Updated from May 10

Xoma

(XOMA) - Get Report

posted a first-quarter loss that missed Wall Street's consensus estimates and warned that losses for the full year will be wider than in 2003, in part because of start-up costs for its Raptiva psoriasis treatment.

Xoma said late Monday that its quarterly loss widened to $20.2 million, or 24 cents a share, on revenue of only $170,000, from $13.1 million, or 18 cents a share, on revenue of $3.2 million. The big drop in revenue was due to the cancellation of licensing agreements with two companies.

The consensus view of analysts polled by Thomson First Call was a first-quarter loss of 23 cents, so this miss marks the fifth consecutive quarter in which Xoma has fallen below Wall Street estimates. The First Call estimate for the full-year 2004 is a loss of 82 cents for the Berkeley, Calif.-based biotechnology company. It lost 78 cents a share in 2003.

"Our first quarter financial results were in line with our expectations," said Peter B. Davis, the company's CFO, in a prepared statement Monday. Xoma has enough cash and estimated funds through collaborations with other companies to meet its operating needs "at least through 2005," the company said.

Xoma's immediate future depends on the success of Raptiva, a psoriasis treatment developed in collaboration with

Genentech

(DNA)

. The start-up costs for Raptiva, which reached the U.S. market in late November, and the canceling of several licensing agreements, are the main reasons why Xoma expects a bigger loss in 2004 than in 2003.

John L. Castello, Xoma's chairman and CEO, said Monday that Genentech has produced an "aggressive" launch of Raptiva, which "has been well-received" by dermatologists and patients. Genentech has said Raptiva produced $6.3 million in sales for the first quarter. The two companies share in the profits and costs of the drug. For the first quarter, Xoma was assessed $3.2 million in "collaboration arrangement expenses" since Raptiva has yet to turn a profit.

Xoma executives said their agreement with Genentech has been "a model" for partnerships with several other companies to investigate treatments for problems associated with heart bypass surgery, excessive bleeding caused by chemotherapy and the treatment of certain cancers.

Xoma's stock gained 20 cents, or 5.1%, to $4.09 Tuesday.