On November 7, 2023 XOMA Corporation (Nasdaq: XOMA), the biotech royalty aggregator, reported its third quarter 2023 financial results and highlighted recent portfolio activities expected to drive long-term shareholder value (Press release, Xoma, NOV 7, 2023, View Source [SID1234637179]).
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"Our existing royalty portfolio continues to mature, driven by increasing cash receipts of VABYSMO and IXINITY and the advancement of several assets, most notably the New Drug Application (NDA) filing of tovorafenib by Day One Biopharmaceuticals," stated Owen Hughes, Executive Chairman of XOMA. "With additional regulatory and development milestones forthcoming by year-end, we believe a solid foundation for future growth is upon us."
Key Third Quarter Events
Partner Event
Day One Biopharmaceuticals Tovorafenib NDA filed in mid-September
Zevra Therapeutics Zevra confirmed arimoclomol NDA to be filed in 4Q
Medexus Pediatric label expansion accepted for review – 1H 2024 decision
Financial Results
XOMA recorded total revenues of $0.8 million for the third quarter of 2023 and $0.5 million for the third quarter of 2022. The increase for the three months ended September 30, 2023, as compared to the same period in 2022, was primarily due to $0.2 million of milestone revenue earned under XOMA’s license agreement with Janssen.
General and administrative ("G&A") expenses were $6.4 million for the third quarter of 2023, compared to $4.8 million for the third quarter of 2022. The additional $1.6 million during the third quarter of 2023 reflects an increase in stock-based compensation expenses of $1.9 million, partially offset by a decrease of $0.6 million for legal and consulting costs.
In the third quarter of 2023, G&A expenses included $2.7 million in non-cash stock-based compensation expense, compared with $0.8 million in the third quarter of 2022. The increase in the 2023 period reflects $1.1 million of stock-based compensation expense related to the issuance of performance-based stock unit awards and $0.9 million related to stock options granted to our new executives at the beginning of 2023. During the quarter, XOMA received approximately $6.6 million from royalties and milestone payments. XOMA’s net cash used in operations in the third quarter of 2023 was $2.1 million, as compared with $3.7 million during the third quarter of 2022.
Other income, net was $0.3 million for the third quarter of 2023 and $0.2 million in the corresponding quarter of 2022. The increase in other income, net between quarters is primarily due to an increase in investment income.
Net loss for the third quarter of 2023 was $5.5 million, compared to net loss of $4.2 million for the third quarter of 2022.
On September 30, 2023, XOMA had cash of $33.5 million. In September 2023, XOMA received a $4.9 million cash payment from Roche representing XOMA’s 0.5% royalty interest related to VABYSMO sales during the first six months of 2023. The payment was recorded in the Company’s condensed consolidated balance sheet as of September 30, 2023, as a reduction of short-term royalty and commercial payment receivables. On October 16, 2023, the Company paid total cash dividends of $1.4 million on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) and on the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO). The Company ended December 31, 2022, with cash of $57.8 million. Based upon the cash flows XOMA expects to receive from VABYSMO and IXINITY sales in addition to its current cash position, the Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years.
Subsequent Events
On October 30, 2023, XOMA earned a $5 million milestone related to the FDA’s acceptance of Day One Biopharmaceuticals’ NDA for tovorafenib as a monotherapy in relapsed or progressive pediatric low-grade glioma. The FDA assigned a Prescription Drug User Fee Act target date of April 30, 2024.
On October 23, 2023, Organon notified XOMA Corporation of its termination of the License Agreement pertaining to the development of ebopiprant, an investigational, orally active, selective prostaglandin F2α (PGF2α) receptor antagonist being evaluated as a potential treatment for preterm labor by reducing inflammation and uterine contractions. Based on the existing human clinical data generated by ObsEva SA and the lack of adequate treatments to treat preterm labor, XOMA will seek to out-license ebopiprant in order to address this critical unmet need.