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Biotech Stock Mailbag: Xoma

BOSTON ( TheStreet) -- Xoma (XOMA - Get Report) CEO Steven Engle -- serial destroyer of shareholder value -- finally resigned this week. For those keeping score, Engle has now blown up at two biotech companies -- he was a disaster at La Jolla Pharmaceuticals before running Xoma into the ditch. I called Engle one of the worst biotech CEOs of 2010 and have longed urged Xoma's directors and shareholders to kick the guy to the curb, so his exit this week is welcome news.

Unfortunately, it's probably too little to late to salvage anything of value from the Xoma wreckage that Engle leaves behind.

Xoma shares were up just 3 cents, or 1.5%, to $1.99 on Thursday morning, the first trading day after Engle's departure. That just shows you how beaten down and irrelevant Xoma has become to biotech investors. Adjusted for the 1-for-15 reverse stock split last year, Xoma trades for 13 cents -- that's down 54% since the reverse split took effect.

Paul L. asks, "What's next for Xoma now that Engle is gone?"

The best option for Xoma now would be to sell whatever assets it can, then shut down and return whatever cash remains to shareholders. Finding buyers for what Xoma has to sell won't be easy. Perhaps the French firm Servier would be willing to buy out Xoma's interest in XOMA 052. It's hard to imagine anyone else stepping in to acquire that troubled asset given the failure in diabetes and hopelessly risky and expensive path forward as a potential cardiovascular treatment.

Drug candidate XOMA 3AB to treat botulism: Who cares?

Xoma's antibody-manufacturing expertise could be worth something to a larger company seeking to get into that field. It's a shame that in more than two decades of trying, however, Xoma was never able to put its antibody expertise to use developing a real drug of its own.

Engle is responsible only for the last four years of Xoma's astonishing futility, but his failure should be the last. If Xoma's directors had any common sense, they'd take immediate steps to wind the company down immediately. It's long overdue.

@BioRunUp asks, "What's your take on the NuPathe (PATH) rejection and how management handled it?"

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