XOMA Reports Third Quarter 2022 Financial Results and Highlights Recent Operational Events

Received first recurring royalty-style payment from Roche related to faricimab, its newly launched therapy for wet age-related macular degeneration (wAMD) and diabetic macular edema (DME).  First five months of sales in the U.S. and initial sales in Japan resulted in a $0.5 million cash payment to XOMA.

Paid $3.0 million milestone to Affitech S.A. triggered by the European Commission’s approval of Roche’s VABYSMO® (faricimab-svoa) for the treatment of wAMD and DME.

Received $2.5 million milestone payment from Kuros triggered by the completion of Regeneron’s acquisition of Checkmate Pharmaceuticals.

Ended the third quarter of 2022 with cash of $78.3 million and no debt on its balance sheet.

EMERYVILLE, Calif., Nov. 03, 2022 (GLOBE NEWSWIRE) -- XOMA Corporation (Nasdaq: XOMA), a biotech royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of advancing novel therapeutic candidates aimed at improving human health, reported its third quarter 2022 financial results and provided a recent operations update.

“The third quarter was a turning point for XOMA as a royalty and milestone aggregator.  Less than one year after we acquired the 0.5% economic interest in VABYSMO® sales, we have received our first commercial payment from Roche.  The therapy is now available to retinal specialists and their patients in three important markets - the U.S., EU, and Japan,” stated Jim Neal, Chairman and Chief Executive Officer of XOMA.  “Separately, as a result of a monetization transaction we closed in 2021 with Kuros Biosciences associated with vidutolimod, which was being developed by Checkmate Pharmaceuticals, we received a $2.5 million payment as Regeneron completed its acquisition of Checkmate.  We look forward to additional business and clinical milestone achievements from our partners as they advance their assets.”

Financial Results
XOMA recorded total revenues of $0.5 million for the third quarter of 2022 and $0.9 million for the third quarter of 2021.  The decrease for the three months ended September 30, 2022, as compared to the same period in 2021, was primarily due to $0.5 million of milestone revenue recognized in the third quarter of 2021 under XOMA’s license agreement with Compugen.

Research and development (“R&D”) expenses were $29,000 and $30,000, respectively, for the third quarters of 2022 and 2021.

General and administrative (“G&A”) expenses were $4.8 million for the third quarter of 2022, compared to $4.3 million for the third quarter of 2021.  The additional $0.5 million during the third quarter of 2022 reflects increased consulting and legal expenses associated with deal costs.

In the third quarter of 2022, G&A expenses included $0.8 million in non-cash stock-based compensation expense, which was consistent with the third quarter of 2021.  XOMA’s net cash used in operations in the third quarter of 2022 was $3.7 million, as compared with $3.1 million during the third quarter of 2021.  

Other income, net was $0.2 million for the third quarter of 2022, compared to other expense, net of $1.1 million in the corresponding quarter of 2021.  The fluctuation in other income (expense), net between the quarters ended September 30, 2022 and 2021, is primarily due to the change in the fair value of equity securities XOMA holds in Rezolute, Inc.

Net loss for the third quarter of 2022 was $4.2 million, compared to net loss of $4.4 million for the third quarter of 2021.

On September 30, 2022, XOMA had cash of $78.3 million.  In August 2022, XOMA received a $0.5 million cash payment from Roche, representing the first commercial payment for XOMA’s 0.5% commercial interest in the sales of VABYSMO® (faricimab-svoa).  The payment was recorded in the Company’s condensed consolidated balance sheet as of September 30, 2022, as a reduction of long-term royalty and commercial payment receivables.  On October 17, 2022, the Company paid cash dividends on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) equal to $0.53906 per share and cash dividends on the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO) equal to $0.52344 per depositary share.  The Company ended December 31, 2021, with cash and restricted cash of $95.4 million.  After paying its remaining debt obligations in the second quarter of 2021, XOMA has no debt on its balance sheet.  The Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years.

About XOMA Corporation
XOMA is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health.  XOMA acquires the potential future economics associated with pre-commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies.  When XOMA acquires the future economics, the seller receives non-dilutive, non-recourse funding they can use to advance their internal drug candidate(s) or for general corporate purposes.  The Company has an extensive and growing portfolio with more than 70 assets (asset defined as the right to receive potential future economics associated with the advancement of an underlying therapeutic candidate).  For more information about the Company and its portfolio, please visit www.xoma.com.

Forward-Looking Statements/Explanatory Notes
Certain statements contained in this press release 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 the timing and amount of potential commercial payments to XOMA and other developments related to VABYSMO® (faricimab-svoa), the potential of XOMA’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time, and XOMA’s cash sufficiency forecast.  In some cases, you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project,” “expect,” “may,” “will”, “would,” “could” or “should,” the negative of these terms or similar expressions.  These forward-looking statements are not a guarantee of XOMA’s performance, and you should not place undue reliance on such statements.  These statements are based on assumptions that may not prove accurate, and actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry, including those related to the fact that our product candidates subject to out-license agreements are still being developed, and our licensees may require substantial funds to continue development which may not be available; we do not know whether there will be, or will continue to be, a viable market for the products in which we have an ownership or royalty interest; if the therapeutic product candidates to which we have a royalty interest do not receive regulatory approval, our third-party licensees will not be able to market them; and the impact to the global economy as a result of the COVID-19 pandemic.  Other potential risks to XOMA meeting these expectations are described in more detail in XOMA's most recent filing on Form 10-Q and in other filings with the Securities and Exchange Commission.  Consider such risks carefully when considering XOMA's prospects.  Any forward-looking statement in this press release represents XOMA's beliefs and assumptions only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date.  XOMA disclaims any obligation to update any forward-looking statement, except as required by applicable law.

EXPLANATORY NOTE: Any references to “portfolio” in this press release refer strictly to milestone and/or royalty rights associated with a basket of drug products in development.  Any references to “assets” in this press release refer strictly to milestone and/or royalty rights associated with individual drug products in development.

As of the date of this press release, all assets in XOMA’s milestone and royalty portfolio, except faricimab, are investigational compounds.  Efficacy and safety have not been established.  There is no guarantee that any of the investigational compounds will become commercially available.

(in thousands, except per share amounts) 
 Three Months Ended September 30, Nine Months Ended September 30, 
  2022   2021   2022   2021  
Revenue from contracts with customers$25  $550  $3,300  $1,094  
Revenue recognized under units-of-revenue method 426   390   1,241   1,121  
Total revenues 451   940   4,541   2,215  
Operating expenses:        
Research and development 29   30   125   129  
General and administrative 4,794   4,255   15,620   14,922  
Total operating expenses 4,823   4,285   15,745   15,051  
Loss from operations (4,372)  (3,345)  (11,204)  (12,836) 
Other income (expense), net:        
Interest expense -   -   -   (461) 
Loss on extinguishment of debt -   -   -   (300) 
Other income (expense), net 194   (1,091)  76   (449) 
Net loss and comprehensive loss$(4,178) $(4,436) $(11,128) $(14,046) 
Less: accumulated dividends on Series A and Series B preferred stock (1,368)  (1,368)  (4,104)  (3,192) 
Net loss available to common stockholders, basic and diluted$(5,546) $(5,804) $(15,232) $(17,238) 
Basic and diluted net loss per share available to common stockholders$(0.48) $(0.51) $(1.34) $(1.53) 
Weighted average shares used in computing basic and diluted net loss per share available to common stockholders 11,447   11,311   11,400   11,279  

(in thousands, except share and per share amounts) 
  September 30, December 31, 
   2022   2021  
Current assets:     
Cash and cash equivalents $78,285  $93,328  
Restricted cash  -   2,049  
Short-term equity securities  443   774  
Trade and other receivables, net  16   209  
Prepaid expenses and other current assets  997   613  
Total current assets  79,741   96,973  
Property and equipment, net  8   13  
Operating lease right-of-use assets  73   200  
Long-term royalty and commercial payment receivables  66,049   69,075  
Other assets - long term  260   301  
Total assets $146,131  $166,562  
Current liabilities:     
Accounts payable $985  $1,072  
Accrued and other liabilities  1,208   525  
Income taxes payable  -   91  
Contingent consideration under royalty purchase agreements and commercial purchase payment agreements  75   8,075  
Operating lease liabilities  85   195  
Unearned revenue recognized under units-of-revenue method  1,704   1,641  
Preferred stock dividend accrual  1,368   1,368  
Total current liabilities  5,425   12,967  
Unearned revenue recognized under units-of-revenue method – long-term  10,381   11,685  
Long-term operating lease liabilities  -   34  
Total liabilities  15,806   24,686  
Stockholders’ equity:     
Preferred Stock, $0.05 par value, 1,000,000 shares authorized:     
8.625% Series A cumulative, perpetual preferred stock, 984,000 shares issued and outstanding at September 30, 2022 and December 31, 2021  49   49  
8.375% Series B cumulative, perpetual preferred stock, 1,600 shares issued and outstanding at September 30, 2022, and December 31, 2021       
Convertible preferred stock, 5,003 issued and outstanding at September 30, 2022, and December 31, 2021       
Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,450,823 and 11,315,263 shares issued and outstanding at September 30, 2022, and December 31, 2021, respectively  86   85  
Additional paid-in capital  1,306,606   1,307,030  
Accumulated deficit  (1,176,416)  (1,165,288) 
Total stockholders’ equity  130,325   141,876  
Total liabilities and stockholders’ equity $146,131  $166,562  

Investor contact:
Juliane Snowden
Media contact:
Kathy Vincent
KV Consulting & Management