XOMA Corp. used the approved hypertension drug perindopril as a slingshot to hit its long-sought target of launching commercial operations in the U.S.

The Berkeley, Calif.-based biotech acquired the U.S. rights to the drug franchise from French drugmaker Les Laboratoires Servier SA – partner for its lead product candidate gevokizumab (formerly XOMA 052).

The agreement includes the branded product Aceon (perindopril erbumine), a generic ACE inhibitor that has been available in the U.S. since 2009, and a portfolio of three late-stage candidates combining a fixed dose of perindopril with one or more active ingredients.

XOMA will not actively market Aceon, which had U.S. sales of $2.8 million last year, but the biotech will assume commercialization activities for the drug on Jan. 23, following the transfer from previous Servier licensee Abbott, of Abbott Park, Ill.

In its 8-K filing with the SEC, XOMA said it paid $1.5 million in the third quarter of 2010 for the perindopril license. However, that fee was "part of an ongoing discussion around these assets," CEO John Varian told BioWorld Today, noting that XOMA and Servier discussed access to the perindopril franchise "for quite some time.

"Having the commercial infrastructure so that we can actually sell product is no small feat," he said. XOMA sought to "put these pieces in place now" so the company would be prepared to manufacture its own products or those licensed with a co-promotion option.

"By working with Servier around this existing asset that's been on the market for years and continues to sell, we were able to do that in a way where we have extremely low risk," Varian added.

Still, commercialization will be handled through contract manufacturers. Earlier this month, the company said it would not renew the lease on its 31,000-square-foot production facility when it expires next year.

"It's too easy for us now to find others who can do Phase III and commercial manufacturing on our behalf," Varian said.

The end game for the arrangement isn't perindopril, but lead compound gevokizumab. In January 2011 , XOMA and Servier, of Suresnes, France, inked a potential $505 million licensing deal around gevokizumab, propelling the company's shares 37.8 percent the day the deal was disclosed. (See BioWorld Today, Jan. 5, 2011.)

Two months later, however, the investigational interleukin-1 (IL-1) inhibitor failed in a Phase IIb trial in Type II diabetes – the drug's most lucrative potential indication. (See BioWorld Today, March 24, 2011.)

XOMA continues to study the compound in noninfectious uveitis, including Behcet's uveitis, with a Phase III study planned to start in the second quarter. The company also launched a proof-of-concept program in three potential additional indications. In December 2011, the company began the first Phase II trial, testing the drug in moderate-to-severe inflammatory acne, though other targets have not been disclosed. Each Phase II study will be designed to report clinical data in six to 12 months, Varian said.

With the company and its stock staggering over the past nine months, Varian – a former board member who assumed the helm four months ago – revealed earlier this month that XOMA would cut about 34 percent of its staff, or about 84 positions, to streamline operations.

In addition to preserving gevokizumab, XOMA will continue to develop two classes of human monoclonal antibodies that activate (XMetA) or sensitize (XMetS) the insulin receptor in vivo, representing potential new therapeutic approaches in diabetes.

"The preclinical group continues to be one that we think will generate leads for us and leads that could be licensed out," Varian said, noting that XOMA is currently "looking for the right kind of partner" to manage a diabetes program.

With the new Servier deal, XOMA also could develop fixed-dose combination (FDC) perindopril products in the U.S., piggybacking on Servier's clinical and commercial expertise in the product, which recorded ex-U.S. sales of more than $1.2 billion in 2011. Varian said XOMA and Servier would work together to evaluate commercial opportunities in the U.S. market.

The proprietary form of perindopril in each of the combination products provides patent protection until 2023.

Under terms of the license agreement, XOMA is required to pay Servier a tiered royalty on Aceon sales, ranging "from a mid-single digit up to a midteen percentage rate," plus a royalty in the midteens on sales of any developed FDC products.

XOMA also is subject to aggregate development milestone payments of $8.5 million and sales milestones up to an aggregate $15.1 million for each FDC drug. Either company may terminate the agreement if the first FDC product does not receive FDA approval by Dec. 31, 2013.

Although XOMA is generally responsible for development and commercialization expenses, Servier agreed to partially fund development of the first FDC product.

XOMA – a presenter at the first J.P. Morgan Healthcare Conference in 1983 – certainly has demonstrated staying power. But the company may continue to battle an uphill fight against IL-1, a target that has stumped other biotechs. Thousand Oaks, Calif.-based Amgen Inc. has an IL-1 blocker, Kineret (anakinra), for rheumatoid arthritis, but the drug has not been very successful on the market.

And Tarrytown, N.Y.-based Regeneron Pharmaceuticals Inc.'s IL-1 blocker Arcalyst (rilonacept) is approved for cyropyrin-associated periodic syndromes but earned net sales of only $25.3 million 2010. In November, the FDA accepted the supplemental biologics license application for Arcalyst injection for the prevention of gout flares in patients beginning uric acid-lowering therapy, with a PDUFA date of July 30. (See BioWorld Today, June 20, 2011.)

Although some observers have been ready to dig a grave for XOMA, Varian said XOMA's recent moves would generate about $14 million in savings in 2012 on top of a cash balance of $47 million as of Sept. 30, 2011, and an expected $35 million in cash from ongoing operations this year. At year-end, the company also secured a $10 million, 42-month secured term loan with GE Capital.

On Wednesday, XOMA shares (NASDAQ:XOMA) gained 2 cents to close at $1.70.