Turnstone Biologics has limped to the exit. Xoma Royalty is buying Turnstone for less than $8 million, marking a low-profile end for a company that pulled in hundreds of millions of dollars from investors and partners.
San Diego-based Turnstone has been on life support since manufacturing costs forced the biotech to ax its last remaining clinical program early this year. The termination triggered another round of layoffs and sparked a search for strategic alternatives.
Transferred off the main Nasdaq exchange and running low on cash, Turnstone lacked some of the resources buyers look for in beleaguered biotechs.
Xoma has seen enough value in Turnstone to offer $0.34 per share in cash for the biotech. Multiplying the offer by the number of shares outstanding at the last count puts the value of the buyout at $7.9 million. Xoma has also offered a contingent value right that could give shareholders a future payday. The companies didn't provide details of the CVR in their June 27 press release.
In return, Xoma will gain Turnstone’s remaining cash reserves, which stood at $21.8 million at the end of March, and its tumor-infiltrating lymphocyte pipeline and technologies. Turnstone’s lead candidate was in a phase 1 solid tumor trial when it ended development.
Xoma’s business model is to acquire rights to royalties and milestones, offering biotechs cash upfront in exchange for longer-term revenue streams.
Turnstone, for its part, teamed up with AbbVie in 2017 and landed a deal with Takeda in 2019, but both partners are long gone.
In its 2024 annual report, Turnstone said “we will not receive any additional collaboration revenue under the Takeda Agreement in the future because this agreement has been terminated.” AbbVie, which axed its deal with Turnstone in 2019, isn’t mentioned in the annual report.