XOMA Reports Fourth Quarter and Full Year 2023 Financial Results and Highlights Recent and Upcoming Events Expected to Drive Shareholder Value
- Raised $140 million in non-dilutive capital through a royalty-backed loan for VABYSMO®
- Received $15.5 million in cash payments from royalties and milestone achievements in 2023
- Acquired economic interests in DSUVIA® and added it to their portfolio
- Closed 2023 with two partners submitting New Drug Applications to the FDA
- Recorded total revenues of $1.8 million and $4.8 million for Q4 and full year 2023, respectively
- Net loss for Q4 and full year 2023 was $20.1 million and $40.8 million, compared to $6.0 million and $17.1 million in 2022
- G&A expenses were $7.3 million for Q4 and $25.6 million for full year 2023
- Net loss increased significantly in 2023 compared to 2022
- G&A expenses saw a slight increase in 2023
- Recorded one-time arbitration settlement costs of $4.1 million in 2023
Insights
The acquisition of economic interests in DSUVIA® and the royalty-backed loan related to VABYSMO® are strategic financial moves for XOMA Corporation, reflecting a proactive approach to capital management. The $140 million royalty-backed financing deal is particularly noteworthy, as it provides non-dilutive capital that can be used to fund operations without diluting existing shareholders. This type of financing is often seen as a positive by the market, as it suggests confidence in the underlying royalty streams and the company's ability to manage debt obligations without compromising equity value.
The reported net loss of $40.8 million for the year ended December 31, 2023, compared to a net loss of $17.1 million for the previous year, indicates a substantial increase in losses, which may raise concerns among investors regarding the company's profitability trajectory. However, the increase in non-cash stock-based compensation, which is a non-cash expense, should be considered when evaluating the company's financial health. Furthermore, the impairment charges related to Bioasis and Organon's terminated License Agreement for ebopiprant, while significant, are one-time events that do not necessarily reflect ongoing operational performance.
Investors should also pay attention to the cash dividends paid on preferred stock, as this represents a fixed cash outflow that can impact the company's liquidity position. The initiation of a stock repurchase program signals management's belief that the company's stock is undervalued, which could be an indicator of confidence in the company's future prospects.
XOMA's focus on growing its royalty base and adding commercial assets like DSUVIA® indicates a strategic shift towards revenue diversification. The royalty aggregator model allows the company to leverage the success of multiple products without bearing the full risk and cost of development. This strategy can be attractive to investors looking for exposure to the biotech sector with potentially lower risk compared to traditional biotech companies focused on a single product or pipeline.
The anticipated FDA action dates for tovorafenib and arimoclomol NDAs in 2024 are significant catalysts that could impact the company's stock performance. Positive outcomes could lead to increased royalty streams and further validate XOMA's business model. However, it's important to note that the company's financial performance is contingent on its partners' clinical and regulatory successes, which adds a layer of risk.
The company's strongest cash position in its history as of the end of 2023 provides it with a solid runway to execute its strategy. However, the reliance on milestone payments and royalties means that revenue streams can be unpredictable and lumpy, which could lead to volatility in financial performance.
The termination of the License Agreement with Organon for ebopiprant and the arbitration settlement costs incurred in 2023 are legal matters with financial implications for XOMA. The termination of a license agreement can lead to a loss of potential future revenue and may necessitate impairment charges, as seen with the $14.2 million charge for ebopiprant. Investors should be aware of the inherent risks in licensing agreements, including the potential for termination and disputes that may result in arbitration or litigation. These events underscore the importance of a robust legal strategy and risk management in the biotech industry.
The acquisition of economic interests in DSUVIA® and the royalty-backed loan arrangement with Blue Owl Capital demonstrate XOMA's ability to negotiate complex financial and legal structures to optimize its capital and asset portfolio. The terms of the DSUVIA® deal, which include a tiered royalty structure and milestone payments, reflect a tailored approach to monetizing pharmaceutical assets that can maximize returns while managing risk.
Raised up to
Received
Added third commercial asset to XOMA’s portfolio with the acquisition of economic interests in DSUVIA® (sufentanil sublingual tablet) in January 2024
Closed 2023 with two partners’ New Drug Applications (NDA) submitted to the U.S. Food and Drug Administration (FDA)
EMERYVILLE, Calif., March 08, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (Nasdaq: XOMA), the biotech royalty aggregator, reported its fourth quarter and full year 2023 financial results and highlighted portfolio activities expected to drive long-term shareholder value.
“Over the course of 2023, we continued to build the foundation for future growth, spearheaded by the
Key Fourth Quarter Events
| Partner | Event |
| Day One Biopharmaceuticals |
|
| Zevra Therapeutics | Resubmitted the arimoclomol NDA with FDA |
| Medexus | Pediatric label expansion application for IXINITY® accepted for review by FDA |
| Rezolute |
|
| AstraZeneca | Launched and dosed first patient in rilvegostomig Phase 3 study |
| LG Chem (AVEO Oncology) | Launched ficlatuzumab Phase 3 study |
| Organon | Announced intent to terminate ebopiprant License Agreement |
Anticipated 2024 Events of Note
| Partner | Event |
| Day One Biopharmaceuticals | April 30, 2024 – FDA action date for tovorafenib NDA |
| Zevra Therapeutics | September 21, 2024 – FDA action date for arimoclomol NDA |
| Medexus | FDA decision regarding IXINITY® pediatric label expansion |
Financial Results
XOMA recorded total revenues of
General and administrative (“G&A”) expenses were
In the fourth quarter of 2023, G&A expenses included
XOMA received cash payments of approximately
XOMA incurred one-time arbitration settlement costs of
For the year ended December 31, 2023, XOMA recorded
Other income, net was
In 2023, net loss for the fourth quarter and year ended December 31, 2023, was
On December 31, 2023, XOMA had cash and cash equivalents of
Subsequent Events
On January 2, 2024, the Company announced a stock repurchase program of up to
On January 7, 2024, Owen Hughes was appointed as Chief Executive Officer and Jack Wyszomierski was named Chairman of the Board of Directors.
On January 18, 2024, XOMA acquired an economic interest in DSUVIA® (sufentanil sublingual tablet) from Talphera, Inc., for
On February 16, 2024, XOMA announced its intention to acquire Kinnate Biopharma for between
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.
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), IXINITY® [coagulation factor IX (recombinant)], DSUVIA® (sufentanil sublingual tablet), tovorafenib, and arimoclomol; the potential out-licensing of ebopiprant to an external partner for further development; the anticipated timings of regulatory filings and approvals related to assets in XOMA’s portfolio; the potential of XOMA’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time; and XOMA’s cash sufficiency forecast. 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, our third-party licensees will not be able to market them; and the impact to the global economy as a result of the COVID-19 pandemic. Other potential risks to XOMA meeting these expectations are described in more detail in XOMA's most recent filing on Form 10-Q 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-svoa), IXINITY® [coagulation factor IX (recombinant)], 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 CORPORATION | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
| (in thousands, except per share amounts) | ||||||||
| Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues: | ||||||||
| Revenue from contracts with customers | $ | 2,650 | $ | 4,150 | ||||
| Revenue recognized under units-of-revenue method | 2,108 | 1,877 | ||||||
| Total revenues | 4,758 | 6,027 | ||||||
| Operating expenses: | ||||||||
| Research and development | 143 | 153 | ||||||
| General and administrative | 25,606 | 23,191 | ||||||
| Impairment charges | 15,828 | - | ||||||
| Arbitration settlement costs | 4,132 | - | ||||||
| Amortization of intangible assets | 897 | 97 | ||||||
| Total operating expenses | 46,606 | 23,441 | ||||||
| Loss from operations | (41,848 | ) | (17,414 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | (569 | ) | - | |||||
| Other income (expense), net | 1,586 | 295 | ||||||
| Loss before income tax | $ | (40,831 | ) | $ | (17,119 | ) | ||
| Income tax benefit | - | 15 | ||||||
| Net loss and comprehensive loss | $ | (40,831 | ) | $ | (17,104 | ) | ||
| Net loss and comprehensive loss attributable to common stockholders, basic and diluted | $ | (46,303 | ) | $ | (22,576 | ) | ||
| Basic and diluted net loss per share attributable to common stockholders | $ | (4.04 | ) | $ | (1.98 | ) | ||
| Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders | 11,471 | 11,413 | ||||||
| XOMA CORPORATION | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except share and per share amounts) | ||||||||
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 153,290 | $ | 57,826 | ||||
| Short-term restricted cash | 160 | - | ||||||
| Short-term equity securities | 161 | 335 | ||||||
| Trade and other receivables, net | 1,004 | 1 | ||||||
| Short-term royalty and commercial payment receivables | 14,215 | 2,366 | ||||||
| Prepaid expenses and other current assets | 483 | 725 | ||||||
| Total current assets | 169,313 | 61,253 | ||||||
| Long-term restricted cash | 6,100 | - | ||||||
| Property and equipment, net | 25 | 7 | ||||||
| Operating lease right-of-use assets | 378 | 29 | ||||||
| Long-term royalty and commercial payment receivables | 57,952 | 63,683 | ||||||
| Intangible assets, net | - | 15,150 | ||||||
| Other assets - long term | 533 | 260 | ||||||
| Total assets | $ | 234,301 | $ | 140,382 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 653 | $ | 524 | ||||
| Accrued and other liabilities | 2,768 | 2,918 | ||||||
| Contingent consideration under RPAs, AAAs and CPPAs | 7,000 | 75 | ||||||
| Operating lease liabilities | 54 | 34 | ||||||
| Unearned revenue recognized under units-of-revenue method | 2,113 | 1,899 | ||||||
| Preferred stock dividend accrual | 1,368 | 1,368 | ||||||
| Current portion of long-term debt | 5,543 | - | ||||||
| Total current liabilities | 19,499 | 6,818 | ||||||
| Unearned revenue recognized under units-of-revenue method – long-term | 7,228 | 9,550 | ||||||
| Long-term operating lease liabilities | 335 | - | ||||||
| Long-term debt | 118,518 | - | ||||||
| Total liabilities | 145,580 | 16,368 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred Stock, | ||||||||
| 49 | 49 | |||||||
| — | — | |||||||
| Convertible preferred stock, 5,003 issued and outstanding at December 31, 2023 and December 31, 2022 | — | — | ||||||
| Common stock, | 86 | 86 | ||||||
| Additional paid-in capital | 1,311,809 | 1,306,271 | ||||||
| Accumulated deficit | (1,223,223 | ) | (1,182,392 | ) | ||||
| Total stockholders’ equity | 88,721 | 124,014 | ||||||
| Total liabilities and stockholders’ equity | $ | 234,301 | $ | 140,382 | ||||
| XOMA CORPORATION | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | |||||||
| Year Ended December 31, | |||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (40,831 | ) | $ | (17,104 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Stock-based compensation expense | 9,099 | 3,608 | |||||
| Impairment charges | 15,828 | — | |||||
| Change in fair value of contingent consideration under RPAs, AAAs, and CPPAs | (75 | ) | — | ||||
| Common stock contribution to 401(k) | 123 | 85 | |||||
| Amortization of intangible assets | 897 | 97 | |||||
| Depreciation | 3 | 7 | |||||
| Accretion of long-term debt | 34 | — | |||||
| Non-cash lease expense | 119 | 170 | |||||
| Change in fair value of equity securities | 174 | 439 | |||||
| Changes in assets and liabilities: | |||||||
| Trade and other receivables, net | (1,003 | ) | 208 | ||||
| Prepaid expenses and other assets | 219 | (71 | ) | ||||
| Accounts payable and accrued liabilities | (523 | ) | 1,845 | ||||
| Income taxes payable | — | (91 | ) | ||||
| Operating lease liabilities | (114 | ) | (195 | ) | |||
| Unearned revenue recognized under units-of-revenue method | (2,108 | ) | (1,877 | ) | |||
| Net cash used in operating activities | (18,158 | ) | (12,879 | ) | |||
| Cash flows from investing activities: | |||||||
| Payments of consideration under RPAs, AAAs and CPPAs | (14,650 | ) | (8,000 | ) | |||
| Receipts under RPAs, AAAs and CPPAs | 13,956 | 3,026 | |||||
| Payment for IP acquired under the ObsEva IP Acquisition Agreement | — | (15,247 | ) | ||||
| Purchase of property and equipment | (17 | ) | — | ||||
| Net cash used in investing activities | (711 | ) | (20,221 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of long-term debt | 130,000 | — | |||||
| Debt issuance costs and loan fees | (4,253 | ) | — | ||||
| Payment of preferred stock dividends | (5,472 | ) | (5,472 | ) | |||
| Proceeds from exercise of options and other share-based compensation | 466 | 2,419 | |||||
| Taxes paid related to net share settlement of equity awards | (148 | ) | (1,398 | ) | |||
| Net cash provided by (used in) financing activities | 120,593 | (4,451 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 101,724 | (37,551 | ) | ||||
| Cash, cash equivalents at the beginning of the period | 57,826 | 95,377 | |||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 159,550 | $ | 57,826 | |||
| Supplemental Cash Flow Information: | |||||||
| Cash paid for taxes | $ | — | $ | 76 | |||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | 468 | $ | — | |||
| Non-cash investing and financing activities: | |||||||
| Issuance of common stock warrants in connection with long-term debt | $ | 1,470 | $ | — | |||
| Accrued issuance costs in connection with issuance of long-term debt | $ | 501 | $ | — | |||
| Preferred stock dividend accrual | $ | 1,368 | $ | 1,368 | |||
| Estimated fair value of contingent consideration under the LadRx Agreements | $ | 1,000 | $ | — | |||
| Accrued transaction costs in connection with ObsEva IP Acquisition | $ | — | $ | 122 | |||
| Accrual of contingent consideration under the Affitech CPPA | $ | 6,000 | $ | — | |||
| Investor contact: Juliane Snowden XOMA +1-646-438-9754 juliane.snowden@xoma.com | Media contact: Kathy Vincent KV Consulting & Management +1-310-403-8951 kathy@kathyvincent.com |
FAQ
How much non-dilutive capital did XOMA raise through a royalty-backed loan?
What were XOMA's total revenues for Q4 and full year 2023?
What was XOMA's net loss for Q4 and full year 2023?
What expenses did XOMA incur in Q4 and full year 2023?
What acquisition did XOMA make in January 2024?
What was XOMA's cash position at the end of 2023?
What significant event did XOMA announce on January 2, 2024?
What is XOMA's plan regarding the acquisition of Kinnate Biopharma?
