OmniAb (OABI) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Biopharmaceutical development is inherently uncertain, and it is possible that none, or very few, of the therapeutic candidates discovered using our platform that are further developed by our partners will become viable commercial products, on a timely basis or at all
2. 02Our partners may not achieve projected discovery and development milestones and other anticipated key events in the expected timelines or at all, which could have an adverse impact on our business and could cause the price of our common stock to decline
3. 03The failure of our partners to meet their contractual obligations to us could adversely affect our business
4. 04Our commercial success depends on the quality of our antibody discovery platform and technological capabilities and their acceptance by new and existing partners in our market
5. 05Our future success is dependent on the eventual approval and commercialization of products developed by our partners for which we have no control over the clinical development plan, regulatory strategy or commercialization efforts
6. 06If we cannot maintain and expand current partnerships and enter into new partnerships, our future operating results would be adversely affected
7. 07In recent periods, we have depended on a limited number of partners for our revenue, the loss of any of which could have an adverse impact on our business
8. 08Our revenue has fluctuated from period to period, and our revenue for any historical period may not be indicative of results that may be expected for any future period
9. 09We have incurred losses on an as-reported basis for the last several years, and we may not be able to generate sufficient revenue to achieve and maintain profitability
10. 10Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide
11. 11Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited
12. 12The sizes of the markets and forecasts of market growth for the demand of our OmniAb technology platform and other of our key performance indicators are based on a number of complex assumptions and estimates, and may be inaccurate
13. 13We may be unable to manage our current and future growth effectively, which could make it difficult to execute our business strategy
14. 14Our platform utilizes various species of animals that could contract disease or die and could otherwise subject us to controversy and adverse publicity, which may interrupt our business operations or harm our reputation
15. 15The life sciences and biotech platform technology market is highly competitive, and if we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue, or sustain profitability
16. 16We rely on third parties to host our mouse and rat colonies, and these third parties may not perform satisfactorily which could delay, prevent or impair our partnerships, programs and research and technology development efforts
17. 17Healthcare reform efforts aimed at lowering the price of biopharmaceutical products may impact our ability to maintain sufficient profits
18. 18U.S. legislation, sanctions, tariffs, trade restrictions and other foreign regulatory requirements could increase costs and adversely impact the supply of material from foreign CROs and CMOs to us and our partners or our partners’ ability to secure government commitments to purchase potential therapies
19. 19We rely on a limited number of suppliers for laboratory equipment and materials and may not be able to find replacements or immediately transition to alternative suppliers
20. 20We must adapt to rapid and significant technological change and respond to introductions of new products and technologies by competitors to remain competitive
21. 21We depend on our information technology systems, and any failure of these systems could harm our business
22. 22Our success is dependent on our ability to attract and retain highly qualified management and other scientific and engineering personnel
23. 23We have made technology acquisitions and expect to acquire businesses or assets or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership, or cause us to incur debt or significant expense
24. 24If our operating facilities become damaged or inoperable or if we move or are otherwise required to vacate our facilities, our ability to conduct and pursue our research and development efforts may be jeopardized
25. 25We do not carry insurance for all categories of risk that our business may encounter and our policies have limits and significant deductibles. Some of the policies we currently maintain include general liability, property, umbrella and directors’ and officers’ insurance
26. 26Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation
27. 27Our business could become subject to more extensive government regulation than we currently anticipate, and regulatory compliance obligations and the investigational exemption and approval processes to which our animals may become subject are expensive, time-consuming and uncertain both in timing and in outcome
28. 28Changes in and actual or perceived failures to comply with applicable data privacy, security and protection laws, regulations, standards and contractual obligations may adversely affect our business, operations and financial performance
29. 29Our portfolio of investments or bank deposits may be subject to market, interest and credit risk that may reduce their value and adversely affect our business, results of operations and financial condition

Risks Related to the Separation and Distribution and Our Relationship with Ligand

1. 30Ligand received a tax opinion from its outside tax counsel to the effect that the Distribution, together with certain related transactions, qualified as a reorganization under Sections 355 and 368(a)(1)(D) of the Code and that the Merger would not cause Section 355(e) of the Code to apply to the Distribution

Risks Related to Our Intellectual Property

1. 31Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our technology
2. 32Issued patents directed to our platform and technology could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
3. 33If we cannot acquire or license rights to use technologies on reasonable terms or if we fail to comply with our obligations under such agreements, we may not be able to commercialize new technologies or services in the future and our business could be harmed
4. 34We cannot prevent third parties from also accessing those technologies. In addition, our licenses may place restrictions on our future business opportunities
5. 35We may not be able to protect our intellectual property rights throughout the world
6. 36Intellectual property rights do not necessarily address all potential threats to our competitive advantage
7. 37If we are unable to protect the confidentiality of our information and our trade secrets, the value of our technology could be materially and adversely affected and our business could be harmed
8. 38We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
9. 39We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position
10. 40We may be subject to claims challenging the inventorship of our patents and other intellectual property
11. 41We may from time to time become involved in litigation and other proceedings related to intellectual property, which could be time-intensive and costly and may adversely affect our business, financial condition, results of operations and prospects
12. 42Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
13. 43Patent terms may be inadequate to protect our competitive position on our technology for an adequate amount of time
14. 44Our use of open source software could compromise our ability to offer our data packages and subject us to possible litigation
15. 45Our employees, consultants and partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, and insider trading
16. 46We use biological and hazardous materials that require considerable expertise and expense for handling, storage and disposal and may result in claims against us
17. 47Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price
18. 48We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives
19. 49Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
20. 50Our failure to meet the continued listing requirements of the Nasdaq Global Market or the Nasdaq Capital Market, as applicable, could result in a delisting of our common stock or warrants
21. 51Our business is subject to risks arising from pandemic and epidemic diseases

Risks Related to Our Common Stock and Warrants

1. 52The market price of our common stock and warrants is likely to be highly volatile, and you may lose some or all of your investment
2. 53Volatility in our share price could subject us to securities class action litigation
3. 54Affiliates of Avista Capital Partners own a significant equity interest in the Company and may take actions that conflict with the interests of our public shareholders
4. 55If securities or industry analysts do not publish research or reports about us, or publish negative reports, our stock price and trading volume could decline
5. 56We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock
6. 57Sales of a substantial number of our securities in the public market by the Selling Securityholders and/or by our existing securityholders could cause the prices of our common stock and warrants to fall
7. 58Certain existing shareholders purchased our shares at a price below the current trading price of such shares, and may experience a positive rate of return based on the current trading price. Our future investors may not experience a similar rate of return
8. 59Provisions in our certificate of incorporation and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
9. 60The exclusive forum clause set forth in the Warrant Agreement may have the effect of limiting an investor’s rights to bring legal action against us and could limit the investor’s ability to obtain a favorable judicial forum for disputes with us
10. 61We are an emerging growth company and smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our shares less attractive to investors
11. 62If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected
12. 63If securityholders exercise their Public Warrants on a “cashless basis,” they will receive fewer shares of common stock from such exercise than if such securityholders were to exercise such Warrants for cash
13. 64Warrants are exercisable for shares of common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders
14. 65We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to securityholders, thereby making such Public Warrants worthless