XOMA Provides Further Details of the Accounting Impact of Changes to RAPTIVA Arrangement
Friday January 21, 7:00 am ET
BERKELEY, Calif.--(BUSINESS WIRE)--Jan. 21, 2005--XOMA Ltd. (Nasdaq:XOMA - News) today announced additional details about the accounting treatment and financial impact of the recent restructuring of its RAPTIVA® agreement with Genentech, Inc., which took effect January 1, 2005.
The discharge of the $40 million development loan plus accrued interest will be recognized by XOMA as income in the first quarter of 2005.
The overall RAPTIVA® impact included in XOMA's reported statement of operations for the nine month period ended September 30, 2004 was a net expense of approximately $16.0 million, which consisted of collaboration agreement expense of $12.3 million, research and development expense of an additional $3.0 million, and interest expense of $0.7 million. XOMA has previously stated that it anticipated additional losses on RAPTIVA® beyond the third quarter of 2004. Under the terms of the new agreement, XOMA will be entitled to royalties on worldwide sales of RAPTIVA® beginning in the first quarter of 2005, and will be compensated by Genentech for any future RAPTIVA® development work that is requested. There will be no further collaboration agreement expense or interest expense on the development loan.
"Because of the importance of the restructuring of this agreement to XOMA's financial results, we felt it would be helpful to give investors a clearer picture of the positive financial impact compared with previously reported trends," said Peter B. Davis, chief financial officer of XOMA. "As we have stated previously, this restructuring will immediately benefit our financial results beginning in the first quarter of 2005, by making RAPTIVA® profitable to XOMA and by strengthening our balance sheet. This is an important step in our goal of making XOMA profitable within three years."
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 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. |
