XOMA Royalty Corporation Surges 18% on Q2 Earnings Beat, Analysts Upgrade Forecasts

XOMA Royalty Corporation has reported Q2 revenues of $40m, beating expectations by $13m, and a statutory profit of $0.44 per share, despite analysts forecasting a loss. Analysts now predict revenues of $50.9m in 2025, a 13% improvement, and statutory earnings of $0.36 per share. The consensus price target fell 27% to $64.67.

XOMA Royalty Corporation (NASDAQ: XOMA) has reported its second-quarter (Q2) 2025 financial results, showcasing a robust performance that exceeded analyst expectations. The company reported revenues of $40 million, surpassing the forecast by $13 million, and a statutory profit of $0.44 per share, contrary to analysts' predictions of a loss. These results come on the heels of significant acquisitions and pipeline advancements.

The company's CEO, Owen Hughes, stated, "We continue to add to our diversified portfolio of both early- and late-stage assets through disciplined capital deployment and creative financial structures. Recently approved drugs are addressing key unmet patient needs, which is driving increased royalty receipts, and we await data from several key Phase 3 assets over the coming quarters."

Key highlights of the Q2 performance include:
- Revenue Growth: Revenues increased to $40 million, up from $27.6 million in Q2 2024, driven by increased royalty payments and milestone payments.
- Profitability: The company reported a statutory profit of $0.44 per share, compared to a loss of $0.05 per share in Q2 2024.
- Pipeline Advancements: Rezolute completed enrollment in its Phase 3 sunRIZE study of ersodetug, receiving a $5 million milestone payment. Takeda's Phase 3 clinical trial investigating mezagitamab also dosed its first patient, resulting in a $3.0 million milestone payment.

Analysts now predict revenues of $50.9 million for 2025, a 13% improvement over the previous year, and statutory earnings of $0.36 per share. The consensus price target fell 27% to $64.67, reflecting the market's reassessment of the company's prospects.

The company's strong Q2 results were supported by strategic acquisitions, including the purchase of BioInvent's mezagitamab royalty and milestone rights, and the acquisition of Turnstone Biologics, LAVA Therapeutics, and HilleVax. Additionally, XOMA Royalty acted as a structuring agent and provided financing for XenoTherapeutics' acquisition of ESSA Pharma.

The company's financial results and pipeline advancements indicate a promising outlook for the remainder of 2025 and beyond. Investors and financial professionals should closely monitor XOMA Royalty's future developments and earnings reports for further insights into the company's growth trajectory.

References:
[1] https://www.biospace.com/press-releases/xoma-royalty-reports-second-quarter-and-year-to-date-2025-financial-results-and-highlights-recent-business-achievements