XOMA

XOMA Royalty Corp($XOMA) Senior Executives Make Consecutive Stock Purchases Amid 43% Price Decline

04/02/2025 20:35

Senior executives at XOMA Royalty Corp ($XOMA) have been actively purchasing company shares amid a recent stock price decline. According to recent SEC filings, CIO Bradley Sitko and SVP Thomas Burns have made consecutive stock purchases from late March through early April. $XOMA's stock has declined approximately 43% from its November high of $33.88 to the current price of $19.30. The downward trend has been particularly pronounced over the past three months, during which the company's CIO Bradley Sitko has demonstrated a pattern of consistent buying. Sitko acquired a total of 4,134 shares (worth approximately $98,751) in two separate transactions on March 21, and further purchased 1,245 additional shares (about $26,200) on March 31. SVP Thomas Burns joined the executive buying trend by acquiring 1,000 shares (approximately $25,460) on April 1. These insider purchases stand in contrast to a significant divestment by a major shareholder earlier this year. BVF Partners L P/IL, a principal stockholder, sold approximately 650,717 shares (valued at nearly $17 million) on January 24, when $XOMA was trading around $26. Additionally, CEO Owen Hughes and SVP Thomas Burns both sold shares in November of last year when the stock was trading near $30, divesting 21,881 shares ($655,336) and 9,775 shares ($292,664) respectively. XOMA Royalty Corp operates with a business model focused on funding biotechnology companies' product development and commercialization in exchange for royalties and milestone payments. In 2024, the company doubled its royalty and milestone portfolio to over 120 assets and celebrated FDA approvals for products from partner companies Day One Biopharmaceuticals and Zevra. However, the company continues to face financial challenges. According to the 2024 annual results released in March 2025, XOMA reported $28.5 million in revenue but posted a net loss of $13.8 million. Notably, $30.9 million in non-cash credit losses negatively impacted profitability. Nevertheless, the company maintains a stable cash position of $106.4 million. Analysts remain optimistic about $XOMA's prospects. Recent reports indicate an average price target of $79.50, approximately four times the current share price. This elevated target reflects the potential future value of the company's royalty portfolio. The recent buying activity from senior executives may signal an internal view that the stock is undervalued. When management purchases company shares, it often indicates confidence in the fundamentals and long-term growth prospects. CIO Sitko, in particular, has demonstrated a pattern of consistent small purchases throughout the year, suggesting a focus on long-term value rather than short-term price fluctuations. Conversely, the substantial selling by major shareholder BVF Partners might raise concerns among some investors. BVF holds Series X Convertible Preferred Stock with a conversion price of $4.03. While their selling may have been for portfolio rebalancing purposes, large institutional divestments can sometimes send negative signals to the market. The future direction of XOMA's stock will likely depend heavily on the market performance of partner products, acquisition of additional royalty assets, and new FDA approvals. In particular, the sales performance of recently approved products such as Day One's OJEMDA™ and Zevra's MIPLYFFA™ could serve as important catalysts. Royalty-based business models like $XOMA's may experience short-term volatility but hold the potential to generate stable long-term cash flows if partner products succeed in the market. The recent insider buying may be a signal of management's confidence in this long-term value proposition.

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