XOMA Reports Second Quarter 2017 Financial Results
August 08 2017 - 4:30PM
Executing new corporate strategy leveraging
extensive portfolio of partnered programsEarned $10 million
milestone payment from a pharmaceutical partnerReduced combined
R&D and G&A expenses 56% year-over-yearCurrent cash balance
sufficient to fund operations through August 2018
XOMA Corporation (Nasdaq:XOMA), a pioneer in the discovery and
development of therapeutic antibodies, today announced its second
quarter 2017 financial results and recent business
highlights.
“We made significant progress executing our new strategy to
create long-term value for shareholders in the second quarter,”
stated Jim Neal, Chief Executive Officer of XOMA. “In addition to
earning a $10 million milestone payment from one of our
pharmaceutical partners, we continued to pursue out-licensing
opportunities for our unpartnered programs and to produce valuable
clinical evidence in support of those assets. We also focused on
decreasing our cost infrastructure as we set the stage for a future
positive cash flow environment. With our extensive portfolio of
partner-funded programs, lean cost structure and strengthened
balance sheet, we are positioning ourselves to deliver profitable
growth in the years ahead.”
Recent Business Highlights
XOMA made important progress positioning the Company for
long-term growth and improving its financial health, including:
- Executing 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.
- Earning a $10 million milestone payment in May 2017 that was
received in July 2017, reflecting the clinical advancement of an
asset the Company licensed to one of its pharmaceutical partners.
Similar to this program, XOMA has more than 20 additional clinical
and preclinical programs that are fully funded by partners across
the biotech and pharmaceutical landscape and that are expected to
add to the growth in milestone payments and royalty revenue streams
over time.
- Pursuing strategic partner discussions with multiple companies
regarding out-licensing certain of XOMA’s unpartnered programs.
Recent developments in certain antibody target-related clinical
trials have led to an increase in the interest in some of XOMA’s
portfolio assets.
- Continuing implementation of the Company’s previously announced
aggressive cost reductions by decreasing headcount to fewer than 20
employees as of June 30, 2017.
- Establishing a tentative agreement with Servier to extend
payment terms on the Company’s €12.0 million debt arrangement.
Financial Results
XOMA recorded total revenues of $10.9 million for the second
quarter of 2017, compared to $0.4 million for the second quarter of
2016. The increase in revenues for the second quarter of 2017 was
due primarily to a $10 million milestone payment earned under the
Company’s license agreement with one of its pharmaceutical
partners. This milestone payment was received in July
2017.
Research and development (R&D) expenses were $2.9 million
for the second quarter of 2017, compared to $13.7 million for the
second quarter of 2016. The decrease in R&D expenses for the
second quarter of 2017 was due primarily to a $3.8 million
reduction in salaries and related expenses, a $3.6 million decrease
in external manufacturing activities, a $1.6 million reduction in
clinical trial costs, and a $1.0 million decrease in the allocation
of facilities and information technology costs. The significant
reduction in R&D spending year-over-year is a result of the
execution of the Company’s new corporate strategy of leveraging its
extensive portfolio of partnered programs and licensed
technologies.
General and administrative (G&A) expenses were $5.2 million
for the second quarter of 2017, compared to $4.8 million for the
second quarter of 2016. G&A expenses for the three months ended
June 30, 2017, included increases of $1.0 million in the allocation
of facilities and information technology costs due to a greater
proportion of general and administrative personnel after the
Company’s restructuring activities, $0.3 million in legal,
accounting and tax services and $0.2 million in consulting
services, partially offset by a $0.8 million decrease in salaries
and other personnel costs related to the reduction in headcount
from its restructuring activities. G&A salaries and related
expenses included $1.6 million of non-cash stock compensation
expense.
Restructuring charges were $1.5 million for the second 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 half of
2017.
Net income for the second quarter of 2017 was $0.3 million,
compared to net loss of $15.2 million for the second quarter of
2016. The Company recorded non-cash charges of $0.9 million for
unrealized foreign exchange losses primarily related to the
Company’s €12.0 million loan from Servier in the second quarter of
2017.
On June 30, 2017, XOMA had cash and cash equivalents of $12.5
million and $10 million included in accounts receivable from a
milestone earned in May 2017 from one of its licensees, which was
received in July 2017. The Company ended December 31, 2016, with
cash and cash equivalents of $25.7 million. The Company’s current
cash and cash equivalents are expected to be sufficient to fund its
operations through August 2018.
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. 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
COMPREHENSIVE INCOME (LOSS) |
|
(unaudited) |
|
(in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License
and collaborative fees |
|
$ |
10,775 |
|
|
$ |
275 |
|
|
$ |
10,925 |
|
|
$ |
2,766 |
|
Contract
and other |
|
|
115 |
|
|
|
168 |
|
|
|
225 |
|
|
|
1,639 |
|
Total
revenues |
|
|
10,890 |
|
|
|
443 |
|
|
|
11,150 |
|
|
|
4,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
2,916 |
|
|
|
13,703 |
|
|
|
6,908 |
|
|
|
27,313 |
|
General
and administrative |
|
|
5,203 |
|
|
|
4,779 |
|
|
|
10,370 |
|
|
|
9,084 |
|
Restructuring |
|
|
1,460 |
|
|
|
(21 |
) |
|
|
3,480 |
|
|
|
15 |
|
Total
operating expenses |
|
|
9,579 |
|
|
|
18,461 |
|
|
|
20,758 |
|
|
|
36,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations |
|
|
1,311 |
|
|
|
(18,018 |
) |
|
|
(9,608 |
) |
|
|
(32,007 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(297 |
) |
|
|
(1,007 |
) |
|
|
(906 |
) |
|
|
(2,009 |
) |
Other
income (expense), net |
|
|
(729 |
) |
|
|
602 |
|
|
|
600 |
|
|
|
296 |
|
Revaluation of contingent warrant liabilities |
|
|
— |
|
|
|
3,263 |
|
|
|
— |
|
|
|
10,195 |
|
Loss on
extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
(515 |
) |
|
|
— |
|
Net
income (loss) |
|
$ |
285 |
|
|
$ |
(15,160 |
) |
|
$ |
(10,429 |
) |
|
$ |
(23,525 |
) |
Basic and diluted net
income (loss) available to common stockholders |
|
$ |
172 |
|
|
$ |
(15,160 |
) |
|
$ |
(16,032 |
) |
|
$ |
(23,525 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share available to common stockholders |
|
$ |
0.02 |
|
|
$ |
(2.52 |
) |
|
$ |
(2.21 |
) |
|
$ |
(3.92 |
) |
Diluted net income
(loss) per share available to common stockholders |
|
$ |
0.02 |
|
|
$ |
(2.52 |
) |
|
$ |
(2.21 |
) |
|
$ |
(3.92 |
) |
Weighted average shares
used in computing basic net income (loss) per share available to
common stockholders |
|
|
7,588 |
|
|
|
6,022 |
|
|
|
7,240 |
|
|
|
6,000 |
|
Weighted average shares
used in computing diluted net income (loss) per share available to
common stockholders |
|
|
7,643 |
|
|
|
6,022 |
|
|
|
7,240 |
|
|
|
6,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) |
|
$ |
285 |
|
|
$ |
(15,160 |
) |
|
$ |
(10,429 |
) |
|
$ |
(23,525 |
) |
Net
unrealized loss on marketable securities |
|
|
— |
|
|
|
(12 |
) |
|
|
— |
|
|
|
(54 |
) |
Total
comprehensive income (loss) |
|
$ |
285 |
|
|
$ |
(15,172 |
) |
|
$ |
(10,429 |
) |
|
$ |
(23,579 |
) |
XOMA CORPORATION |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(in thousands, except share and per share
amounts) |
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
12,465 |
|
|
$ |
25,742 |
|
Trade and
other receivables, net |
|
|
10,631 |
|
|
|
566 |
|
Prepaid
expenses and other current assets |
|
|
334 |
|
|
|
852 |
|
Total
current assets |
|
|
23,430 |
|
|
|
27,160 |
|
Property and equipment,
net |
|
|
234 |
|
|
|
1,036 |
|
Other assets |
|
|
481 |
|
|
|
481 |
|
Total
assets |
|
$ |
24,145 |
|
|
$ |
28,677 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
DEFICIT |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
3,512 |
|
|
$ |
5,689 |
|
Accrued
and other liabilities |
|
|
2,062 |
|
|
|
4,215 |
|
Accrued
restructuring costs |
|
|
1,020 |
|
|
|
3,594 |
|
Deferred
revenue – current |
|
|
1,425 |
|
|
|
899 |
|
Interest
bearing obligations – current |
|
|
13,539 |
|
|
|
17,855 |
|
Accrued
interest on interest bearing obligations – current |
|
|
125 |
|
|
|
254 |
|
Total
current liabilities |
|
|
21,683 |
|
|
|
32,506 |
|
Deferred revenue –
non-current |
|
|
17,255 |
|
|
|
18,000 |
|
Interest bearing
obligations – non-current |
|
|
14,322 |
|
|
|
25,312 |
|
Other liabilities –
non-current |
|
|
— |
|
|
|
69 |
|
Total
liabilities |
|
|
53,260 |
|
|
|
75,887 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
deficit: |
|
|
|
|
|
|
|
|
Preferred
stock, $0.05 par value, 1,000,000 shares authorized, 5,003 and |
|
|
|
|
|
|
|
|
0 shares
issued and outstanding as of June 30, 2017 and December 31, |
|
|
|
|
|
|
|
|
2016,
respectively |
|
|
— |
|
|
|
— |
|
Common
stock, $0.0075 par value, 277,333,332 shares authorized, |
|
|
|
|
|
|
|
|
7,593,230
and 6,114,145 shares issued and outstanding at June 30, 2017 |
|
|
|
|
|
|
|
|
and
December 31, 2016, respectively |
|
|
57 |
|
|
|
46 |
|
Additional paid-in capital |
|
|
1,174,912 |
|
|
|
1,146,357 |
|
Accumulated deficit |
|
|
(1,204,084 |
) |
|
|
(1,193,613 |
) |
Total
stockholders’ deficit |
|
|
(29,115 |
) |
|
|
(47,210 |
) |
Total
liabilities and stockholders’ deficit |
|
$ |
24,145 |
|
|
$ |
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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