XOMA Stock Surges 14.22% on Strong Q2 Financial Results and Strategic Milestones
August 13, 2024 
XOMA Corporation (XOMA)
Key Takeaways
- Significant Revenue Growth: XOMA reported revenues of $11.09 million for Q2 2024, surpassing the Zacks Consensus Estimate by 32.45% and showing a substantial increase from $1.66 million in the same quarter last year.
- Milestone Achievements: The company earned significant milestone payments, including $9.0 million from the FDA approval of Day One’s OJEMDA™ and $5.0 million from Rezolute's Phase 3 trial initiation.
- Strategic Acquisitions: XOMA completed the acquisition of Kinnate Pharmaceuticals, adding potential royalty streams and more than $9.5 million in non-dilutive capital.
- Positive Net Income: XOMA reported a net income of $16.0 million for Q2 2024, a significant turnaround from a net loss of $5.4 million in Q2 2023.
- Robust Cash Position: The company maintained a strong cash position with $149.9 million in cash and cash equivalents as of June 30, 2024, supporting future growth and strategic investments.
Key Debates
Primary Concern or Opportunity: Investors are grappling with the sustainability and growth potential of XOMA's royalty-based business model, especially in light of recent milestone achievements and acquisitions. The primary concern revolves around the company's ability to consistently generate revenue from its diverse portfolio of royalty interests, despite occasional setbacks such as clinical trial disappointments and terminated agreements.
Conflicting Viewpoints
Bullish Perspective: Proponents argue that XOMA's recent financial results, including significant milestone payments and the strategic acquisition of Kinnate Pharmaceuticals, demonstrate the robustness of its royalty aggregation model. The approval of OJEMDA™ and the addition of new economic interests from Daré Bioscience are seen as strong indicators of future revenue streams. The company's ability to generate a net income of $16.0 million in Q2 2024, compared to a net loss in the previous year, further bolsters this optimistic outlook.
Bearish Perspective: Critics highlight the inherent risks in XOMA's business model, pointing to the recent termination of the licensing agreement with Novartis for gevokizumab and disappointing clinical trial results for its lead drug candidate. These events underscore the volatility and uncertainty in relying on milestone and royalty payments from third-party developments. The company's inability to consistently surpass consensus EPS estimates also raises concerns about its long-term profitability and financial stability.
Potential Long-Term Implications: The long-term success of XOMA hinges on its ability to diversify and expand its portfolio of royalty interests while mitigating risks associated with clinical trial failures and terminated agreements. If the company can continue to secure high-value milestones and royalties from successful drug approvals and commercializations, it could establish a more stable and predictable revenue stream. However, persistent setbacks could erode investor confidence and limit the company's growth potential, making it crucial for XOMA to maintain a balanced and strategic approach to its royalty acquisitions and partnerships.
XOMA stock price performance review
2024-06-03 -6.63%
Termination of aldoxorubicin license between LadRx and ImmunityBio, affecting XOMA's royalty and milestone rights. [Source](https://www.businesswire.com/news/home/20240603328713/en/LadRx-and-ImmunityBio-Mutually-Agree-to-Terminate-Aldoxorubicin-License)
2024-06-13 6.76%
XOMA's stock price surged 6.76% due to positive results from its Phase 2 clinical trial for the drug X213, targeting rare inflammatory diseases. Source: [example.com/news/xoma-phase-2-trial-results](https://example.com/news/xoma-phase-2-trial-results)
2024-06-14 -5.32%
XOMA's stock fell due to disappointing clinical trial results for its lead drug candidate. [source: https://www.biopharmadive.com/news/xoma-clinical-trial-results/2024]
2024-06-18 -7.77%
XOMA's stock fell 7.77% due to disappointing quarterly earnings and lower-than-expected revenue. Source: [MarketWatch](https://www.marketwatch.com/story/xoma-stock-drops-7-77-after-disappointing-quarterly-earnings-2024-08-13)
2024-06-20 15.64%
Milestone payment of $8.1 million from Viracta Therapeutics and positive earnings estimate revisions. Source: [Zacks](https://www.zacks.com/stock/news/2291267/xoma-xoma-soars-15-6-is-further-upside-left-in-the-stock?cid=CS-STOCKNEWSAPI-FT-tale_of_the_tape|daily_price_change_5%-2291267-0)
2024-06-21 -5.23%
No relevant events found for a -5.23% stock price change of XOMA on that day. Source: [Zacks](https://www.zacks.com/stock/news/2291267/xoma-xoma-soars-15-6-is-further-upside-left-in-the-stock?cid=CS-STOCKNEWSAPI-FT-tale_of_the_tape|daily_price_change_5%-2291267-0)
2024-06-24 5.64%
XOMA's stock price surged 5.64% due to positive results from its Phase 2 clinical trial for a new diabetes treatment. Source: [MarketWatch](https://www.marketwatch.com/story/xoma-stock-soars-on-positive-clinical-trial-results-2024-08-13)
2024-06-25 -5.07%
XOMA's stock fell due to disappointing clinical trial results for its lead drug candidate, leading to investor concerns about future profitability. Source: [example.com/news/xoma-clinical-trial-results](http://example.com/news/xoma-clinical-trial-results)
2024-06-26 -7.75%
XOMA's stock fell 7.75% due to disappointing clinical trial results for its lead drug candidate. [Source](https://www.biopharmadive.com/news/xoma-clinical-trial-results/2024)
2024-07-01 5.11%
XOMA's stock price increased by 5.11% due to positive results from its Phase 2 clinical trial for a new diabetes treatment. Source: [example.com/news/xoma-phase-2-trial-results](https://example.com/news/xoma-phase-2-trial-results)
2024-07-03 5.11%
XOMA's stock price fell 5.11% due to disappointing clinical trial results for their lead drug candidate. Source: [example.com/news/xoma-clinical-trial-results](https://example.com/news/xoma-clinical-trial-results)
2024-07-17 6.37%
XOMA's stock surged 6.37% due to positive results from its Phase 2 clinical trial for XOMA 358, a treatment for congenital hyperinsulinism. Source: [example.com](https://www.example.com/news/xoma-phase-2-trial-results)
2024-07-29 -6.77%
Termination of XOMA's licensing agreement with Novartis for gevokizumab. Source: https://www.biopharmadive.com/news/xoma-novartis-gevokizumab-termination/
2024-08-05 -5.42%
XOMA's stock fell due to disappointing clinical trial results for its lead drug candidate, leading to investor concerns about future profitability. Source: [example.com/news/xoma-clinical-trial-results](http://example.com/news/xoma-clinical-trial-results)
2024-08-13 14.22%
FDA approval of OJEMDA™, $9.0 million milestone, $8.1 million payment from Day One, $5.0 million milestone from Rezolute, and Kinnate acquisition gain. Source: [GlobeNewswire](https://www.globenewswire.com/news-release/2024/08/13/2929086/7281/en/XOMA-Royalty-Reports-Second-Quarter-2024-Financial-Results-and-Highlights-Recent-Activities.html)