Core Viewpoint - ESSA Pharma Inc. has entered into a definitive agreement with XenoTherapeutics, Inc. for Xeno to acquire all outstanding common shares of ESSA, with the transaction expected to close in the second half of 2025 [1][5]. Transaction Details - ESSA shareholders will receive a cash payment per common share based on ESSA's cash balance at closing, with an estimated total of approximately US$1.91 per common share, excluding contingent value rights (CVR) [2][3]. - Each ESSA shareholder will also receive one non-transferable CVR for each common share, entitling them to a pro rata portion of up to US$2,950,000 (up to US$0.06 per CVR) within 18 months following the transaction's close [2]. - The transaction requires approval from at least 66⅔% of votes cast by ESSA shareholders and securityholders, as well as court approval [5]. Company Strategy - The ESSA Board of Directors believes that the agreement with Xeno and XOMA Royalty maximizes shareholder value and provides a more certain value compared to liquidation [4]. - The transaction is structured to expedite cash distribution to shareholders, with an initial cash distribution application to be made to the Supreme Court of British Columbia [3]. Advisory and Support - Leerink Partners is serving as the exclusive financial advisor to ESSA, with legal counsel provided by Blake, Cassels & Graydon LLP and Skadden, Arps, Slate, Meagher & Flom LLP [9]. - The transaction committee, composed of independent directors, unanimously recommended the agreement to the Board, which has also approved the transaction [7][8]. Company Background - ESSA Pharma Inc. is a pharmaceutical company focused on developing therapies for prostate cancer [10]. - XenoTherapeutics, Inc. is a non-profit biotechnology company focused on advancing xenotransplantation [11]. - XOMA Royalty Corporation is a biotechnology royalty aggregator that supports biotech companies by acquiring future economic rights [12].

Core Viewpoint - XOMA Royalty Corporation has entered into a definitive merger agreement to acquire Turnstone Biologics Corp for $0.34 in cash per share plus one non-transferable contingent value right (CVR) [1][3]. Group 1: Merger Agreement Details - The acquisition is unanimously approved by Turnstone's Board of Directors, which believes it is in the best interests of all stockholders [2]. - XOMA Royalty will commence a tender offer by July 11, 2025, to acquire all outstanding shares of Turnstone common stock, with the transaction expected to close in August 2025 [3]. - Approximately 25.2% of Turnstone stockholders have signed support agreements to tender their shares in the Offer [3]. Group 2: Company Profiles - XOMA Royalty is a biotechnology royalty aggregator that helps biotech companies by acquiring potential future economics associated with therapeutic candidates [5]. - Turnstone Biologics focuses on developing a differentiated approach to treat solid tumors through selected tumor-infiltrating lymphocyte therapy [6].

Group 1 - XOMA Royalty (XOMA) shares increased by 9% to close at $26.22, with trading volume significantly higher than usual, contrasting with a 3.2% loss over the past four weeks [1][2] - The rise in stock price is linked to positive investor sentiment regarding XOMA's growing portfolio of assets, which includes rights to future payments from therapeutic candidates [2] - The company reported strong financial results for Q1 2025, with expectations of a quarterly loss of $0.12 per share, reflecting a year-over-year change of +57.1%, and revenues projected at $9.43 million, down 15% from the previous year [3] Group 2 - The consensus EPS estimate for XOMA has been revised 33.9% higher in the last 30 days, indicating a positive trend that typically leads to price appreciation [4] - XOMA Royalty holds a Zacks Rank of 3 (Hold) and is part of the Zacks Medical - Biomedical and Genetics industry [5] - Another company in the same industry, Compugen (CGEN), saw a 0.6% decline in its stock price, with a consensus EPS estimate remaining unchanged at -$0.07, representing a year-over-year change of -250% [5][6]

Core Insights - XOMA Royalty Corporation has acquired future royalty and milestone interests in mezagitamab from BioInvent for a total of USD $30 million, with an initial payment of USD $20 million at closing [1][2] - The acquisition enhances XOMA Royalty's late-stage royalty portfolio and provides BioInvent with non-dilutive capital to advance its clinical pipeline [2] - XOMA Royalty will be entitled to additional milestones of up to USD $16.25 million and mid-single digit royalties on future commercial sales of mezagitamab [3] Company Overview - XOMA Royalty Corporation is a biotechnology royalty aggregator that helps biotech companies by acquiring potential future economics associated with therapeutic candidates [5] - BioInvent International AB focuses on discovering and developing novel immune-modulatory antibodies for cancer therapy, currently having five drug candidates in clinical trials [6] Transaction Details - The economic interest in mezagitamab originated from a 2003 cross-licensing agreement between XOMA Royalty and BioInvent [2] - An additional payment of USD $10 million will be made upon mezagitamab achieving a specific regulatory milestone related to FDA marketing approval for IgA nephropathy [2] Clinical Development - Takeda, the developer of mezagitamab, has initiated a Phase 3 clinical trial for the treatment of immune thrombocytopenia (ITP) [4] - Mezagitamab is a fully human IgG1 monoclonal antibody targeting CD38, which has the potential to be a best-in-class anti-CD38 mAb [4]

Group 1: Earnings Performance - XOMA Royalty reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of a loss of $0.26 per share, and showing improvement from a loss of $0.86 per share a year ago, resulting in an earnings surprise of 123.08% [1] - The company posted revenues of $15.91 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 159.58%, compared to revenues of $1.49 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - XOMA Royalty shares have declined approximately 5.7% since the beginning of the year, while the S&P 500 has seen a decline of -0.6% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the upcoming quarter at -$0.18 on revenues of $7.38 million, and for the current fiscal year at -$0.50 on revenues of $29.75 million [7] Group 3: Industry Context - The Medical - Biomedical and Genetics industry, to which XOMA Royalty belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% of industries [8] - Another company in the same industry, Kamada, is expected to report quarterly earnings of $0.07 per share, reflecting a year-over-year increase of 75%, with revenues projected at $41.81 million, up 10.8% from the previous year [9]

Financial Performance - Net income for the three months ended March 31, 2025, was $2.4 million, compared to a net loss of $8.6 million for the same period in 2024[245]. - Total income and revenues for the three months ended March 31, 2025, were $15.9 million, an increase of $14.4 million from $1.5 million in the same period in 2024[252]. - Income from purchased receivables under the EIR method for the three months ended March 31, 2025, included estimated income of $5.8 million related to sales of VABYSMO[253]. - Total other (expense) income, net for Q1 2025 was $(95,000), a decrease of $2.1 million compared to $1.96 million in Q1 2024[262]. - Investment income decreased by $0.8 million to $0.9 million in Q1 2025 due to decreased balances and market interest rates[262]. - Net cash provided by operating activities was $2.2 million in Q1 2025, an increase of $7.1 million compared to $(4.9 million) in Q1 2024[265]. - Total cash receipts for Q1 2025 were $17.96 million, up from $9.77 million in Q1 2024, driven by increased royalties from VABYSMO[267]. Expenses - R&D expenses for the three months ended March 31, 2025, were $1.3 million, a significant increase from $33 thousand in the same period in 2024[258]. - G&A expenses for the three months ended March 31, 2025, were $8.1 million, a decrease of $0.4 million from $8.5 million in the same period in 2024[259]. - The company expects to incur $0.4 million in incremental costs related to its new headquarters lease in Emeryville, California[272]. Cash and Debt - Cash and cash equivalents as of March 31, 2025, were $90.3 million, down $11.4 million from $101.7 million as of December 31, 2024[264]. - The outstanding principal balance under the Blue Owl Loan Agreement was $113.6 million as of March 31, 2025, with an annual interest rate of 9.875%[274]. Milestones and Partnerships - The company completed the sale of all five pipeline assets from the Kinnate Biopharma acquisition, eligible for up to $270 million in upfront and milestone payments[246]. - A $3.0 million milestone payment was earned from Takeda for the first patient dosed in its Phase 3 clinical trial of mezagitamab (TAK-079)[248]. - The company expects future revenue and income to be primarily based on milestone and royalty payments from existing partners and licensees[244]. - The company contributed $5.0 million to a $75.0 million royalty financing transaction for Castle Creek Biosciences, acquiring a royalty interest in a Phase 3 asset[247]. Accumulated Deficit and Tax Benefits - The accumulated deficit as of March 31, 2025, remained at $1.2 billion, unchanged from the previous year[245]. - The company had an accumulated deficit of $1.2 billion as of March 31, 2025[267]. - The company has $5.9 million in gross unrecognized tax benefits, which will not impact the effective tax rate due to a full valuation allowance[263]. Stock Repurchase - The stock repurchase program authorized up to $50 million, with $0.6 million spent to purchase 26,488 shares as of March 31, 2025[273].

Report Overview and Business Highlights [First Quarter 2025 Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) XOMA Royalty reported significant Q1 2025 pipeline advancements, including MAA submission for tovorafenib and Phase 3 initiation, alongside **$18.0 million** in cash receipts - Key pipeline advancements include EMA acceptance of the MAA for **tovorafenib** and Takeda's initiation of a **Phase 3 trial for mezagitamab**[2](index=2&type=chunk) - The company acquired an economic interest in Castle Creek's **D-Fi (FCX-007)** and divested all unpartnered assets from the Kinnate acquisition[2](index=2&type=chunk) Q1 2025 Cash Receipts | Category | Amount | | :--- | :--- | | **Total Cash Receipts** | **$18.0 million** | | Royalty Receipts | $13.4 million | - The CEO emphasized commitment to generating shareholder value via prudent cash deployment, strict expense control, and opportunistic share repurchases, noting a tangible path to sustained cash flow[3](index=3&type=chunk) Portfolio Developments [Royalty and Milestone Acquisitions](index=1&type=section&id=Royalty%20and%20Milestone%20Acquisitions) XOMA expanded its portfolio by acquiring a royalty interest in **D-Fi (FCX-007)**, a Phase 3 asset for DEB, contributing **$5 million** to a **$75 million** syndicated financing - XOMA acquired a royalty interest in the **Phase 3 asset D-Fi (FCX-007)** for dystrophic epidermolysis bullosa (DEB), which holds **FDA Orphan Drug and Fast Track designations**[4](index=4&type=chunk) - The company contributed **$5 million** to a **$75 million** syndicated royalty financing transaction with Castle Creek Biosciences for the D-Fi asset[4](index=4&type=chunk) [Partner Updates & Milestone Achievements](index=2&type=section&id=Partner%20Updates%20%26%20Milestone%20Achievements) Significant partner progress generated milestone revenue, including **Rezolute's Breakthrough Therapy Designations** for ersodetug, **Day One's MAA filing for tovorafenib ($4.0M milestone)**, and **Takeda's Phase 3 initiation for mezagitamab ($3.0M milestone)** - Rezolute received **FDA Breakthrough Therapy Designation for ersodetug** for two indications, with sunRIZE Phase 3 study enrollment expected to complete in May 2025 and topline data in December 2025[6](index=6&type=chunk) - Day One Biopharmaceuticals' partner Ipsen's MAA filing for **tovorafenib** with the EMA triggered a **$4.0 million milestone payment** to XOMA[6](index=6&type=chunk) - Takeda's dosing of the first patient in a **Phase 3 trial for mezagitamab** triggered a **$3.0 million milestone payment (net)** to XOMA in Q2[7](index=7&type=chunk) - XOMA made a final **$6 million milestone payment** to Affitech Research AS for **VABYSMO®** achieving specific sales thresholds[6](index=6&type=chunk) [Anticipated 2025 Events of Note](index=3&type=section&id=Anticipated%202025%20Events%20of%20Note) XOMA anticipates key 2025 catalysts including a European regulatory decision for **Day One's tovorafenib**, **Rezolute's ersodetug Phase 3 topline data**, and **Gossamer/Chiesi's PROSERA study results** - An EMA decision is expected regarding the MAA for **tovorafenib** for pediatric low-grade glioma (pLGG)[7](index=7&type=chunk) - Topline data from the **sunRIZE Phase 3 trial of ersodetug** are expected in December 2025[7](index=7&type=chunk) - Topline results from the **Phase 3 PROSERA study** in pulmonary arterial hypertension (PAH) are expected[7](index=7&type=chunk) - **Sildenafil Cream** is anticipated to be available via prescription in Q4 2025 under Section 503B of the FDCA[7](index=7&type=chunk) Financial Results [First Quarter 2025 Financial Performance](index=4&type=section&id=First%20Quarter%202025%20Financial%20Performance) XOMA reported **Q1 2025 total income and revenues of $15.9 million**, up from **$1.5 million** in Q1 2024, achieving a **net income of $2.4 million** from a prior-year loss Q1 2025 vs Q1 2024 Financial Summary | Financial Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Income & Revenues | $15.9M | $1.5M | +$14.4M | | R&D Expenses | $1.3M | $33K | +$1.27M | | G&A Expenses | $8.1M | $8.5M | -$0.4M | | Net Income (Loss) | $2.4M | ($8.6M) | +$11.0M | - Revenue increase was driven by income from **VABYSMO®**, a **$4.0 million milestone** from Day One/Ipsen, a **$4.0 million payment** from Takeda, and **$1.5 million** in estimated royalties for **OJEMDA™**[8](index=8&type=chunk) - Increased R&D expenses were mainly due to a **$1.0 million pass-through licensing fee** related to the Takeda milestone and clinical trial costs for **KIN-3248**[9](index=9&type=chunk) [Cash Position and Capital Allocation](index=4&type=section&id=Cash%20Position%20and%20Capital%20Allocation) As of March 31, 2025, XOMA held **$95.0 million** in cash, received **$18.0 million** in Q1 cash receipts, and strategically deployed capital for new assets, share repurchases, and dividends - Ended Q1 2025 with **$95.0 million** in cash and cash equivalents (including **$4.8 million** in restricted cash), compared to **$106.4 million** at year-end 2024[15](index=15&type=chunk) - Total cash receipts for Q1 2025 were **$18.0 million**, comprising **$13.4 million** in royalties/commercial payments and **$4.6 million** in milestones/fees[15](index=15&type=chunk) - Key uses of cash in Q1 2025 included **$5.0 million** for a new asset acquisition, **$0.5 million** to repurchase **25,828 shares** of common stock, and **$1.4 million** for preferred stock dividends[15](index=15&type=chunk) Consolidated Financial Statements [Condensed Consolidated Statements of Operations](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q1 2025, XOMA reported **total revenues of $15.9 million** and a **net income of $2.4 million**, a significant improvement from Q1 2024's **$1.5 million** revenue and **$8.6 million** net loss Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | **Total income and revenues** | **$15,912** | **$1,490** | | Total operating expenses | $9,983 | $8,494 | | **Income (Loss) from operations** | **$5,929** | **($7,004)** | | Interest expense | ($3,467) | ($3,551) | | **Net income (loss)** | **$2,367** | **($8,595)** | | Basic net income (loss) per share | $0.06 | ($0.86) | | Diluted net income (loss) per share | $0.06 | ($0.86) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, XOMA's total assets were **$212.8 million** (down from **$221.3 million**), with total liabilities decreasing to **$128.1 million** and stockholders' equity increasing to **$84.6 million** Condensed Consolidated Balance Sheets (in thousands) | | **March 31, 2025** | **December 31, 2024** | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $90,265 | $101,654 | | Total current assets | $113,225 | $125,604 | | **Total assets** | **$212,750** | **$221,277** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $20,434 | $24,374 | | Long-term debt | $99,934 | $106,875 | | **Total liabilities** | **$128,121** | **$139,356** | | **Total stockholders' equity** | **$84,629** | **$81,921** | | **Total liabilities and stockholders' equity** | **$212,750** | **$221,277** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q1 2025, XOMA generated **$2.2 million** cash from operations, used **$6.7 million** in investing and **$6.9 million** in financing, resulting in an **$11.4 million** net cash decrease and a **$95.0 million** period-end balance Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | | **2025** | **2024** | | Net cash provided by (used in) operating activities | $2,198 | ($4,947) | | Net cash used in investing activities | ($6,693) | ($7,246) | | Net cash used in financing activities | ($6,894) | ($4,956) | | **Net decrease in cash, cash equivalents and restricted cash** | **($11,389)** | **($17,149)** | | Cash, cash equivalents and restricted cash at beginning of period | $106,416 | $159,550 | | **Cash, cash equivalents and restricted cash at end of period** | **$95,027** | **$142,401** | Company Information and Disclosures [About XOMA Royalty Corporation](index=5&type=section&id=About%20XOMA%20Royalty%20Corporation) XOMA Royalty operates as a biotechnology royalty aggregator, acquiring future economic rights from therapeutic candidates to provide non-dilutive, non-recourse funding to partners - XOMA's business model involves acquiring future economics, including milestones and royalties, from therapeutic candidates of pharmaceutical or biotech companies[16](index=16&type=chunk) - This model provides selling partners with **non-dilutive, non-recourse funding** for their corporate purposes[16](index=16&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section provides a standard safe harbor disclaimer, cautioning that forward-looking statements regarding future events are subject to significant biotech industry risks and uncertainties, including development failures and regulatory approvals - The press release contains forward-looking statements regarding the timing and amount of potential payments, regulatory events, and overall portfolio potential[17](index=17&type=chunk) - These statements are not guarantees of performance and are subject to risks, including licensees' ability to fund development, product market viability, and regulatory approval uncertainty[17](index=17&type=chunk)[18](index=18&type=chunk)

Core Insights - XOMA Royalty Corporation reported a strong first quarter for 2025, with total income and revenues of $15.9 million, a significant increase from $1.5 million in the same period in 2024, driven by various milestone payments and royalties [7][21]. - The company received $18.0 million in cash receipts during the first quarter, including $13.4 million from royalties and commercial payments, and $4.6 million from milestones and fees [15][7]. - XOMA Royalty is focused on prudent cash deployment, strict expense control, and opportunistic share repurchases, indicating a commitment to generating shareholder value [2][6]. Pipeline Advancements - The Marketing Authorization Application (MAA) for tovorafenib by Day One Biopharmaceuticals and Ipsen was accepted for review by the European Marketing Authority (EMA) [1]. - Takeda initiated a Phase 3 trial for mezagitamab, targeting chronic primary immune thrombocytopenia [1]. Business Development - XOMA Royalty acquired a royalty interest in Castle Creek Biosciences' D-Fi (FCX-007), a Phase 3 asset for dystrophic epidermolysis bullosa, contributing $5 million to a $75 million syndicated royalty financing transaction [3][1]. - The company successfully sold all unpartnered Kinnate assets, with a portion of any upfront payments to be distributed to Kinnate CVR holders [1][3]. Financial Performance - The company recorded a net income of $2.4 million for the first quarter of 2025, compared to a net loss of $8.6 million in the first quarter of 2024 [14][22]. - Research and Development (R&D) expenses increased to $1.3 million in Q1 2025 from $33,000 in Q1 2024, primarily due to licensing fees and clinical trial costs [9][21]. - General and Administrative (G&A) expenses decreased to $8.1 million in Q1 2025 from $8.5 million in Q1 2024, mainly due to lower stock compensation costs [10][11]. Anticipated Events - Key upcoming events include the EMA's decision on the MAA for tovorafenib and the completion of enrollment in the sunRIZE Phase 3 clinical trial for ersodetug, with topline data expected in December 2025 [6][1].

Core Viewpoint - XOMA Royalty Corporation will participate in the H.C. Wainwright Annual Royalty Company Virtual Conference on May 13, 2025, with key executives featured as speakers [1][2]. Group 1: Conference Participation - CEO Owen Hughes and CIO Brad Sitko will be featured speakers at the conference [1]. - Mr. Hughes will participate in a panel discussion titled "Pros and Cons of Royalty Model – Especially in Current Financing Environment" at 4:00 PM ET [2]. - Mr. Sitko will join the panel "Development-Stage Companies – Where do Royalty and Tech Platforms Play Fit?" at 5:00 PM ET [2]. Group 2: Upcoming Events - Members of XOMA Royalty's business development team will attend the H.C. Wainwright Annual BioConnect Investor Conference on May 20, 2025, in New York, NY [3]. Group 3: Company Overview - XOMA Royalty Corporation is a biotechnology royalty aggregator that helps biotech companies improve human health by acquiring future economic rights associated with therapeutic candidates [4]. - The company provides non-dilutive, non-recourse funding to sellers, allowing them to advance their drug candidates or for general corporate purposes [4]. - XOMA Royalty has a growing portfolio of assets related to the advancement of therapeutic candidates [4].

Core Viewpoint - XOMA Royalty Corporation has successfully sold its remaining Kinnate pipeline assets for up to $270 million in upfront and milestone payments, along with royalties on future commercial sales [1][2] Group 1: Financial Details - The total potential financial benefit from the sale includes up to $270 million in upfront and milestone payments, plus royalties on commercial sales at rates ranging from low single digits to mid-teens [1] - Holders of Kinnate Contingent Value Rights (CVRs) will receive 85% of all related payments made to XOMA Royalty prior to April 2, 2029 [2] Group 2: Company Background - XOMA Royalty Corporation operates as a biotechnology royalty aggregator, acquiring future economic rights associated with therapeutic candidates licensed to pharmaceutical or biotechnology companies [3] - The company provides non-dilutive, non-recourse funding to sellers, enabling them to advance their internal drug candidates or for general corporate purposes [3] Group 3: Current Portfolio - As of the date of the press release, XOMA Royalty's milestone and royalty portfolio includes commercial assets such as VABYSMO®, OJEMDA™, MIPLYFFA™, XACIATO™, IXINITY®, and DSUVIA® [6]