XOMA Corp false 0000791908 0000791908 2024-05-09 2024-05-09 0000791908 us-gaap:CommonStockMember 2024-05-09 2024-05-09 0000791908 us-gaap:SeriesAPreferredStockMember 2024-05-09 2024-05-09 0000791908 us-gaap:SeriesBPreferredStockMember 2024-05-09 2024-05-09

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): May 9, 2024

 

 

XOMA CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-39801   52-2154066

(State or Other Jurisdiction

of Incorporation)

  

(Commission

File Number)

  

(I.R.S. Employer

Identification Number)

2200 Powell Street, Suite 310, Emeryville, California 94608

(Address of Principal Executive Offices) (Zip Code)

(510) 204-7200

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

  

Trading

symbol(s):

  

Name of each exchange

on which registered:

Common Stock, $0.0075 par value   XOMA   The Nasdaq Global Market
8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05 per share   XOMAP   The Nasdaq Global Market
Depositary Shares (each representing 1/1000th interest in a share of 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05 per share)   XOMAO   The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02

Results of Operations and Financial Condition.

On May 9, 2024, XOMA Corporation issued a press release announcing its financial results for the quarter ended March 31, 2024. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Number    Description of Document
99.1    Press release entitled “XOMA Reports First Quarter 2024 Financial Results and Highlights Recent Activities” dated May 9, 2024.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    XOMA CORPORATION
Date: May 9, 2024     By:  

/s/ THOMAS BURNS

      Thomas Burns
      Senior Vice President, Finance and Chief Financial Officer

Exhibit 99.1

 

LOGO

XOMA Reports First Quarter 2024 Financial Results and Highlights Recent Activities

Earned $9 million milestone upon U.S. Food and Drug Administration’s approval of

Day One’s OJEMDA™ (tovorafenib);

XOMA is entitled to receive a mid-single digit royalty on OJEMDA™ sales

Acquired Kinnate Pharmaceuticals, adding at least $9.5 million in non-dilutive capital to XOMA’s balance sheet

Expanded the commercial royalty and milestone portfolio with the acquisitions of

economic interests in DSUVIA® (sufentanil sublingual tablet) and XACIATO™ (clindamycin phosphate)

vaginal gel 2%, as well as two Phase 3 assets

Launched XOMA’s first stock repurchase program for up to $50 million

EMERYVILLE, Calif. – May 9, 2024 (GLOBE NEWSWIRE) – XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its first quarter 2024 financial results and highlighted recent activities.

“We continue to build the foundation for accelerating value creation with a disciplined approach to capital deployment,” stated Owen Hughes, Chief Executive Officer of XOMA. “In recent months, we’ve completed the acquisition of Kinnate, acquired economic interests in two commercial assets, as well as in two first-in-class Phase 3 assets, and initiated our first share buyback program on the heels of securing the VABYSMO® royalty-backed loan with Blue Owl. Lastly, and most importantly, the FDA approved OJEMBA™ (tovorafenib), Day One Biopharmaceuticals’ type II RAF inhibitor for patients with relapsed or refractory pLGG harboring a BRAF fusion or rearrangement or BRAF V600 mutation, ushering in an important new treatment for children living with relapsed or refractory pLGG.”

Key First Quarter Events

 

Partner

   

Event

Talphera    XOMA added another commercial asset to its royalty portfolio with an economic interest in DSUVIA®, which is marketed by Alora Pharmaceuticals. XOMA receives 100 percent of the DSUVIA® economics until a threshold is achieved; thereafter, XOMA retains the 15 percent royalty associated with DSUVIA® commercial sales. The 75 percent royalties from Department of Defense purchases and remaining milestone payments will be shared equally between XOMA and Talphera.
Kinnate Pharmaceuticals    XOMA initiated the acquisition of Kinnate Pharmaceuticals for $2.5879 in cash per share, plus a non-tradeable contingent value right (CVR) representing the right to receive 85 percent of the net proceeds from the out license or sale of Kinnate assets effected on or before April 2, 2025, and 100% of the net proceeds received from Pierre-Fabre.
Zevra Therapeutics    U.S. Food and Drug Administration (FDA) accepted the arimoclomol NDA resubmission for review and set a Prescription Drug User Fee Act (PDUFA) action date of September 21, 2024. XOMA paid a $1 million milestone to LadRx based upon the achievement of this milestone.
Medexus    FDA approved the pediatric label expansion application for IXINITY® [coagulation factor IX (recombinant)].
Takeda    Reported positive topline results from Phase 2 study evaluating mezagitamab (TAK-079), a potential best-in-class anti-CD38 monoclonal antibody for primary immune thrombocytopenia (ITP).i
LG Chem (AVEO Oncology)    Dosed the first patient in the ficlatuzumab Phase 3 study, resulting in a $1 million milestone payment to XOMA.
Compugen    Received a $1 million milestone payment from Compugen.

Subsequent Events

 

Partner

   

Event

Day One Biopharmaceuticals    FDA approved Day One’s OJEMDA™ (tovorafenib) for use in pediatric patients with pediatric low-grade glioma (pLGG). XOMA earned a $9 million milestone upon the approval and is entitled to receive mid-single digit royalties from OJEMDA sales.
Daré Bioscience    XOMA added economic interests to three best- or first-in-category assets to its portfolio. 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 also acquired a synthetic royalty in Sildenafil Cream, 3.6%, a Phase 3-ready asset for female sexual arousal disorder.
Rezolute    Dosed first patient in its Phase 3 trial of RZ358; XOMA earned a $5.0 million milestone associated with the event.

Anticipated 2024 Events of Note

 

Partner

   

Event

Zevra Therapeutics    September 21, 2024 – FDA PDUFA action date for arimoclomol NDA
Takeda    In its press release dated March 13, 2024, Takeda announced plans to initiate a global Phase 3 trial of mezagitamab in ITP in fiscal year 2024.ii

First Quarter 2024 Financial Results

XOMA recorded total revenues of $1.5 million for the first quarter of 2024, which included a $1.0 million milestone payment received from AVEO Oncology, as compared with $0.4 million in the first quarter of 2023.

Research and development (R&D) expenses were $33,000 and $54,000, respectively, for the first quarters of 2024 and 2023. Upon closing the Kinnate merger in the second quarter of 2024, XOMA assumed operations of Kinnate’s pipeline, as well as ongoing Phase 1 study, and will incur increased R&D costs until winddown activities are complete.

General and administrative (“G&A”) expenses were $8.5 million for the first quarter of 2024, compared to $6.2 million for the first quarter of 2023. The increase of $2.3 million was primarily due to a $1.3 million increase in stock-based compensation and a $0.7 million increase in consulting and legal expenses. The increase in stock-based compensation expenses was largely due to the appointment of Mr. Hughes as our full-time Chief Executive Officer in January 2024.

In the first quarter of 2024, G&A expenses included $2.9 million in non-cash stock-based compensation expense, compared with $1.6 million in the first quarter of 2023. The increase in stock-based compensation expenses was largely due to the PSU grant associated with the appointment of Mr. Hughes as our full-time Chief Executive Officer in January 2024 combined with PSUs granted in May 2023.

Interest expense in the first quarter of 2024 was $3.6 million, representing interest related to the Blue Owl Loan established in December 2023.

The Company reported total other income, net, of $2.0 million in the first quarter of 2024, as compared to total other income, net, of $0.4 million in the corresponding period of 2023. The $1.6 million increase reflects a $1.3 million increase in investment income due to higher cash balances and higher market interest rates on our investments, as well as the change in the market price of Rezolute’s common stock.

Net loss for the first quarter of 2024 was $8.6 million, compared to a net loss of $9.8 million for the first quarter of 2023.

On March 31, 2024, XOMA had cash and cash equivalents of $142.4 million (including $6.2 million in restricted cash). On December 31, 2023, XOMA had cash and cash equivalents of $159.6 million (including $6.3 million in restricted cash). During the first quarter of 2024, XOMA received $9.8 million in cash from royalty and milestone payments and deployed $8 million to acquire new royalty and milestone economic interests. Net cash used in operating activities during the quarter was $4.9 million. On April 15, 2024, the Company paid a total of $1.4 million in cash dividends on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) and the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO).

About XOMA Corporation

XOMA is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA acquires the potential future economics associated with pre-commercial and commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. When XOMA acquires the future economics, the seller receives non-dilutive, non-recourse funding they can use to advance their internal drug candidate(s) or for general corporate purposes. The Company has an extensive and growing portfolio of assets (asset defined as the right to receive potential future economics associated with the advancement of an underlying therapeutic candidate). For more information about the Company and its portfolio, please visit www.xoma.com or follow the Company on LinkedIn.

Forward-Looking Statements/Explanatory Notes

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 timing and amount of potential commercial payments to XOMA and other developments related to VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], DSUVIA® (sufentanil sublingual tablet), and arimoclomol; the potential occurrences of the events listed under “Anticipated 2024 Events of Note”; the anticipated timings of regulatory filings and approvals related to assets in XOMA’s portfolio; and the potential of XOMA’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time. In some cases, you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project,” “expect,” “may,” “will”, “would,” “could” or “should,” the negative of these terms or similar expressions. These forward-looking statements are not a guarantee of XOMA’s performance, and you should not place undue reliance on such statements. 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, including those related to the fact that our product candidates subject to out-license agreements are still being developed, and our licensees may require substantial funds to continue development which may not be available; we do not know whether there will be, or will continue to be, a viable market for the products in which we have an ownership or royalty interest; if the therapeutic product candidates to which we have a royalty interest do not receive regulatory approval, our third-party licensees will not be able to market them; and the impact to the global economy as a result of the COVID-19 pandemic. Other potential risks to XOMA meeting these expectations are described in more detail in XOMA’s most recent filing on Form 10-Q and in other filings with the Securities and Exchange Commission. Consider such risks carefully when considering XOMA’s prospects. Any forward-looking statement in this press release represents XOMA’s beliefs and assumptions 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.

EXPLANATORY NOTE: Any references to “portfolio” in this press release refer strictly to milestone and/or royalty rights associated with a basket of drug products in development. Any references to “assets” in this press release refer strictly to milestone and/or royalty rights associated with individual drug products in development.

As of the date of this press release, the commercial assets in XOMA’s milestone and royalty portfolio are VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], and DSUVIA® (sufentanil sublingual tablet). All other assets in the milestone and royalty portfolio are investigational compounds. Efficacy and safety have not been established. There is no guarantee that any of the investigational compounds will become commercially available.

XOMA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

 

     Three Months Ended March 31,  
       2024         2023    

Revenues:

     

Revenue from contracts with customers

    $ 1,000     $ —   

Revenue recognized under units-of-revenue method

      490       437  
  

 

 

    

 

 

  

Total revenues

      1,490       437  
  

 

 

    

 

 

  

Operating expenses:

     

Research and development

      33       54  

General and administrative

      8,461       6,196  

Arbitration settlement costs

      —        4,132  

Amortization of intangible assets

      —        225  
  

 

 

    

 

 

  

Total operating expenses

      8,494       10,607  
  

 

 

    

 

 

  

Loss from operations

      (7,004 )      (10,170 ) 

Other income (expense)

     

Interest expense

      (3,551 )      —   

Other income (expense), net

      1,960       357  
  

 

 

    

 

 

  

Net loss and comprehensive loss

    $ (8,595 )    $ (9,813 ) 

Less: accumulated dividends on Series A and Series B preferred stock

      (1,368 )      (1,368 ) 
  

 

 

    

 

 

  

Net loss and comprehensive loss attributable to common stockholders, basic and diluted

    $ (9,963 )    $ (11,181 ) 
  

 

 

    

 

 

  

Basic and diluted net loss per share attributable to common stockholders

    $ (0.86 )    $ (0.98 ) 
  

 

 

    

 

 

  

Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders

      11,580       11,460  
  

 

 

    

 

 

  

XOMA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

     March 31,     December 31,  
     2024     2023  
     (unaudited)        
ASSETS     

Current assets:

     

Cash and cash equivalents

    $ 136,225     $ 153,290  

Short-term restricted cash

      160       160  

Short-term equity securities

      413       161  

Trade and other receivables, net

      3       1,004  

Short-term royalty and commercial payment receivables

      9,819       14,215  

Prepaid expenses and other current assets

      270       483  
  

 

 

    

 

 

  

Total current assets

      146,890       169,313  

Long-term restricted cash

      6,016       6,100  

Property and equipment, net

      40       25  

Operating lease right-of-use assets

      364       378  

Long-term royalty and commercial payment receivables

      65,577       57,952  

Other assets - long term

      533       533  
  

 

 

    

 

 

  

Total assets

    $ 219,420     $ 234,301  
  

 

 

    

 

 

  
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

     

Accounts payable

    $ 1,515     $ 653  

Accrued and other liabilities

      1,299       2,768  

Contingent consideration under RPAs, AAAs and CPPAs

      3,000       7,000  

Operating lease liabilities

      55       54  

Unearned revenue recognized under units-of-revenue method

      2,159       2,113  

Preferred stock dividend accrual

      1,368       1,368  

Current portion of long-term debt

      6,144       5,543  
  

 

 

    

 

 

  

Total current liabilities

      15,540       19,499  

Unearned revenue recognized under units-of-revenue method – long-term

      6,692       7,228  

Long-term operating lease liabilities

      319       335  

Long-term debt

      114,528       118,518  
  

 

 

    

 

 

  

Total liabilities

      137,079       145,580  
  

 

 

    

 

 

  

Stockholders’ equity:

     

Preferred Stock, $0.05 par value, 1,000,000 shares authorized:

     

8.625% Series A cumulative, perpetual preferred stock, 984,000 shares issued and outstanding at March 31, 2024 and December 31, 2023

      49       49  

8.375% Series B cumulative, perpetual preferred stock, 1,600 shares issued and outstanding at March 31, 2024 and December 31, 2023

      —        —   

Convertible preferred stock, 5,003 issued and outstanding at March 31, 2024 and December 31, 2023

      —        —   

Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,636,355 and 11,495,492 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

      87       86  

Additional paid-in capital

      1,314,036       1,311,809  

Accumulated deficit

      (1,231,831 )      (1,223,223 ) 
  

 

 

    

 

 

  

Total stockholders’ equity

      82,341       88,721  
  

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 219,420     $ 234,301  
  

 

 

    

 

 

  

XOMA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

     Three Months Ended March 31,  
     2024     2023  

Cash flows from operating activities:

     

Net loss

    $ (8,595 )    $ (9,813 ) 

Adjustments to reconcile net loss to net cash used in operating activities:

     

Stock-based compensation expense

      2,856       1,570  

Common stock contribution to 401(k)

      118       123  

Amortization of intangible assets

      —        225  

Depreciation

      2       1  

Accretion of long-term debt discount and debt issuance costs

      306       —   

Non-cash lease expense

      14       47  

Change in fair value of equity securities

      (252 )      24  

Changes in assets and liabilities:

     

Trade and other receivables, net

      1,001       (5 ) 

Prepaid expenses and other assets

      213       269  

Accounts payable and accrued liabilities

      (105 )      3,122  

Operating lease liabilities

      (15 )      (50 ) 

Unearned revenue recognized under units-of-revenue method

      (490 )      (437 ) 
  

 

 

    

 

 

  

Net cash used in operating activities

      (4,947 )      (4,924 ) 
  

 

 

    

 

 

  

Cash flows from investing activities:

     

Payments of consideration under RPAs, AAAs and CPPAs

      (15,000 )      (9,600 ) 

Receipts under RPAs, AAAs and CPPAs

      7,771       2,366  

Purchase of property and equipment

      (17 )      —   
  

 

 

    

 

 

  

Net cash used in investing activities

      (7,246 )      (7,234 ) 
  

 

 

    

 

 

  

Cash flows from financing activities:

     

Principal payments – debt

      (3,616 )      —   

Debt issuance costs and loan fees paid in connection with long-term debt

      (581 )      —   

Payment of preferred stock dividends

      (1,368 )      (1,368 ) 

Repurchases of common stock

      (13 )      —   

Proceeds from exercise of options and other share-based compensation

      1,956       —   

Taxes paid related to net share settlement of equity awards

      (1,334 )      —   
  

 

 

    

 

 

  

Net cash used in financing activities

      (4,956 )      (1,368 ) 
  

 

 

    

 

 

  

Net decrease in cash, cash equivalents and restricted cash

      (17,149 )      (13,526 ) 

Cash, cash equivalents and restricted cash at the beginning of the period

      159,550       57,826  
  

 

 

    

 

 

  

Cash, cash equivalents and restricted cash at the end of the period

    $ 142,401     $ 44,300  
  

 

 

    

 

 

  

Supplemental Cash Flow Information:

     

Cash paid for interest

    $ 3,780     $ —   

Non-cash investing and financing activities:

     

Accrual of contingent consideration under the Affitech CPPA

    $ 3,000     $ —   

Preferred stock dividend accrual

    $ 1,368     $ 1,368  

# # #

 

Investor contact:    Media contact:
Juliane Snowden    Kathy Vincent
XOMA    KV Consulting & Management
+1-646-438-9754    +1-310-403-8951
juliane.snowden@xoma.com    kathy@kathyvincent.com

 

i 

https://www.takeda.com/newsroom/newsreleases/2024/takeda-announces-positive-topline-results-from-phase-2-study-evaluating-mezagitamab-TAK-079-a-potential-best-in-class-anti-CD38-monoclonal-antibody-for-primary-immune-thrombocytopenia/

v3.24.1.u1
Document and Entity Information
May 09, 2024
Document And Entity Information [Line Items]  
Entity Registrant Name XOMA Corp
Amendment Flag false
Entity Central Index Key 0000791908
Document Type 8-K
Document Period End Date May 09, 2024
Entity Incorporation State Country Code DE
Entity File Number 001-39801
Entity Tax Identification Number 52-2154066
Entity Address, Address Line One 2200 Powell Street
Entity Address, Address Line Two Suite 310
Entity Address, City or Town Emeryville
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94608
City Area Code (510)
Local Phone Number 204-7200
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Stock [Member]  
Document And Entity Information [Line Items]  
Security 12b Title Common Stock, $0.0075 par value
Trading Symbol XOMA
Security Exchange Name NASDAQ
Series A Preferred Stock [Member]  
Document And Entity Information [Line Items]  
Security 12b Title 8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05 per share
Trading Symbol XOMAP
Security Exchange Name NASDAQ
Series B Preferred Stock [Member]  
Document And Entity Information [Line Items]  
Security 12b Title Depositary Shares (each representing 1/1000th interest in a share of 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05 per share)
Trading Symbol XOMAO
Security Exchange Name NASDAQ
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