XOMA Corporation (XOMA) Leerink Global Healthcare Conference 2026 summary

Portfolio strategy and business model

• Focus on increasing portfolio optionality to withstand biotech's binary risks, with 15 assets in phase III and ongoing efforts to backfill earlier-stage assets through business development.

• Over 80 assets added in three years while reducing share count, leveraging creative deal-making and maintaining a relatively static capital base.

• Aim to generate revenue and operating cash flow to reinvest internally (stock buybacks) and externally (pipeline expansion) without dilution.

• Recent acquisitions include negative enterprise value companies and a royalty exchange with Takeda, adding nine new assets and strengthening the tax base.

• Self-sustainability achieved, with outside capital only sought for compelling opportunities; business model emphasizes royalty ownership for non-dilutive, leveraged returns.

Legal and royalty developments

• Ongoing litigation with J&J over Tremfya royalties, following unsuccessful arbitration with MorphoSys; discovery phase underway, with potential resolution in 18-24 months.

• Mediation scheduled for summer, with hope for out-of-court settlement; litigation viewed as a high-priority business development opportunity.

• Previous European arbitration suggested a valid claim against J&J, with multiple law firms supporting the case; potential for significant financial upside if successful.

• Jury trial, if needed, expected in early 2028; outcome considered unpredictable, so no financial projections included in long-range plans.

Financial performance and outlook

• 2025 top-line revenue exceeded $50 million, with $33 million from royalties and the remainder from milestones; free cash flow positive after covering OpEx, loan obligations, and preferred dividends.

• $20 million net cash deployed in 2025, adding 22 drugs and repurchasing $16 million in stock (about 4-5% of shares outstanding).

• Over $620 million in NOLs and R&D deductions will keep effective tax rate low through 2030; approved assets expected to cover expenses and obligations from 2027 onward.

• Blue Owl deal in late 2023 provided capital for acquisitions; Vabysmo royalties (~$25 million/year) currently service the loan, with full payoff expected by 2030.