Xoma shifts manufacturing to contractor, cuts 84 jobs

Xoma shifts manufacturing to contractor, cuts 84 jobs

January 6th, 2012 // 1:17 pm @

Xoma Corp. will cut 84 jobs — about one-third of its workforce — as the Berkeley-based drug developer shifts much of its manufacturing to a contractor.

Xoma (NASDAQ: XOMA), which officially took “interim” off CEO John Varian’s title, said Thursday that it will eliminate 50 jobs immediately and cut the other 34 jobs by the end of the first quarter.

The company, which will have 160 employees, will take a $6 million one-time charge for restructuring and severance costs this year, including $3.6 million in the first quarter. The move will chop about $13 million in capital costs, said Xoma, which will not renew a lease on a 31,000-square-foot manufacturing facility when it expires in 2013.

Xoma will focus on clinical trials of its lead clinical drug — gevokizumab, or XOMA-052 — and antibody discovery and development, Varian said in a press release.

Xoma expects to start a Phase III program of gevokizumab in the eye disease uveitis, in the second quarter. It also is enrolling patients in a Phase II trial of the drug to fight moderate to severe acne.

As Xoma eliminates large-scale Phase III and commercial production to a contractor by the end of the second quarter, it becomes the second East Bay company over the past year to move manufacturing to a contractor. Bayer HealthCare in May said it would move production of its multiple sclerosis drug Betaseron from Emeryville to a Boehringer Ingelheim plant in central Europe, eliminating 540 Bay Area jobs by September 2013.

Xoma did not say who its contractor would be.

Bayer continues to make its hemophilia drugs from its expanded Berkeley facility, and Xoma will retain its pilot manufacturing facility and the ability to make drugs for Phase I and Phase II clinical trials.

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