Monday, Jul 30, 2001

Xanelim Shows Initial Positive Results in Second Pivotal Phase III Study

South San Francisco and Berkeley, Calif. -- July 30, 2001 --

Genentech Inc. (NYSE: DNA) and XOMA Ltd. (Nasdaq: XOMA) announced today that initial results from the second of two pivotal Phase III investigational trials of Xanelim™ (Efalizumab) were presented at the American Academy of Dermatology "ACADEMY 2001" meeting in Anaheim, CA. The effects of Xanelim given by weekly subcutaneous injection were studied in adults with moderate-to-severe plaque psoriasis. The primary study endpoint was patients achieving 75 percent or greater improvement in Psoriasis Area and Severity Index (PASI) score compared to placebo after 12 weeks.Results were presented by Stephen Tyring, M.D., Ph.D., professor of dermatology, microbiology and immunology, and internal medicine at the University of Texas Medical School at Galveston.

"The primary goal in psoriasis therapy is to safely maintain long-term control of psoriasis with maximum patient convenience," said Dr. Tyring. "These data indicate that, if approved by the FDA, Xanelim may offer physicians with a new treatment option for sustained psoriasis control and the added patient convenience of at-home subcutaneous administration."

"We are encouraged by the percentage of patients who achieved 75 percent or greater symptom improvement after both 12 and 24 weeks of Xanelim treatment and the early onset of Xanelim activity," said Susan Desmond-Hellmann, M.D., M.P.H., Genentech's executive vice president, Development and Product Operations and chief medical officer. "The promising results from both pivotal Phase III Xanelim studies indicate the potential ability of Xanelim to provide long-term control of psoriasis symptoms in patients with moderate-to-severe forms of the disease. 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 Food and Drug Administration (FDA) by year-end or in the first quarter of 2002."

In the study, 597 patients aged 18 to 75 with moderate-to-severe plaque psoriasis covering at least 10 percent of total body surface area (BSA) and PASI scores of 12 or higher were randomized to receive 1 mg/kg of Xanelim (n=232), 2 mg/kg of Xanelim (n=243) or placebo (n=122) by weekly subcutaneous injection for 12 weeks.

Among study findings, 22 percent of patients given 1 mg/kg of Xanelim (n=52) and 28 percent of patients given 2 mg/kg of Xanelim (n=69) achieved PASI score improvement of 75 percent or greater after 12 weeks (versus 5 percent placebo, n=6). Of the 134 partial responders, 58 percent of patients receiving 2 mg/kg of Xanelim weekly (n=26) and 29 percent of patients receiving 2 mg/kg of Xanelim every other week (n=12) achieved a 75 percent or greater improvement in PASI score after an additional 12 weeks of treatment (versus 4 percent placebo, n=2). Further, 12 percent of initial non-responders given 4 mg/kg of Xanelim (n=14) achieved 75 percent or greater PASI score improvement after an additional 12 weeks of treatment (versus 2 percent placebo, n=1).

In addition, 52 percent of patients in the 1 mg/kg group (n=120) and 57 percent of patients in the 2 mg/kg group (n=138) achieved PASI score improvement of 50 percent or greater at 12 weeks (versus 16 percent placebo, n=19). Mean PASI score improvements in Xanelim-treated patients versus placebo indicated onset of effect by 28 days. PASI score is based on psoriasis plaque thickness, redness and scaling, and is adjusted for the percentage of affected body surface.

Xanelim also met all secondary endpoints in the study at 12 and 24 weeks, including: Physician's Global Assessment (PGA) scale rating of "excellent" or "clear," OLS scale rating of "minimal" or "clear," reduction of plaque thickness and itching, reduction in psoriatic 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. As an immunosuppressive agent, Xanelim use may be associated with potential risk of infection. Patients receiving Xanelim in this study did not experience T-cell depletion. There were two cases of psoriasis-related hospitalizations reported during this study (one in the treated and one in the placebo group).

"Given the need for safe, effective, and convenient treatments for moderate-to-severe psoriasis patients, we are encouraged by these additional Phase III findings," said Jack Castello, XOMA chairman, president and CEO. "We will continue to work diligently with Genentech to move toward making Xanelim a potential treatment option for psoriasis patients and to advance the Xanelim development collaboration in multiple indications."

This study, ACD2059g, is the second of two pivotal Phase III studies of Xanelim™ (Efalizumab). Results from the first pivotal Phase III study, ACD2058g, were presented in June 2001 at the Second Joint Meeting of the International Psoriasis Symposium and European Congress on Psoriasis in San Francisco.

Complete ACD2059g results and safety data following the initial 24 weeks of evaluation, including additional findings from extended treatment and follow-up periods, are currently being analyzed and will be presented at future scientific meetings. Additional Xanelim studies are ongoing, including a re-treatment trial for patients previously enrolled in Xanelim studies and a one-year study evaluating the effects of Xanelim on maintenance of symptom improvement and long-term safety.

Xanelim Background

Xanelim is an anti-CD11a humanized monoclonal antibody 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. Such processes may be linked to the abnormal growth of skin cells and the painful, elevated scaly patches of skin (lesions) typical among psoriasis sufferers. If approved by the FDA, Xanelim may become a new treatment option designed to reduce skin inflammation and normalize skin cell maturation. 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 or are based on 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 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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