BERKELEY, Calif. -- Xoma Corp. said Thursday that it reacquiredfrom Johnson & Johnson's Ortho Biotech Inc. marketing rightsto CD5 Plus drug for treating autoimmune diseases and solidorgan transplants.

"We are evaluating a number of possibilities to maximize themulti-indication potential of CD5 Plus," said John L. Castello,Xoma's president and chief executive officer. The no-cashagreement with Ortho gives Xoma control of all but onepotential use of CD5 Plus and the flexibility to consider co-marketing or co-development efforts with other companies.

Ortho acquired worldwide rights (except for parts of Asia) inMarch 1990 to CD5 Plus, CD7 Plus and an option of firstnegotiations to applications of other immunoconjugates then indevelopment at Xoma. Ortho last year added the use of CD5Plus to treat type 1 diabetes, which is now returned to Xoma.

Under the agreement announced Thursday, Ortho retainedrights to the use of CD5 Plus for treating and preventing graft-vs.-host disease (GvHD) in bone marrow transplant patients,reflecting its strong interest in treatments of transplant-relatedconditions.

CD5 Plus is now in Phase III clinical trials for treatingrheumatoid arthritis and in early-stage clinicals for treatingpsoriasis and lupus erythematosus. Xoma is developing aprotocol for a randomized trial of CD5 Plus to treat type 1diabetes, following an initial study. An investigational newdrug application (IND) was also submitted for CD5 Plus fortreating steroid-resistant acute GvHD. No clinical trials areunder way for CD7 Plus.

Xoma's stock (NASDAQ:XOMA) closed Thursday at $9.63 ashare, up $1.

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