XOMA Ltd. could receive more than $100 million in a collaboration with Takeda Pharmaceutical Co. Ltd. to discover and develop monoclonal antibody therapeutics.

It marks the second major pharma deal in the last six months for XOMA, which in May formed a discovery and development partnership with Kenilworth, N.J.-based Schering-Plough Corp. for an undisclosed up-front payment and milestones, research funding and royalties. And XOMA hopes similar deals will follow.

"We are certainly working in that direction," said Paul Goodson, senior director of investor relations at the Berkeley, Calif.-based firm, which has seen a "huge demand" for antibody platforms over the last couple of years, especially as big pharma looks for ways to fill thinning pipelines.

Antibody firms have taken center stage in a number of partnerships and acquisitions over the last year, the most notable of which included Thousand Oaks, Calif.-based Amgen Inc.'s buyout of Fremont, Calif.-based Abgenix Inc. for about $2.2 billion and London-based AstraZeneca plc's $1.3 billion purchase of Cambridge, UK-based Cambridge Antibody Technology. (See BioWorld Today, Dec. 15, 2005, and May 16, 2006.)

"I think part of the reason is that antibodies are becoming more and more recognized as an area of new medicines," Goodson said, and pharma companies began realizing "they were not well positioned in the antibody space. I think that's what is driving a lot of the interest."

Goodson called XOMA's deal with Takeda a "classically structured collaboration," with XOMA entitled to undisclosed up-front and milestone payments, plus funding for research and development activities, including the manufacture of antibodies for preclinical and early clinical testing.

All told, XOMA could receive more than $100 million over the life of the collaboration, as well as royalties.

XOMA's technology includes a "broad portfolio of antibody discovery and antibody optimization technologies," said Goodson, in bacterial cell expression and human engineering, as well as an "enormous collection" of phage display libraries.

Since XOMA holds rights to all those technologies, its partners don't have to worry "about incurring a lot of stacked royalties" from the collaboration, he told BioWorld Today. "That's an important incentive."

XOMA will use its technologies to discover therapeutic antibodies against multiple targets selected by Takeda, and handle preclinical studies, cell line and process development and antibody production for early trials. Then Takeda would conduct the clinical trials, submit regulatory filings and commercialize any approved products.

The companies have not disclosed what indications the collaboration aims to target, but it likely will fall into one of Takeda's four focus areas: lifestyle-related diseases; oncology and urological diseases; central nervous system disorders and bone and joint diseases; and gastroenterological diseases.

XOMA also continues work on its own antibody pipeline, which includes Neuprex, a modified recombinant fragment of bactericidal/permeability-increasing protein (BPI) aimed at meningococcal disease. That product has been in Phase III studies, and recently received orphan drug designation in the European Union. It's being studied in pediatric patients undergoing open-heart surgery or suffering severe burns.

The company also has XOMA 629, a peptide for acne that had failed in a Phase II study because the gel formulation used was unable to adequately penetrate the skin. XOMA reformulated the product and aims to re-enter the clinic next year. And it s moving forward on a compound aimed at rheumatoid arthritis and osteoarthritis.

In its collaborations, XOMA is developing an anti-CD40 molecule with Basel, Switzerland-based Novartis AG in chronic lymphocytic leukemia, multiple myeloma and other indications. The company also has ongoing work with Schering-Plough and with Lexicon Genetics Inc., of The Woodlands, Texas.

XOMA, which plans to release its third-quarter earnings next week, reported a net loss of $5.9 million for the second quarter. As of June 30, the company had cash totaling $34.9 million.

Shares of XOMA (NASDAQ:XOMA) rose 17 cents Thursday, 8.2 percent, to close at $2.25.