing partnerships and I think will attract new partners as well and we'll continue to.
Speaker Change: Differentiate it differentiate us so.
Speaker Change: On the other I guess detail I'll give I mean, we've generally launched.
Speaker Change: New things around key scientific conferences.
Speaker Change: And that's worked well for us and that generally includes the pegs protein Engineering conference in May in Boston.
Speaker Change: And the AE conference that is very late in the year down in San Diego. So just kind of some general details there I hope that helps no. It certainly does and one more quick question I guess and it might be a little self deprecating cut the simplistic answer is a yes, no or irrelevant do.
Speaker Change: Do you think that in these current volatile markets that Kurt alluded to and we all know about do you think there's any sort of push for additional pipeline and development, where you might see added cash deployment from partners.
Speaker Change: You know Joe I mean, as we look at our business and the metrics that we track.
Speaker Change:
Speaker Change: It's a business that's been resilient and has done well in a variety of cycles and I think there's a lot of reasons for that potentially you.
Speaker Change: You know that the technologies and the needs that they serve.
Speaker Change: And different.
Speaker Change: Cycles like sub cycles that exist within the industry around therapy areas or approaches to research, whether that's internalization or externalization etcetera and the good news about our platforms is that they are scalable they can be used in the <unk>.
Speaker Change: Flexible fashion in a variety of ways. So I feel like we're kind of well positioned.
Speaker Change: And just about any landscape I don't know curtailing.
Speaker Change: Okay great.
Speaker Change: Fantastic. Thanks for indulging all my questions guys.
Speaker Change: Yeah. Thanks, Joe.
Speaker Change: Your next question comes from the line of Puneet <unk> from Leerink Partners. Your line is now open.
Speaker Change: Yeah, Hi, guys.
Speaker Change: Thanks for the questions here, so first one.
Speaker Change: On the.
Speaker Change: Curt if you could clarify on the 2000 25 million guide.
Speaker Change: Just assuming what are you are you expecting cash and noncash within lab tours that all cash and maybe if you can elaborate.
Speaker Change: You provided a number of programs here any upside you're baking in from those programs and then I know, it's always hard to say how much is collaboration revenue versus license revenue, but maybe you can provide context. Because this is the first time, you're providing this guide.
Speaker Change: Yeah. So puneet so the 20 to 25 is a GAAP number.
Speaker Change: So we're trying to compare GAAP to gaps, but what I. What I was trying to point out was if you think about why the 2025 number is going down relative to 2024.
A big chunk of that of.
Speaker Change: 2024 was the service revenue $6 million was the amortization of service revenue, which which is noncash.
Speaker Change: And that's the piece that was going away I kind of pointed to the balance sheet. If you take a look at deferred revenue on the balance sheet. The balance at the end of the year is only $2 $5 million. So we.
Speaker Change: We recognized $6 million of deferred revenue last year, Theres, only two and a half million left to recognize on the balance sheet. So that's one of the big things that is going down and that's noncash anyway. So I.
Speaker Change: I was trying to just provide some color on that but specifically the 'twenty to 'twenty. Five is is a GAAP number in terms of what we would expect to report.
Speaker Change: Got it and you asked about.
Speaker Change: Kind of the differentiation.
Speaker Change: At this point I don't think we're breaking out.
Speaker Change: In that revenue the difference between milestones versus service revenue versus royalties, but.
Speaker Change: You could allude or you could based on my remarks, you know that kind of the deferred service revenue is a piece that certainly going down next year based on the comments that I've made.
Speaker Change: Got it that's helpful. And then I know academic is a smaller piece of your partner <unk>.
Speaker Change: Contribution, but just.
Speaker Change: I'm wondering if you're seeing any of the impact there obviously the volatility in the market, but more importantly, you know just a lot of NIH worries and whatnot. So I'm just wondering if you're seeing any any decline there.
Speaker Change: Yeah, Yeah Puneet. This is Matt I'll. Thanks for the question I mean, obviously theres been in regard to any NIH funding are obviously a lot of wide reporting on how changes there can or might impact academic research now and in the future.
Speaker Change: This point, we've not seen that impacting how our ecosystem of academic partners are collaborating with us, but we're continuing to watch that space.
Speaker Change: We are in active dialogue with prospective academic partners now.
Speaker Change: And those discussions and progressed despite the headlines.
Speaker Change: And the dynamic nature of the landscape.
Speaker Change: I guess I'll also add well we'll report.
Speaker Change: Our numbers and new partnerships.
Speaker Change: For this year when we report Q1 in May, but we actually just signed a new leading academic institution to a new deal in the last week or so.
Speaker Change: With a group that's very interested in leveraging our omni Dab technology for a variety of pretty impactful areas. So that was a good thing to see but well continue to watch this space.
Speaker Change: Got it and then one more for me.
Speaker Change: You talked about fourth quarter being especially productive for additions has that continued into the first quarter here.
Speaker Change: Now in March.
Speaker Change: Thank you yeah.
Speaker Change: For some of that puneet in terms of the work that we're actively starting.
Speaker Change: I'd say generally yes, it's.
Speaker Change: We do get reports.
Speaker Change: On other elements of our tech that come later, and so hard to say exactly I don't know Kurt anything Yeah, I think I think who need in terms of you know.
Speaker Change: Just like it is with milestone revenue right. It can be lumpy over the quarters and specifically for this data. It's a function of when we get reports in from partners on what they are working on some of these don't companies. They only report quarterly we have a few instances where they only report annually. So.
Speaker Change: Be careful about reading too much into any single quarter in terms of what's happening there obviously the general trend for the year is very positive and we're looking for that to continue but I'm not sure I would sort of tried to take a ruler and draw lines based on what happened in Q4.
Speaker Change: Okay alright, thank you.
Speaker Change: Yeah.
Speaker Change: Your next question comes from the line of Matthew It from Craig Hallum Capital Group. Your line is now open.
Matthew It: Good afternoon, thanks for taking the questions, maybe first off and I just want to make sure I was reading the slides correctly. So I think you're expecting five to seven new clinical entrants. This year I would assume that most if not all of those would trigger milestones and then.
Speaker Change: One of the slides says you've got four.
Speaker Change: That are now in phase III, as we look out and I'm not asking for guidance, but as we look out at 'twenty six 'twenty seven.
Speaker Change: It would appear that she I mean as those kind of get through the clinic, there's an opportunity to see a nice step up in not only the milestones upon approval if that happens, but also on royalties and my thinking about that correctly.
Speaker Change: Yeah, Matt I'll I can comment on I'm sure Kirk I have a comment just on the overall metrics that you're talking about obviously we've.
Speaker Change: Shown a new view of our pipeline chart right.
Speaker Change: So really focus only on the programs that have downstream economics, so and to answer your question generally generally when a program starts a clinical trial.
Speaker Change: That will trigger.
Speaker Change: A milestone in some manner and I say it like that because every contract I mean, there can be differences in in a variety of contracts she looks across all of our programs.
Speaker Change: Over 98% of them have downstream economics to US right. So that's I think an important thing to keep in mind. There are programs now we've kind of pulled out of our pipeline visual representation, but for historical comparative reasons or are in our overall metrics some.
Speaker Change: Those are in later stages of development again deals.
Speaker Change: That were done in a long time ago that we inherited but yeah.
Speaker Change: Hopefully that answers your question on milestones.
Speaker Change: It does and then maybe shifting gears a little bit it sounds like you've had some really positive feedback on omni hub.
Speaker Change: I know last quarter, you said that you had completed a kind of a beta run or a beta test with with a partner and then you're going to present data in December are you now enrolling or signing up.
Speaker Change: Customers or partners to that product and if so how should we think about the ramp of that over the over the year. Thank you.
Speaker Change: Yeah. Thanks, Thanks, Matt So yes partners are using omni hub today we.
Speaker Change: On our last call I think and in November we mentioned the fact that we'd already done some day to work with early adopters. If you will but we launched omni hub in December at the <unk> conference down in San Diego.
Speaker Change: And the receptivity and the feedback has been great on that it allows us to within the digital format share data.
Speaker Change: And tools and things like that with our partners and.
Speaker Change: It's kind of a natural evolution and extension of our our technologies as we had one start sharing more data with more partners have introduced things like omni deep, which is our suite of in silicon and silicon tools that are woven throughout our platform on the Atwood.
Speaker Change: Natural technology technological expansion for us that we launched in December and has been going real well.
Speaker Change: That's great. Thank you.
Speaker Change: Your next question comes from the line of Clipper devote khanda from <unk> Securities. Your line is now open.
Speaker Change: Hey, guys. Thank you so much for taking my questions and congrats on all the progress.
Speaker Change: On the two licenses with Ah I think insight in 14 years that you reported in Q4 could you give us any additional color you there on the therapeutic area the indications or the platforms that they might use.
Speaker Change: And from a therapeutic area perspective, you previously had noted that omni that opens up a lot more possibilities, especially you mentioned neuroscience as well as oncology can you talk about if the trend is continuing or if it has expanded or are there have been any kind of changes in that.
Speaker Change: Yeah.
Speaker Change: Yeah. Thanks.
Speaker Change: On therapy area evolution Omni Dab you know as you know we launched it in November of 2023.
And it certainly has contributed to an uptick of partners who are interested in and are pursuing.
Speaker Change: CNS targets, what I'll describe as high value CNS targets.
Speaker Change: We definitely also have partners using omni Dab.
Speaker Change: With a focus on oncology and in multi specifics and areas like that but it has certainly.
Speaker Change: It increased the diversity of our discovery pipeline.
Speaker Change: With additions of CNS, we also see real interest in radio pharma as well.
Speaker Change: As far as both inside and 14, Yeah, I can't really comment on the areas that they're interested in our with our platforms other than to say they have broad platform access which gives them access to multiple species to our proprietary screening technologies and other downstream technologies and work.
Speaker Change: Close so.
Speaker Change: That's what I got for you on that.
Speaker Change: Okay, great. Thank you.
Speaker Change: As a reminder, if you have a question. Please press star one on your telephone keypad.
Speaker Change: Your next question comes from the line of Stephen Willey from Stifel. Your line is now open.
Speaker Change: Hi, guys. This is totally on for Steve and thank you for taking the question. So just to start with I have a question on your preclinical discovery programs. So among these five incremental or in total 20 preclinical program is there any particular plot.
Speaker Change: Formed that Overrepresent that others in other words like I'm trying to gauge you know like Oh.
Speaker Change: Any particular platform, that's attracting more attention.
Speaker Change: From partners. So that's my first question and I'll ask the second one later.
Speaker Change: Great.
Speaker Change: And as far as that the that 20 programs in the preclinical phase.
Speaker Change:
Speaker Change: I'll just say generally we're really pleased with the diversity of therapy areas in there.
Speaker Change: Fraud.
Speaker Change: Therapeutic interests are really impactful.
Speaker Change: <unk>.
Speaker Change: Indications, where there are significant unmet medical need there also is a mix in there of our source technologies whether that's.
Speaker Change: Our omni roden technologies, our or by specific technologies, omni flick and omni quick as well as our art.
Speaker Change: Our chicken based technologies as well.
Speaker Change: So yeah, it's a nice mix and diversity generally as those programs enter the clinic, that's when there's more information out there about this specific targets that partners are pursuing how they're approaching their clinical development.
Speaker Change: Et cetera, and I and we expect we'll be able to talk more about that through the year as our programs graduate from the preclinical phase to the clinical phase.
Speaker Change: Okay, great. Thank you very much that's helpful and my second question is actually related to one of the like advanced assets.
Speaker Change: O'malley my.
Speaker Change: Partnering with our Keystone so can.
Speaker Change: Can you. Please remind me off the downstream economics related to that asset because the Keystone sounds like they've been making you know significant progress on the commercial side.
Speaker Change: Hi, so the.
Speaker Change: The reason I'm asking this question is I'm wondering if.
Speaker Change: You know potential royalty payment, it's actually embedded in our 2025, our guidance revenue guidance at all so.
Speaker Change: Well I can I can tell you that the the royalties for both to the mellow <unk> Zimbra Zimbra allomap, our 3% globally. So.
Speaker Change: That's the answer that question in terms in terms of the guidance I guess.
Speaker Change: The guidance includes <unk>.
Speaker Change: Revenue from milestones and the.
Speaker Change: Service revenue in royalties, although I think we don't really have a lot of insight into sort of what sales would be in those territories. So I'm not sure. There's a lot of upside baked into our guidance for that kind of thing.
Speaker Change: Great. Thank you so much.
Speaker Change: There are no further questions at this time I will now turn the call back over to Matt for these continue.
Matthew It: Great. Thank you all for joining our call today and we appreciate the engagement and the acquired and the questions.
Speaker Change: Well look forward to keeping you updated on our progress.
Speaker Change: And to speaking to you next quarter. So in the meantime, again, we appreciate your interest in omni I didn't have a great day.
Speaker Change: Yes.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Oh.
Speaker Change:
Speaker Change: Yeah.