XOMA Royalty Corporation Reports Strong 2025 Results and Major Portfolio Developments

Key Financial and Business Highlights for Investors

XOMA Royalty Corporation (“XOMA”), a leading biotech royalty aggregator, has released its financial results for the fourth quarter and full year of 2025, alongside significant updates to its business and portfolio. The company’s performance and actions during the year indicate a robust growth trajectory and a series of strategic moves that may have material implications for shareholders and the company’s future share price.

2025 Financial Performance: Substantial Growth and Positive Cash Flow

• Total Cash Receipts: XOMA achieved over \$50.5 million in cash receipts for 2025, a 9% increase versus 2024. This total included \$33.6 million in royalties and commercial payments (up 68% year-over-year) and \$16.9 million from milestone payments and fees.
• Share Buyback Program: The company executed a major share repurchase, buying back and retiring 648,048 shares for \$16.0 million, returning capital directly to shareholders.
• Net Income: XOMA swung to profitability, reporting net income of \$31.7 million for the year, compared to a net loss of \$13.8 million in 2024. Basic earnings per share were \$1.53 for 2025, compared to a loss of \$1.65 per share in 2024.
• Cash and Liquidity: As of December 31, 2025, the company had \$133.7 million in cash and cash equivalents (including \$50.8 million in restricted cash), up from \$106.4 million at the end of 2024.
• Dividends: The company paid \$5.5 million in dividends on its Royalty Perpetual Preferred stocks during 2025.

Portfolio Expansion and Business Development

• Asset Acquisitions: XOMA added 22 assets to its portfolio in 2025, including five in Phase 2 or Phase 3 development, and completed seven company acquisitions that brought in \$11.7 million in non-dilutive capital. These acquisitions secured economic interests of approximately 25% in up to \$1.1 billion of milestone payments and low-to-mid single-digit royalties from eight partnered programs.
• Strategic Collaborations: The amended collaboration with Takeda significantly expanded the royalty and milestone pool, giving XOMA rights to low-to-mid single-digit royalties and up to \$852.6 million in potential milestones across nine development-stage assets. The company retained a royalty interest and up to \$13.0 million in milestones on mezagitamab.
• Late-Stage Pipeline: XOMA now has 14 programs in registrational studies, offering significant potential for regulatory and clinical catalysts in 2026 and beyond.

Key Events and Catalysts for 2026

• Volixibat (PSC): Phase 2b data expected in Q2 2026; VANTAGE study in PBC to complete enrollment in H2 2026.
• Ersodetug (Tumor HI): Phase 3 topline data anticipated in the second half of 2026. Phase 3 in congenital hyperinsulinism did not meet statistical significance, but regulatory pathway discussions with FDA are ongoing.
• Seralutinib (PAH): Gossamer Bio’s Phase 3 PROSERA study reported a statistically significant improvement in Six-Minute Walk Distance, though it narrowly missed the prespecified alpha threshold. Further discussions with the FDA are planned.
• OJEMDA: The Committee for Medicinal Products for Human Use (CHMP) of the EMA issued a positive opinion recommending conditional marketing authorization. OJEMDA has projected 2026 revenue guidance of \$225–\$250 million. A \$2 million milestone was triggered upon NDA filing in Japan in Q4 2025.
• MIPLYFFA (arimoclomol): Marketing Authorization Application under review by EMA for NPC.
• Major M&A Activity: In March 2026, Day One and Servier announced a definitive agreement for Servier to acquire Day One for \$21.50 per share in cash (total equity value of ~\$2.5 billion).

Litigation and Risks

• Legal Proceedings: XOMA is pursuing litigation against Janssen Biotech, Inc., asserting breach of contract and unjust enrichment over the commercialization of TREMFYA (guselkumab). The company incurred additional legal expenses in 2025 and warns that litigation outcomes are uncertain and may impact future financial results.
• General and Administrative Expenses: G&A costs increased to \$36.1 million in 2025, primarily due to higher business development, deal-related costs, and ongoing litigation. Stock-based compensation for the year was \$9.3 million.

Other Notable Financial Details

• Operating Expenses: Total operating expenses for 2025 were \$40.8 million, down from \$68.5 million in 2024, reflecting cost discipline and reduced credit losses.
• Interest Expense: Interest expense was \$13.0 million, related to the Blue Owl Loan established in December 2023.
• Balance Sheet Strength: Total assets grew to \$272.7 million (from \$221.3 million), with total liabilities at \$168.7 million. Stockholders’ equity increased to \$83.9 million (up from \$61.9 million).

Shareholder-Relevant and Potentially Price-Sensitive Information

• Profitability Achieved: The move from net loss to net income and the significant boost to per-share earnings are likely to be positively received by the market.
• Pipeline Readouts and Regulatory Decisions in 2026: Multiple late-stage clinical and regulatory events in 2026 represent binary catalysts that could materially impact future royalty streams and valuation.
• Large-Scale M&A Activity: The announced acquisition of Day One by Servier and positive EMA opinion for OJEMDA may unlock further value in XOMA’s royalty portfolio.
• Ongoing Litigation: The outcome of the litigation with Janssen Biotech represents a risk that could swing the company’s future revenues, depending on the result.
• Aggressive Portfolio and Asset Diversification: XOMA’s addition of 22 assets and several strategic deals positions the company for diversified and growing cash flows in 2027 and beyond.

Management Commentary

“With multiple commercial assets delivering growing royalty receipts, we achieved positive cash flow from operations and were able to return \$16 million of capital through a share buyback in 2025. Looking ahead, with 14 programs in registrational studies, we anticipate a number of catalysts over the ensuing years, including several regulatory updates and late-stage clinical readouts in 2026, which, if positive, will further diversify our commercial royalty streams and drive growing free cash flow in 2027 and beyond.” – Owen Hughes, Chief Executive Officer

Upcoming Events

XOMA will host a webcast on March 18, 2026, at 8:00 am Eastern Time to discuss these results and provide a business update. The webcast will be available on the company’s investors website.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risks and uncertainties as described in XOMA Royalty Corporation’s SEC filings. Investors should conduct their own due diligence and consult their financial advisor before making investment decisions.

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