Xoma opts out of in-house manufacturing
pharmafile | January 16, 2012 | News story | Manufacturing and Production |Â Â Xoma, manufacturingÂ
US biotech Xoma has decided to rely on a contract manufacturing organisation for its Phase III and commercial production needs, a move that will help it cut personnel by 84 positions, around a third of its total workforce.
The company has also named a new chief executive – John Varian – who has been in the role on an interim basis since the departure of former chief executive Steve Engle in August 2011. Around 50 staff will lose their jobs straight away, while another 34 will depart within the next three months.
The aim of the cost-cutting programme is to re-assign resources to the development of gevokizumab (XOMA 052), a humanised antibody against interleukin-1 beta that is in clinical trials for moderate-to-severe acne, and non-infectious uveitis.
News of the cutbacks has sparked a rally in Xoma’s share price, thanks in turn to upgrades by analysts including Zacks Investment Research.
Xoma relies heavily on royalties from products developed using its antibody discovery and development platform, including macular degeneration drug Lucentis (ranibizumab) and Cimzia (certolizumab pegol) for arthritis and Crohn’s disease, as well as R&D milestone payments. It posted a net loss of $6.5 million in the third quarter of 2011 on revenues of a little over $16 million.
The restructuring programme – which will result in Xoma not renewing its lease on a manufacturing on a 13,000 sq. ft. manufacturing unit in Berkeley, California, when it expires in 2013 – leaves the company with just pilot-scale production facilities.
The cost of the programme will be around $6 million, with Xoma expecting to shave $14 million off its costs in 2012. That money will be spent on clinical development activities for gevokizumab, which is partnered with French drugmaker Servier.
The company has not revealed with CMO will take over its late-stage clinical and commercial manufacturing requirements.
Phil Taylor
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