What changed in XOMA Royalty Corp's 2025 10-K compared to 2024?

Across the narrative sections we track, XOMA Royalty Corp (XOMA) added 419 paragraphs, removed 347, and edited 255 between the 2024 and 2025 10-K filings. The biggest movers are Item 1A. Risk Factors (+201/−165), Item 7. Management's Discussion & Analysis (+110/−100), Item 1. Business (+92/−71).

Did XOMA Royalty Corp add new Risk Factors in the 2025 10-K?

Yes — Item 1A Risk Factors shows 201 new/edited paragraphs and 165 removed paragraphs versus the 2024 10-K.

What changed in XOMA Royalty Corp's MD&A (Item 7) in 2025?

Item 7 Management's Discussion & Analysis shows 110 new/edited paragraphs and 100 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did XOMA Royalty Corp update its Cybersecurity disclosure (Item 1C) in 2025?

Item 1C Cybersecurity has 6 paragraph-level changes between the 2024 and 2025 filings.

Did XOMA Royalty Corp's Legal Proceedings (Item 3) change in 2025?

Item 3 shows 3 added/edited paragraphs and 3 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this XOMA 10-K diff come from?

The source filings are XOMA Royalty Corp's official 2024 and 2025 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in XOMA Royalty Corp's 10-K — 2024 vs 2025

Paragraph-level year-over-year comparison of XOMA Royalty Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+419 added−347 removedSource: 10-K (2026-03-18) vs 10-K (2025-03-17)

Top changes in XOMA Royalty Corp's 2025 10-K

419 paragraphs added · 347 removed · 255 edited across 6 sections

Item 1A. Risk Factors+201 / −165 · 140 edited
Item 7. Management's Discussion & Analysis+110 / −100 · 54 edited
Item 1. Business+92 / −71 · 53 edited
Item 5. Market for Registrant's Common Equity+7 / −2 · 1 edited
Item 1C. Cybersecurity+6 / −6 · 5 edited

Item 1. Business

Business — how the company describes what it does

53 edited+39 added−18 removed50 unchanged

2024 filing

2025 filing

Biggest changeCommercial assets ASSET NAME COMPANY DESCRIPTION ROYALTY RATE VABYSMO ® (faricimab-svoa) Roche Angiopoietin-2 and VEGF-A bispecific antibody 0.5% OJEMDA TM (tovorafenib) Day One Pan-RAF inhibitor Mid-single-digit MIPLYFFA TM (arimoclomol) Zevra Heat-shock protein modulator Mid-single-digit IXINITY ® Medexus Recombinant Factor IX Mid-single-digit DSUVIA ® (sufentanil sublingual tablet) Talphera Acute pain treatment 37.5-75% (DoD) XACIATO TM (clindamycin phosphate) Organon Bioadhesive antibiotic gel Low to high-single-digit 9 Table of Contents Phase 3 assets ASSET NAME COMPANY DESCRIPTION ROYALTY RATE Cetrelimab (JNJ-63723283) Johnson & Johnson PD-1 antibody 0.75% Ersodetug (RZ358) Rezolute INSR antibody High-single-digit to mid-teens Ficlatuzumab (AV-299) LG Chem HGF antibody Low-single-digit Mezagitamab (TAK-079) Takeda CD-38 antibody 4% Ovaprene ® Bayer (option) (Daré Bioscience) Hormone-free contraceptive Low-single-digit Rilvegostomig (AZD2936) AstraZeneca TIGITI/PD-1 bispecific antibody Confidential Seralutinib Chiesi (Gossamer Bio) Inhaled PDGFR, CSF1R, c-KIT inhibitor Low to mid-single digit, net Phase 2 assets ASSET NAME COMPANY DESCRIPTION ROYALTY RATE Acimtamig (AFM13) Affimed CD30/CD16A innate cell engager Confidential AFM24 Affimed EGFR/CD16A innate cell engager Confidential Aldoxorubicin LadRx Albumin-linked formulation of doxorubicin Low-single-digit G03-52-01 National Resilience Botulinum neurotoxin antibodies 15% PBF-677 Palobiofarma Adenosine A3 receptor inhibitor Low-single-digit PBF-680 Palobiofarma Adenosine A1 receptor inhibitor Low-single-digit RZ-402 Rezolute Plasma kallikrein inhibitor Low-single-digit Sildenafil cream, 3.6% Daré Bioscience PDE-5 inhibitor Low-single-digit Vidutolimod (CMP-001) Regeneron Virus-like particle containing a TLR9 agonist High-single-digit to double-digit Vosaroxin Denovo Biopharma Topoisomerase II inhibitor High-single-digit 10 Table of Contents other Assets ASSET NAME COMPANY DESCRIPTION ROYALTY RATE AB101 Rezolute Injectable basal insulin Low-single-digit COM902 Compugen TIGIT antibody Confidential MNPR-101 Monopar Therapeutics Urokinase plasminogen activator receptor (uPAR) radioimmunotherapeutic None MT-0169 Molecular Templates Anti-CD-38 immunotoxin 4% PBF-999 Palobiofarma Adenosine A2a receptor/ PDE-10 inhibitor Low-single-digit PBF-1129 Palobiofarma Adenosine A2b receptor inhibitor Low-single-digit PBF-1650 Palobiofarma Adenosine A3 receptor inhibitor Low-single-digit >60 early-stage assets Twists’ >30 Partners Multiple targets 50% of up to low-single-digits Acquisitions – Commercial Programs VABYSMO - Affitech Commercial Payment Purchase Agreement In October 2021, we entered into the Affitech CPPA, pursuant to which we purchased a future stream of commercial payment rights to Roche’s VABYSMO ® (faricimab-svoa) from Affitech for an upfront payment of $6.0 million.

Biggest changeThese tables do not include all assets because certain assets are subject to confidentiality agreements. 13 Table of Contents Commercial assets ASSET NAME MARKETER DESCRIPTION THERAPEUTIC AREA 2025 ROYALTIES & COMMERCIAL PAYMENTS TO XOMA ROYALTY (in millions) ROYALTY RATE VABYSMO ® (faricimab-svoa) Roche Angiopoietin-2 and VEGF-A bispecific antibody Retinal diseases $22.5 0.5% OJEMDA TM (tovorafenib) Day One Pan-RAF inhibitor Pediatric oncology $6.4 Mid-single digit MIPLYFFA TM (arimoclomol) Zevra Heat-shock protein modulator Rare disease $2.9 Mid-single digit IXINITY ® Medexus Recombinant Factor IX Bleeding disorder $1.7 Mid-single digit DSUVIA ® (sufentanil sublingual tablet) Talphera Acute pain treatment Pain 37.5-75% (DoD) XACIATO TM (clindamycin phosphate) Organon Bioadhesive antibiotic gel Women’s health Low to high-single digit DARE to PLAY™ (sildenafil cream) via Section 503B of FDCA Daré PDE5 inhibitor Women’s health $0 Low single digit Total Royalties & Commercial Payments in 2025 $33.6 Cash Receipts from Milestones and Fees in 2025 (related to both commercial and development-stage assets) $16.9 Total Cash Receipts from Portfolio in 2025 $50.5 14 Table of Contents Late-Stage assets ASSET NAME DEVELOPER DESCRIPTION THERAPEUTIC AREA ESTIMATED POTENTIAL MILESTONES (in millions) ROYALTY RATE Cetrelimab (JNJ-63723283) Johnson & Johnson PD-1 antibody Oncology Not disclosed 0.75% D-Fi (FCX-007) Castle Creek Gene therapy Rare disease Not disclosed Ersodetug (RZ358) Rezolute INSR antibody Rare disease $210 Total $25 due upon first regulatory filing High single digit to mid-teens Ficlatuzumab (AV-299) AVEO/LG Chem HGF antibody Oncology $4.5 Low single digit OHB-607 Oak Hill Bio Recombinant human IGF-1/IGFBP-3 Neonatology $223.1 Low to mid-single digit Ovaprene ® Daré Hormone-free contraceptive Women’s health None Low single digit REC-4881 Recursion Pharmaceuticals MEK1/2 inhibitors Rare disease Not disclosed Low to mid-single digit Rilvegostomig (AZD2936) AstraZeneca TIGITI/PD-1 bispecific antibody Oncology Not disclosed Confidential Seralutinib Gossamer Bio & Chiesi Inhaled PDGFR, CSF1R, c-KIT inhibitor Cardiopulmonary $26.5 Low to mid-single digit, net Sildenafil Cream, 3.6% Daré PDE5 Inhibitor Women’s health $0 Low single digit Takeda Revenue Share Assets – Late Stage (Mezagitamab (TAK-079), Osavampator and Volixibat) CD-38 antibody, AMPA positive allosteric modulator, IBAT inhibitor and other targets Autoimmune diseases, neurology, psychiatry, hepatic diseases $101 (aggregate milestones) Low to mid-single digit 15 Table of Contents Undisclosed Undisclosed TL1-A Autoimmune $1 Low single digit ASSETS ADDED OR MODIFIED Since the Beginning of 2025 ASSET NAME DEVELOPER DESCRIPTION ESTIMATED POTENTIAL MILESTONES (in millions) ROYALTY RATE D-Fi (FCX-007) Castle Creek Gene therapy None XOMA Royalty Share Cell-targeted lipid nanoparticle platform Formerly Generation Bio; Now available for license Cell-targeted lipid nanoparticle delivery system None None HIL-216 Available for license Hexavalent VLP vaccine for norovirus JNJ-89853413 Johnson & Johnson CD33 and Vd2 T cells Gammabody engager $187.5 Low to mid-single digit KIN-3248 Khora FGFR Not disclosed None KIN-7136 Mosaica Therapeutics MEK $21.5 Not disclosed KIN-8741 Celyn Therapeutics c-MET Not disclosed Not disclosed LAVA-1266 Available for license CD123 OHB-607 Oak Hill Bio Recombinant human IGF-1/IGFBP-3 $223.1 Low to mid-single digit PF-08046052 Pfizer EGFR-expressing solid tumors monotherapy $651 High single to mid-teens REC-4881 Recursion Pharmaceuticals Allosteric MEK1/2 inhibitors Not disclosed Low to mid-single digit 16 Table of Contents Takeda Revenue Share Assets – Late Stage (Mezagitamab (TAK-079), Osavampator and Volixibat) CD-38 antibody, AMPA positive allosteric modulator, IBAT inhibitor and other targets $101 (aggregate milestones) Low to mid-single digit 5 early-stage assets Oak Hill Bio Multiple targets $510 (aggregate milestones) Mid-single digit Undisclosed Moderna T-Cell $25 Mid-single digit Undisclosed Khora CDK4 Not disclosed None Undisclosed Khora CDK2/4 Not disclosed None 17 Table of Contents Commercial Programs VABYSMO - Affitech Commercial Payment Purchase Agreement In October 2021, we entered into the Affitech CPPA, pursuant to which we purchased a future stream of commercial payment rights to Roche’s VABYSMO ® (faricimab-svoa) from Affitech for an upfront payment of $6.0 million.

We also acquire milestone and royalty revenue streams on late-stage clinical assets or commercial assets that are designed to address unmet markets or have a therapeutic advantage over other treatment options, and have long duration of market exclusivity.

We also acquire milestone and royalty revenue streams on late-stage clinical assets and commercial assets that are designed to address unmet markets or have a therapeutic advantage over other treatment options and have long duration of market exclusivity.

OJEMDA - Viracta Royalty Purchase Agreement In March 2021, we entered into the Viracta RPA, pursuant to which we acquired the right to receive future royalties, milestone payments, and other payments related to Day One’s tovorafenib (OJEMDA) and Denovo’s vosaroxin.

MIPLYFFA - LadRx Agreements In June 2023, we entered into the LadRx AAA pursuant to which we acquired from LadRx all of its rights, title and interests related to arimoclomol (MIPLYFFA) under the Zevra RPA.

MIPLYFFA - LadRx Agreements In June 2023, we entered into the LadRx AAA pursuant to which we acquired from LadRx all of its rights, title and interests related to MIPLYFFA (arimoclomol) under the Zevra RPA.

Under the Kinnate CVR Agreement, we are responsible for the collection and disbursement of any proceeds to which Kinnate CVR holders could be entitled to Broadridge, the Kinnate CVR holders’ rights agent. Twist Bioscience Royalty Purchase Agreement In October 2024, we entered into the Twist RPA.

Under the Kinnate CVR Agreement, we are responsible for the collection and disbursement to Broadridge, the Kinnate CVR holders’ rights agent, of any proceeds to which Kinnate CVR holders could be entitled. Twist Bioscience Royalty Purchase Agreement In October 2024, we entered into the Twist RPA.

Our right to milestone payments expires on the later of the receipt of payment from Takeda of the last amount to be paid under the agreement or the cessation by Takeda of all research and development activities with respect to all program antibodies, collaboration targets or collaboration products.

In September 2024, the FDA approved MIPLYFFA for use in combination with miglustat for the treatment of neurological manifestations of Niemann-Pick Disease Type C (“NPC”) in adult and pediatric patients two years of age and older. Upon notice of the first commercial sale in November 2024, we paid LadRx an additional $1.0 million milestone payment.

In September 2024, the FDA approved MIPLYFFA for use in combination with miglustat for the treatment of neurological manifestations of Niemann-Pick Disease Type C in adult and pediatric patients two years of age and older. Upon notice of the first commercial sale in November 2024, we paid LadRx an additional $1.0 million milestone payment.

The purchased rights related to arimoclomol included potential regulatory and commercial milestone payments of up to $52.5 million (net of certain payment obligations of up to $9.5 million based on a portion of the regulatory and commercial milestone payments) and potential royalty payments in low single-digit percentages of aggregate net sales associated with arimoclomol.

The purchased rights related to MIPLYFFA included potential regulatory and commercial milestone payments of up to $52.5 million (net of certain payment obligations of up to $9.5 million based on a portion of the regulatory and commercial milestone payments) and potential royalty payments in low single-digit percentages of aggregate net sales associated with arimoclomol.

In April 2023, Talphera divested DSUVIA to Alora Pharmaceuticals for an upfront payment, a 15% royalty on commercial net sales, a 75% royalty on net sales to the DoD, and up to $116.5 million in milestone payments.

In April 2023, Talphera divested DSUVIA to Alora for an upfront payment, a 15% royalty on commercial net sales, a 75% royalty on net sales to the DoD, and up to $116.5 million in milestone payments.

CVR holders are eligible to receive 100% of the net proceeds received within five years of the closing date resulting from the license of exarafenib to Pierre Fabre, which was executed prior to the merger closing date.

Kinnate CVR holders are eligible to receive 100% of the net proceeds received within five years of the closing date resulting from the license of exarafenib to Pierre Fabre, which was executed prior to the merger closing date.

In 2023, we earned a total of $1.5 million in milestone payments from Janssen, which included five milestone payments for IND filings and one milestone payment upon dosing of the first patient in a Phase 3 clinical trial evaluating one of Janssen’s biologic assets. There were no milestone payments earned pursuant to this agreement in 2024.

We are eligible to receive commercial payments from Roche consisting of 0.5% of future net sales of faricimab for a ten-year period following the first commercial sales in each applicable jurisdiction. Commercial payments are due from Roche to us within 60 days of December 31 and June 30 of each year.

We are eligible to receive commercial payments from Roche consisting of 0.5% of future net sales of VABYSMO for a ten-year period following the first commercial sales in each applicable jurisdiction. Commercial payments are due from Roche to us within 60 days of December 31 and June 30 of each year.

The Daré RPAs also provide for milestone payments to Daré of $11.0 million for each successive $22.0 million received by us under the Daré RPAs after achievement of a return threshold of $88.0 million. Receipts pursuant to the Daré RPAs were negligible in 2024.

In addition, changes in existing regulations could have a material adverse effect on us or our partners. In the U.S., the EU and other significant or potentially significant markets for our portfolio and product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of 17 Table of Contents medical products and services.

Also, in August 2022 Congress enacted the Inflation Reduction Act of 2022, which, among other things, requires the Department of Health and Human Services to negotiate Medicare prices for certain drugs, imposes an inflation-based rebate on Medicare Part B and D utilization, restructures the Medicare Part D benefit and increases manufacturer contributions in some or all of the Medicare Part D benefit phases.

Also, in August 2022 Congress enacted the IRA, which, among other things, requires the Department of Health and Human Services to negotiate Medicare prices for certain drugs, imposes an inflation-based rebate on Medicare Part B and D utilization, restructures the Medicare Part D benefit and increases manufacturer contributions in some or all of the Medicare Part D benefit phases.

The failure of any one of these products to move forward in clinical development or commercialization may have a material adverse effect on our financial condition and results of operations. Corporate Information We were incorporated in Delaware in 1981 and redomiciled as a Bermuda-exempted company in December 1998.

The failure of any one of these products to move forward in clinical development or commercialization may have a material adverse effect on our financial condition and results of operations. 27 Table of Contents Corporate Information We were incorporated in Delaware in 1981 and redomiciled as a Bermuda-exempted company in December 1998.

There can be no assurance that developments by others, including, without limitation, the development of generics or biosimilars, will not render our licensees’ or royalty partners’ products or technologies obsolete or uncompetitive. Additionally, our royalty aggregator model faces competition on at least two fronts.

There 24 Table of Contents can be no assurance that developments by others, including, without limitation, the development of generics or biosimilars, will not render our licensees’ or royalty partners’ products or technologies obsolete or uncompetitive. Additionally, our royalty aggregator model faces competition on at least two fronts.

Our portfolio currently includes partner funded programs from which we could potentially receive royalties or other 19 Table of Contents payments if the programs achieve marketability. A large percentage of the calculated net present value of our portfolio is represented by a limited number of products.

Our portfolio currently includes partner funded programs from which we could potentially receive royalties or other payments if the programs achieve marketability. A large percentage of the calculated net present value of our portfolio is represented by a limited number of products.

Based on updates received in November 2024, we evaluated the status of the program for potential credit losses in the fourth quarter of 2024 and determined no payments were probable to be received under the Talphera CPPA as of December 31, 2024.

Additionally, the amendment removed the $4.0 million regulatory milestone payment payable to LadRx under the original agreement that had been contingent upon the achievement of a specified regulatory milestone for the product candidate related to aldoxorubicin.

Additionally, the amendment removed the $4.0 million regulatory milestone payment payable to LadRx 18 Table of Contents under the original agreement that had been contingent upon the achievement of a specified regulatory milestone for the product candidate related to aldoxorubicin.

Under the program, we have discretion in determining the 16 Table of Contents conditions under which shares may be purchased from time to time, including through transactions in the open market, in privately negotiated transactions, under plans compliant with Rule 10b5-1 under the Exchange Act, or by other means in accordance with applicable laws.

Under the program, we have discretion in determining the conditions under which shares may be purchased from time to time, including through transactions in the open market, in privately negotiated transactions, under plans compliant with Rule 10b5-1 under the Exchange Act, or by other means in accordance with applicable laws.

Pursuant to the Aptevo CPPA, we received commercial payments totaling $1.6 million in 2024 and $1.7 million in 2023.

Pursuant to the Aptevo CPPA, we received commercial payments totaling $1.7 million in 2025 and $1.6 million in 2024.

Kinnate Acquisition In April 2024, we acquired Kinnate through a tender offer for (i) $2.5879 in cash per share of Kinnate common stock, plus (ii) one non-transferable contractual CVR per share of Kinnate common stock. Following the merger, Kinnate continued as our wholly-owned subsidiary.

Kinnate Acquisition In April 2024, we acquired Kinnate through a tender offer for $2.5879 in cash and one non-transferable contractual CVR per share of Kinnate common stock. Following the merger, Kinnate continued as our wholly-owned subsidiary.

We are eligible to receive up to $0.5 billion in milestone payments and a 50% share of up to low-single-digit royalties on future commercial sales.

We are eligible to 21 Table of Contents receive up to $0.5 billion in milestone payments and a 50% share of up to low single-digit royalties on future commercial sales.

Our royalty aggregator business is primarily focused on early to mid-stage clinical assets, primarily in Phase 1 and 2 development, which we believe have significant commercial sales potential and that are licensed to well-funded partners with established expertise in developing and commercializing drugs.

Strategy Our royalty aggregator business is primarily focused on early to mid-stage clinical assets, primarily in Phase 1 and 2 development, which we believe have significant commercial sales potential and that are licensed to well-funded sponsors or developers with established expertise in developing and commercializing drugs.

VABYSMO is approved by the FDA and the EMA for the treatment of wet, or neovascular, age-related macular degeneration and diabetic macular edema. It is also approved by the FDA and the EMA for the treatment of retinal vein occlusion. Pursuant to the Affitech CPPA, we received commercial payments totaling $16.9 million in 2024 and $7.3 million in 2023.

XACIATO - Daré Royalty Purchase Agreements In April 2024, we entered into the Daré RPAs pursuant to which we paid $22.0 million in cash to Daré in consideration for (i) 100% of all remaining royalties related to XACIATO not already subject to the royalty-backed financing agreement Daré entered into in December 2023 and net of payments owed by Daré to upstream licensors, which equates to royalties ranging from low to high-single-digits, and of all potential commercial milestones related to XACIATO that are payable to Daré under the Daré Organon License Agreement, (ii) a 4% synthetic royalty on net sales 12 Table of Contents of OVAPRENE and a 2% synthetic royalty on net sales of Sildenafil Cream, which will decrease to 2.5% and 1.25%, respectively, upon us achieving a pre-specified return threshold, and (iii) a portion of Daré’s right to a certain milestone payment that may become payable to Daré under the Bayer License Agreement.

XACIATO - Daré Royalty Purchase Agreements In April 2024, we entered into the Daré RPAs pursuant to which we paid $22.0 million in cash to Daré in consideration for (i) 100% of all remaining royalties related to XACIATO not already subject to the royalty-backed financing agreement Daré entered into in December 2023 and net of payments owed by Daré to upstream licensors, which equates to royalties ranging from low to high single digits, and of all potential commercial milestones related to XACIATO that are payable to Daré under the Daré Organon License Agreement and (ii) a 4% synthetic royalty on net sales of OVAPRENE and a 2% synthetic royalty on net sales of Sildenafil Cream, which will decrease to 2.5% and 1.25%, respectively, upon us achieving a pre-specified return threshold.

As of March 13, 2025, we employed 13 full-time employees who were primarily engaged in executive, business development, legal, finance and administrative positions. We also utilize independent contractors and consultants to supplement our workforce.

As of March 11, 2026, we employed 14 full-time employees who were primarily engaged in executive, business development, legal, finance and administrative positions. We also utilize independent contractors and consultants to supplement our workforce.

We expect most of our future revenue and income to be based on payments we may receive for milestones and royalties associated with these assets as well as the periodic recognition of income under the EIR method. Our strategy is to expand our portfolio by acquiring additional milestone and royalty revenue streams associated with product candidates from third parties.

We expect most of our future revenue and income to be based on payments we may receive for milestones and royalties associated with these assets. Our strategy is to expand our portfolio by acquiring additional milestone and royalty revenue streams associated with product candidates from third parties.

In February 2025, we received a commercial payment of $11.1 million based on sales of VABYSMO during the second half of 2024.

In February 2026, we received a commercial payment of $11.9 million based on sales of VABYSMO during the second half of 2025.

Janssen In August 2019, we entered into an agreement with Janssen pursuant to which we granted a non-exclusive license to Janssen to develop and commercialize certain product candidates, including our patents and know-how. Under the agreement, Janssen made a one-time payment of $2.5 million to us.

Topline results of this study are anticipated in the second half of 2026. Janssen In August 2019, we entered into an agreement with Janssen pursuant to which we granted a non-exclusive license to Janssen to develop and commercialize certain product candidates, including our patents and know-how. Under the agreement, Janssen made a one-time payment of $2.5 million to us.

The repurchase authorization does not obligate us to acquire any particular amount of our common stock. The Board may suspend, modify, or terminate the stock repurchase program at any time without prior notice. As of December 31, 2024, we had purchased a total of 660 shares of our common stock pursuant to the stock repurchase plan for $13,000.

The repurchase authorization does not obligate us to acquire any particular amount of our common stock. The Board may suspend, modify, or terminate the stock repurchase program at any time without prior notice. As of December 31, 2025, we had purchased a total of 648,708 shares of our common stock pursuant to the stock repurchase plan for $16.1 million.

In addition, they are eligible to receive 85% of net proceeds, if any, from any license or other disposition of any Kinnate Pre-Clinical Asset that occurs within one year of the merger closing date. We expect to finalize licensing the Kinnate Pre-Clinical Assets in the first quarter of 2025.

In addition, they are eligible to receive 85% of net proceeds, if any, from any license or other disposition of any Kinnate Pre-Clinical Asset that occurs within one year of the merger closing date. We sold the Kinnate Pre-Clinical Assets in the first half of 2025 and paid the Kinnate CVR holders in the third quarter of 2025.

We will fully retain the 15% royalty associated with DSUVIA commercial sales. In November 2024, Alora discontinued commercial sales of DSUVIA. We remain eligible for payments from sales to the DoD. Pursuant to the Talphera CPPA, we received $0.1 million in commercial payments in 2024.

We will fully retain the 15% royalty associated with DSUVIA commercial sales. In November 2024, Alora discontinued commercial sales of DSUVIA. We remain eligible for payments from sales to the DoD.

Additionally, we acquired pre-clinical intangible assets related to IP for the following: (i) KIN-8741, a highly selective c-MET inhibitor with broad mutational coverage, including acquired resistance mutations, in certain solid tumors driven by exon 14-altered and/or amplified c-MET; (ii) KIN-7136, a brain-penetrant MEK inhibitor; and (iii) CDK4, a potential brain-penetrant selective CDK4 inhibitor (collectively, the “Kinnate Pre-Clinical Assets”) . 13 Table of Contents Each Kinnate CVR represents the right to receive potential payments pursuant to the terms and subject to the conditions of the Kinnate CVR Agreement.

Under the Takeda Collaboration Agreement, we may receive additional milestone payments of an aggregate of up to $19.0 million relating to TAK-079 (mezagitamab) and a 4% royalty on future sales of all products subject to this license.

Under the Takeda Collaboration Agreement, we were eligible to receive milestone payments of up to $20.8 million relating to TAK-079 (mezagitamab) and a 4% royalty on future sales of all products subject to this license.

We acquired all outstanding shares of Pulmokine for a $20.0 million cash payment at closing. In addition, we will pay success-based consideration contingent on future development and commercial performance to Pulmokine stockholders. In 2017, Pulmokine licensed seralutinib to Gossamer Bio, Inc., and in 2024, Gossamer Bio signed a global collaboration and license agreement with Chiesi Farmaceutici S.p.A.

In addition, we will pay success-based consideration contingent on future development and commercial performance to Pulmokine stockholders. In 2017, Pulmokine licensed seralutinib to Gossamer Bio, Inc., and in 2024, Gossamer Bio signed a global collaboration and license agreement with Chiesi Farmaceutici S.p.A.

We believe there are no significant compliance issues with laws and regulations that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have adversely affected, or are reasonably expected to adversely affect, our business, financial condition and results of operations, and we currently do not anticipate material capital expenditures arising from environmental regulation.

If any pricing-related regulation impacts products in our portfolio, it would result in lower royalties received by us. 25 Table of Contents We believe there are no significant compliance issues with laws and regulations that have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, that have adversely affected, or are reasonably expected to adversely affect, our business, financial condition and results of operations, and we currently do not anticipate material capital expenditures arising from environmental regulation.

Below is a list of representative patents and patent applications related to our licensed programs: Licensee Program Representative Patents/Applications Subject Matter Expected Last Expiration in Patent Family Rezolute Anti-INSR US 9,944,698 EP 2 480 254 JP 5849050 US 10,711,067 EP 3 265 491A1 WO2023225657A2* Insulin receptor-modulating antibodies having the functional properties of RZ358 Methods of treating or preventing post-prandial hypoglycemia after gastric bypass surgery using a negative modulator antibody to the insulin receptor RZ358 formulations 2030 2036 2043 Ology Bioservices Anti-BoNT US 8,821,879 EP 2 473 191 Coformulations of anti- botulinum neurotoxin antibodies 2030 Various Phage display libraries US 8,546,307 EP 2 344 686 XOMA phage display library components 2032 AVEO Anti-HGF US 7,649,083** Human-Engineered anti-HGF antibodies and uses thereof 2028 Alexion Anti-PTH1R US 10,519,250 EP 3 490 600A1 Parathyroid Hormone Receptor 1 Antibodies and Uses Thereof 2037 Day One OJEMDA US 8,293,752*** US 8,802,657*** US 9,556,177*** US 9,920,048*** EP3231798B1*** EP2167489B1*** Compositions of matter and methods of use of tovorafenib 2031 * Jointly owned with Rezolute, Inc. ** Jointly owned with AVEO Pharmaceuticals, Inc. *** Jointly owned with Day One Biopharmaceuticals, Inc. If certain patents issued to others are upheld or if certain patent applications filed by others are issued and upheld, our partners and licensees may require certain licenses from others to develop and commercialize certain potential product candidates incorporating our technology.

Below is a list of representative patents and patent applications related to our licensed programs: Licensee Program Representative Patents/Applications Subject Matter Expected Last Expiration in Patent Family Rezolute Anti-INSR US 9,944,698 US 12,371,488 EP 2 480 254 JP 5849050 US 10,711,067 EP 3 265 491 WO2023225657* Insulin receptor-modulating antibodies having the functional properties of RZ358 Methods of treating or preventing post-prandial hypoglycemia after gastric bypass surgery using a negative modulator antibody to the insulin receptor RZ358 formulations 2030 2036 2043 Ology Bioservices Anti-BoNT US 8,821,879 EP 2 473 191 Coformulations of anti- botulinum neurotoxin antibodies 2030 Various Phage display libraries US 8,546,307 EP 2 344 686 XOMA phage display library components 2032 AVEO Anti-HGF US 7,649,083** Human-Engineered anti-HGF antibodies and uses thereof 2028 Alexion Anti-PTH1R US 10,519,250 EP 3 490 600 Parathyroid Hormone Receptor 1 Antibodies and Uses Thereof 2037 26 Table of Contents Licensee Program Representative Patents/Applications Subject Matter Expected Last Expiration in Patent Family Day One OJEMDA US 8,293,752*** US 8,802,657*** US 9,556,177*** US 9,920,048*** EP3231798*** EP2167489*** Compositions of matter and methods of use of tovorafenib 2031 Janssen JNJ-89853413 US 10,501,540# US 11,384,145# EP 3 129 404# WO2021052995# Immunoglobulins binding human Vγ9 Vδ2 T cell receptors Treatment of cancer comprising administration of vgamma9vdelta2 t cell receptor binding antibodies 2034 2039 Pfizer PF-08046052 WO2022122973# WO2023242320# Antibodies that bind gamma-delta t cell receptors Compositions comprising antibodies that bind gamma-delta t cell receptors Moderna Lipid nanoparticles * Jointly owned with Rezolute, Inc. ** Jointly owned with AVEO Pharmaceuticals, Inc. *** Jointly owned with Day One Biopharmaceuticals, Inc. # Owned by LAVA Therapeutics New TopCo B.C If certain patents issued to others are upheld or if certain patent applications filed by others are issued and upheld, our partners and licensees may require certain licenses from others to develop and commercialize certain potential product candidates incorporating our technology.

We earned a net milestone payment of $2.2 million upon FDA approval of MIPLYFFA, and we are eligible to receive mid-single-digit royalties on sales of MIPLYFFA. In March 2025, we received a cash payment of $0.4 million for sales of MIPLYFFA in the fourth quarter of 2024.

We earned a net milestone payment of $2.2 million in 2024 upon FDA approval of MIPLYFFA, and we are eligible to receive mid-single-digit royalties on sales of MIPLYFFA.

Some of our agreements, or those of our partners or licensees, contain “step-down” provisions where the royalty rate is reduced following patent expiration or revocation. Furthermore, there can be no assurance that our royalties will expire when expected. Any reductions in the duration of royalties relative to our estimates may adversely affect our financial condition and results of operations.

Further, many countries outside the U.S., including the EU member states, have established complex and lengthy procedures to obtain price approvals and coverage reimbursement and periodically review their pricing and reimbursement decisions. If any pricing-related regulation impacts products in our portfolio, it would result in lower royalties received by us.

Subject to the terms of those agreements, we are eligible to receive net royalties ranging from the low to mid-single-digits on commercial sales and we will retain a portion of milestone payments.

Subject to the terms of those agreements, we are eligible to receive net royalties ranging from the low to mid-single digits on commercial sales, and we will retain a portion of milestone payments. In February 2026, Gossamer Bio announced topline results from the Phase 3 PROSERA clinical trial evaluating seralutinib for the treatment of PAH.

Item 1. BUSINESS Overview and Strategy XOMA is a biotech royalty aggregator. We have a sizable portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates.

We have a sizable portfolio of economic rights to future potential milestone and royalty payments associated with over 120 commercial products and pre-commercial therapeutic candidates. In 2017, we transformed our business model to become a royalty aggregator.

References to the “Company” and “XOMA” before December 31, 1998 or after December 31, 2011, refer to XOMA Royalty Corporation, a Delaware corporation; references to the “Company” and “XOMA” between December 31, 1998 and December 31, 2011 refer to XOMA Ltd., a Bermuda company. Our principal executive offices are located at 2200 Powell Street, Suite 310, Emeryville, California 94608.

Effective December 2011, we redomiciled from Bermuda to Delaware and changed our name from XOMA Ltd. to XOMA Corporation. Effective July 2024, the name XOMA Corporation was changed to XOMA Royalty Corporation. The Company was reincorporated from Delaware to Nevada in May 2025. Our principal executive offices are located at 2200 Powell Street, Suite 310, Emeryville, California 94608.

Our right to royalties expires on the later of 10 years from the first commercial sale of such royalty-bearing discovery product or the expiration of the last-to-expire licensed patent. In November 2020, the first patient was dosed in Takeda’s Phase 2 study of mezagitamab, and we earned a $2.0 million milestone payment from Takeda.

Our right to royalties expires on the later of 10 years from the first commercial sale of such royalty-bearing discovery product or the expiration of the last-to-expire licensed patent. 22 Table of Contents The Company has received $7.8 million of milestone payments since the inception of the agreement.

Under the terms of the Palo RPA, we paid Palo an upfront payment of $10.0 million for the rights to potential royalty payments on future potential sales of the Palo Licensed Products. Agenus Royalty Purchase Agreement In September 2018, we entered into the Agenus RPA.

Under the terms of the Palo RPA, we paid Palo an upfront payment of $10.0 million for the rights to potential royalty payments on future potential sales of the Palo Licensed Products. Selected Legacy Programs Underlying Our Portfolio The following is a summary of significant licenses and collaboration agreements related to our legacy product candidates and technologies.

Under the license agreement, we are also eligible to receive royalties ranging from the high-single-digits to the mid-teens based upon annual net sales of any commercial product incorporating RZ358.

Under the license agreement, we may receive development and commercial milestone payments of up to an aggregate of $232.0 million based on achievement of pre-specified criteria and royalties ranging from the high single digits to the mid-teens based on annual net sales.

In May 2024, Day One sold its priority review voucher for $108.0 million and we received a payment of $8.1 million. 11 Table of Contents We are also eligible to receive mid-single-digit royalties on sales of OJEMDA, and in 2024, we earned $2.7 million in royalties.

In April 2024, the FDA approved OJEMDA and we earned a $9.0 million milestone payment. In May 2024, Day One sold its priority review voucher for $108.0 million and we received a payment of $8.1 million. In February 2025, we earned a $4.0 million milestone payment related to Day One’s MAA filing with the EMA.

In January 2022, Rezolute dosed the last patient in its Phase 2b clinical trial for RZ358, which triggered a $2.0 million milestone payment due to us pursuant to the Rezolute License Agreement, as amended.

We have earned three milestone payments under the Rezolute License Agreement: (i) $2.0 million in January 2022 when Rezolute dosed the last patient in its Phase 2b clinical trial for ersodetug (RZ358), (ii) $5.0 million in April 2024 when Rezolute dosed the first patient in its Phase 3 clinical trial of ersodetug (RZ358), and (iii) $5.0 million in May 2025 when Rezolute dosed the last patient in its Phase 3 trial of ersodetug (RZ358).

Our 8 Table of Contents portfolio was built through the acquisition of rights to future milestones, royalties and commercial payments since our royalty aggregator business model was implemented in 2017. These acquisitions build upon out-licensing agreements for proprietary products and platforms held within our portfolio.

We subsequently advanced our portfolio by building upon our existing out-licensing agreements for proprietary products and platforms through the acquisition of rights to future milestones, royalties and commercial payments. Currently, our portfolio is anchored by royalty streams and milestone payments derived from seven commercial-stage assets.

Accordingly, we recorded credit losses on purchased receivables of $7.9 million representing the full remaining carrying value of this transaction. Acquisitions - Pre-Commercial Programs Pulmokine Acquisition In November 2024, we acquired Pulmokine to obtain an economic interest in seralutinib, a Phase 3 asset being studied in pulmonary arterial hypertension (PAH).

Pulmokine Acquisition In November 2024, we acquired Pulmokine to obtain an economic interest in seralutinib, a Phase 3 asset being studied in pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). We acquired all outstanding shares of Pulmokine for a $20.0 million cash payment at closing.

In January 2022, we earned a development milestone of $0.8 million pursuant to the Takeda Collaboration Agreement. We are eligible to receive remaining milestone payments of up to a total of $16.0 million under the Takeda Collaboration Agreement.

We are eligible to receive milestone payments of up to a total of $13.0 million, a 2% royalty on future sales relating to TAK-079 (mezagitamab) for the first ten years following first commercial sale, and a 0.5% royalty thereafter for the remainder of the royalty term under the Takeda Collaboration Agreement as amended.

Removed

We believe expanding our portfolio through these acquisitions allows for further diversification across therapeutic areas and development stages. Royalty Portfolio The following tables highlight key assets included in our portfolio of potential future milestone and royalty payment streams. These tables do not include all assets because certain assets are subject to confidentiality agreements.

Added

Item 1. BUSINESS Overview XOMA is a royalty aggregator that plays a distinctive role in helping biotech companies achieve their goal of improving human health. We do this by providing capital in exchange for the economic rights to future milestone and royalty payments associated with clinical candidates and approved products.

Removed

In October 2023, we earned a $5.0 million milestone payment related to the FDA’s acceptance of Day One’s NDA for tovorafenib as a monotherapy in relapsed or progressive pediatric low-grade glioma. In April 2024, the FDA approved OJEMDA and we earned a $9.0 million milestone payment.

Added

In return the drug developer or marketer receives non-dilutive, non-recourse funding. We seek to generate stockholder value by maintaining a diversified portfolio to mitigate single-asset, binary risk and by operating under a capital efficient and low corporate cost structure.

Removed

Based on updates received in July 2024, we evaluated the status of the program for potential credit losses in the third quarter of 2024 and determined no payments were probable to be received under the Agenus RPA as of September 30, 2024.

Added

In 2025, we received $33.6 million in commercial payments and $16.9 million from milestone payments and other fees, for total cash receipts of $50.5 million.

Removed

Accordingly, we recorded credit losses on purchased receivables of $14.0 million representing the full remaining carrying value of this transaction. Aronora Royalty Purchase Agreement In April 2019, we entered into the Aronora RPA.

Added

We believe expanding our portfolio through these acquisitions allows for further diversification across therapeutic areas and development stages, thereby mitigating single-asset binary exposure. We operate under a capital-efficient structure: substantially all R&D and commercialization costs are borne by the assets’ sponsors, and we maintain a lean infrastructure. We also utilize a range of structures to aggregate assets.

Removed

Based on updates received in April 2024, we evaluated the status of the program for potential credit losses in the second quarter of 2024 and determined no payments were probable to be received under the Aronora RPA as of June 30, 2024.

Added

Beginning with the acquisition of Kinnate in 2024, we have acquired or served as the structuring agent for nine acquisitions of publicly traded and private biotech companies, which added a combination of cash and cash equivalents, therapeutic candidates, or economic interests in programs being developed by other pharmaceutical companies.

Removed

Accordingly, we recorded credit losses on purchased receivables of $9.0 million representing the full remaining carrying value of this transaction. 14 Table of Contents Selected Legacy Programs Underlying Our Portfolio The following is a summary of significant licenses and collaboration agreements related to our legacy product candidates and technologies.

Added

Since the beginning of 2025, we have closed seven of these transactions that cumulatively added approximately $11.7 million of cash and cash equivalents, net of transaction costs, and economic interests in six programs. Many of these acquisitions have unpartnered assets and intellectual property that we seek to sell or out-license. In 2025, we sold five of the unpartnered Kinnate assets.

Removed

Rezolute In December 2017, we entered into a license agreement with Rezolute pursuant to which we granted an exclusive global license to Rezolute to develop and commercialize RZ358 (previously known as “X358”) products for all indications.

Added

Royalty Portfolio We have economic interests in over 120 assets in active development. Our portfolio includes seven commercial-stage assets and 14 therapeutic candidates in late-stage development. We also hold economic interests in over 100 earlier-stage assets. Since the beginning of 2025, we have added 22 milestone and royalty interests to our portfolio.

Removed

In addition, we entered into a common stock purchase agreement with Rezolute pursuant to which Rezolute agreed to issue to us, as consideration for receiving the license for RZ358, a certain number of its common stock in connection with any future equity financing activities.

Added

The following tables highlight our commercial and late-stage assets, and the assets that were added to our portfolio in 2025 and prior to March 10, 2026.

Removed

Under the terms of the license agreement, Rezolute is responsible for all development, regulatory, manufacturing and commercialization activities associated with RZ358 and is required to make certain development, regulatory and commercial milestone payments to us of up to an aggregate of $232.0 million based on the achievement of pre-specified criteria.

Added

In November 2025, we earned a $2.0 million milestone payment related to Day One’s NDA filing in Japan. We are also eligible to receive mid-single-digit royalties on sales of OJEMDA, and in 2025, we earned $7.7 million in royalties. On March 6, 2026, Day One announced it had entered into an agreement to be acquired by Servier.

Removed

Rezolute’s obligation to pay royalties with respect to a particular RZ358 product and country will continue for the later of the date of expiration of the last valid patent claim covering the product in each country, or 12 years from the date of the first commercial sale of the product in each country.

Added

Accordingly, we recorded credit losses on purchased receivables of $7.9 million representing the full remaining carrying value of this transaction in 2024. Pursuant to the Talphera CPPA, we received commercial payments totaling $28,000 in 2025 and $0.1 million in 2024. During the first quarter of 2025, Alora withdrew DSUVIA from the commercial market due to unresolvable manufacturing constraints.

Removed

Rezolute’s future royalty obligations in the U.S. will be reduced by 20% if the manufacture, use or sale of a licensed product is not covered by a valid patent claim, until such a claim is granted.

Added

Other Acquired Programs Takeda Revenue Share Agreement In December 2025, we amended the Takeda Collaboration Agreement to reduce the milestones, reimbursements and royalties relating to TAK-079 (mezagitamab) that we are entitled to, and concurrently entered into the Takeda Revenue Share Agreement to receive future milestone, royalty, and other contingent payments that Takeda may receive from a diversified basket of nine development-stage assets pursuant to various underlying license and asset transfer agreements with third parties.

Removed

Pursuant to the license agreement, we are eligible to receive a low-single-digit royalty on sales of Rezolute’s other non-RZ358 products from its current programs, including RZ402 which has completed a Phase 2 clinical study. 15 Table of Contents Rezolute’s obligation to pay royalties with respect to a particular Rezolute product and country will continue until the later of 12 years from the date of the first commercial sale of the product in each country or for so long as Rezolute or its licensee is selling such product in any country, provided that any such licensee royalty will terminate upon the termination of the licensee’s obligation to make payments to Rezolute based on sales of such product in each country.

Added

We did not make or receive any upfront payment in connection with the Takeda Revenue Share Agreement or the amendment to the Takeda Collaboration Agreement.

Removed

The license agreement contains customary termination rights relating to material breach by either party. Rezolute also has a unilateral right to terminate the license agreement in its entirety on ninety days’ notice at any time. To the extent permitted by applicable laws, we have the right to terminate the license agreement if Rezolute challenges the licensed patents.

Added

Under the Takeda Revenue Share Agreement, we are entitled to certain portions of payments Takeda may receive on the following assets: Neurocrine Biosciences is developing osavampator, a potential first-in-class, investigational alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator for patients who have inadequate response to treatment for major depressive disorder.

Removed

No consideration was exchanged upon execution of the arrangement. In consideration for receiving the license for RZ358, Rezolute agreed to issue shares of its common stock and pay cash to us upon the occurrence of any future equity financing activities. The license agreement was subsequently amended in 2018, 2019 and 2020.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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2024 filing

2025 filing

Biggest changeFurther, in the event that we, or one of the third parties on which we rely, is subject to a data breach, security incident, or other unauthorized intrusion or access that leads to the disclosure or modification of, or prevents access to, patient information, including personally identifiable information or protected health information, could result in fines, increased costs or loss of revenue as a result of: harm to our reputation; fines imposed on us by regulatory authorities; remediation measures taken to respond to the event and prevent similar events from occurring in the future; additional compliance obligations under federal, state or foreign laws (including notification obligations); requirements for mandatory corrective action to be taken by us; and requirements to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data.

Biggest changeFurther, as noted in the above risk factor, in the event that we, or one of the third parties on which we rely, is subject to a data breach, security incident, or other unauthorized intrusion or access that leads to the unauthorized access to or disclosure or modification of, or prevents access to, patient information, including personally identifiable information or protected health information, or personal information, we may be required to comply with notification requirements, be subject to litigation (including class actions) or regulatory action (including fines), or otherwise be subject to liability under applicable laws, which could result in increased costs or loss of revenue, and harm to our reputation.

In addition, biopharmaceutical companies increasingly devote significant resources to innovate next-generation products and therapies using gene editing and new curative modalities, such as cell and gene therapy, which may cause products on which we have a milestone or royalty rights to become obsolete.

Disputes may arise regarding intellectual property, royalty terms, payment rights or other contractual terms subject to a license or collaboration agreement, including: ● the scope or duration of rights granted under the license or collaboration agreement and other interpretative issues; ● the amounts or timing of royalties, milestones or other payments due under the license or collaboration agreement; ● the sublicensing of patent or other rights under our license or collaboration relationships; ● the diligence obligations under the license or collaboration agreement and what activities satisfy such diligence obligations: ● the inventorship and ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our partners; and ● the priority of invention of patented technology.

Disputes may arise regarding intellectual property, royalty terms, payment rights or other contractual terms subject to a license or collaboration agreement, including: ● the scope or duration of rights granted under the license or collaboration agreement and other interpretative issues; ● the amounts, timing or duration of royalties, milestones or other payments due under the license or collaboration agreement; ● the sublicensing of patent or other rights under our license or collaboration relationships; ● the diligence obligations under the license or collaboration agreement and what activities satisfy such diligence obligations: ● the inventorship and ownership of inventions and know-how resulting from the creation or use of intellectual property by us or our partners; and ● the priority of invention of patented technology.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our royalty providers’ drug candidates, or change their continuing compliance obligations.

Acquisitions and other similar transactions, arrangements and investments involve numerous risks and could create unforeseen operating difficulties and expenditures, including: ● the possibility that competing offers will be made; ● potential failure to successfully complete the acquisition or transaction in a timely manner, or at all, which may in turn, adversely affect us or our target’s business and the price of us or their respective common stock; ● potential failure to achieve the expected benefits on a timely basis or at all; ● our ability to integrate the acquired assets into our business; ● brand or reputational harm associated with our strategic investments or acquired companies; ● challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues; ● division of financial and managerial resources from existing operations; ● challenges entering into new markets in which we have little or no experience or where competitors may have stronger market positions; ● difficulties and strain on resources in integrating acquired operations, technologies, assets and personnel; 21 Table of Contents ● regulatory challenges from antitrust or other regulatory authorities that may block, delay or impose conditions (such as divestitures, ownership or operational restrictions or other structural or behavioral remedies) on the completion of transactions or the integration of acquired operations; ● failure to fully assimilate, integrate or retrain acquired employees, which may lead to retention risk with respect to both key acquired employees and our existing key employees or disruption to existing teams; ● inability to generate sufficient revenue or income to offset acquisition or investment costs; ● challenges with the acquired company’s customers and partners, including the inability to maintain such relationships and changes to perception of the acquired business as a result of the acquisition; ● potential for acquired products to impact the profitability of existing products; ● unanticipated expenses related to acquired assets or its integration into our business; ● known and potential unknown liabilities associated with the acquired businesses, including due to litigation; ● difficulties in and financial costs of addressing acquired compensation structures inconsistent with our compensation structure; ● additional stock-based compensation issued or assumed in connection with the acquisition, including the impact on stockholder dilution and our results of operations; ● ineffective or inadequate controls, procedures and policies at the acquired company; and ● the tax effects of any such acquisitions including related integration and business operation changes, and assessment of the impact on the realizability of our future tax assets or liabilities.

Acquisitions and other similar transactions, arrangements and investments involve numerous risks and could create unforeseen operating difficulties and expenditures, including: ● the possibility that competing offers will be made; ● potential failure to successfully complete the acquisition or transaction in a timely manner, or at all, which may in turn, adversely affect us or our target’s business and the price of us or their respective common stock; ● potential failure to achieve the expected benefits on a timely basis or at all; ● our ability to integrate the acquired assets into our business; ● brand or reputational harm associated with our strategic investments or acquired companies; ● challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues; ● division of financial and managerial resources from existing operations; ● challenges entering into new markets in which we have little or no experience or where competitors may have stronger market positions; ● difficulties and strain on resources in integrating acquired operations, technologies, assets and personnel; ● regulatory challenges from antitrust or other regulatory authorities that may block, delay or impose conditions (such as divestitures, ownership or operational restrictions or other structural or behavioral remedies) on the completion of transactions or the integration of acquired operations; ● failure to fully assimilate, integrate or retrain acquired employees, which may lead to retention risk with respect to both key acquired employees and our existing key employees or disruption to existing teams; ● inability to generate sufficient revenue or income to offset acquisition or investment costs; 29 Table of Contents ● challenges with the acquired company’s customers, partners, and licensees, including the inability to maintain such relationships and changes to perception of the acquired business as a result of the acquisition; ● potential for acquired products to impact the profitability of existing products; ● unanticipated expenses related to acquired assets or its integration into our business; ● known and potential unknown liabilities associated with the acquired businesses, including due to litigation; ● difficulties in and financial costs of addressing acquired compensation structures inconsistent with our compensation structure; ● additional stock-based compensation issued or assumed in connection with the acquisition, including the impact on stockholder dilution and our results of operations; ● ineffective or inadequate controls, procedures and policies at the acquired company; and ● the tax effects of any such acquisitions including related integration and business operation changes, and assessment of the impact on the realizability of our future tax assets or liabilities.

The market prices of biotechnology companies have been and are likely to continue to be highly volatile, and are affected by a number of factors, including: ● fluctuations in our operating results; ● general market and macroeconomic conditions, including market conditions in our industry and the industries of our collaborators; ● the coverage of our common stock by the financial media, including television, radio and press reports and blogs; ● recruitment or departure of key personnel; ● our ability to realize benefits from strategic partnerships, acquisitions or investments; ● trading activity or positions by a limited number of stockholders who together beneficially own a significant portion of our outstanding common stock; ● the issuance of shares of common stock by us, including as consideration in or in conjunction with acquisitions; ● the inability to execute on our share repurchase program as planned, including failure to meet internal or external expectations around the timing or price of share repurchases, and any reductions or discontinuances of repurchases thereunder; ● issuance of debt or other convertible securities, including as consideration in or in conjunction with acquisitions; ● the inability to conclude that our internal controls over financial reporting are effective; ● changes to our credit ratings; and 54 Table of Contents ● market perception or investment sentiment regarding us or our business strategy.

The market prices of biotechnology companies have been and are likely to continue to be highly volatile, and are affected by a number of factors, including: ● fluctuations in our operating results; ● general market and macroeconomic conditions, including market conditions in our industry and the industries of our collaborators; ● the coverage of our common stock by the financial media, including television, radio and press reports and blogs; ● recruitment or departure of key personnel; ● our ability to realize benefits from strategic partnerships, acquisitions or investments; ● trading activity or positions by a limited number of stockholders who together beneficially own a significant portion of our outstanding common stock; ● the issuance of shares of common stock by us, including as consideration in or in conjunction with acquisitions; ● the inability to execute on our share repurchase program as planned, including failure to meet internal or external expectations around the timing or price of share repurchases, and any reductions or discontinuances of repurchases thereunder; ● issuance of debt or other convertible securities, including as consideration in or in conjunction with acquisitions; ● the inability to conclude that our internal controls over financial reporting are effective; ● changes to our credit ratings; and 63 Table of Contents ● market perception or investment sentiment regarding us or our business strategy.

These disruptions to our licensees or RPA counterparties or their licensees could include, without limitation: ● delays or difficulties in recruiting and enrolling new patients in their clinical trials; ● delays or difficulties in clinical site initiation; ● diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as their clinical trial sites and hospital staff supporting the conduct of their clinical trials; ● interruption of key clinical trial activities, such as clinical trial site monitoring patient dosing and data analysis; ● limitations in employee resources that would otherwise be focused on the conduct of their clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; ● interruption in global shipping that may affect the transport of clinical trial supplies and materials; ● potential refusal by the FDA to accept data, including from clinical trials in affected geographies or failure to comply with updated FDA guidance and expectations related to the conduct of clinical trials during pandemics; ● other delays in the development of product candidates underlying our biopharmaceutical assets; ● delays in receiving approval from the FDA, the EMA and other U.S. and foreign federal, state and local regulatory authorities to initiate their planned clinical trials or to market their products; and ● difficulty accessing capital or credit markets on favorable terms, if at all, which could affect our ability to fund our business operations.

These disruptions to our licensees or RPA counterparties or their licensees could include, without limitation: ● delays or difficulties in recruiting and enrolling new patients in their clinical trials; ● delays or difficulties in clinical site initiation; ● diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as their clinical trial sites and hospital staff supporting the conduct of their clinical trials; 31 Table of Contents ● interruption of key clinical trial activities, such as clinical trial site monitoring patient dosing and data analysis; ● limitations in employee resources that would otherwise be focused on the conduct of their clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; ● interruption in global shipping that may affect the transport of clinical trial supplies and materials; ● potential refusal by the FDA to accept data, including from clinical trials in affected geographies or failure to comply with updated FDA guidance and expectations related to the conduct of clinical trials during pandemics; ● other delays in the development of product candidates underlying our biopharmaceutical assets; ● delays in receiving approval from the FDA, the EMA and other U.S. and foreign federal, state and local regulatory authorities to initiate their planned clinical trials or to market their products; and ● difficulty accessing capital or credit markets on favorable terms, if at all, which could affect our ability to fund our business operations.

Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations. Our operations are subject to anti-corruption laws including the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. §201, the U.S.

We are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption laws, as well as export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations. Our operations are subject to anti-corruption laws including the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S.

For example, Alora Pharmaceuticals withdrew DSUVIA from the commercial market due to unresolvable manufacturing constraints. In addition, our potential milestone or royalty providers may currently or in the future rely on foreign contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”) and contract manufacturing organizations (“CMOs”).

For example, Alora withdrew DSUVIA from the commercial market due to unresolvable manufacturing constraints. In addition, our potential milestone or royalty providers may currently or in the future rely on foreign contract research organizations (“CROs”), contract development and manufacturing organizations (“CDMOs”) and contract manufacturing organizations (“CMOs”).

Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws or Trade Control laws by the U.S. or other authorities could also have an adverse impact on our reputation, our business, financial condition and results of operations. 52 Table of Contents Efforts to confirm that our business arrangements with third parties comply with applicable healthcare laws and regulations may involve substantial costs.

Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws or Trade Control laws by the U.S. or other authorities could also have an adverse impact on our reputation, our business, financial condition and results of operations. 60 Table of Contents Efforts to confirm that our business arrangements with third parties comply with applicable healthcare laws and regulations may involve substantial costs.

Our ability to achieve profitability is dependent in large part on the success of our and our partners’ ability to license product candidates, and the success of our partners’ development programs, both of which are uncertain.

Our ability to achieve sustained profitability is dependent in large part on the success of our and our partners’ ability to license product candidates, and the success of our partners’ development programs, both of which are uncertain.

In responding to an NDA or BLA, the FDA or foreign health authorities may grant marketing approvals determining that the product is safe and effective, or in the case of a biologic, safe, pure, and potent, for its intended use, request additional information or further research, or deny the application if they determine the application does not satisfy regulatory approval criteria.

In responding to an NDA or BLA or similar submission, the FDA or foreign health authorities may grant marketing approvals determining that the product is safe and effective, or in the case of a biologic, safe, pure, and potent, for its intended use, request additional information or further research, or deny the application if they determine the application does not satisfy regulatory approval criteria.

If our potential milestone or royalty providers are not able to secure supply of their 44 Table of Contents products or product candidates as a result of the BIOSECURE Act, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, or other applicable legislation and fail to maintain timely progress on their clinical development programs, regulatory submissions or commercialization activities, they may be unable to deliver milestone or royalty payments to us in a timely manner or at all, and this could adversely affect our business, financial condition, results of operations and cash flows.

If our potential milestone or royalty providers are not able to secure supply of their products or product candidates as a result of the BIOSECURE Act, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, or other applicable legislation and fail to maintain timely progress on their clinical development programs, regulatory submissions or commercialization activities, they may be unable to deliver milestone or royalty payments to us in a timely manner or at all, and this could adversely affect our business, financial condition, results of operations and cash flows.

Under the federal income tax law, $112.9 million federal NOLs incurred in taxable years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of current year taxable income. It is uncertain if and to what extent various states will conform to the federal tax law.

Under the federal income tax law, $142.9 million federal NOLs incurred in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of current year taxable income. It is uncertain if and to what extent various states will conform to the federal tax law.

As of December 31, 2024, shares of Series B Preferred Stock were redeemable at our option, in whole or in part, at redemption prices ranging from $25,500.00 per share ($25.50 per depositary share) to $25,000.00 per share ($25.00 per depositary share), plus any accrued and unpaid dividends, depending on the date of redemption.

As of December 31, 2025, shares of Series B Preferred Stock were redeemable at our option, in whole or in part, at redemption prices ranging from $25,500.00 per share ($25.50 per depositary share) to $25,000.00 per share ($25.00 per depositary share), plus any accrued and unpaid dividends, depending on the date of redemption.

As of December 31, 2024, we had 984,000 shares of Series A Preferred Stock issued and outstanding with a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends up to the date of payment (whether or not declared).

As of December 31, 2025, we had 984,000 shares of Series A Preferred Stock issued and outstanding with a liquidation preference of $25.00 per share, plus an amount equal to any accumulated and unpaid dividends up to the date of payment (whether or not declared).

Accordingly, there is uncertainty as to: ● whether any pending or future patent applications held by us or our potential royalty providers will result in an issued patent, or whether issued patents will provide meaningful protection against competitors or competitive technologies; ● whether competitors will be able to design around our or our potential royalty providers ’ patents or develop and obtain patent protection for technologies, designs or methods that are more effective than those covered by our or our potential royalty providers’ patents and patent applications; or 40 Table of Contents ● the extent to which our or our potential royalty providers ’ product candidates could infringe on the intellectual property rights of others, which may lead to costly litigation, result in the payment of substantial damages or royalties, reduce the royalty rate due to us, and prevent our potential royalty providers from using our technology or product candidates.

Accordingly, there is uncertainty as to: ● whether any pending or future patent applications held by us or our potential royalty providers will result in an issued patent, or whether issued patents will provide meaningful protection against competitors or competitive technologies; ● whether competitors will be able to design around our or our potential royalty providers ’ patents or develop and obtain patent protection for technologies, designs or methods that are more effective than those covered by our or our potential royalty providers’ patents and patent applications; or ● the extent to which our or our potential royalty providers ’ product candidates could infringe on the intellectual property rights of others, which may lead to costly litigation, result in the payment of substantial damages or royalties, reduce the royalties due to us, and prevent our potential royalty providers from using our technology or product candidates.

It is unclear whether the models will be utilized in any health reform measures in the future. In addition, beginning in 2023, Centers for Medicare & Medicaid Services, or CMS, will require manufacturers to refund CMS for certain discarded amounts of single-dose container and single-use package drugs.

It is unclear whether the models will be utilized in any health reform measures in the future. In addition, beginning in 2023, Centers for Medicare & Medicaid Services, or CMS, requires manufacturers to refund CMS for certain discarded amounts of single-dose container and single-use package drugs.

Competitive factors affecting the market position and success of each product may include: ● effectiveness; ● safety and side effect profile; ● price, including third-party insurance reimbursement policies; ● timing and introduction of the product; ● effectiveness of marketing and commercialization strategy and execution; ● market acceptance; ● manufacturing, supply and distribution; ● intellectual property protections; ● governmental regulation, including price caps; ● availability of lower-cost generics and/or biosimilars; ● treatment innovations that eliminate or minimize the need for a product; and ● product liability claims.

Competitive factors affecting the market position and success of each product may include: ● effectiveness; ● safety and side effect profile; ● price, including third-party insurance reimbursement policies; 32 Table of Contents ● timing and introduction of the product; ● effectiveness of marketing and commercialization strategy and execution; ● market acceptance; ● manufacturing, supply and distribution; ● intellectual property protections; ● governmental regulation, including price caps; ● availability of lower-cost generics and/or biosimilars; ● treatment innovations that eliminate or minimize the need for a product; and ● product liability claims.

This risk is especially relevant for us because biotechnology and biopharmaceutical companies often experience significant stock price volatility in connection with their product development programs, and could be increased as a result of our acquisitions of other companies, including our acquisitions of Kinnate and Pulmokine.

As of December 31, 2024, shares of Series A Preferred Stock were redeemable at our option, in whole or in part, at redemption prices ranging from $25.25 per share to $25.00 per share, plus any accrued and unpaid dividends, depending on the date of redemption.

As of December 31, 2025, shares of Series A Preferred Stock were redeemable at our option, in whole or in part, at redemption prices ranging from $25.25 per share to $25.00 per share, plus any accrued and unpaid dividends, depending on the date of redemption.

Many of these competitors may be able to develop products and processes competitive with or superior to our potential milestone and royalty providers for many reasons, including that they may have: ● significantly greater financial resources; ● larger research and development staff; ● entered into arrangements with, or acquired, biotechnology companies to enhance their capabilities; or ● extensive experience in preclinical testing and human clinical trials.

Many of these competitors may be able to develop products and processes competitive with or superior to our potential milestone and royalty providers for many reasons, including that they may have: ● significantly greater financial resources; 45 Table of Contents ● larger research and development staff; ● entered into arrangements with, or acquired, biotechnology companies to enhance their capabilities; or ● extensive experience in preclinical testing and human clinical trials.

Because of the length of time and the expense associated with bringing new products to the marketplace, we and our potential royalty providers hold and are in the process of applying for a number of patents in the U.S. and abroad to protect product candidates and important processes and also have obtained or have the right to obtain exclusive licenses to certain patents and applications filed by others.

Because of the length of time and the expense associated with bringing new products to the marketplace, we and our potential royalty providers hold and are in the process of applying for a number of patents in the U.S. and abroad to protect product candidates and important processes and also have obtained or have the right to obtain exclusive licenses 47 Table of Contents to certain patents and applications filed by others.

Additionally, we may not be able to complete or realize the expected business or financial benefits from our potential acquisitions or investments in companies that hold royalty assets, including our acquisitions of Kinnate and Pulmokine.

Therefore, the process of obtaining coverage and reimbursement is often time-consuming and costly. Thus, even if our partners’ product candidates are approved by the FDA, our royalty partners 38 Table of Contents may not be able to price the products effectively or obtain coverage and adequate reimbursement for their products, which could adversely affect the royalties we receive.

Therefore, the process of obtaining coverage and reimbursement is often time consuming and costly. Thus, even if our partners’ product candidates are approved by the FDA, our royalty partners may not be able to price the products effectively or obtain coverage and adequate reimbursement for their products, which could adversely affect the royalties we receive.

In addition, Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, generally limit the ability of a corporation that undergoes an “ownership change” to utilize its NOL carry-forwards and certain other tax attributes against any taxable income in taxable periods after the ownership change.

In addition, Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, generally limit the ability of a corporation that undergoes an “ownership change” to utilize its NOL carryforwards and certain other tax attributes against any taxable income in taxable periods after the ownership change.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of- 57 Table of Contents pocket cost and through a newly established manufacturer discount program. It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

In addition, we are dependent, to a large extent, on third parties to enforce certain rights for our benefit, such as prosecution, maintenance and protection of a patent estate, adequate reporting and other protections, and their failure to do so could negatively impact our financial condition and results of operations.

In addition, we are dependent, to a large extent, on third parties to enforce certain 30 Table of Contents rights for our benefit, such as prosecution, maintenance and protection of a patent estate, adequate reporting and other protections, and their failure to do so could negatively impact our financial condition and results of operations.

These developments could have a material adverse effect on the sales of the biopharmaceutical products that have potential to generate our milestones and royalties, and consequently could materially adversely affect our business, financial condition and results of operations. 25 Table of Contents We depend on our licensees and royalty-agreement counterparties (and their licensees) for the determination of royalty and milestone payments.

These developments could have a material adverse effect on the sales of the biopharmaceutical products that have potential to generate our milestones and royalties, and consequently could materially adversely affect our business, financial condition and results of operations. We depend on our licensees and royalty-agreement counterparties (and their licensees) for the determination of royalty and milestone payments.

If we do not succeed in attracting new personnel and retaining and motivating existing personnel, our business may suffer, and we may be unable to implement our current initiatives or grow effectively. 46 Table of Contents We rely and will continue to rely on outsourcing arrangements for many of our activities, including financial reporting and accounting and human resources.

If we do not succeed in attracting new personnel and retaining and motivating existing personnel, our business may suffer, and we may be unable to implement our current initiatives or grow effectively. We rely and will continue to rely on outsourcing arrangements for many of our activities, including financial reporting and accounting and human resources.

Our ability to use our NOL carry-forwards and certain other tax attributes to offset taxable income or taxes may be limited. Our net operating loss, or NOL, carryforwards could expire unused and/or be unavailable to offset future income tax liabilities.

Our ability to use our NOL carryforwards and certain other tax attributes to offset taxable income or taxes may be limited. Our net operating loss, or NOL, carryforwards could expire unused and/or be unavailable to offset future income tax liabilities.

Patent terms may be inadequate to 41 Table of Contents protect our competitive position for an adequate amount of time. Significant patents in our portfolio are expected to expire in the coming years and while various extensions may be available, on a jurisdiction-by-jurisdiction basis, continuous patent protection is not guaranteed.

Patent terms may be inadequate to protect our competitive position for an adequate amount of time. Significant patents in our portfolio are expected to expire in the coming years and while various extensions may be available, on a jurisdiction-by-jurisdiction basis, continuous patent protection is not guaranteed.

We do not know whether we will ever achieve sustained profitability or whether cash flow from future operations will be sufficient to meet our needs. To date, we have financed our operations primarily through the sale of equity securities and debt and royalty interests, and payments received under our collaboration and licensing arrangements.

We do not know whether we will achieve sustained profitability or whether cash flows from future operations will be sufficient to meet our needs. To date, we have financed our operations primarily through the sale of equity securities and debt and royalty interests, and payments received under our collaboration and licensing arrangements.

The sponsor of a product candidate for a rare pediatric disease may be eligible for a Priority Review Voucher that can be used to obtain a priority review for a subsequent human drug or biologic application after the date of approval of the rare pediatric disease drug product, which may be redeemed to shorten the review clock for an application from 10 months to 6 months.

The sponsor of a product candidate for a rare pediatric disease may be eligible for a Priority Review 43 Table of Contents Voucher that can be used to obtain a priority review for a subsequent human drug or biologic application after the date of approval of the rare pediatric disease drug product, which may be redeemed to shorten the review clock for an application from 10 months to 6 months.

Our exposure to risks associated with various claims, including claims related to the use of intellectual property, labor or employment related claims, or securities and related stockholder derivative claims, may be increased as a result of our acquisitions of other companies, including our acquisitions of Kinnate and Pulmokine, and we may ultimately be subject to liability or settlement costs.

Our exposure to risks associated with various claims, including claims related to the use of intellectual property, labor or employment related claims, product liability claims or securities and related stockholder derivative claims, may be increased as a result of our acquisitions of other companies, including our acquisitions of Kinnate, Pulmokine, HilleVax, and LAVA, and we may ultimately be subject to liability or settlement costs.

Additionally, we may need to take various actions 26 Table of Contents which we might otherwise not pursue in order to not come within scope of the ’40 Act. These actions may include, among others, restructuring the Company and/or modifying our mixture of assets and income or a liquidation of certain of our assets.

Additionally, we may need to take various actions which we might otherwise not pursue in order to not come within scope of the ’40 Act. These actions may include, among others, restructuring the Company and/or modifying our mixture of assets and income or a liquidation of certain of our assets.

Should any such discussions result in a disagreement regarding a particular product that cannot be resolved satisfactorily to us, we may end up being paid less than anticipated on such product should it successfully progress through clinical development and be approved for commercialization.

Should any such discussions result in a disagreement regarding a particular product that cannot be resolved satisfactorily to us, we may be paid less than anticipated on such product should it successfully progress through clinical development and be approved for commercialization.

Such licensees have substantial control over those efforts and discretion to determine the extent and priority of the resources they will commit to their program for a product. Accordingly, the successful commercialization of a product depends on the licensee’s efforts and is beyond our control.

Such licensees have substantial control over those 52 Table of Contents efforts and discretion to determine the extent and priority of the resources they will commit to their program for a product. Accordingly, the successful commercialization of a product depends on the licensee’s efforts and is beyond our control.

It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with these laws or regulations.

It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions 54 Table of Contents or lawsuits stemming from a failure to be in compliance with these laws or regulations.

Many potential acquisition targets do not meet our criteria, and for those that do, we may face significant competition for these acquisitions from other royalty buyers and enterprises. These unsuccessful attempts to acquire new royalties could 20 Table of Contents result in significant costs to us, could hurt our reputation and divert management and financial resources.

Many potential acquisition targets do not meet our criteria, and for those that do, we may face significant competition for these acquisitions from other royalty buyers and enterprises. These unsuccessful attempts to acquire new royalties could result in significant costs to us, could hurt our reputation and divert management and financial resources.

If we raise additional funds through borrowings, we have in the past and may in the future repay the principal and 28 Table of Contents interest of the loan from certain of our royalty payments and/or use our royalties as collateral for such borrowings.

If we raise additional funds through borrowings, we have in the past and may in the future repay the principal and interest of the loan from certain of our royalty payments and/or use our royalties as collateral for such borrowings.

Additionally, as of December 31, 2024, we had 1,600,000 depositary shares issued and outstanding, each representing a 1/1000th fractional interest in a share of our Series B Preferred Stock with a liquidation preference of $25,000 per share of Series B Preferred Stock ($25.00 per depositary share), plus an amount equal to any accumulated and unpaid dividends up to the date of payment (whether or not declared).

Additionally, as of December 31, 2025, we had 1,760,500 depositary shares issued and outstanding, each representing a 1/1000th fractional interest in a share of our Series B Preferred Stock with a liquidation preference of $25,000 per share of Series B Preferred Stock ($25.00 per depositary share), plus an amount equal to any accumulated and unpaid dividends up to the date of payment (whether or not declared).

To the extent that we do not utilize our carry forwards within the applicable statutory carry-forward periods, either because of Section 382 limitations or the lack of sufficient taxable income, the carry-forwards will also expire unused.

To the extent that we do not utilize our carry forwards within the applicable statutory carryforward periods, either because of Section 382 limitations or the lack of sufficient taxable income, the carryforwards will also expire unused.

The preparation of these consolidated financial statements requires us to make 57 Table of Contents estimates and judgments that affect the reported amounts of our assets, liabilities, revenues, income, and expenses, the amounts of charges accrued by us and related disclosure of contingent assets and liabilities.

The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues, income, and expenses, the amounts of charges accrued by us and related disclosure of contingent assets and liabilities.

Further, even if a royalty provider obtains orphan drug exclusivity for an existing or future product candidate, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties still can be approved for the same condition even with an orphan drug designation.

Further, even if a royalty provider obtains orphan drug exclusivity for an existing or future product candidate, that exclusivity may not effectively protect the product from competition because 42 Table of Contents different drugs with different active moieties still can be approved for the same condition even with an orphan drug designation.

Any failure in identifying and managing these risks and uncertainties could have a material adverse effect on our business. If our potential royalty providers’ therapeutic product candidates do not receive regulatory approval, our potential royalty providers will be unable to market them.

Any failure in identifying and managing these risks and uncertainties could have a material adverse effect on our business. 39 Table of Contents If our potential royalty providers’ therapeutic product candidates do not receive regulatory approval, our potential royalty providers will be unable to market them.

For example, we do not always know the results of studies conducted by sponsors of the products or others or the nature or number of any complaints from doctors or users of such products or the nature or number of adverse effects of such products.

For example, we do not always know the results of studies conducted by sponsors of the products or others or the nature or number of any complaints from doctors or users of such products or 37 Table of Contents the nature or number of adverse effects of such products.

The results of the preclinical studies and clinical testing, together with chemistry, manufacturing and controls information, are submitted to the FDA and other health authorities in the form of a NDA for a drug, and in the form of a BLA for a biological product, requesting approval to commence commercial sales.

The results of the preclinical studies and clinical testing, together with chemistry, manufacturing and controls information, are submitted to the FDA in the form of an NDA for a drug, and in the form of a BLA for a biological product, and similar submissions to other foreign health authorities, requesting approval to commence commercial sales.

If a 43 Table of Contents marketer were to default on its obligations under a license or collaboration agreement, the licensor’s or collaborator’s remedy may be limited either to terminating certain licenses or collaborations related to certain countries or to generally terminate the license or collaboration agreement with respect to such country.

If a marketer were to default on its obligations under a license or collaboration agreement, the licensor’s or collaborator’s remedy may be limited either to terminating certain licenses or collaborations related to certain countries or to generally terminate the license or collaboration agreement with respect to such country.

Our potential milestone and royalty providers may rely on third party manufacturers and such contract manufacturers are required to produce clinical product candidates under cGMP to meet acceptable standards for use in 45 Table of Contents clinical trials and for commercial sale, as applicable.

Our potential milestone and royalty providers may rely on third party manufacturers and such contract manufacturers are required to produce clinical product candidates under cGMP to meet acceptable standards for use in clinical trials and for commercial sale, as applicable.

We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in such a manner as we determine from time to time, including pursuant to our 2018 Common Stock ATM Agreement, as amended, and 2021 Series B Preferred Stock ATM Agreement.

We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in such a manner as we determine from time to time, including pursuant to our 2025 Common Stock ATM Agreement and 2025 Series B Preferred Stock ATM Agreement.

The Health Insurance Portability and Accountability Act of 1996, or HIPAA created new federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including a private payor, or falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of, or payment for, health care benefits, items or services.

HIPAA created new federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including a private payor, or falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of, or payment for, health care benefits, items or services.

Our charter and by-laws: ● require certain procedures to be followed and time periods to be met for any stockholder to propose matters to be considered at annual meetings of stockholders, including nominating directors for election at those meetings; and ● authorize our Board to issue up to 1,000,000 shares of preferred stock without stockholder approval and to set the rights, preferences and other designations, including voting rights, of those shares as the Board may determine.

Our charter and bylaws: ● require certain procedures to be followed and time periods to be met for any stockholder to propose matters to be considered at annual meetings of stockholders, including nominating directors for election at those meetings; and 65 Table of Contents ● authorize our Board to issue up to 1,000,000 shares of preferred stock without stockholder approval and to set the rights, preferences and other designations, including voting rights, of those shares as the Board may determine.

As a result, we will not receive any milestone, royalty or other payments under the Biosis RPA or Second Bioasis RPA. Generally, our current licensees have the right to terminate their collaborations at will or under specified circumstances.

As a result, we will not receive any milestone, royalty or other payments under the Biosis RPA or Second Bioasis RPA. 51 Table of Contents Generally, our current licensees have the right to terminate their collaborations at will or under specified circumstances.

Because we are a small biotech royalty aggregator with limited resources, we may not be able to attract and retain qualified personnel. We had 13 full-time employees as of March 13, 2025. We may require additional experienced executive, accounting, legal, administrative and other personnel from time to time in the future.

Because we are a small biotech royalty aggregator with limited resources, we may not be able to attract and retain qualified personnel. We had 14 full-time employees as of March 11, 2026. We may require additional experienced executive, accounting, legal, administrative and other personnel from time to time in the future.

If we issue additional equity securities, the price of our existing securities may be materially and adversely affected. As of December 31, 2024, there were 5,003 shares of Series X Preferred Stock issued and outstanding. Each share of Series X Preferred Stock is convertible into 1,000 shares of registered common stock.

If we issue additional equity securities, the price of our existing securities may be materially and adversely affected. 64 Table of Contents As of December 31, 2025, there were 5,003 shares of Series X Preferred Stock issued and outstanding. Each share of Series X Preferred Stock is convertible into 1,000 shares of registered common stock.

If the FDA approves generic versions of any of the products or product candidates of our potential milestone or royalty providers that receive marketing approval under NDAs, or does not grant their product candidates appropriate periods of data or market exclusivity before approving generic versions of our product candidates, the sales of their product candidates could be adversely affected, which may materially affect the potential milestones and royalties we receive.

Any of these events may materially impact the potential milestones and royalties we receive. 44 Table of Contents If the FDA approves generic versions of any of the products or product candidates of our potential milestone or royalty providers that receive marketing approval under NDAs, or does not grant their product candidates appropriate periods of data or market exclusivity before approving generic versions of our product candidates, the sales of their product candidates could be adversely affected, which may materially affect the potential milestones and royalties we receive.

In addition, since we and our royalty agreement counterparties license our product candidates to others to fund and conduct clinical trials, we, and they, have limited control over how quickly and efficiently such licensees advance those trials.

Ensuring we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a time-consuming effort that needs to be re-evaluated frequently.

Ensuring we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements 66 Table of Contents on a timely basis is a time-consuming effort that needs to be re-evaluated frequently.

Under the BPCIA, an application for a highly similar or “biosimilar” product 36 Table of Contents may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA.

Under the BPCIA, an application for a highly similar or “biosimilar” product may not be submitted to the FDA until four years following the date that the reference product was first approved by the FDA.

License and collaboration agreements which relate to the products underlying our potential future milestones, royalties and other payment rights are complex and certain provisions in such agreements may be susceptible to multiple interpretations.

License and collaboration agreements which relate to the products underlying our potential future milestones, royalties and other payment rights are complex and certain provisions 50 Table of Contents in such agreements may be susceptible to multiple interpretations.

Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us and/or result in dilution to our stockholders, including pursuant to our 2018 Common Stock ATM Agreement, as amended, and to our 2021 Series B Preferred Stock ATM Agreement.

Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us and/or result in dilution to our stockholders, including pursuant to our 2025 Common Stock ATM Agreement, and to our 2025 Series B Preferred Stock ATM Agreement.

Furthermore, to the extent that any disruption, security breach, or other event were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we may be required to comply with notification requirements, be subject to litigation or regulatory action, or otherwise be subject to liability 47 Table of Contents under applicable laws.

Furthermore, to the extent that any disruption, security breach, or other event were to result in a loss of, or damage to, our data or applications, or inappropriate access to or disclosure of personal, confidential or proprietary information, we may be required to comply with notification requirements, be subject to litigation (including class actions) or regulatory action (including fines), or otherwise be subject to liability under applicable laws.

The CCPA gives California residents certain rights related to their personal information, including the rights to request the correction of, access to and deletion of their personal information, the right to opt out of personal information sharing for cross-context behavioral advertising, as well as the sale of their personal information, and the right to receive detailed information about how their information is processed.

The CCPA gives California residents certain rights related to their personal information, including the rights to request the correction of, access to and deletion of their personal information, and the right to opt out of the sharing of their personal information for cross-context behavioral advertising, as well as the sale of their personal information.

As part of our royalty aggregator strategy, we may continue to purchase future potential milestone and royalty streams associated with product candidates which are in clinical development and have not yet received marketing approval by any regulatory authority or been commercialized.

Acquisitions of potential royalties associated with development stage biopharmaceutical product candidates are subject to a number of additional uncertainties. As part of our royalty aggregator strategy, we may continue to purchase future potential milestone and royalty streams associated with product candidates which are in clinical development and have not yet received marketing approval by any regulatory authority or been commercialized.

The size of our future net losses depends, in part, on the rate of our future expenditures and our and our partners’ ability to generate revenues. If our partners’ product candidates are not successfully developed or commercialized, or if revenues are insufficient following regulatory approval, we may not achieve profitability and our business may fail.

Our results of operations depend, in part, on the rate of our future expenditures and our and our partners’ ability to generate revenues. If our partners’ product candidates are not successfully developed or commercialized, or if revenues are insufficient following regulatory approval, we may not achieve sustained profitability and our business may fail.

This process is lengthy and expensive, often taking a number of years. As clinical results frequently are susceptible to varying interpretations that may delay, limit or prevent regulatory approvals, the length of time necessary to complete clinical trials and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly.

As clinical results frequently are susceptible to varying interpretations that may delay, limit or prevent regulatory approvals, the length of time necessary to complete clinical trials and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly.

Regulatory approval of an NDA, BLA, or supplement is never guaranteed. The approval process can take several years, is extremely expensive and can vary substantially based upon the type, complexity, and novelty of the products involved, as well as the target indications.

Regulatory approval of an NDA, BLA, or supplement, or a similar submission to other foreign health authorities, is never guaranteed. The approval process can take several years, is extremely expensive and can vary substantially based upon the type, complexity, and novelty of the products involved, as well as the target indications.

These laws may impact, among other things, the commercial operations for any of our product candidates that may be approved for commercial sale. 50 Table of Contents The federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, in exchange for or to induce either the referral of an individual for, or the furnishing or arranging for the purchase, lease, or order of a good or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs.

The federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing any remuneration, directly or indirectly, in cash or in kind, in exchange for or to induce either the referral of an individual for, or the furnishing or arranging for the purchase, lease, or order of a good or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs.

Additionally, as of March 13, 2025, we had issued and outstanding 984,000 shares of Series A Preferred Stock and 1,600,000 depositary shares, each representing a 1/1000 th fractional interest in a share of our Series B Preferred Stock.

Additionally, as of March 11, 2026, we had issued and outstanding 984,000 shares of Series A Preferred Stock and 1,760,500 depositary shares, each representing a 1/1000 th fractional interest in a share of our Series B Preferred Stock.

In particular, changes in corporate tax rates, the realization of our net deferred tax assets, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act or any future tax reform legislation, could have a material impact on the value of our deferred tax assets, result in significant one-time charges, and increase our future tax expenses.

In particular, changes in corporate tax rates, the realization of our net deferred tax assets, the taxation of foreign earnings, and the deductibility of expenses under the Internal Revenue Code, as amended by any future tax reform legislation, could have a material impact on the value of our deferred tax assets, result in significant one-time charges, and increase our future tax expenses.

We generally acquire milestone and royalty rights that have limited secondary resale markets and may be subject to transfer restrictions.

As a result, we may suffer losses. We generally acquire milestone and royalty rights that have limited secondary resale markets and may be subject to transfer restrictions.

These provisions of our organizational documents and the DGCL, alone or in combination with each other, may discourage transactions involving actual or potential changes of control, including transactions that otherwise could involve payment of a premium over prevailing market prices to holders of common stock, could limit the ability of stockholders to approve transactions that they may deem to be in their best interests, and could make it considerably more difficult for a potential acquirer to replace management. 56 Table of Contents As a public company in the U.S., we are subject to the Sarbanes-Oxley Act.

These provisions of our organizational documents and the NRS, alone or in combination with each other, may discourage transactions involving actual or potential changes of control, including transactions that otherwise could involve payment of a premium over prevailing market prices to holders of common stock, could limit the ability of stockholders to approve transactions that they may deem to be in their best interests, and could make it considerably more difficult for a potential acquirer to replace management.

We have experienced significant volatility in the price of our common stock in the past. From January 1, 2024, through March 13, 2025, the share price of our common stock has ranged from a high of $35.00 to a low of $18.57.

We have experienced significant volatility in the price of our common stock in the past. From January 1, 2025, through March 11, 2026, the share price of our common stock has ranged from a high of $39.92 to a low of $18.35.

As of December 31, 2024, we had U.S. federal NOL carryforwards of $168.3 million, of which $13.6 million will begin to expire in 2036.

As of December 31, 2025, we had U.S. federal NOL carryforwards of $198.4 million, of which $13.6 million will begin to expire in 2036.

As of December 31, 2024, we had $168.3 million in federal NOL carryforwards, of which $52.7 million is subject to an annual limitation of $0.9 million. Of this amount, $13.6 million will begin to expire in 2036, if not utilized.

As of December 31, 2025, we had $198.4 million in federal NOL carryforwards, of which $55.4 million is subject to an annual limitation of $0.9 million. Of this amount, $13.6 million will begin to expire in 2036, if not utilized.

This could negatively impact our business, financial condition, or results of operations for a given period. 30 Table of Contents Reductions or declines in income from potential milestones and royalties, or significant reductions in potential milestone or royalty payments compared to expectations, or impairments in the value of potential milestones and royalties acquired, could have a material adverse effect on our financial condition and results of operations.

Reductions or declines in income from potential milestones and royalties, or significant reductions in potential milestone or royalty payments compared to expectations, or impairments in the value of potential milestones and royalties acquired, could have a material adverse effect on our financial condition and results of operations.

Their future revenues, profitability and cash flows could also be materially and adversely affected and our ability to obtain a return on their investments in those product candidates 37 Table of Contents may be substantially limited if their products are not afforded the appropriate periods of non-patent exclusivity.

Their future revenues, profitability and cash flows could also be materially and adversely affected and our ability to obtain a return on their investments in those product candidates may be substantially limited if their products are not afforded the appropriate periods of non-patent exclusivity. Any of these events may materially impact the potential milestones and royalties we receive.

Any difficulties or delays in contractors’ manufacturing and supply of our potential milestone and royalty providers’ product candidates or any failure of our potential milestone and royalty providers’ contractors to maintain compliance with the applicable regulations and standards could increase costs, reduce revenue, cause our licensees to postpone or cancel clinical trials, prevent or delay regulatory approval by the FDA and corresponding state and foreign authorities, prevent the import and/or export of our potential milestone and royalty providers’ product candidates, or cause any of our potential milestone and royalty providers’ products that may be approved for commercial sale to be recalled or withdrawn.

As of December 31, 2024, BVF owned approximately 30.4% of the Company’s total outstanding shares of common stock, and if all the shares of Series X Convertible Preferred Stock were converted (without taking into account beneficial ownership limitations), BVF would have owned 50.9% of the Company’s total outstanding shares of common stock.

As of December 31, 2025, BVF owned approximately 21.8% of the Company’s total outstanding shares of common stock, and if all the shares of Series X Convertible Preferred Stock were converted (without taking into account beneficial ownership limitations), BVF would have owned 45.0% of the Company’s total outstanding shares of common stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board, as a whole and at the committee level, has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage, and mitigate those risks. The Audit Committee of the Board, which is comprised solely of independent directors, has been designated by our Board to oversee cybersecurity risks.

Biggest changeThe Incident Response Plan provides a framework for our response, including the appropriate communication and escalation channels. The Board, as a whole and at the committee level, has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage, and mitigate those risks.

We also leverage these outside consultants and other third parties, when appropriate, to implement appropriate processes, policies, and internal controls designed to help prevent, detect, and/or mitigate these cyberthreats. 58 Table of Contents Since the beginning of the last fiscal year, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, but we face certain ongoing cybersecurity threats that, if realized, are reasonably likely to materially affect us.

We also leverage these outside consultants and other third parties, when appropriate, to implement appropriate processes, policies, and internal controls designed to help prevent, detect, and/or mitigate these cyberthreats. 68 Table of Contents Since the beginning of the last fiscal year, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, but we face certain ongoing cybersecurity threats that, if realized, are reasonably likely to materially affect us.

Our actual or perceived failure to comply with any data privacy or security obligations could lead to regulatory investigations or actions; litigation; fines and penalties; a disruption of our business operations; reputational harm; loss of revenue, income, or profits; loss of customers or sales; and other adverse business consequences.” Our management, led by our Chief Executive Officer and the Senior Vice President, Finance and Chief Financial Officer, is responsible for assessing cybersecurity risks and for overseeing our cybersecurity strategy to assess and manage those risks, including responding to attacks or breaches.

Our actual or perceived failure to comply with any data privacy or security obligations could lead to regulatory investigations or actions; litigation; fines and penalties; a disruption of our business operations; reputational harm; loss of revenue, income, or profits; loss of customers or sales; and other adverse business consequences.” Our management, led by our Chief Executive Officer and Chief Financial Officer, is responsible for assessing cybersecurity risks and for overseeing our cybersecurity strategy to assess and manage those risks, including responding to attacks or breaches.

Our Chief Executive Officer and the Senior Vice President, Finance and Chief Financial Officer each have experience in senior leadership roles in which they have been responsible for an entity’s enterprise risk management, including management of cybersecurity risks.

Our Chief Executive Officer and Chief Financial Officer each have experience in senior leadership roles in which they have been responsible for an entity’s enterprise risk management, including management of cybersecurity risks.

The Chief Executive Officer and the Senior Vice President, Finance and Chief Financial Officer regularly communicate with those responsible for daily IT operations and infrastructure to assess potential cybersecurity threats and determine whether updates to the cybersecurity strategy are necessary.

The Chief Executive Officer and Chief Financial Officer regularly communicate with those responsible for daily IT operations and infrastructure to assess potential cybersecurity threats and determine whether updates to the cybersecurity strategy are necessary. We also maintain an Incident Response Plan that sets forth a protocol in the event we are exposed to a cyber-attack or breach.

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We also maintain an Incident Response Plan that sets forth a protocol in the event we are exposed to a cyber-attack or breach. The Incident Response Plan provides a framework for our response, including the appropriate communication and escalation channels.

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The Audit Committee of the Board, which is comprised solely of independent directors, has been designated by our Board to oversee cybersecurity risks.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, from time to time, we may become involved in litigation, arbitration or other proceedings relating to claims arising from the ordinary course of business. We may become involved in material legal proceedings in the future, and the potential impact on us of any on-going proceeding which we do not currently believe to be material could become material.

Biggest changeWe may become involved in material legal proceedings in the future, and the potential impact on us of any on-going proceeding which we do not currently believe to be material could become material.

Such matters are subject to significant uncertainties, and there can be no assurance that any legal proceedings in which we are or may become involved will not have a material adverse effect on our business, results of operations, financial position or cash flows. 59 Table of Contents Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Such matters are subject to significant uncertainties, and there can be no assurance that any legal proceedings in which we are or may become involved will not have a material adverse effect on our business, results of operations, financial position or cash flows. Item 4. MINE SAFETY DISCLOSURES Not applicable. 69 Table of Contents PART II

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Item 3. LEGAL PROCEEDINGS We are not currently engaged in any legal proceedings that, in the opinion of our management, if determined adversely to us, would individually or taken together, have a material adverse effect on our business, results of operations, financial position or cash flows.

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Item 3. LEGAL PROCEEDINGS We are not currently engaged in any material legal proceedings. However, from time to time, we are involved in litigation, arbitration or other proceedings relating to claims arising from the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Registrant’s Common Equity Our common stock trades on The Nasdaq Global Market (“Nasdaq”) under the symbol “XOMA.” On March 13, 2025, there were 179 stockholders of record of our common stock, one of which was Cede & Co., a nominee for the Depository Trust Company (“DTC”).

Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Registrant’s Common Equity Our common stock trades on The Nasdaq Global Market (“Nasdaq”) under the symbol “XOMA.” On March 11, 2026, there were 173 stockholders of record of our common stock, one of which was Cede & Co., a nominee for the Depository Trust Company (“DTC”).

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Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. Item 6. RESERVED 60 Table of Contents

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Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities On January 2, 2024, the Board authorized our stock repurchase program, which permits us to purchase up to $50.0 million of our common stock through January 2027.

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The manner, number, price, structure, and timing of the repurchases, if any, will be determined at our sole discretion and repurchases, if any, depend on a variety of factors, including legal requirements, price and economic and market conditions, royalty and milestone acquisition opportunities, and other factors.

Added

The repurchase authorization does not obligate us to acquire any particular amount of our common stock. The Board may suspend, modify, or terminate the stock repurchase program at any time without prior notice. All common stock repurchased by us during the three months ended December 31, 2025, were subsequently retired.

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Repurchases of our common stock during the three months ended December 31, 2025, were as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 – October 31, 2025 — $ — — $ 47,591,985 November 1 – November 30, 2025 — $ — — $ 47,591,985 December 1 – December 31, 2025 539,538 $ 25.30 539,538 $ 33,943,958 Total 539,538 539,538 $ 33,943,958 (1) The number of shares purchased is based on the settlement date.

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(2) Average price per share includes commissions. 70 Table of Contents Item 6. RESERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeChanges in the fair value-based measurement of stock awards could materially impact our operating results. 66 Table of Contents Results of Operations Income and Revenues Total income and revenues for the years ended December 31, 2024 and 2023, were as follows (in thousands): Year Ended December 31, 2024 2023 Change Income from purchased receivables under the EIR method $ 15,066 $ — $ 15,066 Income from purchased receivables under the cost recovery method 3,201 — 3,201 Revenue from contracts with customers 6,650 2,650 4,000 Revenue recognized under units-of-revenue method 3,570 2,108 1,462 Total income and revenues $ 28,487 $ 4,758 $ 23,729 Income from Purchased Receivables under the EIR Method Income from purchased receivables under the EIR method for the year ended December 31, 2024 included estimated income under the EIR method related to sales of VABYSMO of $14.8 million and to sales of IXINITY of $0.3 million.

Biggest changeResults of Operations Income and Revenues Total income and revenues for the years ended December 31, 2025 and 2024, were as follows (in thousands): Year Ended December 31, 2025 2024 Change Income from purchased receivables under the EIR method $ 26,745 $ 15,066 $ 11,679 Income from purchased receivables under the cost recovery method 13,744 3,201 10,543 Revenue from contracts with customers 10,350 6,650 3,700 Revenue recognized under units-of-revenue method 1,310 3,570 (2,260) Total income and revenues $ 52,149 $ 28,487 $ 23,662 Income from Purchased Receivables under the EIR Method and Cost Recovery Method The following table summarizes income recognized from purchased receivables under the EIR method and cost recovery method during the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Change Affitech (VABYSMO) $ 23,957 $ 14,800 $ 9,157 Aptevo (IXINITY) 989 266 723 LadRx (MIPLYFFA) 1,799 — 1,799 Total income from purchased receivables under the EIR method $ 26,745 $ 15,066 $ 11,679 Viracta (OJEMDA) $ 13,716 $ 3,201 $ 10,515 Talphera (DSUVIA) 28 — 28 Total income from purchased receivables under the cost recovery method $ 13,744 $ 3,201 $ 10,543 Income from purchased receivables under the EIR method for the year ended December 31, 2025, included estimated income under the EIR method related to sales of VABYSMO of $24.0 million, sales of MIPLYFFA of $1.8 million, and sales of IXINITY of $1.0 million.

Income from Purchased Receivables under the Cost Recovery Method Income from purchased receivables under the cost recovery method for the year ended December 31, 2024 included $2.7 million in estimated income under the cost recovery method related to sales of OJEMDA and $0.5 million related to a milestone payment under the Viracta RPA.

Income from purchased receivables under the cost recovery method for the year ended December 31, 2024, included $2.7 million in estimated income under the cost recovery method related to sales of OJEMDA and $0.5 million related to a milestone payment under the Viracta RPA.

Revenue from contracts with customers for the year ended December 31, 2024 primarily included a milestone payment of $5.0 million pursuant to our license agreement with Rezolute, the $0.5 million option fee under our license agreement with Alexion, and a milestone payment of $1.0 million pursuant to a license agreement with an undisclosed licensee.

Revenue from contracts with customers for the year ended December 31, 2024, primarily included a milestone payment of $5.0 million pursuant to our license agreement with Rezolute, a $0.5 million option fee under our license agreement with Alexion, and a milestone payment of $1.0 million pursuant to a license agreement with an undisclosed licensee.

Credit Losses on Purchased Receivables Credit losses on purchased receivables were $30.9 million for the year ended December 31, 2024 and consisted of $9.0 million related to our Aronora RPA in the second quarter of 2024, $14.0 million related to our Agenus RPA in the third quarter of 2024, and $7.9 million related to our Talphera CPPA in the fourth quarter of 2024.

Credit losses on purchased receivables were $30.9 million for the year ended December 31, 2024, and consisted of $9.0 million related to our Aronora RPA in the second quarter of 2024, $14.0 million related to our Agenus RPA in the third quarter of 2024, and $7.9 million related to our Talphera CPPA in the fourth quarter of 2024.

Based on our current cash balance and our planned discretionary spending, such as royalty or other acquisitions, we believe that our current financial resources are sufficient to fund our planned operations, commitments, and contractual obligations for a period of at least one year following the filing date of this Annual Report. The generation of future income and revenue related to licenses, milestone payments, and royalties is dependent on the achievement of milestones or product sales by our existing partners.

Based on our current cash balance and our planned discretionary spending, such as royalty or other acquisitions, we believe that our current financial resources are sufficient to fund our planned operations, commitments, and contractual obligations for a period of at least one year following the filing date of this Annual Report. The generation of future income and revenue related to royalties and milestone payments is dependent on the achievement of product sales or milestones by our existing partners.

Material Cash Requirements Our material cash requirements in the short and long term consist of the following: Operating Expenditures: Our primary uses of cash and our operating expenses include employee and related costs, consultant fees to support our administrative and business development efforts, legal and accounting fees, insurance costs, and costs associated with our investor relations and IT services. To support our royalty aggregator business model, we engage third parties to assist in the evaluation of potential acquisitions of milestone payments and royalty streams.

Material Cash Requirements Our material cash requirements in the short and long term consist of the following: Operating Expenditures: Our primary uses of cash for our operating expenses include employee and related costs, consultant fees to support our administrative and business development efforts, legal and accounting fees, insurance costs, and costs associated with our investor relations and IT services. To support our royalty aggregator business model, we engage third parties to assist in the evaluation of potential acquisitions of milestone payments and royalty streams.

We generated a net loss of $13.8 million and net cash used in operating activities was $13.7 million for the year ended December 31, 2024, and we had an accumulated deficit of $1.2 billion as of December 31, 2024.

We generated a net loss of $13.8 million and net cash used in operating activities was $13.7 million for the year ended December 31, 2024. We had an accumulated deficit of $1.2 billion as of December 31, 2025.

Our developmental pipeline products are non-commercial, non-approved products that require FDA or other regulatory approval, and thus have uncertain cash flows. As of December 31, 2024, the Company is unable to reliably estimate the timing and/or amount of future cash flows associated with certain commercial product receivables and thus accounts for them under the cost recovery method.

Our developmental pipeline products are non-commercial, non-approved products that require FDA or other regulatory approval and, thus, have uncertain cash flows. As of December 31, 2025, the Company is unable to reliably estimate the timing and/or amount of future cash flows associated with certain commercial product receivables and thus accounts for them under the cost recovery method.

Loss of regulatory exclusivity, patent protection, or other additional factors that may be communicated to us by our partners or through third-party information may impact the royalty duration we use in forecasting future expected cash flows. Contingent Payments We may be obligated to make contingent payments related to certain product development milestones and sales-based milestones.

Loss of regulatory exclusivity, patent protection, or other additional factors that may be communicated to us by our partners or through third-party information may impact the royalty duration we use in forecasting future expected cash flows. 75 Table of Contents Contingent Payments We may be obligated to make contingent payments related to certain product development milestones and sales-based milestones.

We are unable to determine precisely when 72 Table of Contents and if our payment obligations under the agreements will become due as these obligations are based on milestone events, the achievement of which is subject to a significant number of risks and uncertainties.

We are unable to determine precisely when and if our payment obligations under the agreements will become due as these obligations are based on milestone events, the achievement of which is subject to a significant number of risks and uncertainties.

All of these milestones and royalty payments represent a portion of the funds we may receive in the future pursuant to these agreements, and therefore we expect these payments to be fully funded by the related royalty or commercial payment receipts.

All of these milestones and royalty payments represent a portion of the funds we may receive in the future pursuant to this agreement, and therefore we expect these payments to be fully funded by the related royalty or commercial payment receipts.

Our royalty aggregator business is primarily focused on early to mid-stage clinical assets, primarily in Phase 1 and 2 development, which we believe have significant commercial sales potential and that are licensed to well-funded sponsors or developers with established expertise in developing and commercializing drugs.

Additional operating expenses, including consulting and legal costs, may continue to increase in 2025 in response to an anticipated increase in the volume of royalty or acquisition targets evaluated or completed. 71 Table of Contents We have an operating lease for our headquarters in Emeryville, California that expires in April 2029.

Additional operating expenses, including consulting and legal costs, may continue to increase in 2026 in response to an anticipated increase in the volume of royalty or acquisition targets evaluated or completed. 82 Table of Contents We have an operating lease for our headquarters in Emeryville, California that expires in April 2029.

When the recorded purchased receivable balance has been fully collected, any additional amounts collected will be recognized as income from purchased receivables under the cost recovery method. 64 Table of Contents We rely on third-party information to calculate the income recognized during the period.

When the recorded purchased receivable balance has been fully collected, any additional amounts collected will be recognized as income from purchased receivables under the cost recovery method. We rely on third-party information to calculate the income recognized during the period.

Milestone payments earned in prior periods are not indicative of anticipated milestone payments in future periods. We may seek additional capital through our 2018 Common Stock ATM Agreement or our 2021 Series B Preferred Stock ATM Agreement (see Note 12 to the consolidated financial statements), or through other public or private debt or equity transactions.

Milestone payments earned in prior periods are not indicative of anticipated milestone payments in future periods. We may seek additional capital through our 2025 Common Stock ATM Agreement or our 2025 Series B Preferred Stock ATM Agreement (see Note 14 to the consolidated financial statements), or through other public or private debt or equity transactions.

As of December 31, 2024, XRL held restricted cash of $4.8 million in reserve accounts that may only be used to pay interest and administrative fees and XRL’s operating expenses pursuant to the Blue Owl Loan Agreement.

As of December 31, 2025, XRL held restricted cash of $2.2 million in reserve accounts that may only be used to pay interest and administrative fees and XRL’s operating expenses pursuant to the Blue Owl Loan Agreement.

Our current expected credit losses are based on an estimate of discounted future cash flows for our purchased receivables, which relies on assumptions including probability of technical success and discount rate. Changes to these assumptions could have a material impact on our financial statements. Intangible Assets Our intangible asset consists of IP from the acquisition of Pulmokine.

Because it is uncertain if and when these milestones will be achieved, such contingencies, aggregating up to $6.3 million (assuming one product per contract meets all milestone events) have not been recorded on our consolidated balance sheet as of December 31, 2024.

Because it is uncertain if and when these milestones will be achieved, such contingencies, aggregating up to $12.1 million (assuming one product per contract meets all milestone events) have not been recorded on our consolidated balance sheet as of December 31, 2025, including the $10.0 million BioInvent 83 Table of Contents contingent consideration.

We had a total of $5.9 million of gross unrecognized tax benefits, none of which would impact our effective tax rate to the extent that we continue to maintain a full valuation allowance against our deferred tax assets.

We had a total of $5.9 million of gross unrecognized tax benefits as of December 31, 2025, none of which would impact our effective tax rate to the extent that we continue to maintain a full valuation allowance against our deferred tax assets. We do not expect our unrecognized tax benefits to change significantly over the next twelve months.

Below is a summary of the cash received from our purchased receivables and contracts with customers for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Royalties and commercial payments VABYSMO $ 16,888 $ 7,283 OJEMDA 1,413 — IXINITY 1,613 1,674 Other 97 — Total royalties and commercial payments 20,011 8,957 Other receipts from purchased receivables 19,250 5,000 Receipts from contracts with customers 7,100 1,650 Total cash receipts $ 46,361 $ 15,607 We have incurred significant operating losses since our inception and as of December 31, 2024, we had an accumulated deficit of $1.2 billion.

Below is a summary of the cash received from our purchased receivables and contracts with customers for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Royalties and commercial payments VABYSMO $ 22,507 $ 16,888 OJEMDA 6,404 1,413 MIPLYFFA 2,884 — IXINITY 1,724 1,613 OTHER 32 97 Total royalties and commercial payments 33,551 20,011 Other receipts from purchased receivables 6,000 19,250 Receipts from contracts with customers 10,900 7,100 Total cash receipts $ 50,451 $ 46,361 We have historically incurred significant operating losses and as of December 31, 2025, we had an accumulated deficit of $1.2 billion.

These changes could impact our fair value-based measurement of stock options granted in the future.

These changes 76 Table of Contents could impact our fair value-based measurement of stock options granted in the future. Changes in the fair value-based measurement of stock awards could materially impact our operating results.

Portfolio Updates – Royalty and Commercial Payment Purchase Agreements Castle Creek Royalty Purchase Agreement In February 2025, we contributed $5.0 million to Castle Creek Biosciences’ $75.0 million syndicated royalty financing transaction led by Ligand. Through this transaction, we acquired a royalty interest in D-Fi (FCX-007), a Phase 3 asset being developed by Castle Creek Biosciences.

Castle Creek Royalty Purchase Agreement In February 2025, we contributed $5.0 million to Castle Creek’s $75.0 million syndicated royalty financing transaction led by Ligand. Through this transaction, we acquired a royalty interest in D-Fi (FCX-007), a Phase 3 asset being developed by Castle Creek. D-Fi is being studied in DEB, a rare progressive and debilitating skin disorder.

D-Fi is being studied in dystrophic epidermolysis bullosa (“DEB”), a rare progressive and debilitating skin disorder. D-Fi has been granted Orphan Drug Designation for the treatment of DEB, as well as Rare Pediatric Disease, Fast Track, and Regenerative Medicine Advanced Therapy designations by the FDA.

D-Fi has been granted Orphan Drug Designation for the treatment of DEB, as well as Rare Pediatric Disease, Fast Track, and Regenerative Medicine Advanced Therapy designations by the FDA.

Net cash used in financing activities for the year ended December 31, 2024 was $11.1 million compared with net cash provided by financing activities of $120.6 million for the year ended December 31, 2023.

Net cash used in financing activities for the year ended December 31, 2025 was $26.5 million, compared with $11.1 million for the year ended December 31, 2024.

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview XOMA is a biotech royalty aggregator. On July 10, 2024, we changed our name from XOMA Corporation to XOMA Royalty Corporation. We have a sizable portfolio of economic rights to future potential milestone and royalty payments associated with partnered commercial and pre-commercial therapeutic candidates.

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview XOMA is a royalty aggregator. We have a sizable portfolio of economic rights to future potential milestone and royalty payments associated with over 120 commercial and pre-commercial therapeutic candidates. In 2017, we transformed our business model to become a royalty aggregator.

As of December 31, 2024, we had $101.6 million in unrestricted cash and cash equivalents and $4.8 million in restricted cash.

As of December 31, 2025, we had $82.9 million in unrestricted cash and cash equivalents and $50.8 million in restricted cash.

The difference was primarily driven by proceeds from our Blue Owl Loan in 2023. 70 Table of Contents Capital Resources We have historically financed our operations and acquisitions through debt facilities, the issuance of our common stock, Series A and Series B Preferred Stock, and amounts received as milestone payments under our license agreements.

The difference was primarily due to repurchases of common stock of $16.0 million, principal repayments on our Blue Owl Loan of $10.6 million (compared with $6.9 million in principal repayments in the year ended December 31, 2024), partially offset by net proceeds from issuances of Series B Preferred Stock of $4.0 million. 81 Table of Contents Capital Resources We have historically financed our operations and acquisitions through debt facilities, the issuance of our common stock, Series A and Series B Preferred Stock, and amounts received as milestone payments under our license agreements.

Benefit/Provision for Income Taxes We recorded an income tax benefit of $5.7 million for the year ended December 31, 2024 and no income tax benefit/provision for the year ended December 31, 2023. We continue to maintain a full valuation allowance against our remaining net deferred tax assets.

This compares to an income tax benefit of $5.7 million for the year ended December 31, 2024, primarily related to the release of valuation allowance resulting from the deferred tax liability recorded on intangible assets acquired in the Pulmokine acquisition. We continue to maintain a full valuation allowance against our net deferred tax assets.

Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate.

We review our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount of an asset group to the future net undiscounted cash flows that the assets are expected to generate.

GAAP does not provide specific authoritative guidance covering such agreements, we have analogized and accounted for the purchased rights as a financial asset in accordance with ASC 310 as we believe our contractual rights to cash flows most closely resemble that of loans (see Note 4 to the consolidated financial statements). 74 Table of Contents Royalty and Commercial Payment Receivables (Cost Recovery Method) We account for milestone and royalty rights related to developmental pipeline or recently commercialized products on a non-accrual basis using the cost recovery method for products where we are not able to reliably estimate the timing and amount of future cash flows.

During the twelve months ended December 31, 2024, we recognized a total of $14.8 million in income from purchased receivables related to the Affitech CPPA under the EIR method for sales of VABYSMO.

Income from purchased receivables under the EIR method for the year ended December 31, 2024, included estimated income under the EIR method related to sales of VABYSMO of $14.8 million and sales of IXINITY of $0.3 million.

Under the effective interest rate method, the amount and timing of contingent payments are included in the forecasted expected cash flows used to estimate royalty and commercial payment receivables and income from purchased receivables. 65 Table of Contents Allowance for Current Expected Credit Losses We review our allowance for current expected credit losses on a quarterly basis based on updates from our partners, press releases and public information on clinical trials.

Revenue from Contracts with Customers Revenue from contracts with customers includes upfront fees, annual license fees and milestone payments related to the out-licensing of our legacy product candidates and technologies.

OJEMDA was launched in the second quarter of 2024, and we expect income from related royalties to increase in future periods based on projections reported by Day One. Revenue from Contracts with Customers Revenue from contracts with customers includes upfront fees, annual license fees and milestone payments related to the out-licensing of our legacy product candidates and technologies.

In March 2025, we paid the final $6.0 million in milestone payments due under the Affitech CPPA. We will be obligated to pay an additional $11.0 million for each successive $22.0 million received by us under the Daré RPAs after achievement of a return threshold of $88.0 million.

We expect to continue deploying capital toward these acquisitions in the near and long term. We will be obligated to pay an additional $11.0 million for each successive $22.0 million received by us under the Daré RPAs after achievement of a return threshold of $88.0 million. In addition, we have potential sales-based milestone payments that may become due under our agreement with Kuros.

Interest expense is shown below for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Change Accrued interest expense $ 12,490 $ 535 $ 11,955 Accretion of debt discount and debt issuance costs 1,350 34 1,316 Total interest expense $ 13,840 $ 569 $ 13,271 We incurred $13.8 million and $0.6 million in interest expense for the years ended December 31, 2024 and 2023, respectively, as a result of interest incurred on the Blue Owl Loan.

Interest expense for the years ended December 31, 2025 and 2024, was as follows (in thousands): Year Ended December 31, 2025 2024 Change Accrued interest expense $ 11,644 $ 12,490 $ (846) Accretion of debt discount and debt issuance costs 1,387 1,350 37 Total interest expense $ 13,031 $ 13,840 $ (809) Interest expense incurred for the years ended December 31, 2025 and 2024, was related to our Blue Owl Loan.

The generation of future revenues and income related to licenses, milestone payments, and royalties is dependent on the achievement of milestones or product sales by our licensees.

The generation of future revenues and income related to licenses, milestone payments, and royalties is dependent on the achievement of milestones or product sales by the sponsors, marketers, and licensees. We generated a net income of $31.7 million and net cash provided by operating activities was $2.9 million for the year ended December 31, 2025.

Revenue from contracts with customers for the year ended December 31, 2023 primarily included milestone payments of $1.5 million and $1.0 million pursuant to the license agreements with Janssen and an undisclosed licensee, respectively.

Revenue from contracts with customers for the year ended December 31, 2025, primarily included a milestone payment of $5.0 million pursuant to our Rezolute License 77 Table of Contents Agreement, $4.1 million pursuant to the Takeda Collaboration Agreement, including $3.0 million from a milestone payment and $1.1 million in other revenue, and $1.3 million in other milestone payments.

Net cash used in investing activities was $28.3 million for the year ended December 31, 2024 compared with net cash used in investing activities of $0.7 million for the year ended December 31, 2023.

The change was primarily driven by cash receipts during the year (see further details in the Capital Resources section below). Net cash provided by investing activities was $50.9 million for the year ended December 31, 2025, compared with net cash used in investing activities of $28.3 million for the year ended December 31, 2024.

The credit losses recorded for each of these programs represented the full remaining purchased receivable balance. 63 Table of Contents Portfolio Updates – License Agreements Rezolute License Agreement In April 2024, Rezolute dosed the first patient in its Phase 3 trial of RZ358, and we earned a $5.0 million milestone payment pursuant to our Rezolute License Agreement.

Portfolio Updates Rezolute License Agreement In May 2025, Rezolute dosed the last patient in its first Phase 3 trial of ersodetug (RZ358), and we earned a $5.0 million milestone payment pursuant to our Rezolute License Agreement. In December 2025, Rezolute announced the Phase 3 clinical study for ersodetug did not meet its primary and key secondary endpoints.

Subject to the terms of those agreements, we are eligible to receive net royalties ranging from the low to mid-single digits on commercial sales and we will retain a portion of future milestone payments.

We are eligible to receive up to $270.0 million in upfront and milestone payments, as well as future royalty payments at rates ranging from the low single digits to mid-teens on commercial sales.

Other Income (Expense) Gain on the Acquisition of Kinnate During the year ended December 31, 2024, we recognized a $19.3 million gain on the acquisition of Kinnate due to the fair value of net assets acquired in the acquisition of Kinnate exceeding the total purchase consideration (see Note 4 to the consolidated financial statements).

Because the fair value of these net assets exceeded the purchase price, we recognized a $3.2 million bargain purchase gain in other income (expense), net for the year ended December 31, 2025.

Intangible assets are amortized based on our best estimate of the distribution of the economic value of the respective intangible assets, which is generally the expected regulatory exclusivity. We review our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Intangible Assets Our intangible assets consist of IP from the acquisition of Pulmokine, the contract-based BioInvent intangible asset, and IP from the acquisition of LAVA. Intangible assets are amortized based on our best estimate of the distribution of the economic value of the respective intangible assets, which is generally the expected regulatory exclusivity.

Our portfolio was built through the acquisition of rights to future milestones, royalties and commercial payments, since our royalty aggregator business model was implemented in 2017. These acquisitions build upon out-licensing agreements for proprietary products and platforms held within our portfolio.

We subsequently advanced our portfolio by building upon our existing out-licensing agreements for proprietary products and platforms through the acquisition of rights to future milestones, royalties and commercial payments. Currently, our portfolio is anchored royalty streams and milestone payments derived from seven commercial-stage assets.

We expect these costs to be funded in full by the cash we received upon close of the merger. Share Repurchase Program: On January 2, 2024, our Board authorized our first stock repurchase program, which permits us to purchase up to $50.0 million of our common stock through January 2027.

If the Boston Lease is terminated, assigned, or subleased after twelve months of the HilleVax Merger Closing Date, 90% of the applicable receipts will be distributed to CVR holders. Stock Repurchase Program: On January 2, 2024, our Board authorized our stock repurchase program, which permits us to purchase up to $50.0 million of our common stock through January 2027.

Revenue Recognized under Units-of-Revenue Method Revenue recognized under the units-of-revenue method includes the amortization of unearned revenue from the sale of royalty interests to HCRP in 2016. The increase in revenue for the year ended December 31, 2024 compared with the year ended December 31, 2023 was due to increased sales of products underlying the agreements with HCRP.

Revenue Recognized under Units-of-Revenue Method Revenue recognized under the units-of-revenue method includes the amortization of unearned revenue from the sale of royalty interests to HCRP in 2016. Changes in revenues recognized in each year presented are related to the changes in estimated royalties received by HCRP.

As of December 31, 2024, we expect to incur incremental undiscounted costs of $0.4 million associated with our building lease. We will be required to make future R&D and G&A expenditures related to the obligations and liabilities we assumed in the Kinnate acquisition.

As of December 31, 2025, we expect to incur incremental undiscounted costs of $0.3 million associated with our building lease. In September 2025, as part of the HilleVax acquisition, we acquired the Boston Lease that expires on December 31, 2032.

We expect these payments to be fully funded by the receipt of milestone and royalty payments from Gossamer Bio. RPAs, AAAs, and CPPAs: A significant component of our business model is to acquire rights to potential future milestone payments and royalty payment streams.

As of December 31, 2025, the current and non-current portion of the initial term loan was $12.5 million and $96.5 million, respectively, and $2.0 million of the restricted cash was classified as non-current. RPAs, AAAs, and CPPAs: A significant component of our business model is to acquire rights to potential future milestone payments and royalty payment streams.

Change in Fair Value of Embedded Derivative Related to RPA During the year ended December 31, 2024, we recognized an $8.1 million change in fair value of an embedded derivative related to RPA associated with a payment of $8.1 million for the sale of a priority review voucher by Day One, which we earned pursuant to the Viracta RPA (see Note 5 to the consolidated financial statements). 68 Table of Contents Interest Expense The accretion of debt discount and debt issuance costs is included in interest expense.

During the year ended December 31, 2024, we recognized an $8.1 million change in fair value of an embedded derivative related to RPA associated with a payment of $8.1 million for the sale of a priority review voucher by Day One, which we earned pursuant to the Viracta RPA. 79 Table of Contents Other Income, Net Other income, net for the years ended December 31, 2025 and 2024, was as follows (in thousands): Year Ended December 31, 2025 2024 Change Other income, net Gain on sale of equity securities $ 3,663 $ — $ 3,663 Investment income 3,470 6,493 (3,023) Arranger fee from ESSA transaction 3,000 — 3,000 Sublease income 840 272 568 Unrealized gain from change in fair value of equity securities 90 131 (41) Other miscellaneous income, net 1,175 25 1,150 Total other income, net $ 12,238 $ 6,921 $ 5,317 During the year ended December 31, 2025, we recognized a gain of $3.7 million from the sale of equity securities.

The increase of $8.9 million was primarily due to $7.4 million in costs associated with our acquisition of Kinnate, which primarily included $3.6 million in severance costs for exit packages provided to Kinnate senior leadership, $2.9 million in legal and consulting costs, $0.4 million in information technology costs, and $0.3 million in insurance costs.

The increase of $1.6 million was primarily due to an increase in business development and deal-related costs of $3.7 million, an increase in lease costs of $1.0 million primarily related to the HilleVax acquisition, partially offset by $3.6 million in costs related to exit packages for Kinnate senior leadership in 2024 and a decrease of $1.0 million in share-based compensation.

Credit losses on purchased receivables were $1.6 million for the year ended December 31, 2023 and consisted of the credit losses of $1.6 million related to our Bioasis RPAs in the second quarter of 2023.

Credit Losses on Purchased Receivables There were no credit losses on purchased receivables for the year ended December 31, 2025.

Sublease income increased by $0.3 million for the year ended December 31, 2024, compared with the same period in 2023 due to the lease assignment agreement acquired under the Kinnate acquisition.

The decrease of $3.0 million in investment income for the year ended December 31, 2025, as compared to 2024 was due to lower cash balances.

Kinnate Acquisition On February 16, 2024, we entered into the Kinnate Merger Agreement pursuant to which we acquired Kinnate through a tender offer for (i) $2.5879 in cash per share of Kinnate common stock, plus (ii) one non-transferable contractual CVR per share of Kinnate common stock.

In March 2026, we distributed $2.1 million to the LAVA CVR holders representing the excess net cash received in the transaction. HilleVax Acquisition In September 2025, we acquired HilleVax through a tender offer for $1.95 in cash per share of HilleVax common stock, plus one non-transferable CVR per share of HilleVax common stock, totaling approximately $105.3 million in purchase consideration.

R&D Expenses R&D expense was $2.9 million for the year ended December 31, 2024, compared with $0.1 million for the year ended December 31, 2023. The increase of $2.8 million was due to clinical trial costs related to KIN-3248. We are in the process of finalizing this study, and we expect a decrease in related R&D costs in 2025.

R&D Expenses Total research and development expenses for the years ended December 31, 2025 and 2024, were as follows (in thousands): Year Ended December 31, 2025 2024 Change Research and development $ 1,712 $ 2,875 $ (1,163) R&D expense was $1.7 million for the year ended December 31, 2025, compared with $2.9 million for the year ended December 31, 2024.

During the year ended December 31, 2024, we purchased a total of 660 shares of common stock pursuant to the stock repurchase program for $13,000. Long-Term Debt: Under the Blue Owl Loan Agreement, the outstanding principal balance will bear interest at an annual rate of 9.875%.

Burns’ resignation, following which the Cash-Out Agreement was terminated and no cash was disbursed. Long-Term Debt: Under the Blue Owl Loan Agreement, the outstanding principal balance bears interest at an annual rate of 9.875%.

Removed

We generated a net loss of $40.8 million and net cash used in operating activities was $18.2 million for the year ended December 31, 2023. Significant Business Developments Pulmokine Acquisition In November 2024, we acquired Pulmokine to obtain an economic interest in seralutinib, a Phase 3 asset being studied in pulmonary arterial hypertension (PAH).

Added

In 2025, we received $33.6 million in commercial payments and $16.9 million from milestone payments and other fees, for total cash receipts of $50.5 million.

Removed

Added

Recent Business Developments Completed Acquisitions Mural Acquisition In December 2025, we acquired Mural for $2.035 per ordinary share and RSU, for a total purchase price of approximately $37.6 million. The transaction included the acquisition of short-term financial assets, such as cash and prepaid expenses.

Removed

The merger closed on April 3, 2024 (the “Kinnate Merger Closing Date”), and XRA merged with and into Kinnate. Following the merger, Kinnate continued as the surviving entity in the merger and our wholly-owned subsidiary. Each Kinnate CVR represents the right to receive potential payments pursuant to the terms and subject to the conditions of the Kinnate CVR Agreement.

Added

LAVA Acquisition In November 2025, we acquired LAVA through a tender offer for $1.04 in cash per LAVA ordinary share and one non-transferable CVR per share, resulting in total purchase consideration of $39.0 million.

Removed

On February 27, 2024, Kinnate sold exarafenib and related IP to Pierre Fabre for an upfront cash consideration of $0.5 million and contingent consideration of $30.5 million upon the achievement of a certain specified milestone (the “Exarafenib Sale”).

Added

As a part of the acquisition, we acquired IP assets related to LAVA’s existing partnered programs with J&J and Pfizer, as well as LAVA-1266, a clinical program for acute myeloid leukemia and myelodysplastic syndrome. We have no plans to develop LAVA-1266, which is instead targeted for divestiture through sale or licensing.

Removed

Kinnate CVR holders are entitled to 100% of any further net proceeds from this transaction, if any, until the fifth anniversary of the Kinnate Merger Closing Date, together with 85% of net proceeds, if any, from any license or other disposition of any or all rights to any product, product candidate or research program active at Kinnate as of the closing that occurs within one year of the Kinnate Merger Closing Date, subject to and in accordance with the terms of the Kinnate CVR Agreement.

Added

The value of the acquired IP assets was reduced by the excess of the fair value of the net assets acquired over the initial consideration based on the relative fair value of each IP.

Removed

We are responsible for the collection and disbursement of any proceeds to which Kinnate CVR holders could be entitled. 61 Table of Contents Stock Repurchase Program In January 2024, our Board authorized our first stock repurchase program, which permits us to purchase up to $50.0 million of our common stock through January 2027.

Added

We are entitled to 25% of the net proceeds related to sales or licenses of these programs. 71 Table of Contents Under the LAVA CVR Agreement, CVR holders are entitled to 75% of the net proceeds from ongoing and future collaborations related to the partnered programs over a 10-year period, 75% of the net proceeds from the disposition of LAVA-1266, 100% of the amount by which LAVA’s closing net cash exceeds the amount of closing net cash as determined by the LAVA Merger Agreement, minus any permitted deductions, as well as 100% of the tax reserve in the amount of approximately $6.3 million minus any permitted tax reserve matter expenses.

Removed

Under the program, we have discretion in determining the conditions under which shares may be purchased from time to time, including through transactions in the open market, in privately negotiated transactions, under plans compliant with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases or by other means in accordance with applicable laws.

Added

As part of the merger, we acquired IP assets related to HIL-216, a pre-clinical vaccine candidate, and assumed existing lease and sublease agreements. We have no plans to develop HIL-216, which is instead targeted for divestiture through sale or licensing.

Removed

Added

Under the HilleVax CVR Agreement, CVR holders are entitled to 90% of the net proceeds from the disposition of HIL-216 if sold within two years of the merger, 100% of the remaining unused funds in the related expense fund at the end of the two-year period, any adjustment of HilleVax’s closing net cash, 100% of security deposit receipts associated with the Boston Lease, and 100% of lease payment obligations saved or the amount received from any subtenant associated with the Boston Lease if subleased within twelve months and 90% if subleased after twelve months.

Removed

The repurchase authorization does not obligate us to acquire any particular amount of our common stock. The Board may suspend, modify, or terminate the stock repurchase program at any time without prior notice. As of December 31, 2024, we have purchased 660 shares of common stock pursuant to this stock repurchase program for $13,000.

Added

As a result of the acquisition, we recognized a $17.9 million bargain purchase gain included in other income (expense), net for the year ended December 31, 2025. Turnstone Acquisition In August 2025, we acquired Turnstone through a tender offer for $0.34 in cash per share of Turnstone common stock and one non-transferable CVR per share of Turnstone common stock, resulting in total purchase consideration of approximately $9.6 million.

Removed

Viracta Royalty Purchase Agreement In April 2024, Day One announced that the FDA granted approval to Day One’s NDA for OJEMDA. Pursuant to the Viracta RPA, we earned a $9.0 million milestone payment upon FDA approval, and we are also eligible to receive mid-single-digit royalties on net sales of OJEMDA.

Added

As part of the merger, we acquired certain short-term financial assets, primarily consisting of cash, receivables, prepaid expenses, and other current assets. Under the Turnstone CVR Agreement, CVR holders are entitled to 100% of the net proceeds from specified Turnstone tax receivables and a lease security deposit.

Removed

In accordance with the cost recovery method, $8.5 million was applied against the remaining long-term royalty receivables balance from the Viracta RPA and the remaining $0.5 million was recognized as income from purchased receivables. For the twelve months ended December 31, 2024, we recognized a total of $3.2 million in income from purchased receivables related to the Viracta RPA.

Added

As a result of the acquisition, we recognized a $1.8 million bargain purchase gain included in other income (expense), net for the year ended December 31, 2025.

Removed

In May 2024, Day One announced that it sold its priority review voucher to an undisclosed buyer for $108.0 million. Pursuant to the Viracta RPA, we received a payment of $8.1 million related to the sale of the priority review voucher, which was recognized in other income during the twelve months ended December 31, 2024.

Added

Other Business Developments Generation Bio Acquisition In February 2026, we acquired Generation Bio through a tender offer for a base price of $4.2913 in cash per Generation Bio’s ordinary share and one non-transferrable CVR per share.

Removed

In December 2024, Viracta assigned to us all its rights, title, and interest in the license agreement with Day One related to OJEMDA. We did not acquire new rights to additional milestone and royalty payments as a result of this assignment. Twist Bioscience Royalty Purchase Agreement In October 2024, we entered into the Twist RPA.

Added

Repare Acquisition and XenoTherapeutics Arranger Letter In November 2025, the Repare Acquisition Agreement was executed, pursuant to which we acted as structuring agent in connection with the acquisition of Repare’s issued and outstanding common shares by Xeno.

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