XOMA Corp (NASDAQ:XOMA) just ended its second quarter, and yet, all eyes are on the biotech company’s endocrinology portfolio, specifically XOMA 358, a human allosteric modulating antibody that binds to insulin receptors that is being investigated for patients with hypoglycemia due to hyperinsulinism disorders.

However, Cowen analyst Phil Nadeau finds Xoma’s pipeline drug to be too early in development to know what to make of its value. Taking into account unknown variables coupled with Xoma’s serious need for funding, Nadeau reiterates a Neutral rating.

Third quarter might prove to be more telling, as a proof of concept studies is due for XOMA 358, a human allosteric modulating antibody that binds to insulin receptors that is being investigated for patients with hypoglycemia due to hyperinsulinism disorders. The trial specifically evaluates patients with congenital hyperinsulinism and in post gastric bypass patients who suffer from severe hypoglycemia after eating any meal.

Nadeau waits until late summer, ready to take into account disclosed data from management to properly assess Xoma’s inherent value intertwined with clinical development. Particularly in the aftermath of gevokizumab’s 2015 failure, Xoma is rechanneling resources into its main strength, its endocrinology portfolio, led by Xoma 358. Xoma’s future will heavily hinge upon its third quarter results and clinical updates.

Additionally, Xoma closed the quarter with $33.9MM in cash flow, which Nadeau believes will last to fund operations into the first quarter of 2017. However, until then, Nadeau believes, “XOMA will need to find sources of financing over the next six months.” Xoma’s revenue by second-quarter yielded $0.4MM, with operating expenses of $18.5MM, and an incurred net loss of $15.2MM, or $13 per share.

According to TipRanks, four-star analyst Phil Nadeau is ranked #724 out of 4,101 analysts. Nadeau has earned a 50% success rate and yields 4.8% in his average profits. However, when recommending XOMA, Nadeau sees an average loss of 77.7% in his returns.

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