Shot-on-Goal Licensing Company Aims for Breakthroughs

A very special breed of animals is helping biotech and pharma companies in the quest for new human therapeutics. CFO Kurt Gustafson joins Pathfinders in Biopharma to explain the technologies behind OmniAb’s business model.

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Hosted by Joseph Coletti
Featuring Kurt Gustafson, CFO, OmniAB
Published July 19, 2024 | 2 min read

Key Points

  • OmniAb licenses discovery research technologies that include transgenic animals to generate antibodies with fully human sequences.
  • The aim is to provide technologies that help partners more quickly and cost efficiently discover next-generation therapeutics.
  • AI is routinely used to optimize the technologies and their outputs.
  • Variations in the deadlines for Medicare price negotiations resulting from the IRA may have the effect of shifting research funding away from small molecules.

Animals with built-in intelligence

Transgenic mice, rats, chickens, and cows are at the core of OmniAb’s discovery research technologies. The company supplies what it calls ‘biological intelligence’ to biotech and pharma partners. This is OmniAb’s term for the way its transgenic animals’ immune systems create optimized antibodies for human therapeutics.

“The intelligence is built right into the animals,” explains Kurt Gustafson, CFO at OmniAb. “They preferentially select antibodies with excellent specificity, as well as developability characteristics.” OmniRat, OmniChicken, and OmniMouse are among the company’s core products, alongside OmniTaur – cow-inspired antibodies with unique structural characteristics, which are being explored for applications in challenging targets.

The company went public in 2022, having assembled its core technologies through six acquisitions. “You could probably find pieces of our technology at other companies, but the diversity of our product offering in a single company, and the fact that it’s proven, is what causes companies to come to us,” says Gustafson.

“You could probably find pieces of our technology at other companies, but the diversity of our product offering in a single company, and the fact that it’s proven, is what causes companies to come to us.”

Kurt Gustafson, CFO, OmniAb

A shots-on-goal business

OmniAb operates a flexible business model with its partners. After signing a licence, clients can complete the research work themselves, or ask OmniAb to take on this work for a fee. Ultimately, the company hopes to earn milestones and royalties on commercial sales.

He describes OmniAb as a “shots-on-goal” business. “The more the technology is used, the more shots that we have to get a drug approved from one of our partners,” he says. “The goal is really to make access to the technology relatively cheap, as we want to encourage our partners to use it as much as possible.”

“The more the technology is used, the more shots that we have to get a drug approved from one of our partners.”

Kurt Gustafson, CFO, OmniAb

AI: part of standard workflow

While acknowledging some “hype and overexuberance” in some of the current conversation around AI and machine learning, Gustafson believes it will shape drug discovery and development. It is already embedded in OmniAb’s technologies and operations.

“We use AI to design the antigen that we’ll give to our animal, in order to elicit the most robust immune response,” he says. AI and machine learning tools also select antibody candidates, and are used for optimization at the end of the process, to identify variants with improved characteristics.

“We use AI to design the antigen that we’ll give to our animal, in order to elicit the most robust immune response.”

Kurt Gustafson, CFO, OmniAb

Small molecules to lose out?

Gustafson believes the mix of future biopharma research will be influenced by the Inflation Reduction Act. He points out that while small molecule drug products will become eligible for price negotiation in seven years, the deadline for large molecule products is eleven years away.” That’s a big deal, and a big difference when you’re thinking about drugs that could be selling hundreds of millions, if not billions, of dollars a year before they become subject to price negotiation,” he says.

He noted one trade association which found that most of its members are considering shifting research dollars away from small molecules in response. Another little-noticed development Gustafson is watching closely is the Biosecure Act now passing through Congress, which could affect the many Chinese companies supplying the U.S. industry. “We’re already seeing companies make choices in terms of deciding who they should be using as suppliers,” he says. “There will be winners and losers as a result of this legislation.”

View audio transcript


Featured Guest

Kurt Gustafson
Kurt Gustafson
CFO, OmniAB

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