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].
XOMA(XOMAO) - 2024 Q2 - Quarterly Report