Request Demo
Ligand snaps up fellow biotech royalty aggregator Xoma for $739M
AcquisitionPhase 3
Both Ligand and Xoma operate by purchasing rights to royalties and milestones, paying upfront cash to support biotechs’ assets with a view to achieving longer-term revenue streams down the line.
On MonXoma Royaltyannounced plans to acquire Xoma for $39 per share of the royalty collector, representing a total deal value of roLigand Pharmaceuticals
Both Ligand and Xoma are what are known as bioXoma royalty aggregators. They operate by purchasing rights to royalties and milestones, paying upfront cash to support biotechs’ assets with a view to achieving longer-term revenue streams down the line. In the case of Xoma, the company has also been known to buy entire biotechs, as long as the price is right.
Regarding Xoma, Xomacompany’s purchase will immediately equip Ligand with three potent commercial revenue generators through Xoma’s deals tied to Roche’s eye med Vabysmo, Day One’s glioma drug Ojemda and Zevra Therapeutics’ rare disease treatment Miplyffa, accordingXomaa company presentation (PDF) on the acquisition.
Ligand has swooped in as XoFierce“approaching an inflection point financially,” the CEO explained. Aside from the expectation that the deal will be immediately accretive, Ligand also figures the Xoma purchase will continue to add “substantial additional product growth” out into the next decade, according to Davis.
“We can absorb the [Xoma] portfolio with almost 100% synergies,” Davis said. “We’ll probably bring a couple to a few employees over, and there’s some lease obligations, but there’s no commercial infrastructure required, there’s no manufacturing infrastructure, there’s no clinical development infrastructure. So this is a highly efficient business model in general, and the [operating expense] essentially tied to the Xoma portfolio now largely goes away through that synergy realization.”
In addition to the share-based purchase terms, Xoma stockholders are also in line to receive one non-transferrable contingent value right (CVR) per share, which Ligand noted will entitle the holders to a portion of 75% of the net proceeds from “certain pending litigation at Xoma Royalty.”
That litigation circles back to a Xoma dispute Xoma J&J’s Janssen unit over the commercialization of Tremfya, per the release. In the company’s latest earnings release, Xoma explained that it filed suit against Janssen over claims of breach of contract and unjust enrichment,Xoma Royaltynked to the J&J unit’s “unauthorized use of Xoma’s intellectual property in the commercialization of Tremfya."
Overall, the Xoma buyout is slateXoma add more thanJ&J0 cJanssenal, clinical and preclinical assets Tremfyand’s portfolio, including 14 that are now in late-stage develXomant, such as Takeda’s anti-CD38 antibodJanssenitamab and other candidates from the Japanese pharma’s externalized asset portfolJ&JXomaTremfya
With the purcXoma, Ligand expects its financial fortunes to ramp up for the rest of the year. The companLigandlifted its 2026 revenue forecast from a prior range of $245 million to $285Takedaon anti-CD38 antibody mezagitamab0 million and $310 million. The company’s proceeds from royalties, specifically, are now expected to reach $225 million to $250 million, versus a previous expectation of $200 million to $225 million.
Breaking down LiganLigandle as a biotech royalty aggregator, Davis noted that there is “over $12 billion, I would estimate, in royalty capital that’s out there and available, but the very significant majority of that capital is still focused on commercial-stage deals.”
Unlike larger outfits charting similar deals such as Royalty Pharma and Blackstone, Ligand aims to fill a different niche in the royalty landscape by focusing on late-stage and private companies at the small- to midcap scale, per Davis.
Regarding Ligand’s specific strategy, the company aggRoyalty Pharmaies bBlackstoneonetizing existing licenses that companies hold, as well as project financing, in which the company might co-fund a biotech’s phase 3 study in return for royalty contracts, Davis explained.
Aside fromLigandize and stage of companies its targeting, Ligand is also pursuing assets that address significant unmet medical needs.
“That’s important not just because it gives us purpose in Ligandlthough it does—but because commercially, if you’re investing in “me-too” products or products that lack differentiation, you’re going to run into a lot more commercial issues downstream with the payers, the uptake, etcetera,” Davis said.
The deal comes after Xoma embarked on a shopping spree for struggling biotechs in the second half of last year, striking deals for the likes of Generation Bio, Mural Oncology, Lava Therapeutics and Takeda spinout HilleVax.
Meanwhile, with the XXomadeal soon to be under its belt, Davis said Ligand will continue to execute on the strategy it laid out with his arrivalGeneration BioetMural Oncology aLava Therapeuticshe $2Takedaion to $6HilleVaxn range.
That said, the company has some increased dealmaking flexibility these days as it tries to build out a diversified portfolio, and the immediate boon from Xoma should allow the company to strike bigger transactions, too, the CEO said.
Editor's note: This story was updated with comments from an interview with Ligand CEO Todd Davis.Xoma
For more details,please visit the original website
The content of the article does not represent any opinions of Synapse and its affiliated companies. If there is any copyright infringement or error, please contact us, and we will deal with it within 24 hours.
Organizations
Indications
Targets
-Hiro LS Researcher
The AI Search Engine Built to Accelerate Biopharma Decisions
Search across billion-scale life sciences data to uncover signals, validate evidence, and act with confidence.
Ask any biopharma research question→
Hot reports
Get started for free today!
Accelerate Strategic R&D decision making with Synapse, Patsnap’s AI-powered Connected Innovation Intelligence Platform Built for Life Sciences Professionals.
Discover Synapse Data Servers
Synapse data is now integrated into the PatSnap LS Model Context Protocol (MCP) service. Customize your LLM agent now using our MCP server!