Novartis signs $500m immuno-oncology deal

Novartis has licensed an immuno-oncology programme from Xoma in a deal that could be worth more than $500m.

The deal covers rights to Xoma's anti-transforming growth factor-beta (TGFb) antibody programme.

Under the terms of the agreement, the Berkeley-based Xoma will receive $37m in upfront payments and is also eligible to receive up to $480m if all development, regulatory and commercial milestones are met.

John Varian, CEO of Xoma, said: “XOMA and Novartis have worked closely together for several years to develop new product candidates.

“When they expressed interest in our anti-TGFb programme, we knew Novartis was the best company to bring this exciting potential therapy to the patients whom it may help.”

TGFb is an immune suppressive cytokine involved in a number of cellular processes, including inhibition of cell growth and immune suppression. Elevated levels of cell growth can be behind numerous diseases, including cancer and fibrosis.

According to Xoma, three isoforms of TGFb exist in humans: TGFb1, 2 and 3. TGFb1 is overexpressed in many cancers and is thought to increase the chances of metastasis.

Its lead candidate Xoma089 is a fully human, high-affinity, late preclinical monoclonal antibody that neutralises TGFb1 and 2 while sparing TGFb3.

Xoma is currently at the forefront in the discovery and development of therapeutic antibodies. The company, however, was left devastated when its Servier-partnered drug for Behcet's disease failed a phase III study in July.

Share prices after this failure fell by 80% - but after the agreement with Novartis they have now risen by 32%.