XOMA Corp (NASDAQ:XOMA) Looking To Rebound

XOMA Corp (NASDAQ:XOMA) has disappointed investors time and time again. Throughout its history, the company has burned through more than $1 billion of investor's money banking on various different drugs. Unfortunately, nothing ever came to pass and the biotech has yet to bring a drug to market. The latest disappointment is that the company has terminated the development of its experimental drug gevokizumab.Investors are now turning their attention to management's attempts to save the company and deliver a return for its shareholders. The good news is that the company has made some strategic partnerships and received upfront cash payments and future revenues. The news is helping as investors are starting to come around to the realization that there is indeed some value in XOMA and that shares have been beaten up too much, mostly due to aggressive short sellers.Helping shares recover has been a series of licensing deals. XOMA has licensed its first-in-class TGF-beta immuno-oncology antibody program to Novartis for an upfront payment of $37 million, potential milestone payments of up to $480 million and tiered royalties up to low double digits. The company also licensed XMetA, its selective insulin receptor modulator antibody program for diabetes, to Novo Nordisk A/S for an upfront payment of $5 million, potential milestone payments of up to $290 million and tiered royalties.XOMA has also sold its biologics manufacturing facility to Agenus Inc. The company has also sold its anti-botulinum toxin program to Nanotherapeutics, Inc. In addition to reducing its headcount by almost 50%, XOMA has enough cash to last until next year. The company is also now looking to sell gevokizumab to an able buyer. The focus now for XOMA is addressing endocrine diseases. CEO John Varian said:

“We are now fully focused on efficiently maximizing the potential of XOMA 358, XOMA 129, and XOMA 213, all of which may address unmet medical needs in endocrinology. Our XOMA 358 proof-of-concept study in patients with hypoglycemia due to congenital hyperinsulinism is progressing on schedule. Several patients have been enrolled in the U.S., and our UK study center expects to begin enrolling patients in the coming weeks. Our XOMA 358 proof-of-concept study in patients with hyperinsulinism post bariatric surgery is expected to start dosing patients early in the second quarter. Additionally, we have finalized the design of a proof-of-concept study for XOMA 213, which may offer a new therapeutic option for patients with hyperprolactinemia, and anticipate initiating the study midyear. In 2016, we expect to have Phase 2 data from both XOMA 358 indications, and they will set the stage for XOMA in 2017 and beyond.”

XOMA's new lead drug is XOMA 358. XOMA 358 is being investigated as a novel treatment for non-drug-induced, endogenous hyperinsulinemic hypoglycemia, as well as hypoglycemia after post-bariatric surgery and other related disorders. XOMA recently initiated Phase 2 development activities for XOMA 358 in patients with congenital hyperinsulinism at The Children’s Hospital in Philadelphia (CHOP) and the Great Ormond Street Hospital (GOSH) in London. A therapy that safely and effectively mitigates insulin-induced hypoglycemia has the potential to address a significant unmet therapeutic need for certain rare medical conditions associated with hyperinsulinism.Congenital Hyperinsulinism (CHI) is a genetic disorder in which the insulin cells of the pancreas (beta cells) secrete inappropriate and excessive insulin. Ordinarily, beta cells secrete just enough insulin to keep blood sugar in the normal range. In people with CHI, the secretion of insulin is not properly regulated, causing excess insulin secretion and frequent episodes of low blood sugar (hypoglycemia). In infants and young children, these episodes are characterized by a lack of energy (lethargy), irritability or difficulty feeding. Repeated episodes of low blood sugar increase the risk for serious complications, such as breathing difficulties, seizures, intellectual disability, vision loss, brain damage, coma, and possibly death. About 60 percent of infants with CHI experience a hypoglycemic episode within the first month of life. Other affected children develop hypoglycemia by early childhood. Current treatments for CHI are limited to medical therapy and surgical removal of part or all of the pancreas (pancreatectomy).Currently trading at a market cap of $107 million, XOMA has a long way to go in terms of getting back to 52 week highs near $5. The company has disappointed investors many times, but we have to give management credit here for making some strategic moves to lessen the impact. The shift towards endocrinology might just be the right move and the company's saving grace. XOMA's scientific research has produced a portfolio of five endocrine assets, each of which has the opportunity to address multiple indications. Investors are certainly hoping that this time the company delivers. We will be updating Insider Financial as soon as we know more. For continuing coverage on XOMA and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in XOMA and have not been compensated for this article.