XOMA Reports First Quarter 2017 Financial Results
May 09 2017 - 4:05PM
Established new corporate strategy leveraging
extensive portfolio of partnered programs Strengthened balance
sheet with BVF Partners investment and substantial debt
repaymentReduced combined R&D and G&A expenses 49%
year-over-year
XOMA Corporation (Nasdaq:XOMA), a pioneer in the discovery and
development of therapeutic antibodies, today announced its first
quarter 2017 financial results and recent business
highlights.
“Progress continued at a good pace in the first quarter as cost
reductions, strategic partner discussions and awareness of our new
corporate initiatives all moved forward,” stated Jim Neal, Chief
Executive Officer of XOMA. “Our portfolio of partnered assets
continued to advance toward milestone points and potential future
royalty streams. In addition, we presented compelling preclinical
and clinical data on our unpartnered programs and have experienced
increased licensing interest over the recent months.”
Recent Business Highlights
XOMA made important progress advancing its development programs
and improving the Company’s financial health, including:
- Launching a new strategy that leverages XOMA’s extensive
portfolio of partnered programs and licensed technologies that has
the potential to generate substantial future milestone and royalty
proceeds for the Company.
- Completing a $25 million registered offering of common stock
and convertible preferred stock to BVF Partners, L.P. (BVF).
Associated with this investment, the Company appointed Matthew
Perry, President of BVF, a highly accomplished investor and
industry professional, to XOMA’s Board of Directors.
- Establishing proof-of-concept for X358 in 14 patients with
congenital hyperinsulinism and 13 patients with hypoglycemia
post-bariatric surgery.
- Achieving positive Phase 2 proof-of-concept results for X213 in
physiological hyperprolactinemia.
- Repaying the full outstanding balance under the Company's term
loan with Hercules Technology Growth Capital, Inc., which had an
outstanding principal balance of $17.5 million as of December 31,
2016.
- Continuing implementation of the Company’s previously announced
aggressive corporate cost reduction plan.
- Presenting clinical data for its two hypoglycemia drug
candidates, X358 and X129, at the Endocrine Society's
99th Annual Meeting (ENDO 2017). The Company also presented
positive data from pre-clinical studies investigating the activity
of its anti-PTH1R antagonist monoclonal antibody at ENDO 2017 and
the American Association for Cancer Research annual meeting.
Financial Results
XOMA recorded total revenues of $0.3 million for the first
quarter of 2017, compared to $4.0 million for the first quarter of
2016. The decrease in revenues for the first quarter of 2017 was
due primarily to upfront and milestone payments received in the
prior year relating to various out-licensing arrangements.
Research and development (R&D) expenses were $4.0 million
for the first quarter of 2017, compared to $13.6 million for the
first quarter of 2016. The decrease in R&D expenses was due
primarily to a $3.5 million reduction in salaries and related
expenses, a $3.2 million reduction in clinical trial costs and a
$1.7 million decrease in external manufacturing activities.
General and administrative (G&A) expenses were $5.2 million
for the first quarter of 2017, compared to $4.3 million for the
first quarter of 2016. The increase in G&A expenses for the
three months ended March 31, 2017, was due primarily to increases
of $0.9 million in consulting services, $0.9 million in allocation
of facilities and information technology costs due to a greater
proportion of general and administrative personnel after our
restructuring activities, and $0.4 million in legal and accounting
costs, partially offset by a $1.3 million decrease in salaries and
related personnel costs resulting from our 2016 restructuring
activities.
Restructuring charges were $2.0 million for the first quarter of
2017. These charges related primarily to severance, other
termination benefits and outplacement services associated with the
Company’s restructuring activities in 2016 and the first quarter of
2017.
Net loss for the first quarter of 2017 was $16.3 million,
compared to net loss of $8.4 million for the first quarter of 2016.
The Company recorded a non-cash charge for a deemed dividend on
convertible preferred stock of $5.6 million in the first quarter of
2017. The non-cash deemed dividend on convertible preferred stock
is associated with the Company’s $25 million registered offering of
common stock and convertible preferred stock that closed in
February 2017. The subsequent increase in stock price following
that transaction triggered the non-cash accounting event.
On March 31, 2017, XOMA had cash and cash equivalents of $20.0
million. The Company ended December 31, 2016, with cash and cash
equivalents of $25.7 million.
About XOMA Corporation
XOMA has an extensive portfolio of products, programs, and
technologies that are the subject of licenses the Company has in
place with other biotech and pharmaceutical companies. Many
of these licenses are the result of the Company's pioneering
efforts in the discovery and development of antibody therapeutics.
There are more than 20 such programs that are fully funded by
partners and could produce milestone payments and royalty payments
in the future. In order to maximize its value in a licensing
transaction, XOMA continues to invest in X358, an allosteric
monoclonal antibody that reduces insulin receptor activity, as a
potential treatment of hyperinsulinism. For more information, visit
www.xoma.com.
Forward-Looking Statements
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 potential of
XOMA’s portfolio of partnered programs and licensed technologies
generating substantial milestone and royalty proceeds over time;
the significant unmet therapeutic need for certain rare medical
conditions associated with hyperinsulinism; XOMA’s intent to
license X213 and X358; and statements that otherwise relate to
future periods. 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 and for companies engaged in the development
of new products in a regulated market. 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.
|
|
XOMA CORPORATION |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(unaudited) |
|
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Revenues: |
|
|
|
|
|
License
and collaborative fees |
|
$ |
150 |
|
|
$ |
2,491 |
|
|
Contract
and other |
|
|
110 |
|
|
|
1,471 |
|
|
Total revenues |
|
|
260 |
|
|
|
3,962 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Research
and development |
|
|
3,993 |
|
|
|
13,610 |
|
|
General
and administrative |
|
|
5,167 |
|
|
|
4,305 |
|
|
Restructuring |
|
|
2,020 |
|
|
|
36 |
|
|
Total operating expenses |
|
|
11,180 |
|
|
|
17,951 |
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(10,920 |
) |
|
|
(13,989 |
) |
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
|
Interest
expense |
|
|
(609 |
) |
|
|
(1,002 |
) |
|
Other
income (expense), net |
|
|
1,329 |
|
|
|
(306 |
) |
|
Revaluation of contingent warrant liabilities |
|
|
— |
|
|
|
6,932 |
|
|
Loss on
extinguishment of debt |
|
|
(515 |
) |
|
|
— |
|
|
Net loss |
|
|
(10,715 |
) |
|
|
(8,365 |
) |
|
Deemed dividend on
convertible preferred stock |
|
|
(5,603 |
) |
|
|
— |
|
|
Net loss available to
common stockholders |
|
$ |
(16,318 |
) |
|
$ |
(8,365 |
) |
|
|
|
|
|
|
|
Basic and diluted net
loss per share available to common stockholders |
|
$ |
(2.37 |
) |
|
$ |
(1.40 |
) |
|
Weighted average shares
used in computing basic and diluted net loss per share available to
common stockholders |
|
|
6,887 |
|
|
|
5,978 |
|
|
|
|
|
|
|
|
Other
comprehensive loss: |
|
|
|
|
|
Net
loss |
|
$ |
(10,715 |
) |
|
$ |
(8,365 |
) |
|
Net
unrealized loss on marketable securities |
|
|
— |
|
|
|
(42 |
) |
|
Total comprehensive loss |
|
$ |
(10,715 |
) |
|
$ |
(8,407 |
) |
|
|
|
|
|
|
|
XOMA CORPORATION |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(unaudited) |
|
(in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
20,045 |
|
|
$ |
25,742 |
|
|
Trade and
other receivables, net |
|
|
1,343 |
|
|
|
566 |
|
|
Prepaid
expenses and other current assets |
|
|
264 |
|
|
|
852 |
|
|
Total current assets |
|
|
21,652 |
|
|
|
27,160 |
|
|
Property and equipment,
net |
|
|
396 |
|
|
|
1,036 |
|
|
Other assets |
|
|
481 |
|
|
|
481 |
|
|
Total assets |
|
$ |
22,529 |
|
|
$ |
28,677 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
DEFICIT |
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
|
$ |
4,176 |
|
|
$ |
5,689 |
|
|
Accrued
and other liabilities |
|
|
2,173 |
|
|
|
4,215 |
|
|
Accrued
restructuring costs |
|
|
1,793 |
|
|
|
3,594 |
|
|
Deferred
revenue – current |
|
|
1,381 |
|
|
|
899 |
|
|
Interest
bearing obligations – current |
|
|
12,544 |
|
|
|
17,855 |
|
|
Accrued
interest on interest bearing obligations – current |
|
|
178 |
|
|
|
254 |
|
|
Total current liabilities |
|
|
22,245 |
|
|
|
32,506 |
|
|
Deferred revenue –
non-current |
|
|
17,408 |
|
|
|
18,000 |
|
|
Interest bearing
obligations – non-current |
|
|
14,085 |
|
|
|
25,312 |
|
|
Other liabilities –
non-current |
|
|
— |
|
|
|
69 |
|
|
Total liabilities |
|
|
53,738 |
|
|
|
75,887 |
|
|
|
|
|
|
|
|
Stockholders’
deficit: |
|
|
|
|
|
Preferred
stock, $0.05 par value, 1,000,000 shares authorized, 5,003 and 0
issued and outstanding as of March 31, 2017 and December 31,
2016, respectively |
|
|
— |
|
|
|
— |
|
|
Common
stock, $0.0075 par value, 277,333,332 shares authorized, 7,585,629
and 6,114,145 shares issued and outstanding at March 31,
2017 and December 31, 2016, respectively |
|
|
57 |
|
|
|
46 |
|
|
Additional paid-in capital |
|
|
1,173,104 |
|
|
|
1,146,357 |
|
|
Accumulated deficit |
|
|
(1,204,370 |
) |
|
|
(1,193,613 |
) |
|
Total stockholders’ deficit |
|
|
(31,209 |
) |
|
|
(47,210 |
) |
|
Total liabilities and stockholders’ deficit |
|
$ |
22,529 |
|
|
$ |
28,677 |
|
|
|
|
|
|
|
|
Investor contact:
Luke Heagle
Pure Communications
+1 910-726-1372
lheagle@purecommunications.com
Media contact:
Colin Sanford
Pure Communications
+1 415-946-1094
csanford@purecommunications.com
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