Monday, Dec 23, 2002

Genentech and XOMA Submit Biologics License Application for FDA Approval of Raptiva(TM) (Efalizumab) for the Treatment of Moderate-to-Severe Plaque Psoriasis

South San Francisco and Berkeley, Calif. -- December 23, 2002 --

Genentech, Inc. (NYSE: DNA) and XOMA Ltd. (Nasdaq: XOMA) today announced they have submitted a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for Raptiva™ (Efalizumab), a recombinant humanized monoclonal antibody under evaluation for the treatment of moderate-to-severe plaque psoriasis.

“Based on the data from our Phase III studies and the more than 2,100 patients in our safety database, we believe that Raptiva has the potential to become an important new therapy for patients with moderate-to-severe psoriasis,” said Susan D. Hellmann, M.D., M.P.H., Genentech’s executive vice president, Development and Product Operations, and chief medical officer. “Psoriasis, a disease with a significant unmet medical need, affects more than 4.5 million people in the United States.”

“The filing of the BLA represents a significant milestone for XOMA and is the successful result of the strong, collaborative efforts of Genentech and XOMA employees,” said Jack Castello, XOMA's president and chief executive officer. "Both companies have worked especially hard over the past year to bring Raptiva to this stage, and we are pleased to have met the year end filing target we established in early May. I believe that if approved, Raptiva will make a significant, positive impact on the treatment of psoriasis.”

About Raptiva™

Raptiva is designed to inhibit the adhesion of T-lymphocytes to other cell types by inhibiting the binding of LFA-1 to ICAM-1. This mechanism of action has a number of effects depending upon the cell type, which include: (1) inhibition of T-lymphocyte activation, proliferation and cytokine release, (2) inhibition of T-lymphocyte migration, (3) inhibition of T-lymphocyte interactions with tissue-specific cells. In the Phase III studies, Raptiva was given as a once-a-week subcutaneous injection.

Raptiva is being developed in the U.S. for plaque psoriasis and is being explored for use in other autoimmune diseases through a collaboration between Genentech and XOMA. Serono S.A. (Virt-x: SEO and NYSE: SRA) has an exclusive license to market Raptiva outside of the United States, Japan and certain other Asian countries. Serono plans to file for approval of Raptiva for the treatment of moderate-to-severe plaque psoriasis with European authorities in the first quarter of 2003.

About Psoriasis

Psoriasis is a chronic skin disease that affects more than 4.5 million Americans (about 2.1 percent of the U.S. population), according to the National Psoriasis Foundation. Psoriasis occurs when new skin cells grow abnormally, resulting in thick, red, scaly, inflamed patches. Plaque psoriasis, the most common form of the disease, is characterized by inflamed patches of skin (“lesions”) topped with silvery white scales. Psoriasis can be limited to a few spots or involve extensive areas of the body, appearing most commonly on the scalp, knees, elbows and trunk. Although it is highly visible, psoriasis is not a contagious disease. While there are a number of medications that may help control the symptoms of psoriasis, there currently is no known cure.

About Genentech

Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. Fifteen of the currently approved biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes ten 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.

About XOMA

XOMA develops and manufactures antibody and other protein biopharmaceuticals for disease targets that include cancer, immunological and inflammatory disorders, and infectious diseases. XOMA's programs include collaborations with: Genentech, Inc. on the Raptiva™ antibody for psoriasis (BLA submission), rheumatoid arthritis (Phase II) and potentially other indications; Onyx Pharmaceuticals, Inc. to develop and manufacture its ONYX-015 product for various cancers (Phase II and III); Baxter Healthcare Corporation to develop NEUPREX® (rBPI-21) for Crohn's disease (Phase II) and other indications; and with Millennium Pharmaceuticals, Inc. on two biotherapeutic agents for certain vascular inflammation indications (preclinical). Earlier-stage development programs include compounds to treat cancer, retinopathies, autoimmune diseases and infections. For more information about XOMA's pipeline and activities, please visit XOMA's website at http://www.xoma.com.

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Statements made in this news release related to the regulatory process and collaborative arrangements, 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 include those related to safety and efficacy of the products being studied; action, inaction or delay by the Food and Drug Administration and European regulators; analysis, interpretation and submission of scientific data; changes in the status of existing collaborative relationships; the ability of collaborators to meet their obligations and market demand for products, as well as those factors described in the preceding paragraph. These risks are discussed in XOMA’s most recent annual report on Form 10K and in other SEC filings. Consider such risks carefully in evaluating XOMA’s prospects.