XOMA Reports First Quarter 2024 Financial Results and Highlights Recent Activities
XOMA reported its first quarter 2024 financial results, earning a $9 million milestone with the FDA approval of OJEMDA™, gaining $9.5 million from Kinnate acquisition, expanding its portfolio, and initiating a $50 million stock repurchase program. The company also reported $1.5 million in total revenues for Q1 2024.
XOMA earned a $9 million milestone with the FDA approval of OJEMDA™, adding to its revenue stream.
The acquisition of Kinnate brought in at least $9.5 million in non-dilutive capital to XOMA's balance sheet.
The company expanded its commercial royalty and milestone portfolio with the acquisitions of DSUVIA® and XACIATO™, enhancing its future financial prospects.
XOMA's net loss for the first quarter of 2024 was $8.6 million, compared to $9.8 million in the previous year, showcasing a negative trend in profitability.
The decrease in cash and cash equivalents from $159.6 million on December 31, 2023, to $142.4 million on March 31, 2024, indicates a lower financial position.
Operating activities resulted in a net cash usage of $4.9 million in the first quarter of 2024, highlighting a cash outflow for the company.
Insights
The milestone achieved from the FDA's approval of OJEMDA™ (tovorafenib) represents not just a significant product development but also a financial inflection point for XOMA. The
However, these positive developments are offset by several concerns. The G&A expenses have increased due to higher stock-based compensation and legal costs, which can be attributed to the new CEO's appointment and the PSU grants. Additionally, R&D expenses are set to rise following the integration of Kinnate's pipeline. The increased interest expense is related to the loan from Blue Owl, which investors should note as it affects the bottom line.
While the share repurchase program could be a sign of management's confidence in the company's value, it also suggests that the company is choosing to return capital to shareholders rather than reinvesting it fully into growth opportunities or paying down debt.
The biotech sector thrives on innovation and FDA approvals and XOMA's multiple acquisitions including the economic interests in two commercial assets and two Phase 3 assets denote an aggressive growth strategy. The broadened portfolio diversifies risk and potentially enhances the revenue stream. This strategic move should ideally be well received in the market, reflecting positively on the company's stock price.
It's worth noting the significance of the Blue Owl Loan in this context. The loan arrangement underscores XOMA's ability to leverage its assets to secure non-dilutive financing. However, prospective investors should be aware of the long-term obligations this creates and consider the potential pressure on future earnings due to the associated interest expenses.
From a biotechnological perspective, the approval of OJEMDA™ is a milestone for pediatric low-grade glioma (pLGG) treatment. This approval could potentially have a ripple effect, improving the company's negotiations for other products in its portfolio. The recent acquisition of economic interests and assets indicates a strategic expansion into diverse therapeutic areas, which is important for resilience in the dynamic biotech landscape.
Investors should recognize the importance of the pipeline's stage: two Phase 3 assets may soon yield results that could significantly impact XOMA's financial position and market valuation. Additionally, the mix of commercial and developmental stage assets provides a balance of current and future revenue streams, a detail of interest for valuation considerations.
Earned
XOMA is entitled to receive a mid-single digit royalty on OJEMDA™ sales
Acquired Kinnate Pharmaceuticals, adding at least
Expanded the commercial royalty and milestone portfolio with the acquisitions of economic interests in DSUVIA® (sufentanil sublingual tablet) and XACIATO™ (clindamycin phosphate) vaginal gel
Launched XOMA’s first stock repurchase program for up to
EMERYVILLE, Calif., May 09, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its first quarter 2024 financial results and highlighted recent activities.
“We continue to build the foundation for accelerating value creation with a disciplined approach to capital deployment,” stated Owen Hughes, Chief Executive Officer of XOMA. “In recent months, we’ve completed the acquisition of Kinnate, acquired economic interests in two commercial assets, as well as in two first-in-class Phase 3 assets, and initiated our first share buyback program on the heels of securing the VABYSMO® royalty-backed loan with Blue Owl. Lastly, and most importantly, the FDA approved OJEMBA™ (tovorafenib), Day One Biopharmaceuticals’ type II RAF inhibitor for patients with relapsed or refractory pLGG harboring a BRAF fusion or rearrangement or BRAF V600 mutation, ushering in an important new treatment for children living with relapsed or refractory pLGG.”
Key First Quarter Events
| Partner | Event |
| Talphera | XOMA added another commercial asset to its royalty portfolio with an economic interest in DSUVIA®, which is marketed by Alora Pharmaceuticals. XOMA receives 100 percent of the DSUVIA® economics until a threshold is achieved; thereafter, XOMA retains the 15 percent royalty associated with DSUVIA® commercial sales. The 75 percent royalties from Department of Defense purchases and remaining milestone payments will be shared equally between XOMA and Talphera. |
| Kinnate Pharmaceuticals | XOMA initiated the acquisition of Kinnate Pharmaceuticals for |
| Zevra Therapeutics | U.S. Food and Drug Administration (FDA) accepted the arimoclomol NDA resubmission for review and set a Prescription Drug User Fee Act (PDUFA) action date of September 21, 2024. XOMA paid a |
| Medexus | FDA approved the pediatric label expansion application for IXINITY® [coagulation factor IX (recombinant)]. |
| Takeda | Reported positive topline results from Phase 2 study evaluating mezagitamab (TAK-079), a potential best-in-class anti-CD38 monoclonal antibody for primary immune thrombocytopenia (ITP).i |
| LG Chem (AVEO Oncology) | Dosed the first patient in the ficlatuzumab Phase 3 study, resulting in a |
| Compugen | Received a |
Subsequent Events
| Partner | Event |
| Day One Biopharmaceuticals | FDA approved Day One’s OJEMDA™ (tovorafenib) for use in pediatric patients with pediatric low-grade glioma (pLGG). XOMA earned a |
| Daré Bioscience | XOMA added economic interests to three best- or first-in-category assets to its portfolio. XACIATO™ vaginal gel |
| Rezolute | Dosed first patient in its Phase 3 trial of RZ358; XOMA earned a |
Anticipated 2024 Events of Note
| Partner | Event |
| Zevra Therapeutics | September 21, 2024 – FDA PDUFA action date for arimoclomol NDA |
| Takeda | In its press release dated March 13, 2024, Takeda announced plans to initiate a global Phase 3 trial of mezagitamab in ITP in fiscal year 2024.ii |
First Quarter 2024 Financial Results
XOMA recorded total revenues of
Research and development (R&D) expenses were
General and administrative (“G&A”) expenses were
In the first quarter of 2024, G&A expenses included
Interest expense in the first quarter of 2024 was
The Company reported total other income, net, of
Net loss for the first quarter of 2024 was
On March 31, 2024, XOMA had cash and cash equivalents of
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 and 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 of 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 or follow the Company on LinkedIn.
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 VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), XACIATO™ (clindamycin phosphate) vaginal gel
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, the commercial assets in XOMA’s milestone and royalty portfolio are VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), XACIATO™ (clindamycin phosphate) vaginal gel
| XOMA CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except share and per share amounts) | ||||||||
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 136,225 | $ | 153,290 | ||||
| Short-term restricted cash | 160 | 160 | ||||||
| Short-term equity securities | 413 | 161 | ||||||
| Trade and other receivables, net | 3 | 1,004 | ||||||
| Short-term royalty and commercial payment receivables | 9,819 | 14,215 | ||||||
| Prepaid expenses and other current assets | 270 | 483 | ||||||
| Total current assets | 146,890 | 169,313 | ||||||
| Long-term restricted cash | 6,016 | 6,100 | ||||||
| Property and equipment, net | 40 | 25 | ||||||
| Operating lease right-of-use assets | 364 | 378 | ||||||
| Long-term royalty and commercial payment receivables | 65,577 | 57,952 | ||||||
| Other assets - long term | 533 | 533 | ||||||
| Total assets | $ | 219,420 | $ | 234,301 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,515 | $ | 653 | ||||
| Accrued and other liabilities | 1,299 | 2,768 | ||||||
| Contingent consideration under RPAs, AAAs and CPPAs | 3,000 | 7,000 | ||||||
| Operating lease liabilities | 55 | 54 | ||||||
| Unearned revenue recognized under units-of-revenue method | 2,159 | 2,113 | ||||||
| Preferred stock dividend accrual | 1,368 | 1,368 | ||||||
| Current portion of long-term debt | 6,144 | 5,543 | ||||||
| Total current liabilities | 15,540 | 19,499 | ||||||
| Unearned revenue recognized under units-of-revenue method – long-term | 6,692 | 7,228 | ||||||
| Long-term operating lease liabilities | 319 | 335 | ||||||
| Long-term debt | 114,528 | 118,518 | ||||||
| Total liabilities | 137,079 | 145,580 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred Stock, | ||||||||
| 49 | 49 | |||||||
| — | — | |||||||
| Convertible preferred stock, 5,003 issued and outstanding at March 31, 2024 and December 31, 2023 | — | — | ||||||
| Common stock, | 87 | 86 | ||||||
| Additional paid-in capital | 1,314,036 | 1,311,809 | ||||||
| Accumulated deficit | (1,231,831 | ) | (1,223,223 | ) | ||||
| Total stockholders’ equity | 82,341 | 88,721 | ||||||
| Total liabilities and stockholders’ equity | $ | 219,420 | $ | 234,301 | ||||
| XOMA CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
| (in thousands, except share and per share amounts) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenues: | ||||||||
| Revenue from contracts with customers | $ | 1,000 | $ | - | ||||
| Revenue recognized under units-of-revenue method | 490 | 437 | ||||||
| Total revenues | 1,490 | 437 | ||||||
| Operating expenses: | ||||||||
| Research and development | 33 | 54 | ||||||
| General and administrative | 8,461 | 6,196 | ||||||
| Arbitration settlement costs | - | 4,132 | ||||||
| Amortization of intangible assets | - | 225 | ||||||
| Total operating expenses | 8,494 | 10,607 | ||||||
| Loss from operations | (7,004 | ) | (10,170 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | (3,551 | ) | - | |||||
| Other income (expense), net | 1,960 | 357 | ||||||
| Net loss and comprehensive loss | $ | (8,595 | ) | $ | (9,813 | ) | ||
| Less: accumulated dividends on Series A and Series B preferred stock | (1,368 | ) | (1,368 | ) | ||||
| Net loss and comprehensive loss attributable to common stockholders, basic and diluted | $ | (9,963 | ) | $ | (11,181 | ) | ||
| Basic and diluted net loss per share attributable to common stockholders | $ | (0.86 | ) | $ | (0.98 | ) | ||
| Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders | 11,580 | 11,460 | ||||||
| XOMA CORPORATION | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | |||||||
| Three Months Ended March 31, | |||||||
| 2024 | 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (8,595 | ) | $ | (9,813 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Stock-based compensation expense | 2,856 | 1,570 | |||||
| Common stock contribution to 401(k) | 118 | 123 | |||||
| Amortization of intangible assets | — | 225 | |||||
| Depreciation | 2 | 1 | |||||
| Accretion of long-term debt discount and debt issuance costs | 306 | — | |||||
| Non-cash lease expense | 14 | 47 | |||||
| Change in fair value of equity securities | (252 | ) | 24 | ||||
| Changes in assets and liabilities: | |||||||
| Trade and other receivables, net | 1,001 | (5 | ) | ||||
| Prepaid expenses and other assets | 213 | 269 | |||||
| Accounts payable and accrued liabilities | (105 | ) | 3,122 | ||||
| Operating lease liabilities | (15 | ) | (50 | ) | |||
| Unearned revenue recognized under units-of-revenue method | (490 | ) | (437 | ) | |||
| Net cash used in operating activities | (4,947 | ) | (4,924 | ) | |||
| Cash flows from investing activities: | |||||||
| Payments of consideration under RPAs, AAAs and CPPAs | (15,000 | ) | (9,600 | ) | |||
| Receipts under RPAs, AAAs and CPPAs | 7,771 | 2,366 | |||||
| Purchase of property and equipment | (17 | ) | — | ||||
| Net cash used in investing activities | (7,246 | ) | (7,234 | ) | |||
| Cash flows from financing activities: | |||||||
| Principal payments – debt | (3,616 | ) | — | ||||
| Debt issuance costs and loan fees paid in connection with long-term debt | (581 | ) | — | ||||
| Payment of preferred stock dividends | (1,368 | ) | (1,368 | ) | |||
| Repurchases of common stock | (13 | ) | — | ||||
| Proceeds from exercise of options and other share-based compensation | 1,956 | — | |||||
| Taxes paid related to net share settlement of equity awards | (1,334 | ) | — | ||||
| Net cash used in financing activities | (4,956 | ) | (1,368 | ) | |||
| Net decrease in cash, cash equivalents and restricted cash | (17,149 | ) | (13,526 | ) | |||
| Cash, cash equivalents and restricted cash at the beginning of the period | 159,550 | 57,826 | |||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 142,401 | $ | 44,300 | |||
| Supplemental Cash Flow Information: | |||||||
| Cash paid for interest | $ | 3,780 | $ | — | |||
| Non-cash investing and financing activities: | |||||||
| Accrual of contingent consideration under the Affitech CPPA | $ | 3,000 | $ | — | |||
| Preferred stock dividend accrual | $ | 1,368 | $ | 1,368 | |||
| Investor contact: | Media contact: |
| Juliane Snowden | Kathy Vincent |
| XOMA | KV Consulting & Management |
| +1-646-438-9754 | +1-310-403-8951 |
| juliane.snowden@xoma.com | kathy@kathyvincent.com |
FAQ
What milestone did XOMA earn with the FDA approval of OJEMDA™?
How much capital did XOMA gain from the acquisition of Kinnate Pharmaceuticals?
What did XOMA do to enhance its future financial prospects?
