Tanox receives $12.8 million milestone payment from Genentech for Xolair

By Angela McDaniels

Seattle, Jan. 23 - Tanox Inc. said it has received a $12.8 million net milestone payment from Genentech Inc. because Xolair (omalizumab) had sales of more than $300 million in the United States during 2005.

Of the $20 million milestone, $7.2 million was payable to Tanox's former attorneys under an adverse arbitration ruling, the company said. Tanox recorded the milestone payment as 2005 fourth-quarter revenue.

The payment was made under terms of a cross-licensing agreement between Tanox and Genentech for selected anti-IgE antibodies.

"The milestone payment is significant for two reasons," Tanox president and chief executive officer Nancy Chang said in a company news release.

"From a financial standpoint, the cash we received will be used to offset a portion of our research and development expenditures, which is a valuable benefit for a company of our size.

"In addition, surpassing $300 million in sales in 2005 shows that Xolair is continuing to gain acceptance among physicians and patients."

Xolair is a humanized therapeutic approved by the Food and Drug Administration and the European Commission for the treatment of moderate-to-severe persistent allergic asthma and was developed by Tanox, Genentech and Novartis Pharma AG.

Genentech and Novartis market Xolair in the United States. Novartis has marketing rights in the rest of the world.

Tanox is a biotechnology company based in Houston that discovers and develops monoclonal antibodies for the treatment of immune-mediated diseases, inflammation, infectious disease and cancer.

Novartis is a pharmaceuticals company based in Basel, Switzerland.

Genentech, based in South San Francisco, Calif., develops and commercializes biotherapeutics for medical needs.

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