XOMA Corp. Restructures, Lays Off One-Third

XOMA Corp. has restructured in an effort to focus on gevokizumab (XOMA 052) opportunities and the company’s antibody discovery and development capabilities.

XOMA plans to eliminate 84 positions, or 34% of personnel, with 50 positions to be eliminated immediately and the remainder by the end of 1Q12. The company plans to use CMOs for Phase III and commercial production and will eliminate internal research functions that can be obtained through the use of contract service providers. XOMA anticipates taking one-time charges for restructuring and related severance costs totaling approximately $6.0 million during 2012.

As a result, XOMA expects to reduce internal spending by approximately $14 million (20%) in 2012 compared to 2011. This reduction in costs allows for investment of a similar amount into gevokizumab’s clinical development during 2012. These investments include the planned Phase III studies in non-infectious uveitis, initial external manufacturing technology transfer, as well as the multiple Phase II proof-of-concept clinical trials.

XOMA plans to use a CMO with operations in the U.S. and the EU for Phase III and commercial production of XOMA products. The company will retain its existing pilot facility and internal resources to manufacture Phase I and II product supplies and conduct early and mid-stage trials. XOMA will maintain its discovery and preclinical research expertise while using external resources on an as-needed basis for routine research activities. The company will complete the biodefense contracts it has in place, but will not actively pursue future contracts.

“We are streamlining XOMA’s operations in order to focus on our key near-term value driver, gevokizumab, and to drive our discovery science toward development of value-creating products and technologies,” said John Varian, chief executive officer. “Our strategy is to maximize the potential of XOMA’s flagship product, pursue discovery-based opportunities, and establish a U.S. commercial presence.”