XOMA Corporation (NASDAQ:XOMA) Won't Stop Here

XOMA Corporation (NASDAQ:XOMA) has been a real winner for us here at Insider Financial over the last six months.Back in April, we published this piece highlighting the company's proprietary platform and pointing out that it has the potential to be transformational for the company. We noted that we were on the lookout for any verification of this thesis as a potential upside catalyst and that – as and when it came – we would likely see the stock start to run. XOMA Daily ChartA couple of weeks ago, on August 25, the company announced this license agreement with Novartis AG (ADR) (NYSE:NVS). On the announcement, XOMA ran from $11 to $16 a share, a 45% gain for anyone that got in ahead of the news. Any of our readers that picked up an exposure back in April, when we first covered the stock, rode out the run from a starting point of $7 a piece – that's a close to 130% gain.The company is still running into the start of this fresh month and it's time to ask the question – what's next?The thing to realize with this company is that when we said that the deals rooted in its proprietary technology are transformational, that's what we meant.The latest Novartis deal, the one referenced above, afforded XOMA the opportunity to pay off 50% of its total outstanding debt to an entity called Les Laboratoires Servier. A 50% reduction in outstanding debt is a big deal for any company at this end of the biotechnology sector and dramatically reduces the risk that the company is asking a shareholder to take on when they pull the trigger on an exposure.And that's only half of the agreement. The upfront cash injection that Novartis paid XOMA as part of the deal essentially trebles runway, while the $5 million equity investment by the latter in the former puts XOMA in bed with one of the biggest names in healthcare.If that's not going to open doors to further collaboration, we don't know what is.So in a nutshell, that's why this one is running right now – the impact of the Novartis deal goes way beyond the individual assets that underpin the licensing agreement. So, while the company hasn’t actually announced anything fresh between the end of last month and now, markets are still loading up on the stock in anticipation of a new development and the company is gaining in strength as a result.Right now, XOMA goes for a little over $16 a share. The latest spike (September 5) came on the back of nearly 2 million shares trading hands. For perspective, average daily volume is less than 100,000 daily.So is this a clue that something might be just around the corner?Perhaps. We've seen it before and at this end of the sector there's plenty of information that seems to dissipate in and around the official release. If this is the case, we're expecting another bit pf partnership news to hit press before the end of the week.Keep in mind that this is speculative stuff and there's a decent chance that the run we are seeing is nothing more than a buy the rumor type situation. If this proves true, we may see a near term correction as the speculative positions bow out and the company dips to reflect the exits. Even if we do see a correction, however, the dip might be a nice opportunity to pick up an exposure to a return to the upside momentum, long term, ahead of a reversal.Our long term thesis still stands: this is a small cap biotech stock but it's one with a strong balance sheet and an intriguing, potentially game changing (and very partner-able) tech on its hands.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on XOMA, sign up below!Image courtesy of Maryland GovPics via FlickrDisclosure: We have no position in XOMA and have not been compensated for this article.