Xoma's senior management, led by newly appointed CEO Steven Engle, outlined a business strategy Nov. 26 that includes an emphasis on building its proprietary pipeline and limiting the number of new antibody collaborations in the future.

The Berkeley, Calif. antibody developer is known for using its bacterial cell expression technology and seven phage-display libraries to attract big pharma partners such as Pfizer, Schering-Plough and Novartis.

"Let me emphasize that we are not backing away from the collaboration and technology licensing business," Engle said during a same-day investor call. "We will look for ways to sharpen our profile as the antibody development partner of choice.... We will also continue to pursue new development collaborations."

"However, we will do this selectively and will limit the number of new antibody collaborations we will accept in the future," he said.

Engel was appointed to the helm of Xoma in August.

Xoma intends to expand development of its proprietary anti-inflammatory antibody 052, now in a Phase I dose ranging diabetes trial, to include gout, rheumatoid arthritis and systemic juvenile idiopathic arthritis. The firm expects dosing data from the trial to be available in the third quarter, at which point Xoma will initiate other studies with the interleukin-1 beta target, Engle said.

The company began the 052 Phase I trial in July, noting at the time that the study results would guide development of the drug in additional indications (¹ Also see "Xoma Launches Phase I Trial Of Monoclonal Antibody Diabetes Therapy" - Pink Sheet, 16 July, 2007.).

"The multi-indication approach provides multiple shots on goal," Engle said. "We believe this approach raises the probability of success and addresses the larger market opportunity." In addition, the exec noted that 052 has the potential to be superior to Amgen's IL-1 inhibitor Kineret (anakinra) in both efficacy and dosing.

"Based on successful use of Kineret in clinical studies of rheumatoid arthritis, SJIA ... osteoarthritis, gout, multiple myeloma and type 2 diabetes, we believe Xoma 052's profile and selectivity for the IL-1 ligand yields the potential for a much higher probability of success than the typical Phase I drug," he added.

Xoma's other near-term development project is the antimicrobial peptide 629, for which the company plans to begin clinical testing in skin surface infections, such as Methicillin-resistant Staphylococcus aureus and impetigo, in 2008. The firm based its decision to move 629 forward on preclinical studies demonstrating strong antimicrobial activity against skin surface pathogens and results from a skin pore penetration acne study.

In 2004, Xoma halted development of 629 in acne after a Phase II study was "inconclusive" (² Also see "Xoma Halts Development Of Acne Therapy XMP.629, Will Evaluate BPI Program" - Pink Sheet, 17 August, 2004.).

Xoma said it intends to fund development of 052 and 629 through royalties, licensing revenues, collaborations and biodefense contracts, as well as by seeking a partner and reducing spending for the antimicrobial Neuprex (opebacan), which the company views as a longer term prospect.

Neuprex has had a rocky history. The drug was first discontinued for hemorrhagic trauma in 1999 after failing to meet criteria in a Phase III trial. Then, in 2000, FDA deemed Phase III data in pediatric meningococcal sepsis insufficient to support a BLA. Xoma then licensed rights to Baxter, but Baxter returned those rights in 2003. Most recently Xoma studied Neuprex in pediatric patients with congenital heart abnormalities requiring open heart surgery.

"We believe it is a valuable product, but with other high value opportunities in front of it, we regard it as a low priority at this time," Engle said of Neuprex. "We therefore plan to seek the licensing partner for Neuprex and redirect resources to Xoma 052."

Xoma declined to provide guidance on spending in 2008; however, the firm said that while spending will increase, the gains are not likely to be dramatic.

As part of its longer-term goals, Xoma noted that it will seek to in-license new technologies as well.

"There are a number of products out there that people have come to us with, as you might guess," Engel said, noting that the company could potentially consider a trade with a collaborator so that potentially no funds would need to be exchanged.

-Jessica Merrill (j.merrill@elsevier.com)

Xoma’s New Business Strategy Emphasizes Proprietary Pipeline

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