7. Restructuring Charges

On July 22, 2015, the Company announced the Phase 3 EYEGUARD-B study of gevokizumab in patients with Behçet’s disease uveitis, run by Servier, did not meet the primary endpoint of time to first acute ocular exacerbation.  Due to the results and the Company’s belief they would be predictive of results in its other EYEGUARD studies, in August 2015, XOMA announced its intention to end the EYEGUARD global Phase 3 program.  On August 21, 2015, the Company, in connection with its efforts to lower operating expenses and preserve capital while continuing to focus on its endocrine product pipeline, implemented a restructuring plan (the “2015 Restructuring”) that included a workforce reduction resulting in the termination of 38 employees.  The Company terminated an additional five employees on September 29, 2015 and an additional nine employees on October 20, 2015.

During the year ended December 31, 2015, the Company recorded charges of $2.9 million related to severance, other termination benefits and outplacement services in connection with the workforce reduction resulting from the 2015 Restructuring. In addition, the Company recognized an additional restructuring charge of $0.8 million in contract termination costs, which primarily include costs in connection with the discontinuation of the EYEGUARD studies.

Of the $3.7 million total expenses associated with the restructuring activities during 2015, the Company paid $3.2 million in 2015 and expects to pay approximately $0.5 million in 2016.

In January 2012, the Company implemented a streamlining of operations, which resulted in a restructuring plan (the “2012 Restructuring”) designed to sharpen its focus on value-creating opportunities led by gevokizumab and its unique antibody discovery and development capabilities. The restructuring plan included a reduction of XOMA’s personnel by 84 positions, or 34%. These staff reductions resulted primarily from the Company’s decisions to utilize a contract manufacturing organization for Phase 3 and commercial antibody production, and to eliminate internal research functions that are non-differentiating or that can be obtained cost effectively by contract service providers.

During the years ended December 31, 2015, 2014 and 2013, the Company incurred zero, $0.1 million and $0.3 million, respectively in restructuring charges related to facility costs resulting from the 2012 Restructuring.

The outstanding restructuring liabilities are included in accrued and other liabilities on the consolidated balance sheets. As of December 31, 2015 and 2014, the components of these liabilities are shown below (in thousands):