An experimental drug made by Genentech Inc. and Xoma Ltd. is effective against psoriasis but slightly raises the risk of side effects such as pneumonia or other infections, a U.S. regulatory staff report said.
Xoma's shares surged the day before a committee of dermatology experts that advises the Food and Drug Administration was to vote on whether to recommend approval of the drug, called Raptiva, as a new treatment for moderate to severe psoriasis.
Raptiva, estimated by analysts to eventually reach peak sales of about $400 million a year, is not expected to be a blockbuster drug for Genentech, but it would be Xoma's first commercial product.
Xoma shares rose $1 to $9.40 on Nasdaq. Genentech jumped $2.77 to $83.52 on the New York Stock Exchange.