Xoma repays loan, can fund operations into 1Q

Xoma repays $44.3 million Goldman Sachs loan, can fund operations into 1st-quarter of 2010

• On 4:04 pm EDT, Thursday September 24, 2009

BERKELEY, Calif. (AP) -- Biotechnology company Xoma Ltd. said Thursday it repaid its $44.3 million Goldman Sachs loan and is discharged from obligations to its lenders, but said it only has sufficient finances to fund operations into the first quarter of 2010.

"The repayment resolves the uncertainty about the loan that arose from the sudden and unexpected withdrawal of Raptiva from the market earlier this year," the company said.

The Genentech unit of drugmaker Roche Holding AG pulled the psoriasis treatment Raptiva off the U.S. market in April because of links to an often fatal brain infection.

That withdrawal triggered Xoma's renegotiation of the loan that was secured by royalties from Raptiva, Lucentis, and Cimzia.

"We are pleased to have successfully concluded this matter," the company said.

The company said it paid the loan with $25 million in proceeds from Genentech's buyout of Xoma's royalty interest in the macular degeneration drug Lucentis and an equity offering of $12.3 million. Other funds came from the restricted cash account reserved for loan repayment containing $6.1 million and $900,000 from Xoma's cash reserves. Also, Xoma was required to pay a prepayment penalty of 6 percent of the loan balance, or $2.5 million, from its cash reserves.

Shares of Xoma fell 13 cents, or 13 percent, to 88 cents in late trading. The stock has traded between 37 cents and $2.20 over the last 52 weeks.

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