XOMA Corp (NASDAQ:XOMA), a leader in the discovery and development of therapeutic antibodies, today provided a corporate update and reported its financial results for the quarter ended June 30, 2015.
“We knew our endocrine portfolio would be important to XOMA regardless of gevokizumab’s role. Today, it takes center stage,” stated John Varian, Chief Executive Officer of XOMA. “Our XMet platform, which is focused on the insulin receptor, has been quite active for several years. We brought XOMA 358, an antibody that reduces the binding of insulin to its receptor, from the bench to the clinic and are ready to enter Phase 2 development in two rare hyperinsulinemic hypoglycemia conditions. We have a second Phase 2-stage asset, as well as several other preclinical- and research-stage programs that provide a critical mass in our endocrine portfolio. In addition, we conducted some very interesting work that has resulted in XOMA 089, an anti-TGF beta monoclonal antibody, which has potential as an important immuno-oncology therapy. We actively are working to out-license those pipeline assets that do not align with our areas of focus as sources of non-dilutive funding to advance those that do.”
Mr. Varian continued, “Over the past two weeks, in response to our disappointing EYEGUARD™-B results, we’ve made some hard decisions. As of the end of August, and in coordination with Servier, we expect to dramatically and quickly reduce our exposure to expenses related to the remaining EYEGUARD clinical development program. We will advance gevokizumab in the ongoing Phase 3 pyoderma gangrenosum program, as the data generated in the EYEGUARD-B study, as well as earlier studies of gevokizumab and other IL-1 therapies, is leading us to believe that IL-1 beta modulation may be best suited for acute, highly inflammatory episodic conditions, such as pyoderma gangrenosum. We are building certain blinded analyses into the studies to allow us to monitor our progress in a thoughtful and disciplined manner.”
“Additionally,” Mr. Varian stated, “we will launch an effort to consider strategic options for XOMA’s manufacturing and biodefense operations to determine if an alliance or other structure could take greater advantage of these valuable capabilities. These collective decisions will be accompanied by organizational changes, and XOMA will be downsized appropriately to support the advancement of XOMA 358 and other endocrine assets. Most of the changes will occur in August; the rest are expected to be completed by the end of the year. These changes will result in a smaller, focused organization staffed to support the growth and development of our endocrine portfolio.”
XOMA reported total revenues of $2.5 million in the second quarter ended June 30, 2015, compared with $6.0 million in the corresponding period of 2014. The reduction in 2015 revenues reflects lower activity under the Company’s existing contracts with National Institute of Allergy and Infectious Diseases (NIAID) for the development of anti-botulism agents.
Research and development (R&D) expenses for the second quarter of 2015 were $19.7 million, compared with $19.6 million in the corresponding period of 2014.
Selling, general and administrative (SG&A) expenses were $5.1 million in the second quarter of 2015, as compared to $5.2 million in the corresponding quarter of 2014.
For the second quarter of 2015, XOMA had a net loss of $23.8 million, compared with a net loss of $11.9 million for the second quarter of 2014. Excluding non-cash charges related to the revaluation of warrant liabilities, net loss in the quarters ended June 30, 2015 and 2014, was $23.6 million and $19.9 million, respectively.
On June 30, 2015, XOMA had cash, cash equivalents, and short-term investments of $51.0 million. The Company ended December 31, 2014, with cash, cash equivalents, and short-term investments of $78.4 million.
“The Company’s principal expenditures over the past several years have been highly associated with the gevokizumab clinical studies, specifically the Phase 3 EYEGUARD and pyoderma gangrenosum programs,” stated Tom Burns, Chief Financial Officer of XOMA. “Given the planned reorganizational activities, decreased spending on gevokizumab, and, in particular, our anticipated licensing deals, we expect our operating cash burn to decrease significantly.” (Original Source)
Following earnings, shares of Xoma are trading at $0.794, down $0.105 or 11.7%. XOMA has a 1-year high of $5.95 and a 1-year low of $0.72. The stock’s 50-day moving average is $3.10 and its 200-day moving average is $3.48.
On the ratings front, Xoma has been the subject of a number of recent research reports. In a report issued on August 4, Wedbush analyst Liana Moussatos reiterated a Buy rating on XOMA, with a price target of $13, which represents a potential upside of 1328.6% from where the stock is currently trading. Separately, on July 23, Jefferies Co.’s Biren Amin downgraded the stock to Hold and has a price target of $1.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Liana Moussatos and Biren Amin have a total average return of 27.8% and 13.6% respectively. Moussatos has a success rate of 46.0% and is ranked #49 out of 3727 analysts, while Amin has a success rate of 54.8% and is ranked #432.
XOMA Corpdiscovers and develops antibody-based therapeutics. Several of its antibodies have properties due to their interaction at allosteric sites on specific protein rather than the orthosteric, or active sites.