8-K

 

 

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, 2018

 

 

XOMA CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

000-14710   Delaware   52-2154066

(Commission

File Number)

 

(State or other jurisdiction

of incorporation)

 

(IRS Employer

Identification No.)

 

2200 Powell Street, Suite 310, Emeryville, California   94608
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (510) 204-7200

(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 ( see General Instruction A.2. below):

 

  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))

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

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, 2018, XOMA Corporation issued a press release announcing its financial results for the quarter ended March 31, 2018. 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 2018 Financial Results” dated March 9, 2018


SIGNATURES

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, 2018      

/s/ Thomas Burns

      Thomas Burns
      Senior Vice President, Finance and Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

XOMA Reports First Quarter 2018 Financial Results

Current cash balance sufficient to fund operations for multiple years

EMERYVILLE, Calif., May 9, 2018 (GLOBE NEWSWIRE) – XOMA Corporation (Nasdaq: XOMA), a pioneer in the discovery, development and licensing of therapeutic antibodies, today announced its first quarter 2018 financial results.

“Our efforts in the first quarter were dedicated to identifying, assessing and analyzing out-license and asset acquisition opportunities. These included potential partnering conversations regarding our novel IL-2 antibody program, as well as discussions with companies seeking to monetize future potential milestone and royalty revenue streams,” stated Jim Neal, Chief Executive Officer at XOMA. “While the number of opportunities continues to expand, we are focused on identifying a narrower set of high quality potential transactions. With a cash runway that spans multiple years and additional access to capital from our credit facility, we remain intensely focused on allowing our fully-funded programs to mature in the hands of our partners while expanding and diversifying our portfolio of potential future revenue streams to drive both near- and long-term value.”

Financial Results

XOMA recorded total revenues of $0.5 million for the first quarter of 2018, compared to $0.3 million for the first quarter of 2017.

Research and development (R&D) expenses were $0.4 million for the first quarter of 2018, compared to $4.0 million for the first quarter of 2017. The decrease in R&D expenses was due primarily to reductions of $1.0 million in clinical trial costs, $0.8 million in consulting costs, $0.6 million in the allocation of facilities costs, $0.3 million in salaries and related expenses, $0.3 million in stock-based compensation, and $0.3 million in external manufacturing costs. The significant reduction in R&D spending year-over-year is a result of the execution of the Company’s royalty-aggregator business model that is designed to leverage its extensive portfolio of partnered programs and licensed technologies.

General and administrative (G&A) expenses were $5.2 million for the three months ended March 31, 2018 and 2017, respectively. The minimal change in G&A expenses for the three months ended March 31, 2018 was due primarily to decreases of $0.8 million in consulting services, $0.3 million in legal and audit fees, and $0.2 million in information technology costs, partially offset by increases of $0.7 million in stock compensation cost and $0.6 million in the allocation of facilities costs due to a greater proportion of general and administrative personnel after the Company’s restructuring activities.

Net loss for the first quarter of 2018 was $3.8 million. Net loss for the first quarter of 2017 was $16.3 million and included non-recurring and restructuring charges totaling $7.6 million.


On March 31, 2018, XOMA had cash and cash equivalents of $42.0 million. The Company ended December 31, 2017, with cash and cash equivalents of $43.5 million. The Company’s current cash and cash equivalents are expected to be sufficient to fund its operations for multiple years.

In May 2018, the Company announced a flexible $20 million credit facility with Silicon Valley Bank. The credit facility is available to XOMA through March 2019 and may be extended to March 2020 upon certain conditions. The credit facility includes the opportunity to increase the borrowing capacity to an aggregate amount of $40 million.

About XOMA Corporation

XOMA has built a portfolio of over two dozen products that are licensed to and being developed by other biotech and pharmaceutical companies. The Company’s portfolio of partner-funded programs spans multiple stages of the drug development process and across various therapeutic areas. Many of these licenses are the result of XOMA’s pioneering efforts in the discovery and development of antibody therapeutics. The Company’s royalty-aggregator business model includes acquiring additional licenses to partner-funded programs. XOMA’s license portfolio has the potential to generate significant milestone payments and royalty revenue 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. 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 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.

Investor contact:

Luke Heagle

W2O pure

+1 910-726-1372

lheagle@w2ogroup.com

Media contact:

Julie Normart

W2O pure

+1 415-946-1087

jnormart@w2ogroup.com


XOMA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except per share amounts)

 

     Three Months Ended
March 31,
 
     2018     2017  

Revenues:

    

Revenue from contracts with customers

   $ 401     $ 150  

Revenue recognized under units-of-revenue method

     62       110  
  

 

 

   

 

 

 

Total revenues

     463       260  
  

 

 

   

 

 

 

Operating expenses:

    

Research and development

     432       3,993  

General and administrative

     5,168       5,167  

Restructuring

     —         2,020  
  

 

 

   

 

 

 

Total operating expenses

     5,600       11,180  
  

 

 

   

 

 

 

Loss from operations

     (5,137     (10,920

Other income (expense):

    

Interest expense

     (170     (609

Loss on extinguishment of debt

     —         (515

Other income, net

     1,501       1,329  
  

 

 

   

 

 

 

Net loss and comprehensive loss

     (3,806     (10,715

Deemed dividend on convertible preferred stock

     —         (5,603
  

 

 

   

 

 

 

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

   $ (3,806   $ (16,318
  

 

 

   

 

 

 

Basic and diluted net loss per share available to common stockholders

   $ (0.46   $ (2.37
  

 

 

   

 

 

 

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

     8,313       6,887  
  

 

 

   

 

 

 


XOMA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share amounts)

 

     March 31,
2018
    December 31,
2017
 
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 41,968     $ 43,471  

Trade and other receivables

     436       397  

Prepaid expenses and other current assets

     273       327  
  

 

 

   

 

 

 

Total current assets

     42,677       44,195  

Property and equipment, net

     75       83  

Other assets

     559       657  
  

 

 

   

 

 

 

Total assets

   $ 43,311     $ 44,935  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 1,420     $ 1,679  

Accrued and other liabilities

     1,338       2,675  

Income taxes payable

     1,666       1,637  

Unearned revenue recognized under units-of-revenue method – current

     658       615  

Contract liabilities

     798       798  

Accrued interest on long-term debt – current

     —         18  
  

 

 

   

 

 

 

Total current liabilities

     5,880       7,422  

Unearned revenue recognized under units-of-revenue method – non-current

     17,019       17,123  

Long-term debt

     14,572       14,572  

Other liabilities – non-current

     203       32  
  

 

 

   

 

 

 

Total liabilities

     37,674       39,149  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Convertible preferred stock, $0.05 par value, 1,000,000 shares authorized, 5,003
shares issued and outstanding at March 31, 2018 and December 31, 2017

     —         —    

Common stock, $0.0075 par value, 277,333,332 shares authorized, 8,332,118 and
8,249,158 shares issued and outstanding at March 31, 2018 and December 31,
2017, respectively

     62       62  

Additional paid-in capital

     1,188,440       1,184,783  

Accumulated deficit

     (1,182,865     (1,179,059
  

 

 

   

 

 

 

Total stockholders’ equity

     5,637       5,786  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 43,311     $ 44,935