XOMA Earns $9 Million Milestone as FDA Grants Accelerated Approval to Day One’s OJEMDATM (tovorafenib) for Relapsed or Refractory BRAF-altered Pediatric Low-Grade Glioma (pLGG)

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XOMA (NASDAQ: XOMA) has earned a $9 million milestone following the FDA's accelerated approval of Day One Biopharmaceuticals' NDA for OJEMDA™ (tovorafenib), a treatment for pediatric low-grade glioma. XOMA is entitled to a mid-single digit royalty on global OJEMDA™ sales. This marks a significant advancement in providing treatment for patients with relapsed or refractory pLGG harboring a BRAF fusion or rearrangement, or BRAF V600 mutation.

Positive

• XOMA earns $9 million milestone from FDA approval of OJEMDA™ for pediatric low-grade glioma
• XOMA entitled to mid-single digit royalty on global OJEMDA™ sales
• Day One Biopharmaceuticals' OJEMDA™ is the first FDA-approved type II RAF inhibitor for relapsed or refractory pLGG patients with specific BRAF alterations
• XOMA CEO Owen Hughes emphasizes the impact of the milestone on children with BRAF-altered low-grade gliomas
• XOMA previously paid $13.5 million upfront for rights to tovorafenib and potential milestones from Viracta Therapeutics

Negative

• None.

Financial Analyst

The FDA approval of OJEMDA™ is a significant milestone for XOMA's strategic focus on monetizing biotech innovations. The $9 million received strengthens their immediate financial position. It's a non-dilutive capital inflow that enhances their balance sheet without shareholder dilution, an aspect often welcomed by investors. Given the mid-single digit royalty agreement, the long-term revenue prospects look favorable, especially considering the lack of competition as the sole FDA-approved type II RAF inhibitor for this indication. However, investors should temper expectations, as global sales will depend on market uptake, pricing strategies and the ability to navigate international regulatory landscapes. Moreover, looking at the $13.5 million upfront investment XOMA made in 2021 for the rights, the return on investment and time to recover the initial outlay will be metrics to watch.

Oncology Drug Market Analyst

Pediatric low-grade glioma with BRAF alterations represents a niche but critical therapeutic area. The approval of OJEMDA™ fills an unmet need, which could translate to a strong market demand. The orphan drug status typically allows for premium pricing, but it also caps the market size. As a type II RAF inhibitor, OJEMDA™ offers a differentiated mechanism of action that can be pivotal in treating relapsed or refractory cases. The lack of alternative FDA-approved type II RAF inhibitors for pLGG positions Day One Biopharmaceuticals favorably, potentially securing a monopolistic market share in the short to medium term. For XOMA, the royalties from sales provide a recurring revenue stream, albeit the real commercial potential hinges on the adoption rate and Day One's execution of their commercialization strategy.

Medical Research Analyst

From a medical standpoint, the approval of OJEMDA™ is a breakthrough for children affected by this rare form of cancer. Its significant efficacy in a serious condition with limited treatments could lead to rapid adoption within the oncology community. This can result in a swift initial sales ramp-up, benefiting XOMA's royalty revenue. However, it's vital to monitor post-approval clinical outcomes and any emerging safety issues that could impact the drug's marketability and, by extension, XOMA's financial benefits. Additionally, the specifics of the 'mid-single digit royalty' will dictate the magnitude of XOMA's revenue stream, with the exact percentage being a key determinant in forecasting long-term financial impact.

XOMA is entitled to a mid-single digit royalty on global OJEMDA™ sales

First and only FDA-approved type II RAF inhibitor for patients with relapsed or refractory pLGG harboring a BRAF fusion or rearrangement, or BRAF V600 mutation

EMERYVILLE, Calif., April 25, 2024 (GLOBE NEWSWIRE) -- XOMA Corporation (NASDAQ: XOMA), the biotech royalty aggregator, announced today it has earned a $9 million milestone related to the U.S. Food and Drug Administration’s (FDA) approval of Day One Biopharmaceuticals’ New Drug Application (NDA) for OJEMDA™ (tovorafenib) for the treatment of patients 6 months of age and older with relapsed or refractory pediatric low-grade glioma (LGG) harboring a BRAF fusion or rearrangement, or BRAF V600 mutation. 

“This is an important milestone for XOMA and our royalty portfolio, but more importantly, it is a watershed event for children living with low-grade gliomas with BRAF alterations that have relapsed or progressed,” stated Owen Hughes, Chief Executive Officer of XOMA.

In March 2021, XOMA paid $13.5 million upfront to acquire the $54 million in potential milestones and mid-single digit royalties associated with tovorafenib, plus a share of potential event-based economics, in addition to the economics associated with vosaroxin, from Viracta Therapeutics. 

About XOMA Corporation
XOMA 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 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 and amount of potential commercial payments to XOMA and other developments related to OJEMDA™ (tovorafenib) 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 “expect,” “may,” “will”, or “could,” 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 OJEMDA™ (tovorafenib), 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 Investor Contact	XOMA Media Contact
Juliane Snowden	Kathy Vincent
XOMA Corporation	KV Consulting & Management
+1-646-438-9754	+1-310-403-8951
juliane.snowden@xoma.com	kathy@kathyvincent.com

FAQ

What milestone did XOMA earn related to the FDA approval of OJEMDA™?

XOMA earned a $9 million milestone related to the FDA approval of Day One Biopharmaceuticals' NDA for OJEMDA™.

What is XOMA entitled to following the FDA approval of OJEMDA™?

XOMA is entitled to a mid-single digit royalty on global OJEMDA™ sales.

What type of patients is OJEMDA™ approved for?

OJEMDA™ is approved for patients 6 months of age and older with relapsed or refractory pediatric low-grade glioma harboring a BRAF fusion or rearrangement, or BRAF V600 mutation.

Who is the CEO of XOMA?

Owen Hughes is the Chief Executive Officer of XOMA.

What did XOMA acquire from Viracta Therapeutics in March 2021?

XOMA acquired the rights to tovorafenib, potential milestones, mid-single digit royalties, and event-based economics associated with tovorafenib, as well as the economics associated with vosaroxin.

When did XOMA pay $13.5 million upfront for the rights to tovorafenib from Viracta Therapeutics?

XOMA paid $13.5 million upfront for the rights to tovorafenib from Viracta Therapeutics in March 2021.