XOMA Expands its Commercial Royalty and Milestone Portfolio with DSUVIA® Acquisition
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Insights
The strategic acquisition by XOMA of a royalty interest in DSUVIA® represents a significant financial maneuver, showcasing the company's commitment to a non-dilutive financing approach. The $8 million investment for a 15% royalty on commercial sales, coupled with a substantial portion of the 75% royalty from U.S. Department of Defense purchases, illustrates a calculated risk with a potentially high reward. This royalty structure allows XOMA to benefit from DSUVIA®'s market performance without diluting shareholder equity, a positive signal to investors.
Moreover, XOMA's entitlement to a minimum of 50% of the potential $116.5 million in milestone payments from Alora Pharmaceuticals could substantially impact its revenue stream. The upfront cost versus the long-term royalty and milestone revenue presents an asymmetric risk/reward profile that could prove lucrative if DSUVIA® sales perform well, especially considering the product's established FDA approval and the DoD's endorsement.
DSUVIA®'s position in the pain management market is noteworthy, particularly due to its unique sublingual delivery system for moderate-to-severe acute pain management. This delivery system offers a differentiating factor in a crowded market, potentially increasing its adoption in medically supervised settings. The endorsement by the U.S. Department of Defense and inclusion in the Joint Deployment Formulary further validates the drug's efficacy and potential for widespread use in military settings, which may drive sales and, consequently, royalties to XOMA.
Alora Pharmaceuticals' role in commercializing DSUVIA® is crucial, given their expertise and resources in the pain management sector. A successful relaunch by Alora could lead to increased market penetration and sales, directly benefiting XOMA's financial position through the agreed-upon royalty structure. However, the market for pain management is highly competitive and the success of DSUVIA® will depend on Alora's execution of its commercial strategy and the drug's ability to secure a significant market share.
The clinical profile of DSUVIA® is an essential factor in assessing the potential of XOMA's investment. As a sublingual tablet designed for use in certified medically supervised healthcare settings, DSUVIA® offers a non-invasive option for pain relief, which may be particularly appealing for use in emergency or battlefield conditions where intravenous access is not feasible. The Milestone C approval from the U.S. Department of Defense indicates a high level of confidence in the drug's utility for military medical use.
However, it is imperative to monitor post-market surveillance and any emerging clinical data that could influence the drug's adoption rate and, consequently, royalties received by XOMA. Any changes in clinical guidelines, adverse event profiles, or competing products entering the market could significantly impact DSUVIA®'s commercial success and XOMA's financial returns.
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EMERYVILLE, Calif., Jan. 18, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (NASDAQ: XOMA) announced today it has acquired an economic interest in DSUVIA® (sufentanil sublingual tablet) from Talphera, Inc., for
“The Talphera transaction is consistent with XOMA’s business model of acquiring royalty economics that we believe offer attractive and asymmetric risk/reward profiles. DSUVIA® is an important sublingual, single use pain management option addressing moderate-to-severe acute pain when used in actively supervised medical settings. We believe Alora has the resources and expertise to relaunch and successfully commercialize DSUVIA® within its expansive pain management portfolio,” stated Brad Sitko, Chief Investment Officer at XOMA. “XOMA was able to structure an attractive, non-dilutive royalty solution as an alternative to traditional financing as Talphera repositions its strategy for future growth.”
In April 2020, DSUVIA® received Milestone C approval from the U.S. Department of Defense (DoD) for use in U.S. Army sets, kits, and outfits (SKOs) and was added to the DoD Joint Deployment Formulary in September 2020. Given the convenient sublingual delivery via a single dose applicator and its ability to provide effective pain relief for several hours, DSUVIA® could be an effective tool for use by military medics to treat injured personnel in contested environments.
Under the terms of the agreement, XOMA will receive 100 percent of all royalties and milestones related to DSUVIA® sales until the Company receives
About DSUVIA (sufentanil sublingual tablet), 30 mcg
DSUVIA® is indicated for use in adults in certified medically supervised healthcare settings, such as hospitals, surgical centers, and emergency departments, for the management of acute pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate. DSUVIA was designed to provide rapid analgesia via a non-invasive route and to eliminate dosing errors associated with intravenous (IV) administration. DSUVIA is a single-strength solid dosage form administered sublingually via a single-dose applicator (SDA) by healthcare professionals. Sufentanil is an opioid analgesic previously only marketed for IV and epidural anesthesia and analgesia. The sufentanil pharmacokinetic profile, when delivered sublingually, avoids the high peak plasma levels and short duration of action observed with IV administration.
For more information, including important safety information and black box warning for DSUVIA, please visit www.DSUVIA.com.
About XOMA Corporation
XOMA is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA acquires the potential future economics associated with pre-commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. When XOMA acquires the future economics, the seller receives non-dilutive, non-recourse funding they can use to advance their internal drug candidate(s) or for general corporate purposes. The Company has an extensive and growing portfolio with more than 70 assets (asset defined as the right to receive potential future economics associated with the advancement of an underlying therapeutic candidate). For more information about the Company and its portfolio, please visit www.xoma.com.
Forward-Looking Statements/Explanatory Notes
Certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the timing and amount of potential commercial payments to XOMA and other developments related to DSUVIA®. In some cases, you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project,” “expect,” “may,” “will,” “would,” “could” or “should,” the negative of these terms or similar expressions. These forward-looking statements are not a guarantee of XOMA’s performance, and you should not place undue reliance on such statements. These statements are based on assumptions that may not prove accurate, and actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry, including those related to the fact that our product candidates subject to out-license agreements are still being developed, and our licensees may require substantial funds to continue development which may not be available; we do not know whether there will be, or will continue to be, a viable market for the products in which we have an ownership or royalty interest; if the therapeutic product candidates to which we have a royalty interest do not receive regulatory approval, and our third-party licensees will not be able to market them. Other potential risks to XOMA meeting these expectations are described in more detail in XOMA's most recent filing on Form 10-K and in other filings with the Securities and Exchange Commission. Consider such risks carefully when considering XOMA's prospects. Any forward-looking statement in this press release represents XOMA's beliefs and assumptions only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. XOMA disclaims any obligation to update any forward-looking statement, except as required by applicable law.
EXPLANATORY NOTE: Any references to “portfolio” in this press release refer strictly to milestone and/or royalty rights associated with a basket of drug products in development. Any references to “assets” in this press release refer strictly to milestone and/or royalty rights associated with individual drug products in development.
As of the date of this press release, all assets in XOMA’s milestone and royalty portfolio, except VABYSMO® (faricimab), IXINITY® [coagulation factor IX (recombinant)], and DSUVIA® (sufentanil sublingual tablet) are investigational compounds. Efficacy and safety have not been established. There is no guarantee that any of the investigational compounds will become commercially available.
| XOMA Investor Contact Juliane Snowden XOMA Corporation +1 646-438-9754 juliane.snowden@xoma.com | XOMA Media Contact Kathy Vincent KV Consulting & Management +1 310-403-8951 kathy@kathyvincent.com |
FAQ
What is the economic interest XOMA acquired from Talphera, Inc.?
What are the terms of the agreement between XOMA and Talphera, Inc.?
When did DSUVIA® receive Milestone C approval from the U.S. Department of Defense?
