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  • XOMA Reports First Quarter 2010 Financial Results

    May 08, 10 Pipeline

    XOMA Ltd. /quotes/comstock/15*!xoma/quotes/nls/xoma (XOMA 0.54, -0.06, -10.07%) , a leader in the discovery and development of therapeutic antibodies, today announced its financial results for the first quarter of 2010 and provided a general business update.

    “The first months of 2010 were highlighted by progress on multiple fronts with our lead candidate, XOMA 052, an anti-inflammatory antibody—enrolling diabetes patients in three Phase 2 clinical trials designed to include more than 400 patients, reporting groundbreaking in vivo and in vitro results in cardiovascular disease and cancer, respectively, and expanding our patent portfolio relating to IL-1 beta antibodies,” said Steven B. Engle, XOMA’s Chairman and Chief Executive Officer. “In parallel, we continued to pursue new antibody discovery and development license and collaborative arrangements, advance our XOMA 3AB anti-botulinum toxin antibody and develop our proprietary preclinical pipeline in autoimmune, cardio-metabolic, inflammatory and oncologic diseases.”

    XOMA had total revenues of $7.2 million in the first quarter of 2010, compared with $39.7 million in the first quarter of 2009. The decrease in revenues was primarily due to a $27.5 million fee recognized in the first quarter of 2009 related to the company’s expanded collaboration with Takeda Pharmaceutical Company Limited. In addition, royalty revenue decreased by $4.4 million in the first quarter of 2010 compared with the first quarter of 2009 primarily due to the sale of XOMA’s royalty interest in LUCENTIS(R) in the third quarter of 2009 and the withdrawal of RAPTIVA(R) from the market earlier in 2009. XOMA had a net loss of $21.8 million, or $0.09 per share, in the 2010 first quarter compared with net income of $6.2 million, or $0.04 per share, in the first quarter of 2009.

    At March 31, 2010, XOMA had cash and cash equivalents of $28.4 million, compared with $23.9 million at December 31, 2009. In January and February 2010, XOMA received approximately $21.0 million in proceeds from financing transactions, after underwriting discounts, expenses and an amendment fee to certain existing warrant holders.

    Recent Highlights

    — Clinical studies of XOMA 052 initiated: XOMA initiated a Phase 2b
        dose-ranging trial designed to evaluate XOMA 052 in patients with Type 2
        diabetes on stable metformin therapy. The primary outcome is reduction
        in glycosylated hemoglobin, or HbA1c, compared to baseline after six
        months of treatment. Additional diabetic outcomes and biomarkers of
        cardiovascular risk will also be evaluated. Top line results from the
        Phase 2b trial are currently expected in the first quarter of 2011.
        Interim results from the ongoing 80 patient Phase 2a clinical trial of
        XOMA 052 in Type 2 diabetes patients are currently expected in the 2010
        fourth quarter.

    A Phase 2 trial to evaluate XOMA 052 in Type
        1 diabetes patients was initiated and is designed to evaluate its
        effects on beta cell function and insulin production over six months.
        Funding for the trial is being provided by the Juvenile Diabetes
        Research Foundation.

    — New positive in vivo and clinical results presented on IL-1 targeting in
        cardiovascular disease: In vivo results were presented at the American
        College of Cardiology (ACC) Annual Scientific Session showing, in an
        animal model of heart attack, that a murine equivalent of XOMA 052
        significantly reduced adverse consequences that can lead to the
        development of congestive heart failure. Also at the ACC meeting, the
        first results were presented from patients with acute cardiac events who
        then received anakinra, an approved IL-1 targeting agent, showing
        patients treated with Kineret(R) (anakinra) had improved post-heart
        attack outcomes compared with placebo-treated patients. These results
        demonstrate the potential for targeting the IL-1 pathway to reduce the
        inflammation that can lead to post-heart attack complications and to
        improved recovery.

    — In vitro results show impact of XOMA 052 on key myeloma factor:
        Extending the potential application of IL-1 beta targeting to oncology,
        an independent investigator presented results at the American
        Association of Cancer Research annual meeting showing that XOMA 052 was
        highly effective in vitro in reducing production of a protein, IL-6,
        that drives the proliferation of cancerous myeloma cells, using cells
        from myeloma patients.

    — New U.S. patents issued relating to IL-1 beta antibodies: Two new U.S.
        patents were issued to XOMA, one covering methods of treating Type 2
        diabetes with high affinity IL-1 beta antibodies including XOMA 052, and
        one covering methods of treating IL-1 related inflammatory diseases with
        XOMA 052 and other antibodies with similar binding properties for IL-1
        beta. With these patents, the intellectual property portfolio for XOMA
        052 includes four issued patents in the U.S. and one granted patent in
        Europe. More than 40 additional applications are pending in the U.S. and
        other countries.

    — Takeda pays milestone: XOMA received a $1 million milestone payment from
        Takeda Pharmaceutical Company Limited for achieving a pre-established
        preclinical milestone under the companies’ 2006 collaboration agreement,
        which also calls for additional future milestone payments and royalties
        on product sales.

    Additional First Quarter Financial Results
    XOMA’s total revenues in the first quarter of 2010 also included $6.8 million in contract and other revenue, as compared with $7.4 million in the first quarter of 2009. Research and development expense for the first quarter of 2010 was $17.6 million, compared with $16.5 million in the same period of 2009. This increase was primarily due to increased spending on XOMA 052 related to the initiation of the Phase 2 clinical program. Selling, general and administrative expenses in the first quarter of 2010 were $5.6 million, compared with $6.1 million for the same period last year.

    Interest expense for the first quarter of 2010 was $0.1 million compared with $1.8 million for the same period of 2009. This decrease was primarily due to the repayment of the Goldman Sachs loan in September 2009. Other income (expense) was ($5.8 million) in the 2010 first quarter compared with nominal income in the first quarter of 2009. This increase was primarily related to $4.5 million paid in the first quarter of 2010 to the holders of warrants issued in June 2009 upon modification of the warrant terms, and a $1.3 million expense relating to the revaluation of our warrant liabilities during the period.

    Liquidity and Capital Resources
    Cash used in operating activities during the first quarter of 2010 was $16.4 million compared with cash provided by operating activities of $15.3 million during the first quarter of 2010. The decrease in cash provided by operating activities in the 2010 period was primarily due to a decrease in revenue receipts for license and collaborative fees and royalties. In the first quarter of 2009, we received $23.2 million related to the expansion of our existing collaboration with Takeda, and recognized royalty revenue from sales of LUCENTIS(R) and RAPTIVA(R) of $4.6 million.

    The company will not be providing specific guidance on overall revenues or cash receipts for 2010 so as to best manage its ongoing negotiations for XOMA 052 and technology licensing and in light of general economic and market conditions. The company expects that cash used in operating activities in 2010 may range from $45 million to cash neutral or positive.

    NASDAQ Status
    As previously announced, in March 2010, XOMA received a Staff Determination letter from the NASDAQ Stock Market LLC indicating that the company has not regained compliance with the minimum $1.00 per share requirement for continued inclusion on The NASDAQ Global Market, pursuant to NASDAQ Listing Rule 5450(a)(1). As a result, the company’s common shares would have been subject to delisting from The NASDAQ Global Market unless XOMA requested a hearing before a NASDAQ Listing Qualifications Panel to present its plan for regaining compliance, which the company has done. The delisting of the company’s common shares has therefore been stayed pending issuance of the Panel’s decision following the hearing.

    Pursuant to Listing Rule 5815(c), the Panel has the authority to grant XOMA up to an additional 180 days from the date of the Staff Determination letter of March 16, 2010 (i.e., until September 13, 2010) to regain compliance. However, there can be no assurance that the Panel will grant XOMA’s request for continued listing on The NASDAQ Global Market.

    Investor Conference Call
    XOMA will host a conference call and webcast to discuss its first quarter 2010 financial results today, May 6, 2010, at 4:30 pm ET. The webcast can be accessed via the Investors section of XOMA’s website at http://investors.xoma.com/events.cfm and will be available for replay until close of business on August 6, 2010.

    About XOMA
    XOMA discovers, develops and manufactures novel antibody therapeutics for its own proprietary pipeline as well as through license and collaborative agreements with pharmaceutical and biotechnology companies, and under its contracts with the U.S. government.

    BERKELEY, Calif., May 6, 2010 (GlobeNewswire via COMTEX)

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