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news.Xoma has licensed the global commercial rights to gevokizumab, a novel anti-IL-1 beta allosteric monoclonal antibody, to Novartis.
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In a separate agreement, XOMA has granted Novartis a license to its intellectual property covering the use of IL-1 beta targeting antibodies in the treatment of cardiovascular disease.
Under these agreements, XOMA will receive $31 million in upfront payments, including a $5 million equity investment, and is eligible to receive significant pre- and post-commercialization milestone payments plus tiered high-single to mid-double-digit royalties on net sales of gevokizumab.
XOMA is also eligible to receive low-single-digit royalties on canakinumab sales in cardiovascular indications rising to mid-single-digit royalties under certain circumstances.
Novartis has agreed to settle XOMA's €12 million debt to Les Laboratoires Servier and extend the maturity date on XOMA's debt to Novartis from September 2020 to September 2022.
"Today, we achieved a significant milestone in the transformational change that we initiated in March of this year. The immediate impact of these licensing agreements for gevokizumab and our IL-1 beta intellectual property eliminates almost half of XOMA's outstanding debt, more than doubles our cash position, and generates potential recurring revenues through royalties.
It also validates both the value of XOMA's scientific advances and our business strategy to build shareholder value by licensing our portfolio of assets and intellectual property to partners who will continue the asset's clinical development," stated Jim Neal, Chief Executive Officer of XOMA.
Gevokizumab is a potent monoclonal antibody with unique allosteric modulating properties. It has the potential to treat patients with a wide variety of inflammatory and other diseases.
Gevokizumab binds strongly to interleukin-1 beta (IL-1 beta), a pro-inflammatory cytokine, and modulates the cellular signaling events that produce inflammation. IL-1 beta has been shown to be involved in a diverse array of disease states, including cardiometabolic diseases and other auto-inflammatory diseases.