Acquired rights to potential milestone and
royalty payments associated with five hematology assetsReceived
$5.5 million milestone paymentAdded Barbara Kosacz to XOMA’s Board
of DirectorsCurrent cash balance sufficient to fund operations for
multiple years
XOMA Corporation (Nasdaq: XOMA) announced its first quarter 2019
financial results and business highlights.
“We continued to execute on our royalty-aggregator business
model in 2019. In early April, we announced we are acquiring
the potential royalty rights associated with five hematology
assets, three of which are being developed under a collaboration
with Bayer, and a percentage of the future milestone payments
associated with the assets,” stated Jim Neal, Chief Executive
Officer of XOMA. “Milestone payments help fuel XOMA’s model,
as they are a means of adding non-dilutive capital that can fund
our royalty asset acquisitions. As I have articulated in the
past, we maintain a lean infrastructure to allow our milestones and
royalties to have a meaningful impact on our financial
results. This quarter’s $5.5 million milestone payment had a
significant positive impact on XOMA’s financial statements.”
Business HighlightsXOMA continued making
significant progress during the first quarter of 2019 as it
positions itself for long-term growth.
- Agreed to acquire the rights to potential royalty payments and
a portion of the potential milestone payments associated with five
hematology assets from Aronora, Inc., three of which are
anti-thrombotic candidates covered by a collaboration with Bayer, a
global leader in hematology therapeutics.
- Received a $5.5 million milestone payment from Rezolute, Inc.,
related to XOMA 358 (now RZ358), and negotiated to receive an
additional $8.5 million in a series of quarterly payments that will
begin to be paid later this year.
- Strengthened the Board of Directors.
First Quarter 2019 Updates About Partnered Assets in
DevelopmentNovartis announced gevokizumab will enter
oncology clinical studies. “There was a great deal of
activity on XOMA-partnered assets in the first quarter of 2019,
including the posting of Novartis’ first clinical study for
gevokizumab in oncology. Given all that has happened with
gevokizumab over the years, seeing that study posted on
ClinicalTrials.gov was a proud moment for everyone at XOMA,”
concluded Mr. Neal.
Novartis also continued to expand the iscalimab (also known as
CFZ533) Phase 2 development program and posted two additional Phase
2 trials on ClinicalTrials.gov during the first quarter. The
anti-CD40 antibody is being studied in six separate indications
across ten ongoing or completed trials.
Sesen Bio, Inc., reported positive preliminary efficacy data for
the primary endpoint of its ongoing Phase 3 registration trial, the
VISTA Trial, of Vicinium®, a locally-administered fusion protein,
for the treatment of patients with high-grade non-muscle invasive
bladder cancer who have been previously treated with bacillus
Calmette-Guérin (BCG) and deemed BCG-unresponsive. The
company reported it anticipates complete 12-month efficacy data
will be reported at a medical meeting in mid-2019.
AVEO Oncology announced positive results from the
investigator-initiated Phase Ib Ficlatuzumab-Cytarabine Trial In
Patients With Relapsed And Refractory Acute Myeloid Leukemia
study. The study results were presented in a poster session
at the 2019 AACR. Of 12 patients who received ficlatuzumab
and cytarabine at the maximally tolerated dose, six achieved a
complete response.
Financial ResultsXOMA recorded total revenues
of $8.1 million for the first quarter of 2019, compared to $0.5
million for the first quarter of 2018. The increase for the
three months ended March 31, 2019, as compared to the same period
in 2018, was primarily due to $8.0 million of license fee revenue
recognized under our license agreement with Rezolute in the first
quarter of 2019, of which $5.5 million was received in cash during
the period.
Research and development expenses were $0.3 million for the
first quarter of 2019, compared to $0.4 million for the first
quarter of 2018. The decrease of $0.1 million for the three
months ended March 31, 2019, compared to the same period in 2018,
was primarily due to a $0.1 million decrease in salaries and
related expenses.
General and administrative expenses were $5.9 million for the
first quarter of 2019, compared to $5.2 million for the first
quarter of 2018. The increase of $0.7 million for the three
months ended March 31, 2019, as compared to the same period of
2018, was primarily due to increases of $0.4 million in stock-based
compensation, $0.2 million in consulting services, and $0.1 million
in salaries and related expenses.
In the first quarter of 2019, XOMA recorded $0.4 million in
total interest expense, as compared to $0.2 million in the
corresponding period of 2018. The increase in interest
expense compared with 2018 is primarily due to the outstanding
Silicon Valley Bank (SVB) loan balance. On May 7, 2018, the
Company executed a loan agreement with SVB, and in September 2018,
XOMA borrowed $7.5 million.
For the quarters ended March 31, 2019 and 2018, XOMA recorded
other income of $1.7 million and $1.5 million, respectively.
During the three months ended March 31, 2019, the fair value of the
long-term equity securities held by XOMA increased by $0.7 million.
As of March 31, 2019, the Company was party to four sublease
agreements, compared with only one sublease agreement for the same
period in 2018, resulting in $0.7 million in sublease income during
the first quarter of 2019 and $0.4 million of sublease income in
the corresponding period of 2018. In the first quarter of
2018, XOMA recognized $1.0 million of other income under the
agreement with Ology Bioservices related to the disposition of
XOMA’s biodefense business in March 2016; no further payments are
due.
Net income for the first quarter of 2019 was $3.2 million,
compared to net loss of $3.8 million for the first quarter of
2018. The net income for the first quarter of 2019 was due
primarily to the increase in total revenues as previously
discussed.
On March 31, 2019, XOMA had cash and cash equivalents of $48.4
million. The Company ended December 31, 2018, with cash and
cash equivalents of $45.8 million. The Company’s current cash
and cash equivalents are expected to be sufficient to fund its
operations for multiple years.
About XOMA CorporationXOMA has built a
significant portfolio of products that are licensed to and being
developed by other biotechnology and pharmaceutical
companies. The Company’s portfolio of partner-funded programs
spans multiple stages of the drug development process and across
various therapeutic areas. Many of these licenses are the
result of XOMA’s pioneering efforts in the discovery and
development of antibody therapeutics. The Company’s
royalty-aggregator business model includes acquiring additional
licenses to programs with third-party funding. For more
information, visit www.xoma.com.
Forward-Looking Statements/Explanatory
NotesCertain 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 potential
of XOMA’s portfolio of partnered programs and licensed technologies
generating substantial milestone and royalty proceeds over time,
creating additional value for the stockholders and cash sufficiency
forecast. 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. Other potential
risks to XOMA meeting these expectations are described in more
detail in XOMA's most recent filing on Form 10-K and in other SEC
filings. Consider such risks carefully when considering
XOMA's prospects. Any forward-looking statement in this press
release represents XOMA's views 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.
|
XOMA CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS) |
(unaudited) |
(in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
Revenues: |
|
|
|
Revenue
from contracts with customers |
$ |
8,026 |
|
|
$ |
401 |
|
Revenue
recognized under units-of-revenue method |
|
105 |
|
|
|
62 |
|
Total
revenues |
|
8,131 |
|
|
|
463 |
|
|
|
|
|
Operating expenses: |
|
|
|
Research
and development |
|
256 |
|
|
|
432 |
|
General
and administrative |
|
5,939 |
|
|
|
5,168 |
|
Total
operating expenses |
|
6,195 |
|
|
|
5,600 |
|
|
|
|
|
Income
(loss) from operations |
|
1,936 |
|
|
|
(5,137 |
) |
|
|
|
|
Other
income (expense), net: |
|
|
|
Interest
expense |
|
(429 |
) |
|
|
(170 |
) |
Other
income, net |
|
1,726 |
|
|
|
1,501 |
|
Net
income (loss) and comprehensive income (loss) |
$ |
3,233 |
|
|
$ |
(3,806 |
) |
Net income (loss) and
comprehensive income (loss) available to common
stockholders, basic |
$ |
1,881 |
|
|
$ |
(3,806 |
) |
Net income (loss) and
comprehensive income (loss) available to common
stockholders, diluted |
$ |
1,935 |
|
|
$ |
(3,806 |
) |
Basic net income (loss)
per share available to common stockholders |
$ |
0.22 |
|
|
$ |
(0.46 |
) |
Diluted net income (loss)
per share available to common stockholders |
$ |
0.21 |
|
|
$ |
(0.46 |
) |
Weighted average shares
used in computing basic net income (loss) per share
available to common stockholders |
|
8,706 |
|
|
|
8,313 |
|
Weighted average shares
used in computing diluted net income (loss) per share
available to common stockholders |
|
9,324 |
|
|
|
8,313 |
|
|
|
|
|
|
XOMA CORPORATION |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(unaudited) |
(in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
48,436 |
|
|
$ |
45,780 |
|
Trade and
other receivables |
|
|
2,755 |
|
|
|
1,468 |
|
Prepaid
expenses and other current assets |
|
|
268 |
|
|
|
378 |
|
Total
current assets |
|
|
51,459 |
|
|
|
47,626 |
|
Property and equipment,
net |
|
|
53 |
|
|
|
59 |
|
Operating lease
right-of-use assets |
|
|
6,906 |
|
|
|
— |
|
Long-term royalty
receivables |
|
|
15,375 |
|
|
|
15,000 |
|
Long-term equity
securities |
|
|
1,107 |
|
|
|
392 |
|
Other assets |
|
|
834 |
|
|
|
708 |
|
Total
assets |
|
$ |
75,734 |
|
|
$ |
63,785 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
987 |
|
|
$ |
1,244 |
|
Accrued
and other liabilities |
|
|
798 |
|
|
|
2,382 |
|
Operating
lease liabilities |
|
|
2,242 |
|
|
|
— |
|
Unearned
revenue recognized under units-of-revenue method |
|
|
595 |
|
|
|
490 |
|
Contract
liabilities |
|
|
798 |
|
|
|
798 |
|
Current
portion of long-term debt |
|
|
1,729 |
|
|
|
789 |
|
Total
current liabilities |
|
|
7,149 |
|
|
|
5,703 |
|
Unearned revenue
recognized under units-of-revenue method – long-term |
|
|
16,807 |
|
|
|
17,017 |
|
Long-term debt |
|
|
20,854 |
|
|
|
21,690 |
|
Long-term operating
lease liabilities |
|
|
6,406 |
|
|
|
— |
|
Other liabilities –
long-term |
|
|
489 |
|
|
|
590 |
|
Total
liabilities |
|
|
51,705 |
|
|
|
45,000 |
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
Convertible preferred stock, $0.05 par value, 1,000,000 shares
authorized, 6,256 shares issued and outstanding at March 31,
2019 and December 31, 2018 |
|
|
— |
|
|
|
— |
|
Common
stock, $0.0075 par value, 277,333,332 shares authorized, 8,724,320
and 8,690,723 shares issued and outstanding at March 31,
2019 and December 31, 2018, respectively |
|
|
65 |
|
|
|
65 |
|
Additional paid-in capital |
|
|
1,213,133 |
|
|
|
1,211,122 |
|
Accumulated deficit |
|
|
(1,189,169 |
) |
|
|
(1,192,402 |
) |
Total
stockholders’ equity |
|
|
24,029 |
|
|
|
18,785 |
|
Total liabilities and stockholders’ equity |
|
$ |
75,734 |
|
|
$ |
63,785 |
|
|
|
|
|
|
Investor contact:Juliane SnowdenOratorium
Group, LLC+1 646-438-9754jsnowden@oratoriumgroup.com
Media contact: Kathy Vincent KV Consulting
& Management +1 310-403-8951 kathy@kathyvincent.com
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