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XOMA Moves Ahead, but Slowly

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I'm not sure if investors should be happy that XOMA (Nasdaq: XOMA  ) is moving its lead program along -- or pull out their hair because it's taken so long.

Yesterday, the biotech said its partner Servier was starting a phase 3 trial of gevokizumab in patients with an eye disease called Behcet's uveitis.

You'll recall that gevokizumab, the upgraded name for XOMA 052, failed to show a meaningful decrease in diabetics' hemoglobin A1c levels. Diabetes was XOMA's quick pathway to riches. A once-monthly dosing scheme would have been substantially better than Bristol-Myers Squibb (NYSE: BMY  ) and AstraZeneca's (NYSE: AZN  ) once-weekly Bydureon. And a once-per-month injection likely could have competed with oral medications like Merck's (NYSE: MRK  ) multi-billion-dollar blockbuster, Januvia. Alas, it wasn't meant to be.

At the time, XOMA already had phase 2 data that suggested the drug was working well enough in Behcet's uveitis to justify pushing it into phase 3 development. More than a year later, the companies have finally started the second phase 3 trial for gevokizumab. XOMA started the first trial in June in patients with non-infectious uveitis, a broader category of eye disease, which Behcet's uveitis falls into.

Sure, the companies are dependent on meetings with regulators to give advice about what the agencies require in the phase 3 program to eventually gain approval. And XOMA expanded the gevokizumab program to see if it will work in other diseases. And it got a new CEO. And. And. And.

OK, there's no point in dwelling on the past. The trials are up and running. Now what? Back to waiting. The phase 3 programs are expected to read out at the end of next year and the middle of 2014.

Then again, what's another year or two for a company that's been around for 30 years and doesn't have a drug it's developed on the market?

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Fool contributor Brian Orelli has no positions in the stocks mentioned above. The Motley Fool owns shares of AstraZeneca. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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