Fusion Antibodies (LSE:FAB) — Interim results presentation

0:02 Good afternoon, ladies and gentlemen, and welcome to the FUSION ANTIBODIES PLC Interim Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be in only mode. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it is appropriate to do so. These will be available

0:33 via your Investor Me company dashboard. I'd also like to remind you that this presentation is being recorded. Before we begin, I'd like to submit the following poll. And I'd now like to hand over to Paul Kerr, CEO, and James Fair, CFO of FUSION ANTIBODIES. Good afternoon to you. Thanks, Mark. This is Paul Kerr, CEO of FUSION ANTIBODIES. Good afternoon to all the people who've signed in. I'm glad they have the opportunity to discuss the h one interim results 2020 with you all. And as Mark said, you know, some questions have been submitted, and you can submit some questions. And we'll do our very best to answer them live at the end of the presentation or, you know, if if we have to maybe look at some stuff afterwards, we'll we'll try to do our best to get those answers to you guys as well.

1:30 Okay. So if you see the slide, just we'll kick off here. My colleague, James Fair, our CFO, is on this call with me. And together, we will run through the the the presentation. So the disclaimer here, you can see that this is a standard text to show that, you know, this is for basically we're a publicly PLC company and and you can read this at your own leisure. So FUSION ANTIBODIES, who are we? Right? We are experts in preclinical development of antibodies mainly for therapeutic use, but also for diagnostic purposes as well. So actually, we're about 95% therapeutic use.

2:27 And in that area, that space, we our main pillars are discovery, engineering, and supply. So just to give you a quick discovery is the generation of antibodies from an idea. Basically, us basically making antibody from scratch, and that's what discovery side of the business is. Engineering is where we take other people's antibodies. They come to us, and we reengineer them primarily humanization, I. E. Make them human so they could be injected into people as therapies and also put supply, which is the scale up for preclinical testing of antibodies and all and for going forward to clinical supply and CGMP.

3:13 So we can make the seed cell line here at FUSION ANTIBODIES, and then we would pass over to large scale manufacturers to grow that up. So there are three main pillars of fusion antibodies, and I will touch on those later. So who do we work with? As I mentioned, it's all like many drug discovery. Drug drug discoverers, scientists from all around the world, and all sorts from large pharma to research institutes, biotech, and also more increasingly virtual companies. And what I mean by virtual companies is asset centric companies, companies that basically it's people who have basically own the IP of an antibody, and they're using companies like ourselves, CROs to process and and be their be their arms and fingers to produce the antibodies and scale up to pass it over for testing. So basically, it's, you know, run virtually very lean, and all the the the the money is on the actual antibody targets themselves and the IP itself. And this is a very efficient way of first discovery.

4:24 These companies then will then plan to license them out to larger pharma companies as you go forward. So on this next slide, so we're all about accelerating the customer journey. And it was all our tools and platforms are really to improve the speed of discovery and also the the the actual yield and the production of the antibodies, make them more efficient, to make them more potent so that they've got better efficacy in the clinic. And that's a a never ending goal. So this year in 2020 with COVID nineteen, that's been unprecedented, you know, since the that virus was discovered in the January 31 sorry. December 31. You know, there's now three vaccines, and there's two antibodies, one's from Regeneron and one's from Eli Lilly.

5:21 And this is unprecedented speed of getting from a target to a a fully commercialized drug. So and whereas normally, talk about ten years for therapies and and could be even longer for vaccines. So there is the the market will have completely shifted. We now know what we can do and the time spent the time and the shortened timelines of drug discovery and development. Of course, I don't think we're gonna beat this. It was almost like a war footing. Like, Eli Lilly spent $400,000,000 on COVID nineteen alone. They used the company jet. They chartered private jets, the ferry scientists and samples all around the world to expedite that antibody development.

6:09 So that's not gonna be done on a normal pathway, but definitely the tools and the things we've learned we learned that we can go faster. We the regulatory systems can be faster.

6:20 So this is what this is exactly what we're in the in the shorter timelines and creating value. So we've a very special scientist team here of bioinformatics, cell line developers, antibody engineers, geneticists, etcetera, people in biochemistry. We've been a long around a long time. We've our company started twenty years ago, all to the day, and we've got a proven track record with multiple targets in the clinic. In fact, another two of our humanized antibodies, we found out one last week went into the clinic from a a spinout from ex Merck Serono in Geneva. And another company in Basel also went into clinic last week.

7:07 So to give you an example of this was in 2012 and 2013 when we first launched our next generation CDRX humanization technology. So this is around engineering piece. In those two years, the total number of projects we did was 10. We now know six of those 10 antibodies are in the clinic. However, of those 10, we don't have any carries or milestones or royalties in those ones. Those came later after 2015 when we did a project with Roche who came to us, and we were then put on the patent for HER three. And they said we were better than a country mile than many other com companies they tried that year. And so going forward after 2015, we've now got about just over two dozen projects where we have carries or milestones.

8:00 But the main thing was, of those 10, we've got a huge a great track record. Fast forward to 2019, 2020, we have now done a 100 humanization projects, so 10 times more. And we continue to improve and develop our CDRX platform. We are working with Queen's University of Belfast under an KTP or knowledge transfer partnership program to add machine learning to improve the algorithm even further so we can increase the productivity even further and increase the capacity of our humanization platforms. So that's just the the continued improvement. So going forward, this next slide, this was a this informatic informatic really shows you the discovery wheel, starting with discovery through the engineering and supply, and it's a la carte. So people, scientists, or companies will come to us at different levels.

9:02 If they come to discovery, there's probably a higher chance there's a higher chance that we will have maybe potentially carried in those in that aspect. Also, discovery, we've been working on the mammalian library for the last three years. This is a next generation library where we can synthetically create antibodies, fully human antibodies, they don't need to go through humanization. So it's gonna be faster, and it's completely synthetic. So it allows us to go after targets or or or target companies can go after targets that are not currently addressable using the current methods attainable. So we have put a lot of effort, a lot of invested, a lot of money and and time in the last three or four years into this platform in the discovery section.

9:55 And this is the one that we we were going after three immuno oncology targets. We still are. But at the start of this year, to try and help with the COVID nineteen pandemic situation. We also added COVID nineteen as a target or SARS COVID two as a target. So that was put in the very front of the platform. So and and we have now been generating that platform going forward with COVID nineteen and the other targets to follow. So engineering, this is the antibody engineering and humanization and ramp. Ramp is our rational affinity maturation platform. Affinity maturation is basically a process where we can make antibodies with a low affinity. This is how they bind to a target.

10:45 So general rule of thumb, if higher the affinity, the tighter the antibody binds to that target, let's say an oncology target binds to the tumor, and and and therefore, rule of thumb is gonna be more effective, more efficacious. And this platform, this is a it's a it's a the the RANP platform is actually developed from the CR human ex humanization platform, and it creates a a a using, again, in silico methods and computational methods, a way of generating a huge number of sequences to that can be engineered in the original antibody to be performed

11:25 better to perform higher affinity to be to compare binding to the target, but also has other manufacturability qualities. We can increase the yield per liter as well as George's cost of goods. We can also engineer out sequence liabilities of the DNA sequence so that the antibodies themselves are actually more potent. So so therefore, it costs less money for them to be engineered. You know, it can be fixed at the post processing or processing manufacturing level, but it's very expensive. You do it at the gene level. This makes it much easier and more cost effective for our clients going forward. And then supply is what it is. Supply would use this two cell lines. These are standard cell lines that are used in over 90% of all the biologics created in the world.

12:16 So we can create the seed here and for the stable cell line and to go forward to partners for CTMP, that's current good manufacturing practice, which are is the control of these antibodies will be made for clinical use. So that is the journey from idea or discovery right through to clinical supply of the seed cell lines producing those antibodies of choice. And it's a la carte. They can come in at any stage. So the highlights for the the six months period, h one period ended 09/03/2020, But we're really pleased to say in the most challenging business, not just business, but life as we know it, the the pandemic, we've grown revenues by 9% of year on year.

13:14 We know this figure could've been higher if it was normal business conditions and norm and and the COVID nineteen wasn't wasn't an issue. Also, the COVID nineteen program introduced as as part of the mammalian antibody library development project. We raised money to to help this, and we also applied for a grant from Invest Northern Ireland. They work with Queen's University of Belfast. So all that has come through in the period. We've increased our research and development expenditure by 50% primarily around the library project, but also, as I mentioned, the the the KTP on the CDRX humanization platform. We've the losses are at the same level as h one last year this year even though we've increased the r and d expenditure.

14:06 And also just on the raise, we raised 3,000,000. Well, it was just to highly oversubscribed pricing at the start of the financial year to primarily, you know, strengthen our balance sheet, but also to add in COVID nineteen to our immuno oncology targets and the and the development of the mammalian library project. So our cash position at the end of the period was 3,240,000 compared to 1,500,000 at March 2020. Could pass you over to our chief financial officer, James Fair, and he'll maybe just walk you through some of the numbers, and I will come back later. Yes.

14:51 Thanks, Paul. Good afternoon, everybody. It's it's James Fair here. Obviously, we put out the full financial statement for for the six months by RNS on Friday, and this is, just a a brief extract here. On in terms of revenue, as Paul said, very challenging climate to to do work for for everyone. And in that midst, 9% year on year growth was very satisfying. I would have thought that that in more normal times, that would have been double digit growth, which is more like we have seen in the past, but still a decent decent result.

15:39 You also see that compared to the same period last year, we have improved margin, and margin is more in along the lines of of what we achieved on the the full year last year. Now we always say that our margin aspirations are in the the sort of 49 to 52% range, so somewhere around the the 50% mark normally for margin. But what we have been doing over the last two or three years is investing for growth. And one of the things that that involves in is adding capacity and adding the highly skilled scientists and adding to that, building that team. Now

16:26 highly skilled scientists, well practiced in the skills and techniques which we're employing, which are cutting edge, they don't come off the shelf. Different people come with different experiences or else we're hiring graduates or postgraduates who are coming in but need to learn the FUSION way and need to develop things. So we tend to have scientists brought in ahead of ahead of demand. We spend a certain amount of time chaining them and bringing them up, under our costs associated with that. So that that keeps our our margin

17:08 a little bit below where we would be in calmer growth phase, I suppose, more established phase. One of the line the line not showing there, I suppose, is administrative expenses, and administrative expenses includes, r and d. It includes sales and marketing, and then all the usual overheads that you would expect to see. Because we're investing for growth, we're investing in the sales and marketing side of things to expand our reach, to reach new people, to reach new geographies, and to generally get the message out there, and find explore why why we're not reaching a 100% of the market.

18:00 So, we're investing in that, which is is, again, a a driver of growth, and we're also investing in r and d. That's,

18:10 partly to keep our existing services at the cutting edge of, what the industry expects because the goalposts are forever moving. And also, as Paul alluded to, the development of the new platform, the antibody library, with the proof of concept targets going through that at the moment. And EBITDA is improving. It's becoming less negative. And when you consider the fact that at the same time we're increasing our r and d spend, If you take the r and d out of that, then EBITDA would be slightly positive. And that's a trend that we we are planning to to see and extend as the revenue growth comes through, to have the trading aspect of the business contributing more towards, the ongoing costs and and development, and producing a little bit of cash to support the r and d stream.

19:17 Moving on to the balance sheet or summary statement of financial position. A nice solid balance sheet in in my opinion. Nothing terribly surprising there. I suppose the current assets are where we want to concentrate our thoughts, cash and cash equivalents. So we we did have a fundraise in April, May. Primarily the primarily the reason for that was to keep funds flowing towards the library development program and also to support working capital as we go through, and we're very comfortable that we've got sufficient cash and eye on the balance sheet to help us to realize those dreams.

20:10 The other line I would draw on there is inventories, and that's up significantly, not so much from March but from September. And, one of the risks we would see arising both from, coronavirus and, to an extent, from Brexit will be, supply chain disruption, potential, supply chain disruption through the winter, and that's for laboratory consumables. Not necessarily particularly high value items in themselves, but costly if we interrupt our work because of a lack of them. So we're continuing to keep our inventories in good shape and purchasing well through November here to make sure that we don't have any sort of interruptions in business on that side of things.

21:06 Otherwise, everything else there, I think, is much as you would expect.

21:14 On the statement of cash flows then, the cash used in operations is a mixture of the R and D expenditure and also increase in working capital needs that I've just mentioned. Investing activities is principally fixed asset purchases equipment. We bought some equipment in the period primarily for the R and D program, and we would envisage some more key pieces of equipment that will you be used not only in the development proof of concept phase of the library, but also will then go on into the production side as well, so efficient use of equipment buying.

22:01 And on the financing activities, there there there's an inflow there of 2,700,000, and, of course, that is principally the fundraise, the 3,000,000 fundraise, 3,000,000 gross fundraise in, April, May,

22:18 and the repayment of some fairly low level borrowings. So cash up in the period from 1,500,000 in March to 3,200,000 now, and, so that that gives us a nice, strong cash position to to see us through. So the strategy for growth and the first strand of that is to build on those existing core services. Paul showed you the the the wheel at the beginning with the the the the a la carte menu of services that people are are using. Engineering has been a great cornerstone of that through the recent years, and we're building on the supply side in the in the current period and and for the rest of of the year and the future with the library then expected to come on stream and start to contribute to the discovery side. So building on those existing core services then adding to those through development plans like the Mammalian Library.

23:33 Also, in the period, we announced a couple of new distributors in Asia, one in India and one for the rest. And we are always open and continuing to to to keep an eye out for student commercial partnerships, distributors, and commercial alliances which help us to reach out into the market with our links.

24:00 We continue to seek milestones and royalty payments. So Paul mentioned the carried interest that we would have on a certain number of targets, and in some cases, we will continue to add either a milestone or a royalty, particularly from the discovery end of things, and we would expect that to increase

24:26 as part of the antibody library when it comes into play as it will be very much a licensing model in the main part. So we have obviously added the COVID nineteen, and there are four targets to go through the proof of concept plans of the library. COVID nineteen is the first one down the track, and as Paul mentioned, then three immuno oncology targets to follow. They in themselves may have value in the marketplace as we carry on, And then, obviously, the the where we see the the next step in our value offering is around actually offering the the discovery service, the mammalian antibody library, to customers, to drug discoverers, as a service, to find novel solutions to unmet medical need.

25:30 Paul, do you want to say something about the library?

25:33 Yeah. Yeah. I'll just say the library. Yeah. The the library is, you know, one of the pivotal, you know, piece of infrastructure that we've been build and it's I've been describing the other investors this morning. Like, it was like like like like Henry Ford building the

25:52 production line. So this is we're trying to streamline discovery from idea to fully human antibodies within three months, which compares to maybe, you know, to get to the same period the same antibody using some current techniques could take eighteen months. And also this this library will can target medical needs that other traditional or current platforms will not be able to prosecute. So so it offers much more controlled synthetic development.

26:32 So yeah. So the the library itself is the whole the business model of the library is gonna be research access fees, and it's gonna be milestones and royalties all the way through. So we're gonna capture the full value of the antibody in this in this discovery library program. So we would see this as a much, much more higher value offering. And and because it's a much more high offering, we need to do much more proof of concept and hence the the four targets that we are prosecuting, the the COVID nineteen and the three immuno oncology targets right now. And so through through the month, the calendar year 2021, we will build up a body of evidence around those four targets, and we will release that evidence to relative RNSs and also to our collaborators at conferences once we get back on the conference circuit and make, you know, also publish papers on these. And this is gonna be very important because we're we're trying to target large pharma company to come to develop their next generation antibodies.

27:45 They're gonna need we're gonna need we're targeting people with deeper pockets who appreciate the time as money, and if we can get the speed of antibodies, new new drug targets out, this is gonna create a high yielding revenue potentially going forward with milestones. So we need to create that body of evidence over the next year, and that's that's fundraise is all being programmed in to provide that library of proof of concept projects and evidence. So in the in that aim, we've recruited additional research scientists. It has been completed. We've got people from AstraZeneca. We've got people from Roche, actually in Switzerland.

28:31 They've come back and, you know, who are working for us. So we've really strengthened. And as James mentioned, these these people, you know, these are hard to come by these scientists. You know, there's it's competitive market out there. So we we've got them here. We're delighted to welcome them here in the the last number of months. So we're hoping that this will add to the the library and getting the results that we want to to sell to the rest of the world in 2022. So we're exploring first opportunities for both supply of options also to diagnostic groups because to pan the library is like the panning for gold. The gold is the actual antibodies themselves that bind to the target. So but in doing that is what you go searching with, what you go fishing with.

29:19 So we have made antigens for the COVID nineteen, and we have sent them out to some diagnostic companies. And this is for serology. This is to find out whether you have antibodies circulating in your body that can protect you from COVID nineteen. So these are gonna be potentially these antigens could be potentially of value going forward in 2021, '22. When the vaccine start to roll out, because this is the market, because, you know, vaccines will have to check if the people need an extra booster or another shot to make sure that the immune system has been stimulated appropriately. So there's there's a lot lot lot of people out there, diagnostic companies, have been working in the background to, you know, gear up for this vaccine serology testing of of people.

30:12 So we've we've it's more of a byproduct. We we we we wanted to make this our antigens to go make the therapeutic antibodies, but we have some of them that are very scalable. I mean, look, we can supply very large scale to if they're selected, but it's a competitive process. There's other antigens out there from other companies around the world. Some of these companies are basically screening, you know, hundreds of antigens, but we're in the mix. And, you know, we I can't say now, but, hopefully, we'll get some feedback early in '21 to see if our any of our antigens are worthy of going forward for commercialization and some of those kits. So in summary, 9% revenue growth achieved in the period of global pandemic. We're we're many thanks to all the staff here at FUSION ANTIBODIES, our clients who have how they reorganized their businesses, the way they work, including ourselves to keep ourselves operational throughout the period.

31:21 And now we are in the new normal. We actually see our clients still in the pandemic situation, but we're kinda seeing that the the working methodology has been adjusted, and we are definitely more hopeful for h two to be better than h one for sure. And and and but also with vaccines coming in that we'll we'll get back to a period of normality maybe in six months time or nine months time. So we can go to attend conferences as usual and promote FUSION ANTIBODIES services and our library. So the cash position against the 09/30/2020 was 3,240,000, and that has really give us a great balance sheet, you know, and continue investing in our growth of capacities and also in our r and d projects.

32:15 The £3,000,000 raise was highly oversubscribed from our existing shareholders and a few new ones, which really underpinned the support from our institutional shareholders. We also know that we've got a large number of smaller shareholders and and so that everybody's really important to FUSION ANTIBODIES, and this is why I'm really glad that we are using this investor meet presentation today to reach out to all the shareholders because all the shareholders have really we have some very long shareholders, some small shareholders, but very long term, and they've all meant an awful lot of support to fusion antibodies. And the COVID nineteen program introduced as part of the mammalian antibody library, which is now branded and trademarked OPTIMAL, is is going progressing the plan. We've got the antibodies now, but we're right at the end of that production line.

33:14 So we know to get the antibodies out. We need to grow them up, and we need them early early next year, get them across to the Queen's University virology department, and get them tested to see if they do neutralize or kill the COVID nineteen antibody. And that is gonna be a massive data because it's one, primarily, it shows we have a library. It works, and we've also potentially got an asset that we can out license to other companies, pharma companies to scale up and provide another solution to the COVID nineteen pandemic. Also and then we got other immuno oncology targets coming down the the track. So next year, we got a a full program of our research and development around the the the the optimal library.

34:03 And again, we are still processing and proving the where the algorithm and machine learning for our CDRX humanization will be testing against that. It's almost like, you know, just like I described earlier, you know, it was it's almost actually remember deep blue supercomputer taken on a grandmaster in the nineteen nineties. Well, this algorithm is gonna take on our grandmaster, doctor Richard Buick, and humanization, and hopefully, we can increase the x by tenfold the amount of antibodies we can humanize going forward in 2021, '22 and beyond. I want to thank everybody for their taking time to listen to our presentation.

34:49 And maybe Mark, our moderator could open the floor to questions. Perfect. Thank you very much indeed to both Paul and to James. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while the company do take a few moments to review the investor questions submitted already, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard. I'd also like to remind you that feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Paul, James, obviously, had the ability to pre submit questions.

35:39 What I propose to do, given the fact that you said your presentation would be forty minutes and you've given me a minute extra, what we have is a number of these questions I'd like to start off with before perhaps addressing those that have come in during the live event and continue to come in, if that's okay with you guys. So Yeah. The first question we have is do you think you are looking at a stronger h two? H one was, in my opinion, quite impressive given everything grinded to a halt for a couple of months. I know you have touched on that, but perhaps you could expand a little. Yeah. Yeah. No. We we do. Thanks for that. It was a challenge in h one, you know, for everybody just personally and business wise. But, yeah, they they because of the we're now seeing that our clients settling down or adjusting to the new pandemic situation and or got their workarounds.

36:30 You know, we we we're seeing it's it's not it's not perfect. It's not back to normal, you know, pre pandemic sort of levels, but or or or working. But we're we can see that the inflows of of money to the from investors in America is the highest it's ever been. And it's well, that's really encouraging because that is the the the source of the well. No money coming into biotechs and drug discovery. That that bodes well for our business and and what we do because, you know, we're in drug discovery and we need investors investing in various companies around the world and and for us to kind of for us to be part of this the art the through tools and picks to mine out those antibodies for those guys in that space. So it's really encouraging the the money inflows, and we're seeing the the levels of inquiries, you know, much more stronger than it was in h one because of real pandemic situation.

37:30 So we're definitely looking forward to a stronger H2, and we'll be certainly keep our investors up to date through the RNSs on that situation. Brilliant. Thank you. The second question was last year's revenues grew by 79%. So this period's 9% could be seen as a failure. How will you go to profitability? Maybe I'll pick that one up. Okay. First of all, I think if you if you look back across the last two financial years, eighteen, nineteen, nineteen, twenty, you're looking at sort of a an on year on year, growth of really, 21%. And, certainly, 21, 20 to 30% would be a very reasonable expectation, in normal times.

38:20 So 79 was perhaps a little strange. 9%, as Paul has just said, is absolutely not a failure given the strange times we live in and the delays in decision making that our customers saw as they reorganized their their strategies. So the ambition would be for more than that, but, in current times, I think, 9% more than satisfactory at this stage. Thanks. In terms of route to profitability, the the the raising of of the 3,000,000 in in April, May, will obviously push profitability out a little bit further because that money will be reinvested back into the business and will obviously be a drag on profits.

39:09 So I think we said in our annual report, which was out in the summer, we would envisage ongoing losses, in the next, two or three years. That's not that's not losses because we're struggling. That's losses because of the planned investment in growth that I spoke about earlier. That's an expenditure on r and d, on sales and marketing, and expansion to do that. So that is is planned cash burn and and planned loss making to deliver a bigger, better, stronger company at the end. Thank you very much indeed, James. Paul, I think your camera is now back on just to make sure you're aware of that.

39:56 The next question we have is we need to know about the potential revenue, about what the potential revenue is from the fee arrangements with drugs in trial and how many there are and what the various stages they're at. I understand this may be difficult with NDAs in place, but perhaps I guess if you can give a little bit of color on that. Okay. I'll I'll answer this one. Right. Yeah. This is a key part of the future value of of fusion antibodies. But, you know, when we went to IPO, we had around about five, we'll call them carries or or milestones. But we purposely decided not to, you know, give them any value at all because at that point in 2017, these things are as we talked, the normal time for a drug to go forward in the clinic and and get approved is around ten years.

40:51 And this is where to start. So and we we we literally have no control. We we do the work. We we, in some cases, take a carry, but it's up to the company themselves to prosecute those and and bring them forward to the clinic and go forward and and hopefully sell them to large pharma companies and then reap the reward of those milestones or the percentage royalty to us. So we we've seen other companies in the past maybe put a lot of emphasis in those carries, and then when they don't pan out, well, the the share prices take a hammer in. So we thought, you know, under promise, over deliver. So basically, you know, we we didn't give anything, but now we're going a lot we're we're we're further we're three years down further down the track.

41:40 And now we we can see from the that's from 2012, 2013, the first two years, we did 10 humanizations. We now know six of those are in the clinic. And in total, we have 11 antibodies in the clinic. Some as far as phase two, obviously, the rest are in phase one at this moment in time. And but and then and 2019 and 2020, we've done a 100 humanizations. So we've we've now got more carries. We've got about somewhere around 25, 26. And we are planning in 2021 to really look at that and and and share with the shareholders in our annual statement, but we may get something beforehand, you know, where which definitely an action point for us to really look at the the the value of that and where and when and when it may drop. It is a difficult thing to measure because some of them are fixed milestones from as little as £100,000 all the way up to single low single digit carries on some of these antibodies.

42:48 You know, some of our clients are saying they could be worth, you know, a billion. They're selling for a billion, you know, so being low digit carry of on a billion is a significant sum. It's, you know, it's you're talking, you know, tens of millions, you know, $1,020,000,000 dollars. So but but it's a it's a whole moving piece, like which ones would come forward, which ones will be successful. But there's no doubt that, you know, we we can see the the run rate currently of around in the first 33 projects. 11 of those are in the the clinic, so that's one on one on three. So we are we will we are confident that some of these carriers will come through, and we're probably, maybe in the next financial year.

43:38 And then going forward, these will definitely be coming into this space where where we have carries. They should be hitting the clinic. That's usually the first milestone or or fee to fusion antibodies for the work done previous. They they should start maybe in next financial year and then going forward. But we will look at those milestones. We will try to map out as best we can. We'll work with our brokers and our investor relations and analysts to try and get that balance right of, you know, not over egging it, but just sort of saying, this is the range, this is the risks, risks and allow the investors to make that decision themselves. Thank you very much indeed. I've got a couple more pre submitted questions. And I think the last one, there are a number of questions in the live event, so I might just go to that. But the next question is what is the progress with COVID neutralizing antibodies?

44:35 This was hoped for by the end of the summer. Right. Yeah. Well, yeah, we were kinda hoping that I think we're that was maybe overoptimistic because we're still I was just saying, like, we were still making the the library. So we're kind of building the library like the you know, the the actual one, the the manufacturing piece, and that has, like, 12 major sort of components. And, you know, we had maybe nine of those components all fixed, but the three towards the end still needed to be fixed themselves, the actual components for the antibody to run down the the actual production run. So the actual because we're building it, the actual platform as well as pushing the COVID nineteen and behind it, it it's it's just the the technical challenges have to be overcome first. So we actually have overcome those technical challenges. We have now can see the antibodies now.

45:38 And as a case of pulling those antibodies out, growing them synthetically so there's enough antibody for for the to pass over to the virologist to test. And really, the updated timelines is gonna be q one of twenty twenty one before we can get, you know, get results from the virology department, at least first indication results that we have antibodies to COVID nineteen to actually neutralize or kill kill those kill those kill the virus. So that is the current progress. So we have yes, go ahead. Thank you very much indeed. I'm just obviously mindful of time. We've got about ten minutes left. I know that investor feedback is particularly important, and I know that we want to make sure that we have time to redirect everybody. So perhaps if I could just ask you to click on the Q and A on the right hand side of the slides.

46:34 And if you don't mind starting at the top, could I possibly ask you to read out the question and then give a response where it's appropriate to do so? You'll you'll see them on, as I say, on the right hand side of the screen. Okay. You want me to take that one, Paul? Or Yeah. Go ahead. Yeah. Yeah. So the first question is about the bid offer spread, and sometimes it is ridiculously large. It can certainly certainly widen. Her liquidity discourages investors and makes raising capital by issued shares more expensive. What do we intend to do about it, and would we consider an open offer with the next equity raise? I that's right.

47:21 A large proportion of our shares are held by management and long term institutional investors, so the amount readily tradable can be limited, and obviously, even among the smaller investors, of those who are buy and hold, then there aren't that many trading in the marketplace. So that then does create reduced liquidity and can lead then at times to the market maker spread pushing up to around 30%. Think it's around the 10% mark today, And we would hope that more activities like this and working to get more shares into liquid and citrulling, but also as the investment community recognizes the underquality of FUSION and and the story strengthens and they can see the progression of some of the value offerings coming through, then the spreads will tighten as the portfolio and the revenue generating IP, some of these carriers and things start from group. Hopefully, the spreads the spreads will tighten.

48:34 In terms of an open offer, yes, we would consider that. We have no plans to raise for another equity raise, but we absolutely would consider that. So thanks very much for that question. Okay. The next one is also the question is in event in the event that all your current collaborations with partners were successful and resulted in a product launch, what would be the maximum future revenues you would receive approximately through just the clinical and regulatory milestone payments? Right? We still have to work that out. But if they were all to come off, all we have right now, you know, it could potentially I'm gonna say 10,000,000, 30,000,000, 40,000,000 right now.

49:28 But that that's you know, the run rate is probably a third. We know that things things get killed off. The whole pharma industry not tries to kill things before they go to the clinic because they want to try and skew success. Once you get to the clinic, they're more confident of success. So, you know, we we don't anticipate all of them being successful. In fact, you know, what I said earlier, one third, which is a excellent number, by the way, is what we would anticipate. And also given context, antibodies that get to the clinical phase one have a one in four chance of getting approved, very high safety levels, antibodies, and that compares to small molecules, I. Like the likes of aspirins.

50:17 Once they get to the clinic, they have a one in on average, a one in eight chance of being approved at the end. Really around safety is the main thing or toxicity. So antibodies have a much higher success rate once they get to the clinic. So that's why it's the fastest growing space in drug drug discovery and precision medicine. At the turn of the century, at 2,000, I would say there was probably a handful of literally a handful of antibodies that were approved. Now there's about 90, just over 90 antibodies approved. And I would say more than half of those approvals have occurred in the last, you know, six, seven years. The next one is around, as far as we're aware, have any of our competitors' CROs introduced a hybrid model like ours with a mixture of milestones and royalties?

51:17 And if so, do you know the quantum of the royalties are similar? There is a few companies out there, you know, like you like like, there's Evotec. They're slightly larger than us right now, but their model of basically fee for service and also some risk share is has been very successful for them. We do roughly know the some of the the the standard payments. There's a lot of consultants out there in this industry, you know, ex pharma people who kind of leave pharma and become consultants, and they advise company like us, like ours to, you know, what to expect in terms of royalties and deal structure.

52:04 So, yep, we have a fairly we have a fairly good idea. And it's actually one of the areas that we will actually, as the library rolls out in '22, we will use we we will strengthen our business development team to ensure that we are getting full value from the antibodies that we create. If I take this one, do you anticipate that all collaborations with OPTIMAL will come with a clause for future milestone payments or royalties? Yes. That's absolutely the business model for the, antibody library. Our intention, as as the thing comes in, is to charge a a a technology access fee at the beginning for actually, getting access to the library, But very much, the the earning from the library will be weighted towards a royalty payment later on. So it'll it'll be a combination of an upfront technology fee, but it will always carry a a royalty as it's more of a licensing model.

53:22 Okay. Hello here. How big is the market opportunity ahead of you? With the market cap of sub 30,000,000, how you look to scale up? And the the market opportunity for our area of work is about 30,000,000,000 in The United States alone. And but there is other CROs and in the in the space and the clinical space especially. But, you know, this us looking to scale up is we're looking to increase our capacities in humanization. That's one of our core technologies and platforms. We're looking to also grow our cell line development platforms.

54:07 This discovery platform like the lobby alone, that is a you know, that's a huge market, and we're really looking to we we can see it's it's it could be enormous. We know that one of our there's a competitor. The company's completely based on a library, one of the first libraries, a yeast library called ANTIMAB, and and they're valued over 1,000,000,000 alone on on their library. So we we know that the the market cap, if all goes well, like, the library itself could put push to a billion market cap valid valid or market cap value if the library does what we hope it can do and and short shortcuts the time to delivery of fully human antibodies ready for clinical trials and also really deliver those challenging antibodies that other the current processes have failed to produce.

55:02 So the the it's got a caveat that with a lot of f's. You know, we are in prime position. We we're absolute experts in antibodies. We've been doing we've been in business twenty years, and, you know, we're we're developing a platform that we believe could really, you know, create a huge amount of value and, you create some great antibodies for unmet medical needs. So, yeah, we've got we've got to get these antibodies out. We'll know more in 2021 from the four antibodies that were produced in the COVID nineteen and the three immuno oncology. Immuno oncology is absolutely, you know, huge. It's a paradigm shift in treatment. There's something some great drugs out there that that the immuno oncology drugs like PD L1 and PD one.

55:51 And PD one itself is set to be the biggest selling drug in the world. It's gonna overtake as an antibody drug, the biggest selling drug in the world ever. It's gonna overtake Humira, which was immuno an arthritis based drug, which is of the cell of $20,000,000,000 a year, but that's gonna be superseded by these new immuno oncology drugs, p d one. So we're in a very lucrative end of the market. You know, the the the rewards are enormous, but, you know, it's a competitive field out there. You know, we gotta make our platform has delivered the best of the best antibodies. So that's what we're trying to aim to do and and the four antibodies that were going down the pathway right now. We'll see the results all through the next cal the next finance this calendar year and the next financial year.

56:45 Mhmm. And we'll keep you updated on those performance. Yeah. There's question there about the potential value of the library when it's fully functional, how far off do we see this, and the chances of being picked off by a big pharma company before shareholders see see the value in that. I think the in term in terms of the full value of the library, it will start to come through once once we are are pulling, live antibodies off this and are demonstrating the effectiveness of the library. In terms of revenue generation, we we think we're probably because it is primarily a licensing model, we're probably a year or two out from actually seeing, recognizing revenues on that probably in the year end, finance year, ending March 23.

57:48 We believe that we've got a loyal base of well informed, institutional investors who will support us, and avoid us getting getting picked off too early in that story, And, we are obviously out of our control, ultimately, but we're doing all we can to make sure that that as the value of that comes through, it is properly communicated both to yourselves through platforms like this and to our institutional shareholders to make sure that, people understand the value at the time of of what we're sitting on. That's brilliant. Thank you very much indeed. I am just mindful, obviously, we're coming through the hour. I think you've taken on probably most, if not all, of the questions. There might be one or two that we've gone through, but of course, we can review those post the meeting.

58:39 Paul, I wonder if I could just hand back perhaps just for a final couple of remarks to close-up. And then what I'd like to do is redirect investors to provide you feedback. Okay. Thanks, Mark. I think I'd just like to sum up and say, you know, we're our cash balance is strong. We're we've we've invested a lot of in our technology and to the library. We we really do believe that it's it it can deliver a transformational shift in the valuation of using antibodies. And you know, going forward, we we've and we're we're on underpinning this with our existing services. As James mentioned earlier, we are striving as a business to get the profitability and and carry those r and d costs going forward. So that is what we're about.

59:31 But but also with a eye to, you know, getting that slab up and running, change using that business model to capture the full value of antibodies for therapeutic use. And this will this will provide we start getting the first number of these even from the carriers and the milestones. They start coming in. That will be an indication of the the value and the value and the worth of these antibodies for therapies that we're making. So it's it's a longer gameplay, but the future is potentially very, very bright. So I wanna thank all investors that have invested and and and stick with us. And and, hopefully, I I definitely encourage, you know, I I think I was encouraged.

1:00:18 It's a great investment opportunity. And but it's it's definitely look into it. It's we're in here for the long haul. It these antibodies pharma companies are conservative. They like to see what the the the value proposition is. They like to see test the antibodies themselves. So but it's a it's a very exciting time. I think COVID has shown a light on the the pharma industry, the how good these antibody therapies are good or or just ask Donald Trump. He loved that Regeneron. He said, man, feel twenty years younger. I was two monoclonal antibodies in that mix. So, yeah, I just thanks for your attention. I think we will definitely do more meetings like this to reach out to investors like yourselves and make sure that you are you get the same attention as institutional investors.

1:01:09 Well, what a good note to forward to to finish on, Paul. Thank you very, very much indeed to Paul and to James. Ladies and gentlemen, could I please ask you not to close this session as you'll now be automatically redirected for the opportunity to provide feedback? If you access this meeting from our website, the feedback page will appear. If you access via the link sent to you by email, you'll simply be asked to log in, but we very much encourage you to give the company your feedback. On behalf of the management team at FUSION ANTIBODIES, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all.