Bay Area's XOMA (US) LLC to Cut Jobs and Change Focus in Light of Q2 Filings and Stock Drop
August 10, 2015
By Mark Terry, BioSpace.com Breaking News Staff
After a failed Phase III study for EYEGUARD-B, XOMA Corporation announced today that it will be making job cuts and shifting its focus. Specific number of job cuts have not been indicated, although they are expected this month.
As part of the company’s second quarter reports, XOMA announced it was shifting away from its EYEGARD clinical development program and putting its resources in line behind its endocrine research, including its XMet platform for diabetes.
“We knew our endocrine portfolio would be important to XOMA regardless of gevokizumab’s role,” said John Varian, chief executive officer of XOMA in a statement. “Today, it takes center stage. Our XMet platform, which is focused on the insulin receptor, has been quite active for several years. We brought XOMA 358, an antibody that reduces the binding of insulin to its receptor, from the bench to the clinic and are ready to enter Phase II development in two rare hyperinsulinemic hypoglycemic conditions.”
The company also has a second Phase II therapeutic, as well as several endocrine drugs in preclinical and research-stage development. The company has also indicated some promising results on XOMA 089, an anti-TGF beta monoclonal antibody, which has potential for immuno-oncology therapy.
As part of its second quarter filing, XOMA announced total three-month revenues of $2.539 million, down from $5.973 million in the same quarter in 2014. Half-year figures are similar, with this year’s six-month total revenues reported as $5.190 million, down from $9.383 million in 2014.
On July 22, the company announced that the Phase III trial for EYEGUARD-B (gevokizumab) in patients with Behcet’s disease, failed to meet its primary endpoint. The orphan disease causes chronic inflammation of the blood vessels. Symptoms can affect the brain, heart, gastrointestinal and cardiovascular systems. It is marked by painful ulcers in the mouth and on the genitals.
The drug’s primary endpoint was the time to first acute ocular exacerbation. “Although the study did not achieve its main objective, we did see signals of drug activity such as preserved visual acuity, less severe ocular exacerbations and a reduced incidence of reported macular edema in patients treated with gevokizumab,” said Paul Rubin, senior vice president of research and development and chief medical officer of XOMA in a statement. “We will continue to work closely with our partner, Servier, and uveitis experts to conduct a thorough analysis of the data to fully understand gevokizumab’s impact on several clinically relevant endpoints.”
has had a rocky few days, with a disastrous drop in the last year. On Aug. 3, stock traded for $0.77, dropped to $0.74 on Aug. 4, rose to $0.93 on Aug. 5, dropped again to $0.71 on Aug. 7 and is currently trading for $0.77 per share. On November 26, 2014, company shares traded for $5.55.
On Wednesday, Wedbush reaffirmed a “buy” rating in a research report. On July 22, Cowen and Company changed the company’s rating to “market perform” from “outperform” and RBC Capital lowered to “sector perform” from “outperform,” dropping the target price from $8 to $2. Ladenburg Thalmann changed the outlook from “buy” to “neutral” on July 22. Jefferies Group went from a “buy” to a “hold” on Thursday July 23. Zacks upgraded from a “sell” to a “hold” on July 27.
“The Company’s principal expenditures over the past several years have been highly associated with the gevokizumab clinical studies, specifically the Phase III EYEGUARD and pyoderma gangrenosum programs,” said Tom Burns, chief financial officer of XOMA in a statement. “Given the planned reorganizational activities, decreased spending on gevokizumab, and, in particular, our anticipated licensing deals, we expect our operating cash burn to decrease significantly.”