Stock Alert for XOMA Ltd. (XOMA)

XOMA Ltd. (XOMA) is a biopharmaceutical company focused on the discovery, development and manufacture of novel antibody therapeutics for its own proprietary pipeline as well as through license and collaborative agreements with pharmaceutical and biotechnology companies, and under its contracts with the U.S. government.  The Company’s product development pipeline includes XOMA 052, an anti-interleukin-1 beta (IL-1 beta) antibody, XOMA 3AB, a biodefense anti-botulism antibody candidate, and preclinical antibody discovery programs in several indications. XOMA has an integrated product development platform, extending from preclinical science to development and manufacturing. The Company’s technologies have contributed to the success of marketed antibody products, including LUCENTIS (ranibizumab injection) for wet age-related macular degeneration and CIMZIA (certolizumab pegol) for rheumatoid arthritis and Crohn’s disease.

Share Statistics (05-Jan-11) FY

2008

FY

2009

%

Chg

Q3

2009

Q3

2010

%

Chg

Symbol XOMA Revenue, $Mn 67.99 98.43 44.8% 27.42 10.90 -60.2%
Current price $6.67 Gross marg.
52wk Range: $2.24-$12.60 Oper. margin 9.5% -152.8%
Avg Vol (3m): 2,927,260 Net margin -66.5% 0.6% -100.9% 5.6% -125.0% -2332%
Market Cap. 145.39M
Shares Outstanding 21.20M EPS, $ -6.06 -1.15 -81.0% 0.39 -0.69 -276.9%

Source: Reuters.com, SEC Filings.

Financial Summary

XOMA had total revenues of $10.9 million and a net loss of $13.6 million, or $0.69 per share, in the third quarter of 2010, compared with total revenues of $27.4 million and net income of $1.5 million, or $0.13 per share, in the third quarter of 2009. The decrease in revenues in the 2010 period compared with the 2009 period was primarily due to the $25.0 million sale of the company’s royalty interest in LUCENTIS® in the third quarter of 2009, partially offset by increased contract revenue related to work performed under a U.S. government biodefense contract and the $4.0 million sale of the Company’s royalty interest in CIMZIA® in the 2010 third quarter.

XOMA had total operating expenses of $27.5 million in the quarter ended September 30, 2010, compared with $20.6 million in the 2009 third quarter. Research and development expenses were $21.3 million in the 2010 third quarter, compared with $13.4 million in the 2009 third quarter, primarily reflecting increased spending on the XOMA 052 phase II clinical program. Selling, general and administrative expenses were $6.2 million in the 2010 third quarter compared with $7.2 million in the 2009 third quarter.

At September 30, 2010, XOMA had cash and cash equivalents of $16.9 million, compared with $23.9 million at December 31, 2009. Subsequent to September 30, 2010, XOMA’s cash position was strengthened by $2.0 million received as final payment under its antibody discovery collaboration with Kaketsuken and $1.5 million in gross proceeds from equity issuances under an At Market Sales Agreement entered into in 2009, which has now been fully utilized. In addition, XOMA was awarded $977,917 in grants under the U.S. government’s Patient Protection and Affordable Care Program.

Source: http://www.xoma.com


Financial Strength (05-Jan-2011) Company Industry Sector S&P 500
Quick Ratio (MRQ) 2.37 2.26 0.65
Current Ratio (MRQ) 1.48 2.96 2.85 0.97
LT Debt to Equity (MRQ) 134.42 14.54 23.20 121.16
Total Debt to Equity (MRQ) 134.42 17.19 27.79 178.24
Interest Coverage (TTM) 2.80 0.17 1.23 16.38

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among six polled investment analysts. Against the XOMA Ltd company.

Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
Latest 3 1 2 0 0 0
4 weeks ago 3 0 2 0 0 0
2 months ago 3 0 2 0 0 0
3 months ago 3 0 2 0 0 0
Last year 3 0 2 0 0 0

The five analysts offering 12-month price targets for XOMA have a median target of 12.00, with a high estimate of 36.00 and a low estimate of 8.00. The median estimate represents a 64.27% increase from the last price of 7.31.

Source: markets.ft.com

Consensus Estimates Analysis


# of Estimates Mean High Low 1 Year Ago
SALES (in millions)
Year Ending Dec-11 3 45.30 49.91 37.50 42.97
EARNINGS (per share)
Year Ending Dec-11 3 -2.61 -2.29 -3.00 -3.05

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=XOMA.OQ


Investment Highlights

XOMA engages in multiple active development projects across several therapeutic areas including cardio-metabolic, inflammatory, autoimmune and infectious disease, and cancer. It develops both proprietary and partnered products using its extensive suite of antibody technologies.

The Company’s pipeline of drug candidates includes XOMA 052, a paradigm-changing antibody for treatment of patients with Beçhet’s uveitis, Type 2 diabetes and other diseases. It has evaluated XOMA 052 in a proof-of-concept clinical trial in patients with Beçhet’s uveitis and two clinical studies in Type 2 diabetes patients for its potential to target key inflammatory pathways that contribute to the death and impairment of insulin-producing cells. The Company intends to advance XOMA 052 into additional clinical studies for the treatment of other inflammatory conditions, and is evaluating its potential in cardiovascular disease.

XOMA develops products with premier pharmaceutical companies including Novartis AG, Schering Corp., a subsidiary of Merck & Co. Inc., and Takeda Pharmaceutical Company Ltd. Its technologies have contributed to the success of marketed antibody products, including LUCENTIS® (ranibizumab injection) for wet age-related macular degeneration and CIMZIA® (certolizumab pegol) for rheumatoid arthritis and Crohn’s disease.

The Company has a premier antibody discovery and development platform that incorporates an unmatched collection of antibody phage display libraries and proprietary Human Engineering(tm), affinity maturation, Bacterial Cell Expression (BCE) and manufacturing technologies. BCE is a key breakthrough biotechnology for the discovery and manufacturing of antibodies and other proteins. As a result, 60 pharmaceutical and biotechnology companies have signed BCE licenses, and several licensed product candidates are in clinical development.

Recent Company News

XOMA recently inked a development and commercialization deal with French drug maker Les Laboratoires Servier for XOMA 052, XOMA’s anti-inflammatory drug candidate in multiple indications. “This is an important collaboration for XOMA as we gain a seasoned partner in Servier and it allows us to accelerate XOMA 052 into Phase 3 development this year in Behcet’s uveitis, an orphan indication for which we have reported positive proof-of-concept results,” XOMA chairman and CEO Steven B. Engle said in a statement.

Under the terms of the agreement, XOMA will receive about $35 million up front, up to $470 million in milestone payments, and royalties up to a mid-teens percentage rate.

XOMA will retain rights to market the product for Behcet’s uveitis and other inflammatory and cancer indications in the United States and Japan.  Servier will commercialize the product for similar illnesses in the rest of the world and will fund the first $50 million of XOMA 052 development expenses and 50% of further expenses for the Behcet’s uveitis indication.

Behcet’s uveitis is a rare blood vessel condition that can lead to vision loss. XOMA looks to advance XOMA 052 for this indication to the late stage this year.

Source: reuters.com; http://www.xoma.com

Technical Analysis

Source: http://stockcharts.com

Comparative Analysis

Company Name Ticker Price per Mrkt. Cap. P/E P/S
Jan-05-2011 symbol Share, $ $ Mn 2010 2011 2010 2011
Abbott Laboratories ABT 48.27 74.62B 11.58 10.36 2.13 1.95
Novartis AG NVS 57.73 132.18B 11.00 10.73 2.60 2.31
Amgen Inc. AMGN 56.73 53.60B 11.08 10.70 3.57 3.51
Biotechnology Median 16.52 n/a 8.82 n/a
XOMA Ltd. XOMA 6.67 145.39M n/a n/a 3.70 2.15

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY

Inside Purchases – Last 6 Months

Shares Transaction
Purchases n/a 0
Sales n/a 0
Net Shares Purchased (Sold) n/a 0
Total Insider Shares Held 557.37K n/a
% Net Shares Purchased (Sold) 0% n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
Shares
Net Shares Purchased (Sold) (2,270,740)
% Change in Institutional Shares Held (702.28%)

Source: Yahoo Finance

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