XOMA Royalty Agrees to Ligand Buyout as Cash Receipts Climb 9%
The biotech royalty aggregator posted $50.5 million in full-year 2025 cash receipts, up 9% year over year, as it prepares to be acquired by Ligand Pharmaceuticals.
XOMA Royalty (XOMA), a biotech royalty aggregator, agreed to be acquired by Ligand Pharmaceuticals for $39.00 a share in cash, valuing the company's equity at roughly $739 million and representing a 14% premium to its 30-day volume-weighted average price. The deal, announced April 27, 2026, marks a transformative shift for a company that spent the prior two years aggressively assembling a portfolio of royalty and milestone interests across more than 120 assets.
The acquisition caps a period of rapid financial improvement. Full-year 2025 income and revenues reached $52.1 million, up 83% from $28.5 million in 2024, while the company swung to net income of $31.7 million from a net loss of $13.8 million the prior year. Cash receipts, a key operating metric for royalty-based businesses, totaled $50.5 million for the year, a 9% increase, with royalty receipts alone surging 68% to $33.6 million.
The fourth quarter of 2025 illustrated the acceleration. Income and revenues were $13.8 million, up 59% from $8.7 million a year earlier, driven by royalties from Roche's VABYSMO and Day One's OJEMDA alongside milestone payments from Rezolute and Takeda. Net income for the quarter was $6.1 million, compared with a $4.0 million loss in the year-ago period.
XOMA completed seven acquisitions since early 2025, accumulating $11.7 million of non-dilutive capital and gaining economic interests in up to $1.1 billion of milestones plus low-to-mid-single-digit royalties from eight partnered programs. A December 2025 strategic royalty-share transaction with Takeda expanded the company's reach to low-to-mid-single-digit royalties and up to $852.6 million in potential milestones across nine development-stage assets, replacing a prior arrangement covering a single product. The portfolio's future potential milestones grew to more than $3 billion, up from more than $2 billion disclosed in the prior quarter's presentation.
General and administrative expenses rose modestly to $36.1 million for the full year from $34.5 million in 2024, reflecting $3.7 million in higher business-development costs and $1.0 million in added lease expenses, partly offset by the absence of $3.6 million in Kinnate exit-package costs from the prior year. Interest expense edged lower to $13.0 million from $13.8 million, reflecting the structure of the company's Blue Owl Loan. Cash and equivalents stood at $133.7 million at year-end, though unrestricted cash declined to roughly $83 million from about $102 million, with $50.8 million restricted. XOMA repurchased and retired about 648,000 shares during the year for $16.0 million at an average price of $24.75.
As part of the merger, XOMA stockholders will receive one non-transferable contingent value right per share, entitling holders to 75% of net proceeds from pending litigation against Janssen Biotech over TREMFYA. The company also announced the redemption of all outstanding Series A and Series B Perpetual Preferred Stock on July 14, 2026, in connection with the transaction. Ligand, for its part, raised its 2026 revenue guidance to $270 million to $310 million, up from $245 million to $285 million, and adjusted its earnings-per-share outlook to $8.50 to $9.50, from $8.00 to $9.00, upon announcing the deal; it expects $1.50 a share of accretion in 2027.
Not all portfolio developments were positive. Seralutinib's Phase 3 PROSERA trial in pulmonary arterial hypertension missed its prespecified alpha threshold, and Rezolute's Phase 3 ersodetug study in congenital hyperinsulinism failed to achieve statistical significance against placebo. On the management front, Thomas Burns stepped down as chief financial officer and was replaced by Jeffrey Trigilio effective January 2026. Day One's OJEMDA program, meanwhile, received a $2 million milestone from a Japan NDA filing in the fourth quarter and secured a positive CHMP opinion for conditional EU marketing authorization in February 2026, before Servier announced its acquisition of Day One for $21.50 a share in March.