XOMA Posts Narrower Loss

Zacks

XOMA Corporation (XOMA) reported fourth-quarter 2012 loss of 15 cents per share, narrower than the year-ago loss of 36 cents and the Zacks Consensus Estimate of a loss of 24 cents. Lower operating expenses led to the narrower year-over-year loss.

For the full year 2012, XOMA suffered a loss of 88 cents per share as opposed to a loss of $1.16 incurred in 2011. 2012 loss was also narrower than the Zacks Consensus Loss Estimate of a loss of $1.42 per share.

Revenues in 2012 declined 42% to $33.8 million. The top-line figure was nominally below the Zacks Consensus Estimate of $34 million.

Quarterly Results

Revenues at XOMA declined 24.9% to $7.4 million in the fourth quarter of 2012. The decline was primarily due to lower contract revenues during the quarter. Revenues fell short of the Zacks Consensus Estimate of $8 million.

XOMA records revenue from its license and collaboration arrangements, contract services, product sales and royalties.

Revenues from license and collaborative fees came in at $1.1 million, down 16.1%. Contract and other revenues dropped approximately 29% to $6 million. XOMA reported net product sales of $0.25 million in the reported quarter. Revenues from royalties accounted for the balance.

Operating expenses declined 10% to $19.7 million. Both research and development (R&D) expenses (down 24.6%) and selling, general and administrative (SG&A) expenses (down 5.6%) declined in the reported quarter.

Pipeline Update

XOMA is expecting several data readouts on its late stage candidate, gevokizumab. The company is developing the candidate for the treatment of non-infectious intermediate, posterior or pan-uveitis (:NIU). Gevokizumab is being studied in three clinical trials, namely, EYEGUARD-A, EYEGUARD-B and EYEGUARD-C.

2013 Projection

XOMA expects cash used in operating activities to be $50 million in 2013 primarily due to costs related to late stage studies of EYEGUARD-A, EYEGUARD-B and EYEGUARD-C.

XOMA, a biotechnology company, currently carries a Zacks Rank #3 (Hold). Other biotech companies like Cytokinetics Inc. (CYTK), WuXi PharmaTech (WX) and Agenus Inc (AGEN) presently look more attractive. Cytokinetics and WuXi Pharma carry a Zacks Rank #1 (Strong Buy), while Agenus carries a Zacks Rank #2 (Buy).

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