Ficlatuzumab

Earned $9 million milestone upon U.S. Food and Drug Administration’s approval of Day One’s OJEMDA™ (tovorafenib); XOMA is entitled to receive a mid-single digit royalty on OJEMDA™ sales Acquired Kinnate Pharmaceuticals, adding at least $9.5 million in non-dilutive capital to XOMA’s balance sheet Expanded the commercial royalty and milestone portfolio with the acquisitions of economic interests in DSUVIA® (sufentanil sublingual tablet) and XACIATO™ (clindamycin phosphate) vaginal gel 2%, as well as two Phase 3 assets Launched XOMA’s first stock repurchase program for up to $50 million EMERYVILLE, Calif., May 09, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, reported its first quarter 2024 financial results and highlighted recent activities. “We continue to build the foundation for accelerating value creation with a disciplined approach to capital deployment,” stated Owen Hughes, Chief Executive Officer of XOMA. “In recent months, we’ve completed the acquisition of Kinnate, acquired economic interests in two commercial assets, as well as in two first-in-class Phase 3 assets, and initiated our first share buyback program on the heels of securing the VABYSMO® royalty-backed loan with Blue Owl. Lastly, and most importantly, the FDA approved OJEMBA™ (tovorafenib), Day One Biopharmaceuticals’ type II RAF inhibitor for patients with relapsed or refractory pLGG harboring a BRAF fusion or rearrangement or BRAF V600 mutation, ushering in an important new treatment for children living with relapsed or refractory pLGG.” Key First Quarter Events PartnerEventTalpheraXOMA added another commercial asset to its royalty portfolio with an economic interest in DSUVIA®, which is marketed by Alora Pharmaceuticals. XOMA receives 100 percent of the DSUVIA® economics until a threshold is achieved; thereafter, XOMA retains the 15 percent royalty associated with DSUVIA® commercial sales. The 75 percent royalties from Department of Defense purchases and remaining milestone payments will be shared equally between XOMA and Talphera.Kinnate PharmaceuticalsXOMA initiated the acquisition of Kinnate Pharmaceuticals for $2.5879 in cash per share, plus a non-tradeable contingent value right (CVR) representing the right to receive 85 percent of the net proceeds from the out license or sale of Kinnate assets effected on or before April 2, 2025, and 100% of the net proceeds received from Pierre-Fabre.Zevra TherapeuticsU.S. Food and Drug Administration (FDA) accepted the arimoclomol NDA resubmission for review and set a Prescription Drug User Fee Act (PDUFA) action date of September 21, 2024. XOMA paid a $1 million milestone to LadRx based upon the achievement of this milestone.MedexusFDA approved the pediatric label expansion application for IXINITY® [coagulation factor IX (recombinant)].TakedaReported positive topline results from Phase 2 study evaluating mezagitamab (TAK-079), a potential best-in-class anti-CD38 monoclonal antibody for primary immune thrombocytopenia (ITP).iLG Chem (AVEO Oncology)Dosed the first patient in the ficlatuzumab Phase 3 study, resulting in a $1 million milestone payment to XOMA.CompugenReceived a $1 million milestone payment from Compugen. Subsequent Events PartnerEventDay One BiopharmaceuticalsFDA approved Day One’s OJEMDA™ (tovorafenib) for use in pediatric patients with pediatric low-grade glioma (pLGG). XOMA earned a $9 million milestone upon the approval and is entitled to receive mid-single digit royalties from OJEMDA sales.Daré BioscienceXOMA added economic interests to three best- or first-in-category assets to its portfolio. XACIATO™ vaginal gel 2% is commercially available and marketed by Organon. Bayer holds the U.S. rights to commercialize Ovaprene®, a hormone-free monthly intravaginal contraceptive, currently in Phase 3 clinical trials. XOMA also acquired a synthetic royalty in Sildenafil Cream, 3.6%, a Phase 3-ready asset for female sexual arousal disorder.RezoluteDosed first patient in its Phase 3 trial of RZ358; XOMA earned a $5.0 million milestone associated with the event. Anticipated 2024 Events of Note PartnerEventZevra TherapeuticsSeptember 21, 2024 – FDA PDUFA action date for arimoclomol NDATakedaIn its press release dated March 13, 2024, Takeda announced plans to initiate a global Phase 3 trial of mezagitamab in ITP in fiscal year 2024.ii First Quarter 2024 Financial Results XOMA recorded total revenues of $1.5 million for the first quarter of 2024, which included a $1.0 million milestone payment received from AVEO Oncology, as compared with $0.4 million in the first quarter of 2023. Research and development (R&D) expenses were $33,000 and $54,000, respectively, for the first quarters of 2024 and 2023. Upon closing the Kinnate merger in the second quarter of 2024, XOMA assumed operations of Kinnate’s pipeline, as well as ongoing Phase 1 study, and will incur increased R&D costs until winddown activities are complete. General and administrative (“G&A”) expenses were $8.5 million for the first quarter of 2024, compared to $6.2 million for the first quarter of 2023. The increase of $2.3 million was primarily due to a $1.3 million increase in stock-based compensation and a $0.7 million increase in consulting and legal expenses. The increase in stock-based compensation expenses was largely due to the appointment of Mr. Hughes as our full-time Chief Executive Officer in January 2024. In the first quarter of 2024, G&A expenses included $2.9 million in non-cash stock-based compensation expense, compared with $1.6 million in the first quarter of 2023. The increase in stock-based compensation expenses was largely due to the PSU grant associated with the appointment of Mr. Hughes as our full-time Chief Executive Officer in January 2024 combined with PSUs granted in May 2023. Interest expense in the first quarter of 2024 was $3.6 million, representing interest related to the Blue Owl Loan established in December 2023. The Company reported total other income, net, of $2.0 million in the first quarter of 2024, as compared to total other income, net, of $0.4 million in the corresponding period of 2023. The $1.6 million increase reflects a $1.3 million increase in investment income due to higher cash balances and higher market interest rates on our investments, as well as the change in the market price of Rezolute’s common stock. Net loss for the first quarter of 2024 was $8.6 million, compared to a net loss of $9.8 million for the first quarter of 2023. On March 31, 2024, XOMA had cash and cash equivalents of $142.4 million (including $6.2 million in restricted cash). On December 31, 2023, XOMA had cash and cash equivalents of $159.6 million (including $6.3 million in restricted cash). During the first quarter of 2024, XOMA received $9.8 million in cash from royalty and milestone payments and deployed $8 million to acquire new royalty and milestone economic interests. Net cash used in operating activities during the quarter was $4.9 million. On April 15, 2024, the Company paid a total of $1.4 million in cash dividends on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) and the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO). About XOMA CorporationXOMA is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA acquires the potential future economics associated with pre-commercial and commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. When XOMA 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 the Company 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 and other developments related to VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), XACIATO™ (clindamycin phosphate) vaginal gel 2%, IXINITY® [coagulation factor IX (recombinant)], DSUVIA® (sufentanil sublingual tablet), and arimoclomol; the potential occurrences of the events listed under “Anticipated 2024 Events of Note”; the anticipated timings of regulatory filings and approvals related to assets in XOMA’s portfolio; and the potential of XOMA’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’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; 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; and the impact to the global economy as a result of the COVID-19 pandemic. Other potential risks to XOMA meeting these expectations are described in more detail in XOMA'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's prospects. Any forward-looking statement in this press release represents XOMA'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 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’s milestone and royalty portfolio are VABYSMO® (faricimab-svoa), OJEMDA™ (tovorafenib), 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 CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) March 31, December 31, 2024 2023 ASSETS(unaudited) Current assets: Cash and cash equivalents$136,225 $153,290 Short-term restricted cash 160 160 Short-term equity securities 413 161 Trade and other receivables, net 3 1,004 Short-term royalty and commercial payment receivables 9,819 14,215 Prepaid expenses and other current assets 270 483 Total current assets 146,890 169,313 Long-term restricted cash 6,016 6,100 Property and equipment, net 40 25 Operating lease right-of-use assets 364 378 Long-term royalty and commercial payment receivables 65,577 57,952 Other assets - long term 533 533 Total assets$219,420 $234,301 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable$1,515 $653 Accrued and other liabilities 1,299 2,768 Contingent consideration under RPAs, AAAs and CPPAs 3,000 7,000 Operating lease liabilities 55 54 Unearned revenue recognized under units-of-revenue method 2,159 2,113 Preferred stock dividend accrual 1,368 1,368 Current portion of long-term debt 6,144 5,543 Total current liabilities 15,540 19,499 Unearned revenue recognized under units-of-revenue method – long-term 6,692 7,228 Long-term operating lease liabilities 319 335 Long-term debt 114,528 118,518 Total liabilities 137,079 145,580 Stockholders’ equity: Preferred Stock, $0.05 par value, 1,000,000 shares authorized: 8.625% Series A cumulative, perpetual preferred stock, 984,000 shares issued and outstanding at March 31, 2024 and December 31, 2023 49 49 8.375% Series B cumulative, perpetual preferred stock, 1,600 shares issued and outstanding at March 31, 2024 and December 31, 2023 — — Convertible preferred stock, 5,003 issued and outstanding at March 31, 2024 and December 31, 2023 — — Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,636,355 and 11,495,492 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively 87 86 Additional paid-in capital 1,314,036 1,311,809 Accumulated deficit (1,231,831) (1,223,223) Total stockholders’ equity 82,341 88,721 Total liabilities and stockholders’ equity$219,420 $234,301 XOMA CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share amounts) Three Months Ended March 31, 2024 2023 Revenues: Revenue from contracts with customers$1,000 $- Revenue recognized under units-of-revenue method 490 437 Total revenues 1,490 437 Operating expenses: Research and development 33 54 General and administrative 8,461 6,196 Arbitration settlement costs - 4,132 Amortization of intangible assets - 225 Total operating expenses 8,494 10,607 Loss from operations (7,004) (10,170) Other income (expense) Interest expense (3,551) - Other income (expense), net 1,960 357 Net loss and comprehensive loss$(8,595) $(9,813) Less: accumulated dividends on Series A and Series B preferred stock (1,368) (1,368) Net loss and comprehensive loss attributable to common stockholders, basic and diluted$(9,963) $(11,181) Basic and diluted net loss per share attributable to common stockholders$(0.86) $(0.98) Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders 11,580 11,460 XOMA CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net loss$(8,595) $(9,813)Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 2,856 1,570 Common stock contribution to 401(k) 118 123 Amortization of intangible assets — 225 Depreciation 2 1 Accretion of long-term debt discount and debt issuance costs 306 — Non-cash lease expense 14 47 Change in fair value of equity securities (252) 24 Changes in assets and liabilities: Trade and other receivables, net 1,001 (5)Prepaid expenses and other assets 213 269 Accounts payable and accrued liabilities (105) 3,122 Operating lease liabilities (15) (50)Unearned revenue recognized under units-of-revenue method (490) (437) Net cash used in operating activities (4,947) (4,924) Cash flows from investing activities: Payments of consideration under RPAs, AAAs and CPPAs (15,000) (9,600)Receipts under RPAs, AAAs and CPPAs 7,771 2,366 Purchase of property and equipment (17) — Net cash used in investing activities (7,246) (7,234) Cash flows from financing activities: Principal payments – debt (3,616) — Debt issuance costs and loan fees paid in connection with long-term debt (581) — Payment of preferred stock dividends (1,368) (1,368)Repurchases of common stock (13) — Proceeds from exercise of options and other share-based compensation 1,956 — Taxes paid related to net share settlement of equity awards (1,334) — Net cash used in financing activities (4,956) (1,368) Net decrease in cash, cash equivalents and restricted cash (17,149) (13,526)Cash, cash equivalents and restricted cash at the beginning of the period 159,550 57,826 Cash, cash equivalents and restricted cash at the end of the period$142,401 $44,300 Supplemental Cash Flow Information: Cash paid for interest$3,780 $— Non-cash investing and financing activities: Accrual of contingent consideration under the Affitech CPPA$3,000 $— Preferred stock dividend accrual$1,368 $1,368 Investor contact: Media contact:Juliane SnowdenKathy VincentXOMAKV Consulting & Management+1-646-438-9754+1-310-403-8951juliane.snowden@xoma.comkathy@kathyvincent.com i https://www.takeda.com/newsroom/newsreleases/2024/takeda-announces-positive-topline-results-from-phase-2-study-evaluating-mezagitamab-TAK-079-a-potential-best-in-class-anti-CD38-monoclonal-antibody-for-primary-immune-thrombocytopenia/

Raised up to $140 million of non-dilutive non-recourse capital through a royalty-backed loan related to VABYSMO® from funds managed by Blue Owl Capital Received $15.5 million in cash payments related to our growing royalty base and the achievement of certain development milestones during 2023 Added third commercial asset to XOMA’s portfolio with the acquisition of economic interests in DSUVIA® (sufentanil sublingual tablet) in January 2024 Closed 2023 with two partners’ New Drug Applications (NDA) submitted to the U.S. Food and Drug Administration (FDA) EMERYVILLE, Calif., March 08, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (Nasdaq: XOMA), the biotech royalty aggregator, reported its fourth quarter and full year 2023 financial results and highlighted portfolio activities expected to drive long-term shareholder value. “Over the course of 2023, we continued to build the foundation for future growth, spearheaded by the $140 million royalty-backed financing of VABYSMO® in the fourth quarter,” stated Owen Hughes, Chief Executive Officer of XOMA. “We entered 2024 with the strongest cash position in the Company’s history, several key upcoming clinical and regulatory events, including the potential approvals of Day One’s tovorafenib and Zevra Therapeutics’ arimoclomol NDAs, and a growing pipeline of asset opportunities.” Key Fourth Quarter Events PartnerEventDay One Biopharmaceuticals Tovorafenib NDA accepted by U.S. Food and Drug Administration (FDA), resulting in XOMA’s receipt of a $5 million milestone payment from ViractaTovorafenib data presented at the Society of Neuro-Oncology Annual Meeting and published in Nature Medicine Zevra TherapeuticsResubmitted the arimoclomol NDA with FDAMedexusPediatric label expansion application for IXINITY® accepted for review by FDARezolute Launched RZ358 Phase 3 studyReceived Priority Medicines (PRIME) eligibility from European Medicines Agency AstraZenecaLaunched and dosed first patient in rilvegostomig Phase 3 studyLG Chem (AVEO Oncology)Launched ficlatuzumab Phase 3 studyOrganonAnnounced intent to terminate ebopiprant License Agreement Anticipated 2024 Events of Note PartnerEventDay One Biopharmaceuticals April 30, 2024 – FDA action date for tovorafenib NDAZevra TherapeuticsSeptember 21, 2024 – FDA action date for arimoclomol NDAMedexusFDA decision regarding IXINITY® pediatric label expansion Financial ResultsXOMA recorded total revenues of $1.8 million and $4.8 million for the fourth quarter and full year of 2023, respectively. In 2023, XOMA recognized $2.5 million in milestone payments received from two partners, whereas the Company reported revenues of $6.0 million in 2022, of which $4.0 million were milestone payments received from four partners. General and administrative (“G&A”) expenses were $7.3 million for the fourth quarter and $25.6 million for the full year of 2023. In the fourth quarter and full year of 2022, G&A expenses were $7.6 million and $23.2 million, respectively. The increase of $2.4 million between the two full-year periods was primarily due to a $5.5 million increase in stock-based compensation, partially offset by a $2.1 million decrease in consulting and legal expenses, and a $0.9 million decrease in salaries and related expenses. In the fourth quarter of 2023, G&A expenses included $2.6 million in non-cash stock-based compensation expense, compared with $1.0 million in the fourth quarter of 2022. For the full year of 2023, G&A expenses included $9.1 million in non-cash stock-based compensation, compared with $3.6 million for the full year of 2022. XOMA received cash payments of approximately $5.7 million from royalties and milestone payments in the fourth quarter of 2023, as compared to $0.8 million in the comparable period in 2022. During the full year of 2023, the Company received cash payments of approximately $15.5 million from royalties and milestone payments, as compared to $7.2 million in 2022. XOMA’s net cash used in operations during the fourth quarter of 2023 was $3.9 million and $18.2 million for the full year, as compared with $3.9 million used during the fourth quarter of 2022 and $12.9 million used for the full year of 2022. XOMA incurred one-time arbitration settlement costs of $4.1 million in 2023, related to an arbitration proceeding settlement with one of its licensees. For the year ended December 31, 2023, XOMA recorded $15.8 million in impairment charges, as a result of the discontinuation of operations at Bioasis ($1.6 million) and Organon’s decision to terminate its License Agreement for ebopiprant ($14.2 million). Other income, net was $1.6 million for the full year of 2023 and $0.3 million for the full year of 2022. The increase in other income, net between periods is primarily due to an increase in investment income. In 2023, net loss for the fourth quarter and year ended December 31, 2023, was $20.1 million and $40.8 million, respectively. In 2022, the net loss for the fourth quarter was $6.0 million and $17.1 million for the full year. On December 31, 2023, XOMA had cash and cash equivalents of $159.6 million (including $6.3 million in restricted cash). In 2023, XOMA’s royalty interests generated cash payments of $7.3 million from Roche related to VABYSMO® sales and $1.7 million from Medexus related to IXINITY® sales. The Company also received a $5.0 million milestone payment from Viracta related to the FDA’s acceptance of Day One Pharmaceuticals’ NDA for tovorafenib. These cash receipts from royalty and milestone acquisitions reduced XOMA’s short-term royalty and commercial payment receivables by $14 million. On October 16, 2023, the Company paid total cash dividends of $1.4 million on the 8.625% Series A Cumulative Perpetual Preferred Stock (Nasdaq: XOMAP) and on the 8.375% Series B Cumulative Perpetual Preferred Stock (Nasdaq: XOMAO). In December 2023, XOMA drew $130.0 million from its royalty-backed loan with certain funds managed by the credit platform of Blue Owl Capital. On December 31, 2022, the Company reported cash of $57.8 million. Based upon the cash flows XOMA expects to receive from VABYSMO®, DSUVIA®, and IXINITY® sales in addition to its current cash position, the Company continues to believe its current cash position will be sufficient to fund XOMA’s operations for multiple years. Subsequent EventsOn January 2, 2024, the Company announced a stock repurchase program of up to $50 million through January 2027. On January 7, 2024, Owen Hughes was appointed as Chief Executive Officer and Jack Wyszomierski was named Chairman of the Board of Directors. On January 18, 2024, XOMA acquired an economic interest in DSUVIA® (sufentanil sublingual tablet) from Talphera, Inc., for $8 million. DSUVIA® is commercialized by Alora Pharmaceuticals. XOMA will receive 100 percent of all royalties and milestones related to DSUVIA® sales until it receives $20 million. Thereafter, XOMA will receive a 15 percent royalty associated with DSUVIA® commercial sales, a 37.5 percent royalty on DoD purchases and 50 percent of the remaining $116.5 million in potential milestone payments due from Alora Pharmaceuticals. On February 16, 2024, XOMA announced its intention to acquire Kinnate Biopharma for between $2.3352 and $2.5879 in cash per share plus a contingent value right (CVR). XOMA anticipates it will add approximately $9.5 million to its cash balance at the closing of the acquisition, which is expected to occur in April 2024. About XOMA CorporationXOMA is a biotechnology royalty aggregator playing a distinctive role in helping biotech companies achieve their goal of improving human health. XOMA acquires the potential future economics associated with pre-commercial and commercial therapeutic candidates that have been licensed to pharmaceutical or biotechnology companies. When XOMA 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. 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 and other developments related to VABYSMO® (faricimab-svoa), IXINITY® [coagulation factor IX (recombinant)], DSUVIA® (sufentanil sublingual tablet), tovorafenib, and arimoclomol; the potential out-licensing of ebopiprant to an external partner for further development; the anticipated timings of regulatory filings and approvals related to assets in XOMA’s portfolio; the potential of XOMA’s portfolio of partnered programs and licensed technologies generating substantial milestone and royalty proceeds over time; and XOMA’s cash sufficiency forecast. 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’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; 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; and the impact to the global economy as a result of the COVID-19 pandemic. Other potential risks to XOMA meeting these expectations are described in more detail in XOMA'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's prospects. Any forward-looking statement in this press release represents XOMA'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 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, all assets in XOMA’s milestone and royalty portfolio, except VABYSMO® (faricimab-svoa), IXINITY® [coagulation factor IX (recombinant)], DSUVIA® (sufentanil sublingual tablet), 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 CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in thousands, except per share amounts) Year Ended December 31, 2023 2022 Revenues: Revenue from contracts with customers$2,650 $4,150 Revenue recognized under units-of-revenue method 2,108 1,877 Total revenues 4,758 6,027 Operating expenses: Research and development 143 153 General and administrative 25,606 23,191 Impairment charges 15,828 - Arbitration settlement costs 4,132 - Amortization of intangible assets 897 97 Total operating expenses 46,606 23,441 Loss from operations (41,848) (17,414) Other income (expense) Interest expense (569) - Other income (expense), net 1,586 295 Loss before income tax$(40,831) $(17,119) Income tax benefit - 15 Net loss and comprehensive loss$(40,831) $(17,104) Net loss and comprehensive loss attributable to common stockholders, basic and diluted$(46,303) $(22,576) Basic and diluted net loss per share attributable to common stockholders$(4.04) $(1.98) Weighted average shares used in computing basic and diluted net loss per share attributable to common stockholders 11,471 11,413 XOMA CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) December 31, December 31, 2023 2022 ASSETS Current assets: Cash and cash equivalents$153,290 $57,826 Short-term restricted cash 160 - Short-term equity securities 161 335 Trade and other receivables, net 1,004 1 Short-term royalty and commercial payment receivables 14,215 2,366 Prepaid expenses and other current assets 483 725 Total current assets 169,313 61,253 Long-term restricted cash 6,100 - Property and equipment, net 25 7 Operating lease right-of-use assets 378 29 Long-term royalty and commercial payment receivables 57,952 63,683 Intangible assets, net - 15,150 Other assets - long term 533 260 Total assets$234,301 $140,382 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable$653 $524 Accrued and other liabilities 2,768 2,918 Contingent consideration under RPAs, AAAs and CPPAs 7,000 75 Operating lease liabilities 54 34 Unearned revenue recognized under units-of-revenue method 2,113 1,899 Preferred stock dividend accrual 1,368 1,368 Current portion of long-term debt 5,543 - Total current liabilities 19,499 6,818 Unearned revenue recognized under units-of-revenue method – long-term 7,228 9,550 Long-term operating lease liabilities 335 - Long-term debt 118,518 - Total liabilities 145,580 16,368 Stockholders’ equity: Preferred Stock, $0.05 par value, 1,000,000 shares authorized: 8.625% Series A cumulative, perpetual preferred stock, 984,000 shares issued and outstanding at December 31, 2023 and December 31, 2022 49 49 8.375% Series B cumulative, perpetual preferred stock, 1,600 shares issued and outstanding at December 31, 2023 and December 31, 2022 — — Convertible preferred stock, 5,003 issued and outstanding at December 31, 2023 and December 31, 2022 — — Common stock, $0.0075 par value, 277,333,332 shares authorized, 11,495,492 and 11,454,025 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 86 86 Additional paid-in capital 1,311,809 1,306,271 Accumulated deficit (1,223,223) (1,182,392) Total stockholders’ equity 88,721 124,014 Total liabilities and stockholders’ equity$234,301 $140,382 XOMA CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year Ended December 31, 2023 2022 Cash flows from operating activities: Net loss$(40,831) $(17,104)Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 9,099 3,608 Impairment charges 15,828 — Change in fair value of contingent consideration under RPAs, AAAs, and CPPAs (75) — Common stock contribution to 401(k) 123 85 Amortization of intangible assets 897 97 Depreciation 3 7 Accretion of long-term debt 34 — Non-cash lease expense 119 170 Change in fair value of equity securities 174 439 Changes in assets and liabilities: Trade and other receivables, net (1,003) 208 Prepaid expenses and other assets 219 (71)Accounts payable and accrued liabilities (523) 1,845 Income taxes payable — (91)Operating lease liabilities (114) (195)Unearned revenue recognized under units-of-revenue method (2,108) (1,877)Net cash used in operating activities (18,158) (12,879) Cash flows from investing activities: Payments of consideration under RPAs, AAAs and CPPAs (14,650) (8,000)Receipts under RPAs, AAAs and CPPAs 13,956 3,026 Payment for IP acquired under the ObsEva IP Acquisition Agreement — (15,247)Purchase of property and equipment (17) — Net cash used in investing activities (711) (20,221) Cash flows from financing activities: Proceeds from issuance of long-term debt 130,000 — Debt issuance costs and loan fees (4,253) — Payment of preferred stock dividends (5,472) (5,472)Proceeds from exercise of options and other share-based compensation 466 2,419 Taxes paid related to net share settlement of equity awards (148) (1,398)Net cash provided by (used in) financing activities 120,593 (4,451) Net increase (decrease) in cash, cash equivalents and restricted cash 101,724 (37,551)Cash, cash equivalents at the beginning of the period 57,826 95,377 Cash, cash equivalents and restricted cash at the end of the period$159,550 $57,826 Supplemental Cash Flow Information: Cash paid for taxes$— $76 Right-of-use assets obtained in exchange for operating lease liabilities$468 $— Non-cash investing and financing activities: Issuance of common stock warrants in connection with long-term debt$1,470 $— Accrued issuance costs in connection with issuance of long-term debt$501 $— Preferred stock dividend accrual$1,368 $1,368 Estimated fair value of contingent consideration under the LadRx Agreements$1,000 $— Accrued transaction costs in connection with ObsEva IP Acquisition$— $122 Accrual of contingent consideration under the Affitech CPPA$6,000 $— Investor contact: Juliane Snowden XOMA +1-646-438-9754 juliane.snowden@xoma.comMedia contact:Kathy VincentKV Consulting & Management+1-310-403-8951kathy@kathyvincent.com