On March 10, 2019 XOMA Corporation (Nasdaq: XOMA) reported its fourth quarter and full-year 2019 financial results and business highlights (Press release, Xoma, MAR 10, 2020, View Source [SID1234555373]).

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"2019 was a tremendous year for XOMA. We added 20 new assets to our royalty license portfolio, eleven of which are clinical-stage candidates. One of our licensees, Janssen Biotech, conducted a portfolio review and identified multiple compounds that were born from an agreement between our companies. As we are constructing XOMA’s portfolio to generate royalty candidates over an extended time horizon, we acquired interests in two exciting platform technologies that we believe will produce multiple clinical candidates to further increase our royalty license portfolio. We entered 2020 with a royalty-potential portfolio of more than 65 partner-funded assets," stated Jim Neal, Chief Executive Officer at XOMA. "Our business model has the potential to generate significant revenue from milestone payments and royalties. In 2019, we received $15.8 million from our partners. Given our royalty acquisition achievements over the last three years and the opportunities before us, we raised an additional $22 million in a rights offering at the end of the year. We anticipate we will deploy this capital to continue building XOMA’s royalty-interest and milestone-bearing portfolio."

Business Highlights
XOMA completed four milestone and royalty acquisition transactions in 2019 that added eleven new potential royalty-bearing assets and interests in two platform technologies to the Company’s portfolio.

Acquired a milestone and royalty interest in two Bayer assets, one Bayer option, and two unpartnered candidates from Aronora.
Acquired a royalty interest in one Novartis asset and five clinical-stage assets from Palobiofarma.
Acquired royalty interest in platform technologies being developed at Bioasis Technologies and Sonnet BioTherapeutics.
Added nine Janssen Biotech assets to XOMA’s royalty portfolio.
Received $15.8 million from partners during 2019.
Completed a $22 million rights offering with XOMA stockholders including BVF Partners, LP.
2019 Updates About Partnered Assets in Development
"Last year two of our partners, Novartis and Sesen Bio, announced significant clinical developments that have the potential to offer patients with few treatment options the opportunity to access new therapies that have clinically meaningful benefits," Mr. Neal continued.

Novartis-licensed assets:

Novartis presented first-of-its-kind histology data with iscalimab (CFZ533)1 at the American Transplant Congress. The data showed 60 percent of iscalimab-treated transplant patients have normal kidney histology at least one year after transplant, compared with 0 percent with tacrolimus (current standard of care)2. The company highlighted iscalimab and its development plans at the Novartis R&D Day on December 5, 2019. Novartis now has seven clinical studies with iscalimab underway.
Novartis launched its clinical program for gevokizumab (VPM087) (anti-IL1β allosteric modulator monoclonal antibody) 3 with a clinical study in patients with metastatic colorectal cancer, gastroesophageal cancer, and renal cell carcinoma.
Sesen Bio reported positive top-line Phase 3 data and subsequently initiated its rolling Biologics License Application (BLA) filing for Vicinium for the treatment of BCG-unresponsive non-muscle invasive bladder cancer (NMIBC)4. The company has stated it anticipates completing its filing in the second half of 2020.

Takeda-licensed assets:

Takeda expanded the TAK-0794 clinical program and now has four studies ongoing.
Takeda and Molecular Templates began enrolling patients in their first TAK-1694 clinical program.
Aronora initiated a Phase 2 study with AB002 (E-WE thrombin)4 in patients with end-stage renal disease on chronic hemodialysis.

AVEO Oncology expanded the clinical program testing ficlatuzumab (AV-299)4 and now is studying the compound’s potential efficacy in a wide variety of oncology indications.

Mr. Neal concluded, "The clinical advancements continued into 2020. In February, Rezolute, Inc., announced the launch of its Phase 2b clinical trial for RZ358 (formerly XOMA 358) in patients with congenital hyperinsulinism (CHI). Given the insight we gained into this terrible condition during our early development of this compound and the extraordinary families we met, we are truly hopeful Rezolute succeeds in its development efforts for RZ358."

Financial Results
XOMA recorded total revenues of $0.4 million for the fourth quarter of 2019, compared to $1.7 million for the fourth quarter of 2018. For the full year of 2019, XOMA recorded revenues of $18.4 million, compared to $5.3 million for the full year of 2018. Revenues for the full year of 2019 reflect $14.0 million recognized under the Company’s license agreement and common stock purchase agreement with Rezolute and $2.5 million in revenue earned from a one-time payment under XOMA’s license agreement with Janssen. Revenues for the full year of 2018 include $1.8 million recognized under the license agreement and common stock purchase agreement with Rezolute, $1.4 million in milestone revenue earned under XOMA’s license agreement with Janssen, and $0.8 million in milestone revenue earned under XOMA’s license agreement with Compugen.

Research and development (R&D) expenses were $0.1 million for the fourth quarter of 2019, compared to $0.2 million for the fourth quarter of 2018. Research & development expenses for the full year of 2019 were $1.3 million, compared to $1.7 million for the same period in 2018. The decrease of $0.4 million in 2019, as compared with 2018, was primarily due to a reduction in headcount of R&D employees.

General and administrative expenses were $4.3 million for the fourth quarter of 2019, compared to $4.3 million for the fourth quarter of 2018. General & administrative expenses were $21.0 million for the full year of 2019, compared to $18.6 million for the full year of 2018. The increase of $2.4 million in 2019 as compared with 2018 was primarily due to a $0.9 million increase for expenses incurred in connection with a separation agreement with our Chief Business Officer, which included $0.5 million in stock-based compensation expense for modifications to vested stock options and $0.4 million in separation benefits, an increase of $0.7 million in stock-based compensation excluding the option modifications, a $0.6 million increase in common area maintenance charges related to our legacy leases, and a $0.4 million increase in expenses related to investor communications.

Interest expense for the fourth quarter of 2019 was $0.6 million, as compared to $0.4 million for the fourth quarter of 2018. For the full year of 2019, interest expense was $1.9 million, compared with $0.9 million reported in the full year of 2018. The increase in 2019 is primarily due to the increase in the outstanding loan balance with Silicon Valley Bank due to the Company’s borrowing activities related to the royalty purchase agreements with Aronora and Palobiofarma.

Other income, net was $0.3 million for the fourth quarter of 2019, compared to $0.7 million for the corresponding quarter of 2018. Total other income, net was $3.8 million for the full year of 2019, compared to $4.3 million for the corresponding period of 2018. The decrease in the full year of 2019 when compared to the full year of 2018 primarily reflects the discontinuation of income under the Ology Bioservices agreement of $2.5 million and a loss of $0.4 million recognized due to the early termination of our legacy building leases, partially offset by the increase in sublease income of $1.2 million and the change in fair value adjustment of Rezolute common stock of $0.9 million.

Net loss for the fourth quarter of 2019 was $4.3 million, compared to net loss of $3.0 million for the fourth quarter of 2018. Net loss for the full year of 2019 was $2.0 million, compared to net loss of $13.3 million for the full year of 2018.

On December 31, 2019, XOMA had cash of $56.7 million compared with $45.8 million on December 31, 2018. The Company’s current cash position is expected to be sufficient to fund its operations for multiple years.