Arimoclomol and Aldoxorubicin Acquisition to Bolster XOMA's Revenue Growth: Analyst

Earlier today, XOMA Corporation XOMA acquired the royalty and milestone rights associated with two assets from LadRx Corporation: arimoclomol for Niemann-Pick disease type C, and aldoxorubicin, an albumin-linked formulation of doxorubicin for $5 million.

Zevra Therapeutics has announced its intention to file a New Drug Application for arimoclomol as early as the third quarter of 20231.

The second asset is aldoxorubicin, a Phase 2 program that ImmunityBio is developing as a potential therapy for pancreatic cancer. 

Under the terms of the agreement, XOMA will receive a mid-single digit royalty on Arimoclomol's commercial sales upon approval and up to $52.6 million in potential milestone payments. 

Should aldoxorubicin be approved, XOMA will receive a mid-single-digit to mid-teens royalty rate on aldoxorubicin commercial sales depending upon the indication, and up to $343 million in development and commercial milestones. 

LadRx will be entitled to receive up to $6 million in certain pre-specified milestones associated with arimoclomol and aldoxorubicin. 

HC Wainright says that the transaction is important as it is true to the model at XOMA in identifying niche opportunities that continue to layer a broad set of future potential royalties.

The analyst reiterates the Buy rating and $69 price target. It also notes that XOMA continues to move towards sustained profitability driven by milestone revenue and royalties.

While milestone revenues are choppy, royalties should provide good stability to revenue growth, hence it looks forward to increased visibility for its partnered assets.

Price Action: XOMA shares are up 3.13% at $19.15 on the last check Thursday.