Downgrade of XOMA Stock#
H.C. Wainwright has changed its rating for XOMA, Ltd. (NASDAQ:XOMA) from Buy to Neutral. This decision follows the announcement that Ligand Pharmaceuticals plans to acquire XOMA at a price of $39 per share. H.C. Wainwright continues to hold a Buy rating on Ligand, indicating confidence in Ligand's future prospects.
XOMA's Role as a Royalty Aggregator#
Since 2017, XOMA has shifted its focus to becoming a royalty aggregator, which means it collects payments from various pharmaceutical companies for the rights to certain drugs. Over this period, XOMA has invested more than $200 million and completed 17 royalty transactions along with 9 acquisitions, strengthening its position in the market.
Strong Financial Performance#
In recent news, XOMA reported impressive financial results for the fourth quarter of 2025. The company achieved earnings per share of $0.26, which is a significant improvement compared to the expected loss of $0.11 per share. Additionally, XOMA's revenue reached $13.76 million, exceeding forecasts of $11.13 million. This performance marks a 336.36% increase in earnings and a 23.63% rise in revenue compared to analyst predictions.
Details of the Acquisition#
Ligand Pharmaceuticals has announced plans to acquire XOMA Royalty Corporation for $739 million in cash. Shareholders of XOMA Royalty will receive $39.00 per share, along with a Contingent Value Right that grants them a share of 75% of net proceeds from certain ongoing legal cases. This acquisition price reflects a 14% premium over XOMA Royalty’s average stock price over the past 30 days, indicating a strong valuation for the company amid these strategic developments.