Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the transition period from __________to__________ Washington, D.C. 20549 Commission File No. 001-39801 FORM 10-Q XOMA Corporation ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT (Exact name of registrant as specified in its charter) For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT If an emerging growth company, indicate by ...

Financial Performance - For the three months ended March 31, 2023, total revenues were $437,000, a decrease of $2.67 million compared to $3.1 million in the same period in 2022[239]. - The company reported a net loss of $9.8 million for the three months ended March 31, 2023, with an accumulated deficit of $1.2 billion as of the same date[233]. - Cash and cash equivalents decreased to $44.3 million as of March 31, 2023, down from $57.8 million at the end of 2022, reflecting a net decrease of $13.5 million[248]. - Net cash used in operating activities for the three months ended March 31, 2023, was $4.9 million, compared to $1.0 million for the same period in 2022[250]. - The company incurred arbitration settlement costs of $4.1 million during the three months ended March 31, 2023[245]. - Net cash used in financing activities for the three months ended March 31, 2023, was $1.4 million, primarily due to dividend payments on Series A and Series B Preferred Stock[252]. Expenses - Research and development (R&D) expenses were $54,000 for the three months ended March 31, 2023, consistent with $56,000 for the same period in 2022[242]. - General and administrative (G&A) expenses increased to $6.2 million for the three months ended March 31, 2023, up from $5.1 million in the same period in 2022, primarily due to increased stock-based compensation and consulting costs[244]. - The company anticipates an increase in operating expenses in 2023 due to a higher volume of acquisition targets being evaluated[259]. Investments and Acquisitions - The company entered into a commercial payment purchase agreement (CPPA) in March 2023, acquiring a mid-single digit percentage payment stream on IXINITY sales, with an upfront payment of $9.6 million[234]. - Net cash used in investing activities was $7.2 million for the three months ended March 31, 2023, primarily due to the $9.6 million payment for the acquisition of payment rights[251]. - The company expects to continue deploying capital toward acquiring rights to potential future milestone and royalty streams in the near and long term[261]. - Potential future milestone payments and legal fees under licensing agreements could aggregate up to $6.3 million, contingent on the achievement of specific milestones[264]. Cash Management - The company had approximately $4.5 million of cash and cash equivalents in accounts with SVB at the time of its closure on March 10, 2023, but regained full access to $3.7 million by March 31, 2023[254]. - Investment income increased to $381,000 for the three months ended March 31, 2023, compared to $15,000 in the same period in 2022, due to higher market interest rates[246]. Preferred Stock and Dividends - Holders of Series A Preferred Stock are entitled to cumulative cash dividends at a rate of 8.625%, while Series B Preferred Stock dividends are at 8.375%[265]. - The company incurred a cost of $4.1 million in April 2023 due to an adverse arbitration decision regarding a license agreement[258]. - The company may seek additional capital through its 2018 Common Stock ATM Agreement or 2021 Series B Preferred Stock ATM Agreement[255]. Lease and Future Outlook - The amended headquarters lease is set to expire in July 2023, with no expected material incremental costs associated with future leases[260].

Portfolio and Acquisitions - XOMA's portfolio is built through acquisitions of rights to future milestones and royalties since 2017, with expectations that most future revenue will come from these payments[31] - The company acquired all of ObsEva's intellectual property related to ebopiprant for an upfront payment of $15.0 million, with potential payments of up to $475.0 million for development and commercialization milestones[36] - The company purchased a future stream of commercial payment rights to Roche's faricimab for an upfront payment of $6.0 million, with a 0.5% royalty on future net sales for ten years[37] - The company acquired rights to potential royalties from Checkmate Pharmaceuticals' vidutolimod for an upfront payment of $7.0 million, with tiered royalties from high single-digit to low double-digits[42] - Company made a $6.0 million upfront payment to Aronora and an additional $3.0 million for three Bayer Products as of September 1, 2019[50] - Company paid $10.0 million for rights to potential royalty payments on six drug candidates targeting various diseases under the Palo RPA[51] - Company received a $37.0 million upfront fee from Novartis for the Anti-TGFβ Antibody License Agreement, with potential total milestones of up to $480.0 million[54] - Company received total consideration of $30.0 million for the Gevokizumab License Agreement, with potential milestones of up to $438.0 million[61] - Company may receive additional milestone payments aggregating up to $19.0 million relating to TAK-079 and a 4% royalty on future sales[70] - Company is eligible to receive up to $232.0 million in milestone payments from Rezolute based on the achievement of pre-specified criteria for RZ358[75] - The company plans to continue business development efforts to acquire or in-license potential milestone and royalty streams, but competition for these opportunities is intense, particularly from larger pharmaceutical and biotechnology companies[159] Revenue and Financial Performance - XOMA is eligible to receive royalties ranging from low to mid-teens from Organon for ebopiprant, while making mid-single-digit royalty payments to Merck KGaA[36] - XOMA's share in future potential development, regulatory, and commercial milestones from the Agenus Royalty Purchase Agreement is up to $59.5 million, with no limit on royalties[45] - Company earned a $25.0 million milestone upon the dosing of the first patient in Novartis' first NIS793 Phase 2 clinical trial[57] - Company is eligible to receive remaining milestones up to a total of $410.0 million under the Anti-TGFβ Antibody License Agreement[59] - Company earned a $2.0 million milestone payment from Takeda upon the first patient dosing in the Phase 2 study of mezagitamab[72] - Company earned a $0.5 million milestone from Janssen in May 2021 and a $0.2 million milestone in December 2021[83] - The company generated a net income of $15.8 million and positive cash flows from operations of $22.7 million for the year ended December 31, 2021, but reported a net loss of $17.1 million and negative cash flows from operations of $12.9 million for the year ended December 31, 2022, with an accumulated deficit of $1.2 billion as of December 31, 2022[141] Risks and Challenges - A significant portion of the calculated net present value of XOMA's portfolio is dependent on a limited number of products, indicating high risk if any fail to progress[29] - The biotechnology and pharmaceutical industries are subject to significant competition, which may impact the company's licensees and royalty partners[88] - The company faces competition from other companies seeking to aggregate royalties or provide alternative financing to development-stage biotechnology and pharmaceutical companies[89] - Regulatory changes in the U.S. and EU could impact drug pricing and result in lower royalties for the company[92] - The ongoing COVID-19 pandemic has caused delays in clinical trials, potentially impacting revenue from milestones and royalties[104] - The company may experience credit risk due to defaults or bankruptcies of licensors or licensees, which could adversely affect future payments[111] - The company faces risks from natural disasters, public health crises, and political crises that could disrupt the development efforts of its licensees and adversely affect future milestone and royalty payments[139] - The company may face significant losses if expected payments from licensees and collaborators do not materialize due to defaults or disagreements[208] - Current collaborations may be terminated at will by partners, potentially delaying or terminating product development[209] Intellectual Property and Regulatory Issues - The company holds numerous patents and applications to protect its products and technology, but the patent position in biotechnology is uncertain[94] - Intellectual property protection is critical for the company and its potential royalty providers, as inadequate protection could harm competitive positioning[186] - The company has filed numerous patent applications domestically and internationally to safeguard its products and technology[188] - Ongoing litigation regarding intellectual property rights could lead to significant costs and impact the company's ability to compete[198] - The company initiated arbitration against a licensee for alleged violations of the License Agreement, seeking damages estimated in the mid-single-digit millions[199] - Regulatory approval is critical for the company's potential royalty providers, and failure to obtain such approvals could prevent marketing and sales of their products[161] - Compliance with current Good Manufacturing Practices (cGMP) is critical; failures could delay regulatory approvals and increase costs[214] Operational and Workforce Considerations - As of March 6, 2023, the company employed 12 full-time and one part-time employee, relying on a small workforce for operations[105] - The company has a small employee base, with only 12 full-time employees, which may impact its ability to attract and retain qualified personnel[218] - The loss of key personnel could significantly hinder the company's ability to meet its operational objectives[217] - Inadequate performance by third-party service providers could delay the development of product candidates and affect potential income[210] Market and Competitive Landscape - The biopharmaceutical industry is highly competitive, and products generating royalties may become obsolete due to new developments[128] - The ability of potential royalty providers to effectively price products and obtain adequate reimbursement is uncertain, which could negatively impact the royalties received by the company[179] - Third-party payors are increasingly challenging pharmaceutical pricing, which may affect the company's revenue from milestone and royalty streams[180] - The company faces uncertainties regarding the market acceptance of its product candidates, which may not be viable even if approved[182] - Approved products are at risk from the introduction of generic or biosimilar versions, potentially affecting market acceptance[184] Financial Strategy and Funding - The company may need to raise additional funds to acquire milestone and royalty interests, and if funds are not available at an acceptable cost of capital, it may be unsuccessful in sustaining the business in the future[145] - The company has incurred significant operating losses and negative cash flows from operations since inception, with future profitability dependent on the success of its partners' product candidates[142] - The royalty aggregator strategy may require the company to register with the SEC as an "investment company," which could impose significant operational changes and costs[136] Cybersecurity and Data Risks - Cybersecurity threats pose a risk to sensitive data, potentially leading to significant financial and reputational harm[224]

1 CORPORATE PRESENTATION NOVEMBER 2022 NASDAQ: XOMA A ROYALTY AGGREGATION COMPANY 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 significant financial contribution, our library of potentially ...

Company Overview - XOMA has a portfolio of over 70 assets across more than 30 disclosed indications[8] - XOMA focuses on acquiring drug royalties associated with mid- to early-stage clinical candidates, particularly those with blockbuster potential licensed to large-cap partners[8] - XOMA's royalty interests are not diluted as companies raise capital[8] Portfolio Advancements and Key Assets - Since 2017, XOMA's portfolio has seen over 25 advancements from phase to phase[13] - Roche's faricimab, in which XOMA holds a 0.5% royalty, has been approved by the FDA for the treatment of nAMD and DME[16, 49] - Key portfolio assets include NIS793 (Novartis), iscalimab (Novartis), MK-4830 (Merck), osocimab (Bayer), and cetrelimab (Janssen), with royalty rates ranging from low single-digit to low teens percentages[16] Financial and Operational Highlights - XOMA acquired economic interest in Roche's faricimab from Affitech for $6 million upfront[38] - XOMA earned a $35 million milestone from Novartis with the first patient dosed in the NIS793 Phase 3 mPDAC study[38] - XOMA has over $1 billion in potential milestones across its portfolio[52, 60, 63, 66]

Table of Contents 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 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from __________to__________ Commission File No. 001-39801 XOMA Corporation (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other jurisdi ...

Table of Contents 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 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2200 Powell Street, Sui ...

Table of Contents 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, 2021 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 001-39801 XOMA CORPORATION (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other jurisdiction ...

Company Overview - XOMA has a portfolio of over 70 assets across more than 30 disclosed indications[8] - The company focuses on acquiring drug royalties associated with mid- to early-stage clinical candidates, particularly those with blockbuster potential licensed to large-cap partners[8] - XOMA's business model is capital-efficient, with R&D costs borne by partners, and exposure risk is mitigated through a diverse portfolio[8] Portfolio Advancements and Key Assets - Since 2017, XOMA's portfolio has seen over 25 advancements from phase to phase[13] - Roche's faricimab, in which XOMA holds a 0.5% royalty, received FDA approval[16] - XOMA has economic rights from Affitech SA[9, 12] Financial and Operational Highlights - XOMA acquired economic interest in Roche's faricimab from Affitech for $6 million upfront[40] - The company completed over $60 million in Perpetual Preferred Stock Offerings[40] Partner-Driven Clinical Events - Novartis launched a Phase 3 study for NIS793 and is conducting multiple Phase 2 trials for iscalimab[45] - Janssen launched a Phase 3 study for cetrelimab[45] Potential Milestones - XOMA's portfolio has over $1 billion in potential milestones[50, 52, 62, 65]

Table of Contents 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 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from __________to__________ Commission File No. 001-39801 XOMA Corporation (Exact name of registrant as specified in its charter) Delaware 52-2154066 (State or other ju ...