Xoma Corp. announced Tuesday that John L. Castello, formerpresident and chief operating officer of Ares Serono Group, aSwiss pharmaceutical company, has been named president andchief executive officer of Xoma.
Castello immediately moved to dispel rumors that the companywas a takeover candidate, telling BioWorld, "I didn't come overhere because I wanted to peddle the company."
Steven Mendell will continue as chairman, relinquishing theCEO position. Dr. Patrick Scannon, who founded Xoma in 1981,will step down as president and become vice chairman forscientific and medical affairs. Gary Wilcox will continue as vicechairman for scientific and business development and head ofXoma's Santa Monica, Calif., research and scale-up operations.
Castello joined Ares Serono in 1986 as president of itsdiagnostics division and served as president and chiefoperating officer of the company from 1988 until he resignedin August 1991.
Mendell said the search for a new president began last spring,when he recommended to Xoma's board that the company(NASDAQ:XOMA) look for a seasoned pharmaceutical executive.
Castello said his job would be to build the company. "That'swhat people pay me to do," he said. He said the goal continuesto be to build an integrated pharmaceutical company, despiterumors on Wall Street that Xoma would be acquired by one ofits marketing partners, Pfizer Inc. or Johnson & Johnson.
Castello also said his decision to take the job wasn't tied to FDAapproval of E5 to treat gram-negative sepsis or CD5 Plus totreat graft-vs.-host disease, although he believes that bothdrugs will be approved.
On April 14, the Berkeley, Calif., company said the FDA haddetermined that E5 wasn't approvable on the basis of Xoma'sfirst clinical trial. The agency is reviewing a second study andis continuing to evaluate the first study in the context of thesecond, said Scannon.
CD5 Plus, which an advisory committee recommended forapproval last June, is delayed because of the FDA's request foradditional historical control data, Scannon said. "The FDA hasbeen very meticulous and thorough in their review, which hastaken time. It's our view that they are moving very rapidlythrough it at this point."
Xoma and the agency also are meeting to discuss studies of thedrug in rheumatoid arthritis and type I diabetes. The delay inapproving the first indication is not a harbinger of an adverseview toward additional indications, Scannon said.
"The company needed some change," said Joyce Lonergan, ananalyst at Cowen & Co. "They've got enough cash and they'rerunning at an incredibly low burn rate of $8 million to $10million per quarter, so maybe they'll pull it off."
Xoma shares lost 50 cents to $13.50.
-- Karen Bernstein BioWorld Staff
(c) 1997 American Health Consultants. All rights reserved.