This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Biotech Stock Mailbag: Xoma

BOSTON ( TheStreet) -- Xoma (XOMA) 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?"

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs