Lazard Capital Markets Healthcare Conference 2011

November 15, 2011 1 AM ET


John Varian – Interim CEO

Paul Rubin – VP, Clinical Development and Chief Medical Officer



[Starts Abruptly] introduce John Varian, who will be presenting to us today about his company XOMA.

John Varian

Thanks Colleen, and thank you to Lazard for having us present here giving us the opportunity to talk about XOMA and some of the new changes that are going on there. I joined the company at the end of August as the interim CEO. I've been involved with XOMA for the last nearly almost 3 years as a board member, and during those 3 years our focus has been on really one thing. XOMA is a company that over the years has had terrific science but there is a belief among the board and I think many others that XOMA has not really benefited as much from its own discoveries as it should have and so our focus has been on changing that making sure we are in a position to benefit from our own discoveries.

We’ll be making forward-looking statements of course today. So if you look at the assets that we have at XOMA the primary asset the thing that most people are focused on is XOMA 052 and it has just received its official name which is gevokizumab. So gevokizumab, it will be 052 we’ll be saying it that way today. Gevokizumab targets IL-1 beta, which is a validated anti-inflammatory target. We will be talking primarily today about an announcement which we made last week, which is a combination of really two things that we are implementing to build more value around gevokizumab.

First of all, we have an expanded phase 3 program expanding beyond the original indication that was planned for it to make it broader and to noninfectious uveitis, and we will be talking more about that through today's presentation. The other thing we announced last week is that we’ve launched a proof of concept program where we’ll be taking different indications and testing gevokizumab in those indications, so that we’ll have good information flow and be building the value of gevokizumab over a shorter period of time.

Paul Rubin is going to speak in great detail about both of those things. One of the most important steps that we took in retaining more value around our own assets was the collaboration that we entered into at the very beginning of this year with Servier. Servier is unique in that there are a $5 billion plus company. I didn't do anything -- I did nothing. I didn't touch anything, I didn't do anything. Well, we’ll be back in our case. Okay. So this collaboration with Servier was very important because they are a company that's again a $5 billion company but they will allow a company like XOMA to have full rights in the United States, and so under our collaboration with Servier, we have full rights in both US and Japan for all indications for gevokizumab except for diabetes and cardiovascular, but even in those indications we have the right to buy back rights in those areas all the way through and even past announcement of phase 3 results.

So again it's a company and a collaboration that gives us rights in the US for our assets. Servier will be starting, in fact their specialty is cardiovascular. They will be starting a phase 2 study in cardiovascular, sometime probably mid-year next year. The other core assets of XOMA are preclinical assets, which we just really started to present at conferences and it has just been published in a paper even as of yesterday. It is called our XMet program. It's a program around insulin activation, and so around sensitizing for better effect from insulin.

So it's another program where we will be seeking a partner in the future to help us develop the program in that area. Our technology has been providing over the years a great deal of financing for XOMA, our technology we are able to license to others so that they can use it as part of their discovery too. In addition we have a biodefense program, which has -- we’ve contracted a total of about $120 million in biodefense, what that does for us is it allows us to do things we would want to do anyway but have it paid for by the under the contracts of US government.

So since I've been at the company again since the very end of August as the interim CEO, we’ve really worked with the management team to focus on how do we build value around our key assets, and again we will be talking about that much more today. The other thing we've done is we put in place some initial cost reductions. There will be a further streamlining of activities at XOMA as we look and focus our efforts. What we want to make sure we're doing, is we are spending money on the things that matter the most and making sure that we don't spend money on things that don't matter as much.

So it's a very strong focus that we will be focused on over the next couple of months. Around the gevokizumab phase 3 program, again what we will be doing is moving into noninfectious uveitis, and that is uveitis that affects more than the anterior portion of the eye. So the back of the eye or the middle of the eye, by doing that by moving away from Behcet's only to noninfectious uveitis, it changes our potential patient base in the US from about 7500 Behcet's uveitis patients to 150,000 noninfectious uveitis patients.

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