XOMA Ltd. Awarded New $16 Million BioDefense Contract

Published: Jul 31, 2006

BERKELEY, Calif.--(BUSINESS WIRE)--July 31, 2006--XOMA Ltd. (Nasdaq:XOMA - News) today announced that it has been awarded an exclusive $16 million contract from the National Institute of Allergy and Infectious Diseases (NIAID), a part of the National Institutes of Health (NIH), to produce monoclonal antibodies for the treatment of botulism to protect U.S. citizens against the harmful effects of botulinum neurotoxins used in bioterrorism. This award follows a $15 million contract with NIAID (Contract No. HHSN266200500004C) announced by XOMA in March of 2005 to initiate the program. Under the new three-year contract, XOMA will create and produce an innovative injectable product comprised of three anti-type A-botulinum neurotoxin monoclonal antibodies to support entry into Phase I safety human clinical trials.

In parallel with the completion of the first contract (scheduled for October of 2006) under which XOMA created production cell lines using its proprietary antibody expression systems, built Master and Manufacturer's Working Cell Banks, developed production processes and produced initial quantities of the three antibodies, XOMA is charged with production of larger amounts of the three antibodies and the development of an appropriate formulation for human administration of the three antibodies in a single injection. This program will require development expertise and innovation to ensure the most appropriate formulation is designed and tested to support an investigational new drug application, which is necessary to initiate human clinical trials. Antibodies and other materials made under the new contract will be produced according to Good Manufacturing Practices (cGMP) at XOMA's manufacturing facility. This project will be 100% funded with Federal funds from NIAID under Contract No. HHSN266200600008C.

"We are pleased to receive a second, follow-on contract from NIAID to further the development of this important biodefense product," said John L. Castello, Chairman of the Board, President, and Chief Executive Officer of XOMA. "As an industry leader in therapeutic antibodies, XOMA is well positioned to continue to support the U.S. government to develop new therapies to counter these biological threats", continued Castello. "This contract with NIAID also supports our company's strategy of leveraging our existing assets to generate revenues and build our financial strength."

About Botulism Neurotoxin (BoNT)

With the deliberate exposure of postal workers, other government employees, and the American public to Bacillus anthracis spores, there is an urgent need to devise effective measures to protect U.S. citizens from the harmful effects of biological agents used as instruments of terror. Botulinum neurotoxins are one of these biological threats and new vaccines, therapies and diagnostics are needed to counter the potential terrorist use of these toxins.

XOMA Biologic Manufacturing Overview

With more than 20 years of experience developing therapeutic antibodies and other proteins, XOMA has built a fully integrated infrastructure that supports biologics development from recombinant DNA engineering and cell expression, through production scale up and cGMP manufacturing. XOMA can rapidly create a production process and advance antibodies into pilot scale production, then complete process scale-up and produce GMP material for use in human clinical trials, Biologics License Applications filings, and initial commercial launch. XOMA's process development and manufacturing capabilities include:

Cell line and process development Optimization of production processes, including scale-up Analytical assays and test methods Formulation optimization Pilot Plant for process development and scale-up with two 500L fermenters cGMP manufacturing facility with three production trains of 2750L capacity Full service Quality infrastructure (Quality Assurance, Quality Control, Quality Engineering) Filling capability up to 3,000 vials (including labeling and packaging services) sufficient for clinical trials Stability program, including all stability-indicating assays For more information, please visit the company's website at www.xoma.com.


NIAID is a component of the National Institutes of Health, an agency of the U.S. Department of Health and Human Services. NIAID supports basic and applied research to prevent, diagnose and treat infectious diseases such as HIV/AIDS and other sexually transmitted infections, influenza, tuberculosis, malaria and illness from potential agents of bioterrorism. NIAID also supports research on transplantation and immune-related illnesses, including autoimmune disorders, asthma and allergies. News releases, fact sheets and other NIAID-related materials are available on the NIAID Web site at http://www.niaid.nih.gov.

About XOMA

XOMA is a leader in the discovery, development and manufacture of therapeutic antibodies, with a therapeutic focus that includes cancer and immune diseases. XOMA has royalty interests in RAPTIVA® (efalizumab), a monoclonal antibody product marketed worldwide (by Genentech, Inc. and Serono, SA) to treat moderate-to-severe plaque psoriasis, and LUCENTIS(TM) (ranibizumab injection), a monoclonal antibody product marketed worldwide (by Genentech and Novartis AG) to treat neovascular (wet) age-related macular degeneration.

The company has built a premier antibody discovery and development platform that includes access to seven of the leading commercially available antibody phage display libraries and XOMA's proprietary Human Engineering(TM) and bacterial cell expression (BCE) technologies. More than 45 companies have signed BCE licenses. XOMA's development collaborators include Lexicon Genetics, Inc., Novartis, and Schering-Plough Corp. With a fully integrated product development infrastructure, XOMA's product development capabilities extend from preclinical sciences to product launch. For more information, please visit the company's website at www.xoma.com.

Certain statements contained herein concerning current collaborations and product development or that otherwise relate to future periods are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions that may not prove accurate. Actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry and for companies engaged in the development of new products in a regulated market. Among other things, XOMA may not be able to produce the required antibodies and/or formulation to the satisfaction of NIAID, and XOMA's work may not support entry into Phase I trials. These and other risks, including those related to the results of discovery research and preclinical testing; the manufacture of antibodies under cGMP requirements; the timing or results of pending and future clinical trials (including the design and progress of clinical trials; safety and efficacy of the products being tested; action, inaction or delay by the FDA, European or other regulators or their advisory bodies; and analysis or interpretation by, or submission to, these entities or others of scientific data); uncertainties regarding the status of biotechnology patents; uncertainties as to the cost of protecting intellectual property; changes in the status of the existing collaborative and licensing relationships; the ability of collaborators, licensees and other third parties to meet their obligations; market demand for products; scale up and marketing capabilities; competition; international operations; share price volatility; XOMA's financing needs and opportunities and risks associated with XOMA's status as a Bermuda company, are described in more detail in XOMA's most recent annual report on Form 10-K and in other SEC filings. Consider such risks carefully in considering XOMA's prospects.

Contact: XOMA Paul Goodson, 510-204-7270 (Investor Relations) www.xoma.com

Source: XOMA Ltd.

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