On Wednesday, H.C. Wainwright updated its outlook on shares of XOMA, Ltd. (NASDAQ: XOMA), raising the price target to $117 from the previous $74, while maintaining a Buy rating on the stock. The firm's decision reflects a positive view of the company's financial future, influenced by recent major transactions.
The analyst from H.C. Wainwright highlighted that XOMA's business model, based on royalty aggregation, has shown maturity and significant value, particularly through its lead assets. The company's recent deals, especially involving products like Vabysmo and Ojemda, have led to substantial improvements in XOMA's financial prospects.
These transactions are seen as major accomplishments that should be recognized for their immediate impact and their role in the company's long-term financial growth. The updated net present value (NPV) model used by H.C. Wainwright now includes key drivers for XOMA's future, such as approved products and important development stage assets, with appropriate risk adjustments.
The analyst believes that XOMA's recent business activities have set the stage for a promising future, with cash flow already underway and significant partner catalysts expected to drive royalty growth. The search for new transactions is anticipated to provide XOMA with diverse funding opportunities.
H.C. Wainwright reaffirmed its Buy rating for XOMA shares, endorsing the stock based on the company's highly diversified portfolio of growing royalty assets. The firm's updated price target and rating reflect confidence in XOMA's continued success and the potential for increased shareholder value.
In other recent news, XOMA Corporation, soon to be known as XOMA Royalty Corporation, has reported significant financial developments. The biotech royalty aggregator received 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™.
Following the U.S. Food and Drug Administration's approval of Day One Biopharmaceuticals' New Drug Application for OJEMDA™, XOMA secured an additional $9 million milestone payment. CEO Owen Hughes anticipates that future royalties from OJEMDA™ will contribute to sustainable free cash flow over time.
In a strategic move, XOMA has announced its rebranding to XOMA Royalty Corporation, a decision that reflects the company's focus and does not alter the voting or other rights of the company's common stock. The change in the corporate name is purely nominal and has no impact on the company's operations or financial standing. These are recent developments in the company's operations.
InvestingPro Insights
Alongside the positive outlook from H.C. Wainwright, InvestingPro data underscores the dynamic nature of XOMA's financial landscape. With a notable revenue growth of 73.1% over the last twelve months as of Q1 2024 and an impressive 240.96% quarterly revenue growth in Q1 2024, XOMA's financial trajectory appears robust. The company's market capitalization stands at $307.96 million, reflecting investor confidence in its business model and growth prospects.
InvestingPro Tips further highlight that XOMA's stock has seen a significant return over the last week with a 14.55% increase, and an even more remarkable return of 67.26% over the past year. While analysts do not expect the company to be profitable this year, XOMA's liquid assets exceed short-term obligations, suggesting a solid financial footing for near-term operations.
For investors looking for more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/XOMA, which provide a comprehensive view of the company's financial health and market performance.
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