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XOMA (US) LLC (XOMA) to Sell Stock to Pay for Clinical Trials, Layoff Costs


3/6/2012 8:13:00 AM

San Francisco Business Times by Ron Leuty, Reporter

Xoma Corp. will sell an undisclosed amount of its common stock and warrants, the Berkeley antibody drug developer said Monday.

Xoma (NASDAQ: XOMA) will use money from the sale to fund a shotgun full of clinical trials -- not including a late-stage trial tied to a drug it bought in January -- as well as to cover costs related to recent layoffs and to continue its preclinical programs.

All of the shares will be sold by Xoma, the company said in a Securities and Exchange Commission filing. The warrants can be exchanged for half-shares of common stock.

RBC Capital Markets and Cowen and Co. are joint book-running managers for the sale and Roth Capital Partners is co-manager.

Xoma said in January said it would shift much of its manufacturing to a contractor. It will take a $6 million charge for restructuring and severance costs, $3.5 million of which would be cash charges.

The company, which will have 157 employees when the layoffs are completed in early April, had $48.3 million in cash and equivalents at the end of last year.

Xoma’s lead drug is gevokizumab, or XOMA-052, an anti-inflammatory humanized antibody that failed a key Phase II trial in diabetes last year. But Xoma and partner Les Laboratoires Servier have a full menu of upcoming trials.

Xoma expectd to take gevokizumab into Phase III trials this year for the eye disease Behcet’s uveitis and non-infectious uveitis. In December, it started a mid-stage trial of geokizumab in acne and will start another Phase II trial in erosive osteoarthritis.

Servier, meanwhile, will start a Phase II trial of the drug in a cardiovascular disease this year, Xoma said in its SEC filing.

What’s more, Xoma in January started selling the hypertension drug Aceon, for which it bought the U.S. rights from Servier for $1.5 million upfront, and in late February started a Phase III trial for the first fixed-dose combination product. Expenses for that trial will be picked up by Servier. A Xoma spokeswoman said other study costs, including from contract research organizations, will be covered by Xoma "over time" by profits from Aceon sales.




   

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