11.  Subsequent Events

On July 27, 2012, the Company entered into an agreement with CMC ICOS Biologics, Inc. ("CMC Biologics"), under which CMC Biologics will sublease the Company's leased facilities that previously held its large scale manufacturing operations and associated quality functions. The sublease payments will fully cover the Company's lease obligations for the remainder of the lease terms. CMC Biologics will also purchase certain manufacturing assets. The Company ceased operations in these facilities during the second quarter of 2012 as part of its streamlining of operations announced on January 5, 2012.

On July 27, 2012, XOMA and its collaboration partner Servier entered into an agreement with Boehringer Ingelheim ("BI") to transfer XOMA's technology and process for the commercial manufacture of gevokizumab. Gevokizumab currently is in Phase 3 clinical development in patients with NIU. Upon completion of the transfer and the establishment of biological comparability, BI is expected produce gevokizumab at its facility in Biberach, Germany, for XOMA's commercial use. XOMA and Servier retain all rights to the development and commercialization of gevokizumab.