Financial Performance - XOMA reported a net loss of $17.2 million for the three months ended September 30, 2024, and an accumulated deficit of $1.2 billion as of the same date [285]. - Total income and revenues for the three months ended September 30, 2024, were $7.2 million, a significant increase of $6.4 million compared to $830,000 in the same period of 2023 [297]. - For the nine months ended September 30, 2024, total income and revenues were $19.8 million, up from $2.9 million in the same period of 2023, reflecting a change of $16.8 million [297]. - The accumulated deficit as of September 30, 2024, was $1.2 billion, indicating significant operating losses since inception [321]. Revenue Sources - Income from purchased receivables for the three months ended September 30, 2024, included $5.4 million related to sales of VABYSMO [298]. - Revenue from contracts with customers for the nine months ended September 30, 2024, included a milestone payment of $5.0 million from Rezolute [301]. - XOMA expects future income related to VABYSMO to increase as sales are anticipated to grow [300]. Expenses - R&D expenses for Q3 2024 were $0.8 million, a significant increase from $25,000 in Q3 2023, primarily due to clinical trial costs related to KIN-3248 [303]. - G&A expenses for Q3 2024 were $8.0 million, up from $6.4 million in Q3 2023, with $1.4 million attributed to costs incurred from the Kinnate acquisition [304]. - G&A expenses for the nine months ended September 30, 2024, totaled $27.5 million, compared to $18.3 million in the same period of 2023, reflecting a $9.2 million increase mainly due to Kinnate acquisition costs [305]. Acquisitions and Agreements - XOMA entered into a royalty purchase agreement with Twist Bioscience for a $15.0 million upfront payment, potentially receiving up to $0.5 billion in milestone payments [286]. - The company recognized a $2.2 million milestone payment upon FDA approval of MIPLYFFA, with eligibility for mid-single-digit royalties on net sales [289]. - A $19.3 million gain was recognized on the acquisition of Kinnate during the nine months ended September 30, 2024, due to the fair value of net assets acquired exceeding the purchase consideration [309]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2024, were $142.1 million, down from $153.3 million as of December 31, 2023, reflecting a decrease of $11.2 million [317]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $10.8 million, a decrease of $3.4 million compared to the same period in 2023 [318]. - Net cash provided by investing activities was $8.2 million for the nine months ended September 30, 2024, compared to a net cash used of $6.2 million in the same period of 2023, marking a $14.4 million change [319]. Future Obligations and Liabilities - The company has authorized a stock repurchase program allowing for the purchase of up to $50.0 million of common stock through January 2027, with $13,000 spent on repurchases as of September 30, 2024 [328]. - Future R&D and G&A expenditures related to the Kinnate acquisition are expected to be funded by cash received upon the merger's close [327]. - The company has recorded $4.0 million of contingent consideration related to RPAs, AAAs, and CPPAs on its balance sheets as of September 30, 2024 [332]. - The company expects to make additional milestone payments of up to $6.0 million under the Affitech CPPA and $1.0 million under the LadRx Agreements [332]. - The company recognized a $1.0 million liability for a commercial milestone payment following FDA approval of MIPLYFFA on September 20, 2024 [339]. - Based on reported 2024 sales of VABYSMO through September 30, 2024, the company recognized $3.0 million in liabilities for sales-based milestone payments [340]. - Holders of Series A Preferred Stock are entitled to cumulative cash dividends at a rate of 8.625% per year, while Series B Depositary Shares have a rate of 8.375% per year [335]. - The company is obligated to pay an additional $11.0 million for each successive $22.0 million received under the Daré RPAs after achieving a return threshold of $88.0 million [338]. - The company has potential future milestone payments aggregating up to $6.3 million that have not been recorded on the balance sheet as of September 30, 2024 [334].

Financial Performance - XOMA generated net income of $16.0 million and $7.4 million for the three and six months ended June 30, 2024, respectively, with an accumulated deficit of $1.2 billion as of June 30, 2024[283]. - Total income and revenues for the three months ended June 30, 2024, were $11.1 million, a significant increase of $9.4 million compared to $1.7 million in the same period of 2023[313]. - Investment income increased by $1.2 million and $2.5 million for the three and six months ended June 30, 2024 compared to the same periods in 2023, respectively, due to higher balances and higher market interest rates[325]. - Net cash used in operating activities decreased by $9.9 million for the six months ended June 30, 2024 compared to the same period in 2023, primarily driven by an increase of $13.6 million in operating cash receipts from partners and licensees[333]. - As of June 30, 2024, the accumulated deficit was $1.2 billion, with cash and cash equivalents of $143.9 million and restricted cash of $6.0 million[336]. Acquisitions and Agreements - The Kinnate acquisition was completed on April 3, 2024, with a cash payment of $2.5879 per share and potential milestone payments totaling $30.5 million[284][285]. - The company recognized a $19.3 million gain on the acquisition of Kinnate during the three and six months ended June 30, 2024, due to the fair value of net assets acquired exceeding the total purchase consideration[322]. - The company entered into the Kinnate CVR Agreement on April 3, 2024, with a potential obligation to pay up to $30.5 million upon achieving specified milestones related to the sale of exarafenib[353]. - The company acquired rights to royalty and milestone payments related to XACIATO, OVAPRENE, and Sildenafil Cream on April 29, 2024, with an additional obligation of $11.0 million for every $22.0 million received after reaching a return threshold of $88.0 million[354]. Revenue Sources - XOMA earned a $9.0 million milestone payment upon FDA approval of Day One's NDA for OJEMDA and is eligible for mid-single-digit royalties on net sales[286]. - Day One sold its priority review voucher for $108.0 million, resulting in an $8.1 million payment to XOMA[287]. - XOMA received $7.4 million in commercial payments from Roche for sales of VABYSMO during the last six months of 2023[291]. - A $5.0 million milestone payment was earned by XOMA when Rezolute dosed the first patient in its Phase 3 trial of RZ358[296]. - Revenue from contracts with customers included a $5.0 million milestone payment from a license agreement with Rezolute for the three months ended June 30, 2024[316]. - The company expects income from VABYSMO and royalties on OJEMDA to increase in future periods as sales are anticipated to grow[315]. Expenses - R&D expenses increased to $1.2 million for the three months ended June 30, 2024, compared to $39,000 in the same period of 2023, primarily due to clinical trial costs related to KIN-3248[318]. - G&A expenses for the three months ended June 30, 2024, were $11.0 million, up from $5.8 million in the same period of 2023, largely due to $5.4 million in costs associated with the Kinnate acquisition[319]. - Interest expense for the three months ended June 30, 2024, was $3.4 million, representing interest incurred on the Blue Owl Loan since December 31, 2023[324]. Impairments and Charges - An impairment charge of $9.0 million was recorded due to Bayer's termination of its license agreement with Aronora[295]. - The company recorded a $9.0 million impairment related to the Aronora royalty purchase agreement for the three and six months ended June 30, 2024[320]. Cash Flow and Financing - Net cash used in investing activities for the six months ended June 30, 2024 was $1.4 million, primarily consisting of a $22.0 million payment to Daré for the acquisition of payment rights[334]. - Net cash used in financing activities for the six months ended June 30, 2024 was $6.1 million, primarily consisting of principal payments of $3.6 million on the Blue Owl Loan and dividends of $2.8 million on Series A and Series B Preferred Stock[335]. - The Board authorized a stock repurchase program allowing the company to purchase up to $50.0 million of its common stock through January 2027, with a total of 660 shares purchased for $13,000 as of June 30, 2024[343]. - Under the Blue Owl Loan Agreement, the outstanding principal balance will bear interest at an annual rate of 9.875%[344]. Future Expectations - XOMA's royalty aggregator business model focuses on early to mid-stage clinical assets with significant commercial sales potential[281]. - The company expects most future revenue to be based on milestone and royalty payments from acquired programs[282]. - The carrying value of receivables for VABYSMO is classified as a current receivable, indicating probable and reliably estimable payments to be received in the next twelve months[304]. - Sublease income increased by $67,000 for the three and six months ended June 30, 2024 compared to the same periods in 2023 due to the lease assignment agreement acquired under the Kinnate acquisition[328]. - The company has potential sales-based milestone payments that may become due under agreements with Aronora and Kuros, with contingencies aggregating up to $6.3 million not recorded on the balance sheet as of June 30, 2024[350].

Financial Performance - The company reported a net loss of $8.6 million and net cash used in operating activities of $4.9 million for the three months ended March 31, 2024, with an accumulated deficit of $1.2 billion as of the same date [259]. - The company generated a net loss of $40.8 million and net cash used in operating activities of $18.2 million for the year ended December 31, 2023 [259]. - Total revenues for Q1 2024 were $1.49 million, a significant increase of 241% compared to $437,000 in Q1 2023 [278]. - Revenue from contracts with customers included $1.0 million in milestone payments from AVEO in Q1 2024, while there was no revenue from contracts in Q1 2023 [279]. - Net cash used in operating activities was $4.95 million in Q1 2024, slightly higher than $4.92 million in Q1 2023 [289]. Acquisitions and Agreements - In February 2024, the company acquired Kinnate for $2.5879 in cash per share plus one non-transferable contingent value right (CVR) per share, with the merger closing on April 3, 2024 [260]. - Kinnate sold exarafenib and related IP for an upfront cash consideration of $0.5 million and contingent consideration of $30.5 million upon achieving specified milestones [261]. - The company entered into Daré Royalty Purchase Agreements for $22.0 million, acquiring royalties and potential commercial milestones related to XACIATO™ [266]. - The company earned a $9.0 million milestone payment from the Viracta Royalty Purchase Agreement following FDA approval of OJEMDA [267]. - The company made a $1.0 million milestone payment to LadRx in January 2024 following FDA acceptance of NDA resubmission for arimoclomol [273]. - The company earned a $5.0 million milestone from Rezolute after the first patient was dosed in its Phase 3 trial of RZ358 [274]. Expenses and Financial Obligations - R&D expenses decreased to $33,000 in Q1 2024 from $54,000 in Q1 2023, with expectations of increased costs in 2024 due to ongoing clinical trials [281]. - G&A expenses rose to $8.5 million in Q1 2024, up from $6.2 million in Q1 2023, primarily due to a $1.3 million increase in stock-based compensation [282]. - Interest expense for Q1 2024 was $3.55 million, reflecting costs associated with the Blue Owl Loan initiated in December 2023 [284]. - The outstanding principal balance of the Blue Owl Loan is $120.6 million as of March 31, 2024, with an interest rate of 9.875% [299]. Cash Position - Cash and cash equivalents decreased to $136.2 million as of March 31, 2024, down from $153.3 million at the end of 2023 [288]. - The company authorized a stock repurchase program allowing for the purchase of up to $50.0 million of common stock through January 2027, with $13,000 spent on 660 shares as of March 31, 2024 [265]. - The company authorized a stock repurchase program of up to $50 million, with $13,000 spent on repurchasing 660 shares by March 31, 2024 [298]. Future Expectations - The company expects to continue acquiring rights to future milestone payments and royalty streams as part of its business model [300]. - Potential future milestone payments and legal fees related to licensing and development programs could aggregate up to $6.3 million, contingent on achieving specific milestones [303]. Dividends - Series A Preferred Stock holders are entitled to cumulative cash dividends at a rate of 8.625%, equating to $2.15625 per share annually [304]. - Series B Depositary Shares holders are entitled to cumulative cash dividends at a rate of 8.375%, equating to $2,093.75 per year per share [304]. - All dividends on Series A and Series B Preferred Stock have been paid as scheduled since original issuance, with expectations to continue these payments using existing capital resources [304]. Regulatory and Reporting - There have been no material changes in commitments and contingencies since the Annual Report on Form 10-K for the year ended December 31, 2023 [305]. - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures [306].

Revenue and Payments - XOMA's royalty aggregator business model focuses on early to mid-stage clinical assets, primarily in Phase 1 and 2, with significant commercial sales potential[26]. - The company expects most future revenue to be based on milestone and royalty payments from partnered therapeutic candidates[26]. - In 2023, XOMA received commercial payments totaling $7.3 million from Roche's VABYSMO, up from $0.5 million in 2022[34]. - XOMA paid $6.0 million in milestone payments related to VABYSMO's marketing approvals in 2022 and may pay an additional $6.0 million based on future sales thresholds[34]. - The company acquired the full commercial payment stream for IXINITY® with an upfront payment of $9.6 million and expects mid-single-digit percentage payments on sales until Q1 2035[35]. - XOMA's acquisition of DSUVIA® includes a 15% royalty on commercial net sales and a 75% royalty on net sales to the DoD, with potential milestone payments up to $116.5 million[37]. - The LadRx Agreements include potential regulatory and commercial milestone payments of up to $52.5 million for arimoclomol and up to $342.7 million for aldoxorubicin[38]. - XOMA entered into the Kuros RPA for potential royalties from CMP-001, with tiered royalties from high single-digit to low double-digits and up to $25.5 million in pre-commercial milestone payments[40]. - The company has rights to receive 33% of future royalties from Incyte and Merck under the Agenus RPA, with potential development and regulatory milestones up to $59.5 million[44]. - XOMA's acquisition of rights to six product candidates targeting the adenosine pathway includes an upfront payment of $10.0 million for potential low single-digit royalty payments[48]. - In November 2022, the company acquired ObsEva's intellectual property related to ebopiprant for a $15.0 million upfront payment and potential earn-out payments of up to $97.5 million[49]. - The company earned a $2.0 million milestone payment from Takeda in November 2020 and is eligible for remaining milestone payments totaling up to $16.0 million[60]. - In 2023, the company earned a total of $1.5 million in milestone payments from Janssen, including payments for IND filings and a Phase 3 trial[70]. - Rezolute is required to make milestone payments to the company of up to $232.0 million based on pre-specified criteria for RZ358, along with royalties ranging from high single-digits to mid-teens on annual net sales[63]. - Rezolute initiated a Phase 3 clinical study for RZ358 in December 2023, triggering a $2.0 million milestone payment due to the company[68]. Regulatory and Compliance Risks - Regulatory compliance is critical for the company and its partners, as failure to meet requirements can lead to delays and potential sanctions[73]. - In the U.S., new legislation is regulating drug pricing, including a requirement for manufacturers to refund CMS for discarded drug amounts starting in 2023 and eliminating the Medicaid rebate cap in 2024[75]. - The Inflation Reduction Act of 2022 mandates Medicare price negotiations for certain drugs and imposes inflation-based rebates on Medicare Part B and D, affecting future revenue streams[75]. - The process of obtaining regulatory approval for product candidates is lengthy and expensive, often taking several years, and there is no guarantee of approval[143]. - The FDA and other regulatory agencies have substantial discretion in the approval process, which can lead to unpredictable delays and increased costs[146]. - Changes in regulatory policies or the enactment of new regulations may cause delays in the approval process for product candidates[145]. - The FDA provides a five-year non-patent exclusivity period for new drugs containing a new chemical entity (NCE) before ANDAs can be submitted[163]. - The company’s potential royalty providers may face significant delays in clinical trials due to various factors, including patient enrollment challenges and regulatory requirements[150]. - The company may encounter challenges in integrating acquired employees and maintaining relationships with customers and partners post-acquisition[96]. Financial Performance and Risks - The company generated net losses of $40.8 million and negative cash flows from operations of $18.2 million for the year ended December 31, 2023, with an accumulated deficit of $1.2 billion as of the same date[116]. - The company faces competition from other firms seeking to aggregate royalties and provide financing to biotechnology companies, which may impact its acquisition strategy[72]. - Recent volatility in capital markets may limit licensees' ability to secure funding, impacting the company's revenue from royalties and milestones[92]. - The company has financed operations primarily through equity securities, debt, and collaboration payments, with future net losses dependent on expenditure rates and revenue generation capabilities of partners[117]. - The company has an obligation to pay cumulative cash dividends of 8.625% on Series A Preferred Stock and 8.375% on Series B Preferred Stock, which may limit borrowing capabilities[124][127]. - As of December 31, 2023, the company had 984,000 shares of Series A Preferred Stock and 1,600,000 depositary shares of Series B Preferred Stock outstanding, indicating significant obligations to preferred shareholders[129]. - The company’s asset portfolio is not fully diversified, with a large percentage of net present value tied to a limited number of products, increasing financial risk[134]. - The company may face adverse effects on financial condition if any payor of future potential milestones or royalties declines to make payments[135]. - The company’s royalty aggregator strategy may be adversely affected by economic downturns or unstable market conditions, impacting growth strategy and financial performance[118][122]. - The company has sustained significant operating losses and negative cash flows since inception, raising concerns about future profitability[116]. Intellectual Property and Legal Risks - The company emphasizes the importance of intellectual property, with potential disputes over rights that could affect its financial condition[81]. - The company relies on patent protection and trade secrets to maintain competitive advantage, but these protections may be limited[178]. - Non-compliance with patent maintenance requirements could result in loss of patent rights, adversely affecting the business[186]. - Enforcement of intellectual property rights in foreign jurisdictions may be challenging, leading to potential infringement issues[187]. - The termination of the Organon License Agreement will result in no milestone payments for achievements post-notice, leading to an impairment charge of $14.2 million as of December 31, 2023[197]. - The company incurred $4.1 million in costs related to an adverse arbitration decision regarding a license agreement, which was paid in April 2023[192]. - Significant patents in the company's portfolio are expected to expire in the coming years, potentially affecting financial condition and operational results[190]. - The company is exposed to risks from litigation regarding intellectual property, which can be costly and time-consuming[191]. - License agreements may be unilaterally terminated, adversely affecting potential milestone and royalty payments[196]. Operational Structure and Employee Risks - The company employs 13 full-time employees as of March 4, 2024, primarily in executive and administrative roles, indicating a lean operational structure[87]. - The company relies heavily on third-party service providers for product candidate development, and inadequate performance by these providers could delay development programs[203]. - The company relies on outsourcing arrangements for significant portions of its activities, including financial reporting and accounting[216]. - The company is exposed to risks related to employee misconduct, which could include noncompliance with regulatory standards[217]. - Cybersecurity threats have increased in sophistication, and the company’s systems are vulnerable to data breaches and unauthorized access[221]. - Data breaches could result in significant financial and operational impacts, including system disruptions and remediation costs[222]. - Compliance with data privacy and security obligations is resource-intensive, and failure to comply could lead to regulatory actions and penalties[224]. - The California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) impose additional data protection obligations on the company[225]. Market and Competitive Landscape - The biopharmaceutical industry is highly competitive, and the company may face challenges from new products or improvements that could render its products obsolete[104]. - The company is actively seeking acquisition opportunities for future royalties and milestone payments, facing competition that could increase costs and reduce potential targets[90]. - The company plans to continue business development efforts to acquire potential milestone and royalty streams or companies, but competition is fierce from larger pharmaceutical and biotechnology companies[138]. - Changes in the royalty acquisition market or reduced growth in the biopharmaceutical industry could diminish opportunities for acquiring significant milestones and royalties[123]. - The ability to obtain adequate reimbursement for products is uncertain, which may prevent potential royalty providers from achieving profitability[170]. - Third-party payors are increasingly challenging pharmaceutical pricing, impacting the sales of medical products and treatments[171]. - The introduction of generic or biosimilar versions can alter market acceptance of branded products, potentially leading to decreased sales[175]. - New developments in biotechnology may render existing product candidates obsolete, increasing competition in antibody-based technologies[166].

Revenue Performance - For the three months ended September 30, 2023, total revenues were $830,000, an increase of $379,000 compared to $451,000 in the same period of 2022[257]. - For the nine months ended September 30, 2023, total revenues were $2.925 million, a decrease of $1.616 million compared to $4.541 million in the same period of 2022[257]. - The company expects most future revenue to be based on payments from milestones and royalties related to partnered clinical assets[245]. Net Loss and Deficit - The company reported a net loss of $5.5 million for the three months ended September 30, 2023, and an accumulated deficit of $1.2 billion as of September 30, 2023[246]. - The company had an accumulated deficit of $1.2 billion as of September 30, 2023[273]. Expenses - G&A expenses for the three months ended September 30, 2023, were $6.4 million, an increase of $1.6 million compared to $4.8 million in the same period of 2022[261]. - R&D expenses were $25,000 for the three months ended September 30, 2023, consistent with $29,000 for the same period in 2022[260]. - Arbitration settlement costs amounted to $4.1 million for the nine months ended September 30, 2023[265]. Cash Flow - Cash and cash equivalents decreased by $24.4 million from $57.8 million as of December 31, 2022, to $33.5 million as of September 30, 2023[268]. - Net cash used in operating activities for the nine months ended September 30, 2023, was $14.2 million, an increase of $5.2 million compared to $8.9 million for the same period in 2022[270]. - Net cash used in investing activities for the nine months ended September 30, 2023, was $6.2 million, primarily due to a $9.6 million payment for the acquisition of payment rights[271]. Milestones and Agreements - The company earned a $5.0 million milestone related to the FDA's acceptance of Day One Biopharmaceuticals' NDA for tovorafenib on October 30, 2023[247]. - The company acquired rights to potential regulatory and commercial milestones of up to $52.5 million related to arimoclomol and up to $342.7 million related to aldoxorubicin[248]. - The company may pay up to an additional $6.0 million in regulatory and commercial milestones related to the LadRx Agreements[289]. - The Organon License Agreement is set to terminate on January 21, 2024, with no material early termination penalties payable by either party[290]. Other Income and Investment - Investment income increased by $0.1 million and $0.9 million for the three and nine months ended September 30, 2023, respectively, due to higher market interest rates[266]. - Total other income (expense), net was $278,000 for the three months ended September 30, 2023, compared to $194,000 for the same period in 2022, reflecting an increase of $84,000[266]. Contingent Consideration - The company has potential contingent consideration of $4.0 million recorded on its consolidated balance sheets as of September 30, 2023[281]. - The company expects to incur incremental undiscounted costs of $0.5 million associated with the new lease expected to commence in the fourth quarter of 2023[279].

Financial Performance - For the three months ended June 30, 2023, total revenues were $1.658 million, a decrease of $675,000 compared to $983,000 for the same period in 2022[252]. - For the six months ended June 30, 2023, total revenues were $2.095 million, down $1.995 million from $4.090 million in the same period in 2022[252]. - The company reported a net loss of $5.4 million for the three months ended June 30, 2023, and an accumulated deficit of $1.2 billion as of June 30, 2023[241]. - G&A expenses for the six months ended June 30, 2023, were $12.0 million, an increase of $1.2 million compared to $10.8 million for the same period in 2022[257]. - The company incurred arbitration settlement costs of $4.1 million for the six months ended June 30, 2023[259]. - Other income (expense), net for the three months ended June 30, 2023, was $557,000, an increase of 97% compared to $460,000 in 2022[260]. - Investment income increased by $0.4 million and $0.8 million for the three and six months ended June 30, 2023, respectively, due to higher market interest rates[260]. - Net cash used in operating activities for the six months ended June 30, 2023, was $12.1 million, compared to $5.3 million in 2022, reflecting increased operating expenses[264]. - Net cash used in investing activities for the six months ended June 30, 2023, was $11.7 million, primarily due to a $9.6 million payment for the acquisition of payment rights[265]. - As of June 30, 2023, cash and cash equivalents were $31.4 million, a decrease of $26.4 million from $57.8 million as of December 31, 2022[262]. - The company has an accumulated deficit of $1.2 billion as of June 30, 2023[267]. Business Development - In June 2023, the company acquired rights related to arimoclomol with potential regulatory and commercial milestones of up to $52.5 million and royalty payments in low single-digit percentages[242]. - The company earned a $0.5 million milestone from Janssen in April 2023 upon dosing of the first patient in a Phase 3 clinical trial[246]. - The company began receiving a mid-single digit percentage payment stream on all IXINITY sales from January 1, 2023, into the first quarter of 2035[244]. - Potential contingent consideration of $1.0 million is recorded for milestone payments due under the agreement with LadRx as of June 30, 2023[274]. - The company has committed to potential future milestone payments and legal fees aggregating up to $6.3 million, contingent on the achievement of certain milestones[276]. Future Commitments - The company expects to incur incremental undiscounted costs of $0.5 million associated with the new lease agreement for its headquarters, expected to commence in Q4 2023[272]. Preferred Stock Dividends - Holders of Series A Preferred Stock are entitled to cumulative cash dividends at the rate of 8.625% per year, while Series B Preferred Stock dividends are at 8.375% per year[277]. Research and Development - R&D expenses were $39,000 for the three months ended June 30, 2023, consistent with the same period in 2022[255].

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[228]. - The company reported a net loss of $9.8 million for the three months ended March 31, 2023, with negative cash flows from operations of $4.9 million[222]. - As of March 31, 2023, the company had an accumulated deficit of $1.2 billion[222]. - Cash and cash equivalents decreased to $44.3 million as of March 31, 2023, down from $57.8 million as of December 31, 2022[237]. - Net cash used in operating activities was $4.9 million for the three months ended March 31, 2023, compared to $1.0 million for the same period in 2022[238]. - The company incurred arbitration settlement costs of $4.1 million during the three months ended March 31, 2023[234]. - As of March 31, 2023, the company had an accumulated deficit of $1.2 billion and $44.3 million in cash and cash equivalents, indicating significant operating losses since inception[241]. Expenses - General and administrative expenses increased to $6.2 million for the three months ended March 31, 2023, compared to $5.1 million in the same period in 2022, primarily due to increased stock-based compensation and consulting costs[233]. - Research and development expenses remained low at $54,000 for the three months ended March 31, 2023, consistent with $56,000 for the same period in 2022[231]. - The company incurred a cost of $4.1 million in April 2023 due to an adverse arbitration ruling, which required it to cover the counter-party's costs[245]. Investments and Income - 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[235]. - The company has potential contingent consideration of $0.1 million recorded for milestone and one-time payments due under agreements with Bioasis and Aptevo as of March 31, 2023[249]. Future Outlook - Future revenues from licenses, milestones, and royalties depend on the achievement of milestones or product sales by existing licensees, with no guarantee of future milestone payments[243]. - The company plans to continue deploying capital towards acquiring rights to potential future milestone and royalty streams in the near and long term[248]. - Potential future milestone payments and legal fees under licensing agreements could aggregate up to $6.3 million, contingent on the achievement of specific milestones[251]. Capital and Financing - The company may seek additional capital through its 2018 Common Stock ATM Agreement or 2021 Series B Preferred Stock ATM Agreement, depending on market conditions[243]. - 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 8.375%, both payable quarterly[252]. Operational Considerations - The company is evaluating its office space needs as its amended headquarters lease expires in July 2023, but does not expect significant incremental costs[247]. - The company had approximately $4.5 million in cash and cash equivalents in accounts with SVB at the time of its closure on March 10, 2023, and regained access to $3.7 million by March 31, 2023[242].

Revenue Streams and Milestones - 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 [27]. - The company has a potential to receive up to $475 million in payments for the development, commercialization, and sales-based milestones related to ebopiprant, with royalties ranging from low to mid-teens [32]. - XOMA acquired rights to 100% of potential future royalties from Checkmate Pharmaceuticals' vidutolimod, with tiered royalties from high single-digit to low double-digits and up to $25.5 million in pre-commercial milestone payments [38]. - The company is eligible to receive a 0.5% commercial payment stream for ten years from Roche for faricimab, with an upfront payment of $6 million for the rights [33]. - XOMA's acquisition of Agenus rights includes 33% of future royalties from Incyte and Merck, with potential development, regulatory, and commercial milestones up to $59.5 million [41]. - The company received $2.4 million from Roche for sales of VABYSMO during the second half of 2022, marking its first commercial payment for this product [37]. - The company received a $37.0 million upfront fee from Novartis under the Anti-TGFβ Antibody License Agreement, with potential total milestones of up to $480.0 million [50]. - A $25.0 million milestone was earned upon the dosing of the first patient in Novartis' first NIS793 Phase 2 clinical trial [52]. - The company is eligible to receive up to $438.0 million in milestones under the Anti-IL-1β Antibody License Agreement with Novartis [56]. - The company is eligible for a 4% royalty on future sales of products under the Takeda Collaboration Agreement, with additional milestone payments of up to $19.0 million [64]. - The company received a $2.0 million milestone payment from Takeda after the first patient was dosed in the Phase 2 study of mezagitamab [66]. - Rezolute is required to make milestone payments of up to $232.0 million based on pre-specified criteria for the development of RZ358 [69]. - A $2.0 million milestone payment was triggered when Rezolute dosed the last patient in its Phase 2b clinical trial for RZ358 [74]. - Janssen made a one-time payment of $2.5 million and milestone payments of up to $3.0 million for each drug candidate, along with a 0.75% royalty on net sales upon commercialization [75]. - In May 2021, the company earned a $0.5 million milestone from Janssen for the first patient dosing in a Phase 3 clinical trial [77]. - The company entered into a new agreement with Affimed in April 2021, eligible for milestone payments upon marketing approval of product candidates [78]. - A $0.5 million milestone payment was earned from Compugen in September 2021 for the first patient dosing in a Phase 1/2 study [79]. - The Sonnet Collaboration Agreement allows for milestone payments up to $3.75 million and low single-digit royalties on future commercial sales [80]. - In April 2022, the company earned a $0.5 million development milestone from Sonnet for initiating a Phase 1 clinical trial [81]. Financial Condition and Risks - 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 [26]. - XOMA's reliance on license and collaboration relationships means that disputes or terminations could adversely affect its financial condition and future prospects [26]. - The company has ongoing obligations to pay quarterly dividends to holders of Series A and Series B Preferred Stock, which may limit its ability to borrow additional funds [26]. - The company incurred significant operating losses and negative cash flows from operations since inception, and its future net losses will depend on the rate of future expenditures and its partners' ability to generate revenues [133]. - 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 [135]. - The company has a continuing obligation to pay quarterly dividends to holders of Series A and Series B Preferred Stock, which may limit its ability to borrow additional funds [137]. - The company may experience credit risk due to potential defaults or bankruptcies of licensors or licensees [105]. - Significant reductions in potential milestone or royalty payments could adversely affect the company's financial condition and results of operation [146]. - A large percentage of the net present value of the company's portfolio is dependent on a limited number of products, and failure in clinical development of any of these could materially impact financial results [147]. - The company’s future income is dependent on numerous assumptions regarding potential product sales, and inaccuracies in these assumptions may lead to lower-than-expected returns [145]. - The company may suffer losses due to the illiquidity of its acquired milestone and royalty rights, making it difficult to dispose of them at favorable prices [127]. - The company faces risks related to the volatility of the biotechnology sector, which can indirectly affect its ability to realize value from its partners [131]. - The company relies on licensees for determining royalty and milestone payments, which may lead to disputes and require legal remedies [124]. - The impact of COVID-19 on the company's operations and financial condition remains uncertain, with potential for significant adverse effects [119]. - The ongoing COVID-19 pandemic has caused delays in clinical trials, potentially impacting revenue from milestones and royalties [98]. Competition and Market Risks - The biotechnology and pharmaceutical industries face substantial competition, with potential obsolescence of products due to technological advancements [82]. - The company’s royalty aggregator model faces competition from other investment vehicles with potentially lower costs of capital [83]. - The company may not be able to effectively compete with larger pharmaceutical firms that have greater financial resources and R&D capabilities [170]. - New developments in biotechnology could render the company's product candidates obsolete or uncompetitive, impacting future revenue potential [163]. - The company faces uncertainty regarding the market viability for its product candidates, which may not be accepted even if approved [171]. - There is a risk that government guidelines could adversely affect product usage, potentially recommending competitive products over those in which the company has an interest [172]. - Approved products are subject to market risks, including the introduction of generic versions that could alter market acceptance [173]. - Pricing and reimbursement challenges from third-party payors could hinder the profitability of products and negatively impact the royalties received [167]. - Legislative and regulatory proposals aimed at controlling pharmaceutical pricing could affect the company's business and revenue streams [169]. Regulatory and Compliance Risks - Regulatory changes in the U.S. and EU could impact drug pricing and result in lower royalties received by the company [86]. - The approval process for new drugs can take several years and is expensive, with no guarantee of success, impacting the company's revenue potential [154]. - Even after FDA approval, products may face additional testing or marketing restrictions, and approval can be withdrawn based on ongoing regulatory oversight [222]. - The FDA, EMA, or other regulatory agencies may impose significant restrictions on product labeling, advertising, and production, affecting marketability [223]. - Marketing approval can be withdrawn due to safety concerns, leading to potential civil or criminal sanctions for non-compliance with regulatory requirements [224]. - Legislative changes, such as the ACA enacted in March 2010, have significantly altered healthcare financing, impacting the profitability of products sold by potential royalty providers [225]. Intellectual Property and Legal Risks - Intellectual property protection is critical, and failure to secure adequate patent protection could harm the company's competitive position and profit potential [175]. - The company holds numerous patents in the U.S. and abroad, but the validity and enforceability of these patents are not guaranteed [179]. - Ongoing litigation regarding intellectual property could result in significant costs and adversely affect the company's ability to compete [187]. - The company initiated arbitration against a licensee for breach of contract, seeking milestone and royalty payments estimated in the mid-single-digit millions [188]. - Termination of license or collaboration agreements could adversely affect future royalty payments and sales of products [192]. - Disputes regarding contract interpretation in license agreements may lead to reduced financial resources and hinder the company's revenue potential [194]. - The company may face significant losses if expected payments from licensees and collaborators do not materialize due to defaults or disagreements [197]. - Current collaborations may be terminated at will by partners, potentially delaying or terminating product development [198]. - Inadequate performance by third-party service providers could delay the development programs of potential milestone and royalty providers [199]. - Changes in estimated payments by licensees can lead to material adjustments in previously reported revenue [202]. - Failure to meet Good Manufacturing Practices standards by contract manufacturers may cause delays in regulatory approval and penalties [203]. Workforce and Operational Risks - As of March 6, 2023, the company employed 12 full-time and 1 part-time employee, relying on a small, skilled workforce [99]. - The high cost of living in the San Francisco Bay Area may impair the company's ability to attract and retain qualified personnel [209]. - The company relies on outsourcing for financial reporting and human resources, which may limit control over these critical functions [210]. - Compliance with data privacy laws like CCPA and CPRA may increase operational costs and potential liabilities [219]. - Cybersecurity threats could lead to significant business disruptions and financial losses if sensitive data is compromised [213].