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XOMA Deals Keep Strengthening
Posted Fri Mar 02, 01:56 pm ET
by Zacks Equity Research
When Zacks senior biotech analyst Jason Napodano, CFA first upgraded Xoma, Ltd. (XOMA) to a Buy, the stock was trading at well under $2 per share. In his recent analyst note, he explains why he is keeping his Buy recommendation on the biotech firm:
“Earlier in the week XOMA announced the termination of the exclusivity period on therapeutic antibody collaboration with Novartis (NVS). The expiration of this exclusive obligation has allowed the company to expand its existing relationship with Takeda Pharmaceuticals to now include oncology candidates.
“XOMA now estimates that the total aggregate upfront, R&D [research and development] funding, milestone and other payments could exceed $230 million before royalties over the life of the agreement. The company has earned $8 million in payments so far from Takeda.
“We continue to recommend the shares at this level. Our near-term price target is $4.
“After over fifteen years with the firm, current CEO Jack Castello, age 70, has announced his intension to retire. Mr. Castello has agreed to stay on in his current role until a suitable replacement is found in order to make the management chance as smooth as possible. There will also be a brief transition period when the new CEO takes over before Mr. Castello leaves. XOMA is employing the help of a CEO Headhunter firm to help facilitate their efforts. The possibility remains that XOMA will promote an internal candidate as well. Founder Patrick Scannon, M.D., Ph.D. remains with the firm as Executive Vice President and Chief Biotechnology Officer." |
