Investment case23 Apr 2025 19:08
Fusion Antibodies (FAB) – Quick Investment Snapshot
Turnaround underway: H1 FY25 revs £1.2m (2x YoY), margin +27% (vs -16%), losses narrowing fast and margins predicted to return to closer to 50%.
FY26 rev guidance: minimum 1.9m in line with expectations. Strong FY26 update expected.
March raise: £1.17m at 6.75p (no discount) and big VCT TR1 holders coming in (Rathbones and Canacord both now around own 7% each). Funds for game changer OptiMAL platform rollout + “remarkable opportunities for growth”
Not reliant on drug approvals: Fee-for-service model = little tariff or regulatory risk.
OptiMAL platform: Fully human antibodies from mammalian cells = faster, better discovery potentially very attractive to big pharma for takeovers and huge licensing and royalty potential as each library is unique.
Big validation: US National Cancer Institute (NCI) using OptiMAL; camelid nanobody humanisation in progress , and potential for globally respected KOL to give this the stamp of approval in global recognised journals!
Future Medicines Institute (FMI): Part of £55m consortium with £1m non-dilutive grant and access to £5m free capital kit. First claim expected soon and great potential growth through this innovative cluster.
Peer comps:
Hugely undervalued IMO
• FAB: ~£8m mcap, 4x rev
• FairJourney Bio: €900m private, 11x rev
• Absci (ABSI): $390m mcap, $4.5m rev (86x rev but maybe AI hype?)
Valuation upside if platform traction continues big potential….and they have other propietary platforms!!
Risks: CRO revenue lumpy, needs more deals for scale. Competition from bigger players, but perhaps mitigated by their unique platforms.
Cash runway: previously on track to h2 2026 now with cash shored up from raise has to be massively extended. Breakeven target now likely to be closer.
News flow ahead in the short term: NCI results update, grant claims, FY26 update, perhaps more contracts to come = strong momentum.
DYOR but I would not want to be out of this share, even with the recent raise, only 115m shares in issue and a large lot in sticky hands!
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