On August 13, 2024, XOMA Royalty Corp (XOMA, Financial) released its 8-K filing detailing its second quarter 2024 financial results. XOMA Royalty Corp is a biotechnology royalty aggregator that acquires potential future economics associated with pre-commercial therapeutic candidates licensed to pharmaceutical or biotechnology companies. The company provides non-dilutive, non-recourse funding to sellers, which can be used to advance their internal drug candidates or for general corporate purposes.
Performance Overview
XOMA Royalty Corp reported total income and revenues of $11.1 million for Q2 2024, significantly higher than the $1.7 million reported in Q2 2023. This includes $4.9 million in estimated income from two commercial products, $0.5 million from the FDA approval milestone of OJEMDA, and $5.0 million from a milestone payment from Rezolute.
Key Financial Achievements
Net income for Q2 2024 was $16.0 million, a substantial turnaround from the net loss of $5.4 million in Q2 2023. This improvement was driven by several factors, including:
- A $19.3 million gain on the acquisition of Kinnate Pharmaceuticals.
- An $8.1 million change in the fair value of an embedded derivative related to a payment from Day One Pharmaceuticals.
- Higher investment income due to increased cash balances and market interest rates.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Income and Revenues | $11.1 million | $1.7 million |
| Net Income (Loss) | $16.0 million | $(5.4) million |
| R&D Expenses | $1.2 million | $39,000 |
| G&A Expenses | $11.0 million | $5.8 million |
Balance Sheet and Cash Flow
As of June 30, 2024, XOMA Royalty Corp had cash and cash equivalents of $149.9 million, compared to $159.6 million as of December 31, 2023. The company received $22.6 million in cash from royalty and milestone payments during the quarter and deployed $22.0 million to acquire new royalty and milestone economic interests. Net cash used in operating activities was $2.2 million.
Strategic Acquisitions and Milestones
During Q2 2024, XOMA Royalty Corp expanded its portfolio with the acquisition of economic interests in XACIATO™ vaginal gel 2%, and two novel Phase 3 assets from Daré Bioscience. The company also completed the acquisition of Kinnate Pharmaceuticals, adding several potential royalty streams and more than $9.5 million in non-dilutive capital.
"The second quarter was marked by pipeline progress, the realization of several cash milestones, the addition of three commercial or late-stage programs, and the acquisition of Kinnate Pharmaceuticals," stated Owen Hughes, Chief Executive Officer of XOMA Royalty.
Analysis and Outlook
XOMA Royalty Corp's strong financial performance in Q2 2024, driven by strategic acquisitions and milestone achievements, positions the company well for future growth. The significant increase in net income and revenues highlights the effectiveness of its royalty aggregation strategy. However, the company faces challenges, including high R&D and G&A expenses, which could impact future profitability. Investors should monitor the company's ability to manage these expenses while continuing to expand its portfolio.
For more detailed information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from XOMA Royalty Corp for further details.
