Q4 2026 Fusion Antibodies PLC Earnings Call
Speaker #2: Entering Webinar of Attendee.
Speaker #3: Good morning. Welcome to the Fusion Antibodies POC Investor Presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab, situated on the right-hand corner of your screen.
Speaker #3: Please just simply type in your questions and press send. Before we begin, I’d like to submit the following poll, and I’d like to hand you over to the management team. Adrian.
Speaker #3: Good morning, sir.
Speaker #4: Good morning. Thank you, Charlie. My name is Adrian Kincaid; I'm the CEO of Fusion Antibodies. I'm joined today by Stephen Smith, who is our interim CFO.
Speaker #4: Although he has been with us for quite a while now, so welcome, Stephen. Thanks for all the support. So, we're going to take you through the results presentation.
Speaker #4: For the year ended 31st of March, following the full audit required—and much of the results have actually been out since we did the trading update—but now they're audited.
Speaker #4: So, we'll follow the usual format, and I just need to remind you of our legal obligations and the disclaimer that's on screen here. Thank you very much for spear-reading it.
Speaker #4: And I'll hand over to Stephen to take us through the income statement.
Speaker #5: Thank you, Adrian. Yeah, and by way of introduction, as Adrian said, I'm Stephen Smith. I'm the interim CFO at Fusion. So, our interim income statement extract for the financial year ending March 31, 2026, showed revenue increasing by 7% to just over $2.1 million.
Speaker #5: In the financial year, it's important to add that revenue for 2026 did include a one-off $250,000 IP transaction with Finn Therapeutics.
Speaker #5: So there was $250,000 of revenue that was, I suppose, outside of our—I wouldn't say our normal scope, but outside of our previous activity in the current financial year.
Speaker #5: So, if we exclude that IP transaction, other operational revenues were down marginally year-on-year. What we've seen is a longer customer decision-making cycle, from discussing deals to pressing go.
Speaker #5: The gross margin, or gross profit summary, increased from £0.4 million to just over £1.2 million. That resulted in a margin increase from 22% to 58%.
Speaker #5: Now, obviously, again, that margin was influenced by that one-off IP transaction. However, there were changes in product mix, operational efficiency, some higher value service work, and an increased contribution from grant-funded activity and other small non-service income streams.
Speaker #5: So, I think it is important that the improvement in reported margin should be considered in the context of the one-off piece of revenue through the IP sale.
Speaker #5: And changes in the revenue mix. So, our EBITDA loss for the year was just over $1 million. That was an improvement of just over $500,000 on the previous year.
Speaker #5: So again, the reduction in EBITDA reflects changes in the gross margin above, and the company's operating cost base during the year. It's worth noting that this reduction in EBITDA loss was achieved alongside continued expenditure on the commercialization of Optimal and broader R&D activities.
Speaker #5: The investment and operating costs that sort of bring us from gross profit to the EBITDA loss aren't included in the income statement extract.
Speaker #5: So I'll add a little bit of color on those. Operating costs actually increased during the year, which reflected the expenditure on the Optimal platform development.
Speaker #5: Related validation activities, significant grant-funded R&D programs, and commercial readiness activities. Total R&D spend in the previous fiscal year increased to approximately $861,000, compared with $191,000 in FY25.
Speaker #5: So that was, again, primarily as a result of the full rollout and implementation of the FMI and Innovate UK grants. This increased R&D expenditure represents a significant increase in investment compared with the prior year.
Speaker #5: And obviously, contributed to the overall cost base. I will move to the summary financial position, or balance sheet. Net assets—if we look to the bottom initially—net assets increased from $756,000 last year to just over $1.65 million, or $1.66 million.
Speaker #5: At the March 31st year-end, the increase was primarily driven by the January 26th equity raise, which increased cash reserves at year-end, and a mix of changes in our overall working capital position.
Speaker #5: Cash increased from $459,000 at the previous year-end to just over $1,040,000 at the current year-end. I would say that the higher year-end cash balance provides additional liquidity for ongoing operating, commercial, and R&D expenditure.
Speaker #5: At year-end, current assets were approximately three times current liabilities, indicating a higher level of current assets relative to short-term obligations. This position remains, obviously, subject to the company's ongoing cash requirements and operating expenditure.
Speaker #5: Our receivables; inventories first. Inventories are higher at the current year-end: $362,000 versus $269,000. Receivables are $966,000 versus $719,000. Receivables include $144,000 of a corporate tax receivable.
Speaker #5: There were $530,000 of debtor receivables. That $530,000 is net of a significant bad debt provision—gross $938,000 with a $408,000 provision. The bad debt provision is largely related to the $250,000 due from Finn Therapeutics.
Speaker #5: While we expect to collect that amount in full, it was deemed prudent to provide for it through our year-end audit. We have $174,000 in prepaids and VAT receivable.
Speaker #5: And $117,000 in accrued income. The current payables of $842,000, versus $623,000 last year, are comprised of $488,000 of trade creditors and $212,000 of other creditors, including accruals and PAYE, National Insurance liabilities.
Speaker #5: And then we have $100,000, which is the current portion of our HP liabilities and our office lease liabilities, and $41,000 of deferred income. Our non-current payables are the long-term portion of our office lease and HP liabilities.
Speaker #5: Our statement of cash flows: cash used in operations decreased from $1.36 million. It reflects changes in gross margins, operational expenditure, and working capital throughout the year.
Speaker #5: Operating cash outflow, nonetheless, remains significant at $1.1 million for the 12 months to March 31. The reduction in operating cash burn occurred alongside a substantial increase, as I said earlier, in R&D expenditure. Part of that, obviously, was supported by government grants.
Speaker #5: Investing activities increased modestly to $58,000. That related to a particular piece of equipment, so limited investing activity throughout the year. Financing activities—the $1.855 million was the net proceeds from the 2006 fundraising activities.
Speaker #5: Those proceeds were intended to fund Optimal commercialization, market and business development, the equipment purchase that I noted above, and, of course, general liquidity requirements.
Speaker #5: So, the year-end cash position increased by $684,000, going up from $359,000 to $1,043,000. Again, this was largely reflected through the fundraising activities, with the cash burn used in operations offsetting that.
Speaker #5: So, I would say in conclusion, before I sort of pass back to Adrian, while cash used in operations reduced during the year, the business remained cash-consuming and EBITDA loss-making.
Speaker #5: The increase in year-end cash was principally supported by the 2026 fundraise, with cash closing at just over $1 million. The cash position provides funding for ongoing activities.
Speaker #5: But the level and duration of available liquidity will remain dependent on operating cash requirements, R&D expenditure, future revenue generation, or future financing activity. So Adrian, with that, I will hand it back to you.
Speaker #1: Thank you very much, Steven. I noticed that we've been asked a question concerning grant income, so I thought that was worth just highlighting here before I go on to the main part, or my part, of the presentation.
Speaker #1: The $2.11 million in revenues does not include grant income. That is something that maybe some other companies do, but we don't. The $2.11 million is recognized revenue, not grant income.
Speaker #1: So, I just wanted to clarify that. Okay, moving on. We are in a very challenging market. Many of our competitors have actually not hit, or even got close to, their targets.
Speaker #1: And in that regard, I think Fusion has actually done well in the year to March 26. Since then, or starting in March, there have also been some further adverse effects which have impacted a very wide range of businesses, not just in our sector, but more globally.
Speaker #1: And you'll be familiar with Richard Branson's recent comments, no doubt. However, it's worth bearing in mind that, thus far, interest rates—or central bank interest rates—in the key markets have not yet risen.
Speaker #1: And we are hearing anecdotally that growth is said to be returning. I'm not sure what's happened on the slides there—apologies for the slides.
Speaker #1: So there are some good prospects, but there is no denying that the market is very difficult. That means that when we're up against competitors—which, of course, we are for pretty much every project that we're pitching for—we find it is becoming increasingly competitive.
Speaker #1: And therefore, what Fusion needs to do to keep winning business, or win more business, is to offer proprietary technologies which have advantages and benefits to the end user, clearly being proprietary.
Speaker #1: They can't be had from elsewhere. So, we have something that really differentiates us in the market. We're always talking about generic services, and there are a number of those. Particularly, the most frequently questioned one is the transient gene expression.
Speaker #1: So that's where you want to make small quantities of antibodies for testing. Each of those antibodies is considered relatively low value, but what you want to do is get them tested quickly and cheaply.
Speaker #1: And other companies have been offering faster services than us, and at lower costs. So those faster services and lower costs are something that we at Fusion need to match.
Speaker #1: So what we've been doing about it to meet those challenges—well, in the proprietary offerings, we have our Optimal platform as the flagship platform.
Speaker #1: And it's worth just dwelling on what that means to us more widely, as well as the potential to sell Optimal deals. Opti-designed libraries are very advanced.
Speaker #1: They introduce naturally occurring somatic hypermutations. So, these are changes in sequence that are outside the obvious areas on an antibody. It's an extremely involved and really elegant piece of science that's behind that.
Speaker #1: And that's one of the reasons why the initially designed Optimal library is as large as 10 to the 45. So absolutely mind-bogglingly large. We can apply that method, which is patent protected including in the USA, Japan, and Canada, we can apply that method to other libraries.
Speaker #1: So, the initial naive library that we offer with that—'naive' meaning that it can be used against any particular target—is not biased towards one particular structure.
Speaker #1: That's only the first offering of the Optimal libraries that we have. The other thing on the proprietary platforms, and then the Optimal in particular, is our mammalian display platform, which is best in class and offers distinct advantages in terms of its performance, and in particular, the efficiency with which it expresses antibodies from sequences that are put into it.
Speaker #1: And that's really valuable. It gives you much more confidence that a sequence has made it through. And if you don't get binding, you can be much more confident that that sequence was actually at fault, and that negative data is often really helpful in supporting what you know about the positive data, if where hits have been found.
Speaker #1: And we have a distinct advantage with mammalian display compared to any of the commercially-available alternatives. Faster timelines and more competitive costs, though, are particularly important for generic services, like I say.
Speaker #1: And this transient gene expression has been a real bugbear. So, we are looking for small quantities of antibody at high throughput. We have now started rolling out a revised process for that.
Speaker #1: And that's being offered to clients now, where we've reduced timelines—which had been as much as nine weeks—down to about three weeks. So it's a much more compelling and greatly improved proposition to our clients.
Speaker #1: That is matched because we've taken out a lot of the labor costs, which is matched with more competitive pricing. What I'm expecting that to mean is that we will win more projects centered around TGE—which involve TGE, sorry—and that will allow us to get improved take-up of our adjacent offerings.
Speaker #1: So, we do the engineering design first, and then we express small quantities and test those antibodies. So, the engineering will be looking more competitive as well.
Speaker #1: And also, once we've expressed them, they choose the antibody that's of interest and then take it on for further tests. That requires a scale-up of the antibody production.
Speaker #1: So I expect that we will retain that much more. So I think, as a single area of improvement—and certainly following feedback that we've had from our client base—this is what they're wanting.
Speaker #1: So, having pitched that back to the clients, the clients are responding and saying that's what we asked for. That's much better. And they are now engaging with us in a more positive way than we had before.
Speaker #1: So, we think we've eliminated one of the roadblocks to successful conversion of leads into projects—time will tell. Another area where we've really hammered the timeline is the much higher-value cell line development area.
Speaker #1: So, cell line development comes in when an antibody has been nailed down. This is the antibody that they want to take into production under controlled conditions, with manufacturing practices or GMP.
Speaker #1: And that enables these antibodies to actually go into clinical trials, and samples of the antibody to go into people. Nothing we produce goes into people because we don't do the GMP stuff.
Speaker #1: That's a kind of different business set. But what we do make is the cell line that can be taken into that production. As such, it is really quite high-value.
Speaker #1: They're significant, chunky contracts that, when we get them for this sort of approach, some of those have been RNSed in the past. And what we have now is a cutting-edge microfluidic technology available to us through the FMI grant in Belfast that allows us to really modify and really change the way cell line development is run.
Speaker #1: So those processes, in terms of timeline, have reduced that from about eight to nine months down to four months. So it's taken four to five months out of it—half that timeline.
Speaker #1: And that is a really significant we're seeing a lot more interest now in that type of course. What they want to see the clients want to see is case study data for it.
Speaker #1: And not just the hand-wavy, "this is what we are told we can do with this new equipment." We really need to show them that we've done it.
Speaker #1: And we're in that position now courtesy of the DR5 grant that we have, which has allowed us to do our own cell line development. So, we have shown, and we have case study data, which we can use and are using in marketing those services to the clients that are interested in cell line development.
Speaker #1: It is also worthwhile pointing out at this point that all of this R&D work that we're doing on our own processes is covered by the FMI grant.
Speaker #1: So we're claiming back for that work that we've been doing. And the DR5 grant is specifically for that project, but it's also given us the opportunity to run case study data, to develop case study data to support these new technologies.
Speaker #1: So that puts us in a much improved position to meet those challenges that we're facing, and that everybody else is facing in the marketplace, but we're improving our competitive position.
Speaker #1: So, the DR5 project itself—the gentleman in the picture here is Professor Chris Scott from Queen's University Belfast. He's one of our collaborators on the project.
Speaker #1: And this photograph was taken at the recent LRIG conference in Belfast. He did an absolutely excellent job of describing the biology and why it's such a good target.
Speaker #1: And I have so much interest in pharma, and indeed, why Amgen's lead product wasn't able to do effectively what our antibody can do. It's a remarkable hit antibody that was shown to be effective in cell-based assays without the need to conjugate it onto another substrate or nanoparticle, for example.
Speaker #1: And that was what was required to make the Amgen antibody work. It's quite a compromise to do that conjugation. It makes the cost of goods much more expensive.
Speaker #1: It makes it more difficult and more challenging to get the work done, but the target was sufficiently attractive that Amgen followed it through. Unfortunately, they then ran into some problems.
Speaker #1: So that leaves the pathway open for other companies with other DR5 antibodies, such as ours, to go forward on the second generation of antibodies.
Speaker #1: So, what we've been doing with our remarkable hit antibody under the grant funded by Innovate UK has been to develop much more complex antibody design structures that really enhance the efficacy of the antibody, using cellular models as the main sort of process—binding, and then cellular models.
Speaker #1: It's worth pointing out that more complex antibody structures are appearing and coming through the drug development pipeline more widely. So, having case study data exemplified by the DR5 project and everything that we've shown there is really important, and shows that we've got technology and a project that we can talk more openly with our prospective clients about to really showcase what we can do.
Speaker #1: If we're doing it for another client, we're under NDA, and we're not allowed to talk about it. It would be inappropriate to discuss the details of somebody else's antibody and the complex engineering that we've done.
Speaker #1: And that's where the grant project—the DR5 in particular—really allows us to do that. And, of course, as I mentioned earlier with the cell line development, it's a really excellent example to showcase how we've taken a whole four months off the development of the cell line, using DR5 as an example case.
Speaker #1: So, where is the project at the moment? It's currently undergoing evaluation in animal models. So, these are xenograft tissue models, where effectively a human tumor is implanted into a mouse, and then that mouse is being treated with antibodies.
Speaker #1: It is too early at this stage to say what those results are going to be. We are waiting with a great deal of interest.
Speaker #1: And when we have those results, we will be updating through an RNS on those findings. If—and it is a big if—but if that proves to be positive and we get the results that we want from those xenograft models, we'll have delivered what the grant set out to do, and we'll have a potentially licensable early-stage asset with very good prospects for much more generous milestone royalty reach-through, as well as upfront payments.
Speaker #1: Then we could possibly have gone from something where we had partnered it with someone at the discovery stage, effectively, where they paid us the fees to go through the process.
Speaker #1: We've done it off our own back, admittedly with the grant funding. So, it's a really brilliant project. It's a cost-effective way of generating case study data, which we need for marketing purposes. But also, we potentially have a licensable asset, which we hope—if the results come through the way we want them to—has distinct advantages over other lead molecules, such as that Amgen one that I spoke about earlier.
Speaker #1: So the other area that I think we've got a lot of scope for improvement and design and growth is the Opted Design Method. So, these are the proprietary methods protected by the patents.
Speaker #1: And some of the areas that I think we particularly have scoped to develop these are, for example, focused libraries. So certain target classes—GPCRs are one—that are typically used.
Speaker #1: They're membrane-associated proteins that signal across the membrane. Certain antibodies have been shown to bind to and potentially activate or block those GPCR proteins. The theory is that if you have a particular length of the CDR3 part of the antibody, then you have an improved chance of binding and modulating GPCRs, just as an example.
Speaker #1: What we can do with the opted design is really focus on that, and mimic or base things on theories like that with the GPCR.
Speaker #1: There are many other theories around other targets, and there are other theories around GPCRs too. But what you can do then is really focus in on a focused library approach, and it's a very successful—or has been a very successful—method, particularly used in small molecules, that we can mimic using antibodies.
Speaker #1: And introducing the opted design and the somatic hypermutations adds in much more diversity and makes them much more human, much more like a fully evolved antibody that the body would produce.
Speaker #1: ...with potentially improved benefits, efficacies, etc. So I'm very excited about this area of growth, and it's underpinned now because of the proprietary, patent-protected method that we can use.
Speaker #1: So we can grow and build on this proprietary platform that we have. The same can be said for fragment-based libraries. So we don't just have to do the full-length, fully intact IgG—full antibody molecule—which is the most challenging thing to do.
Speaker #1: So, we needed to nail that one down to show that we had the wide diversity. But we can do the same design, or an opted design, on fragment-based technologies.
Speaker #1: If those fragments are more simple, shorter chains—maybe simple expression methods—you don't necessarily have to go for the mammalian display. So, we're opening up more markets with proprietary libraries by going through this sort of strategy.
Speaker #1: And then a third area, of course, which is tagged as being a major growth area for the antibody discovery market, is AI and machine learning—designed cause.
Speaker #1: So AI/ML will come up with a fundamental sort of beginning point, a design, and then you want to really explore that chemical space—structure-activity relationships with different substitutions around—to really explore what could be done, and that will lend itself to the opt-ed design approach, too.
Speaker #1: So, I can see us being really well positioned for AI/ML, as well as more traditional, sort of in vitro-based screening methods. So, just want to remind you that that Opted Design method is patented—sorry, is really important to us.
Speaker #1: And potentially very valuable. So, in summary then, yes, 2026—FY26—was a challenging year for Fusion. However, we, by and large, met our targets, with a slightly under, if you want to be pedantic, but close enough.
Speaker #1: That was in large part due to an IP sale, which meant that revenues increased year-on-year by 7%. If we take that IP sale out, then yes, they did decrease by a small margin of 4%.
Speaker #1: The margins have been significantly improved—58% from 22%. If we take out that IP sale, which is obviously very flattering to the margins, we're still at about 43%. So, nearly a doubling of the margin from where we were.
Speaker #1: So much more efficient running of the business because of the mix of work that we're doing, and we can allocate some of the costs to those grants.
Speaker #1: On the grants and post March 31st, we've continued to make progress with the DR5—excellent progress with the DR5 project—providing that all-important case study data that we can feed back into the marketing and commercialization of a lot of our offerings.
Speaker #1: As well as, if that data comes through the way I want it to, the way we all want it to, we have a potential early-stage asset as well.
Speaker #1: The FMI grant funding is supporting the refinement of those offerings and improving our competitiveness, so that puts us in a really great position. And of course, with the R&D expenditure, we also have R&D tax credits to claim too.
Speaker #1: The market challenges do persist, and they are impacting H1. Obviously, the geopolitical factors really started in March and began significantly affecting clients, whose immediate response was to delay.
Speaker #1: We're not quite sure how long they were delayed, but as Stephen was saying earlier, the sales cycle process has been lengthened by factors that are really outside of our control.
Speaker #1: We're doing everything that we can to make sure that we bring those on board and make ourselves more attractive, more competitive, and able to win more business.
Speaker #1: We're doing that without changing the workforce. We're using the people who would be doing the processes to actually improve those processes. They're good scientists.
Speaker #1: They're excellent scientists. And as you can see from the results that I've already explained, they've had some very significant impacts on how we do it, including the timelines for CLD reduced by four months and the timelines for small-scale TGE reduced by as much as 60%.
Speaker #1: On top of that, granted patents really strengthen our position. That proprietary nature is a gateway for us to really change our value proposition.
Speaker #1: If we are the sole, patent-protected offerer of a proprietary technology, so long as the client wants it, they have got to come to us.
Speaker #1: So overall, I think Fusion is positioning itself much better much more competitively and with much more attractive offerings than we've had before. What we need is for the market to improve, for some of those breaks and delays to come off, and then I think the prospects for Fusion are much better than they have been so we're looking forward to, as I'm sure many of our investors are, looking forward to much better times ahead.
Speaker #1: Brilliant. Thank you very much. I will stop there. That’s the last of the slide set, so perfect. Thank you for updating investors today. Could I please remind investors to submit your questions by using the Q&A tab situated on the right-hand corner of your screen.
Speaker #1: And for your reference, a recording of today's presentation will be available on the Investor Meet Company platform shortly after the meeting has ended. As you can see, we have received a number of questions during today's presentation.
Speaker #1: At this point, if I could just hand back to the team to read out the questions and give responses where appropriate to do so, and I'll pick up from you guys at the end.
Speaker #2: Okay, so Stephen, if you could check on the more recently submitted ones just in case there's anything there. I think, from what we saw in the pre-submitted ones, I'll be handling most of those because they're, quite understandably, predominantly looking for future prospects.
Speaker #2: So I can kick off with the first of those. The question is that in September 2025, Fusion said that the NCI, National Counter Institute, had requested an extension of its use of Optimel for further targets.
Speaker #2: Can you give shareholders a clear update on where those discussions now stand and what, if anything, remains to be resolved? So, the negotiations are ongoing.
Speaker #2: And I don't want to say anything that will compromise those very important negotiations. But they are likely to result in Fusion holding a commercial interest, so the NCI are going to do the work and we will have a commercial interest in the antibodies coming out—at least that's the way it's shaping up.
Speaker #2: Of course, we won't know for sure until the deal is actually done. It is worth pointing out that the NCI is a very, very well-placed and influential public body in the United States, which has access to a vast network of academics and clinicians, which it uses to generate data of the absolute highest quality and therefore value of the assets.
Speaker #2: So we remain very keen to continue working with them. We really couldn't get a better partner for this stage of the Optimel's development. However, I am very aware of the frustration and share the frustration that some factors, particularly those ones that are outside of our control, such as governmental shutdowns, have had in slowing the progress of the negotiations.
Speaker #2: So, I'm not able to put a timeline on those negotiations themselves. As we've disclosed in the FY26 results, the formal agreement being negotiated is expected to cover screening of the Optimel library against an agreed number of targets, with joint rights to the jointly discovered inventions, such as those antibodies.
Speaker #2: Despite NCI doing the work, they're using our library, so they are joint discoveries. So we have a commercial interest in those things—in those antibodies being found.
Speaker #2: But there can be no certainty on the timing, especially given the political and administrative challenges that are affecting the NCI. We are, from time to time, updated on progress with the scientific work on Optimel that is being done at the NCI, and the results continue to be favorable.
Speaker #2: They're finding antibodies with suitable binding affinities—those that are within the range expected for commercially viable antibodies. And with the recombinant antibodies—so the ones re-expressed as free-floating antibodies, as it were—binding their targets in relevant human cell models.
Speaker #2: Very much like the work that I've described with DR5, the NCI's next step is cancer-specific cell-based assays to assess therapeutic potential. Where necessary, they will go on to animal models too.
Speaker #2: So, next question: What do you believe is currently the biggest barrier to converting pharma interest into paid optimal programs? This is a good question.
Speaker #2: It's a challenging one, but it's something that we spend a huge amount of time really analyzing and looking into. So, aside from some nervousness due to the geopolitical and economic environment and people delaying their decisions, I'd say that a publicly stated validation from the NCI, backed up by data, would be really impactful.
Speaker #2: That has been delayed while they are filing patents. And of course, they don't want to create prior art for those patents by putting that data into the public domain.
Speaker #2: So, it's just one of those things that we have to wait for. And I'd say that's the biggest factor which has really hindered the conversion of interest into deals.
Speaker #2: We go out, speak to clients, tell them that it works, tell them that it works in the NCI's hands. We would say that, wouldn't we?
Speaker #2: It's the kind of response that we get. So, I think the NCI work going into the public domain is really important. It's not a question of whether the platform has generated encouraging scientific results.
Speaker #2: The NCI work is continuing to generate strong data. It's the publication of that data that we're really pushing for. And I think we'll push some of our clients just over the line and get those signatures onto proposal documents.
Speaker #2: Moving on then. What would management regard as the key commercial validation milestone for Optimel over the next 12 months? Similar sort of theme to it.
Speaker #2: Would that be a major pharma contract, a certain number of paying customers, repeat programs, licensing income, or an antibody progressing towards preclinical development? Some of those would probably take more than 12 months.
Speaker #2: To come through, because it is a fairly involved process. But let me answer it in two different ways. So, first of all, our clients are scientists.
Speaker #2: How do they see it? From a scientific point of view, they would say that an antibody progressing toward clinical development is probably the best sort of validation.
Speaker #2: From my perspective, from a commercial point of view—so commercializing that platform—it’s the availability of third-party data demonstrating the utility of, and faith in, Optimel.
Speaker #2: Obviously, the paid access to that is with commercial sort of meaningful commercial contributions is really important. And that would be very valuable validation of the platform.
Speaker #2: So I think there's a mixture of all of them, and it depends on your point of view. This one still follows on Optimel. If you had to identify one feature of Optimel that you believe would make a pharmaceutical company choose it over phage display, yeast display, or other mammalian display platforms, what would it be?
Speaker #2: It's a really great question because there are so many benefits to the Optimel platform. And it's kind of when we introduce it on the scientific level to potential clients, it's one of the things that we try to identify and how they are looking at it to see which ones seem most relevant to them.
Speaker #2: So, different pharma company clients have differing views. We know that from feedback that they've given us, and it depends largely on their targets and their experiences.
Speaker #2: So when we see something that's similar or sounds similar, we can focus. However, if we classify them together and we're looking at human therapeutics, obviously, then I would say it's the need for a human or potentially humanized antibody.
Speaker #2: You don't need to humanize an antibody out of Optimel; it's already human sequenced. So this is what Optimel can deliver right from the initial screen.
Speaker #2: This improves confidence in the output and the hit antibody itself, and can reduce timelines and risk, as no humanization is required. So, just as a reminder, Optimel combines a fully human antibody library—an absolutely vast one—with mammalian display.
Speaker #2: So that full-size human IgG sequences are expressed on mammalian cells from the discovery stage. This means you'll be screening against the actual endpoint that you're looking for.
Speaker #2: And that shortens the route to a lead human antibody, and it reduces the risks by negating the need for later engineering or many of the engineering aspects.
Speaker #2: Or trying to stitch together antibody fragments, or taking non-human antibodies. So, there are multiple advantages to Optimel. I think some of the next questions have kind of already been addressed, and I've got an eye on the time.
Speaker #2: So I'll move on. You previously said you planned to engage with the AI/ML sectors and conferences on mammalian display. What progress have you made?
Speaker #2: Well, we've done that, and we are actually looking forward to attending the AI Drug Discovery and Development Summit for 2026, which is in Boston in late October.
Speaker #2: So, a month and a half away. In the meantime, we've also been working on at least one particular collaboration with an AI/ML company, and have data resulting from that which exemplifies the utility of mammalian display to AI/ML clients.
Speaker #2: We've been working with that data with a view to using it at the AI Drug Discovery and Development Summit in Boston, so that we have real data that we can discuss with those clients.
Speaker #2: So, it's getting our ducks in a row before we go on display. Now, I believe that AI/ML will be a very significant growth sector within our market.
Speaker #2: I believe that we've got a really excellent platform to complement that. So, not only will we be offering services to end clients—so, the pharma companies and the big biotechs—but also to the AI/ML companies, to partner with them to progress their advanced AI/ML algorithms.
Speaker #2: In addition, we have our own AIMLab antibody platform—so that's AIMLab, short for Antibody Innovation and Manufacturing Lab—which uses, or can use, the same mammalian display technology that you find with Optimel.
Speaker #2: And that expresses, experimentally, those tests—those full-length test antibody sequences developed by or generated by the AIML approaches. So we're generating case study data to really show that approach and show that it's real, and we've done it.
Speaker #2: So it makes it a more compelling argument when pitching it to such AI/ML companies. Okay, next one: Is it time for Fusion to publish its own case studies and in journals on Optimel, given the length of time it's taken for NCI to publish their work as well?
Speaker #2: Yeah, it has taken longer than I would have liked for the NCI to get out, but largely that is due to the patent filing.
Speaker #2: So actually, it's going to be better and more impactful results when it does come through. But for us, and the work that we're doing, and the kind of publications that we go for, our focus has been primarily on the more commercially relevant channels.
Speaker #2: So, posters where you can actually discuss face-to-face with interested scientists—that's where we get our hook and we start to build the relationship and bring in prospective clients on a scientific engagement basis.
Speaker #2: It's really important to get to that scientific engagement as rapidly as possible, and posters are a brilliant way of doing that. We've also done presentations at conferences as well.
Speaker #2: I showed you the photograph of Chris Scott presenting on DR5, but we have also had a presentation at the same conference on Optimel. So we have got presentations and posters, and that's been more of a focus for us than peer-reviewed publications, with their sort of very prolonged process to actually get that data out and in front of people.
Speaker #2: Third parties such as the NCI are far more impactful than any commercial company can be about their own products or platforms. It's that third-party nature of it that really helps in terms of moving the deals forward, or the potential deals forward, with clients.
Speaker #2: Next question was, is management currently confident that the European and Chinese applications will ultimately be granted? I'm not going to make predictions on this, but my confidence in further patents being granted in additional jurisdictions grows with each one future award that we get.
Speaker #2: ...in the granted geographies. So, I'm very pleased with the progress that we've made to date and really look forward to some more patents being granted.
Speaker #2: Don't forget that the U.S. patent we applied for was on an accelerated scheme, so we got that done as quickly as we could.
Speaker #2: Not all jurisdictions do that, and that's possibly one of the reasons why some of them appear to be taking a little bit longer. But it's all good progress so far.
Speaker #2: Next question: Is the Board concerned about the progress that has been made since the launch of Optimel and the fact that, in essence, no material contract numbers have been secured?
Speaker #2: Do they need to adapt the way that do they need to adapt the way they approach sales and perhaps how the sales team operates?
Speaker #2: Of course, the board is concerned, and the commercial approaches are under continual review. We're looking at deal structure; we're looking at ways we can position things.
Speaker #2: We're looking at really trying to get the clients to come over the line, and considering other things that we can do to adjust the efficiency of what we're doing, and therefore the price point at which we offer it as well.
Speaker #2: So the board recognizes that the level of commercial conversion since the launch of Optimel has been slower than we would like. We have therefore continued to invest in dedicated sales and marketing, broadening the customer base and targeting companies that previously we would struggle to see. So we're building up relationships with those people from a lower level than I would have liked, but that's where we started.
Speaker #2: We're increasing engagement with larger organizations and improving our related services as well, particularly around speed and costs. So I think we're doing quite a lot, actually, to address all aspects of the business, but some of that—of course, a lot of that—is going to be impactful on uptake and success of Optimel.
Speaker #2: So, we're already making improvements. Pressing on, then—why has the revenue growth been so low in the recent financial year, particularly if you exclude the one-off IP deal?
Speaker #2: So, the underlying revenues were actually down 4% year on year. How are you going to achieve much higher rates of revenue growth? So, yeah, the market has been challenging, and we've lost out to low-cost, higher-speed offerings from competitors, which is why I'm so pleased with the improvements that we've made to our own offerings.
Speaker #2: And I really do look forward to those improvements feeding through to more commercial success. The market itself is very large, and we're only getting a very small percentage of it.
Speaker #2: So, we believe that growth in that market is coming as we improve our offerings. In addition, with the right proprietary technologies paired with those fast timelines and cost-effective pricing, we are really very well positioned—or increasingly well positioned—to take advantage of a rising market once the brakes come off.
Speaker #2: And we will continue to make further improvements to the way we do things to seek a better match of our offerings to the evolving needs of the marketplace.
Speaker #2: The marketplace isn't a fixed target that we're aiming for. A lot of people's ideas, such as those we talked about earlier with the more complex antibody structures, are really relevant.
Speaker #2: And we are mindful of that, listening to our clients and what they want, and positioning Fusion in the best way possible to take advantage of that.
Speaker #2: So, our proprietary technologies—such as the OptiDesign libraries—I think will provide a platform for significant growth and position us as a leading provider of antibody and antibody fragment libraries.
Speaker #2: Just going to move on. Oh, how much of the DR5 asset, assuming it is an asset—we haven't got the final results yet—how much of the DR5 asset does Fusion own versus QUB?
Speaker #2: That antibody which is being tested—in fact, there are three different antibodies I'm particularly intrigued by and interested in. The best of those would be the putative ATA, and it is 100% owned by Fusion.
Speaker #2: I think we're running a bit short on time, so I'll try and speed some of these up. You stated that one of the purposes of the placing was to invest in strategic partnerships.
Speaker #2: What strategic partnerships have you invested in? So, we're exploring several such opportunities centered on what we believe are growth markets. But we're not yet in a position to go public.
Speaker #2: We will announce any strategic partnership when it reaches a stage where disclosure is appropriate and material. Similar to that, we announced a collaboration with a US-based AI/ML business in 2023.
Speaker #2: Can you tell us more about this and how the partnership has progressed? We've got a very good relationship with that company, and they've helped us develop a much better understanding of the AIML market, and I dare say that we've helped them understand antibodies a lot better as well.
Speaker #2: The collaboration has helped us inform and develop the positioning of AIMLab, which combines AIML design sequences with our proprietary mammalian. Experimentally, the negative results from those are as influential in many ways as the positive results, and having faith that a negative result is a negative result really informs the algorithm in its next iteration.
Speaker #2: So, we continue to see AI/ML as an important growth area, and we are generating data and case studies in collaboration with the US-based AI/ML company that we partnered with to demonstrate the value that Fusion can provide to companies developing antibodies using computational methods.
Speaker #2: I think that's the end of them. Stephen, sorry I've left you very little time, but are there any further ones that you were able to spot?
Speaker #1: Yeah, there's a lot of questions, Adrian, on where we're at with NCI Optimal validation. How do you envisage Optimal to be commercially structured? Upfront fees, annual fees, milestones, royalties?
Speaker #1: So you've probably answered quite a bit of that, but that's one that covers quite a lot of the live questions. There was another: how would you assess competitor products or AI risk to the Fusion suite of products?
Speaker #1: I think those two would sort of be the main points. If I could distill it all into one minute, that would be the theme.
Speaker #2: Okay, I've just scanned down, and one of them jumped out at me. I think I know who it's from. Why on earth don't you do more work like the DR5?
Speaker #2: It sounds like this is where your skill sets lie. Thank you very much for confirming that our case study data is bang on what we need it to be.
Speaker #2: That's why we did DR5—to make sure that we can do exactly that kind of work for our clients. We needed to land a grant to be able to do it because we're not funded directly to do that kind of work.
Speaker #2: So some of that has been limited to winning grants. We're going to continue to apply for grants like that, and hopefully, with money going into the grant funding sector, we can do more like DR5.
Speaker #2: But I really appreciate that, because that shows exactly what we wanted it to do. So, thank you. Okay, I think we're out of time.
Speaker #2: So, I'll hand back to INC to close this off.
Speaker #1: Perfect. Thank you. But just before we ask investors to share their feedback, which I know is particularly important to the company, Adrian, can I please just ask you for some closing comments?
Speaker #2: Okay, so Fusion has been doing well. We've done a lot of work behind the scenes to make sure that we are positioned as best we can be.
Speaker #2: Whenever we find any spare opportunity to improve what we do, we're working on it. We are able to do that with support from the FMI grant in particular.
Speaker #2: So we can cover a lot of those costs, so there isn't any time or money being wasted. Fusion is a very tightly run ship, I believe.
Speaker #2: What we need is for the market to pick up a little bit. Some of those delays in decision-making that our clients have had need to be eased. Pressure on them is building and building, so that is going to happen.
Speaker #2: And we need to be in the best position to win that business. We are in a much better position to win that business now than we were 12 months ago.
Speaker #2: Thank you very much for your time.
