As filed with the Securities and Exchange Commission on March 10, 1999
Registration No. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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XOMA LTD.
(Exact name of registrant as specified in its charter)
Bermuda 94-2756657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Address, including ZIP code, and telephone number, including
area code, of registrant's principal executive offices)
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CHRISTOPHER J. MARGOLIN, ESQ.
XOMA LTD.
2910 Seventh Street
Berkeley, California 94710
(510) 644-1170
(Name, address, including ZIP code, and telephone number,
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to
register additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the
prospectus is expected to be made pursuant to Rule 434, please check the
following box. / /
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Each Class Proposed Proposed
of Securities Amount Maximum Maximum Amount of
To Be To Be Offering Price Aggregate Registration
Registered Registered per Unit(1) Offering Price(1) Fee
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<S> <C> <C> <C> <C>
Common Shares,
par value U.S. $.0005
per share................... 4,481,508(2)(3) $3.0625 $13,724,619 $3,816
</TABLE>
(1) Estimated solely for purposes of computing the registration fee pursuant to
Rule 457(c).
(2) Includes a like number of Preference Share Purchase Rights (the "Rights").
Since no separate consideration is paid for the Rights, the registration
fee is included in the fee for the Common Shares.
(3) Pursuant to Rule 416 under the Securities Act of 1933, any additional
Common Shares issued as a result of the anti-dilution provisions of the
Common Share Purchase Warrants pursuant to which a portion of the Common
Shares registered hereby will be issued are deemed to be registered
herewith.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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-2-
<PAGE>
The information contained in this prospectus is not complete and may be changed.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these secuirities in any state where the offer or
sale is not permitted.
Prospectus Subject to Completion,
dated March 10, 1999
XOMA Ltd.
4,481,508 Common Shares
The Company: The Common Shares:
o We are a biopharmaceutical company o The Common Shares offered by
developing products to treat this Prospectus were or will
infections, infectious complications be issued:
(such as those that follow traumatic
injury and surgery), and immunologic o in the 1999 Private Placement
and inflammatory disorders.
o upon exercise of the 1999
Warrants
o We can be reached at:
which are described in this
Prospectus.
XOMA Ltd.
2910 Seventh Street o Our Common Shares are listed on
Berkeley, California 94710 the Nasdaq National Market under
(510) 644-1170 the symbol "XOMA." The last re-
ported sale price for the Common
Shares on March 4, 1999 was
The Offering: US$3-5/32 per share.
o This is an offering of our Common
Shares, par value US$.0005 per share.
o All of the Common Shares offered by
this Prospectus are being offered by
certain of our shareholders.
o We will not receive any of the pro-
ceeds from the sale of Common
Shares by our shareholders.
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This Investment Involves a High Degree of Risk. Consider Carefully the Risk
Factors Beginning on Page 5 of this Prospectus Before You Invest.
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Neither the SEC nor any state securities commission has approved these
securities or determined that this Prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
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The date of this Prospectus is , 1999.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Incorporation of Information We File Selling Shareholders....................... 14
with the SEC ......................... 3 Description of Share Capital............... 16
Disclosure Regarding Forward- Plan of Distribution....................... 21
Looking Statements ................... 4 Legal Opinion.............................. 22
Risk Factors............................ 5 Experts.................................... 22
The Company.............................12 Where You Can Get More Information......... 22
Price Range of Common Shares and
Dividend Information .................13
</TABLE>
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INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The following documents filed by XOMA Corporation, which was our name as a
Delaware corporation before our recent reorganization resulting in a change of
our legal domicile to Bermuda (the "Reorganization"), and XOMA Ltd., which
became our name as a Bermuda company upon effectiveness of the Reorganization
(each may be referred to in this Prospectus as "XOMA" or the "Company") with the
SEC pursuant to the Securities Exchange Act are "incorporated by reference" in
this Prospectus, which means we can disclose important information to you by
referring you to these documents and they are considered to be a part of this
Prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (File No. 0-14710);
(2) Current Report on Form 8-K dated December 29, 1998 filed on
January 6, 1999 (File No. 0-14710);
(3) Current Report on Form 8-K dated January 28, 1999 filed on January
29, 1999, as amended by Amendment No. 1 on Form 8-K/A dated February 18,
1999 filed on February 18, 1999 (File No. 0-14710); and
(4) The description of XOMA's Common Shares in the Registration
Statement on Form 8-A dated June 9, 1986 filed on June 11, 1986 under
Section 12 of the Exchange Act, including any amendment or report for the
purpose of updating such description (Registration No. 33-4793).
All documents filed by XOMA with the SEC pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act after the date of this Prospectus and
before all of the Common Shares offered by this Prospectus have been sold are
deemed to be incorporated by reference in, and to be part of, this Prospectus
from the date any such document is filed.
Any statements contained in a document incorporated by reference in this
Prospectus are deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus (or in
any other subsequently filed document which also is incorporated by reference in
this Prospectus) modifies or supersedes such statement. Any statement so
modified or superseded is not deemed to constitute a part of this Prospectus
except as so modified or superseded.
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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements made in this Prospectus are forward-looking in
nature, including our product development plans, plans concerning the
commercialization of products and other statements that are not historical
facts. The occurrence of the events described, and the achievement of the
intended results, depend on many events, some or all of which are not
predictable or within our control. Actual results may differ materially from
those anticipated in any forward-looking statements. Many risks and
uncertainties are inherent in the biopharmaceutical industry. Others are more
specific to our business. Many of the significant risks related to our business
are described in this Prospectus. These include, among others, risks associated
with technology and product development, sufficiency and availability of funds,
marketing risks, patent and intellectual property matters, regulatory and
manufacturing issues, risks associated with competition from other companies and
the Year 2000 issue. Many of these risks are discussed further in "Risk
Factors."
--------------------
We have not authorized any dealer, salesperson or other person to give you
written information other than this Prospectus or to make representations as to
matters not stated in this Prospectus. You must not rely on unauthorized
information. This Prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this Prospectus nor any
sales made hereunder after the date of this Prospectus should imply that the
information contained in this Prospectus or the affairs of the Company have not
changed since the date of this Prospectus.
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RISK FACTORS
You should carefully consider the following factors and other information
in this Prospectus before deciding to invest in common shares.
The Manufacture And Distribution Of Our Products Are Strictly Regulated
And There Can Be No Assurance Of Regulatory Approvals Or Additional
Product Development
The United States government and governments of other countries extensively
regulate many aspects of our proposed products, including:
o testing
o manufacturing
o promotion and marketing and
o export.
In the United States, the Food and Drug Administration (the "FDA")
regulates pharmaceutical products under the Federal Food, Drug, and Cosmetic Act
and other laws, including, in the case of biologics, the Public Health Service
Act. At the present time, we believe that our products will be regulated by the
FDA as biologics. State regulations may also effect our proposed products.
Without the required regulatory approvals needed in the United States and other
countries, we will be unable to manufacture and market our products in those
countries.
In December 1992, we submitted an investigational new drug application to
the FDA to begin Phase I human testing of our NEUPREX(R) product, a modified
recombinantly-derived fragment of human bactericidal/permeability-increasing
protein ("BPI"). In March 1993, we initiated human safety and pharmacokinetic
(chemical activity) testing under this application. In mid-1995, we initiated
three clinical efficacy (effectiveness) trials testing the NEUPREX(R) product as
a treatment for the following indications:
o meningococcemia (a potentially deadly bacterial infection principally
of children)
o infectious complications of severe blood loss due to trauma
(hemorrhagic trauma) and
o complications following partial hepatectomy (a type of major liver
surgery).
We began a fourth trial in the first quarter of 1996 to test our NEUPREX(R)
product in combination with antibiotics to treat severe infections within the
abdomen. In the third quarter of 1997, we initiated a Phase I/II clinical trial
to test NEUPREX(R) in cystic fibrosis patients (whose genetic disorder
predisposes them to recurring bacterial lung infections). In August 1996,
following favorable results in a Phase I/II study, the FDA granted us a "Subpart
E" designation for NEUPREX(R) for the treatment of severe pediatric
meningococcemia. This designation is intended to expedite the development,
evaluation and marketing of new therapies for life-threatening and debilitating
illnesses. In October 1996 , we began a Phase III pivotal trial for the use of
NEUPREX(R) to treat this condition in the United States and Canada. Beginning in
the first quarter of 1997, we added trial sites in the United Kingdom to
increase patient enrollment in the trial. In June 1998, we announced that
NEUPREX(R) had been designated as an "orphan drug" under the Orphan Drug Act by
the FDA for the treatment of severe meningococcal disease. The Orphan Drug Act
generally entitles the first developer that receives FDA marketing approval for
an orphan drug to a seven-year exclusive marketing period in the United States
for that product. In the fourth quarter of 1997, we initiated a Phase III
pivotal trial testing NEUPREX(R) to prevent serious pulmonary complications
(pneumonia and/or acute respiratory distress syndrome) in patients
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suffering from hemorrhage due to trauma based on data from our two Phase II
studies in this patient population. We are in the process of reviewing and
analyzing the results of the Phase II partial hepatectomy study, which was
concluded at the end of 1997. We cannot assure you that we will obtain product
approval for NEUPREX(R) or any other BPI product.
Our manufacturing facilities for NEUPREX(R) will require federal licensing
prior to any commercial use or sale of NEUPREX(R) in the United States. We
cannot assure you that we will obtain approval of the manufacturing facilities
for NEUPREX(R).
In March 1989, we filed a product license application for approval of
E5(R), a monoclonal antibody product, for the treatment of gram-negative sepsis.
We completed several clinical trials of E5(R), including two Phase III studies.
In June 1992, the FDA informed us that E5(R) was not approvable without further
clinical testing, and in June 1993 we began a third Phase III clinical trial of
E5(R). In April 1997, we announced that results of an interim analysis of the
third trial did not support continuation of the trial, and in June 1997 we
announced that Pfizer Inc. had decided to end its marketing arrangement with us
for E5(R).
In September 1996, XOMA and Genentech, Inc. announced that an
investigational new drug application with the FDA for clinical testing of hu1124
in patients with moderate to severe psoriasis had been filed. The hu1124
product, previously referred to as anti-CD11a, is a humanized monoclonal
antibody product we are developing in collaboration with Genentech for treatment
of psoriasis. In the second quarter of 1997, in response to findings about the
activity of hu1124 in psoriasis patients, we started additional Phase I studies
at lower doses. We completed enrollment in a Phase II efficacy study in Canadian
psoriasis patients in October 1998 and subsequently received a $2 million
milestone payment from Genentech. In addition, further joint development plans
for this product are currently under review. We cannot assure you that we will
obtain product approval for hu1124 in these or any other indications.
The FDA has substantial discretion in both the product approval process and
manufacturing facility approval process and we cannot predict at what point, or
whether, the FDA will be satisfied with our submissions or whether the FDA will
raise questions which may be material and delay or preclude product approval or
manufacturing facility approval. As we accumulate additional clinical data, we
will submit it to the FDA, which may have a material impact on the FDA product
approval process.
Our other potential products will require significant additional
development, including extensive preclinical and clinical testing. We cannot
assure you that any of the products we are developing will be successfully
developed, obtain the requisite regulatory approval or be successfully
manufactured or marketed.
We Will Need Additional Funds To Continue Our Research And
Development And Other Activities
We have spent, and we expect to continue to spend, substantial funds in
connection with:
o research and development relating to our products and production
technologies
o scale-up of our production capabilities
o extensive human clinical trials and
o protection of our intellectual property.
We believe we have enough cash (including interest income) to meet our currently
anticipated needs for operating expenses, working capital, equipment
acquisitions and current research projects for at least one year. We
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continue to evaluate strategic alliances, potential partnerships and financing
arrangements which would further strengthen our competitive position and provide
additional funding. However, we cannot assure you that:
o operations will generate meaningful funds
o additional agreements for product development funding can be reached
o strategic alliances can be negotiated or
o adequate additional financing will be available for us to finance our
own development on acceptable terms, if at all.
If adequate funds are not available, our business will be materially adversely
affected.
We Have Sustained Losses In The Past And We Expect To Sustain Losses In
The Future
We have experienced significant losses and, as of December 31, 1998, we had
an accumulated deficit of approximately $404.3 million.
For the year ended December 31, 1998, we had net losses of approximately
$47.2 million, or $1.16 per Common Share (basic and diluted). We expect to incur
additional losses in the future. Our ability to make profits is dependent in
large part on obtaining regulatory approval for our products and entering into
agreements for product development and commercialization. Our ability to fund
our ongoing operations is dependent on the foregoing factors and on our ability
to secure additional funds. We cannot assure you that we will ever make a profit
or that cash flow from future operations will be sufficient to meet our needs.
We May Not Be Able To Market Our Products Without a Partner Who Has
Effective Marketing Capabilities
As of the date of this Prospectus, we have not entered into any marketing
agreements regarding our NEUPREX(R) product. Although we continue to evaluate
strategic alliances and potential partnerships for NEUPREX(R) and other
products, we cannot predict whether or when any such alliances or partnerships
will be entered into. Even assuming timely regulatory approval, we cannot assure
you that our products will be successfully marketed because success in marketing
may be dependent to a large extent upon the marketing capabilities of partners
we have yet to find.
If One Of Our Products Receives Regulatory Approval We May Not Have
The Manufacturing Facilities ToMeet Market Demand
We have never commercially introduced any pharmaceutical products. We
cannot assure you that our manufacturing facilities will receive timely
regulatory approval. Even assuming timely regulatory approval, we cannot assure
you that our existing manufacturing facilities would be able to produce
sufficient quantities of our products to meet market demand. Also, if we need
additional manufacturing facilities to meet market demand, we cannot assure you
that we will successfully obtain those facilities or that we will obtain the
requisite regulatory approval.
We Need Enforceable Patent Protection For Our Products In Order To Fully
Realize Our Profit Potential
Because of the length of time and the expense associated with bringing new
products through development and government approval to the marketplace, the
pharmaceutical industry considers it very important
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to obtain and maintain patent and trade secret protection for significant new
technologies, products and processes. We and other biotechnology firms hold and
are in the process of applying for a number of patents in the United States and
abroad to protect our products and important processes and also have obtained or
have the right to obtain exclusive licenses to certain patents and applications
filed by others. However, the patent position of biotechnology companies
generally is highly uncertain, and no consistent policy regarding the breadth of
allowed claims has emerged from the actions of the U.S. Patent and Trademark
Office (the "Patent Office") with respect to biotechnology patents. Legal
considerations surrounding the validity of biotechnology patents continue to be
in transition, and we cannot assure you that historical legal standards
surrounding questions of validity will continue to be applied or that current
defenses as to issued biotechnology patents will in fact be considered
substantial in the future. Accordingly, we cannot assure you as to:
o the degree and range of protection any patents will afford against
competitors with similar technologies
o if and when patents will issue
o whether or not others will not obtain patents claiming aspects similar
to those covered by our patent applications or
o the extent to which we will be successful in avoiding any patents
granted to others.
During the period from September 1994 to December 1998, the Patent Office
issued 33 patents to us related to our BPI-based products, including novel
compositions, their manufacture, formulation, assay and use. We have received
Notices of Allowance for nine additional U.S. patents and have more than 20
pending patent applications worldwide related to its BPI-based products. In
addition, as of December 31, 1998, we were the exclusive licensee of BPI-related
patents and applications owned by:
o New York University ("NYU"), including four issued U.S. patents, one
additional U.S. Notice of Allowance and one granted European patent,
and
o Incyte Pharmaceuticals Inc. ("Incyte"), including six issued U.S.
patents, one granted European patent and pending applications
worldwide.
During the period from July 1991 to December 1998, the Patent Office issued
eight patents to us related to our bacterial expression technology. Numerous
foreign patents have been granted which, along with additional pending foreign
patent applications, correspond to the patents issued and allowed in the U.S.
If certain patents issued to others are upheld or if certain patent
applications filed by others issue and are upheld, we may require licenses from
others in order to develop and commercialize certain potential products
incorporating our technology. We cannot assure you that these licenses, if
required, will be available on acceptable terms.
Due to the uncertainties regarding biotechnology patents, we also have
relied and will continue to rely upon trade secrets, know-how and continuing
technological advancement to develop and maintain our competitive position. All
of our employees have signed confidentiality agreements under which they have
agreed not to use or disclose any of our proprietary information. Research and
development contracts and relationships between us and our scientific
consultants and potential customers provide access to aspects of our know-how
that are protected generally under confidentiality agreements. We cannot assure
you that all confidentiality agreements will be honored or are enforceable.
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Our Product Testing May Not Prove Successful And We May Not Be Able To
Compete With Larger, More WellCapitalized Companies
Technologies developed and utilized by the biotechnology and pharmaceutical
industries are continuously and substantially changing. Competition in the areas
of recombinant DNA-based and antibody-based technologies is intense and expected
to increase in the future as a number of established biotechnology firms and
large chemical and pharmaceutical companies advance in the field. Many of these
competitors may be able to develop products and processes competitive with or
superior to our own for many reasons, including that they have:
o significantly greater financial resources
o larger research and development and marketing staffs
o larger production facilities
o entered into arrangements with, or acquired, biotechnology companies
to enhance their capabilities or
o extensive experience in preclinical testing and human clinical trials.
These factors may enable others to develop products and processes
competitive with or superior to our own. In addition, a significant amount of
research in biotechnology is being carried out in universities and other
non-profit research organizations. These entities are becoming increasingly
interested in the commercial value of their work and may become more aggressive
in seeking patent protection and licensing arrangements. We cannot assure you
that developments by others will not render our products or technologies
obsolete or uncompetitive.
It is possible that one or more other companies may be developing one or
more products based on BPI, and we cannot assure you that these product(s) will
not prove to be more effective than or receive regulatory approval prior to
NEUPREX(R).
We Plan To Do Business Internationally And This Exposes Us To Political,
Economic and Regulatory Uncertainty
We believe that, because the pharmaceutical industry is global in nature,
international activities will be a significant part of our future business
activities and that, when and if we are able to generate income, a substantial
portion of that income will be derived from product sales and other activities
outside the United States. Foreign regulatory agencies often establish standards
different from those in the United States, and an inability to obtain foreign
regulatory approvals on a timely basis could have an adverse effect on our
business. International operations may be limited or disrupted by:
o imposition of government controls
o export license requirements
o political or economic instability
o trade restrictions
o changes in tariffs
o restrictions on repatriating profits
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o taxation and
o difficulties in staffing and managing international operations.
Also, our business may be adversely affected by fluctuations in currency
exchange rates. We cannot assure you that we will be able to successfully
operate in any foreign market.
Our Research, Testing And Manufacturing Operations May Be Disrupted By
The Year 2000 Bug
Although we have yet to complete the first phase of our Year 2000 ("Y2K")
exposure analysis program with respect to all three of the major areas of our
business where we have identified this problem, we believe that we rely on
systems, applications and third-party relationships which, if not Y2K compliant
prior to the end of 1999, could have a material adverse impact on our
operations. Because we have not completed our contingency planning, we cannot
describe what action we would take should Y2K compliance not be achievable in
time. Not having completed our evaluation of all three areas, we cannot at this
time estimate the total potential costs of our Y2K compliance programs. The
funds for these costs will be part of our cash flow from operations and capital
expenditures. Assuming that our efforts to mitigate our Y2K exposure in any of
the three areas referred to above are unsuccessful, the most reasonably likely
worst case scenario is an interruption of ongoing clinical trials, including
delays in gathering and evaluating clinical data, and a disruption of our
manufacturing and research operations.
As a Relatively Small Biopharmaceutical Company We May Not Be Able To
Attract And Retain Qualified Personnel
Our success in developing marketable products and achieving a competitive
position will depend, in part, on our ability to attract and retain qualified
scientific and management personnel. There is intense competition for such
personnel, and we cannot assure you that we will be able to attract or retain
them. Our product development efforts would be set adversely affected by the
loss of a significant group of key personnel.
Because We Engage In Human Testing We Are Exposed To An Increased
Risk Of Product Liability Claims
The testing and marketing of medical products entails an inherent risk of
allegations of product liability. We believe that we currently have adequate
levels of insurance for our clinical trials. We will seek to obtain additional
insurance, if needed, if and when our products are commercialized; however, we
cannot assure you that adequate insurance coverage will be available or be
available at acceptable costs or that a product liability claim would not
materially adversely affect our business.
Our Shareholder Rights Agreement or Bye-Laws May Inhibit A Takeover
Our Shareholder Rights Agreement and Bye-Laws contain provisions that may
have the effect of making more difficult or more costly an acquisition of
control of the Company that has not been approved by our Board of Directors. The
Rights Agreement was designed to:
o protect against attempts to acquire XOMA for an inadequate or unfair
price
o deter abusive tactics which induce shareholders to tender shares prior
to realizing the full value or total potential of their investment in
XOMA and
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o create an incentive for a potential acquirer to negotiate the price
and terms of an acquisition transaction in good faith with the Board
so that shareholders are treated equally.
See "Description of Share Capital -- Preference Shares -- Preference Share
Purchase Rights."
The Market Prices For Securities Of Biotechnology Companies, Including
Our Own, Have Been Highly Volatile
Announcements regarding:
o the results of regulatory approval filings
o clinical trials or other testing
o technological innovations or new commercial products by XOMA or its
competitors
o government regulations
o developments concerning proprietary rights
o public concern as to safety of biotechnology
and other factors have historically caused, and are expected to continue to
cause, volatility in the market price of the Common Shares.
Some Civil Liabilities May Not Be Enforceable Against Us As A Foreign Person
We are a Bermuda company and certain of our officers and directors may be
residents of various jurisdictions outside the United States. All or a
substantial portion of our assets and of such persons may be located outside the
United States. As a result, it may be difficult for investors to effect service
of process within the United States upon such persons or to enforce in United
States courts judgments obtained against such persons. We have irrevocably
agreed that we may be served with process with respect to actions based on
offers and sales of securities made hereby in the United States by serving
Christopher J. Margolin, c/o XOMA Ltd., 2910 Seventh Street, Berkeley,
California 94710, our United States agent appointed for that purpose. The
Company has been advised by its Bermuda counsel, Conyers Dill & Pearman, that
there is doubt as to whether Bermuda courts would enforce judgments of United
States courts obtained in (a) actions against such persons or the Company that
are predicated upon the civil liability provisions of the Securities Act or (b)
original actions brought in Bermuda against the Company or such persons
predicated upon the Securities Act. There is no treaty in effect between the
United States and Bermuda providing for such enforcement, and there are grounds
upon which Bermuda courts may not enforce judgments of United States courts.
Certain remedies available under the United States federal securities laws may
not be allowed in Bermuda courts as contrary to that nation's policy.
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THE COMPANY
XOMA is a biopharmaceutical company developing products to treat
infections, infectious complications (such as those that follow traumatic injury
and surgery), and immunologic and inflammatory disorders. Our current product
development programs include:
- NEUPREX(R) (rBPI21), a modified recombinantly-derived fragment of BPI
and XOMA's lead BPI-derived product. The product is currently in Phase
III efficacy clinical trials in two indications and has been in
earlier-stage clinical trials in three additional indications.
- I-PREX(TM), a proprietary topical formulation of rBPI21 for the
treatment of ophthalmic disorders, which is undergoing preclinical
testing as a treatment for corneal injuries and infections, including
ulcerations and transplants.
- Mycoprex(TM), a fungicidal compound derived from BPI that is currently
in preclinical product development. It is targeted at systemic fungal
infections.
- hu1124 (anti-CDlla), a humanized antibody product being developed in
collaboration with Genentech, which originally discovered the antibody
and characterized it as anti-CD11a. The hull24 product has completed a
Phase II clinical trial for psoriasis. Other indications are under
review.
Management believes the Company's cash position and resulting interest
income are sufficient to finance the Company's currently anticipated needs for
operating expenses, working capital, equipment acquisitions and current research
projects for at least one year. The Company continues to evaluate strategic
alliances, potential partnerships and financing arrangements which would further
strengthen its competitive position and provide additional funding. The Company
cannot predict whether or when any such alliances, partnerships or arrangements
will be consummated or whether additional funding will be available when
required and on terms acceptable to the Company.
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PRICE RANGE OF COMMON SHARES AND DIVIDEND INFORMATION
XOMA's Common Shares (such Common Shares and the Common Stock of our
predecessor Delaware corporation are referred to in this Prospectus as the
"Common Shares") trade on the Nasdaq National Market under the symbol "XOMA."
The following table sets forth the quarterly range of high and low reported sale
prices of the Common Shares on the Nasdaq National Market for the periods
indicated:
High Low
---- ---
1997:
First Quarter $7 1/4 $4 15/16
Second Quarter 5 11/16 3 1/8
Third Quarter 8 1/2 4 5/8
Fourth Quarter 8 1/2 4 7/8
1998:
First Quarter $6 1/2 $4 5/16
Second Quarter 6 4 1/4
Third Quarter 5 1 27/32
Fourth Quarter 5 1 13/16
1999:
First Quarter (through March 4) $4 3/16 3 1/16
On March 4, 1999 the last reported sale price of the Common Shares as
reported on the Nasdaq National Market was US$3-5/32 per share. As of March 4,
1999, there were approximately 4,379 record holders of XOMA's Common Shares.
The Company has not paid dividends on its common equity. The Company
currently does not intend to pay dividends and intends to retain any earnings
for use in its business and the financing of its capital requirements for the
foreseeable future. The payment of any future cash dividends on the Company's
Common Shares will necessarily be dependent upon the earnings and financial
needs of the Company, along with applicable legal and contractual restrictions.
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SELLING SHAREHOLDERS
In January 1999, we entered into a financing transaction involving the
issuance of Common Shares and Common Share Purchase Warrants to Advantage Fund
II Ltd. and Koch Investment Group Limited (the "1999 Private Placement"), which
we previously announced. The shares initially issued in the 1999 Private
Placement were issued pursuant to separate subscription agreements with each
investor, are held by an escrow agent and may be released at the discretion of
the investors beginning on the effective date of the Registration Statement of
which this Prospectus is a part. The subscription agreements provide that we
could be required to issue additional shares ("Adjustment Shares") to the
investors if the "Average Market Price" of our Common Shares (which is defined
as 89% of the average of the closing bid prices for the five trading days during
the 25 immediately preceding trading days on which the lowest closing bid prices
occurred) on August 31, 1999 (the "Reset Date") is less than a floor price of
$5.85008. If the Average Market Price is lower, then we will issue to each
investor Adjustment Shares, if any, equal to (i) the quotient obtained by
dividing (x) the product of the number of shares initially held in escrow on
behalf of each investor on such date (and not previously withdrawn) times
$5.85008 by (y) the Average Market Price, less (ii) such number of shares
initially held in escrow on behalf of each investor on such date (and not
previously withdrawn). Additional Adjustment Shares will be required to be
issued into escrow for the Selling Shareholders on Reset Dates every 90 days
after August 31, 1999 until the earlier of January 2002 or the date when all
shares are released from escrow, based on a similar formula, if the Average
Market Price is less than the Average Market Price on the preceding Reset Date.
To the extent that the number of shares issuable under the foregoing formulas on
any such Reset Date is negative, those shares will be returned by the escrow
agent to us and cancelled. The number of Adjustment Shares may increase under
certain conditions primarily involving our failure to keep the Registration
Statement of which this Prospectus forms a part available for use for resales of
the shares. We may be required to repurchase the shares held in and recently
released from escrow under certain conditions, including a default of our
material obligations under the subscription agreements, the continued
unavailability of the Registration Statement, or the absence of reported prices
for the Common Shares on the New York or American Stock Exchanges or the Nasdaq
National or Nasdaq SmallCap Markets; we may, however, elect to issue additional
shares in lieu of repurchasing such shares if the circumstances triggering the
repurchase obligation are not solely within our control. Wharton Capital
Partners Ltd. received warrants to purchase 64,000 Common Shares for its role in
facilitating the 1999 Private Placement. Separately, Brown Simpson-ORD
Investments, LLC received warrants to purchase 75,000 Common Shares for
providing general financial advisory services.
The following table sets forth certain information regarding the ownership
of Common Shares by the Selling Shareholders as of March 4, 1999, and the number
of Common Shares covered by this Prospectus:
<TABLE>
<CAPTION>
Ownership Ownership
of Common Shares of Common Shares
prior to the Offering after the Offering (Assuming all
Offered Shares are Sold)
Number
Name of Number of Shares Number of Percent
Selling Shareholders of Shares Offered Shares of Class
- ---------------------------------------- --------- --------- --------- --------
<S> <C> <C> <C> <C>
Advantage Fund II Ltd. 1,336,565(1) 2,533,130(2) 0 0%
Koch Investment Group Limited 954,689(1) 1,809,378(3) 0 0%
Wharton Capital Partners Ltd. 64,000(4) 64,000 0 0%
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<PAGE>
Ownership Ownership
of Common Shares of Common Shares
prior to the Offering after the Offering (Assuming all
Offered Shares are Sold)
Number
Name of Number of Shares Number of Percent
Selling Shareholders of Shares Offered Shares of Class
- ---------------------------------------- --------- --------- --------- --------
Brown Simpson-ORD Investments, LLC 114,612(5) 75,000 39,612 less than 1%
</TABLE>
(1) Consists of (a) the initial number of shares issued to this Selling
Shareholder in the 1999 Private Placement and (b) the number of shares
issuable upon exercise of the 1999 Warrants (as defined below) issued to
this Selling Shareholder.
(2) Consists of (a) 1,196,565 shares issued to Advantage Fund II Ltd., (b)
140,000 shares issuable upon exercise of the 1999 Warrants, and (c)
1,196,565 Adjustment Shares which we agreed to register and which may be
issued to this Selling Shareholder in the future pursuant to its
subscription agreement.
(3) Consists of (a) 854,689 shares issued to Koch Investment Group Limited, (b)
100,000 shares issuable upon exercise of the 1999 Warrants, and (c) 854,689
Adjustment Shares which we agreed to register and which may be issued to
this Selling Shareholder in the future pursuant to its subscription
agreement.
(4) Consists of shares issuable upon exercise of the 1999 Warrants. Excludes
(i) 53,654 shares issuable upon exercise of the 1997 Warrants (as defined
below), (ii) 22,692 shares issuable upon exercise of the 1998 Warrants (as
defined below) and (ii) 70,073 shares issuable upon exercise of certain
options to purchase Common Shares at an exercise price of $5.00 per share,
which options expire on March 27, 1999, all of which are beneficially owned
by Michael Arnouse, a principal of Wharton Capital. Wharton Capital
disclaims beneficial ownership of such shares.
(5) Consists of 75,000 shares issuable upon exercise of the 1999 Warrants,
37,412 shares issuable upon exercise of the 1997 Warrants, and 2,200 shares
issuable upon exercise of the 1998 Warrants.
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<PAGE>
DESCRIPTION OF SHARE CAPITAL
The following statements with respect to XOMA's share capital are subject
to the detailed provisions of XOMA's Memorandum of Continuance and Bye-Laws.
These statements do not purport to be complete and, while XOMA believes the
descriptions of the material provisions of the Memorandum of Continuance and the
Bye-Laws incorporated by reference are accurate statements with respect to such
material provisions, such statements are subject to the detailed provisions in
the Memorandum of Continuance and the Bye-Laws, to which reference is hereby
made for a full description of such provisions.
COMMON SHARES
General
The Memorandum of Continuance and the Bye-Laws provide that XOMA's
authorized common share capital is limited to 70,000,000 Common Shares, par
value U.S. $.0005 per share (the "Common Shares"). As of March 4, 1999, there
were 49,917,318 Common Shares outstanding.
Voting
The holders of Common Shares are entitled to one vote per share. All
actions submitted to a vote of shareholders shall be voted on by the holders of
Common Shares, voting together as a single class (together with the Series A
Preference Shares (as defined below), if any), except as provided by law.
Dividends
Holders of Common Shares are entitled to participate, on a share for share
basis, with the holders of any other common shares outstanding, with respect to
any dividends declared by the Board of Directors of XOMA, subject to the rights
of holders of preference shares. Dividends will generally be payable in U.S.
dollars. XOMA has not paid cash dividends on the Common Shares. The Company
currently does not intend to pay dividends and intends to retain any earnings of
XOMA for use in its business and the financing of its capital requirements for
the foreseeable future. The payment of any future cash dividends on the Common
Shares is necessarily dependent upon its earnings and financial needs of XOMA,
along with applicable legal and contractual restrictions.
Liquidation
On a liquidation of XOMA, holders of Common Shares will be entitled to
receive any assets remaining after the payment of XOMA's debts and the expenses
of the liquidation, subject to such special rights as may be attached to any
other class of shares.
Redemption
The Common Shares are not subject to redemption either by XOMA or the
holder thereof.
Variation Of Rights
Under XOMA's Bye-Laws, if at any time XOMA's share capital is divided into
different classes of shares, the rights attached to any class (unless otherwise
provided by the terms of the issue of the shares of that class) may be varied
with the consent in writing of the holders of a majority of the issued shares of
that class either in writing or with the sanction of a resolution passed at a
separate general meeting.
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<PAGE>
PREFERENCE SHARES
General
Under the Memorandum of Continuance and the Bye-Laws, the Company has the
authority to issue 1,000,000 preference shares, par value U.S. $.05 per share.
Of these, 650,000 preference shares have been designated Series A Cumulative
Preference Shares (the "Series A Preference Shares"), 7,500 preference shares
have been designated Convertible Preference Shares, Series B (the "Series B
Preference Shares") and 1,250 preference shares have been designated Convertible
Preference Shares, Series C (the "Series C Preference Shares"). Under the
Bye-Laws, subject to the special rights attaching to any class of shares of XOMA
not being varied and to any resolution approved by the holders of 75% of the
issued shares entitled to vote in respect thereof, the Board of Directors of
XOMA may establish one or more classes or series of preference shares having the
number of shares, designations, relative voting rights, dividend rates,
liquidation and other rights, preferences and limitations that the Board of
Directors fixes without any shareholder approval.
Preference Share Purchase Rights
Pursuant to XOMA's Amended and Restated Shareholder Rights Agreement the
Company issued one Preference Share Purchase Right (a "Right") for each
outstanding Common Share. Each Right entitles the holder to purchase from XOMA a
unit consisting of one one-hundredth of a share (a "Unit") of Series A
Preference Shares at a cash exercise price of $30.00 per Unit, subject to
adjustment.
The Rights are attached to all outstanding Common Shares, including the
Common Shares offered hereby. The Rights will separate from the Common Shares
and will be distributed to holders of Common Shares upon the earliest of (i) ten
business days after the first public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired beneficial
ownership of 20% or more of the Common Shares then outstanding (the date of said
announcement being referred to as the "Share Acquisition Date"), (ii) ten
business days following the commencement of a tender offer or exchange offer
that would result in a person or group of persons becoming an Acquiring Person
or (iii) the declaration by the Board of Directors of XOMA that any person is an
"Adverse Person" (the earliest of such dates, the "Distribution Date").
The Board of Directors of XOMA may generally declare a person to be an
Adverse Person after a declaration that such person has become the beneficial
owner of 10% or more of the outstanding Common Shares and a determination that
(a) such beneficial ownership by such person is intended to cause or is
reasonably likely to cause XOMA to repurchase the Common Shares owned by such
Person or to cause XOMA to enter into other transactions not in the best
long-term interests of XOMA or (b) such beneficial ownership is reasonably
likely to cause a material adverse impact on the business or prospects of XOMA.
The Rights are not exercisable until the Distribution Date and will expire on
December 31, 2002, unless previously redeemed or exchanged by XOMA.
In the event that a person becomes an Acquiring Person or the Board of
Directors of XOMA determines that a person is an Adverse Person, each holder of
a Right will thereafter have the right (a "Subscription Right") to receive upon
exercise that number of Units of Series A Preference Shares having a market
value of two times the exercise price of the Rights. If at any time following
the Share Acquisition Date, (i) XOMA consolidates with, or merges or amalgamates
with and into, any person, and XOMA is not the surviving corporation; (ii) any
person consolidates or amalgamates with XOMA, or merges or amalgamates with and
into XOMA and XOMA is the continuing or surviving corporation of such
transaction and, in connection with such transaction, all or part of the Common
Shares are changed into or exchanged for other securities of any other person or
cash or any other property, or (iii) 50% or more of XOMA's assets are sold or
otherwise transferred, provision shall be made so that each holder of a Right
shall thereafter have the right (a "Merger Right") to receive, upon exercise,
common shares of the acquiring company having a market value equal to
17
<PAGE>
two times the exercise price of the Rights. Rights that are beneficially owned
by an Acquiring or Adverse Person may, under certain circumstances, become null
and void.
At any time after a person becomes an Acquiring Person or the Board of
Directors of XOMA determines that a person is an Adverse Person, the Board of
Directors of XOMA may exchange all or any part of the then outstanding and
exercisable Rights for Common Shares or Units of Series A Preference Shares at
an exchange ratio of one Common Share or one Unit of Series A Preference Shares
per Right. Notwithstanding the foregoing, the Board of Directors of XOMA
generally will not be empowered to effect such exchange at any time after any
person becomes the beneficial owner of 50% or more of the Common Shares then
outstanding.
The Rights may be redeemed in whole, but not in part, at a price of U.S.
$.001 per Right by the Board of Directors of XOMA at any time prior to the date
on which a person is declared to be an Adverse Person, the tenth business day
after the Share Acquisition Date, the occurrence of an event giving rise to the
Merger Right or the expiration date of the Rights Agreement.
The Series A Preference Shares
There are no Series A Preference Shares outstanding. Pursuant to the rights
of the Series A Preference Shares, subject to the rights of holders of any
shares of any series of preference shares ranking prior and superior (such as
the Series C Preference Shares), the holders of Series A Preference Shares are
entitled to receive, when, as and if declared by the Board of Directors of XOMA
out of funds legally available for the purpose, quarterly dividends payable in
cash on the first day of March, June, September and December in each year (a
"Dividend Payment Date"), commencing on the first Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preference
Shares, in an amount per share equal to the greater of (a) $1.00 or (b) 100
times the aggregate per share amount of all cash dividends, plus 100 times the
aggregate per share amount of all non-cash dividends or other distributions,
other than a dividend payable in Common Shares, declared on the Common Shares
since the immediately preceding Dividend Payment Date, or, with respect to the
first Dividend Payment Date, since the first issuance of Series A Preference
Shares.
In addition to any other voting rights required by law, holders of Series A
Preference Shares shall have the right to vote on all matters submitted to a
vote of shareholders of XOMA with each share of Series A Preference Shares
entitled to 100 votes. Except as otherwise provided by law, holders of Series A
Preference Shares and holders of Common Shares shall vote together as one class
on all matters submitted to a vote of shareholders of XOMA.
Unless otherwise provided in the rights attaching to a subsequently
designated series of preference shares of XOMA, the Series A Preference Shares
shall rank junior to any other series of preference shares as to the payment of
dividends and distribution of assets on liquidation, dissolution or winding-up
and shall rank senior to the Common Shares. Upon any liquidation, dissolution or
winding-up of XOMA, no distributions shall be made to holders of shares ranking
junior to the Series A Preference Shares unless, prior thereto, the holders of
Series A Preference Shares shall have received an amount equal to accrued and
unpaid dividends and distributions, whether or not declared, to the date of such
payment, plus an amount equal to the greater of (1) $100.00 per share or (2) an
aggregate amount per share equal to 100 times the aggregate amount to be
distributed per share to holders of Common Shares or to the holders of shares
ranking on parity with the Series A Preference Shares, except distributions made
ratably on the Series A Preference Shares and all other such parity shares in
proportion to the total amount to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding-up.
If the Company shall enter into any consolidation, amalgamation, merger,
combination or other transaction in which Common Shares are exchanged for or
changed into cash, other securities and/or any other property, then any shares
of Series A Preference Shares outstanding shall at the same time be similarly
ex-
18
<PAGE>
changed or changed in an amount per share equal to 100 times the aggregate
amount of cash, securities and/or other property, as the case may be, into which
or for which each Common Share is changed or exchanged.
The shares of Series A Preference Shares shall not be redeemable.
The Series B Preference Shares
There are no Series B Preference Shares outstanding. The 7,500 Series B
Preference Shares have been designated for issuance upon conversion of the
convertible subordinated loans to XOMA made and to be made by Genentech in
connection with the funding of the XOMA's development costs for hull24. Such
loans are and will be convertible into Series B Preference Shares upon the
occurrence of certain events relating to certain regulatory approvals, payment
defaults, prepayments and other circumstances. Pursuant to the rights of the
Series B Preference Shares, the holders of Series B Preference Shares will not
be entitled to receive any dividends on the Series B Preference Shares.
The Series B Preference Shares will rank senior with respect to rights on
liquidation, winding-up and dissolution of the Company to all classes of Common
Shares. Upon any voluntary or involuntary liquidation, dissolution or winding-up
of the Company, holders of Series B Preference Shares will be entitled to
receive $10,000 per share of Series B Preference Shares before any distribution
is made on the Common Shares. The holders of shares of Series B Preference
Shares will have no voting rights, except as required under Bermuda law.
The holders of Series B Preference Shares will have the right to convert
shares of Series B Preference Shares into Common Shares at a conversion price
equal to the current market price of the Common Shares (determined as provided
below). The current market price will be determined (a) for shares of Series B
Preference Shares issued in connection with a conversion of one or more of the
convertible subordinated loans upon certain regulatory approvals, payment
defaults or in certain other circumstances, as of the first date on which such a
conversion occurs, and (b) for shares of Series B Preference Shares issued in
connection with certain prepayments of one or more of the convertible
subordinated loans or a conversion thereof in certain other circumstances, as of
the date of the issuance of such shares of Series B Preference Shares.
The Series B Preference Shares will be automatically converted into Common
Shares at its then effective conversion rate immediately upon the transfer by
the initial holder to any third party which is not an affiliate of such holder.
The Company will have the right, at any time and from time to time, to
redeem any or all shares of Series B Preference Shares for cash in an amount
equal to the conversion price multiplied by the number of Common Shares into
which each such share of Series B Preference Shares would then be convertible.
The Series C Preference Shares
As of March 4, 1999, there were 410 Series C Preference Shares outstanding.
Pursuant to the rights of the Series C Preference Shares, the holders thereof
will be entitled to receive, when and as declared by the Board of Directors of
the Company out of funds legally available therefor, cumulative dividends at a
rate per share (as a percentage of the stated value per share) equal to 5% per
annum. Dividends will be payable, at the option of the Company, in cash or
Common Shares (subject to certain restrictions thereon). In addition, the
Company may elect not to declare or make payment of any dividend, in which event
the accrued and unpaid dividends shall be calculated and paid at the time of
conversion, as described below.
The Series C Preference Shares will rank senior with respect to rights on
liquidation, dissolution or winding-up of the Company to the Common Shares. Upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
Company, holders of Series C Preference Shares will be entitled to receive U.S.
$10,000 per share, plus accrued but unpaid dividends, before any distribution or
payment is made on the
19
<PAGE>
Common Shares or any preference shares of the Company ranking junior as to
liquidation rights to the Series C Preference Shares. Except as may be required
by law and except with respect to certain actions which may adversely affect the
holders of Series C Preference Shares, the holders of Series C Preference Shares
will not be entitled to vote on any matter submitted to a vote of shareholders
of the Company.
The holders of Series C Preference Shares will have the right to convert
shares of Series C Preference Shares into Common Shares at a conversion price
equal to (a) 88% of the average per share market price of the Common Shares for
the five (5) trading days immediately preceding the date of conversion, provided
that the current holders of the Series C Preference Shares have agreed that in
no event shall any such holder be entitled to convert any Series C Preference
Shares (or exercise any 1998 Warrants (as defined below)) to the extent the
issuance of Common Shares upon a proposed conversion (or exercise) would result
in such holder beneficially owning more than 4.999% of the outstanding Common
Shares, absent certain defaults by the Company; and provided, further, that in
the event that on any conversion date the conversion of all the outstanding
shares of Series C Preference Shares upon surrender thereof, together with all
Common Shares previously issued upon conversion of Series C Preference Shares
and the Convertible Preferred Stock, Series G and the Convertible Preferred
Stock, Series H of XOMA and in respect of payment of dividends thereon, would
require the issuance of a number of Common Shares in excess of 20% of the number
of such shares outstanding on June 26, 1998, the Company shall, at its option,
either redeem all of such holder's shares of the Series C Preference Shares not
convertible by reason of the limitation described in this proviso at a
redemption price per share based on the five day trailing average market price
at the time of conversion or at the time of redemption, whichever is greater,
or, after obtaining shareholder approval, convert such Series C Preference
Shares into Common Shares; provided, that, if the Company elects to seek
shareholder approval, the holders of a majority of the outstanding Series C
Preference Shares may request, in lieu of such approval, that the Company redeem
the Series C Preference Shares as set forth above. In addition, subject to the
limitation described in the second proviso of the preceding sentence, the
Company has the right, so long as it is in compliance with its obligations to
the holders of the Series C Preference Shares and the related registration
statement is then effective, exercisable at any time on or after June 26, 2001,
to require the holders thereof to convert all or a portion of their Series C
Preference Shares into Common Shares at the then applicable conversion price.
The holders of the Series C Preference Shares will be entitled to redeem
their Series C Preference Shares at the redemption price described in the
preceding paragraph if the Common Shares are no longer listed for, or are
suspended from, trading on Nasdaq or any other principal market or exchange for
such shares (other than as a result of the suspension of trading in securities
generally or temporarily pending release of material information) for five
trading days in the aggregate.
WARRANTS
XOMA issued common stock purchase warrants (the "1996 Warrants") in
September 1996. Each of the 54,870 unexpired 1996 Warrants outstanding entitles
the holder thereof to purchase one Common Share, subject to anti-dilution
adjustments. A holder may exercise the 1996 Warrants at an exercise price of
$7.29 per share on or before September 24, 1999.
XOMA issued 485,879 common stock purchase warrants (the "1997 Warrants") in
August 1997. Each 1997 Warrant outstanding entitles the holder thereof to
purchase one Common Share, subject to anti-dilution adjustments. A holder may
exercise the 1997 Warrants at an exercise price of $10.00 per share on or before
August 14, 2000.
XOMA issued 618,681 common stock purchase warrants (the "1998 Warrants") in
June 1998. Each 1998 Warrant outstanding entitles the holder thereof to purchase
one Common Share, subject to anti-dilution adjustments. A holder may exercise
the 1998 Warrants at an exercise price of $7.00 per share on or before June 26,
2001.
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<PAGE>
XOMA issued 250,000 common stock purchase warrants (the "Incyte Warrants")
in July 1998. Each Incyte Warrant outstanding entitles the holder thereof to
purchase one Common Share, subject to anti-dilution adjustments. A holder may
exercise the Incyte Warrants at an exercise price of $6.00 per share on or
before July 9, 2008 or earlier upon the related license becoming fully paid up.
XOMA issued 379,000 warrants (the "1999 Warrants") to purchase Common
Shares in January 1999 in connection with the 1999 Private Placement and in
March 1999 to one of its financial advisors. Each 1999 Warrant entitles the
holder thereof to purchase one Common Share, subject to anti-dilution
adjustments. A holder may exercise the 1999 Warrants at an exercise price of
$5.85008 per share on or before January 29, 2004.
None of the warrants described above have been registered under the
Securities Act and none may be transferred except pursuant to an effective
registration statement under the Securities Act or pursuant to an exception from
registration thereunder. Additionally, all of the warrants contain certain
restrictions on their transfer. The Company is not obligated and does not intend
to register the warrants under the Securities Act.
PLAN OF DISTRIBUTION
Any or all of the Common Shares being offered by this Prospectus may be
sold from time to time to purchasers directly by any Selling Shareholder or by
pledges, donees, transferees or other successors in interest. Alternatively, any
Selling Shareholder may from time to time offer the Common Shares through
underwriters, dealers or agents who may receive compensation in the form of
underwriting discounts, concessions or commissions from such Selling Shareholder
and/or the purchasers of Common Shares for whom they may act as agent. Any such
Selling Shareholder, and any such underwriters, dealers or agents that
participate in the distribution of Common Shares, may be deemed to be
underwriters, and any profit on the sale of the Common Shares by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such Common
Shares may be so offered or sold in the open market, on the Nasdaq National
Market, in privately negotiated transactions, in an underwritten offering, or a
combination of such methods, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. To the
extent required, the names of the Selling Shareholders, the number Common Shares
to be sold, purchase price, public offering price, the name of any agent, dealer
or underwriter and any applicable commission or discount or other items
constituting compensation or indemnification arrangements with respect to a
particular offering will be set forth in an accompanying Prospectus Supplement.
The Company will receive no proceeds from the sale by any Selling Shareholder of
the Common Shares offered by this Prospectus.
In connection with distributions of the Common Shares, any Selling
Shareholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the Common Shares in the course of
hedging the positions they assume with such Selling Shareholder. Any Selling
Shareholder also may sell the Common Shares short and deliver the Common Shares
to close out such short positions. Any Selling Shareholder also may enter into
option or other transactions with broker-dealers that involve the delivery of
the Common Shares to the broker-dealers, which may then resell or otherwise
transfer such Common Shares. Any Selling Shareholder also may loan or pledge the
Common Shares to a broker-dealer and the broker-dealer may sell the Common
Shares so loaned or upon a default may sell or otherwise transfer the pledged
Common Shares.
All reasonable expenses (other than underwriting discounts and commissions,
other fees and expenses of investment bankers and brokerage commissions)
incurred in connection with the registration of the Common Shares offered by
this Prospectus, estimated to be approximately $70,000, will be borne by the
Company. As and when the Company is required to update this Prospectus, it may
incur additional expenses in excess of this estimated amount.
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<PAGE>
Any Common Shares offered by this Prospectus that qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under such rule rather than
pursuant to this Prospectus.
LEGAL OPINION
The validity of the Common Shares to which this Prospectus relates has been
passed upon for the Company by Conyers Dill & Pearman, located in Hamilton,
Bermuda.
EXPERTS
The consolidated financial statements of XOMA Ltd. at December 31, 1998,
and for the year then ended, appearing in this Prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The financial statements of XOMA Ltd. for the periods through December 31,
1997 incorporated by reference in this Prospectus and elsewhere in the
Registration Statement, to the extent and for the periods indicated in their
report, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said report.
WHERE YOU CAN GET MORE INFORMATION
This Prospectus is part of a Registration Statement that we have filed with
the SEC. The Registration Statement contains exhibits and other information not
included in this Prospectus. At your request, we will provide you, without
charge, a copy of any documents incorporated by reference in, or included as
exhibits to, our Registration Statement. If you would like more information,
write or call us at:
XOMA Ltd.
2910 Seventh Street
Berkeley, CA 94710
Telephone: (510) 644-1170
XOMA files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements
and other information we file at the SEC's public reference room in Washington
D.C. You can request copies of these documents, upon payment of a duplicating
fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. XOMA's SEC filings
are also available to the public on the SEC Internet site at http://www.sec.gov.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with this offering are as follows:
Amount
to be Paid
SEC registration fee .............................................. $ 3,816
Nasdaq fee ........................................................ 17,500
Legal fees and expenses (including Blue Sky fees and expenses)..... 35,000
Accounting fees and expenses ...................................... 6,000
Miscellaneous ..................................................... 7,684
-------
Total .................................................... $70,000
Item 15. Indemnification of Directors and Officers
Under Bermuda law, a company is permitted to indemnify any officer or
director, out of the funds of the company, against (i) any liability incurred by
him or her in defending any proceedings, whether civil or criminal, in which
judgment is given in his or her favor, or in which he or she is acquitted, or in
connection with any application under relevant Bermuda legislation in which
relief from liability is granted to him or her by the court and (ii) any loss or
liability resulting from negligence, default, breach of duty or breach of trust,
save for his or her fraud and dishonesty.
The Bye-Laws of the Company provide for the indemnity by the Company of the
officers, directors and employees of the Company to the fullest extent permitted
by law.
Expenses (including attorneys' fees) incurred by an officer or director of
the Company in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Company pursuant to the Securities Act of 1933.
An officer or director of the Company shall not be personally liable to the
Company or its shareholders for monetary damages for any breach of fiduciary
duty as a director or officer, except to the extent that such limitation is
prohibited by the Securities Act of 1933.
The indemnification and advancement of expenses and the limitation of
liability provided by the Bye-Laws shall not be deemed exclusive of any other
rights which any officer, director or employee, as such, may have or hereafter
acquire under the Securities Act of 1933, any other provision of the Bye-Laws,
or any agreement or otherwise. Any repeal or modification of the aforementioned
provisions of the Bye-Laws shall not adversely affect any right or protection
existing at the time of such repeal or modification.
II-1
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
Number
3.1 Memorandum of Continuance of XOMA Ltd. (Exhibit 3.4)(1)
3.2 Bye-Laws of XOMA Ltd. (Exhibit 3.5) (1)
4.1 Stockholder Rights Agreement dated as of October 27, 1993 by and among
XOMA Corporation and First Interstate Bank of California as Rights
Agent (Exhibit 1) (2)
4.2 Form of Resolution Regarding Preferences and Rights of Series A
Preference Shares (Exhibit 4.2) (1)
4.3 Form of Resolution Regarding Preferences and Rights of Series B
Preference Shares (Exhibit 4.3) (1)
4.4 Form of Resolution Regarding Preferences and Rights of Series C
Preference Shares (Exhibit 4.4) (1)
4.5 Form of Common Stock Purchase Warrant (1996 Warrants) (Exhibit 4.9)
(3)
4.6 Form of Common Stock Purchase Warrant (1997 Warrants) (Exhibit 3) (4)
4.7 Form of Common Stock Purchase Warrant (1998 Warrants) (Exhibit 3) (5)
4.8 Form of Common Stock Purchase Warrant (Incyte Warrants) (Exhibit 2)
(6)
4.9 Form of Common Share Purchase Warrant (1999 Warrants) (Exhibit 5) (7)
5.1 Opinion of Conyers Dill & Pearman
10.1 Form of Subscription Agreement, dated as of January 28, 1999, by and
between XOMA and the purchasers of Common Shares in the 1999 Private
Placement (Exhibit 2) (7)
10.2 Form of Registration Rights Agreement, dated as of January 28, 1998,
by and between XOMA and the purchasers of Common Shares in the 1999
Private Placement (Exhibit 3) (7)
10.3 Form of Escrow Agreement, dated as of January 28, 1998, by and between
XOMA, Brian W. Pusch, as Escrow Agent and the purchasers of Common
Shares in the 1999 Private Placement (Exhibit 4) (7)
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Arthur Andersen LLP, Independent Public Accountants
II-2
<PAGE>
23.3 Consent of Conyers Dill & Pearman (included in Exhibit 5.1)
24.1 Power of Attorney (included on the signature pages hereto)
- --------------------
(1) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form S-4 filed November 27, 1998, as amended (File No.
333-68045).
(2) Incorporated by reference to the referenced exhibit to XOMA Corporation's
Current Report on 8-K dated October 27, 1993 filed November 2, 1993 (File
No. 0-14710).
(3) Incorporated by referenced to the referenced exhibit to XOMA's Registration
Statement on Form S-3 filed June 28, 1998 (File No. 333-07263).
(4) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated August 13, 1997 filed August 18, 1997 (File No.
0-14710).
(5) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated June 28, 1998 filed June 29, 1998 (File No.
0-14710).
(6) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 9, 1998 filed July 16, 1998 (File No.
0-14710).
(7) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated January 28, 1999 filed January 29, 1999, as
amended (File No. 0-14710).
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in the post-effective amendment by those paragraphs is contained
in periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
II-3
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Berkeley, State of California, on March 10, 1999.
XOMA LTD.
By: /s/ John L. Castello
------------------------------------
Name: John L. Castello
Title: Chairman of the Board,
President and Chief
Executive Officer
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John L. Castello and Christopher J.
Margolin, and each of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) and supplements to this registration
statement, and to file the same, with the SEC, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board, President and March 10, 1999
Chief Executive Officer (Principal
/s/ John L. Castello Executive Officer)
- -------------------------------
John L. Castello
Chief Scientific and Medical Officer March 10, 1999
/s/ Patrick J. Scannon and Director
- -------------------------------
Patrick J. Scannon
Vice President, Finance and Chief March 10, 1999
Financial Officer (Principal Financial
/s/ Peter B. Davis and Accounting Officer)
- -------------------------------
Peter B. Davis
/s/ James G. Andress Director March 10, 1999
- -------------------------------
James G. Andress
/s/ William K. Bowes, Jr. Director March 10, 1999
- -------------------------------
William K. Bowes, Jr.
Director March 10, 1999
- -------------------------------
Arthur Kornberg
/s/ Steven C. Mendell Director March 10, 1999
- -------------------------------
Steven C. Mendell
/s/ W. Denman Van Ness Director March 10, 1999
- -------------------------------
W. Denman Van Ness
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
- ------ ----
3.1 Memorandum of Continuance of XOMA Ltd (Exhibit
3.4) (1)
3.2 Bye-Laws of XOMA Ltd. (Exhibit 3.5) (1)
4.1 Stockholder Rights Agreement dated as of October
27, 1993 by and among XOMA Corporation and First
Interstate Bank of California as Rights Agent
(Exhibit 1) (2)
4.2 Form of Resolution Regarding Preferences and
Rights of Series A Preference Shares (Exhibit 4.2)
(1)
4.3 Form of Resolution Regarding Preferences and
Rights of Series B Preference Shares (Exhibit 4.3)
(1)
4.4 Form of Resolution Regarding Preferences and
Rights of Series C Preference Shares (Exhibit 4.4)
(1)
4.5 Form of Common Stock Purchase Warrant (1996
Warrants) (Exhibit 4.9) (3)
4.6 Form of Common Stock Purchase Warrant (1997
Warrants) (Exhibit 3) (4)
4.7 Form of Common Stock Purchase Warrant (1998
Warrants) (Exhibit 3) (5)
4.8 Form of Common Stock Purchase Warrant (Incyte
Warrants) (Exhibit 2) (6)
4.9 Form of Common Share Purchase Warrant (1999
Warrants) (Exhibit 5) (7)
5.1 Opinion of Conyers Dill & Pearman
10.1 Form of Subscription Agreement, dated as of
January 28, 1999, by and between XOMA and the
purchasers of Common Shares in the 1999 Private
Placement (Exhibit 2) (7)
10.2 Form of Registration Rights Agreement, dated as of
January 28, 1998, by and between XOMA and the
purchasers of Common Shares in the 1999 Private
Placement (Exhibit 3) (7)
10.3 Form of Escrow Agreement, dated as of January 28,
1998, by and between XOMA, Brian W. Pusch, as
Escrow Agent and the purchasers of Common Shares
in the 1999 Private Placement (Exhibit 4) (7)
II-7
<PAGE>
Exhibit
Number Page
- ------ ----
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Arthur Andersen LLP, Independent Public Accountants
23.3 Consent of Conyers Dill & Pearman (included in
Exhibit 5.1)
24.1 Power of Attorney (included on the signature pages
hereto)
- --------------------
(1) Incorporated by reference to the referenced exhibit to XOMA's Registration
Statement on Form S-4 (File No. 333-68045).
(2) Incorporated by reference to the referenced exhibit to XOMA Corporation's
Current Report on 8-K dated October 27, 1993 filed November 2, 1993 (File
No. 0-14710).
(3) Incorporated by referenced to the referenced exhibit to XOMA's Registration
Statement on Form S-3 filed June 28, 1998 (File No. 333-07263).
(4) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated August 13, 1997 filed August 18, 1997 (File No.
0-14710).
(5) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated June 28, 1998 filed June 29, 1998 (File No.
0-14710).
(6) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated July 9, 1998 filed July 16, 1998 (File No.
0-14710).
(7) Incorporated by reference to the referenced exhibit to XOMA's Current
Report on Form 8-K dated January 28, 1999 filed January 29, 1999, as
amended (File No. 0-14710).
II-8
Exhibit 5.1
Opinion of Conyers Dill & Pearman
10 March, 1999
Xoma Ltd.
2910 Seventh Street
Berkeley, California 94710
USA
Dear Sirs:
XOMA Ltd.
We have acted as special legal counsel in Bermuda to XOMA Ltd. (the "Company")
in connection with the registration statement on Form S-3 (the "Registration
Statement") filed with the U.S. Securities and Exchange Commission (the
"Commission") relating to the registration under the U.S. Securities Act of
1933, as amended, of an aggregate of 4,481,508 common shares par value US$.0005
per share (the "Common Shares"), of the Company, including 2,051,254 Common
Shares issued pursuant to the several subscription agreements, each dated as of
January 28, 1999 (collectively, the "Subscription Agreements"), between the
Company and the buyers named therein (the "Initial Shares") , a like number of
shares which may by issued pursuant to the Subscription Agreements (the
"Additional Shares"), and 379,000 shares (the "Warrant Shares") issuable upon
exercise of common share purchase warrants (the "Warrants").
For the purposes of giving this opinion, we have examined the following
documents:
(i) a copy of the form of the Subscription Agreements as executed:
(b) by and between the Company and Advantage Fund II Ltd.;
(c) by and between the Company and Koch Investment Group Limited;
(ii) a copy of a form of the Warrants as executed on behalf of the Company;
(iii) a copy of the Registration Statement (excluding the exhibits thereto and
documents incorporated therein by reference).
<PAGE>
The documents listed on items (i) and (ii) above are herein sometimes
collectively referred to as the "Documents" (which term does not include any
other instrument or agreement whether or not specifically referred to therein as
an exhibit or schedule thereto).
We have also reviewed the memorandum of continuance and the bye-laws of the
Company, each certified by the Secretary of the Company on 29 January 1999,
minutes of a meeting of its directors held on 26 January 1999 (the "Minutes"),
the Company's 1998 Annual Report on Form 10-K filed with the Commission and such
other documents and made such enquiries as to questions of law as we have deemed
necessary in order to render the opinion set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and the
conformity to the originals of all copies (whether or not certified) examined by
us and the authenticity and completeness of the originals from which such copies
were taken, (b) that where a document has been examined by us in draft form, it
will be or has been executed in the form of that draft, and where a number of
drafts of a document have been examined by us all changes thereto have been
marked or otherwise drawn to our attention, (c) the capacity, power and
authority of each of the parties to the Documents, other than the Company, to
enter into and perform its respective obligations under the Documents, (d) the
due execution and delivery of the Documents by each of the parties thereto,
except the Company; (e) the accuracy and completeness of all factual
representations made in the Documents and other documents reviewed by us, (f)
that the resolutions contained in the Minutes remain in full force and effect
and have not been rescinded or amended; (g) that there are reasonable grounds
for believing that prior to and immediately following the Company's entering
into of the Documents, the Company is able to pay its liabilities as they fall
due and the realisable value of the Company's assets is not less that the
aggregate of its liabilities, issued share capital and share premium accounts;
(h) that there is no provision of the law of any jurisdiction, other than
Bermuda, which would have any implication in relation to the opinions expressed
herein and (i) the validity and binding effect under the laws of the State of
New York (the "Foreign Laws") of the Documents in accordance with their
respective terms.
The obligations of the Company under the Documents (a) will be subject to the
laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise, generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought, (c)
will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available and (d) may not be given effect to by a Bermuda court if and to the
extent they constitute the payment of an amount which is in the nature of a
penalty and not in the nature of liquidated damages. Notwithstanding any
contractual submission to the jurisdiction of specific courts, a Bermuda court
has inherent discretion to stay or allow proceedings in the Bermuda courts.
We express no opinion as to the enforceability of any provision of the Documents
which provides for the payment of a specified rate of interest on the amount of
a judgment after the date of judgment or which purports to fetter the statutory
powers of the Company.
We have made no investigation of and express no opinion in relation to the laws
of any jurisdiction other than Bermuda. This opinion is to be governed by and
construed in accordance with the laws of Bermuda and is limited to and is given
on the basis of the current law and practice in Bermuda. This opinion is issued
solely for your benefit and is not to be relied upon by any other person, firm
or entity or in respect of any other matter.
On the basis of and subject to the foregoing, we are of the opinion that:
<PAGE>
1. The Initial Shares, Additional Shares and Warrant Shares have been duly
authorised in accordance with the Company's memorandum of continuance and
bye-laws.
2. When issued and paid for as contemplated by the Subscription Agreements and
the Warrants as applicable, the Initial Shares, Additional Shares and
Warrant Shares will be validly issued, fully paid and non-assessable
(meaning that no further sums are required to be paid by the holders
thereof in connection with the issue of such shares).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to our firm under the section "Legal
Opinion" in the Registration Statement.
Yours faithfully
CONYERS DILL & PEARMAN
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of XOMA Ltd. for the
registration of 4,406,508 common shares and the the incorporation by reference
therein of our report dated February 12, 1999 with respect to the 1998
consolidated financial statements of XOMA Ltd. included in its Annual Report
(Form 10-K) for the year ended December 31, 1998, filed with the Securities and
Exchange Commission.
/S/ ERNST & YOUNG LLP
Palo Alto, California
March 8, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-3 of our report dated
February 3, 1998 included in XOMA Ltd.'s Form 10-K for the year ended December
31, 1998, and to all references to our firm included in this Registration
Statement.
ARTHUR ANDERSEN LLP
San Francisco, California
March 8, 1999
