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October 1, 2015

XOMA Licenses TGFb Immuno-Oncology Program to Novartis for Up to $517M+

  • XOMA said today it has exclusively licensed global development and commercialization rights to its preclinical anti-transforming growth factor-beta (TGFb) antibody program in immuno-oncology to Novartis.

    The deal could generate up to $517 million-plus for XOMA, the company said, of which $37 million will be paid upfront.

    Under the agreement, Novartis will join XOMA to develop first-in-class immunotherapies in cancer using XOMA’s TGFb antibodies, identified through the company’s antibody discovery technology platform. TGFb is a potent immune suppressive cytokine involved in cellular processes that include cell growth inhibition, cell migration, invasion, epithelial–mesenchymal transition, extracellular matrix remodeling, and immune suppression.

    XOMA’s lead compound in its TGFb program is XOMA 089, a fully human, high-affinity, late preclinical monoclonal antibody designed to neutralize TGFb1 and TGFb2 while sparing TGFb3. According to the company, the compound has been shown by data to be both active against tumor growth in preclinical models of head and neck cancer as well as breast cancer and breast cancer metastasis. Preclinical data also suggest that it may be synergistic with PD1 inhibition.

    The company added that it has made “significant” progress regarding XOMA 089—specifically on understanding its activity, mechanism of action, as well as on its preclinical toxicology and manufacturing.

    Other antibodies included in the license agreement inhibit TGFb1, which according to XOMA may prove to be a more appropriate approach to certain indications. These antibodies have potential in immuno-oncology either as a monotherapy and may be particularly amenable to combination therapies, especially with immune checkpoint inhibitors, the company added.

    XOMA said the deal will leave it with more than $50 million in liquid capital, since, Novartis has also agreed in connection with the license deal to extend the loan maturity date for $13.5 million in outstanding debt owed by XOMA to September 30, 2020.

    In return, XOMA agreed to reduce the royalty rate Novartis will pay on sales of products developed with the pharma giant’s clinical stage anti-CD40 antibodies.

    “With this non-dilutive liquidity of essentially $50.5 million, we currently project this capital, in combination with our planned cost savings measures, will fund operations into 2017,” XOMA CEO John Varian said in a statement.

    In addition to the upfront $37 million, XOMA is eligible to receive up to $480 million tied to meeting all development, regulatory, and commercial milestones. XOMA is also eligible to receive royalties on product sales that range from the mid-single digits to the low double digits.

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