On November 9, 2016 XOMA Corporation (Nasdaq:XOMA), a leader in the discovery and development of therapeutic antibodies, reported recent achievements and financial results for the third quarter ended September 30, 2016 (Press release, Xoma, NOV 9, 2016, View Source [SID1234516790]).

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"In the third quarter, we accelerated activity in our XOMA 358 clinical trials in patients with hypoglycemia due to congenital hyperinsulinism (CHI) or post-bariatric surgery (PBS). In mid-September, we presented promising initial data from the first nine patients in these studies, which clearly demonstrated that XOMA 358 impacts insulin signaling. We also opened our first clinical site in Germany, which is actively enrolling patients age 12 years and older into our CHI study. Additionally, our proposal to UK regulators to initiate a multi-dose Phase 2 clinical study of XOMA 358 in children over the age of two with CHI was accepted in principle. We are pleased with the progress we are making in the XOMA 358 development program and are optimistic this first-in-class allosteric modulating antibody will offer a significant benefit for the treatment of CHI and PBS patients," said John Varian, Chief Executive Officer of XOMA.

Recent Achievements

Announced promising initial Phase 2 proof-of-concept data from the first nine patients enrolled in the Company’s ongoing XOMA 358 studies. This data confirm the novel antibodies’ proof-of-mechanism is impacting insulin signaling in patients with hypoglycemia due to CHI or PBS.
Continued to advance the XOMA 358 clinical program and made significant steps toward generating additional patient data.
Treated 14 additional patients with XOMA 358 since the September data presentation.
Met with the UK’s Medicines and Healthcare Regulatory Authority (MHRA) and proposed a multi-dose Phase 2 clinical study of XOMA 358 in children older than age two diagnosed with hypoglycemia due to CHI. The Agency agreed in principle with the proposal.
Opened the Company’s first clinical site in Germany to conduct a repeat-dose study of XOMA 358 in CHI patients over the age of 12.
Unveiled a novel new IL-2 immuno-oncology antibody program. Preclinical data will be presented on November 12th at The Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 31st Annual Meeting. XOMA anticipates out-licensing the asset to help fund its endocrine drug development programs.
Executed a reverse split of XOMA’s common stock to regain compliance with NASDAQ listing requirements.
Third Quarter 2016 Financial Results
XOMA recorded total revenues of $0.6 million for the three months ended September 30, 2016, compared to $2.1 million during the third quarter of 2015. The decrease in third quarter 2016 revenues was due primarily to a reduction in revenues from the National Institute of Allergy and Infectious Diseases (NIAID) and Servier. Going forward, revenues are expected to result from potential new strategic partnerships and arrangements or payments under existing contracts.

Research and development (R&D) expenses for the third quarter of 2016 decreased 51 percent to $8.7 million, compared to $17.6 million in the corresponding 2015 period. The decrease was due primarily to a $3.6 million reduction in clinical trial costs, a $2.7 million reduction in salaries and related expenses, a $1.0 million reduction in external manufacturing activities, a $0.5 million reduction in outside consulting fees due to the termination of the Servier Phase 3 program, and a $0.5 million reduction in depreciation and facility expenses due to the sale of our manufacturing facility to Agenus West LLC.

Selling, general and administrative expenses (SG&A) decreased 28 percent to $4.1 million for the three months ended September 30, 2016, compared to $5.6 million during the same period in 2015. The decrease was due primarily to reduced consulting services and reduced salary and related personnel costs following the Company’s restructuring activities that were initiated in the third quarter of 2015.

"Our financial results for the quarter reflect the significant progress we have made over the past year to reduce our operating expenses across every sector of the Company. Third quarter R&D expenses were 51 percent lower year-over-year and 37 percent lower compared with the second quarter of 2016. We also reduced our SG&A expenses by 28 percent from a year ago and by 15 percent from the second quarter," said Tom Burns, Vice President, Finance and Chief Financial Officer of XOMA. "In addition, we continued our out-licensing and partnering efforts to monetize our non-core assets, as our deep pipeline of early-stage antibodies is of interest to multiple companies focused on addressing a wide variety of medical conditions. These transactions have been and continue to be an important source of non-dilutive financing for the Company. For example, we expect to earn a $10 million milestone payment within the next few months under one of our existing license or collaboration agreements."

For the third quarter ended September 30, 2016, XOMA had a net loss of $12.5 million, compared to a net loss of $0.5 million in the quarter ended September 30, 2015. The net losses in the three months ended September 30, 2016 and 2015, included a $0.3 million and $24.4 million gain, respectively, in non-cash revaluations of contingent warrant liabilities, resulting primarily from fluctuations in XOMA’s stock price. Excluding those revaluations, the net loss for the three months ended September 30, 2016, was $12.8 million, compared to a net loss of $24.9 million for the same reporting period in 2015.

On September 30, 2016, XOMA had cash and cash equivalents of $20.6 million compared with $65.8 million at December 31, 2015.

The Company expects its available capital will be sufficient to fund operations into the first quarter of 2017. The anticipated milestone, referenced above, is not included in this projection.