Biotech royalty aggregator XOMA (Nasdaq:XOMA) has acquired the commercial payment and part of the milestone rights to Ixinity (trenonacog alfa), a hemophilia B therapy originally from Aptevo Therapeutics (Nasdaq:APVO). The aggregator expects the move to bolster its royalty and milestone portfolio, potentially providing consistent cash flow and ramping up its royalty aggregation strategy.

The acquired asset, Ixinity, is now marketed by Medexus Pharmaceuticals (TSE:MDP) to control and prevent bleeding episodes and postoperative management in people with hemophilia B.

Aptevo sold Ixinity rights to Medexus Pharmaceuticals in 2020. The FDA first approved Ixinity in 2015.

A win-win deal

Brad Sitko

Brad Sitko, chief investment officer of XOMA, explained the company’s mission to Drug Discovery & Development, stating, “Our focus is to provide non-dilutive capital to biotech companies, so they can further innovation. Ixinity was not core to Aptevo’s focus on immuno-oncology (IO), and they were looking for a way to monetize the commercial payments so they can further their IO work.”

Sitko described the acquisition as a “win-win,” explaining that Aptevo now has capital for their development activities, and XOMA receives commercial payments. “The more cash flow XOMA receives, the more we can deploy to add additional partnered pre-commercial assets to our royalty and milestone portfolio,” he said.

XOMA focuses on offering non-dilutive capital to biotech firms to support their R&D efforts. Sitko expects the Ixinity acquisition allows Aptevo to concentrate on their immuno-oncology work while giving XOMA access to commercial payments and additional cash flow to strengthen their royalty and milestone portfolio.

The company will begin receiving a mid-single digit percentage payment stream on all Ixinity sales from Jan. 1, 2023, into the first quarter of 2035. The company will also be entitled to milestone payments.

How XOMA shareholders could benefit

XOMA shareholders could benefit from the acquisition of Ixinity’s commercial payment and milestone rights, as it is expected to generate consistent quarterly payments. Sitko highlighted two main growth areas for Ixinity: expanding the label to include the pediatric population, which could increase the market opportunity by up to 33%, and obtaining approval for the Canadian market. The new commercial payment stream will build consistent incoming cash flow, and the established niche in Hemophilia B treatment offers potential growth opportunities.

XOMA has a portfolio of more than 70 assets. The company provides non-dilutive, non-recourse funding to advance internal drug candidates or for general corporate purposes. Other examples of biotech royalty aggregators include Royalty Pharma (Nasdaq:RPRX) and DRI Healthcare (TSE:DHT.UN).