Fusion Antibodies plc

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Raleway

Fusion Antibodies CEO, Adrian Kinkaid, took investors through the recent Interim Results Presentation and the recent grant funding announcement.

Investors enjoyed a lively Q&A session, but some questions went unanswered due to time constraints. We wanted to allow all of our investor community to join in on the discussion so we have provided the questions and responses below:

Q: Adrian, many congratulations on the award of the recent NIPBT grant for £6m, quite an achievement for a market cap of £6m (at the time of the grant). The RNS states that £5m is for capital equipment, what type of equipment could this include? Will Fusion own the equipment outright when the grant is exhausted?

A: Thank you, the market cap was closer to £4m prior to the announcement so it is arguably even more impactful.  The allocation of £5m for capital purchases is for the FMI itself and will remain the property of the institute. Fusion, who have had input on what should be purchased, will have access to the equipment. It includes a wide range of 'kit' including high value and technologically advanced items the Company on its own would not have been able to afford. To give an example one item is a cutting edge microfluidic platform for the selection of single clones of antibody producing cells and is widely regarded as the platform of choice for stable Cell Line Development (CLD). CLD projects are one of Fusion's high value offerings. We will be able to use the equipment to reduce timelines for our client projects. 

Q: I understand the US National Cancer Institute is currently validating your platform. In the event that this is positive, how big is that potential impact on the company?

A: The NCI is validating our OptiMAL(R) technology, one of several platforms we offer. A positive outcome will result in co-authored peer review publications which would provide as good a piece of marketing collateral as we could wish for. It would not only validate the technology, but also that it can be transferred to another lab, paving the way for licensing deals with big pharma and biotechs. The NCI Lab head running the validation is widely regarded as a key opinion leader in our field. 

Q: How will the recent grant funding benefit the company and will it help the company win larger contracts and accelerate growth?

A: The grant funding allows us to do more R&D at a lower cost. The capital equipment element is provided free to Fusion and so reduces our cost of sales for relevant projects enhancing margins and making us more competitive. This includes some of the higher value projects. So, yes it will help the company to win larger contracts and accelerate growth. 

Q: How do you embrace AI in your research?

A: We have developed in house AI platforms centered on the molecular structures of antibodies. We have a platform, AI/ML-Ab (pronounced "Aim Lab") which is centered on cutting edge in silico AI methods for predicting the amino acid sequences for antibodies which the algorithm predicts to bind to the target. This can be combined with  our proprietary Mammalian Display technologies to enable a much deeper dive into the algorithm output testing vastly increased number so f sequences and so de-risking this very novel approach. 

Q: Why should a prospective investor buy shares in your company?

A: Primarily for the same reason as most investors buy shares in AIM listed companies, because they believe they will be worth substantially more in the future. This is my own belief, I have purchased shares too. 

Q: Do you earn royalties on antibodies that you produce and which are then used in commercial drugs?

A: Some of our commercial agreements include royalties and/or milestones for antibodies used as therapeutics and some for diagnostics. Clients can be fiercely resistant to such clauses and they are not suitable for all projects. The antibodies covered by those agreements have not yet entered the market place as commercial products so wee have not yet received royalty payments although some milestone payments have been received. 

Q: Do you have a dedicated sales team? Should this be something Fusion is focusing on?

A: Yes, we have a fully dedicated commercial team who look after the sales process for the business from marketing and lead generation through quoting, closing deals and ongoing liaison with clients.

Q: Do you match your research to specific customers or do you do the research and then look for customers to sell to?

A: We primarily work in a 'custom service' mode on specified projects for our clients. It is very rare that we have the opportunity to develop an antibody for subsequent partnering, but this can and does happen.   

Q: Could you please talk us through how investors get a return on investment?

A: A return on investment for shareholders will come as the share price increases. We are not yet in a position to pay dividends. The share price is obviously linked to revenues and profitability of the business. The revenues are derived mainly from custom service fees and occasional milestone payments with the potential for royalty payments being added to these. In addition we may also license out technology or assets which could then generate further revenue in the form of license payments.   

As always, the best place for investors to talk to us is through our investor hub! Please submit any follow up questions below and we will make sure to get back to you.

ShareSoc Discovery Webinar Series Q&A - 12 December 2024