Ligand to acquire Xoma for $39.00 per share in cash

Ligand (LGND) and Xoma (XOMA) announced that the companies have entered into a definitive agreement under which Ligand will acquire Xoma Royalty for $39.00 per share of common stock in cash, for a total equity value of approximately $739M. Xoma Royalty stockholders are expected to separately receive one non-transferable contingent value right, or CVR, per share entitling the holder to receive a portion of 75% of the net proceeds that may result from certain pending litigation at Xoma Royalty. The cash purchase price at close represents an approximately 14% premium to Xoma Royalty’s 30 trading day volume weighted average price as of April 24, the last trading day prior to announcement of the transaction. With this agreement, Ligand adds over 120 commercial, clinical, and preclinical stage assets to its royalty portfolio. Under the terms of the merger agreement, Ligand will acquire all the outstanding shares of common stock of Xoma Royalty for $39.00 per share in cash. The cash consideration for the transaction is expected to be funded with Ligand’s existing cash on hand and borrowings under Ligand’s existing credit facility. Xoma Royalty’s Series X convertible preferred stock is expected to be converted into shares of common stock at its stated fixed price prior to closing, whereas the outstanding shares of Series A Preferred Stock and Series B preferred stock are expected to be redeemed. Xoma Royalty stockholders also will receive one CVR per share. The CVRs are intended to provide Xoma Royalty stockholders with the opportunity to receive certain net proceeds, if any are recovered, from certain ongoing litigation with regard to Xoma Royalty’s dispute with Janssen Biotech regarding the commercialization of Tremfya. The transaction has been unanimously approved by the Ligand and Xoma Royalty boards of directors. Entities affiliated with BVF Partners, which own approximately 21% of the outstanding shares of Xoma Royalty common stock and approximately 44% assuming the conversion of their Series X convertible preferred stock, have agreed to convert such shares into shares of Xoma Royalty common stock prior to closing and have entered into a voting agreement in support of the transaction. In addition, Xoma Royalty’s directors and officers have also entered into voting agreements in support of the transaction. The transaction is expected to close in the third quarter of 2026, subject to customary closing conditions, approval by Xoma Royalty stockholders and the receipt of certain regulatory approvals.