On March 17, 2025 XOMA Royalty Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its fourth quarter and full year 2024 financial results and highlighted recent activities (Press release, Xoma, MAR 17, 2025, View Source [SID1234651191]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"Our balanced approach to building the scale of XOMA Royalty’s portfolio by selectively acquiring royalty economics across the lifecycle of drug development is beginning to bear fruit," stated Owen Hughes, Chief Executive Officer of XOMA Royalty. "Our growing commercial royalty portfolio of six assets is supported by VABYSMO (faricimab), OJEMDA, and MIPLYFFA, while our Phase 3 portfolio, which now totals 11 assets, promises several key readouts in 2025, including ersodetug from Rezolute, seralutinib from Gossamer Bio, and Ovaprene (non-hormonal vaginal ring) from Daré Biosciences. With over $100 million in cash on hand and a clear path to sustainable cashflow from royalties alone, we are well-positioned to further our goal of driving value for patients and shareholders alike."
Royalty and Milestone Acquisitions
Partner
Asset and Transaction Detail
Twist Bioscience XOMA Royalty completed a $15 million royalty monetization agreement with Twist, acquiring 50% of the future milestones and royalties in 60-plus partnered early-stage programs across 30 companies enabled by Twist Bioscience’s Biopharma Solutions business unit.
Daré Bioscience XOMA Royalty added economic interests to three best- or first-in-category assets to its portfolio for a $22 million upfront payment. XACIATO vaginal gel 2% is commercially available and marketed by Organon. Bayer holds the U.S. rights to commercialize Ovaprene, a hormone-free monthly intravaginal contraceptive, currently in Phase 3 clinical trials. XOMA Royalty also acquired a synthetic royalty in Sildenafil Cream, 3.6%, a Phase 3-ready asset for female sexual arousal disorder.
Talphera, Inc. XOMA Royalty acquired an economic interest in DSUVIA (sufentanil sublingual tablet) from Talphera, Inc., for $8 million. XOMA Royalty is entitled to royalties from DSUVIA sales. Alora Pharmaceuticals discontinued its DSUVIA commercial activities in November 2024. We remain eligible for payments from sales to the U.S. Department of Defense.
Company Acquisitions
Acquired Company
Rationale
Kinnate Biopharma Kinnate stockholders received $2.5879 per share in cash plus a Contingent Value Right (CVR) on April 3, 2024. The acquisition added approximately $7.8 million in cash and five assets to the XOMA Royalty portfolio.
Pulmokine Inc. XOMA Royalty secured a milestone and royalty interest in Gossamer Bio and Chiesi Farmaceutici’s seralutinib held by Pulmokine, a private company. Seralutinib is a Phase 3 asset being studied in pulmonary arterial hypertension (PAH), and Gossamer expects to initiate a registrational Phase 3 study in pulmonary hypertension associated with interstitial lung disease (PH-ILD) in 20251. Acquisition cost was $20 million upfront.
Product Approvals
Partner
Event
Day One Biopharmaceuticals The U.S. Food and Drug Administration (FDA) approved Day One’s OJEMDA (tovorafenib) for use in patients with pediatric low-grade glioma (pLGG). XOMA Royalty earned a $9.0 million milestone upon the approval and recorded $2.7 million in income resulting from OJEMDA sales in 2024. In addition, XOMA Royalty received an $8.1 million payment related to Day One’s sale of its priority review voucher.
Zevra Therapeutics The FDA approved Zevra’s MIPLYFFA (arimoclomol) capsules as an orally delivered treatment for Niemann-Pick disease type C (NPC). MIPLYFFA is indicated for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients 2 years of age and older.
Out-licensing Activities
Partner
Event
Alexion In December 2024, following its acquisition of Amolyt, Alexion (an AstraZeneca company) exercised Amolyt’s option to continue developing anti-PTH1R monoclonal antibodies that originated from XOMA’s discovery efforts as potential treatments for primary hyperparathyroidism and humoral hypercalcemia of malignancy. XOMA Royalty will be eligible to receive up to $10.5 million in milestone payments and royalties ranging from low single to low double-digits on net commercial sales. Upon Alexion’s exercise of the option, XOMA Royalty earned a $0.5 million payment.
Kinnate In early 2025, XOMA Royalty secured license agreements with several parties for the five unpartnered Kinnate assets. Per the terms of the acquisition, a portion of any upfront payments received by XOMA Royalty will be distributed to the Kinnate CVR holders.
Subsequent Events
Partner
Event
Rezolute
Received Breakthrough Therapy Designation from FDA for ersodetug (RZ358) for the treatment of hypoglycemia due to congenital hyperinsulinism (cHI)2.
Announced the independent Data Monitoring Committee reviewed the safety data from eight infants ages 3 months to 1 year enrolled in the open-label portion of the sunRIZE Phase 3 study of ersodetug for the treatment of hypoglycemia due to cHI. Their conclusion was the safety profile was such that infants may now be enrolled in the double-blind, placebo-controlled study3.
Castle Creek
XOMA Royalty added a royalty interest in D-Fi (FCX-007), a Phase 3 asset being developed by Castle Creek Biosciences, to the portfolio. D-Fi is being studied in dystrophic epidermolysis bullosa (DEB), a rare progressive and debilitating skin disorder. D-Fi has been granted Orphan Drug Designation for the treatment of DEB, as well as Rare Pediatric Disease, Fast Track, and Regenerative Medicine Advanced Therapy designations by the FDA.
XOMA Royalty contributed $5 million to Castle Creek Biosciences’ $75 million syndicated royalty financing transaction.
View Source
treatment-of-hypoglycemia-due-to-congenital-hyperinsulinism
View Source
hypoglycemia-due-to-congenital-hyperinsulinism
Affitech Research AS XOMA Royalty paid $6 million in milestones to Affitech related to VABYSMO (faricimab-svoa) achieving specific sales thresholds. This was the final payment due to Affitech.
Anticipated 2025 Events of Note
Partner
Event
Rezolute
Completion of enrollment in sunRIZE Phase 3 clinical trial, which is investigating ersodetug in infants and children with cHI. Topline results are expected in the fourth quarter of 20252.
First patient dosed in Phase 3 registrational study for ersodetug for the treatment of hypoglycemia due to tumor hyperinsulinism4.
Gossamer / Chiesi
Presentation of topline results from the Phase 3 PROSERA study, a global registrational clinical trial in patients with WHO Function Class II and III pulmonary arterial hypertension (PAH).5
Initiation of a registrational Phase 3 study in pulmonary hypertension associated with interstitial lung disease (PH-ILD) in 2025.1
Takeda First patient dosed in Takeda’s Phase 3 clinical trial investigating mezagitamab as a treatment for adults with chronic primary immune thrombocytopenia (ITP).
Daré Bioscience Commencement of one of two registrational Phase 3 clinical trials investigating Sildenafil Cream, 3.6%, for the treatment of female sexual arousal disorder6.
Fourth Quarter and Full Year 2024 Financial Results
Tom Burns, Chief Financial Officer of XOMA Royalty, commented, "Based upon the anticipated incoming cash payments from royalties alone, we have line of sight on becoming cash flow positive on a consistent basis. The transient expenses associated with the Kinnate and Pulmokine acquisitions that impacted our 2024 financial results are coming to a close. We expect our R&D and G&A expenses to normalize in the second half of 2025."
Income and Revenue: XOMA Royalty recorded total income and revenues of $8.7 million and $28.5 million for the fourth quarter and full year of 2024, respectively. In 2023, XOMA Royalty recorded total income and revenues of $1.8 million and $4.8 million for the fourth quarter and full year, respectively. The increase for the full year of 2024 was primarily driven by an increase in our income from purchased receivables.
View Source
for-treatment-of-hypoglycemia-due-to-tumor-hyperinsulinism
Research and Development (R&D) Expenses: R&D expenses were $0.9 million and $2.9 million in the fourth quarter and full year of 2024, respectively. R&D expenses in the fourth quarter and full year of 2023 were $25,000 and $0.1 million, respectively. The increase of $2.8 million for the full year of 2024 is due to clinical trial costs related to KIN-3248 that were incurred subsequent to XOMA Royalty’s acquisition of Kinnate in April 2024. The Company currently is winding down this trial.
General and Administrative (G&A) Expenses: G&A expenses were $7.0 million and $34.5 million for the fourth quarter and full year of 2024, respectively, compared with $7.3 million in the fourth quarter and $25.6 million for the full year of 2023. The increase of $8.9 million for the full year of 2024 was primarily due to $7.4 million in costs associated with the acquisition of Kinnate, which primarily included $3.6 million in severance costs, $2.9 million in legal and consulting costs, $0.4 million in information technology costs, and $0.3 million in insurance costs. In addition, stock-based compensation expenses increased in 2024 by $1.2 million primarily due to the performance stock unit (PSU) grant awarded to Mr. Hughes in connection with his appointment as full-time CEO in January 2024.
In the fourth quarter and full year of 2024, G&A expenses included $2.2 million and $10.3 million, respectively, of non-cash stock-based compensation expenses. In the fourth quarter and full year of 2023, G&A expenses included $2.6 million and $9.1 million, respectively, of non-cash stock-based compensation expenses.
Credit Losses on Royalty and Commercial Payment Receivables (credit losses): In the fourth quarter of 2024, credit losses were $7.9 million related to the 2024 Talphera transaction. For the year ended December 31, 2024, credit losses totaled $30.9 million, consisting of $14.0 million related to the 2018 Agenus transaction, $9.0 million related to the 2019 Aronora transaction, and $7.9 million related to the Talphera transaction. For the year ended December 31, 2023, credit losses were $1.6 million related to the 2019 Bioasis transaction. There were no credit losses in the fourth quarter of 2023.
Interest Expense: Interest expense was $3.4 million and $13.8 million for the fourth quarter and full year of 2024, respectively. Interest expense in the fourth quarter and full year of 2023 was $0.6 million. Interest expense relates to the Blue Owl Loan established in December 2023.
Other Non-Comparable Transactions: Transactions for which there were no comparable period-over-period transactions include the following: In 2023, arbitration settlement costs of $4.1 million were paid in relation to a proceeding with one of XOMA Royalty’s licensees and a $14.2 million non-cash impairment charge was recorded in relation to the intangible ObsEva asset. In 2024, the Company recognized a gain on the acquisition of Kinnate of $19.3 million and an $8.1 million change in fair value of embedded derivative related to the Viracta transaction.
Other Income, net: The Company reported other income, net, of $1.0 million and $6.9 million for the fourth quarter and full year of 2024, as compared to $0.4 million and $1.6 million in the corresponding periods of 2023. The $5.3 million increase during the full year of 2024 was primarily driven by a $4.8 million increase in investment income due to higher balances on XOMA Royalty’s investments.
Net Loss: Net loss for the fourth quarter and full year ended December 31, 2024, was $4.0 million and $13.8 million, respectively, primarily resulting from the $30.9 million in non-cash credit losses on purchased receivables. Net loss for the fourth quarter and full year ended December 31, 2023, was $20.1 million and $40.8 million, respectively, which included $15.8 million in non-cash credit losses and impairment charges.
On December 31, 2024, XOMA Royalty had cash and cash equivalents of $106.4 million (including $4.8 million in restricted cash). On December 31, 2023, XOMA Royalty had cash and cash equivalents of $159.6 million (including $6.3 million in restricted cash). In 2024, XOMA Royalty received $46.3 million in cash receipts including $20.0 million in royalties and commercial payments, $19.3 million in other receipts from purchased receivables, and $7.1 million from licensees. In addition, as of December 31, 2024, the Company netted approximately $7.8 million from its acquisition of Kinnate. In 2024, XOMA Royalty deployed $65 million to acquire new milestone and royalty assets and paid $5.5 million in dividends on the XOMA Royalty Perpetual Preferred stocks.