XOMA Royalty Corp. reported third‑quarter 2025 results on November 12 2025, showing revenue of $9.4 million—down $2.07 million from the $11.47 million consensus estimate and a 29.9% year‑over‑year decline from $7.2 million in Q3 2024. Net income rose to $14.1 million, a turnaround from the $17.2 million loss recorded in Q3 2024, and gave the company a GAAP earnings per share of $0.70, beating the $0.66 consensus by $0.04 or 6%. The company’s cash receipts for the quarter totaled $14.3 million, driven by $30.3 million in royalty payments and $13.6 million in milestone fees recorded year‑to‑date. Cash and cash equivalents stood at $130.6 million as of September 30 2025, including $85.4 million in restricted cash, providing a robust liquidity cushion for future acquisitions.
Revenue fell short of expectations because the company’s core portfolio of late‑stage assets delivered lower-than‑anticipated sales growth. While the portfolio’s flagship products—VABYSMO and OJEMDA—continued to generate strong royalty income, the overall mix shifted toward lower‑margin milestone fees, and the company’s exposure to a few large counterparties increased revenue concentration risk. The revenue miss also reflects broader market softness in the biopharmaceutical sector, which has dampened partner sales and slowed the pace of new product launches.
Operating expenses were largely controlled. Research and development spending dropped sharply to $69 thousand from $0.8 million in Q3 2024, reflecting the company’s decision to scale back internal R&D in favor of acquiring royalty interests. General and administrative expenses rose to $9.7 million, up $1.7 million from the same quarter last year, driven by higher legal and compliance costs associated with recent acquisitions. Interest expense was $3.3 million, slightly lower than the $3.5 million recorded in Q3 2024, as the company refinanced a portion of its debt at a lower rate.
Management highlighted the company’s progress toward a self‑sustaining royalty model. CEO Owen Hughes noted that the quarter’s cash flow “provides the financial flexibility to fund acquisitions and limit dilution as we continue to build a diversified portfolio.” He added that the company’s strategic focus on late‑stage assets and its disciplined cost structure position it to generate positive cash flow in the near term.
While the company’s net income and cash position are strong, the revenue miss and the concentration of royalty income underscore the need for continued portfolio diversification. XOMA’s guidance for the remainder of 2025 remains unchanged, but management emphasized that it expects to maintain profitability through disciplined spending and targeted acquisitions.
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