Thursday, Jun 21, 2001

Xanelim in Pivotal Phase III Study Shows Initial Positive Results

Study Findings Presented from First of Two Pivotal Phase III Clinical Trials

South San Francisco and Berkeley, Calif. -- June 21, 2001 --

Genentech Inc. (NYSE: DNA) and XOMA Ltd. (Nasdaq: XOMA) announced that initial results from the first of two pivotal Phase III investigational trials of Xanelim™ (Efalizumab) were presented today at the Second Joint Meeting of the International Psoriasis Symposium and European Congress on Psoriasis in San Francisco. The effects of Xanelim given by weekly subcutaneous injection were studied in adults with moderate-to-severe plaque psoriasis. The primary endpoint for the study was patients achieving 75% or greater improvement in Psoriasis Area and Severity Index (PASI) score compared to placebo after 12 weeks.

Results were presented by Alice Gottlieb, M.D., Ph.D., professor of medicine at University of Medicine and Dentistry of New Jersey-Robert Wood Johnson Medical School.

In the 498-patient study, 39% of patients given 1 mg/kg of Xanelim (n=63) and 27% of patients given 2 mg/kg of Xanelim (n=44) achieved PASI score improvement of 75% or greater after 12 weeks (versus 2% placebo). Among 123 patients from both dose groups who received an additional 12 weeks of Xanelim treatment after not achieving 75% or greater PASI score improvement during the initial treatment period, 20% more patients achieved the primary efficacy endpoint.

In addition, 61% of patients given 1 mg/kg of Xanelim and 51% of patients given 2 mg/kg of Xanelim achieved PASI score improvement of 50% or greater after 12 weeks of Xanelim treatment (versus 15% placebo). PASI score is based on psoriasis plaque thickness, redness and scaling, and is adjusted for the percentage of affected body surface.

"We are encouraged by the Xanelim results demonstrated to date, and particularly that meaningful symptom improvement was achieved just two weeks after start of treatment," said Susan Desmond-Hellmann, M.D., M.P.H., Genentech's executive vice president, Development and Product Operations and chief medical officer. "Pending favorable results after further data analysis in this trial and our other pivotal Phase III study, we expect to submit a BLA to the FDA by year-end or in the first quarter of 2002."

Xanelim also met the secondary endpoints in the study at 12 weeks, including: Physician's Global Assessment (PGA) scale rating of "excellent" or "clear," Overall Lesion Severity (OLS) scale rating of "minimal" or "clear," reduction of plaque thickness and itching, reduction in psoriatic Body Surface Area (BSA) coverage, and dermatology-specific quality of life improvement.

While Xanelim was generally well tolerated in the study after 12 and 24 weeks of treatment, mild-to-moderate headache, pain, chills, nausea and fever occurred more frequently in patients treated with Xanelim than placebo; these adverse events diminished after the first dose. Serious adverse events that may or may not be related to Xanelim use included one patient with tightness of the throat and one patient with a reduced platelet count. As an immunomodulatory agent, Xanelim use may be associated with potential risk of infection; however, no increased rate of infection was seen in patients treated with Xanelim versus placebo in this study. Patients receiving Xanelim in this study did not experience T-cell depletion.

"These study findings indicate that, if approved, Xanelim may present physicians with a new treatment option for moderate-to-severe plaque psoriasis that can be administered at home for maximum patient convenience," said Dr. Gottlieb. "We look forward to continued evaluation of Xanelim to assess its potential benefits for long-term, sustained control of the disease."

"New therapies may offer hope to many people suffering with psoriasis who are not being adequately treated today," says Gail Zimmerman, president and CEO of the National Psoriasis Foundation. "Roughly 60 percent of people with psoriasis have dropped out of treatment in the United States and are not being helped by current therapy. We believe new therapy, if approved, will offer alternatives for people to consider, which may restore their confidence in treatment."

"There is a strong unmet medical need in psoriasis treatment for therapies that can safely provide early and long-term control of the disease, and the Phase III data have met our expectations based on Phase I and II study findings," said Jack Castello, XOMA chairman, president and CEO. "We look forward to continuing to work closely with Genentech throughout the rest of the development process for psoriasis as well as jointly developing Xanelim for additional indications."

Trial Design

In the study (ACD2058g), patients aged 18 to 75 with moderate-to-severe plaque psoriasis covering at least 10% of total BSA and PASI scores of 12 or higher were randomized to receive 1 mg/kg of Xanelim, 2 mg/kg of Xanelim or placebo by weekly subcutaneous injection for 12 weeks. Following the initial 12 weeks of treatment, patients who achieved the primary efficacy endpoint finished treatment and were observed for up to an additional 24 weeks or until disease recurrence. Patients who did not achieve the primary efficacy endpoint received extended treatment for an additional 12 weeks, totaling 24 weeks of treatment. These patients were given the choice of at-home administration.

Complete results and safety data following the initial 12 weeks of treatment, including findings from extended treatment and follow-up periods, are currently being analyzed and will be presented at future scientific meetings.

Xanelim Background

Xanelim, an immunomodulatory anti-CD11a humanized monoclonal antibody, is designed to inhibit the binding of T-cells to other cell types and to target three key processes in the cascade of events that lead to psoriasis. These processes are: (1) binding of T-cells through interactions with adhesion molecules on the endothelial cell surface; (2) trafficking of T-cells into the skin; and (3) activation of T-cells, all of which may be linked to the abnormal growth of skin cells and the painful, elevated scaly patches of skin (lesions) typical among psoriasis sufferers. Xanelim treatment may lead to reduced skin inflammation, normalize skin cell maturation and result in resolution of psoriatic plaques.

ACD2058g is the first of two pivotal studies included in the Xanelim Phase III clinical trial program for psoriasis. The second trial is ACD2059g, a 597-patient study evaluating the long-term efficacy and safety of Xanelim with design identical to the ACD2058g study over the first 12 weeks of treatment followed by an alternative 12-week extended treatment period to examine the use of additional dosing regimens.

Study results from the second pivotal Phase III study, ACD2059g, will be presented at the summer meeting of the American Academy of Dermatology, July 28-August 1, 2001, in Anaheim, Calif. Additional ACD2058g data also will be presented in the future. Data analysis from both pivotal studies is ongoing.

Additional Xanelim studies in psoriasis are ongoing, including a re-treatment trial for patients previously enrolled in Xanelim studies. In addition, a one-year study is evaluating the effects of Xanelim on maintenance of symptom improvement and long-term safety. Xanelim is also in Phase I/II evaluation for kidney transplant rejection.

Psoriasis Background

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. 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.

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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