Thursday, Apr 15, 1999

XOMA and Genentech Extend hu1124 (Anti-CD11a) Collaboration Through Phase III

Preliminary Phase II investigational study results in psoriasis show promising clinical improvement

Berkeley and South San Francisco, Calif. -- April 15, 1999 --

XOMA Ltd. (Nasdaq: XOMA) and Genentech, Inc. (NYSE: GNE) today announced an agreement to continue collaborative development of the hu1124 (anti-CD11a) monoclonal antibody product through Phase III, intended for the treatment of moderate to severe plaque psoriasis. The hu1124 product is a humanized monoclonal antibody that inhibits T cells and therefore potentially blocks the pathologic immune reaction in psoriasis patients. Agents that inhibit T cell activation and migration can potentially treat a variety of inflammatory and autoimmune diseases by reducing the immune response.

The Phase II randomized, placebo-controlled investigational trial conducted in Canada tested the hu1124 antibody in 145 moderate-to-severe psoriasis patients who underwent an 8-week course of therapy with either the hu1124 product or placebo. The objective of the double-blinded study was to determine clinical safety and efficacy under controlled conditions. Preliminary analysis of data from this study, completed late in 1998, showed a clinical response of 75% or better improvement over baseline, as measured by Physician's Global Assessment, in 25% of the patients treated with hu1124 versus 2% of the patients in the placebo group. Additionally, 47% of patients in the hu1124 group showed 50% or better improvement over baseline versus 15% of the patients in the placebo group. One patient experienced a transient unilateral hearing loss, a serious adverse event, which may or may not have been drug related. Overall, the drug appeared to be well tolerated. The most common adverse events were mild headaches and low grade temperature elevations, most notably after the first dose.

The companies plan to meet with the Food and Drug Administration (FDA) to discuss these promising Phase II results and identify further studies before the FDA can make a final determination regarding clinical safety and efficacy. Details of the study will be presented at the Canadian Dermatology Association meeting taking place June 30-July 4, 1999.

Under terms of the new agreement, XOMA and Genentech will continue to collaborate on the remaining clinical development and regulatory filings for the product in plaque psoriasis. XOMA will share future development costs, as well as future U.S. profits, with Genentech on a 25%/75% basis. XOMA will receive a royalty on sales outside the United States. Genentech will fund XOMA's share of development costs via long-term convertible loans.

"XOMA did an excellent job completing Phase II clinical trials on budget and on time," said Bill Young, Genentech's Chief Operating Officer. "This enabled us to access another Phase III product opportunity."

"There are several reasons we're pleased with this collaboration with Genentech," stated Jack Castello, Chairman, President and CEO of XOMA. "It has allowed us to leverage our capabilities in antibody manufacturing and clinical testing; it adds another late-stage product to our pipeline, and it represents a renewed vote of support from one of the best-regarded biotechnology companies."

Psoriasis is a T cell-mediated chronic inflammatory skin disorder. In the United States, 200,000 to 800,000 people with moderate-to-severe psoriasis suffer recurring bouts of skin inflammation characterized by the formation of red, raised, scaly plaques. T cells are specialized white blood cells mobilized by the immune system to destroy foreign cells. In psoriasis, increased activation and migration of T cells into the skin contributes to development of the disease. T cell activation and migration also play an important role in rheumatoid arthritis, multiple sclerosis, and inflammatory bowel disease.

XOMA Ltd. develops and manufactures biopharmaceuticals at facilities located in Berkeley and Santa Monica, California. Medical targets include bacterial and fungal infections, infectious complications (such as those that may follow trauma or surgery), immunologic and inflammatory disorders. XOMA's primary drug development platform is BPI (bactericidal/permeability-increasing protein), a human protein with multiple anti-infective properties. The Company recently completed a shareholder-approved reorganization that changed its legal domicile from Delaware to Bermuda.

Genentech, Inc., is a leading biotechnology company that discovers, develops, manufactures, and markets human pharmaceuticals for significant unmet medical needs. Twelve of the currently marketed biotechnology products stem from Genentech science. Genentech markets seven 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 and the Pacific Exchange under the symbol GNE.

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