Fusion Antibodies (LSE:FAB) — Full year results briefing

0:00 Good morning, and welcome to the FUSION ANTIBODIES PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review your questions submitted today and publish responses, which is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like

0:31 to hand you over to CEO, Adrian Kincaid. Good morning to you. Thank you, Alex. Good morning, everybody. Thank you for joining us on this IMC. I'm, as as Alex was saying, CEO of FUSION ANTIBODIES. Very pleased to be here. I'm joined today by Steven Smith, our CFO. So without

0:55 any delay, let's let's give you the latest update on fusion antibodies results for the year ended 03/31/2025. So as per usual, we have a disclaimer, which I'm sure all of who's you who have practiced with this will have read that in just a few seconds. So we'll move on, and I will hand over to Steven to take you through. Thanks, Adrian. Again, by way of introduction, I'm Steven Smith. I am the chief financial officer here at FUSION ANTIBODIES. We'll start with our income statement extract for the most recently audited year with full comparatives.

1:41 So revenue increased year over year by 73% from 1,136,000 to 1.965, in the year ended 03/31/2025. The first half of, of fiscal twenty twenty five was strong, at 1,200,000, at which point we were slightly ahead of our, internal forecasts. However, h two was much more challenging, with 765,000 of revenue booked in the final six months of, the year ended 03/31/2025. The the rationale behind the lower than expected h two, was a combination of some projects being pushed out into fiscal twenty six, some being rescoped, downward in size, and in essence, in fee.

2:41 And in one instance, we had a material project, that was canceled. If we can extrapolate between revenue and gross profit, we can say the cost of sales, for fiscal twenty twenty five were 1,535,000, so 78% of revenue, versus 1,181,000, the previous year, which was a 104%, of revenue. So while that's an improvement, the company did undertake some very low margin work, in the previous fiscal year 2025 On the expectation that it would lead to follow-up, higher margin work, this did not materialize.

3:28 So I think, you know, what that tells me is, you know, we have we have headroom to to get better in our in our cost of sales and, you know, pushing that gross gross profit and ultimately margin, higher even based on a similar revenue number, which is obviously not the intention. That resulted in a gross profit, which improved from, you know, 40 actually, a gross loss of 45,000 in the previous fiscal year to a gross profit of 430,000 this year, margin jumping from negative 4% to positive 22%. But as I say, I think, yeah, there's a lot of headroom in that margin to move that margin north.

4:15 Admin expenses for fiscal twenty twenty five were, 2,100,000, versus 2,020,000, the previous year, an increase of, 4%. The overall wage bill and the r and d spend, was reduced year over year. However, an increased business development spend, an increased rent cost for the the company's premises, and a higher provision against debtors caused admin expenses to creep up slightly year over year, resulting in a FY '25 EBITDA of a loss of 1,674,000, an improvement of $394,000 or 19% on the FY 'twenty four EBITDA loss of 2,068,000 We have moved to the, the summary of financial position on the balance sheet.

5:21 Noncurrent assets, there were no additions in the year. So the movement from, a 158,000 to 63,000 is purely a reflection of the depreciation charge in the twelve months on the existing asset base.

5:39 Inventory was reduced from 460,000 to 269,000. I think I've spoken about this in previous presentations, but this was the result of a concerted effort to reduce the level of working capital that we have locked up in in inventory. So I think we've been, we've been somewhat successful, at that. Receivables are slightly higher at 632,000, of which 333,000 are trade debtors. That's net of an 88,000 bad debt provision. We have 53,000 of prepayments, 178,000 of accrued income, and 68,000 of a VAT receivable.

6:28 Cash at year end stood at 359,000, down from 1,200,000 at the same point in time in March 24. This is somewhat skewed by both the the level of fundraising activity in, the prior year fiscal twenty twenty four and the timing of it, right at year end. So that's, we are second fundraise of 2024 right on year end. The second tranche of that fundraise actually fell into, the start of 2025. Current payables also slightly higher at 623,000, of which 372,000 are trade payables, a 158,000 are accruals and other payables.

7:23 We have 38,000 of deferred income. We have 35,000, of Social Security and PAYE payables, and we have 20,000, current portion of our higher purchase payables. Noncurrent payables of 31,000 is the dilapidation provision that we have to restore the, the current premises back to its original, pre fusion state. So, at the year end, total equity stood at 669,000, down from, 1,779,000 at the previous year end. Again, due largely to 2024 having, much higher, fundraise activity on the timing, right at year end.

8:19 Cash flow for the year, cash used in operations, 1,364,000. So that's a reduction of 405,000 or 23% year over year. Minimal amount of investing activity, thousand of interest income last year, 5,000 of interest expense this year. As you can see from the the financing activities line, we had obviously significantly raised a lot more in 2024. And in fact, the 529 that's in this year was the second tranche of of the final fundraise of last year's year end that just fell into 2025.

9:07 So cash movement in the period was a cash burn of 840,000. And then if we do the math, opened the year with $1.1200000, burned $8.40, gives us our cash cash balance at year end of $359,000 Adrian, that concludes the finance slides. Okay. Thank you, Stephen. So what I'd like to do is move our attention looking forward. And to do that, I'd like to if you'll indulge me, just to explain a little bit about the background to antibody discovery. So the front end of what we do, we discover, we engineer, and then we supply antibodies, and the various different engines or discovery platforms that we have for for finding those antibodies.

10:05 For the sake of this, I'm going to talk about human therapeutics, which is still the the largest market for us. It's a global market and very much very much needed. So the the top two platforms here, the mouse hybridoma and the rabbit B cell cloning are pretty much traditional methods of identifying antibodies. In the first instance, it's a mouse antibody or a rabbit antibody that you would be presented with. This then needs humanization, which is part of our engineering process, in order to make it into an antibody that would be accepted by a patient as being a human antibody, one of effectively looking like one of their own, and therefore wouldn't elicit an immune response to the drug.

11:00 Does add a bit of extra time, but a lot of people really want want full length antibodies to be working with. It's very important that you focus on the endpoint in what we're doing, and that is full length antibodies. In this in the top two platform cases, they're just not human. If you do want to start with human sequences, then that's where the bottom three platforms come in. So phage display is, something that's been around for a little while, and it's produced some of the best selling antibodies, but it certainly hasn't taken over the whole, the whole discovery arena.

11:45 So we're still seeing, antibodies at a fairly constant rate in terms of marketed drugs having their roots in full length antibodies from mouse and rabbit. So phage display does have some advantages. It allows you to get straight to human sequences, but it's got a severe restriction in the size of the protein that you can actually interrogate and look for. It's not a full length antibody. It's only a fragment of that. So you then have a a bit of a Lego game to build these fragments together to make a a full length antibody. It does, however, have an advantage in that being a library, you can look at things that would be very similar and conserved between species.

12:35 So, again, in the top two, mouse and rabbit. That's fine if you're looking for, say, infectives, viruses, for example. They're alien to the mouse. They're alien to the rabbit. They're alien to humans, and you can generate antibodies against them directly. If on the other hand you're looking for a therapeutic which is deliberately going to bind and modify, say, an out of control protein but a human protein, then you're looking for something somewhat different. The mouse and rabbit may well generate an antibody to that, but only if the sequences are different between what you're putting into the mouse or the rabbit. In other words, the human sequence is different to those species. If it's the same, it won't rate an antibody to it because it will think it's the the immune system will will be thinking that you're asking it to make something that's autoimmune and going to do detriment.

13:36 So there's this filter that you have with, living species, immune systems that only allow you to get, where there's significant differences. Some of the reasons why people look at more and more exotic platforms than mouse and rabbit is in order to elicit an immune response. So some people are using chicken antibodies and even fish, sharp antibodies in order to find something which is, binds to the human target protein. The further away you go from humans, the more that humanization is. It becomes more and more demanding. So, of course, if you can start with human sequences, that makes it easier. If you can start with a library, you don't have that filter of the immune system. So that that's beneficial.

14:26 However, with phage display, including optiphage, you still need to put the sequences together and build them up. Another way of doing it is in the bottom triangle here, and that would be to build those sequences in silico. And theoretical antibodies can be designed which could bind to a particular target. You have to bring those into the real world and actually test them to see whether the theory was correct. And with most AIML approaches, that means synthesizing each antibody one by one, which limits the number of sequences that can be brought into the the real world. And it could be limited really to tens of antibodies.

15:13 With our AIM lab, we can combine it with the mammalian display that is used in Optimal, and we can do libraries of many thousands of of antibodies. So there's a lot more potential from AIML in our hands using mammalian display in conjunction with the insilico approaches. OPTIMAL, however, is a fully diverse large scale library which can be used for screening pretty much any target and screening against fully full length IgG antibodies, your end target, which are already human, your end target. So if you want to start with the end in mind and who doesn't, then Optimal is is gonna be a way to go.

16:00 It's it can take any target. It's not directed at any particular target class or or useful for particular things. It's universally applicable. So it's an excellent place to start. And, really, it's got an awful lot of advantages not only to our clients, but also to us. Now I've touched on, the antibody market and, why we're doing this, but, essentially, half of the drugs in, development going through through clinical trials, etcetera, are still antibodies. They come in different formats. They can be human or humanized. They could be engineered into bispecifics so that they bind to two particular different targets and bring them together because that antibody then that bispecific antibody then acts as kind of a glue between two targets.

17:02 They can be adapted into what's known as ADCs or antibody drug conjugates, or they can be made radioactive by using radio immunoconjugates or RICs. But, essentially, they're all antibodies. So the the market that we are addressing with this this these discovery platforms is is huge. As I mentioned, the early approach, way we would to develop an antibody would be to immunize different species, humanize them. And if you've got conserved sequences, I'm afraid, between the human and the the species that you use, I'm afraid you're not likely to find so so many hits. There is a risk to the affinity in humanization. You might lose some of the how well that antibody, that initial starting antibody binds. It might need to be compromised in some way.

17:55 And there's also liabilities in terms of manufacturability as you as you move through that process. At the end of the day, you want a human antibody that can be manufactured by expressing it in a mammalian cell, standard methods for manufacture in the industry. So all those different bits sort of add to the timeline.

18:17 Now our approach, a more modern approach, you like, is to discover a human antibody, and there are other ways of doing that. You can make transgenic mice with a human immunome built into them. They become very expensive, and you've still got to immunize in the traditional way. For sure, it's not always ethical to use humans to generate antibodies and use them as discovery platforms. So we can put that certainly to to one side. So human antibody libraries like Optimal are really required to make improvements to the way that therapeutic therapeutic antibody discovery is done.

19:04 On minor caveat, we don't anticipate that actual drugs will come straight out of primary screen. We'll still need to engineer them. They might need affinity maturation, for example, making them bind at even lower concentrations. Another engineering is is possible such as conjugation for ADCs, etcetera. The benefits of Optimal, however, for our our clients is very significant. So we've got that speed, which I mentioned, and OPTIMAL is is really very fast in terms of achieving a fully human IgG. It may take you longer to find some binders, but it is a fully human a full length IgG molecule.

19:52 So it actually works out faster. We're dealing with human antibodies all the way through, so we don't require humanization. We don't have any risks that that process would carry with it. And they are full length antibodies. They're not the phage display fragments. So, again, we eliminate the risk of putting those fragments together and any errors that can come through that. Now in our Optimal platform, our mammalian display platform, it appears that we've developed something which is extremely efficient. So it's enabling the use of much larger libraries, and we're targeting 10 to the nine antibody sequences in the screen, whereas from what we've heard from competitor platforms, mermaidian display platforms, they're orders of magnitude less capable in terms of their total number of sequences that might be used. So they're down at sort of a million target, and that's just not it's just not good enough if you're going in for what we would call a naive screen. So Optimal is enabling us to do much larger screens and go straight in with the Optimal platform against pretty much any target.

21:05 We don't use animals in optimal processes. It's entirely animal free, and that's an important thing. It's important also for our clients. They want to avoid using animals wherever possible. And indeed, there are such things as EU directives saying that it's a legal requirement to use non animal based processes where they're available and can work to the same capability. Developability of an antibody once it's found. Can you manufacture it? An antibody is by means of Optimal discovered by means of Optimal are highly developable. We know that because they've already been selected, being expressed on mammalian cells. So we know that mammalian cells can do it, and that's what's gonna be used in manufacture.

21:58 They're human antibodies as well, so they're much less likely to cause immunogenicity problems, which might otherwise creep through in, say, a humanization process. Sequence liabilities, which we know about, we've got literature examples where people have found liabilities, things that prevent antibodies from working particularly well, being manufactured particularly well. They've already been removed from the optimal library design, and that optimal library design and method is now patented, at least in The US. So we've removed those issues that can be found. So there's distinct advantages for our clients.

22:45 One of the most predominant of which is the timeline and just these are our estimates, so don't hold me to it. But these these are kind of guidelines as it were, which sort of exemplifies OPTIMAL being overall a faster process. So around fifteen weeks is what we're we're seeing for an OPTIMAL screen. Phage display, the third one down, such as optophage is just a little bit longer than that, but the process is somewhat more complex, has different stages in it. And then you can combine phage display with mammalian display, which is probably about the closest competitor that we really have to to Optimal, and it takes that little bit longer.

23:35 Transgenic mice are human antibodies supposedly being found by by using mice still, and that takes longer still. And then the traditional methods of mice rhabdoma and rabbit B cell cloning will take you around six months or more, to get through. So we're looking really at, three Optimal screens being done in a year versus two rabbit or mouse screens being possible in the area if you were to do them end to end. So there's some distinct time savings in the way that we we think that we can get this done. So I've announced previously and updated you previously that OPTIMAL works, and we're now in a very phase of working out how well OPTIMAL works.

24:28 So these are the kind of criterion which I I want to be reporting to you on. As I've said, we're looking to screen around 10 to the nine sequences, fully diverse screenings. So that's a sufficiently large number of sequences that is appropriate for a good hit rate from a screen for pretty much any target. The target classes that people are most interesting are proteins and peptides, so we really wanna make sure that we can deal with those. And then we want reasonably high affinity antibodies. We're not necessarily expecting it to be drugs, but reasonably high affinity antibodies coming out of the the measure there is what's called the KD or dissociation constant.

25:13 And, ideally, we'd be looking for tens of nanomolar, say, 30 nanomolar, 50 nanomolar, something like that coming from the screen and being a good starting point, we might do affinity maturation on those. We wanna be able to tune the process so that we can actually get things that are less capable binders as well. Sometimes that fits the target product profile, and we want our platform to be as widely as possible widely applicable as it possibly can be. So it'd be ideal if we could take that to thousands of nanomolar and to and still be able to extract those antibodies from from the screen if that was what we were looking for. On the other end of the scale, we also might want to make sure that it will pull out antibodies, which are particularly tight binders, but that's in terms of platform development is is less challenging.

26:12 We need selectivity between different targets, so we need to be able within the process to do what's known as negative selection. So we want an antibody to bind to this version of the protein, but not that version of the protein. That would be something that we could potentially build in. If we can do that, then it makes the the platform very much more applicable and saleable. We wanna without with all of this, we we wanna be mindful of time. So getting to the clinic in that four to five month timeline is helpful. So not necessarily getting to clinic unless it's something that drops straight out, but it's the overall timeline to the clinic that's important.

26:59 And the faster we can make the discovery process, we can keep that discovery process down to four to five months, then that's that's really working. Now as you know, we've been working with the NCI doing

27:14 a validation collaboration on using Optimal in their labs, and we wanna be able to make sure that they can do it because that shows that our platform is transferable. We can move to other other clients. So we're looking to derive antibodies through all for NCI to discover antibodies against three particular cancer targets.

27:42 The benefits of Oxmelt to the company and therefore to our shareholders is also very significant. So, obviously, revenue. Optimal is designed as the premium platform for antibody discovery, and they're and applicable to a very wide part of the endotherapeutic antibody discovery market. So we wanna be able to generate significant revenues from this, at, good margin prices. It's proprietary. It's therefore going therefore going to be only us that's able to enable clients to to use this approach. Obviously, we can't overprice it and price ourselves out of the market. That would be foolish, but it is a premium system with, advantages for our clients.

28:30 It would be good if we can reach through and being proprietary and a premium pros process with those advantages, we're in a better place to negotiate milestones and royalties as well as, of course, follow on work. Milestones and royalties are very difficult to come by. People who our clients are very resistant to agreeing to them, and you really need a proprietary position to spend much of a chance of being able to get those. And, of course, Optimel gives us that. It's a very wide appeal, as I was saying, in terms of the target classes that it can do, and it's therefore a very wide appeal to client types. So because it's unique and widely applicable, we believe that it's gonna get attention from big pharma and major biotech, which could have been rather difficult for FUSION to engage with at a meaningful scale. We've engaged with a lot of them.

29:28 They know that we do quality work, but we we're looking forward to having a USP that will get our levels of engagement with them an awful lot more. And, of course, smaller biotech, it's very applicable to to their needs as well. Transferring Optimal to other laboratories enables us to change the the business model so we can license it to those clients. We then cease to be a rate limiting step in terms of the number of optimal screens that can possibly be done in a period of time. We're an agent enabling our clients to do that in in return for a license fee. And a license fee in crude terms is the best margin that you can get.

30:17 Scalable has our own capacity ceases to be a limiting factor. We can run many more screen screens than it would otherwise be possible. The library itself is enormous, 10 to the 45 in theoretical terms. We can't make all of those antibodies. It's highly diverse. It means we can sample for different clients. So if we're making 10 to the nine for a screen for company a, then when company b asks for the us to make a library for them, we're sampling from a much bigger pot, and there's no overlap, which means that we're not having to remove hit sequences to enable to maintain the the value for the first client, so depleting the value of what's on offer to the second client. That does not happen.

31:09 So in fact, Diamond's expecting the with the platform being used more and more, it will actually increase in value because people know about it a lot more. There's a lot less risk that's involved with it. So the library size is a very significant factor in the value of what it presents. It's compatible and synergistic with our other offerings. I've mentioned things like affinity maturation. Of course, we can do that. We can take the those sequences once they're matured. We can put them into our stable cell line generation platform so we can enable people to go all the way through the offerings that we've got. It's also synergistic in the sense that if we engage with people to talk about Optimal, we also might well or are likely to pick up other projects even if it's not Optimal work from from that client base.

32:08 There's further library potential within the scope of Optimal in its entirety, its entire sort of theoretical size. We could focus in on certain features. So it's possible for us to generate many optimal libraries, some of them focused, some of them diverse as in the original formatting, or indeed generating AIML designs in an optimal way so that we're generating focused AI ML libraries. The platform, as I said, is proprietary. It's covered by The US patent, which we recently had granted to us. So it can only be used through FUSION or under license in other laboratories.

32:59 It's unique. So and optimal antibodies cannot be generated using other technologies. So in summary, considering things that Steven mentioned, including that 73% revenue growth, FY 2025 was a really good year for FUSION. We had significant growth. We did very well also in the diagnostic center. I haven't talked about that really today. We also had a key account win for a a cell line development project towards the end of the process that we offer processes that we offer, but of pretty high value for those those sorts of projects.

33:47 In particular, we made really significant progress with platform development. I've spoken a lot today about the Optimal platform and the work that we've done with the NCI, which has provided us with an awful lot of insight and learning points without having to spend more on r and d. And as Steven said, we actually cut down on the r and d spend overall. In addition to that, though, we have also moved forward in developing more novel technology or more up to date technology in terms of how we can do, cell line development. Some of that is coming through the, FMI grant, the Future Medicines Institute grant that we had announced.

34:33 And indeed, phage display and actually running the phage panning is also progressing through collaboration with the FMI and what that enables without us incurring building costs to do it in house. So we reported on a significant increase in pipeline opportunities, particularly in the second half of f y twenty twenty five. We're very mindful that it remains a very tricky market. Certain certain things are moving through quite slowly, but we know that we're doing the right sort of things in order to identify those leads business leads in the first instance. So we're continuing to progress our AIML design of antibody proteins, in particular with a project with Oxford University under the auspices of professor Charlotte Dean, who is a global leading authority on the subject.

35:35 And we've seen some really interesting results coming from that that PhD studentship project that we're running with them. I hope to have more come through from that as well. It's worth pointing out that post Enger, we've now got the FMI grant funding coming into our account. Initially, we were hoping that it would come on on tap quite quickly. It didn't. There were a few administrative teething problems with the process, but that now is is incoming. We also started a further grant for the wonderfully named death receptor five or d r five target, which enables us to do possible asset generation.

36:21 And, again, that d r five grant was made possible really or the we won that large part because we are collaborating with Queen's University through the collaborations within the Future Medicines Institute. Grant of The US patent for Optimal library design and method is brilliant, and we are seeking patent protection in other authorities as well. But it's great to have that that US patent approved. And I think going for that accelerated fast track approach, I guess, in that patent was a really sensible thing for us to have done and very pleased that it's paid off. We also recently announced significant follow on projects from the cell line development. That Kia camp win that I mentioned in the top of this slide has already paid off with significant follow on projects, cell line development in this year and indeed possibly even into into next financial year.

37:30 So overall, FY 2025 was it's a very good year for FUSION. And at that point, I'd like to close, and we can maybe move on to the questions. Fantastic. Adrian, Steven, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right corner of your screen. While the company take a few moments to read those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard. Adrian, Stephen, as you can see, we have received a number of questions throughout today's presentation. And Adrian, if I may now hand back to you to chair the Q and A and read out the questions where appropriate to do so, and I'll pick up from you both at the end. Thank you.

38:20 Thank you very much. And could I say thank you to those people who presubmitted their questions? It gives us a chance to to be appear slightly more organized and and hopefully give better answers than when they pop up. But, also, thank you to those people who've provided answers straight away. So I think most of these, Steven, are for me to answer. I think you've covered your your bit very well, so it's mainly for me. Question one is what's your forecast for the share price over the next twelve months on the back of the financial situation? So we don't make forecasts for the share price.

39:08 I think if if I could do that and do that very accurately, I probably would be on a beach somewhere. But we are making very significant progress, particularly with the Optimal platform, which is due to come online within the next twelve months with as the question is asking. So I would hope to see further improvements in in the share price. Optimal should be very significant. It's a very significant platform. It should therefore be very significant for the business. And I think we are heading in the right direction and doing all the right things. Next question was what is the earliest that we can get an update on the collaboration with the NCI? I do appreciate our shareholders, your, patience with this, and, we will provide an update just as soon as we're in a position, to do so. But more than that, I can't say at this stage.

40:10 Question four, was you said you saw a significant increase in sales opportunity pipeline in h two. Has that trend continued into this year? So I mentioned this in the presentation. That uptick was very encouraging, and it showed that we the demand for our services is there. The market is is definitely there. People may be being a little bit more cautious about how they move it forward. But that uptick was also attributed or can be attributed to our commercial activities, and it confirms that we are doing the right thing. We have the right approach. It generates leads. So that's that's really good. But as I said in the presentation, we are mindful of the economic conditions that our clients are facing. Indeed, the geopolitical conditions have been more turbulent than we and our clients would like.

41:09 So we're certainly not taking anything for granted, especially with regards to the speed of progression or indeed the ultimate outcome of each of those potential sales opportunities. Next question was, can you outline the business models you are considering for Optimum, the scale of the contract value versus the current model, and what sort of margins you are targeting for this service? What is your sense of the overall commercial value for this platform and what it should do to the company's market cap? That's a lot of questions in one go. So in terms of the business models, as I said at the start, we can't out overprice Optimal and price ourselves out of the marketplace.

42:00 We also are selling into a very conservative audience. They're scientists. They like changing one thing at a time. It's usually the parameter that they're they're focused on. So we're gonna have to work to get people to to switch to Optimal. We shouldn't have to work massively hard because there's so many obvious advantages to it, but we have to work to make sure that those are noticed. Initially, I'd expect Optimal revenues to come from custom service contracts very much in line with the kind of work that we're doing at the moment and those screens being run-in our own labs. We have a lot of confidence in OPTIMAL and therefore anticipate successful outcomes for quite a high proportion of those early screens.

42:52 We may include incentives to encourage early adoption amongst our our client base, and that might mean that we see an initial a lower initial fee than we might otherwise charge just to get them on board balanced by success milestones. So if we agree a target product profile and we meet that target product profile, then we might get a success payment in that for that rather than charging them more upfront. Early success would encourage those more active partners or parties such as big pharma and the bigger biotechs, people who run many antibody discovery programs in a year to place orders for multiple screens. So they might want in year two of a collaboration possibly three screens being run rather than one.

43:45 So that obviously gives us a lot of potential for growth, and I would anticipate that that would be done on a custom service basis also. But the next phase is the really interesting one where if they want more control over that or wanna run more screens than the budget would necessarily allow and they want to take that in house, then we can enable that. And that's a a real differentiator really for Optimal. They can bring it in house, run it the way that they want to, and pay us a license fee for the privilege of doing so. Margins wise, a license fee is effectively as close to 100 percent margin as you can get. It's just some administrative charges.

44:31 It also means that FUSION's capacity to run screens would cease to be a rate limiting step or rate limiting factor. We would continue to run them, but we'd be focusing on the next tranche of clients who in the fullness of time, some of those may want want to license the the platform itself. So I can see some very busy times, building through for for FUSION. And, it's a proprietary technology with distinct advantages, so it does fit well with the client offering that timeline and risk reduction and so being worthy of the premium positioning.

45:21 Next question was, what feedback have you had from your client on Optiphage, and when do you plan to formally launch the Optiphage service? I haven't mentioned the project that we ran with which was done really quite ahead of time. So that existing library design project, which we we'd run, it's still with the client for review, which is within the scope of the agreement, how much time we anticipated they would want it for review. And they still have an option for an exclusive license on that particular library. That project was a little unusual in what we anticipated for for Optiphage in that it was just a library design project with the client running the actual screen themselves.

46:14 They were running the actual lab work. So the formal launch of Optiphage is really linked to us being able to offer phage panning as part of the process. And as I mentioned earlier, that's being enabled by doing it through the Future Medicines Institute. So as that comes on onboard, they're not the only people that we could send it to, but it'd be our preferred way of running it just down the road. We've got the collaboration there, but it would be a great way to to run the process. Once that's onboard, then we can look to a launch process for Optiphage to complement Optimal, etcetera. Next question was, FUSION has referred in the past to agreements that could generate milestones or royalties and OPTIMAL should increase this.

47:09 Can you give us a sense of what the portfolio future potential and Titan looks like today, recognizing that it's uncertain if they will come off? So we attempt to add to the portfolio project with potential milestones and or royalty elements. They're a long way downstream. There's an awful lot of work that needs to be done, and our clients are really undertaking some of the most difficult things that I'm in my view, that mankind's ever undertaken, fighting disease by harnessing biology. So it's very difficult also to achieve an agreement on a milestone and a royalty because they are by nature fairly lumpy things.

47:58 And it's particularly difficult if you don't have a proprietary position backed by a patent that shows that it's they they can only come to you for it. Now Optimal does change that. It and it is as it is patented in The US, and we're hoping that it will be patented that the patent will be granted in other jurisdictions as well. So that's where OPTIMAL will improve the situation. It gives us a better chance of doing that really difficult thing of securing agreements with milestone and royalty elements. Those that we've already got in the portfolio that we have some agreement on already, we'll continue to monitor those projects, which may well lead to milestones and or royalty payments, bearing in mind the length of time and the difficulty that is required to make that happen.

48:55 We anticipate that some of these projects will terminate, sadly, before reaching those milestones, but we hope that some will make it through. Indeed, we have seen and reported on milestone payments in the past in the last few years, and I would hope to do so again in the future. Next question was in an answer to a question on the investor hub, you said several partners have expressed an interest in Optimal in your progressing discussions. Do you expect to have any partners on board when it comes to Optimal to launch Optimal as a service? So I don't actually expect to have customers for a service before it has been launched.

49:44 That said, we did see an opportunity to achieve exactly that with Optiphage, which I mentioned a few minutes ago. Nevertheless, Optimal is very newsworthy and potentially impactful platform. So we find that people are very willing to engage with us to discuss things around that, and that's that's very helpful, encouraging, and positions us well, to have traction when it when it is launched. And that includes the associated technologies. So as well as using Optimal with its diverse naive library as we call it, that 10 to the nine library selected from 10 to the 45. What we also find is traction or or interest in just a mammalian display. Some clients may have a library or a library designer or a library project themselves where they really need the mammalian display, and we will engage with those people as well.

50:46 It positions the company to gain traction with Optimal with Mammalian Display, but also increase awareness and traction of our other services too. So we're exploiting that in every way we can going forward. Next question is when do you expect to hear from the n NCI on progress of their validation work? We're in regular contact with the NCI, and we collaborate with them to best progress the optimal antibodies as well as the platform. They will want to ensure that they that any viable HIT antibodies that have been discovered are screened for what we call functional effects and not just they bind to the target, which is kind of our responsibility, but that binding causes, in their case, anticancer effect.

51:41 Now, potentially, that could lead to patents, and, therefore, before they publish any information specifically about those antibodies, They will wanna make sure that they've got their patent applications tied up as well if indeed it goes that route. And we very much respect that and consider it the right approach, so it will take time. It is difficult to predict how long it will take, but to some extent, the higher the value of the antibody, the longer the time it will take before we hear about it. The next question was, can you tell us some more about the specific fusion projects that you're working on as part of the FMI, the Future Medicines Institute?

52:33 Do you anticipate deriving new business directly from membership of that group, or is it a benefit purely r and d at reduced direct costs? Well, I've mentioned several times now the Optiphage platform, and I've spoken about the grant funded d r five project, which is being run-in collaboration with QUB. Both of those Optiphage and the d r five were only really possible in the way that we're we're wanting to do them because of the collaboration with the FMI. We also have two PhD studentships on the r and d side of things, so they're due to start soon. I'm very hopeful that they will develop some very skilled and talented scientists as well as getting some research work done, which will benefit FUSION.

53:33 And they are fully funded by the FMI, so effectively that couldn't come at a lower price point, I suppose. Some of our existing or preexisting clients are also within the FMI partnership group as well, so we anticipate further commercial traction from those. The FMI is also looking to attract additional partners and new people to join the consortium, and they could well be clients. So I can see benefits from the FMI, just definitely not just r and d, but commercial traction as well, be that internal projects such as d r five or revenue generating projects.

54:24 It's all it's very good whichever way you look at it. Next question is, in your annual report, you said the cash raise in March and the FMI grant positions the company well for the final financial year. Do you still think that you don't need to raise funds before breakeven? So we are working to a plan which would enable us to reach cash flow breakeven. We're still on course with that plan, and the auditors have, in the annual report, confirmed their view that this plan is viable, albeit dependent, of course, on revenues being in line with our expectations. And as I've said, the market remains challenging as everybody knows.

55:13 The FMI grant does act as something of a buffer in this regard as staff not deployed on revenue generating projects can be deployed on internal platform and process development work and the associated costs claimed through the grant. So, effectively, we have a very flexible system, extremely well devised for partners such as such as FUSION. Last question of the presubmitted ones is can you explain the decision to no longer remunerate board partially in equity? So the board have been extremely supportive, very supportive of the company.

56:01 This included all of us making some compromises to reduce the cash burn of the business during what was a very difficult period. We're through that period, and we have growth again. So those special circumstances no longer apply. I might also point out that some of the executive remuneration, specifically bonuses, is being made in shares. I am very happy to accept them instead of cash even at the higher share price, and so I'm getting fewer shares than would have been the case when the criteria for the bonuses were met. And I am hopeful that the share price will continue to improve and reward us and all of our shareholders for that faith in the business.

56:58 So I hope that answers that question too. Steven, have you had an opportunity to look at some of the freshly submitted I I have, Adrian, there's I think they can probably mostly for you. I don't know if we want to take them in order. I know we're on the tight on time. There is one on the cash, which which I'm happy to deal with. Was the cash figure at the end of twenty twenty five slightly low due to the second part of the placing and and any FMI grant monies? It's it's really a it's as I said, it's really a timing issue.

57:44 If we look at what happened and when it happened at the end of last year, we right on year end, we had a we had a raise which substantially closed before March 31. So we had a cash raise right at the end of the year to push the year end cash balance. The second tranche of that, raise came in in April 2025. So it's effectively been eleven and a half months since we've had a a cash raise in 2025 versus right on year end at 2024. And then as Adrian alluded to on the FMI grant, while we would have liked to have the first payment in before year end and reflected in the year end cash balance, I think it was actually the second of May of fiscal twenty twenty six that we received the first first payment on the on the FMI grant. So, again, those two things are the are the reasons why the the large delta in cash year over year.

58:53 I've had a chance to scan through some of these questions. One of them that leaps out to me because I I can speak to it with some of my past experience was please explain the comparison between antibodies and aptamers and the pros and cons of each. So it's a bit of a scientific one. Antibodies are what we do. Aptamers are short strands of DNA, which can, in certain circumstances, be used in a similar way to antibodies. The question says, are they competitor processes, and are Aptamas lower cost to create? So I think the first thing in terms of are they competitors?

59:43 Well, to my knowledge, there has been one Aptima drug approved and on the market. I think there may be a second one on the way. Compare that to the number of antibody drugs that are out there in their various forms, and no. There's there's just no comparison. They are interesting molecules. They a lot of the advantages that they have are for the people discovering, engineering them. You can amplify up strands of DNA, whereas you can't amplify up an antibody. So they're easier to work with in some regards.

1:00:30 But once the sequence is known and they're extremely easy to sequence, How do you protect them? You can apply for patents. Yes. But, really, they are extremely easy to to copy. So I'm less enthusiastic about them for those reasons. I think they they have a place. They're interesting binders. They have interesting properties. You can make them bad binders quite easily, which means that they could release the target, and that's that's quite interesting. It can be applicable in certain circumstances.

1:01:16 But, really, if you compare them to antibodies to well, it's difficult to compare them. Antibodies are the benchmark, the gold standards. The vast majority of the marketplace, the better applications, the more solidly founded. So I'm gonna remain focused on antibodies if you don't mind. Just one more, I think, that we can squeeze in. I know we're already a little over time. So one cuts right to the point at the end here. Are you now generating sufficient cash to be cash positive?

1:02:04 Not yet, but it's a question of time, and we're doing all the right things to get us to that position. And we have some great assists in doing that, particularly with the FMI grant. I think that's that's one of the the key things. But as it stands, as we've reported, we're not yet cash positive. It's just a question of time. So I think we best draw a halt to the q and a there, Alex, if that's okay. Yes. That's great, Adrian, Steven. You have covered a lot there today. And of course, the company can review all those questions submitted. I will publish those responses on the Investor Meet company platform. But Adrian, before I redirect investors to provide you with their feedback, which I know is particularly important to the company, could I just please ask you for a few closing comments?

1:02:57 Yeah. So as I said, FY 2025 has been a remarkably good year for the company. We want it to be better still. We are working towards being to cash flow breakeven. Not quite there yet, but as I say, it's a question of time when we have all of the components required to, I believe, to to get us there. Most notably, of course, is the Optimal platform. But at the same time, I really shouldn't allow that to overshadow the other things that we do, which are highly relevant to the client base. And indeed, some of those, one of our clients recently described us as being best in the world at doing.

1:03:45 So it's definitely not a sideshow with the other stuff that we that we do. But quite rightly, Optimal is new and gathering us an awful lot of attention, which we intend to exploit for the benefit of our shareholders. Thank you very much, everyone, for your attention. That's great. Adrian and Stephen, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of FUSION ANTIBODIES PLC, we would like to thank you for attending today's presentation, and good afternoon to you all.