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) January 7, 2019

 

 

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 7.01. Regulation FD Disclosure.

Beginning on January 7, 2019, XOMA Corporation (the “Company”) will participate in conferences with investors and analysts during the 37th Annual JP Morgan Healthcare Conference in San Francisco, California. A copy of the Company’s presentation materials has been posted to the Company’s website and is attached hereto as Exhibit 99.1.

Limitation of Incorporation by Reference

In accordance with General Instruction B.2. of Form 8-K, this information, including the Exhibit, is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Item 7.01 of this Current Report on Form 8-K will not be deemed an admission as to the materiality of any information that is required to be disclosed solely by Regulation FD.

Cautionary Statements

This filing and the presentation include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could impair the Company’s royalty assets or business are disclosed in the “Risk Factors” contained in the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2018, and updated in subsequent filings. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1    Presentation


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: January 7, 2019            /s/ Thomas Burns
      Thomas Burns
      Senior Vice President, Finance and Chief Financial Officer
EX-99.1

Slide 1

` corporate PRESENTATION January 2019 With over 35 years of discovery activity, XOMA currently has over three dozen partnered and fully-funded assets with the potential to drive milestone and royalty payments, along with multiple additional programs ready for out-licensing Exhibit 99.1


Slide 2

Certain statements in this presentation 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: future monetization opportunities, active transactions with significant financial implications, collaborations poised for significant financial contribution, our library of potentially value-generating assets, future potential for milestone and royalty payments, the potential of our antibody discovery engine, potential out-licensing of our internal compounds and products, the ability of our partners and their licensees to successfully develop their pipeline programs, the productivity of acquired assets, our revenue forecasts, upcoming internal milestones and value catalysts, our future cash needs, our strategy for value creation, and other statements that relate to future periods. These statements are not guarantees of future performance and undue reliance should not be placed on them. They 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 statements represent XOMA’s views only as of the date of this presentation 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 law. FORWARD-LOOKING STATEMENTS


Slide 3

What do these TWO geniuses have in common? (and why is XOMA talking about them?)


Slide 4

Warren Buffet’s Model Buy & hold The principle of compound growth Buy & build Buy good companies with good management teams who know how to grow their business


Slide 5

# OF CLINICAL STAGE ASSETS IN XOMA PORTFOLIO BUY & HOLD BUILD & HOLD Time XOMA’s Model: Build & Hold and Buy & Hold Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold royalty payment rights Buy & Hold Acquire rights to additional potential milestone & royalty assets


Slide 6

Buy & Hold Acquire MILESTONE AND royalty rights to additional fully-funded assets XOMA’s Model Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold Milestone & royalty payment rights


Slide 7

Build & Hold element Requires 2 Things XOMA Spend ($M) PATIENCE TO PROVIDE TIME FOR UNDERLYING DRUG ASSETS TO ADVANCE THROUGH THE LONG YEARS OF DISCOVERY, DEVELOPMENT AND APPROVAL A LEAN INFRASTRUCTURE TO MINIMIZE COSTS 1. 2.


Slide 8

Preclinical Phase 1 Phase 2 Phase 3 NDA filing 38 BUILD & HOLD PARTNERED ASSETS 1 1 11 12 8 5 Total Future Development Expense by XOMA: $0 20 Assets with Large-Cap Partners


Slide 9

YEAR COMPANY ASSET phase Of Development UPFRONT Potential MILESTONES ROYALTY % 2005 Novartis CFZ533 (Anti-CD40) Phase 2 $16.2M (+$7.5M debt reduction) $14M High single digits– low teens 2009 Takeda Phage display & Ab technologies Early Stage Undisclosed $230M Undisclosed 2015 Novartis Anti-TGFβ Phase 1 $37.5M $480M Mid single digits – low teens 2015 FivePrime Phage display library Early Stage Undisclosed Single-digit 2016 Ology Bioservices Anti-botulinum program Phase 2 Undisclosed 15% 2017 Novartis Gevokizumab IL-1β Phase 1 $31M $5M (XOMA stock) €12M debt repayment $438M High single digits – mid teens 2017 Rezolute XOMA 358 Phase 2 $5M (Rezolute stock) $232M High single digits – mid teens Build & hold Publicly disclosed Deal Terms


Slide 10

INDICATION pHASE STATUS STUDY SIZE START DATE Primary Sjogren's Syndrome 2 Recruiting 66 11/14 Lupus Nephritis 2 Recruiting 60 8/18 System Lupus Erythematosus 2 Not yet recruiting 120 9/18 Kidney Transplant 2 Not yet recruiting 325 9/18 Liver Transplant 2 Not yet recruiting 128 12/18 Graves' Disease 2 Completed 15 Moderate to Severe Myasthenia Gravis 2 Completed 44 de Novo Renal Transplantation 1/2 Completed 59 Rheumatoid Arthritis 1 Completed 75 Novartis' expansive development of Anti-CD40


Slide 11

INDICATION pHASE STATUS STUDY SIZE START DATE Primary Sjogren's Syndrome 2 Recruiting 66 11/14 Lupus Nephritis 2 Recruiting 60 8/18 System Lupus Erythematosus 2 Not yet recruiting 120 9/18 Kidney Transplant 2 Not yet recruiting 325 9/18 Liver Transplant 2 Not yet recruiting 128 12/18 Graves' Disease 2 Completed 15 Moderate to Severe Myasthenia Gravis 2 Completed 44 de Novo Renal Transplantation 1/2 Completed 59 Rheumatoid Arthritis 1 Completed 75 Novartis' expansive development of Anti-CD40


Slide 12

2 XOMA ASSETS HIGHLIGHTED AS POTENTIAL BLOCKBUSTERS BY NOVARTIS AT NOV 2018 R&D UPDATE XOMA Royalty Rate: Mid single digits to low teens


Slide 13

# of Assets at clinical stage XOMA’s Partnered Assets have progressed to Clinical Stage at 13% Annual growth rate Since 2001


Slide 14

Buy & Hold Acquire milestone & royalty rights to additional fully-funded assets XOMA’s Model Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold royalty payment rights


Slide 15

XOMA’s Buy & build Model is Designed for Our Industry Biotech Industry Characteristics Build & hold for long-term Buy & hold for long-term Development costs borne by partners Large diversified portfolio helps mitigate single asset risk XOMA Royalty Aggregator Strategy Long Product Life Cycles High Capital Requirements Low Probability OF Success


Slide 16

Phase 3 50% Phase 2 16% Phase 1 10% Preclinical 5% drug Development takes a long time and is capital intensive Avg. Time to Conduct (months) Avg. $ to fund Cumulative prob. of success 31 26 22 37 $210M $45M $30M $3M Sources:Dimasi, Hansen & Grabowski, 2003, Tufts University; Hay, Rosenthal, Thomas & Craighead, 2011, Biomedtracker


Slide 17

PHASE 3 Licensing Deals: 190 Total Licensing Deals 2014 - 2017 1,532 Licensing activity is robust at all stages of development PHASE 2 Licensing Deals: 269 PHASE 1 Licensing Deals: 143 Preclinical / OTHER Licensing Deals: 930


Slide 18

PRECLINICAL PHASE 1 PHASE 2 PHASE 3 APPROVAL COMMERCIAL > $100M $25M – $100M < $25M XOMA is Positioned to Monetize Royalties on Mid- to Early stage clinical assets Capital Deployed per Transaction Ligand Royalty Pharma HCRP


Slide 19

BIOTECH ‘X’ Seeks non-dilutive funding to take an additional program into clinical development to diversify risk Examples of Opportunities XOMA Will Target BIOTECH ‘Y’ Seeks funding to hold lead program to participate in next value inflection point


Slide 20

Key Attributes of XOMA Target Assets PRE-COMMERCIAL THERAPEUTIC ASSETS Phase 1, 2, or 3 LONG DURATION OF MARKET EXCLUSIVITY Patent expiration or regulatory exclusivity HIGH REVENUE POTENTIAL High unmet need or clear clinical benefit over alternatives STRONG DEVELOPER/MARKETER Assets partnered with high-quality pharma/ biopharma companies Rx


Slide 21

XOMA’s First Royalty Monetization transaction - Agenus Total Investment by XOMA: $15M 7 Assets with Large-Cap Partners 33% Royalty Interest 10% of Future Milestones 100% Immuno-Oncology Focus


Slide 22

Agenus transaction hits all Key Attributes of XOMA Target Assets PRE-COMMERCIAL THERAPEUTIC ASSETS Phase 1, 2 or 3 LONG DURATION OF MARKET EXCLUSIVITY Patent expiration or regulatory exclusivity HIGH REVENUE POTENTIAL High unmet need or clear clinical benefit over alternatives Volume or pricing advantage STRONG DEVELOPER/MARKETER Assets partnered with high-quality pharma/ biopharma companies Rx 7 total assets; 5 in clinical development Potentially 10-years post commercialization Potentially important IO drugs Merck, Incyte


Slide 23

Diversification: 45 Assets Across 9+ Therapeutic Categories


Slide 24

XOMA’s Model is Distinctive Typical Small/ Mid-Cap Biotech PORTFOLIO SIZE 1 - 3 assets 45 assets PORTFOLIO FOCUS Narrow Diversified PROBABILITY OF AN APPROVAL Low High RISK : RETURN POTENTIAL High : High Low : Mid / High CAPITAL User Provider


Slide 25

Compound interest is the eighth wonder of the world. He who understands it … earns it. He who doesn’t … pays it. - Albert Einstein What to expect from xoma compound growth impact


Slide 26

XOMA’s Model: Build & Hold and Buy & Hold – Compound GROWTH Principle total: Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold milestone & royalty payment rights Buy & Hold Acquire rights to additional potential milestone & royalty assets 38 Assets 45 Assets 7Assets


Slide 27

Buy & Hold Expand portfolio of revenue opportunities by acquiring new potential milestones & royalties 2018 operational results Build & Hold Allow current portfolio to continue to advance in hands of partners Completed $20M Rights Offering Established $20M LoC with Silicon Valley Bank Maintained lean cost infrastructure and financial discipline Agenus transaction - 7 new royalty interests $15M investment - $7.5M in cash / $7.5M from SVB LoC Merck & Incyte Multiple conversations span deal process


Slide 28

Royalty Rate at Projected Peak Sales < $500M (14 assets) $500M - $1B (11 assets) ≥ $1B (20 assets) < 2.5% 10 8 10 2.5% < 7.5% 3 2 7 7.5% - 15% 1 1 3 2 of 14 with Large-Cap Partners 8 of 11 with Large-Cap Partners 17 of 20 with Large-Cap Partners ASSETS BY PROJECTED PEAK SALES POTENTIAL A View of Market potential - 45 xoma assets > 40% of assets have sales milestones 27 assets are with Large-Cap Partners Annual revenue from just one $750M asset with a 2% royalty would cover XOMA’s current operating burn


Slide 29

# OF CLINICAL STAGE ASSETS IN XOMA PORTFOLIO BUY & HOLD BUILD & HOLD Time XOMA’s Model: Build & Hold and Buy & Hold Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold milestone & royalty payment rights Buy & Hold Acquire rights to additional potential milestone & royalty assets