XOMA Royalty Corporation

Good day, everyone. My name is Kahe Alani, and I'll be your conference operator today. At this time, I would like to welcome you to the ZOMA Royalty 2025 Financial Results and Business Highlights Investor Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, and if you have joined via the webinar, please use the raise hand icon which can be found at the bottom of your webinar application. At this time, I'd like to turn the call over to Julianne Snowden, Investor Relations.

Good morning, everyone, and welcome to the Zoma Royalty fourth quarter and full year 2025 earnings call. Earlier today, we issued our financial results press release, which is available in the investor relations section of our website at www.zoma.com. A replay of this call will be available on our website following the webcast. Joining me today are Owen Hughes, Chief Executive Officer, Brad Sitko, Chief Investment Officer, and Jeff Tregilio, Chief Financial Officer. During today's call, we will review our 2025 financial results, discuss recent business development activity and portfolio updates and provide commentary on key upcoming catalysts. After our prepared remarks, we will open the call for questions. Before we begin, I would like to remind everyone that statements made during this call that are not historical facts may be considered forward-looking statements within the meaning of federal securities laws. These statements are based on our current expectations and are subject to risks, uncertainties, assumptions, and other factors that could cause actual results to differ materially from those described or implied in these statements. please refer to our filings with the Securities and Exchange Commission, including our most recent Form 10-K, for a discussion of these and other risks. ZOMA royalty undertakes no obligation to update forward-looking statements except as required by law. And with that, I'll turn the call over to Owen.

Thank you very much, Julianne, and good morning, everyone. 2025 was a foundational year for Zoma Royalty as we continue to execute on our strategy of building a diversified portfolio of biotechnology royalty and milestone assets. We are approaching the inflection point when expected cash flows from our royalty receipts alone should cover the core operating costs of the company. Through both traditional royalty and milestone acquisitions, as well as innovative transactions, we enhanced the company's prospects by adding 22 assets to the Zoma royalty portfolio in 2025, in addition to the acquisition of two platform technologies that we hope to be able to out-license in order to generate future royalties and milestones. Furthermore, total portfolio receipts surpassed 50 million, including royalty receipts of 34 million, which grew 68% from fiscal year 2024. By maintaining a lean operating structure, we achieved positive cash flow from operations and were able to return 16 million of capital through opportunistic share buybacks in 2025, retiring more than 5% of our common stock outstanding. On a go-forward basis, we anticipate maintaining a disciplined approach to capital deployment, investing in new portfolio assets to increase the portfolio breadth, while continuing to chip away at our equity base, which should increase our future cash flow per share. With seven commercially available programs, we are establishing a diverse and growing source of recurring receipts for our investors. Several of these commercial stage programs, including Day One, Pharmaceuticals Agenda, and Zebra Therapeutics MyPlypha are in the early stages of what appear to be very promising launches with potential geographic expansion ahead. In fact, both companies submitted marketing authorizations in the EU in 2025. And just recently, I believe it was February 26th, 2020-26, Ipsen, Day One's partner outside the United States, announced a positive CHMP opinion recommending the conditional marketing authorization of Agenda in the EU. In addition, Ipsen submitted a marketing authorization to Japan in the fourth quarter, triggering a $2 million milestone payment to Zoma. On the flip side, however, we're not immune to the impact of clinical setbacks, although though given the breadth of our portfolio, we hope to be more resilient and less binary than traditional drug developers. In that vein, over the last few months, we've had two Phase III studies. Resolute's program for congenital hyperinsulinism and Gossamer Bio's serolutinib for pulmonary arterial hypertension demonstrate clinical efficacy that unfortunately failed to show statistically significant differences at their respective thresholds relative to the control arms. We are encouraged, however, that both companies remain committed to exploring options in 2026 for these programs. Resolute is undertaking extensive analysis of the primary results and other endpoints and plans to meet with the FDA prior to the end of the first quarter under its breakthrough designation. Gossamer has also indicated that it plans to meet with the FDA to discuss a path forward for serolutinib, which, in a pre-specified intermediate and high-risk subgroup of 234 participants, showed a 20-meter placebo-adjusted 6-minute walk distance improvement, achieving a p-value of 0.0207, with three of the four secondary endpoints achieving a p-value of less than 0.0125. Our broader portfolio includes 14 programs and registrational stage, and therefore a number of key catalysts and sources of potential top-line royalty growth over the ensuing years. The developers and marketers have guided to the following events that could occur in calendar year 2026. Top-line results from Resolute's separate phase three program evaluating erostatic in participants with tumor hyperinsulism in the second half. Top line results from the Velixibat VISTA study in PSC in the second quarter. REC 4881, the developer engaging with the FDA in the first half to align on a registration study in FAP. And additional data from AZ's TIGIT program in various solid tumors throughout 2026. This robust late-stage pipeline is a result of both traditional and innovative sourcing methods. In 2025, we executed a strategic revenue share transaction with Takeda, where we added potential royalty and milestone payments across nine programs, including four in phase two and phase three, to our portfolio, while simultaneously reducing our economic interest in Takeda's anti-CD38 antibody mezogidemab, which is being evaluated in two indications in phase three trials. Importantly, we still maintain a healthy, low single-digit royalty on Mezogidimab as we are keen on the mechanism of action and the dosing paradigm, particularly in IgA nephropathy. We also continue to efficiently expand our portfolio of assets through the acquisition of seven negative enterprise value companies, either directly or as a structuring agent. For the cost of sweat equity, not cash from our balance sheet, we have added multiple development stage assets, either wholly owned or with established partner economics, receive non-dilutive cash to support expenses or future investments, and in certain circumstances, acquire a technology platform such as Generation Bio's CTLNP for the delivery of messenger RNA and nucleic acids. These transactions highlight one of Zoma's unique strengths, our ability to structure creative transactions that provide capital to both biotech innovators while capturing the long-term economics for our shareholders. From a strategic perspective, our focus remains clear to build a large diversified portfolio royalty interest in high quality therapeutic programs while maintaining disciplined capital allocation. When we look at the company today in early 2026, compared with where we were at the beginning of 2023, the transformation and execution against that strategy is coming to light. Since then, we have built one of the industry's most expansive royalty portfolios, doubling the number of assets in active development, going from roughly 60 assets in 2023 to over 120 today. The portfolio has matured with sevenfold increases in both the number of commercially available assets, as well as the number of assets in late stage or potentially registrational development. Our prior business development efforts are starting to bear fruit in the form of milestone payments and growing recurring royalty receipts, such as our economic interest in MyPlaifa, which was acquired in 2023. We have also increased our unrestricted cash position to over 80 million, accessed non-dilutive capital thoughtfully and creatively, and demonstrated that our business model can achieve positive operating cash flows, which gives us the firepower to continue to add assets on a go-forward basis. Importantly, we have done all this without diluting our shareholders, as evidenced by a share count that is essentially flat compared to 2023. Overall, We believe Zoma Royalty is well positioned as a differentiated royalty aggregator and remains the only firm to invest in royalty assets across the entire development spectrum from preclinical stages, all the way through commercial assets, helping innovative companies access non-dilutive capital while building a portfolio designed to generate long-term shareholder value. With that overview, let me turn the call over to Brad to give you more detail on the portfolio and pipeline.