XOMA (XOMA) Misses Q2 EPS by 2c, Revenue Light

XOMA (NASDAQ: XOMA) reported Q2 EPS of ($0.20), $0.02 worse than the analyst estimate of ($0.18). Revenue for the quarter came in at $2.5 million versus the consensus estimate of $4.38 million.

"We knew our endocrine portfolio would be important to XOMA regardless of gevokizumab's role. Today, it takes center stage," stated John Varian, Chief Executive Officer of XOMA. "Our XMet platform, which is focused on the insulin receptor, has been quite active for several years. We brought XOMA 358, an antibody that reduces the binding of insulin to its receptor, from the bench to the clinic and are ready to enter Phase 2 development in two rare hyperinsulinemic hypoglycemia conditions. We have a second Phase 2-stage asset, as well as several other preclinical- and research-stage programs that provide a critical mass in our endocrine portfolio. In addition, we conducted some very interesting work that has resulted in XOMA 089, an anti-TGF beta monoclonal antibody, which has potential as an important immuno-oncology therapy. We actively are working to out-license those pipeline assets that do not align with our areas of focus as sources of non-dilutive funding to advance those that do."

Mr. Varian continued, "Over the past two weeks, in response to our disappointing EYEGUARD™-B results, we've made some hard decisions. As of the end of August, and in coordination with Servier, we expect to dramatically and quickly reduce our exposure to expenses related to the remaining EYEGUARD clinical development program. We will advance gevokizumab in the ongoing Phase 3 pyoderma gangrenosum program, as the data generated in the EYEGUARD-B study, as well as earlier studies of gevokizumab and other IL-1 therapies, is leading us to believe that IL-1 beta modulation may be best suited for acute, highly inflammatory episodic conditions, such as pyoderma gangrenosum. We are building certain blinded analyses into the studies to allow us to monitor our progress in a thoughtful and disciplined manner."

"Additionally," Mr. Varian stated, "we will launch an effort to consider strategic options for XOMA's manufacturing and biodefense operations to determine if an alliance or other structure could take greater advantage of these valuable capabilities. These collective decisions will be accompanied by organizational changes, and XOMA will be downsized appropriately to support the advancement of XOMA 358 and other endocrine assets. Most of the changes will occur in August; the rest are expected to be completed by the end of the year. These changes will result in a smaller, focused organization staffed to support the growth and development of our endocrine portfolio."

For earnings history and earnings-related data on XOMA (XOMA) click here.

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