Exhibit 99.3

Exchange Offer for

Outstanding 6.50% Convertible Senior Notes due February 1, 2012

in Exchange for

6.50% Convertible SNAPs_SM due February 1, 2012

and the Sale of up to $10,000,000 of 6.50% Convertible SNAPs_SM

due February 1, 2012 for Cash

Which Will be Registered Under

the Securities Act of 1933, as Amended,

Prior to Closing

of

XOMA Ltd.

To: Brokers, Dealers, Commercial Banks,

Trust Companies and Other Nominees

XOMA Ltd. (the “Company”) is offering, upon and subject to the terms and conditions set forth in the Preliminary Prospectus, dated January 10, 2006 (the “Prospectus”), and the enclosed Letter of Transmittal (the “Letter of Transmittal”), to exchange its 6.50% Convertible SNAPs_SM due February 1, 2012 (the “New Notes”) for its outstanding 6.50% Convertible Senior Notes due February 1, 2012 (the “Existing Notes”) (the “Exchange Offer”), as described in the Prospectus.

We are requesting that you contact your clients for whom you hold Existing Notes regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Existing Notes registered in your name or in the name of your nominee, or who hold Existing Notes registered in their own names, we are enclosing the following documents:

Your prompt action is requested. The Exchange Offer will expire at 12:00 midnight, New York City time, on February 8, 2006, unless extended by the Company (the “Expiration Date”). Existing Notes tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date or at any time after March 10, 2006 if we have not accepted the tendered Existing Notes for exchange by that date.

To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof), or an electronic confirmation pursuant to the Depository Trust Company’s ATOP system, with any required signature guarantees and any other required documents, should be sent to the Exchange Agent in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus.

Please note that the Depository Trust Company’s ATOP system cannot accommodate indications of interest in purchasing New Notes in the new money offering.

If a registered holder of Existing Notes desires to tender, but the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under “The Exchange Offer—Guaranteed Delivery Procedures.”

The Company will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Prospectus and the related documents to the beneficial owners of Existing Notes held by them as a nominee or in a fiduciary capacity. The Company will pay or cause to be paid all stock transfer taxes applicable to the exchange of Existing Notes pursuant to the Exchange Offer, except as set forth in Instruction 5 of the Letter of Transmittal.

The Company has not authorized anyone to make any recommendation to holders as to whether to tender or refrain from tendering in the Exchange Offer.

Any questions related to the procedure for tendering you may have with respect to the Exchange Offer should be directed to Wells Fargo Bank, National Association, the Exchange Agent for the Exchange Offer, at its address and telephone number set forth on the front of the Letter of Transmittal. Any other questions you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to Georgeson Shareholder Communications Inc., the Information Agent for the Exchange Offer, at its address and telephone numbers set forth in the instructions to the Letter of Transmittal.

Very truly yours,

XOMA Ltd.