XOMA Royalty Corporation has entered into a definitive agreement to acquire Generation Bio Co. (NASDAQ: GBIO) for $4.2913 in cash per share, with a non‑transferable contingent value right (CVR) that entitles holders to a pro‑rata share of any net cash above $29 million at closing, plus savings from Generation Bio’s Cambridge office lease and proceeds from its existing license agreement with Moderna.
The deal will be executed through a tender offer launched by a wholly‑owned XOMA subsidiary within 15 business days of the announcement, and the transaction is expected to close in February 2026, subject to customary conditions and regulatory approvals. The CVR structure is designed to bridge any valuation gap between the base price and the value of Generation Bio’s remaining assets, providing upside to former shareholders while limiting XOMA’s upfront risk.
Strategically, the acquisition aligns with XOMA’s focus on royalty‑based assets. By adding Generation Bio’s cell‑targeted lipid nanoparticle (ctLNP) delivery platform and the potential future economics of its collaboration with Moderna, XOMA expands its portfolio of high‑growth, non‑dilutive revenue streams. For Generation Bio, the deal marks the end of its operational phase and provides shareholders with a clear exit value, while the CVR offers a path to capture upside from the ctLNP platform and the Moderna license.
Financially, Generation Bio reported total assets of $121.90 million and liabilities of $71.34 million as of Q4 2025, with a debt‑to‑equity ratio of 0% and a net loss of $5.5 million in Q3 2025. XOMA Royalty, by contrast, maintains a strong liquidity position with a current ratio of 3.91 and a net income of $9.86 million over the last twelve months, underscoring its capacity to fund the acquisition and absorb the CVR upside.
Market reaction to the announcement was mixed. Generation Bio’s shares fell to $5.15 in overnight trading, reflecting the lower base price relative to recent trading levels, while Jefferies downgraded the stock to “Hold” with a $5.00 price target, citing the CVR as a potential bridge. XOMA’s shares dipped 1.14% in after‑hours trading, and analysts noted concerns about the financial impact of the deal and its fit within XOMA’s portfolio, given the company’s recent 20% decline in the past week.
The transaction signals a strategic shift for both companies: XOMA expands its royalty portfolio into a promising delivery platform, and Generation Bio exits its operating model to monetize its remaining assets. The CVR structure provides a mechanism for upside capture, while the cash consideration offers a straightforward exit for shareholders. Investors will likely monitor the integration of the ctLNP platform and the performance of the Moderna license to assess the long‑term value of the deal.
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