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XOMA Ltd: Odds Improving On This $1 Biotech Lottery Ticket

XOMA Ltd. has had a disastrous year in 2015 as its main drug candidate flunked a Phase 3 trial causing the stock to plunge more than 80% as a result.

However, the company had multiple shots of goal and should not have been given up for dead as it had strong analyst support and some possible aces left to play.

The company announced a major deal with giant pharma firm Novartis on Thursday that could potentially alter the future course for this high risk/high reward biotech concern.

Small cap biotech stock XOMA Ltd. (NASDAQ:XOMA) is the perfect example of why I always preach Shotgun Investing in the very volatile small cap biotech space. It also is why I also want to see a company have several products in its pipeline or multiple "shots on goal" before I will make a small investment in one of the promising but speculative types of investment.

The company has had a horrid year so far in 2015, but a recent deal with pharma giant Novartis (NYSE:NVS) made Thursday may turn out to be the Rx that XOMA needed to get off the schneid and produce some spectacular returns from its current price of just over $1.00 a share. Let's take a deeper look at this small cap biotech concern.

Company Overview:

XOMA Corporation is a late-stage biotechnology company with expertise in allosteric modulation and a portfolio of innovative therapeutic monoclonal antibodies. The company currently has a market capitalization of just over $125 million and a stock price of ~$1.00 a share.

XOMA's flagship compound is gevokizumab, an IL-1 beta modulating...