4670000223700069500009610000603800035300009686000114340000.530.310.851.021142100011285000113760001126300060380003530000968600011434000114210001128500011376000112630000.530.310.851.0211315263114238230000791908--12-312022Q2falsehttp://fasb.org/us-gaap/2022#OperatingLeaseLiabilityCurrent http://fasb.org/us-gaap/2022#OperatingLeaseLiabilityNoncurrent984000984000500350031600160000000000000000.539060.523440.539060.523440.539060.52344000000000000.020000791908xoma:AronoraIncMemberxoma:SiliconValleyBankMemberxoma:RoyaltyPurchaseAgreementMember2019-04-072019-04-070000791908xoma:RezoluteIncMemberxoma:LicenseAgreementRz358Member2017-12-062017-12-060000791908xoma:RezoluteIncMemberxoma:LicenseAgreementNonRz358ProductsMember2017-12-062017-12-060000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:MezagitamabMemberxoma:CollaborationAgreementMember2006-11-012006-11-010000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:RoyaltyPurchaseAgreementMember2022-06-300000791908xoma:AgenusIncMemberxoma:MerckImmunoOncologyProductMemberxoma:RoyaltyPurchaseAgreementMember2018-09-200000791908xoma:AgenusIncMemberxoma:IncyteImmunoOncologyAssetsMemberxoma:RoyaltyPurchaseAgreementMember2018-09-200000791908xoma:AgenusIncMemberxoma:MerckImmunoOncologyProductMemberxoma:RoyaltyPurchaseAgreementMember2018-09-202018-09-200000791908xoma:NovartisPharmaAGMemberxoma:IL1TargetLicenseAgreementMember2017-08-242017-08-240000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMemberxoma:SecondRoyaltyInterestAcquisitionAgreementMember2016-12-212016-12-210000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMemberxoma:FirstRoyaltyInterestAcquisitionAgreementMember2016-12-212016-12-210000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2015-01-012015-12-310000791908srt:MaximumMemberxoma:AtMarketIssuanceSalesAgreement2021Member2021-08-052021-08-050000791908srt:MaximumMemberxoma:TwoThousandEighteenAtMarketAgreementMember2018-12-182018-12-180000791908xoma:TwoThousandFifteenEmployeeStockPurchasePlanMember2022-01-012022-06-300000791908xoma:ViractaTherapeuticsInc.Memberxoma:RoyaltyPurchaseAgreementMember2021-03-222021-03-220000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementTwoMember2020-11-022020-11-020000791908xoma:PalobiofarmaSLMemberxoma:RoyaltyPurchaseAgreementMember2019-09-262019-09-260000791908xoma:AgenusIncMemberxoma:RoyaltyPurchaseAgreementMember2018-09-202018-09-200000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementMember2022-04-012022-06-300000791908xoma:AronoraIncMemberxoma:RoyaltyPurchaseAgreementMember2019-09-012019-09-300000791908us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-04-012022-06-300000791908us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-06-300000791908us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-04-012021-06-300000791908us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-06-300000791908xoma:AgenusIncMemberxoma:IncyteImmunoOncologyAssetsMemberxoma:RoyaltyPurchaseAgreementMember2018-09-202018-09-200000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementMember2019-02-252019-02-250000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:RoyaltyPurchaseAgreementMember2022-05-012022-05-310000791908xoma:AgenusIncMemberxoma:MerckImmunoOncologyProductMemberxoma:RoyaltyPurchaseAgreementMember2020-11-012020-11-300000791908xoma:TwoThousandEighteenAtMarketAgreementMember2021-03-102021-03-100000791908xoma:AtMarketIssuanceSalesAgreement2021Member2021-08-050000791908xoma:TwoThousandEighteenAtMarketAgreementMember2018-12-180000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2019-08-012019-08-310000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:RoyaltyPurchaseAgreementMember2021-07-140000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementTwoMember2020-11-020000791908xoma:AgenusIncMemberxoma:RoyaltyPurchaseAgreementMember2018-09-200000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2017-12-062020-12-310000791908xoma:ViractaTherapeuticsInc.Memberxoma:RoyaltyPurchaseAgreementMember2022-01-012022-06-300000791908xoma:PalobiofarmaSLMemberxoma:RoyaltyPurchaseAgreementMember2022-01-012022-06-300000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:RoyaltyPurchaseAgreementMember2022-01-012022-06-300000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementTwoMember2022-01-012022-06-300000791908xoma:AronoraIncMemberxoma:RoyaltyPurchaseAgreementMember2022-01-012022-06-300000791908xoma:AgenusIncMemberxoma:RoyaltyPurchaseAgreementMember2022-01-012022-06-300000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2022-01-012022-06-300000791908xoma:ViractaTherapeuticsInc.Memberxoma:RoyaltyPurchaseAgreementMember2021-01-012021-12-310000791908xoma:PalobiofarmaSLMemberxoma:RoyaltyPurchaseAgreementMember2021-01-012021-12-310000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:RoyaltyPurchaseAgreementMember2021-01-012021-12-310000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementTwoMember2021-01-012021-12-310000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementMember2021-01-012021-12-310000791908xoma:AronoraIncMemberxoma:RoyaltyPurchaseAgreementMember2021-01-012021-12-310000791908xoma:AgenusIncMemberxoma:RoyaltyPurchaseAgreementMember2021-01-012021-12-310000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2021-01-012021-12-310000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMemberxoma:FirstRoyaltyInterestAcquisitionAgreementMember2016-12-210000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2022-01-280000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2021-10-060000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:RoyaltyPurchaseAgreementMember2021-07-142021-07-140000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2021-10-200000791908xoma:RezoluteIncMemberxoma:LicenseAgreementRz358Member2017-12-060000791908xoma:NovartisPharmaAGMemberxoma:XOMA052LicenseAgreementMember2017-08-240000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2015-09-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:MezagitamabMemberxoma:CollaborationAgreementMember2006-11-010000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:OtherAntibodiesMemberxoma:CollaborationAgreementMember2009-02-012009-02-280000791908xoma:AronoraIncMemberxoma:RoyaltyPurchaseAgreementMember2019-04-072019-04-070000791908xoma:AronoraIncMemberxoma:BayerProductsMemberxoma:RoyaltyPurchaseAgreementMember2019-04-072019-04-070000791908xoma:BioasisTechnologiesIncMembersrt:MaximumMemberxoma:RoyaltyPurchaseAgreementMember2019-02-250000791908xoma:KurosBiosciencesAgKurosUsLlcAndKurosRoyaltyFundUsLlcMemberxoma:ContingentConsiderationSalesMilestonesMemberxoma:RoyaltyPurchaseAgreementMember2022-06-300000791908xoma:AronoraIncMemberxoma:ContingentConsiderationRoyaltyMilestonesMemberxoma:RoyaltyPurchaseAgreementMember2022-06-300000791908xoma:AffitechResearchAsMemberxoma:ContingentConsiderationSalesMilestonesMemberxoma:CommercialPaymentPurchaseAgreementMember2022-06-300000791908xoma:AffitechResearchAsMemberxoma:ContingentConsiderationRegulatoryMilestonesMemberxoma:CommercialPaymentPurchaseAgreementMember2022-06-300000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementMember2022-06-300000791908xoma:AffitechResearchAsMemberxoma:ContingentConsiderationRegulatoryMilestonesMemberxoma:CommercialPaymentPurchaseAgreementMember2021-12-310000791908xoma:AffitechResearchAsMemberxoma:ContingentConsiderationRegulatoryMilestonesMemberxoma:CommercialPaymentPurchaseAgreementMember2021-10-060000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementMember2019-02-250000791908us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000791908xoma:AffitechResearchAsMemberxoma:ContingentConsiderationRegulatoryMilestonesMemberxoma:CommercialPaymentPurchaseAgreementMember2022-01-012022-06-300000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2022-01-282022-01-280000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2021-10-062021-10-060000791908xoma:AffitechResearchAsMemberxoma:CommercialPaymentPurchaseAgreementMember2022-04-012022-06-300000791908xoma:BioasisTechnologiesIncMemberxoma:RoyaltyPurchaseAgreementMember2022-01-012022-06-300000791908xoma:AgenusIncMemberxoma:MerckImmunoOncologyProductMemberxoma:RoyaltyPurchaseAgreementMember2020-11-012020-11-300000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2017-08-242017-08-240000791908xoma:RezoluteIncMemberxoma:LicenseAgreementMember2017-12-062017-12-060000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2015-09-302015-09-300000791908xoma:ViractaTherapeuticsInc.Memberxoma:RoyaltyPurchaseAgreementMember2021-03-220000791908xoma:PalobiofarmaSLMemberxoma:RoyaltyPurchaseAgreementMember2019-09-260000791908xoma:AronoraIncMemberxoma:NonBayerProductsMemberxoma:RoyaltyPurchaseAgreementMember2019-04-070000791908xoma:AronoraIncMemberxoma:RoyaltyPurchaseAgreementMember2019-04-070000791908xoma:AronoraIncMemberxoma:BayerProductsMemberxoma:RoyaltyPurchaseAgreementMember2019-04-070000791908us-gaap:CommonStockMember2022-01-012022-03-310000791908us-gaap:CommonStockMember2021-01-012021-03-310000791908dei:AdrMemberxoma:AtMarketIssuanceSalesAgreement2021Member2021-08-052022-06-300000791908us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2021-04-012021-06-300000791908xoma:TwoThousandEighteenAtMarketAgreementMember2018-12-182022-06-300000791908xoma:NovartisPharmaAGMemberus-gaap:CommonStockMemberxoma:XOMA052LicenseAgreementMember2017-08-242017-08-240000791908us-gaap:CommonStockMember2022-04-012022-06-300000791908us-gaap:CommonStockMember2021-04-012021-06-300000791908xoma:RezoluteIncMember2020-10-012020-10-310000791908us-gaap:RetainedEarningsMember2022-06-300000791908us-gaap:AdditionalPaidInCapitalMember2022-06-300000791908us-gaap:RetainedEarningsMember2022-03-310000791908us-gaap:AdditionalPaidInCapitalMember2022-03-3100007919082022-03-310000791908us-gaap:RetainedEarningsMember2021-12-310000791908us-gaap:AdditionalPaidInCapitalMember2021-12-310000791908us-gaap:RetainedEarningsMember2021-06-300000791908us-gaap:AdditionalPaidInCapitalMember2021-06-300000791908us-gaap:RetainedEarningsMember2021-03-310000791908us-gaap:AdditionalPaidInCapitalMember2021-03-3100007919082021-03-310000791908us-gaap:RetainedEarningsMember2020-12-310000791908us-gaap:AdditionalPaidInCapitalMember2020-12-310000791908us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2022-06-300000791908us-gaap:SeriesAPreferredStockMemberus-gaap:PreferredStockMember2022-06-300000791908us-gaap:ConvertiblePreferredStockMemberus-gaap:PreferredStockMember2022-06-300000791908us-gaap:CommonStockMember2022-06-300000791908us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2022-03-310000791908us-gaap:SeriesAPreferredStockMemberus-gaap:PreferredStockMember2022-03-310000791908us-gaap:ConvertiblePreferredStockMemberus-gaap:PreferredStockMember2022-03-310000791908us-gaap:CommonStockMember2022-03-310000791908us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2021-12-310000791908us-gaap:SeriesAPreferredStockMemberus-gaap:PreferredStockMember2021-12-310000791908us-gaap:ConvertiblePreferredStockMemberus-gaap:PreferredStockMember2021-12-310000791908us-gaap:CommonStockMember2021-12-310000791908us-gaap:SeriesBPreferredStockMemberus-gaap:PreferredStockMember2021-06-300000791908us-gaap:SeriesAPreferredStockMemberus-gaap:PreferredStockMember2021-06-300000791908us-gaap:ConvertiblePreferredStockMemberus-gaap:PreferredStockMember2021-06-300000791908us-gaap:CommonStockMember2021-06-300000791908us-gaap:SeriesAPreferredStockMemberus-gaap:PreferredStockMember2021-03-310000791908us-gaap:ConvertiblePreferredStockMemberus-gaap:PreferredStockMember2021-03-310000791908us-gaap:CommonStockMember2021-03-310000791908us-gaap:SeriesAPreferredStockMemberus-gaap:PreferredStockMember2020-12-310000791908us-gaap:ConvertiblePreferredStockMemberus-gaap:PreferredStockMember2020-12-310000791908us-gaap:CommonStockMember2020-12-310000791908us-gaap:MeasurementInputSharePriceMember2022-06-300000791908us-gaap:MeasurementInputSharePriceMember2021-12-310000791908xoma:NovartisPharmaAGMemberus-gaap:CommonStockMemberxoma:XOMA052LicenseAgreementMember2017-08-2400007919082021-01-012021-12-310000791908us-gaap:EmployeeStockOptionMember2022-04-012022-06-300000791908us-gaap:EmployeeStockOptionMember2021-04-012021-06-300000791908us-gaap:EmployeeStockOptionMember2021-01-012021-06-300000791908xoma:EmployeeMemberus-gaap:EmployeeStockOptionMember2022-01-012022-06-300000791908srt:DirectorMemberus-gaap:EmployeeStockOptionMember2022-01-012022-06-300000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMember2022-04-012022-06-300000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMember2022-01-012022-06-300000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMember2021-04-012021-06-300000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMember2021-01-012021-06-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2022-04-012022-06-300000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2022-04-012022-06-300000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2022-04-012022-06-300000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2022-04-012022-06-300000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2022-04-012022-06-300000791908xoma:AffimedMemberxoma:LicenseAgreementMember2022-04-012022-06-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2022-01-012022-06-300000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2022-01-012022-06-300000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2022-01-012022-06-300000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2022-01-012022-06-300000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2022-01-012022-06-300000791908xoma:AffimedMemberxoma:LicenseAgreementMember2022-01-012022-06-300000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2022-01-012022-01-310000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2021-12-012021-12-310000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2021-10-202021-10-200000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2021-05-012021-05-310000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2021-04-012021-06-300000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2021-04-012021-06-300000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2021-04-012021-06-300000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2021-04-012021-06-300000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2021-04-012021-06-300000791908xoma:AffimedMemberxoma:LicenseAgreementMember2021-04-012021-06-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2021-01-012021-06-300000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2021-01-012021-06-300000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2021-01-012021-06-300000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2021-01-012021-06-300000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2021-01-012021-06-300000791908xoma:AffimedMemberxoma:LicenseAgreementMember2021-01-012021-06-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2020-11-162020-11-160000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2020-10-212020-10-210000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2019-01-012019-12-310000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2017-01-012017-12-310000791908xoma:NovartisPharmaAGMemberxoma:XOMA052LicenseAgreementMember2017-08-242017-08-240000791908us-gaap:SeriesBPreferredStockMember2022-06-300000791908us-gaap:SeriesAPreferredStockMember2022-06-300000791908us-gaap:ConvertiblePreferredStockMember2022-06-300000791908us-gaap:SeriesBPreferredStockMember2021-12-310000791908us-gaap:SeriesAPreferredStockMember2021-12-310000791908us-gaap:ConvertiblePreferredStockMember2021-12-310000791908us-gaap:SeriesBPreferredStockMember2022-05-182022-05-180000791908us-gaap:SeriesAPreferredStockMember2022-05-182022-05-180000791908us-gaap:SeriesBPreferredStockMember2022-03-172022-03-170000791908us-gaap:SeriesAPreferredStockMember2022-03-172022-03-170000791908us-gaap:SeriesBPreferredStockMember2021-10-202021-10-200000791908us-gaap:SeriesAPreferredStockMember2021-10-202021-10-200000791908us-gaap:SeriesBPreferredStockMemberus-gaap:SubsequentEventMember2022-07-152022-07-150000791908us-gaap:SeriesAPreferredStockMemberus-gaap:SubsequentEventMember2022-07-152022-07-150000791908us-gaap:SeriesBPreferredStockMember2022-04-152022-04-150000791908us-gaap:SeriesAPreferredStockMember2022-04-152022-04-150000791908us-gaap:SeriesBPreferredStockMember2022-01-182022-01-180000791908us-gaap:SeriesAPreferredStockMember2022-01-182022-01-180000791908us-gaap:SeriesBPreferredStockMember2022-04-012022-06-300000791908us-gaap:SeriesAPreferredStockMember2022-04-012022-06-300000791908us-gaap:SeriesBPreferredStockMember2021-04-012021-06-300000791908us-gaap:SeriesAPreferredStockMember2021-04-012021-06-300000791908us-gaap:SeriesBPreferredStockMember2021-01-012021-06-300000791908us-gaap:SeriesAPreferredStockMember2021-01-012021-06-300000791908us-gaap:SeriesBPreferredStockMember2022-01-012022-06-300000791908us-gaap:SeriesBPreferredStockMember2021-01-012021-12-310000791908us-gaap:SeriesAPreferredStockMember2021-01-012021-12-310000791908us-gaap:RetainedEarningsMember2022-04-012022-06-300000791908us-gaap:RetainedEarningsMember2022-01-012022-03-310000791908us-gaap:RetainedEarningsMember2021-04-012021-06-300000791908us-gaap:RetainedEarningsMember2021-01-012021-03-310000791908xoma:BiotechnologyValueFundLPMemberxoma:XomaCorporationMemberus-gaap:CommonStockMember2022-06-300000791908xoma:LeasedFacilitiesEmeryvilleCaliforniaMember2022-01-012022-06-300000791908us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000791908us-gaap:FairValueMeasurementsRecurringMember2021-12-310000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMemberxoma:RoyaltyInterestAcquisitionAgreementsMember2016-12-212016-12-210000791908xoma:RezoluteIncMember2022-04-012022-06-300000791908xoma:RezoluteIncMember2022-01-012022-06-300000791908xoma:RezoluteIncMember2021-04-012021-06-300000791908xoma:RezoluteIncMember2021-01-012021-06-300000791908xoma:RezoluteIncMember2022-06-300000791908xoma:RezoluteIncMember2021-12-310000791908us-gaap:EmployeeStockOptionMember2022-06-300000791908us-gaap:EmployeeStockOptionMember2022-01-012022-06-300000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMemberxoma:RoyaltyInterestAcquisitionAgreementsMember2022-06-300000791908xoma:HealthCareRoyaltyPartnersTwoLimitedPartnersMemberxoma:RoyaltyInterestAcquisitionAgreementsMember2021-12-310000791908xoma:NovartisNoteMember2020-10-212020-10-210000791908xoma:AffimedMemberxoma:LicenseAgreementMember2021-12-310000791908xoma:Partner2Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-04-012022-06-300000791908xoma:Partner1Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-04-012022-06-300000791908xoma:Partner4Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-06-300000791908xoma:Partner3Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-06-300000791908xoma:Partner2Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-06-300000791908xoma:Partner1Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-06-300000791908xoma:Partner2Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-04-012021-06-300000791908xoma:Partner1Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-04-012021-06-300000791908xoma:Partner1Memberus-gaap:TradeAccountsReceivableMemberus-gaap:CreditConcentrationRiskMember2021-01-012021-12-310000791908xoma:Partner2Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-06-300000791908xoma:Partner1Memberus-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-06-300000791908xoma:TenYearWarrantsIssuedThirdRangeMember2022-06-300000791908xoma:CommonStockWarrantExercisePrice14.71Member2022-06-300000791908xoma:TenYearWarrantsIssuedThirdRangeMember2021-12-310000791908xoma:CommonStockWarrantExercisePrice14.71Member2021-12-3100007919082021-06-3000007919082020-12-310000791908us-gaap:USTreasuryBillSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908us-gaap:USTreasuryBillSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908us-gaap:FairValueMeasurementsRecurringMember2022-06-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2022-06-300000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2022-06-300000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2022-06-300000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2022-06-300000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2022-06-300000791908xoma:AffimedMemberxoma:LicenseAgreementMember2022-06-300000791908xoma:TakedaPharmaceuticalCompanyLimitedMemberxoma:CollaborationAgreementMember2021-12-310000791908xoma:RezoluteIncMemberxoma:LicenseAgreementAndCommonStockPurchaseAgreementMember2021-12-310000791908xoma:NovartisPharmaAGMemberxoma:Xoma052LicenseAgreementAndIL1TargetLicenseAgreementMember2021-12-310000791908xoma:NovartisInternationalPharmaceuticalLtdMemberxoma:LicenseAgreementMember2021-12-310000791908xoma:JanssenBiotechInc.Memberxoma:LicenseAgreementMember2021-12-310000791908us-gaap:WarrantMember2022-04-012022-06-300000791908us-gaap:EmployeeStockOptionMember2022-04-012022-06-300000791908us-gaap:ConvertiblePreferredStockMember2022-04-012022-06-300000791908us-gaap:WarrantMember2022-01-012022-06-300000791908us-gaap:EmployeeStockOptionMember2022-01-012022-06-300000791908us-gaap:ConvertiblePreferredStockMember2022-01-012022-06-300000791908us-gaap:WarrantMember2021-04-012021-06-300000791908us-gaap:EmployeeStockOptionMember2021-04-012021-06-300000791908us-gaap:ConvertiblePreferredStockMember2021-04-012021-06-300000791908us-gaap:WarrantMember2021-01-012021-06-300000791908us-gaap:EmployeeStockOptionMember2021-01-012021-06-300000791908us-gaap:ConvertiblePreferredStockMember2021-01-012021-06-300000791908us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300000791908us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300000791908us-gaap:GeneralAndAdministrativeExpenseMember2021-04-012021-06-300000791908us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-06-3000007919082021-01-012021-06-300000791908us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-3000007919082022-04-012022-06-300000791908us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-3100007919082022-01-012022-03-310000791908us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000007919082021-04-012021-06-300000791908us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100007919082021-01-012021-03-3100007919082022-06-3000007919082021-12-310000791908us-gaap:SeriesAPreferredStockMember2022-01-012022-06-300000791908us-gaap:CommonStockMember2022-01-012022-06-300000791908dei:AdrMember2022-01-012022-06-3000007919082022-08-0100007919082022-01-012022-06-30xoma:customerxoma:facilityxbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:purexoma:itemxoma:productiso4217:EURxoma:periodxoma:agreement

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________

Commission File No. 001-39801

XOMA Corporation

(Exact name of registrant as specified in its charter)

Delaware

   

52-2154066

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

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

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

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)

XOMAO

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No  

As of August 1, 2022, the registrant had 11,450,823 shares of common stock, $0.0075 par value per share, outstanding.

Table of Contents

XOMA CORPORATION

FORM 10-Q

TABLE OF CONTENTS

    

    

Page

Glossary of Terms and Abbreviations

1

PART I

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

3

Condensed Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021

3

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

4

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)

5

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (unaudited)

7

Notes to Condensed Consolidated Financial Statements (unaudited)

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

32

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

PART II

OTHER INFORMATION

38

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

70

Item 3.

Defaults Upon Senior Securities

70

Item 4.

Mine Safety Disclosure

70

Item 5.

Other Information

70

Item 6.

Exhibits

71

Signatures

73

Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS

Abbreviations

    

Definition

2018 Common Stock ATM Agreement

At The Market Issuance Sales Agreement with HCW dated December 18, 2018

2021 Series B Preferred Stock ATM Agreement

At The Market Issuance Sales Agreement with B. Riley dated August 5, 2021

‘40 Act

Investment Company Act of 1940

ACA

The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010

Affimed

Affimed N.V.

Affitech

Affitech Research AS

Affitech CPPA

the Company's Commercial Payment Purchase Agreement with Affitech dated October 6, 2021

Agenus

Agenus, Inc. and certain affiliates

Agenus RPA

the Company's Royalty Purchase Agreement with Agenus dated September 20, 2018

Anti-TGFβ Antibody License Agreement

the Company's License Agreement with Novartis dated September 30, 2015

Aronora

Aronora, Inc.

Aronora RPA

the Company's Royalty Purchase Agreement with Aronora dated April 7, 2019

AstraZeneca

AstraZeneca plc

ASC

Accounting Standards Codification

ASC 606

ASC Topic 606, Revenue from Contracts with Customers

Bayer

Bayer Pharma AG

Bioasis

Bioasis Technologies, Inc. and certain affiliates

Bioasis RPA

the Company's Royalty Purchase Agreement with Bioasis dated February 25, 2019

BLA

Biologic License Application

Black-Scholes Model

Black-Scholes Option Pricing Model

B. Riley

B. Riley Securities, Inc.

BVF

Biotechnology Value Fund, L.P.

CCPA

California Consumer Privacy Act of 2018, collectively the Act and its regulations

CARES

Coronavirus Aid, Relief, and Economic Security

cGMP

current Good Manufacturing Processes

Chiesi

Chiesi Farmaceutici S.p.A.

Chiron

Chiron Corporation

Chiron Collaboration Agreement

the Company's Collaboration Agreement with Chiron dated February 27, 2004, as amended in May 2005, July 2008 and September 2015

Company

XOMA Corporation, including subsidiaries

CPPA

Commercial Payment Purchase Agreement

CPRA

California Privacy Rights Act

EMA

European Medicines Agency

ESPP

2015 Employee Stock Purchase Plan, as amended

EU

European Union

FCPA

U.S. Foreign Corrupt Practices Act of 1977, as amended

FDA

U.S. Food and Drug Administration

GAAP

Generally accepted accounting principles

G&A

General and administrative

GDPR

General Data Protection Regulation

Gevokizumab License Agreement

the Company's License Agreement with Novartis dated August 24, 2017

HCRP

Healthcare Royalty Partners II, L.P.

1

Table of Contents

HCW

H.C. Wainwright & Co., LLC

HIPAA

Federal Health Insurance Portability and Accountability Act of 1996

ICE®

Innate cell engager

Janssen

Janssen Biotech, Inc.

Kuros

Kuros Biosciences AG, Kuros US LLC and Kuros Royalty Fund (US) LLC, collectively

Kuros RPA

the Company's Royalty Purchase Agreement with Kuros dated July 14, 2021

Merck

Merck Sharp & Dohme Corp

NDA

New Drug Application

NOL

net operating loss

Novartis

Novartis Pharma AG, Novartis International Pharmaceutical Ltd., Novartis Institutes for Biomedical Research, Inc. and/or Novartis Vaccines and Diagnostics, Inc.

Novartis Note Agreement

the secured note agreement with Novartis (previously Chiron) dated May 26, 2005, as amended

Novartis Note

the note with Novartis pursuant to the Novartis Note Agreement

Ology Bioservices

Ology Bioservices Inc. (formerly Nanotherapeutics Inc., now a wholly owned subsidiary of National Resilience, Inc.)

Palo

Palobiofarma, S.L.

Palo RPA

the Company's Royalty Purchase Agreement with Palo dated September 26, 2019

Pfizer

Pfizer, Inc.

R&D

Research and development

Regeneron

Regeneron Pharmaceuticals, Inc.

Retention Plan

Retention and Severance Plan dated March 31, 2022

Rezolute

Rezolute, Inc., formerly Antria Bio

Rezolute License Agreement

the Company's License Agreement with Rezolute dated December 6, 2017, as amended in March 2018, January 2019 and March 2020

RPA

Royalty Purchase Agreement

Roche

F. Hoffmann-La Roche AG

SEC

U.S. Securities and Exchange Commission

Second Bioasis RPA

the Company's Royalty Purchase Agreement with Bioasis dated November 2, 2020

Series A Preferred Stock

the 8.625% Series A cumulative, perpetual preferred stock issued in December 2020

Series B Preferred Stock

the 8.375% Series B cumulative, perpetual preferred stock issued in April 2021

Series A and Series B Preferred Stock

Series A Preferred Stock and Series B Preferred Stock, collectively

Series B Depositary Shares

the depositary shares, each representing 1/1000th interest in a share of Series B Preferred Stock

Sonnet

Sonnet BioTherapeutics, Inc., formerly Oncobiologics, Inc.

Sonnet Collaboration Agreement

the Company's Collaboration Agreement with Sonnet dated July 23, 2012, as amended in May 2019

SOX

Sarbanes-Oxley Act of 2002

SVB

Silicon Valley Bank

SVB Loan Agreement

the loan and security agreement with SVB dated May 7, 2018, as amended

SVB Loan

the loan with SVB pursuant to the SVB Loan Agreement

Takeda

Takeda Pharmaceutical Company Limited

Takeda Collaboration Agreement

the Company's Collaboration Agreement with Takeda dated November 1, 2006, as amended in February 2007 and February 2009

Viracta

Viracta Therapeutics, Inc.

Viracta RPA

the Company's Royalty Purchase Agreement with Viracta dated March 22, 2021

XOMA

XOMA Corporation, a Delaware corporation, including subsidiaries

2

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

XOMA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

June 30, 

December 31, 

    

2022

    

2021

(unaudited)

(Note 1)

ASSETS

Current assets:

Cash and cash equivalents

$

83,182

$

93,328

Restricted cash

2,049

Short-term equity securities

523

774

Trade and other receivables, net

 

5

 

209

Short-term royalty and commercial payment receivables

2,500

Prepaid expenses and other current assets

 

1,051

 

613

Total current assets

 

87,261

 

96,973

Property and equipment, net

 

10

 

13

Operating lease right-of-use assets

116

200

Long-term royalty and commercial payment receivables

 

66,575

 

69,075

Other assets - long term

 

260

 

301

Total assets

$

154,222

$

166,562

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

1,153

$

1,072

Accrued and other liabilities

 

1,026

 

525

Income taxes payable

 

 

91

Contingent consideration under RPAs and CPPAs

3,075

8,075

Operating lease liabilities

133

195

Unearned revenue recognized under units-of-revenue method

 

1,669

 

1,641

Preferred stock dividend accrual

1,368

1,368

Total current liabilities

 

8,424

 

12,967

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

 

10,842

 

11,685

Long-term operating lease liabilities

34

Total liabilities

 

19,266

 

24,686

Commitments and Contingencies (Note 9)

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 June 30, 2022 and December 31, 2021

49

49

8.375% Series B cumulative, perpetual preferred stock, 1,600 shares issued and outstanding at June 30, 2022 and December 31, 2021

 

Convertible preferred stock, 5,003 shares issued and outstanding at June 30, 2022 and December 31, 2021

 

 

Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,423,823 and 11,315,263 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

 

86

 

85

Additional paid-in capital

 

1,307,059

 

1,307,030

Accumulated deficit

 

(1,172,238)

 

(1,165,288)

Total stockholders’ equity

 

134,956

 

141,876

Total liabilities and stockholders’ equity

$

154,222

$

166,562

The accompanying notes are an integral part of these condensed consolidated financial statements.

(Note 1) The condensed consolidated balance sheet as of December 31, 2021, has been derived from the audited consolidated financial statements as of that date included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

3

Table of Contents

XOMA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2022

    

2021

    

2022

    

2021

Revenues:

Revenue from contracts with customers

$

525

$

525

$

3,275

$

544

Revenue recognized under units-of-revenue method

 

458

 

376

 

815

 

731

Total revenues

 

983

 

901

 

4,090

 

1,275

Operating expenses:

 

 

 

 

Research and development

 

40

 

38

 

96

 

99

General and administrative

 

5,710

 

3,927

 

10,826

 

10,667

Total operating expenses

 

5,750

 

3,965

 

10,922

 

10,766

Loss from operations

 

(4,767)

 

(3,064)

 

(6,832)

 

(9,491)

Other income (expense), net:

 

 

 

 

Interest expense

 

 

(172)

 

 

(461)

Loss on extinguishment of debt

 

 

(300)

 

(300)

Other income (expense), net

 

97

 

1,299

 

(118)

 

642

Net loss and comprehensive loss

$

(4,670)

$

(2,237)

$

(6,950)

$

(9,610)

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

(1,368)

(1,293)

(2,736)

(1,824)

Net loss attributable to common stockholders, basic and diluted

$

(6,038)

$

(3,530)

$

(9,686)

$

(11,434)

Basic and diluted net loss per share attributable to common stockholders

$

(0.53)

$

(0.31)

$

(0.85)

$

(1.02)

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

11,421

11,285

11,376

11,263

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents

XOMA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

(in thousands)

Series A 

Series B

Convertible

Additional

Total

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Paid-In

Accumulated

Stockholders’

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

     

Shares

  

Amount

 

Capital

   

Deficit

  

Equity

Balance, December 31, 2021

984

$

49

2

$

5

$

 

11,315

$

85

$

1,307,030

$

(1,165,288)

$

141,876

Exercise of stock options

 

 

 

 

91

 

1

 

632

 

 

633

Issuance of common stock related to 401(k) contribution

 

 

 

 

4

 

 

85

 

 

85

Stock-based compensation expense

 

 

 

 

 

 

978

 

 

978

Preferred stock dividends

 

 

 

 

 

 

(1,368)

 

 

(1,368)

Net loss and comprehensive loss

 

 

 

 

 

 

 

(2,280)

 

(2,280)

Balance, March 31, 2022

984

$

49

2

$

5

$

 

11,410

$

86

$

1,307,357

$

(1,167,568)

$

139,924

Exercise of stock options

 

 

11

189

189

Issuance of common stock related to ESPP

 

 

3

45

45

Stock-based compensation expense

 

 

836

836

Preferred stock dividends

 

 

(1,368)

(1,368)

Net loss and comprehensive loss

 

 

(4,670)

(4,670)

Balance, June 30, 2022

984

$

49

2

$

5

$

 

11,424

$

86

$

1,307,059

$

(1,172,238)

$

134,956

5

Table of Contents

Series A 

Series B

Convertible

Additional

Total

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Paid-In

Accumulated

Stockholders’

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

     

Shares

  

Amount

 

Capital

   

Deficit

  

Equity

Balance, December 31, 2020

984

$

49

$

5

$

 

11,229

$

84

$

1,267,377

$

(1,181,086)

$

86,424

Exercise of stock options

 

 

 

 

24

 

 

388

 

 

388

Exercise of common stock warrants

 

 

 

 

5

 

 

 

 

Issuance of common stock related to 401(k) contribution

 

 

 

 

2

 

 

90

 

 

90

Stock-based compensation expense

 

 

 

 

 

 

2,898

 

 

2,898

Preferred stock dividends

 

 

 

 

 

 

(707)

 

 

(707)

Net loss and comprehensive loss

 

 

 

 

 

 

 

(7,373)

 

(7,373)

Balance, March 31, 2021

984

$

49

$

5

$

 

11,260

$

84

$

1,270,046

$

(1,188,459)

$

81,720

Exercise of stock options

 

 

49

1

593

594

Issuance of common stock related to ESPP

 

 

1

17

17

Stock-based compensation expense

 

 

768

768

Issuance of preferred stock

 

2

 

37,140

37,140

Preferred stock dividends

 

 

(1,424)

(1,424)

Net loss and comprehensive loss

 

 

(2,237)

(2,237)

Balance, June 30, 2021

984

$

49

2

$

5

$

 

11,310

$

85

$

1,307,140

$

(1,190,696)

$

116,578

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Table of Contents

XOMA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

Six Months Ended June 30, 

    

2022

    

2021

Cash flows from operating activities:

Net loss

$

(6,950)

$

(9,610)

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation expense

 

1,815

 

3,666

Common stock contribution to 401(k)

 

85

 

90

Depreciation

 

3

 

4

Amortization of debt issuance costs, debt discount and final payment on debt

 

 

200

Loss on extinguishment of debt

 

300

Non-cash lease expense

 

84

 

79

Change in fair value of equity securities

 

251

 

(617)

Changes in assets and liabilities:

Trade and other receivables, net

 

204

 

251

Income tax receivable

1,526

Prepaid expenses and other assets

 

(398)

 

(701)

Accounts payable and accrued liabilities

 

582

 

748

Income taxes payable

(91)

Operating lease liabilities

(96)

(88)

Unearned revenue recognized under units-of-revenue method

 

(815)

 

(731)

Other liabilities

 

 

(6)

Net cash used in operating activities

 

(5,326)

 

(4,889)

Cash flows from investing activities:

Payment of contingent consideration under RPAs and CPPAs

(5,000)

Payments related to purchase of royalty rights and other commercial payment rights

 

 

(13,500)

Net cash used in investing activities

 

(5,000)

 

(13,500)

Cash flows from financing activities:

Proceeds from issuance of preferred stock

 

 

40,000

Payment of preferred stock dividends

(2,736)

(707)

Payment of preferred and common stock issuance costs

(3,106)

Proceeds from exercise of options

 

1,905

 

1,355

Taxes paid related to net share settlement of equity awards

 

(1,038)

 

(355)

Principal payments – debt

 

 

(4,250)

Payment for extinguishment of debt

(17,103)

Payment for debt modification fee

(24)

Net cash (used in) provided by financing activities

 

(1,869)

 

15,810

Net decrease in cash, cash equivalents and restricted cash

 

(12,195)

 

(2,579)

Cash and restricted cash at the beginning of the period

 

95,377

 

86,364

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

$

83,182

$

83,785

Supplemental Cash Flow Information:

  

Cash paid for taxes

$

95

$

Cash paid for interest

$

$

311

Non-cash investing and financing activities:

 

  

  

Preferred stock dividend accrual

$

1,368

$

1,424

Accrued cost related to issuance of preferred stock

$

$

105

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

Table of Contents

XOMA CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Description of Business

XOMA, a Delaware corporation, is a biotech royalty aggregator with a sizable portfolio of economic rights to future potential milestone and royalty payments associated with partnered pre-commercial therapeutic candidates. The Company’s portfolio was built through licensing its proprietary products and platforms from its legacy discovery and development business, combined with the acquisition of rights to future milestones and royalties that the Company has made since the royalty aggregator business model was implemented in 2017. The Company’s drug royalty aggregator business is focused on early to mid-stage clinical assets primarily in Phase 1 and 2 with significant commercial sales potential that are licensed to large-cap partners. The Company expects that most of its future revenue will be based on payments the Company may receive for milestones and royalties related to these programs.

Liquidity and Financial Condition

The Company has incurred significant operating losses and negative cash flows from operations since its inception. As of June 30, 2022, the Company had cash and cash equivalents of $83.2 million. Based on the Company’s current cash balance and its ability to control discretionary spending, such as royalty acquisitions, the Company has evaluated and concluded its financial condition is sufficient to fund its planned operations and commitments and contractual obligations for a period of at least one year following the date that these condensed consolidated financial statements are issued.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions among consolidated entities were eliminated upon consolidation. The unaudited condensed consolidated financial statements were prepared in accordance with GAAP in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. As permitted under those rules certain footnotes or other financial information can be condensed or omitted. These financial statements and related disclosures have been prepared with the assumption that users of the interim financial information have read or have access to the audited consolidated financial statements for the preceding fiscal year. Accordingly, these statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 8, 2022.

These financial statements have been prepared on the same basis as the Company’s annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s consolidated financial information. The interim results of operations are not necessarily indicative of the results that may be expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates including, but not limited to, those related to revenue recognition, revenue recognized under the units-of-revenue method, royalty and commercial payment receivables, legal contingencies, contingent consideration and stock-based compensation. The Company bases its estimates on historical experience and on various other market-specific and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

8

Table of Contents

Actual results may differ significantly from these estimates, such as the Company’s amortization of the payments received from HCRP. Under the contracts with HCRP, the amortization for the reporting period is calculated based on the payments expected to be made by the licensees to HCRP over the term of the arrangement. Any changes to the estimated payments by the licensees to HCRP can result in a material adjustment to revenue previously reported.

The COVID-19 pandemic has resulted in a global slowdown of economic activity which has led to delays and could result in further delays or terminations of some clinical trials underlying the Company’s RPAs. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company’s financial statements.

Cash, Cash Equivalents and Restricted Cash

Cash consists of bank deposits held in business checking and interest-bearing deposit accounts. As of June 30, 2022, the Company had cash equivalent balances of $30.0 million, defined as highly liquid financial instruments purchased with original maturities of three months or less. The Company considers all highly liquid debt instruments with maturities of three months or less at the time the Company acquires them and that can be liquidated without prior notice or penalty to be cash equivalents. As of December 31, 2021, the Company did not have any cash equivalent balances.

Restricted cash as of December 31, 2021 consisted of bank deposits held to pay dividends on the Company’s Series A and Series B Preferred Stock. As of June 30, 2022, the Company has paid the first year of dividends for the Series A and Series B Preferred stock and is no longer required to hold a restricted cash balance.

The Company maintains cash balances at commercial banks. Balances commonly exceed the amount insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to any significant credit risk with respect to such cash.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (in thousands):

June 30,

December 31,

2022

2021

Cash and cash equivalents

$

83,182

$

93,328

Restricted cash

2,049

Total cash, cash equivalents and restricted cash

$

83,182

$

95,377

Revenue Recognition

The Company recognizes revenue from all contracts with customers according to ASC 606, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised

9

Table of Contents

within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied.

The Company recognizes revenue from its license and collaboration arrangements and royalties. The terms of the arrangements generally include payment to the Company of one or more of the following: non-refundable, upfront license fees, development, regulatory and commercial milestone payments, and royalties on net sales of licensed products.

License of intellectual property

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, such as transfer of related materials, process and know-how, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. Under the Company’s license agreements, the nature of the combined performance obligation is the granting of licenses to the customers as the other promises are not separately identifiable in the context of the arrangement. Since the Company grants the license to a customer as it exists at the point of transfer and is not involved in any future development or commercialization of the products related to the license, the nature of the license is a right to use the Company’s intellectual property as transferred. As such, the Company recognizes revenue related to the combined performance obligation upon completion of the delivery of the related materials, process and know-how (i.e., at a point in time).

Milestone payments

At the inception of each arrangement that includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. The Company uses the most likely amount method for development and regulatory milestone payments.

If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and earnings in the period of adjustment.

Royalties

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract

10

Table of Contents

inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

Sale of Future Revenue Streams

The Company has sold its rights to receive certain milestones and royalties on product sales. In the circumstance where the Company has sold its rights to future milestones and royalties under a license agreement and also maintains limited continuing involvement in the arrangement (but not significant continuing involvement in the generation of the cash flows that are due to the purchaser), the Company defers recognition of the proceeds it receives for the sale of milestone or royalty streams and recognizes such unearned revenue as revenue under the units-of-revenue method over the life of the underlying license agreement. Under the units-of-revenue method, amortization for a reporting period is calculated by computing a ratio of the proceeds received from the purchaser to the total payments expected to be made to the purchaser over the term of the agreement, and then applying that ratio to the period’s cash payment.

Estimating the total payments expected to be received by the purchaser over the term of such arrangements requires management to use subjective estimates and assumptions. Changes to the Company’s estimate of the payments expected to be made to the purchaser over the term of such arrangements could have a material effect on the amount of revenues recognized in any particular period.

Stock-Based Compensation

The Company recognizes compensation expense for all stock-based payment awards made to the Company’s employees, consultants and directors that are expected to vest based on estimated fair values. The valuation of stock option awards is determined at the date of grant using the Black-Scholes Model. The Black-Scholes Model requires inputs such as the expected term of the option, expected volatility and risk-free interest rate. To establish an estimate of expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations and volatility. The estimate of expected volatility is based on the Company’s historical volatility. The risk-free rate is based on the yield available on United States Treasury zero-coupon issues corresponding to the expected term of the award. The Company records forfeitures when they occur. The Company records compensation expense for service-based awards on a straight-line basis over the requisite service period, which is generally the vesting period of the award, or to the date on which retirement eligibility is achieved, if shorter.

Equity Securities

The Company entered into a license agreement with Rezolute in December 2017, in which it received shares of common stock from Rezolute (Note 4). Equity investments in Rezolute are classified in the condensed consolidated balance sheets as equity securities. The equity securities are measured at fair value, with changes in fair value recorded in the other income (expense), net line item of the condensed consolidated statement of operations and comprehensive loss at each reporting period. The Company remeasures its equity investments at each reporting period until such time that the investment is sold or disposed of. If the Company sells an investment, any realized gains and losses on the sale of the securities will be recognized in the condensed consolidated statement of operations and comprehensive loss in the period of sale.

Purchase of Rights to Future Milestones, Royalties and Commercial Payments

The Company has purchased rights to receive a portion of certain future developmental, regulatory and commercial sales milestones, royalties and option fees on sales of products currently in clinical development. The Company acquired such rights from various entities and recorded the amount paid for these rights as long-term royalty receivables (Note 5). In addition, the Company may be obligated to make contingent payments related to certain product development milestones, fees upon exercise of options related to future license products and sales-based milestones. The contingent payments are evaluated whether they are freestanding instruments or embedded derivatives. If the contingent payments fall within the scope of ASC 815, the contingent payments are measured at fair value at the inception of the arrangement, and subject to remeasurement to fair value each reporting period. Any changes in the estimated fair value are recorded in the condensed consolidated statement of operations and comprehensive loss.

11

Table of Contents

The Company accounts for milestone and royalty rights related to developmental pipeline products on a non-accrual basis using the cost recovery method. These developmental pipeline products are non-commercialized, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. The Company is not yet able to reliably forecast future cash flows given their pre-commercial stages of development. The related receivable balance is classified as noncurrent or current based on whether payments are probable to be received in the near term. Under the cost recovery method, any milestone or royalty payment received is recorded as a direct reduction of the recorded receivable balance. When the recorded receivable balance has been fully collected, any additional amounts collected are recognized as revenue.

The Company reviews public information on clinical trials, press releases and updates from its partners regularly to identify any impairment indicators or changes in expected recoverability of the long-term royalty receivable asset. If an impairment indicator is identified, and the Company determines expected future cash flows discounted to the current period are less than the carrying value of the asset, the Company will record impairment. The impairment will be recognized by reducing the financial asset to an amount that represents the present value of the most recent estimate of future cash flows. No impairment indicators were identified, and no impairment was recorded as of June 30, 2022 and December 31, 2021.

Leases

The Company leases its headquarters office space in Emeryville, California.

The Company determines the initial classification and measurement of its right-of-use assets and lease liabilities at the lease commencement date and thereafter if modified. The lease term includes any renewal options and termination options that the Company is reasonably certain to exercise. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its incremental borrowing rate. The incremental borrowing rate is determined by using the rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments for a similar term and in a similar economic environment. The Company built its incremental borrowing rate starting with the interest rate on its fully collateralized debt and then adjusted it for lease term length.

Rent expense for the operating lease is recognized on a straight-line basis, over the reasonably assured lease term based on the total lease payments and is included in operating expenses in the condensed consolidated statements of operations and comprehensive loss.

The Company has elected the practical expedient to not separate lease and non-lease components. The Company’s non-lease components are primarily related to property maintenance, which varies based on future outcomes, and thus is recognized in rent expense when incurred.

Income Taxes

The Company accounts for income taxes using the liability method under which deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount which is more likely than not to be realizable.

The recognition, derecognition and measurement of a tax position is based on management’s best judgment given the facts, circumstances and information available at each reporting date. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits.

12

Table of Contents

Net Loss per Share Attributable to Common Stockholders

The Company calculates basic and diluted loss per share attributable to common stockholders using the two-class method. The Company’s convertible Series X preferred stocks participate in any dividends declared by the Company on its common stock and are therefore considered to be participating securities. The Company’s Series A and Series B Preferred Stock do not participate in any dividends or distribution by the Company on its common stock and are therefore not considered to be participating securities.

Under the two-class method, net income, as adjusted for any accumulated dividends on Series A and Series B Preferred Stock for the period and any deemed dividends related to beneficial conversion features on convertible preferred stock, if applicable, is allocated to each class of common stock and participating security as if all of the net income for the period had been distributed. Undistributed earnings allocated to participating securities are subtracted from net income in determining net income attributable to common stockholders. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. Basic net loss per share attributable to common stockholders is then calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. All participating securities are excluded from the basic weighted average common shares outstanding.

Diluted net loss per share attributable to common stockholders is based on the weighted average number of shares outstanding during the period, adjusted to include the assumed exercise of certain stock options and warrants for common stock. The calculation of diluted net loss per share attributable to common stockholders requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of any outstanding options or warrants, the presumed exercise of such securities is dilutive to net loss per share attributable to common stockholders for the period. Adjustments to the denominator are required to reflect the related dilutive shares. The Company’s Series A and Series B Preferred Stock become convertible upon the occurrence of specific events other than a change in the Company’s share price and, therefore, are not included in the diluted shares until the contingency is resolved.

Concentration of Risk

Cash, cash equivalents and receivables are financial instruments which potentially subject the Company to concentrations of credit risk, as well as liquidity risk.

The Company monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business but does not generally require collateral on receivables. For the three months ended June 30, 2022, two partners represented 51% and 47% of total revenues. For the six months ended June 30, 2022, four partners represented 49%, 20%, 18% and 12% of total revenues. For the three months ended June 30, 2021, two partners represented 55% and 42% of total revenues. For the six months ended June 30, 2021, two partners represented 57% and 39% of total revenues. As of December 31, 2021, one partner represented 100% of the trade receivables, net balance. As of June 30, 2022, the Company had no trade receivables, net balance.

Comprehensive Loss

Comprehensive loss is comprised of two components: net loss and other comprehensive loss. Other comprehensive loss refers to gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net loss. The Company did not record any transactions within other comprehensive loss in the periods presented and, therefore, the net loss and comprehensive loss were the same for all periods presented.

Accounting Pronouncements Recently Adopted

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (