XOMA Announces Q1 2024 Financial Results and Recent Highlights

28 June 2024

XOMA Corporation, a biotechnology royalty aggregator, has announced its financial results for the first quarter of 2024, alongside recent strategic activities. The company reported a significant milestone with the U.S. Food and Drug Administration's approval of Day One’s OJEMDA™ (tovorafenib), a treatment for pediatric low-grade glioma (pLGG). This approval led to XOMA earning a $9 million milestone payment and the entitlement to receive a mid-single digit royalty on the sales of OJEMDA™. 

Additionally, XOMA's acquisition of Kinnate Pharmaceuticals added at least $9.5 million in non-dilutive capital to its balance sheet. This strategic move is part of XOMA's broader effort to expand its commercial royalty and milestone portfolio. New acquisitions include economic interests in DSUVIA® (sufentanil sublingual tablet) and XACIATO™ (clindamycin phosphate) vaginal gel 2%, alongside two Phase 3 assets.

XOMA also initiated its first stock repurchase program, permitting the buyback of up to $50 million worth of shares. This move follows securing a VABYSMO® royalty-backed loan with Blue Owl, highlighting the company's strategic financial maneuvers.

Key activities for the first quarter of 2024 include:

1. OJEMDA™ Approval: The FDA’s approval of Day One Biopharmaceuticals’ OJEMDA™, a type II RAF inhibitor, for pediatric patients with relapsed or refractory pLGG harboring specific mutations. This approval brought in a $9 million milestone for XOMA and an entitlement to royalties.

2. Kinnate Pharmaceuticals Acquisition: XOMA completed the acquisition of Kinnate Pharmaceuticals with a cash payout per share and a contingent value right (CVR). This acquisition is expected to add substantial non-dilutive capital and brings along Kinnate’s pipeline.

3. Economic Interests in Commercial Assets: XOMA expanded its portfolio by acquiring economic interests in DSUVIA®, marketed by Alora Pharmaceuticals, and XACIATO™ vaginal gel 2%, marketed by Organon. These assets are part of XOMA’s strategy to build a diversified royalty and milestone portfolio.

4. Stock Repurchase Program: The company launched a stock repurchase program to buy back up to $50 million worth of its shares, showing confidence in its financial stability and future growth prospects.

First quarter financial results show total revenues of $1.5 million, up from $0.4 million in the first quarter of 2023. This increase includes a $1.0 million milestone payment from AVEO Oncology. Research and development expenses were relatively low at $33,000, reflecting XOMA's focus on acquiring economic interests rather than direct R&D activities. General and administrative expenses rose to $8.5 million from $6.2 million the previous year, largely due to increased stock-based compensation and consulting fees, as well as the appointment of Owen Hughes as full-time CEO.

Interest expenses related to the Blue Owl Loan amounted to $3.6 million, while total other income was $2.0 million, a significant increase from $0.4 million in the first quarter of 2023, driven mainly by higher market interest rates and increased investment income. Net loss for the quarter was $8.6 million, compared to $9.8 million in the same period last year.

As of March 31, 2024, XOMA held $142.4 million in cash and cash equivalents, slightly down from $159.6 million at the end of 2023. The company received $9.8 million in cash from royalty and milestone payments during the quarter and deployed $8 million to acquire new economic interests. Net cash used in operating activities was $4.9 million.

In summary, XOMA continues to strategically expand its royalty and milestone portfolio while maintaining a disciplined approach to capital deployment. The recent FDA approval of OJEMDA™ and acquisitions like Kinnate Pharmaceuticals position the company for future growth and value creation.

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