Thursday, Aug 19, 1999

XOMA Announces Expansion of Genentech Collaboration in hu1124 to Include Organ Transplant Rejection

Berkeley, Calif. -- August 19, 1999 --

XOMA Ltd. (Nasdaq: XOMA) today announced that it and Genentech, Inc. (NYSE: DNA) have agreed in principle to expand the hu1124 (antiCD11a) antibody product development program to include organ transplant rejection. The companies are still working out details of the program, initially focused on kidney transplant recipients. The hu1124 product is a humanized monoclonal antibody that inhibits T cells and therefore can potentially treat a variety of inflammatory and autoimmune diseases by reducing the immune response.

When the collaboration was established in April 1996, psoriasis and organ transplant rejection were identified as initial targets. Based on encouraging Phase II trial results in psoriasis, the product is expected to enter Phase III testing for that indication in the fourth quarter of 1999. The companies have now agreed to move forward in the organ transplant indication.

"I'm pleased to see our joint program expanded to include organ transplant," said Jack Castello, Chairman, President and CEO of XOMA. "Under our profit-sharing agreement, this adds another potential market opportunity to our pipeline. XOMA and Genentech together can marshal more resources and expertise to apply to the development of this product than either company alone. This enables us to speed clinical development by pursuing multiple indications in parallel."

When an organ such as a kidney is transplanted, the recipient's immune System typically identifies the grafted organ as a foreign body. The new host's T cells attack the transplant, a process called rejection that can prevent the organ from functioning or eventually destroy it. The hu1124 product targets the CD11a receptor on the surface of T cells to inhibit rejection without suppressing the entire immune response. This may offer a more specific and less toxic therapy than the immunosuppressive drugs currently used to prevent rejection.

XOMA Ltd. develops and manufactures biopharmaceuticals at facilities Located in Berkeley and Santa Monica, Calif. The Company's 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 the BPI molecule, a human protein with multiple anti-infective properties that is part of the body s defense system against microbial infection. The first product from the BPI platform, NEUPREX(R) is in late-stage development for two indications, meningococcemia and hemorrhage due to trauma.

Statements made in this news release related to the timing of clinical trials and other aspects of product development, 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 which 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 the timing or results of pending or future clinical trials, changes in the status of the Company's collaborative relationships, uncertainties regarding the legal standards applicable to biotechnology patents, and actions by the U.S. Food and Drug Administration or the U.S. Patent and Trademark Office, are discussed in the Company's most recent annual report on Form 10-K and in other SEC filings. Consider such risks carefully in evaluating XOMA's prospects.

Ellen M. Martin, 510/644-1170 or 800/BIO XOMA
Fax News on Demand, 800/901-7788

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