XOMA Restructures Drug Development Collaboration Including Oncology Drug Candidate HCD122
Monday November 10, 8:01 am ET
XOMA to Receive Upfront Cash, Potential Milestones and Higher Royalties, Full Funding of Ongoing R&D, Reduction of Existing Loan and Elimination of Certain XOMA Payment Obligations
BERKELEY, Calif., Nov. 10, 2008 (GLOBE NEWSWIRE) -- XOMA Ltd. (NasdaqGM:XOMA - News), a leader in the discovery and development of therapeutic antibodies, today announced the restructuring of its product development collaboration with Novartis Vaccines and Diagnostics, Inc. (``Novartis''), which involves six development programs including the ongoing HCD122 program. Under the restructured agreement Novartis will make an upfront payment to XOMA of $6.2 million; fully fund all future R&D expenses; reduce existing debt by $7.5 million; pay potential milestones of up to $14 million and double-digit royalty rates for two ongoing product programs including HCD122; and provide XOMA with options to develop or receive royalties on four additional programs currently pending selection. In exchange, Novartis will have control over the HCD122 program and the additional ongoing program, as well as the right to expand the development of these programs into additional indications outside of oncology. As part of the agreement, NVS will pay XOMA for all project costs incurred after July 1.
Novartis will pay XOMA royalties on sales of HCD122 and one other active product program candidate, based on aggregate sales in all indications. If either XOMA or Novartis chooses to activate any or all of the four currently pending programs, the developing company will pay the other party reduced royalties on sales of any resulting products. In all cases, royalty rates are subject to certain customary adjustments.
``The restructured agreement with Novartis allows XOMA to focus our resources on proprietary projects like XOMA 052, an anti-inflammatory drug candidate designed for use in multiple diseases, while maintaining a share of the potential value of the product candidates resulting from the collaboration,'' noted Steven Engle, Chairman and Chief Executive Officer of XOMA. ``Importantly, the development of HCD122 can now be expanded under Novartis' leadership into new disease indications. We believe this expansion is a key step in realizing the full potential of this program.''
About the Agreement
Formed in 2004, the collaboration between XOMA and Novartis (then Chiron Corporation) began with the signing of an exclusive, worldwide, multi-product agreement to develop and commercialize multiple antibody products for the treatment of cancer. The companies shared expenses and revenues, generally on a 70-30 basis, with XOMA's share being 30 percent. Financial terms included initial payments to XOMA in 2004 totaling $10.0 million and a note agreement, secured by XOMA's interest in the collaboration, to fund up to 75 percent of the company's share of expenses beginning in 2005. In the first quarter of 2007, the mutual obligations of XOMA and Novartis to work together on an exclusive basis in oncology expired, except with respect to existing collaborative product development projects.
As of June 30, 2008, XOMA had $21.3 million of outstanding principal on its secured note agreement with Novartis. Under the revised agreement, the principal has been reduced by $7.5 million to $13.8 million. The remaining principal of approximately $13.8 million is due in 2015 and accrues interest at a rate of 2 percent plus LIBOR. Under the revised agreement, no additional draw downs on the note may be made by XOMA.
About HCD122
HCD122 is a fully human monoclonal antibody that targets CD40. The investigational drug is in a Phase 1/B-2A clinical trial for the treatment of lymphoma and a Phase 1 clinical trial for the treatment of multiple myeloma. The antibody has a dual mechanism of action that involves inhibition of CD40-ligand mediated growth and survival while recruiting immune effector cells to kill CD40-expressing tumor cells through a process known as antibody-dependent cellular cytotoxicity (ADCC). CD40, a member of the tumor necrosis factor superfamily, is a cell surface antigen expressed in B-cell malignancies and involved in a broad variety of immune and inflammatory responses. |
