Roth Capital Reiterates Buy On Xoma Following 3Q:14 Update

Roth Capital analyst Ed Arce reiterated a Buy rating on Xoma (NASDAQ:XOMA) with a $9 price target, which represents a potential upside of 127% from where the stock is currently trading. The report follows the company’s third-quarter results, posting diluted loss of ($0.17) per share, excluding warrant revaluations, versus Roth’s ($0.15) per share estimate, on revenues of $5.1M versus Roth’s $6.0M estimate.

Arce observed, “Last Friday (11/7), XOMA shares slipped 7.5% following disclosure that some exacerbations in the pivotal EYEGUARD-B trial were found to be non-protocol and will not count in the final efficacy analysis. However, newly-occurred per- protocol exacerbations match the number of those removed. The net result is a now thoroughly validated data set and, we believe, positive top-line results are still likely by late January 2015. We recommend accumulation of shares at these levels.”

The analyst added, “Based on our discussions with management, we model a $15M upfront payment for licensing XMet A in 1Q15, a $10M upfront payment for licensing XMet S in 3Q15, and a $10M upfront payment in 4Q15 for signing a gevokizumab commercial partner for Japan.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Ed Arce has a total average return of 21.7% and a 52.5% success rate. Arce has a 6.1% average return when recommending XOMA, and is ranked #216 out of 3369 analysts.

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