Xoma Waffles on Timing of Drug Partnership: BioBuzz

BERKELEY, Calif. (TheStreet) -- Xoma(XOMA Quote) management backed away Monday from its previously stated promise of a Big Pharma partnership for its diabetes drug XOMA 052 by year's end.

The company now says that potential partners may need extra time to review new preclinical data of XOMA 052 in cardiovascular disease, which could significantly increase the value of the drug beyond diabetes.

Um, okay, but I bet if Xoma polled its shareholders today, most would be more than happy to see the company make good on its initial promise and bring home a diabetes partnership for '052 this year.

What we're getting instead looks suspiciously like stalling tactics, even with the dangled promise of a bigger deal that could encompass diabetes and cardiovascular indications.

At best, Xoma is sending investors mixed signals. On the one hand, the company says it has all the '052 data necessary to land a partnership today. But why, then, is the company also starting new studies in diabetes and cardiovascular disease, which it says partners may want to look at?

Xoma says it is speaking to many interested partners and those who wait for the next slug of '052 diabetes data expected in the third quarter 2010 may risk losing out to a competitor. But if there's already multi-party interest in '052, why can't Xoma management get a contract signed sooner rather than later?

Xoma's stock price clearly reflects a skepticism over '052 and the company's ability to pull off a significant partnership. Monday's conference call did nothing to dispel those doubts.

Ariad Upgraded, Xenoport Drug Delayed

(At 7:51 AM ET)

Shares of Ariad Pharmaceuticals(ARIA Quote) may see some action Monday after a JPMorgan analyst upgraded the stock to overweight from neutral