Exhibit 99
Investor and Media Contacts:
Laura Zobkiw Peter Davis
Corporate Communications & Investor Relations Chief Financial Officer
(510) 204-7200 (510) 204-7200
XOMA Reports Third Quarter 2003 Financial Results
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RAPTIVA(TM) Approved by FDA for Chronic Moderate-to-Severe Psoriasis
Berkeley, CA - November 12, 2003 -- XOMA Ltd. (Nasdaq: XOMA), a
biopharmaceutical development company, today announced its financial results for
the third quarter ended September 30, 2003 and for the year to date.
For the third quarter of 2003, the Company recorded a net loss of $9.9 million
($0.13 per share), compared with $12.3 million ($0.17 per share) for the third
quarter of 2002. The Company's net loss for the nine-month period ended
September 30, 2003 was $39.0 million ($0.54 per share), compared with $28.3
million ($0.40 per share) in the prior year period.
Revenues:
Total revenues for the third quarter of 2003 increased to $12.6 million compared
with $4.2 million in the same period of 2002. Year-to-date revenues were $18.2
million in both 2003 and the prior year period. License and collaborative fee
revenue was $14.1 million for the first nine months of 2003 compared with $9.1
million in the comparable 2002 period. The 2003 revenue included a $10.0 million
fee from Baxter Healthcare Corporation in the third quarter related to the
termination of a license for XOMA's NEUPREX(R) product, and the 2002 revenue
included a non-recurring $5.0 million licensing fee from MorphoSys AG recorded
in the first quarter. Contract and other revenue decreased to $4.0 million in
the first nine months of 2003, from $9.1 million in the 2002 period, reflecting
reduced billings for development services to Baxter and Onyx Pharmaceuticals,
Inc.
Expenses:
Research and development expenses for the third quarter of 2003 increased to
$15.9 million compared with $9.7 million in the same period of 2002. Research
and development expenses for the first three quarters of 2003 were $41.4
million, compared with $30.4 million in the corresponding 2002 period. The
year-to-date amount reflects increased costs related to collaborations with
Genentech, Inc. on RAPTIVA(TM)and Millennium Pharmaceuticals, Inc. on CAB-2 and
MLN2201, to internal development costs for XOMA's proprietary XMP.629 acne
compound, and to a charge of $1.3 million for the inventory reserve recorded for
NEUPREX(R) inventory related to the termination of the Baxter agreement. The
increases were partially offset by reduced spending on Onyx-015, NEUPREX(R) and
ING-1.
Marketing, general and administrative expenses for the third quarter of 2003
were $6.3 million, compared with $6.4 million for the same period in 2002, and
$14.9 million for the nine-month period ended September 30, 2003, compared with
$15.1 million for the same period in 2002. In both the third quarter and the
first nine months of 2003, increased spending on pre-launch marketing activities
for RAPTIVA(TM)partially offset by reduced legal expenses as a result of
litigation that was concluded in 2002.
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XOMA continues to anticipate a higher net loss in 2003 compared with 2002,
primarily related to increased R&D expenses and RAPTIVA(TM) marketing costs.
Full year revenues are also expected to be lower as a result of reduced service
revenue from Baxter and Onyx.
Liquidity
In September of 2003, XOMA successfully completed an underwritten public
offering of nine million common shares for gross proceeds of $72.0 million. In
October of 2003, the underwriters exercised their over-allotment option to
purchase an additional 1.35 million shares for $10.8 million, bringing the total
gross proceeds to $82.8 million.
In November of 2003, the Company announced that it had exercised its right to
defer $40.0 million of its development loan obligation to Genentech and to pay
the remaining balance of approximately $29.3 million in preference shares that
are convertible to common shares at a price of $7.75 per share.
As of September 30, 2003, XOMA held $80.8 million in cash, cash equivalents,
short-term investments and restricted cash, compared with $38.2 million at
December 31, 2002. The Company estimates that it has sufficient cash resources,
together with sources of funding available to it, to meet its current net cash
consumption levels through at least the end of 2005. The Company's actual share
of future profits or losses from RAPTIVA(TM), which received marketing approval
from the FDA for moderate-to-severe plaque psoriasis on October 27, 2003, may
materially impact our cash resources. Additional licensing arrangements,
collaborations or financing arrangements could potentially extend or shorten
this period.
"The recent approval for RAPTIVA(TM) in moderate-to-severe psoriasis represents
a major milestone for XOMA and an important new treatment option for these
patients," said John L. Castello, XOMA's chairman, president, and chief
executive officer. "We look forward to the upcoming launch of the product, and
along with Genentech and Serono, will continue working hard to maximize the
opportunity that this product represents."
"Our corporate financial results remain in line with our internal expectations,"
said Peter B. Davis, XOMA's vice president, finance and chief financial officer.
"The approval of RAPTIVA(TM) combined with our recent public offering and
determination of how to re-pay the development loan to Genentech puts us on an
improved path for future growth."
Product Highlights
RAPTIVA(TM) (Efalizumab) with Genentech, Inc.:
On October 27, 2003, Genentech and XOMA announced the FDA approval of
RAPTIVA(TM) for chronic moderate-to-severe plaque psoriasis in adults who are
candidates for systemic therapy or phototherapy. RAPTIVA(TM) is the first
biologic therapy designed to provide continuous control of chronic
moderate-to-severe plaque psoriasis and can be self-administered by patients as
a single, once-weekly subcutaneous injection.
Under the terms of XOMA's financing agreements with Genentech, this first
product approval triggers XOMA's obligation to pay balances due under separate
commercial and development loan facilities (respectively, $8.0 million and $69.3
million as of September 30, 2003) within 90 days of approval. On November 3,
2003, XOMA announced that it had elected under the development loan agreement to
defer $40.0 million of the amount due. The deferred portion will be paid out of
proceeds from XOMA's share of U.S. operating profits generated from future
RAPTIVA(TM) sales. The Company also elected to pay the remaining balance of the
development loan ($29.3 million as of September 30, 2003) before year-end 2003
with preference shares that are convertible into XOMA common shares, at a price
of $7.75 per share.
Genentech and XOMA continue to evaluate additional indications for RAPTIVA(TM).
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XMP.629:
XOMA is currently evaluating XMP.629, a topical anti-bacterial as a possible
treatment for acne. Propionibacterium acnes, a microbe commonly found on human
skin, is associated with inflammatory lesions in acne patients. The emergence of
strains resistant to current antibiotics used to treat acne has encouraged XOMA
researchers to review the anti-P. acnes properties of the compound for this
dermatological indication. At the end of September, XOMA announced the start of
a Phase I safety study in healthy volunteers and initiated a second Phase I
study in patients with acne at the end of October.
Collaboration with Millennium Pharmaceuticals, Inc.:
XOMA and Millennium are developing CAB-2, a complement inhibitor for coronary
artery bypass graft ("CABG") surgery, targeting complications associated with
coronary bypass surgery. CAB-2 has completed IND-enabling preclinical testing,
and the Company is targeting the initiation of clinical testing later this year.
In October of 2003, XOMA announced that it has discontinued development of
MLN2201 based on preliminary data from a Phase I clinical study that did not
meet pre-defined criteria necessary to support further product development
efforts.
NEUPREX(R):
NEUPREX(R) is an injectable formulation of rBPI-21, a genetically engineered
fragment of human bactericidal/permeability-increasing protein (BPI).
In July of 2003, XOMA announced the termination of its license and supply
agreements with Baxter for this product. In return for a release from its
obligations under the agreements, Baxter has agreed to a one time $10.0 million
payment to XOMA to be made no later than January of 2004. Until such payment is
made, Baxter is committed to reimburse XOMA for certain development expenses
that may be incurred. Going forward, Baxter will not be involved with the
product.
In October of 2003, XOMA announced commencement of an open-label Phase I/II
study of NEUPREX(R) in pediatric patients undergoing open-heart surgery for
congenital heart abnormalities. The study is sponsored by an investigator at the
Children's Medical Center in Dallas.
XOMA is evaluating future options for developing the product in multiple
indications, including seeking a pharmaceutical partner.
ING-1:
ING-1 is a recombinant monoclonal antibody that binds with high affinity to an
antigen expressed on epithelial cell cancers (breast, colorectal, prostate and
others) and is designed to destroy cancer cells by recruiting a patient's own
immune system. Three Phase I studies have been completed, testing both
intravenous and subcutaneous formulations of ING-1, and XOMA plans to seek a
partner for further development of this product.
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Investor conference call
XOMA has scheduled an investor conference call regarding this announcement
today, November 12, 2003 beginning at 4:00 PM EST (1:00 P.M. PST). Investors are
invited to listen to the conference call by phone or via XOMA's website,
http://www.xoma.com/. The domestic dial-in number (U.S./Canada) for the live
call is 1-877-356-2902 and the conference ID number is 3556975. The
international dial-in number is 1-706-643-3700 and uses the same dial-in
conference I.D. number. To listen to the call via the Internet, go to XOMA's
website a few minutes before the start of the call to register, download, and
install any necessary audio software.
The audio replay of the call will be available beginning two hours following the
conclusion of the webcast through 6:00 p.m. EST (3:00 p.m. PST) on November 26,
2003. Access numbers for the replay are 1-800-642-1687 (U.S./Canada) or
1-706-645-9291 (International); Conference I.D. 3556975.
About XOMA
XOMA develops and manufactures antibody and other protein-based
biopharmaceuticals for disease targets that include cancer, immunological and
inflammatory disorders, and infectious diseases. XOMA's programs include
collaborations with Genentech, Inc. on the RAPTIVA(TM) antibody for psoriasis
(FDA approved), psoriatic arthritis (Phase II) and other indications and with
Millennium Pharmaceuticals, Inc. on a recombinant protein, CAB-2 for coronary
artery bypass graft ("CABG") surgery, targeting complications associated with
coronary bypass surgery (preclinical). BPI-derived programs include NEUPREX(R)
in a Phase I/II study to limit complications following pediatric cardiopulmonary
bypass surgery, and XMP.629, a topical formulation of a BPI-derived compound for
acne (Phase I). Other development programs focus on antibodies and other
compounds developed by XOMA for the treatment of cancer and retinopathies. For
more information about XOMA's pipeline and activities, please visit XOMA's
website at http://www.xoma.com/.
Certain statements contained herein related to the relative size of the
Company's loss for 2003, the estimated levels of expenses and revenues for the
balance of 2003, the sufficiency of its cash resources and the marketing and
sales efforts for RAPTIVA(TM), as well as other statements related to the
progress and timing of product development, present or future licensing,
collaborative or financing arrangements 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, the
actual loss for 2003 could be higher depending on revenues from licensees and
collaborators, the size and timing of expenditures and whether there are
unanticipated expenditures; the sufficiency of cash resources could be shortened
if expenditures are made earlier or in larger amounts than anticipated or are
unanticipated or if funds are not available on acceptable terms; and the
marketing and sales efforts for RAPTIVA(TM) may not be successful if Genentech
fails to meet its commercialization goals, due to the strength of the
competition or if physicians do not adopt the product as treatment for their
patients. These and other risks, including those related to the results of
pre-clinical testing, 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), changes in the status of the existing collaborative relationships,
availability of additional licensing or collaboration opportunities, the ability
of collaborators and other partners 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,
uncertainties regarding the status of biotechnology patents, uncertainties as to
the cost of protecting intellectual property and risks associated with XOMA's
status as a Bermuda company, are described in more detail in the Company's most
recent annual report on Form 10K and in other SEC filings.
Condensed Financial Statements Follow
XOMA Ltd.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
2003 2002
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ASSETS (Unaudited) (Note 1)
Current assets:
Cash and cash equivalents $ 80,078 $ 36,262
Short-term investments 676 391
Restricted cash - 1,500
Receivables 10,657 8,656
Related party receivables - current 100 206
Inventory - 1,306
Prepaid expenses and other 1,093 449
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Total current assets 92,604 48,770
Property and equipment, net 22,050 22,650
Related party receivables - long-term 107 190
Deposits and other 159 172
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Total assets $ 114,920 $ 71,782
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LIABILITIES AND SHAREHOLDERS' EQUITY (Net Capital Deficiency
Current liabilities:
Accounts payable $ 2,532 $ 3,201
Accrued liabilities 6,520 7,096
Short-term loan - 763
Capital lease obligations - current 530 667
Deferred revenue - current 635 1,729
Convertible subordinated note - current 5,248 5,146
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Total current liabilities 15,465 18,602
Capital lease obligations - long-term 353 729
Deferred revenue - long-term - 800
Note payable long-term 7,956 -
Convertible subordinated note - long-term 69,282 63,016
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Total liabilities 93,056 83,147
Shareholders' equity (net capital deficiency):
Common shares 41 36
Additional paid-in capital 601,550 529,354
Accumulated comprehensive income 153 121
Accumulated deficit (579,880) (540,876)
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Total shareholders' equity (net capital deficiency) 21,864 (11,365)
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Total liabilities and shareholders' equity $114,920 $ 71,782
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Note 1 - Amounts derived from the Company's audited financial statements
appearing in the Annual Report on Form 10-K for the year ended December 31, 2002
as filed with the Securities and Exchange Commission.
XOMA Ltd.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three months ended Nine months ended
September 30, September 30,
-------------------------- ------------------------------
2003 2002 2003 2002
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Revenues:
License and collaborative fees $12,050 $ 1,423 $14,125 $ 9,076
Contract and other revenue 582 2,810 4,032 9,103
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Total revenues 12,632 4,233 18,157 18,179
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Operating costs and expenses:
Research and development 15,933 9,701 41,417 30,395
Marketing, general and administrative 6,266 6,416 14,869 15,114
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Total operating costs and expenses 22,199 16,117 56,286 45,509
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Loss from operations (9,567) (11,884) (38,129) (27,330)
Other income (expense):
Investment and other income 166 194 549 698
Interest expense (449) (572) (1,424) (1,714)
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Net loss $ (9,850) $ (12,262) $ (39,004) $ (28,346)
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Basic and diluted net loss per common share $ (0.13) $ (0.17) $ (0.54) $ (0.40)
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Shares used in computing basic and diluted net
loss per common share 73,224 70,330 72,371 70,291
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