Xoma, Ltd. is a biopharmaceutical company that develops and manufactures recombinant antibodies and other protein products to treat cancer, immunological and inflammatory disorder, and infectious diseases.

The original Complaint charges Xoma issued materially false and misleading information and failed to disclose material facts and, as a result, the market price of Xoma’s securities was artificially inflated during the Class Period. Specifically, the Complaint alleges that during the Class Period, Xoma announced the result of Phase I clinical trials of XMP.629, an acne drug being developed by the Company. The announced results indicated that XMP.629 would be an effective acne treatment. However, shortly after reiterating the result of the Phase I studies, Xoma announced that Phase II studies did not show any clinical benefit for XMP.629 and that additional clinical trials with XMP.629 were not going to be pursued. The statements were materially false and misleading because they failed to disclose and misrepresented the following material adverse facts which were known to the Defendants or recklessly disregarded by them prior to a July 29, 2004 announcement: (1) that the Phase II trial of XMP.629 was not showing any clinical benefit for XMP.629; and (2) that additional clinical trials with XMP.629 were not going to be pursued.

The Complaint further alleges the day after the August 16, 2004 press release, the price of Xoma’s common stock tumbled nearly 37% from $2.58 to $2.26. On or around August 18, 2004, the share price tumbled yet another 13% to $1.98. On both days, the trading volume was approximately 14 times the average volume.

On April 27, 2005, the Court entered the Order signed by U.S. District Judge Maxine M. Chesney granting the Defendants’ motion to dismiss the Complaint with leave to amend. On May 20, 2005, the Plaintiff filed a First Amended Complaint.

By the Stipulation and Order of Dismissal with Prejudice dated August 4, 2005, the action is dismissed with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1).