– OmniAb is a recent spinout from $LGND that merged with a SPAC.
– Shares have been driven down by post-spin structural sell-off as large part of $LNGD shareholders could not own $OABI.
– OmniAb earns revenue from access fees, milestone payments, and royalties on its antibody development technologies and patents.
– Both large pharma and smaller startups are clients.
– OmniAb has durable future cash flows from various income streams so not the typical binary biotech bet.
– Extremely high takeout value by a strategic acquirer.
– Even bear case assumptions would merit a share price nearly double where it trades today.
– Present value of 2022-2040 cash flows is worth $940m or $5.74/share.
– Adding terminal value increases this to $9.29/share.
– OABI shares trade at a FCF yield of 7.8% in 2024 and 10.2% in 2025, whereas peer $ABCL sits at a 5% yield.
Exp. gain: +320% to $9.29/share.
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