XOMA Corporation (XOMA - Snapshot Report) recently announced the pricing of its common stock offering. The company said that it will issue 7.6 million shares for $3.62 per share. Moreover, underwriters have been granted a 30-day option to purchase up to an additional 1.1 million shares.
XOMA expects to raise net proceeds of about $25.5 million from the offering, which is slated to close on or about Aug 23. The funds should come in handy for the company's research and development efforts.
XOMA exited the second quarter of 2013 with cash and equivalents of about $57.9 million and expects to use about $50 million in 2013, mainly on its clinical and preclinical activities. The company expects research and development spend to increase this year mainly due to the ongoing global phase III development of lead candidate, gevokizumab, for the non-infectious uveitis (NIU) indications and XOMA’s ongoing phase II proof-of-concept program.
XOMA’s lead pipeline candidate, gevokizumab, is being developed with Les Laboratoires Servier. Between the two companies, gevokizumab is currently in more than 12 studies covering 10 indications including six rare disease indications.
Some of the indications being studied include moderate to severe inflammatory acne (phase II results reported in Jan 2013), erosive osteoarthritis (EOA) of the hand with elevated C-reactive protein (phase II top-line results due in October), pyoderma gangrenosum (pilot study ongoing), reduction of plaque inflammation in patients with atherosclerosis (phase II ongoing) and polymyositis/ dermatomyositis (proof-of-concept study ongoing).
Meanwhile, gevokizumab is currently in phase III development for NIU and Behçet’s uveitis. XOMA is conducting both the NIU studies (EYEGUARD-A and EYEGUARD-C) while the Behçet’s uveitis study is being sponsored by Servier.
XOMA currently carries a Zacks Rank #4 (Sell). At present, companies like Actelion Ltd. (ALIOF - Snapshot Report), Biogen Idec (BIIB - Analyst Report) and Gilead Sciences, Inc. (GILD - Analyst Report) look well-positioned with all three being Zacks Rank #1 (Strong Buy) stocks.