On May 5, 2020 XOMA Corporation (Nasdaq: XOMA) reported its first quarter 2020 financial results and provided a COVID-19 business update (Press release, Xoma, MAY 5, 2020, View Source [SID1234557011]).

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"Our first priority is to ensure the safety and well-being of our employees, our consultants, and our partners during the global COVID-19 pandemic. Our small team has been set up from Day One of XOMA’s strategic pivot to be fully capable of working remotely from anywhere around the globe, and we have maintained business continuity during the shelter-in-place directives. I am proud of the team and every member’s dedication to our mission of funding tomorrow’s therapeutic breakthroughs by acquiring the future potential milestone and royalty revenues associated with clinical-stage partnered assets," stated Jim Neal, Chief Executive Officer of XOMA.

"Today’s challenging capital market dynamics are expected to provide us with additional and more diverse acquisition opportunities to build our milestone and royalty portfolio. With more than $53 million in cash at the end of the first quarter, our low-cost infrastructure, and a strict discipline on capital deployment, we are in a healthy financial position. We recognize the challenges that COVID-19 is having on our partners as they enroll and conduct clinical trials, and these challenges may impact the timing of receipt of potential milestone payments, including payments we anticipated from Rezolute, Inc. In order to preserve cash, we have identified certain non-core expenses that we can defer or eliminate to further extend our cash runway.

"In the meantime, our partners remain committed to their missions of providing new therapies to patients in need. For example, at the end of March, Compugen dosed the first patient in its Phase 1 clinical trial studying COM902, an immune-oncology therapeutic antibody targeting TIGIT, in patients with advanced malignancies. Earlier in March, we announced a license agreement with Zydus that we anticipate could lead to a novel IL-2 antibody based immuno-oncology therapy for cancer patients. We remain positive as non-COVID-19 medical advances are happening across the healthcare industry, and XOMA will continue to play a role in improving human health," Mr. Neal concluded.

Financial Results
XOMA recorded total revenues of $0.8 million for the first quarter of 2020, compared to $8.1 million for the first quarter of 2019. The decrease for the three months ended March 31, 2020, as compared to the same period in 2019, was primarily due to $8.0 million of license fee revenue recognized in the first quarter of 2019 under our license agreement with Rezolute.

Research and development expenses were $0.1 million for the first quarter of 2020, compared to $0.3 million for the first quarter of 2019. The decrease for the three months ended March 31, 2020, compared to the same period in 2019, was due to a $0.2 million decrease in salary and related expenses.

General and administrative ("G&A") expenses were $6.4 million for the first quarter of 2020, compared to $5.9 million for the first quarter of 2019. The increase of $0.5 million for the three months ended March 31, 2020, as compared to the same period of 2019, was primarily due to $1.4 million recognized in bad debt expense and an increase of $0.3 million in professional fees, partially offset by a decrease of $1.2 million in facilities costs due to the early termination of our legacy leases in Berkeley, California, in December 2019.

In the first quarter of 2020, G&A expenses included $1.8 million in stock-based compensation and $1.4 million in bad debt expense, which are non-cash expenses. The Company’s net cash used in operations was $2.3 million during the first quarter of 2020.

In the first quarter of 2020, XOMA recorded $0.5 million in total interest expense, as compared to $0.4 million in the corresponding period of 2019, both of which reflect the Company’s outstanding loan balances with Silicon Valley Bank and Novartis.

For the quarter ended March 31, 2020, XOMA recorded total other expense, net of $0.1 million. For the quarter ended March 31, 2019, XOMA reported total other income, net of $1.7 million, which included sublease income of $0.8 million and a change in the fair value of the long-term equity securities held by the Company of $0.7 million. As a result of the early termination of XOMA’s legacy leases in December 2019, it is no longer a party to any subleases, which is reflected in the total other expenses reported during first quarter of 2020.

Net loss for the first quarter of 2020 was $4.8 million, compared to net income of $3.2 million for the first quarter of 2019. The net income for the first quarter of 2019 was due primarily to the revenue recognized in 2019 as previously discussed.

On March 31, 2020, XOMA had cash of $53.3 million. The Company ended December 31, 2019, with cash of $56.7 million. The Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years.