Xoma Royalty Corporation · NASDAQ:XOMA
Xoma Royalty — XOMA — Investor Presentation (January 2019)
29 slides from Xoma Royalty's investor presentation, Jan 7, 2019
Slide 1: Corporate Presentation January 2019
` corporate PRESENTATION January 2019 With over 35 years of discovery activity, XOMA currently has over three dozen partnered and fully-funded assets with the potential to drive milestone and royalty payments, along with multiple additional programs ready for out-licensing Exhibit 99.1
Slide 2: Forward-Looking Statements
Certain statements in this presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding: future monetization opportunities, active transactions with significant finan
Slide 3: What do these two geniuses have in common?
What do these TWO geniuses have in common? (and why is XOMA talking about them?)
Slide 4: Warren Buffett's Model: Buy & hold, compound growth, buy & build
Warren Buffet’s Model Buy & hold The principle of compound growth Buy & build Buy good companies with good management teams who know how to grow their business
Slide 5: XOMA's Model: Build & Hold and Buy & Hold
# OF CLINICAL STAGE ASSETS IN XOMA PORTFOLIO BUY & HOLD BUILD & HOLD Time XOMA’s Model: Build & Hold and Buy & Hold Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold royalty payment rights Buy & Hold Acquire rights to additional potential milestone & royalty a
Slide 6: XOMA's Model: Buy & Hold and Build & Hold
Buy & Hold Acquire MILESTONE AND royalty rights to additional fully-funded assets XOMA’s Model Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold Milestone & royalty payment rights
Slide 7: Build & Hold element requires patience and lean infrastructure
Build & Hold element Requires 2 Things XOMA Spend ($M) PATIENCE TO PROVIDE TIME FOR UNDERLYING DRUG ASSETS TO ADVANCE THROUGH THE LONG YEARS OF DISCOVERY, DEVELOPMENT AND APPROVAL A LEAN INFRASTRUCTURE TO MINIMIZE COSTS 1. 2.
Slide 8: Build & Hold partnered assets by phase
Preclinical Phase 1 Phase 2 Phase 3 NDA filing 38 BUILD & HOLD PARTNERED ASSETS 1 1 11 12 8 5 Total Future Development Expense by XOMA: $0 20 Assets with Large-Cap Partners
Slide 9: Publicly disclosed Build & Hold deal terms
YEAR COMPANY ASSET phase Of Development UPFRONT Potential MILESTONES ROYALTY % 2005 Novartis CFZ533 (Anti-CD40) Phase 2 $16.2M (+$7.5M debt reduction) $14M High single digits– low teens 2009 Takeda Phage display & Ab technologies Early Stage Undisclosed $230M Undisclosed 2015 Novartis Anti-TGFβ Phas
Slide 10: Novartis' expansive development of Anti-CD40
INDICATION pHASE STATUS STUDY SIZE START DATE Primary Sjogren's Syndrome 2 Recruiting 66 11/14 Lupus Nephritis 2 Recruiting 60 8/18 System Lupus Erythematosus 2 Not yet recruiting 120 9/18 Kidney Transplant 2 Not yet recruiting 325 9/18 Liver Transplant 2 Not yet recruiting 128 12/18 Graves' Disease
Slide 11: Novartis' expansive development of Anti-CD40
INDICATION pHASE STATUS STUDY SIZE START DATE Primary Sjogren's Syndrome 2 Recruiting 66 11/14 Lupus Nephritis 2 Recruiting 60 8/18 System Lupus Erythematosus 2 Not yet recruiting 120 9/18 Kidney Transplant 2 Not yet recruiting 325 9/18 Liver Transplant 2 Not yet recruiting 128 12/18 Graves' Disease
Slide 12: XOMA assets highlighted as potential blockbusters by Novartis
2 XOMA ASSETS HIGHLIGHTED AS POTENTIAL BLOCKBUSTERS BY NOVARTIS AT NOV 2018 R&D UPDATE XOMA Royalty Rate: Mid single digits to low teens
Slide 13: Partnered assets have progressed to clinical stage
# of Assets at clinical stage XOMA’s Partnered Assets have progressed to Clinical Stage at 13% Annual growth rate Since 2001
Slide 14: XOMA's Model: Buy & Hold and Build & Hold
Buy & Hold Acquire milestone & royalty rights to additional fully-funded assets XOMA’s Model Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold royalty payment rights
Slide 15: XOMA's Buy & Build model is designed for our industry
XOMA’s Buy & build Model is Designed for Our Industry Biotech Industry Characteristics Build & hold for long-term Buy & hold for long-term Development costs borne by partners Large diversified portfolio helps mitigate single asset risk XOMA Royalty Aggregator Strategy Long Product Life Cycles High C
Slide 16: Drug development takes a long time and is capital intensive
Phase 3 50% Phase 2 16% Phase 1 10% Preclinical 5% drug Development takes a long time and is capital intensive Avg. Time to Conduct (months) Avg. $ to fund Cumulative prob. of success 31 26 22 37 $210M $45M $30M $3M Sources:Dimasi, Hansen & Grabowski, 2003, Tufts University; Hay, Rosenthal, Thomas &
Slide 17: Licensing activity is robust at all stages of development
PHASE 3 Licensing Deals: 190 Total Licensing Deals 2014 - 2017 1,532 Licensing activity is robust at all stages of development PHASE 2 Licensing Deals: 269 PHASE 1 Licensing Deals: 143 Preclinical / OTHER Licensing Deals: 930
Slide 18: XOMA is positioned to monetize royalties on mid- to early-stage assets
PRECLINICAL PHASE 1 PHASE 2 PHASE 3 APPROVAL COMMERCIAL > $100M $25M – $100M < $25M XOMA is Positioned to Monetize Royalties on Mid- to Early stage clinical assets Capital Deployed per Transaction Ligand Royalty Pharma HCRP
Slide 19: Examples of opportunities XOMA will target
BIOTECH ‘X’ Seeks non-dilutive funding to take an additional program into clinical development to diversify risk Examples of Opportunities XOMA Will Target BIOTECH ‘Y’ Seeks funding to hold lead program to participate in next value inflection point
Slide 20: Key attributes of XOMA target assets
Key Attributes of XOMA Target Assets PRE-COMMERCIAL THERAPEUTIC ASSETS Phase 1, 2, or 3 LONG DURATION OF MARKET EXCLUSIVITY Patent expiration or regulatory exclusivity HIGH REVENUE POTENTIAL High unmet need or clear clinical benefit over alternatives STRONG DEVELOPER/MARKETER Assets partnered with h
Slide 21: First royalty monetization transaction - Agenus
XOMA’s First Royalty Monetization transaction - Agenus Total Investment by XOMA: $15M 7 Assets with Large-Cap Partners 33% Royalty Interest 10% of Future Milestones 100% Immuno-Oncology Focus
Slide 22: Agenus transaction hits all key attributes
Agenus transaction hits all Key Attributes of XOMA Target Assets PRE-COMMERCIAL THERAPEUTIC ASSETS Phase 1, 2 or 3 LONG DURATION OF MARKET EXCLUSIVITY Patent expiration or regulatory exclusivity HIGH REVENUE POTENTIAL High unmet need or clear clinical benefit over alternatives Volume or pricing adva
Slide 23: Diversification: assets across 9+ therapeutic categories
Diversification: 45 Assets Across 9+ Therapeutic Categories
Slide 24: XOMA's model is distinctive
XOMA’s Model is Distinctive Typical Small/ Mid-Cap Biotech PORTFOLIO SIZE 1 - 3 assets 45 assets PORTFOLIO FOCUS Narrow Diversified PROBABILITY OF AN APPROVAL Low High RISK : RETURN POTENTIAL High : High Low : Mid / High CAPITAL User Provider
Slide 25: What to expect from XOMA: compound growth impact
Compound interest is the eighth wonder of the world. He who understands it … earns it. He who doesn’t … pays it. - Albert Einstein What to expect from xoma compound growth impact
Slide 26: Build & Hold and Buy & Hold: compound growth principle
XOMA’s Model: Build & Hold and Buy & Hold – Compound GROWTH Principle total: Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold milestone & royalty payment rights Buy & Hold Acquire rights to additional potential milestone & royalty assets 38 Assets 45 Assets 7
Slide 27: 2018 operational results
Buy & Hold Expand portfolio of revenue opportunities by acquiring new potential milestones & royalties 2018 operational results Build & Hold Allow current portfolio to continue to advance in hands of partners Completed $20M Rights Offering Established $20M LoC with Silicon Valley Bank Maintained lea
Slide 28: A view of market potential - 45 XOMA assets
Royalty Rate at Projected Peak Sales < $500M (14 assets) $500M - $1B (11 assets) ≥ $1B (20 assets) < 2.5% 10 8 10 2.5% < 7.5% 3 2 7 7.5% - 15% 1 1 3 2 of 14 with Large-Cap Partners 8 of 11 with Large-Cap Partners 17 of 20 with Large-Cap Partners ASSETS BY PROJECTED PEAK SALES POTENTIAL A View of Mar
Slide 29: XOMA's Model: Build & Hold and Buy & Hold
# OF CLINICAL STAGE ASSETS IN XOMA PORTFOLIO BUY & HOLD BUILD & HOLD Time XOMA’s Model: Build & Hold and Buy & Hold Build & Hold Allow current portfolio of assets to advance, fully-funded by Partners; hold milestone & royalty payment rights Buy & Hold Acquire rights to additional potential milestone