XOMA and Les Laboratoires Servier have announced the signing of a regional agreement to jointly develop and commercialize XOMA 052, XOMA’s anti-inflammatory drug candidate, in multiple indications. XOMA 052 is designed to inhibit the pro-inflammatory cytokine interleukin-1 beta that is believed to be a primary trigger of pathologic inflammation in multiple diseases. Under the deal XOMA will receive around $35 million upfront, up to $470 million in milestone payments and tiered royalties up to a mid-teens percentage rate. XOMA retains the development and commercialization rights for Behcet’s uveitis and other inflammatory and oncology indications in US and Japan. Servier will receive similar rights in the rest of the world. Servier will also fund the first $50 million of XOMA 052 development expenses and 50% of further expenses for the Behcet’s uveitis indication. XOMA 052 is expected to advance into Phase 3 development in Behcet’s uveitis in 2011. Servier will fund development for diabetes and cardiovascular disease indications in exchange for worldwide rights. XOMA retains an option to reacquire the development and commercialization rights to the diabetes and cardiovascular indications in the U.S. and Japan by paying an option fee and partial reimbursement of incurred development expenses. If XOMA reacquires these rights, it has the ability to license them to one or more third parties.