XOMA Corporation (XOMA) Leerink Global Healthcare Conference 2025 summary

Vision and strategy

• Operates as the smallest public royalty player with the largest portfolio and highest dividend yield, aiming for unmatched growth by combining early-stage pipeline building with commercial cash flow generation.

• Achieved free cash flow positivity in 2024 on an operating basis, expecting this to continue for several years due to a scalable, low-cost structure.

• Focuses on raising the bar for new portfolio additions, targeting $100M+ in royalty receipts within 4-5 years, up from $25M currently.

• Seeks to create terminal value by investing earlier in drug development, differentiating from peers who focus on near-term cash flows.

• Maintains a $20M annual operating expense run rate, with scalability as royalty receipts grow and minimal need for increased headcount.

Key portfolio drivers and financial engineering

• Major revenue drivers are Vabysmo (wet AMD, Roche), Ojemda (pediatric glioma), and Miplyfa (NPC2), each acquired for ~$14M and expected to generate significant long-term cash flows.

• Vabysmo deal included a $130M royalty-backed loan, providing non-dilutive capital and tax advantages, with the asset returning to the company by 2028-2029.

• Ojemda and Miplyfa are projected to deliver $500M-$600M and $300M-$400M in sales, respectively, with royalty rates supporting $80M-$100M in annual receipts from these three assets alone.

• Portfolio includes 11 phase III assets, with a strategy to increase early-stage (phase I/II) assets for future growth and upside.

• Actively acquires assets through creative deals, including company acquisitions that add assets and cash, and out-licensing for portfolio expansion.

Pipeline and upcoming milestones

• Key upcoming phase III readouts include Rezolute's congenital hyperinsulinism antibody and Gossamer's seralutinib for PAH, both with high royalty rates and significant commercial potential.

• Additional phase III assets include AstraZeneca's TIGIT (immuno-oncology), a new EB drug with Ligand/Castle Creek, and Ovaprene (non-hormonal contraceptive) with Daref and Bayer.

• Twist Bioscience deal added 60 preclinical/phase I assets, aiming to build a robust early-stage pipeline and create long-term terminal value.

• Success in the portfolio is expected to come from both high-sales, low-royalty assets and smaller products with higher royalty rates.

• Goal is to grow the portfolio to 250-300 assets, leveraging scale for probabilistic success and surprise upside.