XOMA Corp (XOMA) Shares Up After License Agreement with Novo Nordisk

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Shares of XOMA Corp (NASDAQ:XOMA) are up significantly this morning after they just announced a license agreement with Novo Nordisk for XMetA Program in diabetes. According to the agreement, it is an exclusive deal which will provide rights to their XMetA program of allosteric monoclonal antibodies that “upu-regulate” the insulin receptor to Novo Nordisk A/S. It’s a treatment for Type 2 diabetes.

The deal is said to be worth up to $295 million, with $5 million being paid upfront and the remaining paid as the company reaches specific milestones.

“Novo Nordisk is recognized globally as the leader in the development of therapies to treat diabetes mellitus. It has the expertise to further develop these first-in-class insulin receptor activators, which were discovered by XOMA’s scientists,” said Jim Neal, Senior Vice President and Chief Operating Officer at XOMA. “Our corporate strategy is to develop novel therapeutics for endocrine diseases, particularly those that are considered rare, and we were able to structure the agreement with Novo Nordisk to retain commercialization rights of the XMetA program for rare indications.”

The stock is up 12.78% or $0.17 after the positive news, hitting $1.5 per share. About 1.63M shares traded hands. XOMA has declined 59.94% since April 28, 2015 and is downtrending. It has underperformed by 59.05% the S&P500.

Out of 5 analysts covering Xoma Limited (NASDAQ:XOMA), 1 rate it “Buy”, 0 “Sell”, while 4 “Hold”. This means 20% are positive. $6 is the highest target while $1.50 is the lowest. The $3.75 average target is 150.00% above today’s ($1.5) stock price. Xoma Limited was the topic in 8 analyst reports since July 23, 2015 according to StockzIntelligence Inc. Zacks downgraded the stock on September 4 to “Hold” rating. Ladenburg Thalmann downgraded the shares of XOMA in a report on July 22 to “Neutral” rating.

The institutional sentiment increased to 1.53 in Q2 2015. Its up 0.33, from 1.2 in 2015Q1. The ratio is positive, as 12 funds sold all XOMA Corp shares owned while 28 reduced positions. 24 funds bought stakes while 37 increased positions. They now own 77.58 million shares or 0.90% more from 76.88 million shares in 2015Q1.

Signpost Capital Advisors Lp holds 1.12% of its portfolio in XOMA Corp for 1.01 million shares. Opaleye Management Inc. owns 650,000 shares or 1% of their US portfolio. Moreover, Baker Bros. Advisors Lp has 0.5% invested in the company for 14.68 million shares. The New York-based Kingdon Capital Management L.L.C. has invested 0.5% in the stock. Broadfin Capital Llc, a New York-based fund reported 1.50 million shares.

Since March 17, 2015, the stock had 0 buys, and 4 selling transactions for $256,228 net activity. Rubin Paul D sold 5,000 shares worth $22,992. Varian John sold 10,000 shares worth $44,869.

XOMA Corporation is engaged in the discovery and development of antibody therapeutics. The company has a market cap of $182.24 million. The Company’s lead product candidate, gevokizumab, is a potent, humanized allosteric-modulating monoclonal antibody that binds to the inflammatory cytokine interleukin-1 beta . It currently has negative earnings. The Firm has initiated three pivotal clinical trials evaluating gevokizumab for the treatment of non-infectious intermediate, posterior or pan-uveitis (NIU) and Behcet’s disease uveitis.

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