What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-04 · 34 added, 79 removed, 147 unchanged (43% of the section changed)

18 unchanged sentences

We provide our partners both integrated end-to-end capabilities and highly customizable offerings, which address critical industry challenges and provide optimized discovery solutions.

As of September 30, 2025, we had 104 active partners with 399 active programs using the OmniAb technology platform, including 28 OmniAb-derived antibodies in clinical development by our partners, one under regulatory review, and three approved products developed and commercialized by our partners.

As of March 31, 2026, we had 107 active partners with 409 active programs using the OmniAb technology platform, including 27 OmniAb-derived antibodies in clinical development by our partners, two under regulatory review, and three approved products developed and commercialized by our partners.

Our proprietary technologies are joined with and leverage a suite of in silico , artificial intelligence and machine learning tools for therapeutic discovery and optimization that are woven throughout our various technologies and capabilities.

Additionally, an established core competency focused on ion channels and transporters further differentiates OmniAb’s technology and creates opportunities in many important and emerging target classes.

OmniAb technologies are designed to be leveraged for the discovery of a variety of next-generation antibody-based therapeutic modalities, including bi- and multi-specific biologics, antibody-drug conjugates, CAR-T therapies, targeted radiotherapeutics, and many others.

The OmniAb suite of technologies spans from Biological Intelligence-powered repertoire generation to cutting-edge antibody discovery and optimization offering an increasingly efficient and customizable end-to-end solution for the growing discovery needs of the global pharmaceutical industry.

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We believe the long-term value of our business will be driven by royalties given that such payments are based on global sales of potential future partner programs, which generally provide for larger and recurring payments as compared to technology access, research and milestone payments.

We believe our revenue will be materially driven by milestones in the shorter term, and by royalties in the longer term, from our partnered programs.

We believe our revenue will be materially driven by milestones and services in the shorter term, and by royalties in the longer term, from our partnered programs.

However, there is significant uncertainty in timing and likelihood of reaching marketing authorization in drug discovery and development, and we cannot be certain when, if at all, royalty payments will be a material portion of our revenue.

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(2) (7) (1) —

September 30, 2025 104 399 32 3

March 31, 2026 107 409 32 3

Active partners represents the number of partners that have rights to an active program or have executed a license agreement in advance of initiating an active program.

16 unchanged sentences

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Three Months Ended September 30,

Comparison of the Three Months Ended March 31, 2026 and 2025

Three Months Ended March 31,

(Dollars in thousands)

7 unchanged sentences

Because of these factors, license and milestone revenue could fluctuate significantly from period to period.

License and milestone revenue decreased primarily due to a $1.0 million decline in milestone revenue, partially offset by a $0.3 million increase in license revenue.

• Service revenue declined primarily as a result of the completion of certain small molecule ion channel programs in the first half of 2025.

Nine Months Ended September 30,

(Dollars in thousands)

2025 2024 Change % Change

License and milestone revenue $ 3,879 $ 5,216 $ (1,337) (26) %

Service revenue 5,027 9,416 (4,389) (47) %

xPloration revenue 724 — 724 100 %

Royalty revenue 660 955 (295) (31) %

Total revenue $ 10,290 $ 15,587 $ (5,297) (34) %

• License and milestone revenue decreased primarily due to a $1.8 million decline in milestone revenue, partially offset by a $0.5 million increase in license revenue.

• Service revenue declined primarily as a result of the completion or discontinuation of certain small molecule ion channel programs and the acceleration of revenue in the prior year period as a result of one of the discontinued programs.

• xPloration revenue increased primarily as a result of the sale of an instrument and related consumables.

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

License and milestone revenue increased primarily due to a $10.0 million increase in milestone revenue.

• Service revenue increased primarily as a result of an increase in ion channel programs.

• xPloration revenue and royalty revenue remained relatively consistent period over period.

Costs and Operating Expenses

Three Months Ended September 30,

Three Months Ended March 31,

(Dollars in thousands)

4 unchanged sentences

Amortization of intangibles 6,028 3,228 2,800 87 %

Other operating expense (income), net (34) 146 (180) (123) %

Other operating income, net (46) (750) 704 (94) %

Total costs and operating expenses

1 unchanged sentence

• 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.

and development expenses decreased primarily due to lower personnel expenses related to lower share-based compensation expense and headcount, and lower external expenses associated with ion channel programs.

Three Months Ended September 30,

(Dollars in thousands) 2025 2024 Change % Change

Personnel related expenses 5,552 6,756 $ (1,204) (18)%

External expenses 2,733 4,205 (1,472) (35)%

Facility and other overhead expenses 2,094 2,357 (263) (11)%

Total research and development expenses $ 10,379 $ 13,318 $ (2,939) (22)%

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

• Amortization of intangibles declined primarily due to the write-off of the net carrying value of $2.7 million of certain small molecule ion channel intangible assets in the prior year period.

• Other operating expense (income), net during the three months ended September 30, 2025 and 2024 primarily includes the contingent liability adjustments associated with certain ion channel programs.

Nine Months Ended September 30,

(Dollars in thousands)

2025 2024 Change % Change

Cost of xPloration revenue $ 294 $ — $ 294 100 %

Research and development 33,845 41,804 (7,959) (19) %

General and administrative 22,376 23,381 (1,005) (4) %

Amortization of intangibles 9,684 11,348 (1,664) (15) %

Other operating expense (income), net (2,706) (2,324) (382) 16 %

Total costs and operating expenses

$ 63,493 $ 74,209 $ (10,716) (14) %

• Cost of xPloration revenue consists of contract manufacturing costs, material parts costs and associated freight, shipping and handling costs, royalty costs, and other direct costs related to xPloration revenue recognized in the period.

During the nine months ended September 30, 2025, cost of xPloration revenue increased due to direct costs associated with the sale of xPloration revenue recognized during the period.

• Research and development expenses decreased primarily due to lower personnel expenses related to lower share-based compensation expense and headcount, and lower external expenses associated with ion channel programs and lower contract research costs.

Nine Months Ended September 30,

Research and development expenses decreased primarily due to lower personnel expenses related to lower share-based compensation expense and headcount, and lower external expenses associated with ion channel programs.

Three Months Ended March 31,

(Dollars in thousands) 2026 2025 Change % Change

3 unchanged sentences

Total research and development expenses $ 9,640 $ 12,602 $ (2,962) (24)%

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

• Amortization of intangibles declined primarily due to the write-off of the net carrying value of our finite-lived intangible assets related to the acquisition of Ab Initio of $1.2 million and the write-off of the net carrying value of $2.7 million of certain small molecule ion channel intangible assets in the prior year period.

• Other operating income, net during the nine months ended September 30, 2025 includes a gain of $3.0 million from the sale in May 2025 of a small molecule Kv7.2 program to Angelini and a $0.9 million reduction in contingent liabilities attributed to changes in certain ion channel programs, which were partially offset by the $1.0 million contingent liability adjustment associated with the Angelini program.

Other operating income, net during the nine months ended September 30, 2024 primarily consists of a $2.4 million reduction in contingent liabilities attributed to changes in ion channel programs.

• General and administrative expenses declined primarily due to lower personnel expenses related to lower share-based compensation expense and headcount and lower legal fees.

• Amortization of intangibles increased primarily due to the write-off of the net carrying value of $2.9 million of certain legacy small molecule ion channel intangible assets.

• Other operating income, net decreased primarily due to a lower reduction in contingent liabilities attributed to changes in certain ion channel programs, which was partially offset by an increase in royalty expense.

Other Income (Expense), net

Other income (expense), net during the three and nine months ended September 30, 2025 and 2024 primarily related to interest earned on short-term investments.

Other income (expense), net during the three months ended March 31, 2026 and 2025 primarily related to interest earned on short-term investments.

The decline in interest income was related to lower short-term investment balances as well as declines in interest rates.

Income Tax Benefit

Three Months Ended September 30,

(Dollars in thousands)

2025 2024 Change % Change

Loss before income taxes

$ (17,686) $ (19,081) $ 1,395 (7) %

Income tax benefit

1,161 2,708 (1,547) (57) %

Net loss $ (16,525) $ (16,373) $ (152) 1 %

Effective tax rate

(6.6) % (14.2) %

Nine Months Ended September 30,

Income Tax (Expense) Benefit

Three Months Ended March 31,

(Dollars in thousands)

2 unchanged sentences

$ (7,265) $ (18,306) $ 11,041 (60) %

Income tax benefit

Income tax (expense) benefit

(442) 106 (548) (517) %

5 unchanged sentences

The tax rate is also affected by discrete items that may occur in any given year but are not consistent from year to year.

Our effective tax rate for each of the three and nine months ended September 30, 2025 and 2024 differed from the federal statutory tax rate of 21.0% primarily due to the valuation allowance established on federal and state attributes and the tax impact of stock award activities that was partially offset with the benefit related to research and development tax credits.

Our effective tax rate for each of the three months ended March 31, 2026 and 2025 differed from the federal statutory tax rate of 21.0% primarily due to the valuation allowance established on federal and state attributes and the tax impact of stock award activities that was partially offset with the benefit related to research and development tax credits.

Liquidity and Capital Resources

As of September 30, 2025, our cash, cash equivalents and short-term investments were $59.5 million.

As of March 31, 2026, our cash, cash equivalents and short-term investments were $49.1 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.

8 unchanged sentences

• the effect of competing technological and market developments;

• the impact of pandemic or epidemic diseases on global social, political and economic conditions;

• delays or issues with any of the above, including that the risk of each may be exacerbated by tariffs or trade policies, any future pandemics or epidemic diseases, potential geopolitical instability, war, terrorism, inflation or rising interest rates;

• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents and other intellectual property and proprietary rights;

2 unchanged sentences

The aggregate gross proceeds from the August 2025 PIPE were approximately $30.0 million, before deducting placement agent fees and offering expenses.

On September 12, 2025, we filed a registration statement on Form S-3 with the SEC registering the resale of the shares of common stock issued in the August 2025 PIPE, which registration statement was declared effective by the SEC on September 19, 2025.

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.

1 unchanged sentence

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 September 30, 2025, $88.3 million remains available under the Sales Agreement for future sales of our common stock.

During the three months endedMarch 31, 2026, we sold no shares of our common stock under the Sales Agreement.

As of March 31, 2026, $88.3 million remains available under the Sales Agreement for future sales of our common stock.

Additionally, we may receive up to $218.6 million from the exercise of our warrants, assuming the exercise in full of all the warrants for cash, but not from the sale of the shares of our common stock issuable upon such exercise.

4 unchanged sentences

Cash Flow Summary

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2026 2025 Change

4 unchanged sentences

Cash from Operating Activities:

During the nine months ended September 30, 2025, cash used in operating activities of $30.8 million primarily reflected our net loss of $50.6 million and changes in our operating assets and liabilities in the amount of $2.0 million, partially offset by net non-cash charges of $21.9 million which primarily included $12.2 million in share-based compensation, $14.0 million in depreciation and amortization, a gain on sale of an ion channel asset of $3.0 million and a change in our deferred income taxes of $1.1 million.

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, $16.0 million in depreciation and amortization, a change in our deferred income taxes of $7.2 million, a change in the estimated fair value of contingent liabilities of $2.4 million, and the amortization of discounts on short-term investments of $1.3 million.

During the three months ended March 31, 2026, cash used in operating activities of $4.9 million primarily reflected our net loss of $7.7 million and changes in our operating assets and liabilities in the amount of $7.7 million, partially offset by net non-cash charges of $10.5 million which primarily included $6.0 million in amortization of intangible assets, $3.3 million in share-based compensation, $0.6 million in depreciation of property and equipment, and $0.6 million in amortization of operating lease right-of-use assets, and a change in our deferred income taxes of $0.4 million.

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.

These non-cash charges primarily included $4.1 million in share-based compensation, $3.2 million in amortization of intangible assets, $1.0 million in depreciation of property and equipment, and $0.5 million in amortization of operating lease right-of-use assets, partially offset by $0.8 million of changes in estimated fair value of contingent liabilities.

Cash from Investing Activities:

During the nine months ended September 30, 2025 , cash provided by investing activities of $3.8 million primarily consisted of $39.8 million of proceeds from the maturity of short-term investments and $3.0 million of proceeds from the sale of an ion channel asset, partially offset by $38.6 million of cash used to purchase short-term investments.

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.

During the three months ended March 31, 2026 , cash provided by investing activities of $8.4 million primarily consisted of $18.0 million of proceeds from the maturity of short-term investments, partially offset by $9.4 million of cash used to purchase short-term investments.

During the three months ended March 31, 2025 , cash used in investing activities of $0.9 million 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.

Cash from Financing Activities:

During the nine months ended September 30, 2025 , cash provided by financing activities was $28.0 million, which primarily consisted of net proceeds from the issuance of our common stock in the August 2025 PIPE.

During the nine months ended September 30, 2024 , cash provided by financing activities was $9.2 million, which primarily consisted of $2.3 million of proceeds from the issuance of common stock from stock plans and $8.5 million of proceeds from the issuance of common stock under the ATM facility, net of commissions, 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.

During the three months ended March 31, 2026 and 2025 , cash from financing activities was negligible.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates during the nine months ended September 30, 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.

There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2026, 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 2025 Annual Report.

Recent Accounting Pronouncements

1 unchanged sentence

Quantitative and Qualitative Disclosures about Market Risk

As of September 30, 2025, there were no material changes to our market risks from the discussion provided in Item 7A of our 2024 Annual Report.

As of March 31, 2026, there were no material changes to our market risks from the discussion provided in Item 7A of our 2025 Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis