XOMA Corporation operates as a biotechnology royalty aggregator in Europe, the United States, and the Asia Pacific. The company engages in helping biotech companies for enhancing human health. It acquires the potential future economics associated with pre-commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. The company focuses on early to mid-stage clinical assets primarily in Phase 1 and 2 with commercial sales potential that are licensed to partners. It has a portfolio with approximately 70 assets. XOMA Corporation was incorporated in 1981 and is headquartered in Emeryville, California.
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- Like a music publishing company, but for drug royalties instead of songs.
- Like a Real Estate Investment Trust (REIT) such as Prologis (PLD) or Simon Property Group (SPG), but for drug royalties instead of physical properties.
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- Royalty Streams: Financial interests that provide XOMA with a percentage of future sales from various approved pharmaceutical products developed and marketed by third-party companies.
- Milestone Payments: Economic rights that entitle XOMA to receive payments upon the achievement of pre-defined development or regulatory milestones for drug candidates developed by other companies.
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XOMA Royalty (XOMA) sells primarily to other companies. Its major "customers" are the pharmaceutical companies that commercialize the products from which XOMA holds royalty interests. These companies pay royalties to XOMA based on the sales of those products.
The major customer companies, along with their symbols if publicly traded, include:
- F. Hoffmann-La Roche AG (OTCQX: RHHBY) - (via its subsidiary Genentech, Inc., for VABYSMO®)
- Eli Lilly and Company (NYSE: LLY) - (for RETEVMO®)
- Johnson & Johnson (NYSE: JNJ) - (via its subsidiary Janssen Biotech, Inc., for STELARA®)
- AbbVie Inc. (NYSE: ABBV) - (for certain biologic products related to the STELARA® royalty stream)
- Sumitomo Pharma Co., Ltd. (TYO: 4506; OTC: DNPUF) - (via its subsidiary Urovant Sciences, Inc., for GEMTESA®)
- Mayne Pharma Group Limited (ASX: MYX) - (for IMVEXXY®)
- Bausch Health Companies Inc. (NYSE: BHC) - (via its subsidiary Salix Pharmaceuticals, Inc., for GOLYTELY®)
- Norgine B.V. (private company) - (for MOVIPREP®)
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Owen Hughes, Chief Executive Officer
Owen Hughes was appointed full-time Chief Executive Officer of XOMA Royalty in January 2024, after serving as Executive Chairman of the Board and Interim Chief Executive Officer since January 2023. He has served as CEO of Sail Bio, Inc., a private biotechnology company, since February 2022. Mr. Hughes was also the co-founder and CEO of Cullinan Oncology, Inc., a publicly-traded oncology company, from September 2017 to October 2021. Prior to his operating roles, he spent 16 years on Wall Street, with positions at Brookside Capital, an operating division of Bain Capital, and Pyramis Global Advisors, a Fidelity Investments Company. Mr. Hughes served on the board of Radius Health, Inc. until its sale to Gurnet Point Capital and Patient Square Capital, and on the board of Translate Bio, Inc. until its acquisition by Sanofi.
Thomas Burns, Senior Vice President, Finance and Chief Financial Officer
Thomas Burns has served as Senior Vice President, Finance and Chief Financial Officer of XOMA Royalty since March 2017. He joined the company in August 2006 and has held various senior finance and accounting roles. Mr. Burns possesses over 25 years of experience in accounting and finance within both biotechnology and high-technology sectors. Before joining XOMA, he held multiple senior financial management positions at high-technology companies including Mattson Technology, IntruVert Networks (acquired by McAfee), Niku Corporation (acquired by Computer Associates), and Conner Technology.
Bradley Sitko, Chief Investment Officer
Bradley Sitko has been the Chief Investment Officer of XOMA Royalty since January 2023. From November 2019 to January 2023, he served as Managing Director, Strategic Finance, at RTW Investments, LP, a global investment firm focused on the biopharmaceutical and medical technology sectors, where he was responsible for royalty monetization, structured finance, and alternatives efforts. He also served as a board member of RTW Investments ICAV and was Chief Financial Officer of Ji Xing Pharmaceuticals Limited, a Shanghai-based biopharmaceutical company incubated by RTW Investments, LP. Prior to RTW, Mr. Sitko worked as a senior investment banker at MTS Health Partners.
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The addressable markets for XOMA Royalty's main products or services, which are royalty streams from therapeutic candidates, are as follows:
- DSUVIA (sufentanil sublingual tablet) for acute pain: The commercial market for DSUVIA has been withdrawn due to manufacturing constraints.
- OJEMDA™ (tovorafenib) for pediatric low-grade glioma (pLGG): The global market for pediatric glioma drugs is estimated at approximately USD 5 billion in 2024 and is projected to reach nearly USD 11 billion by 2034. North America holds the largest share of this market, accounting for about 42% of total revenue in 2024.
- MIPLYFFA™ (arimoclomol) for Niemann-Pick disease type C (NPC): The global Niemann-Pick Disease Type C market reached US$ 9.00 million in 2024 and is expected to reach US$ 923.57 million by 2033.
- Ersodetug for congenital hyperinsulinism (HI): The global congenital hyperinsulinism treatment market size was estimated at USD 192.20 million in 2024 and is expected to reach USD 302.41 million by 2032.
- Seralutunib for pulmonary arterial hypertension (PAH): The global pulmonary arterial hypertension market size was estimated at USD 8.02 billion in 2024 and is projected to reach USD 13.34 billion by 2033. North America maintains the largest share of 41.85% in 2024.
- Sildenafil Cream, 3.6% for female sexual arousal disorder: The global arousal disorder treatment market was valued at USD 7.5 billion in 2022 and is projected to reach USD 11.08 billion by 2030. The U.S. female sexual dysfunction treatment market is projected to reach an estimated value of USD 782.3 million by 2032.
- Hormone-free monthly intravaginal contraceptive: The global contraceptive market size was estimated at USD 31,178.9 million in 2024 and is projected to reach USD 44,039.4 million by 2030. North America held the largest global revenue share of 30.98% in 2023.
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Here are 3-5 expected drivers of future revenue growth for XOMA Royalty (XOMA) over the next 2-3 years:
- Increased Royalties from Currently Commercialized Products: Continued strong sales and market penetration of XOMA's existing commercial royalty assets are expected to drive recurring revenue growth. Specifically, VABYSMO® (faricimab), OJEMDA™ (tovorafenib), and MIPLYFFA™ (arimoclomol) have been highlighted as primary contributors to increased income.
- Milestone Payments from Advancing Pipeline Candidates: XOMA Royalty acquires economic rights to future milestone payments associated with partnered pre-commercial clinical candidates. The successful advancement of these assets through clinical trials and achievement of regulatory approvals are expected to trigger significant milestone payments. Upcoming key pipeline advancements include Zevra Therapeutics' arimoclomol for Niemann-Pick Type C, Rezolute Bio's ersodetug for congenital hyperinsulinism, and Gossamer Bio's seralutunib for pulmonary arterial hypertension, all of which have anticipated clinical readouts or regulatory submissions in the near term.
- Strategic Acquisitions of New Royalty and Milestone Interests: XOMA Royalty's business model centers on actively acquiring the rights to future potential milestone and royalty payments from therapeutic assets, including through whole company acquisitions. This strategy diversifies and expands their portfolio, adding new revenue streams. Recent examples include the acquisitions of Turnstone Biologics, HilleVax, and the expected acquisition of LAVA Therapeutics, as well as securing additional economics in mezagitamab.
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Capital Allocation Decisions (Last 3-5 Years)
Share Repurchases
- XOMA's Board of Directors authorized a stock repurchase program of up to $50 million in January 2024, set to run through January 2027.
- During the first nine months of 2025, XOMA Royalty repurchased approximately 108,510 shares of its common stock for a total cost of $2.4 million.
Share Issuance
- As of March 13, 2025, the number of outstanding common shares was 11,978,717, an increase from 11,625,826 shares outstanding on March 4, 2024.
Outbound Investments
- In 2024, XOMA Royalty deployed $65 million to acquire new milestone and royalty assets.
- During the first six months of 2025, XOMA Royalty deployed $25.0 million to acquire additional assets for its royalty and milestone portfolio, including $20 million to acquire additional economics in mezagitamab from BioInvent International.
- In January 2025, XOMA completed a strategic acquisition of Pulmokine Inc. and its stake in the drug seralutinib for $20 million upfront, with potential milestone payments up to an additional $25 million.
Capital Expenditures
- Research and development expenses for the third quarter of 2025 were $69,000, significantly lower than $0.8 million in the corresponding period of the prior year, indicating minimal capital expenditures related to R&D.
