On Tuesday, H.C. Wainwright maintained a Buy rating on shares of XOMA, Ltd. (NASDAQ: XOMA) and increased the price target to $123 from $117 following the company's acquisition announcement. The stock has shown remarkable momentum, delivering a 110.86% return over the past year.
According to InvestingPro data, analyst targets for XOMA range from $55 to $123, with several additional metrics available to subscribers. XOMA has purchased Pulmokine Inc., a private firm, along with its stake in seralutinib, which is currently in development for treating pulmonary arterial hypertension (PAH).
XOMA paid $20 million upfront to acquire the asset, which could potentially bring in low-to-mid single digit royalties. Moreover, XOMA may receive up to $25 million in milestone payments, while Pulmokine is eligible for contingent, success-based milestones. This marks XOMA's second whole company acquisition in 2024.
The company maintains strong financials with an impressive 90.58% gross profit margin and a healthy current ratio of 7.52, indicating solid liquidity. InvestingPro subscribers can access detailed financial health metrics and additional insights about XOMA's growth potential.
Pulmokine has licensed seralutinib to Gossamer Bio (NASDAQ:GOSS), Inc. (GOSS; Buy; Trucchio), which in turn partnered globally with Chiesi Farmaceutici S.p.A. Through this partnership, Gossamer received a $160 million development reimbursement payment and could earn up to $146 million in regulatory milestones, plus $180 million in sales milestones.
Both Gossamer and Chiesi will share a 50/50 profit split in the U.S. market and have a global cost-sharing agreement in place. Should seralutinib receive approval, Gossamer is set to receive mid-to-high teens royalties on sales. With this acquisition, XOMA, currently valued at $382.11 million, is poised to enter the PAH market and potentially expand into additional indications.
The analyst reasserted the Buy rating and adjusted the price target upwards, reflecting optimism about XOMA's growing portfolio and the new asset's market potential. The stock is trading near its 52-week high of $35, suggesting strong market confidence in the company's strategic direction.
In other recent news, XOMA Corporation has made significant strides in its financial landscape. The company's newly FDA-approved drug, Miplyffa, developed by Zevra Therapeutics for the treatment of Niemann-Pick type C, is poised to provide a mid-single digit royalty and up to $52.6 million in milestone payments.
This approval marks the addition of the sixth commercial asset to XOMA Royalty's portfolio and is a result of a transaction with LadRx Corporation.
Moreover, XOMA reported an $8.1 million milestone payment from Viracta Therapeutics tied to the sale of a Priority Review Voucher by Day One Biopharmaceuticals. This is part of a larger agreement where XOMA initially invested $13.5 million to secure up to $54 million in potential milestones plus mid-single-digit royalties on OJEMDA™.
Lastly, XOMA announced its rebranding to XOMA Royalty Corporation, a change that does not affect the company's operations or financial standing. These are all recent developments in the company's operations.
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