Revenue Performance - Total revenues for Q3 2020 were $557,000, a decrease of $8.3 million compared to $8.9 million in Q3 2019[229]. - Revenue from contracts with customers dropped to $200,000 in Q3 2020 from $8.5 million in Q3 2019, primarily due to the absence of significant milestone payments[231]. Expenses - Research and development expenses for Q3 2020 were $34,000, down from $100,000 in Q3 2019, reflecting a shift in employee categorization[234]. - General and administrative expenses decreased to $3.2 million in Q3 2020 from $5.8 million in Q3 2019, mainly due to reduced salary and facilities costs[236]. - The company expects lower R&D spending for the remainder of 2020 due to a focus on the royalty aggregator business model[235]. Milestone Payments and Agreements - The company received a $25 million milestone payment from Novartis for the advancement of NIS793 to Phase 2 development[219]. - The company entered into a license agreement with Zydus, which includes potential milestone payments of up to $24 million and royalties[226]. - The company anticipates potential delays in milestone payments due to the impact of COVID-19 on clinical trial activities of its licensees[232]. Financial Position - Cash balance as of September 30, 2020, was $45.7 million, a decrease of $10.96 million from $56.69 million at the end of 2019[243]. - The company has an accumulated deficit of $1.2 billion as of September 30, 2020[251]. Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2020, was $7.6 million, primarily due to a net loss of $9.4 million[244]. - Net cash used in investing activities for the nine months ended September 30, 2020, was $9,000, compared to $19.3 million in 2019 due to different investment activities[245]. - Net cash used in financing activities for the nine months ended September 30, 2020, was $3.4 million, primarily related to principal payments of debt[246]. Interest and Other Income - Total interest expense for the nine months ended September 30, 2020, was $1,484,000, an increase of $148,000 compared to $1,336,000 in 2019[239]. - Other income, net for the nine months ended September 30, 2020, was $2,046,000, a decrease of $1,513,000 compared to $3,559,000 in 2019[240]. - The company recognized gains of $1.9 million from the fair value remeasurement of equity securities during the nine months ended September 30, 2020, compared to $0.5 million in 2019[241]. - The company recorded an income tax benefit of $1.5 million for the nine months ended September 30, 2020, due to the CARES Act[242]. Bad Debt and Uncertainties - The company recorded $1.4 million in bad debt expense related to future cash payments from Rezolute due to uncertainties from COVID-19[222]. - The company expects to continue recognizing savings in facilities costs related to legacy leases throughout the remainder of 2020[237].

Business Model & Portfolio - XOMA acquires pre-commercial drug royalties, focusing on development-stage assets with blockbuster potential licensed to large-cap partners[8] - The company's portfolio includes 65+ assets in >30 disclosed indications and is growing[8] - XOMA's strategy involves acquiring milestone and royalty rights to high-potential, fully funded assets, focusing on mid-stage clinical assets[20] - The average royalty rate in XOMA's portfolio is approximately 2.5%, with royalty terms of 8-12 years post-commercialization[43] Transactions & Investments - XOMA's investment in Agenus' royalty interest totaled $15 million[29], securing 33% of future milestones[28] - The company invested $9 million in Aronora's royalty interest[34], gaining 100% of future milestones[33] - XOMA's investment in Palobiofarma's assets amounted to $10 million[38], acquiring 100% of clinical-stage assets[36] Financial Highlights & Strategy - In 2019, XOMA received $15.8 million from partners[80] - The company completed a $22 million Rights Offering, backstopped by BVF Partners[80] - XOMA maintains a lean cost infrastructure, with core G&A expenses of approximately $1 million per month[81] Partnered Programs - XOMA's portfolio includes 42 assets with large-cap partners[44] - >90% of XOMA's current royalty portfolio covers the next generation of emerging and novel I-O targets[48]

Revenue Performance - Total revenues for Q2 2020 were $444,000, a decrease of 54% compared to $962,000 in Q2 2019, and for the first half of 2020, revenues were $1.248 million, down 86% from $9.093 million in the same period of 2019[219]. - Revenue from contracts with customers decreased by $572,000 in Q2 2020 compared to Q2 2019, primarily due to a $500,000 revenue recognition under a collaboration agreement with Takeda in Q2 2019[219]. - The company expects future revenues to be dependent on milestone payments and product sales by existing licensees, with potential delays anticipated due to COVID-19 impacts on clinical trial activities[221]. Expenses - Research and development expenses for Q2 2020 were $38,000, a significant decrease of 94% from $700,000 in Q2 2019, and for the first half of 2020, R&D expenses were $100,000, down 90% from $1 million in the same period of 2019[223]. - General and administrative expenses for Q2 2020 were $3.6 million, a decrease of 27% from $4.9 million in Q2 2019, and for the first half of 2020, G&A expenses were $9.9 million, down 9% from $10.9 million in the same period of 2019[225]. - Interest expense for Q2 2020 was $508,000, an increase of 20% compared to $423,000 in Q2 2019, primarily due to the outstanding loan balance with SVB[227]. - The company anticipates lower R&D spending for the remainder of 2020, focusing on its royalty aggregator business model[224]. Financial Position - Cash decreased by $7.2 million to $49.5 million as of June 30, 2020, from $56.7 million at December 31, 2019[231]. - Net cash used in operating activities was $5.2 million for the six months ended June 30, 2020, primarily due to an $8.3 million net loss[232]. - The company had an accumulated deficit of $1.2 billion as of June 30, 2020[239]. - The company anticipates that its cash position will enable it to maintain operations for at least 12 months following the filing date of the report[239]. - Net cash used in financing activities was $2.0 million for the six months ended June 30, 2020, primarily related to principal payments of debt[234]. - The company has not sold any shares under the 2018 ATM Agreement, which allows for sales up to $30.0 million[238]. Other Financial Activities - The company recorded a $1.4 million bad debt expense related to Future Cash Payments from Rezolute for Q1 2020, reflecting concerns over the collectability of future payments[217]. - The company recorded an income tax benefit of $1.5 million for the six months ended June 30, 2020, due to the CARES Act[230]. - The company amended its license agreement with Rezolute to extend the payment schedule of a $2.6 million balance, spreading it into seven quarterly payments through September 30, 2021, due to COVID-19 related cash preservation needs[212]. - The company is actively evaluating potential acquisitions of milestone and royalty rights, which may lead to increased professional fees[226]. - The company is taking steps to manage resources and may reduce or delay acquisitions to improve cash position amid the COVID-19 pandemic[240]. Other Income and Losses - Total other income (expense), net decreased by $936,000 to $126,000 for the three months ended June 30, 2020, compared to $1,062,000 in 2019[228]. - The company recorded a loss of $0.2 million on the fair value of equity securities for the six months ended June 30, 2020, compared to a gain of $0.7 million in the same period of 2019[229].

Revenue Performance - Total revenues for Q1 2020 were $804,000, a decrease of $7.3 million compared to $8.1 million in Q1 2019[212]. - Revenue from contracts with customers was $500,000 in Q1 2020, down from $8 million in Q1 2019, primarily due to a milestone payment recognized in the previous year[213]. Expenses - Research and development expenses decreased to $100,000 in Q1 2020 from $300,000 in Q1 2019, reflecting a reduction in salary and related expenses[216]. - General and administrative expenses increased to $6.4 million in Q1 2020 from $5.9 million in Q1 2019, driven by $1.4 million in bad debt expense[218]. - Interest expense rose to $542,000 in Q1 2020 from $429,000 in Q1 2019, primarily due to the outstanding loan balance with SVB[220]. - The company recorded a bad debt expense of $1.4 million related to future cash payments from Rezolute, reflecting concerns over collectability due to COVID-19[210]. - The company expects lower R&D spending for the remainder of 2020 compared to 2019 levels[217]. Cash and Financial Position - As of March 31, 2020, the company had cash of $53.3 million, a decrease of $3.4 million from $56.7 million in March 2019[224]. - The company reported a net cash used in operating activities of $2.3 million for the three months ended March 31, 2020, compared to a net cash provided of $3.2 million in the same period in 2019[225]. - The company had an accumulated deficit of $1.2 billion as of March 31, 2020[231]. - The company anticipates that its cash will enable it to maintain operations for at least 12 months following the filing date of the report[231]. Strategic Actions - The company amended its license agreement with Rezolute to extend the payment schedule for a $2.6 million balance into seven quarterly payments through September 30, 2021[209]. - The company is taking steps to manage resources by reducing discretionary expenditures due to the COVID-19 pandemic[232]. - The company is actively evaluating potential acquisitions of milestone and royalty rights, which may increase related professional fees[219]. - The company has committed to pay contingent consideration of up to $0.2 million to Bioasis as product candidates reach development milestones[235]. Debt and Agreements - As of March 31, 2020, the company had an outstanding principal balance of $15.6 million under the Loan Agreement with Silicon Valley Bank[229]. - The company has not engaged in any off-balance sheet arrangements[237]. - The company has not sold any shares of common stock under the 2018 ATM Agreement, which allows for sales up to $30.0 million[230].

Financial Strategy and Revenue Generation - XOMA Corporation has a portfolio of economic rights to future milestone and royalty payments from partnered pre-commercial therapeutic candidates, with a focus on expanding its pipeline through acquisitions[1][15] - The company has entered into multiple Royalty Purchase Agreements, including a $15.0 million agreement with Agenus, which allows XOMA to receive up to $59.5 million in potential future milestones and unlimited royalties[19] - XOMA's acquisition of rights from Aronora includes a $6.0 million upfront payment and potential tiered milestone payments of up to $85.0 million per product based on cumulative royalties exceeding $250.0 million[22] - The company has a collaboration with Novartis that includes a $37.0 million upfront fee and eligibility for up to $480.0 million in development, regulatory, and commercial milestones for the anti-TGFβ antibody program[31] - The company aims to diversify its revenue streams by acquiring pre-commercial stage drug candidates with high revenue potential and long market exclusivity[15] - The company is eligible for low single-digit to mid-teens royalty rates on sales of licensed products from its collaborations with Novartis and Takeda[28][31] - The company is engaged in a royalty aggregator strategy, seeking to acquire future royalties and milestone payments related to drug development and sales[69] - The company’s future revenue is expected to be primarily based on milestone and royalty payments from its partnered programs[200] Financial Condition and Capital Structure - The company reported net losses of $2.0 million and $13.3 million for the years ended December 31, 2019, and December 31, 2018, respectively, with an accumulated deficit of $1.2 billion as of December 31, 2019[78] - The company has financed its operations primarily through the sale of equity securities, debt, and royalty interests, and payments received under collaboration and licensing arrangements[79] - The company may need to raise additional funds to acquire milestone and royalty interests, and there is uncertainty regarding the availability of funds at acceptable costs[80] - The company may need to raise significant additional capital in the future, which could lead to substantial dilution for existing stockholders[95] - The company may sell additional equity or convertible debt securities to fund operations, which could impose restrictions on business and result in dilution[99] - The company has experienced ownership changes that limit the future use of net operating loss carry-forwards and certain tax attributes[109] - The Tax Cuts and Jobs Act of 2017 reduced the corporate tax rate from 35% to 21%, but the overall impact on the company's financial condition remains uncertain[112] Partnerships and Collaborations - The company has established partnerships with major pharmaceutical firms, which are critical for the success of its royalty aggregator business model[1][15] - The company has a Royalty Purchase Agreement with Bioasis Technologies, involving an upfront payment of $0.3 million and potential future payments of up to $0.2 million based on development milestones[207] - The company is entitled to low single-digit royalties on future sales of Bayer Products and 10% of all future developmental, regulatory, and sales milestones related to these products[206] - The company has the right to receive low-single digit percentage of net sales from non-Bayer Products and 10% of all future payments related to these products[206] Risks and Challenges - The company faces competition from other entities seeking to aggregate royalties or provide alternative financing to development-stage biotechnology and pharmaceutical companies[56] - The company relies on third parties for the achievement of regulatory and developmental milestones, which directly impacts potential royalty and milestone payments[73] - The company has a risk of credit exposure due to potential defaults or bankruptcies of licensors or licensees associated with acquired royalty streams[70] - The company’s financial condition may be adversely affected if drug products in clinical development are not successfully commercialized[71] - The company’s ability to receive royalty payments is dependent on the accuracy of its licensees' sales and accounting functions[72] - The company’s business model is subject to various risks, including competition, regulatory changes, and reliance on third-party developments[67] - The company faces potential penalties for violations of healthcare laws, which could adversely affect its business operations[186] - The company is subject to risks related to third-party service providers, which could affect product candidate development and manufacturing programs[85] Intellectual Property and Regulatory Environment - The company holds a number of patents and applications in the United States and internationally, but the patent position is highly uncertain[58] - The company relies on patent protection to safeguard its technologies, but the effectiveness of such protection can be uncertain and subject to legal challenges[142] - If intellectual property rights are not adequately protected, competitors may commercialize similar technologies, harming the company's market position[145] - The company may face claims of patent infringement, which could prevent the development or commercialization of products if licenses are not obtainable[151] - Regulatory approvals are required for the company's licensees' product candidates to be manufactured and marketed, which could impact commercialization[118] - The initiation of clinical trials requires approval from health authorities, and the process can take several years and is extremely expensive[119] - The FDA and foreign health authorities have substantial discretion in the drug approval process, and failure can occur at any stage, potentially delaying or preventing product approval[123] Operational and Management Considerations - The company has significantly restructured its business to focus on becoming a royalty aggregator, which may affect its financial performance and balance sheet if not executed successfully[82] - The company relies heavily on licensee relationships, and any disputes or breaches could reduce financial resources, including milestone payments and future royalty revenues[84] - The company has experienced significant volatility in its stock price, ranging from a high of $28.85 to a low of $11.50 from January 1, 2019, to March 5, 2020[93] - The company had 10 employees as of March 5, 2020, and faces challenges in attracting and retaining qualified personnel due to competition and high living costs in California[153] - The loss of key personnel, such as the CEO or CFO, could delay or prevent the achievement of business objectives[152] - Cyberattacks and data breaches pose significant risks to the company's sensitive information and could lead to substantial remediation costs and operational disruptions[159] - Shareholder lawsuits could result in substantial damages and divert management's focus from business activities, impacting financial performance[167]

Washington, D.C. 20549 UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________ Commission File No. 0-14710 XOMA Corporation (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________ Commission File No. 0-14710 XOMA Corporation (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other jurisdictio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to__________ Commission File No. 0-14710 XOMA Corporation (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other jurisdicti ...

1 CORPORATE PRESENTATION March 2019 NASDAQ: XOMA A Royalty Aggregation Company DISCLAIMERS 2 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 significant financial contribution, our library of potentially v ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 0-14710 XOMA CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organizati ...