Drug royalty company XOMA Corporation (XOMA) has priced a new preferred.
The coupon is 8.375% and it is cumulative. I have defined the dividend as ‘variable’ because earnings are ‘lumpy’ and there may be some dividends that are return of capital.
The issue did not trade on the OTC grey market but has just started trading on the NASDAQ today under ticker XOMAO. Now trading at $24.70
The prospectus is here and the pricing term sheet is here.
The company has a 8.625% preferred issue outstanding as well–both issues can be seen here. Disclosure–I own the 8.625% issue.
18 thoughts on “XOMA Corporation Prices New Preferred”
I will go for 25% of my normal investment. Common forecasts look decent.
Royalty portfolio is growing…..(The new O share is about the only preferred I can find trading under par still with a higher % coupon. )
EMERYVILLE, Calif., April 15, 2021 (GLOBE NEWSWIRE) — XOMA Corporation (Nasdaq: XOMA) today announced its portfolio of potential future milestone and royalty assets has increased with the addition of three Affimed N.V. (Nasdaq: AFMD) innate cell engager (ICE®) programs for which XOMA could receive future economics. In 2006, Affimed licensed certain XOMA technologies to further its research and discovery efforts.
“It’s always exciting to see XOMA’s legacy technology license agreements mature into clinical-stage drug candidates that may generate economic benefits for XOMA in the future. We’re delighted to add AFM13, AFM24, and an undisclosed clinical-stage partnered asset to XOMA’s portfolio,” stated Jim Neal, Chief Executive Officer at XOMA.
AFM13, which has Orphan Drug designation from the U.S. Food and Drug Administration, is a first-in-class CD30/CD16A ICE® generated from Affimed’s ROCK® platform that induces specific and selective killing of CD30-positive tumor cells by engaging and activating natural killer (NK) cells and macrophages, thereby leveraging the power of the body’s own innate immune system. Affimed currently is studying AFM13 in combination with cord blood-derived allogeneic natural killer cells in cooperation with the MD Anderson Cancer Center in Houston.
AFM24 is a tetravalent, bispecific EGFR- and CD16A-binding ICE® also generated from Affimed’s ROCK® platform. AFM24 uses the cytotoxic potential of the innate immune system by redirecting and activating NK cells and macrophages to kill EGFR-positive cancer cells through antibody-dependent cellular cytotoxicity (ADCC) and antibody-dependent cellular phagocytosis (ADCP), respectively.
XOMA is eligible to receive undisclosed payments on future commercial sales of each of the three ICE® molecules and any pre-loaded NK cells containing the ICE® molecules. Additionally, XOMA is eligible to receive an undisclosed milestone for each program on achieving marketing approval.
I too bought a smallish amount. Hoping to get a quick small profit but I’m not holding on to it in either case. Priced fairly compared to XOMAP, which I have a mere 100 shares in a mostly buy&hold taxable account. Diversification, man.
I think the prudent approach here is as Tim outlined. Initially I was really bullish on the preferred (and actually have been scalping the P shares for months) when I looked at debt/cash ratio and the fact that the company has been around since 1981. However they only recently made the pivot in 2017 to being a royalty aggregator.
Schwab lists an XOMA P…closed over $25 today, div now 8.63%
Ron–I have a little dab of it–not getting carried away. Just went ex (3/31) for 71 cents (longer than full quarter)–with that divi I will have a 4% gain in a couple months and just might exit–will see.
Been around for a while, but negative earnings until last year. Definite flyer, but guess that’s why it’s offering 8%+ dividend.
Interesting that they only have 10 employees.
It doesn’t take many people to do what they do.
Chuck P–all they do is invest in ‘potential’ new drugs. I own some but not getting carried away with it.
I bought a small position of XOMAP at slightly above par but sold it when issuer delayed the first dividend. So I sold it lost $1 or $2. After chasing after Safe Bulkers Inc., C or D, still slightly below par with 8% QDI, I picked up just 124 shares of XOMAO at $24.75. They seem to try similar strategy as Compass Dividersified, place bets on many biotech seedlings. XOMA certainly does not have the long history of success as CODI or B Reilly Financial.
My Many Thanks to you and Gridbird for all the fantastic names and positions. They all hold well and climbed. All my best to you,
Thanks John—I just sold CODI-B for a 3.75% gain in 15 days–was going to hold through ex div, but it ran hard into ex (tomorrow) so I let it go. I have had the XOMAP for a few months–certainly not a quality holding, but in this environment I guess it doesn’t matter (until it does).
After due consideration, I also sold CODI-B today, for long term gains.
Good job furcel–I think. I am guessing we will see a re-entry point sometime soon.
Didn’t take long, Tim. CODI-C ask 25.48 at the close.
John, I turned to the dark side with you a couple months ago. I actually own four shippers now…
What’s next Grid?? Surely if you’re accepting shippers into the fold now, you’re also looking at BDCs too, yes??? I know they too used to be on your no no list……IMHO BDCs are easier to accept then shippers. When I think of shippers, I can’t help but think of the old adage “Beware of Greeks Bearing Gifts.” ha… and for the pc crowd, please note, no stereotyping meant to be implied…
I missed this post, 2WR. I caught your PC comment. I made an old school less than PC joke on that last year, lol. Old habits are hard to break with those shipper jokes. I found an excuse to sell one of the shippers today and take the cash as I found another suitable dusty old illiquid to buy.