LAVA Therapeutics Announces Acquisition Agreement with XOMA Royalty Corporation, Reports Q2 2025 Financial Results and Updates on Partnered Programs.

LAVA Therapeutics reports Q2 2025 financials with a cash position of $56.2 million and an increased net loss of $8.6 million. The company discontinues LAVA-1266 program but continues partnered programs with J&J and Pfizer. LAVA has a definitive agreement to be acquired by XOMA Royalty Corporation, offering $1.16-$1.24 per share plus contingent value rights.

LAVA Therapeutics (NASDAQ: LVTX) has reported its Q2 2025 financial results, showing a cash position of $56.2 million and an increased net loss of $8.6 million. The company has also discontinued its LAVA-1266 program for acute myeloid leukemia and myelodysplastic syndrome. However, LAVA continues to progress two partnered programs with Johnson & Johnson and Pfizer, both in early Phase 1 trials. Notably, LAVA has entered into a definitive agreement to be acquired by XOMA Royalty Corporation, offering shareholders $1.16-$1.24 per share plus contingent value rights [2].

The Q2 2025 financial results indicate a challenging operational environment for LAVA. The company's net loss increased to $8.6 million, compared to $8.3 million in Q2 2024. This is primarily driven by ongoing research and development (R&D) and marketing, selling, and general administrative (SG&A) expenses. Despite the increased losses, LAVA's cash position has declined to $56.2 million from $76.6 million at year-end 2024, reflecting a quarterly cash burn rate of approximately $10 million. The company's operating loss of $9.75 million underscores the pressure on its cash flow as it invests heavily in pipeline development [1].

The discontinuation of the LAVA-1266 program, which was the company's lead internal program, highlights LAVA's strategic shift. The company's remaining value now primarily resides in its two partnered programs with Johnson & Johnson and Pfizer. The J&J program (JNJ-89853413) targets CD33 for blood cancers, while Pfizer's program (PF08046052) targets EGFR for solid tumors. The acquisition by XOMA Royalty Corporation, a royalty acquisition company, reflects its interest in the potential future royalty streams from these partnered programs rather than continuing internal development [2].

The acquisition structure includes a fixed payment of $1.16-$1.24 per share in cash, plus a contingent value right (CVR) tied to the company's partnered and unpartnered assets. The $35 million in deferred revenue on LAVA's balance sheet likely represents milestone payments from these partnerships that could eventually translate to value through the CVR. The deal is expected to close in Q4 2025, subject to shareholder approval and other customary closing conditions [2].

For investors, this acquisition represents a clear valuation benchmark in a challenging market for early-stage biotech companies. LAVA's strategic shift and the acquisition by XOMA offer a potential exit strategy for shareholders while providing the company with a pathway to future growth through its partnered programs.

References:
[1] https://www.ainvest.com/news/lava-therapeutics-reports-loss-q2-2025-market-reacts-mixed-sentiment-2508/
[2] https://www.stocktitan.net/news/LVTX/lava-reports-second-quarter-2025-financial-results-and-provides-djhr7togim7w.html