Thursday, May 24, 2001

Phase III Clinical Trials of Xanelim Humanized Monoclonal Antibody for Moderate-to-Severe Psoriasis Show Preliminary Positive Results

South San Francisco and Berkeley, Calif. -- May 24, 2001 --

Genentech, Inc. (NYSE: DNA) and XOMA Ltd. (Nasdaq: XOMA) today announced preliminary positive results from the initial 12-week treatment period of the two pivotal Phase III clinical trials of Xanelim™ (Efalizumab) in patients with moderate- to-severe plaque psoriasis. After 12 weeks of treatment, both trials met the primary efficacy endpoint, which was the difference in the percentage of Xanelim-treated patients achieving a 75% or greater improvement in Psoriasis Area and Severity Index (PASI) scores over placebo.

Genentech and XOMA plan to complete a full analysis of the Phase III data for the Xanelim humanized anti-CD11a monoclonal antibody within the next several months. These findings will be presented at future scientific meetings. Pending favorable analysis of the complete data set (which will include data beyond the initial 12 weeks of treatment), the companies will make the decision to file a Biologics License Application (BLA) with the U.S. Food and Drug Administration (FDA). Genentech and XOMA are co-developing Xanelim.

"There is a tremendous unmet medical need in psoriasis treatment for therapies that can safely provide early and long-term control of the disease, and we are encouraged by the initial findings that indicate the potential for Xanelim use in moderate-to-severe psoriasis patients," said Susan D. Hellmann, M.D., M.P.H., Genentech's executive vice president, Development and Product Operations and chief medical officer. "We look forward to further data analysis over the next several months, and pending favorable data analysis, a BLA filing by the end of this year or in the first quarter of 2002."

"These results reflect the strong collaborative effort by XOMA and Genentech throughout the Xanelim clinical trial process," said Jack Castello, chairman, president and chief executive officer of XOMA. "We will continue to work closely with Genentech during this data analysis period and look forward to the data being presented at future scientific meetings."

The pivotal Phase III clinical trials included more than 1,000 patients at approximately 80 sites in the United States and Canada. The double-blinded, placebo-controlled studies enrolled patients aged 18 to 70 with plaque psoriasis covering a minimum of 10% of total body surface area. Patients were randomized to receive 1 mg/kg of Xanelim, 2 mg/kg of Xanelim or placebo by weekly subcutaneous injection for 12 weeks. At the conclusion of the initial 12 weeks of treatment, patients were re-treated with follow-up observation for up to six or 12 months, depending on the study. PASI scores were measured at various time points. This index incorporates thickness of the psoriatic plaque, degree of scaling and level of redness, as well as the percentage of body surface affected.

Xanelim was generally well tolerated during the initial 12 weeks of treatment. The most commonly observed adverse events were mild-to-moderate headache, nausea, chills and pain. Further safety and efficacy findings will be available upon completion of Phase III study analysis.

Additional Xanelim studies are ongoing, including a trial for patients previously enrolled in Xanelim studies. In addition, a one-year study is ongoing to evaluate the effects of continuous Xanelim treatment on maintenance of symptom improvement and long-term safety.

Psoriasis is a chronic skin disease that affects more than seven million Americans, according to the National Psoriasis Foundation. Approximately 30% of people with psoriasis under a physician's care are estimated to have moderate-to-severe forms of the disease. Psoriasis occurs when new skin cells grow abnormally, resulting in inflamed, swollen and scaly patches of skin where the old skin has not shed quickly enough. Plaque psoriasis, the most common form of psoriasis, is characterized by inflamed patches of skin ("lesions") topped with silvery white scales. Psoriasis can be limited to a few plaques or can involve extensive areas of skin, appearing most commonly on the scalp, knees, elbows and trunk. Although highly visible, psoriasis is not a contagious disease. There is no known cure.

Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant unmet medical needs. Fourteen of the currently approved biotechnology products stem from Genentech science. Genentech markets nine biotechnology products directly in the United States. The company has headquarters in South San Francisco, California and is traded on the New York Stock Exchange under the symbol DNA.

XOMA develops and manufactures innovative biopharmaceuticals for disease targets that include cancer, immunological and inflammatory disorders and infectious diseases. In addition to the Genentech Xanelim collaboration, late-stage programs include collaborations with Baxter Healthcare Corporation to develop NEUPREX™ (rBPI-21) for multiple indications (Phase II and III), and Onyx Pharmaceuticals, Inc. to develop and manufacture its CI-1042 product for cancer (Phase II and III). Earlier-stage development programs include compounds for cancer, autoimmune diseases, fungal infections and retinopathies. For more information about XOMA's pipeline and activities, please visit the Company's web site at http://www.xoma.com.

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The statement made in this press release relating to the BLA filing time frame is forward-looking and the actual filing time frame could differ materially. Among other things, the BLA filing could be impacted by any unexpected safety or efficacy concerns and additional time requirements for data analysis, BLA preparation, discussions with the FDA, additional clinical studies and manufacturing process modifications.

Statements made in this news release related to collaborative agreements and current plans for product development, including the progress of clinical trials and the timing of regulatory filings, 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. These risks, including those related to changes in the status of existing collaborative relationships, the timing or results of pending and future clinical trials, the ability of collaborators and other partners to meet their obligations, market demand for products, actions by the Food and Drug Administration or the U.S. Patent and Trademark Office and uncertainties regarding the status of biotechnology patents, are discussed in XOMA's most recent annual report on Form 10-K and in other SEC filings. Consider such risks carefully in evaluating XOMA's prospects.

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