XOMA Corporation (XOMA) TD Cowen 46th Annual Health Care Conference summary

Company overview and strategy

• Holds an enterprise value of ~$550M, market cap ~$450M, and $80M in cash, with a large portfolio of over 120 assets, including 15 in phase III development.

• Focuses on building a diversified royalty portfolio across all drug development stages, taking on more risk than competitors who focus on late-stage or commercial assets.

• Uses a barbell approach to balance early and late-stage assets, seeking mispriced opportunities and special situations to add value.

• Wind-down transactions generated ~$12M in net capital and $500M in tax deductions, shielding profits from federal taxes for several years.

• Strategic asset swaps, such as with Takeda, have expanded the portfolio and diversified risk.

Portfolio milestones and catalysts

• 15 phase III programs are expected to read out over the next 24–30 months, providing significant news flow.

• Recent phase III readouts for Rezolute (congenital hyperinsulinism) and Gossamer were negative, but upcoming data for tumor hyperinsulinism and Velixabat in PSC are anticipated.

• Regulatory decisions for MIPLYFFA and OJEMDA outside the U.S. are expected, with ONIVYDE receiving a positive CHMP opinion in Europe.

• Royalties from commercial products are covering operating expenses, with milestones and tax advantages expected to drive profitability from 2026 onward.

• Share buybacks have reduced outstanding shares by 5% since 2023, while asset count has grown.

Product and market insights

• Tumor hyperinsulinism market is believed to be larger than congenital hyperinsulinism, with potential for a drug exceeding $500M in sales if pricing and regulatory paths align.

• MIPLYFFA launch in Niemann-Pick has exceeded expectations, aided by weight-based dosing and identification of adult patients.

• Ovaprene, a non-hormonal contraceptive, is expected to benefit from market trends favoring non-hormonal options, with phase III data expected next year.

• OJEMDA and MIPLYFFA royalties alone are projected to make the company profitable by 2027, with VABYSMO also contributing.