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
- Launched a royalty-aggregator strategy that leverages
XOMA'sextensive 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 millionregistered 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'sBoard of Directors.
- Licensed the global development and commercialization rights to gevokizumab, a novel anti-IL-1 beta allosteric monoclonal antibody, to
Novartis. XOMAis eligible to receive up to $438 millionin development, regulatory and commercial milestones plus tiered high single-digit to mid-teens royalties on net sales of gevokizumab.
Novartisa license to its intellectual property covering the use of IL-1 beta targeting antibodies in the treatment of cardiovascular disease. XOMAis eligible to receive low single-digit royalties on canakinumab sales in cardiovascular indications, rising to mid single-digit royalties under certain circumstances.
$31 millionfrom Novartisin cash payments, including a $5 millionequity investment in connection with the gevokizumab and intellectual property licenses.
XOMA's€12 million debt to Servier as part of the gevokizumab transaction with Novartis, as well as extended the maturity date on the Company’s debt to Novartisfrom September 2020to September 2022.
- Licensed the global development and commercialization rights for
XOMA358 to Rezolute, Inc., formerly AntriaBio, Inc., a biopharmaceutical company that specializes in developing therapies for metabolic and orphan diseases. XOMAis entitled to receive up to approximately $232 millionin potential milestone payments plus royalties ranging from the high single-digits to mid-teens on net sales of RZ358. XOMAalso 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 of XOMA'sproprietary 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 millionmilestone payment in May 2017reflecting the clinical advancement of an asset the Company licensed to one of its pharmaceutical partners.
- Earned a
$3 millionmilestone payment related to the clinical advancement of an anti-botulism product candidate the Company licensed in 2015 to Ology 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 millionas of December 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.
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
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
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)|
|(in thousands, except per share amounts)|
|Three Months Ended December 31,||Year Ended December 31,|
|Contract and other||39||424||379||2,268|
|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):|
|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||$||(8.89||)|
|Weighted average shares used in computing basic net income (loss) per share available to common stockholders||8,197||6,053||7,619||6,021|
|Weighted average shares used in computing diluted net income (loss) per share available to common stockholders||8,197||6,053||7,980||6,021|
|CONSOLIDATED BALANCE SHEETS|
|(in thousands, except share and per share amounts)|
|December 31,||December 31,|
|Cash and cash equivalents||$||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|
|LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)|
|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|
|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, $0.0075 par value, 277,333,332 shares authorized, 8,249,158 and 6,114,145 shares issued and outstanding at December 31, 2017 and 2016, respectively||62||46|
|Additional paid-in capital||1,184,783||1,146,357|
|Total stockholders’ equity (deficit)||5,786||(47,210||)|
|Total liabilities and stockholders’ equity (deficit)||$||44,935||$||28,677|
Source: XOMA Corporation