XOMA Limited (NASDAQ:XOMA)

CAPS Rating: 3 out of 5

A biopharmaceutical company that discovers, develops and manufactures antibodies and other genetically-engineered protein products to treat immunological and inflammatory disorders, cancer and infectious diseases.

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Member Avatar zzlangerhans (99.79) Submitted: 7/23/2015 9:34:36 PM : Outperform Start Price: $1.02 XOMA Score: -10.68

When I dropped my red thumb on Xoma years ago, I didn't know what Baker Brothers was. I just saw the company as a perma-disappointer experiencing an inexplicable and temporary rebound before eventually resuming their downward spiral to bankruptcy. Little did I know that I would have to endure a multihundred point deficit on the pick before eventually experiencing redemption.

Baker Brothers, of course, is the biotech hedge fund that rose to supremacy in the minds of the street after taking large positions in companies like Pharmacyclics, Incyte, and Seattle Genetics long before everyone else realized that they were on their way to becoming enormous successes. Xoma belonged to the second generation of Baker Brothers picks, which also included Vanda, SynaGeva, and Biocryst. All of the second generation picks happened to be stocks which I absolutely hated, but they all began to soar as soon as the street became aware that the Bakers were buying in. I initially concluded that the Bakers were cynically parlaying their early success into the practice of creating self-fulfilling prophecies. I figured they would sell at the peak price engendered by their own follower effect. This turned out to be somewhat true for Vanda, although the stock still trades far above where the Bakers bought in despite their reduced position. It remains to be seen if Vanda ever becomes a profitable company, although I have my doubts. Then came SynaGeva, where despite my massive skepticism about the existence of a market for their ultrarare disease drug the company was recently bought out for a huge premium by Alexion. At that point I concluded that the Bakers had to either have exceptional insight or access to unparalleled insider information prior to making their purchases. But now there's Xoma. Although the Bakers only had 15M, down from 23M at the peak, they still took an enormous hit today when the share price dropped more than 75% to 1 after announcement of failure of the EYEGUARD-B trial.

Of course, only the Bakers know how much they ended up making on their Xoma bet considering the early start they got and the millions of shares they sold in the 7's. Still, it has to hurt leaving 100M on the table. Did they fear if they sold everything near the top that they'd kill their golden goose of a follower effect and get the SEC sniffing around to boot?
I'm still unsure how to play Baker Brothers stocks. I could have followed along when they recently took a position in Transition, but I would have gotten my teeth kicked in. Perhaps I'll wait for everyone to decide it's a position worth following and then follow them. A follower's follower, so to speak. If the recent past is any guide, there will still be a lot of profits to be made long after the stock has passed any seemingly rational valuation.

Getting back to Xoma, they've never reported a positive mid to late stage trial result in the eight years I've been following, and I'm aware their history of futility dates back much longer than that. The last few of those failures have involved lead drug gevokizumab, which is also the drug being tested in the remaining late stage EYEGUARD trials. The market cap has been shaved down to 122M, but cash is only 67M, debt is 47M, and the burn runs at about 20M a quarter. Eventually Xoma is going to make another run if institutional promoters decide to push a thesis that the EYEGUARD-B failure won't read through to the other ongoing trials of gevokizumab. Given the number of gevo failures we've seen so far, this could be a hard sell. This could get a lot uglier before we see some recovery here. Nevertheless, I think the stock is worth flagging as a green thumb just in case the prospects start looking a little better for a turn-around down the road.

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Member Avatar manirg (97.38) Submitted: 3/12/2015 9:38:58 AM : Outperform Start Price: $3.59 XOMA Score: -71.27

Undervalued, my start Limit $3.6

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Member Avatar TMFBiologyFool (97.04) Submitted: 3/6/2014 7:03:57 PM : Outperform Start Price: $6.59 XOMA Score: -90.69

Knockdown after EOA data looks like a decent entry point.

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Member Avatar Crystalball (95.22) Submitted: 3/6/2014 11:28:21 AM : Outperform Start Price: $6.82 XOMA Score: -91.38

Gevokuzimab could still be used on 10 other indications. Sell off way overdone.

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Member Avatar outinthesnow (59.72) Submitted: 12/27/2013 1:02:10 AM : Outperform Start Price: $7.32 XOMA Score: -94.64

Old favorite

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Member Avatar rknapton (< 20) Submitted: 8/22/2013 5:31:32 PM : Underperform Start Price: $4.50 XOMA Score: +98.63

Short. Biotech that sells stock.

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Member Avatar savvyhelper (< 20) Submitted: 7/13/2013 12:40:42 PM : Outperform Start Price: $4.70 XOMA Score: -98.43

research is on the move and hope fully cures

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Member Avatar TMFRSue (33.20) Submitted: 4/28/2012 3:18:31 AM : Outperform Start Price: $2.48 XOMA Score: -109.54

Quality scientific organization with deep pipeline in area of breakthrough novel antibody therapeutics under direction and leadership of deeply experienced Senior Vice-President of Research and Development/Chief Medical Officer Dr. Paul Rubin.

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Member Avatar measured (59.32) Submitted: 4/24/2012 4:50:40 PM : Outperform Start Price: $2.85 XOMA Score: -111.43

Need to have patience.A multibagger

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Member Avatar jimscottage11 (20.03) Submitted: 12/19/2011 7:00:59 AM : Outperform Start Price: $1.18 XOMA Score: -88.87

New 52wk low on fri 16th 2011. could bounce

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Member Avatar danienov (< 20) Submitted: 12/9/2011 3:13:29 PM : Outperform Start Price: $1.46 XOMA Score: -97.50

052

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Member Avatar p1a5244 (67.51) Submitted: 9/18/2011 11:20:44 PM : Outperform Start Price: $2.13 XOMA Score: -124.00

9/18/11 Options Predictor Rank #33. P/C Ratio 0.075 and Call Sizzle 3.383.

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Member Avatar rwpaules (90.83) Submitted: 6/20/2011 12:15:41 PM : Underperform Start Price: $2.30 XOMA Score: +116.41

Poster child for R&D futility. Betting on them could be lucrative. Betting against them could be reasonable.

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Member Avatar SCmaverick96 (< 20) Submitted: 4/7/2011 8:33:29 PM : Outperform Start Price: $3.47 XOMA Score: -121.68

I bought this stock around $5/share. Yes, I did take a huge blow from the bad research data about diabetes but I still believe I got a deal because cardiovascular is where it's at. I'm a nurse and that is what leads our nation in death tolls. The research is there, they just need to make it work. I know that's a big "IF" but I'm willing to hold on. I will buy more shares as soon as I can. I'm trying to keep my faith in the XOMA team to give that huge blockbuster drug so I can retire at 30.

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Member Avatar hrairk (< 20) Submitted: 3/22/2011 10:25:16 PM : Underperform Start Price: $3.32 XOMA Score: +126.22

Their "flagship" product just sank.

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Member Avatar dangank (< 20) Submitted: 2/16/2011 10:30:29 AM : Outperform Start Price: $4.94 XOMA Score: -128.81

The science seems to be sound, but one has the sense that no one, not even management really knows.

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Member Avatar prior601 (< 20) Submitted: 2/9/2011 7:25:49 AM : Outperform Start Price: $5.26 XOMA Score: -131.80

Set to blow!

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Member Avatar graniteguys (45.88) Submitted: 1/5/2011 2:27:05 PM : Outperform Start Price: $6.75 XOMA Score: -140.81

Bought before reverse split
Hope make money back and little gain

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Member Avatar dahabnick (< 20) Submitted: 12/28/2010 4:30:50 PM : Outperform Start Price: $4.82 XOMA Score: -137.64

This is one of those single disease, solution focused companies. I believe diabetes is there game. Either they succeed or they don't. It will take time before there product can climb through the FDA approval jungle. Thats why Isay , at least 2 years. Anticipation until then will make it rise faster than others.

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Member Avatar ferrarimondial32 (< 20) Submitted: 12/28/2010 4:16:34 PM : Outperform Start Price: $4.82 XOMA Score: -137.64

Blockbuster drug close to approval.

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