News Release
[GRAPHIC OMITTED]
Investor and Media Contacts:
Ellen M. Martin
Kureczka/Martin Associates
Investor Relations
Tel: (510) 832-2044
Deb McManus, APR
Media
(510) 204-7240
XOMA ANNOUNCES RESTRUCTURING OF RAPTIVA(R) COLLABORATION
AGREEMENT
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-- RAPTIVA(R) BECOMES IMMEDIATELY PROFITABLE FOR XOMA --
BERKELEY, CA - January 12, 2005 - XOMA Ltd.
(NASDAQ: XOMA) today announced the
restructuring of its collaboration
agreement with Genentech, Inc. (NYSE: DNA)
related to RAPTIVA(R) (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:
o 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(R) 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(R) results, with a higher worldwide
royalty
rate structure, but required immediate repayment of the
development
loan.
o 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(R)
operating losses by offsetting them against future royalties
payable
by Genentech.
o 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(R).
This revised agreement is effective as of
January 1, 2005, and as a result,
RAPTIVA(R) 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
<PAGE>
first step. We're enthusiastic about
RAPTIVA(R) 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(R),
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 c
