XOMA Corporation’s (XOMA) fourth-quarter 2011 loss of 34 cents per share was wider than the Zacks Consensus Estimate of a loss of 25 cents but narrower than the year-ago loss of 84 cents. Higher revenues and lower operating expenses led to the narrower year-over-year loss.
Revenue at XOMA improved marginally (2%) to $9.8 million in the fourth quarter of 2011. Revenues, however, were well short of the Zacks Consensus Estimate of $15 million. Revenue from license and collaborative fees came in at $1.3 million, against $0.4 million in the year-ago quarter. Contract and other revenue dipped approximately 6.5% to $8.6 million. Revenues from royalties accounted for the balance.
Operating expenses declined 14.8% to $21.9 million. Both research and development (R&D) expense (down 12.6%) as well as selling, general and administrative (SG&A) expense (down 21.2%) were on the downswing in the reported quarter. R&D expenses declined mainly due to the lower spending on pipeline candidate gevokizumab (XOMA 52). XOMA is evaluating the candidate for multiple indications.
For the full year 2011, XOMA suffered a loss of $1.04 per share as opposed to a loss of $3.69 suffered in 2010. 2011 loss was wider than the Zacks Consensus Loss Estimate of $0.94 per share. Higher revenues and lower operating expenses led to narrower year-over-year loss.
Even though revenues in 2011 climbed 73% to $58.2 million, they were well short of the Zacks Consensus Estimate of $64 million. Revenue from license and collaborative fees came in at $18.0 million, against $2.2 million in 2010. The massive jump was attributable to the recognition of $16.2 million in 2011 from partner Servier related to gevokizumab. Contract and other revenue climbed 47.1% to $ 40.0 million. Revenues from royalties accounted for the balance.
XOMA, which boasts of collaborations with big players such as Novartis (NVS) and Takeda, expects cash used in operating activities to be $35 million in 2012.
Currently, we have a Neutral stance on XOMA in the long run. The company carries a Zacks #3 Rank (Hold rating) in the short run.
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