Jefferies Global Healthcare Conference November 20, 2014

Forward-looking Statements

Certain statements contained herein including, but not limited to, statements related to

anticipated timing of initiation and completion of clinical trials, anticipated size of clinical trials,

therapeutic and market potential of XOMA’s product candidates, continued sales of approved

products, regulatory approval of unapproved product candidates, sufficiency of our cash

resources and anticipated levels of cash utilization, or that otherwise relate to future periods

are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933

and Section 21E of the Securities Exchange Act of 1934.

These statements are based on assumptions that may not prove accurate, and actual results

could differ materially from those anticipated due to certain risks inherent in the biotechnology

industry and for companies engaged in the development of new products in a regulated

market. Potential risks to XOMA meeting these expectations are described in more detail in

XOMA's most recent filing on Form 10-K and in other SEC filings. Consider such risks

carefully when considering XOMA's prospects. Any forward-looking statement herein

represents XOMA’s views only as of the date of this presentation and should not be relied upon

as representing its views as of any subsequent date. XOMA disclaims any obligation to update

any forward-looking statement, except as required by applicable law.

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XOMA: Value Creation and Value Capture

Create value by focusing on lead asset ─ gevokizumab

• Potent, fully humanized allosteric-modulating monoclonal antibody

• Once-a-month, subcutaneous injection

• Modulates inflammatory response to cytokine interleukin-1 beta (IL-1 β)

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Disruption of

disease-causing

inflammatory cascade

IL-1β binds to

IL-1β Receptor

Inflammatory diseases

induced through

over-produced IL-1β by

multiple Immune

system cells

Gevokizumab

binds to IL-1β

and

down-modulates

IL-1β signaling

XOMA: Value Creation and Value Capture

Create value by developing gevokizumab broadly across multiple

inflammatory indications

• Execute ongoing Phase 3 EYEGUARD™ studies in non-infectious uveitis (NIU)

– Report top-line results from EYEGUARD-B, Behçet's disease uveitis patients,

approximately 6 weeks after achieving the target event

– EYEGUARD-A and EYEGUARD-C studies in broad NIU population - results will follow

• Initiated Phase 3 study in second pivotal indication: pyoderma gangrenosum

• Use expansive proof-of-concept (POC) program to let gevokizumab lead us to

next diseases for pivotal development

– Multiple indications in POC testing at XOMA

– Leveraging Servier’s development in additional POC indications

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XOMA: Value Creation and Value Capture

Capture value for XOMA by commercializing gevokizumab

directly in the U.S.

• Deal with Servier retains XOMA U.S. and Japanese commercial rights

– Select indications served by specialty physicians to enable direct commercialization

by XOMA in the U.S.

• Leverage Servier commercialization outside the U.S. and Japan

– Milestones and royalties to XOMA

• License gevokizumab development and commercialization in Japan

Use gevokizumab success to advance additional XOMA

discoveries

• 30 years of leadership in antibody discovery and development

• Sizeable portfolio of potential antibodies to explore

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Gevokizumab: Pipeline in a Product

IndicationPre-

clinicalPhase 1 Phase 2 Phase 3

Upcoming

Milestones

XOMA’s Development Programs

Non-infectious uveitis (NIU) – EYEGUARD™-A & -C*2015:

Ph 3 Endpoints

Behçet's disease uveitis (BDU) – EYEGUARD-USQ3 14:

Initiated Ph 3 Trial

Pyoderma gangrenosum (PG)Q4 14:

Initiated Ph 3 Trial

Multiple POC Programs As Occurring

Servier’s Development Programs

Behçet's disease uveitis - EYEGUARD-BQ1 15:

Ph 3 Data

Cardiovascular Ongoing

Multiple POC programs As Occurring

6*Worldwide development by both XOMA and Servier

Gevokizumab: Behçet's Disease Uveitis (BDU)& Non-infectious Uveitis (NIU)

Gevokizumab: Three EYEGUARD™ Phase 3 Studies Ongoing in Non-infectious Uveitis

Inflammation of the uvea which can

occur in front, middle and/or back of

the eye

• Can be infectious or non-infectious

• Gevokizumab targeted for non-infectious

patients where back of the eye is affected

150,000 NIU patients in U.S. is

significant market opportunity yet

retains orphan status (granted)

Multiple etiologies

• Behçet's disease uveitis is representative of

multiple forms

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Gevokizumab: Clinical Activity in XOMA’s First Phase 2 Trial of Behçet's Disease Subset of NIU

7 of 7 patients showed rapid treatment effect for intraocular inflammatory attack

5 of 5 responded to second dose

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Day 0: Day 1: Day 4:

Flare score: 467 ph/msec *

Anterior chamber cell: 4+

Vitreous haze: 3+

Fundus score: 8

Flare score: 45 ph/msec

Anterior chamber cell: 4+

Vitreous haze: 3+

Fundus score: 4

Flare score: 62 ph/msec

Anterior chamber cell: 4+

Vitreous haze: 2+

Fundus score: 4

hypopyon off-center iris * photon counts per millisecond

Gevokizumab: Phase 2 Behçet's Disease Uveitis Studies Clearance of Vitreous Haze

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Day 0 - Vit. Haze: 3+

Servier’s study in 21 patients with Behçet's disease uveitis patients

included 15 patients with acute disease

• All responded to gevokizumab - most within 1 week

• Of 11 acute patients with a baseline vitreous haze score of ≥ 2+, 8 showed at least a

2-unit reduction at Day 70, remaining 3 had at least a 1-unit reduction

Day 1 - Vit. Haze: 3+ Day 4 - Vit. Haze: 2+

Day 7 - Vit. Haze: 1+ Day 14 - Vit. Haze: 0.5+ Day 21 - Vit. Haze: 0

Patient from XOMA 7-patient Phase 2 study

Gevokizumab: EYEGUARD-B Study Design and Status

Strong Phase 2 data in Behçet's disease uveitis patients (BDU)

led to Servier run EYEGUARD-B study

Ex-U.S. BDU patients, randomized, double-masked

Receive 60mg gevokizumab or placebo subcutaneously monthly

• Randomized 1:1

Patients must be stable on corticosteroids prior to randomization

• Steroids further tapered according to a pre-set fixed schedule

Primary endpoint is time to first exacerbation which is

interpolated from Kaplan-Meier survival analysis

• Hazard ratio of 0.3 gives 90% power at p≤ 0.05

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Gevokizumab: Driving Toward First BLA in Behçet’s Disease Uveitis

EYEGUARD-B results are expected first

• Waiting for final pre-specified exacerbations

Use EYEGUARD-B results to request pre-BLA Meeting with FDA

Perform statistical analysis of XOMA and Servier Phase 2 results

to support EYEGUARD-B results

Initiated EYEGUARD-US study in up to 28 BDU patients to further

supplement overall results

• May not be necessary for approval

• Interim results may be used for informational purposes

• Pivotal results may be required for approval

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Gevokizumab: EYEGUARD-US Behçet’s Disease Uveitis Supplemental Study

Patients can have active Behçet’s disease uveitis

• Patients with active disease are brought under control with gevokizumab

(open label), or

Patients can be under control with other therapies

• Treatment control transferred to gevokizumab

– From anti-TNF-αs

– From Prednisone and/or other immunosuppressives

Once patients are controlled on gevokizumab for 28 days -

• Randomized 1:1to continue to receive monthly 60 mg subcutaneous

treatment with gevokizumab or placebo

Primary Endpoint is time to first ocular exacerbation

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Gevokizumab: Regulatory Submission Strategy

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EYEGUARD-B

+

Two Phase 2

Trials

Supplemented w/

EYEGUARD-US

~7,500 U.S.

Patients

Non-infectious

uveitis

EYEGUARD-B

+

EYEGUARD-A

and/ or

EYEGUARD-C

~150,000 U.S.

Patients

Other follow-on

indications:

Ophthalmology

Scleritis

Dermatology

Pyoderma

Gangrenosum(Phase 3 Q4 2014)

Other Neutrophilic

Dermatoses

Behçet's disease

uveitisNon-infectious

uveitis

Other follow-on

indications

Gevokizumab: Pyoderma Gangrenosum (PG)

Pyoderma Gangrenosum: XOMA’s Next Phase 3 Indication

Severe inflammatory, ulcerative disease of the skin with

undetermined cause

• One of several indications collectively known as neutrophilic dermatoses

• Claims data over past 3 years indicate U.S. pyoderma gangrenosum patient

population of 11,000 - 14,000

• Typically takes >11 months to fully heal with corticosteroids*

• Orphan Drug Designation granted by FDA: February 2014

6 patients enrolled in pilot study at 60mg dose

• 5 patients showed improvement in ulcer size

by Day 28

– 4 patients had total resolution of ulcer by Day 84

• All patients demonstrated pain improvement

16 *Bennett ML et al. “Pyoderma gangrenosum. A comparison of typical and atypical forms with an emphasis on time to remission. Case review of 86 patients

from 2 institutions.” Medicine (Baltimore) Jan;79(1):37-46. PMID: 10670408

DAY 0 DAY 84

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Gevokizumab: Pyoderma Gangrenosum Subject 2300

Day 0 Day 84

ID Area (cm2) Area (cm2) D%

1 5.2 0 100

Ulcer Size:Pain

(0 - 10) Investigators Assessment of Target Ulcer

Day 0 10

Day 84 70: Total resolution of target ulcer with no sign

of active PG

1

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Gevokizumab: Pyoderma Gangrenosum Phase 3 Program Study Designs

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Pyoderma Gangrenosum

Phase 3 Studies

U.S. Only

(Study 172)

U.S. & x-U.S.

(Study 173)

# Patients 58 58

Gevokizumab doses

(Monthly)60mg : Placebo 60mg : Placebo

Randomization 1:1 1:1

Primary endpoint Complete healing of target ulcer at approximately Day 124

Secondary endpoints Multiple, including time to ulcer closure and pain

Statistical Powering 80%; p=0.05 80%; p=0.05

XOMA Metabolic (XMet) Program

Creating Value from XMet Discovery Program

XMet A: selective insulin receptor modulator (SIRM)

• May provide a long-acting alternative to basal insulin*

• Data from non-human primates should be predictive and is being used for

partnering discussions

XMet S: insulin sensitizing antibodies

• May enable more effective use of own insulin for early stage diabetics

• Mouse model has shown a 20x increase in sensitivity to insulin

XOMA 358: antagonist (deactivator) of the insulin receptor

• 3 potential rare disease indications to be evaluated:

– Congenital Hyperinsulinism (CHI)

– Insulinomas

– Hyperinsulinemic Hypoglycemia Post Gastric Bypass Surgery

• Patients concentrated in a few centers nationwide - development could be

rapid

• Phase 1 study initiated October 2014

20*Vigneri, R., Squatrito, S., Frittitta, L., Diabetes May 2012

Building Value Through Development Activities

Compound IndicationPre-

clinicalPhase 1 Phase 2 Phase 3 Marketed

XOMA’s Development Programs

Gevokizumab Non-infectious uveitis (NIU) – EYEGUARD-A & -C

Behçet's disease uveitis (BDU) – EYEGUARD-US

Pyoderma gangrenosum (PG)

Erosive osteoarthritis of the hand (EOA)

Moderate-to-severe acne

Non-infectious scleritis

Autoimmune inner ear disease (AIED)

XOMA 358 Excess insulin – Rare disease indications

Servier’s Development Programs

Gevokizumab Behçet's disease uveitis - EYEGUARD-B

Cardiovascular

Polymyositis/dermatomyositis

Schnitzler syndrome

Giant cell arteritis (GCA)

XOMA Development Activities for Licensure

XMet A, S Type 1 & 2 diabetes mellitus

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Financial Highlights

$59.1 million cash at September 30, 2014

Approximately 107 million shares outstanding

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Investment Thesis –Committed to Become a U.S. Commercial Company

Complete gevokizumab global Phase 3 program in non-infectious

uveitis (NIU) clinical trials

• EYEGUARD-B data may allow a “Behçet's first” BLA submission

• EYEGUARD-US study to supplement Behçet's disease uveitis BLA

submission

• EYEGUARD-A and -C may expand label to broader NIU population

Second gevokizumab pivotal program with studies in pyoderma

gangrenosum

Assess gevokizumab’s potential in additional inflammatory

indications through POC program

Advance proprietary allosteric modulating antibody pipeline

towards an IND and commercialization or licensure, particularly

XOMA 358

Use gevokizumab to build XOMA into a fully integrated company

with a commercial capability

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