OmniAb, Inc.

Previous wording

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, our expected cash runway, our business strategy, our expectations regarding the application of, and the rate and degree of market acceptance of our OmniAb® technology platform and other technologies, our expectations regarding the addressable markets for our technologies, including the growth rate of the markets in which we operate, the potential for and timing of receipt of milestones and royalties under our license agreements with partners, our research and development plans, the potential for our partnered or internal programs to progress in their development, the anticipated timing of the initiation and completion of preclinical studies and clinical trials by our partners or us, the timing and likelihood of regulatory filings and product approvals by our partners or us, the potential for and timing and geographic markets of any commercial product launches by our partners and potential for commercial success, our ability to enter into any new, or maintain existing, strategic partnerships or collaborative relationships, our ability to obtain and maintain intellectual property protection for our platform, products and technologies, the timing and likelihood of success, plans and objectives of management for future operations, and future results of anticipated business development and product development efforts, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Current wording

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, our expected cash runway, our business strategy, our expectations regarding the application of, and the rate and degree of market acceptance of, our OmniAb® technology platform and other technologies, our expectations regarding the addressable markets for our technologies, including the growth rate of the markets in which we operate, the potential for and timing of receipt of milestones and royalties under our license agreements with partners, our research and development plans, the potential for our partnered or internal programs to progress in their development, the anticipated timing of the initiation and completion of preclinical studies and clinical trials by our partners, the timing and likelihood of regulatory filings and product approvals by our partners, the potential for and timing and geographic markets of any commercial product launches by our partners and potential for commercial success, our ability to enter into any new, or maintain existing, strategic partnerships or collaborative relationships, our ability to obtain and maintain intellectual property protection for our platform, products and technologies, the timing and likelihood of success, plans and objectives of management for future operations, and future results of anticipated business development and product development efforts, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

Previous wording

OmniAb licenses cutting edge discovery research technology to the pharmaceutical and biotech industries and academic institutions to enable the discovery of next-generation therapeutics. Our technology platform creates and screens diverse antibody repertoires and is designed to quickly identify optimal antibodies and other target-binding proteins for our partners’ drug development efforts. At the heart of the OmniAb platform is what we call Biological Intelligence™, which powers the immune systems of our proprietary, engineered transgenic animals to create optimized antibody candidates for human therapeutics. We primarily derive revenue from license fees for technology access, milestones from partnered programs and service revenue from research programs.

Current wording

OmniAb licenses cutting-edge discovery research technology to pharmaceutical and biotech companies and academic institutions to enable the discovery of next-generation therapeutics. Our technology platform creates and screens diverse antibody repertoires and is designed to quickly identify optimal antibodies and other target-binding proteins for our partners’ drug development efforts. At the heart of the OmniAb platform is what we call Biological Intelligence™, which powers the immune systems of our proprietary, engineered transgenic animals to create optimized antibody candidates for human therapeutics.

Previous wording

As of September 30, 2024, we had 86 active partners with 352 active programs using the OmniAb technology platform, including 29 OmniAb-derived antibodies in clinical development by our partners, one under regulatory review, and three approved products of our partners.

Current wording

As of March 31, 2025, we had 95 active partners with 378 active programs using the OmniAb technology platform, including 29 OmniAb-derived antibodies in clinical development by our partners, one under regulatory review, and three approved products developed and commercialized by our partners.

Previous wording

Our license agreements with pharmaceutical and biotechnology partners generally include: (i) upfront or, in some instances, annual payments for technology access and payments for performance of research services; (ii) downstream payments in the form of preclinical, intellectual property, clinical, regulatory, and commercial milestones; and (iii) royalties on net sales of our partners’ products, if any. License agreements with academic institutions are typically structured with revenue sharing. We succeed when our partners are successful, and our agreements are structured to align economic and scientific interests. Our license agreements typically include reporting requirements, which provide us updates from our partners on the status of their programs. In addition, we track our active partnered programs by reviewing our partners’ public announcements and maintaining close communications with our partners to the extent possible. In some instances, a partner may not publicly announce milestones, in which case, we would be generally dependent on our partner to track, report and disclose to us milestones at the time of achievement. Our license agreements typically grant a perpetual license to our technology and are typically terminable by our partners without penalty with specified notice. However, all milestone payments and royalties survive termination and continue with respect to any OmniAb-derived antibodies. The royalty term is generally the longer of 10 years from the first commercial sale or through the last expiration in any jurisdiction of the patents covering such OmniAb-derived antibody. Importantly, our royalty term is typically linked to the composition-of-matter patents that our partners file related to the antibody discovered using our technology, which both lengthens and diversifies the royalty streams we receive. Our typical royalty rates for antibody discovery contracts are currently in the low- to mid-single digits and can vary depending on other economic terms in the agreement. Although our license agreements with pharmaceutical and biotechnology partners typically include technology access fees, milestone payments and royalties, each agreement is negotiated separately and as a result, the financial terms and contractual provisions vary from agreement to agreement. By providing a full suite of antibody discovery technologies with streamlined economics, we believe we offer an attractive option to industry stakeholders.

Current wording

Our license agreements with pharmaceutical and biotechnology partners generally include: (i) upfront or, in some instances, annual payments for technology access; (ii) payments for performance of research services; (iii) downstream payments in the form of preclinical, intellectual property, clinical, regulatory, and commercial milestones; and (iv) royalties on net sales of our partners’ products, if any. License agreements with academic institutions are typically structured with revenue sharing. We succeed when our partners are successful, and our agreements are structured to align economic and scientific interests. Our license agreements typically include reporting requirements, which provide us updates from our partners on the status of their programs. In addition, we track our active partnered programs by reviewing our partners’ public announcements and maintaining close communications with our partners to the extent possible. In some instances, a partner may not publicly announce milestones, in which case, we would be generally dependent on our partner to track, report and disclose to us milestones at the time of achievement. Our license agreements typically grant a perpetual license to our technology and are typically terminable by our partners without penalty with specified notice. However, all milestone payments and royalties survive termination and continue with respect to any OmniAb-derived antibodies. The royalty term is generally the longer of 10 years from the first commercial sale or through the last expiration in any jurisdiction of the patents covering such OmniAb-derived antibody. Importantly, our royalty term is typically linked to the patents that our partners file related to the antibody discovered using our technology, which both lengthens and diversifies the royalty streams we receive. Our typical royalty rates for antibody discovery contracts are currently in the low- to mid-single digits and can vary depending on other economic terms in the agreement. Although our license agreements with pharmaceutical and biotechnology partners typically include technology access fees, milestone payments and royalties, each agreement is negotiated separately and as a result, the financial terms and contractual provisions vary from agreement to agreement. By providing a full suite of antibody discovery technologies with streamlined economics, we believe we offer an attractive option to industry stakeholders.

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024

Previous wording

•Royalty revenue declined primarily due to lower net sales from partners’ product sales.

Current wording

•Royalty revenue declined primarily due to lower net sales from partners’ product sales in China.

Previous wording

Research and development expenses consist of (1) personnel related expenses, including salaries, benefits and share-based compensation, (2) external expenses, including third-party costs for goods and services such as lab supplies and contract research, and (3) facility and other overhead expenses, including depreciation and occupancy costs.

Current wording

•Research and development expenses consist of (1) personnel related expenses, including salaries, benefits and share-based compensation, (2) external expenses, including third-party costs for goods and services such as lab supplies and contract research, and (3) facility and other overhead expenses, including depreciation and occupancy costs. Research and development expenses decreased primarily due to lower share-based compensation expense and lower external expenses associated with ion channel programs and screening technology development.

Previous wording

•General and administrative expenses decreased primarily due to lower legal and share-based compensation expense.

Current wording

•General and administrative expenses decreased primarily due to lower legal fees and share-based compensation expense.

Previous wording

•Other operating income, net increased primarily due to a $2.4 million reduction in contingent liabilities attributed to changes in ion channel programs.

Current wording

•Other operating income, net increased primarily due to a $0.8 million reduction in contingent liabilities attributed to changes in ion channel programs.

Previous wording

Other income (expense), net during the three and nine months ended September 30, 2024 and 2023 primarily related to interest earned on short-term investments. The decline in interest income related to lower short-term investment balances as well as declines in interest rates.

Current wording

Other income (expense), net during the three months ended March 31, 2025 and 2024 primarily related to interest earned on short-term investments. The decline in interest income related to lower short-term investment balances as well as declines in interest rates.

Previous wording

Our effective tax rate for the three and nine months ended September 30, 2024 differed from the federal statutory tax rate of 21.0% due to share-based compensation expense that is not tax deductible and an increase to our valuation allowance recorded against deferred tax assets, partially offset by the tax benefit from research and development tax credits. Our effective tax rate for the three and nine months ended September 30, 2023 differed from the federal statutory tax rate of 21.0% due to share-based compensation expense that is not tax deductible and increases to our valuation allowance recorded against deferred tax assets, partially offset by the tax benefit of research and development tax credits.

Current wording

Our effective tax rate for the three months ended March 31, 2025 and 2024 differed from the federal statutory tax rate of 21.0% due to share-based compensation expense that is not tax deductible and an increase to our valuation allowance recorded against deferred tax assets, partially offset by the tax benefit from research and development tax credits.

Previous wording

As of September 30, 2024, our cash, cash equivalents and short-term investments were $59.4 million. We believe our cash, cash equivalents and short-term investments are sufficient to support our operations through at least the next 12 months.

Current wording

As of March 31, 2025, our cash, cash equivalents and short-term investments were $43.6 million. We believe our existing cash, cash equivalents and short-term investments are sufficient to support operations through at least the next 12 months from the date of issuance of these financial statements.

Previous wording

•our ability to achieve revenue growth;

Current wording

•our ability to achieve revenue growth, which is dependent on the ability of our partners to successfully develop and commercialize therapies based on antibodies discovered using our platform;

Previous wording

In December 2023, we entered into an Open Market Sale Agreement SM (the “Sales Agreement”), with Jefferies LLC (the “Sales Agent”) under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100.0 million in an “at the market” (“ATM”) offerings program through the Sales Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Sales Agent. The Sales Agent will receive a commission from us of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. Sales of our common stock made pursuant to the Sales Agreement are made under our shelf registration statement on Form S‐3 which was filed on December 8, 2023 and declared effective by the SEC on December 18, 2023. We are not obligated to sell, and the Sales Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement.

Current wording

In December 2023, we entered into an Open Market Sale Agreement SM (the “Sales Agreement”), with Jefferies LLC (the “Sales Agent”) under which we may, from time to time, sell shares of our common stock having an aggregate offering price of up to $100.0 million in an “at the market” (“ATM”) offerings program through the Sales Agent. Sales of the shares of common stock, if any, will be made at prevailing market prices at the time of sale, or as otherwise agreed with the Sales Agent. The Sales Agent will receive a commission from us of up to 3.0% of the gross proceeds of any shares of common stock sold under the Sales Agreement. Sales of our common stock made pursuant to the Sales Agreement are made under our shelf registration statement on Form S‐3 which was filed on December 8, 2023 and declared effective by the SEC on December 18, 2023. We are not obligated to sell, and the Sales Agent is not obligated to buy or sell, any shares of common stock under the Sales Agreement. As of March 31, 2025, $88.3 million remains available under the Sales Agreement for future sales of our common stock.

Previous wording

During the nine months ended September 30, 2024, cash used in operating activities of $35.8 million primarily reflected our net loss of $49.0 million, changes in our operating assets and liabilities in the amount of $8.8 million, partially offset by net non-cash charges of $22.0 million which primarily included $16.4 million in share-based compensation and $16.0 million in depreciation and amortization.

Current wording

During the three months ended March 31, 2025, cash used in operating activities of $15.9 million primarily reflected our net loss of $18.2 million, changes in our operating assets and liabilities in the amount of $5.4 million, partially offset by net non-cash charges of $7.7 million which primarily included $4.1 million in share-based compensation and $4.7 million in depreciation and amortization.

Previous wording

During the nine months ended September 30, 2023, cash provided by operating activities of $11.5 million primarily reflected changes in our operating assets and liabilities in the amount of $24.9 million, net non-cash charges of $23.2 million which primarily included $18.9 million in share-based compensation, and $14.6 million in depreciation and amortization, partially offset by our net loss of $36.6 million.

Current wording

During the three months ended March 31, 2024, cash used in operating activities of $17.0 million primarily reflected our net loss of $19.0 million, changes in our operating assets and liabilities in the amount of $5.5 million, partially offset by net non-cash charges of $7.4 million which primarily included $5.7 million in share-based compensation, and $4.9 million in depreciation and amortization.

Previous wording

During the nine months ended September 30, 2023, cash used in investing activities of$23.1 million primarily consisted of$86.9 million of cash used to purchase short-term investments and$3.6 million of payments to contingent liabilities holders, partially offset by$66.3 million of proceeds from the maturity of short-term investments.

Current wording

During the three months ended March 31, 2025, cash used in investing activities primarily consisted of$10.3 million of cash used to purchase short-term investments, partially offset by$9.5 million of proceeds from the maturity of short-term investments.

Previous wording

During the nine months ended September 30, 2024, cash provided by investing activities of$37.5 million primarily consisted of$63.5 million of proceeds from the maturity of short-term investments and$1.9 million from the sale of short-term investments, partially offset by$25.7 million of cash used to purchase short-term investments and$1.8 million of cash used to purchase property and equipment.

Current wording

During the three months ended March 31, 2024, cash provided by in investing activities of$19.9 million primarily consisted of$26.0 million of proceeds from the maturity of short-term investments, partially offset by$5.4 million of cash used to purchase short-term investments and$0.9 millionof cash used to purchase property and equipment.

Previous wording

During the nine months ended September 30, 2024, cash provided by financing activities was$9.2 million, which primarily consisted of$8.5 million of proceeds from the issuance of common stock under the ATM facility, net of commissions and$2.3 million of proceeds from the issuance of common stock from stock plans, partially offset by$1.0 million of taxes paid related to the net share settlement of equity awards and$0.5 million of transaction costs.

Current wording

During the three months ended March 31, 2025, cash provided by financing activities was negligible..

Previous wording

During the nine months ended September 30, 2023, cash used in financing activities was$0.4 million, which primarily consisted of$0.9 million oftaxes paid related to the net share settlement of equity awards and$0.5 million of transaction costs, partially offset by$1.0 million of proceeds from the issuance of common stock from stock plans.

Current wording

During the three months ended March 31, 2024, cash used in financing activities was$0.2 million, which primarily consisted of$0.9 million oftaxes paid related to the net share settlement of equity awards and$0.3 million of transaction costs, partially offset by$1.0 million of proceeds from the issuance of common stock from stock plans.

Previous wording

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 2024, as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2023 Annual Report.

Current wording

There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2025, as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2024 Annual Report.