XOMA Ltd. (XOMA) reported fourth-quarter fiscal 2009 earnings of one cent per share, well above the Zacks Consensus Estimate for a loss of 3 cents but below the year-ago earnings of 7 cents. The lower earnings were primarily attributable to the dip in revenues in the fourth quarter of 2009.

Quarterly Results

Revenue declined approximately 41.5% to $21.6 million from $36.9 million in the year-ago quarter. Revenue from license and collaborative fees came in at $14.5 million, against $14.9 million in the year-ago quarter, down approximately 2.7%. Contract and other revenue dipped approximately 56.7% year-over-year to $ 6.8 million. Royalty income dipped to $0.2 million, against $6.3 million in the year-ago quarter.

Research and development expense for the reported quarter stood at $14.7 million, compared to $20.1 million in the year-ago quarter. This decrease was attributable to reduced personnel costs as a result of the job cuts in January 2009 and other cost control initiatives. Selling, general and administrative expenses stood at $4.8 million, versus $5.2 million last year.

Yearly Results

For the full year 2009, XOMA earned 2 cents per share (excluding special items), surpassing the Zacks Consensus Estimate for a loss of 5 cents. The company suffered a loss of 34 cents (excluding special items) in 2008. The higher earnings in the year were primarily attributable to the rise in 2009 revenues.

Revenue for 2009 increased approximately 44.7% to $98.4 million from approximately $68.0 million in 2008. Revenue from license and collaborative fees came in at $43.8 million, against $16.4 million in 2008. Contract and other revenue dipped approximately 16.4% year-over-year to $ 25.5 million. Royalty income for 2009 increased to $29.1 million, compared to $21.1 million in 2008.

Research and development expense for 2009 stood at $58.1 million, against $82.16 million in the year-ago quarter. This decrease was attributable to reduced personnel costs as a result of the reduction in workforce in January 2009 and other cost control initiatives. Selling, general and administrative expenses declined marginally to $23.7 million from $24.1 million in 2008.

Interest expense for 2009 stood at $4.9 million, against $7.0 million in 2008. The reduction is primarily attributable to the repayment of the Goldman Sachs (GS) loan by XOMA in September 2009 in addition to a decrease in the average outstanding principal balance of and a reduced interest rate on the note due to Novartis (NVS).

XOMA ended 2009 with cash, cash equivalents and short-term investments of $23.9 million, compared with $10.8 million at the end of 2008. Furthermore, XOMA received approximately $21.0 million in net proceeds from financing transactions in January and February 2010.

Guidance

XOMA did not provide guidance on revenues or cash receipts for 2010. However, the company believes that cash used in operating activities may range from $45 million to cash neutral or positive.

 

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