Xoma initiated with an Outperform at Leerink

Leerink initiated coverage of Xoma with an Outperform rating and $40 price target. The firm’s investment thesis is that Xoma’s growth outlook, new product catalysts, and future operating leverage are underappreciated by the market. Xoma is a biopharma royalty company with substantial growth prospects. Leerink views Xoma as having multiple “X Factors” as a publicly traded company, including a unique business model to capitalize on biopharma industry needs to raise non-dilutive capital, a large portfolio of candidates with optionality, and a management team with extensive experience and a sense of urgency to enhance shareholder value.