XOMA Announces Restructuring of RAPTIVA Collaboration Agreement
Wednesday January 12, 6:30 pm ET
RAPTIVA Becomes Immediately Profitable For XOMA
BERKELEY, Calif.--(BUSINESS WIRE)--Jan. 12, 2005--XOMA Ltd. (NASDAQ:XOMA - News) today announced the restructuring of its collaboration agreement with Genentech, Inc. (NYSE:DNA - News) related to RAPTIVA® (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:
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® 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® results, with a higher worldwide royalty rate structure, but required immediate repayment of the development loan.
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® operating losses by offsetting them against future royalties payable by Genentech.
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®.
This revised agreement is effective as of January 1, 2005, and as a result, RAPTIVA® 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® 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®, 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® 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 xoma.com. |
