XOMA

XOMA is a royalty aggregator with economic rights tied to 120+ therapeutic candidates, anchored by seven commercial-stage assets. MD&A discloses $50.5M of FY2025 cash receipts ($33.6M commercial + $16.9M milestones/fees) — a far more honest measure of the business than the $10.3M GAAP revenue line, which under the effective-interest-rate (EIR) method only periodically recognizes income. The $31.7M FY25 net income is real but heavily distorted: it includes a $17.9M bargain purchase gain on HilleVax and a $3.2M bargain gain on Mural, meaning roughly two-thirds of reported earnings came from acquisition accounting rather than operating royalty cash flow. That makes the headline 28.9x P/E and 306% net margin meaningless as forward gauges, and the 48.5x P/S off the GAAP line equally misleading.

The FY25 acquisition spree — HilleVax ($105.3M), LAVA ($39.0M), Mural ($37.6M), Turnstone ($9.6M) — explains the $99M capex surge and is the actual story: XOMA is rolling up cash-rich biotech shells to build the royalty portfolio cheaply (hence the bargain-purchase gains). CVR structures off-load the unwanted clinical programs (HIL-216, LAVA-1266) to legacy shareholders while XOMA keeps the IP/royalty optionality. Cash fell to $82.9M (-18.4%), long-term debt is $96.5M, and L/E sits at 2.01x — not stressed, but not pristine either, especially with $5.5M dividends and $16M buybacks alongside the M&A pace. The accumulated deficit of $1.22B is a relic of XOMA's prior R&D-company life and not a forward concern.