Biotech Values

[DonShimoda]

XOMA - Recent Financings

XOMA Announces Pricing of $40.0 Million Public Offering of Common Stock
BERKELEY, Calif., Oct. 24, 2012 (GLOBE NEWSWIRE) -- XOMA Corporation (XOMA) announced today the pricing of 13,333,333 shares of its common stock at a price to the public of $3.00 per share. In addition, XOMA has granted the underwriters a 30-day option to purchase up to an additional 1,999,999 shares of common stock on the same terms and conditions, solely to cover over-allotments, if any. The shares will be issued pursuant to a prospectus supplement filed as part of a shelf registration statement previously filed with the Securities and Exchange Commission (SEC) on Form S-3. XOMA anticipates its aggregate net proceeds from the offering will be approximately $36.9 million after deducting the underwriting discount and estimated offering expenses payable by XOMA. The offering is expected to close on or about October 29, 2012, subject to customary closing conditions.
Credit Suisse Securities (USA) LLC and Cowen and Company, LLC are acting as joint book-running managers. Wedbush Inc. is acting as a financial advisor to


Tuesday, 6 Mar 2012 -- XOMA Corp announced the pricing of 29,669,154 shares of its common stock and accompanying warrants to purchase one half of a share of common stock for each share purchased at a price to the public of $1.32. The warrants are exercisable at an exercise price of $1.76 per share beginning on the date of issuance and will expire on the fifth anniversary of the date of issuance. All of the shares and warrants in the offering are to be sold by XOMA. The shares and warrants will be issued pursuant to a prospectus supplement filed as part of a shelf registration statement previously filed with the Securities and Exchange Commission (SEC) on Form S-3. XOMA anticipates that its aggregate net proceeds from the offering will be approximately $36.2 million after deducting the underwriting discount and estimated offering expenses payable by XOMA. The offering is expected to close on or about March 9, 2012, subject to customary closing conditions. RBC Capital Markets and Cowen and Company are acting as joint book-running managers and Roth Capital Partners is acting as co-manager of the offering. Ladenburg Thalmann & Co. Inc. is acting as a financial advisor to XOMA for the offering.

After the March financing, Adam Feuerstein wrote:
"Why is Xoma up 50% for the month?"

The spark that sent Xoma shares higher was the $40 million financing announced March 6. Normally, dilutive financings undertaken by money-losing biotech firms don't send stock prices higher. That's particularly true for companies like Xoma with a sad history of drug development futility.

What's different here is that Baker Bros., a well-respected and closely followed health-care hedge fund, bought half the Xoma deal.

The question you're probably asking now is, "Wait a second -- Xoma? What the hell can Baker Bros. see in Xoma?" [I wondered the same thing.]

Xoma is apparently getting a new lease on life, thanks to a top-to-bottom restructuring -- a new CEO and chief medical officer, cost cutting and a new business model. Xoma is still developing the same lead drug XOMA 052 (given a new name, gevokizumab) but money-wasting efforts in diabetes and cardiovascular indications have been shelved in favor of clinical trials for Behcets uveitis and non-infectious uveitis -- both diseases of the eye.

A phase III study of gevokizumab is expected to start this summer with data likely available by the end of 2013.

Whether Xoma succeeds with gevokizumab and breaks a three-decade-long streak of internal drug development failures is still an open question, but what's different today is that the company has some big-name investor support.
http://www.thestreet.com/story/11466875/1/biotech-stock-mailbag-xomas-big-backers-fda-approvals-contest.html