Leerink Partners increased its price target for XOMA, Ltd. (NASDAQ:XOMA) to $50 from $45 and maintained an Outperform rating, according to the firm's latest model update. The new target is calculated against a reference share price of $25.32 and implies roughly 97% upside, in line with a broader analyst consensus characterized in the market as Strong Buy. Across analysts, price targets for XOMA range from $45 to $97, reflecting divergent views on the company's royalty-focused business model.
The firm's valuation is based on a discounted cash flow approach that projects cash flows through 2035, assumes a terminal growth rate of 0%, and applies a 12% discount rate. That rate represents a reduction from a prior 15% discount rate. Leerink's DCF incorporates several specific assumptions: the possibility of a royalty settlement tied to Tremfya, potential royalties from a TL1A program, and the explicit removal of seralutinib royalties after a Phase 3 failure. The model also lowers projections for certain other pipeline candidates and fully accounts for dilution arising from convertible preferred shares.
Those modeling changes had measurable impacts on forward estimates. Leerink cut its 2030 revenue forecast by 19%, from $211 million to $171 million, and reduced its earnings-per-share projection for the same year from $6.89 to $5.10. At the same time, the firm's cash flow outlook was improved by the inclusion of a potential litigation settlement related to Tremfya, which the DCF treats as a contributor to near-term cash inflows.
Leerink reiterated its Outperform rating on XOMA following these updates. The firm signaled that the adjusted valuation reflects both downside from clinical program setbacks and upside from possible royalty receipts and legal-resolution proceeds.
In other corporate developments, XOMA completed the acquisition of Generation Bio in a deal valued at approximately $29 million. The transaction involved a payment of $4.29 per Generation Bio share plus a contingent value right. The acquisition prompted TD Cowen to reinstate coverage of the combined company with a Hold rating. Jefferies, responding to the acquisition announcement, downgraded Generation Bio from Buy to Hold and lowered its price target to $5.00.
XOMA has also amended its collaboration agreement with Takeda. The amendment reduces XOMA's royalty interest in mezagitamab from mid-single digits to low-single digits and caps potential milestone payments at $13 million. Following that agreement modification, Leerink reiterated an Outperform rating on XOMA while maintaining a $45 price target tied specifically to the revised collaboration terms.
At the executive level, XOMA announced a change in finance leadership. Thomas Burns, the company's chief financial officer for nearly two decades, has stepped down. Jeffrey Trigilio has assumed the CFO role; his background includes positions at Obsidian Therapeutics and Cullinan Therapeutics.
Taken together, the valuation update, acquisition completion, collaboration amendment, and senior management change mark a period of notable adjustment for XOMA. The company's near-term financial profile reflects a mix of reduced revenue and EPS projections driven by pipeline revisions and dilution, alongside potential offsets from royalty settlements and acquisition-related strategy changes.