Business development: Secures royalty economic interests in two early stage partnered assets through XOMA Royalty’s announced expected acquisition of LAVA Therapeutics. Company acquisitions: •Completed XOMA Royalty’s acquisitions of Turnstone Biologics and HilleVax; • announced acquisitions of LAVA Therapeutics and Mural Oncology; • acted as structuring agent for XenoTherapeutics’ acquisition of ESSA Pharma. Key Pipeline advancements: • Zevra Therapeutics submitted a Marketing Authorization Application (MAA) with the European Medicines Agency (EMA) seeking marketing approval for arimoclomol as a treatment for Niemann-Pick Type C; • Rezolute Bio reconfirmed its expectations to announce topline data in December from its Phase 3 ersodetug trial in patients with congenital hyperinsulinism (HI) and announced alignment with FDA on streamlined design for ongoing Phase 3 trial of ersodetug in tumor HI; •Gossamer Bio expects topline results from PROSERA, its Phase 3 trial of seralutunib in pulmonary atrial hypertension (PAH), in February 2026. Cash receipts: In the first nine months of 2025, XOMA Royalty received $43.9 million in royalties and milestones from its partners, including $14.3 million from royalties during the third quarter. EMERYVILLE, Calif., Nov. 12, 2025 (GLOBE NEWSWIRE) -- XOMA Royalty Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its 2025 third quarter and year to date financial results and highlighted recent actions that have the potential to deliver additional shareholder value. “We continue to execute on innovative ways to increase optionality within our portfolio while maintaining a healthy cash balance and limiting dilution to our shareholders,” stated Owen Hughes, Chief Executive Officer of XOMA Royalty. “Growing royalty receipts reflect solid commercial execution on the part of our partners. We look forward to several clinical readouts over the coming months and quarters that, if positive, can meaningfully shape our business trajectory.” Royalty and Milestone Acquisitions CompanyAsset and Transaction DetailLAVA TherapeuticsXOMA Royalty will secure an economic interest in PF-08046052, which is being developed by Pfizer, and JNJ-89853413, which is being developed by Johnson & Johnson, upon closing its acquisition of LAVA.
Company Acquisitions CompanyTransaction DetailsTurnstone BiologicsXOMA Royalty acquired Turnstone for $0.34 in cash per share of Turnstone common stock plus one non-transferable contingent value right (CVR). HilleVaxXOMA Royalty acquired HilleVax for a cash payment of $1.95 per share plus a non-transferable CVR that entitles holders to receive certain potential payments. LAVA TherapeuticsXOMA Royalty will acquire LAVA for (i) an initial cash amount per share of $1.04 plus (ii) a non-transferable CVR per share representing the right to receive certain cash payments, including (A) the previously announced rights to receive, among other things, 75% of the net proceeds related to LAVA’s two partnered assets plus 75% of any net proceeds from any out license or sale of LAVA’s unpartnered programs, plus (B) a new right to receive up to approximately $0.23 per CVR depending on the final determination after closing of certain potential liabilities.Mural OncologyXOMA Royalty will acquire Mural Oncology through its wholly owned subsidiary XRA 5 Corp. for between $2.035 and $2.24 in cash per share. The acquisition is expected to close in the fourth quarter of 2025.1,2XenoTherapeutics Acquisition of ESSA PharmaXOMA Royalty acted as structuring agent for XenoTherapeutics’ completed acquisition of ESSA Pharma. Pipeline Partner Updates through November 10, 2025 PartnerEventRezoluteIn September, Rezolute announced it had achieved alignment with FDA on a significantly streamlined clinical development path for its ongoing Phase 3 study (upLIFT) of ersodetug for the treatment of tumor HI. Topline results are expected in the second half of 2026.3TakedaThe first patient was dosed in Takeda’s Phase 3 clinical trial investigating mezagitamab as a treatment for adults with IgA Nephropathy.Zevra TherapeuticsOn July 28, Zevra announced it had submitted an MAA to EMA for the evaluation of arimoclomol for the treatment of Niemann-Pick Disease Type C (NPC)4.Gossamer BioActivated first clinical site for the global, registrational Phase 3 SERANATA study examining seralutinib in patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD) in the fourth quarter of 20255.Daré BiosciencesAnnounced positive interim safety and efficacy results from its ongoing Phase 3 clinical trial evaluating the contraceptive effectiveness, safety, and acceptability of Ovaprene®, an investigational monthly, hormone-free intravaginal contraceptive.6 Anticipated Partner Events of Note through Mid-2026 PartnerEventRezoluteAnnounces topline data in December 20257 from sunRIZE Phase 3 clinical trial, which is investigating ersodetug in infants and children with congenital HI.Gossamer BioPublishes topline results from the Phase 3 PROSERA Study evaluating seralutinib in Functional Class II and III PAH patients5.Daré BioscienceMakes DARE to PLAY™ Sildenafil Cream available commercially via prescription in the fourth quarter of 2025 as a compounded drug under Section 503B of the Federal Food, Drug, and Cosmetic Act.8Commences one of two registrational Phase 3 clinical trials investigating Sildenafil Cream, 3.6%, for the treatment of female sexual arousal disorder9. Discussions with FDA regarding endpoint assessment for Phase 3 clinical studies of Sildenafil Cream, 3.6% continue8.Day One BiopharmaceuticalsPer the Day One conference call held on November 4, 2025, Ipsen, Day One’s partner outside the U.S., expects to receive EMA regulatory decision on its application to commercialize tovorafenib in the European Union. 1 https://investors.xoma.com/news-events/press-releases/detail/482/mural-oncology-announces-entry-into-agreement-to-be 2 http://ml.globenewswire.com/Resource/Download/538d82a8-0fae-4d41-8687-71845b9b67c2 3 https://ir.rezolutebio.com/news/detail/361/rezolute-announces-alignment-with-fda-on-streamlined-design-for-ongoing-phase-3-trial-of-ersodetug-in-tumor-hyperinsulinism 4 https://investors.zevra.com/news-releases/news-release-details/zevra-therapeutics-submits-marketing-authorization-application 5 https://ir.gossamerbio.com/news-releases/news-release-details/gossamer-bio-announces-third-quarter-2025-financial-results-and 6 https://ir.darebioscience.com/news-releases/news-release-details/positive-interim-phase-3-results-highlight-potential-ovaprener 7 https://ir.rezolutebio.com/news/detail/366/rezolute-reports-first-quarter-fiscal-2026-financial-results-and-provides-business-update 8 https://ir.darebioscience.com/news-releases/news-release-details/dare-bioscience-reports-second-quarter-2025-financial-results 9 https://ir.darebioscience.com/news-releases/news-release-details/dare-bioscience-announces-phase-3-plans-sildenafil-cream-36 Third Quarter and Year to Date 2025 Financial Results Tom Burns, Chief Financial Officer of XOMA Royalty, commented, “In the first nine months of 2025, we have received $43.9 million in cash from partners, of which $30.3 million were royalty payments related to commercial sales and $13.6 million in milestone payments and fees. In the third quarter, we received $14.3 million in cash from our partners’ commercial sales. With well-executed commercialization efforts by our partners and the emergence of new commercial opportunities from within our portfolio, XOMA Royalty has the potential to become a self-sustaining entity from royalties alone over the near term.” Income and Revenue: Income and revenue for the three and nine months ended September 30, 2025, were $9.4 million and $38.4 million, respectively, as compared with $7.2 million and $19.8 million for the corresponding periods of 2024. The increase in both periods presented was primarily driven by increased income related to VABYSMO and OJEMDA. Research and Development (R&D) Expenses: R&D expenses for the three and nine months ended September 30, 2025, were $69 thousand and $1.4 million, respectively, compared with $0.8 million and $2.0 million for each of the corresponding periods of 2024. R&D expenses in the first quarter of 2025 and the three- and nine-month periods of 2024 were related to the clinical trial costs incurred subsequent to XOMA Royalty’s acquisition of Kinnate in April 2024 related to KIN-3248 and the associated wind-down activities. General and Administrative (G&A) Expenses: G&A expenses for the three and nine months ended September 30, 2025, were $9.7 million and $25.7 million, respectively, as compared with $8.0 million and $27.5 million for the corresponding periods of 2024. The increase of $1.7 million for the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in business development and deal-related costs, partially offset by a decrease in stock-based compensation expense. For the nine months ended September 30, 2025, the decrease of $1.8 million, as compared to the same period in 2024, was primarily due to costs related to exit packages for Kinnate senior leadership in the second quarter of 2024 and a decrease in stock-based compensation expense, partially offset by an increase in business development and deal-related costs. XOMA Royalty’s G&A expenses included non-cash stock-based compensation expenses during the three and nine months ended September 30, 2025, of $1.8 million and $5.4 million, respectively, as compared to $2.6 million and $8.1 million for the corresponding periods of 2024. The 2024 periods reflect non-cash stock-based compensation related to the appointment of Mr. Hughes to full-time Chief Executive Officer and issuance of performance stock units. Credit Losses on Purchased Receivables: During the nine months ended September 30, 2024, XOMA Royalty recorded one-time, non-cash credit losses on purchased receivables associated with the Aronora and Agenus assets. To date, there have been no credit losses in 2025. Amortization of Intangible Assets: Amortization of intangible assets relates to the IP acquired in the Company’s acquisitions of Pulmokine in November 2024 and the mezagitamab economics from the BioInvent transaction in May 2025. Amortization of non-cash intangible assets were $0.9 million and $2.1 million for the three and nine months ended September 30, 2025. Gains on Acquisitions: In the third quarter of 2025, XOMA Royalty recorded gains on acquisitions of $17.9 million for HilleVax and $1.8 million for Turnstone. Interest Expense: For the three and nine months ended September 30, 2025, interest expense was $3.3 million and $10.0 million, respectively, as compared with $3.5 million and $10.4 million for the corresponding periods of 2024. Interest expense relates to the Blue Owl Loan established in December 2023. Other Income, net: For the three and nine months ended September 30, 2025, other income, net was $0.7 million and $8.5 million, respectively, as compared with $1.9 million and $5.9 million for the corresponding periods of 2024. Net Income: XOMA Royalty reported net income of $14.1 million and $25.6 million for the three and nine months ended September 30, 2025, as compared to net losses of $17.2 million and $9.9 million in the corresponding periods of 2024. Cash Position: On September 30, 2025, XOMA Royalty had cash and cash equivalents of $130.6 million, including $85.4 million in restricted cash. The restricted cash balance included $43.3 million related to the assumed HilleVax lease, $39.9 million reserved to fund the Mural acquisition, and $2.2 million related to the Blue Owl Loan. Cash and cash equivalents of $106.4 million as of December 31, 2024, included $4.8 million in restricted cash related to the Blue Owl Loan. In the third quarter of 2025, XOMA Royalty received $14.3 million in cash receipts from royalties and commercial payments and paid $1.4 million in dividends on the XOMA Royalty Perpetual Preferred stocks. In the first nine months of 2025, XOMA Royalty received $43.9 million in cash receipts, including $30.3 million in royalties and commercial payments and $13.6 million in milestone payments and fees. During the first nine months of 2025, XOMA Royalty deployed $25.0 million to acquire additional assets for its royalty and milestone portfolio, repurchased approximately 108,510 shares of its common stock for a cost of $2.4 million, and paid $4.1 million in dividends on the XOMA Royalty Perpetual Preferred stocks. About XOMA Royalty CorporationXOMA Royalty is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA Royalty acquires the potential future economics associated with pre-commercial and commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. When XOMA Royalty acquires the future economics, the seller receives non-dilutive, non-recourse funding they can use to advance their internal drug candidate(s) or for general corporate purposes. The Company has an extensive and growing portfolio of assets (asset defined as the right to receive potential future economics associated with the advancement of an underlying therapeutic candidate). For more information about the Company and its portfolio, please visit www.xoma.com or follow XOMA Royalty Corporation on LinkedIn. Forward-Looking Statements/Explanatory NotesCertain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding the timing and amount of potential commercial payments to XOMA Royalty and other developments related to VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), MIPLYFFA™ (arimoclomol), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], DSUVIA® (sufentanil sublingual tablet), and Sildenafil Cream, 3.6%; the potential occurrences of the events listed under “Anticipated 2025 Events of Note”; the anticipated timings of regulatory filings and approvals related to assets in XOMA Royalty’s portfolio; and the potential of XOMA Royalty’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time. In some cases, you can identify such forward-looking statements by terminology such as “anticipate,” “intend,” “believe,” “estimate,” “plan,” “seek,” “project,” “expect,” “may,” “will”, “would,” “could” or “should,” the negative of these terms or similar expressions. These forward-looking statements are not a guarantee of XOMA Royalty’s performance, and you should not place undue reliance on such statements. These statements are based on assumptions that may not prove accurate, and actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry, including those related to the fact that our product candidates subject to out-license agreements are still being developed, and our licensees may require substantial funds to continue development which may not be available; we do not know whether there will be, or will continue to be, a viable market for the products in which we have an ownership or royalty interest; and if the therapeutic product candidates to which we have a royalty interest do not receive regulatory approval, our third-party licensees will not be able to market them. Other potential risks to XOMA Royalty meeting these expectations are described in more detail in XOMA Royalty's most recent filing on Form 10-Q and in other filings with the Securities and Exchange Commission. Consider such risks carefully when considering XOMA Royalty's prospects. Any forward-looking statement in this press release represents XOMA Royalty's beliefs and assumptions only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. XOMA Royalty disclaims any obligation to update any forward-looking statement, except as required by applicable law. EXPLANATORY NOTE: Any references to “portfolio” in this press release refer strictly to milestone and/or royalty rights associated with a basket of drug products in development. Any references to “assets” in this press release refer strictly to milestone and/or royalty rights associated with individual drug products in development. As of the date of this press release, the commercial assets in XOMA Royalty’s milestone and royalty portfolio are VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), MIPLYFFA™ (arimoclomol), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], and DSUVIA® (sufentanil sublingual tablet). All other assets in the milestone and royalty portfolio are investigational compounds. Efficacy and safety have not been established. There is no guarantee that any of the investigational compounds will become commercially available. XOMA ROYALTY CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except share and per share amounts)
Three Months Ended September 30, Nine Month Ended September 30, 2025 2024 2025 2024 Income and Revenues:
Income from purchased receivables under the EIR method$6,962 $5,423 $19,039 $9,985 Income from purchased receivables under the cost recovery method 1,857 1,040 9,125 1,910 Revenue from contracts with customers 225 25 9,250 6,050 Revenue recognized under units-of-revenue method 307 709 978 1,828 Total income and revenues 9,351 7,197 38,392 19,773
Operating expenses:
Research and development 69 817 1,431 2,011 General and administrative 9,734 8,020 25,682 27,485 Credit losses on purchased receivables - 14,000 - 23,000 Amortization of intangible assets 878 - 2,077 - Total operating expenses 10,681 22,837 29,190 52,496
Income (Loss) from operations (1,330) (15,640) 9,202 (32,723)
Other income (expense)
Gains on acquisitions 18,004 - 18,004 19,316 Change in fair value of embedded derivative related to RPA - - - 8,100 Interest expense (3,301) (3,493) (10,004) (10,446) Other income, net 727 1,890 8,456 5,900 Net income$14,100 $(17,243) $25,658 $(9,853) Income tax expense$(49) $- $(49) $- Net income (loss)$14,051 $(17,243) $25,609 $(9,853)
Net income (loss) available to (attributable to) common stockholders, basic$8,981 $(18,611) $15,192 $(13,957) Basic net income per share available to common stockholders$0.74 $(1.59) $1.26 $(1.20) Weighted average shares used in computing basic net income per share available to common stockholders 12,137 11,712 12,038 11,645
Net income (loss) available to (attributable to) common stockholders, diluted$12,683 $(18,611) $21,505 $(13,957) Diluted net income per share available to common stockholders$0.70 $(1.59) $1.20 $(1.20) Weighted average shares used in computing diluted net income per share available to common stockholders 18,141 11,712 17,932 11,645
XOMA ROYALTY CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share and per share amounts)
September 30, December 31, 2025 2024 ASSETS Current assets:
Cash and cash equivalents$45,189 $101,654 Short-term restricted cash 45,288 1,330 Investment in equity securities 1,521 3,529 Trade and other receivables, net 3,573 1,839 Short-term royalty and commercial payment receivables under the EIR method 13,269 14,763 Short-term royalty and commercial payment receivables under the cost recovery method 900 413 Prepaid expenses and other current assets 967 2,076 Total current assets 110,707 125,604
Long-term restricted cash 40,076 3,432 Property and equipment, net 24 32 Operating lease right-of-use assets 272 319 Long-term royalty and commercial payment receivables under the EIR method 4,678 4,970 Long-term royalty and commercial payment receivables under the cost recovery method 57,864 55,936 Exarafenib milestone asset 3,500 3,214 Investment in warrants 595 - Intangible assets, net 44,556 25,909 Other assets - long term 879 1,861 Total assets$263,151 $221,277
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$2,654 $1,053 Accrued and other liabilities 4,134 5,752 Contingent consideration under RPAs, AAAs, and CPPAs - 3,000 Operating lease liabilities 2,508 446 Unearned revenue recognized under units-of-revenue method 1,320 1,361 Preferred stock dividend accrual 1,368 1,368 Current portion of long-term debt 14,345 11,394 Contingent value rights liabilities - current portion 1,976 - Total current liabilities 28,305 24,374
Unearned revenue recognized under units-of-revenue method – long-term 3,473 4,410 Exarafenib milestone contingent consideration 3,500 3,214 Long-term operating lease liabilities 20,678 483 Long-term debt 94,382 106,875 Contingent value rights liabilities - long-term 4,807 - Deferred tax liability 49 - Total liabilities 155,194 139,356
Convertible preferred stock, $0.05 par value, 5,003 shares authorized, issued and outstanding as of September 30, 2025 and December 31, 2024 20,019 20,019
Stockholders’ equity:
8.625% Series A cumulative, perpetual preferred stock, $0.05 par value, 984,000 shares authorized, issued and outstanding as of September 30, 2025 and December 31, 2024 49 49 8.375% Series B cumulative, perpetual preferred stock, $0.05 par value, 3,600 shares authorized, 1,600 shares issued and outstanding as of September 30, 2025 and December 31, 2024 — — Common stock, $0.0075 par value, 277,333,332 shares authorized, 12,310,300 and 11,952,377 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 92 90 Additional paid-in capital 1,301,542 1,298,747 Accumulated other comprehensive income 121 73 Accumulated deficit (1,213,866) (1,237,057) Total stockholders’ equity 87,938 61,902 Total liabilities, convertible preferred stock and stockholders’ equity$263,151 $221,277
XOMA ROYALTY CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited)(in thousands)
Nine Months Ended September 30, 2025 2024 Cash flows from operating activities:
Net income$25,609 $(9,853)Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustment for income from EIR method purchased receivables 627 (9,985)Stock-based compensation expense 5,358 8,136 Gains on acquisitions (18,004) (19,316)Credit losses on purchased receivables — 23,000 Gain on sale of equity securities (3,663) — Income tax expense 49 — Common stock contribution to 401(k) 141 118 Amortization of intangible assets 2,077 — Depreciation 8 8 Accretion of long-term debt discount and debt issuance costs 1,136 996 Non-cash lease expense 47 45 Change in fair value of equity securities (1,230) (624)Change in fair value of available-for-sale debt securities classified as cash equivalents 49 104 Change in fair value of derivatives 10 — Changes in assets and liabilities:
Trade and other receivables, net (1,187) (41)Prepaid expenses and other assets 1,839 (72)Accounts payable and accrued liabilities (3,248) (1,348)Operating lease liabilities (268) (185)Unearned revenue recognized under units-of-revenue method (978) (1,828)Net cash provided by (used in) operating activities 8,372 (10,845)
Cash flows from investing activities:
Net cash acquired in Kinnate acquisition — 18,926 Net cash, cash equivalents and restricted cash acquired in Turnstone acquisition 3,943 — Net cash, cash equivalents and restricted cash acquired in HilleVax acquisition 46,832 — Payments of consideration under RPAs, AAAs, and CPPAs (8,000) (37,000)Receipts under RPAs, AAAs, and CPPAs 3,139 26,263 Payment for BioInvent contract-based intangible asset (20,725) — Payment of contingent consideration related to Kinnate IP asset (550) — Purchase of property and equipment — (17)Purchase of equity securities (99) — Sale of equity securities 6,999 — Net cash used in investing activities 31,539 8,172
Cash flows from financing activities:
Principal payments – debt (10,598) (6,902)Debt issuance costs and loan fees paid in connection with long-term debt (80) (740)Payment of preferred stock dividends (4,104) (4,104)Repurchases of common stock (2,395) (13)Proceeds from exercise of options and other share-based compensation 3,422 4,127 Taxes paid related to net share settlement of equity awards (2,019) (2,429)Net cash used in financing activities (15,774) (10,061)
Net increase (decrease) in cash, cash equivalents, and restricted cash 24,137 (12,734)Cash, cash equivalents, and restricted cash at the beginning of the period 106,416 159,550 Cash, cash equivalents, and restricted cash at the end of the period$130,553 $146,816
Supplemental Cash Flow Information: Cash paid for interest$11,906 $9,985 Cash paid for taxes$277 $— Non-cash investing and financing activities: Accrual of contingent value rights liability in the Turnstone acquisition$1,110 $— Accrual of contingent value rights liability in the HilleVax acquisition$5,673 $— Right-of-use assets obtained in exchange for operating lease liabilities in the HilleVax acquisition$22,525 $— Relative fair value basis reduction of right-of-use assets in the HilleVax acquisition$(22,525) $— Transaction costs in connection with the Turnstone acquisition included in accounts payable$92 $— Transaction costs in connection with the HilleVax acquisition included in accounts payable and accrued expenses$449 $— Excise tax accrual due to stock repurchases$24 $— Preferred stock dividend accrual$1,368 $1,368 Estimated fair value of the Exarafenib milestone asset$— $2,922 Estimated fair value of the Exarafenib milestone contingent consideration$— $2,922 Right-of-use assets obtained in exchange for operating lease liabilities in the Kinnate acquisition$— $824 Relative fair value basis reduction of rights-of-use assets in the Kinnate acquisition$— $(824)Accrual of contingent consideration under the Affitech CPPA$— $3,000 Accrual of contingent consideration under the LadRX AAA$— $1,000
Investor contact:Media contact:Juliane SnowdenKathy VincentXOMA Royalty CorporationKV Consulting & Management+1-646-438-9754kathy@kathyvincent.com juliane.snowden@xoma.com
