Xoma’s High-Stakes Expansion Strategy Faces Market Scrutiny

The biotechnology sector continues to represent a high-risk, high-reward landscape, and Xoma Corporation is demonstrating an aggressive approach to growth. Despite recent stock price weakness, the company is vigorously pursuing its expansion agenda, with recent modifications to its acquisition agreement with LAVA Therapeutics signaling its determination to push the deal forward regardless of obstacles.

All attention now turns to November 6, 2025, when Xoma Royalty is scheduled to release its third-quarter financial results. The company established strong expectations with its impressive second-quarter performance, which featured:

• Earnings per share of $0.48 (compared to anticipated losses of $0.12)
• Revenue reaching $13.13 million (surpassing projections of $9.39 million)

This robust quarterly showing provides the foundation upon which Xoma must demonstrate it can financially support its ambitious acquisition strategy. The upcoming Q3 figures will reveal whether the company's expansion efforts are yielding tangible results.

Acquisition Terms Modified to Facilitate Deal Completion

On October 17, 2025, Xoma announced significant revisions to its purchase agreement with LAVA Therapeutics. The minimum cash requirement for closing was substantially reduced from $31.5 million to $24.5 million. Concurrently, the offering period was extended through November 12, 2025. These adjustments indicate Xoma's commitment to streamlining and accelerating the acquisition process, underscoring the transaction's strategic importance to the company's broader objectives.

Should investors sell immediately? Or is it worth buying Xoma?

Share Price Reflects Sector Volatility

Market participants have responded cautiously to recent developments. During the final trading session of October, Xoma shares declined more than 4% on trading volume of approximately 67,660 shares. This price action exemplifies the characteristic volatility of biotechnology investments, where market participants react sharply to company-specific news. Following this downward movement, the stock now trades approximately 15% below its 52-week high.

Strategic Vision Focuses on Portfolio Diversification

Xoma is currently executing a clear growth strategy that extends beyond the LAVA Therapeutics transaction. The company is integrating additional biotechnology assets from Mural Oncology and HilleVax, demonstrating its systematic approach to establishing itself as a leading royalty aggregator within the sector. By securing licensing rights across various therapeutic approaches, Xoma is building a diversified portfolio designed to generate long-term value.

The critical question remains whether Xoma's upcoming quarterly report will validate its aggressive acquisition approach, providing markets with the confirmation they await from the third-quarter performance data.