XOMA

XOMA Royalty Corp($XOMA) Executives Continue Share Purchases - CIO and SVP Signal Strong Conviction Buying Near 52-Week Lows

04/09/2025 20:48

As XOMA Royalty Corp ($XOMA) trades near its 52-week low, key company executives have been consistently purchasing shares over the past few months, drawing market attention. XOMA's stock price has declined steadily from its 52-week high of $33.88 in November to a recent $19.30, representing a roughly 43% drop with particularly steep declines in recent months. Despite this stock weakness, company insiders, especially Chief Investment Officer Bradley Sitko, have demonstrated consistent buying behavior worthy of attention. XOMA Royalty Corp operates as a biotechnology royalty aggregator, acquiring potential future royalties associated with pre-commercial and commercial therapeutic candidates licensed to pharmaceutical and biotechnology companies. The company generates revenue through royalty payments when treatments developed by other companies succeed. Recent insider trading data reveals that CIO Bradley Sitko has purchased company shares consistently across eight separate transactions from December 2024 through April 2025. Most recently, on April 7, 2025, he acquired 2,000 shares at $24.70 per share, investing a total of $49,400. Earlier, on March 21, he purchased 4,134 shares ($98,751) in two separate transactions, followed by an additional 1,245 shares ($26,200) on March 31. Notably, Senior Vice President Thomas Burns also joined the executive buying pattern, purchasing 1,000 shares at $25.46 ($25,460) on April 1, 2025. These recent insider purchases stand in contrast to November 2024 sales by CEO Owen Hughes and SVP Thomas Burns, who sold 21,881 shares ($655,335) and 9,775 shares ($292,663), respectively. Meanwhile, major shareholder BVF Partners sold 650,717 shares on January 24, 2025, liquidating approximately $16.98 million. According to insider trading footnotes, BVF sold shares held indirectly through various affiliates, suggesting a possible portfolio adjustment by the major shareholder. Examining XOMA's recent financial performance, the company reported $8.71 million in revenue for Q4 2024, representing approximately 375.4% growth year-over-year. However, the company continues to report quarterly net losses, posting a $4.0 million loss for the fourth quarter. For the full year 2024, XOMA recorded $28.5 million in revenue with a net loss of $13.8 million. From a cash flow perspective, XOMA maintains a relatively strong position. As of the end of 2024, the company held $106.4 million in cash and cash equivalents, including $4.8 million in restricted cash. During 2024, XOMA received a total of $46.3 million in cash receipts, including $20 million in royalties and commercial payments, while investing $65 million in acquiring new milestone and royalty assets. The company demonstrated its royalty income expansion potential in June 2024 when it received an $8.1 million milestone related to Day One Biopharmaceuticals' sale of its priority review voucher. This royalty model offers a unique investment opportunity to participate in biotech industry growth without direct R&D risks. Currently, the analyst consensus for XOMA is 'buy' with a median price target of $79.50, suggesting approximately 312% upside potential from current levels. This indicates analysts place high value on the company's royalty portfolio and future growth prospects. Looking at financial ratios, XOMA's Price-to-Sales ratio stands at a relatively high 31.47, while Quick Ratio of 7.41 and Current Ratio of 7.52 indicate the company has ample liquidity to meet short-term financial obligations. The recent insider buying pattern suggests company executives believe the current stock price is below its intrinsic value. Particularly, the CIO's consistent increase in buying positions despite price declines reflects strong insider confidence in the company's royalty portfolio and future growth potential. While the major shareholder's large sale warrants careful interpretation, it could represent portfolio rebalancing. Biotech royalty businesses inherently depend on clinical success and regulatory approval of pipeline therapeutics, which can lead to short-term volatility. However, the continuous executive purchases and high analyst price targets present a positive long-term outlook for XOMA's business model.

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