By Mary Welch

Xoma Ltd. signed a licensing deal worth at least $11 million granting Allergan exclusive rights to Xoma's recombinant bactericidal/permeability-increasing (BPI) when used with other anti-infectives in products to treat ophthalmic infections.

Xoma, based in Berkeley, Calif., will receive an up-front payment as well as milestones totaling $11 million, and low double-digit royalties on net worldwide sales of Allergan's anti-infective products that include BPI. In addition, a Xoma affiliate will manufacture BPI for Allergan.

"It's our first BPI collaboration, and we're pleased that Allergan made a significant financial commitment as well as in future product development spending," said Ellen Martin, director of corporate communications.

Allergan, of Irvine, Calif., will fund all future development costs for any products developed under this agreement. BPI is currently in preclinical development at Xoma.

"We've done extensive preclinical work, but I understand that, traditionally, there is a great deal of preclinical done in the ophthalmic field," said Martin. "So, it could be expected that Allergan would do their own preclinical research. It'll probably be a four to five-year process through the entire development process."

BPI is a naturally occurring human host-defense protein found in white blood cells with multiple anti-infective properties. Neuprex, another Xoma BPI drug, is in Phase III trials for meningococcemia and hemorrhage/trauma. Neuprex is also in one Phase I trial for lung infections in cystic fibrosis patients, Phase II for partial hepatectomy and Phase I/II for severe intra-abdominal infections. The company expects to file a biologics licensing agreement by year's end for the meningococcemia indication, a rare but deadly blood-borne bacterial infection that strikes children. The hemorrhage/trauma indication is expected to complete enrollment by the first quarter of next year.

Since 1995, Xoma has been researching applications of BPI under its I-PREX topical BPI ophthalmic program. Other BPI products include mycoprex, a fungicidal compound for systemic fungal infections; XMP300, anti-angiogenic compounds for chronic inflammation and metastatic tumors; XMP500, antibacterial compounds for Gram-negative and Gram-positive infections; and XMP 600, which are anti-endotoxin compounds.

Xoma's stock (NASDAQ:XOMA) closed Monday at $5.968, up 11 percent.