XOMA Corporation (XOMA) reported fourth quarter 2013 financial results but the earnings report was overshadowed by disappointing results from a couple of phase II studies (erosive osteoarthritis of the hand − EOA) on gevokizumab.
XOMA said that it will not move gevokizumab into late-stage development for the EOA indication. Shares were down in pre-market trading.
As far as fourth quarter 2013 results are concerned, XOMA reported a loss of 18 cents per share, wider than the year-ago loss of 15 cents per share. However, the loss was narrower than the Zacks Consensus Estimate of a loss of 19 cents per share.
Fourth quarter revenues were $12.5 million, up 69.6% from the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $9 million.
XOMA reported a full-year loss of 72 cents per share, narrower than the year-ago loss of 88 cents per share and the Zacks Consensus Estimate of a loss of $1.04 per share. Revenues increased 4.9% to $35.5 million in 2013, surpassing the Zacks Consensus Estimate of $31 million.
In the fourth quarter of 2013, R&D expenses increased 45.6% year over year to $22.9 million. This increase was driven by higher external costs related to the development of gevokizumab.
SG&A expenses increased 27.9% year over year to $5.0 million.
XOMA will focus on the phase III study on gevokizumab for inflammatory pyoderma gangrenosum (PG), which is expected to commence in 2014. An end of phase II meeting will be conducted with the U.S. Food and Drug Administration (FDA) this month to fix the phase III study protocol.
XOMA and its partner Servier are also enrolling patients for the phase III EYEGUARD program on gevokizumab. EYEGUARD-A is being conducted to evaluate gevokizumab for the treatment of non-infectious uveitis (NIU), EYEGUARD-B is evaluating gevokizumab’s ability to prevent disease flares in patients with Behçet's uveitis and EYEGUARD-C is being conducted to evaluate gevokizumab for the prevention of disease flares in NIU patients who are controlled with steroids and immunosuppressants.
2014 Guidance
XOMA expects cash usage for operating activities in the range of $55.0 million − $60.0 million in 2014. A major part will be to support the development of gevokizumab.
XOMA currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biotech sector include Alexion Pharmaceuticals, Inc. (ALXN), Biogen Idec Inc. (BIIB) and Gilead Sciences Inc. (GILD). All these stocks carry a Zacks Rank #1 (Strong Buy).
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