XOMA Corp (NASDAQ: XOMA)
XOMA is having a great day in the market today after announcing a licensing agreement surrounding its XmetA program. Today, we’ll discuss the licensing agreement, how the market is reacting to the news, and what we can expect to see from XOMA moving forward. So, let’s get right to it…
XOMA Enters A Licensing Agreement With Novo Nordisk
Early this morning, XOMA announced that it had entered a licensing agreement with Novo Nordisk A/S (NYSE: NVO). According to the terms of the new agreement, NVO will receive exclusive global development and commercialization rights to the XmetA program. XOMA will also retain commercialization rights. In the beginning, XOMA will receive an up-front payment of $5 million. From there, it has the potential to receive up to $290 million based on development, regulatory, and commercial milestones. Also, XOMA is eligible to receive royalties on the end product. In a statement, Jim Neal, SVP and COO at XOMA had the following to offer:
“Novo Nordisk is recognized globally as the leader in the development of therapies to treat diabetes mellitus. It has the expertise to further develop these first in class insulin receptor activators, which were discovered by XOMA’s scientists… Our corporate strategy is to develop novel therapeutics for endocrine diseases, particularly those that are considered rare, and we were able to structure the agreement with Novo Nordisk to retain commercialization rights of the XmetA program for rare indications.”
How The Market Reacted To The News
As we’ve come to expect any time we see positive news surrounding a publicly traded company, XOMA is having a great day in the market today. Currently (9:46) the stock is trading at $1.50 per share after a gain of 12.61%.
What We Can Expect To See From XOMA Moving Forward
Moving forward I have an overwhelmingly positive opinion of what we can expect to see from XOMA. While the news with regard to the licensing agreement is good, it seems to only be the tip of the iceburg here. Don’t forget about XOMA 358. For those of you who do not know, XOMA is in the process of developing a treatment for indications associated with hypoglycemia. We saw overwhelmingly positive results in both the Phase 1 and Phase 2 studies of the treatment. Now the company is in the midst of the Phase 3 study, which is likely to produce overwhelmingly positive results. With that said, I’m expecting to see several catalysts in the stock moving forward, each pushing XOMA exponentially higher! So, if you’re wondering if it’s too late to get in on the growth, the answer is no, we still have plenty more to look forward to!
Out of 5 analysts covering XOMA, 1 rates it “Buy”, 0 “Sell”, and 4 “Hold”. $6 is the highest target while $1.50 is the lowest. The $3.75 average target is 146.71% above today’s ($1.52) stock price. XOMA was the topic in 8 analyst reports since July 23, 2015, according to StockzIntelligence Inc. Zacks downgraded the stock on September 4 to a “Hold” rating. Ladenburg Thalmann downgraded the shares of XOMA in a report on July 22 to a “Neutral” rating.
The institutional sentiment increased to 1.53 in Q2 2015. Its up 0.33, from 1.2 in 2015Q1. The ratio is positive, as 12 funds sold all XOMA Corp shares owned while 28 reduced positions. 24 funds bought stakes while 37 increased positions. They now own 77.58 million shares or 0.90% more from 76.88 million shares in 2015Q1.
Signpost Capital Advisors LP holds 1.12% of its portfolio in XOMA Corp for 1.01 million shares. Opaleye Management Inc. owns 650,000 shares or 1% of their US portfolio. Moreover, Baker Bros. Advisors LP has 0.5% invested in the company for 14.68 million shares. The New York-based Kingdon Capital Management LLC has invested 0.5% in the stock. Broadfin Capital LLC, a New York-based fund, reported 1.50 million shares.
Since March 17, 2015, the stock had 0 insider buys, and 4 sales for $256,228 net activity. Rubin Paul D sold 5,000 shares worth $22,992. Varian John sold 10,000 shares worth $44,869.
XOMA Corporation is engaged in the discovery and development of antibody therapeutics. The company has a market cap of $185.28 million. The company’s lead product candidate, gevokizumab, is a potent humanized allosteric-modulating monoclonal antibody that binds to the inflammatory cytokine interleukin-1 beta. It currently has negative earnings. The firm has initiated three pivotal clinical trials evaluating gevokizumab for the treatment of non-infectious intermediate, posterior, or pan-uveitis (NIU) and Behcet’s disease uveitis.
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