HCW starts XOMA at buy

H.C. Wainwright initiated coverage of XOMA (NASDAQ:XOMA) with a “buy” rating and $15 price target. The stock closed at $6.86 on June 12th.

XOMA owns several premier antibody discovery and development platforms that incorporate leading capabilities in antibody phage display, library construction, proprietary antibody humanization, and affinity enhancement, writes analyst Carol Ann Werther.

Select blockbusters approved utilizing XOMA's technologies include Lucentis for age-related macular degeneration, Cimzia for rheumatoid arthritis and Crohn’s disease, and Rituxan for several cancer indications.

XOMA's lead product candidate, XOMA 358, is a fully human negative allosteric antibody that reduces insulin receptor activity. XOMA has demonstrated Phase 2 proof-of-concept in patients with congenital hyperinsulinism and in post-bariatric surgery induced hyperinsulinism, Ms. Werther said.

She said key reasons to own XOMA now include an extensive portfolio of license agreements, with partners paying milestones and royalties. XOMA expects more than $30-million in potential milestones in the next 36 months, excluding any new partnerships, “which in our view is very unlikely,” she added.

In addition, she said management has demonstrated its ability to execute the plan to realign its business strategy, with the majority of cost cutting done, and company plans to expand portfolio through out-licensing current programs and acquiring additional programs.