XOMA Royalty Corporation (NASDAQ: XOMA) announced its third quarter 2024 financial results, highlighting significant portfolio developments and financial performance. The company reported a total income of $7.2 million, a substantial increase from the $0.8 million reported in the same quarter of the previous year. This includes $6.5 million derived from commercial products within its portfolio. A key highlight was the FDA approval of Zevra Therapeutics' MIPLYFFA™ (arimoclomol) for Niemann-Pick disease Type C (NPC). This approval marks a significant milestone as MIPLYFFA™ is the first therapy approved for this rare genetic disorder, addressing a critical unmet medical need.
Financial Performance
Cash receipts totaled $9.9 million in Q3 2024 and $42.3 million for the first nine months of the year. Despite the revenue growth, XOMA recorded a net loss of $17.2 million, primarily attributed to a $14.0 million non-cash impairment related to its Agenus royalty purchase agreement. Research and development expenses were $0.8 million, reflecting clinical trial costs associated with KIN-3248 from the Kinnate acquisition, which the company is currently winding down. General and administrative expenses increased to $8.0 million, up from $6.4 million in Q3 2023, largely due to costs incurred after the Kinnate acquisition.
As of September 30, 2024, XOMA maintained a strong cash position with $146.8 million in cash and cash equivalents. "We continue to take a balanced approach to building a portfolio of sustainable cashflow streams by selectively acquiring royalty economics across the lifecycle of drug development," stated Owen Hughes, Chief Executive Officer of XOMA Royalty.
Portfolio Expansion and Strategic Developments
In addition to the FDA approval of MIPLYFFA™, XOMA completed a $15 million royalty monetization agreement with Twist Bioscience, acquiring 50% of the future milestones and royalties from 60-plus partnered early-stage programs across 30 companies. This strategic move diversifies XOMA's portfolio and expands its exposure to multiple therapeutic areas.
Clinical Pipeline Updates
Several partnered programs saw significant developments during and subsequent to the third quarter:
- Rezolute: The sunRIZE Phase 3 clinical trial for ersodetug (RZ358) in congenital hyperinsulinism (CHI) is set to begin enrolling patients in the U.S. in early 2025. The FDA also cleared Rezolute to initiate a Phase 3 registrational study for ersodetug in tumor hyperinsulinism.
- Johnson & Johnson: Presented Phase 2 data for neoadjuvant TAR-200 plus cetrelimab in muscle-invasive bladder cancer (MIBC) at the European Society of Medical Oncology (ESMO) 2024 Congress. However, one of two Phase 3 trials involving cetrelimab in MIBC was discontinued due to not showing superiority to chemoradiation in an interim analysis.
- Takeda: Will discuss mezagitamab at its upcoming R&D Day on December 12, 2024, providing further pipeline visibility.
MIPLYFFA™ Approval Details
MIPLYFFA™ (arimoclomol) is indicated for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients 2 years of age and older. The FDA approval marks a significant advancement in treating this rare and debilitating disease.
Financial Outlook
XOMA's diversified portfolio and strategic acquisitions position it for continued growth. While the net loss in Q3 2024 reflects specific non-cash charges, the company's strong cash position and expanding royalty streams provide a solid foundation for future performance. The company's focus on acquiring royalty economics across the drug development lifecycle aims to generate sustainable cash flow and distribute risk across a diversified portfolio.
