Core Insights - XOMA Royalty Corporation has completed the acquisition of LAVA Therapeutics N.V., with shareholders receiving $1.04 in cash per share and a contingent value right (CVR) [1][2] - The acquisition aligns with XOMA's strategy of enhancing its portfolio through partnerships with established oncology firms like Johnson & Johnson and Pfizer, potentially leading to significant value creation [2][3] Acquisition Details - The acquisition involved a total of 23,956,708 shares validly tendered, representing approximately 91.1% of the outstanding shares as of the final expiration date [2] - Following the acquisition, LAVA underwent a corporate reorganization, resulting in XOMA acquiring 100% of LAVA's shares, with remaining shareholders receiving the same cash and CVR consideration [3] Financial Aspects - LAVA shareholders are entitled to receive 75% of net proceeds from LAVA's partnered assets and any out-licensed or sold unpartnered programs, along with potential additional payments of up to approximately $0.23 per CVR [1][2] - The acquisition is expected to drive future milestones and royalties, enhancing the financial outlook for both XOMA and LAVA CVR holders [2] Legal and Advisory Information - XOMA Royalty was advised by Gibson, Dunn & Crutcher LLP and Loyens & Loeff N.V., while LAVA was represented by Leerink Partners and Cooley LLP [4]

Core Insights - XOMA Royalty reported a quarterly loss of $0.35 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.02, representing an earnings surprise of -1,650% [1] - The company generated revenues of $9.35 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 25.7%, but showing an increase from $7.2 million in the same quarter last year [2] - XOMA Royalty shares have increased by approximately 31.2% year-to-date, outperforming the S&P 500's gain of 16.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $13.46 million, and for the current fiscal year, it is $0.62 on revenues of $55.05 million [7] - The estimate revisions trend for XOMA Royalty was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Medical - Biomedical and Genetics industry, to which XOMA Royalty belongs, is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - VistaGen Therapeutics, another company in the same industry, is expected to report a quarterly loss of $0.51 per share, reflecting a year-over-year change of -21.4% [9]

Financial Performance - In Q3 2025, XOMA Royalty reported income of $9.4 million, up from $7.2 million in Q3 2024, and year-to-date income of $38.4 million compared to $19.8 million in the same period last year[10]. - The company recorded net income of $14.1 million for Q3 2025, a significant improvement from a net loss of $17.2 million in Q3 2024[17]. - Total income and revenues for the three months ended September 30, 2025, were $9,351,000, an increase of 30% compared to $7,197,000 for the same period in 2024[25]. - Net income for the three months ended September 30, 2025, was $14,100,000, compared to a net loss of $17,243,000 for the same period in 2024[25]. - Basic net income per share available to common stockholders for the three months ended September 30, 2025, was $0.74, compared to a loss of $1.59 per share for the same period in 2024[25]. - Net income for the nine months ended September 30, 2025, was $25,609, compared to a net loss of $9,853 in the same period of 2024[29]. Cash and Assets - XOMA Royalty received $43.9 million in cash from partners in the first nine months of 2025, including $30.3 million in royalties and $13.6 million in milestone payments[10]. - XOMA Royalty's cash and cash equivalents stood at $130.6 million as of September 30, 2025, including $85.4 million in restricted cash[18]. - Cash and cash equivalents decreased to $45,189,000 as of September 30, 2025, from $101,654,000 as of December 31, 2024[27]. - Total assets increased to $263,151,000 as of September 30, 2025, compared to $221,277,000 as of December 31, 2024[27]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $130,553, down from $146,816 at the end of the previous year[29]. Expenses - R&D expenses for the first nine months of 2025 were $1.4 million, a decrease from $2.0 million in the same period of 2024[11]. - General and Administrative expenses for the first nine months of 2025 were $25.7 million, down from $27.5 million in the same period of 2024[12]. - Research and development expenses for the three months ended September 30, 2025, were $69,000, a significant decrease from $817,000 for the same period in 2024[25]. - General and administrative expenses for the three months ended September 30, 2025, were $9,734,000, compared to $8,020,000 for the same period in 2024[25]. Acquisitions and Investments - The company completed acquisitions of Turnstone Biologics for $0.34 per share and HilleVax for $1.95 per share, and announced the acquisition of LAVA Therapeutics[2][6]. - XOMA Royalty expects to secure economic interests in two partnered assets through the acquisition of LAVA Therapeutics, including PF-08046052 and JNJ-89853413[6]. - The company reported gains on acquisitions of $18,004,000 for the three months ended September 30, 2025[25]. - The company acquired net cash of $46,832 in the HilleVax acquisition and $3,943 in the Turnstone acquisition[29]. Dividends and Cash Flow - XOMA Royalty paid $1.4 million in dividends on its Perpetual Preferred stocks during Q3 2025[19]. - Net cash provided by operating activities was $8,372, a significant improvement from a cash used of $10,845 in the prior year[29]. - The company reported a net cash increase of $24,137 in cash, cash equivalents, and restricted cash during the period, compared to a decrease of $12,734 in the previous year[29]. - Cash paid for interest increased to $11,906 from $9,985 year-over-year[29]. - Payments of consideration under RPAs, AAAs, and CPPAs totaled $8,000, down from $37,000 in the previous year[29]. - The company recognized a gain on the sale of equity securities amounting to $6,999[29]. - Principal payments on debt were $10,598, compared to $6,902 in the prior year[29]. - The company reported an adjustment for income from EIR method purchased receivables of $627, compared to a negative adjustment of $9,985 in the previous year[29]. Future Outlook - The company anticipates several clinical readouts in the coming months that could significantly impact its business trajectory[5].

Financial Performance - Net income for the three and nine months ended September 30, 2025, was $14.1 million and $25.6 million, respectively, with an accumulated deficit of $1.2 billion as of September 30, 2025[302]. - Total income and revenues for the three months ended September 30, 2025, were $9,351,000, an increase of 30% compared to $7,197,000 in 2024; for the nine months ended September 30, 2025, total income and revenues were $38,392,000, up 94% from $19,773,000 in 2024[322]. - Income from purchased receivables under the EIR method for the three months ended September 30, 2025, was $6,962,000, a 28% increase from $5,423,000 in 2024; for the nine months, it rose to $19,039,000 from $9,985,000, reflecting a 91% increase[324]. - Total cash receipts from royalties and commercial payments for the nine months ended September 30, 2025, amounted to $30.3 million, up from $18.2 million in 2024, reflecting a year-over-year increase of 66%[343]. - Cash and cash equivalents as of September 30, 2025, were $45,189,000, a decrease of 56% from $101,654,000 as of December 31, 2024; working capital decreased to $82,402,000 from $101,230,000, a decline of 18%[339]. Acquisitions and Investments - The company completed the acquisition of HilleVax for a total purchase consideration of $105.3 million, recognizing a $17.9 million bargain purchase gain[303][304]. - The acquisition of Turnstone was completed for $9.6 million, resulting in a $1.8 million bargain purchase gain[305]. - The company entered into an agreement to acquire all remaining rights to milestone payments and royalties from BioInvent for $20.0 million, with an additional $10.0 million contingent payment upon FDA approval of mezagitamab[314]. - The company is eligible to receive up to $270 million in upfront and milestone payments from the Kinnate acquisition, with royalty payments ranging from low single digits to mid-teens on commercial sales[315]. - The company plans to acquire LAVA with a base price of $1.16 per share, with the acquisition not yet closed as of the report date[308]. - The company has set aside $39.9 million in restricted cash for the Mural acquisition, which has not yet closed[309]. Milestone Payments - A milestone payment of $5.0 million was earned from Rezolute upon dosing the last patient in its Phase 3 trial of ersodetug (RZ358)[312]. - A milestone payment of $3.0 million was earned from Takeda upon dosing the first patient in its Phase 3 clinical trial of mezagitamab[317]. - The company has potential future milestone payments totaling $12.1 million that are contingent upon the achievement of specific developmental milestones by licensees[355]. Expenses and Financial Management - Total research and development expenses for the three months ended September 30, 2025, were $817,000, a decrease of 88% from $1,431,000 in 2024; for the nine months, expenses were $2,011,000, down 29% from $2,845,000 in 2024[329]. - General and administrative expenses for the three months ended September 30, 2025, were $9,734,000, an increase of 21% from $8,020,000 in 2024; for the nine months, expenses decreased to $25,682,000 from $27,485,000, a reduction of 7%[331]. - Interest expense for the three months ended September 30, 2025, was $3,301,000, a decrease of 6% from $3,493,000 in 2024; for the nine months, it decreased to $10,004,000 from $10,446,000, a reduction of 4%[333]. - There were no credit losses on purchased receivables for the three or nine months ended September 30, 2025; in contrast, credit losses were $23,000,000 for the nine months ended September 30, 2024[332]. Cash Flow and Financing - Net cash provided by operating activities for the nine months ended September 30, 2025, was $8.4 million, a significant increase of $19.2 million compared to a net cash used of $(10.8) million in the same period of 2024[340]. - Net cash provided by investing activities was $31.5 million, primarily driven by net cash acquired in the HilleVax acquisition of $46.8 million and the sale of equity securities for $7.0 million[341]. - Net cash used in financing activities totaled $15.8 million, mainly due to principal repayments on the Blue Owl Loan of $10.6 million and dividend payments of $4.1 million on preferred stock[342]. - The stock repurchase program authorized by the Board allows for the purchase of up to $50.0 million of common stock, with $2.4 million repurchased as of September 30, 2025[350]. - The company plans to seek additional capital through its 2025 Common Stock ATM Agreement or other public or private debt or equity transactions, depending on market conditions[345]. Tax and Liabilities - The company recorded an income tax expense of $49,000 for the three and nine months ended September 30, 2025, primarily related to a deferred tax liability from the acquisition of HilleVax[338]. - The company expects to incur approximately $41.7 million in undiscounted costs under the Boston Lease acquired as part of the HilleVax acquisition, which expires on December 31, 2032[349]. Preferred Stock Dividends - Holders of Series A Preferred Stock are entitled to cumulative cash dividends at a rate of 8.625%, while Series B Preferred Stock holders receive dividends at a rate of 8.375%[356].

Business Development - XOMA Royalty has completed acquisitions of Turnstone Biologics and HilleVax, and announced acquisitions of LAVA Therapeutics and Mural Oncology [1][6] - The company acted as a structuring agent for XenoTherapeutics' acquisition of ESSA Pharma [1] Key Pipeline Advancements - Zevra Therapeutics submitted a Marketing Authorization Application (MAA) for arimoclomol to treat Niemann-Pick Type C [2] - Rezolute Bio expects to announce topline data in December from its Phase 3 ersodetug trial for congenital hyperinsulinism [2] - Gossamer Bio anticipates topline results from its Phase 3 trial of seralutunib in pulmonary atrial hypertension in February 2026 [2] Financial Performance - In the first nine months of 2025, XOMA Royalty received $43.9 million in royalties and milestones, with $14.3 million received in the third quarter [3][10] - Income for the three and nine months ended September 30, 2025, was $9.4 million and $38.4 million, respectively, compared to $7.2 million and $19.8 million for the same periods in 2024 [10] - Net income for the three and nine months ended September 30, 2025, was $14.1 million and $25.6 million, compared to net losses of $17.2 million and $9.9 million in the corresponding periods of 2024 [17] Cash Position - As of September 30, 2025, XOMA Royalty had cash and cash equivalents of $130.6 million, including $85.4 million in restricted cash [18][19] - The company received $14.3 million in cash receipts from royalties and commercial payments in the third quarter of 2025 [20] Acquisitions and Royalty Interests - XOMA Royalty will secure economic interests in partnered assets from LAVA Therapeutics, including PF-08046052 and JNJ-89853413 [5] - The acquisition of Mural Oncology is expected to close in the fourth quarter of 2025, with cash payments ranging from $2.035 to $2.24 per share [6] Research and Development Expenses - R&D expenses for the three and nine months ended September 30, 2025, were $69 thousand and $1.4 million, respectively [11] - The increase in R&D expenses in 2025 was primarily related to clinical trial costs following the acquisition of Kinnate [11] General and Administrative Expenses - G&A expenses for the three and nine months ended September 30, 2025, were $9.7 million and $25.7 million, respectively [12] - The increase in G&A expenses for the three months ended September 30, 2025, was due to higher business development costs [12]

Core Viewpoint - LAVA Therapeutics N.V. is urging its shareholders to tender their shares in the ongoing acquisition offer from XOMA Royalty Corporation before the expiration deadline of November 12, 2025, to avoid potential risks associated with the failure of the transaction [1][3][12]. Group 1: Transaction Details - On August 4, 2025, LAVA and XOMA entered into a share purchase agreement, with XOMA extending its offer to purchase all outstanding common shares of LAVA until November 12, 2025 [2]. - The LAVA Board unanimously recommends that shareholders tender their shares to ensure the completion of the offer [3]. Group 2: Risks of Non-Completion - If the requisite percentage of shares is not tendered, the offer cannot be completed, which may lead to significant risks for shareholders, including potential liquidation and dissolution of LAVA [3][6]. - In the event of non-completion, LAVA's share price may decline, particularly if the current market price reflects expectations of the offer being completed [6]. Group 3: Share Tendering Process - Shareholders holding LAVA shares through brokers are advised to instruct their brokers to tender their shares promptly to meet processing deadlines [4][5]. - Those who have previously tendered their shares do not need to take any further action due to the extension of the offer [8]. Group 4: Company Overview - LAVA Therapeutics is a biopharmaceutical company focused on developing bispecific gamma delta T cell engagers using its proprietary Gammabody® platform, with partnerships including Johnson & Johnson and Pfizer [9].

Core Points - Mural Oncology plc's shareholders approved the acquisition by XRA 5 Corp, a subsidiary of XOMA Royalty Corporation, with over 99% of votes in favor at both the Scheme Meeting and Extraordinary General Meeting held on October 24, 2025 [1][4][10] Acquisition Details - The acquisition agreement stipulates that Mural shareholders will receive a base cash price of $2.035 per share, based on an estimated closing net cash of approximately $36.2 million [2][3] - The total value of Mural's issued share capital is approximately $36.2 million, excluding any additional cash that may be payable [3] - The acquisition is expected to close in the fourth quarter of 2025, pending customary closing conditions and approval from the High Court of Ireland [3] Voting Results - At the Scheme Meeting, 10,103,706 shares (99.20%) voted in favor of the proposal, representing 58.31% of the total shares outstanding [8][9] - At the EGM, 10,607,228 shares (99.16%) approved the proposal, with 10,647,967 shares (99.54%) voting in favor of the amendment to the articles of association [10][10]

Core Points - XOMA Royalty Corporation and LAVA Therapeutics N.V. have amended their definitive share purchase agreement, adjusting the cash amount and contingent value rights for LAVA shareholders [1][2] Summary by Sections Amendment Details - LAVA shareholders will now receive an initial cash amount of $1.04 per share, down from the previously agreed range of $1.16 to $1.24 [2] - The non-transferable contingent value right (CVR) will allow shareholders to receive 75% of net proceeds from LAVA's partnered assets and any net proceeds from unpartnered programs, plus a potential additional $0.23 per CVR based on certain liabilities [2] - The minimum net-cash closing condition has been reduced to $24.5 million from $31.5 million [2] Offer Extension - The tender offer expiration has been extended to November 12, 2025, from the original date of October 17, 2025 [3] - The acquisition is expected to close in the fourth quarter of 2025, pending customary closing conditions [3] Shareholder Actions - Shareholders who have already tendered their shares do not need to take further action due to the extension [4] - Support agreements have been signed by LAVA shareholders to tender their shares before the new expiration date [4] Closing Conditions - The closing of the offer is contingent upon the tender of at least 80% of LAVA's outstanding shares, adoption of certain resolutions at the shareholder meeting, and maintaining a minimum net-cash balance [5] Extraordinary General Meeting - LAVA will reconvene its Extraordinary General Meeting of Shareholders on November 7, 2025, to approve matters related to the transaction [6]

Group 1 - The focus is on income-producing asset classes such as REITs, ETFs, Preferreds, and 'Dividend Champions' that target premium dividend yields up to 10% [1] - iREIT®+HOYA Capital is highlighted as a premier income-focused investing service that offers sustainable portfolio income, diversification, and inflation hedging opportunities [2] - XOMA Royalty Corporation provides preferred stock investors with a chance to diversify their holdings away from mREITs and banks without needing to invest in ETFs or CEFs [3]

Group 1 - The focus is on income-producing asset classes such as REITs, ETFs, Preferreds, and 'Dividend Champions' that target premium dividend yields up to 10% [1] - iREIT®+HOYA Capital is highlighted as a premier income-focused investing service that offers sustainable portfolio income, diversification, and inflation hedging opportunities [2] - XOMA Royalty Corporation provides preferred stock investors a chance to diversify their holdings away from mREITs and banks without needing to invest in ETFs or CEFs [3]