FDA Acceptance of Zevra’s Arimoclomol NDA Filing for Niemann-Pick Disease Type C (NPC) Results in XOMA Making a $1 Million Milestone Payment to LadRx
XOMA Corporation (NASDAQ: XOMA) announced that the FDA has accepted Zevra Therapeutics' New Drug Application for arimoclomol, a first-in-class therapy for Niemann-Pick disease type C (NPC), with a PDUFA target action date of June 21, 2024. XOMA will make a $1 million milestone payment to LadRx based on the FDA's acceptance. The company previously paid LadRx a $5 million upfront payment and acquired a mid-single digit royalty on arimoclomol's commercial sales, with potential milestone payments of up to $52.6 million, net, from Zevra. The transaction also included a royalty rate on commercial sales of aldoxorubicin and potential payments of up to $343 million in development and commercial milestones from ImmunityBio.
The FDA's acceptance of the New Drug Application for arimoclomol is a pivotal event for XOMA Corporation and its investors. The assignment of a PDUFA target action date is a significant milestone in the drug approval process, indicating that the FDA will make a decision on the drug's marketability by June 21, 2024. It is crucial to note that the $1 million milestone payment to LadRx is part of a larger financial arrangement, which includes a mid-single digit royalty on arimoclomol's commercial sales and substantial potential milestone payments that could enhance XOMA's revenue streams.
From a financial perspective, the success of arimoclomol has a direct impact on XOMA's future cash flows. The royalty structure in place for arimoclomol's commercial sales provides a recurring revenue model that is highly favorable for XOMA, especially considering the high costs associated with drug development. Furthermore, the additional royalties from aldoxorubicin, contingent on its commercial success, represent another layer of potential income for the company. Investors should closely monitor the FDA's decision, as approval could lead to significant stock price appreciation, while a rejection or request for additional data could adversely affect the company's financial projections.
Niemann-Pick disease type C (NPC) is an ultra-rare and debilitating condition and the development of arimoclomol represents a potential breakthrough in addressing the unmet medical needs of those affected. As a first-in-class therapy, arimoclomol's novel mechanism of action could establish a new standard of care for NPC, which may translate into a strong market position if approved. The biotech industry often sees significant valuation increases for companies that successfully bring to market treatments for rare diseases due to factors such as market exclusivity, pricing power and patient advocacy support.
It is also important to consider the broader impact on the biotech sector. Success in this case could incentivize further investment in therapies for rare diseases, potentially leading to a surge in innovation and research funding. On the flip side, should arimoclomol encounter regulatory hurdles or fail to demonstrate efficacy to the FDA's satisfaction, it could cast a shadow on similar developmental treatments and dampen investor enthusiasm for orphan drug candidates.
The FDA's acceptance of arimoclomol's NDA underscores the strategic importance of XOMA's business model as a biotech royalty aggregator. This model allows XOMA to mitigate some of the risks associated with drug development by acquiring royalty interests in multiple drugs, diversifying its investment portfolio. The company's milestone-based payment structure with Zevra Therapeutics and ImmunityBio highlights a trend in the biotech industry where companies leverage partnerships and licensing deals to finance and manage the costs of bringing new therapies to market.
Given the rarity of NPC and the lack of approved treatments, arimoclomol's potential market impact is significant. Assuming approval, XOMA's royalty revenue from arimoclomol's sales could be substantial, particularly when considering the premium pricing often associated with orphan drugs. However, the market size is inherently limited by the low prevalence of NPC, so the financial success of the drug will also depend on market penetration and reimbursement rates. Stakeholders should evaluate the potential market size and pricing strategy to fully assess the long-term financial implications for XOMA.
01/11/2024 - 04:05 PM
FDA has acknowledged receipt of the resubmission and assigned a PDUFA target action date of June 21, 2024
EMERYVILLE, Calif., Jan. 11, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, announced today that based upon the U.S. Food and Drug Administration’s (FDA) acceptance of Zevra Therapeutics’ New Drug Application (NDA) for arimoclomol, an orally-delivered, first-in-class therapy for Niemann-Pick disease type C (NPC), XOMA will make a $1 million milestone payment to LadRx.
“NPC is an ultra-rare, progressive, neurodegenerative genetic disorder where those living with NPC lose independence due to physical and cognitive limitations, with key neurological impairments presenting in speech, cognition, swallowing, ambulation, and fine motor skills. Arimoclomol has the potential to be the first approved therapy designed to slow the progress of this devastating disease,” stated Brad Sitko, Chief Investment Officer at XOMA. “We, together with the NPC community, support Zevra’s efforts to secure marketing approval for arimoclomol in the U.S. and the EU.”
In June 2023, XOMA announced it had paid LadRx a $5 million upfront payment plus a share of future event-based milestones to acquire a mid-single digit royalty on arimoclomol’s commercial sales and up to $52.6 million , net, in potential milestone payments from Zevra.
The transaction also included a mid-single-digit to mid-teens royalty rate on commercial sales of aldoxorubicin depending upon the indication, in addition to potential payments of up to $343 million in development and commercial milestones from ImmunityBio.
About XOMA Corporation
Forward-Looking Statements/Explanatory Notes Certain 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 of FDA review and approval of arimoclomol, the amount of potential milestone and commercial payments to XOMA and other developments related to arimoclomol and aldoxorubicin, 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-K 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) and IXINITY® [coagulation factor IX (recombinant)], 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 Investor Contact XOMA Media Contact Juliane Snowden Kathy Vincent
What is the FDA action date for Zevra Therapeutics' New Drug Application for arimoclomol?
The FDA has assigned a PDUFA target action date of June 21, 2024 for the NDA for arimoclomol.
What milestone payment will XOMA make to LadRx based on the FDA's acceptance of the NDA?
XOMA will make a $1 million milestone payment to LadRx based on the FDA's acceptance of the NDA for arimoclomol.
What were the terms of the previous payment made by XOMA to LadRx?
XOMA previously paid LadRx a $5 million upfront payment and acquired a mid-single digit royalty on arimoclomol's commercial sales, with potential milestone payments of up to $52.6 million, net, from Zevra.
What other potential payments were included in the transaction?
The transaction also included a royalty rate on commercial sales of aldoxorubicin and potential payments of up to $343 million in development and commercial milestones from ImmunityBio.
