Corporate Presentation September 2015
Forward-looking Statements Certain statements contained herein including, but not limited to, expected licensing transactions, statements related to anticipated timing of initiation and completion of clinical trials, anticipated size of clinical trials, therapeutic and market potential of XOMA s product candidates, the manufacture of our product candidates, the expansion of our endocrine program, regulatory approval of unapproved product candidates, sufficiency of our cash resources and anticipated levels of cash utilization, or that otherwise relate to future periods are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions that may not prove accurate, and actual results could differ materially from those anticipated due to certain risks inherent in the biotechnology industry and for companies engaged in the development of new products in a regulated market. Potential risks to XOMA meeting these expectations are described in more detail in XOMA's most recent filing on Form 10-K and in other SEC filings. Consider such risks carefully when considering XOMA's prospects. Any forward-looking statement herein represents XOMA s views only as of the date of this presentation and should not be relied upon as representing its views as of any subsequent date. XOMA disclaims any obligation to update any forward-looking statement, except as required by applicable law. 2
XOMA Near-term Actions Focus on Future Activities Gevokizumab: The Path Forward Endocrine Platform: XOMA s New Focus Non-core Assets: Source of Non-dilutive Financing XOMA: Required Structure 3
Gevokizumab: Substantially Reduce Internal and External Resources Focus exclusively on episodic hot diseases Terminating efforts in chronic inflammatory diseases Continue Pyoderma gangrenosum (PG) Phase 3 program An episodic hot disease, IL-1β appears to be central Implementing strict go/no go evaluation points to proceed in a controlled and disciplined manner Dramatically reduce XOMA spend on EYEGUARD studies Decisions made in coordination with Servier Agreement that there will be a significant reduction in XOMA's future spend Other Servier indications may provide upside 4
XOMA Near-term Actions Focus on Future Activities Gevokizumab: The Path Forward Endocrine Platform: XOMA s New Focus Non-core Assets: Source of Non-dilutive Financing XOMA: Required Structure 5
The Endocrinology Portfolio is Appealing Allosteric modulation approach creates competitive advantage Dramatically increases number of potential targets Success with GPCRs allows us to take a monoclonal approach 6 assets each with multiple potential indications 2 assets in the clinic, 1 could be at IND within a year Clinical strategy typically starts with severe, low-prevalence indication; expand into a larger ones Potential for acute, single-administration indications Simpler and faster clinical development Commercial synergies common set of physician targets 6
XOMA 358: Down-regulates the Insulin Receptor Compound Target Current Stage XOMA 358 [XMetD] Long-acting negative allosteric modulator of insulin receptor Phase 2 launch in 2015 XOMA 129 [XMetD Fabs] XOMA 213 [LFA 102] XMetA Anti-PTHr Anti-ACTH Short-acting negative allosteric modulator of the insulin receptor Prolactin receptor antagonist Positive allosteric modulator of insulin receptor Parathyroid receptor antagonists Adrenocorticotropin hormone antagonists Lead identified; preclinical testing Safety established in Phase 1 study Phase 2 ready T2D licensing efforts ongoing Potential in orphan diseases Antibodies with in vitro functional activity identified Antibodies with in vitro functional activity identified 7
XOMA 358: Down-regulates the Insulin Receptor First-in-Class, Fully Human, Monoclonal Antibody Negative allosteric IgG 2 monoclonal antibody specific to insulin receptor (INSR) Can shift insulin response curve up to 100-fold in vitro Blocks hypoglycemia in multiple animal models of disease Effects can be reversed with the addition of insulin 8
XOMA 358: Potential Phase 2 Indications Congenital Hyperinsulinism (HI) Due to unregulated secretion of insulin from pancreatic beta-cells leading to severe episodic hypoglycemia The most common cause of hyperinsulinemic hypoglycemia in neonatal, infant and childhood periods U.S. incidence = 1:50,000 births (claims data reveals a prevalence in U.S. of approximately 6,000) Majority of patients concentrated in designated treatment centers XOMA 358 received Orphan Drug Designation from FDA in June 2015 Post-Bariatric Surgery Hyperinsulinism (PBS) Onset observed up to 3 yr post-surgery, especially after the most common procedure (Roux-en-Y) 1-6% develop hypoglycemic events due to hyperinsulinism Postprandial (vs fasting) hypoglycemia is more common Mechanism poorly understood and currently challenging to treat 9
XOMA 358: First in Human Study Overview Phase 1, double-blind, placebo-controlled, single ascending dose study to assess the safety, tolerability, PK, and PD in healthy adult males Ascending doses of 0.1, 0.3, 1, 3, (6 & 9) mg/kg (planned) Inpatient safety monitoring from Baseline through 7-day treatment period with follow up thereafter Pharmacodynamic (PD) markers: insulin, glucose, C-peptide Assessment of the prevention of hypoglycemia after intravenous insulin administration 10
XOMA 358: Phase 1 Study Highlights Phase 1 Trial Demonstrated: Dose-dependent increase in post-meal glucose Dose-dependent decrease in insulin signaling as measured by fasting HOMA-IR values Dose-proportional PK profile that is longer than expected for a surface receptor-targeted mab Reduced insulin sensitivity from Day 2 through at least Day 5 Extended duration of therapy while also improving insulin tolerance Duration of therapy (~15-26 day half life) offers differentiation over current treatment options Well-tolerated with no Serious Adverse Events No active intervention was needed Most events were mild; no patients were removed from study 11
XOMA 358: Prevents Hypoglycemia for up to 5 Days after Intravenous Insulin Administration INSULIN TOLERANCE TEST (Following 3mg/kg IV infusion) Insulin Administration Baseline Day 2 Day 3 Day 5 12
XOMA 358: Key Next Steps Initiate US congenital hyperinsulinism protocol Children s Hospital of Philadelphia (CHOP) Single dose adults Initiate UK congenital hyperinsulinism protocol Great Ormond Street Hospital (GOSH) Single dose 12 and older Initiate US post-bariatric surgery hyperinsulinism protocol Possible ex-us sites to be added 13
XOMA 213 (LFA 102): Phase 2-ready Endocrine Asset Humanized monoclonal that potently blocks signaling at the prolactin receptor Developed under joint collaboration with Chiron/Novartis Pre-clinical, toxicology and Phase 1 safety work completed by Novartis In support of oncology indications Drug was well tolerated XOMA exercised right to take LFA102 back for development in diseases of Hyperprolactinemia Can progress immediately to Phase 2 proof-of-concept studies 14
XOMA 213 (LFA 102): Potential Indications Prolactinoma Benign tumors of the pituitary gland Results in sexual dysfunction, infertility and osteoporosis Existing therapies poorly tolerated in 20% of 140,000 patients Antipsychotic-Induced Hyperprolactinemia Side effect seen in patients treated with commonly prescribed antipsychotics, antidepressants and pain medications Can result in same signs and symptoms as prolactinoma Can result in poor compliance Existing therapies can worsen psychosis 15
XOMA 129 (XMetD FAB): Potential Fast Acting Treatment for Hypoglycemia Highly potent XMetD Fab fragment with negative allosteric modulation of INSR Offers potential for rapid onset, improved efficacy, and tailored duration of therapy Potential treatment for acute severe hypoglycemia and nocturnal hypoglycemia Severe hypoglycemia is life-threatening Multiple adverse cardiovascular impacts tied to severe hypoglycemia 1 Offers tailored duration of therapy and improved efficacy and tolerability compared to IV glucose or glucagon injections 1 Frier, B. M., G. Schernthaner, and S. R. Heller. "Hypoglycemia and Cardiovascular Risks." Diabetes Care 34, no. Supplement 2 (2011). 16
XOMA 129 (XMetD FAB): Potential Fast Acting Treatment for Hypoglycemia For patient populations in which current therapies cannot address the substantial unmet need Insulin- and sulfonylurea-induced hypoglycemia are two of the most common types of medication-induced hypoglycemia ~10% of all ER visits = insulin-related severe hypoglycemia 17
XOMA 129: Dose-dependently Rapidly Stabilizes Glycemia or Reverses Hypoglycemia in Bolus Insulin-treated Rats Animal models demonstrated: Faster onset of action and improved efficacy over variant mabs Encouraging potency and duration of efficacy = XOMA 129 dosing 18
FGS (mg/dl) XMet A: Positive Allosteric Modulator of the Insulin Receptor Day 2 7:00 AM fasting serum glucose (FSG) 300 250 14% 24% Post Vehicle 200 24% Post XMetA 41% 150 100 50 0 All animals (n=5)- 3mg/kg All animals (n=5)- 10mg/kg Excluding non responder (n=4)- 3mg/kg Excluding non responder (n=4)- 10mg/kg Dose-Dependent Reduction in Fasting Serum Glucose Following First Administration 19
Anti-PTHr Research Program Hyperparathyroidism results from overproduction of parathyroid hormone (PTH) when the gland hypertrophies Can be primary or secondary to Chronic Kidney Disease Most primary patients can be treated surgically 10% do not respond to surgery PTHrP is a protein produced in ~30% of patients with solid tumors Endogenous hyperparathyroidism and PTHrP can result in significant hypercalcemia causing fatigue, loss of appetite, confusion, nausea and muscle weakness Both ligands signal through the PTHr Antibodies found that bind to receptor and inhibit signaling to both natural ligand (PTH) and to PTHrP (associated with malignancy) Lead selection is now in process 20
Anti-ACTH Research Program ACTH (adrenal corticotropic hormone) is produced by pituitary gland Causes release of cortisol from adrenal glands Antibody approach to condition when non-malignant tumors (adenoma) on the pituitary gland causes excessive release of ACTH Existing therapies inefficient or poorly tolerated Antibodies discovered that bind to ACTH ligand and reduce or eliminate signaling Presently screening to identify more potent leads 21
XOMA s Current Pipeline Compound Indication Preclinical Phase 1 Phase 2 Phase 3 XOMA s Endocrine Franchise XOMA 358 (INSR) XOMA 213 (Prolactin receptor) XOMA 129 (INSR) XMetA (INSR) Anti-PTHr Anti-ACTH Congenital hyperinsulinism & Post-bariatric surgery hyperinsulinism Various hyperprolactinemias Short acting reversal of insulin (e.g. hospital treatment of insulin overdose) Inherited Receptoropathies Hyperparathyroidism, Malignancy Induced Hypercalcemia Cushing s Disease XOMA s Gevokizumab Development Pyoderma gangrenosum (PG) Servier s Gevokizumab Development Non-infectious uveitis (NIU) EYEGUARD -A & -C Diabetic nephropathy Schnitzler syndrome Out-license Opportunities TGFβ XMetA Immuno-oncology Type 2 Diabetes 22
XOMA Near-term Actions Focus on Future Activities Gevokizumab: The Path Forward Endocrine Platform: XOMA s New Focus Non-core Assets: Source of Non-dilutive Financing XOMA: Required Structure 23
Out-licensing Opportunities to Provide Non-dilutive Financing XOMA 089: Fully human antibody with biased signaling to TGFb1 and 2, but not TGFb3 TGFb1 and TGFb2 blockade important for efficacy, while TGFb3 may be linked to toxicity Potential as an immuno-oncology therapy Outside areas of therapeutic focus XMetA: Novel, first-in-class fully human allosteric mab of the Insulin Receptor Alternative to basal insulin for late-stage diabetics Animal data has shown: Improvement in fasting serum glucose and Hemoglobin A1c Dose-dependent reduction in Fasting Blood Glucose (FBG) Type 2 Diabetes outside our focus and capabilities Term sheets received and negotiations underway 24
Financial Highlights $51.0 million cash at June 30, 2015 Approximately 118.0 million shares outstanding at June 30, 2015 25
XOMA Near-term Actions Focus on Future Activities Gevokizumab: The Path Forward Endocrine Platform: XOMA s New Focus Non-core Assets: Source of Non-dilutive Financing XOMA: Required Structure 26
Investment Thesis Committed to Become a U.S. Commercial Company XOMA 358: Initiate Phase 2 clinical studies in congenital hyperinsulinism & post-bariatric hyperinsulinism XOMA 213: Initiate proof-of-concept IV Phase 2 study in lactation cessation XOMA 129 (XMetD Fab): Manufacture lead molecule, conduct tox studies leading to clinical development Expand endocrine rare disease portfolio with ongoing highvalue research programs Gevokizumab: Continue Phase 3 pyoderma gangrenosum (PG) program with disciplined go/no go decisions Use non-core assets to finance endocrine pipeline 27