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Xoma to stop testing drug as arthritis treatment

March 4 (Reuters) - Xoma Corp said it would not proceed with late-stage studies of its drug, gevokizumab, as a treatment for a form arthritis of the hand, after data from two mid-stage studies showed that the drug did not benefit patients.

The company said it would review data from the mid-stage studies to determine if there were some patients who responded to the drug, before it starts additional studies in patients with erosive osteoarthritis of the hand.

Xoma is also testing the drug to treat two forms of eye disease, acne, autoimmune ear disease and pyoderma gangrenosum, a rare skin disease.

The company's shares were halted before the news. They closed at $9.44 on Tuesday on the Nasdaq.