Xoma collaborates with Servier to develop antibody drug

The French drug maker Servier is obtaining the rights to develop of Xoma’s long-anticipated clinical-stage anti-inflammatory candidate Xoma 052 in multiple indications outside of the U.S. and Japan with an upfront payment $15 million and a loan of  $20 million. The Berkeley, CA-based Xoma  will be entiltled to $470-$800 million in milestone payments in addition to the upfront fee, dependent on whether it reacquires the diabetes and cardiovascular disease rights to Xoma 052 for the U.S. and Japan.

Under terms of the agreement, Servier will receive worldwide rights to develop Xoma 052 for diabetes and cardiovascular disease indications, and will fund all development activities for relevant diseases. Xoma does, however, retain an option to re-acquire development and commercialization rights to the diabetes and cardiovascular indications in the U.S. and Japan by paying an option fee and the partial reimbursement of Servier’s incurred development expenses.

Xoma also retains the rights to develop and commercialize its drug for the Behcet’s uveitis and other inflammatory and oncology indications in the U.S. and Japan, with Servier being granted development rights to Xoma 052 for these indications in all other regions.

Xoma says it plans to report results from two ongoing Phase II studies with Xoma 052 in type 2 diabetes during the first quarter of 2011.

“The agreement advances our strategy of focusing on opportunities in the U.S. where we can directly participate in the development and commercialization of our novel products,” remarks Steven B. Engle, Xoma chairman and CEO. “This agreement substantially increases our cash resources while reducing future cash requirements, provides a pathway to commercialization of Xoma 052 in the near term, and supports development in diabetes and cardiovascular disease while maintaining our ability to participate in these programs.”

Xoma has had a tough time over the past two years. In 2009 it cut close to half of its workforce as it responded to declining royalty revenues and growing debt. The restructuring also triggered a delay in the development plan for 052 as it raised fresh doubts about its ability to deliver.

Xoma 052 is a human engineered antibody targeting interleukin-1 beta (IL-1?), which Xoma projects could have potential utility in the treatment of a range of disorders including diabetes, cardiovascular disease, rheumatoid arthritis, acute gout, and systemic juvenile idiopathic arthritis. The drug is currently in Phase II development for types 1 and 2 diabetes, and cardiovascular disease. Orphan drug status for Xoma 052 has also been granted in the U.S. and EU for the Behcet’s uveitis indication, for which Xoma says has previously reported proof of concept data.