Corporate Presentation October 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
Actions to Complete by Year-end 2015 Enact decision regarding future gevokizumab development Right size XOMA to support endocrine franchise Out-license non-core assets to provide non-dilutive financing Evaluate strategic alternatives for CMC and biodefense operations Initiate XOMA 358 Proof-of-Concept studies 3
Investment Thesis Driving Development in Endocrine Therapeutics Focus resources on advancing Endocrine portfolio XOMA 358: Initiate Phase 2 studies in hyperinsulinemic hypoglycemia indications XOMA 129: Initiate IND-enabling studies XOMA 213: Finalize protocol and launch POC Expand endocrine rare disease portfolio with ongoing high-value research programs Continue gevokizumab Phase 3 program in pyoderma gangrenosum (PG) with disciplined go/no-go decisions 4
Endocrine Portfolio
XOMA s Endocrinology Advantage Allosteric modulation enables antibody approach Enhances or attenuates receptor activity but doesn t fully block essential endocrine functions Dramatically increases number of potential targets Success with GPCRs (G-protein-coupled receptors) allows for a monoclonal approach 6 assets with multiple potential indications 2 assets in the clinic, 1 could be at IND within a year Clinical strategy starts with severe, rare indications; expand into a larger ones Potential for acute, single-administration indications May allow simpler and faster clinical development Commercial synergies: common set of physician targets 6
XOMA s Endocrine Portfolio Compound Target/Potential Indications Current Stage XOMA 358 [XMetD] XOMA 129 [XMetD Fabs] XOMA 213 [LFA 102] XOMA 159 [XMetA] XMetA Anti-PTHr Anti-ACTH Long-acting negative allosteric modulator of the Insulin Receptor Short-acting negative allosteric modulator of the Insulin Receptor Prolactin receptor antagonist Positive allosteric modulator of the Insulin Receptor Positive allosteric modulator of the Insulin Receptor Parathyroid receptor antagonists Adrenocorticotropic hormone antagonists Phase 2 launch in 2015 Lead identified; preclinical testing Safety established in Phase 1 study Phase 2 ready Lead identified; potential in INSR orphan diseases T2D licensing efforts ongoing Antibodies with in vitro functional activity identified Antibodies with in vitro functional activity identified 7
XOMA 358: Down-regulates Insulin Receptor First-in-class, fully human, monoclonal antibody Allosterically binds to insulin receptor (INSR) and reduces INSR activity Shifts insulin response curve up to 100-fold in vitro Blocks hypoglycemia in multiple animal models Effects can be reversed with the addition of insulin Investigated as novel treatment for non-drug-induced, endogenous hyperinsulinemic hypoglycemia Presented positive Phase 1 data at ENDO 2015 8
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 9
XOMA 358: Phase 1 Study 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 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 Well-tolerated with no Serious Adverse Events No active intervention was needed Most events were mild; no patients were removed from study 10
XOMA 358: Prevented Hypoglycemia for up to 5 Days after IV Insulin Administration INSULIN TOLERANCE TEST (Following 3mg/kg IV infusion) Insulin Administration Baseline Day 2 Day 3 Day 5 11
XOMA 358: Phase 2 Indication Congenital Hyperinsulinism Congenital Hyperinsulinism (HI) Unregulated secretion of insulin leads to severe episodic hypoglycemia Most common cause of hyperinsulinemic hypoglycemia in neonatal, infant and childhood periods No approved medication; currently therapies offer inadequate efficacy and tolerability - Disease management options are continuous ingestion of glucose or surgical removal of part or all of the pancreas U.S. incidence = 1:50,000 births - Claims data reveals a prevalence in U.S. of approximately 6,000 XOMA 358 received Orphan Drug Designation from FDA in June 2015 Majority of patients concentrated in designated treatment centers Initiating Proof-of-Concept Study in 2015 US: Children s Hospital of Philadelphia (CHOP) UK: Great Ormond Street Hospital (GOSH) 12
XOMA 358: Phase 2 Indication Post-Bariatric Surgery Hyperinsulinism Post-Bariatric Surgery Hyperinsulinism (PBS) Onset observed up to 3 yrs post-surgery, especially after the most common procedure (Roux-en-Y) - 1-6% develop hypoglycemic events due to hyperinsulinism 1 - Postprandial (vs fasting) hypoglycemia is more common - Mechanism poorly understood and currently challenging to treat Plan to initiate PBS study in 2015 1 Lee, C.J., Obesity (2015) 23, 1079 1084. doi:10.1002/oby.21042 13
XOMA 129: 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 Compared to IV glucose or glucagon injections Treatment for acute severe hypoglycemia Severe hypoglycemia is life-threatening Multiple adverse cardiovascular impacts tied to severe hypoglycemia 1 ~10% of all ER visits = insulin-related severe 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 1 Frier, B. M., G. Schernthaner, and S. R. Heller. "Hypoglycemia and Cardiovascular Risks." Diabetes Care 34, no. Supplement 2 (2011). 14
XOMA 129: Dose-dependently Rapidly Stabilizes Glycemia or Reverses Hypoglycemia Bolus insulin-treated rat models demonstrated: Faster onset of action and improved efficacy over variant mabs Encouraging potency and duration of efficacy XOMA 129 dosing (20 min) 15
XOMA 213 (LFA 102): Phase 2 Ready Endocrine Asset Fully human, monoclonal antibody 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 reacquire LFA 102 for development in diseases of hyperprolactinemia Can progress immediately to Phase 2 POC studies 16
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 17
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 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 18
Anti-ACTH Research Program Adrenal corticotropic hormone (ACTH) 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 19
Gevokizumab: Pyoderma Gangrenosum (PG)
Pyoderma Gangrenosum: Gevokizumab Phase 3 Indication Severe inflammatory, ulcerative disease of the skin with undetermined cause One of several indications collectively known as neutrophilic dermatoses Claims data over past 3 years indicate U.S. pyoderma gangrenosum patient population of 11,000-14,000 Typically takes >11 months to fully heal with corticosteroids 1 Orphan Drug Designation granted by FDA: February 2014 Patent from POC study Total resolution of target ulcer with no sign of active PG Pain (0-10) Ulcer Size (cm 2 ) Day 0 10 5.2 Day 84 7 0 Day 0 Day 84 1 Bennett ML et al. Pyoderma gangrenosum. A comparison of typical and atypical forms with an emphasis on time to remission. Case review of 86 patients from 2 institutions. Medicine (Baltimore) Jan;79(1):37-46. PMID: 10670408 21
Pyoderma Gangrenosum: Phase 3 Program Study Designs Pyoderma Gangrenosum Phase 3 Studies U.S. Only (Study 172) U.S. & x-u.s. (Study 173) # Patients 58 58 Gevokizumab doses (Monthly, SC) 60mg : Placebo 60mg : Placebo Randomization 1:1 1:1 Primary endpoint Complete healing of target ulcer at approximately Day 124 Secondary endpoints Multiple, including time to ulcer closure and pain Statistical powering 80%; p=0.05 80%; p=0.05 22
XOMA s Pipeline Compound Indication Preclinical Phase 1 Phase 2 Phase 3 Endocrine Franchise XOMA 358 (INSR) Congenital hyperinsulinism & Post-bariatric surgery hyperinsulinism XOMA 129 (INSR) Short acting reversal of insulin (e.g. hospital treatment of insulin overdose) XOMA 213 (Prolactin receptor) Various hyperprolactinemias XOMA 159 (INSR) Inherited receptoropathies Anti-PTHr Hyperparathyroidism, Malignancy-induced hypercalcemia Anti-ACTH Cushing s disease Gevokizumab Pyoderma gangrenosum (PG) Out-license Opportunity XMetA Type 2 Diabetes 23
Financial Highlights $51.0 million cash at June 30, 2015 Raised ~$50.5 million non-dilutive liquidity by licensing TGF-b antibody program to Novartis on September 30, 2015 $37.0 million upfront payment $13.5 million loan maturity date extended to September 2020 Potential milestone payments of up to $480 million Royalties tiered from mid-single digits to low double digits Cash runway into 2017 Corporate actions reduces cash burn rate significantly Right sized XOMA to support endocrine franchise Evaluating strategic alternatives to CMC and biodefense operations Approximately 118.0 million shares outstanding at June 30, 2015 24
Investment Thesis Driving Development in Endocrine Therapeutics XOMA 358 (XMetD): Initiate proof-of-concept clinical studies in congenital hyperinsulinism & post-bariatric hyperinsulinism XOMA 129 (XMetD Fab): Manufacture lead molecule, conduct tox studies leading to clinical development XOMA 213 (LFA 102): Initiate proof-of-concept study in lactation cessation Expand endocrine rare disease portfolio with ongoing high-value research programs Continue gevokizumab Phase 3 program in pyoderma gangrenosum (PG) with disciplined go/no-go decisions Amending protocol to allow blinded data analyses Use non-core assets to help finance the endocrine effort 25