Leerink Partners reiterates Outperform rating on XOMA stock amid strong Q2 results

Published 14/08/2025, 12:14
Leerink Partners reiterates Outperform rating on XOMA stock amid strong Q2 results

Investing.com - Leerink Partners has reiterated an Outperform rating and $55.00 price target on XOMA, Ltd. (NASDAQ:XOMA), currently trading at $30.89, following the company’s second-quarter 2025 financial results. According to InvestingPro data, analyst targets range from $35 to $104, suggesting significant upside potential.

XOMA reported revenue of $13.1 million for the second quarter of 2025, exceeding Leerink’s estimate of $10.4 million by 29%. The company posted a GAAP earnings per share of $0.44, significantly above the analyst’s estimate of -$0.07. InvestingPro analysis reveals impressive gross profit margins of 93.23% and strong liquidity, with current assets exceeding short-term obligations by nearly 5x.

During the quarter, XOMA recorded $11.7 million in cash receipts, including a $5.0 million milestone payment from RZ358 for completing Phase 3 trial enrollment and a $3.0 million milestone from mezagitamab for first patient dosing. The company’s recent performance has been notable, with a 19.5% return over the past week. Unlock more insights and 5 additional ProTips with InvestingPro.

Several pipeline catalysts are expected through year-end 2025, including topline results from RZ358 in congenital hyperinsulinism in December 2025. XOMA holds high-single-digit to mid-teen royalties on RZ358, which management believes could become its largest royalty stream if the drug generates compelling results. The company’s market capitalization stands at $370 million, with revenue growth of 195% over the last twelve months.

Other upcoming catalysts include Ojemda EU approval and the seralutinib Phase 3 readout, while XOMA also expects to receive low-single-digit million cash inflows from the acquisitions of HLVX and Turnstone, plus approximately $3 million from short-term financing for ESSA’s acquisition.

In other recent news, XOMA Royalty Corporation has announced several significant acquisition agreements. XOMA Royalty will acquire HilleVax Inc. for $1.95 in cash per share, along with a non-transferable contingent value right (CVR) that offers potential additional payments. The CVR for HilleVax stockholders includes potential payments from excess cash, savings on office lease obligations, and proceeds from norovirus vaccine programs. Additionally, XOMA Royalty has entered into an agreement to acquire LAVA Therapeutics N.V. for between $1.16 and $1.24 per share in cash, plus a CVR representing 75% of net proceeds from LAVA’s partnered assets and unpartnered programs. Furthermore, XOMA Royalty will acquire Turnstone Biologics for $0.34 in cash per share, with a CVR included in the deal. These acquisitions reflect XOMA Royalty’s strategic moves to expand its portfolio through upfront cash payments and contingent value rights. The transactions have been approved by the respective boards and are expected to close in the coming months.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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