Xoma Royalty Corporation · NASDAQ:XOMA
Xoma Royalty — XOMA — Investor Presentation (July 2019)
29 slides from Xoma Royalty's investor presentation, July 2019
Slide 1: Corporate Presentation: A Royalty Aggregation Company
CORPORATE PRESENTATION A ROYALTY AGGREGATION JULY 2019 NASDAQ: XOMA COMPANY 1
Slide 2: Disclaimers
DISCLAIMERS Certain statements in this presentation are forward-looking Potential risks to XOMA meeting these expectations are statements within the meaning of Section 27A of the Securities described in more detail in XOMA's most recent filing on Form Act of 1933 and Section 21E of the Securities Ex
Slide 3: XOMA Snapshot
XOMA SNAPSHOT Monetizing and aggregating pre-commercial drug royalties ₋ Use portfolio approach to expand number of royalty positions ₋ Differentiate by focusing on development-stage assets with blockbuster potential licensed to large-cap partners Providing exposure, through royalties, to the up
Slide 4: XOMA vs. Traditional Biotech Industry
XOMA VS. TRADITIONAL BIOTECH INDUSTRY Biotech LONG HIGH LOW Industry CAPITAL PRODUCT PROBABILITY Characteristics LIFE CYCLES REQUIREMENTS OF SUCCESS XOMA Hold royalty Development Large diversified Royalty interests for the costs borne by portfolio mitigates Aggregator long-term partners single asset
Slide 5: Opportunities Abound for Royalty Monetization
OPPORTUNITIES TOTAL ABOUND FOR ROYALTY MONETIZATION 1,988 LICENSING DEALS ’14-’18 PHASE 3 LICENSING DEALS: 236 Biotech & Pharma License Transactions consist of: PHASE 2 LICENSING DEALS: 343 • Milestone payments • Royalty obligations PHASE 1 LICENSING DEALS: 194 Companies’ funding needs increase over
Slide 6: XOMA Is Positioned to Monetize Royalties on Mid- to Early-Stage Clinical Assets
XOMA IS POSITIONED TO MONETIZE ROYALTIES ON MID- TO EARLY-STAGE CLINICAL ASSETS Capital per transaction > $100M Royalty Pharma $25M – Ligand $100M HCRP < $25M 6 PRECLINICAL PHASE 1 PHASE 2 PHASE 3 APPROVAL COMMERCIAL
Slide 7: XOMA's Competitive Advantage
XOMA’S COMPETITIVE ADVANTAGE Typical Small/ Mid-Cap Biotech PORTFOLIO SIZE 1 - 3 assets 50+ assets PORTFOLIO FOCUS Narrow Diversified PROBABILITY OF AN APPROVAL Low High RISK : RETURN High : High Low : Mid / High CAPITAL User Provider 7
Slide 8: Measuring XOMA's Intrinsic Value Today
MEASURING XOMA’S INTRINSIC VALUE TODAY XOMA PORTFOLIO PROFILE ‒ 50+ assets and growing FULLY FUNDED PROGRAMS ‒ > 60% of assets in clinical-stage development 50+ ‒ Many with blockbuster revenue 45 potential TYPICAL XOMA ECONOMICS 30 25 ‒ Development & Sales milestones ‒ Royalty rate: ~3% ‒ Royalty te
Slide 9: XOMA Acquisition Strategy Is Distinct
XOMA ACQUISITION STRATEGY IS DISTINCT THE BENEFITS TO Acquire milestone and royalty licenses ASSET SELLERS: to high-potential, fully funded assets Focus on mid-clinical stage assets Recognize value of non-dilutive, non-recourse financing Partner companies pay development Few options to monetiz
Slide 10: XOMA's Model: Hold & Buy More
XOMA’S MODEL: HOLD & BUY MORE HOLD LEGACY ASSETS Allow current portfolio of assets to advance, fully-funded by Partners; hold 39 ASSETS TOTAL: 50+ milestone & royalty payment rights BUY MORE & HOLD Acquire rights to additional potential milestone & royalty assets 12 ASSETS ASSETS 10
Slide 11: XOMA's Model: Hold & Buy More
XOMA’S MODEL : HOLD & BUY MORE HOLD ALLOW PORTFOLIO OF ASSETS TO ADVANCE, FULLY FUNDED BY PARTNERS; HOLD MILESTONE & ROYALTY PAYMENT RIGHTS BUY MORE & HOLD ACQUIRE MILESTONE AND ROYALTY RIGHTS TO ADDITIONAL FULLY FUNDED ASSETS 11 11
Slide 12: Hold Strategy Component Requires 2 Things
HOLD STRATEGY COMPONENT REQUIRES 2 THINGS XOMA Spend ($M) 1. PATIENCE TO PROVIDE TIME $120 FOR UNDERLYING DRUG SG&A $100 ASSETS TO ADVANCE R&D THROUGH THE YEARS OF $80 DISCOVERY, DEVELOPMENT $60 AND APPROVAL $40 $20 2. A LEAN INFRASTRUCTURE TO MINIMIZE COSTS $0 2014 2015 2016 2017 2018 12
Slide 13: XOMA's Portfolio: 50+ Partnered Programs
XOMA’S PORTFOLIO: 50+ PARTNERED PROGRAMS PRECLINICAL PHASE 1 PHASE 1/2 PHASE 2 PHASE 3 NDA FILING 1 1 12 5 Total Future Development 14 Expenses by XOMA: 6 $0 10+ 32 Assets with Large-Cap Partners 13
Slide 14: Diversification: 50+ Assets Across 11+ Therapeutic Categories
DIVERSIFICATION: 50+ ASSETS ACROSS 11+ THERAPEUTIC Dermatology Oncology CATEGORIES Ophthalmology Endocrinology Cardiovascular Infectious Diseases Inflammation Diabetes Hematology Immunology Other 14
Slide 15: XOMA's Legacy Portfolio Key Highlights
XOMA’S LEGACY PORTFOLIO KEY HIGHLIGHTS POTENTIAL COMPANY ASSET & PHASE OF DEVELOPMENT ROYALTY % MILESTONES Iscalimab (CFZ533) anti-CD40 antibody Novartis Phase 2 $14M Mid single digits – low teens TAK-079 (Anti-CD38) Takeda Phase 1b/2 $21M 4% NIS793 (Anti-TGFβ) Novartis Phase 1b $480M Mid-single dig
Slide 16: Novartis' Expansive Development of Anti-CD40
NOVARTIS’ EXPANSIVE DEVELOPMENT OF ANTI-CD40 INDICATION PHASE STATUS STUDY SIZE START DATE Lupus Nephritis 2 Recruiting 60 8/18 Systemic Lupus Erythematosus 2 Recruiting 120 9/18 Kidney Transplant 2 Recruiting 325 9/18 Liver Transplant 2 Not yet recruiting 128 12/18 Hidradenitis Suppurativa 2 Recrui
Slide 17: XOMA Assets Highlighted as Potential Blockbusters by Novartis
2 XOMA ASSETS HIGHLIGHTED AS POTENTIAL BLOCKBUSTERS BY NOVARTIS (JANUARY 30, 2019) XOMA Royalty Rate: Mid-single digits to low teens 17
Slide 18: Iscalimab (CFZ533) Progress
ISCALIMAB (CFZ533) PROGRESS Novartis presents first- of-its-kind histology data with iscalimab (cfz533) suggesting extended survival of transplanted organs may be possible 18 18
Slide 19: Significant Royalty Revenue Potential
SIGNIFICANT ROYALTY REVENUE POTENTIAL ASSETS BY PROJECTED PEAK SALES POTENTIAL Royalty Rate at < $500M $500M - $1B ≥ $1B Projected Peak Sales (14+ assets) (15 assets) (22 assets) < 2.5% 9+ 11 11 2.5% - 7.5% 4 3 8 7.5% - 15% 1 1 3 5 of 14+ 9 of 15 18 of 22 with large-cap partners with large-cap partn
Slide 20: XOMA's Model: Hold & Buy More
XOMA’S MODEL : HOLD & BUY MORE HOLD ALLOW PORTFOLIO OF ASSETS TO ADVANCE, FULLY FUNDED BY PARTNERS; HOLD MILESTONE & ROYALTY PAYMENT RIGHTS BUY MORE & HOLD ACQUIRE MILESTONE AND ROYALTY RIGHTS TO ADDITIONAL FULLY FUNDED ASSETS 20
Slide 21: XOMA Acquisition Strategy Is Distinct
XOMA ACQUISITION STRATEGY IS DISTINCT THE BENEFITS TO Acquire milestone and royalty licenses ASSET SELLERS: to high-potential, fully funded assets Focus on mid-clinical stage assets Recognize value of non-dilutive, non-recourse financing Partner companies pay development Few options to monetiz
Slide 22: Key Attributes of XOMA Target Assets
KEY ATTRIBUTES OF XOMA TARGET ASSETS Rx 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 wit
Slide 23: XOMA's First Royalty Monetization Transaction: Agenus
XOMA’S FIRST ROYALTY MONETIZATION TRANSACTION: AGENUS 7 33 % 10% 100% Assets with Large- of Agenus’ of Future Immuno- Cap Partners Royalty Interest Milestones Oncology Focus Total XOMA Investment: $ 15M 23
Slide 24: XOMA's Latest Royalty Monetization Transaction: Aronora
XOMA’S LATEST ROYALTY MONETIZATION TRANSACTION: ARONORA 2 5 100% OF 10% 100% Assets with Large- of Aronora’s of Future Anti-Thrombotic Cap Partner Royalty Interest Milestones Focus Total XOMA Investment: Up to $ 9M 24
Slide 25: These Transactions Hit All of the Key Attributes of XOMA Target Assets
THESE TRANSACTIONS HIT ALL OF THE KEY ATTRIBUTES OF XOMA TARGET ASSETS Rx PRE-COMMERCIAL THERAPEUTIC ASSETS Phase 1, Phase 2 typically Potentially 10 years LONG DURATION EXCLUSIVITY post-commercialization Immuno-oncology & HIGH REVENUE POTENTIAL anti-thrombotics STRONG DEVELOPER/MARKETER Incyte, Mer
Slide 26: XOMA's Model: Hold & Buy More
XOMA’S MODEL: HOLD & BUY MORE HOLD LEGACY ASSETS Allow current portfolio of assets to advance, fully-funded by Partners; hold 39 ASSETS TOTAL: 50+ milestone & royalty payment rights BUY MORE & HOLD Acquire rights to additional potential milestone & royalty assets 12 ASSETS ASSETS 26 26
Slide 27: Recent Highlights
RECENT HIGHLIGHTS OPERATIONAL PARTNERS & PARTNERED ASSETS $20M Rights Offering led by BVF Partners Novartis Established $20M LoC with Silicon Valley Bank ₋ Oncology clinical studies with gevokizumab started Acquired milestone & royalty interests in: ₋ Iscalimab (CFZ533) data presentations at
Slide 28: Looking Ahead
LOOKING AHEAD PARTNERS & PARTNERED ASSETS OPERATIONAL NOVARTIS Acquire additional milestone Iscalimab data readouts and royalty interest assets to NOVARTIS continue to grow the portfolio TGFβ advancing to Phase 2 Maintain lean cost INCYTE infrastructure and financial Immuno-oncology programs Dat
Slide 29: Why Is XOMA's Portfolio Valuable?
WHY IS XOMA’S PORTFOLIO VALUABLE? XOMA holds 50+ current assets; pharmaceutical partners fund the research & development and cover 100% of costs XOMA sources royalty rights through deep industry network XOMA constructs an increasingly diverse and expanding portfolio to increase odds of success