On November 12, 2025 XOMA Royalty Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its 2025 third quarter and year to date financial results and highlighted recent actions that have the potential to deliver additional shareholder value.
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"We continue to execute on innovative ways to increase optionality within our portfolio while maintaining a healthy cash balance and limiting dilution to our shareholders," stated Owen Hughes, Chief Executive Officer of XOMA Royalty. "Growing royalty receipts reflect solid commercial execution on the part of our partners. We look forward to several clinical readouts over the coming months and quarters that, if positive, can meaningfully shape our business trajectory."
Royalty and Milestone Acquisitions
Company
Asset and Transaction Detail
LAVA Therapeutics
XOMA Royalty will secure an economic interest in PF-08046052, which is being developed by Pfizer, and JNJ-89853413, which is being developed by Johnson & Johnson, upon closing its acquisition of LAVA.
Company Acquisitions
Company
Transaction Details
Turnstone Biologics
XOMA Royalty acquired Turnstone for $0.34 in cash per share of Turnstone common stock plus one non-transferable contingent value right (CVR).
HilleVax
XOMA Royalty acquired HilleVax for a cash payment of $1.95 per share plus a non-transferable CVR that entitles holders to receive certain potential payments.
LAVA Therapeutics
XOMA Royalty will acquire LAVA for (i) an initial cash amount per share of $1.04 plus (ii) a non-transferable CVR per share representing the right to receive certain cash payments, including (A) the previously announced rights to receive, among other things, 75% of the net proceeds related to LAVA’s two partnered assets plus 75% of any net proceeds from any out license or sale of LAVA’s unpartnered programs, plus (B) a new right to receive up to approximately $0.23 per CVR depending on the final determination after closing of certain potential liabilities.
Mural Oncology
XOMA Royalty will acquire Mural Oncology through its wholly owned subsidiary XRA 5 Corp. for between $2.035 and $2.24 in cash per share. The acquisition is expected to close in the fourth quarter of 2025.1,2
XenoTherapeutics Acquisition of ESSA Pharma
XOMA Royalty acted as structuring agent for XenoTherapeutics’ completed acquisition of ESSA Pharma.
Pipeline Partner Updates through November 10, 2025
Partner
Event
Rezolute
In September, Rezolute announced it had achieved alignment with FDA on a significantly streamlined clinical development path for its ongoing Phase 3 study (upLIFT) of ersodetug for the treatment of tumor HI. Topline results are expected in the second half of 2026.3
Takeda
The first patient was dosed in Takeda’s Phase 3 clinical trial investigating mezagitamab as a treatment for adults with IgA Nephropathy.
Zevra Therapeutics
On July 28, Zevra announced it had submitted an MAA to EMA for the evaluation of arimoclomol for the treatment of Niemann-Pick Disease Type C (NPC)4.
Gossamer Bio
Activated first clinical site for the global, registrational Phase 3 SERANATA study examining seralutinib in patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD) in the fourth quarter of 20255.
Daré Biosciences
Announced positive interim safety and efficacy results from its ongoing Phase 3 clinical trial evaluating the contraceptive effectiveness, safety, and acceptability of Ovaprene, an investigational monthly, hormone-free intravaginal contraceptive.6
Anticipated Partner Events of Note through Mid-2026
Partner
Event
Rezolute
Announces topline data in December 20257 from sunRIZE Phase 3 clinical trial, which is investigating ersodetug in infants and children with congenital HI.
Gossamer Bio
Publishes topline results from the Phase 3 PROSERA Study evaluating seralutinib in Functional Class II and III PAH patients5.
Daré Bioscience
Makes DARE to PLAY Sildenafil Cream available commercially via prescription in the fourth quarter of 2025 as a compounded drug under Section 503B of the Federal Food, Drug, and Cosmetic Act.8
Commences one of two registrational Phase 3 clinical trials investigating Sildenafil Cream, 3.6%, for the treatment of female sexual arousal disorder9. Discussions with FDA regarding endpoint assessment for Phase 3 clinical studies of Sildenafil Cream, 3.6% continue8.
Day One Biopharmaceuticals
Per the Day One conference call held on November 4, 2025, Ipsen, Day One’s partner outside the U.S., expects to receive EMA regulatory decision on its application to commercialize tovorafenib in the European Union.
Third Quarter and Year to Date 2025 Financial Results
Tom Burns, Chief Financial Officer of XOMA Royalty, commented, "In the first nine months of 2025, we have received $43.9 million in cash from partners, of which $30.3 million were royalty payments related to commercial sales and $13.6 million in milestone payments and fees. In the third quarter, we received $14.3 million in cash from our partners’ commercial sales. With well-executed commercialization efforts by our partners and the emergence of new commercial opportunities from within our portfolio, XOMA Royalty has the potential to become a self-sustaining entity from royalties alone over the near term."
Income and Revenue: Income and revenue for the three and nine months ended September 30, 2025, were $9.4 million and $38.4 million, respectively, as compared with $7.2 million and $19.8 million for the corresponding periods of 2024. The increase in both periods presented was primarily driven by increased income related to VABYSMO and OJEMDA.
Research and Development (R&D) Expenses: R&D expenses for the three and nine months ended September 30, 2025, were $69 thousand and $1.4 million, respectively, compared with $0.8 million and $2.0 million for each of the corresponding periods of 2024. R&D expenses in the first quarter of 2025 and the three- and nine-month periods of 2024 were related to the clinical trial costs incurred subsequent to XOMA Royalty’s acquisition of Kinnate in April 2024 related to KIN-3248 and the associated wind-down activities.
General and Administrative (G&A) Expenses: G&A expenses for the three and nine months ended September 30, 2025, were $9.7 million and $25.7 million, respectively, as compared with $8.0 million and $27.5 million for the corresponding periods of 2024. The increase of $1.7 million for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in business development and deal-related costs, partially offset by a decrease in stock-based compensation expense. For the nine months ended September 30, 2025, the decrease of $1.8 million, as compared to the same period in 2024, was primarily due to costs related to exit packages for Kinnate senior leadership in the second quarter of 2024 and a decrease in stock-based compensation expense, partially offset by an increase in business development and deal-related costs.
XOMA Royalty’s G&A expenses included non-cash stock-based compensation expenses during the three and nine months ended September 30, 2025, of $1.8 million and $5.4 million, respectively, as compared to $2.6 million and $8.1 million for the corresponding periods of 2024. The 2024 periods reflect non-cash stock-based compensation related to the appointment of Mr. Hughes to full-time Chief Executive Officer and issuance of performance stock units.
Credit Losses on Purchased Receivables: During the nine months ended September 30, 2024, XOMA Royalty recorded one-time, non-cash credit losses on purchased receivables associated with the Aronora and Agenus assets. To date, there have been no credit losses in 2025.
Amortization of Intangible Assets: Amortization of intangible assets relates to the IP acquired in the Company’s acquisitions of Pulmokine in November 2024 and the mezagitamab economics from the BioInvent transaction in May 2025. Amortization of non-cash intangible assets were $0.9 million and $2.1 million for the three and nine months ended September 30, 2025.
Gains on Acquisitions: In the third quarter of 2025, XOMA Royalty recorded gains on acquisitions of $17.9 million for HilleVax and $1.8 million for Turnstone.
Interest Expense: For the three and nine months ended September 30, 2025, interest expense was $3.3 million and $10.0 million, respectively, as compared with $3.5 million and $10.4 million for the corresponding periods of 2024. Interest expense relates to the Blue Owl Loan established in December 2023.
Other Income, net: For the three and nine months ended September 30, 2025, other income, net was $0.7 million and $8.5 million, respectively, as compared with $1.9 million and $5.9 million for the corresponding periods of 2024.
Net Income: XOMA Royalty reported net income of $14.1 million and $25.6 million for the three and nine months ended September 30, 2025, as compared to net losses of $17.2 million and $9.9 million in the corresponding periods of 2024.
Cash Position: On September 30, 2025, XOMA Royalty had cash and cash equivalents of $130.6 million, including $85.4 million in restricted cash. The restricted cash balance included $43.3 million related to the assumed HilleVax lease, $39.9 million reserved to fund the Mural acquisition, and $2.2 million related to the Blue Owl Loan. Cash and cash equivalents of $106.4 million as of December 31, 2024, included $4.8 million in restricted cash related to the Blue Owl Loan.
In the third quarter of 2025, XOMA Royalty received $14.3 million in cash receipts from royalties and commercial payments and paid $1.4 million in dividends on the XOMA Royalty Perpetual Preferred stocks. In the first nine months of 2025, XOMA Royalty received $43.9 million in cash receipts, including $30.3 million in royalties and commercial payments and $13.6 million in milestone payments and fees. During the first nine months of 2025, XOMA Royalty deployed $25.0 million to acquire additional assets for its royalty and milestone portfolio, repurchased approximately 108,510 shares of its common stock for a cost of $2.4 million, and paid $4.1 million in dividends on the XOMA Royalty Perpetual Preferred stocks.
(Press release, Xoma, NOV 12, 2025, View Source [SID1234659833])