Xoma Royalty Acquires Struggling Biotechs HilleVax and Lava Therapeutics

Xoma Royalty has announced the acquisition of two biotechnology companies, HilleVax and Lava Therapeutics, both of which have faced recent clinical setbacks. The deals, disclosed on August 4, 2025, mark a significant move for Xoma as it expands its portfolio beyond its traditional focus on acquiring royalty and milestone rights.

HilleVax Acquisition Details

Xoma will pay $1.95 cash per share for HilleVax, slightly below the company's closing price of $2.04 on the previous trading day. HilleVax shareholders will also receive a nontransferable contingent value right (CVR), entitling them to:

• A portion of any remaining cash in HilleVax's account after $102.9 million is deducted
• A share of savings from closing HilleVax's Boston office
• A percentage of proceeds from potential license or sale of HilleVax's vaccines within five years

This acquisition comes after HilleVax's norovirus vaccine candidate, HIL-214, failed to meet primary and secondary endpoints in a phase 2b trial involving over 2,800 infants in July 2024. The clinical setback led to a 40% reduction in HilleVax's workforce and a shift in focus towards exploring adult applications for their vaccine candidates.

Lava Therapeutics Deal Structure

In a separate transaction, Xoma will acquire Lava Therapeutics for between $1.16 and $1.24 per share, below Lava's closing price of $1.42. Lava shareholders will receive a CVR granting them a share of proceeds from any of Lava's assets, including:

• LAVA-1266, currently in phase 1 trials for acute myeloid leukemia and myelodysplastic syndrome
• A Johnson & Johnson-partnered CD33- and gamma delta T cell-targeting program
• A Pfizer-partnered EGFR and bispecific gamma delta T cell receptor-targeted therapy

As part of the deal, Lava will wind down the LAVA-1266 program and discontinue its ongoing phase 1 study. This decision follows the failure of Lava's lead asset, LAVA-1207, in a phase 1 prostate cancer study in late 2024, which had previously led to significant layoffs and the closure of Lava's operations in the Netherlands.

Strategic Implications for Xoma Royalty

These acquisitions represent a shift in strategy for Xoma Royalty, which has traditionally focused on acquiring rights to royalties and milestones. Owen Hughes, Xoma's CEO, stated, "We believe the structure of this transaction has the potential to benefit both Lava and Xoma Royalty shareholders over time. We are adding economics related to Lava's partnered programs investigating the utility of gamma delta bispecific antibodies, which hold significant promise for patients."

The deals follow Xoma's recent acquisition of Turnstone Biologics in June, further diversifying the company's portfolio and signaling a more active approach to asset acquisition in the biotech sector.