Core Insights - XOMA Royalty is focusing on building a diversified portfolio of biotechnology royalty and milestone assets, with 2025 being described as a "foundational year" for the company [3][4][7] - The company reported total portfolio receipts exceeding $50 million in 2025, with royalty receipts growing by 68% year-over-year to $34 million [2][15][19] - XOMA added 22 new assets to its portfolio in 2025, including two platform technologies aimed at future out-licensing [3][11][14] Financial Performance - Total GAAP income for 2025 was $31.7 million, a significant increase from a GAAP net loss of $13.8 million in 2024 [19] - The company achieved positive cash flow from operations and repurchased $16 million worth of shares, retiring over 5% of common shares outstanding [2][20] - General and administrative expenses rose to $36 million in 2025, including $9.3 million in non-cash stock-based compensation [17] Portfolio Development - XOMA's portfolio includes 14 registrational-stage programs with multiple catalysts expected in 2026, such as Rezolute's top-line data and AstraZeneca's TIGIT program data [5][10][18] - The company has engaged in revenue-sharing transactions, including a deal with Takeda that could yield low- to mid-single-digit royalties and up to $853 million in milestones across nine development-stage assets [6][12][13] - XOMA's acquisition strategy has involved whole-company acquisitions and special situations, generating $11.7 million of non-dilutive capital net of expenses [14] Clinical Developments - Two Phase III programs, Rezolute and Gossamer, did not meet statistical significance, but both companies are exploring options for 2026 [8][9] - Rezolute plans to meet with the FDA regarding its breakthrough designation, while Gossamer is also seeking a path forward for its seralutinib program [9] Strategic Outlook - The company aims to balance portfolio investments with share repurchases to enhance free cash flow per share over time [24] - XOMA does not intend to become a drug development company but seeks to license technologies for royalties and milestones [23]

Financial Performance - In 2025, XOMA received total cash receipts of $50.5 million, comprising $33.6 million from commercial payments and $16.9 million from milestone payments and other fees[35]. - The company generated a net income of $31.7 million and cash flows from operations of $2.9 million for the year ended December 31, 2025, but has an accumulated deficit of $1.2 billion[152]. - Company received commercial payments of $1.7 million in 2025 and $1.6 million in 2024 under the Aptevo CPPA[57]. - The company has authorized a stock repurchase program allowing for the purchase of up to $50.0 million of its common stock through January 2027[98]. - As of December 31, 2025, the company had repurchased 648,708 shares for a total of $16.1 million[99]. Portfolio and Assets - The company has a diversified portfolio with economic rights to over 120 assets, including seven commercial-stage assets and 14 late-stage therapeutic candidates[38]. - XOMA's portfolio includes assets with significant commercial sales potential, primarily in Phase 1 and 2 development stages[36]. - The company has added 22 milestone and royalty interests to its portfolio since the beginning of 2025[38]. - Company acquired rights to receive potential regulatory and commercial milestone payments of up to $342.7 million and royalties on net sales of aldoxorubicin in the low to mid-teens percentage range for orphan indications[52]. - Company acquired Pulmokine for $20.0 million, with eligibility for low to mid-single-digit royalties on commercial sales of seralutinib[70]. Revenue Streams - The commercial asset VABYSMO® generated $22.5 million in royalties for XOMA in 2025, with a royalty rate of 0.5% on future net sales[40]. - XOMA earned $7.7 million in royalties from OJEMDA in 2025, following its FDA approval in April 2024[50]. - The company is eligible for mid-single-digit royalties on sales of OJEMDA, with additional milestone payments received in 2025 totaling $15 million[49]. - Company paid $22.0 million for 100% of remaining royalties related to XACIATO, with royalties ranging from low to high single digits[58]. - The company is eligible to receive milestone payments of up to $20.8 million related to TAK-079 (mezagitamab) and a 4% royalty on future sales of all products under the Takeda Collaboration Agreement[83]. Acquisitions and Transactions - XOMA's strategy includes acquiring additional milestone and royalty revenue streams, having closed seven transactions since the beginning of 2025, adding approximately $11.7 million in cash and cash equivalents[37]. - Company entered into the Twist RPA for $15.0 million, eligible to receive up to $0.5 billion in milestone payments and low single-digit royalties[75]. - Company acquired an economic interest in DSUVIA for $8.0 million, with potential royalties of 15% on commercial sales[60]. - The company plans to continue business development efforts to acquire potential milestone and royalty streams or companies, with future growth dependent on the availability of suitable products at acceptable prices and terms[175]. - The company may seek to expand market opportunities by acquiring securities from other biopharmaceutical companies, which could involve risks and uncertainties[124]. Risks and Challenges - The company faces competition from other firms seeking to aggregate royalties and provide financing to biotechnology companies, which may impact its market position[103]. - A significant portion of the company's portfolio value is concentrated in a limited number of products, indicating that the failure of any one product could materially impact financial results[112]. - The company may face challenges in integrating acquired assets, which could disrupt operations and dilute shareholder value[121]. - The company is dependent on third parties to achieve development milestones and product sales, which could affect financial performance[112]. - The company may not be able to realize anticipated benefits from acquisitions or in-licensing due to integration risks and unforeseen challenges[176]. Regulatory and Market Conditions - Regulatory approvals for development-stage product candidates are subject to extensive requirements, and unknown problems may lead to marketing restrictions or product withdrawals[129]. - The company’s potential royalty providers may face significant delays in clinical trials due to various factors, including patient enrollment challenges and regulatory requirements[187]. - Changes in regulatory policies under the current U.S. Presidential administration may create uncertainty for the company's licensees and their business operations[148]. - The introduction of generic drugs can significantly reduce sales of branded products, adversely affecting potential milestones and royalties[210]. - The FDA's interpretation of orphan drug exclusivity may change, affecting the competitive landscape for drugs with orphan designation[198]. Intellectual Property - The company and its potential royalty providers rely on patent protection, copyright, trade secret, and trademark laws to safeguard proprietary technology, but these protections may be limited[226]. - The validity and enforceability of issued patents are uncertain, and U.S. patents may be subject to post-grant review procedures that could result in the loss of valuable patent rights[229]. - Inadequate protection of intellectual property rights could hinder the commercialization of technologies or products, negatively impacting sales and market share[230]. - The biotechnology patent landscape is highly uncertain, with evolving legal standards that may affect the validity of patents[230]. - Competitors may design around existing patents or develop superior technologies, impacting the company's market position[233].

Group 1 - XOMA Royalty Corporation reported Q4 earnings per share of 26 cents, surpassing the consensus estimate of a 15 cent loss, and revenue of $13.75 million, exceeding the consensus estimate of $11.04 million [2] - The company repurchased and retired 648,048 shares for a total of $16.0 million during 2025, and reported cash and cash equivalents of $133.7 million as of December 31, 2025, which includes $50.8 million in restricted cash, compared to $106.4 million at the end of 2024 [2] - CEO Owen Hughes indicated that with 14 programs in registrational studies, the company anticipates several catalysts in the coming years, including regulatory updates and late-stage clinical readouts in 2026 [3] Group 2 - XOMA shares are currently trading 5.70% higher at $28.54 [4]

Financial Data and Key Metrics Changes - In 2025, XOMA Royalty reported total GAAP income and revenue of $52.1 million, a significant increase from $28.5 million in 2024 [21] - Total cash receipts grew by 9% to $50.5 million, with royalty receipts reaching approximately $34 million, marking a 68% increase compared to 2024 [21] - Full-year GAAP net income was $31.7 million, compared to a GAAP net loss of $13.8 million in 2024 [23] Business Line Data and Key Metrics Changes - The company added 22 assets to its portfolio in 2025, including five in phase II or phase III trials, with a total cash outlay of only $25 million upfront [14] - Royalty receipts came from four programs in 2025, two more than in 2024, and six programs achieved clinical, regulatory, and business development events, leading to approximately $17 million in cash milestone payments [21] Market Data and Key Metrics Changes - The portfolio has expanded significantly, doubling the number of assets in active development from roughly 60 in 2023 to over 120 in 2025 [12] - The company has established a diverse and growing source of recurring receipts, with seven commercially available programs [5] Company Strategy and Development Direction - XOMA Royalty aims to build a diversified portfolio of biotechnology royalty and milestone assets while maintaining disciplined capital allocation [11] - The company is focused on innovative transactions and underappreciated opportunities, positioning itself as a unique source of capital for biotech innovation [20] - The strategy includes a balance between returning capital to shareholders and investing in new portfolio assets to increase breadth [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects for royalty receipts, particularly from VABYSMO, OJEMDA, and MIPLYFFA, which are expected to ramp up significantly [32] - The company is approaching an inflection point where royalty receipts alone could cover operating expenses by 2027 [28] - Management remains optimistic about the potential for future milestone payments and royalty growth from a robust late-stage pipeline [9] Other Important Information - The company maintained a lean operating structure, achieving positive cash flow from operations and returning $16 million of capital through share buybacks [5] - XOMA Royalty ended the year with approximately $83 million in unrestricted cash and cash equivalents, providing ample firepower for future investments [27] Q&A Session Summary Question: Growth prospects for royalty receipts on approved products - Management indicated strong growth prospects, particularly from VABYSMO, which had double-digit growth last year, and positive expectations for OJEMDA and MIPLYFFA [32] Question: Confidence in Tremfya economic opportunity - Management expressed confidence in the breach claim related to Tremfya, citing historical relationships and potential royalty rates [34] Question: Prioritization of capital deployment between share buybacks and new deals - Management emphasized a philosophy of reducing equity base to increase cash flow per share while balancing external opportunities [46] Question: Size of the opportunity for Rezolute's ersodetug program - Management estimated the combined opportunity for the two indications to be approaching $1 billion, with a favorable split between congenital and tumor hyperinsulinism [48]

Financial Data and Key Metrics Changes - In 2025, XOMA Royalty reported total GAAP income and revenue of $52.1 million, a significant increase from $28.5 million in 2024 [21] - Total cash receipts grew by 9% to $50.5 million, with royalty receipts reaching approximately $34 million, marking a 68% increase compared to 2024 [21] - Full-year GAAP net income was $31.7 million, compared to a GAAP net loss of $13.8 million in 2024 [23] Business Line Data and Key Metrics Changes - The company added 22 assets to its portfolio in 2025, including 7 commercially available programs, enhancing its recurring revenue sources [4][5] - The growth in royalty receipts was driven by VABYSMO and OJEMDA, along with contributions from MIPLYFFA following its approval [21] - Six programs achieved clinical, regulatory, and business development events, leading to approximately $17 million in cash milestone payments [21] Market Data and Key Metrics Changes - The company is seeing promising launches from several commercial-stage programs, with potential geographic expansions anticipated [6] - The portfolio includes 14 programs in registrational stage, indicating multiple catalysts for potential top-line royalty growth in the coming years [8] Company Strategy and Development Direction - XOMA Royalty aims to build a diversified portfolio of biotechnology royalty and milestone assets while maintaining disciplined capital allocation [11] - The company executed a strategic revenue share transaction with Takeda, adding potential royalty and milestone payments across 9 programs [10] - The focus remains on innovative transactions and underappreciated opportunities to expand the portfolio without diluting shareholder value [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects for royalty receipts, particularly from VABYSMO, OJEMDA, and MIPLYFFA [32] - The company is approaching an inflection point where royalty receipts alone could cover operating expenses by 2027 [28] - Management remains optimistic about the potential for future cash flow growth from the expanding portfolio and ongoing clinical developments [29] Other Important Information - The unrestricted cash position increased to over $80 million, providing ample resources for future investments [12] - The company maintained a flat share count compared to 2023, avoiding shareholder dilution while achieving positive operating cash flows [13] Q&A Session Summary Question: Growth prospects for royalty receipts on approved products - Management indicated strong growth prospects, particularly from VABYSMO, with double-digit growth and positive expectations for OJEMDA and MIPLYFFA [32] Question: Confidence in Tremfya economic opportunity - Management expressed confidence in the breach claim related to Tremfya, citing historical relationships and potential royalty rates [34] Question: Prioritization of capital deployment between share buybacks and new deals - Management emphasized a balance between returning capital to shareholders and investing in new opportunities, favoring internal investments to enhance cash flow per share [45] Question: Size of the opportunity for Rezolute's program for ersodetug - Management estimated the combined market opportunity for the two indications to be around $1 billion, with a favorable split between congenital and tumor hyperinsulinism [48]

Financial Data and Key Metrics Changes - In 2025, XOMA Royalty reported total GAAP income and revenue of $52.1 million, a significant increase from $28.5 million in 2024 [22] - Total cash receipts grew by 9% to $50.5 million, with royalty receipts reaching approximately $34 million, marking a 68% increase compared to 2024 [22][24] - Full-year GAAP net income was $31.7 million, compared to a GAAP net loss of $13.8 million in 2024 [24] Business Line Data and Key Metrics Changes - The company added 22 assets to its portfolio in 2025, including 7 commercially available programs, enhancing its recurring revenue sources [4][5] - Royalty receipts came from four programs, two more than in 2024, and six programs achieved clinical, regulatory, and business development events, leading to approximately $17 million in cash milestone payments [22] Market Data and Key Metrics Changes - The portfolio's total receipts surpassed $50 million, driven by significant contributions from VABYSMO and OJEMDA, as well as new contributions from MIPLYFFA [4][22] - The company anticipates continued growth in royalty receipts from approved products, particularly from VABYSMO, OJEMDA, and MIPLYFFA [33] Company Strategy and Development Direction - XOMA Royalty aims to build a diversified portfolio of biotechnology royalty and milestone assets while maintaining disciplined capital allocation [11] - The company executed a strategic revenue share transaction with Takeda, adding potential royalty and milestone payments across nine programs [10] - The focus remains on innovative transactions and underappreciated opportunities to expand the portfolio without diluting shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth prospects for royalty receipts, particularly from VABYSMO, OJEMDA, and MIPLYFFA, which are expected to ramp up in the coming years [33] - The company is approaching an inflection point where royalty receipts alone could cover operating expenses by 2027 [28] - Management remains optimistic about the potential for future milestone payments and royalty growth from a robust late-stage pipeline [9][12] Other Important Information - The company maintained a strong balance sheet with approximately $83 million in unrestricted cash and cash equivalents, providing ample resources for future investments [27] - XOMA Royalty has successfully avoided shareholder dilution, with a share count remaining flat compared to 2023 [13] Q&A Session Summary Question: Growth prospects for royalty receipts on approved products - Management indicated strong growth prospects, particularly from VABYSMO, which had double-digit growth last year, and positive expectations for OJEMDA and MIPLYFFA [33] Question: Details on the Tremfya economic opportunity - Management expressed confidence in the breach claim related to Tremfya, citing historical relationships and potential royalty rates in the low single digits [34][35] Question: Capital deployment strategy - Management emphasized a balance between returning capital to shareholders and investing in new deals, favoring internal investments that enhance cash flow per share [46][48] Question: Opportunity size for Rezolute's program for ersodetug - Management estimated the combined opportunity for the two indications at approximately $1 billion, with a favorable split between congenital and tumor hyperinsulinism [50][52] Question: Evolution of the royalty model and deal activity - Management stated a preference for quality over quantity in deal-making, focusing on driving risk-adjusted net present value rather than setting specific targets for deal volume [58][60] Question: Amendment of the Takeda deal - Management explained that the amendment was driven by initial discussions with BioInvent and the desire to diversify revenue streams through collaboration with Takeda [68][74] Question: Future capital structure changes - Management indicated that the current capital structure is effective, but they may explore optimizing it over the next 12 months, particularly regarding preferred equity [76][77]

CORPORATE PRESENTATION NASDAQ COMMON: XOMA NASDAQ PERPETUAL PREFERRED SHARES: XOMAP, XOMAO THE ROYALTY AGGREGATOR FOR BIOTECH COMPANIES Q1 2026 DISCLAIMERS Certain statements in this presentation 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: future potential monetization opportunities, active transactions with significant financial implications, collaborations poised for s ...

Core Insights - XOMA Royalty Corporation reported over $50 million in cash receipts for the full year 2025, with a 9% increase in total receipts and a significant 68% rise in royalties compared to 2024 [1][7] - The company added 22 assets to its portfolio, including five programs in advanced Phase 2 or Phase 3 development [1][3] - A stock buyback program was executed, repurchasing 648,048 shares for a total of $16 million [1][3] - XOMA completed seven acquisitions, generating $11.7 million in non-dilutive capital and gaining economic interests in potential milestone payments of up to $1.1 billion [1][6] - Key pipeline events for 2026 include anticipated Phase 2b data from volixibat and Phase 3 data from ersodetug, along with potential EMA decisions on marketing authorizations for OJEMDA™ and MIPLYFFA™ [1][4] Financial Performance - In Q4 2025, XOMA Royalty received $3.2 million from royalties and $3.3 million from milestone payments, with a total of $50.5 million in cash receipts for the full year [7][8] - The company reported income and revenues of $13.8 million for Q4 2025, up from $8.7 million in Q4 2024, and $52.1 million for the full year 2025, compared to $28.5 million in 2024 [8][14] - General and administrative expenses increased to $10.4 million in Q4 2025 from $7.0 million in Q4 2024, primarily due to higher business development costs [9][10] Business Development - XOMA amended its collaboration with Takeda, which will yield low to mid-single-digit royalties and potential milestones of up to $852.6 million across nine development-stage assets [6] - The company has been active in acquisitions, completing seven since the beginning of 2025, which has strengthened its portfolio and financial position [6][11] Cash Position - As of December 31, 2025, XOMA Royalty had cash and cash equivalents of $133.7 million, including $50.8 million in restricted cash [15][29] - The company experienced a net increase in cash of $27.3 million during the year, compared to a decrease of $53.1 million in 2024 [29][30]

Core Viewpoint - XOMA Royalty Corporation will report its fourth quarter and full year 2025 financial results on March 18, 2026, and will host a webcast to discuss these results and provide a business update [1]. Company Overview - XOMA Royalty Corporation is a biotechnology royalty aggregator that aids biotech companies in improving human health by acquiring potential future economics associated with therapeutic candidates licensed to pharmaceutical or biotechnology companies [3]. - The company provides non-dilutive, non-recourse funding to sellers, which can be utilized to advance their internal drug candidates or for general corporate purposes [3]. - XOMA Royalty has a growing portfolio of assets, defined as the rights to receive potential future economics linked to the advancement of underlying therapeutic candidates [3].

Summary of XOMA Corporation Conference Call Company Overview - **Company**: XOMA Corporation (NasdaqGM:XOMA) - **Industry**: Biotechnology - **Key Leadership**: CEO Owen Hughes, CFO Jeff Trigilio, Chief Investment Officer Brad Sitko Core Points and Arguments - **Portfolio Strategy**: XOMA aims to increase optionality within its portfolio, focusing on building a robust pipeline to withstand the binary nature of biotech. The company has 15 assets in phase 3 development, with 2 recent failures attributed to a higher-than-expected placebo effect. Despite this, the company's valuation remains stable, indicating confidence in its portfolio's potential [6][7]. - **Asset Growth**: Over the past three years, XOMA has added approximately 80 assets while reducing its share count, demonstrating effective capital management and a strategy to leverage future returns without diluting equity [8]. - **Tremfya Economics**: XOMA has a claim related to the commercialization of Tremfya, which it believes is integral to the drug's development. Although a recent arbitration was unsuccessful, the company sees potential in pursuing Johnson & Johnson for royalties, with a market cap of $450-$500 million and significant potential financial upside if successful [9][12][14]. - **Litigation Outlook**: The company is optimistic about the potential for a settlement or favorable ruling in its ongoing litigation, which could provide additional funding for business development and shareholder returns [19][22][27]. - **Takeda Transaction**: In 2025, XOMA completed a significant transaction with Takeda, exchanging one asset for nine additional assets, enhancing its portfolio and optionality. This deal is part of a broader strategy to diversify risk and increase net present value (NPV) [34][35]. Financial Highlights - **2025 Financial Performance**: XOMA reported over $50 million in top-line revenue, with $33 million from royalty receipts. The company achieved free cash flow positivity and repurchased $16 million of stock, indicating strong financial health [42][43]. - **Future Projections**: The company anticipates continued growth in royalties from approved therapies, with expectations of covering operational expenses and financial obligations through royalties alone by 2027. XOMA has over $620 million in net operating losses (NOLs) and capitalized R&D deductions, allowing it to maintain a low effective tax rate [51][52]. Upcoming Catalysts - **Clinical Trials**: XOMA has several upcoming catalysts, including the phase 2b readout for volixibat and a phase 3 trial for ersodetug, both of which could significantly impact the company's financials and market position [79][85]. - **Vabysmo Royalties**: Currently generating approximately $25 million annually from Vabysmo royalties, with expectations for continued growth. The drug's performance will influence the company's ability to pay off loans and return cash flows to shareholders [89][90]. Additional Insights - **Business Model**: XOMA's strategy focuses on acquiring non-dilutive capital and building a diversified portfolio to mitigate risks associated with biotech investments. The company emphasizes the importance of maintaining a flat share count while pursuing growth opportunities [60][64]. - **Market Positioning**: The company recognizes the challenges in biotech, including the unpredictability of clinical success and market dynamics. XOMA aims to leverage its unique assets and partnerships to create sustainable revenue streams [55][56]. This summary encapsulates the key points discussed during the conference call, highlighting XOMA's strategic direction, financial performance, and future opportunities within the biotechnology sector.