Xoma scoops up struggling biotechs HilleVax and Lava in bargain deals

Xoma Royalty has acquired HilleVax and Lava Therapeutics, two biotechs hit by recent clinical trial failures, paying below-market prices and offering contingent value rights (CVRs) tied to potential future returns.

Why it matters: These deals reflect Xoma’s broader strategy to capitalize on biotech setbacks, offering cash now for speculative, milestone-based gains later. The acquisitions follow its June purchase of Turnstone Biologics and reinforce Xoma’s role as a consolidator of distressed biotech IP.

Backstory:

• HilleVax stumbled in 2024 when its lead norovirus vaccine, HIL-214, failed a large phase 2 trial. The company slashed staff and paused infant studies, hinting only at possible adult trials.

• Lava’s prostate cancer drug LAVA-1207 failed phase 1, prompting layoffs and the shutdown of its Dutch operations. Remaining assets include partnered programs with Johnson & Johnson and Pfizer.

Big picture: Xoma isn’t the only one scooping up distressed biotechs at steep discounts and offering shareholders contingent payouts tied to asset monetization. As we recently covered, Concentra’s buying spree (including takeovers of Cargo Therapeutics, Elevation Oncology, Kronos Bio, Allakos, and IGM Biosciences) reflects a broader trend of opportunistic acquisitions in a cooling biotech market, where clinical failures and cash burn have left many companies vulnerable.

Zoom in:

• HilleVax shareholders get $1.95/share + CVR linked to cash left, office savings, and any asset sales over five years, bringing the company value to approximately $96 million.

• Lava shareholders receive $1.16–$1.24/share + CVR tied to partnered programs and asset monetization, valuing the company at around $30 million.