XOMA surges on Q4 earnings beat, swing to $31.7M profit
Royalty aggregator reverses 2024 loss as revenue jumps 83% and cash receipts top $50M
XOMA Royalty Corporation reported fourth-quarter earnings that crushed analyst expectations and revealed a dramatic turnaround in its financial performance, sending shares higher in Wednesday morning trading.
The biotechnology royalty aggregator reported diluted earnings per share of 26 cents for the fourth quarter of 2025, far exceeding Wall Street's consensus estimate for a loss of 4 cents per share. Revenue of $13.8 million surpassed analyst projections of $11.5 million, representing a 20% beat on the top line.
The quarterly performance capped a remarkable full-year transformation. XOMA swung to a net income of $31.7 million for 2025, compared with a net loss of $13.8 million in the prior year. Total income and revenues surged 83% to $52.1 million, driven primarily by growing royalties from commercial products including VABYSMO® and OJEMDA™, alongside milestone payments from Rezolute and Takeda.
"With multiple commercial assets delivering growing royalty receipts, we achieved positive cash flow from operations and were able to return $16 million of capital through a share buyback in 2025," said Owen Hughes, Chief Executive Officer of XOMA Royalty. The company repurchased and retired 648,048 shares during the year.
Royalty collections proved the engine of growth, increasing 68% year-over-year to $33.6 million. Total cash receipts for 2025 exceeded $50 million, comprising $33.6 million in royalties and $16.9 million in milestone payments. The company ended the year with a robust cash position of $133.7 million.
The earnings report marks a significant milestone for XOMA's business model, which centers on acquiring and managing royalty interests in biopharmaceutical assets. The company added 22 assets and two platform technologies to its portfolio over the past year, expanding its revenue streams and diversification.
Analysts had maintained a consensus rating of "Strong Buy" on the stock prior to the earnings release, with an average price target of $64.50 to $73.50—representing substantial upside from its current trading level around $27 per share.
Looking ahead, XOMA outlined a pipeline of catalysts for 2026 that could drive further growth. The company expects Phase 2b data for volixibat in primary sclerosing cholangitis in the second quarter, and Phase 3 data for ersodetug in tumor hyperinsulinism in the second half of the year. Potential decisions from the European Medicines Agency on marketing authorization applications for OJEMDA™ and MIPLYFFA™ also loom on the horizon.
"With 14 programs in registrational studies, we anticipate a number of catalysts over the ensuing years, including several regulatory updates and late-stage clinical readouts in 2026," Hughes said. Positive outcomes from these milestones "will further diversify our commercial royalty streams and drive growing free cash flow in 2027 and beyond."
The company's ability to generate substantial cash from operations while simultaneously returning capital to shareholders through buybacks signals a maturation in its business model. The $16 million repurchase program reduces share count by approximately 5%, providing immediate accretion to existing shareholders.
XOMA's royalty aggregation strategy differs from traditional biotech development models, insulating the company from the binary risks of clinical trial failures while providing exposure to commercial success across a diversified portfolio. The 68% increase in royalty receipts demonstrates the effectiveness of this approach as partner products reach commercial scale.