XOMA Royalty Corp

DEFM14A 1 d137792ddefm14a.htm DEFM14A Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐ Check the appropriate box: ☐ Preliminary Proxy Statement ☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ☒ Definitive Proxy Statement ☐ Definitive Additional Materials ☐ Soliciting Material under §240.14a-12 XOMA ROYALTY CORPORATION (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement if other than the Registrant) Payment of Filing Fee (Check all boxes that apply): ☐ No fee required ☒ Fee paid previously with preliminary materials ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 Table of Contents MERGER AND REORGANIZATION PROPOSALS—YOUR VOTE IS VERY IMPORTANT Dear Stockholders: On April 27, 2026, XOMA Royalty Corporation, a Nevada corporation (the “Company” or “XOMA Royalty”), Ligand Pharmaceuticals Incorporated, a Delaware corporation (“Parent”), and Flex Merger Sub, Inc., a Nevada corporation and wholly owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger, as amended by Amendment No. 1 to the Agreement and Plan of Merger on May 16, 2026, by and among XOMA Royalty, Parent, Merger Sub and XOMA Royalty Holdings Corporation, a Nevada corporation and wholly owned subsidiary of XOMA Royalty (“HoldCo”), as it may be amended from time to time (as amended, the “Merger Agreement”). Pursuant to the terms and subject to the conditions of the Merger Agreement, including, without limitation, effecting the Holding Company Reorganization (as defined below), Merger Sub will merge with and into HoldCo (the “Merger”), with HoldCo surviving the Merger as a wholly owned subsidiary of Parent. Following the Holding Company Reorganization, unless the context otherwise requires, all references in this letter to the “Company” or “XOMA Royalty” refer to HoldCo. Following the Holding Company Reorganization, HoldCo will assume all obligations of the Company under the Merger Agreement. Pursuant to the Merger Agreement, at the time the Merger becomes effective (the “Effective Time”), each share of common stock, par value $0.0075 per share (the “common stock”), of the Company (the “Shares”) issued and outstanding immediately prior to the Effective Time (other than certain Shares to be cancelled pursuant to the Merger Agreement and Dissenting Shares (as defined in the Merger Agreement)) will be automatically converted into the right to receive (i) $39.00 per Share in cash, without interest, and subject to deduction for any required withholding tax, plus (ii) one contingent value right (a “CVR”) representing a contractual right to receive contingent cash payments, if any, derived from the net proceeds of a pending litigation against Janssen Biotech, Inc. (the “Janssen Litigation”), which payments, if any, will be made by a newly formed Delaware statutory liquidating trust (the “CVR Trust”) out of distributions, if any, made by XOMA Royalty LLC to the CVR Trust (clauses (i) and (ii) collectively, the “Merger Consideration”). The CVRs are highly contingent, non-transferable except in limited circumstances, will not be listed or traded, may have no value and may never result in any payment. For a more detailed description of the CVRs, the Janssen Litigation, related risks and U.S. federal income tax consequences, see sections titled “ Contingent Value Rights ,” “ Risk Factors—Risks Related to the CVRs ” and “ U.S. Federal Income Tax Consequences of the Merger ” beginning on pages 92, 23 and 104, respectively, of the accompanying proxy statement/prospectus. In addition, pursuant to the Merger Agreement, prior to the Effective Time, each 8.625% Series A Cumulative Perpetual Preferred Stock, par value $0.05 per share (the “Series A Preferred Stock”) and 8.375% Series B Cumulative Perpetual Preferred Stock, par value $0.05 per share (the “Series B Preferred Stock”, together with the Series A Preferred Stock, the “Perpetual Preferred Stock” and collectively with the Series X Preferred Stock, par value $0.05 per share, the “Company Preferred Stock”), shall be redeemed in accordance with the terms of the applicable certificate of designation governing such Perpetual Preferred Stock, including payment of all accrued and unpaid dividends thereon through the date of such redemption. The Merger Agreement also specifies the treatment of the Company’s outstanding equity awards and warrants in connection with the Merger. Prior to the Effective Time, XOMA Royalty will effect a holding company reorganization (the “Holding Company Reorganization”) pursuant to the applicable provisions of the Nevada Revised Statutes (“NRS”), including Chapter 92A thereof, pursuant to the Agreement and Plan of Merger, to be entered into by and among XOMA Royalty, HoldCo and XRH Merger Sub, Corp., a Nevada corporation and a wholly owned subsidiary of HoldCo (“HoldCo Merger Sub”) (the “HoldCo Reorganization Merger Agreement”), whereby (i) HoldCo Merger Sub will merge with and into XOMA Royalty, with XOMA Royalty surviving as a direct, wholly owned subsidiary of HoldCo and HoldCo becoming the holding company of XOMA Royalty, (ii) each Share issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be Table of Contents converted into one share of common stock of HoldCo, having the same rights, powers and preferences as such Share, (iii) each share of Company Preferred Stock issued and outstanding immediately prior to the effectiveness of the Holding Company Reorganization will automatically be converted into one share of a corresponding series of preferred stock of HoldCo, having the same designations, rights, powers, preferences, qualifications, limitations and restrictions as such share of Company Preferred Stock, and (iv) each Company equity-based award outstanding immediately prior to the effectiveness of the Holding Company Reorganization will be automatically converted into a corresponding award with respect to shares of HoldCo common stock on the same terms and conditions. XOMA Royalty common stock is listed on The Nasdaq Global Market under the symbol “XOMA,” the Series A Preferred Stock is listed on The Nasdaq Global Market under the symbol “XOMAP,” and XOMA Royalty’s depositary shares, each representing a 1/1000 th fractional interest in a share of the Series B Preferred Stock, are listed on the Nasdaq Global Market under the symbol “XOMAO.” XOMA Royalty will hold a special meeting of its stockholders in connection with the Merger and the Holding Company Reorganization (the “Special Meeting”). At the Special Meeting, XOMA Royalty stockholders will be asked to consider and vote on (1) a proposal to approve the Merger Agreement (the “Merger Agreement Proposal”), (2) a proposal to approve the Holding Company Reorganization, including the HoldCo Reorganization Merger Agreement (the “Holding Company Reorganization Proposal”), (3) a non-binding, advisory proposal to approve the compensation that may be paid or become payable by XOMA Royalty to its named executive officers in connection with the Merger Agreement and the transactions contemplated therein (the “Compensation Proposal”), and (4) a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Merger Agreement Proposal or the Holding Company Reorganization Proposal. The XOMA Royalty board of directors recommends that XOMA Royalty stockholders vote “FOR” each of the proposals to be considered at the Special Meeting. The Merger Agreement requires, as a condition to closing of the Mer