On May 5, 2022 XOMA Corporation (Nasdaq: XOMA), a biotech royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of advancing novel therapeutic candidates aimed at improving human health, reported its first quarter 2022 financial results and provided a recent operations update (Press release, Xoma, MAY 5, 2022, View Source [SID1234613621]).

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"Our team’s ability to identify and acquire the economic interests in potential therapeutic assets that have significant potential has been further validated with two events in the first months of 2022. First, since enacting of the milestone and royalty monetization strategy, an asset in our royalty portfolio became the first to achieve regulatory and commercialization approvals, leading off with the FDA in January and Japan’s MHLW at the end of the quarter. Second, we are encouraged by Regeneron’s recently announced acquisition of Checkmate and vidutolimod (CMP-001)1," stated Jim Neal, Chairman and Chief Executive Officer of XOMA. "We congratulate our partners on their recent achievements."

"Several other partners announced milestones in their development programs. In January 2022, Rezolute dosed the final patient with RZ358 in its Phase 2 congenital hyperinsulinism (CHI) study, which triggered a $2 million milestone payment to XOMA. We congratulate Rezolute on the RIZE Study data presented at Pediatric Endocrine Society Annual Meeting, which took place on May 12,3 and its $130 million registered direct offering and private placement4. We are pleased Rezolute and its shareholders are committed to

moving RZ358 into Phase 3 clinical development. Additionally, Janssen expanded its cetrelimab clinical program to investigate the compound in patients with chronic hepatitis B virus. Furthermore, Palobiofarma launched a Phase 2 study with PBF-6880 in COPD patients. Each of these advancements reflect the dedication and desire of the scientists and clinicians to give patients and their families much needed hope."

Faricimab, Affitech, and Roche Update

In October 2021, XOMA acquired an economic interest Roche’s novel bispecific antibody from Affitech SA. During the first quarter of 2022, XOMA paid $5 million in milestones to Affitech based upon the January 2022 commercialization approval from the U.S. Food and Drug Administration (FDA)5. XOMA does not owe Affitech a milestone based upon the Japan’s Ministry of Health, Labour and Welfare (MHLW) commercialization approval6, which was granted in March 2022. On April 25, 2022, Roche reported first quarter 2022 financial results, which included initial faricimab sales7.

Financial Results

XOMA recorded total revenues of $3.1 million for the first quarter of 2022, compared with $0.4 million in the first quarter of 2021. The increase for the three months ended March 31, 2022, as compared to the corresponding period of 2021, was primarily due to the $2.0 million milestone earned under the Company’s development and commercialization agreement with Rezolute and a $0.8 million milestone earned under the Takeda Collaboration Agreement.

Research and development ("R&D") expenses were $56,000 and $61,000, respectively, for the first quarters of 2022 and 2021.

General and administrative ("G&A") expenses were $5.1 million for the first quarter of 2022, compared to $6.7 million for the first quarter of 2021. The decrease of $1.6 million for the three months ended March 31, 2022, as compared to the corresponding period of 2021, was due primarily to a $1.9 million decrease in stock-based compensation expense for stock options and a $0.2 million decrease in consulting and deal costs, partially offset by a $0.5 million increase in personnel related expenses.

In the first quarter of 2022, G&A expenses included $1.0 million in non-cash stock-based compensation expense, compared with $2.9 million in the first quarter of 2021. XOMA’s net cash used in operations in the first quarter of 2022 was $1.0 million, as compared with $0.9 million during the first quarter of 2021.

Other expense, net was $0.2 million for the first quarter of 2022, compared to other expense, net of $0.7 million in the corresponding quarter of 2021. The fluctuation in other (expense) income, net between the quarters ended March 31, 2022 and 2021, is primarily due to the change in the fair value of equity securities XOMA holds in Rezolute, Inc.

Net loss for the first quarter of 2022 was $2.3 million, compared to net loss of $7.4 million for the first quarter of 2021.

On March 31, 2022, XOMA had cash, cash equivalents and restricted cash of $88.6 million. On January 18, 2022, the Company paid cash dividends on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) equal to $0.53906 per share and cash dividends on the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO) equal to $0.52344 per depositary share. The Company ended December 31, 2021, with cash and restricted cash of $95.4 million. After paying its remaining debt obligations in the second quarter of 2021, XOMA has no debt on its balance sheet. The Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years.