XOMA Royalty Corp

What they do

XOMA provides non-dilutive, non-recourse capital to biotech companies in exchange for economic rights to future milestone and royalty payments. It maintains a lean cost structure, with R&D and commercialization costs borne by sponsors. The portfolio is diversified across therapeutic areas and development stages, including commercial, late-stage, and earlier-stage assets.

Revenue drivers

• VABYSMO (faricimab-svoa) — Royalty from Roche on retinal disease sales; largest commercial asset, generating $22.5M in 2025 royalties at a 0.5% rate.
• OJEMDA (tovorafenib) — Royalty from Day One on pediatric oncology sales; generated $6.4M in 2025 at a mid-single-digit royalty rate. Day One guided to $225-$250M FY2026 revenue.
• MIPLYFFA (arimoclomol) — Royalty from Zevra on rare disease treatment; generated $2.9M in 2025 at a mid-single-digit rate.
• Milestone payments and other fees — Including $16.9M from milestones and other fees in 2025, with recent catalysts like a $2M milestone from OJEMDA's Japan filing in 4Q25.

Recent performance

Full-year 2025 revenue was $10.3M, up from $6.7M in 2024, and net income swung to $31.7M from a $13.8M loss in 2024. Cash receipts hit $50.5M in 2025, including $33.6M in commercial payments (up 68% from 2024). First-quarter 2026 revenue surged to $12.3M, compared to $1.1M in 4Q25. Operating cash flow turned positive at $2.9M in 2025 versus a $13.7M use in 2024. The company repurchased 648,048 shares for $16.0M in 2025.

Strategy

XOMA focuses on acquiring early-to-mid-stage clinical assets (Phase 1/2) licensed to well-funded sponsors, and late-stage/commercial assets with long exclusivity. It has expanded via acquisitions of public and private biotech companies; since 2025, closed seven such deals adding $11.7M cash and interests in six programs. These acquisitions often include unpartnered assets that XOMA seeks to sell or out-license, with proceeds shared via CVRs. Management aims to maintain a capital-efficient structure and diversify to reduce single-asset binary risk.

Risks

• Royalty underperformance — Acquired royalty streams may not produce anticipated revenues, and defaults or bankruptcies of licensors could impair value.
• Clinical and regulatory setbacks — Late-stage programs like ersodetug and seralutinib have shown mixed results, and failures could reduce future milestones and royalties.
• Concentration in few assets — Despite diversification, VABYSMO and OJEMDA account for a significant portion of commercial receipts, making XOMA sensitive to their sales trajectories.
• Acquisition integration and asset disposition risk — Recent acquisitions add unpartnered assets that may be difficult to sell or license, impacting expected proceeds and CVR obligations.

Outlook

Management anticipates several 2026 catalysts, including Phase 2b data for volixibat in PSC, Phase 3 data for ersodetug in tumor HI in 2H, and potential EMA decisions on OJEMDA and MIPLYFFA. They plan to meet with FDA regarding ersodetug in congenital HI and seralutinib in PAH. With 14 programs in registrational studies, they expect these events to diversify commercial royalty streams and drive free cash flow growth in 2027 and beyond.