Two days after an FDA advisory panel recommended approval of its partnered psoriasis drug Raptiva, XOMA Ltd. disclosed plans for a public offering of 9 million common shares.

The Berkeley, Calif.-based company would gross about $85.3 million if the shares priced at their $9.48 closing bid Wednesday. The stock (NASDAQ:XOMA) gained 8 cents that day, a mild uptick following the news from the panel late Tuesday. On Thursday, the shares slipped 52 cents to $8.96.

"We waited until now to do this because the market conditions were pretty poor over the past couple of months, and our own stock price was particularly depressed, in our view," Laura Zobkiw, XOMA's manager of corporate communications and investor relations, told BioWorld Today. "But we're confident about efficacy and safety data that was coming out on Raptiva, so we felt it was best to wait out for a more reasonable stock price."

The FDA's Dermatologic and Ophthalmic Drugs Advisory Committee voted in favor of the humanized monoclonal antibody developed in partnership with Genentech Inc. for moderate to severe plaque psoriasis in adults. The panel unanimously agreed that Raptiva's overall risk-benefit comparison is favorable. The FDA will review the committee's decision. (See BioWorld Today, Sept. 10, 2003.)

For XOMA, Raptiva (efalizumab) is expected to produce its first revenues from drug sales. The company will pocket 25 percent of U.S. revenues, with South San Francisco-based Genentech getting the rest. Neither company has publicly provided revenue projections, though.

"We have specifically tried to avoid giving guidance," Zobkiw said. "We haven't priced the product as yet, and we're still studying the market potential because there are 1.5 million psoriasis patients who have been classified as moderate to severe. But there is a host of patients that remain untreated."

The product, which is designed to block T cells that play an underlying role in the skin disease, is expected to compete in a market that already includes Biogen Inc.'s Amevive (alefacept), another immunosuppressive drug that was the first biologic agent approved for psoriasis, and TNF blockers used off label to treat psoriasis.

The FDA's PDUFA date is Oct. 27, and Zobkiw added that Genentech expects to be in a position to launch the product by the end of the year.

Initial sales eventually would boost figures at XOMA, which does not expect to produce profits this year and reported a second-quarter revenue drop to $2.4 million for the period ended June 30. The decline, from last year's second-quarter revenues of $4.7 million, resulted from lower payments from ex-partners Baxter Healthcare Corp. and Onyx Pharmaceuticals Inc.

XOMA also reported a $16.1 million net loss for the quarter, which it ended with $29.5 million in cash, cash equivalents and short-term investments. The company had about 72 million shares outstanding through June 30.

The shares will be offered from an effective registration statement, filed a month earlier. UBS Securities LLC is acting as the offering's sole book-running manager, with co-management from CIBC World Markets Corp.; U.S. Bancorp Piper Jaffray; Adams, Harkness & Hill Inc.; Jefferies & Co. Inc.; and ThinkEquity Partners. XOMA said it would grant a 30-day, 1.35-million-share overallotment option to the underwriters, all of which are based in New York except for Adams, Harkness & Hill, of Boston.

On Aug. 13, the company registered with the SEC to sell up to 13 million shares of stock from time to time, which it added to 7 million shares carried over from a three-year-old registration statement. Zobkiw declined to comment on the future of shares that remain on the shelf.

In its prospectus related to the latest registration, XOMA said it would use the proceeds for general corporate purposes, including current research and development projects, the development or acquisition of new products or technologies, equipment acquisitions, general working capital and operating expenses.

Among clinical programs moving forward, XOMA and Genentech have completed enrollment in a Phase II study of Raptiva in psoriatic arthritis patients as the partners continue to study additional indications for the drug. In partnership with Millennium Pharmaceuticals Inc., XOMA said a Phase I program is under way to evaluate MLN2201, a humanized monoclonal antibody for inflammation of the heart and blood vessels. A second compound, called CAB-2, is in preclinical studies for vascular inflammation as part of the partnership, through which Cambridge, Mass.-based Millennium continues to gain an equity stake in XOMA.

Under terms of the 2001 agreement, Millennium committed to purchase up to $50 million of common shares over a three-year period, at XOMA's option. To date, XOMA has sold $16.5 million worth of stock to Millennium. The latest transaction, in June, involved the sale of about 609,000 shares at $6.57 apiece for $4 million.

On its own, XOMA's clinical pipeline includes ING-1, a recombinant monoclonal antibody that binds with high affinity to an antigen expressed on epithelial cell cancers such as breast, colorectal, prostate and others. Two completed Phase I studies tested an intravenous formulation of ING-1, and a third continues to study the safety of subcutaneous administration of ING-1. Later this year, XOMA expects to begin clinical testing of XMP.629, a topical antibacterial formulation of a bactericidal/permeability-increasing protein (BPI)-derived compound for acne. The company is analyzing preclinical studies of other BPI-derived compounds for retinal disorders in partnership with the Joslin Diabetes Center at Harvard University in Cambridge.

Recently ended partnerships have halted development of other clinical products tied to XOMA, though the terminations bring money to the company.

Deerfield, Ill.-based Baxter is due to pay $10 million to XOMA no later than January as a result of stopping development of Neuprex for systemic anti-infective and anti-endotoxin indications. XOMA called a search for another pharmaceutical partner one future option for developing the product, an injectable formulation of rBPI-21, a genetically engineered fragment of BPI.

Richmond, Calif.-based Onyx's decision to discontinue its therapeutic virus program, which includes ONYX-015, will result in $1.5 million worth of payments to XOMA. The relationship was related to XOMA's scale-up processes to support further trials of the therapeutic, a modified adenovirus genetically engineered to destroy cancer cells. (See BioWorld Today, June 13, 2003.)