Miglustat

FDA approval of MIPLYFFA™ and product launch cap third quarter filled with multiple commercial and clinical development milestones Zevra received rare pediatric disease Priority Review Voucher Company ends quarter with cash, cash equivalents and investments of $95.5 million Company to host conference call and webcast today, Nov. 12, 2024, 4:30 p.m. ET CELEBRATION, Fla., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Zevra Therapeutics, Inc. (NasdaqGS: ZVRA) (Zevra, or the Company), a commercial-stage company focused on addressing unmet needs for the treatment of rare diseases, today reported its financial results for the third quarter ended Sept. 30, 2024, and provided corporate updates. “The third quarter was one of the most exciting and transformational periods in Zevra’s journey,” said Neil F. McFarlane, Zevra’s President and Chief Executive Officer. “After years of tireless effort, our team has achieved a major milestone with FDA approval of MIPLYFFA™ (arimoclomol), and we’re celebrating with the Niemann-Pick disease type C (NPC) community. We intend to achieve our goals with a high-performing team committed to execute, focus and innovate to drive our continued growth and long-term transformation.” Program Highlights On Sept. 20, the U.S. Food and Drug Administration (FDA) approved MIPLYFFA capsules as an orally delivered treatment for NPC. MIPLYFFA, the first NPC drug approved by the FDA, is indicated for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients 2 years of age and older. With the approval of MIPLYFFA, Zevra received a rare pediatric disease Priority Review Voucher (PRV) which the Company could monetize to help fund its growth. As of Oct. 31, Zevra has received 90 prescription enrollment forms for MIPLYFFA of which 30% are approved for reimbursement and are ready for fulfillment upon drug availability, consistent with the Company’s prior guidance of eight to 12 weeks post launch. Zevra has launched AmplifyAssist™, a comprehensive support program for caregivers and those eligible living with NPC or UCDs. OLPRUVA® had three new patient enrollments in the third quarter, and reimbursement coverage is at approximately 76% of covered lives. Improving OLPRUVA’s formulary position is a primary objective to make it the preferred treatment for UCDs. Zevra is refining its commercial strategy for OLPRUVA to focus on specific patient segments where there are fewer access barriers, and, together with The National Urea Cycle Disorders Foundation, launched a targeted patient education campaign highlighting the importance of prompt and accurate testing of blood ammonia levels, which, when elevated, may be a sign of a UCD. Campaign materials are available at www.checkammonia.com. The Company recently completed an End-of-Phase 2 meeting with the FDA for KP1077. The Agency indicated that a single pivotal study with appropriate confirmatory evidence will be sufficient to submit a new drug application (NDA). Zevra is evaluating strategic alternatives to advance clinical development and later, commercialization. The Phase 3 DiSCOVER trial of celiprolol for the treatment of Vascular Ehler-Danlos Syndrome (VEDS) is underway, and the Company has achieved its objective to restart enrollment and to begin dosing new patients, reporting that a total of 19 patients are now in the trial as of the end of the third quarter. Zevra is continuing its efforts to expand its partnerships with patient advocacy groups, treatment centers of excellence, and medical key opinion leaders. Corporate Highlights and Upcoming Milestones In August, Zevra completed an underwritten public offering of 10,615,385 shares of its common stock at an offering price of $6.50 per share for total net proceeds of approximately $64.5 million, after deducting underwriting discounts and commissions and offering expenses. Cantor and William Blair were joint book-running managers for the offering. Citizens JMP and H.C. Wainwright & Co. were co-managers. The Company completed a thorough portfolio assessment and developed a strategic plan for 2025 that builds from its 2024 accomplishments and furthers Zevra’s transformation towards becoming a leading rare disease company with a five-year vision to create value for patients and shareholders by organizing our priorities on four key pillars: Commercial Excellence, Pipeline and Innovation, Talent and Culture, and Corporate Foundation. Now focused on late-stage clinical development and commercial opportunities, Zevra has discontinued its in-house drug discovery activities and is closing its laboratory facilities in Iowa and Virginia. Future early research and development activities will be outsourced. Q3 2024 Financial Highlights Revenue, Net: $3.7 million, comprised of $2.6 million in net reimbursements from the French expanded access program (EAP) for arimoclomol, $1.1 million of royalties and other reimbursements under the AZSTARYS® license agreement, and de minimis OLPRUVA revenue. Cost of Goods Sold: $2.3 million, which includes recognition of $2.0 million in inventory obsolescence reserve expense related to OLPRUVA inventory that is nearing expiration. R&D Expenses: $10.9 million, which represents a decrease of $1.4 million compared to Q3 2023 due to the completion of the KP1077 phase 2 trial. SG&A Expenses: $16.2 million for Q3 2024, compared to $5.8 million in Q3 2023, which reflects the commercial team fully in place and actively engaged in commercial launch activities and patient services initiatives. This includes non-cash stock compensation of $6.1 million during the quarter, of which $2.5 million was performance-based upon the approval of MIPLYFFA. Net Loss: ($33.2) million, or ($0.69) per basic and diluted share for Q3 2024, compared to a net loss of ($10.4) million, or ($0.30) per basic and diluted share in Q3 2023. Cash Position: Cash, cash equivalents and investments were $95.5 million as of Sept. 30, 2024. Cash Runway Forecast: Based on the Company’s current operating plan, available cash, cash equivalents and investments are expected to extend Zevra’s cash runway into 2027, subject to continuing compliance with debt covenants. Cash runway forecast includes anticipated revenue from MIPLYFFA sales, reimbursements from the French EAP for arimoclomol, royalties under the AZSTARYS license agreement, and continued investments into our development pipeline programs. It does not include potential proceeds from a PRV sale. Common and Fully Diluted Shares O/S: As of Sept. 30, 2024, total shares of common stock outstanding were 53,227,364, and fully diluted common shares were 67,698,898, which included 5,483,537 shares issuable upon exercise of warrants. Upcoming Events Guggenheim Securities Healthcare Innovation Conference, with fireside chat on Wednesday, Nov. 13, 2024, at 4:00 p.m. ET. Management will be available for one-on-one meetings with registered attendees. Conference Call Information - UPDATED Zevra will host a conference call and audio webcast today at 4:30 p.m. ET to discuss its corporate update and financial results for the third quarter of 2024. The audio webcast will be accessible via the Investor Relations section of the Company’s website, http://investors.zevra.com/. An archive of the audio webcast will be available for ninety (90) days beginning at approximately 5:30 p.m. ET on Nov. 12, 2024. Additionally, interested participants and investors may access the conference call by dialing either: (785) 838-9345 (United States) -- updated dial-in +1 (203) 518-9814 (International)Conference ID: ZVRAQ324 About MIPLYFFA MIPLYFFA (arimoclomol) increases the activation of the transcription factors EB (TFEB) and E3 (TFE3) resulting in the upregulation of coordinated lysosomal expression and regulation (CLEAR) genes. MIPLYFFA has also been shown to reduce unesterified cholesterol in the lysosomes of human NPC fibroblasts. The clinical significance of these findings is not fully understood. MIPLYFFA was granted Breakthrough Therapy designation, Rare Pediatric Disease designation, Orphan Drug designation, and Fast Track designation by the FDA for the treatment of NPC. MIPLYFFA was further granted Orphan Medicinal Product designation by the European Medicines Agency (EMA) for the treatment of NPC. INDICATIONS AND USAGE MIPLYFFA is indicated for use in combination with miglustat for the treatment of neurological manifestations of Niemann-Pick disease type C (NPC) in adult and pediatric patients 2 years of age and older. IMPORTANT SAFETY INFORMATION Hypersensitivity Reactions: Hypersensitivity reactions such as urticaria and angioedema have been reported in patients treated with MIPLYFFA during Trial 1: two patients reported both urticaria and angioedema (6%) and one patient (3%) experienced urticaria alone within the first two months of treatment. Discontinue MIPLYFFA in patients who develop severe hypersensitivity reactions. If a mild or moderate hypersensitivity reaction occurs, stop MIPLYFFA and treat promptly. Monitor the patient until signs and symptoms resolve. Embryofetal Toxicity: MIPLYFFA may cause embryofetal harm when administered during pregnancy based on findings from animal reproduction studies. Advise pregnant females of the potential risk to the fetus and consider pregnancy planning and prevention for females of reproductive potential. Increased Creatinine without Affecting Glomerular Function: Across clinical trials of MIPLYFFA, mean increases in serum creatinine of 10% to 20% compared to baseline were reported. These increases occurred mostly in the first month of MIPLYFFA treatment and were not associated with changes in glomerular function. During MIPLYFFA treatment, use alternative measures that are not based on creatinine to assess renal function. Increases in creatinine reversed upon MIPLYFFA discontinuation. The most common adverse reactions in Trial 1 (≥15%) in MIPLYFFA-treated patients who also received miglustat were upper respiratory tract infection, diarrhea, and decreased weight. Three (6%) of the MIPLYFFA-treated patients had the following adverse reactions that led to withdrawal from Trial 1: increased serum creatinine (one patient), and progressive urticaria and angioedema (two patients). Serious adverse reactions reported in MIPLYFFA-treated patients were hypersensitivity reactions including urticaria and angioedema. To report SUSPECTED ADVERSE REACTIONS, contact Zevra Therapeutics, Inc. at toll-free phone 1-844-600-2237 or FDA at 1 800-FDA-1088 or www.fda.gov/medwatch. Before prescribing MIPLYFFA, please read the full Prescribing Information, including Instructions for Use. Drug Interaction(s): Arimoclomol is an inhibitor of the organic cationic transporter 2 (OCT2) transporter and may increase the exposure of drugs that are OCT2 substrates. When MIPLYFFA is used concomitantly with OCT2 substrates, monitor for adverse reactions and reduce the dosage of the OCT2 substrate. Use in Females and Males of Reproductive Potential: Based on animal findings, MIPLYFFA may impair fertility and may increase post-implantation loss and reduce maternal, placental, and fetal weights. Renal Impairment: The recommended dosage of MIPLYFFA, in combination with miglustat, in patients with an eGFR ≥15 mL/minute to <50 mL/minute is lower than the recommended dosage (less frequent dosing) in patients with normal renal function. MIPLYFFA capsules for oral use are available in the following strengths: 47 mg, 62 mg, 93 mg, and 124 mg. About OLPRUVA OLPRUVA (sodium phenylbutyrate) was approved for the treatment of certain UCDs in December 2022 and has recently been marketed under the brand name, OLPRUVA. OLPRUVA (sodium phenylbutyrate) for oral suspension is a prescription medicine used along with certain therapies, including changes in diet, for the long-term management of adults and children weighing 44 pounds (20 kg) or greater and with a body surface area (BSA) of 1.2 m2 or greater, with UCDs, involving deficiencies of carbamylphosphate synthetase (CPS), ornithine transcarbamylase (OTC), or argininosuccinic acid synthetase (AS). OLPRUVA is not used to treat rapid increase of ammonia in the blood (acute hyperammonemia), which can be life-threatening and requires emergency medical treatment. For more information, please visit www.OLPRUVA.com. Important Safety Information Certain medicines may increase the level of ammonia in your blood or cause serious side effects when taken during treatment with OLPRUVA. Tell your doctor about all the medicines you or your child take, especially if you or your child take corticosteroids, valproic acid, haloperidol, and/or probenecid. OLPRUVA can cause serious side effects, including: 1) nervous system problems (neurotoxicity). Symptoms include sleepiness, tiredness, lightheadedness, vomiting, nausea, headache, confusion, 2) low potassium levels in your blood (hypokalemia) and 3) conditions related to swelling (edema). OLPRUVA contains salt (sodium), which can cause swelling from salt and water retention. Tell your doctor right away if you or your child get any of these symptoms. Your doctor may do certain blood tests to check for side effects during treatment with OLPRUVA. If you have certain medical conditions such as heart, liver or kidney problems, are pregnant/planning to get pregnant or breast-feeding, your doctor will decide if OLPRUVA is right for you. The most common side effects of OLPRUVA include absent or irregular menstrual periods, decreased appetite, body odor, bad taste or avoiding foods you ate prior to getting sick (taste aversion). These are not all of the possible side effects of OLPRUVA. Call your doctor for medical advice about side effects. You may report side effects to FDA at 1-800-FDA-1088. About KP1077 Serdexmethylphenidate (SDX) is Zevra’s proprietary prodrug of d-methylphenidate (d-MPH) and is the sole active pharmaceutical ingredient (API) of KP1077. KP1077 has been granted Orphan Drug designation by the FDA, and by the European Commission, for the treatment of Idiopathic Hypersomnia, or IH. The U.S. Drug Enforcement Agency (DEA) has classified SDX as a Schedule IV controlled substance based on evidence suggesting SDX has a lower potential for abuse when compared to d-MPH, a Schedule II controlled substance. In addition, KP1077 has intellectual property protection through 2037. About Celiprolol Celiprolol is an investigational clinical candidate for the treatment of Vascular Ehlers-Danlos Syndrome (VEDS). Celiprolol has been granted Orphan Drug and Breakthrough Therapy designations by the FDA. Zevra recently restarted enrollment in the Phase 3 trial, known as the DiSCOVER trial being conducted under a Special Protocol Assessment (SPA) agreement with the FDA. Celiprolol’s mechanism of action is designed to reduce the mechanical stress on collagen fibers within the arterial wall through vascular dilation and smooth muscle relaxation. About Zevra Therapeutics, Inc. Zevra Therapeutics, Inc. is a commercial-stage rare disease company combining science, data, and patient needs to create transformational therapies for diseases with limited or no treatment options. Our mission is to bring life-changing therapeutics to people living with rare diseases. With unique, data-driven development and commercialization strategies, the Company is overcoming complex drug development challenges to make new therapies available to the rare disease community. Expanded access programs are made available by Zevra Therapeutics, Inc. and its affiliates and are subject to the Company's Expanded Access Program (EAP) policy, as published on its website. Participation in these programs is subject to the laws and regulations of each jurisdiction under which each respective program is operated. Eligibility for participation in any such program is at the treating physician's discretion. For more information, please visit www.zevra.com or follow us on X and LinkedIn. Cautionary Note Concerning Forward-Looking Statements This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the promise and potential impact of our preclinical or clinical trial data; the initiation, timing and results of any clinical trials or readouts, the content, information used for, timing or results of any NDA submissions or resubmissions for any products or product candidates for any specific disease indication or at any dosage; the potential benefits of any of our products or product candidates for any specific disease or at any dosage; the impact of meetings or communications with the FDA or any advisory committee; statements or decisions by the FDA or any other entity for any products or product candidates; our ability to monetize any PRV; future research and development activities; our strategic and product development objectives, including with respect to becoming a leading, commercially focused rare disease company; the potential benefits of our debt facility; our financial position, including our cash balance; our corporate governance objectives; potential revenues from our arimoclomol expanded access program in France; the potential for royalty and milestone contributions, the presentation of data at conferences; and the timing of any of the foregoing. Forward-looking statements are based on information currently available to Zevra and its current plans or expectations. They are subject to several known and unknown uncertainties, risks, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These and other important factors are described in detail in the “Risk Factors” section of Zevra’s Annual Report on Form 10-K for the year ended Dec. 31, 2023, Zevra’s Quarterly Report on Form 10-Q for the three months ended Sept. 30, 2024, and Zevra’s other filings with the Securities and Exchange Commission. While we may elect to update such forward-looking statements at some point in the future, except as required by law, we disclaim any obligation to do so, even if subsequent events cause our views to change. Although we believe the expectations reflected in such forward-looking statements are reasonable, we cannot assure that such expectations will prove correct. These forward-looking statements should not be relied upon as representing our views as of any date after the date of this press release. Zevra Contact Nichol Ochsner+1 (732) 754-2545nochsner@zevra.com Russo Partners Contact David Schull+1 (858) 717-2310david.schull@russopartnersllc.com ZEVRA THERAPEUTICS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share and per share amounts) Three months ended September 30, Nine months ended September 30, 2024 2023 2024 2023 Revenue, net $3,695 $2,895 $11,569 $14,541 Cost of product revenue (excluding $1,545 and $4,619 in intangible asset amortization for the three and nine months ended September 30, 2024, respectively shown separately below) 2,303 144 6,051 946 Intangible asset amortization 1,545 — 4,619 — Operating expenses: Research and development 10,945 12,297 33,743 28,385 Selling, general and administrative 16,208 5,818 38,743 19,657 Total operating expenses 27,153 18,115 72,486 48,042 Loss from operations (27,306) (15,364) (71,587) (34,447)Other (expense) income: Interest expense (2,312) (366) (5,157) (745)Fair value adjustment related to warrant and CVR liability (4,746) 3,678 4,660 4,253 Fair value adjustment related to investments 90 124 64 451 Interest and other income (expense), net 1,049 1,738 2,248 4,331 Total other (expense) income (5,919) 5,174 1,815 8,290 Loss before income taxes (33,225) (10,190) (69,772) (26,157)Income tax expense — (177) — — Net loss $(33,225) $(10,367) $(69,772) $(26,157) Basic and diluted net loss per share of common stock: Net loss $(0.69) $(0.30) $(1.59) $(0.76) Weighted average number of shares of common stock outstanding: Basic and diluted 47,808,817 34,724,614 43,843,851 34,364,075 ZEVRA THERAPEUTICS, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and par value amounts) September 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $54,039 $43,049 Securities at fair value, current 35,337 24,688 Accounts and other receivables 7,790 17,377 Prepaid expenses and other current assets 2,276 1,824 Total current assets 99,442 86,938 Inventories 8,756 9,841 Securities at fair value, long-term 6,105 — Property and equipment, net 607 736 Operating lease right-of-use assets 820 790 Goodwill 4,701 4,701 Intangible assets, net 70,608 69,227 Other long-term assets 512 94 Total assets $191,551 $172,327 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $24,464 $28,403 Line of credit payable — 37,700 Current portion of operating lease liabilities 540 543 Current portion of discount and rebate liabilities 8,547 4,550 Other current liabilities 930 2,524 Total current liabilities 34,481 73,720 Long-term debt 58,904 5,066 Warrant liability 13,902 16,100 Operating lease liabilities, less current portion 483 456 Discount and rebate liabilities, less current portion 8,490 7,663 Other long-term liabilities 5,521 7,458 Total liabilities 121,781 110,463 Commitments and contingencies Stockholders’ equity: Preferred stock: Undesignated preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of September 30, 2024, or December 31, 2023 — — Common stock, $0.0001 par value, 250,000,000 shares authorized, 54,803,056 shares issued and 53,227,364 shares outstanding as of September 30, 2024; 43,110,360 shares issued and 41,534,668 shares outstanding as of December 31, 2023 5 4 Additional paid-in capital 550,413 472,664 Treasury stock, at cost (10,983) (10,983)Accumulated deficit (469,550) (399,778)Accumulated other comprehensive income (loss) (115) (43)Total stockholders' equity 69,770 61,864 Total liabilities and stockholders' equity $191,551 $172,327

Zevra’s MIPLYFFA™ (arimoclomol) received FDA approval and became the sixth commercial asset in XOMA Royalty’s portfolio XOMA Royalty acquired a 50 percent economic interest in TWIST Bioscience’s portfolio of 60-plus licensed early-stage assets across approximately 30 partners Cash receipts totaled $9.9 million in the third quarter, and $42.3 million for the first nine months of 2024 EMERYVILLE, Calif., Nov. 07, 2024 (GLOBE NEWSWIRE) -- XOMA Royalty Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its third quarter 2024 financial results and highlighted recent activities. “We continue to take a balanced approach to building a portfolio of sustainable cashflow streams by selectively acquiring royalty economics across the lifecycle of drug development,” stated Owen Hughes, Chief Executive Officer of XOMA Royalty. “The September approval of MIPLYFFA™, the first therapy approved for patients living with Niemann-Pick disease Type C, adds to our growing commercial royalty portfolio, while the recent transaction with Twist Bioscience further expands our early-stage portfolio, a key focus for us as we look to distribute risk across a diversified portfolio.” Key Third Quarter Events PartnerEventZevra TherapeuticsThe U.S. Food and Drug Administration (FDA) approved Zevra’s MIPLYFFA™ (arimoclomol) capsules as an orally delivered treatment for Niemann-Pick disease type C (NPC). MIPLYFFA™ is indicated for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients 2 years of age and older.RezoluteAnnounced the sunRIZE Phase 3 clinical trial investigating ersodetug (RZ358) in patients with congenital hyperinsulinism (CHI) will begin enrolling patients in the U.S. in early 2025¹.Received FDA clearance to initiate Phase 3 registrational study for ersodetug for the treatment of hypoglycemia due to tumor hyperinsulinism².Johnson & JohnsonPresented neoadjuvant TAR-200 plus cetrelimab Phase 2 data in patients with muscle-invasive bladder cancer (MIBC) who are ineligible or refuse neoadjuvant platinum-based chemotherapy and are scheduled for radical cystectomy at the European Society of Medical Oncology 2024 Congress³. Subsequent Events PartnerEventTwist BioscienceXOMA Royalty completed a $15 million royalty monetization agreement with Twist, acquiring 50% of the future milestones and royalties and adding 60-plus partnered early-stage programs across 30 companies enabled by Twist Bioscience’s Biopharma Solutions business unit to the XOMA Royalty portfolio.Johnson & JohnsonAnnounced one of two Phase 3 clinical trials in difficult to treat muscle-invasive bladder cancer (MIBC) that included treatment with cetrelimab was being discontinued for not showing superiority to chemoradiation during a scheduled interim analysis⁴. Cetrelimab continues to be investigated in multiple other clinical trials. Anticipated 2024 Events of Note PartnerEventTakedaOn December 12, 2024, Takeda will be hosting an R&D Day: Focus on Late-State Pipeline and Market Opportunity and has commented publicly mezagitamab will be discussed during this investor event. Third Quarter 2024 Financial Results XOMA Royalty recorded total income and revenues of $7.2 million for the third quarter of 2024, which included $6.5 million in estimated income associated with two commercial products in our portfolio. In the third quarter of 2023, XOMA Royalty reported total income and revenue of $0.8 million. Research and development (R&D) expenses were $0.8 million in the third quarter of 2024, reflecting transitory clinical trial costs related to KIN-3248, an asset acquired in the Kinnate acquisition, which the Company currently is winding down. R&D expenses in the third quarter of 2023 were $25,000. General and administrative (“G&A”) expenses were $8.0 million for the third quarter of 2024 compared with $6.4 million in the third quarter of 2023. The increase of $1.6 million was primarily comprised of $1.4 million in total costs incurred after our acquisition of Kinnate, which included $1.1 million in legal and consulting costs, $0.1 million in information technology costs, and $0.1 million in insurance costs. The remainder of the increased G&A expense reflects an increase of $0.2 million for salaries and related costs. In the third quarter of 2024, as a result of communications with Agenus, XOMA Royalty evaluated the status of the partnered programs underlying the Agenus Royalty Purchase Agreement for potential impairment and recorded a one-time, non-cash impairment charge of $14.0 million and a reduction of royalty receivables of $14.0 million associated with Agenus. In the third quarters of 2024 and 2023, G&A expenses included $2.6 million and $2.7 million, respectively, in non-cash stock-based compensation expenses. Total interest expense in the third quarter of 2024 was $3.5 million, representing interest and costs related to the Blue Owl Loan established in December 2023. The Company reported total other income, net, of $1.9 million in the third quarter of 2024, as compared to total other income, net, of $0.3 million in the corresponding period of 2023. The $1.6 million increase reflects a $1.3 million increase in investment income due to higher balances on our investments and the change in the market price for XOMA Royalty’s shares of Rezolute common stock. Net loss for the third quarter of 2024 was $17.2 million, compared to a net loss of $5.5 million for the third quarter of 2023, primarily resulting from the $14.0 million non-cash impairment related to the Agenus Royalty Purchase Agreement. On September 30, 2024, XOMA Royalty had cash and cash equivalents of $146.8 million (including $4.8 million in restricted cash). On December 31, 2023, XOMA Royalty had cash and cash equivalents of $159.6 million (including $6.3 million in restricted cash). During the third quarter of 2024, XOMA Royalty received $9.9 million in cash from royalty and commercial payments. Net cash used in operating activities during the quarter was $8.6 million. On October 15, 2024, the Company paid a total of $1.4 million in cash dividends on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) and the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO). About XOMA Royalty Corporation XOMA Royalty is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA Royalty acquires the potential future economics associated with pre-commercial and commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. When XOMA Royalty 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 XOMA Royalty Corporation 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 Royalty and other developments related to VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), MIPLYFFA™ (arimoclomol), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], and DSUVIA® (sufentanil sublingual tablet); the potential occurrences of the events listed under “Anticipated 2024 Events of Note”; the anticipated timings of regulatory filings and approvals related to assets in XOMA Royalty’s portfolio; and the potential of XOMA Royalty’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time. 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 Royalty’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; and 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. Other potential risks to XOMA Royalty meeting these expectations are described in more detail in XOMA Royalty'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 Royalty's prospects. Any forward-looking statement in this press release represents XOMA Royalty'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 Royalty 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, the commercial assets in XOMA Royalty’s milestone and royalty portfolio are VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), MIPLYFFA™ (arimoclomol), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], and DSUVIA® (sufentanil sublingual tablet). All other assets in the milestone and royalty portfolio 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 ROYALTY CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)(in thousands, except per share amounts) Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023 Income and revenues: Income from purchased receivables $6,463 $— $11,895 $— Revenue from contracts with customers 25 225 6,050 1,350 Revenue recognized under units-of-revenue method 709 605 1,828 1,575 Total income and revenues 7,197 830 19,773 2,925 Operating expenses: Research and development 817 25 2,011 118 General and administrative 8,020 6,368 27,485 18,341 Royalty purchase agreement asset impairment 14,000 — 23,000 1,575 Arbitration settlement costs — — — 4,132 Amortization of intangible assets — 224 — 673 Total operating expenses 22,837 6,617 52,496 24,839 Loss from operations (15,640) (5,787) (32,723) (21,914) Other income (expense): Gain on the acquisition of Kinnate — — 19,316 — Change in fair value of embedded derivative related to RPA — — 8,100 — Interest expense (3,493) — (10,446) — Other income (expense), net 1,890 278 5,900 1,192 Net loss $(17,243) $(5,509) $(9,853) $(20,722) Net loss attributable to common stockholders, basic $(18,611) $(6,877) $(13,957) $(24,826)Basic net loss per share attributable to common stockholders $(1.59) $(0.60) $(1.20) $(2.17)Weighted average shares used in computing basic net loss per share attributable to common stockholders 11,712 11,473 11,645 11,466 Net loss attributable to common stockholders, diluted $(18,611) $(6,877) $(13,957) $(24,826)Diluted net loss per share attributable to common stockholders $(1.59) $(0.60) $(1.20) $(2.17)Weighted average shares used in computing diluted net loss per share attributable to common stockholders 11,712 11,473 11,645 11,466 XOMA ROYALTY CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except share and per share amounts) September 30, December 31, 2024 2023 ASSETS (unaudited) Current assets: Cash and cash equivalents $142,050 $153,290 Short-term restricted cash 80 160 Short-term equity securities 785 161 Trade and other receivables, net 1,045 1,004 Short-term royalty and commercial payment receivables 12,682 14,215 Prepaid expenses and other current assets 2,379 483 Total current assets 159,021 169,313 Long-term restricted cash 4,686 6,100 Property and equipment, net 34 25 Operating lease right-of-use assets 335 378 Long-term royalty and commercial payment receivables 54,207 57,952 Exarafenib milestone asset 3,125 — Other assets - long term 1,932 533 Total assets $223,340 $234,301 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $1,131 $653 Accrued and other liabilities 2,451 2,768 Contingent consideration under RPAs, AAAs, and CPPAs 4,000 7,000 Operating lease liabilities 434 54 Unearned revenue recognized under units-of-revenue method 1,924 2,113 Preferred stock dividend accrual 1,368 1,368 Current portion of long-term debt 9,826 5,543 Total current liabilities 21,134 19,499 Unearned revenue recognized under units-of-revenue method – long-term 5,589 7,228 Exarafenib milestone contingent consideration 3,125 — Long-term operating lease liabilities 594 335 Long-term debt 108,089 118,518 Total liabilities 138,531 145,580 Stockholders’ equity: Preferred Stock, $0.05 par value, 1,000,000 shares authorized: 8.625% Series A cumulative, perpetual preferred stock, 984,000 shares issued and outstanding at September 30, 2024 and December 31, 2023 49 49 8.375% Series B cumulative, perpetual preferred stock, 1,600 shares issued and outstanding at September 30, 2024 and December 31, 2023 — — Convertible preferred stock, 5,003 issued and outstanding at September 30, 2024 and December 31, 2023 — — Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,755,223 and 11,495,492 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 88 86 Additional paid-in capital 1,317,657 1,311,809 Accumulated other comprehensive income 104 — Accumulated deficit (1,233,089) (1,223,223)Total stockholders’ equity 84,809 88,721 Total liabilities and stockholders’ equity $223,340 $234,301 XOMA ROYALTY CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)(in thousands) Nine Months EndedSeptember 30, 2024 2023 Cash flows from operating activities: Net loss $(9,853) $(20,722)Adjustments to reconcile net loss to net cash used in operating activities: Income from purchased receivables under effective interest rate method (9,985) — Stock-based compensation expense 8,136 6,450 Royalty purchase agreement asset impairment 23,000 1,575 Gain on the acquisition of Kinnate (19,316) — Change in fair value of contingent consideration under RPAs, AAAs, and CPPAs — (75)Common stock contribution to 401(k) 118 123 Amortization of intangible assets — 673 Depreciation 8 2 Accretion of long-term debt discount and debt issuance costs 996 — Non-cash lease expense 45 115 Change in fair value of equity securities (624) 121 Change in fair value of available-for-sale debt securities classified as cash equivalents 104 — Changes in assets and liabilities: Trade and other receivables, net (41) (42)Prepaid expenses and other assets (72) (202)Accounts payable and accrued liabilities (1,348) (554)Operating lease liabilities (185) (120)Unearned revenue recognized under units-of-revenue method (1,828) (1,575) Net cash used in operating activities (10,845) (14,231) Cash flows from investing activities: Net cash acquired in Kinnate acquisition 18,926 — Payments of consideration under RPAs, AAAs, and CPPAs (37,000) (14,650)Receipts under RPAs, AAAs, and CPPAs 26,263 8,428 Purchase of property and equipment (17) — Net cash provided by (used in) investing activities 8,172 (6,222) Cash flows from financing activities: Principal payments — debt (6,902) — Debt issuance costs and loan fees paid in connection with long-term debt (740) — Payment of preferred stock dividends (4,104) (4,104)Repurchases of common stock (13) — Proceeds from exercise of options and other share-based compensation 4,127 208 Taxes paid related to net share settlement of equity awards (2,429) (5) Net cash used in financing activities (10,061) (3,901) Net decrease in cash, cash equivalents, and restricted cash (12,734) (24,354)Cash, cash equivalents, and restricted cash as of the beginning of the period 159,550 57,826 Cash, cash equivalents, and restricted cash as of the end of the period $146,816 $33,472 Supplemental Cash Flow Information: Cash paid for interest $9,985 $— Right-of-use assets obtained in exchange for operating lease liabilities $— $85 Non-cash investing and financing activities: Estimated initial fair value of the Exarafenib milestone asset in Kinnate acquisition $2,922 $— Estimated initial fair value of the Exarafenib milestone contingent consideration in Kinnate acquisition $2,922 $— Right-of-use assets obtained in exchange for operating lease liabilities in Kinnate acquisition $824 $— Relative fair value basis reduction of right-of-use assets in Kinnate acquisition $(824) $— Accrual of contingent consideration under the Affitech CPPA $3,000 $3,000 Accrual of contingent consideration under the LadRx AAA $1,000 — Estimated fair value of contingent consideration under the LadRx Agreements $— $1,000 Preferred stock dividend accrual $1,368 $1,368 Investor contact:Media contact:Juliane SnowdenKathy VincentXOMA Royalty CorporationKV Consulting & Management+1-646-438-9754+1-310-403-8951juliane.snowden@xoma.comkathy@kathyvincent.com _____________________________________¹ https://ir.rezolutebio.com/news/detail/339/fda-lifts-partial-clinical-holds-on-rz358-for-the-treatment-of-congenital-hyperinsulinism-and-authorizes-u-s-inclusion-in-ongoing-phase-3-study² https://ir.rezolutebio.com/news/detail/337/rezolute-announces-fda-clearance-of-ind-application-for-phase-3-registrational-study-of-rz358-for-treatment-of-hypoglycemia-due-to-tumor-hyperinsulinism³ 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