The firm has encouraging news today. But recently the firm’s stock plummeted for reasons not related to the firm’s technological capabilities, but to a mixture of inherited consequences of bad financial decisions, past unethical behavior and, in some circumstances, bad luck. Investors’ agitation - well reflected in their exaggerated reactions towards some of the firm’s unfortunate news, has also contributed to the stock’s plummeting. The negative chain reaction began a few years ago when Xoma’s investigational drug for sepsis failed to pass the approval test even though it saved children’s lives in clinical trials. The company decided to abandon the drug years before investors learn the news that was never announced. A couple of years after the firm has shelved the drug, investors realized that the drug is not existing in longer in Xoma’s pipeline.
To sum it up, Xoma is now suffering investors’ lack of confidence in its promises after many of them have gone with the wind. Investors, though, recognize the fact that Xoma has superior antibody technology, the Bacterial Cell Expression (BCE) technology. They also know that Xoma’s technology and expertise have already contributed to the development of breakthrough antibody products including, Lucentis® (ranibizumab injection) for wet age-related macular degeneration, Cimzia® (certolizumab pegol), for rheumatoid arthritis and Crohn's disease, in addition to other drugs. They know also that more than 50 pharmaceutical and biotechnology companies have been attracted to the firm’s technology and signed licenses to use it in developing product candidates, many of then are in clinical development. They know all that, which is specifically what puzzles them. They wonder, why with the breakthrough technologies, the numerous rich alliances and the drug development capabilities the stock has become a penny stock, instead of reaching the moon?
Among other things, investors question the reason for keeping 200 employees in the headquarters of a firm that, after a quarter century in existence with a breakthrough technology in hand attracting 50 companies and helping some of them put great products on the market, has only one proprietary product in clinical trial?
The High Hope
The high hope now is in XOMA 052 product for Type 2 diabetes. Today, the firm announced that enrollment is underway in a 325-patient phase 2b dose-ranging clinical trial of XOMA 0521. The randomized, placebo-controlled trial that will be conducted at up to 70 U.S. sites, will evaluate multiple dose levels of the drug over six months. The trial is also intended to guide phase 3 development. Xoma estimates that top-line results from the study will be available in the first quarter of 2011.
1. Xoma had previously announced that the XOMA 052 phase 2 program would include a Phase 2a extended safety trial in Type 2 diabetes patients for which interim results are expected in the fourth quarter of this year, a cardio-metabolic trial in Type 2 diabetes patients and a trial in patients with Type 1 diabetes funded by the Juvenile Diabetes Research Foundation. For competitive reasons, XOMA is limiting disclosure regarding the Phase 2 program to certain studies and selected details within those studies. In 2009, XOMA announced results from successful Phase 1 trials of XOMA 052 in 98 Type 2 diabetes patients, demonstrating that XOMA 052 was well tolerated, could be given on a monthly or less frequent schedule and showed positive biologic activity in diabetic parameters such as HbA1c and reduction in biomarkers associated with cardiovascular risk such as C reactive protein.
For trial details click: XOMA Initiates Phase 2b Dose-Ranging Clinical Trial of XOMA 052 in Type 2 Diabetes Patients
Despite our frustration with Xoma, we are enthusiastic about its XOMA 052 products. Our reasons for enthusiasm include the results of phase 1 trials, which exceeded the most optimistic expectations of an anti-inflammatory drug developed to treat diabetes. XOMA 052 is a monoclonal antibody that binds strongly to interleukin-1 beta (IL-1 beta), a pro-inflammatory cytokine. This is a new approach where inhibiting the activation of the IL-1 receptor is used for diabetes based on the hypothesis that diabetes is an inflammatory diseases. XOMA 052’s half-life, binding properties and specificity for IL-1 beta may, indeed, provide for convenient dosing of once per month or less frequently. We have to note that other existing molecules that bind to IL-1 have not performed as well as Xoma 052 in diabetes. Even if one of them passes the tests, the dosing will be as frequent as once a day, or every other day.