XOMA Royalty Reports Q3 2024 Financial Results and Recent Activities

XOMA Royalty Corporation, a biotech firm specializing in royalty aggregation, has released its financial performance details for the third quarter of 2024, alongside recent corporate updates. The company continues to expand its portfolio, aiming to create sustainable cash flows by acquiring royalty interests throughout various stages of drug development.

Owen Hughes, the CEO of XOMA Royalty, emphasized the company’s strategic approach in building a diversified portfolio. A significant milestone was achieved with the FDA approval of Zevra’s MIPLYFFA™ (arimoclomol), marking the first approved treatment for Niemann-Pick disease Type C, adding another commercial asset to XOMA’s growing royalty portfolio. Additionally, the recent agreement with Twist Bioscience has expanded XOMA's early-stage portfolio, reflecting the company's strategy to mitigate risks through diversification.

Key events during the third quarter included significant developments from Zevra Therapeutics, Rezolute, and Johnson & Johnson. Zevra’s MIPLYFFA™ received FDA approval for treating neurological manifestations of Niemann-Pick disease Type C in patients aged two and older. Rezolute announced the initiation of the Phase 3 trial for ersodetug (RZ358) targeting congenital hyperinsulinism, with FDA clearance for a Phase 3 study addressing hypoglycemia due to tumor hyperinsulinism. Johnson & Johnson presented promising Phase 2 data for TAR-200 plus cetrelimab in muscle-invasive bladder cancer patients at the European Society of Medical Oncology 2024 Congress.

Following the quarter, XOMA finalised a $15 million agreement with Twist Bioscience, securing 50% of future milestone payments and royalties from 60 early-stage programs across 30 partnerships. However, one of Johnson & Johnson’s Phase 3 trials involving cetrelimab for muscle-invasive bladder cancer was discontinued due to insufficient superiority over chemoradiation during an interim analysis. Despite this, cetrelimab continues to be the subject of several other clinical trials.

Financially, XOMA Royalty reported a total income and revenue of $7.2 million for Q3 2024, a significant rise from $0.8 million in Q3 2023. The increase was primarily driven by income from two commercial products in its portfolio. Research and development expenses for Q3 2024 were $0.8 million, up from $25,000 in Q3 2023, reflecting costs from winding down the KIN-3248 clinical trial, an asset acquired from Kinnate. General and administrative expenses rose to $8.0 million in Q3 2024, up from $6.4 million in Q3 2023, mainly due to costs associated with the Kinnate acquisition, including legal and consulting fees.

A notable financial event was a $14.0 million non-cash impairment charge related to the Agenus Royalty Purchase Agreement, leading to a net loss of $17.2 million for Q3 2024, compared to a $5.5 million net loss in Q3 2023. The company’s interest expenses amounted to $3.5 million, linked to the Blue Owl Loan established in December 2023. Other income increased to $1.9 million in Q3 2024 from $0.3 million in Q3 2023, primarily due to higher investment income and changes in the market price of XOMA’s shares of Rezolute.

As of September 30, 2024, XOMA Royalty held cash and cash equivalents totaling $146.8 million, including $4.8 million in restricted cash, down from $159.6 million at the end of 2023. The company received $9.9 million in cash from royalty and commercial payments during the third quarter, with net cash used in operations amounting to $8.6 million. Additionally, on October 15, 2024, XOMA Royalty paid $1.4 million in cash dividends on its Series A and Series B Cumulative Perpetual Preferred Stocks.

XOMA Royalty Corporation remains committed to its strategy of acquiring and managing a diversified portfolio of royalty interests, aiming to provide non-dilutive funding for biotech companies while potentially capturing significant future earnings through milestone and royalty payments.