02.26.13 - XBiotech Expands Portfolio to Include Biosimilars

Proprietary Manufacturing Methods Enable Significant Cost Reduction and Flexibility to Position XBiotech as the Most Competitive Provider of Generic Antibody Therapeutics

XBiotech, a privately held biotechnology company, announced today that it is entering the biosimilar business. The Company is launching its biosimilar business with development of two of the world's leading therapeutic antibodies, one an oncology and the other an anti-inflammatory product. Entering into the biosimilar space will complete what XBiotech considers is its strategic portfolio of therapeutic antibodies. The Company believes that its manufacturing technology will lower production costs for biological products by an order of magnitude compared to other developers of generic biologics. Moreover, the Company claims that the flexibility and short lead-times needed to build production capacity is ideally suited for addressing the uncertain market conditions for biosimilars. The Company aims to enter into clinical trials with its first biosimilar product within the next year and launch into the market place by 2017.

"With our ability to manufacture antibody product at ultra-low costs, our aim is to make XBiotech the most competitive provider of biosimilar products in the world," said John Simard, president and CEO of XBiotech. "This is a logical next step to round out our antibody assets and fully exploit XBiotech's antibody commercialization platform."

There are a number of different biosimilar antibodies expected to hit the market beginning in 2014, including generic versions of Avastin®, Herceptin®, Remicade™, Rituxan®, and others. These therapeutics currently represent the majority of revenues from global sales of antibodies, of more than $40 billion. The potential to capture significant share of this market is luring a number of players, including heavy-weight producers of branded biologics, such as Amgen, and diverse entrants, such as Samsung, into the biosimilar development. However, with the large number of developers there remains considerable uncertainty about how market share is going to be divided, once a number of competing products hit the market.

Simard added that "In the biosimilar space cost competitiveness is going to be crucial to the success of these products. Market share is going to be driven by the ability to provide these products to the end user at lower costs than the competitor's. Developers capable of dramatically reducing cost of goods and establishing innovative distribution strategies will ultimately be able to dominate the biosimilar market. We believe XBiotech is well positioned to take advantage of this opportunity."

ABOUT XBIOTECH

XBiotech is pioneering breakthrough therapies that improve the safety and efficacy of antibody therapeutics. The Company's lead product candidate inhibits chronic sterile inflammation by targeting IL-1α, a master regulator of inflammation. The clinical development program addresses tremendous unmet medical need in multiple disease indications including, acne, psoriasis, cachexia, cancer, type 2 diabetes and cardiovascular disease. XBiotech is also revolutionizing scalable, flexible manufacturing systems for the production of biological therapies. Using minimal infrastructure and disposable bioreactor technology - to dramatically reduce capital requirements, operating complexity, and lead times - the Company has established a compelling commercialization path for therapeutic antibodies.

Contact
Investors:
Erika Geimonen
XBiotech
info@xbiotech.com
512.386.2906

Media:
Aaron DeLucia
XBiotech
aaron.delucia@porternovelli.com
512.241.2249

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