Fusion Antibodies upbeat on 'mixed but improving' performance

(Sharecast News) - Fusion Antibodies said on Tuesday that full-year revenue rose and margins had improved sharply, as the pre-clinical antibody specialist made progress with platform development, grant-funded programmes and larger pharmaceutical customers.

The AIM-listed company said unaudited revenue for the year ended 31 March rose about 9% to £2.13m, from £1.96m in 2025.

Unaudited gross margins improved to 50% from 22%, while underlying gross margins, excluding an intellectual property transfer agreement with Finn Therapeutics, increased to 43%.

Cash at the end of the year was £1.04m, compared with £0.4m a year earlier.

Fusion said the business continued to benefit from commercial revenue and non-dilutive funding, including Future Medicines Institute and other grant programmes.

The company said performance in the 2026 financial year was mixed but improving, reflecting a slow recovery in market conditions and the variability of project-based revenues.

It said margins were strengthened by underlying improvement and the IP sale announced on 30 March.

Fusion said it made strategic progress in diversifying its customer base, with increased engagement from larger companies alongside its traditional early-stage biotechnology clients.

The shift is intended to improve revenue visibility and reduce exposure to funding volatility in smaller biotech markets.

The company secured follow-on contracts under an existing stable cell line development collaboration with a US biotechnology company, extending the programme with about $460,000 of additional fees, most of which was recognised in 2026.

It also secured new projects with global pharmaceutical companies, including a humanisation project with a US-based speciality division of a global pharmaceutical company and a multi-target integrated therapeutic antibody services project with a European-based global pharmaceutical group.

Fusion also signed a £250,000 antibody IP transfer agreement with Finn Therapeutics, with ongoing collaboration expected to support further development and future project work.

The full revenue for the project was recognised in 2026, with payment expected in FY2027 after completion of a Finn Therapeutics fundraise.

Chief executive Adrian Kinkaid said the year had brought "continued progress and development" as Fusion built on the recovery achieved in the prior financial year.

"While revenues in the first half reflected ongoing market challenges, we have seen improving momentum supported by a stronger order book and pipeline," he said.

Fusion said it had received a US patent for its OptiMAL platform, covering the core library design and methodology, with further patent applications progressing in other jurisdictions.

The company also reported continued progress in its collaboration with the US National Cancer Institute, with further promising validation results from OptiMAL.

Kinkaid said the US patent and ongoing validation work represented "significant steps forward" in unlocking the long-term value of Fusion's platform technologies.

The company also received an additional grant-funded collaboration with Queen's University Belfast to develop a therapeutic antibody against DR5, with up to £545,000 expected to be received over the project duration.

Fusion said the DR5 programme was expected to provide both scientific and potential commercial value through a potentially licensable therapeutic asset and marketing case study data.

It said cutting-edge microfluidic equipment available through the Future Medicines Institute initiative had accelerated cell line development timelines from about eight to nine months to less than four months, while producing good numbers of high-producing clones.

Kinkaid said Fusion was encouraged by its ability to win work from global pharmaceutical companies and monetise intellectual property while retaining collaborative relationships.

"This agreement demonstrates our ability to monetise background IP alongside continued project engagement," he said of the Finn Therapeutics deal.

Looking ahead, the board said it was cautiously optimistic for the 2027 financial year, supported by a stronger and more diversified pipeline, greater engagement with larger pharmaceutical customers, deployment of new technologies and progress in platform validation.

It said non-dilutive funding also provided a foundation for growth, although it remained mindful of macroeconomic uncertainty and the variability of project-based revenues.

"With advances in our technologies and offerings and continued support from grant funding, we believe the company is well positioned for further progress in 2027 and beyond," Kinkaid said.

At 1144 BST, shares in Fusion Antibodies were down 10.71% at 12.5p.

Reporting by Josh White for Sharecast.com.

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