Executive Summary / Key Takeaways

• AnaptysBio is undergoing a significant strategic separation by year-end 2026, aiming to create two independent, publicly traded companies: a "Royalty Management Co" focused on maximizing returns from existing royalty streams (Jemperli, imsidolimab) and a "Biopharma Co" dedicated to advancing its innovative immunology pipeline (rosnilimab, ANB033, ANB101).
• The company's proprietary antibody technology, particularly its selective T-cell depletion mechanism for rosnilimab, has demonstrated "JAK-like efficacy" in Phase 2b rheumatoid arthritis (RA) trials, achieving 53–63% CDAI low disease activity at Week 28, positioning it favorably against competitors.
• Despite a recent setback with the discontinuation of the rosnilimab ulcerative colitis (UC) trial, the strong RA data and the substantial, growing non-cash royalty revenue from GSK's Jemperli (projected to exceed $390 million annually at peak sales) provide a financial anchor and potential for future funding.
• AnaptysBio reported a net income of $15.11 million for Q3 2025, a notable improvement from a $32.85 million net loss in Q3 2024, driven by a $50 million non-cash milestone from Jemperli sales exceeding $750 million. The company anticipates ending 2025 with approximately $300 million in cash, cash equivalents, and investments.
• Investors should monitor the execution of the company separation, the progress of ANB033 and ANB101 in clinical trials, and potential strategic partnerships for rosnilimab in RA, as these factors will be critical in realizing the anticipated enhanced shareholder value.

Setting the Stage: A Biotech's Dual Path to Value Creation

AnaptysBio, Inc. (NASDAQ:ANAB) stands at a pivotal juncture, transforming from a clinical-stage biotechnology company with a diversified pipeline and collaborative revenue streams into two distinct entities. This strategic maneuver, announced in September 2025, aims to unlock and enhance shareholder value by separating its substantial royalty assets from its innovative, wholly-owned biopharma programs. The core business of AnaptysBio has historically centered on discovering and developing immunology therapeutics for autoimmune and inflammatory diseases, a highly competitive and rapidly evolving sector within the broader biotechnology industry.

The company's foundational strength lies in its proprietary antibody technology, which has enabled the creation of targeted therapies designed to modulate immune responses with precision. This technological edge is critical in an industry dominated by large pharmaceutical and biotechnology companies such as Bristol-Myers Squibb , AbbVie , Johnson & Johnson (JNJ), and Merck (MRK), all of whom possess significantly greater financial, manufacturing, marketing, and R&D resources. AnaptysBio's strategy has been to leverage its innovative discovery platform to develop novel product candidates while also engaging in strategic collaborations to monetize certain assets, thereby funding its internal pipeline. This dual approach has been instrumental in its journey since its incorporation in 2005.

Technological Edge: Precision Immunology at Work

AnaptysBio's competitive differentiation is deeply rooted in its advanced antibody engineering capabilities, which yield highly specific immune-modulating therapeutics. The company's lead wholly-owned program, rosnilimab, exemplifies this technological prowess. Rosnilimab is an IgG1 antibody designed as a selective and potent pathogenic T cell depleter. Its mechanism of action involves targeting specific T cells, such as activated Tph, Tfh, and T effector cells, in inflamed tissues and the periphery. This selective depletion is intended to drive specific immunological outcomes, including a reduction in T cell proliferation, migration, and cytokine secretion, as well as a decrease in plasma cell generation and autoantibody levels, all while sparing non-pathogenic T cells to preserve overall immune function.

The tangible benefits of this technology were underscored in the Phase 2b trial for moderate-to-severe rheumatoid arthritis (RA). Rosnilimab demonstrated a robust, on-target pharmacological activity, achieving an approximately 90% reduction in pathogenic T cells in both blood and synovial biopsies, alongside an increase in total regulatory T cells (Tregs). Clinically, this translated to "JAK-like efficacy" on multiple meaningful measures, including low disease activity (LDA) and remission on the Clinical Disease Activity Index (CDAI), as well as ACR70 response, over a six-month period. Notably, these responses proved durable for at least two to three months after the last dose. This performance is particularly compelling when compared to Eli Lilly's (LLY) now-discontinued PD-1 agonist peresolimab, which showed a lower CDAI LDA rate of 37% at Week 24, versus rosnilimab's 53–63% range at Week 28. The favorable safety and tolerability profile, with no treatment-related serious adverse events or malignancies, further enhances its competitive standing in the RA landscape.

Beyond rosnilimab, AnaptysBio's pipeline includes other technologically differentiated assets. ANB033, a CD122 antagonist, targets the common beta subunit shared by the IL-15 and IL-2 receptors. This mechanism aims to inhibit IL-15 and IL-2 signaling, leading to a 70-75% reduction in CD122-expressing CD8 T cells and effective elimination of CD122-expressing NK cells, without significantly impacting overall CD8 T cell counts or regulatory T cell numbers. The Phase 1a trial in healthy volunteers demonstrated a favorable pharmacokinetic profile with an estimated two-to-three-week half-life and full receptor occupancy. The strategic intent behind ANB033 is to achieve and maintain inflammation remission by reducing disease-causing NK cells and certain CD8 T cell subsets, while potentially enhancing regulatory T cell numbers.

The company's ANB101 program, a BDCA2 modulator antibody acquired from Centessa Pharmaceuticals (CNTA), targets plasmacytoid dendritic cells (pDCs). These cells are critical in the inflammatory cascade, acting as prolific secretors of type I interferons. By modulating BDCA2, ANB101 aims to potently inhibit interferon secretion and modulate antigen presentation, offering a novel approach for autoimmune and inflammatory diseases. A Phase 1 trial for ANB101 in healthy volunteers is currently ongoing.

The "so what" for investors is clear: AnaptysBio's technological differentiators are not merely academic; they translate into tangible clinical benefits that could carve out significant market share in highly lucrative therapeutic areas. The ability to achieve "JAK-like efficacy" with a potentially superior safety profile, as seen with rosnilimab in RA, positions the company for premium pricing and strong commercial uptake, should it gain regulatory approval. These innovations form the bedrock of its competitive moat, offering a strategic advantage against broader, less targeted therapies from larger rivals.

A Tale of Two Companies: Strategic Separation and Financial Performance

In a bold move to maximize shareholder value, AnaptysBio announced its intent to separate its business into two independent, publicly traded companies by year-end 2026. This strategic split will create a "Royalty Management Co" and a "Biopharma Co." The Royalty Management Co will house the substantial, non-cash royalty and milestone streams from out-licensed assets, primarily GSK's Jemperli and Vanda Pharmaceuticals' (VNDA) imsidolimab. The Biopharma Co will focus on the development and potential commercialization of AnaptysBio's wholly-owned pipeline, including rosnilimab, ANB033, and ANB101. This separation is designed to allow investors to align their investment philosophies with distinct business models.

The financial performance for the nine months ended September 30, 2025, reflects the increasing contribution from these collaborative programs. AnaptysBio reported collaboration revenue of $126.35 million, a significant increase from $48.17 million for the same period in 2024. This surge was primarily driven by a $50 million non-cash milestone recognized in Q3 2025 as Jemperli annual sales exceeded $750 million, compared to a $15 million non-cash milestone in Q3 2024. All royalty revenue, totaling $66.60 million for the nine months ended September 30, 2025, was non-cash due to existing royalty monetization agreements. The company also recognized $9.60 million in license revenue and $0.20 million in transition services revenue from the Vanda License Agreement, alongside $5.40 million in other income from existing drug supply transferred to Vanda.

Despite the growing revenue, AnaptysBio continues to operate at a net loss, reporting a net loss of $62.85 million for the nine months ended September 30, 2025, an improvement from a $123.45 million net loss in the prior year period. For the third quarter of 2025, the company achieved a net income of $15.11 million, a notable turnaround from a net loss of $32.85 million in Q3 2024. Research and development (R&D) expenses decreased by $10.90 million to $110.41 million for the nine months ended September 30, 2025, primarily due to an $8.60 million decrease in clinical expenses and a $7.20 million decrease in manufacturing expenses. This reflects a dynamic allocation of resources within the pipeline. Non-cash interest expense, however, increased by $27.50 million to $60.18 million for the nine-month period, largely due to the Jemperli Amendment which increased the threshold amounts of aggregate royalties and milestones payable to Sagard.

Liquidity and Capital Allocation: Fueling Future Growth

As of September 30, 2025, AnaptysBio maintained a liquid position with $256.70 million in cash, cash equivalents, and investments, though this represents a decrease from $420.80 million at December 31, 2024. Management projects that these existing resources will be sufficient to fund its current operating plan for at least the next 12 months from the November 4, 2025, filing date of the 10-Q. The company anticipates ending 2025 with approximately $300 million, including an expected $75 million commercial sales milestone from GSK in the fourth quarter of 2025, contingent on Jemperli achieving $1 billion in global net sales.

Cash flow from operations for the nine months ended September 30, 2025, showed a net use of $78.30 million, primarily due to the net loss and changes in working capital. Investing activities provided $154.50 million, largely influenced by the timing of investment sales and maturities. Financing activities used $89.50 million, including $24.80 million for repayments of royalty monetization liabilities and $65.20 million for common stock repurchases under the 2025 Repurchase Program, which still has $9.80 million available. This capital allocation strategy, including share repurchases, signals a commitment to returning value to shareholders while managing the ongoing R&D investments. The planned Biopharma Co is expected to launch with adequate capital to fund operations for at least two years post-separation, underscoring the company's focus on sustainable development for its innovative pipeline.

Competitive Landscape and Strategic Outlook

AnaptysBio operates in a fiercely competitive biotechnology landscape, where innovation and strategic partnerships are paramount. In rheumatoid arthritis, rosnilimab faces a crowded market with established biologics like AbbVie's (ABBV) Humira, Roche's (RHHBY) Actemra, Regeneron's (REGN) Kevzara, Bristol-Myers Squibb's (BMY) Orencia, and Pfizer's (PFE) Xeljanz, as well as emerging JAK inhibitors. Rosnilimab's demonstrated "JAK-like efficacy" and favorable safety profile in RA position it as a strong contender, potentially offering a differentiated therapeutic option. The company is actively assessing strategic paths for rosnilimab in RA, including global partnerships or independent Phase 3 development, which will be crucial for its commercialization success.

The recent discontinuation of the rosnilimab Phase 2 trial in ulcerative colitis, due to not meeting primary or key secondary endpoints at Week 12, highlights the inherent risks in drug development and the intensity of competition in this indication. The UC market is also highly competitive, with numerous monoclonal antibodies and S1P inhibitors from major players. This setback, while disappointing, is expected to yield at least $10 million in savings, allowing for a reallocation of resources to more promising programs.

For ANB033 in celiac disease, AnaptysBio faces clinical competitors such as Forte Bioscience's (FBRX) FB-102 and anti-IL-15 monoclonal antibodies from Novartis (NVS) (GIA-632) and Teva (TEVA) (TEV-408). ANB101, the BDCA2 modulator, will compete with Biogen's (BIIB) litifilimab and Amgen's (AMGN) daxdilimab in systemic lupus erythematosus and related inflammatory conditions. AnaptysBio's competitive advantage in these areas stems from its targeted antibody mechanisms, which aim for superior efficacy and safety profiles by precisely addressing disease drivers.

The "Royalty Management Co" will benefit from the continued commercial success of Jemperli, a PD-1 antagonist out-licensed to GSK . GSK has reported strong commercial performance for Jemperli, with sales growing over 16% quarter-over-quarter to $303 million in Q3 2025 and $785 million year-to-date 2025. GSK projects peak sales for Jemperli in monotherapy indications to exceed $2.7 billion, which AnaptysBio anticipates will be achieved before 2031, translating to over $390 million in annualized royalties. This substantial and growing royalty stream provides a stable financial foundation, mitigating some of the R&D risks associated with the Biopharma Co. However, the recent termination of GSK's (GSK) TIM-3 antagonist antibody development program underscores the inherent risks in collaborative agreements.

Looking ahead, AnaptysBio anticipates providing an update on the advancement of rosnilimab in RA in the first half of 2026, with funding expected from strategic or other sources without diluting existing royalties. Top-line Phase 1b data for ANB033 in celiac disease is expected by Q4 2026, with plans to initiate another Phase 1b trial for ANB033 in a second inflammatory disease in 2026. Research and development expenses are expected to increase as these programs advance, while general and administrative expenses are also projected to rise due to public company costs and intellectual property expansion. The successful execution of the company separation by year-end 2026, and the subsequent performance of both entities, will be key determinants of AnaptysBio's future trajectory.

Conclusion

AnaptysBio is embarking on a transformative journey, strategically separating its business to unlock distinct value propositions for investors. The core investment thesis hinges on the robust, differentiated technology underpinning its wholly-owned immunology pipeline, particularly the promising Phase 2b data for rosnilimab in rheumatoid arthritis. While the recent discontinuation of the rosnilimab UC trial serves as a reminder of the inherent risks in biotech, the strong RA results and the significant, growing royalty income from Jemperli provide a resilient financial backbone.

The impending separation into a royalty-focused entity and a dedicated biopharma company is a calculated move to enhance transparency and allow for more focused capital allocation. With a projected $300 million in cash and investments by year-end 2025, and the Biopharma Co slated for at least two years of funding post-split, AnaptysBio appears adequately capitalized for its immediate strategic objectives. The company's ability to execute this separation effectively, secure a strategic partnership for rosnilimab in RA, and advance ANB033 and ANB101 through their respective clinical stages will be paramount in realizing the full potential of this dual-path strategy and delivering enhanced shareholder value in a competitive market.