Quarterly report pursuant to Section 13 or 15(d)

Collaborative and Other Agreements

Collaborative and Other Agreements
3 Months Ended
Mar. 31, 2015
Collaborative and Other Agreements [Abstract]  
Collaborative and Other Agreements
4. Collaborative and Other Agreements

In December 2010, the Company entered into a license and collaboration agreement (“Collaboration Agreement”) with Servier, to jointly develop and commercialize gevokizumab in multiple indications. Under the terms of the agreement, Servier has worldwide rights to cardiovascular disease and diabetes indications and rights outside the United States and Japan to all other indications, including NIU, Behçet’s disease uveitis and other inflammatory and oncology indications. Under this agreement, Servier will fund all activities to advance the global clinical development and future commercialization of gevokizumab in cardiovascular-related diseases and diabetes.  Also, Servier funded the first $50 million of gevokizumab global clinical development and Chemistry, Manufacturing and Controls expenses related to the three pivotal clinical trials under the EYEGUARD program.  All remaining expenses related to these three pivotal clinical trials are shared equally between Servier and the Company. For the three months ended March 31, 2015 and 2014, the Company recorded revenue of $0.5 million and $0.9 million from this Collaboration Agreement, respectively.

On January 9, 2015, concurrent with a loan amendment (see Note 6), the Company and Servier entered into Amendment No. 2 to the Collaboration Agreement (“Collaboration Amendment”).  Under the Collaboration Agreement, the Company was eligible to receive up to approximately $433 million in the aggregate in milestone payments, most of which are denominated in Euros, if the Company re-acquires cardiovascular and/or diabetes rights for use in the United States, and approximately $770 million in aggregate milestone payments if the Company does not re-acquire those rights. Under the Collaboration Amendment, the Company would be eligible to receive up to $415 million in the aggregate in milestone payments in the event the Company re-acquires the cardiovascular and/or diabetes rights for use in the United States and approximately $752 million if the Company does not re-acquire those rights. The milestone reductions are related to a very low prevalence indication of which Servier would not have pursued development had these payments been required. All other terms of the Collaboration Agreement remain unchanged.

Symplmed Pharmaceuticals

On January 26, 2015, Symplmed Pharmaceuticals (“Symplmed”) announced that the FDA approved PRESTALIA® (perindopril arginine and amlodipine) tablets, originally licensed from Servier by XOMA, for the treatment of hypertension. In July 2013, the Company transferred the development and commercialization rights of PRESTALIA to Symplmed. Pursuant to the transfer agreement with Symplmed, the Company is eligible to receive royalties of 3% to 10% on any potential sales of PRESTALIA in the United States.