Viracta (VIRX) and XOMA (XOMA) Announce Multi-License Milestone and Royalty Monetization Transaction

March 23, 2021 8:07 AM EDT

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Viracta Therapeutics, Inc. (Nasdaq: VIRX), and XOMA Corporation (NASDAQ: XOMA) announced today XOMA has purchased the potential future milestones and royalties associated with existing licenses relating to two clinical-stage drug candidates that were obtained in Viracta's merger with Sunesis Pharmaceuticals in exchange for an upfront payment of $13.5 million and up to $20 million in a pre-commercialization, event-based milestone. The first candidate, DAY101 (pan-RAF kinase inhibitor), is being developed by Day One Biopharmaceuticals, which recently initiated a pivotal Phase 2 with DAY101 in pediatric low-grade glioma. The second candidate, vosaroxin (topoisomerase II inhibitor), is being developed by Denovo Biopharma as a potential treatment for acute myeloid leukemia.

"This transaction with XOMA offered a unique opportunity for Viracta to secure meaningful non-dilutive capital and further strengthen our balance sheet prior to the initiation of our registration trial for the treatment of relapsed/refractory Epstein-Barr virus (EBV)-positive lymphoma and our Phase 1b/2 trial in EBV-positive solid tumors," said Dan Chevallard, Chief Operating Officer and Chief Financial Officer of Viracta. "We look forward to evaluating opportunities to strategically deploy this capital to further develop, expand and diversify our portfolio and pipeline."

"We congratulate Viracta for their recent successful merger. XOMA's purpose-built milestone and royalty acquisition-focused business provides an alternative source of capital and offers an ideal solution for companies like Viracta to capitalize on the opportunity to divest non-strategic assets," commented Jim Neal, Chief Executive Officer of XOMA. "We like both Day One and Denovo's thoughtful clinical development approaches, and we look forward to seeing them progress."

Under the terms of the agreement, XOMA has acquired potential royalty economics related to DAY101 and up to $54 million in pre-commercialization, event-based milestones and high single-digit net royalties on sales related to vosaroxin and up to $57 million in regulatory and commercial milestones.

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