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Biotech / Medical : XOMA. Bull or Bear? -- Ignore unavailable to you. Want to Upgrade?

To: ballydog1 who wrote (13735)	6/1/2000 10:34:00 AM
From: Slugger	Read Replies (1) \| Respond to of 17367

Here are Scogale's two posts taken from Yahoo! summarizing the XOMA meeting: Shareholders meeting by: scogale 5/31/00 4:59 pm Msg: 21257 of 21302 I went to the shareholder's meeting today. There were 3 basic parts: votes, a slide show summarizing where Xoma is today and plans for upcoming year, and an extensive Q&A session. On the votes, everything passed except "certain business changes" vote, which was deferred to a later date due to technicalities (it has enough votes to pass, but management will defer vote until non-responding institutions have an opportunity to vote. Seems that according to Bermuda law, non-responders count as no votes). The slide show was basically the same as Sutro presentation--you can see that on Xoma website. From Q&A session, I will just post what seemed to me to be the key points, as I interpreted them, and as reflected in my notes. CD11: psoriasis p3 trials progressing well, Xoma gets 25% of profits in US and "high single digit" royalty on sales outside US. Psoriasis market in US is 500-800K patients (total,not just moderate to severe). Moderate-to-severe patients spend $6-8K/yr on treatments. Xoma suspects there will be on-going maintenance dosing with CD11 for this indication, not just once-a-week for 12 weeks and that's it. Main competing biological is from Biogen (?Amiveve). Genentech & Xoma are looking to begin clinicals for a third indication soon. ING-1: looking to go into clinicals this year. Genimmune: this is a third-generation version of CD5plus, which Xoma worked on with JNJ several years ago. Mr. Castello says they learned a lot from those trials that should help them with Genimmune trials. Mycoprex: antifungal market is roughly $2.5 billion per year in US. Xoma is fairly far along in partnering discussions. And last, but not least, BPI: Mr. Castello says that although FDA found data "very compelling," FDA wants more data. To me it sounds like more trials, but it's hard to say. I don't get the sense that Xoma knows for sure what FDA wants at this point, but I could be wrong. Mr. Castello told audience not to expect a major drug approval in 2000, or something to that effect. He also commented on seasonality of meningo, and that if additional trials are required there's no way to do them until this fall/winter. Mr. Castello would like to publish data in a peer-reviewed journal by this summer. He does not want to release data prior to publication, because most top journals won't publish data that's been leaked out (they want first dibs on the data). Once data is published, Xoma and Baxter will look seriously at pursuing approval in Europe. I don't get the sense that they are particularly wedded to seeking US approval before European approval. Evidently Baxter & Xoma had recent meetings with other parties in Europe about European filing. Xoma expects Allergan collaboration to move into clincals within 12 months. Shareholders meeting 2 by: scogale 5/31/00 5:30 pm Msg: 21259 of 21302 my overall take from meeting is that Mr. Castello and the rest of the board are good people who aren't trying to "screw" anybody. They seem as frustrated as the shareholders are. Mr. Castello commented about how biopharma industry has immense waiting periods, followed by significant rewards when approval is gained, and significant barriers to competitors due to regulatory processes. I wouldn't characterize the meeting as upbeat, but I do get the sense that management is alligned with shareholders, and that they recognize that biotech investors need a lot of patience and a bit of luck. A good part of the discussion focused on the political nature of the FDA approval process. Mr. Castello noted that other drugs have gotten through on subpart E without good (or any) p-values, mostly for cancer and AIDS. These indications have strong constituency groups that apply pressure to the system, something that meningococcemia lacks. It was noted that senators and congress(wo)men sometimes play a role in helping to get a drug through. It was also noted that even if the FDA subcommittee votes in favor of an approval, FDA can still kill the drug. This evidently happened with one of Xoma's prior drugs--drug got a 7-1 vote in favor of approval from subcommittee, but got flushed by FDA nonetheless. I'm not sure if this was the Pfizer drug or the JNJ drug. Overall, Mr. Castello was balanced and neutral on his views of FDA, which any CEO should be. My opinion at this point is that there's a lot of politics going on with Neuprex and FDA. Putting the lives of American children aside, this drug has no constituency arguing for it, and fiscal considerations that argue against it. It is sad, but these things can play a big role in whether a drug gets approved. Most meningo cases are isolated. Isolated families suffer tremendously, but never connect with one another to form a cohesive constituency, the families are isolated from one another in space and in time. We have had our fun with the Xomanista stuff (Exito sure has), but there was a method to my madness in introducing the Xomanistas to this board. Given the somewhat unique characteristics of this disease (i.e. the gruesome effects on children), the press will definitely be interested in this one, as would legislators once the data is published. So, I feel that the Xomanistas should continue to gather supporting data as part of Operation Neuprex Shield. Once the p3 data is out, Neuprex Shield may become Neuprex Storm if the data is compelling. As part of Neuprex Shield, we need to determine what other drugs have gone through on subpart E, and the p-values (if any) those drugs had. It would be nice to have a ranked table of all the drugs, their indications, and their p-values, with Neuprex placed where it belongs in the table. As time permits, I will do some digging to see if I can find out which drugs have gone through on subpart E. Exito says he does not plan to leave the Mark of Exito on anybody just yet. Viva las Xomanistas!