XOMA Reports Fourth Quarter and Full Year 2017 Financial Results and Provides Business Update
Transformed business model to a royalty aggregator with extensive asset portfolio and capital;
Added nine new partner-funded programs in 2017 with potential for milestone and royalty payments;
Current cash balance sufficient to fund operations for multiple years
“In 2017, we completely transformed XOMA’s business model and operations. We are now a lean, well-capitalized royalty aggregator with the potential to generate significant future milestone payments and recurring revenue. We added nine new partner-funded programs during the year, including two additional licenses with
Business Highlights
- Launched a royalty-aggregator strategy that leverages
XOMA's extensive portfolio of partner-funded programs and licensed technologies that has the potential to generate significant future milestone payments and royalty revenue for the Company. - Completed a
$25 million registered offering of common stock and convertible preferred stock toBVF Partners, L.P. (BVF). Associated with this investment, the Company appointedMatthew Perry , President of BVF, a highly accomplished investor and industry professional, toXOMA's Board of Directors. - Licensed the global development and commercialization rights to gevokizumab, a novel anti-IL-1 beta allosteric monoclonal antibody, to
Novartis .XOMA is eligible to receive up to$438 million in development, regulatory and commercial milestones plus tiered high single-digit to mid-teens royalties on net sales of gevokizumab. - Granted
Novartis a license to its intellectual property covering the use of IL-1 beta targeting antibodies in the treatment of cardiovascular disease.XOMA is eligible to receive low single-digit royalties on canakinumab sales in cardiovascular indications, rising to mid single-digit royalties under certain circumstances. - Received
$31 million fromNovartis in cash payments, including a$5 million equity investment in connection with the gevokizumab and intellectual property licenses. - Settled
XOMA's €12 million debt to Servier as part of the gevokizumab transaction withNovartis , as well as extended the maturity date on the Company’s debt toNovartis fromSeptember 2020 toSeptember 2022 . - Licensed the global development and commercialization rights for
XOMA 358 toRezolute, Inc. , formerlyAntriaBio, Inc. , a biopharmaceutical company that specializes in developing therapies for metabolic and orphan diseases.XOMA is entitled to receive up to approximately$232 million in potential milestone payments plus royalties ranging from the high single-digits to mid-teens on net sales of RZ358.XOMA also is entitled to receive low single-digit royalties on net sales of AB101 and two other products developed from Rezolute’s extended release and oral plasma kallikrein inhibitor platforms. - Entered into new non-exclusive license agreements with three separate companies,
Tizona Therapeutics, Inc. ,Torch Biosciences, Inc. , and LakePharma, for use ofXOMA's proprietary phage display libraries for antibody discovery. Under these agreements, the Company is eligible to receive development and regulatory milestone payments plus single-digit royalties on net sales. - Earned a
$10 million milestone payment inMay 2017 reflecting the clinical advancement of an asset the Company licensed to one of its pharmaceutical partners. - Earned a
$3 million milestone payment related to the clinical advancement of an anti-botulism product candidate the Company licensed in 2015 toOlogy Bioservices, Inc. - Repaid 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 ofDecember 31, 2016 . - Completed the Company's previously announced aggressive cost reductions by decreasing headcount to fewer than 20 employees as of
December 31, 2017 . - Strengthened the leadership team with the appointment of
Dee Datta , Ph.D., as Chief Business Officer.
Financial Results
Research and development (R&D) expenses were
General and administrative (G&A) expenses were
Restructuring charges for the full year of 2017 were
Net loss for the fourth quarter of 2017 was
On
About
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, creating additional value for the stockholders and cash sufficiency forecast. 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; we may not be successful in entering into out-license agreements for our product candidates; if our therapeutic product candidates do not receive regulatory approval, our third-party licensees will not be able to manufacture and market them. Other potential risks to
XOMA CORPORATION | ||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
License fees | $ | 5,318 | $ | 100 | $ | 52,311 | $ | 3,296 | ||||||||
Contract and other | 39 | 424 | 379 | 2,268 | ||||||||||||
Total revenues | 5,357 | 524 | 52,690 | 5,564 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 660 | 8,248 | 7,875 | 44,234 | ||||||||||||
General and administrative | 6,711 | 5,184 | 24,337 | 18,322 | ||||||||||||
Restructuring charge (credit) | (4 | ) | 4,551 | 3,447 | 4,566 | |||||||||||
Total operating expenses | 7,367 | 17,983 | 35,659 | 67,122 | ||||||||||||
Income (loss) from operations | (2,010 | ) | (17,459 | ) | 17,031 | (61,558 | ) | |||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (129 | ) | (955 | ) | (1,238 | ) | (3,946 | ) | ||||||||
Loss on extinguishment of debt | — | — | (650 | ) | — | |||||||||||
Other income, net | 777 | 925 | 1,115 | 1,510 | ||||||||||||
Revaluation of contingent warrant liabilities | — | 9 | — | 10,464 | ||||||||||||
Income (loss) before income tax | (1,362 | ) | (17,480 | ) | 16,258 | (53,530 | ) | |||||||||
Provision for income tax benefit (expense) | 44 | — | (1,662 | ) | — | |||||||||||
Net income (loss) and comprehensive income (loss) | $ | (1,318 | ) | $ | (17,480 | ) | $ | 14,596 | $ | (53,530 | ) | |||||
Net income (loss) and comprehensive income (loss) available to common stockholders, basic | $ | (1,318 | ) | $ | (17,480 | ) | $ | 5,714 | $ | (53,530 | ) | |||||
Net income (loss) and comprehensive income (loss) available to common stockholders, diluted | $ | (1,318 | ) | $ | (17,480 | ) | $ | 5,810 | $ | (53,530 | ) | |||||
Basic net income (loss) per share available to common stockholders | $ | (0.16 | ) | $ | (2.89 | ) | $ | 0.75 | $ | (8.89 | ) | |||||
Diluted net income (loss) per share available to common stockholders | $ | (0.16 | ) | $ | (2.89 | ) | $ | 0.73 | $ | (8.89 | ) | |||||
Weighted average shares used in computing basic net income (loss) per share available to common stockholders | 8,197 | 6,053 | 7,619 | 6,021 | ||||||||||||
Weighted average shares used in computing diluted net income (loss) per share available to common stockholders | 8,197 | 6,053 | 7,980 | 6,021 | ||||||||||||
XOMA CORPORATION | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(unaudited) | |||||||||
(in thousands, except share and per share amounts) | |||||||||
December 31, | December 31, | ||||||||
2017 | 2016 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 43,471 | $ | 25,742 | |||||
Trade and other receivables, net | 397 | 566 | |||||||
Prepaid expenses and other current assets | 327 | 852 | |||||||
Total current assets | 44,195 | 27,160 | |||||||
Property and equipment, net | 83 | 1,036 | |||||||
Other assets | 657 | 481 | |||||||
Total assets | $ | 44,935 | $ | 28,677 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 1,679 | $ | 5,689 | |||||
Accrued and other liabilities | 2,545 | 4,215 | |||||||
Accrued restructuring costs | 130 | 3,594 | |||||||
Income taxes payable | 1,637 | — | |||||||
Deferred revenue – current | 1,413 | 899 | |||||||
Interest bearing obligations – current | — | 17,855 | |||||||
Accrued interest on interest bearing obligations – current | 18 | 254 | |||||||
Total current liabilities | 7,422 | 32,506 | |||||||
Deferred revenue – non-current | 17,123 | 18,000 | |||||||
Interest bearing obligations – non-current | 14,572 | 25,312 | |||||||
Other liabilities – non-current | 32 | 69 | |||||||
Total liabilities | 39,149 | 75,887 | |||||||
Stockholders’ equity (deficit): | |||||||||
Convertible preferred stock, $0.05 par value, 1,000,000 shares authorized, 5,003 and 0 shares issued and outstanding at December 31, 2017 and 2016, respectively | — | — | |||||||
Common stock, $0.0075 par value, 277,333,332 shares authorized, 8,249,158 and 6,114,145 shares issued and outstanding at December 31, 2017 and 2016, respectively | 62 | 46 | |||||||
Additional paid-in capital | 1,184,783 | 1,146,357 | |||||||
Accumulated deficit | (1,179,059 | ) | (1,193,613 | ) | |||||
Total stockholders’ equity (deficit) | 5,786 | (47,210 | ) | ||||||
Total liabilities and stockholders’ equity (deficit) | $ | 44,935 | $ | 28,677 | |||||
Investor contact:
W2O pure
+1 910-726-1372
lheagle@w2ogroup.com
Media contact:
W2O pure
+1 415-946-1087
jnormart@w2ogroup.com
Source: XOMA Corporation