XOMA Corporation (XOMA) H.C. Wainwright 26th Annual Global Investment Conference 2024 summary

Business model and strategy

• Aggregates biotech royalties and milestones, focusing on clinical-stage assets to build a diversified portfolio for long-term cash flows.

• Operates with a lean team and low annual spend, enabling scalability and efficient growth since 2017.

• Maintains a low expense base and share count to drive leveraged EPS growth and aims for sustained profitability and reinvestment.

• Fills a market gap by providing non-dilutive financing to smaller biotech firms, targeting sub-$25 million deals.

• Differentiates from peers by focusing on early to mid-stage assets and offering patient capital without fund life constraints.

Portfolio highlights and recent transactions

• Portfolio includes over 70 assets, with five currently generating royalties and several in late-stage or commercial phases.

• Recent successes include Ojemda's approval and launch, with $22 million received to date and further milestones and royalties expected.

• Acquired royalties on Roche's Vabysmo, turning a $14 million investment into $140 million via a royalty-backed loan.

• Added assets in women's health, rare diseases, and field-use therapeutics, including XACIATO, DSUVIA, and arimoclomol.

• Uses M&A creatively, such as acquiring Kinnate's IP to out-license and expand portfolio opportunities.

Market environment and financial outlook

• Royalty monetization is increasingly attractive as equity markets struggle and debt costs rise, creating new opportunities.

• Maintains a strong balance sheet, with $120 million in milestones collected since 2017 and over $1 billion in potential milestones.

• Approaching a cash flow positive inflection point, with disciplined expense management supporting bottom-line growth.

• Offers investors participation through common stock and high-yield perpetual preferreds.

• Board and team combine scientific, investment, and transactional expertise to drive continued growth.