Fusion Antibodies plc (FAB.L) Earnings Call Transcript & Summary

Good morning, and welcome to the Fusion Antibodies plc Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Adrian Kinkaid. Good morning.

Thank you very much. Thank you, everyone, for joining us today. For those people who don't know me, my name is Adrian Kinkaid. I am the CEO of Fusion Antibodies. I'm joined today by Stephen Smyth, who is our Interim CFO. You'll be hearing more from Stephen in a short while. So let me kick off and tell you the latest about Fusion. We have, of course, the usual disclaimer. So I will assume that you've all speed read that. Thank you very much. So Fusion Antibodies acts as a contract research organization or CRO within the field of antibodies. Now by far, the largest market for antibodies is therapeutics, but we mustn't forget there's also diagnostic applications and indeed research antibody markets as well. We focus on the main market, antibody therapeutics. And you can see from these various market studies and highlights on this slide that the market is absolutely vast. So it's been building from $253 billion in 2024 to projected value of very nearly $0.5 trillion by 2029, if everything goes to plan, of course. Between 2020 and 2024, there have been 63 antibody therapeutics granted approval either in the U.S.A., which is the largest market or the EU and about half of those have been for cancer, which is interesting. And sorry about the wording on this one, but it was lifted from the report in -- from 2023. But at that time, there were 9 antibodies with sales, each of those antibodies having sales of more than $5 billion per year in 2023. The graphic on the right-hand side shows how the number of approvals, so that's as therapeutics has been growing. These are from the FDA. And you can see that 2025 has a significant number, although that's under review. So the marketplace is growing extremely well, and that means that it needs to be serviced. It's becoming very -- or it always has been, but is increasingly competitive. And clients of ours are looking for the best advantages they can have to get the best antibodies into the market as rapidly as possible, into the clinic as rapidly as possible. I sometimes say that in this industry, it's not good enough to be best in the world. Your antibody has to be the best that it possibly can be. And that's one of the things that Fusion tries to provide for our clients in getting the absolute best sequence, the best possible antibody and getting that into the clinic as rapidly as possible. The way we do that, we provide an integrated service, highlighting here therapeutics, but of course, we can do the same for diagnostics. And that goes through 3 sort of phases: discovery, finding an antibody in the first instance, engineering it to make it the best that it possibly can be. and then supply so that we can provide quality samples of antibodies for testing, evaluating. It should be said that none of the antibody that we produce should go into people, although what we can make and do make is stable cell lines, which can then be used in manufacturing to generate that antibody, which then goes into clinical studies and even on to the market. So we can make the cell line, but we don't actually make the antibody to go into people that it's made by a manufacturing organization. So the people that we work with come in all sorts of shapes and sizes. The drug discovers from 1-man, 2-man bands emerging out of academia right the way through large and small biotechs through to large pharmaceutical companies. virtual companies, some that exist without any labs. We also do have clients who are working with veterinary medicine and finding cures and diagnostics for our pets and research institutions and academic centers really pushing the boundaries of novel research. So the whole scope in that area is vast. It's a very important one for mankind, and it's a very important industry overall, hence, the revenues that we were just describing earlier. Now over the last, I would say, 3 years, basically since I've been CEO of Fusion Antibodies, we've been evolving the offering that Fusion Antibodies has. So initially, we were really well known for humanization in particular, but engineering and development sort of aspects. We have been described as the best in the world at humanization. We believe that is very much still true. But what I wanted to do with the strategy was start to really transition us to offer groundbreaking class-leading discovery engines that would drive clients to us so that we can do the discovery part of those antibodies. And the obvious advantage of that represented by the arrow on the left-hand side of this slide is that if we can engage our clients at the earliest stage when they're first nominating a target and help them through antigen design, platform selection and screening for those antibodies, in the discovery mode, then we can hold on to them through the development process, finishing with that cell line development so they can go off to manufacture for putting that antibody into people. So we want to go from start to finish, hold those clients more all the way through. We can do a better job for them because we know more about the target product profile, what they're trying to achieve. There's more continuity. There's better relationships built up, better collaboration comes out of it. It's a much better way of leading the business. And key to that has been us developing novel discovery engines that can engage people that our clients want to sign up for with us. So the key engines for that are OptiMAL, and I'll be describing that a lot more. And that OptiMAL can be split into 2 parts. There's mammalian display part, which is particularly useful, I believe, for engaging in combination with artificial intelligence, machine learning, design of antibodies as well. In other words, AI/ML-Ab, as we call it. But the other part of OptiMAL in terms of the Opti library can also be packaged in a more sort of current industry standard phage display format, and we can offer that as OptiPhage. And those 3 combined platforms really stemming from the OptiMAL research program that we've been running. We can make very significant inroads into gathering more clients at the discovery stage, holding on to them throughout that process. And some of them will sign up for the journey from start to finish as integrated therapeutic antibody services. So that's a strategy that we've been working on for the last 3 years. And we're getting to the point now, it's a really exciting point now, where we can really start engaging and delivering on this. And the key part for that is the delivery of OptiMAL itself. So that launch is due to happen at Antibody Engineering and Therapeutics Conference, a key scientific conference for the field, and that's happening on the 15th of December. OptiPhage, we've actually had contract for that already, but that was really about the design of an Opti-based library, and it actually wasn't for human antibody fragments, but we obviously want to be doing that for OptiPhage as well. So whilst we say it's available, there's actually more that we want to bring to market in terms of planning and actually doing screening processes as well as that design of libraries. Nevertheless, it is available. AI/ML-Ab likewise has been available. This is the AI, artificial intelligence or machine learning development or design of antibody sequences that exist in silico on the computer. They need to be brought into the real world. And we've been doing that relatively low key with small numbers of antibodies in the tens to hundreds. What we can now do with the mammalian display, which is part of OptiMAL is actually do that on a much grander scale, covering much more data for those AI/ML algorithms, which can get fed back and improve those algorithms to generate antibody libraries and so have a lot more data and a lot more available for that. So again, AI/ML-Ab is available, but we're looking with mammalian display to bring that from small numbers of sequences to a library-based approach, a much more significant engagement as well. So in terms of the highlights, we had revenues of GBP 0.84 million. That was somewhat down on H1 of last year, but really, it's more appropriate, I believe, to compare to H2 of last year. In other words, immediately preceding 6 months, which was GBP 755,000, showing about an 11% increase in revenues. We did increase our expenditure on R&D, which stood at GBP 350,000. That's largely because we have the backing of a couple of grants, which we can offset that spend. So it's natural to increase that spend on R&D and really be delivering improved offerings to the client base. There was a reduced loss overall of just over GBP 0.5 million, which is significantly down on H1 of '25. And the cash position of the bank at the end of the period, 30th of September was GBP 252,000, which was somewhat down on where it had been on 31st of March. But I'm very pleased to say that it's pretty stabilized at the moment and indeed was a few days ago when we put the figures into the public domain, it was slightly higher than it had been at the close of the period. Post half year, we've had some highlights. We particularly had a contract win with a specialty division of a European-based global pharma company. They engaged us for humanization of a number of antibodies that they had, again, feeling or providing evidence of the fact that I'm not the only one that believes we are the best in the world at humanization. As I mentioned, the FMI grant and the DR5 grant are the 2 grants that we've been doing R&D on. Those projects are progressing well and the corresponding financial support is flowing the way that it should. There was a little bit of a teething problem with the FMI grant, which is in part due to the FMI grant being paid in advance of the work being done. So each quarter, we call down on that and get the cash in as the work is actually proceeding rather than claiming it back at the end of the quarter and then it follows some weeks later. That standard mechanism is used for DR5, but FMI pays in advance. The biggest news that we've had though during the period has been and indeed after the 30th of September has really been our collaboration with the National Cancer Institute. For me, this is probably the best deal that the company has ever had because of the impact that OptiMAL can have. And it's been very successful. The acid test for that is that the NCI are seeking to continue to use OptiMAL for frontline antibody screening. In other words, using it widely against a number of targets over a number of more years and continue to use OptiMAL in the way that it was designed. They will need a license to do that. Unfortunately, the shutdown, the government shutdown in the U.S. has impacted on NCI. So that progress has obviously been somewhat stymied by that. But we are both working towards getting that agreement in place. Very importantly, from that with the results, the actual scientific results for the scientific validation. And in the cases of both peptides and proteins, which are 2 really significant target types that clients wish to raise antibodies to. In both cases, we were finding single-digit nanomolar hits. So that's really tight binders or as one of the CSOs I spoke to recently from a client organization or prospective client organization said, wow, that's good. Coming straight out of the screen is really what we want to deliver. Those hits may well need further engineering if the target product profile -- provides or requires, sorry, tighter binding, and we have technologies that are able to do that. But coming straight out of the screen, single-digit nanomolar is really an extremely good result, and we are getting that for both proteins and the much smaller peptides. Prelaunch, so we haven't launched OptiMAL yet. It's happening on the 15th of December, but prelaunch feedback regarding OptiMAL from prospective clients has been positive. The OptiMAL platform has best-in-class and indeed first-in-class status, and we've had multiple expressions of interest. I'll tell you a little bit more about that shortly. And the final bullet point on this slide was to do with the cash position as of 20th of November, which, as I said, is slightly improved. And that's due to revenues obviously coming in, grant income coming from those -- both of those 2 grants, but most importantly probably is a very careful management. Stephen, would you like to take us through the rest?

Thank you, Adrian. And again, by way of introduction, my name is Stephen Smyth. I'm the Interim CFO at Fusion, and I'm going to take you through in some detail the H1 performance. So we'll start with the income statement extract. As Adrian mentioned, revenue for the 6 months to September 30 was GBP 838,000. As we can see sort of comparing to the same 6 months last year, that was down GBP 369,000 or 30.6%. We can back into H2 of last year by doing the math. So we're actually 80,000 ahead of the second half of fiscal 2025, so 10.6% ahead this year. Gross profit, GBP 247,000 with a margin of 30% compares favorably against 27% for the same period last year and 22% overall for fiscal 2025. Again, if we back into H2 2025, the margin was 13.9% for the final 6 months of last year. So a marked improvement in margin over the previous 6 months performance. EBITDA loss of GBP 494,000 is 32.7% better than the same period last year. And again, the EBITDA loss for the H2 fiscal 2025 was actually GBP 940,000. So we're 47.4% better off there than the previous 6 months. We move to the summary financial position on balance sheet. Large increase in noncurrent assets jumping up to GBP 420,000. That's driven by a change in lease accounting policy. So we are now following IFRS 16, which mandates that we need to move to on-balance sheet accounting for our leases. So we have a right-of-use asset, and that's our office lease to premises in Belfast. So we have a right-of-use asset valued at GBP 329,000 now recorded on the balance sheet. So that's largely the difference in the noncurrent assets. Inventories at the end of H2 -- H1, sorry, sat at GBP 272,000, so very, very similar to the position at the previous year-end. Receivables have risen to GBP 868,000. These are comprised of trade AR of GBP 542,000, prepaids of GBP 121,000, accrued income of GBP 145,000. That GBP 145,000 is split GBP 97,000 project related and GBP 48,000 grant related. We have a VAT receivable of GBP 23,000 and an R&D tax credit calculation at this stage in the year of GBP 36,000 receivable. Adrian mentioned the cash is sitting at GBP 252,000, pretty consistent since we released these numbers. It's GBP 107,000 lower than the previous year-end. Current payables up GBP 149,000 since year-end to GBP 772,000 comprised of payables of GBP 401,000, accruals of GBP 31,000, deferred income of GBP 100,000, PAYE and pension payables of GBP 45,000, deferred grant income of GBP 85,000, the current portion of our HP agreement, which is GBP 24,000. And now we start to see the other side of the IFRS 16 lease accounting come in. We have current lease liabilities, so that's lease liabilities over the next 12 months of GBP 81,000 and other payables of GBP 4,000. More striking in the noncurrent payables, we obviously see a large increase here against the portion of the lease that's greater than 12 months. So it's comprised of office lease greater than 1 year, GBP 254,000. Our HP agreement greater than 1 year, GBP 28,000. Those 2 things combined are the increase from GBP 31,000 at year-end, which is our ongoing obligation provision accrual to return the premises to the we find it in at the end of the lease. We'll jump to the cash flow. Cash flow for the 6 months to September 30, cash used in operations of GBP 567,000, that's down from GBP 752,000 for the prior year H1 and GBP 612,000 for the prior year H2. Investing activities of GBP 58,000 was the purchase of a new piece of equipment for the lab. Financing activities was the second portion of the raise that was conducted over the previous year-end, the GBP 518,000 closed and was received in April 2025. So cash movement in the period, negative GBP 107,000, closing out at GBP 252,000. I think the cash flow itself gives a pretty good visual. If we compare the current 6 months with the full year of 2025, we can see that the financing activities are fairly similar over those 2 periods. Yet in 2025, we burned GBP 840,000 of cash with a similar raise level, it wouldn't be ridiculous to expect sort of 50% burn in the first 6 months, but it's significantly down at GBP 107,000. And I think that's a really positive thing to take out of the 6 months under review. Adrian, that concludes my presentation. I'm happy to hand it back to you.

Thank you very much, Stephen. I really appreciate that. So just returning then to OptiMAL and looking forward as to why I'm so excited, and I hope many of you as shareholders will be excited about this as well. OptiMAL is first-in-class in terms of human antibody discovery. It's suitable for primary screening. So we can come at this with a target that we don't have much other information about. And that means that it can be used very, very widely. It's a cell-based library screen, which we interrogate whole human antibodies we produce and they sit on the external surface of different cells, each expressing a good number of the same antibodies. And then the next cell along has different antibodies on it. So we selected the cells that encode for the antibodies that we're interested in. Despite us being the best in the world at humanization, no humanization is required because it is human library. It is -- they are human sequences, they are human antibodies already. That also means that we don't need to use any animals, which, of course, our client base is very sensitive about the use of animals. Sometimes they're forced to do so and really want to avoid it as much as possible where there is an alternative such as OptiMAL. Interestingly and very importantly, OptiMAL, because it doesn't use an animal system, it means that the platform works for conserved and highly conserved targets. You'll only get an immune response from an animal when it recognizes a sequence as being foreign. So with the most important, most significant biology is conserved sequences between species, then the animal will not recognize the human target necessarily as being foreign and won't raise you any antibodies anyway. We don't get that problem with OptiMAL. We can use it for highly conserved target sequences. There's no need to reconstruct from protein fragments because we're screening for whole antibodies. We're actually screening and testing against the final result, the full-size antibody. We're getting much better data from doing that because it is the end product that we're actually testing against. Overall, that also means that it's much faster to get to those already human full-length antibodies straight out of the screen, which means that the clients are much faster getting into the next phase, which could be efficacy testing, possibly in the clinic, other models, whatever, however they're doing it, they're faster to get to that next stage. In the meantime, we've also reduced the risk of immunogenicity because these are human sequences and immunogenicity is one of the issues that really dogs therapeutics going through the program. And also best still, they've been prefiltered for developability. These antibodies are actually made by those mammalian cells, which express them on the cell surface. So issues of developability are already tackled right up front of the part of the screen. So there is this prefiled for developability. Those are just some of the highlights that you get with OptiMAL, and it can be summarized really in terms of being faster discovery, particularly getting the antibody, the human antibody to the clinic, reduced risk overall, lower costs overall, and I would claim very much smarter science overall as well. So with those sort of factors, it's not surprising that a lot of our clients really ought to be interested. And what I can update you with now is the initial prelaunch feedback from some of those clients. So we have had multiple conversations about OptiMAL with a good number of leads from a range of organizations. Some of those are existing clients who have come to us saying, "this is our next target, how would you do it?" and we said, well, we'll have OptiMAL available then, and it brings all of these advantages. Other ones are clients who we've not -- or potential clients that we've not spoken to before. And we've met them at different conferences. We've been attending a good number of conferences recently, some high-quality conferences with the right kind of people who will make those decisions. So we can rely on the data that we've got. The potential value, if we take some of those leads that we've spoken about, is already in excess of GBP 1 million. That's if all of those projects, those selected projects came through. These are early soundings. I must emphasize that is not GBP 1 million about to appear in the bank account tomorrow. There's a long way to go. These are early soundings. Those clients need to decide whether this is the right platform for them. I thoroughly believe that it is, but they need to see it that way. The timings, the other factors that they need to assess need to fit in as well. But for the stage that we're at, prelaunch of this new platform, it is getting remarkably good reception. I've been involved in some of the conversations myself, and I'm really impressed with that we've basically hit the nail on the head for a large proportion of the marketplace. So the prospects at this stage, prelaunch, early days in terms of that pipeline is that it's looking extremely good. So what do we do plan to do next is basically more of the tried and tested approach to exploit this first-in-class optimal platform. We want to get engagement with key scientists, the decision-making scientists in the process and the best way we find of doing that most efficient and effective way is to engage them at scientific conferences that are focused on antibody discovery. We want to also include and do more with the AI/ML sectors, the artificial intelligence, machine learning sectors which is becoming a very hot topic within antibody discovery to exploit that interest and using the libraries that are generated by AI/ML with our mammalian display part of OptiMAL. So that's not necessarily the Opti library, but using the same technology, the same processes to exploit other library designs, which really shows the utility and the future proofing of this platform that we can take forward. And that's really now possible because of that validation of the OptiMAL platform, which exemplifies the use of mammalian display in large-scale library screens. So the results coming back from this prelaunch marketing have been phenomenal in my view. really, really exciting, compelling sort of arguments that we can put forward for the use of OptiMAL and I'm delighted with the progress so far. So on that, hopefully, positive upbeat note, I will draw this Investor Meet company presentation to a close. And thank you very much for your time.

That's great, Adrian and Stephen. Thank you very much indeed for your presentation. [Operator Instructions] I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard. Adrian and Stephen, as you can see, we have received a number of questions. And if I may now hand back to kindly ask you to read out the questions where appropriate to do so, and I'll pick up from you both at the end. Thank you.

Excellent. Thank you very much. So I'll do my best to go through questions. I haven't had a chance to put them into too much of an order at the moment. So apologies if we jump around all over the place. I'm following your lead. So first question, you said you had a client evaluating whether to take an exclusive license for OptiPhage. This was a particular OptiPhage designed library. What feedback have you had from them? And when does that evaluation window close? I'm going to duck part of that question. But what I will say is that we are in the pre-agreed evaluation period, and I don't actually expect to hear back from that client before that period comes to an end. Essentially, no news is good news. So I think that's probably all I can say on that one at the moment. Next question was brokers are forecasting GBP 1.4 million revenue in H2. What more can you tell us about order book pipeline and client sentiment that would support that level of growth? Yes, it's -- that's the target. And whilst we don't disclose specific details about the order book or pipeline because of inherent uncertainty within them, with that important caveat in mind, there is enough in the pipeline for us to believe that the results for the full year will be in line with market expectations and are achievable. Time will tell. Next question was post launch, if all goes well, do you expect small pilot contracts before bigger contracts come in? I assume this is relating to OptiMAL. Well, the nature of OptiMAL itself, the OptiMAL platform is that screens are likely to be on the order of the size of 10 to the 9, so billion different sequences in size tested against each individual target. This is because OptiMAL is used, as I've described, as a frontline screen where the client doesn't have. They've not already identified antibodies or other prior information that we can use to really focus in on something. It's front line. This is how you go at it without necessarily going for anything else. This is where you come to first. So the number of antibody sequences you're going to test against needs to be large and 10 to the 9, we believe is about the right size is certainly the largest that's out there of any mammalian display platform that we're aware of. So because OptiMAL is used in that way, it's not really possible to gauge the performance, should I say, of the platform from a partial screen. So at this stage, no, we don't expect to run anything against the OptiMAL library, which would not constitute a full screen, in other words, 10 to the 9, and we wouldn't do a small pilot project as such. However, the story is not quite that simple. With OptiMAL, we've also got the mammalian display platform. So some clients may already have a more focused sort of smaller library of sequences for which they're looking for a mammalian display technology, and that might be a smaller, more focused library maybe coming from AI/ML modeling processes. And that would really fit with mammalian display. So we would do smaller screens that originate from a different library to the Opti library, which is designed to do any target. Okay. So in that sense, there, it would be possible that it could be shorter, more focused pilot screens that were used in that sense. Either way, it's exciting times as we're opening up multiple markets to service various antibody discovery approaches and engaging with clients as to whether they've designed their own libraries or looking for ones off the shelf. So sorry if I overdid that one, but we'll move on. Good question. Question 4 was Fusion's market cap was materially higher a few years ago. Yet today, the company is leaner, has stronger data, has much more advanced technology stack, especially with OptiMAL now validated. Why do you think the valuation hasn't caught up with the progress you've made? And what do you see as the key triggers that close that gap? Well, I think that's an excellent question. The intervening years have been very difficult for the wider sector, drug discoveries in general, but also including the CRO market, which we obviously serve. And presumably, that's not confidence. At Fusion, we've implemented strategic changes, which have served us very well. And we're about to introduce a whole new platform, OptiMAL, in fact, 3 whole new platforms really, Opti, Mammalian Display and OptiMAL Combined, which will open up or I expect that'll open up certain revenue streams, which are additional revenue streams to what we do from the current offerings. So I would agree that we're in much more efficient and better -- much, much better placed than we were when we last enjoyed significantly higher market cap. And I can only expect that this will start to be recognized and corrected in the share price over time. Next question is, how long do the company plan to continue the interim CFO arrangements versus a permanent appointment? I'm not entirely sure this wasn't Stephen submitting the question and may be fishing for a permanent place, but I'm not actually allowed to bring him on board permanently. That's part of the outsourcing restriction. But as you can tell or I hope you can tell, the arrangement is working very well. We're an extremely well-run, efficient organization. So there is no pressing need for a change. In the fullness of time, the company will expect to internalize the CFO function, but we've not put a time scale on making that change, and I'm very happy with the arrangements as they are. I'm not sure Stephen say the same, but... So next question was tell us more about the work of the scientific advisory panel with Charlotte Deane. So Charlotte Deane is a key asset and sits on our scientific advisory panel. We seek advice from the scientific advisory panel members on a range of subjects as and when we feel it would be beneficial to the company to get their input. And certainly, in Charlotte, in particular, we have a world-leading eminent authority on AI/ML applications related to antibody discovery and development. It's a great asset to the company. However, it's worth remembering that overall, our R&D spend has needed to be significantly curtailed. We're starting to improve on that and increase that again now because of the grants that are in place to take some of that weight off the finances. And we have resources to deliver on the most pressing of our R&D projects, but basically no more than that. So we've not really been seeking too much from the Scientific Advisory Board on new grand schemes, as you might say. Effectively, we've had our hands full with OptiMAL, Mammalian Display and OptiPhage, which is certainly enough. And I've said before, any one of my competitors would bite my hand off for one of those. So in terms of the Scientific Advisory Board, I think a lot of the work that they've done is coming to fruition now, but we do continue to use them as and when it's appropriate. Next question was, what are the key deliverables Fusion will produce as part of the FMI, that's the Future Medicines Institute. And how will that generate value for us, shareholders? Good point. So the mission of the Future Medicines Institute, the FMI is to develop platform technologies, which can deliver the next generation of therapies and diagnostics. And the excellent FMI grant funds Fusion to do this as it relates to antibodies, our core expertise. And that maps extremely closely to what the company wants to do as its central R&D activities anyway. So in addition, our team have been training very recently, in fact, on a new and advanced microfluidic platform for the handling of individual cells, and that can be used hopefully in a number of ways, including for cell line development, for example. Also, the FMI staff are the ones working on getting phage display established, which we will use to create OptiPhage from the patented Opti library. So we'll put that into phage format, and that will be run down at the FMI and the team working on that also includes one of the PhD students, which is allocated to Fusion but funded by the FMI. So there's already there several examples of R&D and development platform development, technology development that is coming through the FMI as well as that financial support that you can see in the financial figures, really supporting pretty much all of our R&D activities. Next question was, what is your strategy for marketing and promoting OptiMAL post launch? Basically, full steam ahead. We know that scientific conferences provide us with a great way to engage with scientific decision-makers, the critical people that we need to convince, and we want them to be trialing initially and adopting OptiMAL in fullness of time. So we want to continue those people and continue those channels to get access to those people and promote OptiMAL. I would like to expand this to AI/ML conferences and forums to particularly exploit the mammalian display part of OptiMAL. And we also -- I don't think this is in the public domain, but we also are expanding the size of the commercial team or re-expanding it, should I say, is still much smaller than it used to be with the appointment of a new but very well experienced and very appropriately experienced member of the team who's going to be starting in the beginning of December, so not long to wait now. And we're looking forward to having them on board. In addition, we also plan to upgrade our website to provide a foundation for improved digital marketing as well. So there's a lot going on to really push and exploit OptiMAL the best that we possibly can. I've got another one here. What's the split of grant funding received for DR5 versus FMI in the period? And how much of the FMI grant funding is the company expecting to draw down in H2? Again, I'm going to duck some of this. I don't think that level of detail is necessarily appropriate. But I will point out some of the differences between the grants. The DR5 is the grant is -- project rather, is a traditional format with tasks being scheduled and expected to be delivered according to the approved project plan. In other words, we've got a time line at which we're going to have to dedicate the resources to do that -- those particular tasks, those particular work. And grant funding, therefore, matches those activities and is indeed paid after we've done it and claim it back. The FMI grant is rather more flexible and allows us to deploy staff according to their availability. In other words, as we get busier with, say, client projects, we may well have fewer resources to allocate on an internal R&D process research, which would otherwise be supported by the FMI grant. And so the drawdown, I would expect will be reduced as we get busier. As I have said before, this really does make the FMI grant one of the best that I've ever seen for a largely service-based company like Fusion, balancing out the peaks and demands -- peaks in demands with the resources that are available. And we're really extremely fortunate to be part of the initiative and I applaud those who designed it. It wasn't me, brought it into being and continue to support and fund it. Such projects like the FMI backed by, yes, generous grant funding and also the tax incentives, Stephen mentioned them earlier about R&D tax credits. They're essential to building high-quality and high-growth enterprises such as Fusion or such as Fusion is on the verge of becoming. We haven't seen anything yet. Another question on R&D is can you update us on DR5? I'll do it very briefly. The project is going well and lead antibody has been selected or an antibody sequence has been selected. Whilst we all hope that the project will produce a viable DR5 asset, there is a long way to go. And even if it doesn't produce that as a viable asset in its own right, it will provide invaluable experience for us and the means to generate useful and marketable case study data to win more business anyway. So a lot of the justification for the DR5 grant is really about generating case study data and being able to showcase and talk about this project because it's our project rather than a client's project where we're confined by confidentiality clauses. Stephen, have you spotted any questions?

Yes. There's one here. Can you advise what the GBP 400,000 of additional borrowing relates to? So again, touching on what I said in the original presentation, we don't have GBP 400,000 of additional borrowing, but we do have our lease now on balance sheet. So as I said, IFRS 16 is an International Financial Reporting Standard that requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for most with terms over 12 months. So what would have happened in the past is that when we paid our rent, we would have expensed the rent payment and it would have shown up as an income statement expense and that was it. Now this new approach shows the current portion, so i.e., the rent that we need to pay over the next 12 months, but also the noncurrent portion, so the rent that we need to pay until the end of the lease. That is then replicated with a right-of-use asset. So the liability goes down as you pay your rent and the right-of-use asset gets amortized as you work your way through the lease agreement. So that's how the rent expense feeds its way into the income statement. So I hope that's clear, but definitely no additional borrowing. It's the IFRS 16 accounting for the lease.

Thanks, Stephen. That's great. Just looking at some of the most recent questions. I'll pick on as many as I can to work through them. One here, which is beautifully optimistic and exactly what we expect. When we start getting deals for OptiMAL, are we likely to get bigger GBP 1 million deals soon? Will the next possible -- I'll skip that bit because it's speculation about share price. But will we get multi -- or will we get GBP 1 million deals with OptiMAL being launched? Okay. So OptiMAL brings clients in at the discovery phase at that start, and that's the best time at which we can use the ITAS, the integrated therapeutic antibody service offering to see them all the way through to the end. If a client signs up for that, that will be significantly more than GBP 1 million for the standard project. So yes, that would be the case if they sign up for all of it. If they sign up and want to -- for only the beginning part, so it's a bit like slice loaf of bread. If they go for the sliced loaf as opposed to the whole loaf model, then we only get commitment from them on various phases as they work through. And that won't necessarily be a single PO covering GBP 1 million or more. It could be broken up, which also means that you won't necessarily see them in because by virtue of them being large commitments, financially large commitments and therefore, being reported through RNSs. But the cumulative value of those is still going to be heading towards GBP 1 million and more provided, of course, they stick with us and go all the way through. Not all clients will want that. It is their choice. It is their project, it's their money. They get to choose how to run it. We work with them and obviously, being best in the world at some of the things that we do, having the best-in-class technologies, they're more likely to come with us and hopefully stay with us as we go through all of that up to the stable cell line production. I have one here, which I think it's a very good question. I'm not sure I can do it justice in this forum. Could you briefly review the competitors in your sectors? If I focus that one on OptiMAL, there is no competitor as such as a frontline screening. If you break it down to mammalian display, there are. There was a recent journal publication that was used that summarized those mammalian display technologies and their capabilities. In fact, I think it was written by one of our competitors. But it acts as an excellent sort of benchmark, maybe slightly biased towards them in the way it's written. But we can layer on top of that another column, which will basically describe Fusion's offering, mammalian display and OptiMAL offering and show how that compares. And we expect that comparison to come out as part of the launch of OptiMAL and marketing material that will go through that. So I will try to make sure that, that gets made very visible for shareholders, investors as well. We might do something on the investor hub to highlight that one. I presume you are qualifying for significant R&D tax credits. Can they become significant assets? We do qualify for R&D tax credits. Stephen has already spoken about that. Can they become significant assets, not in comparison to the other stuff that we've got they pale into insignificance. Very nice to have brilliant support. And I believe there's another financial presentation going on this week. Hopefully, they will continue to support R&D tax credits. It really is essential for the kind of provide some support and benefit to this kind of industry and the quality of the jobs and the values that we're hoping to generate. Another one here on the NCI. Given the NCI collaboration agreement ends at the end of this month, does it started on the 28th of November '23. Does that mean that without a commercial deal signed by -- with us that the NCI will then not have access to OptiMAL? Unless we can get long-term agreement with a new agreement in place with OptiMAL, they will eventually lose access to it. However, they're excellent collaborators. We like working with them. We want them to continue using the platform. We'd very much like to see that continue. And if I am slightly Machiavellian about it, why would I want to stop them becoming more and more involved with the platform that I want them to continue to use. I don't think I would. So I don't think it's in our interest necessarily to immediately pull the plug, but we do want and they want an agreement going forward to allow them to continue to use the platform. Stephen, have you seen any others that you can work on? I'm just reading through some more.

I don't think there's any more from me, Adrian, unless I missed one that you saw.

No, nothing like that. I just trying to get my head around the next 1 or 2. There's one about the -- can you give an indication of the value of the company's current order book? I kind of answered that one previously and said that I'm not going to. But in the nature of the analyst forecast, I think I've also answered that one that we believe we're on track and have the opportunities to deliver that GBP 1.4 million. Can you comment on the practical aspects of the OptiMAL launch? Are early adopters likely to get preferential terms? Are you likely to have to make additional capital investments, e.g. lease new equipment to service new OptiMAL client projects? So the OptiMAL launch is all planned out. Everything is going really well. The initial prelaunch sort of marketing, getting the feelers and everything to adjust has been very positive initially. We have to be quite careful not to price ourselves out of the marketplace. We want to get people in, make sure that they use it and then see the benefits. So we might have some incentives for them to do that. We might backload some of the deals such that there might be success fees paid or asking for success fees provided the screen produces the kind of hits that we believe it would, making it less risky for a client to come on board. So yes, we will negotiate around those for early adopters. That will be somewhat time limited that we will do that. If it goes off as successfully and we get as many leads and as much business as I believe, is out there and the marketplace for it is very significant, then we will need to increase our capacity to be able to run those, train up more people. At the moment, the platform is relatively low on capital equipment needs, although there are some. So I think we can manage with what we've got for a good period of time. But once we're sure about the business or relatively sure about the business and the business case for it, then of course, scaling that business to meet need is an obvious thing to do, and I'm not sure that anyone would argue against it. I think we run out of time, and I will do my best to round up the other questions that we haven't answered and get them out in possibly on the Investor hub or through IMC afterwards. But I'm afraid that's all we've got time for today. So I'm going to have to stop there. And apologies if I haven't answered one of your questions.

That's fine, Adrian. As you said, we can write any further responses post the meeting. And of course, we will publish those appropriate on the Investor Meet Company platform. But Adrian, before I redirect investors to provide you with a feedback, which I know is particularly important to the company, could I please ask you for a few closing comments?

Okay. So at the risk of repetition, there is immense appetite for antibody discovery, indeed for human therapeutic antibodies in particular. And that means for full-length human IgG molecules, the full-length antibody molecule. And this is what OptiMAL offers to those -- to our clients. It's first-in-class, best-in-class platform, and we are bringing OptiMAL to the market now in the next few days, and the benefits from that will follow. So thank you very much for your support.

Fantastic, Adrian and Stephen, thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order 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.