On August 8, 2023 XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its second quarter 2023 financial results and highlighted recent operational achievements as XOMA accelerates its differentiated biotech royalty and milestone acquisition strategy (Press release, Xoma, AUG 8, 2023, View Source [SID1234633997]).

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"XOMA is increasingly being recognized for enabling innovative biotech companies to unlock value in the face of a challenging financing environment. To date, the team has added three new assets to XOMA’s royalty and milestone portfolio to complement the growing cash flows generated by VABYSMO (faricimab)," stated Owen Hughes, Executive Chairman of XOMA. "And over the ensuing quarters, the potential approval of arimoclomol, a first-in-class molecule for Niemann-Pick Disease Type C (NPC) and tovorafenib for relapsed or progressive pediatric low-grade glioma, as well as the expansion of IXINITY’s label into the pediatric population with Hemophilia B, should address critical unmet needs for patients and drive increasing cash flows for XOMA shareholders."

"We see a great opportunity to continue expanding XOMA’s portfolio and building shareholder value, as the biotech industry’s desire for non-dilutive capital is greater than ever. Our team has been sourcing and reviewing more royalty and milestone acquisition opportunities than ever," said Brad Sitko, Chief Investment Officer of XOMA. "We are acting quickly on these opportunities to continue building XOMA’s portfolio with value-creating acquisitions."

Second Quarter 2023 Financial Results

XOMA recorded total revenues of $1.7 million for the second quarter of 2023 and $1.0 million for the second quarter of 2022. The increase for the three months ended June 30, 2023, as compared to the same period in 2022, was primarily due to $1.1 million of milestones earned during the quarter pursuant to the license agreement with Janssen.

Research and development ("R&D") expenses were $39,000 and $40,000, respectively, for the second quarters of 2023 and 2022.

General and administrative ("G&A") expenses were $5.8 million and $5.7 million, respectively, for the second quarters of 2023 and 2022. The second quarter of 2023 included an increase of $1.3 million in stock-based compensation expense and was offset by a decrease of $1.1 million in legal and consulting costs.

As a result of the announcement by Bioasis to suspend its operations and the termination of Bioasis’ research collaboration and license agreement with Chiesi, XOMA recorded a one-time, non-cash impairment charge of $1.6 million and a reduction of $1.6 million under long-term royalty receivables in the second quarter of 2023.

In the second quarter of 2023, G&A expenses included $2.2 million in non-cash stock-based compensation expense, as compared with $0.8 million in non-cash stock-based compensation expense in the second quarter of 2022. XOMA’s net cash used in operations in the second quarter of 2023 was $7.2 million, which included a one-time arbitration settlement cost of $4.1 million, as compared with $4.3 million during the second quarter of 2022.

Other income, net was $0.6 million for the second quarter of 2023, compared to other income, net of $0.1 million in the corresponding quarter of 2022. The $0.5 million difference primarily is due to an increase of $0.4 million in investment income combined with the change in fair value of $75,000 for the contingent consideration related to Bioasis.

Net loss for the second quarter of 2023 was $5.4 million, compared to net loss of $4.7 million for the second quarter of 2022.

On June 30, 2023, XOMA had cash and cash equivalents of $31.4 million. On July 17, 2023, 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, 2022, with cash and cash equivalents of $57.8 million. Due to recent communications from several partners related to delays in achieving specific milestones that are associated with payments to XOMA, the Company currently anticipates lower cash receipts from milestone payments in 2023 than previously expected. Based upon the cash flows XOMA expects to receive from VABYSMO and IXINITY sales in addition to its current cash position, the Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years.