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XOMA ANNOUNCES NEW STRATEGIC FOCUS AND RESTRUCTURING

 XOMA ANNOUNCES NEW STRATEGIC FOCUS AND RESTRUCTURING
 BERKELEY, Calif., Oct. 29 /PRNewswire/ -- XOMA Corporation


(NASDAQ-NMS: XOMA) today announced that it has refocused its corporate strategy and restructured its operations in Berkeley and Santa Monica, Calif.
 XOMA will emphasize the development of genetically engineered products based on human bactericidal/permeability increasing (BPI) protein for the treatment of infections. XOMA also will develop new T cell-targeted products for autoimmune disease therapy. The company will continue development of its E5 product for gram-negative sepsis, and of its CD5 Plus product for graft-vs.-host disease. Operationally, XOMA will reduce its workforce and adjust other expenditures to achieve approximately a 25 percent reduction in net cash outflow by mid-1993.
 "We decided to shift XOMA's principal research focus to BPI because of its clinical and commercial potential," said Jack Castello, XOMA's president and chief executive officer. "Due to the delays we have encountered with E5 and CD5 Plus, we are refocusing and streamlining our organization. This means strengthening the commitment to BPI and to the autoimmune disease field and deferring or eliminating activities in other areas. The objective is to enable XOMA to focus on its scientific strengths and develop ethical pharmaceutical products in our areas of emphasis."
 Product Development Programs
 BPI is a human protein which has significant therapeutic potential, as demonstrated in preclinical and animal testing. It was developed by XOMA in collaboration with Drs. Peter Elsbach and Jerrold Weiss, leading researchers affiliated with New York University who discovered the BPI protein in human neutrophils. The company currently plans to file for Food and Drug Administration (FDA) authorization to begin human testing of a genetically engineered portion of the human BPI protein in the first quarter of 1993.
 In order to expedite progress toward possible FDA licensure of E5, XOMA and its marketing partner, Pfizer Inc, plan to begin a third Phase III clinical trial of the product. The trial will be managed by Pfizer. A proposed clinical trial protocol is currently under review by FDA. There can be no assurance that the trial will yield data that will result in licensure of E5 in the United States. XOMA is actively pursuing registration of E5 in the countries of the European Community and in Japan.
 XOMA is continuing clinical development of CD5 Plus exclusively in the management of graft-vs.-host disease (GvHD) in bone marrow transplantation. XOMA is working with the Ortho Biotech division of Johnson & Johnson, its CD5 Plus marketing partner, to gain FDA licensure of CD5 Plus for GvHD therapy.
 XOMA is building on its experience with CD5 Plus in the development of new T cell-targeted genetically engineered proteins for autoimmune disease therapy. This program utilizes the company's clinical knowledge in addition to its sophisticated animal model systems for evaluation of T cell-related product candidates for rheumatoid arthritis and other autoimmune conditions.
 "Our research emphasis on BPI-based proteins and advanced autoimmune disease products is a direct result of our decision several years ago to expand beyond products based on monoclonal antibody technology," said XOMA founder and Vice Chairman Patrick J. Scannon, M.D., Ph.D. "XOMA is actively applying all relevant aspects of molecular biology to our proprietary product development programs."
 XOMA currently plans to seek licensees for proprietary technology and product candidates outside its core areas of focus. The company also will continue to actively pursue strategic technology acquisitions.
 Restructuring
 As a result of the restructuring, XOMA's total workforce will be reduced to approximately 240 employees, a reduction of 85 people. For the third quarter ended Sept. 30, 1992, the company will take a one-time charge to earnings totalling approximately $10 million. The charge will include personnel costs associated with the restructuring in addition to costs related to idle manufacturing capacity and a reserve established for a portion of the company's E5 raw materials inventory.
 "The restructuring will conserve the company's financial resources while providing the support necessary to aggressively develop our products," said Castello. "With a clear market orientation and focus, these products provide the foundation for the company's growth."
 XOMA is a leading biotechnology company in the development of proprietary products for the treatment of infectious diseases and immune system disorders.
 -0- 10/29/92
 /CONTACT: Carol DeGuzman of XOMA, 510-644-1170; or Mike Millican or Dan O'Connell of Robert Marston and Associates, 212-371-2200, for XOMA/
 (XOMA) CO: XOMA Corporation ST: California IN: MTC SU: RCN


CK-LR -- NY042 -- 6572 10/29/92 12:22 EST
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Date:Oct 29, 1992
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