This excerpt taken from the XOMA 10-K filed Mar 11, 2008.
Revenues - Total revenues for 2007 were $84.3 million, compared with $29.5 million in 2006. License and collaborative fee revenues were $36.5 million in 2007, compared with $2.8 million in 2006. The increase resulted primarily from the Companys license agreement with Pfizer with its $30 million up-front cash payment.
Contract and other revenues were $31.1 million in 2007, compared with $16.3 million in 2006. The increase resulted primarily from the Companys service arrangements with National Institute of Allergy and Infectious Diseases (NIAID), Schering Plough Research Institute, AVEO Pharmaceuticals, Inc. (AVEO), and Takeda.
Royalties in 2007 totaled $16.7 million, compared with $10.3 million in 2006, reflecting the growth in RAPTIVA® and LUCENTIS® sales.
Expenses - In 2007, research and development expenses were $66.2 million, compared with $52.1 million in 2006. The $14.1 million increase in 2007 compared with 2006 primarily reflects increased spending on development of XOMA 052, including Phase 1 clinical trials, and our contracts with NIAID, Schering Plough Research Institute/AVEO and Takeda, partially offset by a decrease in our spending on Taligen.
In 2007, general and administrative expenses were $20.6 million compared with $18.1 million in 2006. The $2.5 million increase for 2007 resulted primarily from increased employee-related costs.
Interest Expense - Interest expense was $11.6 million in 2007 compared with $12.9 million in 2006. Interest expense for 2007 primarily consisted of $6.1 million from the revaluation of the embedded derivative on the Companys convertible debt, $3.4 million in interest expense on the Companys loan from Goldman Sachs and $1.3 million of interest payable on the Companys loan from Novartis AG (Novartis). Interest expense for 2006 primarily consisted of interest on convertible debt and the Companys loan from Novartis.
Long-Term Debt - At December 31, 2007, XOMA had $30.3 million of long-term debt under a $35 million 5-year term loan facility with Goldman Sachs and $20.6 million of long-term debt under a $50.0 million loan facility with Novartis established to facilitate XOMAs participation in its collaboration with Novartis.
Liquidity and Capital Resources As of December 31, 2007, cash, cash equivalents and short-term investments were $38.6 million compared with $46.4 million at December 31, 2006. This $7.8 million decrease in 2007 reflects cash provided by operations of $4.5 million offset by cash used in the purchase of fixed assets of $9.5 million primarily for research and development capabilities and cash transferred to restricted cash of $1.7 million. Net cash used in operating activities was $33.3 million in 2006.
Guidance - XOMA is providing the following guidance for 2008 and plans to update this guidance on a quarterly basis.
We expect revenue for 2008 will be between 90 percent and 105 percent of the $84.3 million record level in 2007. Due to the timing of anticipated business activities, we also expect that revenues will be greater in the second half of 2008 than in the first half of 2008. We expect research and development expense in 2008 to increase between 25 percent and 40 percent from the $66.2 million spent in 2007 primarily to fund proprietary product research and expansion of projects with our collaborators. We expect general and administrative expense for 2008 will increase between 15 percent and 25 percent from the $20.6 million spent in 2007.
We expect to use $15 million to $20 million in cash in 2008 operating activities and to spend $12 million to $13 million for capital items. Based on current spending levels, anticipated revenues, collaborator funding and other sources of funding expected be available, the Company estimates it has sufficient cash resources to meet anticipated net cash needs through at least the next 12 months.