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what it is
XOMA buys rights to future drug royalties and milestone payments, then waits for other companies to do the hard part.
how it gets paid
Last year Xoma Royalty made $7M in revenue. commercial royalty revenue was the main engine at $3.1M, or 44% of sales.
what just happened
The quarter was all about revenue jumping to $9M, a huge spike against a company with only $7M of trailing annual revenue.
At a glance
C++ balance sheet — some cracks in the foundation
10/100 earnings predictability — expect surprises
7.6x trailing p/e — the market's not buying it — or you found a deal
9.3% return on capital — nothing to write home about
$0.36 fy2024 eps est
xvary composite: 40/100 — below average
What they do
XOMA buys rights to future drug royalties and milestone payments, then waits for other companies to do the hard part.
XOMA wins by selling money, not lab work. Royalty acquisition → buying future drug payment streams → so what: you get exposure to biotech products without paying to run giant clinical trials yourself. With just 13 employees and $115 million of debt, it is built more like a financing shop than a drug developer.
How they make money
$7M
annual revenue
commercial royalty revenue
$3.1M
+4011%
milestone revenue
$2.0M
flat
license and collaboration revenue
$1.2M
dn
other royalty-related income
$0.7M
flat
The products that matter
drug royalty acquisition portfolio
Royalty Portfolio
$9.4M royalty and license revenue
it's the core business. the portfolio generated $9.4M in royalty and license revenue over the last twelve months, which tells you XOMA is still early in converting acquired rights into meaningful cash flow.
core economics
revised partnered royalty stream
Mezagitamab (Takeda)
up to $13M in milestones
the December 2025 revision gives XOMA a low single-digit royalty plus up to $13M in potential milestones. that's useful, but it also tells you how this model works — progress often comes in negotiated slices, not giant step-changes.
watch this asset
Key numbers
7.6x
trailing p/e
P/E → price compared with past earnings → so what: the stock looks cheap if the earnings hold, and silly if they do not.
$115M
long-term debt
Debt matters more here because the business only has about $7M in trailing revenue, so the balance sheet has to do real work.
n/a
operating margin
Prior margin KPI failed sanity check — verify in filings. Operating margin → what is left after expenses → so what: the reported economics are still wildly uneven.
9.3%
return on capital
Return on capital → profit from money invested → so what: XOMA is getting some return on its deal-making, just not enough to make the income statement pretty.
Financial health
C++
strength
- balance sheet grade C++ — below average — limited financial resources
- risk rank 3 — safer than 50% of stocks
- price stability 20 / 100
- long-term debt $115M (26% of capital)
C++ — below average. watch for debt servicing and cash burn.
Total return vs. market
Return history isn't available for XOMA right now.
source: institutional data · return history unavailable
What just happened
beat estimates
The quarter was all about revenue jumping to $9M, a huge spike against a company with only $7M of trailing annual revenue.
Latest-quarter revenue was $9M, up 4011% vs. prior year, and EPS was $1.20, up 71% vs. prior year, based on the SEC-backed figures provided. Quiet part out loud: one royalty payment can make this business look transformed for a quarter.
$9M
revenue
$1.20
eps
n/a
operating margin
the number that mattered
$9M matters most because it is larger than the company's $7M trailing annual revenue, which shows how extreme quarter-to-quarter swings can be.
source: company earnings report, 2026
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What could go wrong
the #1 risk is partner drug programs failing to produce durable royalty cash flow.
med
binary pipeline exposure
XOMA does not control the labs, trials, or launches behind the assets it owns rights to. You are underwriting external execution.
Impact: the current revenue base is only $12.6M, so one missed partner program can matter a lot.
med
milestone-heavy revenue mix
Reported annual revenue of $29M sits next to a $12.6M trailing revenue base and just $9.4M of royalty and license revenue. That gap tells you how irregular recognition can be.
Impact: the market can celebrate one quarter and then relearn that milestone timing is not recurring demand.
med
debt limiting deal flexibility
Long-term debt is $115M, or 26% of capital. This model needs fresh royalty acquisitions to keep growing, and debt reduces room for error on price and timing.
Impact: if acquired assets disappoint, leverage stops being a tool and starts being a restraint.
med
capital allocation transition risk
The January 2026 CFO transition matters because this is a business where financing terms and deal selection are the product.
Impact: even a small execution slip can matter when earnings have already declined 31.9% annually over five years.
This is not a diversified cash machine. It is a $327M equity value sitting on $12.6M of trailing revenue and $115M of long-term debt, with most of the upside tied to partner programs outside XOMA's control.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
royalty revenue versus milestone revenue
The number that matters is not whether a quarter looks good. It is whether royalty and license revenue keeps moving above the current $9.4M run-rate without needing milestone noise to do the work.
calendar
q4 and full-year 2025 results
Management is scheduled to report on March 18, 2026. You want to see whether the $12.6M trailing revenue base starts to look less temporary.
trend
Takeda-related economics actually converting
The revised mezagitamab agreement offers a low single-digit royalty and up to $13M in milestones. More assets on paper are nice. More cash in reported results is better.
risk
post-transition capital allocation discipline
With a new CFO and $115M of long-term debt, every acquisition decision matters. Watch the pace, size, and structure of the next royalty deals.
Analyst rankings
earnings predictability
10 / 100
in human-speak, analysts do not expect a smooth earnings line here. milestone timing can make one quarter look great and the next one look empty.
risk rank
3
roughly middle of the pack on broad risk scoring, but the business model itself is much more event-driven than that number suggests.
source: institutional data
Institutional activity
institutional ownership data for XOMA is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$24
current price
n/a
target midpoint · n/a from current
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