EMERYVILLE, Calif. - XOMA Corporation (NASDAQ: XOMA), a biotech royalty aggregator, announced on Thursday that it has secured a $9 million milestone payment following the U.S. Food and Drug Administration's approval of Day One Biopharmaceuticals' New Drug Application for OJEMDA™ (tovorafenib).
OJEMDA™ is now the first and only FDA-approved type II RAF inhibitor for patients six months and older with relapsed or refractory pediatric low-grade glioma (pLGG) harboring a BRAF fusion or rearrangement, or BRAF V600 mutation.
The milestone is part of a larger agreement wherein XOMA acquired the rights to future milestone payments and royalties associated with tovorafenib, in addition to other potential economic benefits.
In March 2021, XOMA made an upfront payment of $13.5 million to Viracta Therapeutics for rights that included a total of $54 million in potential milestones, as well as mid-single digit royalties on global sales of the drug.
Owen Hughes, Chief Executive Officer of XOMA, commented on the significance of this development not only for XOMA's portfolio but also for the pediatric patients affected by this condition. The FDA's approval marks a significant advancement in the treatment options available for children with these BRAF-altered gliomas.
XOMA's business model focuses on acquiring potential future economics from licensed pharmaceutical and biotechnology companies' pre-commercial and commercial therapeutic candidates. These acquisitions provide non-dilutive, non-recourse funding to the sellers, which they can use for various purposes, including advancing internal drug candidates or for general corporate purposes.
The FDA approval of OJEMDA™ (tovorafenib) is a crucial step for XOMA, as it demonstrates the potential of the company's partnered programs to generate substantial milestone and royalty proceeds over time. However, it is important to note that the product candidates in XOMA's portfolio are still in development, and their commercial success is subject to regulatory approvals and market viability.
The information in this article is based on a press release statement from XOMA Corporation.
InvestingPro Insights
XOMA Corporation's recent FDA approval for OJEMDA™ (tovorafenib) has marked a significant milestone, reflecting the company's strategic focus on acquiring royalties and milestone payments. This development could potentially enhance the company's revenue streams. According to InvestingPro data, XOMA has experienced a quarterly revenue growth of 23.35% in Q1 2023, which is a promising sign for investors looking at the company's short-term financial performance.
InvestingPro Tips indicate that while XOMA is not expected to be profitable this year, analysts are forecasting sales growth. The company is also trading near its 52-week high, with a notable 24.41% return over the last three months, which could signal strong market confidence in its recent performance and future prospects. Additionally, XOMA's liquid assets surpass its short-term obligations, suggesting a stable financial position in terms of liquidity.
With a market capitalization of $298.32 million, XOMA is operating with a moderate level of debt and maintains a high gross profit margin of nearly 97% as of the last twelve months ending Q4 2023. However, it's important for potential investors to note that the company is trading at a high revenue valuation multiple, which could imply expectations of future growth are already priced into the stock.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, which could provide further insights into XOMA's financial health and market performance. Readers can access these valuable tips by visiting https://www.investing.com/pro/XOMA. Moreover, using the coupon code PRONEWS24 will grant an extra 10% off a yearly or biyearly Pro and Pro+ subscription, offering more comprehensive data to inform investment decisions.
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