More Trouble for Genentech's Xanelim - TheStreet

Updated from 9:42 a.m. EST

Genentech's

(DNA)

efforts to get its psoriasis candidate Xanelim on the market were complicated Friday when a study found a new manufacturing process had changed the treatment's composition.

Genentech drew the FDA's ire last year when it modified its process for producing Xanelim in order to produce more of it. The agency insisted that the new batches be compared with the initial runs, which were produced by

Xoma

(XOMA) - Get Report

.

The study "did not achieve predefined statistical definition for comparability," Genentech said, adding the new batches had a slightly higher serum concentration than the XOMA material.

The news was torpedoing Xoma's stock. At about noon it was off 40% at $4.63. Genentech was down 5.8% at $46.13.

"Genentech and XOMA will work closely with the Food and Drug Administration to determine next steps, but this will probably delay the filing of a Biologics Licensing Application with the FDA for Xanelim beyond summer 2002," Genentech said.