News Release [GRAPHIC OMITTED]
Investor and Media Contacts:
Ellen M. Martin
Kureczka/Martin Associates
Investor Relations
Tel: (510) 832-2044
Deb McManus, APR
Media
(510) 204-7240
XOMA ANNOUNCES RESTRUCTURING OF RAPTIVA(R) COLLABORATION
AGREEMENT
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-- RAPTIVA(R) BECOMES IMMEDIATELY PROFITABLE FOR XOMA --
BERKELEY, CA - January 12, 2005 - XOMA Ltd. (NASDAQ: XOMA) today announced the
restructuring of its collaboration agreement with Genentech, Inc. (NYSE: DNA)
related to RAPTIVA(R) (efalizumab), an approved biologic treatment for chronic
moderate-to-severe plaque psoriasis in adults age 18 or older who are candidates
for systemic therapy or phototherapy. Key financial elements of the new,
restructured agreement include:
o The current cost and profit sharing arrangement in the United States
will be modified. XOMA will earn a mid-single digit royalty on
worldwide sales of RAPTIVA(R) with an additional royalty rate on sales
in the United States in excess of a specified level. The original
agreement provided XOMA with the option of electing a royalty-only
participation in RAPTIVA(R) results, with a higher worldwide royalty
rate structure, but required immediate repayment of the development
loan.
o In return, Genentech agreed to discharge XOMA's obligation to pay the
$40 million balance on the development loan plus accrued interest and
to allow repayment of XOMA's fourth quarter share of RAPTIVA(R)
operating losses by offsetting them against future royalties payable
by Genentech.
o By selecting the royalty option, XOMA will no longer be responsible
for funding any development or sales and marketing activities or have
the right to co-promote RAPTIVA(R).
This revised agreement is effective as of January 1, 2005, and as a result,
RAPTIVA(R) will become immediately profitable for XOMA, beginning in the first
quarter of 2005. No further financial details on the restructuring were
disclosed.
"Our goal over the next three years is to make XOMA profitable while continuing
to strengthen and deepen our product pipeline," said John L. Castello, chairman,
president and chief executive officer of XOMA. "This is a challenging goal, but
the restructuring of our agreement with Genentech is a critical
first step. We're enthusiastic about RAPTIVA(R) and our continuing excellent
relationship with Genentech."
"Besides strengthening our balance sheet by eliminating the $40 million loan
payable, this restructuring moves XOMA to a royalty participation on RAPTIVA(R),
providing us with positive cash flow from the product sooner than we would have
experienced under the previous profit sharing agreement" said Peter B. Davis,
chief financial officer of XOMA. "By working closely and collaboratively with
Genentech, we've been able to restructure the agreement in a mutually
satisfactory way."
About XOMA
XOMA is a biopharmaceutical company focused on the development and
commercialization of antibody and other protein-based biopharmaceuticals for
disease targets that include cancer, immunological and inflammatory disorders,
and infectious diseases. XOMA's proprietary and collaborative product
development programs include: RAPTIVA(R) for moderate to severe plaque psoriasis
(marketed) and other indications in collaboration with Genentech, Inc.; MLN
2222, a recombinant protein for reducing the incidence of post-operative events
in coronary artery bypass graft surgery patients with Millennium
Pharmaceuticals, Inc. (Phase I); CHIR-12.12, an anti-CD40 antibody for treating
B-cell tumors and additional product candidates in connection with an antibody
oncology collaboration with Chiron Corporation (preclinical); a TPO mimetic
antibody to treat chemotherapy-induced thrombocytopenia in collaboration with
Alexion Pharmaceuticals, Inc. (preclinical); and anti-gastrin antibody product
candidates in conjunction with the antibody collaboration for the treatment of
gastrointestinal cancers with Aphton Corporation (preclinical). Licensing
agreements include: ING-1, XOMA's proprietary, anti-tumor monoclonal antibody
for the treatment of various adenocarcinomas in conjunction with a licensing
arrangement with Triton BioSystems, Inc.; and XOMA's
bactericidal/permeability-increasing protein (BPI), including NEUPREX for
product commercialization in conjunction with an exclusive licensing agreement
with Zephyr Sciences, Inc. For more information about XOMA's product pipeline
and antibody product development capabilities and technologies, please visit
XOMA's website at http://www.xoma.com/.
Certain statements contained herein concerning the Company's potential for
profitability and future sales and development of RAPTIVA(R), or that otherwise
relate to future periods, are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements are based on assumptions that may not
prove accurate. Actual results could differ materially from those anticipated
due to certain risks inherent in the biotechnology industry and for companies
engaged in the development of new products in a regulated market.
Among other things, the Company's ability to achieve profitability will depend
on the success of the sales efforts for RAPTIVA(R), the Company's ability to
effectively anticipate and manage its expenditures and the availability of
capital market and other financing, and the sales efforts for RAPTIVA(R) may not
be successful if Genentech or its partner, Serono SA, fails to meet its
commercialization goals, due to the strength of the competition, if physicians
do not adopt the product as treatment for their patients or if important
remaining regulatory approvals are not obtained. These and other risks,
including those related to the results of pre-clinical testing, the timing or
results of pending and future clinical trials (including the design and progress
of clinical trials; safety and efficacy of the products being tested; action,
inaction or delay by the FDA, European or other regulators or their advisory
bodies; and analysis or interpretation by, or submission to, these entities or
others of scientific data), changes in the status of the existing collaborative
relationships, the ability of collaborators and other partners to meet their
obligations, market demand for products, scale up and marketing capabilities,
competition, international operations, share price volatility, availability of
additional licensing or collaboration opportunities, uncertainties regarding the
status of biotechnology patents, uncertainties as to the cost of protecting
intellectual property and risks associated with XOMA's status as a Bermuda
company, are described in more detail in the Company's most recent annual report
on Form 10-K and in other SEC filings.
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