Zacks Equity Research Analyst Blog
Positive News for XOMA
Posted Thu Nov 02, 10:34 am ET
In the past, I’ve talked about how a $2 stock might get to become a $4 stock. Today, Xoma Ltd. (XOMA) may have provided a good answer to that. Today, Xoma announced it has reached an agreement for therapeutic monoclonal antibody discovery and development with Takeda, a large-cap Japanese pharmaceutical company, for a deal that could be worth $100 million to Xoma in upfront payments, development milestones and royalties.
This is great news for the biotech company, which currently has a market cap of only $200 million. Takeda, while not a household name in the U.S., is a major player in the world pharmaceutical market. In my most recent Xoma report – which was made “Bull of the Day” on October 26th – I specifically noted that before year-end we were looking for another collaboration with a large pharmaceutical company that would have the potential to give the stock a pop, and today that news came out.
The deal also has the potential to open doors on additional collaborations for Xoma through the remainder of the year. In addition, we are awaiting the approval of Cimzia at UCB Pharma, on which Xoma stands to receive a royalty payment. We believe the outlook is good for Xoma to see more catalysts coming to help drive shares. Our target price remains $4 for the time being. |
