Core Insights - XOMA Royalty has transformed its business model from traditional biotech drug development to acquiring and monetizing drug pipeline assets, achieving significant revenue growth and profitability [1][3][19] - The company has successfully completed multiple acquisitions, leveraging its financial expertise to identify undervalued assets and structure favorable deals [7][10][19] Financial Performance - In H1 2025, XOMA reported total revenue of approximately $29.6 million, a year-on-year increase of over 130%, with $16 million from commercialization-related sales and $13.6 million from milestone payments [20] - The company's R&D expenses have drastically reduced to $1.4 million, aligning with its strategy of low-cost operations while maintaining a focus on cash flow generation [20] Business Model Transformation - XOMA shifted from a high-risk drug development approach to a model focused on acquiring existing pipeline assets, resulting in a fivefold increase in revenue and a tenfold increase in net profit since 2021 [3][4] - The company has built a portfolio of over 120 pipeline assets across various therapeutic areas, minimizing the risks associated with clinical failures by selecting projects with established partnerships [4][21] Acquisition Strategy - A notable acquisition was the purchase of Kinnate Biopharma for approximately $118 million, which included five pipeline assets and cash reserves, demonstrating XOMA's ability to identify and capitalize on distressed assets [7][9] - XOMA's structured deal-making, including the use of Contingent Value Rights (CVR), allows original shareholders to retain a portion of future profits, facilitating quicker transaction closures [11][17] Market Positioning - XOMA operates as a "special asset disposal expert" in the biotech sector, focusing on financial maneuvers rather than scientific innovation, which allows it to navigate the industry's inherent risks [19] - The company's approach of converting future revenue rights into immediate cash flow positions it uniquely in the market, especially during periods of financial uncertainty for biotech firms [21]