When Ligand Prescription drugs executives first floated the plan to spin off the corporate’s antibodies unit as a separate entity, they advised the enterprise would conduct a conventional IPO however left the door open to different choices. The antibody enterprise that Ligand constructed goes public, however it is going to be by means of a merger.
Ligand’s OmniAb enterprise unit is combining with Avista Public Acquisition Firm II (APAC), a particular goal acquisition firm (SPAC). The deal introduced after the market shut Wednesday will infuse as much as $266 million within the mixed firm, which will probably be led by Ligand’s president, Matt Foehr. The mixed enterprise will take the OmniAb title.
The merger comes as conventional IPO exercise has principally floor to a halt as a consequence of monetary markets affected by investor concern about provide chain issues, inflation, and the influence of Russia’s invasion of Ukraine. However by spinning out its antibodies unit as an unbiased entity, Ligand is making a longer-term guess on one thing else: the rising variety of antibodies in improvement world wide. Ligand believes OmniAb is properly positioned to take part in a rising share of this antibody improvement now and seize royalties from these organic medication as they attain the market sooner or later.
San Diego-based Ligand supplies a variety of applied sciences and companies that its pharmaceutical business clients use for drug discovery and improvement. Amongst these choices is a platform for antibody discovery, supplied by means of Ligand’s OmniAb enterprise, which is headquartered in Emeryville, California. Ligand added antibodies to its product choices through the 2016 acquisition of Open Monoclonal Know-how. The OmniAb enterprise expanded by means of further acquisitions in addition to Ligand’s funding in its applied sciences. The enterprise mannequin isn’t that of a service supplier. In trade for offering entry to its expertise platform, OmniAb receives collaboration service charges, milestone funds tied to am antibody’s progress in improvement, and royalties from gross sales of antibody medication that attain the market.
“We’ve made iterative enhancements to our antibody discovery engine and expertise stack over time, and that’s usually allowed us to drive royalty charges and market share increased,” Foehr stated, in keeping with a transcript of a recording made for traders. “We see long run worth of the enterprise being pushed by downstream royalty funds as packages progressed by means of improvement and turn into accepted and launched.”
In response to an OmniAb investor presentation, the enterprise at the moment has greater than 55 energetic companions spanning the globe. Disclosed companions embody Amgen, Genmab, Pfizer, Seagen, and Takeda Pharmaceutical. As of the top of 2021, OmniAb’s platform had led to 2 antibodies that are actually accepted in China, one antibody at the moment underneath FDA evaluate, 23 which have reached scientific testing, and 252 within the discovery stage. The overwhelming majority of those antibodies, in any respect levels of improvement, are for oncology indications.
OmniAb’s essential competitors comes from two established gamers in antibody discovery, publicly traded AbCellera and privately held Adimab. The investor presentation exhibits that AbCellera has 36 energetic companions spanning 78 packages, whereas Adimab has 95 energetic companions with 425 packages. OmniAb notes that each AbCellera and Adimab don’t disclose if the packages or partnerships mirrored in these totals are ongoing or terminated offers.
In response to the merger plan, Ligand will distribute the entire fairness in OmniAb to Ligand shareholders instantly previous to that enterprise’s mixture with APAC. When the deal closes, Ligand shareholders will personal between 75% to 84% of the mixed firm, relying on what number of shares are bought again to the corporate.
The newly unbiased OmniAb will obtain as much as $266 million, which breaks all the way down to $236 million from the SPAC belief and $15 million apiece from Avista Capital Companions and Ligand. That whole assumes that there aren’t any share redemptions from the belief by APAC shareholders. The least OmniAb will obtain is $130 million. Avista has agreed to supply as much as $100 million to backstop redemptions from the SPAC’s shareholders; that money will probably be mixed with the $15 million every from Ligand and Avista.
The boards of each APAC and Ligand have accepted the merger, which is anticipated to shut within the second half of this yr. When it does, OmniAb will commerce on the Nasdaq underneath the inventory image “OABI.”
Photograph: nespix, Getty Photographs
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