Core Insights - XOMA Royalty Corporation will have its Chief Investment Officer, Brad Sitko, presenting at the Jones Healthcare and Technology Innovation Conference on April 9, 2025 [1] - The presentation will be accessible online, and a replay will be available for 90 days post-event [2] Company Overview - XOMA Royalty Corporation operates as a biotechnology royalty aggregator, assisting biotech companies in enhancing human health [3] - The company acquires future economic rights associated with therapeutic candidates that are licensed to pharmaceutical or biotechnology firms, providing sellers with non-dilutive, non-recourse funding [3] - XOMA has a growing portfolio of assets, defined as the rights to receive potential future economics linked to the advancement of therapeutic candidates [3]

Revenue Generation and Payments - XOMA's royalty aggregator business model was implemented in 2017, focusing on early to mid-stage clinical assets, primarily in Phase 1 and 2 development [27]. - The company expects most future revenue to be based on milestone and royalty payments associated with its portfolio of assets [27]. - In 2024, XOMA received commercial payments totaling $16.9 million from Roche's VABYSMO and $7.3 million in 2023 [37]. - XOMA earned a $5.0 million milestone payment in October 2023 related to the FDA's acceptance of Day One's NDA for tovorafenib [39]. - The company is eligible to receive mid-single-digit royalties on sales of OJEMDA, earning $2.7 million in royalties in 2024 [41]. - XOMA acquired rights to arimoclomol with potential regulatory and commercial milestone payments of up to $52.5 million and low single-digit royalty payments [42]. - The company paid an upfront payment of $5.0 million for the LadRx Agreements and earned a net milestone payment of $2.2 million upon FDA approval of MIPLYFFA [44]. - XOMA received commercial payments totaling $1.6 million in 2024 and $1.7 million in 2023 from IXINITY sales [46]. - The company is eligible to receive up to $232.0 million in milestone payments from Rezolute based on the achievement of pre-specified criteria related to RZ358 [70]. - The company is entitled to receive additional milestone payments of up to $19.0 million and a 4% royalty on future sales under the Takeda Collaboration Agreement [66]. Acquisitions and Portfolio Management - The company has a diverse portfolio with over 60 early-stage assets across multiple therapeutic targets [35]. - XOMA's strategy includes expanding its portfolio through acquisitions of additional milestone and royalty revenue streams [28]. - In April 2024, the company entered into Daré Royalty Purchase Agreements, paying $22.0 million for 100% of remaining royalties related to XACIATO, with royalties ranging from low to high-single-digits [47]. - The company acquired an economic interest in DSUVIA for $8.0 million, retaining a 15% royalty on commercial sales, while receiving $0.1 million in commercial payments in 2024 [51][52]. - In November 2024, the company acquired Pulmokine for $20.0 million, gaining rights to net royalties ranging from low to mid-single-digits on commercial sales of seralutinib [53]. - The company acquired Kinnate in April 2024, paying $2.5879 in cash per share, and obtaining rights to potential milestone payments and royalties from Kinnate's assets [54][55]. - In October 2024, the company entered into a Twist Royalty Purchase Agreement for a $15.0 million upfront payment, eligible for up to $0.5 billion in milestone payments and low-single-digit royalties on future sales [57]. - The company routinely reviews acquisition opportunities for future royalties and milestone payments as part of its royalty aggregator strategy [103]. Financial Performance and Risks - The company generated net losses of $13.8 million and negative cash flows from operations of $13.7 million for the year ended December 31, 2024, with an accumulated deficit of $1.2 billion [133]. - The company has financed operations primarily through the sale of equity securities, debt, and royalty interests, and payments received under collaboration and licensing arrangements [134]. - The company may need to raise additional funds to acquire milestone and royalty interests, which may not be available at an acceptable cost of capital [139]. - The company expects to sustain losses in the foreseeable future, dependent on the success of its partners' product candidates and regulatory approvals [134]. - The company may face adverse impacts from macroeconomic conditions, including high interest rates and economic inflation, affecting its financial performance and stock price [136]. - The company faces significant risks related to acquisitions, including potential credit risks from licensors or licensees defaulting, which could adversely affect future royalty and milestone payments [106]. - Acquisitions may not yield expected financial benefits and could disrupt business operations, dilute shareholder value, and negatively impact stock market performance [107]. - The company faces risks related to the potential decline in income from milestones and royalties, which could adversely affect financial condition and results of operations [151]. Regulatory and Competitive Environment - Regulatory changes in the U.S. and EU are increasingly limiting or regulating medical product pricing, which could adversely affect the company's royalty income [89]. - The company is subject to various governmental regulations that could impact its operations and financial results if compliance is not maintained [86]. - The biopharmaceutical industry is highly competitive, with risks of product obsolescence due to new therapies or generics, which could materially impact potential royalty revenues [121]. - The company faces significant competition in the biotechnology and pharmaceutical industries, including from companies with greater financial and technical resources [85]. - The company faces significant competition from biotechnology research conducted in universities and non-profit organizations, which may lead to the development of superior products [192]. Intellectual Property and Legal Matters - The company relies on patent protection and trade secrets, but faces challenges in enforcing these rights, particularly in foreign jurisdictions [205]. - The company is engaged in ongoing litigation to protect intellectual property rights, which can be costly and time-consuming [220]. - The company may face claims of patent infringement, which could hinder the development, manufacturing, and sales of its products unless licenses are obtained, potentially affecting future revenue [222]. - Participation in litigation regarding intellectual property could adversely impact the company's competitive position and may lead to a decline in stock price if perceived negatively by analysts or investors [223]. - The company incurred $4.1 million in costs related to an adverse arbitration decision regarding milestone and royalty payments [221]. Future Outlook and Strategic Plans - The company intends to continue acquiring development-stage product candidates, but there are uncertainties regarding regulatory approvals and market acceptance that could affect financial outcomes [116]. - The company plans to continue business development efforts to acquire potential milestone and royalty streams, but competition for suitable assets is fierce [156]. - The company may not be able to successfully manage risks associated with integrating new products or companies into its business [157]. - The timing of clinical trials for product candidates may face significant delays due to various factors, impacting the overall development timeline [169]. - The company's future income is highly dependent on numerous milestone and royalty-specific assumptions, which may prove to be inaccurate, potentially affecting expected returns [150].

Financial Performance - Total cash receipts for 2024 amounted to $46.3 million, including $20.0 million in royalties and commercial payments[17] - The company recorded total income and revenues of $28.5 million for the full year 2024, a significant increase from $4.8 million in 2023[7] - Total income and revenues for 2024 reached $28,487,000, a significant increase from $4,758,000 in 2023, representing a growth of approximately 498%[24] - The company reported a gain of $19,316,000 from the acquisition of Kinnate, contributing positively to the financial results[24] - The company reported a significant increase in revenue, reaching $1.5 billion, representing a 20% year-over-year growth[29] Expenses and Losses - R&D expenses increased to $2.9 million for the full year 2024, up from $0.1 million in 2023, primarily due to clinical trial costs related to Kinnate[9] - G&A expenses for the full year 2024 were $34.5 million, compared to $25.6 million in 2023, largely due to acquisition-related costs[10] - Net loss for the full year 2024 was $13.8 million, a reduction from a net loss of $40.8 million in 2023[16] - Credit losses totaled $30.9 million for the year 2024, significantly impacting net loss figures[12] - The net loss for 2024 was $13,821,000, a reduction from a net loss of $40,831,000 in 2023, indicating an improvement of about 66%[24] - Total operating expenses for 2024 were $68,463,000, up from $46,606,000 in 2023, marking an increase of approximately 47%[24] Cash and Assets - The company had cash and cash equivalents of $106.4 million as of December 31, 2024, down from $159.6 million in 2023[17] - Cash and cash equivalents decreased to $101,654,000 as of December 31, 2024, down from $153,290,000 in 2023, a decline of about 34%[26] - Total assets decreased to $221,277,000 in 2024 from $234,301,000 in 2023, a decline of about 6%[26] - The company’s accumulated deficit increased to $1,237,057,000 as of December 31, 2024, compared to $1,223,223,000 in 2023[26] Acquisitions and Portfolio Growth - XOMA Royalty doubled its royalty and milestone portfolio to over 120 assets through five transactions in 2024[1] - XOMA Royalty completed two whole company acquisitions in 2024, adding approximately $7.8 million in cash and five assets to its portfolio[3] - FDA approvals were received for Day One's OJEMDA™ and Zevra's MIPLYFFA™, contributing to the company's royalty income[1] User and Market Growth - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[29] - The company provided an optimistic outlook for the next quarter, projecting revenue growth of 15% to 18%[29] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[29] - Market expansion plans include entering two new international markets by Q3 2024, targeting a potential user base of 3 million[29] - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[29] Customer and Operational Improvements - Customer retention rates improved to 85%, up from 80% in the previous quarter, reflecting enhanced customer satisfaction[29] - The company aims to reduce operational costs by 10% through efficiency improvements in the next year[29] - A new marketing strategy is expected to increase brand awareness by 30% in the upcoming quarter[29] - The weighted average shares used in computing basic net loss per share increased to 11,701,000 in 2024 from 11,471,000 in 2023[24] - The company recognized $6,650,000 in revenue from contracts with customers in 2024, compared to $2,650,000 in 2023, representing an increase of approximately 150%[24]

Core Insights - XOMA Royalty Corporation has expanded its royalty and milestone portfolio to over 120 assets through five transactions in 2024, significantly enhancing its potential for future revenue [1] - The company completed two whole company acquisitions aimed at unlocking shareholder value, which included Kinnate Biopharma and Pulmokine Inc. [4] - XOMA's products OJEMDA™ (tovorafenib) and MIPLYFFA™ (arimoclomol) received FDA approval, contributing to the company's revenue growth [5] Financial Performance - In Q4 2024, XOMA reported cash receipts of $4.0 million, with total cash receipts for the full year reaching $46.3 million [1] - Total income and revenues for 2024 were $28.5 million, a significant increase from $4.8 million in 2023, primarily driven by income from purchased receivables [10] - The net loss for 2024 was $13.8 million, an improvement from a net loss of $40.8 million in 2023, largely due to reduced credit losses [18] Acquisitions and Investments - XOMA Royalty completed a $15 million royalty monetization agreement with Twist Bioscience, acquiring 50% of future milestones and royalties from over 60 partnered early-stage programs [3] - The acquisition of Kinnate Biopharma added approximately $7.8 million in cash and five assets to XOMA's portfolio, while the acquisition of Pulmokine provided a milestone and royalty interest in seralutinib [4] - The company invested $65 million in acquiring new milestone and royalty assets in 2024 [19] Product Development and Approvals - The commercial royalty portfolio now includes six assets supported by FDA-approved products such as VABYSMO® (faricimab), OJEMDA™, and MIPLYFFA™ [2] - XOMA anticipates several key readouts in 2025 from its Phase 3 portfolio, which includes 11 assets [2] - The FDA approved OJEMDA™ for pediatric low-grade glioma, resulting in a $9.0 million milestone payment for XOMA [5] Future Outlook - XOMA Royalty is well-positioned for sustainable cash flow from royalties, with over $100 million in cash on hand [2] - The company expects to normalize R&D and G&A expenses in the second half of 2025, following the transient expenses related to recent acquisitions [11][12] - Anticipated events in 2025 include the completion of enrollment in the sunRIZE Phase 3 clinical trial and the initiation of registrational studies for various assets [7][9]

Core Insights - XOMA Royalty Corporation will participate in multiple investor conferences in March 2025, including the T.D. Cowen 45th Annual Health Care Conference and the Leerink 2025 Global Healthcare Conference [1][2][3] Group 1: Investor Conferences - XOMA will present at the T.D. Cowen 45th Annual Health Care Conference on March 3, 2025, at 11:10 AM ET in Boston, MA [2] - The company will also participate in a fireside chat at the Leerink 2025 Global Healthcare Conference on March 10, 2025, at 2:20 PM ET in Miami Beach, FL [3] - Presentations will be accessible via the investor relations section of XOMA's website, with replays available for 90 days post-event [3] Group 2: Company Overview - XOMA Royalty Corporation operates as a biotechnology royalty aggregator, aiding biotech firms in enhancing human health [4] - The company acquires future economic rights associated with therapeutic candidates licensed to pharmaceutical or biotechnology companies, providing sellers with non-dilutive funding [4] - XOMA has a growing portfolio of assets, defined as rights to receive future economics linked to therapeutic advancements [4]

XOMA Corporation (XOMA) FY 2025 Conference February 11, 2025 03:20 PM ET Company Participants Owen Hughes - CEOBrad Sitko - Chief Investment Officer Conference Call Participants Trevor Allred - Biotech Analyst Trevor Allred Morning, everyone or good afternoon, everyone. I'm, Trevor Allred, one of the biotech analysts here at Oppenheimer. We have with us today, CEO, CEO Owen Hughes and Brad Sitko, CIO from Zoma Royalty, here with us to disc discuss the company. So let's kick things off. So, you know, you're ...

Core Viewpoint - XOMA Royalty Corporation will participate in the Oppenheimer 35th Annual Healthcare Life Sciences Conference, highlighting its role as a biotech royalty aggregator and its commitment to improving human health through strategic partnerships [1][3]. Group 1: Event Participation - XOMA's CEO Owen Hughes and CIO Brad Sitko will engage in a fireside chat on February 11, 2025, at 3:20 PM ET [2]. - The presentation will be accessible via a provided link and will also be available on the company's investor relations website for 90 days post-event [2]. Group 2: Company Overview - XOMA Royalty Corporation specializes in acquiring future economic rights associated with therapeutic candidates licensed to pharmaceutical or biotech companies, providing non-dilutive funding to sellers [3]. - The company maintains a growing portfolio of assets, defined as rights to receive potential future economics from underlying therapeutic candidates [3].

Core Viewpoint - XOMA Royalty (XOMA) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Rising earnings estimates for XOMA Royalty indicate an improvement in the company's underlying business, suggesting that investors may respond positively by driving the stock price higher [5][10]. Recent Earnings Estimate Revisions - For the fiscal year ending December 2024, XOMA Royalty is expected to earn -$0.12 per share, reflecting a year-over-year change of 95.5% [8]. - Over the past three months, the Zacks Consensus Estimate for XOMA Royalty has increased by 19.2%, indicating a positive trend in earnings expectations [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, highlighting their superior earnings estimate revision features [9][10].

Company Performance - XOMA Royalty reported a quarterly loss of $0.39 per share, better than the Zacks Consensus Estimate of a loss of $0.44, and improved from a loss of $0.60 per share a year ago, representing an earnings surprise of 11.36% [1] - The company posted revenues of $7.2 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 8.06%, and significantly up from $0.83 million in the same quarter last year [2] - Over the last four quarters, XOMA Royalty has exceeded consensus revenue estimates four times, although it has surpassed consensus EPS estimates only once [2] Stock Performance - XOMA Royalty shares have increased approximately 75.5% since the beginning of the year, outperforming the S&P 500's gain of 24.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.49 on revenues of $6.52 million, and for the current fiscal year, it is -$0.12 on revenues of $25.75 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which XOMA Royalty belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Financial Performance - XOMA Royalty reported total income and revenues of $7.2 million for Q3 2024, a significant increase from $0.8 million in Q3 2023[6] - The company recorded a net loss of $17.2 million in Q3 2024, compared to a net loss of $5.5 million in Q3 2023, primarily due to a $14.0 million non-cash impairment charge[12] - Total income and revenues for the three months ended September 30, 2024, were $7,197,000, compared to $830,000 for the same period in 2023, representing a significant increase[18] - The net loss attributable to common stockholders for the three months ended September 30, 2024, was $(18,611,000), compared to $(6,877,000) for the same period in 2023, representing an increase in loss of 170%[18] - Net loss for the nine months ended September 30, 2024, was $9,853,000 compared to a loss of $20,722,000 for the same period in 2023[20] Cash Flow and Liquidity - Cash receipts for Q3 2024 totaled $9.9 million, with cumulative cash receipts of $42.3 million for the first nine months of 2024[1] - On September 30, 2024, XOMA Royalty had cash and cash equivalents of $146.8 million, down from $159.6 million at the end of 2023[13] - Cash and cash equivalents as of September 30, 2024, were $142,050,000, a decrease from $153,290,000 as of December 31, 2023[19] - Cash used in operating activities was $10,845,000, an improvement from $14,231,000 in the prior year[20] - Cash, cash equivalents, and restricted cash at the end of the period totaled $146,816,000, up from $33,472,000 in the previous year[20] Expenses - XOMA Royalty's R&D expenses were $0.8 million in Q3 2024, a notable increase from $25,000 in Q3 2023[7] - General and administrative expenses rose to $8.0 million in Q3 2024, up from $6.4 million in Q3 2023, largely due to costs associated with the Kinnate acquisition[8] - Operating expenses for the three months ended September 30, 2024, totaled $22,837,000, up from $6,617,000 in the same period of 2023, indicating a rise of 245%[18] - Stock-based compensation expense increased to $8,136,000 from $6,450,000 year-over-year[20] Assets and Liabilities - Total assets decreased to $223,340,000 as of September 30, 2024, from $234,301,000 as of December 31, 2023[19] - Total liabilities as of September 30, 2024, were $138,531,000, down from $145,580,000 as of December 31, 2023[19] Acquisitions and Investments - The FDA approved Zevra's MIPLYFFA™ (arimoclomol) for Niemann-Pick disease Type C, adding to XOMA's commercial royalty portfolio[2] - XOMA Royalty acquired a 50% economic interest in TWIST Bioscience's portfolio, which includes over 60 early-stage assets across approximately 30 partners, through a $15 million royalty monetization agreement[4] - The company recognized a gain of $19,316,000 on the acquisition of Kinnate during the nine months ended September 30, 2024[18] - Net cash acquired in the Kinnate acquisition amounted to $18,926,000[20] - Estimated initial fair value of the Exarafenib milestone asset in the Kinnate acquisition was $2,922,000[20] Other Income - The company recorded total other income, net, of $1.9 million in Q3 2024, compared to $0.3 million in Q3 2023, reflecting a $1.3 million increase in investment income[11] - Total interest expense for Q3 2024 was $3.5 million, related to the Blue Owl Loan established in December 2023[10] - Payments of consideration under RPAs, AAAs, and CPPAs totaled $37,000,000, compared to $14,650,000 in the previous year[20] - Net cash provided by investing activities was $8,172,000, a recovery from a cash outflow of $6,222,000 in the prior year[20] - The company recognized a royalty purchase agreement asset impairment of $23,000,000[20]